Why we don’t get economic development: we don’t really want it.

Ask any civic leader the number one thing they want for their town and
“jobs,” economic development, is what they …

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If you are not reading the Urbanophile, I think you should.  Aaron Renn brings a new perspective to the discussion of local government, planning and economic development issues that should be required reading all over.

Aaron’s essays are usually detailed, well-documented and powerfully convincing.  In a recent short essay, though, I think he was exploring something that he didn’t completely unpack.  It’s unnerving to pretend you know what someone else meant to say, like I did to Matthew Turek last week week (Las Vegas bookies put it at 5-4 that I got something wrong).  But Aaron’s brief post generated such a response from people who I suspect were more equipped to read between the lines on this topic, that I think what he wrote is worth exploring a little more.  And from a sheer power and thoughtful provocation approach, I definitely think you should hear what he has to say.

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Ask any civic leader the number one thing they want for their town and “jobs,” economic development, is what they will likely tell you. Yet when you look at the incredibly poor economic development track record across America, despite… billions of public dollars pumped into projects ostensibly designed to produce it, it’s enough to prompt one to question whether or not economic development is actually really wanted at all.

Jane Jacobs once said that “Economic development, no matter when or where it occurs, is profoundly subversive of the status quo.” This, in a nutshell, is why policies and programs that might actually move the needle and generate economic development are not implemented. The politicians, power brokers, businessmen, non-profit executives, etc. all at some level benefit from the status quo. Anything that disrupts the status quo is a threat to them….

Economists have a concept called “revealed preference” that suggests that consumers reveal their true preferences through the actual purchasing decisions they make. Applying this to public policy, it’s hard not to come to the conclusion that the real preference of the powers that be in most places is the maintenance of the status quo, not disruptive economic development. It probably also explains why every city obsesses over “talent” publicly, but almost none of them undertake actions that might actually attract it for real.  [emphasis mine]

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Ouch.

I agree with Aaron’s assessment here, at least behaviorally (he doesn’t do any psychoanalysis of why, which would probably make a mess of the point of the passage anyways).

If the purpose of economic development is to change the economic direction of a community – whether subtly or profoundly – then the conflict between rhetoric and revealed preference that Aaron theorizes makes sense.  If nothing else, it’s the devil you know versus the devil you don’t.  If your work and your mission is about “profoundly subverting” the status quo, or at least of changing something in the hope that it will work better, fear of that change would logically create a headwind against any such efforts.  That’s a universal —  whether in economic development, transportation planning, your own sleeping patterns, you name it.   Welcome to Sociology 101.

And if you come to economic development from an old-fashioned sales-oriented approach – what I uneasily termed the “Old White Guy” paradigm – then you are probably not equipped to fight that headwind – or you might avoid venturing out into it.  If your only tool is a hammer, you’ll have a hard time cutting a bevel joint in the woodwork.

In this context, the ongoing incentives debate in economic development circles is both a central issue, and a red herring.  The money involved, and the lack of other funding sources, necessitates that we make certain that we are using those resources to get the most impact we can squeeze out of them.  And for me, the strongest takeaway from the light that has been shown on incentive practices to date has been that… we really don’t have the information we need to answer that question conclusively.

But the squabbles over incentives – yes-no-yes-no-yes-no – threatens to pull us away from the bigger issue, the realization that should keep you up at night, if it’s not already doing so:

The world in which we work, the world of the communities in which we have this responsibility to make something work better than it is…that world has changed and is changing.  With stunning, mind-blowing speed.  It’s changing from top to bottom, locally and globally.

And we don’t know where it’s going.

Any cause for confidence that we used to have, any sense that we can predict the future or make comfortable projections from today to tomorrow, should take a flyer out your window, if it hasn’t already done so.

2005, or 1995, or 1975, isn’t coming back.

It’s not surprising that electeds and staff and communities resist change. But the fact of the matter is, we don’t have that choice anymore.  It’s gone, or going – maybe not today, maybe not next week, but soon.  Way sooner than you think.   You and your community, and your electeds, can stick your collective head in the ground, or you can start to build your capacity to handle change.  And like anything else, it’s a matter of baby steps before you learn to run.

More tomorrow.

 

14 thoughts on “Why we don’t get economic development: we don’t really want it.”

  1. Interesting observation. I’ve worked in communities where economic development meant ONLY industrial development. In one particular community, revitalizing downtown was seen as the job of the private sector and not in the province of city. In another community, the owner of the local bank wanted to be part of our development departments activities – covertly. And he did his damnest to make sure that artists, bohemians, etc., were not part of the plan. In the same community, we were pressured by the council to provide economic development, but council would not fund ED activities and the clerk of council controlled the website – we could not promote available buildings and land, among other things. So, “old white guy” paradigm — yeah — lived it.

  2. I too have live this old paradigm even though I was directing a very successful Community Development department that before I came was considered a joke infact the City Manager had dismantle the department.

    In the beginning when we first started proposing projects it was a joke to the administration but later after a few successes and after the majority of the community started buying in . My department found ourselves having to look out for obstacles set up for us to fail. After a while it became so blatant that we were told that we were not going to be allowed to do certain activities that obviously were in the community’s best interest.

    Even though the majority of the community felt we were doing an excellent job the Manager and others within the organization made my department and more specifically me a target. I don’t care how good you are if you’re walking around all the time with a target on you’re back sooner or later someone is going to tag you.

  3. Tried to convince a suburban town that already had a reputation as an activity center (because it was near a former military base) in a sea of peaceful (read dull) town centers to capitalize on its reputation and encourage restaurants, bars, live entertainment. Turned out that they preferred to forget their former position and be more like their boring neighbors than be a center of attention and economic activity.
    Their goals, their decision, but it did raise the question of how the ED goal compared to other goals such as social status and tranquility.
    I see the same for communities that claim to put their kids first, but oppose any building or activity that will attract or entertain kids for fear of kids being attracted, having fun, becoming boisterous, or …?.

  4. There’s nothing more counterintuitive than a Government worker presenting an entrepreneur vision to their current employer. The Economic Development person won’t risk their own job to create one for somebody else. The problem is the structure.

  5. While I am unfamiliar with Aaron Renn his treatise on our sclerotic leadership to affect true change is accurate. In order to take the sort of action our economy needs to increase GDP, create new jobs and revive the entrepreneurial spirit that has always been the backbone of our economy would be a departure from the current ‘comfortable rut’ our leaders continue to travel. I applaud Mr. Renn, but now for the tough part – we have identified the problem what are we going to do about it? The solution is in the hands of the private sector.

  6. This problem of “status quo” is not limited to only economic developers. In fact this dilemma affects all human beings, some more than others of course. The emerging research from social neuroscience and social psychology strongly suggests that our primitive negative instincts (stemming back to our caveman roots) are more powerful than once realized. Not to mention evidence that indicates our unconscious wiring affects our economic behavior in evaluating an opportunity or threat.

    In fact it has been shown in clinical tests that humans tend to overestimate the value (good or bad) of things in the present and underestimate the value (good or bad) of things in the future. What am I saying? As Jane Crawford, a behavioral expert, for humans attention has a negative bias. It is much more useful to notice the tiger lurking in a tree than the tasty fruit on its branches.” As a consequence, our human brain are wired generally to avoid loss more than to seek gain. Distrust is easier than trust.

    So if we all are predisposed to this negative bias how can we ever over come this? Are we doomed to repeat our old habits. Absolutely not, it just requires concerted efforts in overcoming this tendency in both the individual and in the decision makers to make positive behavioral changes that ultimately results in new positive outcome.

  7. Our graduating class of students receiving the MCP from UC Berkeley had our class t-shirt printed that said “UC Berkeley Department of City and Regional Planning: Enshrining the Status-quo”. It was a critique that even the institutions that think they are progressive aren’t.

    My first big take away from Della’s eloquent post: Individual economic developers, or even economic developers as a profession, cannot maintain the status quo, because the world is changing whether they are ready for change or not. It’s in this context I keep wondering, why are some EDpros so scared of change? It’s inevitable. They can either be ahead of the curve or run over by it.

    My second take away: economic development is disruptive to those that benefit from the set of circumstances that got them to their current places of power. If you are an agent of disruption who embraces changing opportunities, then this is fine for you as you’ll adapt. But those that hate change are ripe for disruption.

    1. Wow…what a story, Anatalio. Oh, to have been a fly on the wall… 🙂

      I think you nailed it. We don’t have the choice of _not_ embracing change. We don’t have the choice of pretending we can go back to some supposed simpler time. We just don’t. And that has major ramifications for what we do and how we do it.

      …”those that hate change are ripe for disruption.” Well said. Thanks!

    1. Ow… really? Definitely you guys are pushing the change that many probably don’t want to believe they need. Hang in there, Antony.

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