Canada at the Crossroads: Reality of the New Competitive Enviroment

[chris lindberg]

More Focused Technology Development and Faster Adoption

The private sector is not taking advantage of government-produced research

- Improve co-ordination of government R&D programs to reduce duplication

- Forge stronger links among government laboratories, provincial organizations, universities and private sector

- Increase the proportion of government-funded R&D performed in the private sector, to give it a bigger role

- Encourage greater specialization among universities, to let each become large and expert in a particular field

- Expand information available on intellectual property, to support rapid diffusion of new knowledge

[Thunderball]

I think there's two major problems hindering Canada's global competitiveness:

-The Old Boys Club: There's been way too much pandering between the government and big business in Canada, particularly Ontario... and that has lead to fat, bloated oligarchs who fail to provide efficient and cutting edge services. Why would they? The government makes it easy by artificially deflating the dollar making it easy to make a dollar with unrealistic economic plans. The government has a long tradition of not only creating an artificial business environment, but to protect these industries by limiting competition. With NAFTA and other modern globalization developments, this has become difficult to continue.

-The Canadian Education System: Our K-12 program does a pathetic job readying the student for the workforce. Universities/Colleges/Trade Schools have to either re-teach or start from scratch causing students to stay in post-secondary much longer than they should. Instead of churning out "well-rounded" students, aptitudes should be identified by Grade 9, and learning should be directed at those aptitudes and all probable career paths for them. For example, students with English/Social aptitudes should be directed towards Law, Business, Humanities and Education paths in High School, rather than burden them with useless knowledge that in many cases, holds them back because their aptitudes don't match it. Students with aptitudes towards trades should be placed in predominantly trade-based education to have them ready for the labour force as soon as possible. If students come to post secondary ready to take on their chosen path, they don't need to be there as long, and in turn, the university can start churning out more graduates. Does it matter if a Lawyer can't do Pure Math 30, or a Doctor had a 60 average in Social Studies?

[chris lindberg]

Increase the Pace of Regulatory Reform in Infrastructure Sectors.
Encourage more competition in transportation and communications. Reduce inter-provincial competition restrictions. Encourage rationalization.

Strengthen Resource Conservation and Renewal Policies - like forest replantation.

Priorities in Specific Policy Area's: Demand Conditions
Use government procurement product standards, environmental regulation to encourage sophisticated home demand.

Restructure Government Procurement to encourage Canadian companies to develop innovative products. Encourage more competition for government dollars (especially remove anti-cometitive provincial preferences)

Adopt Stringent and Foward-Looking Regulatory Standards. Make safety, environmental, energy-use standards tough, to spur innovation which will give Canadian companies an international edge.

Priorities in Specific Policy Area's: Related and Supporting Industries.
Policies should encourage development of strong, geographically-concentrated clusters. Build on existing clusters, not pop up losers. Invest in technical training instutions.

Priorities in Specific Policy Area's: Firm Strategy, Structure and Rivalry
Encourage local rivalry, and provide incentives for investment, upgrading, training.

Create Stronger Individual and Corporate Incentives for Investment and Upgrading

- Re-engineer "safety net" programs to ensure thet are well targeting to those in need and provide appropriate incentives - a hand up, not a hand out.

- Encourage stronger linkages between performance and compensation, by showing example with it's own employees, and by encouraging employee investment in their companies.

- Provide more favourable tax treatment for long-term equity investment, by providing capital gains tax breaks

Extend Efforts to Increase Rivalry, particularly among firms now sheltered by interprovincial trade barriers.

Move Aggressively to Restore a Favourable Macroeconomic Enviroment by reducing budget deficits, becoming more efficient, and co-ordinating with provincial governments.

Implications for Canadian Citizens
Canadians must understand and accept that change is necessary to preserve our standard of living. We cannot go back to the comfortable old way. We must all become more productive, more competitive.

Thanks for any help that is offered CalgaryPuck!
Your opinion and advice for my friday morning test is much appreciated.

[chris lindberg]

nm

[chris lindberg]

The changing economic enviroment was insulated - which made us soft..did not encourage the development of real Sustainable Competetive Advantages.

Our industry used to shelter behind tariffs - now free trade is exposing our weakness and speeding up structural change.

But there are barriers which we have put in the way of our successful adaptation, in the areas of science, technology, education and training.

We have a lot of foreign ownership of business in Canada, buy most are branch plants - not home bases where companies have the best jobs and do the most research. Home bases are where the action is, but Canada could lose the ability to attract and hold them.

Many of our idustries are not upgrading their technology to compete in an innovation international economy.

[chris lindberg]

In the 1980's the Canadian economy performed well. There was growth, but there were underlying weaknesses.

- productivity was very low

- our unit labour cost rose faster than our competitors'.

- unemployment in Canada was higher and longer than the average.

- Investment lagged in machinery, equipment and worker training.

- In the macroeconomic evviroment, there was rising government debt, high taxes: constraint on government's ability to invest in productivity improvement.

[chris lindberg]

A study was done of Canada's position in the period 1978-89, vs. other industrialized countries, It focused on the "traded goods" (import/export) sector.
This sector has unlimited growth potential, with the ability to profitably soak up Canadian resources that are not being used to best advantage.

Canada'a export sector accounted for 25% of GDP in 1989, second only to Germany in domestic economic importance.

Canada'a share of total world exports is in slow decline (partly because other countries are strengthening) The real worry is the composition of the exports:

Our exports are greatly dependent on natural resources 46% in 89' over a third of them unprocessed or semi-processes. Too many Canadian industries are not upgrading technology to produce value-added product.

This leaves Canadian companies vulnerable to commodity price drops, material substitution, lower cost competition.

[GreatWhiteEbola]

I haven't read all of this, was the Amero <sp> mentioned? How will that factor in our future business dealings? Do you think that with the CAD at par for a long time, it will allow the Amero to become reality with out much public debate? I don't know if this is something that has been touched upon.

[chris lindberg]

Originally Posted by Cowboy89

Yeah but when Lindberg refers to productivity this is exactly why we need a lower dollar to be competitive. If we could compete with Americans productivitywise then we'd find ways to make goods that are affordable and of good quality in a par dollar world. Look at car manufacturers for instance, the average American labor dollar (even after paying for private health insurance) goes farther than a dollar spent in Canada with the currency within 10 cents of the American dollar. We should focus on why that is as opposed to devaluing our dollar.

Great question, anyone have any insight to this question?

[chris lindberg]

Do the Americans provide corporate welfare like us?

Our policy makers do need to give their head a shake also.

When you say particularly Ontario's "Old Boys Club" who exactly are you talking about?

I agree with the idea that our Canadian Education System should focus on our students interests and that their learning should be directed to those aptitudes and all probable career paths that are best for them...

[chris lindberg]

Originally Posted by GreatWhiteEbola

I haven't read all of this, was the Amero <sp> mentioned? How will that factor in our future business dealings? Do you think that with the CAD at par for a long time, it will allow the Amero to become reality with out much public debate? I don't know if this is something that has been touched upon.

Most business owners I've talked to don't see this happening.