Economic Development: We can do better.
In a recent VTDigger piece, Secretary of Commerce and Community Development, Mike Schirling, highlighted actions his agency has taken to make a positive impact on Vermont’s previously lackluster economic development program: “focusing on fundamental activities, supporting economic growth, and affordability.”
There are many moving parts to economic development. Presently, Vermont has spread those needs across various constituencies. To be successful, they will need to be reorganized under one comprehensive office with a clear mission and sole authorization –including the management of the funding steams such as VEDA, VEGI , and the like that support grants and loans.
Unfortunately, the legislature also allocates what little there is of its funding for all economic development activities over the regional development authorities, the industrial development authorities, and county development groups. This dispersal of assets clouds strategic initiative, focus and mission, and diminishes overall results. With the exception of very recent actions by the ACCD, overall results have been marginal. Economic development is a potent political catchphrase but in reality, has contributed little to Vermont’s growth for decades.
Successful economic development programs are by their very nature complex, have low visibility, and require longer gestation periods. Using a smaller, independent and highly focused group of non-political professionals, we must step back and articulate the underlying fundamentals of Vermont’s strategy. This should be a non-governmental agency with skilled but apolitical leadership, a clear organizational chart, and declared accountability measures and sole responsibility for economic improvement – in essence returning to the basic fundamentals of the craft and not on feel-good approaches that fail to bring meaningful results.
If we’ve learned nothing more from the recent EB-5 fiasco, political appointees, as a general rule, rarely provide competent leadership. In the past ten years or so, there’s also been directives given to outside committees and consultants to develop strategies to bring greater responsiveness to economic opportunities – efforts then gobbled up by competing economic development interests as these various factions seek to protect their turf.
Neither will simple nostrums help. In a recent New Your Times article, Paul Volcker was asked about his concerns for the current economic climate. He noted that while attending recent economic lectures and presentations, eventually someone would always ask, “What about that poor manufacturer in my town?” He further noted that the questioner’s concern was too easily dismissed with talk of worker retraining or some other solution far easier said than done. In essence, there’s no single stratagem but rather the need for a more comprehensive approach to understanding the growth economy.
A new quasi-governmental agency would replace all existing programs and have sole responsibility and accountability for economic development efforts and be managed by a professional with requisite experience and support staff. Not all opportunities are equal or readily apparent. Business development executives know that a sustained and proactive approach to growth opportunities brings success. In the current economic climate where competing states have focused approaches to bring new business into their economies, Vermont’s been on the sideline. Economic development in the new age will not just be about low taxes and deregulation. Most new businesses will accept taxes that enhance the economies and markets in which they and their employees live and work if they’re regionally competitive. They also want rules of the game that are principle-based, not mercurial, to enable long term business planning.
To that end, a new agency would categorize and index Vermont’s current businesses into related groups to better understand their underlying challenges, trends, and growth needs. The Public Assets Institute, recently presented data showing that most growth does indeed come from our current business community. But if Vermont is to ever have meaningful job growth, it will need to come from new business and markets as well.
The University of Vermont is the premier basic research institution in Vermont. A future Economic Development authority would collaborate with UVM’s various advanced scientific disciplines to help them bring new technologies to market, either independently or through existing enterprises here. The Rubenstein School and the UVM Medical School both have deep experience in intellectual property transfer in the service of new business development. Such a partnership will enhance the continuum from research to intellectual property transfer management and new business development.
Such a change will be a radical move for state government. The Governor and the legislature need to stop reassuring Vermonter’s that “all is well” when they know full well the existing system has been a failure from an organizational and performance perspective.
Governor Scott has made economic development a top priority, but this will need to go beyond his simple “affordability agenda,” which is retrospective rather than prospective. It will be up to Governor Scott to take the lead rationalizing and championing such organizational change, while articulating why it is imperative for Vermont’s economic future. Without executive branch support, our state will continue to be an “also ran” to the detriment of all Vermonters across the economic spectrum. Until he makes significant organizational changes, economic development will continue to be a slogan rather than a reality.
- Peter Stromgren and Bill Schubart