The New Year brought with it a lot of frenzy and panic as oil prices slid downward.

Economists and analysts were deeply concerned about the low price of oil and what the long-term impact would be on Alberta’s economy. According to a Conference Board of Canada report, the Alberta economy is expected to decline by 0.7 per cent this year. Since it could be a while before we see the oil price climb back up to the $100-per-barrel mark, it’s time to look for a silver lining.

In the words of Hegel, “The only thing we learn from history is that we learn nothing from history.” Historically, we have seen numerous fluctuating oil price cycles. In the 1980s, oil prices reached a record high but by 1986 the oil prices came crashing down by 67 per cent to about $12 a barrel, as the world floated in an oil surplus and the market faced falling consumer demand

Starting in June 2014, we saw crude prices decrease by 57 per cent in just six months. Although 2014 is not 1986, many of the best ideas emerge from the toughest conditions. One of the defining moments of the 1986 crash was the technological advancements and the development of drilling techniques that helped the world climb out of the oil crisis.

Hence, we can in fact learn something from history – innovation is the lesson we need to remember. If Alberta wants to continue to be an energy and innovation centre, the global political and economic instability with respect to oil prices is the perfect time to step back and assess what we must do differently.

While technological advancements have limits to what they can achieve, we do have to reinvent ourselves as an industry. At a time where costs are high and margins are low, it would be wise to look to technology developments that cut costs and improve productivity and efficiency. Not only that, but we also have to ensure that these costs don’t start climbing up as soon as the oil prices start their road to recovery.

Innovation is not limited to technology but also applies to the realm of policy; as some serious thinking is needed about diversifying our markets and improving our transportation infrastructure to remain competitive in the global market. Under a new NDP government, the province will undergo some policy changes, with a royalty review and a new climate change strategy on the horizon. As Notley navigates the environment and economic spheres to find a system that works for both, she also needs to make sure that the new system drives innovation.

The reaction to this recession will determine long-term growth prospects for the province. An Alberta focused on innovation will come out stronger, in a better position to withstand future downturns in the oil and gas industry, and ready to fully exploit opportunities in an upturn.

– By Shafak Sajid, policy analyst