A new paper released by the Atlantic Institute for Market Studies says fundamental deficiencies seriously undermine the prospects that New Brunswick will ever achieve importance as a plastics products powerhouse, as the provincial government hopes.
New Brunswick’s Plastics Industry: Rhetoric versus Reality by internationally-renowned business analyst and academic I.A. (Al) Litvak says, “attempts to develop New Brunswick as one of North America’s top plastic production centers is “yet another misguided, publicly funded effort at industrial planning.”
From a base of less than 1 percent of Canada’s production, New Brunswick has launched a drive to become a significant North American plastics products manufacturing region. The momentum behind creating such a centre grew out of two highly publicized plant-site consulting reports which Dr. Litvak says base their findings on characteristics that are inappropriate for the local industry. The paper also points out several other serious deficiencies that must be recognized, among them:
- Human resources are weak in the specialized categories the industry requires.
- Knowledge resources are underdeveloped, with the relevant postsecondary education sector being relatively small.
- Demand conditions are poor, with New Brunswick’s underdeveloped industrial base providing little in the way of a home market.
- The absence of plastics products supporting and related industries
Dr. Litvak acknowledges the good intentions and political advantages of the government’s strategy but goes on to say, “Politicians and government bureaucrats are among those least qualified to pick industrial winners and losers. At best, they lack the specific business knowledge of the sophisticated investors they are attempting to attract. At worst, they may inadvertently create subsidized competition for existing businesses.”
AIMS President Brian Lee Crowley said, “This paper by an internationally-acclaimed professor of business studies demonstrates once again that wishful thinking is no substitute for a real hard-headed analysis about what makes businesses and industries succeed. As well meaning as this plastic pipe dream may be, sound capital investment must be based on reasonable expectations of opportunities in the future. As Professor Litvak so clearly shows, the fundamentals for a successful plastics cluster in New Brunswick simply aren’t there.”
Dr. Litvak is concerned that existing New Brunswick plastics companies cannot possibly meet the government’s growth expectations, adding, “The dismal track record of such diverse countries as the United States, Japan, and Germany in identifying winning industries offers little encouragement that New Brunswick, in targeting the plastics industry, and using the analysis investigated in this paper, will be any more successful.”
Isaiah Allan Litvak holds the Eugene and Christine M. Lynn Eminent Scholar Chair in Business at the College of Business, Florida Atlantic University (FAU) and is Professor Emeritus of Policy and until 1999 held the Pierre Lassonde Chair in International Business at the Schulich School of Business at York University in Toronto. He is a recognized authority in the field of strategic management and public policy. He received his MSc & PhD degrees from Columbia University and a BComm from McGill University.
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