I Worry About The Image of The Economic Development Profession

Your true character is revealed by the clarity of your convictions, the choices you make, and the promises you keep. Hold strongly to your principles and refuse to follow the currents of convenience. What you say and do defines who you are. And who you are, you are forever.

Source: Successories

There Has Got To Be A Better Way

I have been talking with a number of economic development professionals across the country, so I know I am not alone in my concern. Two issues that have real potential to damage the image of the economic development profession – 1) Incentive packages are getting larger and 2) company attraction tactics are getting more aggressive.

The deal between Tesla and Nevada is a recent example of the magnitude incentive packages are reaching to close deals. The public sector is investing $1.2 billion to bring an estimated 6,500 jobs to Storey County (population 3,935 in 2012). The Reno Gazette-Journal published a good article detailing the specifics of the deal. As thorough as the article is, it fails to talk about the additional investments taxpayers in Storey County and the state will need to make to accommodate the facility and the increased population associated with it. The lives of current residents will be forever changed in the name of economic progress. So what is the true public cost of this deal? And what if Tesla Aftermarket ends up being a business failure? After all, it is not like established auto manufacturers aren’t entering the market (e.g. BMW i3). Is this ultimately a good deal? I don’t have the answer, but the residents of Storey County better hope it is and better hope Tesla is successful. And, as a profession we need to hope Tesla is successful otherwise we will collectively look like trading cash for magic beans is good economic development. At a minimum, economic development leaders in Storey County will need a disaster plan to handle the downside risk of a Tesla market failure.

On the second point, the tactics being used in Texas to “poach” companies from other states is concerning. I appreciate Texas has a historical appreciation for rustling. But, in Texas rustling used to be a crime and rustlers were hung from the nearest high tree branch for perpetrating it. Now the state is getting predatory in its company attraction efforts denigrating other states in the process. I don’t have any personal problem with aggressive competition, but I do have a concern when it involves bad mouthing the competition in order to make your state business climate appear better than it may actually be. I worry about the ethics of that approach and the potential negative impact it can have on the economic development profession. Getting ahead by bad mouthing the competition doesn’t sit well with my personal principles. Nor, do I believe should it with our collective professional principles.

In a prior blog post “Are Deal Incentives Killing The Economic Development Profession?”, I attempt to shine a light on how the above practices may be having a negative impact on the economic development profession image. I am genuinely concerned that if www continue on the current path the profession will pay a price. I believe it will be increasingly hard to encourage the best and brightest to enter and/or stay in economic development. Given the importance of the profession to our national economic prosperity, this should be a topic of interest to everybody involved.

I don’t profess to have answers.

But I am trying to highlight some of the right questions. It is a debate I encourage you to enter and share your thinking/experience. To be clear, in no way am I trying to make the case that incentives or aggressive competition will (or should) go away. I am suggesting though that there is an accountability to better enabling our residents to achieve their American Dream that needs to be considered in deal making and a set of ethics that should guide competition practice.

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