Finding a pathway to economic diversification

By Ainslie Pierrynowski (AIMS on Campus Student Fellow)

Nearly twenty years ago, a community organization in Bridgewater, Nova Scotia embarked on a mission to transform the town’s economic landscape. Between 2000 and 2017, the Bridgewater Development Association (BDA) spearheaded a number of local initiatives, including the establishment of the Bridgewater Area Family Health Centre, the construction of the Bridgewater Marina, and the extension of Glen Allan Drive. These projects—as different as they might seem from each other at first glance—were all informed by the Association’s overarching goal: diversifying Bridgewater’s economy.

In this context, economic diversification refers to expanding the number of strong, productive sectors and livelihoods. Essentially, in a community reliant on one predominant industry, the entire local economy can suffer when said industry experiences a downturn. Conversely, an area which is home to multiple well-performing economic sectors is less vulnerable when one (or more) local industries encounter difficulties. Given the economic stagnation wrought, in part, by the decline of key industries like coal and steel production—not to mention many communities’ current reliance on tourism and other seasonal sectors—Atlantic Canada has good reason to pursue greater economic diversification. In the words of Bridgewater Mayor David Mitchell, “We want to make sure that Bridgewater is not a one-industry town because we’ve seen what happens to communities when they rely on one industry.” Economic diversification, however, is no easy task. It may require developing new training and continued education programs, devising a strategy to attract investment to the area, gaining access to markets beyond the local community, and creating the infrastructure necessary to support new, burgeoning economic sectors. How, then, should communities in Atlantic Canada go about diversifying their economies?

First, effective local organizations like the BDA can be instrumental to economic diversification. They can identify community needs, act as intermediaries between investors, local businesses, and other stakeholders, and enhance accountability. Garrett County, Maryland (US) provides one such success story. When the focal point of its local economy—a glasses factory—closed its doors, Garrett County lost a substantial number of jobs, including indirect jobs supported by the county’s economic base. To boot, the displaced workers often lacked transferable skills. Amid the economic uncertainty, local leaders met to assess the situation and formulate a response to the crisis. These discussions produced a short, concise economic growth strategy aimed at utilizing existing local assets and enhancing the area’s economic infrastructure. This initial step was soon followed by an ongoing planning process where five key local economic development organizations and several different industry sectors provided input on the county’s future direction. Overall, Garrett County’s economic diversification strategy proved successful. The county is among the most economically diverse municipalities in the Appalachian region. As well, Garrett County experienced above average employment and income growth between 2002 and 2009, with more recent years bringing stable employment and some small employment gains in the manufacturing and recreation sectors. By working with local stakeholders from the beginning, the local government could respond quickly to funding opportunities at the state or federal level. That is, rather than spending time forging coalitions, businesses, community organizations, and local leaders could instead draw on pre-existing partnerships when presented with funding opportunities. The area’s success stems not only from this collaborative approach, but from that fact that the country’s economic diversification strategy was effectively implemented. In particular, the strategy was reviewed every few years, thereby ensuring that Garrett County’s economic diversification strategy was attuned to the community’s current circumstances. Moreover, the partners involved in the planning process agreed on how to measure the outcomes of their economic diversification efforts. This allowed communities to hold those involved in implementing the plan accountable. Garrett County’s response to local economic decline could therefore prove fruitful for post-industrial communities in Atlantic Canada facing similar challenges.

Beyond the local level, regional economic development agencies, particularly the Atlantic Canada Opportunities Agency, could take a new—and potentially more successful—approach to economic diversification. As this article notes, regional economic development agencies could improve public confidence in their operations, promote openness and accountability, and potentially make more informed decisions by adopting a transparent, depoliticized process for selecting which communities will receive funding. Additionally, these agencies could further promote economic diversification by placing a greater focus on funding the programs needed to support economic diversification—such as education and training programs, or high-speed Internet in isolated communities—rather than emphasizing more traditional programs like business loans.

Ultimately, while businesses, workers, organizations, and policymakers seek to ensure Atlantic Canada’s long-term economic prosperity, it is essential that we not only diversify the region’s economies, but carefully consider how we will achieve economic diversification. As the experiences of Bridgewater and Garrett County illustrate, direction, accountability, and adaptability are needed if the region is to prepare for its economic future. In the words of Mr. Mitchell, “Economic and community development are linked…we have to look at every component and determine the strengths we have and identify areas that still need work.” Communities throughout Atlantic Canada would do well to take heed.



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