Category Archives: Business

Pointing a way forward for Atlantic Canada

Somewhere over the rainbow, a brighter future for Atlantic Canada

Somewhere over the rainbow, a brighter future for Atlantic Canada

It’s timely, cogent and thoughtful, which is exactly why it’ll never work. Human nature abhors big ideas and grand schemes, preferring, instead, to domicile stubbornly in its hobbit holes.

That’s one way to regard the final report of the 4Front Atlantic Conference, a meeting of regional business leaders that just wrapped up in Halifax.

Another is to recognize that the document contains just enough practical magic and common-sense solutions to the problems that burden Atlantic Canada’s economy to suggest that durable, sustainable prosperity in this corner of the steppe need not remain a pipe dream.

That, too, is human nature. After all, the future is about nothing if not the choices we make today.

“What can I do to make Atlantic Canada a more promising place for our children – so that they can realize their potential and their dreams, and be successful in this changing world, living and working here in Atlantic Canada?”

That’s the action plan’s “rallying cry”.

So is: this: “How do we change to prosper in a world where China and Brazil are among the global economic leaders, old trade relations are no longer enough, and all markets are global?”

And this: “How should I work with my neighbour, whether down the street or across the region, to seize these opportunities today for future generations of Atlantic Canadians?”

After three conferences and hundreds of hours examining the issues, the folks at 4Front offer a few suggestions, the most important of which is to start thinking for yourself and stop believing in governments as the fountainheads of originality. They are not. They merely reflect the broader aspirations – or lack, thereof – of those who installed them. And that’s us.

Henceforth, our concern should be aggressively collegial. The history, geography and demographics of this region precludes any degree of economic success as long as we remain siloed by our narrow, parochial interests.

We need a common approach to our common purposes.

On education and training, 4Front says: “We must create a ‘K‐to‐work’ approach, where the focus is on preparing students for the workforce of tomorrow and providing a link between formal schooling and future employers.The public education system should investigate the usage of open online courses and what this technology could mean for core K‐12 courses. We recommend an increased focus on experiential learning and co‐op placements, so that students have the chance to apply their knowledge while trying out different careers and building skills.”

On new skills: “We need dramatically higher levels of economic immigration – this can be done through a business‐government‐university‐community partnership where we are clear about the skills needed, geographic targets, and an engaged community to welcome and integrate these new Canadians.”

On innovation and productivity: “We need to significantly increase the collaboration and alignment between university and industry R&D. University research capacity should be more accessible to private companies and the private sector must engage better with universities and invest more in innovation. We need to establish an accelerator to support and mentor Atlantic Canadian emerging start‐ups, similar to Communitech in Waterloo.”

On globalization: “We must focus on strategic business sectors and global geographies where we can be globally competitive and develop a detailed regional strategic plan for each that is managed and measured. We need to help make Atlantic Canadian SMEs export ready, through ‘reverse trade missions’ where we bring international businesses to visit us and other initiatives.”

On capital: “To combat serious underfunding of Atlantic firms, we should create a regional equity‐investment tax credit. We need to create an organization that can forge stronger linkages to external networks (Silicon Valley, angel investors, Canadian VC funds, universities). We should unify our provincial securities commissions,thus eliminating the four‐tier fee structure for companies and brokers and make financing easier for our firms.”

As for governments, their watchwords should be collaboration, efficiency and relevance.

None of this is particularly new which means, if nothing else, all of it is perfectly achievable, as long as the better angels of our human nature choose to act.

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How (not) to breed a culture of innovation

Think about tech at least once in your freakin' life!

Think about tech at least once in your freakin’ life!

Once again, a major Canadian think tank concludes that the nation’s private sector is not spending enough of research and development, on science and technology. Once again, the news runs buried in the tech sections of the day’s print organs, all but guaranteeing the predictable reader response of “so what.”

For decades – at least since the early 1980s – experts have warned that unless industry picks up the pace of innovation, the consequences for Canada’s productivity and competitiveness in the global economy will be dire. But what, exactly, does that mean and why should anyone outside the pearly gates of academe give a fig?

Not long ago, the Conference Board of Canada took a shot at answering the question. In a report entitled “How Canada Performs”, the organization had this to say about the country’s low ranking, compared to other economies, on innovation:

“Overall, countries that are more innovative are passing Canada on measures such as income per capita, productivity, and the quality of social programs. It is also critical to environmental protection, a high-performing education system, a well-functioning system of health promotion and health care, and an inclusive society. Without innovation, all these systems stagnate and Canada’s performance deteriorates relative to that of its peers.”

What’s more, the Board said, “With new key players – such as China, India, and Brazil – in the global economy, Canadian businesses must move up the value chain and specialize in knowledge-intensive, high-value-added goods and services. Although Canada has some leading companies that compete handily against global peers, its economy is not as innovative as its size would otherwise suggest.”

Now, the Science, Technology and Innovation Council (STIC) – a creature of the current federal government – adds its voice to the chorus. “Canada’s gross domestic expenditures on R&D (GERD) declined from their peak in 2008 and, when measured in relation to gross domestic product (GDP), since 2001,” it reports. “In contrast, the GERD and GERD intensity of most other countries have been increasing. Canada’s declining GERD intensity has pushed its rank down from 16th position in 2006 to 17th in 2008 and to 23rd in 2011 (among 41 economies). . .The more recent declines in the country’s total R&D funding efforts are attributable predominantly to private sector funding of R&D.”

The Council also notes, somewhat cheerfully that “Canadians understand that, if we want to create jobs and opportunity in a competitive world and address the key societal challenges that confront us in the 21st century, STI must be an integral part of the national agenda.”

But here’s the thing: I’m not at all sure Canadians do – understand, that is. If they did, then this conversation, which feels like a toothache, would be over. So would the chimerical debate, in government circles, about funding hard, “blue sky” science at the “expense” of applied, commercially viable research. Notice where these discussions almost never occur: Switzerland, Sweden, Denmark, The Netherlands, and, yes, even the United States.

That’s because these nations, unlike Canada, have recognized the truth of their circumstances, which is, both simple and elegant: If you want an innovative culture, you have to breed a culture of innovation. And silos of self-interest won’t help you accomplish the task. All segments of society – government, industry, higher education – must pull in the same direction if we’re going to get anywhere.

Or, as the STIC observes, “The responsibility is shared: all participants in our STI ecosystem have a role to play in driving enhanced performance and lifting Canada into the ranks of the world’s leading innovative economies. It is not just about investing more, but about investing more strategically and coherently, focusing our resources and efforts, learning from the experience of global STI leaders and improving agility to seize emerging opportunities. That is how Canada will truly be able to ‘run with the best.’”

It’s also how you convince average Canadians, who may not often read the tech sections of their newspapers, that their material well being – their wages and standards of living – depends directly on the quantity and quality of the innovations they enlist in the service of their respective futures.

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A bitter lesson in corporate responsibility

Death in Dhaka...600 and counting

Death in Dhaka…600 and counting

Galen Weston’s remorse notwithstanding, it’s tempting to think the man who runs one of the largest retail organizations in Canada should have known how dangerous conditions were for the Bangladeshi garment workers who died when their building – where some of the Loblaw-owned Joe Fresh apparel was manufactured – caved in on them.

There was even a hint of self-recrimination in remarks he made separately to reporters and investors last week, as reported by CBC News and The Canadian Press. Referring to his company’s commitment to safety standards at the overseas facilities it contracts to produce its goods, the executive chairman said, “Nothing in (the) reports suggested a problem, but the scope of the audits does not cover structural integrity. . .I am deeply shaken by the event. . .Our thoughts and prayers. . .go out to those who were injured and to all of the families who have lost loved ones.”

More than 500 perished in the collapse outside the Bangladeshi capital of Dhaka last month. As many as 150 remain missing. The tragedy made headlines around the world. And, still, Mr. Weston wondered about “the deafening silence from other apparel retailers on this. . .I’m very troubled. . .Thirty companies were having goods manufactured, but only two have come forward to speak publicly.”

But whether or not he and his industry counterparts should have known about the perilous condition of the edifice (and if, by knowing, done something about it before the dreadful accident occurred) is lamentably moot. What matters is what they do now.

Other than remaining mute, they can exit the country altogether. According to an item in The Independent, “Executives at Disney were so concerned about labour conditions in Bangladesh that they ordered a halt to operations in the country, before the clothes-factory collapse. The decision to stop production of branded merchandise was taken in March and was prompted, in part, by the factory fire in Bangladesh in November last year that killed more than 120 workers.”

The news source quoted Bob Chapek, president of Disney Consumer Products: “We felt this was the most responsible way to manage the challenges associated with our supply chain.”

The third option is a version of staying the course, sadder but wiser. Reports suggest this will be Loblaw’s approach, with renewed vigilance. The company plans to enhance its facility audits, engage its own people directly in inspections and create a disaster relief fund for the victims and their families. “We have taken action to address the situation,” Mr. Weston said last week, according to CP. “(This includes) the announcement of a fund to provide relief. . .There is more we will do and we will make that public over the next few days.”

Crucially, the company will remain in Bangladesh because Mr. Weston and his senior executives believe the garment industry can be a “force for good” in the otherwise impoverished Third World. Under the circumstances, this is the most responsible course of action.

Globalization has changed the rules of the road for western corporations that avail themselves of cheap labour overseas. The vast and integrated nature of their supply chains demands that, if they choose to do business with poor countries such as Bangladesh (where, paradoxically, the apparel industry generates $20 billion a year), they are also obliged to assume a more direct role in overseeing manufacturing processes and infrastructure.

The disaster in Dhaka illustrates that globalization’s evolution is halting and still fraught with atavistic, hands-off ignorance of, or indifference to, working conditions around the world.

But it also stands as a wake-up call to rich retailers who can no longer afford, either morally or financially, to shirk their duties abroad. The Internet and near-ubiquitous mobile communications is seeing to that. So, increasingly, are consumers who, in virtue of the options they enjoy, can and do make mincemeat of a company’s most important asset: its brand.

Mr. Weston’s remorse is genuine. He might yet take some comfort in the fact that, in exercising his presidential choice, he is doing the right thing in Bangladesh.

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