Future-Proofing Our Communities

I don’t want to be all doom and gloom, but I do want to highlight a couple of important economic indicators for the future.


Talk of a real estate bubble, it’s bursting and the potential economic fallout will be front and centre for the next while. The real estate bubble, the US current account and trade deficits, consumer debt and consumer spending patterns and high energy prices are all conspiring to put the North American (and global) economy into a high-risk situation. Brush up on your Tipping Point.

Meanwhile, the auto industry is in dire straights for the foreseeable future. When Dieter Zetsche, Chairman of DaimlerChrysler states that it is impossible to profitably make subcompacts in North America, watch out for continued recalibration of the trade economics of advanced manufacturing up the food chain. This is just the beginning of a larger trend, not a short-term blip.

So, this places the issue of Canada’s and Ontario’s long-term economic future into sharp relief. The Ontario government in its report Toward 2025: Assessing Ontario’s Long-Term Outlook, identified the Bio-Technology, Information and Communications Technology (ICT) and Entertainment and Creative industry clusters as having important long-term growth potential. Guess what? Those same three industry clusters appear as the bottom three in terms of competitiveness (measured by average wages) relative to competing North American jurisdictions according to the Institute for Competitiveness and Prosperity. So what are we doing about it? MaRS was one response. Innovation Commons is another. More is needed.

Change is rapid and global. But the responses to change must be local. We must make our communities resilient in the face of global change. This was the conclusion of the federal External Advisory Committee on Cities and Communities, led by Mike Harcourt, which reported in June. Which is why initiatives like the ICT Toronto project and the Strategies for a Creative City project are too important to leave to government.

When bubbles burst, when business cycles take a turn, resilient communities adapt quickly and have the structures in place to deploy the resources freed by economic adjustment and provide a secure foundation to build again for the future. Those that lack those structures face long-term decline as talent and capital flee to better environments.

Where is the political discourse on these important issues? Where is the press? Community-builders are needed, with the vision and stamina to outlive the short-term political calculus of any single government. The economy of the future will be built by communities of practice, interest and geography. It is about connecting ideas with talent, experience and capital. We are more than free-moving economic actors, we are citizens of our communities, closely linked to one another.

We need to articulate our aspirations for the future and work toward a new collective project. I invite you to join the conversation.

6 thoughts on “Future-Proofing Our Communities”

  1. Mark, I’m confused by “[Bio-Technology, ICT and Entertainment&Creative] appear as the bottom three in terms of competitiveness (measured by average wages) relative to competing North American jurisdictions”.

    Does that mean that our wages are supposedly too high, or too low? I suppose too high would mean that our companies can’t afford to hire, while too low would mean that we don’t attract or retain top workers. But each has its flipside: low also means that companies can hire cheaply, which is good, and high also means that top workers arrive and stay.

  2. Good catch Rohan. To clarify, the Institute for Competitiveness and Prosperity uses average wages as a measure of competitiveness, but really it’s prosperity that we’re after. Knowledge-based industries that are globally competitive can afford to (indeed must) pay high wages to keep top tier talent. We have a chronic problem of losing top tier talent to other places because our industry does not utilize (and pay for) that talent.

  3. Thanks, Mark. In that case I’d have to disagree with the Institute’s using high average wages as the measure of competitiveness:

    1. It doesn’t take into account the local cost of living.

    2. Do we really have “a chronic problem of losing top tier talent to other places” because of wages? I’d like to see some hard evidence of that – in which “top tier talent” is *not* defined as “whoever gets paid the most”. In my experience the true “top tier talent” is rarely driven by money, as long as their income is adequate. As Joel Spolsky says (at http://www.joelonsoftware.com/articles/FieldGuidetoDevelopers.html), “Programmers don’t care about money, actually, unless you’re screwing up on the other things.” Quality of life is far more important, and Toronto rates well in this respect.

    I’m happy to see that your examples of good responses to any lack of competitiveness are MaRS and Innovation Commons. But given how the Institute measures competitiveness, those might not be considered “effective” responses. The toughest task ahead may be to educate organizations like ICT Toronto about what actually influences city-to-city competitiveness.

  4. As for the cost of living, it is factored in to a degree via Purchasing Power Parity in exchange rates.

    I agree that $$ alone doesn’t keep top talent. However, top talent does earn top $$ and our lower average wages reflects that we ARE losing our top talent to more vibrant places where the most innovative and creative work is happening. For evidence, check out the Canadians in the Valley or New York or Los Angeles or London.

    This means we should be doing more research and design and less servicing and support. That’s where initiatives like MaRS and Innovation Commons come in. We should not be trying to be a low-cost production centre, because that’s a losing proposition in a global market. We should be making our communities more dynamic places that support the needs of innovators and creative professionals and provide the quality of life and the opportunities they need to thrive.

  5. Mark,
    I am reminded of that old saw that said, “If you put all the economists in the world, end to end you still would not reach a conclusion�. That being said I do agree with your comments of having a system of greater resiliency for communities but they will never be isolated in today’s economy. The need for action is urgent.
    The current issue of the Economist and its article on the “New Titans� as well as an earlier article by Dr Greg Mankiw of Harvard discuss the rapidly rising role of China & India and its impact in North America. It is estimated that by 2040, China’s economy will be in the lead, both in world market capture as well as GDP. The US since the 1950’s has been losing market share but has a rapidly increasing it’s GDP. The swing in world economies has been stated by some as occurring as quickly as 10-15 years with the question as to whether it will be China or India as number 1, either country will relegate the US to number 2.
    While I may disagree with you on the housing bubble there is still an impact on Canada. The bubble outside of the US (where there is a bubble) in most cases is in isolated to Alberta, lessor in Vancouver but relatively stable in rest of Canada.
    What really concerns me as part of community resiliency is education as well as fostering an environment that our brains wish to stay here because we have the resources. We no longer can look at China or India as not becoming self-sufficient or a low cost outsourcing community. In 1990-1991 India graduated 180,000+ science and engineering students, in 2002-2004 they graduated 690,000+. China 1990-1991, 180,000+, in 2002-2004, 525,000+. The European Union has even outstripped the US and Japan in graduates.
    Where does that leave us, well, outside of this and other critical data, a call to move our butts. The reliance on one economy is no longer sufficient and the old models are no longer working.

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