by Ken Chapman, Executive-in-Residence, GO Productivity

The IMD World Competitiveness Centre, part of the Swiss based IMD business school, has released its 2016 World Competitiveness Scoreboard.

NOT GOOD NEWS FOR CANADA

There are plenty of changes since 2015.  While Canada is still in the Top 10 we have slipped 5 places since last year...OUCH!  The only other economies to slip more than Canada are Mexico, Kazakhstan, Indonesia and Greece.  Not distinguished company to be associated with at all.

The IMD rankings are based on 340 criteria assessed  around economic performance, government efficiency, business efficiency and infrastructure.  The also survey about 5400 executives around the world and ask them to assess the situation in their own country.

Professor Bris, the IMD Director, is quoted as saying, "One important fact is the rankings make clear year after year is that current economic growth is by no means a guarantee of future competitiveness."  That is a lesson Alberta's industrial construction sector is learning the hard way right now.

USA PUSHED OFF #1 SPOT

The USA, by the sheer size of it's economy has held the #1 spot for the past three years.  The IMD says that while the USA is still the "best at economic performance," that is no longer enough to keep the top spot.  It has dropped to third place behind Hong Kong  and Switzerland.  

Hong Kong's success is a factor of its banking and financial centre role plus innovation encouragement via simple taxation and free capital flows. Switzerland's secret is it small size, at just over 8 million people, roughly twice Alberta's population.  Thw Swiss have a special emphasis and commitment to quality and that is pushing its positive competitiveness positioning.

HOW WOULD ALBERTA STACK UP ON COMPETITIVENESS?

I wonder how Alberta, even as a sub-national jurisdiction, would rank in the IMD system?  I think we would do rather well relatively speaking, especially compared to Canada, but our trend would definitely be down in 2016.  That would be from much lower overall economic activity due to lower for longer commodity prices, particularly in the energy area.  

I expect we would be seen as having less government efficiency since a totally new majority social democrat government was elected in the last year with limited governance experience.  Our public infrastructure investment has also not kept up with the population growth due to sustained neglect by the past government.  That is hurting our competitiveness.

Our business efficiency has deteriorated significantly.  The $100+ oil prices hid a lot of "sins" poor management practices, low productivity, waste, delay and other poor project planning and execution realitie.  This , especially in our industrial project sector.   

From mid 2014 to today, lower commodity prices have caused significant changes in changes to lower cost structures, job losses and operational changes to improve productivity and reduce waste in our dominant oil and gas sector. Governments are borrowing again to fund public and community infrastructure projects to close the gap left by the past government.  That will have a positive impact in 2017 competitiveness rankings.

It is a sad irony that the wildfires in Fort McMurray will have a dampening effect of Alberta's and Canada's economy in the sort term but a positive impact in late 2016 and through the 2017 economy as the rebuilding of the community infrastructure gets going.  The oil sands will also start expanding capacity again and start to see the benefits of applied best practices aimed at better productivity.

GO PRODUCTIVITY IS MAKING A DIFFERENCE

GO Productivity is in the thick of all of Alberta-based industrial construction and industrial maintenance competitive enhancing initiatives. Working in groups through enabling pilot projects collaborations in innovations and productivity improvements, the goal is to return Alberta to international competitiveness.

The participant Founders and Associates behind GO's efforts are progressive corporations and unions engaged together in the Project Alignment and Delivery (PAAD) initiative. This work is about to become more public in the near future and share information on its accomplishments and growing collaborations.  

Watch this space for more information on GO Productivity's PAAD initiative, but in the meantime: 

Here is a link to the 2016 and 2015 comparisons of the IMD World Competitiveness  Scoreboard.