Guest editorial: Here’s how to create a viable economic development strategy
Vermont’s economic development strategy needs coordination — and perhaps centralization
Vermont has no long-term, well-articulated economic development strategy, nor the funding capacity to execute one.
It’s not that we don’t spend money on economic development. There are many earnest people working hard to generate economic activity in Vermont, although we often confuse economic and community development; a Greensboro Pride Parade or town green replanting is not “economic development.”
The modest state budget we do have for economic development is doled out and jealously guarded by small fiefdoms operating regionally and, to some extent, statewide. Each time there is an executive or legislative attempt to implement a broad, strategic, statewide economic development plan — one that acknowledges regional, and international realities — it’s opposed by existing beneficiaries that assail the legislature to protect their mission. What’s left is inadequate to fund a statewide strategic initiative.
Complicating the lack of funds to develop and implement such a strategy are several negative socio-economic indicators that inhibit our growth:
• Demographics. Vermont’s annual birth rate in the last 20 years has dropped from 7000 to some 5400. Our median age is five years older than the national average. Our work force, markets, and population are shrinking. Urbanization is propelling our once thriving rural communities into our few urban centers for employment. There are more jobs than qualified people to take them.
• Broadband deployment. A modern economy requires ubiquitous and affordable broadband access. In the past, the federal government took the lead on rural electrification and universal phone service but has punted on broadband access, leaving it to the impoverished states and municipalities. Vermont is a patchwork.
• Affordable housing. Vermonters cannot afford to live where they work and there’s not enough public transportation buildout to allow them to easily commute.
• Childcare. One clearly documented problem for workers — and therefore employers — is the lack of affordable, quality childcare statewide.
The business community itself, when recently polled, has a dominantly negative view of near-term business prospects.
Because we have no overall strategy, our priorities for business growth and our message to potential partners is unclear. I attended a recent Grafton Conference on the Arts and Humanities, which focused on their ability to tell story, bring to life the human impacts our challenges pose, and dream large about solutions. A big take-away for me was about our traditional definition of a “Vermonter,” to which — not being one — I had always subscribed … a white man or woman probably with agrarian roots whose family dates back at least several generations. Wow! — there’s an exclusionary definition. Imagine if our vision of a “real Vermonter” were someone of any age or color who chose Vermont for its opportunities, lifestyle, and values.
A feasible strategy must start with an in-depth assessment of all of Vermont’s businesses, from convenience stores to major employers. It would include the non-profits, which account for 20 percent of jobs. (Of the four largest Vermont employers, three are non-profits: UVM Medical Center, the State of Vermont, Global Foundries, and UVM.) This database would include a core business descriptor, the number of employees, and gross sales. It would also accommodate employer-option inputs for enterprise goals, challenges, and sought partnerships. It would be open to research by businesses or non-profits seeking partners, products, acquisition, or new markets.
Productive economic policy would also maintain a similar network of significant regional research entities and colleges that could partner with existing businesses to solve challenges or entrepreneurialize intellectual property assets. A business is a practical laboratory. By way of example: a grass-fed beef farmer might find the answer to a specific challenge in research being done by a soil scientist at Cornell, UVM, or Sterling College.
How do we rise above “business as usual” and develop a statewide strategy and communications plan for economic development? It will necessitate some reallocation of current resources which will, no doubt, trigger a defensive response from legacy recipients.
What if, instead of just annually allocating money across a dozen entities, a central economic development authority were to use its resources to fund development projects based on their intrinsic worth, measurable outcomes, and their consistency with a Vermont strategic plan?
There’s a model for this. Some years back, the then-Chittenden County United Way recognized it couldn’t continue to fund all of the non-profits requesting money. It laid out a county-wide list of challenges and invited non-profits to apply for grants that would remediate the outlined challenges and then held them accountable for outcomes. It was radical at the time but it reallocated scarce resources with much greater efficiency and effect. We must do the same in economic development if we are to ever make a dent in our economic well-being.
Some have suggested we move economic development out of the government sector. I struggle with this. Our socio-economic challenges usually end up being solved cooperatively between the business, non-profit, and government sectors. To simply abandon a manifest government function and toss it to the non-profit sector or privatize it is no solution.
Good news is … a growing economy will address many of the socio-economic problems that bedevil us.
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