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What Makes Calgary Tick
$800,000 analysis finds Calgary's transportation,
warehousing and logistics sector is city's second largest 'cluster'
Geoffrey Scotton
Calgary Herald,
Saturday, October 27, 2001
Jim Gollub of ICF Consulting oversaw a study which
identifies the strengths Calgary has that could make the city a North
American "super hub" because of location, population growth
and other factors
Calgary's economic future lies in some obvious -- and not so obvious --
areas, according to the most in-depth analysis of the city's economy to
date.
The study, a product of Calgary's economic development
agency, Promoting Calgary Inc. (PCI), found that the fastest-growing and
most prominent sectors of the Calgary regional economy revolve around
seven established clusters of activity, and that an eighth, wellness,
is emerging.
Clusters represent areas of export-oriented regional economic activity
where industries, their suppliers and the types and numbers of workers,
institutions and networks needed to support them have reached a critical
mass, growing faster than the national economy.
Some of Calgary's clusters are hardly surprising -- the largest, oil and
gas, for example -- but others provide interesting insight into the trends
that define Calgary's economy at the beginning of the 21st century.
They include: geomatics, agriculture, health biotechnology, wireless,
telecom and information technology, tourism and arts and the transportation,
warehousing and logistics industry.
The $800,000 analysis, conducted by San Francisco-based ICF Consulting
Group, found that Calgary's transportation, warehousing and logistics
sector is now the city's second-largest cluster, employing nearly 48,000
people. Surprisingly, that segment comes second in employment, with the
more prominent and well-known oil and gas cluster employing 50,500, according
to ICF. ICF vice-president Jim Gollub, who oversaw the study, said the
fundamentals are in place to ensure the continued growth of the transportation
and logistics field, which has been fuelled by huge local developments
at the airport, by railways, in trucking and in warehousing.
"We see the emergence of super-hubs in Salt Lake City, Minneapolis
and potentially Calgary. Calgary's advantages of location, population
growth, lower costs, coupled with the growth in trucking, warehousing
and distribution could propel Calgary forward in its goal to become a
super-hub," said Gollub.
The identification of geomatics, agriculture and health biotechnology
as seed or emerging clusters, while surprising, suggests their role and
importance in the local economy will continue to grow. Although both are
small in terms of employment -- the agriculture and health biotechnology
sector employs less than 300 people centred within six firms -- its potential
for growth is huge. The segment, which in Calgary centres on therapeutics
and plant and animal product enhancement, serves a market estimated to
amount to $13.4 billion a year in the U.S. and $2 billion annually in
Canada.
Geomatics, which revolves around technologies that track and display information
on natural and manmade environments, is also small, with about 2,000 workers
and, cultivated by the oil and gas industry, has grown out of such technology
as global positioning systems, remote sensing and geographic information
systems. "This is an important emerging cluster for the Calgary region,"
said Gollub. "Calgary . . . has a growing number of firms in these
areas, many of which served or were originally linked to the oil and gas
industry."
Along with agriculture and health biotechnology and geomatics, Gollub,
his ICF colleague Rula Sadik and Promoting Calgary believe the so-called
wellness sector is a potential cluster. This area represents a broad swath
of business and educational activity in Calgary, including tele-medicine,
training and care, health treatment, protective equipment and sports research
and development.
"You have very nascent competencies (in wellness) that are just starting
to take hold," said Sadik, who added that the segment "might
be one that you need to support."
Economists say the study will be a useful tool for planning economic development,
which is PCI's goal and was a major part of the rationale for the expenditure.
The price tag has come under fire from some economic development veterans
and civic leaders such as Calgary alderman John Schmal. The report is
intended to serve as a benchmark of the Calgary economy as part of PCI's
key strategy thrust begun last year, known as C-Prosperity, which will
see the creation of cluster advisory groups. Those groups are expected
to produce recommendations by early next year on how they and the region
can cultivate continued growth in their areas, as well as strategies to
address economy-wide issues, such as a lack of skilled workers in many
areas.
"We always need to know where we are in order for us to plot our
course for the future," said City of Calgary senior corporate economist
Patrick Walters. Walters, who was not involved in producing the report,
said it's essential for PCI to continue to monitor changes to the economy
and be able to respond accordingly. "The trick for us will be to
continue to monitor our course to see how the world is evolving and how
we are adjusting. This is a first step."
Conference Board of Canada economist Alexander Fritsche, who closely studies
and measures Canada's western urban economies, concurs the study is "a
necessary stepping stone" in the city's economic development campaign.
"This lifts the fog, and shows you which road to take," said
Fritsche. He also notes that ICF has completed similar reports for Edmonton,
Ottawa and Toronto, and that similar work has been done by others for
other Canadian cities, allowing Calgary officials to "compare apples
to apples." But Fritsche, while supporting the PCI report's conclusions,
argued it's apparent it has purposes other than pure analysis.
"It's certainly a marketing tool as well, the
spin is very positive on the entire document," said Fritsche. "Obviously
in some respects it reflects really the strength of the Calgary economy,
but certainly if I'm Promoting Calgary, I'm going to tell them to put
a positive spin on this because I'm going to want to hand this out to
possible investors."
The seven industries of Calgary's
future:
Oil and Gas: 50,000 jobs
Transportation and Logistics: 47,800 jobs
Information Technology: 22,900 jobs
Tourism and Arts: 1,000 jobs
Wireless/Telecom: 10,400 jobs
Geomatics: 2,000 jobs
Health and Agricultural Biotechnology: more than 300 jobs
© Copyright 2001 Calgary Herald
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