Setting a Course for Optimal Growth

City of Saskatoon and Surrounding Region

In the words of Noam Chomsky, “Optimism is a strategy for making a better future. Because unless you believe that the future can be better, you are unlikely to step up and take responsibility for making it so.” Is the glass half empty or half full? Optimists would answer the latter. There certainly are times when the belief of a bright and favourable future becomes overshadowed by pessimism and uncertainty. Unfortunately, there isn’t a magic crystal ball that provides a glimpse into the future.

But forethought, insight into the possibility of what can be, and being prepared, are but a few things on which the Saskatoon Regional Economic Development Authority (SREDA) works diligently. SREDA is proving instrumental in shaping the future of Saskatoon regional growth and economic prosperity and, “Its job is to help the city and region grow,” says Jim George, SREDA’s acting president and CEO of business development.

Saskatoon was the nation’s leader in GDP growth in 2013 at an impressive 6.5 percent. With a population of over 250,000 Saskatoon is expected to hit the 500,000 mark by 2032. This growth will be a challenge requiring innovation and long-range thinking to realize Saskatoon’s vision as being seen as a world class city. SREDA’s aim is to see this vision realized through its SREDA Insights and Saskatoon’s Economic Road Map, two essential tools that SREDA will implement to help local and regional businesses grow and prosper.

SREDA Insights is a newly created extension of SREDA’s mandate to help local and regional businesses achieve sustained growth. Insights will provide an interpretive analysis of growth potential in all sectors. This analysis is meant to equip businesses, both large and small, with insight derived from local, national and global events that may impact a particular sector’s growth.

“SREDA’s Insights was designed to provide more than just data. What we wanted to do was take the data and look behind it,” says Jim. “What’s interesting is SREDA is an economic data hub. We get all kinds of information from many different partners and players and typically we’ve been repackaging it and sending it out as the data comes in. So SREDA Insights is designed to get behind the numbers and look for trends and activity that perhaps other organizations and other businesses are perhaps not looking at.”

There are over 10,000 businesses in the Saskatoon region (many with fewer than ten employees) that were started by entrepreneurs. Many of these businesses are focused on the business at hand and don’t have the available time to think about or understand where a particular market is going or if there are changes in those markets.

“They just react,” says Jim. “SREDA is providing a bigger picture insight. Not that these [companies] can’t do it. They’re just busy filling to orders, so to speak. That was the genesis behind the SREDA Insights.”

He relates that Saskatchewan had become accustomed to being a ‘have not’ province for years; the mentality had been engrained in the psyche by years of slow growth, however, that is changing. “We’ve been experiencing 3.5 percent growth over the last seven or eight years, maybe longer.”

SREDA’s Economic Road Map was developed in partnership with the Conference Board of Canada (CBOC) and forecasts three projected growth paths for Saskatoon and region for the next twenty years. This forecasted analysis of growth will be determined on a quarterly basis to ascertain which path the city and region is currently following and how choosing the right path could ultimately lead to substantial growth, given the right direction in the form of understanding drivers and scenario analysis.

“We do a lot of scenario analysis. We have a strategic early warning and opportunity system that we developed,” shares Jim. “We bring together different trends that are going on globally and try to determine how those trends can affect different scenarios and how. Those scenarios can work their way down into the organization. We track what’s going on.”

With three economic scenarios forecasted over the next twenty years – optimistic (2.9 percent average annual GDP growth), average (2.4 percent) and pessimistic (1.9 percent), close to $6 billion would be the potential GDP gap between the optimistic and pessimistic scenarios.

Jim explains that the Economic Road Map creates a perspective of what slower growth versus larger growth can look like. “It provides a base case and an optimistic case of all industries operating on all cylinders,” he says. “When you look at this thing you can see that we’ve experienced the marginal growth and most people don’t want that again… we can map now where we’re going.”

The principle of the Economic Road Map is to take different aspects of growth and apply that to different sectors to discern what the data signifies for each industry group. Owners of companies in each sector are brought together and shown the data.

“We show them where they could be versus where they are,” says Jim. “We listen to their challenges. A lot of skilled labour challenges are common… These people that we bring in start understanding some of the things that they need to do as an industry.”

High growth is not without its challenges but the Economic Map allows for analysis of the drivers of any given industry. “It’s not just a figure anymore. It’s actually mapping to trends and projections of what could be. That’s the value of the Economic Map. Sure growth brings challenges, but at the same time it brings prosperity.”
The province of Saskatchewan has a rich resource based economy with the Saskatoon region being a central part of this economy. Looking at drivers such as population growth, employment, environment and demographics, for example, that may ultimately shape the future of any given industry, is crucial. “We have a manufacturing base that is quite diverse, but it serves the resource industry – the extraction. Everybody’s looking at the macro side. Geopolitical is huge these days. The only problem is that we have no control over those things. All we’re doing is watching and we don’t influence anything geopolitically, so it’s more of a reactive component.”

Jim explains that SREDA looks regionally and globally, particularly in Asia and China, to ascertain what’s happening in those areas from a commodities perspective and how drops in commodity prices affects the extraction industries. “These are the change drivers that we follow. We also look at free trade agreements,” he says. “We do a lot of monitoring of what’s going on, really focusing on those change drivers.”

Economically stable communities and cities are a true reflection of a nation’s health. The Saskatoon region is certainly well positioned to be a true indicator of just how well we’re doing as a country. But Jim suggests that there is a shortfall that Saskatoon needs to address so that the city can realize its full potential.

“We do not do well in R&D on the innovation side,” he suggests. “We’re more prone to growing and extracting… We’re not doing enough value add; there is a value added sector here, but that’s just starting. When you look at the other industries [such] as potash, all we do is extract it; uranium, we extract it; oil and gas, we extract it. In my opinion, we haven’t done enough innovation and R&D work that figures out how we can make something more from it. It’s been too good for too long on the extraction side… generally, we have to do more.”

As for Saskatoon’s future, Jim remains optimistic. He’d like to see the city and region maintain its growth in the next two decades and beyond. SREDA Insights and the city’s Economic Road Map may prove to be a step in the right direction. “We can grow and manage. That’s the good news,” he says. “If we could have two to three percent growth every year – that would be phenomenal.”

December 14, 2017, 9:59 AM EST