Thunder Bay’s transition to a knowledge-based economy is not optional

527

Sleeping GiantTHUNDER BAY – Thunder Bay’s transition to a knowledge-based economy is not optional:  without investing in developing a strong human capital (skill/talent) base, Thunder Bay will not be able to retain or attract businesses that require the skills and talents of knowledge workers.  Knowledge must be the means by which an economy adapts and thrives.  Even in the case where natural advantages are present (i.e. mining or wood product manufacturing), knowledge must play a critical role in the productivity of such industries.

This study, undertaken on behalf of the local Planning Board by P. Knafelc of Community Benchmarks, examines the Thunder Bay Census Metropolitan Area with the express intent of identifying and documenting the economic and labour force characteristics and trends that demonstrate or hinder the transition to a knowledge-based economy.

The executive summary of the report states; “Thunder Bay’s economic future lies in its ability to adapt.  Central to economic adaptation is Thunder Bay’s ability to transition its economy to one that is knowledge-based. 

Given the economic shift being experienced in Canada and Ontario, it is well documented that Thunder Bay’s economic performance, being traditionally reliant on the forestry industry, has weakened. Action is needed to support a new human capital infrastructure directed at transitioning the area to a knowledge-based economy. Such a transition is not a trendy economic development initiative, nor is it optional: a knowledge-based economy will be the primary determinant in Thunder Bay’s ability to regenerate jobs, and be a competitive player in a restructured global marketplace.

Thunder Bay’s transition to a knowledge-based economy must engage in the delivery of high value-added products and services.  Core to achieving this are employers and workers with skills and expertise.

It is encouraging to note that shining examples already exist within Thunder Bay of industrial sectors that are knowledge-based. The Health Sciences sector, for example, has already benefited the community through the creation of highly skilled jobs and the attraction of significant public and private-sector investment in research and development.

Additionally, there are industries within the community that are typically considered “traditional” economy sectors but are extremely well positioned to make the transition to a more knowledge intensive state. Thunder Bay’s Mining and Forestry sectors, for example, are some of the strongest sectors of their kind within the province. This leadership position and associated competitive advantage will be extremely beneficial as these industries look to improve worker knowledge and skills, and heighten productivity.

A proper assessment of the challenges is essential to forming a realistic and feasible approach. 

A number of factors speak to the need for economic and employment transition: 

· Since 2002-2003, Thunder Bay’s economic output (Gross Domestic Product) increased a modest 0.9 percent compared to a 9.4 percent increase in Ontario.

· Employment declined 2.8 percent in Thunder Bay and increased 10.1 percent in Ontario. 

· Revenue generated declined 5.5 percent in Thunder Bay while rising 14.1 percent in Ontario. 

These factors are also reflected in Thunder Bay’s labour market, where a lack of (or a perceived lack of) employment opportunities greatly affects the community’s ability to retain and attract skilled labour:

· Between 2001 and 2006, Thunder Bay’s migration trends show that 20,720 persons left the area while 19,757 persons moved to the area. 

· Thunder Bay also experienced a net loss of employed persons, with 6,715 employed persons leaving the area and 5,005 moving to Thunder Bay, equating to a net loss of 1,710 employed persons. 

· In total, 42 of the 57 occupations examined have experienced a net loss of  workers, including knowledge-oriented occupations such as Professional occupations in natural and applied sciences.

The data also suggests labour skill deficiencies, based on post-secondary attainment within Thunder Bay.  When compared to Ontario, Thunder Bay has a lower proportion of workers who have completed post-secondary education across the majority of occupations.  In 13 of the 26 occupations examined, Ontario’s proportion of workers with post-secondary credentials exceeded Thunder Bay’s by three or more percentage points.  In light of the necessity to be globally competitive, this difference makes the attraction of knowledge-based business investment more difficult. 

Related to labour skill deficiencies, while a modest 5.1 percent of Thunder Bay CMA’s workers live outside the area, they tend to have higher levels of education than those workers who reside in Thunder Bay. This suggests employers may need to extend their talent/skill search.  

On the positive side, Thunder Bay’s economy is incredibly resilient.  Even though tens of thousands of jobs have been lost in Thunder Bay CMA over the last decade, employment remains relatively stable (with only a slight decline) over the time period. 

Clearly, thousands of jobs are also being created, offsetting many of those lost.

Additionally, the fact that Thunder Bay’s median employment income increased 10.4 percent between 2001 and 2006 – outpacing a 10.2 percent increase in Ontario – suggests that many of the jobs being created are contributing to higher wage levels. 

Thunder Bay has also shown considerable improvement in educational attainment, with the proportion of persons with post-secondary credentials increasing in all but two occupations between 2001 and 2006. 

The transition to a knowledge-based economy is propelled by the need to adapt, survive and compete; paramount to this transition is a rise in productivity.  While productivity is difficult to measure, a proxy for productivity is the revenue (output) per worker.  With respect to this metric, Thunder Bay shows progress.  On average, between 2003 and 2008, the revenue per worker increased in Thunder Bay’s small- to medium-sized businesses (those with 1 to 49 employees).  Businesses with 5 to 9 employees showed the greatest increase in revenue per worker, increasing from $97,242 in 2003 to $183,714 in 2008.  This real and percentage increase in the 5 to 9 employee firm size, may be a key contributor to helping lead Thunder Bay’s future economic renewal.”

For more information, read the entire report at http://www.nswpb.ca/

Previous articleSupport Big Brothers and Sisters in Thunder Bay
Next articleOutstanding Creativity at Lakehead University Yields Stronger Concrete
NetNewsledger.com or NNL offers news, information, opinions and positive ideas for Thunder Bay, Ontario, Northwestern Ontario and the world. NNL covers a large region of Ontario, but are also widely read around the country and the world. To reach us by email: newsroom@netnewsledger.com Reach the Newsroom: (807) 355-1862