ACOA: the midwife to a new Atlantic economy?

You can’t deny the TJ editorial writers the occasional rhetorical flourish.   There is a good editorial today that ends with the phrase:

With a shift in policy, ACOA could become the midwife to a new Atlantic economy – one fuelled by entrepreneurialism and innovation. That is its mandate, and the objective matters more today than it ever has.

I still think that those two words ‘entrepreneurialism’ and ‘innovation’ have been the target of ACOA for over 20 years (check that, innovation just became a high priority a few years ago with the launch of the AIF).

But I still think the issue is our collective need for more business investment (in non-local sectors) to fuel job creation and economic growth.  Limited ACOA’s scope to entrepreneurialism and innovation (which in ACOA’s case means innovation among the region’s entrepreneurs) ignores the reality that the Atlantic economy – particularly the New Brunswick economy – hasn’t shown the capacity to generate enough new business investment to sustain itself.

I think we need a broader strategy that focuses on key sectors and promotes growth in those sectors near, far and wide.  I am not talking about only focusing on national and international firms – far from it.  Any efforts should be open to one and all.

But the more I think this through, the more I think that ACOA should be transformed into an IPA (investment promotion agency) for the Atl. region or at least 33/33/33 – 33% IPA, 33% trade development and 33% entrepreneurship fostering (incl. R&D support). 

I think this hope that local entrepreneurs are going to come out of the woodwork and save the economy is a false dream.  It has been ACOA’s mandate since 1987 – just about the time the region’s population started to stagnate and fall into decline. 

I’m not blaming ACOA for the region’s population decline.  I think there are many success stories that were supported by ACOA and I think those that deny this just should look around.   But it hasn’t been nearly enough and I think at some point we have to come to the realization that we can’t get to a prosperous and dynamic economy only through efforts to grow local firms.

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7 Responses to ACOA: the midwife to a new Atlantic economy?

  1. Anonymous says:

    The five companies were all aquaculture companies!
    For one million dollars!!!

    Lets hear the whole story,cause this is NB and there a lot more behind this!

    OK ,I can’t stop myself from one snider.And truth

    All five are located in English New Brunswick ?

    Just in comparison, $12,000,000 in Liquor sales was lost to Quebec !
    60,000,000 dollars was lost to case unpopulaire !

    And not by these 5 English companies who have not yet paid back $1,000,000 ?

    ACOA Provides Money for Several Companies in Province
    January 23, 2009

    12 million dollars from ACOA has been pumped into 5 research and development projects in this province. The Minister of State for the Atlantic Canada Opportunities Agency Keith Ashfield made the announcement, under ACOA’s Atlantic Innovation Fund. The projects involve Camouflage Software Inc., Memorial University, Oceanic Consulting Corporation, Wabush Mines and Compusult. Compusult’s Paul Mitten, says it’s a fantastic opportunity for the company. Mitten says the money will be used for their Geospatial Open Platform Sensorweb project.

    Man!

  2. mikel says:

    And 80 million was ‘lost’ to Atlantic Yarns, which pretty much paints a dismal picture of ANY ‘specific’ industrial investments. But ‘investment promotion’? What does that even mean? Does anybody EVER do any case studies on companies that recieve funding? Either failed ones or successful ones? Does FatKat get ACOA funding? We all know business is a risky business, so what exactly is being discussed here? From my looking at ACOA funding it is VERY limited in R&D funding. So take the example here of the Perimeter Institute. WHile there is no ‘ACOA’ here, the facility recieves local grants, university grants, provincial funding and federal funding-as well as private funding (I think you can donate online now). What facilities like that has ACOA EVER funded? I’d disagree with David a bit, lots of their investments have almost ZERO to do with business investment. In the north much of it is bridges, roads and dams.

    What would be interesting is knowing what businesses are NOT funded. It could be like the Fredericton film Co-Op, where virtually every (few) proposal is scrutinized but everybody knows they’ll get funding anyway. About ten years ago that dried up, I can remember going into their office once and being told that they don’t invest money in business AT ALL, that they were just their ‘to help administer’.

    The paper asks a good question. Let’s forget David’s suggestion if only because its not going to happen anyway (in fact CAN”T happen). We live in a knowledge based economy. For 20 years the OECD has said Canada needs to step up research and development funding. Services, meaning ‘knowledge’ have outstripped ‘products’ as the main export.

    Yet you live in a province that has one of the highest illiteracy rates in the northwestern hemisphere. A province that has the LOWEST funding for education in Canada as a percentage of its budget. Is basicallly handing over its education department to Microsoft and the private sector. In my mind whether ACOA should be investing in education isn’t even a serious question, how can it NOT, and still be taken seriously as an economic investment vehicle.

  3. Mike you tend to do your research. You should know that the bulk of the money given to the textile firms was to keep bailing it out. I am opposed to bailing out companies with bad business models. We need R&D but the north needs good jobs. Education won’t matter if there is no one there to educate.

  4. Anonymous says:

    If we continue to politicize economic development with north-south, english-french, rural-urban etc issues, we will continue to get poor results.

    New Brunswick has the population the size of a city suburb. Let’s act our size. There is no room for divisions and no room for elaborate buraucracy.

    We need to target business development where business can be profitable. Forget our own divisions; if it is in NB it is good for NB.

  5. Anonymous says:

    Aquaculture is an excellent example of the power of focus on ED sectors that have logical relevance to New Brunswick. Aquaculture can flourish because of the flushing action of the highest tides in the world. Supporting the sector has helped to develop a global powerhouse (Cooke Aquaculture) who is investing in international aquasitions. There is talk on this blog of developing more McCains, more Irvings, more Ganongs; well ACOA may have helped to develop the first new one in decades.

    ACOA is in place, at least partly, to invest where there is promise but traditional financing sources are not quite ready. There needs to be diligence but there is risk. There will be failures. Otherwise, we might as well abolish ACOA and try our luck with banks and venture capitalists; this works in well developed economies but not one that has been in decline for decades.

    Regarding the yarn factory, the question we should be asking (and should have asked) is why can this textile operation be profitable in New Brunswick? Are they using fibers from our forestry sector? Are they benefiting from proximity to suppliers and/or customers? Are transportation costs lower? Are energy costs lower? What is the competitive advantage that will allow the company to be profitable? It does not appear obvious. There either was something (currently mysterous) that someone beleived in else this was merely a poorly executed attempt of political economic development.

  6. Anonymous says:

    Who was NB’s former Minister of Aquaculture.
    And questions are answered.

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