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It recently came to my attention that NPR, via This American Life, put together an unconscionably biased report at an IEDC conference earlier this year to prove that the assumption they walked in with – namely, that all economic developers do is “poach” businesses from other states – was correct, and then aired a program to this effect (with the segment entitled “Job Fairies”). Your hardworking editor was not in attendance, unfortunately, having zero time for conference-going. However, since my days are spent following and encouraging all things related to economic development in the United States, I thought I might point out a few things regarding the supposed poaching.
First and foremost, are we supposed to entertain the notion that some CEOs wake up in the morning with the idea to uproot their entire operation, relocate themselves and their families to a new state, spend millions of dollars building a new facility, hire and train a new workforce (while most likely providing severance packages for those who cannot relocate), all for a few tax credits or incentives? Or that an economic developer from another state somehow “talked them into” relocating? Preposterous. I submit that without some other catalyst – either a market shift or a change in the business climate – the idea of relocating would not even be a blip on their radar.
And what of FDI? Foreign Direct Investment creates sizable economic footprints in America. As Dennis Donovan notes in his excellent Insights piece, 18 percent of new facilities are foreign-owned. And according to a June 14th U.S. Department of Commerce report, over the last decade FDI has created five million jobs in the U.S. and $1.7 trillion in investment. Are we to believe that these projects just fell out of the sky, with no help from any local or state economic developers? I’m sure that incentives are important to foreign-based companies looking to expand in America (and economic developers make worthy use of these), but it must be equally important to these entities to know that they have local partners who can help them get up and running so they can start achieving a return on their investment. As a matter of fact, I would be fascinated to learn of even one single example of a foreign company setting up shop in the U.S. without any economic development contact at all.
Lastly, part of my duties involves keeping tabs on all of the projects and announcements taking place across country, and I post many of these to our website and submit them to our Twitter feed. While I haven’t done any in-depth number-crunching, I estimate that a full fifty percent of these announcements involve companies expanding existing facilities in their current locations and increasing their payrolls. These are noteworthy because they often involve help from either the local or state economic development agency with things like loans or bonds to help expand, help cutting through bureaucracy and red tape, or help filling the new positions via workforce training programs. Without this help, many of these expansions might never occur, and less people would be afforded the opportunity to go back to work.
In closing, I am reminded of an excellent quote from Teddy Roosevelt regarding critics:
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again, because there is no effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who know neither victory nor defeat.”
This is a great issue, written by and for people who get things done. Keep fighting the good fight!
Gavin T. Petty