Columnist: It’s About More than Jobs

In the world of economic development, some say jobs are the measuring stick of success. While they are undoubtedly important, jobs cannot be the only measuring point when the ultimate goal is creating prosperous communities, according to Governing columnist William Fulton:

Here are the facts: The national radio show This American Life aired a segment in May on economic development, including a visit to a conference put on by the International Economic Development Council (IEDC). Because the show depicted the council and what it represents in such negative tones, long-time IEDC President Jeff Finkle wrote a lengthy letter of complaint, saying he felt like a guy who invited the show’s producers to a dinner party at his house, and then watched them insult the guests. Ira Glass, producer of This American Life, apologized for the segment’s snarkiness. In the end National Public Radio, which co-funds the show, apologized too.

All this was good copy, as we say in the newspaper business. In particular, Finkle deserves credit for successfully calling out the radio show for its highly negative story and eliciting an apology — something that almost never happens. But the whole controversy obscured one valid criticism of the profession: The way job creation is used as the first, last and only measure of success.

The problem, as the radio show correctly identified, is that there is enormous pressure on politicians and the economic development experts who work for them to take credit for jobs created — and, in some cases, jobs only supposedly created. Sometimes economic developers differentiate between good jobs and lousy jobs, mostly by looking at the hourly or annual wage scales of the jobs — but usually the headline simply telegraphs the number of jobs a state or locality has produced. As the radio show pointed out, at times politicians go to hilarious lengths to take credit, as when Missouri Gov. Jay Nixon held a press conference to celebrate the creation of eight jobs.

So in the same way that teachers are expected to deliver test scores rather than educated children, economic developers are expected to deliver jobs rather than prosperous communities. Hence the focus on poaching jobs from somebody else’s turf and the spotlight on poaching big companies rather than small ones.

As we all know, there’s far more to the economic development profession than jobs. Over the past 20 years, as smokestack-chasing has subsided, economic developers all across the country have done a great job of focusing on growing jobs locally rather than poaching them. But even this approach doesn’t really convey how economic development works. Ultimately, successful economic development can’t be measured only by the number of jobs or even the number of high-paying jobs that have been created.

Everybody needs a “job” in the sense that everybody needs a source of income capable of sustaining them. But prosperity today is so much more than providing everybody with a conventional job. Entrepreneurs need an entire ecosystem to support them — financiers, lawyers, strategists and a growing workforce. Communities need wealth retained in their hometown to endow their future needs.

Different types of people need different types of jobs — white collar, blue collar, professional, technical. As I wrote in this space in May, the next generation increasingly realizes that their future lies in the so-called “1099” economy, where temporary work is becoming the norm. They have no expectation of a traditional career path or even a traditional job.

These are the subtleties of economic development in the United States today that cannot be captured by measuring what we traditionally call “jobs.” They are measured by other things: venture capital available to local companies, skills in the workforce, the value of local philanthropic endowments, the number of startups (successful and unsuccessful) and overall household income.

The end result of all these activities is a prosperous community where people have money in their pocket and a commitment to spending it in a way that benefits both themselves and their hometown. Yes, sometimes this means smokestacks, and yes, most of the time it means jobs. But the underlying truth of that NPR segment is that there’s a difference between jobs and prosperity. If economic development is about nothing but jobs, then stealing jobs and taking credit for jobs that don’t exist will be the inevitable result.

Site Selecton Mag Recognizes Indiana for Economic Development Projects

Marion, Huntington, Angola, Seymour and Peru were recognized by Site Selection Magazine recently on its ranking of states by economic development projects.

For the sixth time since Site Selection Magazine began its Governor’s Cup rankings in 2003, Marion Indiana has made the list, this year as the ninth top Micropolitan in the United States. The magazine ranking of Top Micropolitans ranks cities of 10,000 to 50,000 within at least one county. Marion, Indiana was ranked among the nation’s 576 other Micropolitan areas.

This is Marion, Indiana’s second top ten ranking since 2003. It is the first Indiana Micropolitan community to make a top ten ranking twice. The Site Selection’s 2010 Governor’s Cup was published in the March 2011 issue of Site Selection Magazine and on their award-winning website http://www.siteselection.com.

The Grant County Economic Growth Council is a non-profit organization with the mission to facilitate investment and reinvestment for job creation and retention in Grant County.

You can view the Micropolitan rankings by clicking here.

You can view the Site Selection cover story here.

Planning Now for 2025

The Indiana Chamber is in the midst of a process titled Indiana Vision 2025. As the name suggests, it’s a long-range economic development planning process for the state. It will guide the Chamber’s advocacy efforts and hopefully help the state move forward, no matter which political party might be in power.

A task force of statewide business and organization leaders makes for fascinating discussion at each meeting. Last week’s focus on higher education took the dialgoue up a notch, with guest presentations from Nicole Smith of the Georgetown University Center on Education and the Workforce and Dewayne Matthews of the Lumina Foundation for Education.

Just a few of the many interesting highlights — ones that have to make you stop and think at least a little bit:

  • Each year of training (either formal college education or improving adult skills in some way) leads to a 3% to 6% increase in gross domestic product
  • When surveyed, 85% of eighth-graders and their parents state the young people plan to go to college. The actual number, of course, is far lower
  • In 1973, 28% of jobs required at least some college education or better. In 2018, that number is projected to be 63%
  • Low skill jobs that paid high wages are largely gone — and not coming back. "For the first time, the only way to get into the middle class is through education"
  • In Indiana, 735,000 working-age adults have attended college but don’t have a degree

Like I said, just a few numbers and perspectives. Look for much, much more in the months ahead.

Have a Question for Mitch Roob? Here’s Your Chance

Mitch Roob’s job is to sell Indiana. He does it in all corners of the state, from coast to coast and on a global basis. Roob will slow down for an hour on Friday to participate in the Indiana Chamber’s Policy Conference Call.

It’s a members-only event, and it’s your opportunity to ask a question or make a comment to Indiana’s Secretary of Commerce. I’m looking forward to leading the discussion and have plenty of topics planned. Among them: foreign trade missions, the balance between attracting new companies and assisting existing businesses, legislative priorities and much more.

It should be a good one. Join us on Friday. Register here.

Economic Development in Southern Indiana

Jim Plump of the South Central Indiana Economic Development Group discusses ongoing projects and the status of the region with our very own Tom Schuman on Inside INdiana Business:

I also wrote an article on this topic in the latest edition of BizVoice that you might find useful if you’re interested in Southern Indiana, which, in addition to being one of the most beautiful parts of the country — in this observer’s opinion — also may have a very bright economic future.

Idaho Getting Creative With Energy Solutions, Tapping into “Back End” Infrastructure

Today’s riddle: When can a good idea also stink? Ag Weekly has the answer:

That odor wafting from 550,000 cows that make up Idaho’s growing dairy herd smells like energy independence and economic development to state energy czar Paul Kjellander.

Idaho is now America’s No. 3 milk producer, trailing California and Wisconsin. That also means it’s cow pie central.

Mountains of manure are fueling Kjellander’s dream of pipelines crisscrossing the Snake River plain, linking manure digesters at dairies large and small to central refineries that produce natural gas pure enough for homes or cars. Processed manure would be sold as plant bedding. Dairies could also fire turbines, shooting electricity into the power grid. And they could sell carbon credits in schemes to slash greenhouse gas emissions.

Kjellander, who heads up Gov. C.L. “Butch” Otter’s Office of Energy Resources, is pushing a package of income tax credits, property tax waivers and other incentives in the 2009 Legislature starting Jan. 12 to transform Idaho’s southern heartland into a methane Mecca.

I was amused that the author used the phrase "cow pie central" when referring to Idaho. I believe that is also the name of the least popular train station of all time.

More Accolades for Indiana Business Climate

In its November issues, Site Selection magazine has labelled Indiana as the most improved business climate in the nation. We were also named tops in the Midwest and number five in the nation. Inside INdiana Business has the info:

Indiana’s award-winning efforts to attract new jobs and investment comes as the Indiana Economic Development Corporation is on pace for a fourth consecutive year of success. Since January, 137 businesses have committed to create 17,297 new jobs and invest more than $4.1 billion in their Indiana operations. Despite the national economic slow down, the jobs-hunting agency is nearly at the same totals for job attraction as it was at this time in 2007.

Following the governor’s creation of the agency in 2005, the state has logged three years of record-level attraction of new job-creating investment. Cumulatively since its inception, the Indiana Economic Development Corporation has worked with nearly 620 companies that have committed to create more than 76,000 new jobs and invest more than $18.6 billion in their Indiana operations.

IEDC: National Media Lauding Indiana’s Business Climate

In a recent web article from the Indiana Economic Development Corporation (IEDC), it seems many national news media and sources are looking at Indiana as a model for how to take care of business, so to speak:

National news broadcaster CNBC listed the Hoosier state as the “Most Improved State for Business” in its 2008 survey of states. Indiana ranked the best in the Midwest and third in the nation for Business Friendliness in the survey, the best in history for the state and far better than the rest of the industrial Midwest.

Forbes magazine also provided Indiana acclaim by rating the state’s business tax climate as the best in the Midwest and sixth lowest cost of doing business nationally in 2008.

Indiana’s low cost of doing business and tax-friendly environment scored accolades from a Chief Executive magazine survey of the nation’s top CEOs. The magazine’s fourth annual “Best & Worst States” survey polled 605 top executives in early 2008 who listed Indiana as the best place in the Midwest for business, scoring an eighth place national finish and edging out neighboring states by more than 15 places on the survey.

To view all of the rankings, read the piece on IEDC’s web site (PDF).

Quality of Life Doesn’t Matter? Are You Sure?

Economic development guru William Fulton of Governing magazine has an interesting piece on business attraction strategies.

His premise, based on a recent survey, is that manufacturers still dominate and their top factors (cost of labor, access to key transportation and speed to have a new facility ready) don’t correspond with the growing emphasis on quality of life issues.

Fulton advises cities and metro areas to not all try to be the next Silicon Valley and focus on setting themselves apart. Manufacturing churn, he notes, will keep more companies expanding than contracting.

He makes some good points, but the near dismissal of "creative companies" and attributes such as the quality of the symphony run counter to common practice or sense. A hybrid — improve the education, workforce training and infrastructure that all companies need in addition to enhancing quality of life — seems to be the way to go.

Read what Fulton has to say; let us know what you think.