Sometimes I chafe at simplistic summaries of real issues but as a columnist I realize it’s hard to fully make the case for anything in 600 words. But his underlying point that New Brunswick companies need to get a whole lot more productive is a good one.
New Brunswick has relied on ‘cheap’ labour and lower costs for a long time. I have speculated that a major reason why so many NB firms are against attracting national and international firms here is that it will drive up wages and costs – an objective of economic development but not one that interests many firms in the province. In fact, just last week I had a conversation with a great company in the Maritimes doing very interesting things but the boss was adamantly against any efforts to attract firms like his to the region because they would just raid his workers and drive up costs. My argument about the cluster effects from having many similar firms in a local market fell on deaf ears.
So, it makes logical sense that we need to figure out how to be more productive but I think that has to be thought through – at a firm and industry level – very carefully. I have witnessed first hand how companies can blow through hundreds of thousands on I.T. and it not get them anywhere (greased with government grants).
The broader issue is really about redefining the value proposition for targeted industries in New Brunswick. The province should have lower costs – not deeply lower – but lower costs because that is relatively normal when comparing large urban areas to small urban areas. But the value proposition needs to go well beyond cost if we are to be effective going forward.
Instead of worrying so much about human capital factor and its relocation, I think we should concentrate on environmental technology, spurned on by larger R&D investments, which could produce technology that would be marketable in China and India. Dollar for dollar, capital invested in greenhouse gas reduction technology would accomplish much more if used to improve the efficiency of power plants over seas than if spent money to invest on older technologies that would attract people to declining industries in New Brunswick. Don’t get me wrong, we need legislation capping carbon emissions here in NB and across the country, but NB politicians and leaders should allow more focus on made in New Brunswick solutions for investments in carbon offsets in China and India against those caps, where the growth potential for such an industry is much greater.