September 1, 2000
A lack of leadership and vision, plus an increasingly uncompetitive infrastructure spells trouble for Winnipeg. A technology expert assesses Winnipeg’s bleak prospects in the new economy and offers some solutions.
Winnipeg Quo Vadis (Where are you Going)?
Elegy Written in a Country Churchyard by Thomas Gray
The abandoned prairie farmhouse, the silent mill by the stream, the stone fence overgrown and hidden by forest are all popular poetic symbols for the decay in traditional rural values of hard work, family, and community. Will artists portray the deserted downtowns of cities by-passed by the changing nature of our institutions with the same sense of sentimental loss? And will Winnipeg be one of these?
It is a myth to believe that the future is difficult to predict: what is difficult is being accurate. But even that is not so tough when projecting the rise and fall of economic entities that confront rivals with technologies superior in cost and service: it is just a simple matter of making the prediction and waiting for the slow and painful but inevitable to occur. Lamentations for heroic struggles in the face of the pre-ordained is the fodder of poets, but for Winnipeg there will be no music and no poetry.
The city was founded at the confluence of the Assiniboine and Red Rivers and became the transportation gateway to the West and North for the new Dominion of Canada. It attracted a diversified and vibrant business activity and at the turn of the century had the most prized real estate of anyplace in North America. The interests of financial and grain companies came to define downtown Winnipeg. Urban planners designed city cores so that the communication links among workers could be as short and as efficient as possible. This was at a time when the costs of storing (filing cabinets), manipulating (human interface), and transmission (telegraph and long distance telephone) meant that these workers had to be close to one another and close to the physical product they controlled. Costs were high and jobs labour intensive.
But now the Internet and the technologies that underpin it have reduced these business costs by an entire order of magnitude. What used to cost $10 can now be had for $1 and the costs continue to decline exponentially. Jobs in Winnipeg's $10 infrastructure are bleeding away to those cities that have retooled with information technology and are successfully competing for knowledge-based, high-value jobs. While Winnipeg has clung to the dream of revitalizing its downtown on the basis of restaurants, baseball parks, and libraries, cities as diversified as Halifax, Fredericton, London, Saskatoon, Calgary, and Vancouver have been preparing for a decade to adapt to the changing nature of institutions and developing digital infrastructures and mounting new industries. No credible IT infrastructural job-creation proposal has yet come from either the City of Winnipeg or the Province of Manitoba.
Winnipeg's strategy of becoming a low-cost producer of low-valued products is best exemplified by the conversion of Nortel's abandoned plant: $50-an-hour jobs are being replaced by $10.00-an-hour call centre jobs. Being a low-cost producer of low-value jobs is not necessarily a bad thing: the unskilled tasks are satisfactory for many and can provide thousands of needed jobs in the city. This good short-term strategy to reduce unemployment in Manitoba, however, was never followed up with a long-term strategy by the municipal and provincial administrations to create permanent valued-added jobs in IT or knowledge-based industries. . It's a shame, because it is precisely this kind of job creation which generates sustained wealth and stability for a city and province, and which in turn resuscitates downtown cores, fosters lasting financial support of the arts; makes cities national players, and endows leading educational facilities.
Can the tide be reversed? It will be tough. Other cities are more than a decade ahead of Winnipeg in developing their entrepreneurial and new media skills in sectors where learning is dominant and exponential, and change so rapid that it is best measured in dog years. For a city that has yet to start the transformation from an industrial to a knowledge-based digital economy, the prospects are increasingly dim.
One way to begin is by convincing municipal authorities, through the use of a high profile, independent audit, that Winnipeg's current economic development strategy has missed the high-value opportunities inherent in the shift to the digital economy. Hand waving, "one-offs" and stop-gap jobs will only obscure and delay the massive rebuilding required. The livelihood of tens of thousands of Winnipeggers depends on jobs that are competitive in the global digital economy. As theory and empirical evidence demonstrate, for Winnipeg to gain a competitive advantage in securing high-value jobs, every element of the community - labour, management, educational institutions, and government - must work together. Above all, the mayor of Winnipeg must provide a vision and lead the community, coupled with a staff that share and understand the vision and have the skill-sets to implement it. The vision must be clear, constantly articulated, and reinforced by all political levers available.
One such vision would be to use the city's reputation as a provider of low-cost quality products to attract manufacturing operations such as Celestica's (controlled by a former Winnipegger) to which Nortel and CISCO outsource work. Over time (and it may take up to a decade) Winnipeg could use these orbits of change to develop high-level technical, entrepreneurial, and conceptual skills and becomes a leader in the next wave of technological change.
Even with the best vision and a superb plan to see it through to fruition, Winnipeg will not be successful in providing meaningful employment unless it becomes a more competitive place for investment, capital, and the knowledge class to live and work in. The bigger picture of competitive taxes, better quality educational facilities, and broader quality of life variables requires partnering with the province. The mayor needs to make it clear that the prosperity of Manitoba depends upon the wealth-creating potential of the 65% of its citizens who live in Winnipeg.
Winnipeg may yet escape the iambic pentameters of those poets who will find their themes in the decaying remains of downtown cores, boarded up windows, rusting girders, and papers blowing among the weeds of vacant parking lots.
I hope so.
Related Items:See the federal reserve bank of Dallas’s excellent overview of how technology is shaping the new economy, in the frontier centre's virtual library
Stephen Leahey was formerly the president of the Manitoba Innovation Network. He now operates Pagweak Consulting, a technology consulting company from Nova Scotia.