The economic news is beginning to move from the bad side to the good side of the ledger. But the road to recovery won't take us back to the world that existed before the subprime crisis began.
Growth in Canada, the United States and other developed nations will be more subdued. Global trade and economic activity will be driven increasingly by China, India, Brazil and other emerging powerhouses. Governments will have to reverse pedal-to-the-metal fiscal stimulus to rein in big deficits, and interest rates will rise as central banks ease up on the monetary accelerator. There is also a clear risk that the performance divide between developed and emerging nations could increase friction over international trade and investment.
For many Canadian businesses, these new world realities point to tougher competition in traditional markets - and a world of opportunity in emerging ones. But focusing our collective attention and scarce national resources on supporting the familiar, while avoiding the unfamiliar, is a losing strategy. Government subsidies can't insulate domestic business from the powerful forces reshaping the global economic landscape.
Currency depreciation won't be riding to the rescue: Higher commodity prices may soon push the loonie to parity with the U.S. dollar, and beyond. Skilled-labour shortages also will intensify as Canada's economy revives, limiting the potential for businesses to trim costs for a healthier bottom line.
Successful business strategies increasingly will hinge on identifying high-value-added products and skill-based services that can plug into global supply chains or take advantage of unique local or international niche market opportunities. Innovative, nimble small- and medium-sized businesses will be a key source of job creation.
When it comes to helping Canadian businesses and households adjust to these new realities, our governments have limited resources; they face long "to do" lists that include balancing budgets while investing in major infrastructure projects.
But among the many competing demands, it is essential that education and skills training remain a top priority because the quality of our work force is one area where Canada must be able to compete with the best.
We have already made great strides in improving our educational infrastructure. At the postsecondary level, federal and provincial innovation agenda and world-class R&D centres are developing. New industry-academia collaborations are emerging. Students have broader access to financial assistance and to internship and apprenticeship programs.
At the kindergarten to grade 12 level, a number of provinces have achieved smaller class sizes and expanded early-childhood and ESL programs.
But this is only the beginning of what must be done: We need to more fully integrate the education process into our economic and social fabric.
Our children require a clearer understanding of how K-12 education success relates to career success and to productive citizenship. We need more initiatives such as The Learning Partnership's "Take Our Kids to Work" program, which enables 250,000 students to go to 75,000 workplaces across Canada each year, to experience firsthand some of the career options available to them as they begin to plan their future.
In the upcoming era of scarce resources and rapid pace of change, the education sector must resolve key challenges and respond to new opportunities.
If Canada is to assume a position of leadership in the new global economy, we need fresh thinking about our "innovation ecosystem." This will require higher levels of collaboration across sectors - industry, chambers of commerce, schools, universities and families - to ensure full integration of education into our economic and social environment.
If Canada is to produce a growing stream of young scientists and entrepreneurs, we must set this as a national target and integrate the K-12 sector into our innovation agenda. It is only through skilled, highly qualified young workers that we can implement an innovation agenda that enlarges our R&D capacity and our ability to commercialize research into globally competitive new products and services.
We need to provide more authentic opportunities for young Canadians to experience the worlds of business, science and technology - to mention just a few key sectors - in ways that excite them and encourage more of them to seek the special training that will lead to fulfilling scientific, technological and entrepreneurial careers.
Warren Jestin is senior vice-president and chief economist at Bank of Nova Scotia. Stan Shapson is vice-president of research and innovation at York University. They are co-chairmen of The Learning Partnership's Policy and Research Advisory Council.
