Training transforms a region's economy: the province of New Brunswick breathed new life into a dying economy by creating 20,000 new technology jobs and training residents for them

Workforce, July, 2002 by Patrick J. Kiger

Situated along the Gulf of St. Lawrence in eastern Canada, the province of New Brunswick is blessed with forests of spruce and balsam fir, hillsides rich in copper, lead, and zinc, and offshore waters filled with herring, cod, and crabs. For generations, residents made their livings in lumber mills, mines, and fishing boats, collecting and processing the natural wealth. But by the early 1990s, the provincial government's economic planners realized that the traditional way of life was no longer sustainable and, unless the economy changed quickly, New Brunswick faced a bleak future.

New Brunswick officials knew they had to find a way to reverse the unemployment tide before it turned into a tsunami that might wreck the province's already destabilized economy. It was the sort of dire plight that demanded a radical solution. Fortunately, the province's political leader at the time, Premier Frank McKenna, was a man with an unconventional style of thinking. "Chairman Frank," as the Canadian newsmagazine Maclean s once labeled him, liked to think of himself not as a politician in charge of one of Canada's poorest provinces but as a business executive running a big, diversified corporation. He was fond of applying ideas that worked in business to government-total quality management, performance benchmarking, and customer-service orientation.

As the province struggled to automate, it had to shed jobs. Its old resource-based industries could no longer compete in the new world economy. "We already had 15 percent unemployment," says Leonard Weeks, an HR professional who is New Brunswick's manager in charge of knowledge industry and innovation. "And our projections showed that during the 1990s, we were going to lose at least 10,000 more industrial jobs, nearly 5 percent of t he province's workforce." Beyond that, the lack of opportunity in the region was causing young educated people to move to other parts of Canada and the United States.

Like a turnaround expert trying to revive a failing company, McKenna methodically assessed New Brunswick's prospects. The existing industries weren't going to add new workers. And the province's small size--at 750,000, its population was roughly a third that of the city of Toronto--and relatively remote location made it an unlikely choice for new manufacturing operations.

Instead, McKenna decided that the province had to reposition itself. It must develop a new, growing industry where it could quickly become a leader in a field in which initiative mattered more than location. He zeroed in on the then nascent field of information technology and multimedia. With companies increasingly relying on computer networks and the Internet to manage their far-flung global operations, it seemed like a promising bet. Additionally, the strategy enabled New Brunswick to leverage a significant asset--l,800 miles of fiber-optic cable that its phone company, NBTel, already had installed. The project was an effort to create a digital phone network, and cost $50 million. That same infrastructure could be harnessed for high-speed data transmission, giving the rural province enough bandwidth to compete with large metropolitan workers.

But McKenna 's vision contained one big if. To transform New Brunswick's economy, the province needed plenty of technologically skilled, intellectually creative people. That was no easy task in a place where the populace was more accustomed to fishing lines than keyboards, the youngest and brightest had fled, and the older workers feared new technology and change. At its core, New Brunswick's economic crisis was an HR problem that required an inspired HR approach. Weeks posed this question: "As we're building the technology base, why not use it to develop our workers?" The workforce could serve essentially as a laboratory subject for the information products that New Brunswick sought to develop.

Today, a decade later, the success of the HR strategy is obvious. Largely because of its information-technology thrust, New Brunswick's unemployment rate has dropped 5 percent. Twenty thousand people are now employed in the new sector, and the province's training infrastructure produces more than 2,500 workers skilled in software development and content creation each year. With IT employment growing at a 30 percent annual rate, workers now are moving into the province to find jobs. Both New Brunswick's economy and its image have undergone a dramatic shift. The former rural rust belt is now considered a global leader in producing software and content for distance learning and online corporate training. Its information products are used by an estimated 100,000 companies worldwide. In March, IBM hired two New Brunswick companies, Advanced Training & Services and CertifyOnline.com, to train Web developers throughout the world. Paul McErlean, IBM Canada's vice president of software, says the technology giant's dec ision was influenced largely by "the amazing amount of skills" possessed by the province's technology-savvy workers. The workers also produce much of the content for SmartForce, an Irish company that is the world's biggest provider of online learning services to businesses.