Wednesday, May 19, 2010

Incentives and Anti-Competitive Practices

Responding to David W. Campbell

I was involved in some if the GIS work in Alberta in the late 1990s (as architect of the 'MuniMall' project for Alberta Municipal Affairs). There were many plans for GIS back in those days but all the data was held under proprietary lock and key, so there wasn't much anyone but the licensed vendor could do with it.

In order to have built on local work and made geomatics work as an industry here, it would have been necessary to get a jump on the proprietary systems. But to do that would have involved the province opening its geographic data as a resource on which to build.

As it stands now, there probably isn't much that can be done. It's most likely all privately owned and under contract to some U.S. or (if we're lucky) Alberta-based company, and we can't even do geomatics in our own province, much less globally.

That said, let me address the wider question...

> We should fund research that is aligned with targeted sector development efforts.

Yes. But. On what basis do you do the targeting?

The approach I've seen applied here in NB across all levels of government is that company execs lobby government ministers, who then determine that NB should invest in such-and-such, based on these recommendations.

The problem is,

a) these companies are usually looking for very short-term returns, if they are looking for research returns at all, and not just no-strings funding, which is more common

b) NB companies are now behind the curve and are asking for research which has already been done elsewhere and which is therefore not original or useful

c) NB companies are more concerned about competition here in NB (this is *especially* true of the larger NB companies) and seek research in order to gain a local advantage, freezing out existing competitors, or new industry from the grassroots or from external companies

d) NB companies, and companies in general, want research which preserves existing business practices, and not the sort of research that would produce new startups and new employment sectors in the province

These apply not just to research money, but to development money in general. If you allow the business sector direct the direction of economic stimulus, business will recommend spending in such a way that entrenches its own interests, even if this is harmful for the economy as a whole.

Therefore, if research and development is to be targeted, it should not be based on the interests of existing business. Indeed, the larger and more entrenched the business, the less input it should have on the direction of this spending.

Rather, what should be identified are new and unique ventures. This that have the potential to create economic activity (and not just some shop of flea market, which is what passes for 'entrepreneurship' out of the Chamber of Commerce these days). What are people doing that actually constitutes expertise? What are we actually getting good at?

In view of that, GIS was probably destined to be a miss in this province. Did we have any *actual* capabilities or capacity in this province around GIS? Was the province prepared to step in, not simply with money, but with infrastructure and industrial support - being a provider of data and services, and being a model customer?

From where I sit, I've seen minimal GIS work in NB over the last 10 years. It was probably all golf-course-ware -- a bunch of corporate types and Business NB types out on the golf course saying, "hey, wouldn't this be a good place to invest in?" And some half-formed plans to invest in something nobody in the province is actually doing.

We have research, development and training infrastructure,  capacities in place here in NB - not much, but it's there. This should be the *source* of these new ideas, not some mill that you just turn on and send your golf-course ideas to. What are the researchers *actually* building and developing? How can we spin *that* off into a cluster?

As long as we continue to thing of research and education merely as tools to be used by business to implement their plans, they will not add to NB's economic development capacity. And then all the rest of it - "diploma and degree programs... targeting immigrants... branding the province or regions... preparing cost studies...e developing tax incentive programs... organize trade missions [etc]" - are nothing more than ways to strengthen the incumbents and to stifle actual economic development here.

I'm not sure you get this (maybe I'm wrong). But the very same incentive, applied in one place, stimulates development, while applied in another, inhibits it. And in NB, we have become experts at using incentives to inhibit growth. We spend our money and incentives entrenching existing industries and anti-competitive practices, while we should be doing exactly the opposite.

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