Why change?

That's the easy part. The hard question is how.

Times are good in Canada. The economy is growing, corporate earnings are healthy, and the commodities boom has put our natural resources in high demand. Our governments have by and large slain the deficit dragon. Unemployment is at 30-year lows. Why change?

It’s a valid question. But as you read the stories that follow — all of which address the issue of how best to realize Canada’s economic potential in the decades to come — some answers emerge, and none of them recommends the status quo.

The first reason is purely defensive. The rise of manufacturing and service-sector power in Asia, the productivity gap with the United States, the emergence of regional trade pacts in South America, the Far East and Europe, all threaten the prosperity Canadians now enjoy. Faced with changing realities, our economy must adapt to a radically altered economic universe.

A second justification for change is opportunistic. Many of the forces that add up to what we call globalization present not just threats, but chances for smart businesses and smart capital to grow. It’s not enough for us to tread water in a globalized economy; we should win. But if you look at just about any measure of economic vitality, Canada typically is in the middle of the pack compared with its peers. To me, that’s just not good enough. Canada should be aiming for No. 1.

This issue of Canadian Business is all about ways to get there. As a reference point, we picked the year 2020 and asked what the outlook was for a variety of areas important to economic health. We then worked to identify ways to improve Canada’s competitive position, looking to experts in the field but also to best practices from around the world. The solutions vary, but a few common themes emerge.

The first and most important is that Canada must work harder to develop its human capital. That’s not just because, in an era of global value chains, people, not natural resources, will be the key to sustained prosperity; it’s also because an equitable sharing of the fruits of globalization can be best realized by allowing as many people as possible to participate in it. We need to produce more global-minded Canadians who have skills that are marketable in the global economy.

A second theme is that the change required is fundamental — ad hocery is inadequate. There remain in Canada many structural barriers to prosperity and to innovation, and it is up to policy-makers at every level of government to see they are removed. Quickly.

Third, enhancing competitiveness demands change from businesses. They need to take on risk, to maintain a global outlook, and to be willing to invest for the long term. Governments can help them do that, through smart reforms and incentives. But too many companies have valued conservatism over growth. That’s a cultural problem.

Another theme: we are not alone. Countries everywhere are struggling to adapt to change. Canadians, understandably, tend to look too much to the United States both for policy options and for business opportunities. We should instead be looking the world over.

Finally, what troubles me most are not the barriers to growth so much — those are surmountable — but rather the barriers in this country to change itself.

In many areas vital to the economy, real reform demands a national vision and a nationally co-ordinated strategy. Unfortunately, from interprovincial trade and labour mobility to securities regulation and most things in between, Canada resembles a patchwork of warring and small-minded fiefdoms rather than a Northern Tiger ready to take on the world with a consistent, intelligent, market-focused strategy.

How to fix it? The simple answer: leadership.

But where will leadership come from? The political culture is hardly amenable to grand economic visions. Maybe it never was. William Lyon Mackenzie King ruled for almost 22 years (more than any prime minister in Commonwealth history) by prevaricating, delaying and holding to his inactivist motto: “It is what we prevent, rather than what we do, that counts most.” Brian Mulroney won the last election campaign that was fought over economic policy nearly 20 years ago, and went on to usher Canada into the modern global economy; he was rewarded with an 11% approval rating and the destruction of the Progressive Conservative party. Paul Martin provided sound fiscal stewardship during the decade of Liberal government that followed, but never really translated that into political capital. Now, federal politics might finally have reached its level of final placement: an era of eternal minority governments. If that’s the case, the political legacy of Mackenzie King enshrined by F. R. Scott in the poem W.L.M.K. — “Let us raise up a temple / To the cult of mediocrity, / Do nothing by halves / Which can be done by quarters” — may be with us for a long time.

There is no point in despairing; it’s just a matter of being realistic. If real economic reform is going to happen, politicians must a) be convinced of the need for reform and b) be convinced that voters can be convinced of the need for reform.

The good news is that some business leaders are stepping up to the plate. You might disagree with what Manulife’s Dominic D’Alessandro says about the need for protections from foreign takeovers — I certainly do — but at least he has added his voice to an important discussion about what kind of economy Canadians want. Jim Balsillie of Research In Motion has, through his support of the Centre for International Governance Innovation, become a vocal proponent of enhancing Canada’s presence in a globalized marketplace. I think Claude Lamoureux, in the field of governance, and Gwyn Morgan, ex-CEO of EnCana, are also significant players in a gathering public debate about the economic future of this country.

That these men are all heads (or former heads) of globally competitive organizations gives their words weight. Canada needs more voices like theirs.

And it needs to get to work.