ECONOMIC DEVELOPMENT COMMITTEE
	TO:	Mayor and Members of Council
	FROM:	Stephen Chait, Economic Development Director
	PREPARED BY:	same as above
	DATE OF MEETING:	February 16, 2004
	SUBJECT:	International and Economic Alliance Program

RECOMMENDATION:

That the report entitled “International & Economic Alliance Program” be received,

And That approval be given to Economic Development staff to implement a 3-year economic cooperation plan with Laval (Quebec), contingent upon receipt of budget approval for 2004 capital account funding,

And further that approval be given to Economic Development staff to implement a 3-year economic cooperation plan with Cary (North Carolina), contingent upon receipt of budget approval for 2004 capital account funding,

And that Economic Development staff be directed to present Council with a recommendation prior to the end of 2004 for a 3-year economic alliance program with an appropriate business community in China.

PURPOSE:

To inform Council about the status of the Town’s economic alliance and twinning program, and to request approval for Economic Development staff to focus on deriving economic benefits for Markham from three high potential markets.

BACKGROUND:

The Town of Markham has maintained an active program of national and international economic alliances since 1990. Currently the Economic Development Department maintains three active alliances: Cary, NC; Laval, Quebec; and Beijing/Zhongguancun Science Park. In addition, the Town of Markham is twinned with the City of Nordlingen, Germany (home of the original settlers of Markham), however this “twinning” is historical and not founded on economic development criteria. In addition, throughout the year the Economic Development staff assist the Mayor and Council in receiving and serving numerous foreign delegations (15-20) who visit Markham and request economic development assistance.

DISCUSSION:

The Town has over 14 years experience in operating its International and Economic Alliance Program

In January 1990, the Town of Markham approved an economic development strategy that targeted the need to assist the business sector in creating world-wide trading and investment opportunities. It was acknowledged that to maintain the Town’s strong economic position, Markham must promote itself internationally and assist its businesses in capitalizing on global trading and investment opportunities. To address these opportunities, the Town initiated a partnership comprising the Markham Board of Trade and the York Technology Association. To ensure a community economic focus, the partnership coined the concept of “Economic Alliance”. An economic alliance is defined as an association between municipalities and business groups of two geographic jurisdictions with the purpose of establishing networks to develop business relations and opportunities.

The stated objective of Markham’s Economic Alliance Program is to “create a global network of business relationships with communities and business groups in strategic market locations and to create an international awareness of Markham’s business assets and locational benefits”. Since its inception in 1990, over a dozen economic alliance agreements have been negotiated, of which only 3 remain active:

Date Signed Active Alliance Partner

April 1996 Ville de Laval, Quebec (Laval Technopole)

April 2002 City of Cary, North Carolina (Research Triangle area)

April 1998 Haidian District (Beijing), China (Zhongguancun Science Park in Sept.

2002)

The Economic Alliance program has provided Markham and its business community with a more diverse presence in the global marketplace, and a growing network of contacts. In particular, the benefits of the program include:

· A source of contacts for businesses wishing to expand export opportunities

· An economical promotional vehicle for Markham and Markham businesses in international markets

· A guarantee of positive/high quality business and government contacts/protocol in partnership communities

· A proactive and qualified source of investment leads

· An opportunity to learn and collect data on competitive global business and government issues of importance to Markham

Whereas the Town’s Economic Alliance program was founded on the basis of trade and investment attraction potential, the Town has acknowledged that there are also advantages in forging ties to municipalities based on cultural, social, and political interests and historical affinity. In 1998, Markham Council endorsed a formal “twinning policy” and adopted a set of criteria for forging these new relationships between municipalities (refer to Twinning/Sister Cities Criteria in Attachment 1 to this report). At this time (April 2003), the Town of Markham maintains one twinning agreement: that being with the City of Nordlingen, Germany (birthplace of Markham’s founder, Wilhelm Berczy).

A strategic focus and operational commitment to results will improve program performance

Over the past 6 months, Economic Development staff have engaged Economic Alliance partners in Laval and Cary regarding ways in which the economic benefits and business results of the alliances could be increased, and made more visible in our respective communities. A draft framework was developed for this purpose, and was made specific to the needs and capabilities of the respective partners. As a result of further meetings and discussions, specific three year Economic Cooperation Plans, have been drafted for Laval and for Cary. Each 3-year plan addresses the following protocols:

Priorities

In each community, the top 3 business or economic development sectors for attention have been identified. In all cases, the emphasis of the plan shall be to focus on assisting small and medium sized businesses. As well, Markham, Laval, and Cary will be committed to maintaining a program of frequent information, promotion and events to its respective business community regarding the benefits and value of the economic alliance.

Action Plan

Specific actions, initiatives, and deliverables have been identified in each of Years 1, 2, and 3. These include: increased use of Internet based communication, information gathering and data sharing, invitations to business functions of particular value, business trade and investment missions tailored to local needs and demands.

Monitoring and Control

A key feature of the plans is the requirement that staff in each community produce and present an annual report to their respective Councils in each of the 3 years. These reports will assist Councils in monitoring the effectiveness of the plan, and also provide for further input and strategic direction.

The proposed 3-year Economic Cooperation Plan between the Town of Markham and the Town of Cary is presented as Attachment 2 to this report. The proposed 3-year Economic Cooperation Plan between the Town of Markham and the City of Laval is presented as Attachment 3 to this report. A similar initiative with China would be helpful in rationalizing the currently fragmented and often ineffective pattern of exchanges between Markham and its many contacts in China. Economic Development staff would like to develop a 3-year Economic Cooperation Plan with a key community in China in order to raise Markham’s business and investment attraction success with this key global market. This initiative will require further research and consultation before a specific community and appropriate framework can be brought forward for consideration by Council.

The Town of Markham has always been open to the consideration of new international opportunities that may be of benefit to the Town. However, recognizing that there is a financial and staff resource cost that accompanies these opportunities, the Town has been cautious in approving new economic alliances or twins. Instead, for purposes of maintaining good international relations, the Town has from time to time endorsed the signing of a “Memorandum of Understanding” (MOU) in order to test the value of new opportunities without pledging the resources required of a higher order relationship. This practice is helpful and does not encumber the Town or staff with onerous commitments requiring staff time or financial expense. It is recommended that the Town continue to make use of MOU’s wherever appropriate.

FINANCIAL CONSIDERATIONS:

The 3-year Economic Cooperation Plans require Markham to commit itself to an active program of publicity, event production, occasional business travel, and regular hosting of business delegations. These obligations will require staff time and occasional involvement by consultants and special subject experts. In particular, any initiatives involving Laval and China will necessitate the retention of expert consultants who are capable of addressing the language and cultural protocols of these markets and communities. For these reasons, Economic Development staff have identified the need for a an annual budget of $25,000 in each of the 3 years. Staff have submitted a request for a 2004 capital budget of $25,000 (including GST) sufficient to provide Year One funding for a maximum of 3 economic alliances (Cary, Laval, China). Past and recent experience in working with these markets suggests that this will be sufficient base annual funding, and that Economic Development staff may be able to raise additional external funds through other means (e.g., Industry Canada, sponsorships, etc.).

ENVIRONMENTAL CONSIDERATIONS:

none

ACCESSIBILITY CONSIDERATIONS:

none

ENGAGE 21ST CONSIDERATIONS:

The recommendations in this report are consistent with the Town’s strategic plan and community vision.

BUSINESS UNITS CONSULTED AND AFFECTED:

The Town’s Treasurer has reviewed this report, and approves of its contents.

ATTACHMENTS:

1. Twinning/Sister Cities Criteria
2. 3-year Economic Cooperation Plan between the Town of Markham and the Town of Cary
3. 3-year Economic Cooperation Plan between the Town of Markham and the City of Laval

Stephen Chait, Director of Economic Development

John Livey, Chief Administrative Officer

Attachment 1.

Twinning/Sister Cities Criteria

Overall factors to take into consideration:

1. Genuine interest on both sides

2. Long-term commitment for the relationship

3. Adequate financial support for exchanges and maintenance of the sister cities relationship

4. Realistic assessment of what makes a successful sister cities relationship

5. Look for best results which will capitalize on existing strengths

6. A desire to learn from and share with a sister city can, in many cases, balance the lack of any similar characteristics with a potential sister city.

Specific categories of factors to take into consideration:

General:

1. Population

2. Similar geographic location (e.g., port city, airport, mountains, etc.)

3. Comparison of key industries

4. Ethnic and cultural composition

5. Existing linkages (e.g., universities, businesses, etc.)

6. Role for Town’s community organizations in the relationship

Cultural/Civic/Educational (the presence of the following):

1. Museums, theatres, symphony/orchestra, libraries

2. Variety of civic organizations

3. Newspapers, television stations, sports teams, hospitals

4. Schools, colleges, universities

Economic:

1. Similar economic conditions

2. Level of government bureaucracy

3. Language/cultural patterns not creating barriers

4. Market analysis of industries

5. Investment climate and present investment levels

6. Branches of banks, factories, airlines present

7. Number of foreign residents locally

Commercial:

1. Trade and investment climate

2. If a port city; port connections

3. Trade in services (e.g., high-tech, education, business services, etc.)

4. Trade exchange potential, air links

5. Active Board of Trade or Chamber of Commerce

6. Diplomatic presence, Honorary Consuls

7. Number/flow of tourists

8. Presence of foreign businesses locally

9. Local businesses engaged in international activity

Political:

1. Geographic location

2. History of diplomatic relations

3. Present degree of cooperation in political, economic, commercial, and cultural fields