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REF NO.: 58
SUBJECT: Professor says province needs a promotion to compete
DATE: Oct. 24
Dr. Dave Stewart, a professor at the Faculty of Business Administration, thinks Newfoundland and Labrador needs a promotion - agency that is. Dr. Stewart, who holds the Vector Aerospace Chair in Irish Business Studies, and his assistant Brandi Green, have been examining how other regions, particularly Ireland, have attracted businesses and how their investment promotion agencies (IPAs) work. Their report could help bring investment to the province and bring Newfoundlanders back home.
Ireland has become a model for economic development and for the past six months Dr. Stewart has been researching how this province could learn from their success. He attributes much of Ireland's economic success to the work of its IPAs. An IPA's main goal is to attract foreign investment into a country or region. This type of investment generates jobs, brings expertise to the region, and diversifies the economy. It also tends be fairly significant and can lure skilled expatriates back home.
"When Intel considered setting up in Ireland they were concerned the country didn't have enough skilled engineers for their operations. What they found out was that many of Ireland's skilled engineers were working abroad and were prepared to come home. Intel's decision to locate in Ireland brought many of these engineers back."
In the past, Atlantic Canada has only been able to attract around seven per cent of Canada's total foreign investment. Dr. Stewart believes this is partly due to how the area is promoted. Currently, the Trade Commissioner Service, which operates through Canadian embassies, is required to promote the country as a whole. "It's difficult to promote the distinct advantages of doing business in Newfoundland and Labrador when you're trying to sell all of Atlantic Canada at the same time," he said.
Dr. Stewart believes Newfoundland would have more success in attracting foreign investment with an IPA of its own. In the Throne Speech presented last March, the provincial government proposed a business attraction agency. "The agency needs to be properly resourced, recruit a mix of public- and private-sector expertise and be focused purely on investment promotion." He argues that current government structures that link trade and investment should be reexamined. "While trade and investment are linked, trade is a short-term activity while investment is a long-term activity," Dr. Stewart explained. "It's difficult for one agency or department to concentrate on both. The agency should target specific industries and companies and develop a value proposition to present these companies."
Dr. Stewart suggested that a good starting point for the new agency would be to examine the needs of existing foreign firms within the province. To read about Dr. Stewart's other recommendations in the complete report visit www.business.mun.ca.
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