Using Teconomics Alberta Economic Forecasting System as technical tools, we analyzed structural changes in major 23 industries and their contributions in total Alberta economic activities. Tentative conclusions based on our 1983 analyses are:
Investment is a vehicle for growth and employment generation in both short and long term.
Labour is better off during the process of capital accumulation.
Many key sectors in Alberta economy will go through the process of higher capital intensive structural changes to be more competitive and to meet the challenge in the near future.
Service and Finance sectors will lead the growth potential in future Alberta economic activities if both Governments and industries can meet the market challenge, in which market opportunities and diversifications in services, finance, manufacturing and trade are necessary ingredients.
Under reasonable assumptions and a new spirit of cooperation between Governments and industries, Alberta economy can be prosperous and have more balanced growth in 1990's despite the declining productive capacity of oil and gas. Thus, the current slowdown of the energy sector may provide a real challenge for a more balanced growth period in 1990's.
NOTE: By the time of submitting this paper, we are still under the process of revising the analyses and forecasts. The paper is, consequently, written in very general terms. Actual presentations will be based on the paper supplied at the Conference and will be compliments from Teconomics Ltd.
Alberta has changed drastically from an overheated economy in 1979 with 9.6% real growth to a depressed economy with −4.5% in 1982. Living in this complicated and rapidly changing environment, where complex interactions of many key forces must be understood, there is an urgent need for a systematic approach to take into consideration all relevant forces for better decisions by senior management. A comprehensive forecasting system, combining both hard evidences based on state-of-the-art techniques in different fields and subjective judgments for what-if analyses is an obvious answer. A forecasting system is not only a tool for forecasting, but also "a piece of capital" and a mean to sharpen management understanding of the real world for capturing available opportunities and avoiding serious mistakes.
Using Teconomics Alberta Economic Forecasting System, publicly available tool, together with our own analyses we can shed much light upon many key issues faced by Alberta economy in the next ten years.
Teconomics economic forecasting system is a collection of many inter-related models. Each model is a collection of statistical data, market information, government regulations, and practical experiences, combined together in a disciplined environment of economic, engineering, and statistical theories for forecasting and what-if analyses. The system has been tested in the past four years and has been used in consulting studies for industries and governments. The entire system is currently run under BEES (Business Economics Engineering Software) using IBM personal computer.
Figure 1 gives an overview of the Alberta economic forecasting system. The heart of the system is an econometric – input/output model called IDEAL (Industrial Disaggregated Economic Activity Long-term Model).