Northern firms prosper in changing economy.

• Author: Krejlgaard, Chris

Most economic experts agree that the recession of 1990/91 differed from its predecessor of nine years earlier.

This time around the consequence of spiralling debt was accompanied by structural changes in the global economy, the emergence of new technologies and deep-routed changes in market demand.

"This was much more than a recession. The world has never gone through the changes it is going through now," says Laurentian University geography professor Oiva Saarinen.

"We are in an information revolution that is hitting us with a vengeance," says Saarinen. "We are moving from an industrial age to an information age."

With such a dramatic change it is unlikely that the former foundations of our economy - the automotive, steel, forestry and mining sectors - will return to their past prominence.

Of these, mining shows the most promise because it has undergone a dramatic restructuring over the past 10 years. It is this phase of painful rationalization that forestry and manufacturing now face.

Some economists are betting on the strength of the service sector to provide some stability. Service, the largest sector of our economy, only had a 14-per-cent downturn during the recession.

"You have to look at where the jobs are. About 90 per cent are in the service sector," says Rick Lymer, Northern Ontario district economist for Employment and Immigration Canada. "That trend will continue through the '90s."

However, the service sector, primarily retail, faces a tough challenge of its own. An aging, environment- and value-conscious population is forcing the sector to re-evaluate the products and services it offers and how it delivers them.

In light of this, the real growth of the 1990s will be led by companies which can deliver new products and services, put technology to work to solve old problems and tap new global markets.

The areas which show real potential for growth include health care, communications, instrumentation and process controls, computers and the environment.

The good news is that Northern Ontario is home to a handful of companies in each of these areas which are poised to take advantage of new technologies and innovative methods to vault into the next century.

THE TRI-CARE GROUP OF COMPANIES

The Tri-Care Group of Companies of Sudbury is well positioned to capitalize on the needs of an aging population and on the financial crisis now being experienced by Ontario's health-care sector.

The Tri-Care Group provides administrative services to a majority of the health insurance companies in Canada as well as to more than 140 corporations.

The company has dramatically reduced the time required to process health insurance claims. It utilizes wallet-sized plastic cards with built-in computer chips and a network of point-of-capture equipment at pharmacies, optical outlets and medical dispensaries which read the cards.

Company president Robert Morel is projecting double-digit annual growth in the company's revenue.

"Currently business is flat, but if you look at the stories in the Globe and Mail and in other newspapers, we're pretty happy with that," says Morel.

Layoffs resulting from the recession have had a significant impact on Tri-Care's business.

"If you have 1,800 companies and each one lays off just one employee, it's going to have an adverse effect," Morel explains.

However, Morel believes his company is well positioned to take advantage of the aging of Canada's population.

"The average age of the workforce is 41, and we're starting to see an upwards trend," he notes.

Morel explains that an older population will generate more drug prescriptions, which account for 70 per cent of all medical claims.

But there are some clouds on Tri-Care's horizon.

Morel is concerned about legislation before the House of Commons which would allow banks to purchase insurance companies, Tri-Care's major clients. He fears that the insurance industry could be swallowed up.

Morel is also concerned that current GATT (General Agreement on Trade and Tariffs) discussions will lead to an increase in protection of brand-name drugs to between 15 and 20 years.

He says the move would reduce the number of generic drugs on the market and increase health-care costs...