The Canadian Manufacturers and Exporters (CME) Association released a report in late February, that summarized survey results from Canadian manufacturers and exporters on their perceptions of business conditions.
Key trends from the survey include:
A majority of manufacturers and exporters expect the value of new orders to fall over the next three months – 56 per cent say that orders are likely to decrease between February and May. This is a less optimistic outlook than in January when only 43 per cent of companies were expecting new orders to drop in the coming three months.
45 per cent of companies say that employment levels are likely to fall. This is slightly higher than the 42 per cent of companies that expected their employment levels to fall in the January survey.
The credit crunch is affecting smaller companies the most, but larger companies are now reporting difficulty accessing financing. 60 per cent of manufacturers and exporters report difficulties accessing adequate levels of financing including obtaining working capital, extending lines of credit, accessing financing for new technologies and product development.
Ottawa is at 4.6%, but this low number may be misleading due to the outflow of laid-off workers from the city. During past tech layoffs Stats Canada reported that, 2 out of 5 laid off tech workers left Ottawa — with the declining prospects for tech workers in Ottawa, this rate of departures will likely have increased in the current downturn.
Over the years, I used the OCRI services for the launch and ramp of both Liquid Computing and Purple Forge. Liquid Computing and myself were both honored to receive OCRI Awards and recognition. Moreover, I have benefited from Jeffrey’s personal help and support.
As a result of my belief in the good work that OCRI was doing for our community and my positive personal experiences with the OCRI team and Jeffrey, I joined the OCRI board of directors two years ago.
With Jeffrey’s departure, I spent some time this weekend reflecting on what I will remember the most about OCRI under Jeffrey’s leadership. There are a long list of things I will remember, but the three things that will stand out the most in my memory about Jeffrey are that -
Jeffrey was a very active and very visible cheerleader for Ottawa and the tech community. He was also an articulate spokesman – he put a face on the local tech community and was a visible advocate of its interests;
Jeffrey worked tirelessly on behalf of the community in general – the job was definitely not a 9 to 5 type of job;
Jeffrey established a team at OCRI that was very much focused on the entreprenuer – in my direct experience – the OCRI team is responsive, knowledgeable and sincerely interested in making a difference, and that reflects on its leadership.
A recent Rand report , “The Global Technology Revolution 2020″, looks at 16 upcoming key technologies and the ability of 29 countries to acquire and to implement. The following chart identified the key technology applications -
Only three of the 29 countries examined by Rand were identified as being able to acquire and implement all 16 key technology applications – the United States and Canada in North America and Germany in Western Europe.
The Ontario Commercialization Network Steering Committee Report was delivered to the Minister late February. PWC produced a report on OCN prior to the Steering Committee Report but it was not made public.
The report makes some blunt assessments of serious problems with Ontario’s current approach to economic development and commercialization. Some key findings include:
Lack of co-ordination and sharing across many fragmented organizations
Lack of overall governance
Lack of clear entry-point for clients/entrepreneurs
Lack of metrics and performance targets
Need for better co-ordination between Provincial and Federal governments
Economic conditions demand quick action
Key recommendations include specifics related to:
Fixing the governance model
Fixing the delivery model
Reducing overlaps of products and services within the Province and between the Province and Federal programs
The report was one of the best i’ve seen so far – it cuts directly to the issues and provides some very rational recommendations.
According to the Globe and Mail, Chrysler has resorted to extortion in order to extract tax payer money to prop up their failing company. According to the article:
At a parliamentary committee hearing last night, Chrysler president Thomas LaSorda said the company would commit to maintaining roughly a quarter of its North American production in Canada if its “needs” are met.
Chrysler then went on to list three demands/conditions of Chrysler continuing operations in Canada: union concessions, tax payer money, and an agreement that Canada will back off on its tax collection efforts to recover $1B in taxes it currently owes the Canadian people.
(Chrysler officials) “can say whatever they want. … Taxpayers expect us to apply the same rules to everybody in Canada and we’re not going to change the rules for Chrysler”
U.S. troops returning from duty in Iraq will be carrying out homeland patrols in America from October 1st in complete violation of Posse Comitatus for the purposes of helping with “civil unrest and crowd control” – which could include dealing with unruly Americans after a complete economic collapse.
Other news reports have highlighted past “behind the scenes” preparation by the US government relative to even a modest level of anticipated civil unrest, such as the advance preparation of massive prisoner holding pens which were put in place for expected mass arrests during the Denver Democratic National Convention in 2008.
Denver
Recently, a bill entitled the National Emergency Centers Establishment Act (HR 645) was introduced in the US Congress in January. It calls for the establishment of six national emergency centers in major regions in the US to be located on existing military installations. The stated purpose of the “national emergency centers” is to provide “temporary housing, medical, and humanitarian assistance to individuals and families dislocated due to an emergency or major disaster.” Some pundits say that this bill is in reality establishing domestic internment camps since HR 645 explicitly states that the camps can be used to “meet other appropriate needs, as determined by the Secretary of Homeland Security.”
Europe’s top politicians are so rattled by the prospect of growing protests that they have arranged an emergency leaders’ summit in March to deal with growing tensions.
There are numerous tent cities starting to appear in the United States as the financial crisis continues to hit hard.
Growing Tent City Outside of Sacramento California
The Daily Mail in the UK reports on the growing number of unemployed in the US moving into tent cities. The article talks to the growing tent city outside of Sacramento California. Surprisingly, Sacramento’s mayor, Kevin Johnson views this as a viable solution to handling the increasing number of unemployed. The Mayor is quoted as saying:
‘I can’t say tent cities are the answer to the homeless population in Sacramento, but I think it’s one of the many things that should be considered and looked at.’
There are an increasing number of videos that document this disturbing trend -
… 31,000 jobs added to the health care and social services sectors in February alone.
Recession-proof jobs are identified as including: education, health care, the public service. Civil engineering and construction jobs are also considered safe due to government stimulus spending on physical infrastructure such as roads and bridges.
Nortel currently accounts for 32% of the R&D spend in the top 10 spenders in Canada, and Magna (automotive parts) currently accounts for 13%. Over 45% of the R&D spend of the top 10 spenders in Canada is in decline and at risk of evaporating to nothing.
Unfortunately – RIM which is always held up as the shining tech light for Canada – isn’t even in the same league as Nortel and never will be. It could be argued that RIM is likely to rapidly diminish in size/scope over the coming years as technologies such as the iPhone and Android continue to see rapid adoption.
Jeff predicts thatthe US auto industry will undergo a massive correction that will eliminate 200,000 more jobs as half the US’s 51 auto plants are permanently shut down.
The Canadian economy contracted at an annualized rate of 3.4 per cent in the fourth quarter, compared with a 6.2 per cent decline in the U.S. economy, a 5.9 per cent drop in the European Union and a 12.7 per cent plunge in Japan. Canadian GDP dropped 1% in December.
A friend in California sent me an article today that was very disconcerting. The article was reflecting on a recent report published in Europe relative to the impacts and consequences of the economic situation:
According to the European think tank, LEAP/Europe 2020, two factors make the US a likely candidate for civil violence: the absence of a strong social safety net and the presence of hundreds of millions of firearms.
Former National Security Adviser Zbigniew Brzezinski has publicly expressed his fears about impending civil unrest with MSNBC’s Joe Scarborough:
JOE SCARBOROUGH: You also talked about the possibility of class conflict.
ZBIGNIEW BRZEZINSKI: I was worrying about it because we’re going to have millions and millions of unemployed, people really facing dire straits. And we’re going to be having that for some period of time before things hopefully improve. And at the same time there is public awareness of this extraordinary wealth that was transferred to a few individuals at levels without historical precedent in America….
And you sort of say to yourself: what’s going to happen in this society when these people are without jobs, when their families hurt, when they lose their homes, and so forth?
We have the government trying to repair: repair the banking system, to bail the housing out. But what about the rich guys?… Where is the monied class today? Why aren’t they doing something: the people who made billions, millions…. there’s going to be growing conflict between the classes and if people are unemployed and really hurting, hell, there could be even riots!
And the unrest is not expected to be restricted to the US. On Feb 23rd, London Police expressed public concern over the possibility of a “summer of rage” in the UK -
Police said on Monday they feared a “summer of rage” with mass protests over the economic crisis…
A reduction in the number of service companies related to knowledge-based companies (and Nortel), e.g. legal, accounting, recruiting, manufacturing, technical contracting, retail
Ottawa economic growth prospects will decline as the city becomes increasingly less attractive for knowledge-based multi-nationals to locate/expand in Ottawa due to declining size and skills of the local workforce brought about by:
Continued emigration of knowledge-workers out of Ottawa (Stats Canada reports have highlighted the lost high tech capabilities and workforce emigration away from Ottawa - 2 in 5 laid off tech workers left Ottawa)
Continued reduction in base of knowledge-workers with current experience (Stats Canada reports have highlighted that 4 of 5 laid off tech workers did not find work in tech)
Ottawa may soon be the “Flint Michigan of Canada” when it comes to high tech.
After this blog entry I was immediately asked about the challenges those ex-techies who joined the Federal government have found. Here is a quick summary of what I’ve been told:
Being under-employed/under-challenged (compared to their personal perceived capability)
Being discouraged from working excessive hours (one individual told me about a situation where a co-worker took them aside and asked them to stop working long hours because it was making the rest of them look bad – however all other individuals I know said they had never experienced this type of behavior and in fact noted that people in their departments tended to work more then the regular work hours as a matter of course)
Really, really bad employees who are passed from department to department like a hot potato (these employees typically know how to exploit the various government union and HR policies to effectively do nothing and avoid being fired and consume vast amounts of their managers time and reputation in the process)
Political wars and games where each department was working to position themselves for projects they expect to see funded
In Nortel, I personally experienced:
Being under-employed/under-challenged (only when working on a product transitioning to legacy support – when this happened I usually changed jobs)
Being given really, really bad employees as part of a new project team (who I first mentored/worked with to help them develop missing skills or cultural awareness, and if that failed (only on one occasion) I put them into the HR process leading to termination/transfer to a job with a better fit)
Political wars and games where each department was working to position themselves for projects they expect to see funded
Anyone else from High Tech who ended up in the Federal government have observations to contribute?
The stereotypical government employee is usually characterized as “lazy”, “inefficient”, “in by 9 out by 4″.
With the tech downturn, a lot of people I know ended up in the government. The general consensus among the ex-tech people who ended up in the government is that yes, there are pockets of poor performers and demoralized individuals – but by and large – the majority of government employees are motivated and engaged in doing the best job they can. The other observation of the ex-tech people inside the government is that the internal politics are very similar (although more pronounced in some departments more then others!) to the politics that they encountered inside Nortel.
On a personal level, my observations and experiences with Federal government employees include:
I have made submissions and worked with the NRC-IRAP team over the years. I have found the NRC-IRAP team in general to be top-notch from the executives down to the ITA’s – they recognize the importance of their role in the future of Canada tech development and they work as an engaged and committed partner.
Stats Canada produces high quality research reports that I have found to be very insightful and valuable in supporting my various market analysis activities over the years.
The Passport office is a model of efficiency and customer orientation. When I look back to the first passport I got compared to the last one a few years ago – they have made massive improvements. In general I have found they are increasingly efficient and customer service oriented. The last time I went in to get my renewed passport – in-spite of a full waiting room of people – I was in and out in less then 30 minutes. I personally like the way they introduced an option for a taxpayer to pay extra for expedited services.
On the e-Government side, e.g. making it easy to find information and access services online, the government continues to make improvements year over year. I have always been able to find the information I need online. As an aside – I believe our government’s expertise in e-Government is a area we should be looking to export/develop into commercial businesses.
Politicians aside, in general it is my opinion that we have a pretty good group of people working for us in the Federal government.
One in five persons living in Canada is foreign born
In Toronto, almost half of the population is foreign born
Census statistics from 2001 provides a broader overview of immigrant origin in Canada:
I personally believe this is a great advantage for Canada. The more ties we have with other countries, the more likely that business relationships will be developed.
As of Sept 30 2008, the US national debt was estimated to be$10 Trillion. This is roughly $35,469 per US taxpayer. The debt is continuing to grow in the wake of the increasing size of the stimulus budget items.
Canadian Federal Debt as % of GDP
As of February 2009, the federal debt stands at roughly $458-billion. This is roughly $13,685 per Canadian taxpayer. This is an upward trend with the recent federal budget, which reduces the debt reduction activities of past government budgets.
Who Owns the US National Debt?
The view from an independent analysis based on January 2007 data:
The view from the US Federal government for Sept 2008:World National Debt by % of GDP (2007 from CIA estimates)
With all the talk of government stimulus and spending it is disappointing to see the government not using programs that have already been approved and rolled-out.
“We’re stepping up because Ontario is not going to let others steal our future out from under us - we will produce the next wave of clean technologies that create jobs and clean up the environment,” said Premier McGuinty.
“We’re sending the message to companies around the world that if you’ve got a project that will grow your business and create jobs, we’ll make it happen in Ontario,” said Minister of Economic Development and Trade Sandra Pupatello.
“This fund is about building on our strengths to ensure Ontario can compete and win in the global economy - and create a better standard of living for Ontario families,” said Minister of Research and Innovation John Wilkinson.
There was also much noise made about how:
Companies are guaranteed a decision within 45 days of submitting a complete proposal.
So, since being announced a year ago…. nothing has happened.
Furthermore, last summer – Nortel, IBM and Carleton University submitted a proposal to establish and collaborate on a project called “Coral CEA”. The group’s proposal was to setup an organization to focus on development of communications enabled applications with the objective of spinning-off companies and jobs. In-spite of being under bankruptcy protection Nortel remained committed to the proposal because of it’s strategic value.
This was a proposal from two of Canada’s top innovators and Ottawa’s leading University… and nothing has happened.
In fact, worse then nothing has happened – good ideas have been submitted and no action has been taken.
It appears that the only jobs that the NGoJF is creating are jobs for government organ grinders whose purpose is to turn our “Creative Class” into dancing monkeys for the bureaucracy -
If McGuinty is serious about his commitment to innovation and the NGoJF – he needs to roll up his sleeves and take direct personal action in his government. Right now McGuinty and his government fall into the category of “Big Hat, No Cattle”.
March 16, 2009
