A few months ago, I wrote an opinion piece in OBJ about how the Ottawa economy isn’t what it used to be. I received many comments from friends and readers, some disagreeing with me, but most acknowledging that our economy is not as robust as it was five to 10 years ago.
Many think this is just a normal economic cycle. However, some observers, including me, think we are seeing a structural shift in our economic base.
Since I wrote that article, a few other news stories related to this issue have caught my attention, including Air Canada’s decision to cancel its daily flight from Ottawa to Frankfurt in the winter months and Holt Renfrew’s announcement that it will close its Ottawa location, which has been in business for more than 75 years, early in 2015.
While these two events might not seem all that significant at first glance, their underlying causes are.
Air Canada is not seeing the business passenger volume it has in the past for the Frankfurt flight and Holt Renfrew is not seeing sales growth. Both the transatlantic flight and Holt Renfrew, a high-end retailer, rely on wealthy consumers, vibrant businesses and a federal government that is more focused on generating prosperity than on cutting spending.
OBJ has invited me to write some additional opinion pieces on the Ottawa economy, including the challenges it faces, the possible causes of its current woes and potential actions the business community and government can take to secure the region’s economic prosperity for the next generation.
The best method of understanding our current economic condition is to talk to various leaders in our community in an effort to look at the issues from multiple perspectives. Over the next six months, I will be sharing my discussions and offering my opinions on the following topics:
The federal government’s impact on the Ottawa economy
Federal spending cuts and downsizing have hit our city hard. The last time something similar happened in the early 1990s, our entire community rallied to minimize the impact on our economy. How are we reacting this time?
The changing nature of high-tech companies in the capital
Are our local companies focused on growth or survival? Many of our large homegrown tech firms have been sold to multinational corporations. Consequently, upper management and its decision-making power have been transferred elsewhere. How has this affected our economy?
Clearly, Ottawa still has a vibrant startup community with lots of support from organizations such as Startup Canada, Invest Ottawa and various incubators and accelerators. However, my discussion will focus on the companies that are beyond the startup phase and are now focused on international growth.
A workforce at a crossroads
This city has one of the most highly educated workforces in the world. However, do those workers have the skills and experience that employers are looking for today? We also have a large number of people who are currently underemployed because of the hollowing out of the senior management ranks at our tech companies. Is the next generation of growth companies taking advantage of these skilled human resources?
The financial crunch facing small business
Do our businesses have access to the financial resources necessary to fuel their growth? Homeowners can quite easily get a mortgage at 2.99 per cent, but local business owners are finding it increasingly difficult to secure commercial financing. Canada’s financial institutions tend to be very risk-averse. Is this contributing to local companies not being able to expand?
Lessons from local success stories
My last article will focus on local companies that are growing. What are these companies and why are they thriving? Does their success offer lessons for other entrepreneurs?
My objective in these articles is to generate a dialogue with you, the readers, and to encourage our community leaders to take action to collectively address our city’s economic challenges. I encourage you to get engaged and add your voice to the discussion through comments and conversations with your friends and colleagues.
Jeffrey Dale is the director and co-founder of the Odawa Group as well as the former president of the Ottawa Centre for Research and Innovation.