Your Next Big Thing: Solve burning social issues

Written by Laura Pratt and Deena Waisberg
The gold in green
Business can clean up by, well, cleaning up

New environmental regulations are creating an unplanned but welcome by-product — opportunities for the private sector. These include:

Post-pesticide lawns: In 2001, the Supreme Court of Canada upheld a bylaw in Hudson, Que. banning pesticide use on lawns. Similar bans have also passed in Halifax, Toronto and many other cities, and more are considering them. That has consumers looking for natural alternatives to pesticides, as well as landscaping design services that offer lawn alternatives such as rocks and ground cover.

Money from muck: Many Canadian cities have ultra-ambitious recycling targets. Toronto, for example, plans to divert 60% of its waste from landfills to recycling facilities by 2006, double the 32% it achieved last year. Look for outsourcing opportunities in sorting and processing various sorts of waste. But not all the resulting materials have end-markets for them, cautions Mark Winfield, Toronto-based program director of environmental governance at the Pembina Institute, an environmental policy and research organization.

Cleaning up the Far East: China is spending US$100 billion per year, an enormous 8% of its GDP, on remedies for its appalling pollution, such as remediation technology to clean up industrial sites, waste-water treatment equipment, sanitation technology and clean-energy technology. (By comparison, Canada spends 3% on this.) It is also starting to shut down some of the country’s major pollution emitters, such as coal-fired power plants in Beijing, and is looking for greener options, such as fuel-cell or dry-cell technology.

Other opportunities include air- and water-monitoring instruments, water purification devices, industrial waste-water treatment equipment and resource-recovery technologies. But be careful: you’ll need reliable partners and the right connections to do business with the Chinese government, and it’s tough to protect intellectual property. “If you introduce a technology, it won’t be long before Chinese companies will have it,” warns Jayson Myers, senior vice-president and chief economist at Canadian Manufacturers and Exporters in Ottawa.

Prescriptions for health care
A big dose of technology is just what the doctor will order

Ottawa’s commitment to inject billions of dollars more into medicare opens up the possibility for better health-care delivery. And that offers an opening for business, especially for tech suppliers. William Tatham, CEO of XJ Partners Inc., Toronto-based strategic investors and consultants to producers of health-care technology, believes that IT is where the top opportunities lie because it’s fundamental to enhancing efficiency. The best bets are:

Film-free X-rays: Tatham says hospitals are starting to switch from film X-rays to digital imaging so health-care providers at different locations can access them online — avoiding having to ship film around. Business opportunities include image capture, storage and archiving, and workflow management. They exist in the U.S., too, where hospitals en masse are starting to switch. Tatham says so far just 6% of U.S. hospitals with 100 to 300 beds, which make up 60% of all hospitals there, have done so.

Portal power: Tatham sees an emerging need for IT firms to build Web-based portals through which patients can track and participate in their own recovery. And 500 Ontario doctors are now testing a portal launched by the health ministry to read health alerts, journals and drug interaction databases.

Bits-based records: Health care lags far behind most sectors in using IT. Most patient records reside only on paper, whereas an electronic system would allow better collaboration among health-care providers. Going electronic would require data conversion and storage, and connecting and integrating IT legacy systems so they can talk to one another. U.S. president George W. Bush is pushing for every American to have an electronic medical record by 2010, and some health-management organizations have already started converting to them. In April, Capital Health, an Edmonton-based regional health authority covering 1.6 million Albertans, rolled out netCARE, the first regional electronic health record in Canada. Still, there’s a lot of inertia to overcome before everyone converts, and it’s tough to design IT projects that can cope with the health-care system’s size and complexity. But for anyone who can figure out how to do so, health care’s scale promises huge returns. — DW

Beyond the public schools
Government’s funding retreat offers an opening for business

The provinces, although still the dominant players in education, are squeezing budgets, creating more room for the private sector.

Private alternatives: Independent schools’ enrolment grew by 34% over the 1990s, according to the Abbotsford, B.C.-based Federation of Independent Schools in Canada. By 1999€“2000, the most recent period measured, it was 314,000, or 5.6% of all students. Susan Hazell, executive director of the Lakefield, Ont.-based Canadian Association of Independent Schools, says most new schools joining her association are in the suburbs, and some in rural areas. Still, there are cautionary notes. Statistics Canada forecasts there will be 14% fewer children aged five to 13 by 2011 than there were in 2001. Also, warns Hazell, parents may balk at rising tuition fees if we enter economic hard times.

The art of arts education: Music, drama and art often lose out when schools must make tough choices, driving parents to look to private enrichment programs. Enrolment at Toronto’s Royal Conservatory of Music is up 15% in the past five years, and the number of private music schools jumped 50% in B.C. from 1997 to 2004, according to Paula Quick, president of the British Columbia Association of Community Music Schools. Yet “it’s difficult to charge enough to students to pay for quality teachers and the space, and still make a good margin,” says Jeff Melanson, dean of the Royal Conservatory. And competition is intensifying, including from those who teach from home.

Nutritionally correct snacks: Many school boards are seeking outside revenue to make up for cutbacks, but they’re wary of products that clash with their values. A case in point: the ban on junk food in vending machines in Ontario’s elementary schools. That’s an opportunity to supply snacks that aren’t health disasters but that kids will actually eat, such as granola bars, muffins, cheese, pretzels and popcorn.

Save our cities
Government is funding urban renewal. Prepare your bids

By next year, half the infrastructure in Canadian cities will have reached the point at which it should be replaced, according to the Canadian Urban Institute, a Toronto-based non-profit organization that promotes urban quality of life. At the same time, the long squeeze on provincial funding to cities is easing, and plans to reinvest in infrastructure promise new business for the private sector.

Ottawa is leading the way with twin commitments for transfers to cities that must be spent on infrastructure: a GST rebate of $7 billion over 10 years, and a share of federal gas taxes worth up to $5 billion over five years. This will lead to engineering and construction contracts for design, project management, consulting, building and repair services. And cities will need materials for roads, sewers, street lights, water mains, police stations and more.

These projects won’t materialize overnight. “Infrastructure investment takes a long time to get past the talking stage,” says Glenn Miller, vice-president of education and research at the Canadian Urban Institute.

Public transit will be a key focus. The Ontario government is transferring to cities for transit projects a portion of its gas taxes totalling $680 million over three years. That will yield contracts for bus refurbishment (e.g., brakes, seats), station repair (e.g., construction, signage, handrails, ticket booths, escalators, transfer machines) and new technology (e.g., smart-card readers used in fare systems, solar-powered bus shelters).

Cities are also redeveloping “brownfields” — land contaminated by previous use. Remediation projects completed or under way include the Sydney Tar Ponds in Nova Scotia and St-Hubert Airport in Quebec. Opportunities exist for soil specialists, environmental cleanup services and commercial developers.

© 2004 Laura Pratt and Deena Waisberg

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