Month: October 2012

I was intrigued to read Adrianne Erdman’s blog post and how her perspective about an Indian entrepreneur evolved to include ideas about social entrepreneurship. Before attending the Comm 101 class on social entrepreneurship, I would have thought that Mr. Muruganantham’s approach to business is a bit unusual and inefficient. However, I think it is important to appreciate that many people in the business world have motivations other than profit alone. Successful small businesses are finding ways to grow revenues while also promoting their values or taking action on important social problems.

Adrianne mentions Mr. Muruganantham’s Indian social enterprise which seeks to provide low-cost feminine hygiene products for women in developing countries. At the expense of maximizing profits, this business has not only provided inexpensive hygiene pads for women but is currently providing resources for girls to manufacture the pads themselves in schools across India.

This business is, by no means, a charity; the business is constantly seeking local raw materials and more efficient means of production. Mr. Muruganantham’s fabric-shredding machinery has allowed women across India and other developing countries to embrace a sustainable business model while introducing the concept of a practical and sustainable sanitary practice to women. I believe this is a model social enterprise which displays how sustainable business can contribute to social advancement in addition to making profit.

The debate regarding the controversial Northern Gateway pipeline project proposed by Calgary-based Canadian company Enbridge is soon to reach a critical breaking point. The pipeline would carry over half a million barrels of bitumen per day from northern Alberta to the B.C. coast, mainly for export to Asia where there is an enormous market demand.

Benefits include a predicted BC tax revenue of 1.2 billion dollars over 30 years and over 3000 jobs for the construction of the pipeline. For Alberta oil companies, the most obvious benefit is an increased strategic advantage for Albertan oil in world markets. Asian purchasers would increase demand for Alberta oil allowing corporations to greatly expand profit margins.

The controversy lies in the fact that politicians and locals are concerned about environmental issues (tanker spills) and impact on aboriginal groups, among other problems. Some, like Justin Trudeau, the Liberal Party leadership hopeful, have expressed deep concern for the ecosystems in the west coastal region. B.C. premier Christy Clark has clearly stated that her government is more interested in developing natural gas pipelines estimated to produce around a trillion dollars in econmomic benfit for B.C. She has no motivation to support the pipeline which may benefit Albertans more than anyone.

Although I have a strong bias as a born-and-raised Albertan, I feel that all Canadian businesses should have equal access to export their product via the west coast of British Columbia. I don’t believe this should be a battle between the B.C. and Alberta governments but rather a negotiation between Enbridge and local groups affected by the pipeline.

According to Canadian Business magazine, Target won’t kill Canadian retail – it will save it. American retailer Target plans to open up 165 stores in Canada starting in March as part of a multi-billion-dollar strategy. Canadian shoppers are happy because they can now buy the fashionable yet inexpensive products locally rather than crossing the border. Unexpectedly, however, many are expecting the American retail giant’s arrival to benefit Canadian retailers as well.

Jeremy Reitman, the CEO of Canadian clothing chain Reitman’s believes Target will attract many consumers to malls that would otherwise die due to declining shopper traffic. Furthermore, Reitman asserts that Target’s decision to expand into Canada will incentivize consumers to shop in Canada, further drawing traffic to other Canadian retailers as well. Target is also planning to hire over 30 000 workers in Canada which will help reduce unemployment in certain areas.

I believe Target has the ability to legitimately help Canadian retailers to boost sales and contribute greatly to the Canadian economy. The American big business model has the ability to generate billions in revenue while giving Canadian consumers a reason to stay north of the border.

As Richard Warnica explains in his article entitled, “Vancouver’s video-game industry is slowly disappearing,” British Columbia has become the unfortunate victim of a lack of economic competitiveness; this has led many businesses out of B.C. and on to a greener pasture. The Canadian video gaming industry, which, for many years, was based mainly in Vancouver, is moving almost entirely to Ontario and Quebec.

Why? The answer is simple: input costs are much cheaper in Eastern Canada due to new tax incentives provided by provincial governments. In Ontario, for example, the provincial government has offered a 37% labour tax credit to all video-game developers. This compares rather favorably when put side-by-side with B.C.’s 17% labour tax credit – not to mention sky-high commercial rent costs in the Lower Mainland.

How can local governments increase economic competitiveness and create thriving industry in their region? Taxes are an inevitable cost to business in order to create societal benefit; which industries deserve tax breaks and at whose cost should these subsidies be incurred? Finally, are there other, more effective, ways of attracting certain business to invest capital in a particular state/province?