What makes our city ‘thriving’ anyway?

One of a thriving city’s greatest virtues is economic diversity. It is a central tile in a mosaic of a progressive and attractive metropolis. Economic diversity is also one of Hamilton’s strong suits. In fact, the Conference Board of Canada gave Hamilton a 0.92 rating in their economic diversity index earlier this year. The index is calibrated between 0 and 1, with 1 being ‘highly diverse’.

But what is economic diversity, and how does a diverse economy benefits a transitioning city?
In short, economic diversity pertains to the amount of business sectors within a city. The more successful these sectors are, the higher the economic diversity rating a city receives.

A diverse economy translates into security for the city, as well as potential for significant growth in the future.

“It’s like walking into a casino and walking up to the roulette table,” said Keanin Loomis, President and CEO of the Hamilton Chamber of Commerce. “If you put it all on black, the payoff is huge, but your chances of long term success are very low. But if you spread it out over the board, you may not get the huge home-run win, but you’re certainly stabilizing your portfolio.”

For the city, it’s a bit of a balancing act. Invest too much into one sector and there is a high risk of economic instability. But with a diverse economy, there is a greater potential to establish more growth industries, and less risk involved.

It’s this stability that attracts businesses looking to make significant investments in the city.
“Even if one particular sector is doing very, very well—and they’re going to be making an investment in that sector—they’ll be looking at the whole portfolio of the city,” he said.

“One of the things they are going to be looking at—especially if it’s a labour intensive business—is what the quality of life is in the community.”

Loomis alluded to Maple Leaf Foods, which recently opened $390 million plant and brought 670 new jobs to the city.

Quality of life for their workers is one of the big things they look at before investing. The state of a city’s arts and cultural sector, and the education sector, for example, contribute to transforming a city into an alluring investment location.

Hamilton’s most prominent growth industries are advanced manufacturing, education, and health and life sciences. The largest of the three is the healthcare and social services sector, which reached 13.3 per cent employment shares, according to Canada Mortgage and Housing Corporation in 2013. The manufacturing sector is not far behind at 12 percent.

Interconnected industries can also work to support, and even redefine, their sectors.

“What you can see further down the road is our life sciences research that is happening here in our community ultimately leading to something that is manufacturable,” Loomis said. Gene therapy—in which genes need to be replicated—is one example of how sectors can evolve.

“I think what we’ll see over time is the definition of manufacturing will evolve to include life sciences at some point.”

Economic diversity acts similar to an ecosystem. The vitality of one sector is often tied to the prosperity of another. When a city bolsters a diverse economy, it is cultivating an alluring environment for thriving future investments.

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