With no clear sign of a prosperous recovery in the energy sector any time soon, Edmonton should shift its focus to “exporting brains” globally rather than resources, the city’s chief economist says.
“I don’t want to suggest for a moment that we’re going to walk away from the energy sector or walk away from manufacturing, no,” chief economist John Rose said during an economic forecast presentation Wednesday morning. “But thinking about where growth is going to be and how we want to position ourselves, I think people need to shift gears a little bit and start thinking about our ability to sell our know-how, our brain power, our technologies and our intellectual properties.”
Rose presented his economic outlook to a room of about 15 small business owners at the North Edmonton Business Association 2019 forecast event.
The city has a strong services economy, occupying 70 per cent of overall employment, and Rose said advancements in artificial intelligence, educational services and technologies is the best way forward for economic growth. He pointed to Edmonton-based companies Stantec and PCL Construction as successful examples of exporting services internationally.
“Our ability to feed into the services sector is going to drive our ability to integrate with the global world. So it’s not going to be so much anymore the global economy is growing, therefore there’s increased demand for oil and gas or other resources. It’s going to be more about the economy’s growing, therefore we need more doctors, we need more engineers, we need more environmental researchers,” Rose said.
There have been successes on this front, but Rose said more support from the city will be required to combat the expenses and challenges startup companies face. This could include financial backing and incubator services to get small businesses on their feet, he said.
“When it comes to selling professional services, you really have to be thinking globally and for small businesses that’s a real challenge. It’s not cheap, it’s not easy,” he said. “That’s where the city can come in … to try and assist these small businesses to expand.”
An immediate step in the right direction would be increasing the amount of international flights flying in and out of the Edmonton International Airport, said Rose. This would make it more accessible for entrepreneurs to travel globally and also allow outside business owners to visit Edmonton.
With the drastic oil-price differential and a “lot of oil sloshing around” in the province, Rose said Edmonton’s economy isn’t directly dependant on the energy sector and won’t take much of a hit if there are further losses.
“But it’s part of the ethos. It’s a part of the culture here, that we’ve relied on the energy sector for decades,” he said. “Maybe we have to start thinking about a life after oil.”
Looking ahead to 2019, there are two major economic risks in the form of provincial and federal elections, said Rose, suggesting the deficits facing both levels should be on the minds of prospective voters.
“Watch very carefully what the major political parties are saying about how we address the fiscal situation,” Rose said, highlighting a cutback on expenditures or an increase in taxes as the two viable ways out. “It may take the form of reduced services or it may be higher taxes, but there’s going to be some pain here.”