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Reinventing economic development: Why not wing it?

Reinventing economic development: Why not wing it?

Reinventing economic development: Why not wing it?

New Mexico Business Weekly by Mark Lautman, Guest Columnist

Date: Friday, March 23, 2012, 4:00am MDT

Imagine having a life plan to get married, have three kids, put them all through college, pay off a new house and go on a three-week vacation every year, all without a viable career plan.

Pretty dumb, isn’t it? Chances are you’d crash and burn.

Now imagine living in a community that has the same attitude. It has elaborate, long-range plans for the stuff it thinks it needs: transportation, utilities, parks and recreation facilities, schools, public health and safety programs and such, but nothing close to a plan for developing the economic base to pay for it all.

Truth is, most communities are like that — they’re winging it — and you’re probably living in one.

In years past, communities, like individuals, could get away with winging it. Not anymore.

Some important economic and demographic trends have reversed, making economic development for many communities nearly impossible without a clear strategy and a plan. If you think about it, your community not having an economic development plan could actually ruin your life.

Living the happy, secure and prosperous life you have in mind is going to be increasingly difficult if the economic base of your community isn’t growing a little faster than the population. If it doesn’t, your friends, local businesses and the tax-dependent institutions you rely on will have to serve more people each year with fewer resources, and your house will lose value instead of appreciating.

Richard Florida’s book “Who’s Your City” makes a compelling case that when it comes to our personal happiness and well-being, the most important life decision we make now is not who we marry (except in my case), how many kids we have or the career we choose — it’s where we decide to live. Our health and safety, who we hook up with, who we become friends with, the trajectory of our careers, the value of our homes, our education and avocations flow from the community in which we live.

So your personal health, happiness and net worth might come down to whether your community’s leaders have a viable economic development strategy and the political will to execute it. If they don’t, you might want to move.

Last month, I wrote about getting the planning process set up.

Do you have the right players at the table? Do they believe they have influence over how your local economy turns out? Do you have the right process? Can you agree on how many jobs you need to create every year? After you know how many jobs you need, you are ready to focus on what kinds of jobs you want.

Let’s say you’ve agreed that the community will need to create 500 new economic base jobs per year to get back the jobs you lost in the recession, replace expected annual attrition losses and support enough new households to grow a little.

The “what you want” part of the process is economic architecture. It’s the design of the future economic base of the community.

Whole new markets, industries, business models and jobs are being invented every year. Many of these new jobs are footloose or location-neutral, meaning they can be performed anywhere.

The process of figuring out what kind of jobs to go after involves the following steps: develop criteria to ensure that the jobs you go after will meet the needs and character of the community; match the community’s location, business climate and workforce skills to the needs of candidate industries; verify competitive advantages needed; and finally, calculate the number of jobs and transactions that will be required in each target sector.

You should have a pretty good idea (hard-number goals) for how many jobs you’re going after in each economic base target sector. For example, you might decide you want the 500 jobs you need a year to come from 10 transactions that yield 100 jobs per year in digital media, 100 in aerospace parts manufacturing, 200 in financial services and 100 in tourism.

At this point, you are ready to start developing a strategic plan. That means figuring out how many frogs your marketing people will have to kiss every year to load the sales pipeline, how much real estate inventory, how many qualified workers, new utility capacity, capital, incentives and tax and regulatory improvements you need to be competitive.

Then comes the fun part: figuring out who is going to organize, fund and take responsibility for execution.

And you wonder why most communities end up winging it.