Originally published in the Sept. 2013 issue of the Nova Scotia Business Journal
By Fred Morley
Economic development professionals are always looking for an edge for their community –– something that will help them out-compete their neighbours. Smart communities have figured out that immigrants can give them that edge over the competition.
In Nova Scotia, our provincial immigration strategy has figured out that we need more newcomers. We just haven’t figured out how to get a lot more. Immigration levels have been flat over the last number of years although there was a bump in permanent residents to about 2,400 in 2012, about the same as Kitchener, Ontario. In addition, we had about 4,400 temporary foreign workers and about 3,300 international students working and studying hard in our province in 2012.
The good news here in Nova Scotia is that organizations like ISIS, the Greater Halifax Partnership and the Nova Scotia Office of Immigration have figured out how to retain more immigrants. We are up from mid 40 per cent retention a decade ago to over 70 per cent these days. But as economic development organizations know, good isn’t good enough when it comes to immigration.
So how do immigrants help economies grow? A recent research paper by the International Economic Development Council in Washington DC laid this out pretty clearly.
According to this recently published report (The Economic Development Impacts of Immigration), immigrants can enhance the attractiveness of a community to external investors by rounding out the labour pool with skills that may be in short supply locally. At the other end of the labourforce spectrum, immigrants often take jobs that are not in their field or below their skill level. Immigrant spending creates demand in local stores, restaurants and for other service providers. In general, immigrants are as close to the magic elixir for community growth as economic developers can find.
According to the IEDC report, U.S. immigration between 1990 and 2006 caused almost a three per cent bump in average real wages and an 11 per cent jump in employment. Immigrants in the science, technology, engineering and math fields (STEM) help the most. Every 100 STEM immigrants create 86 jobs for native workers.
Immigrants also had a higher likelihood than native born to become entrepreneurs. The IEDC study points out that almost a quarter of new high technology companies had at least one immigrant as a founder. Between 2006 and 2012, these startups generated more than $63 billion in sales and employed more than 560,000 workers in the U.S. Indeed immigrants are twice as likely to become entrepreneurs as native born Americans and account for one in 10 private sector workers. The percentage is even higher in Canada.
Immigrants also help with demographic challenges. The vast majority of immigrants are in that sharply declining but vital working age population –– 18 to 64 years. They also have more kids per family than native born.
In the U.S., it is widely understood that better immigration policy will act as a fiscal tonic for the American economy. Earlier this year, a nonpartisan Congressional Budget Office report found that proposed immigration reform would boost GDP per person by $1,500 and reduce the federal deficit by over $2.5 trillion. All of this translates directly into Canada.
Smart communities and smart states and provinces are pressing hard for higher levels of immigration. It’s not surprising that good economic developers are implementing innovative new policies to attract, retain and engage newcomers. The report goes on to list examples of best practice immigration programming across North America, including the Greater Halifax Partnership Connector Program which has now expanded to 15 Canadian communities.
So communities everywhere have figured out that immigration is one of the keys to a prosperous future. The competition for those immigrants just got tougher.
Fred Morley is the executive vice president and chief
economist of the Greater Halifax Partnership. He has
written over 100 articles on economic growth issues and presented his views to dozens of organizations and governments around the world. You can reach Fred at email@example.com .