If there is ever a blog post of mine worth a read, this is it.
And if there is ever a list of reasons as to why I am considering a run for the Mayor’s chair in the next election, they are listed below.
Reason 1: London’s economy is in material decline.
Please do not let the recent upticks in percent employment and housing starts as reported in the local media mislead you. London’s economy is eroding and at a rate of decline that should be of concern to us all. I shall not bore you with a lot of dry economic analysis. However, the trend lines, especially when compared to our peer municipalities are not good.
- Gross Domestic Product averaging 1% growth for over a decade while growth is materially higher almost everywhere else in Ontario.
- Employment Rate hovers around 60% for the last 10 years. The rate elsewhere averages 65%.
- Labour Participation Rate (measure of people employed or seeking work) now below 60% for the first time. Rate elsewhere averages nearly 70%.
- Personal Median Incomes declined 3.6% since 2005. Incomes are up in most other cities.
- Number of Londoners without any employment income increased 19% since 2005.
- Number of monthly Ontario Works cases (Londoners on social assistance) have increased 55% since 2005.
The increased number of monthly Ontario Works cases is particularly concerning because it represents not just the loss of an employable Londoner’s contribution to the local economy, it also represents an additional and considerable social cost that the city must now bear. And please do not assume that this high number is influenced by the number of retirees in our city. The percentage of London’s retirees closely approximates that of many similar-sized municipalities in Ontario.
In fact, it can be argued that the number of Londoners relying on Ontario Works (estimate 20,000 people based on 12,000 households) approximates and may even exceed the total number of employees actually working in either of London’s two largest employment sectors – health care (~20,000) or manufacturing (~22,000).
Reason 2: London’s economy is surrounded by a wealth of assets and opportunities.
Perhaps what is most frustrating about the troubling economic ‘lowlights’ outlined above is that London does not have to be struggling this way. In my view, with a little focus, better leadership, better organization, and a lot of perseverance, London could not just “reverse this curve”, but flourish in the global economy.
Some of these opportunities are well-known and rather obvious. For example, most Londoners would acknowledge the economic value of our proximity to the United States, our close connection to the 401/I75 corridor, access to the largest airport in the region, the diversity of our primary economic sectors, and advanced education levels of our workforce.
What may be less obvious, but no less important, is that London is strategically located inside the heart one of the most fertile agricultural ecosystems in North America and the largest freshwater catchment area on earth. This presents significant opportunities to develop value added industries in food production and food processing.
London is also home to two of the largest, most reputable, post-secondary institutions in the nation. This includes one of the largest concentrations of medical research and clinical care talent per capita in Canada.
London’s digital sector has also made significant strides not just building businesses, but also reaching out to all parts of the digital economy. In fact, a large number of them were recently recognized among the 500 fastest growing companies in Canada.
London serves as headquarters for some the largest and most reputable builders, developers and investors in the region.
London has repeatedly demonstrated an exceptional capability to attract a wide array of arts, cultural and entertainment events, as well as industry partners, to drive the city’s tourism and hospitality sectors.
Finally, the London region is fortunate to be home to an impressive roster of first class corporate entities including 3M, General Dynamics, London Life, Labatt, Formet, CAMI and TD. These highly respected organizations anchor London’s vital interests in manufacturing and financial services.
All of these assets present our city with a boatload of opportunities to not just reverse the trajectory of our local economy, but restore London’s economic relevance in the region and provide its citizens with an opportunity to contribute to a better local society.
Reason 3: London’s economic challenges are fixable
This is leads me to one of the key barriers to our success. London’s economic development organizations and assets do not work as a team. In my opinion, the City of London spends more than enough money on economic development initiatives. Unfortunately, the current system lacks clear lines of responsibilities, quality execution and independent measures of success. This lack of alignment leads to siloed thinking, sub-optimal market approaches, duplication of effort and a reputation of business-indifference.
Let me share with you a specific example. In 2003, the City of London, in partnership with the Ontario Government, opened the Stiller Centre for Biotech Commercialization – an impressive incubator designed to stimulate and nurture early-stage companies in the emerging life sciences sector.
For the next 10 years, the Stiller Centre struggled to operate at breakeven, as the cost of delivering the Centre’s roster of entrepreneurial programs and support services exceeded the Centre’s revenue generating capability. At some point during this period, the Stiller Centre leadership team sought and received approval for a $200,000+ annual subsidy from City Council to support the Centre’s efforts.
In 2010, after several years of losses, the Centre Board in partnership with the City, approached Western University to negotiate an agreement where the University would assume ownership of the asset in return for a commitment to absorb any future losses.
In 2012 I assumed responsibility for the Centre as part of my new executive role leading Western’s Research Park. Within a short period, I determined that the Centre team and its roster of services were almost exactly the same as those provided by TechAlliance, another city-subsidized organization that had accumulated an impressive track record developing early-stage tech companies. In response, I collapsed the Stiller Centre’s entrepreneurial support program and engaged TechAlliance to deliver the service to our tenants. Concurrently, I committed to City Council that beginning in 2017, the Stiller Centre would no longer require the City’s annual subsidy, and encouraged the City to explore alternative uses for the funds. It is worth noting that the Stiller Centre has operated without a loss since 2013.
I share this story not just to demonstrate our collective ability to deliver these business development programs more efficiently, but also to illustrate the duplication of services that exists in London. This duplication reflects a systemic problem within London’s economic development apparatus – something that needs to be corrected if we are ever going to “reverse the curve”, and collectively give our businesses and citizens a fighting chance to succeed in the global economy.
Before closing, I want to extend a special note of thanks to the amazing number of selfless business people who have, once again, kindly offered to assist in the development of a game plan for London Inc. Your expertise and contributions to the quantitative and qualitative arguments that are shaping this series of posts is sincerely appreciated.
London’s economy has material challenges but enormous potential. What is needed now is a plan to manage the challenges and pursue this potential, a team to deliver on the plan, and the collective will to make it happen.
Next Week – An Achievable Vision for London’s Economy