Local Factors in an Uncertain Economic Time

For me, the more important part of the article is the last paragraph, stated below.

http://www.areadevelopment.com/siteSelection/January2012/uncertain-economic-development-expansion-environment-776542.shtml

“Uncertainty is the enemy of capital investment. For companies, that will mean continued caution and exploration of alternatives that do not include new facility investment. And when considering new locations, maximum due diligence will be necessary. For economic development agencies, this means taking the time to reduce risk wherever and whenever they can — physical factors (site and infrastructure planning), operating factors (labor investment, controlling of public costs, especially to business), and quality-of-life factors (continued investment in such). Fewer active projects and more hungry locations imply even greater competition — ready communities with reduced risk profiles will win the day.”
 
 
1) Reduce Risk regarding physical factors

2) Reduce Risk in public costs of doing business

3) Continue stability in quality of life amenities

 In following the spirit of the article, communities must have a clear, developed and funded plan for infrastructure development and upgrading.  Too many communities do not have the financial policies and practices in place developing and maintaining capital funding and reserve funding to  provide for the infrastructure needed to develop green field, redevelop brown fields or to repair/replace inadequate main lines.  Reducing risk in this area is to have in place (1) the financial resources; (2) the preventive maintenance, inspection and repair of existing main lines (including I&I); (3) training programs in place for line and system workers.

Companies are looking for stability or at least predictability in the cost of local government.  Many local governments are transparent in their operations, except when it comes to talking about costs.  I have talked with too many local economic development officers who do not want to share the costs imposed by the local government, instead, choosing to provide this information only when asked or pushed to provide the data.  Some communities think that listing these costs is adequate enough.  It is no longer adequate.  Using tools like the EDDS BARC® system provides all of these costs in a calculator format where a business can see what all of the local government costs are up front.

Another source of providing stability in costs is a thorough examination of municipal services.  This is not just the issue of contracting; it is bigger than that.  Communities need to work together to see just what services can be combined and provided on a regional level, eliminating duplicative costs of equipment and personnel.

In these times, maintaing a quality of life while being faced with a double whammy of reduced federal and state funding, is a huge challenge.  Localities have to be more creative: again the idea of regional services, contracting out, inviting community volunteers are solutions that need to be explored.

Equally important in the cost equation is the role of organized labor.  Municipal workforces are part of the solution and they need to be brought into the process — not just in explaining budget difficulties, but by bringing them into the decision process regarding wages and benefits, creating  and maintaining best practices in the workplace.  Employee empowerment is key in these times; and yes, it is a scary place to go, but can be overcome with trust and transparency.  Attacking local government employees may make for good press, but it is lousy public policy.  The road workers, police officers, firefighters, clerks and inspectors are the foundation of the services and can make all members of the community look good.  It’s time for authentic engagement with local employees.

The key here from the three points mentioned in the article can reduce uncertainty for local economic development decisions.  Local governments are not collections of services and departments, but rather an organic inter-related and interdependent system.  Economic development is everyone’s job.

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About Economic Development Data Services, Inc.

EDDS is a company focused on providing effective, efficient solutions for local governments in the areas of community and economic development and strategic planning. We offer the BARC - Business Assistance Recruitment Calculator - tool and website solutions in developing economic development websites. Our new website is www.econdevdataservices.com
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5 Responses to Local Factors in an Uncertain Economic Time

  1. William Lutz says:

    Charley – Again you have provided some really useful insights; I always enjoy reading your thoughts on the subjects you write about. Regionalism is such a controversial issue. Right now it appears that many local government administrators are embracing the idea when it comes to low hanging fruit. Sometimes it seems that elected officials can be even larger obstacles to progress, which is disappointing.

    • You are correct Bill. Unfortunately, I too have seen that parochial interests and political boundaries take precedent, and interestingly enough, it appears to me that it is usually a group of city managers that lead the way – sometimes to the determent of their tenure. Concurrently, it seems as often that Council members in a Council-Manager form of government are willing to take the risk of leadership to work with and direct the manager to participating in regional efforts. Hopefully, this trend will continue.

      • William Lutz says:

        I am wondering if those courageous council members are coming from the new wave of economical conservative thinking best exemplified by local Tea Party groups. Thanks to social media and networking I get the feeling that elected officials from different jurisdictions are connecting in new ways and are collaborating new ideas sometimes outside of ear shot of top administrators. If they are able to carefully build those bridges where everyone can benefit, more power to them!

  2. The featured economist at OCMA last week spoke to the high usage of “Capacity” inthe manufacturing center and how most every economic indicator was pointing towards a stabilizing economy excpet “home starts”. The certainty issues apppear to be waiting on the Greek financial mess and our Presidential election primary or process. Columbus area is seeing good evidence of recovery…gas prices are the other big “uncertainty” that is clouding the future; we are seeing increased leads and investment in Delaware County.

  3. William Lutz says:

    David,

    Things here in Miami County are picking up as well. Smaller projects are ticking up and the big announcement by Abbott Labs was a really good sign as well. I agree about the uncertainty in gasoline prices. I would dare say that those gasoline prices are going to be a huge driver in any type of economic recovery we have regardless of outcomes in Greece and at the ballot box for the simple reason that those gas prices have such a universal effect on people and have huge psychological power.

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