In the early 1990s, then Premier of New Brunswick Frank McKenna struck a partnership with NBTel (now Aliant) to attract call centres to the province. Each party contributed financial support and human resources to the initiative. The partnership was highly successful and resulted in the creation of over 10,000 new jobs in the province. This partnership, however; peetered out after the change in government in 1999 and the number of new company investments in New Brunswick in this sector have plummeted.
While I believe that economic development (i.e. community efforts to attract investment, increase trade or upgrade infrastructure) is primarily the role of local, provincial and federal governments (as representatives of the community as a whole), there are definitely cases in which the private sector should be directly involved (financially and otherwise) in the process.
For example, in the case of NBTel, they had a strong financial incentive to partner on the call centre attraction initiative. At the peak of the initiative, NBTel was generating at least $50 million in high margin revenue that it wouldn’t have otherwise had. This new business was definitely worth the limited investment made by NBTel.
I think that we need to look at specific partnerships like this for specific sector development strategies. There are many companies that benefit directly from economic development activities and should be involved.
Earlier this week, the government of Newfoundland and Labrador announced a partnership with Aliant to attract new Information and Communications Technology (ICT) companies to the province. Called Nearshore Atlantic, the initiative will involve a business attraction strategy to attract non NL based companies into the province to conduct software related work for international markets. This partnership, if successful, will generate financial benefits for both parties (tax base for the province and clients for Aliant).
Once again, this is another case of someone else emulating what has been previously done successfully in New Brunswick. It’s too bad we no longer see the value in these types of initiatives. Congratulations to the government in Newfoundland for seeing the value in this type of partnership.