Craig Alexander, Partner & Chief Economist of Deloitte Canada had a chat with CanadianSME to discuss some of the projects he is working on since he started his role, and his advice on when is the right time for an entrepreneur to start a business based on the situation of the economy.
He has over twenty years of experience in the private sector as a senior executive and leading economist in applied economics and forecasting. He performed macroeconomic research, regional and sector analysis, and fiscal market forecasting and modelling.
Craig is a passionate public speaker and holds a graduate degree in Economics from the University of Toronto.
You have over 20 years of experience as a senior executive and leading economist in applied economics and forecasting. How do you believe your past experience has prepared you for your current role?
I studied economics at university. I did an undergrad in economics and then went off to grad school. I’ve been doing economics right from university. I’ve never had a job where I haven’t been an economist – studying economic trends and talking about economic issues. Throughout my career, I’ve probably covered almost all the aspects of economics. I started at Statistics Canada, and then moved on to covering the global economy at TD Bank, and then covering world financial markets at RBC and CIBC.
I rejoined TD and did all aspects of economic forecasting. I ultimately rose to being the Chief Economist for TD. When I left TD, I spent some time in the non-profit economic think tank world and then I joined Deloitte.
You’re the first Chief Economist at Deloitte Canada. Why do you believe Deloitte or any of the Big Four accounting firms never had a Chief Economist before?
Deloitte brought me on to be the first chief economist because it would complement their economic advisory practice. It’s been a growing business. In the past, the big picture was not really looked at – the macroeconomy – and the group had not done economic forecasting. The goal is to do national, provincial and industry economic forecasting, and use that capability to support businesses in Canada and support all the other activities Deloitte does. For example, if you’re trying to understand real estate, you need to understand the economic cycle. There’s an economic dimension to mergers and acquisitions for example. Economics is involved in practically every area of business.
Furthermore, the Future of Canada Centre at Deloitte produces research that touches on public policy issues.
Also, when you’re doing economic forecasting, you discuss how the labour markets are changing and there’s an initiative at Deloitte that is devoted to exploring the future of work.
What are some of the projects that you’ve been working on since you took this role?
What we have already done is built the capacity to do national and provincial forecasting. We published our first quarterly forecast in October and will continue publishing a new report every three months. I’ve been traveling coast to coast, talking to businesses and government about economic trends.
I’ve been tackling the question of what are the implications of the tentative new free trade deal between Canada and the US, and what are opportunities for businesses to take advantage of this deal. The deal still has to navigate its way through Congress, so we’ve been exploring the risks as well. I’ve been talking about a lot of the risks for the outlook – issues like Brexit and China’s economic slowdown.
There’s always a lot of interest in Canada about the vulnerabilities of the housing market so we’ve been looking into that.There is also always interest in the outlook for the Canadian dollar.
Businesses need to understand these things when evaluating their business plans and how it could impact them. They need to look at how can we take full advantage of the new technology available in the market.
One of the economic challenges we have is that Canadian businesses tend to be a bit risk-averse, and yet we need investments and new technology to boost competitiveness. There are some areas where Canada has amazing competitiveness. We have the most educated population of any industrialized nation. But there are areas where we have a competitiveness challenge. We are not as good as other countries in R&D for example.
Competitiveness embodies many different facets. Infrastructure for example- Canada is in the middle of the pact. Economies grow because their population grows or they use their labour more productively. Immigration cannot fully offset the ageing of the population, and that the ageing population has become a real problem for our economy in Canada.This is contributing to labour shortages.
Can you give our readers some insight about what a regular workday is like for you?
When I’m not on the road, typically I get up early and head over to the office and get ready for the morning’s economic releases. I get into the office early enough to be ready for the 8:30 am Statistics Canada release, and I go through it and do some analysis, and often put together some thoughts. I spend a lot of time keeping up with the global economy and politics. I read several newspapers every day. I use a Bloomberg terminal to stay on top of financial markets and events. I get email questions and phone calls from clients or internal Deloitte staff and help provide an economic lens. One of the big challenges is that in today’s age, people want to know what it means immediately. When you have economic development, people want your immediate thoughts.
When I started my career, I had to manually input the data in Excel every morning when I would receive economic releases. Now, that has been automated with the flip of a button. As a result, the market need for information and analysis is immediate because of technology, and that has been a challenge for me to provide them with immediate analysis.
Is there ever a “right” time for an entrepreneur to start a business based on the current economic climate? Would you recommend an evaluation of the economy prior to deciding to start a business? If so, describe the evaluation process?
There are always economic opportunities. When we think of the economy, there are going to be times when it’s doing better and it’s easier to succeed. And vice versa. When it comes to entrepreneurial behaviour, Canada needs more of it. When economists see more businesses starting out, that is typically a very positive factor which stimulates growth in an economy.
There is an economic cycle that entrepreneurs need to be mindful of, but it’s almost always a good time to start a business. One of the issues is that businesses, in general, are psychologically impacted by the news they hear. Since 2008, we’ve been in a risk-filled economy, but that should not stop people from starting a business. You have to be thoughtful about risk, and take risks you understand.
Even in tough economic times, there can be good opportunities. When I was at the TD Bank, we launched our US expansion in 2007/2008 immediately before the Great Recession. It was one of the worst environments you can think of. But because TD bank was in a good financial position compared to competitors, when the crisis lessened it allowed the firm to grow rapidly.
If you could give advice to someone who is just starting as an economist and looking to advance in the corporate world, what would it be?
I do a fair number of career sessions. Economics is a paradigm. It’s a way of thinking about things. You can apply it to practically anything. If you’re passionate about professional sports, you can apply it there. If you’re passionate about the environment, you can become an environmental economist. And this is one of the reasons from the professional point of view, I’ve benefited from different roles and different environments to apply economics. I like helping businesses and entrepreneurs to understand the economy.
If there’s a young economist out there, figure out what dimension of economics you’re most interested in and then find the economics job that would let you do work in that space.
Experience different roles! Each new experience I had gave me a new skill set. There is a tendency to become good in one area, but try to experience different industries and roles that will broaden your skill set.
On a side note, when you study economics, you should study the history of economic thought. It’s one of the areas of economics that I have found most interesting and helped me understand economics. Over time, we developed a new and better understanding of the economy and how it behaved. The classical economists had a view that the economy would clear and supply would equal demand. Keynes discussed how you deal with tough economic times. After Keynes, there was neoclassical economics which developed a more modern understanding of how economic relationships play out. When we think about the Canadian economy, it’s somewhere in between the US and Europe. The US is a more market-driven economy and a lot of Europe is much more managed and heavily regulated. China is on the far end of the spectrum and is very centrally controlled. Canadian society likes a capitalist economy that will create a rising standard of living but Canadians expect a significant role of government in ensuring the well-being of its citizens.
What advice you will give to our readers when it comes to succeeding as an entrepreneur?
Canada is a great place to start a business. If you look at how easy is it to start a business in Canada, it’s far easier than other countries. The biggest challenge here is scaling businesses. This is a bit of a conundrum and governments have been struggling to address the problem. The good thing is the awareness; there is support out there that entrepreneurs can take advantage of.
For example, BDC helps a lot of domestic small enterprises and can help support their growth. Export Development Canada can help businesses grow in global markets.
Generally speaking, we need more small businesses to go global for growth. If you look at it in the global aspect, Canada is roughly 2-3% of the world’s economy so entrepreneurs should consider tapping global markets. Small and medium-size firms need to engage globally and tap global supply chains.
Technology investments can be expensive but pay off in increased productivity and effectiveness. It can be a great enabler to propel economic growth.