The world of 2020 will be a very different place to do business than the world of today. As a consequence of economic liberalization, capital market developments, technological advances and demographic shifts, the world is witnessing an astounding realignment of economic activity.

The emergence of China and India as global players and the wholesale reassignment of jobs in many industries has in the West sparked deep fears for jobs and wages. This is placing enormous stress on Western economies to adapt to new conditions or face declining competitiveness and prosperity.

The critical dimensions of this transformation include the need to develop a strategy of economic integration into the global marketplace, establishing a strategic initiative whose focus is the structural reform of government, reinventing entrepreneurship as the motive force of innovation, and rethinking the social contract to support local trust and collaboration institutions. Across Canada, people have told the Carlisle Institute that Canadians would be more prepared for these challenges if they were more informed and knowledgeable about the transformation taking place.

It has never been more important to consider the fundamental competitive position of Canada in this global economy and what we need to do to accelerate that competitiveness when other nations are making rapid progress. The stark reality is that we have no coherent long-term Canadian economic strategy to ensure competitiveness over the long haul. It is far from clear that we are taking the steps most important to Canada's long-term economic prosperity. Even though some firms have performed well, the competitiveness of the Canadian economy has become increasingly unsustainable. This fragility is responsible for the deep insecurities of many Canadians, even before the current financial crisis. To reconcile these conflicting perspectives, the Carlisle Institute believes it is necessary to assess where we actually stand and to recognize that we have enjoyed relative prosperity in recent years because we have established a set of competitive strengths.

To make Canada competitive, political leaders, business leaders, and civil society must begin a respectful, fact-based dialogue about our challenges. A strategy would direct our spending to priority investments and review the appropriate role of government. It is imperative that we foster the innovation that will integrate Canada in the high productivity environment that underpins so much of the global economy. Success means neither protectionism nor letting the free market ride. We need a more imaginative and measured approach to economic growth that integrates the different ways government influences industry and achieves overarching public objectives. We will be irredeemably irresponsible unless we insist on a radical redesign of our political, business and educational institutions to vest the responsibility for competitiveness squarely at the feet of the private sector.

We have a historic opportunity to adopt a strategic approach to Canada's economic future. We are at our best when we stand up to our shortcomings and accept responsibility for dealing with them. All Canadians should hope that our leaders rise to the challenge.

For more information about Carlisle's research program, contact us at research@carlisleinstitute.org.