So, now, we yet again have a new regional economic development plan.
Last week, the latest plan was launched in a public meeting of the Memphis & Shelby County Regional Economic Alliance attended mostly by the usual suspects and was provoked by the outburst of tensions last year between EDGE and Greater Memphis Chamber although the former’s president and the latter’s chairman of the board did not attend the kickoff.
They were central figures in the process leading to the announcement, and the good news from the controversy is that Memphis’ poor economic growth was called out for the first time and a new sense of urgency injected into local economic thinking.
In its way, the rollout was déjà vu all over again. After all, it feels so much like a list of priorities we’ve all seen before.
What we’re hoping is that déjà vu doesn’t also characterize what happens next, which in the past has been a lot of upbeat speeches at kickoffs, an initial burst of activities, and then inconsistent follow through, if there was any substantive follow through at all. Normally, after a few years, no one is referring to the plan’s priorities at all.
There’s Always One More
It’s only been six years since the last one, A Roadmap for Transforming the Memphis Economy, developed during the term of Memphis Mayor A C Wharton Jr. with a collaboration with county government, EDGE, Greater Memphis Chamber, University of Memphis, FedEx, and more. It pointed out how much the local economy lagged behind those of the U.S. and peer cities, and it targeted startups and entrepreneurship, global logistics, international trade, workforce development, and regional governance. It is difficult to point to any real movement that flowed from the plan.
About seven years earlier, in 2006, the Memphis Fast Forward economic development plan was unveiled, led by Memphis Tomorrow which had been asked by Memphis Mayor Willie W. Herenton Jr. and Shelby County Mayor Wharton to develop it. Subsequently, it was called a model collective impact process by a national consulting group. Greater Memphis Chamber and dozens of other local organizations participated in the process which was as much about establishing the infrastructure – or backbone organizations – to improve the factors affecting economic outcomes as setting specific priorities. It did set specific goals for jobs creation which fell short despite considerable funding from the private sector.
In 2001, The Memphis Sourcebook, developed by the Governors’ Alliance for Regional Excellence, but driven by Shelby County Government and Greater Memphis Chamber, was released as the definitive regional economic development. With Charlotte, NC-based Michael Gallis of Gallis & Associates as consultant, it was arguably the most ambitious plan ever undertaken in our region and perhaps its approach was too “big picture” and visionary for the regional appetite and it never produced the kind of change in thinking that it should have sparked.
Building a Scaffolding for the Future
We’ll stop there, but those are just the major economic development plans in first two decades of this century.
Truth be told, none of them ever provided the disruptive innovations that we need to fundamentally change the trajectory of the Memphis economy or the forces that define it. As a result, there was no discernible improvement in key economic indicators for the Memphis region, which continued to languish, and as a result, Memphis was in the last handful of cities that took 10 years to return to its pre-Recession levels.
Each of them largely existed in isolation rather than building on the one that came before or became the scaffolding on which all economic development efforts were built.
It’s a curious anomaly of economic development planning in Memphis and Shelby County. Each plan is accompanied by terms like transformation, new framework for growth, innovation, catalyzing new development, and other hyperbole, but they tend to be an ad hoc approach that starts the clock anew as if the previous plans never existed.
More to the point, because they also have seemed content to build on the existing economic order, they have done little to nothing to close the income inequality gap, whose closure represents the single biggest opportunity to expand the metro GDP.
Finally, these plans are regularly developed by talking to local CEOs when the net for more voices should be cast wider, but we continue to operate on the pervasive notion that business leaders are also economic development experts. That’s not to say their opinions are not important and valuable, but they often produce priorities that seem to be the local economy as seen through rose-colored (or self-interested) glasses, absent the academic rigor that our universities’ own experts and others can supply, much less the place-based, neighborhood-centric development plans that benefit the entire community and not just the established order of things.
The Latest Plan’s Priorities
So, the latest regional economic development plan led by Mass Economics of Cambridge, MA, produced these priorities:
* The medical device sector. This has been a priority pursued by Memphis Bioworks Foundation since its founding 17 years ago and has appeared before in economic development plans. It continues to be a prime target to be exploited, and Memphis deserves credit for taking a more nuanced and focused approach when city after city spent millions on biotech centers whose overall results were underwhelming for most.
* Transportation, distribution, and logistics firms. The no-brainer that shows up on every list but usually without a plan for how to leverage the region from the company town reality that exists today and to produce jobs that pay a living wage (not $15 an hour but a living wage in keeping with the MIT Living Wage Calculator). TDL was a centerpiece of the Brookings Institution plan.
* Food and agricultural technology. Agricenter International, whose successes have been modest, approaches its 30th anniversary. Memphis Bioworks Foundation’s Peter Nelson, and his compelling vision of the Memphis region, put bioag on the local agenda and created the AgLaunch program 12 years ago. In addition, Indigo Ag may be the best marketing hook we’ve had in years.
* Business services calls for nurturing minority firms. Minority business generally have been firmly on the Memphis agenda for the past five years and with this plan, the hope is to turn a talking point into a detailed plan of action.
* Emerging technology. Memphis has always seemed like the awkward kid at the dance in going assertively for technology jobs (just over the past weekend, we talked to two people moving from Memphis because of a lack of technology jobs). In the past, we’ve offered more explanations about why we can’t compete than forging a clear competitive path to the future. The enterprises identified in the latest plan have been driving this priority for many years.
* Music. Music was last found on the Memphis Fast Forward list, and often feels like it’s included as a politically correct addition. It is difficult to envision a market-driven strategy and it’s likely that we’ll call incremental progress a success.
Pitfalls from the Past
So, looking back, What kept previous plans from having traction?
The chief reason that the impact of the plans was limited was because sustained focus and concerted efforts are needed, but plans are often personality driven. For example, a mayor convenes a group and calls for a plan. Everyone feels compelled to join in the process, but they aren’t really invested in the results. For example, it’s been said that although EDGE was the organization leading the Brookings plan, it never really committed to pursuing its recommendations. That feels too simplistic for us because we didn’t notice anyone picking up the baton and running with it as the politicians moved on to other things and the pressure to make something happen faded.
These kinds of territorial issues often dog these plans, which are seen as this mayor or that mayor’s plan, or Memphis Tomorrow’s plan, the Chamber’s plan, or FedEx’s plan but it in truth, they’ve never been embraced broadly as the community’s plan. Memphis Fast Forward came closest but in time, its emphasis dissipated with the instructions by the city and county mayors for newly created EDGE to be in charge of developing an economic development plan.
In addition, because many plans originate in the political sector, they are short-term in nature when the kind of economic progress needed here requires decades of sustained implementation.
A Reason for Optimism
So, the next question is, Why should this plan be any different?
For us, the involvement of Cambridge, Massachusetts-based Mass Economics and its principal, Teresa M. Lynch, are reasons for optimism. While the recent plan’s priorities may feel pretty much like the standard list we’ve become accustomed to here, she has worked in this community before and knows it well and her approach is different than the consultants normally hired for this kind of work.
In 2013, Mass Economics worked for Community LIFT, identifying options for modifying economic development tools and incentives in response to the needs of Memphis neighborhoods. In 2014, Ms. Lynch was on the peer review team that critiqued the research and recommendations by planner and Harvard University professor Toni Griffin that set the framework for Memphis 3.0.
More than that, Mass Economics has a distinctly urban approach to economic growth and unlike many economic development consultants, it recognizes the importance of equity, social justice, and neighborhood-based economic success as core elements of an effective plan for the future.
Those factors alone make this plan different from all the ones that have come before because more than just set out priorities, Mass Economics will develop specific next steps for each one, and if it remains true to form, these will not be perfunctory and are likely to be more values-driven than its predecessors, particularly as it relates to income equity. If our region could close the gap between the median household incomes of whites and people of color, it would produce a $22 billion boost to our regional GDP.
Wanted: A Sustained Sense of Urgency
All that said, we return to what really matters: a structure that sustains the plan for more than a few years of heightened attention and a process that reports to the public on whether it is achieving its goals.
It’s much like the performance management system that the Strickland Administration has engrained into City of Memphis government (and the mayor indicates that this focus on data and results will be built into the new regional plan). The challenge is how to entrench it firmly enough within the city bureaucracy that it survives long after Mayor Jim Strickland leaves office.
The same goes for the economic development plan. The challenge is not to develop a plan – we’ve gotten experienced at that – but to root it deeply enough that the urgency that created it – the very public conflict between EDGE and the Chamber – does not pass but inspires a new burst of determination to significantly improve the trajectory of the Memphis economy.
As we blogged in November, 2018: “We are paying today for the lack of urgency that has characterized our community’s economic development for the past dozen years. That, more than anything, is what any agreement, plan, or way forward must have. “We begin with the acknowledgement that it will not be easy. Today, cities that already have wealth, opportunity, highly educated workers, and high salaries attract more of them. These cities are increasing their competitive advantages in today’s economy. Between 2010-2017, nearly half of the U.S.’s total employment growth took place in just 20 cities, particularly high-paying tech jobs.
“As a result, the Memphis region has to combat two kinds of inequity. One is the income inequality here but there is also the inequality from the widening gap between our community and these 20 major urban centers. Here’s the thing: the workers needed to drive transportation, logistics, and distribution – our economic answers in 1981 – are not the workers who drive our economic future. That’s why the ultimate challenge, not just for the future but for the present economic development planning, may take decades to overcome.”
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