It's The Economy, Stupid

This is a good thing, on a number of levels. First there is considerable IT heft in Saint John and to have a provincial IT initiative led out of that city makes sense. Second, we need a provincial initiative.

Read the PropelICT strategic plan here.

It’s pretty good stuff but it would go a long way in my books if this organization would at least recognize the importance of both IT company incubation and attracting a few key anchor IT firms from away. They do mention in this strategy “attracting and growing IT firms”. Here are the three elements of the purpose strategy:

To develop the necessary community based infrastructure (Ideas, People, Capital) to expandentrepreneurship, innovation and economic activity in the sector.

To influence government to adopt policy and practices that will foster growth of the sector,especially through business start-ups.

I think it is clear that the province has spent far more money and time trying to grow ICT firms than it has trying to attract ICT firms. How many national or multinational ICT firms has the province attracted here (not including a couple that came for government contracts)? Not many. Any? Probably a couple but I can’t think right off the top. As for supporting startups I can name you 50 without even thinking from Learnstream, Provinent, ContentAlive, JOT, Ithinkinteractive, Romunlin, Ecom, EHub, BKM Training I’ll stop here but you get the point. You will also notice they are all out of business.

I would like the ICT industry in New Brunswick to have a look at successful ICT ecosystems elsewhere and really understand the linkages between big and small ICT firms, education, association and government. It can be a highly complex ecosystem and the first step towards building a cluster is understanding this reality. For example, most successful small ICT firms never grow big alone – they are almost always bought by a larger firm or at least injected with equity from a large partner. The nature of ICT is that if companies want to expand beyond small local contracts, they need serious equity beyond short term cash flow.

But I have talked about this at great length before. For now, I wish PropelICT all the success in the world.

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One of the oldest tricks in the advertising biz is to develop ads that are so interesting and innovative that you get a pile of media coverage thus doubling or more the impact of the advertising.

The other thing about Nova Scotia is that they are becoming quite creative in their advertising.

And that buys them a full story in the LA Times.

This is kind of my mantra. If you don’t have anything, make something up.

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I love it when the media talks about a new “Marshall Plan” or “Bretton Woods” plan to address the current global financial crisis. Not to be outmanoeuvered, some are calling for Green Marshall Plan.

It’s funny but I actually like these efforts and this thinking but I would put it in the context of New Brunswick. Imagine if we did a Fed/Prov Bretton Woods type conference on the future of New Brunswick but we invited the Feds as a full partner, a few large industrial tycoons and even reps from other other provinces.

Develop a 30 year Marshall Plan – heck, let’s call it the McKenna Plan – that involves serious investment (not just tweaks), serious regulatory/legislative changes (not just tweaks), serious ramping up of ED efforts (not just tweaks) and serious targets and milestones.

Then, in 30 years, when NB is a thriving, have province that is one of the leading regions in North America for economic growth and has a number of leading 21st Century clusters in place, we can refer to the “McKenna Plan” when discussing other provinces or states that want to rise up.

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The TJ has an editorial quite critical of SJ leadership this a.m. and it uses the dreaded comparison to Moncton and Fredericton to make its point.

It’s been a good year for Moncton and Fredericton. In March, these municipalities were ranked the No. 1 and No. 2 most cost-competitive cities in northeastern North America. This week, they were listed among the 21 smartest communities worldwide. Saint John did not place on either list – and the responsibility lies with local political leadership.

Now I am all for challenging local council to be more proactive in the area of economic development and fully funding and supporting Enterprise Saint John (as well as having an internal ED officer). But these two specific points are a bit misleading.

First, the KPMG report is paid advertising. You pay to have your city included. I have to admit that I don’t know why SJ was not it but that study is not completely unbiased or neutral. You pay to get in and if you like your ranking you push it for all its worth.

Second, the Intelligent Communities Foundation program is similar in that the community has to submit its case for its intelligence. There were 400 submissions this year and Moncton and Fredericton should be congratulated for making the list of 21. But there are dozens of awards that a city can aspire to – even in the area of economic development – EDAC awards, IEDC awards, ICF awards and yes even Communities in Bloom. Cities need to be strategic and selected about which awards they target.

Saint John, for example, might be better off putting its energies into joining this group – The World Energy Cities Partnership.

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Well, this will be fun. Fredericton and Moncton vying to be the world’s most intelligent community.

Both communities made the short list of 21 Intelligent communities.

Congratulations.

I’ll be curious to see how they get to the short list of seven but I will say this. They talk about a “culture of use”. Moncton’s use of telecommunications and IT to power economic development has been impressive over the past 20 years. In 1985, no one would have thought that Moncton would have 5,000 people working in the call centre biz and the largest IT workforce in New Brunswick.

That’s not to take away from Freddy Beach. The Capital city is one of the smartest cities in Canada (as measured by percentage of the population with a unversity degree). But Freddy didn’t have to transform the way Moncton did.

The reality is that Saint John has a similar story of transformation as well. Not that long ago I did a little review of the changing labour force structure in the big three cities and SJ had an almost 300% increase in its IT workforce over 10 years, Moncton had something like a 270% increase and Freddy only 70%. Now, of course, Freddy had far more IT workers in 1996 than either Moncton or SJ but now both SJ and Moncton have more – by a margin (although as a percentage of the labour force Freddy still has the highest percentage of the three).

So all three can make a case – I guess it’s up to the respective City Hall’s to make their case – now it’s about marketing.

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I think the first time I started to seriously think that data centres might be an interesting ED opportunity for NB was over three years ago. Now, it is now a mainstream economic development opportunity and I get multiple stories every week about a new data centre campus, a new way to power data centres, etc.

This notion of a data centre park is a good one providing you have competitive electricity rates. Basically, you go out and recruit a data centre company (the ones that host other people’s data) and build a little cluster around them and their recruitment efforts.

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It’s a bit strange but I have five emails in my inbox suggesting that Keith Ashfield getting the ACOA portfolio would be great news for New Brunswick. The kind of legacy that McGuire left in PEI, one said.

Maybe. But I would be more concerned that Ashfield will be presiding over the slow unwinding of ACOA.

Tony Clement gets the Industry Canada portfolio and all the pundits I heard today say it is so that he can come up with the bailout packages for Ontario’s manufacturing sector. That will be the ED focus out of Ottawa for the forseeable future.

Dont’ get me wrong. I would love to see a rejuvinated ACOA with a strong mandate to support the attraction of industry and foster serious business investment in the region.

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I saw on Tuesday as Frank McKenna was announcing he wouldn’t run to lead the Libs, the other less known Premier, Bernard Lord, was announced as the new president of the Canadian wireless industry association.

I was more confused about Bernie’s move than Frank’s. McKenna is living the life right now – jetting around, making good dough, executive homes in Rosedale and New Brunswick and a brand image larger than life. Why subject yourself to that rough and tumble world of politics? I had hoped he would, but I understand why not.

Now, Bernie’s move – that I don’t understand. Running an industry association is a job – maybe a well paid job – but just a job. He will get neither rich (i.e. Frank’s way) no will he advance his political ambition. He will become just another lobbyist writing reports and workin’ 9-5. It seemed to me the whole lawyer, power broker, deal maker, etc. was a far more impressive way to proceed if politics is in the future. And it seemed from his public persona, bilingual commission, national co-chair of the Conservative campaign, etc. that he was angling for either more time in politics or some senior government appointment (ambassador, etc.).

Why take a ‘job’? And if he wanted a job, why not running ACOA or some other plum federal job from his buddy Steve?

Strange.

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I just heard Finance Minister Jim Flaherty say that the Equalization program as currently structured is unsustainable. The New Brunswick government has relied on tens of millions more each year in Equalization and it is now the single largest source of revenue the province takes in.

The interesting thing is that the program was enriched by Harper when he first got in to appease Quebec. I would be curious to see if this is Harper firing a shot over the bow of Quebeckers so to speak. The Harper giveth. The Harper taketh away. Because any major changes to equalization will be most acutely felt in Quebec because it gets the most (on a dollar basis).

The reality is the Graham, McGuire et. al. were right back in 2006 when they framed the debate about self-sufficiency.

However, they have yet to show a pathway to less equalization. The last forecast I saw predicted additional increases every year until at least 2010/2011.

It’s one thing to know what needs to be done. It’s quite another thing to actually do it.

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There’s an X factor in politics. Something that cuts across policies, dogma and ideology. There was something about Frank McKenna that made a few of us (maybe a lot of us) think that New Brunswick could be a leader instead of a laggard. Could be a place that was a magnet for people and investment not a repellant. Could be a place to be proud of not always in defensive mode (sorry if that last one sounds like Michelle Obama but I do spend a fair share of time arguing the case for NB with folks outside the province).

When you deconstruct it was Frank’s time in office transformational? Are we, now 11 years out reaping the benefits of the outstanding policies and legislation that were put in place?

I won’t cover that again except to say that I think a realistic assessment of Frank’s time in office would be mixed. Certainly, his focus on economic development was needed and should have been sustained after his retirement.

But his personal charisma and much of his language (I am not talking about French and English) pointed us in a positive direction. That has, in my opinion, slipped somewhat in recent years.

There are a lot more shrugged shoulders these days. Resignation that we are unlikely to really see much change in the way things are done.

A quick anecdote – maybe illustrative maybe not. For a project I am working on I had to review the industrial park profiles put out for the parks in Nova Scotia. These are provincial documents – professionally done but with some interesting text.

Under the heading “Rail Access” instead of just putting “no”, the profiles (remember these are marketing documents meant to extol the virtues of the industrial parks) state things like “CN stopped offering rail service in 1990s” or “there are no plans to offer rail to this park” and “CN is not planning to put a spur from the main line” and other strangely out of place comments in a marketing brochure. It’s almost like mischievous bureaucrat trying to rub it in that CN tore up the tracks – but sent through the wrong medium. CN is never going to read these industrial park profiles.

It’s a little thing but it points to a broader attitude in this part of the world that stuff can’t really get done here. I hear it all that time. “That can’t happen here.” “‘Why would they want to invest here?” “If I were Microsoft, I wouldn’t put a development studio here.” And these are economic developers and bureaucrats and politicans.

You know what I would say if I was writing these profiles? I would say (particularly about the industrial parks where the CN line passes relatively close to the park) “if you need rail access and you’ve got a good project in mind [like a Michelin plant], we’ll make it happen.” “If I have to go out there and hammer in the spikes myself, we’ll get you a spur line if it is a deal breaker for a $200 million investment.”

That, it seems to me was the essence of Frank McKenna. And that’s what’s missing. And he would have brought that to the national stage.

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