What do you think the performance of the Canadian $ to the US $ will be for 2008 ?

Jim Carroll: I don't think anyone quite knows. I think the key thing is that Canadian industry has to be much more prepared for continued volatility, and in the early stages of parity, they showed signs they weren't.

Publishers were making traditional excuses that "this will take time to sort out" and distributors made the same plea.

What the world has shown us in the last five years is that business organizations and countries must be prepared and able to cope with rapid volatility. Take the issue of 'qualtiy' — I keynoted the World Congress on Quality in Orlando in May of this year. I suggested to the audience — 3,000 quality professionals in manufacturing, construction, health care, etc — from around the world — that we might soon see the issue of "quality" and "China" become linked. This was based on the pet food issue then arising in Canada.

But a few months later, the issue had exploded, and companies were scrambling to deal with quality from every perspective. That's an example where volatility is the new normal, and that's what we need to prepare for.

How will the presidential elections impact the economies of Canada and the US this year?

Jim Carroll: Spend some time at immigration at Pearson or Vancouver airport, and watch the new tone of DHS (Department of Homeland Security) towards business travelers.

Post 9-11, security is beyond used as an excuse for over-exuberance on traditional labor mobility between the two countries. Most Canadians dont' realize how bad it is becoming. I wrote about this issue at length in a column in 2003. Some business groups are just beginning to understand the challenges, but there is not yet a national focus on fixing this problem — most of the border attention goes to goods. It's useless to get goods across the border if you can't get people across too.

And as the immigration rhetoric heats up in the US, so too is Canada affected. So it's not just about lobbying on passports — it extends to lobbying on labor mobility.

National economic projections may be misleading for many considering that boom areas can shift data sets. What differences do you see in the economic health of the various regions in 2008?

Jim Caroll: I was speaking at an economic development event in Windsor yesterday; there was a lot of press there. A young lady from CBC Radio French, transferred to Windsor for a time, noted that "people tend to talk a lot about the economy here." Yup! Folks in Windsor are inside the automotive-challenge-bubble, and all they see is downside.

My message focused on how other manufacturing centers worldwide are transitioning up the skills ladder, taking existing skills, layering capabilties on top of them, and attacking new markets.

In Sydney, Australia, one metals company has transitioned previous auto workers into a new role, manufacturing parts for aerospace companies, AND manufacturing car parts destined to Chinese car companies. Mfg share of the economy has gone from 21% to 19%, but has grown in value from $14.4 to $15.5 billion (I think the $$$ are A$). They've moved up the skills ladder. We need to do that too.

The CEO of this company puts reality plainly:

"The world of manufacturing has changed. Anything to do with non-sophisticated, value-added manufacturing has moved offshore to cheaper labour markets. The companies that survive will be those dealing with intellectual property or knowledge."
Carlos Broen, CEO

I see a lot of potential for skills transfer. Georgian College is establishing a marine navigation/engineering school, aimed at training global students from China, the Phillipines and India on the latest marine navigation technologies, methodologies etc. Moncton's flight school has about 250 Chinese students — they're taking a 48 week course, and then going back to the fast growing east-Asian airline industry We can do more of that. Why not do that in Windsor? Why not have people who are transiting to white-hot career opportunities in the oil-patch settle into Windsor training on welding, pipefitting, assembly and all the other specialized skills that exist in Windsor, and then move to the oil patch?

That's what I see some communities doing, and I think there's huge opportunity in knowledge transfer and upgrading both nationally and globally

In Canada, we tend to make the same old excuses: let's throw out some subsidies to deal with the pain of the $. Let's create jobs. Let's do what we've done before but which we know doesn't work. Well, it doesn't work, so why should we try? That's why innovative thinking is so darned critical.

I'm interested in investing in Asia. If the American economy slows, I expect stock markets globally will be impacted. Do you think that Asian economies will be able to decouple and recover faster than the US? I'm fearful that the US economic fundamentals (debt especially) put the US in a precarious position.

Jim Carroll: The most important thing about China is this : there's what, something like 2 billion people under the age of 25? A good chunk of them are aggressively collaborative; they're moving into a higher economic status; and they're smart.

The disparity in science education in North America vs. Asia is simply staggering. And what is happening now is that we're rapidly moving from the "MADE IN CHINA" phase to the "CREATED IN CHINA" or "DESIGNED IN CHINA" stage.

As China gets more aggressive on innovation, they're gonna rock and roll our world. Smart companies and investors will jump on that trend; other companies will whine about protectionism etc.

Look, the music industry died because it didn't realize the fundamentals about innovation shifted; we need to understand the same thing here too. I suppose this type of thinking might provide an answer to your question.

The latest unemployment figures show that almost all the employment growth over the past year has come from the public sector. What needs to happen to increase the competitiveness of the Canadian private sector and jumpstart job creation?

Jim Carroll: I don't think we "create" jobs. That's from the 20th century, and it didn't quite work then. It won't work now. I spend a lot of time with US and global organizations. I've met a lot of senior leaders who are focused on innovating within the business in terms of structure, skills access, ability to respond to rapid market change, spot new opportunities, and move on them quickly. I've seen a lot of smart CIO's who have focused their energies on ensuring that the company has an infrastructure that can get them into a solid growth pattern.

I spent time with UnderArmour, the global sporting goods company. The attitude of the CEO and CIO was : "if we're going to go from being a $200 million to a $1 billion dollar company, then we're going to have to ensure we've got an infrastructure to take us there. We're going to be able to roll out smart retail capabilities; we're going to be work intelligently by linking into our customers information systems; we're going to be on top of our inventory everywhere minute by minute; we're going to ensure our sales team has deep insight into what's moving and what's not. They grew fast."

Compare that to Lululemon. There was an article some months back in an earnings conference call; the company was whining that it was suffering stock outs and inventory problems, because of computer teething problems. Well, d'uh. Of course you will. You can't be a growth oriented company and do it with a half-baked IT infrastructure.

My money is on the UnderArmours of the world. If you have a smart CEO and CIO who understand scalability, and how to really grow in a high speed economy, you've got it nailed.

And I think in Canada, there's a whole bunch of organizations who still don't think like that.

That's but one example, and it involves innovation. It's not just about IT innovation; it's about staffing, structure, leadership capabilities; our ability to jump onto rapidly emerging markets. And I think with a lot of those things, compared to what I see within a lot of my clients elsewhere, we just don't have that.

If we do the right things, jobs emerge.

Regarding the pending/current economic conditions, would you recomend moving retirement investments to the most stable of investment funds ? ie:money market funds.
45 years old. curently invested in aggressive growth funds.

Jim Carroll: Have you looked at the performance of some of the money market funds? Didn't part of the sign on the CIBC tower in Toronto fall to the street yesterday? Are the two linked?

I think we all know that we won't see quite the ride in the market in 08 that we saw in 07; again I hate to overuse the phrase but its all about volatility.

On the other hand, there are areas of continued, significant growth. Health care (boomers, sick, hospitals.) Global food production will double in the next 40 years with little new arable land, and so existing producers with smart operations have huge potential. Analytics is the next billion dollar market; see the trends page on my site for an example.

Pervasive connectivity is huge — I have an internet-connected thermostat in my chalet, which I head up to shortly — there's some powerfully transformative stuff happening there.

Bio-connectivity is not on anyone's radar but is one of the biggest trends to come in health care. For that matter, in health care, 20 years back, we'll look at the transition which happened towards personalized medicine, and say, "WOW! THAT WAS BIG!" And I think one of the biggest changes to come has to do with simple demographics.

Baby boomers — many still change adverse — are letting go of the levers of power. As Gen-X, Y and Gen-Connect take over, things change faster. These folks inhale change. They'll crash open new markets, destroy business model complacency, and generally shake the hell out of everything. I'm 48, and they're younger than me and I'm really excited for the revolution they are bringing to business. I talk about all this stuff on my 2008 trends page at www.jimcarroll.com/acrobat/FutureTrends.pdf

Look, the future has huge potential. That's why I focus on it!