Statistics Canada's Agriculture Division in October 2006 released a report on "Northern Ontario's Communities: Economic Diversification, Specialization and Growth," which has implications for regional economic development.

 

Through the use of regression analysis and a Herfindahl Index, this report studies the degree of economic diversification or specialization in communities in Northern Ontario between 1981 and 2001 and their relationship to change in the workforce.

 

Historically, Northern Ontario's sources of employment have been resource based industries, especially forestry and mining.  During this period, overall employment increased 4%.  While this number appears stable, there was substantial change in the overall structure of employment.  Employment in the primary sector (agriculture, forestry and mining) fell by 47%.  Manufacturing jobs associated with these industries also declined by 23%.  These declines were offset by increases in the construction, producer services, personal services and social services industries. 

 

Using the Herfindahl Index, it is shown that over the study period communities became slightly more alike over time, with specialized communities becoming more diverse and vice versa.  It was also found that those communities which became more diverse were likely to have employment growth and specialized communities were more likely to have employment decline.  However, if a community's employment grew, there was no clear pattern of diversification or specialization.  Very few communities had either a continuous path of employment growth or decline or pattern of specialization or diversification. 

 

Differences in occupational staffing within industries across regions will influence the inter-relationship between patterns of economic diversification and employment change; measuring employment purely by industrial sector will miss the influence that occupational skill levels will have on patterns of employment growth or decline.  Northern Ontario communities were found to have a lower percentage of employment in professional jobs and a higher intensity of jobs in skilled applications.

 

Implications for Economic Development

 

 

Understanding the local labour profile in a community is crucial to developing sound economic development policy.  It is occupational make-up of the labour force, as detailed above, that will have a pronounced affect upon total employment growth and decline.  It will be the variations in skill-sets of the local populace that will require attention from local development iniatives. 

 

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