Tag: competition

Shifting the Alberta Advantage

The main thing we talked about yesterday at the ONEdmonton forum was economic development. In addition to breakouts and other discussion, we had two informative presentations that I hope to blog about over the next while. In her presentation on Diversifying Edmonton’s Economy, Tammy Fallowfield, EEDC’s Executive Director of Economic Development, touched on shifting the “Alberta Advantage”. Here’s what her slide said:

  • Remain relatively low tax
  • Not a low cost environment
  • Not a surplus of labour
  • Not a currency ‘bargain’

I think the phrase “Alberta Advantage” means different things to different people, but traditionally our low taxes, low cost of doing business, surplus of labour, and being attractive to investment, have all been considered important aspects. Here are a few notes on each.

Alberta’s low taxes remain a strength. From the Alberta Competitiveness Council’s 2010 report (PDF, 14 MB):

[Taxes and fiscal policy] represents the area of best performance for Alberta, with moderately low tax burdens for both corporations and individuals and a strong government financial position.

Of all the measures that report looks at, Alberta performs the best (unsurprisingly) in taxes and fiscal policy.

What about being a low-cost environment? From the same report:

Within Canada, business costs in Alberta (Edmonton) are lower than Ontario (Toronto), but higher than in each of the other provinces compared. This result is due to Alberta’s strong economy of recent years, which led to a much higher increase in business costs – especially labour, electricity, and facility costs – than seen in other provinces.

I haven’t yet found a good comparison of business costs with regions elsewhere in the world, so let me know if you come across something. I suspect the picture is not as rosy as it once was.

How about our labour force? All across Canada the population is aging, and that (along with our very low fertility rate) is going to lead to labour shortages. Here’s a graph from Alberta’s Occupational Demand & Supply Outlook, 2009-2019 (PDF), that shows this trend for our province:

There are many consequences as a result of this trend, not the least of which is Alberta’s challenge to attract and retain labour. Our taxes will likely also be impacted – an older population means higher costs for health care, and a slow growing labour force means a slow growing tax base.

Let’s look at the Canadian dollar (compared to the US dollar).

The strength of the Canadian dollar has an impact on foreign investment, among other things. As you can see, the dollar has been quite strong in recent years (aside from the dip in late 2008/early 2009), which may not be a good thing for Alberta.

So if being low-cost, having a surplus of labour, and being a relative currency ‘bargain’ are no longer part of the Alberta Advantage, what does that mean?

This diagram comes from the Institute for Competitiveness & Prosperity, based on a presentation that Professor Daniel Trefler of the University of Toronto gave here in Alberta on October 15, 2009. The diagram was originally used to illustrate the shift that China and India have yet to make.

On the same slide that listed the four points above, Tammy included this diagram. That’s the shift we need to make here in Alberta – from being a strong low-cost competitor, to being a strong innovation-based competitor.

How are we going to do that? By making strategic choices. Here’s (more or less) what Tammy showed next:

Tammy went on to talk about the industries that are important for us to focus on here in Edmonton, and a similar exercise would apply for Alberta. I’m not sure if what I have written above is exactly what she was trying to get across, but that’s how I interpreted it.

What do you think about shifting the Alberta Advantage?

Who is Google's worst enemy?

Post ImageIf you said Microsoft or Yahoo, you’d be wrong. I think the real enemy for Google is itself, which is kind of like Microsoft, but for different reasons. Microsoft’s worst enemy is itself because it has to find ways to get people to upgrade from the existing versions of Microsoft software they already use. Or to move their users to a subscription model. Google’s worst enemy is itself because they have done an amazingly good job of accomplishing nothing.

“But they have so many products!” you exclaim. Exactly. They have got a ton of products, including some like the recently released Google Spreadsheets that seem to target Microsoft applications (though Microsoft’s Don Dodge makes a good case that they target open source software instead), yet none of them make money. Honestly, Google must have the largest number of non-revenue earning products of any company in history. I say they have accomplished nothing because their core product (AdSense, not search) really hasn’t changed all that much since it was launched. Instead of improving it, and finding ways to deal with click fraud and the other problems, Google has blinded itself with these side projects that seem bent on competing with Microsoft. And don’t be fooled by their ad company purchases – none of them have come to bear any fruit yet.

When I first learned about it, I thought that Google’s policy of encouraging employees to spend 10-20% of their time working on non-core projects was a good one, but now I am not so sure. It has resulted in lots of interesting technology to be sure, but not much else. I really don’t see how Google would get any ROI out of something like Google Spreadsheets. I have no idea what Google’s revenue breakdown is, but I highly doubt there’s a gem, other than AdSense of course, to be found.

That’s why I think Google’s worst enemy is itself. They have grown so big, so fast, that they forgot to take care of the goose that laid the golden egg. They haven’t cut it open yet, but if they continue to focus on these other mostly unimportant side projects, they might as well have.

Kudos Symantec

Post ImageI’d be remiss if I didn’t give props to Symantec today. It seems that Google, Sun, and many of Microsoft’s other so-called competitors could learn a thing or two from the security firm. Instead of whining to the government, Symantec plans to innovate and compete with Microsoft:

John Thompson vowed that it would put more resources into research and development over the coming the year, speaking to reporters at the Symantec’s annual Vision conference here.

“Our strategy is to out-innovate Microsoft. We know more about security than they ever will,” Thompson said.

How refreshing to hear that a company is going to compete against Microsoft for once!

Read: CNET News.com