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The Value of Impact in Economic Development

I had the honor of meeting with the management team from a state Commerce department, economic development division this week, focusing generally on the topic of preparing for a challenging future. Of particular interest were the characteristics required to create a ‘magnetic’ environment that attracts business and industry.

Focus on the Future

While it seems obvious that any strategic thought would rely on a future focus, the nuance in this discussion related to perspective. That is, these talented pubic managers and planners are dedicated to building economic vitality throughout the state and see the future through that lens. A key question is, ‘How does a business planner see the future and what characteristics are most critical in his or her decision making process – i.e. whether to pack up and move from one state to another?’ Business is comprised of people and most want the same things – decent health care, good schools, accessible higher education, recreational opportunities, reasonable home prices and home availability, a sensible cost of living, low crime rates, and a decent place to live. Business wants viable and accessible markets, good transportation, a reliable supply chain, a reasonable tax structure, a capable workforce, low operating costs, and localized support services. Many economic development professionals work tirelessly to provide these things for new and existing enterprises. But what provides the greatest ‘magnetism?’

There’s more to it. Less than ten years ago the prediction was that people would change careers five to ten times in a lifetime. This has changed. It was another ‘bubble’ that did not get much attention. The emerging trend is reversing again toward stability. When given the choice, businesses and employees would rather have a stable environment in which to live and work than the tenuous promise of riches tied to high risk. Our research shows that businesses would trade a higher profit margin for a reduced margin that is accompanied by long-term stability, more predictable opportunity, more safety, and an environment that, over time, provides the best possible platform for stable growth. When given the choice, more people will now choose less short-term reward for more long-term opportunity and the intangibles that come with it. Provide that environment in tandem with traditional success factors and you’ll attract business.

A new ‘Center.’ Times are changing. The past year was merely a prelude to a major shift toward more thoughtful, prudent decision-making and a re-centering of society. To create more ‘magnetic’ communities, economic development teams must concentrate on intangibles as much as tangibles. While tax rates, land availability, supply chains, broadband capacity, and transportation infrastructure remain important, the enterprise of the future will also be attracted to areas that epitomize balance, safety, stability, acceptance and opportunity – for individuals and businesses.

The key is to be aware of what motivates people in troubled and challenging times. Most would rather make less money but know they have a job (or viable business) and longer term prospects. My message – economic growth may very well depend on creating what Richard Florida terms ‘a place to be.’ And much of that environment will be defined in social-cultural terms, not business terms.

The Value of Impact

From personal experience as a public employee in both local and state government, I can attest that a great frustration is the process of gaining the attention of decision makers. An endemic issue in state government is the enormously talented cadre of well-educated and experienced professionals whose advice and counsel is not followed by elected officials. However, very often, our analysis finds that presentation is an underlying cause of inattention.

Properly executed strategic plans should have as their foundation a platform of issues and challenges that negatively impact the state and its citizens. Focusing this day on economic development, questions must be raised regarding what issues or circumstances exist in the state that inhibit economic growth and dampen attempts to maintain vitality? 

Everything distills down to If-Then scenarios. Decision makers need to not only be informed of the issues, but absolutely MUST understand the IMPACT of each issue. There is an implied “So what?” to every issue or problem statement. And, unfortunately, many do a poor job of explaining with good data the ramifications of each issue.

Elected officials live in a world of triage. Having understandable metrics that relate directly to IMPACT will allow them to weigh resource allocation options. The professional economic developer must demonstrate that IF resources are allocated to a particular effort, THEN predictable results will accrue. Conversely, IF the issue is not addressed, THEN a negative, less desirable result will most likely occur (the classic, ‘Choose your news.’)

Being Prepared for Challenge requires an understanding of the value of impact in the context of the evolving future. It is a vital tool of public managers at every level and in every discipline. Consider intangibles as much as tangibles and always take time to preemptively answer the question, “So what?’ 

 

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges. He holds both the MPH and MPA degrees as well as a doctorate in education.

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