My latest contribution to The Globe and Mail:

Canadians love to buy houses.

Not only does the rate of home ownership surpass that of the United States, Canada seems to have dodged the crisis that so vexes the U.S. Sales are up, and property values keep appreciating as U.S. prices have fallen 30 per cent or more.

As an investment, home ownership seems to match Canada’s national character: it’s responsible, practical and risk-averse.

Or at least it has been.

This week, financial analysts at Edward Jones rained on the real-estate parade warning that current conditions – prices that are too high, easy credit and lax government policy – could lead to a big downturn in the market.

Which may not be such a terrible thing because home ownership is an impediment to Canada’s long-term prosperity.

Historically, a house has been like a savings account that keeps on growing. Keep it 20 or 30 years, and you can finance your retirement.

And yet, except for some exceptional booms, housing has never been that good an investment. Yale University’s Robert Shiller, a keen student of economic bubbles, found that, in the U.S., from “1890 to 1990, the rate of return on residential real estate was just about zero after inflation.”

There are some important social benefits – home ownership generally instills in people a deeper commitment to their community. But it also can be very costly to the economy.

A study by the Federal Reserve Bank of Dallas in 1998, well before the boom and bust, found the U.S. had over-invested in housing relative to other forms of capital since 1929. It has drained off capital from productivity improvement, innovation, medical technology, software or alternative energy: sectors that could drive growth well into the future.

Here as well, housing sucks up a huge share of national capital that should go to support innovation and new industries. Canadians actually carry more mortgage debt as a percentage of their disposable incomes than Americans do.

British economist Andrew Oswald has found that cities with higher rates of home ownership also have higher unemployment – in Europe, a 10-per-cent rise in the former corresponds with a 2-per-cent rise in the latter.

What’s the link? The simple fact that anyone who has invested in a house is less likely to pack up and leave when times get tough.

In 2008, fewer Americans moved, as a percentage of the population, than in any year since the U.S. Census Bureau started tracking changes of address in the late 1940s: less than 12 per cent versus more than 20 during suburbia’s golden years.

By the same token, laid-off workers who can’t sell a home in Windsor aren’t about to move to Toronto, Vancouver or Calgary where jobs are easier to find.

Yet this is the absolute worst time for people to lose the ability to move around. The economy is going through a broad structural shift. This is a moment of significant creative destruction; old industries are giving way to new ones. It’s much harder for workers to find jobs where they live.

But the U.S. has shown an uncanny ability to use crisis to remake its economy, and it has remade its housing system more than once, most recently ushering in the suburban age and mass home ownership after the Second World War.

It may be doing so again. Because of the economic crisis, fewer Americans are buying houses, a decline likely to continue as young people choose to save money and guard their options by renting. Sure, the social costs are considerable, but they can be more than offset by the broader gains to the economy provided by a more flexible, 21st-century housing system.

As a result, Americans may already be restoring the flexibility and mobility at the heart of their resilience, adaptability and innovativeness. Rahm Emmanuel, who is chief of staff to U.S. President Barack Obama, likes to say that “a crisis is a terrible thing to waste.” In the end, Canada may face a bigger challenge even if its bubble doesn’t burst: If times are good, why bother changing

Here’s my paper with Charlotta Mellander and Kevin Stolarick on regional development in Canada.

On Tuesday, I DJ’d a party for the Governor General of Canada celebrating Barack Obama’s Inauguration. It was a cool little affair that brought a diversity of youth together to discuss what this event means to us as young Canadians. Peace to Emcee E and Nomadic Massive who also performed. At the end of the blog I’ll post my playlist, since people often wonder what one might play at an event like that.

In as much as we are different, Canada and the U.S. in fundamental ways – landmass, population, density, demographics, political structure, etc. – we are the same in that we are neighbors and share the same land and, in broad strokes, share ideals about how life should be lived. This event and the reactions in the room showed how more than ever the American dream is really a North American dream that we all take part in.

Young people are definitely empowered by President Obama as a living example of change. It’s interesting, however, to see how hungry young Canadians are to play a role in and identify with this change. As neighbors to ground zero of the global Obama-wave, and a nation that is deeply interlinked with the U.S., it is natural and fair that we pose the question “where is our Canadian change?”, and not unreasonable that we would yearn somewhat for an Obama figure of our own – to give young people a sense that their voices participate as equals in their democracy. In this new vision of the North American dream, what will Canada’s role be and where will its youth place?

While Canada’s version of the dream is younger, less dense, a bit smaller, and more cautious, it is sturdy, perhaps a bit more agile, and has the advantage of being able to consider the trials and missteps of its older, bolder neighbor in order to innovate on that experience and those ideas – probably in a faster and more dexterous way as a result of being over 60 percent slimmer in terms of population and density. While we might not do the scaling up, we are in a great position to build the models. The climate will most certainly be ripe for the ideas. More than anything, I think that’s where young people, particularly in Canada, will be participating heavily. Whereas Barack finally opened the door for youth in the U.S. to participate in driving the U.S. with their vote, he might have also opened the window for young Canadians to make significant contributions to the welfare of this continent with their ideas – particularly with the U.S. school system in the state that it’s in. With any luck, the positive feedback loop between the two countries will help us retrofit the way that leaders lead in Canada, because one thing that was voiced repeatedly at the forum is that we need that kind of reform.

While the U.S. is being clear that it wants to set the pace, how can young people in Canada help to finish the race, considering our position as neighbors and co-participants in the dream? What is the most constructive way to set up this partnership?  How can we see the innovations in the democratic process invoked over the border be brought into play over here?

And now, the inaugural playlist:

1. We Almost Lost Detroit – Gil Scott Heron
2. My People…Hold On – Eddie Kendricks
3. Long Time Coming – Aloe Blacc
4. Stakes Is High – De La Soul
5. Resurrection – Common Sense
6. The Souljazz Orchestra – Mista President*
7. Black President (Feat Johnny Polygon)  – Nas
8. Voices At The Crossroads – Knaan f. Tracy Chapman*
9. What’s Going On – Marvin Gaye
10. Change – Donald Byrd
11. Get Involved – Soule, George
12. Positivity (Mark Ronson ‘68 Remix) – Stevie Wonder
13. Brand New Day – Staple Singers

Maclean’s magazine contacted me last month to ask for my comments about a recently released mega-study of “lifelong learning.” The subject of the piece was the 2008 Composite Learning Index (CLI), from the Canadian Council on Learning.

Here’s a link to the Maclean’s article, which has some insightful quotes from CCG’s Kevin Stolarick, and some boring ones from me.

The Maclean’s article is a good overview of the ambitious CLI study, but it’s really worth a look in its raw form. Here is the home page for the Composite Learning Index, and the 2008 report itself.

Your time is valuable, so let me just give you my thoughts about the study, having done many similar ones over the last 25 years or so.

• First, it’s huge in scope - too big, in my opinion, for any valuable insight. By covering so much, it dilutes its results by including sometimes conflicting measures.
• The study attempts to quantify “learning” in large and small cities and towns across Canada, nearly communities in all. In an apparent effort to value everyone everywhere, all types of learning are included such as use of the Internet; recreation and sports participation; buying and reading printed matter; attending live performing arts; travel time to nearby museums, libraries, and business/civic associations; expenditures on social clubs; attending church; volunteering and socializing with other cultures; as well as the more common measures of high school and university graduation rates and student test scores. These are all valuable metrics, and all worthy of their own study. By mashing them all together into one index, some insights are undoubtedly lost.
• Many of the metrics are based on estimates of household expenditures for various metrics. I did not find a list of specific sources, but in my experience household expenditure data is based on a national model, and adjusted for each geographic area, usually on the basis of income. It is unlikely that individual differences between communities are revealed, except as a function of income. Rich places spend more, poor places less.
• Some measure of the quality of the resources should be attempted, not just the proximity to libraries,  schools and universities, museums and art galleries. It’s much different having access to a world-class museum with rotating exhibits, instead of a small-town one-room museum with the usual few bones, muskets, baskets, and pottery (charming though they are.) Use annual attendance figures or budgets to estimate the quality of the experience, or average entrance scores to rank universities.
• There are four major segments of the study, based on the type of learning – Knowing, Work Experience, Community, and Personal Development. These would best remain segregated. It’s appealing to combine them all into one super-score but, like mixing many colors together, insights are lost.

All in all, the CLI is a wonderfully ambitious attempt to quantify “learning” and provide a road map for the future. But a Swiss Army knife is rarely the best tool for the job, or even any job. By dividing the components of the study into more meaningful sections, better insights may be gained.

Have a look and tell me what you think. Do their rankings fit with your experience?

Best, Bert

A great article from an upcoming issue of Macleans magazine on “Canada’s Smartest Cities” research done by the Canadian Council on Learning (CCL) indicates which cities offer the most opportunities – with Ottawa and Victoria topping the charts. Calgary is labeled as the country’s most cultured city with Guelph taking the prize as the most caring city. Check out the rankings and experiment with the interactive mapping of more than 4,700 cities conducted by the CCL here.

Why should you care how smart your city is? According to the CCL, having more opportunities for lifelong learning can mean “higher wages, better job prospects, improved health and a more fulfilling life.

The CCL’s index is created with data from 25 indicators, which in turn are grouped into four pillars of learning, originally developed by the United Nations Scientific and Cultural Organization (UNESCO). The four pillars are: Learning to know, Learning to Do, Learning to Live and Learning to Be.

Thumbs up to Bert Sperling and Kevin Stolarick for their insights provided in the article. Oh, and watch out Canada… Who’s Your City: The Canadian Edition is coming to a bookshelf near you in March of next year, chalk-full of analysis and rankings on Canadian cities.

What do you think makes a city smart? Is it cultural opportunities, volunteer activities, workplace training? Or are there other elements that rank high on what you believe a smart city should be?

A new report out by The Conference Board of Canada states that the culture sector directly contributes about $46B CDN or just under 4 percent to Canada’s overall GDP in 2007. The economic impact on the economy is much broader – $85B CDN in 2007, or just over 7 percent of total real GDP. Taking a look at employment, almost 4 percent of total national employment in 2003 can be traced back to arts and culture industries.

Indeed, those are big numbers, eh? How meaningful is the creative economy in your country or hometown? How big (or small) of an employment driver is it?

Canada is upping its game in the global competition for talent, liberalizing immigration for students and skilled workers. As the Globe and Mail reports, the country

is creating a new fast-track immigration route for skilled foreign workers and students who’ve already proved employable in Canada: an effort to prevent an erosion of talent as global competition heats up for higher-value labour.

Unlike existing programs, the Canadian Experience Class immigration stream will make work experience in this country a key criterion for vetting applicants. It will also allow temporary foreign workers and students living here to apply from within Canada rather than having to leave first. It’s expected to grant permanent resident status to 12,000 to 18,000 economic immigrants in the first year, a figure that’s forecast to rise to 25,000 annually over time …

The goal is to improve the quality of immigrants and retain the most valuable workers and educated students: arrivals who’ve already proven they can integrate into society and meet labour market needs. “If we’re going to compete internationally for the best and for the brightest, we need to improve the way that we attract and retain those who want to work in their fields and contribute to Canadian society,” federal Immigration Minister Diane Finley explained.

In Flight, I argued it would be just these sorts of incremental improvements in competing for global talent – by Australia, the UK, New Zealand, and northern European countries, as well as the ability of the BRICs to lure back emigres – that could begin to undermine the U.S. lead in global talent. And with the situation in Iraq, the sub-prime meltdown and credit crisis, not to mention a watershed election, the U.S. seems incapable of addressing this issue.

Do you think the U.S. will be able to turn the corner on this one, or will some combinations of other nations inexorably undermine its long-standing talent advantage?

But what we really need are your stories.

Back in September of 2006,
I asked for personal stories about your city, and recieved more than 200
responses many of which made it into the book.  Most of which were about US cities.

Now, I’d like to ask for your stories about Canadian cities Tell me about the
place you live.  Why did you pick your city or region? How did you go about
picking it – what was your strategy? What other kinds of places did you look
at?  How has that choice affected the rest of your life?   Your job or
career?  Friends, family, or romantic interests?  Fulfillment and fun?  Real
estate jackpots or money pits? Would you do it differently next time? What
cities and regions are on your radar  for the future and why? That’s it. 100
or 200 words, on any or all of those subjects.  300-500 words could be even
better.

Send your stories to Patrick Adler at patrick.adler@rotman.utoronto.ca
, or post them on the comment section of this entry, or do both.  Together,
we’ll build a reservoir of community knowledge that I hope can make the book as
relevant as possible for Canadian readers.

Thanks all.