The importance of small business: Part 23

I have been saying for awhile now that the most important role of small business in a local economy is to foster competitive and dynamic local industries.     Professional services is an excellent example of this.  If a place like Fredericton or Moncton only had one or two architectural firms, over time the lack of competition could lead to higher prices, lower service and less innovation.  A healthy mix of large and small firms creates a competitive environment and consumers/residents end up better off.

Statistics Canada tells us that New Brunswick architectural firms have consistently higher operating profit margins (as an industry) than Canada as a whole.  This could mean there isn’t enough competition in that space.  It’s also interesting that the architectural services sector only generates about half the revenue per capita as Canada as a whole.  This most likely points to a few things such as the weaker overall economy and the unwillingness of firms/individuals to pay more for value added architectural work (such as green buildings).

I am talking mainly to local economic developers on this one.  It would be interesting to do a complete review of the local industrial mix to see where there are gaps/weaknesses/higher than average profits/lower than average profits, etc.   It may make sense for a local economic development agency to try and attract architectural firms in a situation where there was clearly not enough local competition.

 

 

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One Response to The importance of small business: Part 23

  1. Free press says:

    http://www.winnipegfreepress.com/business/breakingnews/domtar-sells-idled-lebel-sur-quevillon-que-mill-to-fortress-paper-for-1-138418814.html

    We have to get our news from manitoba!

    FREDERICTON – New Brunswick Premier David Alward says a new panel will help the province prepare for the shifting needs of today’s aging population.

    Alward has announced the creation of five-member panel that will develop a blueprint to guide government spending in services that help seniors live active, healthy lives.

    The panel will be led by John McLaughlin, president emeritus of the University of New Brunswick.

    It will look at the economic and social challenges facing seniors and their communities, while identifying supports seniors say are needed to live independently.

    The Atlantic Institute on Aging is helping with the project, with its blueprint due to be delivered to the premier this summer.

    Jane Barratt of the International Federation on Aging and Pierre LeBouthilier, former head of the Beausejour Regional Health Authority, are among the other panellists.

    More of alwards friends get big money to show how to cut the poorest.

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