I have personally observed the broken city economy story in many cities across the USA. The names are different, but the story is the same. The economic development methods of the last 20 years, which focused on replacing or growing jobs through tax benefits and buying the relocation of business units, has failed. Only people who see the emperors new clothes fail to accept this fact. The old economic development tools failed, not because they were inherently flawed, although they have received appropriate criticism on this basis; but because the facts of the last 20 years are now surfacing like the explosion of a submarine breaking the ocean’s surface.
The facts are that businesses of fewer than 50 employees create 2,000,000 jobs per year. The fortune 500 creates very few jobs. IBM a $100 billion dollar behemoth has fewer employees today then it did in 1990. When Nations Bank merged with Bank of America, 75,000 jobs were eliminated. The manufacturing industry has shed jobs like a snake sheds skin. We do not make televisions, microchips, computer monitors, computers and cell phones. We do not even make the age old American "Monopoly" game, which quietly displays a made in China sticker on its box. It does not take a genius to recognize that the nation that we joked at in 1960 for making tiny umbrella shades that went into drinks now makes most of the electronics that operate our airplanes, our computers and most of the appliances in our home. You do the math. Losing the manufacturing job competition is a lot like gaining weight; we know we were thinner, but we just do not remember when.
A new century with new problems requires new tools to turn the problems into opportunities for the local communities. Software code will be written in some cities. Web based businesses will be located in some cities. Wireless products will be built in some cities. How many of these jobs will be available in your community? This is a function of the leadership of the region and the state.
The Fortune 500 mystic is dead. In 1998, Fortune Magazine listed Enron as the Number 1 most admired company in America. Enron was also given high marks in the same ranking for innovation. Only three years later this view has dramatically changed. More than 50% of the Fortune 500 companies in 1987 are not on the list in 2003. 16 years of change.
I worked in Silicon Valley for 20 years. I did work for 3 years in Paris, France and traveled extensively throughout the middle east, Europe and South Africa. People would ask me how we can create a Silicon Valley in our community. What was the plan that created such a mammoth job creation engine and drove property values to create wealthy people who just lived there? There was no plan per se. However, there was a conscious effort to create an entrepreneurial environment.
The winning regions develop a culture that accepts failure as training, recognizes contribution over ethnicity, rewards people who build a business and respects wealth creation, not wealth redistribution, as an important component of the economy.
What is your region doing?
No comments:
Post a Comment