By GRAHAM HICKS
Public-sector unions scream at any suggestion their members shoulder some of Alberta’s economic pain.
Interest groups go bonkers at the very thought of the provincial teat running dry.
Never considered is the source of the wealth that pays the health care workers, the school custodians and subsidizes start-up companies.
Which is — duh! — the taxes paid by thousands of small-to-medium sized Alberta companies and their employees. At least what’s left of those companies and their payrolls after the “right-sizing” of the past four years.
Alberta’s future well-being depends on the entrepreneurial will of those owner/operators.
Put yourself in their boots.
Joe and Betty are in their early 50s. They started and built an oil-field servicing company. In the good times, 100 technicians were out in the field. The company had revenues of $50 million.
But today the oilpatch is stagnant. The company’s 2019 revenues will be $10 million. The workforce has already been “right-sized,” getting by with 20 employees.
What will Joe and Betty do?
They could sell the company — for a pittance, as nobody is investing in oil — or simply shut it down. They’ve done reasonably well. They could retire to an Ice District condo, watch the Oilers, babysit the grandchildren, golf at home in the summer, in Arizona during January and February.
Or they could pivot in a new direction. Dust off their entrepreneurial skills. Take the company’s earnings and technological know-how in a new direction. How about medicinal cannabis? Or a micro-brewery!
Or Betty and Joe could give up on Alberta and move the company to Texas, the oil centre of North America. Just about every input — taxes, labour, materials — is cheaper.
Hank Van Weelden is a far-thinking businessman. As CEO of Alta-Fab Structures, he and his partners have responded to Alberta’s current business climate with a pivot.
While still in modular construction, Alta-Fab is designing/building spas for the hospitality market. (It was Alta-Fab, unable to agree on financial terms, that recently pulled the plug on a proposed Fort Edmonton Park spa.)
Entrepreneurial spirit — the “git’er done” attitude of the oilpatch — built Alberta, says Van Weelden.
If that entrepreneurial spirit can stay alive, can adapt to ever-changing technology and automation, Alberta can still flourish.
The challenge, Van Weelden suggests, lies in the willingness of Betty and Joe to re-invest in 21st century technology and opportunities.
“Our businesspeople, with financial capital, entrepreneurial spirit and endless energy, are mostly oilfield experts,” he says. “At the University of Alberta, we have some of the best artificial intelligence (AI) research in the world.
“But the two sides have not yet figured out how to talk to each other. No businessman is going to invest their hard-earned capital into something they don’t understand.
“It’s about new partnerships, learning the language of high-tech, sustainability and robotics in the new “green” world, applying that knowledge to our resource-based industries, or new industry altogether.”
It’s in the oil industry where most of Alberta’s capital, both financial and intellectual, resides. Much of Alberta’s economic future lies with the response of the oil-field entrepreneurs to the opportunities and challenges of re-invention.
Like Betty and Joe, will they adapt, take the risk, re-invest their oil capital in brand-new endeavours? Will they retire, or move to the business-friendly U.S.A.?
“Sustainability and the digital revolution are the future,” says Van Weelden. “Green is beautiful because it makes good business sense.”
If Alberta’s middle-aged oilfield entrepreneurs are willing to cross the digital bridge, to learn enough about machine learning and artificial intelligence to place multi-million investment bets in the new Alberta business world, our provincial economy could adjust its foundation.
Best-case scenario: Thanks to tax income flowing from the adaptation of entrepreneurs to the new order, Alberta is able to pay reasonable salaries to the nurses, teachers and civil servants.