Quote:
Originally Posted by Doug
Diversification only reduces volatility it does not inherently promote growth. A relatively stagnant city can have a very diversified economy (ex. Winnipeg), but still grow far less quickly than one more exposed to business cycles. A more important quality than diversification is agility - i.e. the ability to constantly change direction in order to seize opportunities. Calgary with a young, ambitious and highly trained white collar workforce is well positioned, especially given that much of its economy consists of small business and the self employed. Cities that rely on blue collar industries, government and large business may be more stable economically, but also more lethargic. Besides, boom and bust is far more exciting than boring steady as you go.
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Excellent points. The high level of educational attainment in particular bodes well for Calgary's ability to ride out economic turbulence. The large number of engineers, MBA's etc. provides a skilled workforce with a lot of expertise that can apply to fields other than oil and gas.
And it is certainly true that there really isn't much correlation between economic diversification and growth. If I recall correctly, Canada's 3 most economically diversified big cities are (in whatever order) Edmonton, Winnipeg and Montreal. Of those, only Edmonton is what I would consider to be a fast-growing city.