This is the second instalment in a two-part series on local economic development (LED).
In the report on global competitiveness, Canada rates 14th overall. This does not equate to the Northwest Territories in Canada’s North. Perhaps the diamond mines and some oil and gas activity was making it look a bit better a a few years ago, but investment and activity in these extractive, non-renewable resources is playing less of a part in the economy.
There are few manufacturing or other export driven activities in the NWT. To compete, you must start with an economy that is benefiting from factors such as geography and abundance of certain resources. Innovation and competitiveness are closely tied, but in the NWT, we have only recently been connected to the fibre for internet. Our education levels are generally low and Indigenous communities suffer from a history of colonialism and systemic abuse and racism.
Generally, the people are innovative and can be involved in frugal innovation. There are no universities or high tech clusters in the NWT that serve as competitive supports for innovation. Smaller scale innovations are connected to the peoples knowledge of the land, the materials they use and the tools they need. I have seen many ladies develop great innovative earrings using beads and fancy materials. This is a step above the traditional designs. Using the internet and marketing such small scale ideas can now be promoted to the much wider potential market.
Who are the local entrepreneurs?
The local entrepreneurs in the NWT range widely. In the larger centres and especially in Yellowknife, there are entrepreneurs that are the growth-driven type. As we move to the smaller communities, there is much less chance to develop or start a larger business and many entrepreneurs are guided by the rationality of survival. They are engaging in business to help sustain themselves and their families. The general economic environment basically controls this situation.
Smaller communities, with less population, do not have the market or the factors that would create a successful export trading business. Government contracts are often the reason to start a small business, which allows individuals to participate in the economy. This is part of the colonial legacy of the government on the NWT. Government is a major player in the supporting GDP and government jobs, services and investment comprise approximately 25 per cent of the overall GDP.
Small entrepreneurs may be involved in arts and crafts production, especially women. This is encouraged by the government. This type of business supports the transfer of cultural knowledge and allows women a chance to make extra money. It is almost always a supplemental income type of business, however.
Bigger businesses are usually located in the bigger cities of Yellowknife, Inuvik and Hay River. Here, there is sufficient investment and market opportunity to support growth. In larger centres there is more competition (creative-destructive capitalism equals innovation through a process of out with the old, in with the new).
Identifying possible LED actions
In my region (Dehcho), there are a cluster of businesses that are involved in tourism. They are centered around bringing tourists into Nahanni National Park for canoe trips down the fabled South Nahanni River and to see the majestic Virginia Falls (twice as high as Niagara Falls in Canada). The park is only accessible by air and this has created a cluster of three airlines in the community that link with three or four licensed outfitters that market wilderness canoe trips. Accommodations facilities (hotel/motel/B&B’s) also are connected to this supply chain. The government promotes tourism in the NWT and does have specific grants and contributions which it can give especially for marketing.
In the past (30 years ago), there was an association called the Nahanni Ram Tourism Association. It formalized and tried to represent all these interconnected businesses. The mandate was to create new business opportunities, to learn from buyers, to promote innovation and market directly on behalf of the entire cluster. This association operated from a building specifically meant to act as a visitor centre.
The association along with its members also promoted a driving loop through the area called the Dehcho Connection. Unfortunately, over time, the government stopped funding regional tourism associations and businesses started viewing each other as competitors instead of partners. While there exists a Chamber of Commerce, it is not very active and represents the entire business community rather than any particular clusters.
This is an opportunity to rejuvenate this connected cluster by getting them to work together. Learning, linkages and financing are all important to keeping this cluster vibrant and growing in the community. Funding is always an issue, but lobbying together and sharing information that enhances competitiveness and innovation is very important when competing in the world destination wilderness travel market.
What would trigger an LED initiative?
In my home community, the apparent failure of the school system to prepare young people with an adequate education has spurred some people to action. Preparing children through school to be able to advance in life is a foundational LED activity. It must precede other planning, as without an educated and motivated workforce, an economy cannot be built. There is a gathering consensus that the damages done through colonization must be dealt with first in order to build a healthy community that can then benefit from more advanced LED.
Many community champions are involved in socio-economic activities geared to solving social problems, and this could also require business participation. An example would be on-the-land healing camps, often run through businesses and partnerships with local indigenous governments and or government agencies.
Key LED actors
Living in an unsettled land claim area brings many constraints to LED. Partnerships and informed consent must be obtained for many activities. This is often seen as slow and cumbersome, but it does guarantee that a certain amount of collective support behind any project must be negotiated prior to commencing. Some government agencies support LED, but it is grassroots people that need to be the real heroes or leaders that will guide LED.
LED and its outcomes
Because there are so many connections in a small town or region such as the one I live, there is always going to be issues around building consensus. Issues around winners and losers is often discussed as no one wants to affect each other negatively, since everyone will be affected by both positive and negative results. This can slow down LED planning, but it gives the process an opportunity for full community participation.
LED actions to start
Many opportunities do exist in renewable resource development, such as fishing lodges, tourism, and knowledge network advancement. The North can focus on developing alliances with southern universities to advance the knowledge economy, studying issues such as climate change and its impact on the Boreal forest, for example.
Tourism and the cluster of businesses already existing in the Fort Simpson area could greatly benefit the region by sharing knowledge, establishing better linkages and expanding the opportunity for capital investment. First Nations and Indigenous people want to engage in tourism and view it as a key to their future economic advancement. Activities that are socio-economic in nature, that rely on culture and the land to support healthy living also are viewed as strong precursors to building a strong local economy.
-Sean Whelly is a lifelong Northerner, economic development practitioner and Mayor of Fort Simpson.