Those of you who read this blog regularly, may have noticed that I tend sometimes to wax philosophical. Today is one of those days. I’ve been thinking about why it is we do economic development.
You may remember the hoopla this spring surrounding an episode of the popular NPR show This American Life called “How to Create a Job”. The episode questioned the value of economic development as a profession, suggesting that economic development doesn’t really create jobs but merely moves them around from one place to another (i.e., a big win for one community is another community’s unfortunate loss, which amounts to a zero-sum game). There were a lot of hurt feelings in our profession surrounding this episode.
When someone suggests that your life’s work doesn’t really amount to much, it’s easy to get your feelings hurt. What can sometimes be a little harder to do is to step back, get some perspective, and realize that you’ve been given an excellent opportunity to dispel misconceptions and give a reasoned defense of the value of the work you deem so important.
In June, the IEDC published a letter objecting to the way economic development was portrayed in the episode and condemning the conclusion that economic development is not valuable. The letter made some fair points (including the point that economic development is largely carried out at a community-by-community level) but ultimately it failed to provide a defense of economic development.
It’s part of our job as economic developers to convince people outside of economic development that our work is valuable. On a regular basis, we must convince school boards, planning commissions, and elected officials, just to name a few. If we want others to see the value of our work, we need to make a convincing argument and dispel popular misconceptions about the purpose of economic development. And, we need to be able to respond constructively to criticisms.
On that latter point, let’s look at NPR reporter Adam Davidson’s argument from “How to Create a Job”. It seems to go something like this:
1. The purpose of economic development is to create jobs.
2. Economic development doesn’t really create jobs (or not enough anyhow).
- 2a. (evidence in support of 2) Economic development may appear to create jobs if we focus on the local level, but considered from the national (or further, the international) level it seems that economic development is merely a matter of enticing companies to move from one place to another, and take their employment opportunities with them.
- 2b. (more evidence in support of 2) Economic gardening claims to grow jobs by nurturing potential local entrepreneurs and small business owners, but this strategy takes vast amounts of resources and more often than not results in very few job creations.
3) Therefore, economic development does not serve its purpose.
The IEDC’s response takes issue with premise 2, saying, in essence, that the evidence in support of 2 is misleading. But, like it or not, 2 isn’t exactly false: 2a is a sad, and far too often unacknowledged, truth of our profession; and, 2b is another sad truth—economic gardening is tough and it isn’t cheap.
The problem with Davidson’s argument isn’t the facts, it’s the underlying assumption that the purpose of economic development is to create jobs.
Of course we want to create jobs. But, job creation isn’t an end in itself. Job creation is a tool for economic growth—we want economic growth and creating jobs helps us achieve that. But, job creation isn’t the purpose of economic development. If we want to deny the conclusion to Davidson’s argument, we ought to show why premise one is false.
How do we show that? We suggest another purpose that’s a better explanation of why we do what we do. So then, what is the purpose of economic development if not job creation? The goal that job creation helps us achieve, namely, economic growth? Well, yes, but. . . economic growth isn’t an end in itself either. We care about economic growth because we are working under the assumption that money plays an important role in making our lives better. What we really care about in economic development is making our lives and the lives of everyone in our community (be it local, regional, national, or global) better.
Economic developers create strategies and make plans for the financial future of our communities. Planning for our financial future is important for our communities, just as it is for our families. But, securing our financial future—and getting richer—is only part of the story. It’s not money itself that makes our lives better, it’s what money can buy like food and shelter and healthcare and art museums, parks, and educations.
Good economic development is holistic; it takes (or should take) all of our quality of life concerns seriously, precisely because its main concern is improving our quality of life. Any good economic developer will tell you that, but the truth is we sometimes we let ourselves lose sight of it. We’ll call a new coal-fired power plant a win and tout the number of jobs it will create even when the social costs and other negative externalities associated with the plant’s operation outweigh the economic growth it brings. When we lose sight of the bigger picture, when we focus just on job creation or just on economic growth, we inadvertently validate misconceptions like Davidson’s that economic development is just about job creation.
If we don’t take the time to dispel such misconceptions, we shouldn’t be surprised that people outside our profession are confused about the value of economic development, about what we’re really trying to do and why we do it.
Mac Holladay has been known to galvanize audiences of economic developers with a rousing “This is important work,” but it can be hard to translate that feeling that he’s right into an argument that convinces your stakeholders. I hope you’ll come away from this blog post with a better idea of how to craft an argument that does not merely focus on how many jobs your organization created last year, but also gets at the heart of why we do economic development at all—to improve the lives of everyone in our communities—because that’s the kind of argument we’ll need if we’re going to be convincing.