3 Thoughts for the 20 New Governors

January is an exciting month in many state capitals around the country. There are twenty new Governors being sworn in and starting to announce their teams. There are others who were re-elected and recognize that a second term provides a unique moment to be bold with their agendas. Soon, many will need to submit their first budget request and begin the shift from campaign rhetoric to actual programmatic and policy-driven agenda setting.

We have seen the good, the bad, and everything in between in how these leaders – well, LEAD. Some will seek to lead in a hands-on way, meeting with key constituents and helping to manage the daily agenda of the government. Others will choose to rely on the talented people they hire to carry out the vision.

Most are in agreement that the economy of their state – jobs for residents, happy employers, outsiders interested in moving in – are all important to their political futures. They recognize that a healthy economy makes the other tough issues they must deal with easier.

So how do they ensure economic success?

Think Beyond Transactions

It’s hard to argue against wanting the press release and the photo op with the big scissors or golden shovels. The announcement of an expansion, a new housing development for millennials, or a major infrastructure project, all attract interest and ‘show’ that things are getting done. I’ve seen too many economic development leaders focus on these wins and ignore what’s bubbling beneath the surface in their communities.

The announcement of these transactions must be accompanied by an understanding of the  short and long term consequences. Often these broadcasted wins fall short of the excitement promised. Economic forces change the narrative and project scope as the growth ramps up; or worse, the face-value excitement is for a deal that will strain the community fabric. For example:

Community Win: Job creation!

Community Loss: All of the jobs pay below the community’s living wage.

Too many communities are losing with this rhetoric, and trust in leadership is lost as excitement deflates.

Announcing improvement in areas like place, investment, diversity, sustainability, and talent are the wins that leaders should aim for to create a lasting impact and to maintain trust and excitement about local development.

The Fourth Economy Community Index is a great resource for economic development officials to start looking into key indicators, like those listed above for each county in their state. The Community Index is a free resource that profiles almost every county by using 19 indicators that we think illustrate what is needed for success.

Quality of Place Drives Economic Development

For years now, I’ve been preaching that the best tool for economic development is a vibrant community that supports diverse lifestyles. There are a lot of people who get paid to tell you how bad your tax system is, why you should throw truckloads of incentives at companies and that your red tape is ‘crushing business’. Our research has shown that in a vibrant community those issues become footnotes and not the lead story. People want to be in communities that have culture, recreation, good education, and a welcoming environment. If you have those things people will stay or move to be there and the jobs will follow.

A few years back we researched the most transformed places in the country and found the quality of place to be the common thread. The message and results of that research are stronger than ever.

Power Comes From Collaboration

The history of governors and economic development leaders is filled with those who have tried the Command and Control approach, and those that pursue Collaboration.

The command and control leaders think that the path to success can be dictated. They fail to recognize that economic development is a team effort that can sometimes involve hundreds of organizations and leaders.

The Collaborative crowd recognize this and use their positions to rally, to leverage, to inspire those in their network to pursue a shared vision. The collaborative leaders will have a longer-lasting positive impact. They are the ones that collect awards and are well-regarded by their peers and communities they serve.  

These are my three pieces of economic development advice to our newly-elected officials:

  1. Don’t get caught up in flashy announcements
  2. Pursue quality of place for all citizens
  3. Work collaboratively with organizations and local leaders.

Governors that uphold these standards will set themselves, and their state, apart from the rest. I hope that all leaders, not just governors, can use this advice to help chart a better course and support vibrant communities in their state.

Embedding Equity Into Economic Development

Guest Blog by Sarah Treuhaft, Director of Equitable Growth Initiatives, PolicyLink

Treuhaft-Inequit-BlogIt is another summer in which America’s deep racial fault lines are being painfully exposed. Following the horrific violence in Baton Rouge, Falcon Heights, and Dallas, in a July 8 poll seven in ten Americans said race relations are “generally bad.” A National League of cities analysis of one hundred “state of the city” speeches from 2016 found that mayors increasingly view racism and inequities as major threats to progress in their cities.
Continue reading “Embedding Equity Into Economic Development”

NIST Announces NMII Competition

Paytas-Blog-20160405Recently, The National Institute of Standards and Technology (NIST) announced the competition to award its first National Manufacturing Innovation Institute (NMII).  Proposers may focus on any advanced manufacturing technology area not already addressed by another institute or open competition. Seven institutes have been funded to date with two currently moving through the review and negotiation process. After attending the Proposer Day session on March 8, 2016, it is clear that many proposal teams have already been formed. Continue reading “NIST Announces NMII Competition”

WIA to WIOA – What It Means for Economic Developers

The following guest post is provided by Thomas P. Miller and Associates, a national workforce development consulting firm and partner with Fourth Economy Consulting on numerous projects to align workforce and economic development.

Workforce---WIOA-WIAThe Workforce Innovation and Opportunity Act, or WIOA, was passed in July 2014 to reauthorize Congress to fund federal workforce and job training programs from 2015-2020. It is the first major workforce development legislation in over 15 years and replaces the Workforce Investment Act of 1998, or WIA.

Through WIOA, the U.S. Department of Labor is focusing its efforts on better aligning federal funding with the in-demand skills required by business and industry. States are required to identify workforce/economic development regions and coordinate planning efforts and service delivery strategies. Continue reading “WIA to WIOA – What It Means for Economic Developers”

Arts, Culture and the Economy: Fourth Economy Participates in the Unsung Majority Rollout

141106-Art-CouncilAs part of our ongoing efforts to engage with the sectors that drive economic development, Fourth Economy joined the Pittsburgh Arts Research Committee (PARC)—an advisory committee to the Greater Pittsburgh Arts Council. The PARC worked with the Heinz Endowments and the Pittsburgh Foundation to review and comment on their study of small and mid-sized arts organizations in and around Pittsburgh, PA. On October 28, the Heinz Endowments and the Pittsburgh Foundation rolled out the final report with a daylong event including panel discussions, breakout sessions and networking called The Unsung Majority. Continue reading “Arts, Culture and the Economy: Fourth Economy Participates in the Unsung Majority Rollout”

Debating the Mortgage Interest Deduction

Mortgage-RateMitt Romney lost the election but some of his fiscal ideas may survive.  Mitt Romney’s comments on an Iowa radio station re-ignited the debate about the mortgage interest deduction (MID) that has been simmering since at least 1984.  Romney’s plan calls for a $17,000 deduction budget that effectively caps and may even kill the MID:

 As an option you could say everybody’s going to get up to a $17,000 deduction. And you could use your charitable deduction, your home mortgage deduction, or others — your health care deduction, and you can fill that bucket, if you will, that $17,000 bucket that way. And higher income people might have a lower number.

The MID inspires deep passions.  It is also not likely to be received by the public with any objectivity.  The National Association of Home Builders (NAHB)  released a poll showing that the MID was supported by 77 percent of Republicans, 71 percent of Independents and 71 percent of Democrats.  Real estate lobbyists have been arguing for some time that eliminating the MID while the housing market is weak would further destabilize housing.   However home prices and interest rates are so low right now that the benefit that the deduction provides to buyers has been significantly minimized.  As a result, there are new calls that now is exactly the right time to restructure the deduction. Continue reading “Debating the Mortgage Interest Deduction”

BioEconomy 2.0

Over the past few months there have been several new strategies and reports published by states, regions and think tanks regarding the BioEconomy.  We are at the start of the next phase of economic development investments in the sector, which I think is BioEconomy 2.0. BioEconomy in this context refers to a variety of similar terms used by economic developers including life sciences and biosciences.

The first phase of activities began around 1999 when states such as Pennsylvania launched their life science initiatives utilizing a portfolio approach to investing in infrastructure, research and development, venture capital and regional innovation clusters. Their work inspired several states to launch similar efforts including Massachusetts, California, Texas and others to varying degrees. Continue reading “BioEconomy 2.0”

Flying Pigs and 50 Foot Women

Gernot Wagner‘s new book, But will the Planet Notice?  How Smart Economics Can Save the World.  In this book, he argues that we are past the turning point where individual choices (reusable grocery bags or hybrid cars) will be enough the save the planet.  We need to change the rules of the game to harness the choices of billions of people by changing the economic incentives.

Continue reading “Flying Pigs and 50 Foot Women”

PA Governor’s Proposed Budget Cuts Millions from Economic Development Programs

Today in Harrisburg, Governor Corbett revealed his proposal for the 2012-2013 budget. We wanted to provide a quick summary and high-level observations to members of the economic development community. The bottom line is that there is little to be excited about if you work in the economic development or related communities in Pennsylvania.

First, this budget continues and in some cases adds to the cuts that have been faced by almost all of the Department of Community and Economic Development programs. The chart below illustrates the impact over the past 12 budget cycles on the economic development initiatives in the Commonwealth.

 

Commonwealth of PA Economic Development Funding

Source: Fourth Economy Consulting

 

This year’s budget further reduces economic development spending by $3.6 million from 2012-2013 figures.

This is a total of $60.9 million from the end of the previous administration with several programs consolidated or eliminated in the past two years. The chart provided also breaks out Commonwealth Financing Debt service as this funding is going to pay off previous commitments rather than being available for new investments.

The larger cuts are in the areas of Pennsylvania First (decreased by $2.5 million) and the Marketing to Attract Tourists (decreased by $1 million).

Programs such as the Ben Franklin Technology Development Authority which supports the Ben Franklin Technology Partners ($14.5 million), the Life Science Greenhouses ($3 million), and the newer Discovered and Developed in PA program ($9.9 million) are level funded in the Governor’s proposal. It remains to be seen if the Corbett administration will continue to support the Keystone Innovation Zone program. Previously those funds were provided as part of the BFTDA funding but in the past year the appropriation went to support the regional Ben Franklin Technology Partners.

One major blow to the state’s colleges and research universities that are performing health research is a redirection of all funding for the Health Research Priorities otherwise known as the Commonwealth Universal Research Enhancement program (CURE). Last year the CURE program supported $55.8 million in research funding and if the Governor’s proposal passes they will received no funding.

The budget negotiation process begins today and the Governor has made his recommendations. We will keep you posted about the conversations. If you have any questions or information to share please feel free to ask and comment.

 

 

 

Value Your View Shed

Admittedly, I am not a fan of billboards.  A few years back a friend from Scenic America pointed out that billboards are the only form of advertising that the target audience cannot turn off, turn the channel, turn the page or log off.  Opposition in many communities towards billboards is growing.  A documentary has been made highlighting this trend – it’s worth a look.

Trailer from This space available on Vimeo.
While the growing cases of billboard bashing may at first appear singular and unique, I think there is more to it.  I see it as representative of a larger trend of local stakeholders, residents and investors valuing their own community in a different way.  As more state and local leaders realize that the days of smokestack chasing as an economic development strategy are over, the more they are looking inward at the quality of their communities.  They are recognizing that amenities such as housing, parks, transportation options and yes, even view sheds are the primary criteria upon which their communities are being evaluated.

The rise in smaller firms and entrepreneurial start-ups as a key economic driver makes this trend even more important.  Those mega industrial opportunities that primarily sought large tracts of land or sites supported by rail and highways are becoming the exception rather than the rule.  Attention today is focused on a greater degree on infill opportunities, urban sites and mixed use development.

So, look around your own community and ask – how do we look?  Are we doing the best we can do to attract modern investment.  Or do we need to take on or support different approaches to drive modern economic development.  You may end up choosing not to advertise your community on that large billboard blocking the view of your mountain range.