Saturday, November 14, 2009

Economic development must move beyond taxes, freeways, railroads and land, to talent, education, innovation, and entrepreneurs

Every twenty years, South Carolina lands a major buffalo like BMW or Boeing. Attracting Boeing is terrific in itself, but it likely will reinforce the bad habits of the economic development community to focus almost all their efforts on industrial recruitment in order to land the next buffalo.

Need proof? In a recent meeting, the Anderson Independent reports that economic development leaders reemphasized the traditional industrial recruitment strategy as the path to prosperity for Anderson. “The tax structure here, the freeway, the railroads, this is a logical place for companies. But you have got to have a location for them to land on.” The economic development leadership “challenged Anderson County today to offer aggressive tax benefits and build inventory of available sites to try to land large industries.”

Is this view of economic development wrong? Well no, if the objective of your economic development strategy is to recruit the next branch manufacturer. But is this to best economic development strategy for the future of Anderson Country, or for the rest of the state for that matter? No. Not in the 21st century global economy.

Anderson needs to move away from trying get branch manufacturers to locate there because they have cheap land, cheap labor and incentives. As the singular focus of economic development, that strategy is obsolete.

The largest private employer in Anderson in AmMed. How does Anderson grow AnMed? And how does Anderson grow an ecosystem of small and medium companies and education institutions that make AnMed as the health care anchor of Anderson more innovative and productive? How does Anderson identify and support the high impact entrepreneurial company that starts-up to meet an AnMed need, and then can grow into a major company serving other hospitals across the country or even globally? Focusing on growing health care, and making it more innovative and productive, can grow thousands of well paying, stable jobs in Anderson.

There are eighteen high-impact companies forming the “Clemson cluster,” that have grown up in recent years around the university. How Does Anderson make sure that some of these seeds are planted in Anderson to grow into the next major company headquartered there?

Anderson has major production facilities, like Michelin, Bosch and others. How can Anderson grow an ecosystem of small and medium companies and education institutional around these anchors that makes them more innovative and productive? Recruiting BMW manufacturing was great, but that was followed by leveraging that relationship using Clemson as a magnet to attract the BMW Information Technology Research Center as a foundation of CU-ICAR. How can Anderson leverage their relationships with global companies to attract other, more innovative parts of those companies, especially around the Clemson Advanced Materials Lab which is located in Anderson?

Speaking of start-ups and small and medium sized enterprises, there are very talented and experienced people associated with Tri-country Technical College and Anderson University. How does Anderson incubate business opportunities spinning out of those institutions, as well as Clemson?

All of this requires top flight talent, which Anderson won’t have unless it reforms public education. Anderson has one of the better public school superintendents in Becky Bagley in Anderson District 5. How does Anderson support her and make sure the other public schools districts in Anderson are high quality? A national leader in Montessori education, Paul Epstein, is the head of the Montessori School of Anderson. How does Anderson makes sure more students benefit from this wonderful asset? Anderson has an incredible champion focused on early childhood education for children in poverty, Roy Jeffcoat. How does Anderson makes sure Roy’s program get the support it deserves?

Anderson needs to make sure that it hangs onto, and attracts more of, its best and brightest talent. I recently was in a meeting in Anderson, where an educated young woman said she had recently moved to Anderson after considering several other places in the Upstate, like Greenville. She intentionally chose Anderson because she thought it was a wonderful, walkable, green community. Anderson needs to grab hold of young people like her to understand and build on what they find great about Anderson so they attract and retain more of the best and brightest.

Am I being too harsh on the economic development community? I don’t think so. I hope they take this as a sobering call to action. Instead of focusing myopically on taxes, freeways, railroads and land, economic development professionals also should focus on talent, education, innovation, and entrepreneurs. The SC Department of Commerce, the Upstate Alliance, and the Anderson County Office of Economic Development need to develop and execute a comprehensive economic development strategy of which industrial recruitment is a part, but where cheap land, cheap labor and incentives are no longer treated as sufficient for Anderson to become the prosperous community its citizens aspire for it to be.

By John Warner, Courtesy of Swamp Fox

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