The Future of Economic Development: Part I

austin-distel-wD1LRb9OeEo-unsplashRecently the Brookings Institute revisited their previous position on the future of economic development wherein they postulated that workforce capabilities are what determines successful investment and therefore ought to be the focus of future efforts.  The article advocates for “talent-driven economic development” and the importance of crafting a more visionary approach for the future that is people-focused, less “trickle down” and more “reaching up”. They seem to promoting the idea that by placing the emphasis on growing regional talent versus attracting business the latter will by its own nature occur while also raising the bar for productivity and outcomes in the long term. Coupling this article with the 2019 Business Roundtable manifesto of the purpose of business being to service all stakeholders it feels that there may be a sea change happening. Or is it?

The US Department of State’s USAID vision for global security and individual prosperity has always been predicated upon the assumption that sustainable long-term development begins with broad-based programs focused upon growing market access for all persons. Increasing access to education and funding has been a priority of the agency as it is the agency’s position that the more educated a workforce the greater the growth of economies. While this has been a touchstone for global aid and diplomacy in actuality it has not always been the standard for domestic programs although there is data that demonstrates this is changing. While conventional advertising and marketing to businesses and investors is a powerful driver for many agencies and organizations there has been a noticeable shift in focus that appears to have some correlations with increased access to technology and peer-to-peer enterprise.

Brookings asserts that economies grow when the productive potential of the workforce is developed, citing that the “collective knowledge of the U.S. population is worth $240 trillion…” and argues educational attainment has always been the best predictor for individual or regional success. Therefore, they conclude that the development of local talent ought to be a “fundamental concern” for EDOs and goes on to argue that impediments to education and training ought to be revisited with a clear plan for overcoming them.

Again, these are not new concepts. Training and education has always been considered a priority for lawmakers when devising national and regional agendas. Governmental and private programs focused on creating equal access to educational opportunities have been operating for decades now.  Brookings even acknowledges corporate continuing education programs as being prevalent in the United States with most “white collar” industries. Where, perhaps, there can be improvement is in a culture that economically rewards those who continue from high school into four-year programs over more meritocratic models.

Research indicates that a large majority of those seeking university degrees do so purely to either obtain a job or receive a promotion at their current job without too much thought given into the actual field of study.  Outcome assessments reveal a population of people who had no real interest in their field of study outside of economic benefits. Happiness factors are bottoming out among the educated workforce as many feel trapped in careers that they have no real love for. A few years ago The Atlantic published an article called: American, Abandon Your Reverence for the Bachelor’s Degree. In it the author walks through various modern scenarios regarding higher education, training programs, and their correlation with promotion and wages to demonstrate the disparity in income related to those who have training, experience, and no degree versus those that do as well as how universities deal with life experience when devising credit hours and degree programs. The author asserts that there needs to be a shift in how we feel about university degrees and what constitutes education.

So while Brookings is correct in the need for education to be a priority when crafting a vision for economic development, there also needs to be a shift in what constitutes an “educated workforce.” Without revisiting how corporation views education and merit programs to promote it can only go so far. It is self-evident that talent driven economies are robust and desirable but what constitutes talent and how does one measure it?

Their article rightly decries the very modest 2% of the $50 billion in US economic incentives going to training but it doesn’t touch upon the changes in culture that have to occur to value training programs at the same level as university-based learning.  Instead it focuses upon prioritizing business outreach beginning at the middle school level in order to drive interest among students still trying to figure out what they wish to do with their adult lives or to create more public financing programs that will equalize educational access among all major socio-economic groups.

None of the ideas presented by Brookings are necessarily bad ideas and are –in fact—very good ideas that will increase access to higher economic opportunity for individuals. A focus on active engagement between EDOs and business, prioritization and development of talent, and increased awareness of educational opportunities beginning at the middle school level are all positive suggestions that has worked to grow the financial capacities of both rural and urban areas alike. However, if one suggestion could be made it would be increased dialogue of work-life balance and how happiness equates to productivity.

The most positive aspect of this article was that it demonstrates the increased awareness and sensitivity on the part of business leaders to embrace and respond to the communities that sustain them. “Profit over people” has always been a chief complaint of workers the world over, so to see prestigious business think tanks incorporate the worker’s success and development into long-term strategies is wholly a positive. Suggesting that economic development agents shift focus towards the workforce is a clear sign that the business community understands the importance and value of their employees and how those employees can sustain and grow their business.

They conclude with “five discrete priorities” for economic agents that can be a framework for a talent-focused vision that is well worth a read. Their article and supporting paper is a clear indicator of where economic development and site selection is headed. Economic development organizations have always known that their community’s is the priority and sustainable growth is what they have sought to attract. The Brooking’s paper along with the BRT statement on corporate responsibility has given them justification to reprioritize or ask for funding to access community educatio

site selection, economic incentive, EDO, Brookings Institute