A couple of observations coming out of the Future NB summit. It was very interesting to me as I met and had significant conversations with union leaders, social development folks, left-leaning educators, etc. – we mostly got a long – particularly this really interesting and thoughtful union rep – his name escapes me but he was wearing a great tie. I came away thinking that this talking thing really does have merit. Maybe I should meet David Coon some day.
I am still surprised at the low level dislike of attracting business to New Brunswick – mostly among the business community. I get more support – you will have to trust me on this – from non-businesses when talking about the value of attracting companies to this province than I do from the business community.
There are a few zealots like Francis McGuire who realize that attracting investment like that is the third leg on the stool of – entrepreneurship, trade development and investment attraction – but he is in the minority.
Don’t get me wrong – most business people are polite when I talk about this (some not) but I don’t think you will ever see them advocating strongly for it.
They are just hardwired to distrust this concept. They see these businesses as coming here to establish ‘branch plants’, suck subsidies out of government and leave. Alternatively, they worry about these companies coming in and stealing their workforce and driving up labour and retention costs. Some even worry these companies will come here and steal their local markets.
I have written hundreds of pages on this subject so I won’t go into all the benefits -from anchoring growth sectors, to acting as an incubator of entrepreneurs to bolstering trade and as comfortable targets for people looking to move to New Brunswick – but I will say that the reality is the point is almost a moot one anyway.
For companies – any companies – to locate in a province there needs to be a reason – a value proposition to do so. For local firms a big part of that value proposition is that they are local, loyal and interested in their own communities here. And I am not understating that. I would prefer – all things being equal – investment and job creation from a local company than a national or an international one but things are never equal.
But loyalty doesn’t mean stupid. No one will invest long term in an area where they can’t make a decent return on their investment.
That’s the reason why 98% or so of our pension and RRSP investments flow out of New Brunswick – because ‘we’ through our proxies don’t like the risk/return profile of investing in this province. But we expect businesses to line up and take a loss? Not likely.
So, my point is that if NB is a good place to invest – specific industries – we should welcome investment from all sources – and ensure that the components of that ‘goodness’ – access to qualified workers, supply chain access, infrastructure, taxes, etc. remain relatively stable.
I would like to see the industry groups themselves helping the government sell this province abroad. I think having IT industry leaders on the trail with government pitching to Oracle, Google, – and hundreds of other good international players would be a wonderful value add – but not likely.
I’d make the same case for energy, certain manufacturing, certainly life sciences, etc.
Encouraging NBers to invest
A number of the proposals yesterday were around this issue of encouraging more of us to invest in New Brunswick with our sometimes paltry investment dollars. This could add up. If just 10,000 of us (there are well over 100,000 people that contribute to RRSPs each year) put $1,000 into local investments (through channels of course I wouldn’t feel qualified to invest by myself) that would be $10 million that could be invested into fast growing entrepreneurs here in the province. Of course, that is a drop in the bucket of need but it would also invest us – personally – in our economy and its development in a way we haven’t seen before.
Of course everyone talks about the provincial government pension plan investing here. It does seem a little weird that virtually none of the public sector money for retirement is invested in this province. But I am told the investment management corp. is mandated to make the best return for its plan members and that return is elsewhere. Seems a bit sad to me. They manage something like $8 billion in NB government pension monies – just 5% would be $400 million – a huge sum for a small province. This is done in Quebec and elsewhere but is certainly a tricky proposal.
In the end, this kind of event – Future NB – could be a catalyst for change or it could fizzle out – either by a lack of interest or broader forces. I thought there was a very promising initiative underway to grow the energy sector in New Brunswick – then an election – then it died.