Managing Canada’s Rural   Regions in a Knowledge-Based             Economy                                       by       ...
Recent global trends and the paradox of increasing emphasis on localeconomic developmentThese transitions suggest the need...
In the context of the current knowledge-based economy, the discourse of      rural economic development is increasingly sh...
ACOA and WDThe Western Economic Diversification (WD) and the Atlantic CanadaOpportunities Agency (ACOA) are two of the fou...
Transition in Canada’s Rural Development PolicyBut by the latter part of the 1990s, certain structural, ideational and pol...
New BrunswickA particularly interesting irony accentuated by the greater assertiveness ofrural communities since the late ...
In 2006, a new Development Plan for New Brunswick, titled    “Achieving Self-Sufficiency,” was unveiled under a new govern...
ManitobaRural municipalities and northern jurisdictions in Manitoba are graduallybeing viewed less as residual institution...
Manitoba’s Agriculture, Food and Rural Initiatives Department can be  seen as an increasingly significant player in the pr...
Moreover, back in 2003, the Manitoba government released the “ActionStrategy for Economic Growth,” which became the offici...
An even more significant aspect of the NDS is that it envisages an implementation strategy that focuses on horizontal publ...
E.g, the Community Adjustment Fund (CAF) administered by ACOA andWD is reflective of the new governance model.ACOA in part...
3. Rural economic development is not about redistribution, but about a   strategic vision focused on investing in innovati...
However, other critical factors that influence the success of adaptiveregions include the presence of local champions, ins...
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Cs2 p6 conteh managing canada's rural regions in a knowledge based economy

  1. 1. Managing Canada’s Rural Regions in a Knowledge-Based Economy by Dr. Charles Conteh Public Policy & Management Dept. of Political Science,, Brock University, OntarioIntroduction“Rural economy” and “knowledge economy” - what’s theconnection?The “triple bind” confronting some OECD economies (including Canada)1. Increasing competition from low-cost jurisdictions2. Declining productivity (total factor productivity)3. Increased international competition
  2. 2. Recent global trends and the paradox of increasing emphasis on localeconomic developmentThese transitions suggest the need for certain institutional capacities forhorizontal collaboration in rural economic developmentThe experience of the provinces New Brunswick and Manitoba over the pasttwo decades will serve to illustrate some of the complexities and challengesof rural economic development policy governanceThe implications of the above-mentioned changes for the mandates andstrategies of two federal agencies tasked with managing regional economicdevelopment in the two provinces.Conceptual Framework of Rural Economic DevelopmentEconomic development policy initiatives aimed at rural regions in thecountry have included a wide range and mixture of strategies such as:• modernization of traditional industries (like forestry, fishing, agri-business,etc);• diversification of the rural economies through service industries andtourism;• development of small & micro enterprises;• exploitation of the potentials for research and development, and•selective infrastructure development and social development (esp. betteraccess to health care & education)
  3. 3. In the context of the current knowledge-based economy, the discourse of rural economic development is increasingly shifting towards innovation in key sectors.What distinguishes the new emphasis on innovation from earlier strategies is its focus on the capacity of local economic clusters to learn continuously and adapt to rapidly changing conditions that determine their economic performance and even survivalInnovation implies that non-metropolitan regions must engage in value- added industrial and commercial activities built upon their existing comparative advantages in natural resourcesIt also suggests that service sectors such as tourism must demonstrate credible differentiation (i.e. combating crowding and homogeneity)Institutional Context of RED in CanadaRural economic development policy is not new in Canada• a rise, demise and re-birth over the past six decades• gradual melding of rural and regional development since the 1960s.The present institutional configuration of rural economic development policygovernance within the framework of regional development in Canada datesback to the 1987 restructuring that led to the creation of four regionaldevelopment agencies for Western Canada, Atlantic Canada, NorthernOntario and Quebec
  4. 4. ACOA and WDThe Western Economic Diversification (WD) and the Atlantic CanadaOpportunities Agency (ACOA) are two of the four agencies createdACOA’s mandate has been to support and promote opportunities for theeconomic development of Atlantic Canada, with particular emphasis onsmall and medium-sized enterprises, through policy, program and projectdevelopment and implementation.It main program activity areas are Enterprise Development, CommunityDevelopment, and Policy, Advocacy and Coordination.The primary tool of the Western Economic Diversification Agency (WD) inManitoba has been the bipartite framework agreement referred to as theEconomic Partnership Agreement (EPA) by which the federal governmententers into a form of contractual commitments with the western provincesThe Canada-Manitoba Economic Partnership Agreement (MEPA) is aprovince-specific example of the institutionalized series of five-year EPAs
  5. 5. Transition in Canada’s Rural Development PolicyBut by the latter part of the 1990s, certain structural, ideational and politicalchanges have provided opportunities for some transformation in the policyand institutional configuration of rural economic development.Structurally, globalization and its implications for the Canadian economy.Ideationally, the increasing urgency of innovation as a key competitiveadvantage for knowledge-based economiesPolitically, the emergence of a greater desire on the part of provincialgovernments and, even, local communities to exercise more control overtheir socioeconomic destinies.Rural Development in New Brunswick and ManitobaKey development in New Brunswick and Manitoba during the latter part ofthe 1990s include:First, rising discontent in the rural and northern regions about the constraintsof grassroots participation in economic developmentSecond, growing desire of the private sector within these regions to be partof a more inclusive and strategic governance framework that focuses onlonger-term economic planning.Third, the New Brunswick and Manitoba governments seemed increasinglywilling and desirous to take on more active leadership in directing the futurecourse of their economies (the politics of wilful provincialism).
  6. 6. New BrunswickA particularly interesting irony accentuated by the greater assertiveness ofrural communities since the late 1990s was the absence of effective localgovernance institutions for most of New Brunswick’s rural regionsPart of the provincial government’s response was to create communityeconomic development agencies (CEDAs) in order to stimulate greater localparticipation in economic developmentEach CEDA has an advisory board, providing a permanent forum for localstakeholders to take part in decision making. In 2002, the New Brunswick government released its “Prosperity Plan” for the province (Government of New Brunswick 2002). The Plan set out a 10-year comprehensive strategic path to economic development covering both the rural and urban sectors. The key elements of the strategy focus on innovation, productivity, and export orientation – perceived determinants of success in a globally-integrated knowledge-based economy. In 2003 the government of New Brunswick launched the New Brunswick Innovation Foundation (NBIF). The significance of the NBIF for rural communities is that it supports activities in value-added natural resource products and business processes in agriculture, forestry, minerals, aquaculture and fisheries.
  7. 7. In 2006, a new Development Plan for New Brunswick, titled “Achieving Self-Sufficiency,” was unveiled under a new government The substance of the 2006 Plan was similar in many respects to the 2002 Plan, except that the 2006 Plan has a longer time frame and greater attention to the inclusion of local and rural regions in the institutional infrastructure of innovation governance. In particular, the 2006 Plan prioritizes working more closely with the resource-based sectors to enhance their competitiveness through productivity improvements and greater economic diversification.Just recently, in 2010, the New Brunswick government published yet anotherstrategic plan, titled “Action Plan for self-Sufficiency in Northern NewBrunswick 2010-13” - solely dedicated to the economy of non-metropolitanregions of the province.The 2010 Action Plan further reinforces the dawn of a new paradigm thatenvisages a more strategic approach to rural economic development in aknowledge-based economy.E.g. the Action Plan targets 3 areas: modular fabrication and componentconstruction industries; industrial development; and resource-basedindustries.The above initiatives and development are indicative of the recognition bythe New Brunswick government of the existing vulnerabilities of its resource-dependent regions that have been a severe victim of seismic shift in globalresource markets.
  8. 8. ManitobaRural municipalities and northern jurisdictions in Manitoba are graduallybeing viewed less as residual institutions for performing rudimentary tasks,and more as indispensable partners in the search for local innovation andadaptation.An evidence of this shift in thinking is the response by the Manitobagovernment to the demand for new rural governance arrangements in thelate 1990s that led an Aboriginal Summit in 2000.Some of the key initiatives that have emerged from this Summit andsubsequent consultations include the Manitoba International GatewayCouncil Initiative, which seeks opportunities to use Manitoba’s uniquenorthern rail route, and deep sea port, in the Port of Churchill, to developtrade links with northern Europe and Asia. Another significant development indicative of the new approach is the province’s adoption of a strategic plan titled “Creating Opportunities Action Plan”. The Plan identifies rural economic development initiatives in six areas: alternative energy, tourism, agriculture, natural resources, industry services and manufacturing, and Aboriginal and northern initiatives. A number of other initiatives have been developed within the past decade. One of them is the Rural Entrepreneur Assistance Program (REAP)
  9. 9. Manitoba’s Agriculture, Food and Rural Initiatives Department can be seen as an increasingly significant player in the province’s attempt to enhance the economic capacities of rural communities. E.g., their programs include assistance for farm and rural families with the goal of enhancing their knowledge and skills in leadership and management, marketing, sustainable production, value-added processes, and the range of economic development options within the agricultural sector. Another significant initiative of the Department is the Rural Economic Development Initiatives (REDI). REDI programming includes the Community Works Loan Program, Rural Entrepreneur Assistance, the CED Tax Credit Program, and the Community Adjustment Assistance programs, among others.There has also been a noticeable increasing emphasis on nurturingproductive innovation clusters in the rural economy of Manitoba.E.g., the Economy and Rural Development Branch fosters the developmentof co-operative enterprises among rural, northern and urban Manitobans.This is considered by the Branch as critical to the social capital and networklinkages of adaptable rural regions in the knowledge-driven economy.In pursuit of the concept of innovation clusters and social capital within ruraleconomies, Manitoba’s Agriculture, Food and Rural Initiatives Departmentrecently organized a conference titled “Capturing Opportunities 2011”.The conference is designed to create knowledge exchange amongentrepreneurs and researchers about new ideas and resources within thebio-based economy (namely, in sectors such as food and health, bio-products, energy, and agriculture).
  10. 10. Moreover, back in 2003, the Manitoba government released the “ActionStrategy for Economic Growth,” which became the official document thatlays out the province’s vision for future economic development, includingrural economic developmentThe Action Strategy contains a ‘Six-Point Action Plan’ that involves amongother things, leveraging the increasing strategic importance of rural regionsin a knowledge-driven global economy.Since the publication of the Action Strategy, a particularly significantinitiative reflective of the new paradigm of rural economic development in aknowledge-based economy is the development of an assistance program forBrandon University’s Rural Development Institute to support rural researchand development projects.Also, the province’s Broadband Communications North program has beenincreasing the potential for economic development, having connected 52 outof 67 northern communities to a broadband network.Another policy initiative of crucial importance to rural economic developmentin Manitoba is the Northern Development Strategy (NDS).The NDS was initiated by the northern MLAs in April, 2000 responding tothe pressure of their constituencies for a more proactive and collaborativeapproach to rural and northern economic development.The NDS is a long-term plan that identifies opportunities to develop thehuman capital and value-added industrial processing in the naturalresources sector of the North
  11. 11. An even more significant aspect of the NDS is that it envisages an implementation strategy that focuses on horizontal public, private and community partnerships. In this regard, if implemented according to its stated instruments, the NDS may serve to correct the historic tendency of provincial governments in the province to pursue top-down and uncoordinated initiatives in the rural and northern regions. In particular, what would make the NDS even more different from previous northern and rural initiatives is the extent to which it provides the institutional requisites for the inclusion of communities in its implementation framework.The Imperatives of the New Governance Context: Implications for Federal Agencies By the turn of the millennium, in the face of the aforementioned developments in New Brunswick and WD, the focus of ACOA and WD has gradually turned toward overcoming administrative boundaries and facilitating better networks with the provincial and municipal governments, as well as with non-state actors such as the private sector and community actors. Successful regional development policy governance in New Brunswick and Manitoba gradually became about how well ACOA and WD could frame their policy interventions as consistent with and supportive of local joint action under provincial leadership.
  12. 12. E.g, the Community Adjustment Fund (CAF) administered by ACOA andWD is reflective of the new governance model.ACOA in particular appears to be most keen to make the necessaryadjustments to synchronize its programs and activities with provincial andlocal initiatives.E.g. the agency’s Regional Economic Development Organizations(REDOs) play a leadership role by bringing communities together to plan,develop, and implement economic development efforts.What the new approach of the two federal agencies share in common is aprogram delivery mechanism that emphasizes collaborative policygovernance that transcends institutional boundaries.Key Lessons The imperatives of the new economy require a rethink of rural economic development1. Policy alignment across levels of government - a framework of public management that gives a central importance to “place” not only as a geographical construct but also an institutional construct.2. Horizontal collaborative governance between the public, private and community sectors - rural communities can be seen less as objects of economic development and more as agents of their own adaptation to global and local changes. The role of government is increasingly to serve as a facilitator or enabler of community-driven processes of economic adaptation
  13. 13. 3. Rural economic development is not about redistribution, but about a strategic vision focused on investing in innovation-related assets of each region (in key sectors such as agriculture, aquaculture, minerals, forestry and tourism).4. Invest more in mechanisms to benchmark progress against goals as well as demonstrate evidence-based policy formulation and program development (i.e. systematic analysis of regional, national and global trends and their implications for distinct rural communities)5. Encourage policy learning and transfer across regions, agencies and communities. Conclusion The complexity of modern public policy environments means that managing rural economic development could be better viewed as a process of navigating institutional boundaries rather than simply optimizing program output. The effectiveness of policy governance in such settings requires the ability of public managers to make connections across levels of government and outside government, and share ideas, resources and power with public and non-state actors. The analysis of the cases of New Brunswick and Manitoba illustrate that the emergent threads of rural economic development policy governance weaves through a wider fabric of innovation policy in a knowledge-based economy.
  14. 14. However, other critical factors that influence the success of adaptiveregions include the presence of local champions, institutionalintermediaries, equitable participation, a dynamic and creative civicculture, and financial and technical resources.Therefore, the increasing role of local regions in the new economy doesnot necessarily translate into greater adaptive capacity for ruralcommunities - as such capacities are a function of the institutionalstructures of multilevel governance especially in federal systems suchas Canada.

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