Past sins seem to be on everyone’s mind these days. From Supreme Court nominees to TV executives, hardly a day goes by without a news story about one sinner or another. So I feel it’s my responsibility to turn attention to some of our own sins, as economic developers that is.
Sin #1: Outmigration of Youth
The future of any community rests on the shoulders of its youth. Every child should eventually leave their home, but not their community. After all, young adults will find maturity and valuable contacts in new and different surroundings. The sin is not in the leaving, mind you, but in not having a plan for our youth to find opportunity in their own town. As economic developers, it is our job to develop and manage the plan to create a healthy environment that includes better jobs, increased cultural and recreational activities, expansion of educational and job skill training and promoting entrepreneurial resources for startups that will woo them back home to raise a family and bring money into the local economy. Encouraging them to connect to the local economy early will motivate meaningful participation and sustained involvement that will provide value to the community in the future.
Sin #2: Neglect of Infrastructure
America’s infrastructure is unloved and in serious need of repair. The American Society of Civil Engineers gives it an overall grade of D+. If your kid came home with a D+ there would probably be hell to pay. But the solution is not to scream about it but to identify the root cause of the problems and make smart investments in financing, leadership and planning. To create a future for your community, you need to make sure your community’s infrastructure is solid, from the roads and bridges to schools and Internet connectivity. A glossy ad campaign isn’t going to cover up an infrastructure that is crumbling. Make smart investments, prioritize the work to be done and don’t just look the other way when a difficult decision needs to be made when resources and funds are finite or even scarce.
Sin # 3: Lack of Workforce Collaboration
The skills gap will continue to plague our economy. Nearly 60% of U.S. employers have job openings that remain unfilled for 12 weeks and even longer. Industry needs and workforce training is not aligned properly. High demand professions in engineering and technology represent only 5% of graduating majors while psychology, performing arts and history account for 22%, even though these professions have little to no demand. To fix this sin, educational institutions, particularly community and technical colleges, need to work closely with employers to match demand with supply. Colleges are creating a disservice when they counsel students to major in coursework that won’t lead to jobs, only student debt. Conversely, businesses must forecast the skills that will be necessary in the near and long term and develop internship and apprentice programs that will provide ready employees.
Sin #4: Bias Towards Business Incentives
Incentives are like cholesterol. There are good incentives and bad incentives. For the last 50 years, incentives for out-of-state businesses such as tax breaks and subsidies have remained a core strategy for economic developers. They have grown by more than three times what they were in the 1990’s. These incentives are often poorly targeted and more often than not are front-loaded rather than getting incentives over the long haul. Instead of catering to out-of-state companies, communities need to incentivize downtowns, workforce programs, entrepreneurs, home-grown businesses, artists, craftspeople and talent. Investing in your own businesses and communities will not only give you better ROI, but also create more stability, sustainability, and long term growth.
Sin #5: Ignoring the Creative Industry
The creative industry has become the unsung heroes for many communities. Unfortunately, many economic developers have turned a blind eye toward the value of these entrepreneurs. There’s a mistaken belief that creative industries are simply people in the arts and that they don’t create jobs or add value to the economy. A sin, for sure. In truth, the creative economy is a powerful growth strategy. It includes advertising, architecture, design, fashion, publishing, R&D, software, toys and games, TV and radio, and video games. The passion people have for their industry will drive them to success. According to the Arts and Economic Prosperity report, the industry generated $135.2 billion of economic activity and supports 4.13 million full-time entrepreneurial jobs. The industry also generates $22.3 billion in revenue to local, state, and federal governments every year. Economic developers would do well to include the arts as a strategic investment in entrepreneurship that will create a thriving community.
Sin #6: Neglect of Downtown
Downtowns have been a center of commerce and community for centuries. As workers moved to the suburbs after World War II, shopping malls turned many downtown cores into ghost towns. Property owners let their buildings fall into disrepair and community leaders didn’t fight back, letting these economic centers languish and often die. Today, the reverse is true. One out of four malls will close for business in the coming years, 8,600 stores this year alone. Downtowns with vibrant local shopping districts, quality eateries and entertainment and safe gathering places are in vogue once again. Economic developers need to take advantage of this trend and work with their downtown and main street officials and property owners to reduce crime and homelessness, provide parking and appropriate signage for tourists, create a lively schedule of events, establish rules for absentee landlords and support new businesses for empty buildings. Downtowns present one of the best opportunities for economic growth for many communities, particularly those in rural and underserved areas.
Sin #7: Uneducated Legislators
Economic development ideas are mostly local but when it comes to funding, the money is at the state and federal level. That said, there seems to be little effort to educate legislators on what economic development actually is. This leaves legislators to their own to focus on jobs and recruitment instead of other factors that may lead to even better economic vitality and sustainability. Legislators need to be educated on what economic development is and the role its practitioners play. Building an informed constituency can play a key role in supporting a consensus for a vision and goals that provide clear direction for local economic development. Understanding a community’s strategic approach means linking realistic economic development goals to specific activities, allocating a budget and staff to these activities and evaluating performance based on measurable and reasonable outcomes.
Thankfully, all these sins can be forgiven (but not forgotten) with the right planning and investments. What can’t be forgiven is being content with the sins of status quo thinking, when the real economic development work – the rewarding part of the job – is giving the community the infrastructure, tools, resources and attention it needs and deserves to build organically and locally and focus on moving the community forward. Not only will this overcome the sins of the past, but also position your economy for the inevitable downturns that may lie somewhere just beyond the horizon.
What’s New This Month…
The Bearded Librarian:
The Wit and Wisdom of an Economic Developer, by Maury Forman
Economic Development Podcasts
- Renewing Americas Economic Promise
- Making a Market for Irregular Employment
- Revitalize Your City by Helping to Retrain Your Workers
- The Market is Stacked Against Low Skilled Workers
- 2017 Great Seattle Ecosystem report
- What ‘Back To The Future’ Teaches Us About Innovation
- Are Some People Born to Be Entrepreneurs
Grants and Awards