Can professional services succeed where manufacturing has failed?
A recent Bloomberg report suggests that since exports of oil and other commodities have not been able to significantly buoy Canada’s economy, it may be time to look for an alternative model.
Historically, exports in raw materials have been a major contributor to Canadian GDP expectations. “[The prevailing idea is that] we are a rich country in natural resources and we’re a net exporter of those raw goods, and nothing that we have managed to do in the past has really reversed that trend,” said Bloomberg correspondent Danielle Bochove.
She explained that while there have been efforts to shore up the economy through manufacturing, Canada has remained a net importer of manufactured goods even with a weak Canadian dollar.
In light of that, what’s needed is more diversification. “It’s not easy … going for the simple solution, which is taking stuff out of the ground and selling it as cheaply as we can abroad, is not a long-term solution because these are finite resources and it also hasn’t done the economy much good lately,” she notes.
With that in mind, the Trudeau government has been eyeing a solution that’s higher up the value chain. Services-sector jobs are reported to have been growing twice as fast as manufacturing jobs.
“However, as energy prices have fallen, we have lost more in terms of oil exports than we have gained in terms of exporting services, so it’s obviously not the entire equation,” said Bochove.
Citing an earlier Bloomberg interview with a Canadian businessman formerly from South Africa, she pointed out the opportunity for a more holistic approach which may benefit from Canada’s immigrant population. “Canada has such an immigrant-rich population, and increasingly the immigrant population is coming from parts of the world that are still growing.”
While there is debate ongoing between proponents of protectionism and those of globalization, certain regions are opening their doors. A globally focused government in Ottawa, which is focused on welcoming more waves of immigration, may represent an opportunity to build business and economic ties between Canada and immigrants’ mother countries.
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