More of what? As I write this, news of the $2.75 billion USD sale of St. John’s, N.L.-based online financial security company Verafin to Nasdaq is still fresh. On the surface, this is a huge win for the founders, the shareholders and the employees—particularly those who had options. But it is also a huge success for less obvious reasons.
In my last column I talked about the need to push the pedal to the metal on the economy of tomorrow… the new business community. Verafin is an example of this economy. A generation ago, maybe even just 25 years ago, it would have been impossible to build a company with Verafin’s value in the time frame in which its founders accomplished this feat. This company was, is, about creating value not from our natural resources, but something much more powerful: the ideas, ambitions and energy of our young people. Such tangible evidence of the value of this sort of creativity is hugely stimulating to others who might now be so encouraged as to pursue their own ambitions to launch a business.
Think about the impact Verafin has had and will continue to have on the local job market (while the ownership changed, the company’s management and location did not). More young people pursued an education in the computer sciences knowing they could potentially be hired to work locally, and for a really exciting company. More graduates of Memorial will be able to get good jobs here rather than having to move elsewhere. More investors, locally, nationally and internationally will pay attention to what’s happening in Atlantic Canada and be more inclined to finance our startups. There is no more important stimulant to success than success itself.
As we are encouraged by the ambitions of this company and those companies still to be formed, we must now move to a focus on prodding the public sector to be more innovative in its responsibility to provide equal or better quality services, at lower cost. A lot of progress has been made in breaking down the inter-provincial walls that used to exist (and still do in a lot of instances). These walls have been built with different regulatory standards or rules but mostly with a bias, an inefficient and expensive bias, to local politics. We can all understand how this has been shaped. A local MLA in rural Nova Scotia has little interest in doing anything for a constituency in rural Labrador. There is no incentive for he or she to think about such a connection. But such a connection does exist. Here’s an example…
We have four provincial liquor distribution monopolies in Atlantic Canada. These are each enormously profitable and their respective government owners have grown dependent on the profits, understandably so. But why not look to increasing those profits, without any sacrifice as to the quality of the service these agencies offer? The obvious answer is to consolidate the respective authorities into one. They don’t need separate CEOs or Boards, CFOs or purchasing departments, and on and on. Simply put them altogether under one management team and share the savings in some equitable fashion amongst their provincial masters. Will there be a fight over where the “head office” should be located? For sure. I remember being on the Board of Maritime Tel and Tel (the N.S.-based Bell affiliate). Whenever the discussion arose around consolidating the regional Bell affiliates, the counter argument was always that the premiers would never allow it in the absence of securing the coveted head office function. But it did happen and there was some angst, but Bell responded intelligently and responsibly by ensuring there was fair distribution of the senior positions around the region. So it can be done and it should be done.
My point is simply this: the private sector is leading the way, generating value, being creative and innovative and inspiring us all. The public sector needs to follow. We need new ideas, a sense of energy and urgency with some regional leadership mixed in. Please. •