Self delusion

I talked with a young economic developer this week for a couple of hours. He hasn’t been doing economic development that long but he told me that he felt there was a sense of self delusion among many economic developers in the province. He said they start to believe their own marketing shtick. Which, of course, is what I have been saying all along.

The message to the external market – business investors – needs to focus on our strengths and put forward our key attributes. The message interally needs to emphasize our weaknesses and how we can overcome them.

He, and I can’t fault him, wondered about our value proposition for business attraction. He told me that the guys and gals doing investment attraction have the “hardest job” in New Brunswick.

I agree. 15 years ago, we were pitching a lower cost environment than the U.S. and now that advantage is all but eroded due to the rise in the Canadian dollar. We were pitching lots of available labour and that has been dropping as well (although the latest unemployment numbers are up to 9.7% unemloyment). We were pitching low cost power. We were will a lot of projects in an industry we had natural advantages in – namely call centres but we are at the tail end of the call centre boom and desperately seeking new industries where we can be competitive.

He, and I agree with him, said we need to be far more focused on building the infrastructure for New Brunswick to be competitive. On making key investments that will help NB have a competitive advantage in specific sectors.

What is infrastructure when it comes to economic development? Simple. It is investing in whatever will make New Brunswick competitive in specific industry sectors: R&D, people/training, physical infrastructure, etc.

For example. Some people have said to me over the last week that it is outrageous that the Tennessee goverment would give VW tens of millions of dollars to train their workers.

To me that’s a weird way to look at things. The Tennessee government spends hundreds of millions each year on ‘education’ and ‘training’. They invest in primary, secondary and post-secondary education infrastructure. Why? So that the people of Tennessee can have the skills necessary to be successful in the job market. Education is not some abstract concept. It is one of the pieces of the pie needed for people to achieve their social goals and a certain standard of living.

To give VW millions to traing 1,200 workers, in my opinion, is even a far better investment than giving the money directly to educational institutions. That training investment is tied directly to high paying jobs.

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0 Responses to Self delusion

  1. mikel says:

    I’ll occupy my usual position in the middle of the fence. Both views seem perfectly valid. However, writing from ontario gives a different perspective. Thinking an automaker is a great ED vehicle is a touchy one. There is a good reason people don’t like corporate welfare, and I know its not popular here but there ARE other ED models.

    So to bring up NBT’s long assertion, ontario is now paying for the past propping up of its auto market. Ontario communities are going the way of rural NB ones-they are just larger so you don’t hear about it. The local pogey skills training centre just had a barbecue for the 400 people who lost their manufacturing jobs at NCR-it was grim event.

    Looking at ontario shows just what a ‘gamble’ automakers are. Any company that sets up under those conditions will have no trouble packing up.

    That doesn’t mean its good OR bad, it COULD be good, but again, here’s a model-who would you rather invest your tax dollars and training in-companies that have bee in your town for decades but have hit hard times, or a huge MNC that has tons of cash but is looking for the best bribe? That’s definitely a judgement call.

  2. Harold Jarche says:

    Richard Florida’s research shows that jobs move to the people, not vice versa. The only ec. dev. that will work in a post-industrial economy is to invest in people – not jobs and not corporations.

    The Tennessee strategy was an investment in its people. The Irish tiger was a direct result of investment in public education.

    We have to make NB an attractive place for creative people, by investing in what is important for them, not for economists nor politicians.

  3. mikel says:

    I don’t know anything about Richard Florida, however, NOBODY has research that shows ‘THIS is the case’ in economics. Does EVERY person determine where they will live based on jobs? No doubt SOME will. But there are as many different reasons for where people live as there are people.

    We moved to Waterloo because my wife got a job here, simple as that. Obviously since we are ‘people’, and since this particular job didn’t move to where we were living then Florida is wrong. New Brunswick’s outmigration pretty much proves that. In all of New Brunswick’s history WHEN have jobs moved to people? Canada’s entire history is of people moving to jobs. In fact, the celtic tiger is proof of that, Ireland’s population practically doubled in the last ten years-the people went to where the jobs were. That is starting to change.

    But we should break down what is meant by ‘jobs’. There are resource jobs-and those go to where the resources are. Hewing wood doesn’t take a lot of education, so the people that did those jobs tended to not bother. That of course doesn’t mean they are not ‘creative’. Creativity is decreasingly meaning ‘jobworthy’. I can play a couple of instruments, I can sing badly, I can write songs. But I’m not going to make a living at it. I’m ‘creative’ but not in a ‘make work’ way.

    Of course I agree with the above assertion, you invest in ways to help people, not economists or politicians (although I’m not positive what that means). In canada that is becoming more and more obvious since fewer and fewer can afford post secondary education.

    I’m not sure how the Tennessee example is ‘investing in people’, after all, you are essentially TELLING them what type of ‘creativity’ they need to practise if they are to survive in any decent manner. They say they are investing millions in ‘training’, but I never read where that training ‘would have been offered anyway’. Long ago I got training from the pogey people, I was lucky enough to live in an area that offered money for training, ten kilometres away there was none. So the auto training could be NEW money.

    Investing in ‘what is important for them’ of course assumes that you ASK them and find out. There is virtually NONE of that conversation going on anywhere. The economic models, no matter what they are, are always developed first and people forced to fit them. For young people though its more of a given-investments in cultural projects rank most highly. Ask a kid what is important and I’ll guarantee you its Film and video, music, and video games, and sports. There are TONS of economic development models within every one of those, but even at this blog they are rarely broached. Economics ALWAYS comes first (unfortunately).

    And again, no country’s econom

  4. richard says:

    “Richard Florida’s research shows that jobs move to the people,”

    Florida’s ‘research’ and $1.50 will buy you a coffee at Timmy’s. Richard writes entertaining books but stinks at research. He doesn’t seem to understand the difference between cause and effect. That’s why he works at a business school rather than a science lab.

    Companies seek opportunities. They need people, sure, but they also need to make money. All the trained labour in the world won’t attract them if the opportunity to make money isn’t there.

    The auto industry in ON has been extremely successful, with the usual result that the province has become over-reliant on it. Hard times are coming now, but so what? Every industry goes thru cycles; the question is really whether or not the industry in ON can adapt.

    “The Irish tiger was a direct result of investment in public education”

    Ah, yes, the Celtic tiger. Was it produced by investment in public education, massive Euro subsidies, demographics, or reduced corporate tax? Not sure it’s clear that is was a ‘direct’ result of any one thing. And the tiger seems to be aging quite rapidly anyway.