We are losing record numbers of jobs. The number of business prospects has flatlined. The number of applications for public incentives can be counted on one hand.
So, faced with these brutal facts of life and the need for dramatic action, the priorities of the Memphis and Shelby County Office of Economic Development seem strange to the extreme. Its pressing concern is how it can move up higher in the city and county organizational structure. This was the substance of the plea made by the office’s executive director last week to the Shelby County Board of Commissioners.
If there is a poster child for a public agency that routinely takes its eye off the ball, the Office of Economic Development appears primed for that distinction. It produced a surreal moment last week when elected officials, anxious to create more economic activity and reverse the spiraling jobs trend line, weren’t told about the realities of the restructuring of the global economy but the need for the restructuring of the office in the city and county hierarchy.
We’re Not Laughing
It would have been laughable except for the seriousness projected by the office’s executive director.
Inside Memphis and Shelby County Government, it is not only verboten to bypass the chief administrative officers, but it is often a self-destructive exercise as well. A couple of weeks ago, City of Memphis Chief Administrative Officer George Little was summoned to a Shelby County Board of Commissioners meeting to respond to questions about the economic development office based on information supplied by its executive director.
Last week, Shelby County Chief Administrative Officer Jim Huntzicker appeared similarly surprised when the office’s executive director again took his case to the county legislative body. He told commissioners that because his office is part of the Division of Planning and Development, along with other agencies like the Memphis Landmarks Commission, his office cannot operate at its best. He also called for his office to become a division (rather than a department) where he could be a peer with city and county elected officials.
As anyone familiar with the inner workings of government knows, an office’s location within the org chart is largely irrelevant. The lesson was clear when someone as gifted in economic development as Dexter Muller was head of the office. He possessed the credibility and the latitude to take his case to the mayors whenever it was necessary. In other words, it’s not so much where your office is as to whether you have the equity to break through when necessary.
Stuck in Time
According to one commissioner in the meeting, the suggestion for new organizational placement seemed more anchored in ego and perks than evidence and performance.
But all of this is just so much back story. The real story is that Mayor Wharton, with his transition team and with his subsequent comments, is giving serious consideration to dramatic changes in the office of economic development. We can’t imagine that the track record of the office in recent years isn’t cause for concern, and its one-note economic development philosophy – “we need more tax freezes and more money to give away” – seems stuck in an old school approach to the new economy.
The truth is that success isn’t about the organizational chart or about processing more PILOT requests. If we’re going to have a city-county economic development office, it should at least be focused on the right objectives and act as a force for new thinking about economic growth.
Needed: New Ideas
If Memphis and Shelby County are to have an economic development office, why shouldn’t it be supplying its bosses with an innovative plan to encourage and help entrepreneurs, particularly African-American ones? The office is long on tactics and short on vision and long on anecdotes and short on research.
“The key implication for policymakers concerned about restarting America’s job engine, therefore, is to begin paying more attention to removing roadblocks to entrepreneurs who will lead us out of our current pessimism about jobs and sustain economic expansions over the long run,” said a report by the Kaufmann Foundation earlier this year. Despite the regularity of these kinds of reports about the importance of start-ups, it’s hard to see any evidence that their advice is being heeded by anyone in economic development leadership.
Here are the brutal facts: in the recent analysis by the U.S. Bureau of Labor, Memphis lost 17,700 jobs in one year – from April 2009 to April 2010 – and in the 100 largest regions, there were 89 regions ahead of us in jobs growth. Or put another way, we were #90 of 100 in private sector job growth, and any way you cut it, it’s a staggering loss of jobs.
The Very Brutal Facts
It also should be a wake-up call that the economic strategies and programs that we’ve been using have us in a race to the bottom.
To compound the brutal facts, between March 2001 and March 2009, we lost about 17,000 jobs, meaning that in the last nine years, we have lost 34,700 jobs.
Put another way, we have lost 1.5 jobs a day for the past nine years.
It seems nearly impossible to comprehend, but employment here has been stagnant for a decade, and it’s a testament to our stability that our losses haven’t been larger. About 77% of the metro’s jobs are in Shelby County and most of these are in Memphis.
No Growth for 15 Years
And yet, economic development officials treat the PILOT program as if it’s still the Holy Grail. We’ll never know for sure if the tax freezes are necessary because our economic development officials lack the incentive to develop better and more effective long-term programs.
It’s said that we may be in the midst of a jobless recovery and it may be five years before jobs growth cranks up again. In other words, we may have 15-20 years that are essentially no growth in the Memphis region. The out-migration of talent will continue, and as we wrote last week, in 10 years, Shelby County lost about 48,000people and $1.9 billion in income.
Any of this would be cause enough for alarm and cause enough for a new look at what we’ve been doing to recruit and create jobs. Clearly, what we’re doing isn’t working and in the midst of this track record of failure, the best recommendation that the Memphis and Shelby County Office of Economic Development can give us is that it needs to be moved in the organizational chart.
That alone says volumes about our economic development problems.
If the economic development was given its own division, wouldn’t that streamline the ED process? Can you think of NO good reason for economic development to control its own destiny? It’s all about ego and nothing, right? That’s what you’re saying in this article. Couldn’t you at least get to the point quicker?
The entire economic development process needs rethinking and imagination. We’d prefer a nonprofit corporation with both public and private sector involvement and with all public economic development organizations under it.
PS: The point was in the second paragraph.
But can’t the economic development division change quicker if it was in control of its own destiny as opposed to being part of a larger division?
As far as the point, I misspoke. You got to the point quickly, but then you wrote a small novel about it. I guess I was asking for some brevity. I think it would lead to more feedback from readers.
We write long on everything, because we believe that most folks want more than the superficial information they get from media these days. At least that’s the feedback we get from our readers. But we appreciate your constructive criticism.
We don’t understand how the economic development office isn’t in charge of its own destiny. The office appears more worried about who signs purchase orders than developing effective strategies to create new jobs.
Structural changes should follow an assessment and should not be made in a vaccuum.
You can be thorough and succinct at the same time.
Also, can you imagine how long it takes to sign a purchase order in government? Every other person who has to sign a document adds a week.
Finally, if it doesn’t matter, then what’s the problem with letting them have their way?
Because there’s no serious justification for it. It’s just an idea from the folks who think it’s the magic answer. And we think the folks in the office don’t understand that there will also be somebody else signing the purchase order.
It sounds like you need to write your own blog. 🙂
I’m not very well-versed in this issue, I just think there can be a pro-side to this. If Wharton is seriously considering it, then there must be some merit to it. I would like to know a little more of what their argument is. I guess I’m always the devil’s advocate.
Keep writing the good write.
We don’t think Wharton is considering a new division, but a better centralized function. Stay tuned.
We need more devil’s advocates.
Well here’s a thought- we have created a department that is forced into fighting a 3 front battle. On the larger scale the organization is asked to foster and attract quality employment for the local citizenry. On the micro scale it must battle with the State of Mississippi and the local economic development militias funded by DeSoto and a host of municipalities on the southern front and a much more meager force on the western front by way of Arkansas development efforts. We expend so much energy infighting over a corporation locating at any point within a 5 mile radius, it is no wonder that the focus becomes lost.
Think bigger- metro economic development agency? Attract the company and then let the different municipalities duke it out? This might also allow the local boards and agencies redirect their investments towards the much hyped home grown entrepreneurs.
What, you don’t think working all day long and achieving negative results deserves a promotion?
Why, that’s the example that apparently everyone of their generation got as the way to do business, look at the banks, bonuses for failure, One guy got fired to the tune of a 34 million dollar severance package this week.
You’re just behind the times, man, LOSING is the new winning!
Ok, I agree with you on this post and the follow up of believing you should write long because you think we don’t like fluff, true, but, it doesn’t have to be written long for me, just puts some numbers in it, like statistics. Good ole unrefutable math, how exactly have they been doing, trending, etc.
Hey, nice graphic, but, no numbers on it, you know I like the numbers.
What if we stopped competing with surrounding areas?
What if we completely changed the focus of what kind of business we were trying to attract. Mississippi is fishing in our pond, and I bet we’ve stolen their bait more than once. How about if all that ended and we designed a new way, to attract a type of business that we “can do”, with what we have here? But not the same way we have been doing it, as in no more selling on price, because that’s a long one way trip to the gutter.
What if we sold companies on quality, our people CAN and WOULD deliver if they were payed enough and treated like human beings.
Pretty much I know most people would be for that, right?
What about companies here, how would they make it work? How would hey sell customers on quality instead of cheapness? maybe if companies didn’t think they had to “last forever making he same products” and instead EVOLVED with he market, they could continuously employ the same employees for decades without being a detriment to society as a whole for the effect of substandard everything from wages to product.
Take the Royal Typewriter, you can find those blasted things still working some places right now, but, they went out of business. Not because their typewriter was inferior, but, because they were not positioned to evolve. They FOUGHT “the next thing” when they could have taken their ethic and made a better, newer mousetrap for the new mice.
Like Apple Computer. They don’t fight evolution much.
Computers were big when they started they outlasted IBM, then laser printers, PDA’s, phones that do stuff, software, internet servers, computer graphics, home desktops, Ipods for music, WIFI hubs, wireless backups that can go back to specific points in the specific computer’s history, and they aren’t losing any ground.
They also look good, better than other computers.
Memphis could do that.
What do we have more of than we can use?
Employees.
What does the world need, especially the USA, that we DON”T need to get from the orient?
Generators that harness the sun and the wind.
How can Memphis benefit from it?
We can get the HUMONGOUS city utility bill, and MCS’s, out of the tax bill for every citizen. LOWER TAXES.
We can lower our carbon footprint to a baby’s print.
We can utilize our location and our favorite shipper to get them distributed.
We could sell them to MLGW to deploy in neighborhoods in Memphis and lower the utility bills by lowering the consumption of other expensive sources of electricity.
We could make three things, 3-5 kw solar dishes and the sterling motor generator, and horizontal axis and vertical axis wind generators that are low profile and roof mounted to capitalize on roof thermal currents to generate electricity when the sun is out, and batteries to store excess to be used at night and on dark days.
Is that so impossible?
I don’t think so.
Who gets hurt by that plan, seriously, WHO?