Economic Development and the War over Jobs

Do you ever sit back while watching politicians promise to “grow the economy,” “create jobs,” and “put Americans back to work” and wonder how they plan to make it all happen? Most often than not, politicians don’t have a clue, not necessarily due to incompetence (although that’s questionable), but because they increasingly rely on a set of economic development experts to guide them through the madness. For those unfamiliar with the whole idea behind Economic Development, William Fulton of the Kinder Institute for Urban Research at Rice University best sums it up as the act of growing, stealing, adding, and ensuring constituents have “jobs”. And by jobs we mean quality, long-term jobs; jobs that propel individuals or families to the middle class and have added value to the community.

Today more than ever, economic development has become the new hot trend in public administration and we’re seeing not only states, counties, and large cities, but also small towns incorporate economic development offices as integral parts of their administrations. What has become of the phenomenon is what some experts call the Economic Development Wars. The result is more than $80 billion spent by states and municipalities each year in competitive tax breaks, cash payments, building subsidies, and worker training to start-up, steal, and keep U.S. firms. The huge question remains, are any of these strategies working? Who’s accountable? And more importantly, is $80 billion each year better spent elsewhere?

The truth like in most things is, it depends. It depends on your community’s skill sets, landscape, and natural advantages in gaining capital investment. For many years and to this day, what this has transitioned into is an arena of competitive business incentives where states, counties, cities, and towns all compete for businesses and businesses, particularly the Boeing’s, G.M.’s, and Tech Giants of the world, sit back and watch states compete in a gladiator style race to the bottom. Today, quality/ long-term jobs have become the exception not the norm, but economic developers continue to rely on the same strategy. Regardless, of this fact one thing rings true, even at its worse, economic development has a bigger stake in directly and immediately affecting constituents than many government services. So what is there to do?

These questions sparked my passion for Economic Development last fall and luckily there are plenty of individuals taking on the challenge. One of them being, Victoria Demchak whose 2013 book emphasized the importance of considering economic development as a three pillared edifice, where too much or too little investment in one pillar produces an unsound or unstable environment for economic development. This is a much better mindset and most likely a much more flexible, sustainable, and effective strategy for economic developers particularly as we see the definition of "jobs" change in the future. I for one, will consider this strategy as I move forward in my career, and advise that you do the same if ED is something your into. What do think?

Demchak, Victoria. 2013. "Art, Wine, and Local Investment in the Finger Lakes: Designing a Collaborative Stakeholder Tourism in Tompkins County." Submitted to the 2013 APA Economic Development Division Travel Scholarship.