Savoie dissects Nova Scotia

Donald Savoie’s new report on the future of economic development (and other things) in Nova Scotia is out.  He is not recommending consolidation as some had suggested of the various organizations (NSBI, ERD, Innovacorp, etc.) but it does seem he is pushing the need for more integration of service delivery.

I only read it quickly but he wants to strengthen NSBI with a greater trade development and is calling for a more streamlined process for company support projects.  He also seems to want NSBI to work more closely with these allied organizations.

He is pushing for a more aggressive R&D tax incentive regime and cutting the capital tax.

He thinks the R&D focus should be primarily on the sectors with the greatest opportunity.  Sound familiar?

He says “The provincial government should invest the necessary resources with the Atlantic Canada Opportunities Agency to assess properly the performance of the RDAs”.  I think this is key.  There is way to much moaning and complaining about the ineffectiveness of RDAs in both Nova Scotia and New Brunswick.   Let’s figure out once and for all what is the most effective role for local RDAs.  Are they are bookshelf for provincial and federal funding programs as some have suggested?  Or are they a highly valuable development team providing services that grow key sectors of the local economy?

I think his point that it doesn’t require new money and there may actually be savings is a good one.  He claims $500 million is spent on economic development each year in Nova Scotia.  That seems high to me but I know from my own research that the amount of money – for specific economic development – isn’t the problem in either NS or NB.   I do think we could see more provincial spending on activities that influence economic development (like R&D) but the direct spending is large and maybe could be cut. 

In New Brunswick, there are something like 600 people employed for economic development organizations such as BNB, Enterprise Agencies, ACOA, Industry Canada, NRC, etc.  That’s more than enough  – the real issue is effectiveness.

I think Savoie missed the boat by not recommending better measurement of results.   NSBI has done some interesting things in this area and is probably one of the better organizations for measuring results.  Others are far worse.  New Brunswick’s reporting and measuring of economic development is vague at best.

In the end, I would have liked to have seen Savoie delve more into the FDI piece.  He seems to have accepted this as for granted – he isn’t against it and repeats on several occassions the important role of NSBI in this area – but he doesn’t develop it in much detail while there are pages and pages on how to foster more entrepreneurship.

I think he touches on the issue that I have been focused on in recent years – aligning economic development on a sector or cluster basis.  There is quite a bit of language in there about stratetgic growth sectors.    The truth is that a lot of government bureaucrats don’t want to talk about focusing on key sectors (except in a broad, almost marketing sense) because they think that will dissaude investment in other sectors.  I disagree.

Economic development in the Maritimes is now more important than ever.  While Savoie looks at the world through a public policy lense, his addition here is valid and should be implemented in large measure by Nova Scotia.

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2 Responses to Savoie dissects Nova Scotia

  1. richard says:

    A few other points made by Savoie:
    – NS has a lower proportion of firms exporting products and services than the Cdn average. I wonder what the comparable figure is for NB?
    – Encourage high-value and high-wage jobs by encouraging those firms that create those kind of jobs. This is, in part, because the NS pop is expected to decline, so you need higher incomes to provide the tax revenue to fund public programmes. Many of those high-value jobs are linked to R&D.
    – See Halifax as a good thing for the rest of the province, not as a drain or competitor for other regions. That is something applicable to the Maritmes as a whole.

    As to the coordinating/streaming of ED orgs; good idea, but it will require a lot of work and focus by someone to get that done. The ‘single service desk’ approach makes sense but can the various orgs involved work together well-enough to make that happen?

  2. NB has a very low percentage of exporting firms. I don’t have the hard data on this now but close to 95% of the value of all exports can be tied to a couple of dozen firms (55% from one company).

    There are still significant silos in New Brunswick economic development efforts.

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