Insight: Focus on the East Region and Brockville

The Martin Prosperity Institute recently completed a large scale research project for the Economic Developers Council of Ontario, funded in part by the Ontario Ministry of Agriculture, Food and Rural Affairs, which provided benchmarking and analysis of Ontario’s rural Creative Economy. The project divided the province into five regions, within which one focus community was selected and compared to nine benchmarking communities. Each community was compared across a host of indicators from Creative Class share to population density, to the number of arts and entertainment facilities. This is the fifth insight in a series of six, which have examined each region one by one, and will discuss the overall findings of the report, with the full report available online at http://martinprosperity.org/research-and-publications/publication/benchmarking-the-creative-economy-in-rural-ontario. This week, we will take a look at the Eastern Region and the benchmarking community of Brockville, Ontario.

Overview

Brockville, the Focus Community for this region, is the midpoint between Toronto and Montreal, and has a population of 21,957. Brockville is a deep sea diving destination located adjacent to the St. Lawrence River and the Thousand Islands. With key industries including pharmaceuticals, food processing and logistics, the major employers in Brockville are: Proctor & Gamble, Shorewood Packaging, 3M Canada, Burnbrae Farms, Trillium Health Care, Abbott Laboratories, Brockville Mental Health Centre, Brockville General Hospital, Black & Decker, Canarm, Shell, Invista and the Upper Canada District School Board. As will be examined, these employers benefit from a large Creative Class concentration of workers in this town. St. Lawrence College serves as the sole postsecondary school in Brockville, which focuses on theatre and creative arts studies. The residents of Brockville also benefit from a close proximity to a number of Universities, as Queens is about 1 hour away, along with the University of Ottawa and Carleton and within 2–3 hours are all of the Montreal and Toronto Universities.

Exhibit 1: East region

East Ontario

The City of Brockville was compared to the following nine benchmarking communities in the East Region: Greater Napanee, Pembroke, South Glengarry, South Stormont, Rideau Lakes, Leeds and the Thousand Islands, Smiths Falls, Renfrew and Tweed. With a population of 1,723,135, this region borders Quebec and includes the metropolitan areas of Ottawa and Kingston, which make up 59.9% of the regions total population. Brockville has a lively tourist and recreation sector, as it benefits from proximity to Leeds and the 1000 Islands. Brockville is also a very dense community, with 1,058.8 people per square km, a trait not evident in many of the rural communities under examination. As a result, Brockville has a distinctive advantage within the East region in that it has the benefits of a larger and dense population, while keeping a small-town feel.

The ‘Three T’s’ in a Rural Context: Creative Class Central

Of the five rural focus communities examined in this report, Brockville is well positioned to emerge as a regional leader in the Creative Economy. In addition to being well connected to the surrounding regions with multiple transit routes, Brockville leads its benchmarking peers on talent, tolerance and technology. Moreover, of the communities in the Eastern region, Brockville not only has the highest Creative Class share, but also ranks first on the Creativity Index in this region. Brockville’s Creativity Index, which combines Technology, Tolerance and Talent (Creative Class Share) scores, was found to be 0.69. Brockville’s Creativity index is not only the highest in the East region, but the third highest of all 50 rural communities studied and much higher than the average of all 50 communities, which is 0.42.

Exhibit 2: Focus on Brockville’s Creativity Index

Focus on Brockville Creativity Index

One reason for Brockville’s high score on Creative Index is the large occupational share of Creative Class jobs within the town. Brockville’s Creative Class share is 25.3%, which is the highest of the benchmarking regions and is close to the Ontario average. Brockville, through its strong Creative Class share, has the opportunity to become a financial hub of the East region, and it also benefits from having an economy that does not rely upon manufacturing and working class occupations. However, Brockville does have a smaller share of the population holding a bachelor’s degree and above. Combined with a large contingent of low-paying service class jobs in this City, there is a clear need to develop and increase the skills and educational attainment of many in Brockville’s workforce.

In addition, technology comprises one-third of the measurement for the Creativity Index and once again, Brockville scored very well. Brockville’s High-Tech establishment share, High Tech Location Quotient and their Ontario Tech Pole Index are the highest of any community in the East region. These three scores were also much higher than most communities studied in every region. As a result, Brockville has an advantage over its surrounding rural communities, in that it is attractive to industries that require individuals with expertise in technological occupations.

Finally, we can examine the third ‘T’ of tolerance in Brockville. As has been described in previous Insights, a common characteristic of many rural communities is a low share of visible minorities and immigrants. Brockville does well in comparison to its peer communities, which may be attributed to the close proximity to the GTA and two other large metropolitan areas. As a result, Brockville could use its larger share of Creative occupations and local amenities to attract more immigrants and visible minorities to create a more diverse rural community.

Recommendations

Despite the considerable strengths of Brockville, there are still challenges facing this City. A key recommendation for Brockville would be to continually develop different aspects of its already strong Creative Class occupational share. Like most rural communities, Brockville has a high percentage of its Creative Class share within “Meds and Eds,” and it would advantageous to diversify across other weak sectors such as arts and culture, management occupations and professional occupations within science. With a large number of Universities within a short distance, Brockville should seek to attain higher levels of education within in the community, which could in turn attract higher paying firms. Overall, Brockville is a community well positioned within the Creative Economy to continue and further its success.

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The Martin Prosperity Institute at the University of Toronto‘s Rotman School of Management is the world’s leading think-tank on the role of sub-national factors — location, place and city-regions — in global economic prosperity. We take an integrated view of prosperity, looking beyond economic measures to include the importance of quality of place and the development of people’s creative potential.

Towards a Broader Conception of Economic Competitiveness

The economic crisis has challenged popular conceptions of economic growth, both in terms of the definition and the measurement of it. While engendering growth and bolstering competitiveness remains high on political agendas, immediate attention has shifted to creating jobs, lifting wages, addressing inequality, and fostering long-term, sustainability prosperity.

A new report from the Martin Prosperity Institute, “Creativity and Prosperity: the Global Creativity Index,” addresses the challenge of nurturing sustainable economic development head-on, shifting the dialogue from a narrow focus on competitiveness and growth to a broader focus on creativity, prosperity, and well-being.

We first introduced the Global Creativity Index (GCI) in 2004. One again, the Index assesses the prospects for long-term prosperity across 82 nations according to a combination of underlying economic, social, and cultural forces. We refer to these forces as the 3 Ts of economic development: Technology, Talent, and Tolerance. The Index also compares the GCI to a series of other metrics of competitiveness and prosperity, from conventional measures of economic growth to alternative measures of economic equality, human development, and happiness and well-being.

The Global Creativity Index strong correlates with other measures

We compared the 3 Ts metrics with the GCI to established measures of economic and social progress. The GCI is closely associated with conventional measures of economic output and economic competitiveness, and it is also associated with broader measures of human development and life satisfaction (or happiness). Nations that score better on the 3 Ts not only have higher levels of economic output but also higher levels of human development and happiness. We also find that the GCI is associated with greater economic equality; nations that score higher on the GCI have less inequality. Our findings suggest that there are two distinct paths available to greater economic competitiveness. On the one hand, there are nations like the United States and the United Kingdom, who exhibit high levels of economic output and competitiveness alongside higher levels of inequality. On the other hand, there are a greater number of nations like Sweden and Norway, where high levels of economic output and competitiveness occur alongside far greater equality. This suggests that there exists a high-road path to sustainable prosperity, where the fruits of economic progress are broadly shared.

The data in this report covers 82 nations for the period 2000–2009.

Download this Insight (PDF)

The Martin Prosperity Institute at the University of Toronto’s Rotman School of Management is the world’s leading think-tank on the role of sub-national factors—location, place and city-regions—in global economic prosperity. We take an integrated view of prosperity, looking beyond economic measures to include the importance of quality of place and the development of people’s creative potential.

 

 

 

 

How Toronto measures up: comparing the city to its North American peers

In February 2009, Roger Martin and Richard Florida released Ontario in the Creative Age, a study of the changing composition of Ontario’s economy that provided recommendations on how the province can remain prosperous and globally competitive.

As part of the Cities Centre’s Toronto 2010 Election Series we’ve prepared Toronto in the Creative Age, a more modest research brief that aims to do something similar for the city of Toronto.

Analysis

The three Ts approach to understanding regional development finds that the presence of three factors — technology, talent, and tolerance — drives economic growth in contemporary cities. A city with substantial and balanced performance across all three measures is likely to experience sustained prosperity. The following figure summarizes Toronto’s performance on the three Ts compared to 10 peer cities in the United States and Canada. Peers were chosen based on their population size, geographic location, and importance to the North American economic system.

Talent

Toronto places third in the overall talent ranking, led by its strength in creative class share. But a look at the detailed numbers shows that Toronto ranks only sixth on share of population over 25 years old possessing a bachelor’s or graduate degree. So while there is evidence that the region does a better job than competitors of attracting university graduates, its total stock of degree holders is just average.

Technology

Technology is an impetus for productivity improvements and a large industry unto itself, and technologically advanced cities are more likely to experience sustained economic growth.

Toronto ranks last in the technology ranking, largely due to its extremely low scores on patent-related measures. And while Toronto excels in industries and occupations that are not patent-intensive like food processing and media production, patenting is important in many high-growth, high-wage industries like high-tech and biotech. Toronto’s poor performance in patent growth – the city filed 8.3% fewer patents in 2000 than in 2005 – is particularly troubling, as it suggests Toronto is falling even further behind its peers on patenting.

Tolerance

A diverse population acts as a signal of the ability of a region to attract and retain the immigrants who expand its talent pool. It also leads to a broader range of skills, creative ideas and approaches to problem solving. Dispersing and integrating various ethnic groups somewhat across different neighbourhoods is a good way to encourage the flow of ideas between them. Not surprisingly, Toronto performs well on the overall tolerance ranking.

Of all the tolerance measures, Toronto’s lowest ranking is on the Integration Index, which measures the evenness of the distribution of ethnic groups across a city. Its score of 0.43 suggests that ethnic groups in Toronto are integrating adequately compared to the broader set of peer cities. But it is worth noting that Vancouver and Montreal—Toronto’s two Canadian immigrant gateway peers—were found to have more integrated neighbourhoods.

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Further Reading:

One of the traits of the most socioeconomically successful cities is that they are always seeking to improve. For a brief economic history of Toronto, further analysis and some thoughts on the kinds of policies that could address Toronto’s weaknesses on these measures – including unlocking the city’s creative infrastructure and prioritizing early childhood development – see the full discussion paper.

The Martin Prosperity Institute at the University of Toronto’s Rotman School of Management is the world’s leading think-tank on the role of sub-national factors—location, place and city-regions—in global economic prosperity. Led by Director Richard Florida, we take an integrated view of prosperity, looking beyond economic measures to include the importance of quality of place and the development of people’s creative potential.

Leaders and laggards of Ontario: How our metro regions stack up

Which of Ontario’s cities are better prepared for the profound transformation into the creative age?

To better understand how Ontario’s city regions are competing we used the Creative Class Index to compare them to peer city regions of roughly equal size from across the US and Canada. Composed of variables from each of the 3Ts of economic development (Technology, Talent and Tolerance), the composite score is reflective of a region’s ability to become more vibrant and prosperous. Economic development in the creative age requires strong performance on all of the 3Ts; each one is necessary, but alone is insufficient to achieve sustainable growth.

We assessed 15 census metropolitan areas (CMAs) that account for 82% of Ontario’s 12.2 million people and approximately 92% of Ontario’s regional GDP of $530 billion. These 15 regions were placed into 5 major groupings based on size (e.g. Toronto CMA with approximately 5.3 million people to Peterborough’s CMA with a population of approximately 110,000) and within each size group 10 peers were selected.

What we found was that Ontario’s city regions tended to perform average compared to their peer group often ranking in the middle 5 or below. (See Figure below)

Results

  • The top region in both Canada and Ontario is Ottawa-Gatineau which ranks 1st within its peer group (regions with a population between 1 and 2 million), and 3rd out of a total of 374 US and Canadian city regions
  • Toronto trails places like Seattle and Vancouver. (regions with a population of 2 million or more)
  • Hamilton is ranked 97th amongst the 374 city regions and sits in the middle of its peer group (regions with a population of 500,000 to 1 million)
  • Kitchener, London, Windsor, Oshawa, and St. Catharines-Niagara all live in the middle of their peer groups (regions with a population size of 250,000 to 500,000)
  • Peterborough, Guelph, Kingston, Barrie, Greater Sudbury, Thunder Bay, and Brantford are evenly distributed with two regions in the top 25%, three in the inter-quartile range and two in the bottom 25% of the peer group (regions with a population of 100,000
    to 250,000)

Digging deeper into these results reveals that the biggest weakness among Ontario’s city regions is Talent, measured by the Talent Index (the percentage of population older than 25 with at least a bachelors degree) and the percentage of the labour force in the Creative Class. Places like Ottawa do well across all of the 3Ts, ranking 5th on Talent, 10 on Tolerance and 10th on Technology.

The Challenge: In order for Ontario to be prosperous in the creative age, those regions which are lagging behind must work diligently to improve areas where they are not as effective. While the challenges they face are significant, they can be overcome by learning from this assessment. The leading regions cannot become complacent and must continue to strive to be better than they are now. We believe Ontario’s performance on Talent suggests that there is more to do in order to become the world’s leading talent and educational province described in our capstone report. If Ontario is to reach the goal of 70% of the population with post secondary education, it must keep improving the access and incentives to attend institutions of higher learning. In addition to growing its own, Ontario scores well on Tolerance making it well positioned to attract a portion of the Talent it needs from elsewhere.

Our assessment shows that while Ontario has challenges to overcome for sustained economic development, we are confident that by harnessing the creativity of all Ontarians – in every region – that the province can become a global leader.

This Martin Prosperity Insight is part of the “Ontario in the Creative Age” series(French), a project we are conducting for the Ontario Government and is supported by our benchmarking analysis that begins this week with “Ontario Competes” an overview of the more detailed work that will follow next week on each of the 5 CMA groupings. The project was first announced in the 2008 Ontario Budget Speech, and its purpose is to understand the changing composition of Ontario’s economy and workforce, examine historical changes and projected future trends affecting Ontario, and provide recommendations to the Province for ensuring that Ontario’s economy and people remain globally competitive and prosperous. The series will involve a number of Insight releases over the course of the coming months.

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Further Reading:

Ontario Competes: Performance Overview Using the 3Ts of Economic Development

The Martin Prosperity Institute at the University of Toronto’s Rotman School of Management is the world’s leading think-tank on the role of sub-national factors—location, place and city-regions—in global economic prosperity. Led by Director Richard Florida, we take an integrated view of prosperity, looking beyond economic measures to include the importance of quality of place and the development of people’s creative potential.

Inside Canada’s black box of regional development

Creative Class / Human Capital / Income / Service Diversity / Technology / Tolerance / University

What do these terms have in common and how do they contribute to regional prosperity? These terms are often studied independently; however, a closer look reveals that they are all interconnected and form an economic ecosystem that facilitates regional development.

In order to begin to understand this ecosystem, we differentiate the terms listed as either Outcome factors (Talent, Technology and Income per capita) or Regional Setup Factors (University, Service Diversity, and Tolerance). To observe the system we created an interactive model where we can quantify the impact that specific occupational groups such as managers, business and finance, health and arts, and cultural occupations have on the ecosystem. (See Figure 1).

In this ecosystem the Outcome factors are directly affected by:

  • Talent – the size of universities, the diversity of consumer services and tolerance
  • Technology – quality of talent, universities, the diversity of consumer services, and tolerance
  • Income per capita, which approximates regional economic development and is dependent on universities, tolerance, talent and technology

Using economic modeling techniques the significance of these linkages on income per capita can be measured and reveal some very interesting results for Canadian metro regions.

The model reveals that the largest impact on regional economic development comes from two major factors: 1) Talent, as measured by human capital and how this manifests by the share of the workforce in the Creative Class; 2) Tolerance, as measured by self-expression variables and the Mosaic Index as the proportion of the total population that is foreign born and an indicator of the ability of a region to attract and retain the immigrants needed to diversify the talent pool. Not surprisingly, the university used as a Regional Setup Factor, is found to be a talent producing factory but has a weaker than expected effect on technology. With these two factors the path is laid to creating technology. These high level results verify and validate the importance placed on talent in theories of economic of development.

Regional development is shaped by the 3Ts of technology, talent and tolerance. In the economic ecosystem, the Talent factor can be replaced by occupations to understand the regional returns associated with specific types of economic activity. The Creative Class is composed of people who are generally paid to think and includes occupations related to Technology, Arts and Culture, Professional and Managerial and Education (TAPE). Using TAPE occupations, the system showed that certain types of jobs have larger direct impact on regional income per capita than might have been expected, while others work through technology to ultimately increase incomes/wages.

Interestingly, Professional Occupations in Natural and Applied Science are the most highly correlated with technology and higher income per capita in Canadian regions. Regions need people employed and engaged in research, development and related activities.

Managerial occupations of all types also play important roles within the ecosystem; they help to organize assets, and promote innovation and commercialization. All three managerial categories within the talent factor showed a positive and significant correlation with technology and regional income per capita. As the share of the workforce classified as managers increases, there is a trend towards higher income per capita.

Broadly speaking, the results of the economic modeling suggest that for Canada, the Universities, Service Diversity, and Mosaic/Self–Expression jointly create an environment of tolerance and diversity that helps to attract the Creative Class. As members of the Creative Class, scientists and managers are among the most important occupations for regional economic development. However, we find that the effects of these occupational groups on incomes to be weaker compared to the results from comparable studies of the U.S. (Florida et al, 2008) using a similar methodology. This may be the result of lower productivity levels, since wage levels tend to be a reflection of economic productivity.

This Martin Prosperity Insight is part of the “Ontario in the Creative Age” series, a project we are conducting for the Ontario Government and is supported by and is supported by Richard Florida, Charlotta Mellander, and Kevin Stolarick’s working paper “Talent, Technology and Tolerance in Canadian Regional Development”. The project was first announced in the 2008 Ontario Budget Speech, and its purpose is to understand the changing composition of Ontario’s economy and workforce, examine historical changes and projected future trends affecting Ontario, and provide recommendations to the Province for ensuring that Ontario’s economy and people remain globally competitive and prosperous. The series will involve a number of Insight releases over the course of the coming months.

Download this Insight (PDF)

Further Reading:

Richard Florida, Charlotta Mellander, Kevin Stolarick. Talent, Technology and Tolerance in Canadian Regional Development

David Wolfe, Jen Nelles. Strategic Management of Urban Economies and the Scope for Intermunicipal Cooperation: Alternative Approaches to Local and Regional Development

 

The Martin Prosperity Institute at the University of Toronto’s Rotman School of Management is the world’s leading think-tank on the role of sub-national factors—location, place and city-regions—in global economic prosperity. Led by Director Richard Florida, we take an integrated view of prosperity, looking beyond economic measures to include the importance of quality of place and the development of people’s creative potential.