Do we need more economic development organizations?
The title of this one is likely to enrage my Insights podcast co-host. Don has openly questioned why there are so many different organizations and government departments associated with economic development in the region.
I have some sympathy with his position but my line in the sand is that you must have capacity to properly identify and develop economic opportunities in all regions of your province or jurisdiction. For me that could theoretically be done by one or a hundred organizations.
And I want to also reiterate that I am not talking about what many people think of when they define ‘economic development’. I’m not talking about funding programs to encourage companies to expand nor am I talking about business counselling services. I’m not even talking about marketing and promoting communities in some generic way (e.g. we are the best!).
I’m talking about identifying those opportunities that hold potential for investment and then working with industry to assess the opportunity, build a value proposition and then go out and hustle to attract entrepreneurs and companies to leverage the opportunity.
This ranges from the micro - attracting a physiotherapist to Chipman so that people do not have to commute to Fredericton for that service to the large scale - a billion dollar mining project in the region. These opportunities are usually built around some specific asset, attribute or existing cluster of activity. A university R&D centre, for example or a tungsten deposit.
Ontario recently set up a new initiative to “to encourage the development, protection and commercialization of intellectual property in the province”. Technically they set up a whole new agency.
It started with a question - why does Canada generate so little IP relative to the U.S.? Then it led to a political promise, followed by a panel to study the issue (headed by Jim Balsillie) and, finally, a new agency - IP Ontario - to be far more deliberate about translating research into commercializable products.
Which brings me back to the number of ‘economic development’ organizations. If you need some specific, targeted organizations to do something like this, I say giddy up.
When we set up the energy opportunities development corp between NB Power and GNB in 2016ish, I thought it would pursue and develop a whole range energy projects including fostering energy-related startups, SMRs, export-focused renewable energy, export-focused Smart Grid projects, etc. In some alternate universe, NB Power-affiliated experts would have been consulting on smart grid deployments around the world.
It turned out that corp was only meant to be a vehicle for channeling funds to support SMR development - and I was ultimately disappointed.
But if you need specialized teams to develop specific opportunities, don’t be shy. These could sit under an agency such as ONB (think CyberNB before it was cut loose) or could be standalone (think NBIF or BioNB) but if they have a clear mandate and the ability to generate an ROI on the taxpayer investment, why not?
For more than a decade I have been pushing a more muscular approach to economic development. I don’t go as far as Mariana Mazzucato as she wants far more government control over the economy. I just want government and partners with a vested interest - to be aggressively looking at opportunities from one end of the province to the other. But for me the goal is to catalyze private sector investment - with relatively little taxpayer investment. Once the opportunity is clearly identified (think Cyber) and government has made investments to strengthen the value proposition (think R&D, talent development, infrastructure) then we sell the heck out of the place to related entrepreneurs and firms.
So, in the end, we could end up with even more economic development organizations but also much better results.