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Rethinking Economic Development

Rethinking Economic Development PDF

Competitiveness Just Changed

At Optimus SBR, we keep a close eye on developments that impact our clients. Specifically, we anticipate that economic development agencies will require a fundamental shift in strategy this year to remain relevant in the eyes of their communities and shareholders.

Over the past months, Canada’s political leaders have called for a new world order and the rapid adoption of “near-shoring”. They have accelerated the divestment of Chinese ownership in Canadian mining companies, and they have heightened support for Indigenous equity participation in resource and infrastructure projects. US leaders have passed the Inflation Reduction Act and the US military has moved to secure continental supply chains for assets representing national security risks. New democratic and/or nominally democratic trade partners (e.g., India, Vietnam, Cambodia, and Mexico) have replaced those from non-democratic jurisdictions, while multinationals and foreign investors are actively changing their investment policies and location priorities as energy security, ESG and mandatory disclosures are now driving their decision-making.

These developments suggest a rapidly evolving landscape for economic development agencies to navigate, as previous strategic plans have quickly become obsolete. Local communities, companies, industries, and regions are needing to adapt quickly to mitigate economic risks, secure their place in realigned value chains (e.g., raw materials, production, assembly, labour, logistics, and exports), and pursue new opportunities as they emerge.

In this rapidly changing environment, we at Optimus SBR encourage economic development agencies to rethink how they do annual strategic planning and ensure they embrace strategic thinking and scenario planning into, what now should be, a quarterly process.

Over the next twelve months, we anticipate regional economies will need to redefine relationships around:

  • Foreign Direct Investment
  • Export and Trade
  • Supply Chains
  • Labour and Immigration
  • Marketing and Place Branding
  • Conferences, Conventions, and Major Events
  • Tourists and Visitors
  • Direct Flights
  • Investment and Business Retention
  • Students and Researchers

This redefined economic landscape will challenge jurisdictions across Canada and will require leaders to be proactive in how they design and implement strategies for growth. Economic development agencies will need to anticipate and adapt their strategies, otherwise they risk having to answer some very tough questions from their boards, shareholders, and taxpayers. Better to have them asked and answered in advance.

Questions to be Answered

At Optimus SBR we start every assignment by defining what winning means. For Canada’s economic development agencies, winning often means increasing the standard of living of its residents and/or increasing the long-term competitiveness of the jurisdiction regardless of what economic scenario unfolds. We apply an insightful geopolitical, economic, environmental, technological, and societal lens to our strategic planning process and test the robustness and resilience of client strategies against various scenarios.

Before rinsing and repeating a similar process to last year, we encourage business, community, and political leaders to consider the following four themes:

  1. Strategy – Is our organization simply renewing its strategic plan, or are we engaged in strategic thinking?

To prepare for the challenges ahead, status quo is no longer an option. Strategic planning needs to start with strategic thinking, understanding the changing context of the world today and exploring the options for achieving perpetual growth. Rich conversations are needed to produce resilient strategies and facilitating a strategic direction among divergent views in a fast-changing world requires skill and expertise.

  1. Governance – Are we operating in isolation, or are we cooperatively leveraging other tiers of government?

Economic development is both a team sport and a leverage game. Capital and program funding from multiple levels of government can be enhanced as markets tighten and Fed-Prov-Muni relationships are redesigned. Adjacent and duplicative organizations and programs that were birthed in times of prosperity may need to be consolidated for effectiveness in times of constraint. Boards and shareholders should be asking tough questions around how to form new relationships and how to best create value for the community, requiring governance muscles to be flexed.

  1. People & Structure – Are we deploying our people in ways that create value and maximize their potential?

Talented individuals within the economic development space run hard and fast, but sometimes in the wrong direction. Allocating fixed budgets and scarce resources requires a rethink of how organizational structure can best support the strategy, while identifying delivery and technology partners to achieve more with less is within reach for those willing to challenge the traditional economic development business model.

  1. Culture & Performance – Do our people feel accountable for our objectives and for winning?

When the going gets tough, the tough acquire market share. Achieving growth in a tough economy requires a competitive spirit, and that requires a sharpened mindset and culture. Gone are the days of trade shows without results; success in 2023 will require a culture of performance aligned with strategy and grounded in accountability and deep resolve. Strategic planning needs to embrace the same level of competitiveness, and facilitators need to bring a new flavour of competitiveness to the strategic planning table.

Time to Think Differently

Optimus SBR’s Government Practice

Optimus SBR is an implementation-focused firm that specializes in turning strategy into action, built on a vision of powering organizations to win. Our team has significant experience working with and leading economic development agencies across Canada, and we partner with leaders who want to transform the value they deliver for their communities.

If you found this helpful, or want to discuss how we assist with strategic thinking, please give us a call, or send us a note.

Brad Ferguson, SVP, Industries and Government Practice
P: 416.649.9184  D: 780.909.5149

David Lynch, Principal, Industries and Government Practice 
P: 647.280.5754

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