I don’t want to post another blog about data centres but there is a good article that was sent to me (with some good links) about Iowa’s ability to attract big name data centres. I have posted at least 20-30 blogs and wrote several columns touching on this issue. I won’t go into it again in much detail. I will say this. Those large data centres are energy hogs. They need the electricity of a small pulp mill. Iowa has some of the cheapest electricity in the U.S. – and has anchored much of its economic development around that – first for power intensive agrifood prodution, now increasingly biofuels (which require significant electricity in the production process) and now data centres.

As far as I can tell, very few of these large scale data centre are locating in large urban centres. They are locating in upstate New York, Iowa and the farmers’ fields of Washington State. There is increasingly proof that smaller urban and rural areas can take advantage of IT-based economic development. The issue, as usual, is the ability to develop a compelling value proposition for those small urban/rural regions. That can be cheap power, it must include skilled workers, etc.

There is hope for a place like New Brunswick – which will not be able to base its economic development on natural resources – to have succssful economic growth but it will be based on this province’s ability to be a great place to do business – for specific industry sectors. It would be impossible to build a broad value proposition that was attractive to all industries. We need to focus – and in fact we always have – now we need to refocus on new 21st century industries. Think about the 20th Century. NB’s economy was based primarily on natural resources and much of the infrastructure developed to support those industries. Now, natural resources are in decline as a percentage of the overall economy and will likely decline even further (although always remaining a major contributor to the economy). So the issue for NB is where will we go next?

Some will argue energy – nuclear, LNG, Eider Rock (oil), wind, etc. I tend to agree with the energy focus but my issue is engineeing the energy hub to mean cheap energy here in New Brunswick – to attract power intensive industries.

Some say – and have told me – that it is Soviet-style planning to ‘pick’ one industry over another and focus on it. I disagree – wholeheartedly. Government has access to scarce resources. It can only direct them in certain ways. If the government is going to invest in areas that influence economic development (from tax policy to education policy to infrastructure) it should make those investments in ways that will generate the best return to the public on those investments and focus must be the key. Ontario has spent billions to develop the auto sector. Quebec billions on pharma. BC billions on new media/film. Alberta billions (in forgone royalties/taxes) to develop the oilsands. All could have said “We can’t focus. That’s Soviet-style planning”. But all didn’t and have strong value propositions to develop those industries in their provinces.

What industries have a compelling value proposition to invest in New Brunswick?

That’s the question.

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0 Responses to

  1. Anonymous says:

    So who understands what the hell campbell is talking about here.
    Data centers using large amounts of electricty?????

    Each company has their OWN Data centers or they wouldn’t be a large company very long.
    Jeez

  2. Anonymous says:

    And so speaks the voice of education and reason.
    The above comment is exactly what I am talking about in various comments placed here. I am not going to educate this person (above) who obviously switches on his moonshine distillation facility and the power consumption doesnt register on a meter anywhere near where he lives in his cave on the top of his mountain in the Appalations (can you hear the banjos playing in the background?).
    How in the world can NB make progress when this attitude prevails? I am appalled! Please take the above comment down, David, for fear that a representative of a foreign investment company reads it and forms an opinion that the whole province’s population are a bunch of uneducated, illiterate, narrow minded, ignorant morons. If I can access it easily from Europe anyone can!

  3. Anonymous says:

    Wow,interesting.Describing exactly the kind of life we all accrue to.
    And all this after studies have shown ,as this comment is showing,that most of us are illeterate from our pacifying education fantasy dream.
    Although you apparently comment here often,it must have left no impression,as there is no recognition.
    Though we notice the Europe reference and that assures us that you are obviously very brilliant (thats what the reference was for ,si?),could you not add a bit of your HUGE knowledge by showing where I made my dumb errors.Having two of my family in the 6 figure bracket running the Data centers for a huge company here has swollen my inability to realize my inability.
    And how can you reply from europe so fast,gee thats fast mail service.Oh yes ,I forgot,one of my family worked in the Data center over their for a few years.He probably set things up smartly!
    I doubt this will get posted so will copy it to a popular EU blog.

  4. Anonymous says:

    Well ok,sometimes I am wrong.

  5. Rob says:

    Cheap energy will never exist without government subsidy. There will always be a market price for electricity. NB Power pays so much for uranium, oil, coal, etc. to generate power. If our government chooses to charge less for this power than it costs to produce, we can “create” lower energy prices.
    The energy hub will not lower energy costs for ordinary consumers, it means more transit fees and taxes for government coffers.

    The key to attracting data centres is not electricity, it’s bandwidth. The Mohawks outside Montreal have access to a major data backbone, and have turned their reserve into a major hub for online poker.

    Meanwhile, people 10km outside Fredericton don’t have access to high speed Internet. We can’t expect to attract major data centres without significant infrastructure investment.