In this column in today’s Toronto Star, James Biggar of Leadnow.ca calls on Ontario to, “embrace the green future,” and to avoid becoming the, “Commodore 64 of the world economy, sitting on the trash heap of history.” I agree, but perhaps not for the reasons you expect.
This statement has irony written all over it. For you see, the Commodore 64 could have been a great Canadian success story. If you take a look at this history of Commodore, you will see that the original Commodore International Limited was founded by Jack Tramiel in Toronto! It was then a manufacturer of typewriters and adding machines. After enduring some business hardship, the company was on the verge of something big and then…they relocated to Palo Alto in 1976. In 1977, they launched the PET, in 1981 the Vic20, and in 1982 they introduced the best-selling computer of all time, the Commodore 64.
Ontario’s Green Energy Act is, “part of Ontario’s plan to become a leading green economy in North America.” To succeed, they must learn the lessons of the Commodore 64. At the time, Palo Alto offered locational advantages to Toronto, and so the company relocated. Right now, the Green Energy Act creates a lot of artificial fiscal and regulatory comparative advantage for Ontario in the race to develop better green energy technology. The trick is making sure that the big breakthrough in renewable energy doesn’t happen a few years after the industry packs up and leaves Ontario for a better deal somewhere else, as Ovonic Solar did when they got a better deal from Ontario than they had in Greenville, SC. To do so, Ontario needs to focus on building real comparative advantage through skills development, superior supply chains, etc. Unlike a fossil fuel industry, renewable energy industries are mobile and so maintaining locational comparative advantage is crucial.
The history of Commodore tells me that Tramiel is, “basically retired and now lives in a house house atop a foothill in Monte Sereno, Calif.” He was able to capture a lot of the benefit from his success, but the place where his business got its start was not. We absolutely should not let Ontario’s Green Energy Economy go the way of the Commodore 64.