Regional Economic Development: Whither Strategy? Advocacy? Engagement?

At long last, the provincial government has announced its plans for regional economic development in New Brunswick….. sort of.

In fact, the provincial government is doing two things: 1) it is scrapping the Enterprise agencies and 2) it is setting up provincial government offices in 12 locations around the province to “decentralize decision-making for programs and funding for small- and medium-sized businesses”.   To prove the point, the press release goes on to say the government “will offer our business community a quick and easy access to provincial funding programs”.

There will be advisory groups set up that will be charged with “developing a regional, rolling three-year regional economic development plan”, “determining key industry and business sectors on which to focus for expanding investment potential in each region” and “identifying strategies to achieve a prosperous and sustainable local economy.”

It’s no secret that am somewhat uncomfortable with the provincial government developing and owning regional economic development strategies.   I have always preferred a model where local government, business and community leaders develop regional strategies that roll up to support a provincial vision.  There are many economic development functions that are logistically better placed at the provincial level because of scale (we are a small province).  I include here investment attraction, venture capital and other stuff that makes sense to be offered on a provincial (or even regional) basis.

I worry that this new model will lead to even less engagement by local leaders.

At the same time, I have heard from many involved with the changes and privately a lot of them were not happy with the old Enterprise model.  They saw it as lacking vision, accountability and measurement.  They saw the private sector boards of directors as nothing more than rubber stamping work plans and occasionally calling up politicians to gripe about how their region has been unfairly treated.  They also saw the Enterprise agencies as ‘delivering provincial and ACOA programs’ and felt they could do that in house without the overhead.

Effective regional economic development is not ‘delivery of provincial programs’.  That can be done by provincial government employees.

Regional economic development is fundamentally about creating the environment on the ground that fosters more business investment and job creation.    The ‘banking’ services of government is only one small part of that puzzle.

I have said a thousand times that if the government offered zero funding programs for business (there are dozens of different programs now), 80% of economic development work would still need to get done.  Some have suggested that the banking function is just a distraction that crowds out private sector funding.  I don’t go that far but I do see it as only one small piece.  Now we have 12 new offices focused on delivering these ‘programs’.

I will repeat my vision.  It has several elements:

1. ACOA and the Province come up with a joint economic development strategy for the province that includes a clear and reasonable approach to foster new investment and measure that new investment.  It should be aligned with any provincial GDP growth targets.

2.  The ‘sectors’ to be focused on should be those that have a clearly definable opportunity for growth here (I assume there will need to be foundational investments in marketing, infrastructure, training, supply chain).   This could and should include sectors such as mining, oil and gas, regional distribution and any other that has opportunity.

3. The focus on small business needs to be more tightly calibrated to high growth potential entrepreneurs.  If you want to give funding to small businesses with very limited export-based growth potential, you already have the CBDCs in place.  Let them lead in that area.

4. Regional economic development organizations should be primarily focused on building the value proposition for investment in their regions.  If they want to do provincial or federal government program delivery – that is fine – as long as it doesn’t distract from the much more important focus.   Program delivery can just as easily be done  by provincial government employees (at a higher cost, however) as we see under this new model.

5.  International business attraction marketing should be a provincial responsibility but should be tightly aligned to what is going in the regions.  Companies do not set up in ‘provinces’.  They set up in ‘communities’.  80% of the value proposition is local – maybe 10 percent is based on provincial factors and another 10 is based on national government issues such as the financial system, inflation, lack of corruption, etc.

 

In the end, I have been begging them to get on with this.  The Enterprise agencies have been in a holding pattern for several years – even going back into the previous administration.  Now it is done and we need to get on with it.

 

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3 Responses to Regional Economic Development: Whither Strategy? Advocacy? Engagement?

  1. mikel says:

    If you remember, all the work that was done in Sussex by their Enterprise Agency to tout all the wonders of a local industrial development powered by natural gas got them laughed at by the province. I can’t prove it, but I suspect the enterprise agency in McAdam was also part of their pitch for a community forestry development model, and they were similarly told to go to hell by the province.

    So basically if you sit in an office and realize that the MORE work you do, the LESS likely it is to be successful or have ANY impact, then of course there is little incentive to do much.

    In a TINY province like New Brunswick its ludicrous to be talking about this in any case. Heck, MOST MLA’s are sitting there either in caucus or in opposition doing absolutely nothing. Most communities in the province could easily work through them. Go look at provincial investments and you can tell there is VERY little going on in this field. As for ‘regional’, thats a bit of a joke….do they even have ANY money that they hand out? I know people in VERY tiny mom and pop operations who have gotten grants, but EVERYTHING is done through the province. Most aren’t even aware they have a local organization.

    And for local development, pretty much ALL the local community can do for economic development is offer deals on land…maybe golf club membership. EVERYTHING is done through the province. And the free land stuff has to go through local elected officials anyway.

    Its pretty easy to ‘read between the lines’ to know that Alward is hoping to put on a dog and pony show and HOPE for the best. He’s been in for two years and was around LONG before that…does he actually need ‘more studies’ to prepare yet another plan? To be fair, the reality is that with the status quo in place there is VERY little that the province can do. The province has fairly low taxes, will hand out money to any corporation that asks, has no problem destroying the environment, and now, contrary to what the call centre people say, there are tons of workers who would probably work for dirt cheap. An article about the Saint John housing market talks about a woman wanting to downgrade to an apartment now that her husband is an electrician out west.

    I think on this one your rhetoric SHOULD be a little more strident, because it wouldn’t be rhetorical at all. The bottom is literally falling out of New Brunswick and this guy is twiddling his thumbs as if it were six years ago.

  2. Richard Reeleder says:

    “1. ACOA and the Province come up with a joint economic development strategy for the province …..”

    This Gloomy Gus says you’re beaten right there. Under what scenario do you see the current federal or provincial political leaders making real moves in that direction? The federal mindset right now is ‘hands off’. Mr Alward may mean well, but he is mainly focussed on re-election, and has a poor grasp of economic development issues.

    I see nothing but posturing for the next few years – a political holding pattern, while the province continues to slide downhill. Perhaps slowing growth in China will trigger some stimulus spending by the federal Cons. That is about all we can expect in the near-term.

  3. Dave P says:

    @mikel
    Mikel, your comment seems right on to me. I believe one report said this new effort would require some 20 new positions to be filled . . . ?

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