7 September 2022
New Economic Development strategy for Alberta – Blog #31
Economic Development Strategies usually come as top down documents from governments. An exception to this rule is the “Define the Decade” document recently released by the Business Council of Alberta. This vision and plan was developed as a result of an extensive consultation process (i.e. bottom up) and comes from a private sector organization. The Business Council of Alberta (BCA) consists of 100+ CEOs of companies across Alberta, including most of the major companies in the province.
So what is in this plan?
The plan starts by stating three goals:
- A good life for all;
- Economic expansion;
- Long term sustainability.
The BCA then sensibly starts by identifying the areas where Alberta has a competitive advantage and has potential to meet global needs. These areas are;
- Medical and wellness.
In addition to identifying the areas to focus on (the “what”) the strategy includes a significant focus on “how” to achieve its goals. These include an emphasis on social goals such as inclusion, diversity, collaboration and reconciliation.
Let’s look at these areas one at a time.
For agriculture the plan takes a broad and forward looking approach, both strengthening existing agricultural sectors and incorporating new approaches such as precision farming, hydroponics, aeroponics, vertical farming and greenhouse growing. It points out that the global food market will be $4.1 trillion by 2024, and that Alberta is one of only a few jurisdictions in the world that produces more food than it consumes. Alberta is definitely building on strengths here – in 2021 agricultural exports were $14 Billion, and there are already 17.6 million square feet of greenhouses in the province.
It proposes these changes, among many others:
- Using technology for more precise use of water and fertilizer;
- More value added food production;
- Expanding technologies such as vertical farming and hydroponics.
Under this heading the strategy includes low carbon energy, materials and critical minerals such as lithium and copper. It points out that the Russian invasion of Ukraine has changed the global situation, and that we need to address the imperative of climate change. Alberta has the possibility of becoming a global leader in clean energy and materials by having the lowest carbon footprint possible, using carbon capture and storage.
Alberta has significant strengths in this area. Canada is the 4th largest oil producer in the world and Alberta is a big part of that. It has technical expertise, leading research and innovation centres, coal free electricity by 2023 and geological capacity for carbon storage. It also has one of the largest petrochemical complexes in the world and significant wind turbine capacity.
The plan proposes these changes, among many others:
- Developing a water strategy;
- Building infrastructure for low carbon energy – power grids and pipelines;
- Expanding recycling;
- Expanding petrochemicals;
- Accelerating the use of wind, solar and geothermal energy;
- Expanding post-secondary to build the necessary skilled workforce.
Medical and wellness.
The plan points out the challenges and opportunities facing medicine and wellness: an aging population, rise of chronic diseases such as dementia, Parkinson’s disease, heart disease and diabetes. It also describes the need for more equitable outcomes from medicine, and the need to address mental health. Addressing these challenges requires breakthroughs in research, new diagnostic technologies, and innovative pharmaceuticals and therapies. New technologies such as virtual reality and artificial intelligence are becoming available that may also be able to help.
Alberta has strengths in this area: a province wide healthcare system, the largest in Canada, research centres at the University of Calgary and University of Alberta. There are also a growing number of health and med-tech startups across the province. The province has significant expertise in a wide range of areas, including AI and machine learning, virology, diabetes, medical robotics, brain research, urology, diagnostics, and biomedical research—all fields of growing importance over the next decade.
It proposes these changes, among many others:
- Creating incentives for innovation in healthcare;
- New collaboration between industry, healthcare providers and academic institutions.
- Prioritizing behavioural health as much as physical health
- Empowering patients and families to be active participants in their own care
- Ensuring adequate domestic production of supplies, medicines, and vaccines
- Transforming the health care system to constantly assess outcomes and quality of care.
In addition to the three targeted areas, the plan identifies three additional strengths in Alberta – tourism, transportation and logistics, and fintech and social enterprise.
It also proposes the development of a “mega region” encompassing Calgary, Edmonton, Lethbridge, Medicine Hat, Grande Prairie and Red Deer to position the province to compete with similar regions elsewhere.
The plan proposes six “prosperity pillars”:
- Quality of life and belonging
- Skilled and prepared workforce;
- Technology and Innovation;
- Physical and digital infrastructure;
- Environmental sustainability;
- Fiscal sustainability.
For each of these six pillars three metrics are proposed to measure progress, which would be reported on periodically.
Two main measures are proposed to implement the strategy:
- Creation of an “Alberta Mission Agency” similar to AOSTRA that is arm’s length from government modelled on the German Fraunhofer and Max Planck Institutes. [AOSTRA is the Alberta Oil Sands Technology and Research Authority that spearheaded development of the oil sands in the 1970’s 80’s and 90’s and is regarded as one of the most successful innovations in Canadian history.]
- Creation of a “Heartland Economic Region” to compete against other similar regions such as Toronto-Waterloo, Cascadia Corridor, Front Range Corridor, Silicon Valley, and others.
What to make of this?
This is one of the most comprehensive and well thought out economic strategies I have seen. I particularly liked the strong focus on social aspects as well as the hard economic numbers, as well as the focus on only three areas to avoid dilution of efforts.
The plan can be criticized for leaving out any dollar cost but that is understandable given the ambitious agenda.
How well it can succeed will depend in large part of the political will of provincial and federal governments, as this approach will require large and sustained funding. The Alberta government is currently undergoing a leadership election and a provincial election is scheduled for 2023, so it may be some time before the degree of provincial support can be gauged.
However, given the current high price of oil and likely large government surpluses, Alberta certainly has the capacity to implement this very ambitious plan. Let’s hope it gets some serious traction in the months ahead.