Go east, young grads

After a myriad of Atlantic Canada bashing stories, the National Post is actually running a positive one this morning. I can’t give you a link because it is ‘paid content’ but here are some excerpts:

“We’ve been led to believe everyone is leaving,” Mr. Van Poelgeest [Boston Pizza] says. “But that’s not the case.” According to the 2001 Census (the most recent stats available) Halifax, Fredericton and Moncton are growing, retaining, repatriating and attracting more people who are living quite well.

Perhaps one of the biggest success stories in the region is Fredericton, N.B., which has a population of 47,560. Growing since the late 1980s, the city has taken off in the past five years. Last year, housing starts were 40% above the record set the previous year, and the city is tracking ahead of that this year. There is one million sq. ft. of new retail space in construction, and the city’s high tech companies are looking for top talent.

Fredericton boasts more businesses per capita than any other city in Canada and is home to more than 70% of the province’s knowledge-based businesses making it a hotbed for innovation, particularly in the areas of engineering, computer science, software testing and e-learning. In 2003, the city launched the first free wireless network in North America— the Fred-eZone.

“There is this perception in the rest of Canada that somehow Fredericton is a locational disadvantage,” says Nancy Mathis, president and chief executive of Mathis Instruments. “That’s simply not true — and our U.S. clients certainly don’t think so.” Mrs. Mathis and her husband came to Fredericton in 1990 to complete their graduate work in engineering and ended up launching their company, which manufactures sensors used by pharmaceutical companies to profile what’s happening during the manufacture of specific pharmaceutical products.

A few points:

1) Fredericton, hands down, has been the most successful city in New Brunswick in the past 2-3 years at getting the media outside NB to talk about it – mainly pivoted around its eZone. This was the best few thousand dollars the city ever spent, in my opinion. I have tracked at least a dozen stories – national, regional and in trade pubs about that eZone.

2) Is the growth of Fredericton, Moncton and Halifax a sign things are ‘improving’ in the Maritimes or just a consolidation of economic activity? Because the overall Maritime population is dropping and because the whole region is growing more and more dependant on Equalization, I would suggest this is a short term consolidation of economic activity. APEC is pushing for ‘urbanization’ in Atlantic Canada but I think we need a more nuanced understanding of the issuse.

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0 Responses to Go east, young grads

  1. Cooker Boy says:

    I would like to know 2 things:

    1) What age demographic is moving into these regions.

    2) Where are most of them coming from?

    I have a hypothesis that most are just moving from rural to urban settings. That being said, at least they are finding work.

  2. Anonymous says:

    I don’t think a more nuanced view is needed, simply a reading of this web site. The stats are pretty well stacked up. Of course the Post has to post at least one story like this to ‘be objective’.

    As for the e-zone, if there are lots of companies taking advantage of it I don’t know where they are. It’s primarily for the benefits of bureaucrats who can now surf the web on their lunch break.

    Fredericton’s downtown, like most downtowns, is dying and there are empty buildings all over the place. New companies are setting up in the newly opened up areas at the ‘top of the hill’.

    Most government towns do fairly well because companies know that that is where the pork is. Actually, I’d say they do quite poorly considering the government connection. How often Mathis staff goes to their customers is the big question. If you are visiting all your clients, then obviously they don’t care where you are. When its vice versa then its a different story. I don’t remember frederictons airport having that many connections. Of course business people are now well used to the inconveniences of flight travel.

    It’s hardly a big plus that a province is emptying out its rural areas to feed its cities, and its not a good sign, although we can note that it is a worldwide phenomena.

    But that’s usually the way PR pieces work, and thats where the more ‘nuanced’ look is necessary. For example, the feature will include a story with one overriding accomplishment, such as the e-zone as its ‘central example’. This although there is ZERO evidence that it actually does anything for business. Being first with a dumb idea is not a big plus. Other cities were at work on theirs, and many are now fuctional but they don’t pretend it has anything to do with economic development but usually because its cheaper for libraries.

    Then there is the ‘feature example’ to prove things are wonderful, in this case pointing out the “Mathis Instruments” example which is mentioned in just about every freaking economic story on Fredericton. By know the story should read “Mathis instruments…well, you know”

    When we start hearing some OTHER examples and other companies people may get impressed. But company reps can easily read between the lines when the same examples keep getting touted over and over again.

    If you look, I think fatkat in Miramichi employs FAR more people than Mathis, and I’m not sure but I don’t even think they are tied to the corporate pogey tail.

  3. Geeks on Ice says:

    Mathis and Fatkat are 2 completely different business models. Mathis is an R&D firm that sells the technology they build to other companies. They do not want to be the “sales/marketing/client services” operation. If you ever have the chance to see Nancy speak, take the opportunity. She’s a very dynamic personality.

    Fatkat is creating and selling their product. They also play an outsourcing role. Animation is really a hot market right now and NB has tremendous talent in that area.

  4. Reg says:

    Mathis is the success story that isn’t. Everyone involved from the funding side has been quietly looking for an easy way out for years now. It’s the R&D success story UNB and the city have come to depend on for selling themselves but it doesn’t make any money.

  5. Geeksonice says:

    It is a success story for UNB’s incubator program. Mathis’s goal is not regional economic development. Their goal is to create innovative technology and find a buyer that will be able to implement it and sell it. I do know that they have had success in the pharma vertical and are looking for other uses of their sensor technology.

    I’m not close to the situation, but I haven’t heard the above point. That being said, R&D firms are always looking for funding and it is a risky venture, but with great risk comes great reward.

    I met Nancy last December and was impressed with her entrepreneurial spirit and dedication to innovation. I think we need more incubator programs in this province that provide our University students an opportunity to put their thesis into practice. We have brilliant minds in NB, they just need an environment that fosters innovation.

    A healthy business environement and startup money is always good!

  6. David Campbell says:

    Ouch. Without knowing the specifics of Mathis, I have always wondered why the attrition rate among NB IT firms is so high. And I am not talking about the mini ones. I’m talking about LearnStream, BKM, e-Com, Romulin/Cyberdesign, JOT, others. Is it a scale issue? Is it marketing? Is it the underlying business model? I know that there are differences among all those firms but ultimately, I think for most of them, the goal should be to be bought out by a national player that will give them some scope and financial stability. Look at SkillSoft in Freddy Beach. That came about after the purchase of a small Fred.-based firm. We’ve become so scared of ‘foreign ownership’ that it’s not even on the table as a viable alternative (from the gov’s perspective) but I think it should be even though ‘anonymous’ is going to scream.

  7. Geeks on Ice says:

    I agree with you David and I have concluded that the biggest issue facing IT firms in our region is our lack of sales and marketing expertise.

    For example, a new startup In Sussex has a really cool technology that could help accelerate quoting for new business. Due to the nature of the Insurance industry to provide a quick turnaround for quotes to make them competitive, they decide to target that market.

    Here’s the issue, no one at the startup has working knowledge of the insurance industry, thus they spend a lot of time trying to figure out the right message to get their foot into the door. IT people have a really bad habit of talking techno bable to business groups in meetings. This often leads to the key(CFO, CEO) decision makers, non-technical, being frustrated by the sales process. Due to a limited base of sales/marketing profesionals for the US and Canadian insurance market in our region, the company should look at larger markets(NY, Conn, TO, NJ) to fill the void.

    These profesionals can then use their existing rolodex contacts in the industry as well as their knowledge to propel the organization into a key market player.

    Remember most IT people study technology, not business skills like marketing and sales. In our global economy there’s no reason why we soudn’t look for outside help. We cannot be to proud to ask.

    You can build a better mouse trap but if you do not tell anyone they will not sell!

  8. Geeksonice says:

    I might add that in our case we identified our lack of expertise and bought a Ontario based organization that helped us fill the gap. How’s that for FDI! 😉

  9. Anonymous says:

    Business really is quite simple:

    1. Make a product
    2. Sell a product

    Thats it. The reality is that if you have a company that doesn’t do BOTH of those things your in big trouble.

    If you can’t do it, as the above points out, then either sell your company to somebody who can (and I’m not about to yell about that because its a free country-I certainly don’t think they should HAVE to, for the same reason)or bring in somebody who can, like the geek above says.

    Some companies are very good at one thing, others are very good at another. Some companies are very good at doing research in areas that look cool, but in a market driven economy, if it doesn’t provide product you are out of luck.

    There are many ‘flashy talkers’ who really motivate people, but as any salesperson will tell you, ‘flash doesn’t get a signature’. In the end, its ALWAYS about just that-getting a signature making the sale.

    ANY company that is being ponied up by government has something wrong with it. THAT needs to be looked at. I have no problem when research is paid by government, in fact most of it always has been, my problem is when it is simply given away to the private sector to make even more money by charging us again for something taxpayers paid for.

    A company like Mathis might be a great place to train students and thats great, that SHOULD get investment by government. But call a spade a spade. If the thought is that New brunswickers are so stupid they can’t understand the basic 1-2 model above, that’s a pretty in depth debate that needs to be had and proven before ‘solutions’ are provided.

    Another question that could be asked is whether everything is being done for those companies that are already set up in the area. Hell, you hear so little about them that you can’t even invest in those companies who are hiring New Brunswickers.

    That’s another plug for that New Brunswick television station. Perhaps if all these questions got out there, solutions could actually be found. Right now, nobody hears about them very often.

  10. David Campbell says:

    Cooker Boy, that’s a bloggable post if I ever saw one.

  11. Geeksonice says:

    ” If the thought is that New brunswickers are so stupid they can’t understand the basic 1-2 model above..”

    Just for clarification, I wasn’t saying we are incapable to make and sell a product on our own. But, the area where most start up’s have trouble is in becoming domain experts. It’s a hurdle we have compared to bigger IT markets.

    In our case, we hired domain experts from outside NB. Employees made an effort to learn from these “mentors” so we could someday be self sufficient. In the end we did, but could forsee a huge demand for our product so had to take the neccessary measures to “acquire” the experience we needed to fill the gap.

    I guess my point is this, you can not be afraid to say you don’t know and seek out expertise that will make you profitable. On the flip side, we need to make our education system provide graduates the cross-professional base needed to compete in today’s marketplace. I beleive it will be essential in the future that IT engineers know how to turn terms like Java or .Net, into language like ROI and market share.

    You are right flash doesn’t lead to a sale, but value does. If you demonstrate a bigger value to your prospect then your competitor, you will always win. Can you tell I’m in sales? 😉 But try building value when you have zero customers and no domain expertise…it’s pretty hard and costly.

  12. Cooker Boy says:

    WHOO HOOO 2 for 2!

  13. Anonymous says:

    There is nothing stopping anybody from becoming domain experts in their particular field, the internet is vast, and the information is there. That’s not a shot at the post above, quite obviously if you don’t know how to do something then nobody is ever going to fault you from getting help from wherever you choose-unless the government is paying for it and the info can be found locally.

    There is a danger though in extrapolating industry wide recommendations based on one person or groups experience. This isn’t a site for solving every IT company’s internal problems, or anybody’s in fact, but if solutions are recommended then a LOT of information is required beforehand.

    There is a whole different set of issues in developing local companies vs being a branch plant of a national or international company. As David says, in some cases that might be the best way to go, to sell to a company that can maximize the local profit potential-but there’s a lot of variables involved before admitting that thats what EVERY or even MOST companies ‘should’ do.

    Every large company started off small somewhere, and one thing that has been proven is that a good many companies stick close to the place they know. National company’s don’t feel that loyalty, so something that may seem like a good idea today, won’t be when the company hits a snag in ten years and either blackmails the government into largesse, or else just leaves.

    PS it would be nice to know if you are going to blog that story because the end of the link is cut off.

  14. Geeks on Ice says:

    Dear Anon,

    I should have stated in my post it is based on personal experiences. While I do not categorize myself as an expert in economic development, I do know many individuals from the IT industry who have expressed these issues to me.

    Nowhere in my post do I demand policy be shaped by my personal beleif nor do I ask you to accept it has absolute thruth. You are right when you state: “There is nothing stopping anybody from becoming domain experts in their particular field, the internet is vast, and the information is there.”. However, companies who buy your product want to know that you have done it before or at the very least, have ressources that have domaine expertise and that expertise is not acquired by Googleing your market.

  15. David Campbell says:

    Keep posting, Geeker, I think you stuff adds value.

  16. Geeks on Ice says:

    Thanks, I will try to add when I have something I can contribute. Keep up the good work, you blog is the first thing I read in the AM’s now.

  17. Anonymous says:

    Mathis Instruments is now closed. After spending $15M+, their landlord and financial backers pulled the plug. Another PHD come business person trying to show the world they know better. Good effort but R&D efforts have to evolve into sales efforts.