Tuesday, January 5, 2016

Economic Development Should Focus on Sustainability, Not Growth for Growth's Sake

Recently, I took Dick De Stefano's advice and cracked open the Greater Sudbury Development Corporation's new economic development plan, “From theGround Up, 2015-2025”. De Stefano, writing in the Sudbury Star last week, said the Plan “could change the face of the community for the next 10 years if all sectors actively participate and contribute their energy and insights" into the Plan's recommendations.  He also referred to the over-arching “Everest Goal” on which the plan is based – the creation of 10,000 new jobs in the City over the next 10 years (see: "Column: Sudbury's way to the future," the Sudbury Star, December 31, 2015).

I participated in the public consultation process for the creation of “From the Ground Up”, but it looks like the feedback that I provided took a back-seat to the vision which has emerged in this plan. That's not to suggest that the Plan isn't chock full of good ideas, because there really are an abundance of those (approximately 115 goals are identified, including the Everest Goal, along with numerous smaller goals broken down under 9 separate priority subheaders). Many of the Plan's goals are absolutely worth pursuing, for numerous reasons. But the context in which these goals are identified is, to me, somewhat problematic.

Getting It Wrong – Plan Focus

From the Ground Up” unapologetically focuses on job creation as the ultimate economic development goal for the City. While this may sound like a sensible measure to some, my question back to the Plan administrators has to do with why this goal was chosen. Shouldn't a goal of an economic development plan for a City be one in which the City emerges more economically healthy in the future than it is today? Again, one might argue that job creation facilitates that outcome – but we know that' based on the evidence, it isn't true. There are a number of factors which contribute to economic health, and they all have to do with sustainability.

What happens if we create those 10,000 jobs in the midst of a feverish boom period over the next 10 years, but we all end up paying higher levels of property taxes and new user fees to cover the costs of unsustainable growth? Is our City better off if it has to take on debt or raise taxes to pay for new infrastructure to accommodate this growth?

And that's why “From the Ground Up” is so problematic – because it is premised on the notion that the pursuit of growth alone justifies the pursuit of growth as an economic development tool – in fact, as the only economic development tool that really matters. And that's just not the case.

Climb Mount Everest

The Plan's use of an “Everest Goal” as a starting point – the creation of 10,000 jobs over 10 years – exemplifies this misguided approach to planning. The Plan describes an “Everest Goal” as being, “beyond normal goal setting. It represents an ultimate achievement or an extraordinary accomplishment and it requires everything one can give.” Clearly, the idea here is to create a target which is aspirational, but which should nevertheless be striven for – at all costs. To me, this seems like a very bizarre way of setting an over-arching goal for any plan. Shouldn't goals be realistically achievable? Otherwise, they represent one-in-a-million chances on which an abundance of resources are wasted trying to achieve.

As on Mount Everest, not every expedition is successful, but every step upwards moves us in a positive direction,” states the plan. And yet, as on Mount Everest, those unsuccessful upward expeditions based on poor planning usually end in downward retreat at best, or complete and utter disaster at worst. If you're going to climb a mountain – any mountain – your ability to do so should match your ability, because anything else is simply not sustainable. And that's why “Everest Goals” make incredibly poor benchmarks for planning purposes. If we've no realistic expectation of meeting the goal, why are we wasting all of our scarce resources on achieving it? Perhaps a more realistic destination ought to have been chosen.

Evidence-Based Planning vs. Counterfactualism

A man's dream should always exceed his grasp – I agree with that sentiment, but I think there's a question of how we determine an appropriate size for that gap. There's something to be said for having the audacity to dream big – but I think most taxpayers prefer a degree of realism when it comes to public spending and the use of public resources in the pursuit of shared goals. That's why it's so important for plans, including economic development plans, to set achievable, measurable, implementable goals based on clear evidence, and not pie-in-the-sky dreaming.

In this specific case, the Everest Goal – 10,000 jobs, representing a growth in the City's population of 30,000 new people in the next 10 years – isn't one based on anything like evidence. In fact, while the Plan acknowledges the recent Hemson Consulting report which looked at the City's expected population and job growth over the next 20 years (just 10,500 people over that period), it nevertheless rejected the good work which Hemson has done based on realistic, evidence-based growth modelling, and has instead chosen a counterfactual and unrealistic starting point for it's over-arching goal. Keep in mind, the Everest Goal is the one from which all of the other 114 goals flow. Starting in an unrealistic place – a place lacking in evidence – significantly diminishes the Plan and leads to sincere questions about the Plan's long-term sustainability.

Sustainability Should Be the Focus

But sustainability doesn't really seem to be something that the Plan is ultimately concerned with anyway. We're talking about growth for the sake of growth here, because growth has been always equated with economic development, at least in the past. Of course, new theories of economic development have been around for a few decades now – ones which aren't based on the old, failed growth paradigm, but rather use a suite of markers to determine success (markers such as happiness, environmental sustainability, and social equity).

It's 2015. It completely amazes me that a Plan developed from the guidance of steering committee consisting of 24 members from the business community, academia, government, labour and the arts community, could lack a focus on what's really important to Greater Sudburians – sustainability. Yes, Greater Sudburians are concerned about sustainable development, whether they know it or not. All that griping about our roads, or burst watermains? That's because we can't pay to the costs to maintain our current physical infrastructure. Despite never having budgeted for long-term maintenance of our infrastructure, we continue to hear that property taxes are too high, and user fees are gouging residents. Again, those aren't matters which “growth” is going to address. It hasn't elsewhere, and it hasn't in Greater Sudbury.

Growth clearly isn't the answer. And if it's not the answer, why are we pursuing it? And not just pursuing it – “From the Ground Up” would have us pursue it in a single-minded manner, almost as automatons, with “everything one can give” - even when it's not based on evidence or reality.

Implementation Matters

Dick Di Stefano urged every citizen in our City to embrace this Plan as a way forward. I think that would be foolhardy, although I have to acknowledge that Plans like these will most often sit on the shelves, collecting dust – trotted out only rarely for some moribund annual reporting exercise. This isn't a “living plan” - it's a snapshot in time, viewed through a 1980s Danny Gecko-type lens.

Plans ought to identify responsibility for implementation. While there are “partners” identified for the 114 goals of the Plan (most of which are organizations in our community), there's a clear lack of ownership of the specific goals. The Plan calls for monitoring and report-backs quarterly to the public, and annually to Council, but those are all to be done by the Development Corporation. If Laurentian University, for example, doesn't want to play ball “maximizing partnerships to promote more innovative and globally connected entrepreneurship start ups, and to leverage and compliment existing entrepreneurship structures and programming,” as per Goal 1.3.5, then what are the consequences?

Ownership of goals is critical for implementation. So is plan monitoring and review. That a plan is monitored is important, but how it is monitored is just as important. What are the benchmarks for success? What are the timeframes for implementation? Yes, From the Ground Up does identify timeframes for each goal – short, medium and long, but that's it. Where's the implementation plan to accompany the goals? What actions specifically will lead to these goals being achieved? Who needs to undertake them? We can have as much reporting back as we want, and undoubtedly some of the goals identified here will end up being met – but if they do, it won't be because the Plan provided a lot of direction. It will be because the goal made sense and those involved in working towards the outcomes went and figured out a way to do it outside of the Plan.

If we're serious about wanting the success of specific goals, we should be serious about developing a path forward in which there's a realistic and detailed way of achieving the goal. That's called an Action Plan – and it's something which is clearly missing in From the Ground Up.

We Measure What We Value

The Plan does identifies “Key Performance Indicators” on which report backs will be prepared. These indicators are very telling, as they intend to measure the Plan's success based on what's important, or valued. The success of the Plan will be determined by counting things: the number of jobs (presumably “more” will be better than “less”, although it's not specified); the number of students enrolled; the number of products tested; the value of building permits; the number of unemployed individuals (and other numbers).

None of the Key Performance indicators measure those things which are actually important to Greater Sudburians – the livability of our City; the rate of municipal property taxes vs. earnings; the sustainability of our municipal infrastructure. Again, let me be clear: we can have all of the growth we can get, but if we're worse off as a City as a result, what was the point?

That being said, these Performance Indicators may be well-suited to the Plan prepared by the Economic Development Corporation, because the measure of primary importance to the Plan is simply the creation of jobs. If we have more jobs tomorrow than we do today, that'll be a success from the Plan's point of view.

And that's just not good enough.

Economic Development = Long Term Sustainability

The point of any economic development stratetegy should be to prioritize the health and well-being of citizens, along with long-term fiscal sustainability. The Province of Alberta here provides a prescient object lesson. Throughout the 2000's, Alberta's economy boomed, but the Province failed to invest in the infrastructure needed to make cities more livable. Only later did it realize that health care and social services, long neglected, were not meeting the needs of Albertans. Rather than using revenues from the boom economy to invest in Alberta, and to generate additional revenues, Albertans were left to muddle through the boom economy, which may have worked well for those in the midst of the boom, but for others outside, no so much.

Well, now that the boom is over, what does Alberta have to show for all of that growth? Not as much as it might have otherwise have leveraged for sure – along with a provincial fiscal deficit of about $7 billion dollars. Alberta had the chance to leverage growth there in a way which left average Albertans better off than they were in the past. Largely, this hasn't really happened. When growth for growth's sake is your priority, that's what you get. When you plan to make the long-term health and well-being of people your economic priority, that's what you'll get. And that's why it's astounding that our City is being urged to embrace an economic development plan which actually doesn't prioritize our health and well-being, but rather simply pursues growth as if growth were all that mattered.

Good Goals

Yes, I know – what I've written there doesn't acknowledge all of the good which will come from achieving many of the goals identified in the Plan. Who wouldn't think that attracting academic and industry leaders to our City is a worthwhile endeavour to undertake, or that development a program to retain skilled workers and graduates would benefit our City? Again, I acknowledge that there are many good goals in the Plan that we ought to be pursuing, despite the growth paradigm in which the Plan was developed.

But what about goals like, “ensuring that Greater Sudbury's roads network meets the needs of current and future economic growth”? On the surface, that seems reasonable – sustainable, even. But what are our “needs”? Are they based on Hemson (10,500 people over 20 years), or From the Ground Up (30,000 people over 10 years)? And why single out our roads when there are other components of our transportation system which we ought to be focusing on – likely as even a greater priority?

And are the other 114 goals identified realistic in the context of reality, or just in the context of the counterfactual Everest Goal? Likely, many of them are – but to what degree? Can they actually be achieved in our existing context, or is success contingent upon achieving a completely unrealistic goal?

Again, if you start your plan in the wrong place, these are the sorts of traps that you'll fall into.

Thinking More Broadly About Economic Development

And what about goals not mentioned? What about developing tools to better achieve housing affordability for everybody? Or what about the bold step of achieving economic development goals by ending homelessness, as they've done in Medicine Hat? Not only are these measures potentially ones which would contribute to greater economic stability (although not necessarily growth or job creation), they're also ones which are likely to lead to greater livability in our communities and the happiness of residents. Those are just two examples.

The Plan's Appendix A, Consultation Summary, actually identifies numerous items which could have been made Plan goals, but weren't. In many cases, items identified from the community conflict with one another (some want more roads like Maley Drive, while others want to curb sprawl and intensify development), but many would be worthwhile pursuits for economic reasons (example: ensure drinking water quality remains high; moving downtown rail lines; more green space). However, the lack of focus on jobs (which are, after all, what the Performance Indicators will measure), probably doomed these valuable suggestions to the Appendices rather than the body of the Plan.

Going Forward – Making Economic Development Work For People

A lot of good work went the development of “From the Ground Up”, but the Plan's lack of basis in reality, coupled with a poor implementation strategy and performance measures which aren't based on sustainable or even necessarily positive outcomes will lead to this Plan taking up space on the City's shelves, collecting dust. That it also contains important goals which we can all work towards achieving is besides the point. The 10,000 job Everest Goal, for example, won't be translated into the City's Official Plan, or Infrastructure Plan, because those Plans are based on evidence, and not on counterfactual aspirations.

Going forward, let's make economic development initiatives and strategies work for the betterment of our City and its residents, rather than simply pursuing growth for the sake of growth. Let's develop a real economic development strategy, based on evidence, with long-term sustainability at its heart, to better help guide our way forward in the 21st Century.

(opinions expressed in this blog are my own and should not be interpreted as being consistent with the positions and policies of the Green Parties of Ontario and Canada)

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