People have been asking me how I would recommend going about the process of selecting targeted sectors to focus on and build up a strong value proposition. I was thinking we could adapt some of the old BCG modelling from the 1980s. Take this chart I put together as a fictitious example. In this idea, we would developa methodology for assessing sectors with growth potential (x axis) against the economic value (y axis). Growth potential would be developed using a variety of metrics and economic value would be tied to things like high wages, high economic multiplier, etc.
So, in my theoretical model here (back of the napkin stuff), you would protect sectors that have high economic value but limited growth potential. By protect, I don’t mean throw massive subsidies – by putting them into this quadrant we are saying they have high economic value. The bottom left quadrant would be harvest – meaning don’t particularly invest a lot of new effort because there is limited growth potential and the economic benefits per dollar of investment are low.
For fast growing sectors (high growth potential) but limited economic value, I would say you invest strategically – only when it makes sense. For the sectors in the upper right quadrant, you invest heavily. Invest heavily, again, doesn’t necessarily mean subsidies but it means investing in developing the workforce, R&D, infrastructure, tax incentives, business recruitment, people recruitment, etc. that will animate these sectors into high growth/high value for the province.
Work in Progress.