Is Canada becoming the world’s most advanced asset management economy?
December 20, 2016 by David Bowcott
No matter where I go these days it seems like every economy, both governments and corporations, are toying with new ways to design, build and operate their physical assets. The over-arching trend behind this long-term capital concept is Asset Management. Owners are tired of the traditional fragmented approach used to create and run their non-human assets, and they are experimenting with new procurement and operations strategies in order to optimize every asset’s performance. It isn’t happening everywhere and in every sector, but the momentum is moving forward unabated, and is spreading to new countries and industry sectors everyday.
When it comes to helping owners build and operate their assets more efficiently, Canada is punching above its weight. Our federal, provincial and municipal governments, as well as some key private sector industries, are driving towards a total cost of ownership model that is truly asking the question: “what is the most cost effective way for me to design, build and operate this asset over the projected life of the asset?” Because this question has been asked more and more over the past 20 years in Canada, we have created quite a laboratory of asset management. Several sectors of our economy have become global leaders in long-term asset development and management.
Here are a few sectors where Canada is, or is becoming, a world leader:
Government Authorities – Much of the Asset Management adoption has happened within our provincial governments. Several of our leading provinces (like British Columbia, Ontario, Alberta, and Quebec) are considered world leaders in the long-term asset management community. And with the Federal governments formation of P3 Canada and the most recent initiation of a Canadian Infrastructure Development Bank, it seems that leadership brand will only grow.
Equity – Several of our pension funds and life insurance companies are amongst the top investors in long-term asset management investments. Canadian Pension Plan, Ontario Teachers’ Pension Fund, Caisse De Depot et placement du Quebec, and several other pension funds and life insurers are global leaders in the infrastructure investment market (Public-Private Partnerships or P3s).
Contractors – Our Canadian contractors have been exposed to massive change over the last 20 years given the introduction of new delivery models to the Canadian economy. In the early 2000’s our economy created a substantial pipeline of work and attracted the world’s top global players from European and Asian Pacific communities. Exposure to so many global perspectives has given contractors resident in Canada a view into the future. Several of these contractors are building their companies for the future and are hoping to help owners gain maximum efficiency out of their physical assets.
Debt Advisors – Our financial advisors, lender technical advisors, lender insurance advisors, and rating agencies are amongst the best. Combined with the sophistication of our capital we have what several in the world consider to be the world’s leading project finance community.
Consultants – Our management consultants, lawyers, and risk advisors/brokers have all gained tremendous experience over the years. Several within this community have gone on to take up global leadership roles within their companies, which is a testament to our collective leadership position within the asset management community globally.
Technology – Most recently Canada is beginning to develop a tremendous concentration of high-level talent that is focusing on asset management technology. Whether it is new construction materials, project management software, design software, counter-party risk solutions, or wearable technologies for construction and asset management, Canada is starting to harness the high-tech talent we have in order to develop the asset management technologies of the future.
What’s it going to take?
Bottom line, Canada is on the verge of becoming the world’s best builders and operators of physical assets and all levels of government. Canadian domiciled corporations should be working together to better brand what we appear to be turning into. If we manage to more effectively collaborate around this very real opportunity, we could make construction and asset management a very large component of our future GDP growth. Further by building our assets better now, we could attract the best and brightest globally to our construction and asset management companies. Collaboration will be key to success as a united voice and consistent message is vital to grow our global brand in this sector.
David Bowcott is Global Director – Growth, Innovation & Insight, Global Construction and Infrastructure Group at Aon Risk Solutions. Please send comments to firstname.lastname@example.org