Key learnings from David Knight Legg at the 2021 Alberta Economic Summit
By ATB Financial 8 February 2021 5 min read
The future of economic development in Alberta will be brightest if the province can overcome key challenges it faces locally and abroad, said David Knight Legg, the keynote speaker at the recent Alberta Economic Recovery Summit 2020. As CEO of Invest Alberta, Knight Legg offered deep insights and experience into what Alberta needs to accomplish to entice global investment and continue to flourish as one of the most attractive investment destinations in North America.
At the Summit produced by MNP in partnership with ATB, Legg began his keynote by illustrating how Alberta’s oil sands sector strengthened its position when major investment banks recognized the importance of environmental, social, and governance (ESG) strategies “that allowed continued capital and insurance access to our core industry,” as he noted.
ESG scores in Canada have been widely lauded, as noted by BMO in a report stating Canadian oil companies deliver stronger ESG scores compared to companies from all other oil producing countries in the world.
Legg then discussed the importance of the province having a robust presence in each of the vital regions where Alberta can attract investment opportunities. The majority of capital that flows into the province comes from Toronto, London, Houston, and New York City, and each city would benefit from a dedicated office representing the interests of Alberta’s economy, he noted.
There is a greater chance of economic prosperity for Alberta when the province is heavily represented in regions where the majority of business is conducted, such as New York, Toronto, the UAE and Tokyo, Legg said.
Focus on three client segments and seven sectors
With an eye to Alberta securing a prime position as an investment opportunity, Knight Legg said Invest Alberta is targeting three key types of clients: investment firms with around $20 billion to $100 billion to invest; corporate executives that decide where talents and assets go; and entrepreneurs.
“Whether that investment firm is a bank providing credit and lending, or it’s a large sovereign wealth fund or pension fund, we have a specific pitch to put in front of them,” he said.
Next, Knight Legg identified seven sectors that can help accelerate investment opportunities in the province: energy and cleantech; tourism; petrochemicals; agribusiness; aviation and logistics; technology and data; and financial services.
On the last three sectors, Knight Legg said, “Our goal is to look at places where the government plays a role through policy in creating better long term structural competitive advantages for Alberta, and those industries are places where it can have a huge effect. If we play it right, those three industries are enabling industries.”
Knight Legg cited the example of Dubai’s aviation sector “helping them build high velocity economic growth.” Several figures support Legg’s assertion: As far back as 2013, the aviation sector brought in 26.7 per cent of Dubai’s total GDP and supported around 416,500 jobs, or 21 per cent of Dubai’s total employment.
Turning to technology and data, more than $630 million has been invested by private and public sector in Alberta communications networks in 2019.
Knight Legg’s optimism around the opportunities in the financial services sector is supported by a report from Calgary Economic Development, which found that most of the world’s major investment and commercial banks have a presence in Calgary. It’s worth noting that, “Calgary firms handled 9.5 per cent of energy-related finance deals across the world from 2012 to 2016 and about 17 per cent of their total value.”
Agribusiness continues to be a key driver of economic growth for major players in the industry, Knight Legg said, and Asia remains an opportunity the province could be leveraging. “We want Alberta to take great agribusiness products to Tokyo and Seoul,” Knight Legg added.
According to McKinsey, food and agribusiness comprise a $5 trillion USD global industry that is only increasing. “If current trends continue, by 2050, caloric demand will increase by 70 per cent, and crop demand for human consumption and animal feed will increase by at least 100 per cent,” the McKinsey brief wrote.
The more Alberta can ride the momentum of these business trends, the path to a stronger economic backbone will be made all that much easier.
Establish strong relationships with advisory firms
When strategic decisions align with investment opportunities, it’s not only about what Alberta economic leaders do but equally how they do it that matters.
Knight Legg recommended a key prong in courting investment into the province: establish a relationship with advisory firms—accountancies, consultancies, law firms—who are already greatly trusted by their clients. “We want to engage heavily with those advisory organizations so corporations looking to gain market entry will turn to us rather than somewhere else,” he said.
What will help strengthen Alberta’s competitive advantage is to also apply a “constant improvement mentality” to all processes, Knight Legg said. “If we found that in Texas, say, permitting is getting done in eight hours rather than the eight weeks it takes us, we have to figure out how they are doing it and which elements we can borrow as a best practice to a drive faster economic outcome for Albertans.”
He stressed the importance of our key municipalities being collaborators, not competitors, in our collective efforts to win investor confidence and bring new opportunities to Alberta.
Knight Legg concluded his talk by reinforcing Invest Alberta’s position as a significant partner in the province’s overall economic development strategy.. “We create a bridge between what we understand is happening in these capital markets, these external markets, and where those opportunities for those markets could sit in Alberta,” he said.
He concluded by noting how Albertan cities often compete with each other for the same clients, but what will be more valuable for the province going forward is closer collaboration. Knight Legg said, “We have to reframe the way we understand competition so it’s not between ourselves but other regions, we need to frame competition as more of a one-team environment.”