Entrepreneurship, Innovation, and Diversification During Times of Crisis: Challenges and Opportunities for Newfoundland

The current crash in global oil prices has shown the importance of diversifying economies away from dependence on oil extraction and towards higher value services both within the resource industry and in unrelated industries. Innovation both within the oil and gas industry (by entering the global value chain) or within unrelated industries (such as by applying ROV technology for building offshore wind farms) help detach the economy from dependence on a single economic engine and make it more resilient to economic shocks.

The oil and gas industry in Newfoundland has created a strong foundation for economic development; they contributed to a concentration of human and financial capital in the region that can serve as a platform for continued economic development. Entrepreneurs can potentially use this human and financial capital to diversify the economy away from depending on resource prices However, the same forces that help build up these stocks of capital and skills also create barriers to diversification.