Remapping economic regions

Researchers use commuting patterns to group communities

Published on June 11, 2014
Researchers David Freshwater (left) and Alvin Simms have released a report through Memorial University’s Harris Centre that identifies a new way to promote regional economic development. They met with reporters Tuesday at the St. John’s office of Municipalities Newfoundland and Labrador. — Photo by Andrew Robinson/The Telegram

Researchers have identified a new way to map regional economies and hope policy-makers in Atlantic Canada will take notice.

Released through Memorial University’s Harris Centre, the report used Statistics Canada commuting data to establish borders for 259 local labour markets in Atlantic Canada, or functional economic regions as the report calls them.

“The intriguing part about this is most of the time we define regions by drawing administrative boundaries,” explains David Freshwater, an agricultural economics professor at the University of Kentucky who co-authored the report with MUN geography professor Alvin Simms and former MUN geography graduate student Jamie Ward.

“Somebody in St. John’s, Halifax, Charlottetown or Ottawa says, ‘This is the region that we want to deal with. We’ll draw the line here.’ But this is a different approach. It’s an approach that’s revealed by people’s behaviour.”

Those 259 regions within Atlantic Canada were then divided into five categories based on population. More than half of those regions had a total population of 600 people or less. At the other end of the spectrum, the report identified 11 urban centres throughout Atlantic Canada. As the categories move down the line from urban to the most rural areas, the number of regions identifiable within that grouping increases.

The report went on to look at socioeconomic indicators in those regions. Larger regions generally performed better than smaller ones when it came to indicators such as population growth rates, education and economic diversity.

However, when measuring productivity in these regions, it was found many rural ones performed very well. In Newfoundland and Labrador, there were nine regions where the gross domestic product per worker exceeded $100,000. In the rest of Atlantic Canada, there were three such regions.

“So no matter what size region you’ve got, if you’ve got high-performing firms you’re going to do well, and in a small region you don’t need very many high-performing firms,” said Freshwater.

As Simms put it, even a business that creates 10 jobs in a small community makes a huge difference economically and can produce a trickle-down effect leading to further job creation. He emphasized the need for communities to have entrepreneurs willing to take risks and generate economic activity.

The report’s authors hope policy-makers can look at this model for grouping economic regions and focus on economic development plans that consider what’s working well for those with a comparable population and strong productivity.

“It’s not about treating everybody equally — it’s treating everybody appropriately,” said Freshwater.

As the Harris Centre’s executive director sees it, there may be a need to consider collaborations that stretch beyond provincial borders. Rob Greenwood also said rural areas might not always be best served emulating the strategies of larger municipalities.

“There may be some lessons, but much more valuable would be for places of similar regions of similar sizes and characteristics to be learning from each other and partner where appropriate,” he said. “And that may be a place on the Burin Peninsula partnering with a place in Cape Breton. It may not be your next-door neighbour that’s the best fit to be learning from.”

Simms mentioned further research that will use functional economic regions to identify gaps in local economies and opportunities available. As was the case with his latest report, the Atlantic Canada Opportunities Agency (ACOA) will help fund the project.

“I think they see utility in this,” said Simms. “They see some usefulness in terms of having evidence-based policy development, because so many things that were done in the past, like someone decides to put a facility in any location, and it fails. Well, why does it fail? Maybe because it doesn’t have good industry linkages locally. Maybe its transportation costs are high. Maybe the local labour market doesn’t supply the skills that it needs.”

Twitter: @TeleAndrew