Sunday, July 24, 2005

Canada Going Going On

Sitting at the airport in Ottawa, having had time with some 40 MBA students exploring the future of Canada, I am struck by how few of them have a broad understanding of Canada's predicament. Here we are, without doubt a great nation to experience and live in, quietly starting to see our place in the world erode rapidly.

Like: (a) productivity growth in Canada is now zero; (b) competitiveness is declining; (c) we are ranked 27th out of 30 in innovative capacity by OECD; (d) Goldman Sachs stuff suggests that we will provide less than 1% of GDP (closer to 0.75) by 2025; (e) though a small nation, we produce 4% of the world's S&T (therefore importaing more than we produce).....and the list goes on.

Some of my colleagues at the Edmonton Journal (for which I now write a column on a regular basis) dont get it either - if it isnt productivity, we'd find something else.

Reality: Canada is falling.
Possibility: Canada could chose to face up to this, act decisevely and chose to lead the 21dt Century by showing the world what a new 21st century focused state is like.
Odds: Low for Canada to show courage and leadersship
Probability: More of the same

- sad, eh ?

1 comment:

Aaron said...

The World Economic Forum's Global Competitiveness Report shows that Canada was the 15th most competitive economy, up one spot from 16th place in 2003.

I think that some of the productivity loss in Canada may have something to do with the exchange rate. That's bad for exports as it limits the demand in the US for Canadian goods. What it is good for, however, is investment. It lowers the cost of American-made capital for Canadian firms, and these investments require substantial setup time (Oil Sands).

Speaking of the Oil Sands, Alberta has extremely low factor productivity because the investment is so high right now, but production won't occur for a few years. Even though Alberta has the highest numbers, from a Capital productivity standpoint it isn't that hot.

With Labour, one has to take the long view. Judging from figures published by Alberta Finance, labour productivity is slowly inching upward.