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Balancing oil and ideas

Colorado Sunset by Travis Bredehoft on

Canada is a resource rich country. And one of the things that commonly happens to countries with a lot of resources is that they begin to myopically focus on the immediate gains from resources at the expense of long term innovation and economic development. 

This is known as the “resource curse.”

The Martin Prosperity Institute here in Toronto recently published a report that looks at this exact topic: Canada’s urban competitiveness through the lenses of its resource economy and its knowledge economy. In the end, Richard Florida and Greg Spencer conclude that two can and should work together, but that we need to stop neglecting our cities:

“The oil and gas industry is not necessarily a constraint on the creative economy, but in the past decade or so it has come to dominate thinking around economic development policy-making. It is time to use the resources from the energy economy to build a more secure future as an urban knowledge economy. We can also use
talent and technology to deepen and expand the resource economy.”

And one of their key recommendation is something I have argued for many times here on Architect This City:

“A New Federalism for Cities: It is time to give cities the taxing and spending powers they require. Cities must be given more control over their own destinies if they are to prosper
in the 21st century.”

Now, here are a few interesting charts from the report.

This first one looks at the relationship between a city’s population and its creativity levels. The two are positively correlated, which means that, in this context, bigger is better.

This second one splits Canada in half – east and west – and then looks at how average income levels are affected by creativity levels (the knowledge economy). Here we see that in eastern cities, income levels are positively correlated with creativity levels. But in western cities, changing creativity levels have almost no impact on income levels. 

Finally, this third chart compares the relationship between oil and gas employment (LQ = location quotient) and average income levels. What it finds is that income levels and oil and gas employment are positively correlated in the west, but there’s almost no relationship in eastern cities. 

The way to read this chart is to think of the LQ as the employment multiple relative to the national average. So for example, a LQ = 10 means that the oil and gas employment levels are 10 times the national average. As you probably guessed, the pink dot way out on the right is Fort McMurray.

If you’d like to read the entire report, you can do that here. I hope that our new Prime Minister, Justin Trudeau, will read reports like this and spend more of his efforts investing in our knowledge economy – which means investing in our cities.

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