Home Contact Us Subscription
IN THIS ISSUE
SPECIAL SECTION
NEWS RELEASE
FEATURES
OPINION
TIPS & TRICKS
BIZ BITES
MOVERS & SHAKERS
LOOKING BACK
PRO FILES
EDITORíS LETTER
PAST ISSUES

Quick Search:
Advanced Search
SPECIAL SECTION

Generation Next

THE GOLDEN HORSESHOE IN 2020

Predicting the future is difficult. Predicting tomorrow is tough enough. Spend a day at the Toronto Stock Exchange, if you suspect differently. A decade ago, who would have imagined the disintegration of Nortel or the credit crisis, or the preponderance of Facebook and other social networks, or more Blackberries than you can shake a memory stick at? How out of place would a Smart Car have looked in 2000? How much easier was it to get through an airport back then?

BY TED McINTYRE  •  ILLUSTRATION BY NANCY DOUGLAS

Technology does not advance in a straight line; it’s an exponentially increasing curve that will, likely in our lifetime, result in the creation of computers that can think as fast—and then a week later, faster—than human beings. Medical science is already employing bionics to repair or replace human limbs—that’s when they’re not growing them with the use of stem cell research.
/>
Some things have changed drastically; some have not. The forlorn Brant Street Pier in Burlington—two years behind schedule with $6.5 million already poured into the water—is evidence of the latter, as is the glacial pace of the cleanup in the waters off the shores of Stelco.

As the world continues to gradually run out of energy, food and fresh water, one positive prediction we can make is that conservation is not a trend—it is a lifestyle, and one that every company and entrepreneur must continue to invest in—educationally, emotionally and financially. According to a recent report by San Francisco-based trade organization Cleantech Group, while the credit crisis and broadening recession led to an overall decrease in the volume of venture-capital deals in 2008, clean technology venture investments in North America, Europe, China and India soared 38 percent to a record total of $8.4 billion. Over the next four years, American president Barack Obama has promised to triple investment in the U.S. clean-tech industry. “Stocks in alternative energy producers will rise as investors anticipate these growing subsidies. We are definitely going to see a clean-tech bubble in the first few years of the decade,” University of Toronto professor and environmental economist Donald Dewees told the Financial Post.

Ontario, meanwhile, has struck a 20-year deal with a subsidiary of Samsung to develop a $7 billion wind and solar-power project in the province, which will generate 2,500 megawatts (four percent of Ontario’s total power consumption)—more than the total electrical output of Nova Scotia.

What’s old is new again as individuals and communities attempt to return to simpler, healthier lifestyle choices, with the communities of Oakville, Burlington and Hamilton all taking huge strides to improve their trails and environmental areas. Residents are beginning to grow their own herbs and vegetables again, with rooftop gardens on apartments and condos expected to increase as the decade presses on.

Another business reality is international trade, and we’re not just talking about major corporations. Small companies have the flexibility to better take advantage of time-sensitive opportunities. If you’re not thinking globally, regardless of the product or service you provide, you’re severely limiting your potential market. Burlington’s Sound Design Technologies is a prime example. Having recognized the emerging markets of India and China years ago, the local hearing aid specialist leapt at the overseas opportunity and now predicts 30 percent growth in its China market.

The world is indeed getting smaller, which makes it harder to hide, with so much personal information floating around the web. And as we gradually leave the world of hard copy information behind in favour of almost exclusively electronic data, storing and safekeeping that information will be an increasingly vital industry.

Some events that will have global implications are inevitable, from natural disasters to terrorist threats. But what follows is an analysis of more predictable evolutions in the region, from wine to steel, and from Hamilton’s airport to Oakville’s Ford plant.

The savvy entrepreneur will read between the lines and anticipate inevitable trends by the year 2020. Will automobiles be 100 percent hybrid by then...or even better? Does that mean companies that supply lithium or who specialize in car battery disposal will be popping up everywhere? Will our Blackberry-type devices be programmed to inform us of potential market-changing events (from wars to hurricanes in the Gulf to Twittered rumours of corporate takeovers), which allow us to make instant stock trades multiple times a day? Will the Toronto Maple Leafs win the Stanley Cup for the first time in 53 years?

OK, some predictions are more far-fetched than others.

Hamilton Re-invented

The numbers paint an interesting picture. According to a Centre for Spacial Economics study, commissioned by the Hamilton Training Advisory Board (HTAB) and released late last month, there will be as many as 29,000 new jobs created in Hamilton by 2016. That, coupled with the eventual retirement of 21,000 current workers, means that 50,000 jobs will require filling in six years’ time. The question is whether Hamilton will have the population—or the training—to fill those jobs.

Marvin Ryder, a lecturer of Strategic Market Leadership at McMaster University’s DeGroote School of Business, notes that an increase in population will have to be inordinately supported through immigration—which will create a new cultural dynamic given that Hamilton has traditionally lagged well behind the Ontario average for visible minority population—13.6 percent compared with the provincial mark of 22.8 percent.

“If we’re looking at roughly 10 percent growth in Hamilton and the Golden Horseshoe, which is in keeping with Ontario forecasts, I can tell you that it will not happen organically, because people living here are not having children at a rate that will sustain our population,” explains Ryder. “For that to happen, couples need to have 2.1 children. Our birthing rate is closer to 1.7 children per couple. At that rate, our population would slowly shrink. So if we have 10 percent more people—a number between 50,000 and 75,000 by 2020, depending on which communities you include—growth will be tied to immigration. It will be interesting to see what they value in our community. Will they be as concerned about heritage buildings or the pursuit of an NHL team? I doubt it.”

If they or existing Hamiltonians are to fill the jobs of 2016 and beyond, something has to change, given that 210,000 Hamilton residents over age 15 have high school diplomas or less.

Another area where the labour force is changing is age. While the total number of workers in Hamilton is expected to increase by 42,100—from 263,600 in 2006 to 305,7000 in 2016—the HTAB study indicates a huge jump in the age 55-64 bracket in the workforce, with numbers doubling from just over 30,000 in 2006 to an estimated 61,000 by 2016.

In the meantime, Hamilton’s community leaders are focusing on private sector job creation and prosperity growth, and the city’s spot on the map remains their ace in the hole.

“Playing to our existing strengths” is key, says John Dolbec, CEO of the Hamilton Chamber of Commerce. “If nothing else, our geographic location virtually dictates that Hamilton will succeed.”

From a transportation and logistics standpoint, the city is a natural hub as a goods movement gateway, akin to Kansas City’s highly successful SMARTport initiative, Dolbec observes. “We have one of the finest natural harbours in the world, which combines access to both ocean-going vessels and short-sea shipping to any port. Plus, we have under-utilized serviced land adjacent to our port that is ideal for conversion to state-of-the-art intermodal logistics handling. We have one of North America’s most successful airports specializing in airfreight. We are at the virtual centre of a rail network that effectively accesses the whole continent, including all major ports and established gateways. And we’re at the centre of a road network that not only accesses the greater GTA, but also is within a couple of hours of Canada’s two busiest border crossings. Thus, we’re ideally suited to take strong advantage of the ‘just-in-time’ delivery model vital to modern business success.”

The recent study by the McMaster Institute for Transportation and Logistics indicates that this sector alone can generate at least 34,000 well-paying, private sector jobs, excluding the benefits to local manufacturing.

Although Hamilton has lost 26,200 manufacturing positions since 1987, Dolbec also cites advanced manufacturing and innovation as bright spots in the coming years. “While it has taken quite a beating, contrary to popular myth, manufacturing remains our largest single employment sector. But it’s largely now a very different kind of manufacturing—entrepreneurially based in diverse small-to mid-sized enterprises specializing in niche markets, highly dependent on international trade (largely, still to the U.S.) and on technology and innovation.”

But success in the new global knowledge-based economy is going to be fundamentally based on the City’s collective ability to train, attract and retain highly educated/skilled motivated people, among them new Canadians from around the world, notes Dolbec, who believes Hamilton’s noted post-secondary education facilities will not only prepare the workers of the future, but add innovation and quality of life. That’s essential to attracting and retaining talent, particularly young talent, who place more emphasis on these issues than any previous generation. Which is why the City is actively addressing the view many outsiders still have of Hamilton as a polluted, blue-collar town plagued by organized crime.

“The City’s community partners, via the Jobs Prosperity Collaborative and including the Chamber, are currently undertaking a major PR campaign to correct that misplaced image,” says Dolbec, who cites private-based community branding efforts such as Chris Ecklund’s “Hamilton: City of Waterfalls” and the Chamber’s own “Hamilton: City of Entrepreneurs.”

Assisting their initiatives is an independent 2008 study entitled “Investment-Ready Communities,” which noted that the city already possesses the fundamentals needed to attract and retain business. Hamilton, in fact, scored higher than the other six communities studied.

“What we have lacked, until recently, is a comprehensive plan to connect these dots, and perhaps the collective will to work collaboratively,” says Dolbec. “But the City, the Chamber and our mutual partners are now pulling on the oars together.”

Is clustering our future?

It has worked for places like Seattle, San Jose, Kanata and Waterloo. Could Hamilton be next?
That’s the question experts are pondering when discussing the notion of clustering, the concept of bringing specific expertise into one region and developing an industry around it.  A report late last month from the Hamilton Training Advisory Board predicted the future development of six key industry groups or clusters: advanced manufacturing; agriculture/agra-food/agra-based products; biosciences, clean-tech business; creative industries; and goods movement. The concept could be critical to the region’s future.

Kevin Restivo, a former journalist and technology analyst with IDC in Toronto, says clustering has proven highly effective within areas like Kanata and Waterloo. He adds those clusters have almost always been driven by a large successful business, as Nortel was in Kanata during the dot-com bubble, and as Research in Motion is in Waterloo today.

“While a place like Toronto will always be attractive to international companies, we’re talking about companies that do more research and development. That’s what these clusters are developed around,” Restivo says.

Hamilton already has successful development in health and biotechnology involving McMaster University. But can it continue to grow over the next 10 years to become a vibrant part of the economy of the region? Some worry that the explosion of RIM in Waterloo could hurt the development of a high-tech steel or health-science cluster in Hamilton by luring top engineering talent away. Restivo says the success of such an initiative in Hamilton will be largely dependent on the successful businesses that emerge from it. It is possible, Restivo explains, that in 10 years RIM will not be the dominant force it is today and that development around other industries could increase the focus on Hamilton.

“People with capital go where companies are successful,” he says. “That doesn’t really matter whether you’re talking about technology, health sciences or other industries. Investors are a big part of this and they’ll go where there are attractive opportunities.”

While some see the steel industry as failing in Hamilton, Peter Warrian, a professor at the Munk Centre for International Studies, has spent the last five years working on research about the development of a steel cluster. He uses Pittsburgh as a comparison, noting that while seven steel manufacturing facilities closed in the U.S. city, a new industry sprung up around the region’s expertise.

“In Pittsburgh, the steel technology cluster, including R&D, employs as many people as the mills did in the past, even though they don’t manufacture,” he explains. “They may make equipment, they may do R&D and they may do product design. There were 39,000 people employed before and there are 39,000 people employed there now.”

The switch to a cluster concept will require a change in thinking, Warrian says. No longer can Ontario and the Golden Horseshoe expect to be competitive with lower-cost geographies when it comes to manufacturing. Instead, Ontario needs to focus on its intellectual property and the research and development skills of its employees.

“Instead of Hamilton reading this story and thinking steel went away and that they got nothing, it has to look to its expertise,” he says.

The question for Hamilton is whether it can become another Pittsburgh. Robert Thompson

Future Workers

Although she is not far from joining the workforce, Ashley Milne sees a very different employer-employee relationship in the decade to come. The 23-year-old is currently pursuing a double major in Commerce and Sociology at McMaster University and is also a co-chair of the DeGroote School of Business-administered Focus 2040 project.

“When I have been working for a few years and have established my career, I expect to be given quite a bit of autonomy over my work and work schedule,” says Milne. “In the future, I see more and more of the monotonous tasks becoming further automated and companies focusing their human resources on innovation and change management. Technology will be rapidly evolving and to stay competitive, companies will have to dedicate extensive resources to keep up with those changes. I also see organizations moving further into smaller, flatter models, focusing on specialized work groups that operate on a per-project basis. In my experience as a student, we’ve been trained to work on projects in groups. There is generally no clear leader; however, roles naturally evolve based on each other’s strengths. Accountability to the group keeps everyone in line and motivated to not let the team down, which I find more effective than any authoritarian figure could be.

“Our generation is a very social one, as networking sites like Facebook have proven; therefore cutting people off in cubicles and having a stiff office culture will fade away. I see open-concept offices, large work areas that make the workplace more comfortable and conducive to collaboration. Workplaces will evolve to allow employees more flexibility over their schedules.

With technology constantly evolving, I anticipate more innovative forms of e-commuting. As cities are getting fuller and traffic worse, more people will have to live further from where they work, and won’t want to waste time sitting in rush hour. As long as employees get their work done and are positively contributing to their organizations, it shouldn’t matter when or how the work is getting done; only that it’s ready when it needs to be. I don’t think we’ll be working longer hours, but when we work will change—not so much 9 to 5. “My generation’s values are significantly different than those of my parents. Having grown up with relatively little, for them money was a significant motivator. I personally never wanted for anything growing up. Yes, I want a comfortable lifestyle, but that also includes having enough time off to enjoy the money I make. I want to feel like I’m a part of a team and that I am valued in an organization, not a faceless drone. I think corporate culture and the tiny details of what a company offers to make their employees feel valued will be what truly attracts the prime talent in the future.

“How the company conducts business will also be a factor that governs who will want to work for them. As environmental sustainability becomes a main focus in the future, corporate responsibility becomes more important. New ways of evaluating organizational success will be adopted. As the global community expands, companies will have to be more tactful,
responsible and sensitive to issues of other cultures. There’s no longer room for the ‘I’m right because I have the money’ attitude. Natural land has to be preserved and smaller indigenous cultures have to be respected, not assimilated. “

Spreading their wings

Richard Koroscil is rather high on the future of the Hamilton International Airport. But he has every right to be. “The stars are aligning,” says the airport’s president and CEO, as infrastructure, land use and both in-airport plans and off-airport transportation development appear to be coming together.

“We’ve already seen significant growth in recent years, and that will continue,” says Koroscil, the president-elect of the Hamilton Chamber of Commerce. “I see us being the major secondary airport in Canada, probably in the top eight airports overall in the country, with 2 million passengers and both expanded and new terminal facilities.”

In terms of added carriers, Koroscil foresees both low-cost and mainline U.S. airlines, expanded Canadian destinations with additional service from Westjet as well as additional Canadian carriers, and a low-cost European option.

“Today we’re the country’s largest intermodal cargo airport, and we’ve done that primarily on our domestic traffic,” Koroscil notes. “But international cargo has the potential to be at least twice what our domestic traffic is.”

Expansion in that realm includes CargoJet, who gave the airport its first long-haul international cargo service in November when it commenced weekly flights to Poland. “They just bought two new wide-body Boeing 767s. At the same time, Purolator and Kelowna Flightcraft have brought in new DC 10 wide-body aircraft, giving us added long-haul capacity,” says Koroscil. “(By 2020), the cargo business will be double what it is today, to over 200,000 tons, with the biggest growth in our international cargo thanks primarily to the open skies agreements, which opens up 27 countries for us in the European Union alone. But I also see opportunities in terms of international cargo to South America and Asia.”

Expansion on the ground, however, is just as vital for the 70-year-old facility. “One project that will have a big impact on us is the airport employment growth district, which the City has been working on for three years and which will be coming to City Council probably in March or April,” Koroscil explains. “That will open up about 3,000 acres around the airport and the new Highway 6, which will support significant growth and investment in our community. You’ll see 20 or 30 new companies by (2020). Some of those will be logistics and distribution companies, which will take advantage of the airport’s air cargo network and infrastructure. That could drive upwards of 4,000 to 6,000 jobs. Airport staff alone should go from 3,600 today to about 8,000 by then.”

Development should theoretically occur without adverse residential effects. “A lot of those aircraft are much quieter and fuel-efficient,” Koroscil says. “And the City has designated the lands around the airport as ‘Airport Influence Area,’ which restricts future residential growth, while supporting the development of the airport employment growth district, which is all commercial and industrial activity.”

Within the airport proper, air cargo facilities are expected within the next two years that will provide cooling and freezing capabilities for cargo storage, allowing the airport to support the huge market for flower products, pharmaceuticals and fruits and vegetables.

As the skies over Hamilton get busier, so will the roadways around it. “By 2020 we will see some construction of the Niagara-GTA corridor—part of the new continental highway plan that will connect Fort Erie to the U.S. superhighway network,” says Koroscil. “We expect it will go right by our front door, connecting to Highway 6, and probably off to Kitchener-Waterloo-Guelph area, then connect to the GTA west corridor, and eventually to the GTA east corridor, providing a ring road around Toronto.”

The airport will become a major player in the Hamilton Gateway, Koroscil stresses. “Work done by the McMaster Institute of Transportation and Logistics clearly shows that Hamilton is already a gateway for goods movement. But it can be done better, with some work to focus on intermodal, integrated transportation connections between the airport and the Hamilton Port. As an example, you could have marine containers coming in on short-sea shipping vessels. They would then be transferred onto railcars and shipped to destination. Some could come to the airport to distribution facilities, where they would be shipped by air. Take clothing as an example. A store in Winnipeg could sell a 42-tall suit. As soon as they sell it, a message comes back to the distribution centre in Hamilton. A replacement 42-tall is pulled, packaged, put on a plane and is in the store in Winnipeg ready for sale the next morning. That’s the kind of thing that could happen.”

Market shift

“Stock market trends are often tough to forecast, but as I look back 10 years, one big difference I notice is the amount of money available in the marketplace,” says Ken McIntosh, a senior equity trader at Blackmont Capital. “It used to be that a small number of Canadians were into the market, but now there’s a much larger percentage, so brokers have to be ready to deal with a much more varied clientele. Ten years from now, I suspect the percentage will have grown even further, with a lot more people taking a proactive look at their financial affairs.

“I also see more people doing their own trading, which is not necessarily a good thing for me, except that an informed, knowledgeable investing public is almost always an advantage for professionals.”And where will this well-informed public be investing?

“The banks will be in a stronger position in the market, mostly because of economies of scale,” says McIntosh. “Those of us here will probably all work for banks, or subsidiaries of them.”


IN THIS ISSUE

FOLLOW US!