There’s a great story in the TJ today about a new report on the State of Maine and its economic development efforts. Someone posted much of it in a comment to a previous post here but I like to limit my cutting and pasting. The full report is here. What is interesting is the addition of Nova Scotia and New Brunswick as benchmarks when comparing to Maine. It is difficult to truly compare U.S. and Canadian jurisdictions because of a) currency issues and b) differing methodologies around the calculation of job creation, unemployment rates, university graduates, etc. But it is helpful nevertheless as long as you view the numbers with caution. For example, the consultant looks at personal income per capita over a seven year period and concludes New Brunswick is last among the peer group. That is correct – technically – but again how much of that is due to currency fluctuations versus underlying economic strength? They used 86 cent dollars. Just a couple of years ago we were at par which would have pushed NB’s per capita income to just under the median.
Other points of interest:
1. The report cost $150,000. Where do I sign up? It’s good work if you can get it
2. I firmly believe that ED agencies should go through a thorough benchmarking exercise at least once every five years. This should be done by an external consultant that is unbiased. It should look at results versus effort but also more broadly at incentive tools, marketing efforts, etc. A few years ago I did this type of review and found that most of the successful jursidictions – even smaller ones like NB – have international offices for trade and investment promotion. New Brunswick still does not.
3. The report compared new business start up data and found New Brunswick looked strong in this area. But that is not a good measurement. It is a good measurement when correlated to specific efforts of an ED agency (i.e. how many companies were brought in) but not economy-wide. The number of businesses have actually declined in New Brunswick from 2003 to 2008 – down strongly something like 3.9% according to Statistics Canada data. So start ups need to be shown against business exits to be relevant.
At the end of the day economic development has two measurements: 1) the success or failure of specific ED agencies and 2) the overall success in the economy. You can theoretically have an ED agency meet its objectives but the economy overall continue to struggle and you have have a lame duck ED agency but the economy boom anyway. It’s important not to blur the lines here.
Let’s take ACOA for a minute. It’s roundly criticized by folks but the people I have worked with in the past are professional and motivated. Not that long ago the agency published its 5 year report to parliament and it was filled with great data – tens of thousands of jobs created, hundreds of millions in exports supported, GDP growth all as a result of ACOA.
But the region – all four province’s combined – can’t even generate enough jobs to keep the population we have let alone grow the population. So is ACOA working? Maybe it is but if its mandate is to support an economic transformation in the region it is not working prima facie. Maybe it’s time to rethink the role of a regional ED agency because we are not seeing the kind of transformation that was envisioned (I assume) when it was set up back in the 1980s.