China, India, Brazil and other emerging economies now play a larger role in the global economy. The impact of these countries was once a boardroom issue, but has now become a highly publicized matter that challenges the way businesses operate globally.
In addition, a rise in the Canadian dollar relative to the U.S. currency since 2003 has forced Canadian businesses to critically examine and remodel their operations through investment in new machinery, training and improved productivity.
Operating in the global economy requires efficiency and flexibility in every aspect of business. The ability to learn and innovate is the key to success and many Nova Scotia businesses have shown a capacity to adapt to changing global trends.
The need to adapt is reflected in the structure of the provincial economy, which, for decades, has transitioned from goods production and traditional industries, such as fishing and agriculture, to service industries like information technology (IT), health care and retail trade. The province has also been shaped by a variety of economic issues since 2001, including globalization and the impact of changing demographics on employment.
Nova Scotia continues to move through a demographic transition. Over time, the falling birth rate means that fewer young people will enter the workforce in the future. In addition, Nova Scotia’s population is getting older and businesses are faced with challenges due to an aging workforce. These issues, combined with a downward trend in Nova Scotia’s unemployment rate over the last several years, have resulted in increased difficulty for Nova Scotia businesses to attract and retain skilled employees.
The booming economic growth in Alberta has created challenges and opportunities for Nova Scotia businesses as they work to attract and retain a skilled and educated workforce. Higher paying salaries have resulted in the movement of employees from all areas of Canada to Alberta. However, it has also provided export and partnering opportunities for Nova Scotia businesses as they work to stay competitive.
Although Nova Scotia’s economy has grown, it hasn’t kept pace with other jurisdictions across North America since the early 1980s.
In 2005, the Voluntary Planning Sector Committee on Economic Growth and Competitiveness released its report, Closing Our Prosperity Gap. The report shows that Nova Scotia, as measured by gross domestic product (GDP) produced per Nova Scotian, is behind similar-sized North American jurisdictions in overall economic growth. Nova Scotia’s GDP per capita is 22 per cent lower than the average of these jurisdictions.
If Nova Scotians were generating the same GDP per capita as the average of these jurisdictions, the province would see each household’s after-tax income increase by $12,500 and government tax revenues by at least $1 billion annually. 1 To overcome this gap, provincial and business leaders must continue to collaborate on key economic priorities, including education, exporting and innovation in order to create higher quality, higher paying job opportunities.
Nova Scotia has proven that it can be a major global competitor in spite of many economic challenges, but it cannot be complacent. The world continues to evolve and the province must continue to evolve and grow
with it.
Reflecting on the Nova Scotia economy since 2001 gives provincial and business leaders the knowledge and insight they need to move the province forward and to enable future business growth.
In the future, economic issues like globalization and the impact of changing demographics on employment will only continue to influence business growth. By embracing these challenges and finding ways to tackle them, Nova Scotia will continue to build on its economic success since 2001.