In the Global Competitiveness Report 2015-2016 the World Economic Forum stated that “seven years after the global financial crisis, the world economy is evolving against the background of the ‘new normal’ of lower economic growth, lower productivity growth and higher unemployment”. The report goes on to state “rather than adjusting to the new normal, countries must step up their efforts to re-accelerate growth”. Under such circumstances, small market economies, like Canada, are particularly vulnerable with their heavy reliance on foreign trade and investment.
Urban studies theorist Richard Florida wrote in a recent report, “Canada is in effect a nation built around two different economic models – one based on resources, the other on ideas. Canada is one of the very few nations in the world that has the capacity to combine these two models, using resources to fuel the growth of the knowledge economy, while deepening and expanding the resource economy with technology and knowledge.”
Canada has long been recognised for its plentiful resources including lumber, oil and gas, minerals and food. Less well known is the significant foreign investment made in the knowledge industries. Global tech giants IBM and Ericsson are among the largest corporate R&D spenders in Canada. French game manufacturer Ubisoft first invested in Montreal to enter the North American market and has since continued expansion in Montreal, invested in new development facilities in Toronto and Quebec City and recently purchased a company in Halifax. Microsoft has continued its expansion in Canada with the recent opening of the Vancouver Innovation Centre. Google has invested heavily in Waterloo, both in product development and as a node in its tech hub network. Life Science giant Johnson and Johnson has set up a R&D presence in Toronto and continues investing with Canadian technology partners.
Adapting to change
The Canadian economic development community recognised that the global economy was changing over 15 years ago. Ottawa, Toronto and Waterloo learned that new players like India and China were competing successfully for the investment dollars coming out of Silicon Valley. It became evident that the competition was not between each other but from across the world. A collaborative model was established in the IT sector that soon expanded to other sectors and cities in Ontario and to include both the provincial and federal governments. In 2007, the collaboration went national with seven economic development agencies from across Canada beginning to meet.
Investors are looking for clarity and stability, not confusion and conflicting messages
From the informal start, the Consider Canada City Alliance (CCCA) became a formal corporation in 2012 and today has 11 members stretching over 4,500km from Halifax on the Atlantic Ocean to Vancouver on the Pacific. Its primary focus is two way FDI between Canada and its global partners. It also understands that trade and research partnerships are important to establish the relationships that lead to investment.
Its relationships are built on cooperation and collaboration. The strongest partner of the CCCA is the federal department Global Affairs Canada (GAC), home to the national FDI attraction organisation Invest in Canada as well as the Trade Commissioner Service (TCS), the federal trade and investment representation abroad.
Investors are looking for clarity and stability, not confusion and conflicting messages. The federal government creates the policies and environment that attract the investor. Cities are increasingly the global economic drivers. The CCCA provides knowledge of access to the regional ecosystem that will deliver the value-add to close the investment decision and then provides the assistance in implementation and aftercare for sustainable success.
Several initiatives have already been put in place to provide higher service levels to the investor and to de-risk the investment decision:
- Regular meetings are held between the CCCA and GAC to discuss initiatives to enhance Canada’s attractiveness to foreign investors;
- Internal sessions on lessons learned to improve the performance of all members;
- ‘Soft landing’ and investor tracking systems have been implemented;
A trade commissioner placed in residence with the CCCA.
As the WEF noted, countries must continue to revitalise their economies. Richard Florida rightly pointed out that Canada offers the potential for an economic model that is a world leader combining resource independence with innovation. The CCCA will continue its evolution in 2016 by launching new projects to:
- Deepen the member aftercare capability and talent development/attraction programmes;
- With partners, expand Canada’s trade and investment agreements, strengthen its innovation ecosystem and grow its labour force.
A ‘new normal’ offers economic opportunity. The CCCA and its members are working to ensure that Canada continues to build an ecosystem and business model that maximises prosperity for its citizens in the new global economic reality.