Snap Summary, CUSLI Conference Panel 3 – The Great Lakes-St. Lawrence Region in the Era of Global Competition

The Canada-U.S. economic relationship is fundamentally different with the raise of new major economic powers.  And public policies, whether workforce training or deciding how much foreign State-owned industries (read: China) can buy into domestic industries.

The panel participants:

Jim Dickmeyer, U.S. Consul General in Toronto (Chair)

Renato Discenza, C Suite Leader in Private and Public Sector

Kasi V. P. Rao, Kasi Rao Consulting Inc.

P. Kelly Tompkins, Executive Vice President for Legal, Government Affairs and Sustainability, and Chief Legal Officer,  Cliffs Natural Resources and President, Cliffs China

Christopher Smille, Senior Advisor, Government Relations and Public Affairs at Building and Construction Trades Department, AFL-CIO

Douglas Porter, BMO Capital Markets

The Global and Canada-U.S. Economic State of Play:  U.S. Looking Up, Canada Down a Touch, Great Lakes is a Critical Economic Player

Douglas Porter, of BMO Capital Markets, kicked off the panel with a presentation on the state of the global economy.

Some highlights:

-“a slow-down in the Canadian housing markets” – leading to Canada not growing faster than the U.S.

-Great Lakes Region:  Facts and Figures – looking at States and Provinces who touch the Great Lakes.  The Great Lakes would be the fourth largest

-Ontario trade with Great Lakes States larger than any other States, or other nations.

-Labor Market:  Manufacturing jobs lead the way, with construction, government and leisure and hospitality area are the lagging sectors.

Renato Discenza:  “Nothing is inevitable about where we end up as an economy.”

“Nothing is inevitable about where we end up as an economy, ” Renato Discenza told the group.

Whether Canada and the United States will succeed in the 21^st global marketplace will depend on how we shift our role in the global economy.

What’s the change?  Simple, according to Discenza, “Whatever it is, [China] will be the biggest market?”

But China’s being the biggest market doesn’t mean that North America can’t secure its own prosperity for the next generation.

Instead, “our region [the Great Lakes] could actually help people in their domestic supply chains.”  One example he shared, getting our Smartphones into emerging market economy.

Kasi V. P. Rao:  The Attitudinal Shift Needed for North America to Succeed in the World’s New and Soon-to-be Largest Markets

Kasi Rao stressed three issues that have changed the global marketplace.

Those issues:

Emerging Market Conflicts, Economic or Otherwise, are no Longer Regional.  China and India are now not regional players, but global players.  Their conflicts are global conflicts.

The Needs of the Global Economy, Thus Biggest Business Opportunities, Are Coming from Emerging Industries.  Most of the world’s greatest challenges are coming from emerging economies, with China and India leading the way.  Companies who address these will be the in-demand companies of the 21^st century.

We Need to Share Knowledge and Collaborate With Emerging Markets…And That’s More Than International Students.  The need of collaboration and international knowledge sharing is critical to economic success.  This goes beyond international students.  Rather, like Gary Goodyear, research partnerships between Canada and India.  “Increasingly, this is the world we need to go.”  Why?  Businesses must deal with “consumers at the bottom of the pyramid.”  Like Nokia cell phones have dust buster component to adapt these goods to new markets.  

My favorite key points:  

Frugal innovation is needed.  “Frugal innovation” isn’t just cost-efficiency, it “responding to the needs of consumers.”

Hard and soft Infrastructure.  Demand for work training and research will quintuple.

Why the Great Lakes Can Succeed.  “Simply no reason why the Great Lakes Region…we’ve got the networks, we’ve got the institutions, what we need to do is demonstrate  an attitudinal shift and sustain it …which will serve us very well for the next 40, 0 years.”

P. Kelly Tompkins:  ‘The Globalized World’ A Cleveland Company Developing Canadian Resources Fate May Be Decided by Chinese Investment in Africa.

Kelly Tompkins, of Cliffs Natural Resources, shared his experiences with our emerging markets are fundamentally changing the economic dynamics of the Canada-U.S. economic relationship.

On the one hand, Cliffs—a Cleveland-based company—is setting up a new Chromite Mine in Northern Ontario.  Sounds like the typical Canada-U.S. story of the last 50 years.

But “[o]ver fifty percent of our product is being sold to steel industries in China.”  And the iron ore is “coming out of Quebec.”

The big takeway:  Canada-U.S. relationship, as shown by Cliffs, will be defined by China and other large developing economies, who are now players in regions like Africa.  Hence, a Cleveland based company who trades mainly to Canada fate may be decided in Africa.

Christopher Smille:  The Market Will Leave Behind Jurisdiction That Do Not Pick the Right Human Capital Policies

Chris Smille, with AFL-CIO, interjected a workforce perspective, providing an interesting viewpoint to a panel dominated by industry and finance experts.

Yes, Smille, agreed, the free market is important and businesses and governments working to understand new customers is critical.

But, guess what?  

“The question of growth will be squarely determined by human capital.”

“Markets beside the flow of capital…a free market economy would tell me that the market will work out this human capital thing out.”

The goal:  Not to lose a new business opportunity in the Great Lakes because a skilled workforce is lacking.

Why Chris has reason to worry.  His organization represents skilled trade laborers, and they ready and willing to work.  

But guess what?  They’re graying.  52 is the most common age in his membership.

But this is a problem since,

Infrastructure.  All the Great Lakes jurisdictions will need to update infrastructure over the next 20 years.“  In Alberta, alone, over the next…now and 2020, they are going to be spending $250 billion dollars for upgrading oil sands infrastructure.” 

Future Industries Need Skilled Workers.  “How is the Great Lakes Region going to compete? … How will you build the solar farms of the future?”  Not to mention other sites that will need update.

Transportation:  All the jurisdictions “have a vested interest in developing a skilled workforce”; “make sure the human capital thing right”

And immigration can’t fix this, and it probably shouldn't Chris contended.

Skilled labor, unlike the masses of poly sci grads who can’t get jobs, among the new generation can secure good jobs for our public and ensure North America competes in the 21^st century marketplace.

 “To get the economic thing right, we have to get the people thing right.”