Adapt to New Rules, But Ask Right Questions

The Memphis News

The economic development game still features victory speeches with an obligatory line that sounds like this: “We stand here today because of a strong public-private partnership that leveraged private investment and resulted in a win-win situation for the company and the community ... .”

Your eyes probably glazed over for a second there. And it’s for good reason. Government leaders have been making the same ribbon-cutting speeches with the same clichés and corporate front offices have been standing behind them clapping politely for decades.

If that’s all you know about economic development, you might not think the rules have changed. But they have.

Economic development plums aren’t what they were in the 1980s when states first started falling all over themselves in the relatively new process of corporate relocations. There is some dispute about who set the rules first – business or government. But it doesn’t matter since the other side quickly countered. Businesses wanted infrastructure and tax breaks. Governments wanted capital-investment guarantees, claw-back provisions and – most importantly – jobs.

The recent series of economic development wins for the city and county have been more manufacturing jobs than we’ve seen in a while. But what’s new is that while they are large plants, they don’t employ as many people as they once did. That shouldn’t be a surprise because the mantra of education reform echoing loudly in Tennessee has been that these aren’t jobs a high school graduate can hold. Our civic discourse is still peppered with calls to do better than “stack and pack” jobs in warehouses and other kinds of distribution warehouses. Even those jobs have been transformed in recent years and it doesn’t take as many workers as it once did to run such a distribution center.

We will always be uncertain about how long these kind of economic gains will remain as long as we put off working on the long-term goal of a citizenry that completes some degree of education beyond high school.

That is the economic development incentive that should assure any legitimate site consultant or corporation on the move far into the future. In the near term, it is imperative for both mayors to cement the progress being made currently by building a streamlined process with a minimum of the political horseplay that accompanied the Mitsubishi and Electrolux projects.

Some of the questions, especially about Electrolux, were legitimate. But they weren’t asked early enough to make a real difference. Some were asked by elected officials using an old trick to get a personal piece of the action. Motive matters and the shakedowns have hurt economic development as much as a lack of infrastructure.

An open process also matters – one that makes a distinction between proprietary information that a competitor might use and general information about publicly funded incentives that the public should know about sooner.