Economic Development: searching for the magic bullet

Our friend Tom Eblen at the Herald has written a nice piece about one community searching for a way to improve its future.

Versailles is one place that is comfortable with having these dialogues.  I’ve participated in many. In fact, in 2000 when I was CEO of Blue Grass Tomorrow, we brought in Doug Henton – the facilitator of the meeting described in Eblen’s article.  Henton had done some meetings in Versailles, and Bluegrass Tomorrow and the Lexington Chamber of Commerce jointly sponsored a talk by him here in Lex.

His points then were the same as they were in Versailles last week:

Long-term economic development isn’t about cheap labor and tax breaks, Henton said. It is about regional collaboration, productivity and continuous innovation. It is about having infrastructure, a skilled workforce and sufficient economic and social capital.

“It’s not just about having assets, but creating networks of people who can make the best use of those assets,” he said. “It’s not just the ingredients, it’s the recipe.”

It also is about quality of life, a hard-to-define combination of environment, resources and social conditions such as inclusiveness. “Economic development today is about where people want to live,” he said. “You can’t have a strong economy without a good community.”

Henton advised Woodford County leaders to assess weaknesses they need to fix and unique strengths — “economic clusters” — they can build on and market to bring money in from elsewhere.

Exactly the same thing our leaders heard 10 years ago.   All this is based on the Silicon Valley model.  And it sounds like it should really work.

Except that it really hasn’t.  Silicon Valley was a historical fluke.  From the 1940s to the 1990s, something unique happened out there.  And then the bubble burst.  So is this really the model we need for the 21st century, when we face energy and resource limits and environmental decay?

The real reason any community in the US has done well in this recession has been one or more of a combination of things:  health care, higher education, and government.  That’s all that’s left of our economy.  And those are bubbles too. Damn, in reality the only economy this country has had for the last 30 years is bubble based.

Henton is right on one count, though:  We need to cooperate regionally.  Not for some “economic cluster model,” but on the things that will keep this place liveable.  Things like a secure, low energy water supply.  Agricultural production.  Mineral and other resource management.  Reality based transportation planning.  Building a stable, long-term regionally- based economy.

Perhaps the trouble with the acceptance of this is contained right away in Eblen’s article:  “How can people there create a more prosperous future while protecting their community’s beauty and quality of life?”  That is the faulty assumption that most people carry around with them.  I think most people assume that prosperity equals more money.  Yet more money means more economic growth, and growth means more damage to the environment and our heritage.   It’s just not possible to have it both ways, even if we truly want it to be so.

But if we redefine “prosperity” to mean health, community, meaningful work, and protection of our environment then we can really begin building a 21st century economy.   And we can leave the snake oil salesmen behind.

———

Tom Eblen: Finding a community’s strengths

VERSAILLES — Woodford County, like a lot of places, is struggling to adapt to a changing economy. How can people there create a more prosperous future while protecting their community’s beauty and quality of life?

Those were the big questions posed one morning earlier this month when community activist Deborah Knittel and the Woodford Coalition, a citizens group, invited more than 100 local leaders to meet in a church’s fellowship hall.

The facilitator was Doug Henton, a California-based consultant who has helped more than 40 communities across the country deal successfully with these issues over the past three decades.

Henton is also a native of Woodford County, where his family has lived for two centuries.

The points Henton made, the questions he raised and the research and further discussions he suggested could help other Kentucky communities that are struggling with these issues. In other words, every community.

To an outsider, Woodford County would seem an unlikely place for anxiety. It ranks first among Kentucky counties in per-capita income, is strategically located between Lexington and Frankfort and has some of the Bluegrass’s most beautiful countryside.

But income statistics may be skewed by wealthy landowners. The Thoroughbred industry is in a slump. Tobacco farming is all but gone, and many of the factories that once gave Woodford County workers a middle-class lifestyle have closed. Conflict over growth, development and land-use planning has created deep divisions.

Henton, CEO of Collaborative Economics of San Mateo, Calif., didn’t come home with all of the answers. What he offered were tips for analyzing a community’s strengths, weaknesses and opportunities, with the goal of creating a shared vision for growth.

Long-term economic development isn’t about cheap labor and tax breaks, Henton said. It is about regional collaboration, productivity and continuous innovation. It is about having infrastructure, a skilled workforce and sufficient economic and social capital.

“It’s not just about having assets, but creating networks of people who can make the best use of those assets,” he said. “It’s not just the ingredients, it’s the recipe.”

It also is about quality of life, a hard-to-define combination of environment, resources and social conditions such as inclusiveness. “Economic development today is about where people want to live,” he said. “You can’t have a strong economy without a good community.”

Henton advised Woodford County leaders to assess weaknesses they need to fix and unique strengths — “economic clusters” — they can build on and market to bring money in from elsewhere.

He talked about his work with Sonoma County, Calif., in the early 1980s, which leveraged its wine industry for more tourism and used its beauty and quality of life to attract professionals who could live wherever they chose.

The Woodford County folks quickly got the point: horses, bourbon, scenic beauty, good quality of life. Other assets to build on: good roads, attractive downtowns in Versailles and Midway and educational assets such as Midway College. They even started reeling off names of people who do business all over the world but choose to live in Woodford County.

The discussion also identified things the county lacks: public transportation, motels, a movie theater, enough affordable housing for low-wage workers.

Then talk turned to deeper concerns: fragmented local governments that don’t cooperate enough, a lack of support for entrepreneurs, friction over land-use planning and old debates over private property rights vs. public good.

The people, seated at round tables, were asked to talk among themselves to identify Woodford County’s strengths and weaknesses. As each table reported, you could hear the buzz: what some thought of as strengths, others saw as weaknesses.

As one table’s representative discussed social issues, Larry Blackford, who was there representing a local African-American group, rolled his eyes and leaned over to me. “They’re in denial,” he said.

Nothing was resolved, but I had the sense that this sort of frank and open discussion doesn’t happen very often.

“We need to listen to each other,” said Dan Rosenberg, a Thoroughbred industry consultant. “It’s not a situation of you’re right and you’re wrong. We all have different perspectives.”

Henton urged the group to keep meeting, identify champions to take on specific issues and visualize what they hope to achieve. “It’s about people and relationships,” he said. “The critical point in all of this is trying to define goals for a shared future.”

It was a good first step. But without diverse leadership and buy-in, Knittel fears, the effort could fizzle. “I think good things will come out of this,” she said. “Any conversation is better than the one we haven’t had.”

For any Kentucky community wanting a brighter future, that’s good advice.

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2 Comments

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2 responses to “Economic Development: searching for the magic bullet

  1. Danny

    Nice comments Steve. It’s been amazing to me how ingrained is the assumption that success and money are the same things. Unfortunately, I don’t see that assumption questioned much here in Lexington (though, to be honest, Lexington’s not unique in this). It continues to drive most of our educational (Top 20) and city (WEG, Creative Class/Cities) actions.

    One would think that in a city of world class scholars at UK, that this assumption would be challenged more directly. Not sure if that’s a UK problem or an academia problem…probably a little of both.

  2. Danny, while the majority of the rest of the world tends to believe that success brings you money(or comfort), we Americans feel that money and comfort are what brings success. The one(money) will bring the other(success) What bothers me most is the way that we cannot or will not try to make ALL American successful. We HAVE to be the most successful of all, or it doesn’t matter. A rising tide should raise all boats, except that our tide must swamp all other boats.

    We are going about it all wrong.

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