Friday, January 17, 2014

one region - one vision / une région - une vision


OK, I’m going to try and make some sense out of the last day and a half at the “one region – one vision” Greater Moncton economic summit…obviously, this is my personal perspective, so it will inevitably vary from the way others perceived the experience. I’ll give a bit of an overview of each of the presentations with my personal thoughts interspersed.

 

We began this morning with an excellent presentation by Don Mills, from Corporate Research Associates, called “Setting the table…Get your act together or else!” I had already heard his presentation a few months ago, but still, it was very informative.

 

Basically, the news was not good. We are experiencing a prolonged period of weak economic growth, stagnation really…we’ve had less than 1% growth over the last 5 years. If we continue to do things exactly as we have done in the past, then we will continue on this path...and that isn't good. However, Moncton leads the province (and also Halifax) from a consumer confidence perspective. There is a downward trend in housing starts in all of NB, so no one is getting wealthy through real estate these days. Jobs dominate New Brunswickers’ concerns. Wealth creation comes from the private sector. The systemic seasonal unemployment continues to extract a toll from the province.  Urban areas of Atlantic Canada are doing well, but the 13 month unemployment average is 10.5%. Not many people are getting raises…which seems to make them blame their government since there is a perception here that the government should be solving these issues…citizens are cranky! (He predicts that the Liberals will sweep the 2014 election…but then again, you know pollsters!) Public sector employment is significantly higher in Atlantic Canada than in other parts of the country…the national average is 20% public sector, but in NB it is 30.8%, which obviously slows our GDP growth. We are the least urbanized province in Canada. While the national average is 19% rural, NB is 47% rural…and we are last in terms of population growth.

 

So, the opportunity is for urban centred economic development…the 100 km radius around Moncton represents 265,000 people, so businesses need to think about this.  

 

He then went on to dissect the Moncton Miracle 2.0:

1. We need a clearly articulated economic strategy that must be defined and understood by all key stakeholders (especially taxi drivers!).

2. Greater Moncton must act as a single economic unit and the private sector must support EGM.

3. The private sector must be actively engaged in any economic effort (80-85% of economic development is locally generated).

4.We have tremendous strengths in our local workforce. The bilingual nature of the workforce should be a cornerstone of any economic strategy (leverage the strengths of the post-secondary sector).

 5. Continue to revitalize the DT core...make it a great place to live, work and play.

 6. Greater Moncton must focus on serving a wider geography than the CMA

7. Any economic strategy should have some focus on arts and culture, the things that help make a community vibrant and liveable

8. Greater Moncton should play a lead role in the revitalization of all urban areas in NB

9. We need to brand ourselves for what we are: NB's most entrepreneurial business-friendly city.

10. Include an aggressive immigration strategy to build workforce capabilities.

 

From my perspective, I like statistics and real science, so I really enjoyed this Nova Scotian’s perspective on our area. (He was just the first of many presenters from outside of our province who focused on the strengths that many of us take for granted, such as our bilingual workforce.)

 

We then had a presentation by PEI native Danny Murphy, who owns all kinds of businesses: Tim Horton’s, Wendy's, Leon’s, nine hotels (Future Inn, Hampton Inn, etc.).  He had lots of fun anecdotes including one which focused on Robert Irving telling the owners of Wendy’s "I run a small family business". His message was that all of our products are getting very similar – it is how we differentiate that will make the difference. He has chosen "hospitality like never before". He went on to say that he thinks of Moncton as a "nice-sized" city...and the "Centre of the Universe" in Atlantic Canada…we have the AAA location. He cited the new Cabella's as a great example…apparently they attract 2 million people a day to their stores. He is convinced that it will attract a lot of new people to Moncton…he is even thinking about putting another hotel out there.

 

Paul Martin, from Martin Charlton Communications in Saskatchewan  talked a lot about football…and that the best thing about having a CFL franchise is that national media has to mention your name once a day! (Neat fact: Riders sell more gear than the entire league combined and they are third in merchandise sales only to the Leafs and the Canadians.)

 

Twenty years ago he was writing the stories that we are writing now in NB…about out-migration and keeping our youth here. There was a huge level of frustration in the community…until 1999 when they got together and decided that they would get things going in time for their 100th anniversary in 2005. The first thing that they did was speak with Grade 8 kids without any other adults around and asked them when they started talking about moving to Alberta and discovered that they did…at age 12. Obviously, the kids were not reading about this in the G&M…they were getting this at home. So, they decided that they needed to change attitudes and did a lot of "summit-type” events, where inevitably an entrepreneur would get up at the back of the room and say very heatedly, "What's the government doing to build my business?" -- no one had the market covered on government like Saskatchewan! Unfortunately Statistics Canada no longer keeps stats on such things, but at this time in Saskatchewan only 1 out of 7 people drew more from the government than they put in (I wonder what our numbers are?). They also found out that as a province, they had a basic bias against success -- they hated success and people and businesses that were successful.  So, if nothing else, they got the community ready attitudinally to accept success. They currently have 90,000 unfilled jobs. He encouraged us to use population as a measure of success…if people want to live here then things are good…if they are all leaving, then obviously things are bad. Almost all of their growth is coming from immigration -- 12,000 per year, primarily from the Philippines.  It is now much easier for them to attract youth back home and their population has gone from 980,000 to 1.1 million. When you move that many people in, you have a lot of construction activity, but unfortunately they also have a lot of infrastructure catch-up. While they have added 110,000 people they have not added one hospital…and it is now $350/sq foot for new construction.  Their economy has gone from a 7 billion platform to 21 billion.

 

How did all of this growth come about? Growth in the middle class in India and China! They wanted protein and Saskatchewan provided…food, fuel and fertilizer.  So, their economy grew like crazy and now they have young men from all over driving jacked up pick-up trucks (OK, this part I’m not OK with…personally I would have loftier goals for the youth in our community…doesn’t seem terribly sustainable to me…but this seems to be what happens when provinces get into the fuel business…education is thrown out the window with the big salaries…).

 

We then broke into 12 different sector groups. I was in “community development”. Our presenter was Brock Dickinson from Millier Dickinson Blais (Canada’s largest economic development consultancy, Toronto). He gave us a quick overview of the history of economic development, which used to be “smoke-stack chasing”, but this is not the best strategy anymore (look at the rust-belt in the US). He acknowledged that sometimes we are all paralysed by the size of the problems, but it is time now for Economic Development 2.0.

 

Reality check #1

A new kind of economy requires a new approach: "We are entering the world of the invisible". In the past we could see the change happening...could see horses to cars...more smokestacks,  etc. However, today’s growth is in on-line, digital, virtual, nano-technology,  or biotechnology...changes take place inside plants, animals or our human bodies. Sometimes the scope of the change catches us by surprise. Gilder's Law: The cost of transferring one bit of information falls by 50% every 12 months. (Think about how much it used to cost for a 3 minute conversation with a friend in Europe…now it is free with Skype!)

 

Reality Check #2

No one's coming to save you. The sources of new jobs in North America come primarily from existing businesses (76%) from new entrepreneurs (9%)…only 15% is true investment attraction. So, obviously I believe, we need to support our local businesses, encourage their growth, which will in turn spin out some excellent new entrepreneurs. And of course, great success with our local businesses will in turn attract other businesses.  We need a new focus on local business retention and expansion, nurturing ongoing relationships and encouraging people to stay and build community capacity. How willing are we to put in the time?

 

Reality Check #3

There is only one source of competitive advantage.  So how do we compete in the invisible economy? KNOWLEDGE. Richard Florida: how to nurture, retail and grow the creative class? "People who are paid principally to do creative work for a living" (scientists, engineers, doctors, artists, musicians, designers, knowledge workers).

 

In 1900 less than 10% of the US workforce was in the creative class, but today across the industrialized world it is 33%, accounting for 50% of all wages. This is continually expanding and is well-compensated and driving the economy. "THE MOST CRITICAL RESOURCE WEARS SHOES AND WALKS OUT THE DOOR AROUND 5:00 EVERY DAY". The importance of talent came up over and over all day long. So how do we build knowledge assets? We concentrate on youth, immigrants and skilled labour. We need to strengthen educational institutions and develop infrastructure for knowledge transfer incubators, accelerators and generators.

 

Reality Check #4

These trends collide and mix in the new economy. We need to reflect on our core strengths and advantages. (OK, maybe I fell asleep here…there was more, but I can’t remember! I think it was basically to break down the silos and get people working together.)

 

Reality Check #5

The building blocks of economic development are not put in place overnight...they emerge from a long-term process that takes time, patience, and consistent effort.  Slow and steady wins the race and there are unfortunately no shortcuts. However, there are multiple ways to get there!.We just need to figure out which ones are the key pieces, so that ten years from now we can be celebrating this process.

 

Reality Check #6

We are not alone. We have a social fabric that knows we have to work collaboratively. Municipal boundaries are invisible to a new investor (they have NO idea where the boundaries are between Moncton, Riverview and Dieppe!).  A new economy requires a new strategy for economic development.

 

How do we celebrate a culture of positivity? There are LOTS of great success stories in Moncton, but we don’t always hear about them. Nadine Duguay from 21 Inc. had lots of success stories to share about 20-30-year-olds in our province. Success stories that need our support. It’s funny how so often so many things come down to communication…both internal and external.

 

This was my favourite session of the day. The discussion (led by David Hawkins) was excellent and for the first time in the last day and a half, provoked a lot of future-thought. There was some talk about immigration and the possibility of tax incentives to attract business-minded new immigrants. I just keep thinking about how yesterday Francis McGuire said that we had to take off our jackets and roll up our sleeves and get to work…and then he basically said that shale gas was our only hope. Personally, I think that shale gas would be the easy way out. I think we need to roll up our sleeves and work harder, dig deeper (OK, not literally!) to find other solutions that aren’t just about non-renewable natural resources. I read recently that if just 20% of all the food that New Brunswickers consumed was produced here we would create way more jobs than shale gas could ever hope to create. I know that we need a multi-pronged approach to economic development, but I truly don’t believe that there are any easy answers. I also believe that we need to hear from a lot more youth on this…only 23 out of the 340 people in attendance were under 40. As well, while women represent 52% of our population, Aldéa Landry was the only female business professional to present.

 

So, I think we need to support our existing businesses. Nurture them, encourage them. Invest in them. $140,000 in angel investment money was raised by the end of the day today, so that is a good start. But we have to do more. And, over the course of the 13 hours of presentations, it is obvious that we can’t and shouldn’t depend so heavily upon the government for support.

 

Then it was time for lunch and Bruce Fitch spoke briefly about his government’s complete support for shale gas, followed by a business panel.

 

Pierre-Yves Julien from Medavie Blue Cross spoke about the top questions that people ask when they are considering moving here: how is the education system? How is healthcare? However, to attract really skilled high-level executives, they want and interesting and unique challenge. He also spoke about the need to re-vamp our excellent healthcare system and make it more efficient.

Keith Parlee from Apex Industries ($40 million in sales) spoke about some of the difficulties in finding skilled labour and how industry in general needs to do a better job of informing youth about some of the opportunities (i.e., their aerospace and R&D sector).

 

George Donovan from Gojii Games talked about the opportunities for extreme growth in his sector (he doesn’t have one client in Canada!). We need to have small investors and mentorship is critical. As well, any business that is relying on the gov't for capitol is doomed!

 

Jim Spatz from Southwest Properties (owns Marriott and Keg) talked about how the City of Moncton was extremely accommodating when they wanted to build – they had approval in two weeks for the hotel. He too spoke about Moncton’s ability to embrace diversity, our bilingualism and the special buzz that is going on here, particularly regarding our entrepreneurs. We need to build on this (and reduce government dependency and permit the entrepreneurial sector to grow). When he built Bishop’s Landing in Halifax in 2000, 1/3 of the subtrades came from Moncton. He also spoke about the skill shortage and high unemployment and how we need to address structural unemployment.

 

Aldéa Landry (Landal Inc.) spoke about the “world of the invisible” and how it took two Nova Scotians to identify our competitive edge, which is bilingualism. We need to become more business-women friendly! (I completely agree! There were many women in the audience…1/3? But not many on stage.) She also wondered why we have such a hard time selling ourselves. I personally don’t know why…maybe because I’m a “snobby Upper Canadian” but I think we live in one of the best places on the planet…we just need to let others know about it! I think we take a lot of the amazing things we experience every single day for granted. She (and many others) spoke about the need to re-introduce the word “hub” into our vocabulary.

 

There was SO much more (I think that someone will be reporting on all the other 11 sectors), but I really have to go to my son’s hockey game now!  Happy Friday everyone!