Adam Davidson and Ira Glass may have gotten their facts right, but they clearly got their story wrong. They failed to deliver on their basic promise to listeners, "How to Create a Job". You can read more about the backstory to this story at the NPR Ombudsman blog.
The Story of Oklahoma City
As one of the chief architects of the Oklahoma City turnaround, I suppose I should be happy with the upbeat references to our work there. Others have also noticed.
Yet, over a period of two years, a small group of us developed and implemented a strategy that turned Oklahoma City around. We moved ahead after the bombing, strongly convinced that the people of Oklahoma City would rally.
And rally they did. The big story of Oklahoma City: People were willing to tax themselves to reinvest in their city.
Our approach combined "publicly led, privately supported" investments (an arena and a baseball park, for example) with "privately led, publicly supported" investments in innovation, marketing and workforce development, all led by the Chamber. Most important, we fostered a climate of collaboration. It was not easy. We had to overcome some entrenched patterns of bad civic behavior. But leaders like former mayor Ron Norrick, chamber president Charles Van Rysselberge, financier Clay Bennett, and banker (now president of Oklahoma State University) Burns Hargis did not waiver.
The strategies we developed in Oklahoma City run the gamut of economic development investments, and they speak to the complexity of transforming a regional economy.
None of this story managed to find its way on the "How to Create a Job" piece, because, I suspect that the reporters found an easy "hook" that fit into an edgy, snarky, cyclical style. That's what they were really after.
This fact is disturbing. Adam Davidson is no cub reporter. He is one of the leads on NPR's Planet Money team. That he knows so little about economic development is disheartening. That he could defend himself with "my facts were right" is, well, odd. (It's as if he were reporting the story of the Japanese tsunami with a lead, "Some buildings have been destroyed in Japan…" Factually correct, perhaps, but hardly the right story.)
At the same time, we in the profession have not done a very good job communicating how -- like every other aspect of our economy -- economic development is undergoing a transformation.
First: Some History
To figure out where economic development is today, let's start with a little history.
At its formation, the the International Economic Development Council (IEDC), the focal point of the radio braodcast, merged two schools of economic development, both of which are now being severely tested and rethought.
The first school, represented by the former American Economic Development Council, included industrial developers who recruited firms. This formula for economic development, born in Mississippi in the 1930's, spread throughout the South in the 1950's and 1960s.
Several factors came together to make this formula work magnificently. The advent of air conditioning, the opening of the Interstate system, and the location of defense production facilities in the Sunbelt during the war, all combined to propel the South forward.
The second school of economic development represented in IEDC emerged in the urban areas, propelled by increasing federal investments in the 1960's. The former Council for Urban Economic Development represented this group. These professionals became very skilled at brokering federal programs to funnel money into downtown districts and blighted urban neighborhoods.
Beginning in the late 1970's a third trend in economic development emerged with the development of technology-based economic development. Propelled by early initiatives like the Connecticut Product Development Corporation and the Massachusetts Technology Development Corporation, there were enough of these initiatives around by the early 1980's that the former Congressional Office of Technology Assessment put together a catalogue.
In the late 1970's, Roland Tibbetts at National Science Foundation took an important step in defining a federal role in technology-based economic development: he launched the Small Business Innovation Research program which has since spread through the federal government.
Now, this thread of economic development -- technology-based economic development -- is represented by SSTI, founded in 1996.
Other threads emerged as well. The Association of University Research Parks founded in 1986 began exploring how universities could drive economic development. The University Economic Development Association has recently refocused its mission to support the emerging role of higher education in economic development. (Disclosure: I sit on the UEDA Board.)
Other organizations focus on different dimensions of economic development: the National Association of Development Organizations, the National Rural Economic Developers Association, the National Business Incubator Association, the CDFI Coalition, the Association of Small Business Development Centers, the National Community Development Association, the Council for Community and Economic Research, the American Planning Association.
The list goes on.
And, of course, any economic development professional will tell you that skilled workers now play heavily into the equation of expanded investment. So, community colleges and the public workforce system -- long thought of as outside economic development -- now play an increasingly important role in local and regional economic development strategies.
How do we put all this into a thumbnail portrait of economic development? A portrait that radio reporters can easily grasp?
Defining Economic Development Today
Here's where we stand.
Economic development focuses on collaborative civic investments that are publicly valuable, but not privately profitable. When well-designed, these co-investments accelerate innovation and improve the productivity of our market economy. When we do that, businesses innovate, grow, generate more value, and employ workers in higher paying, higher skilled jobs.
These collaborative investments fall into five areas:
This game of recruitment is fueled by incentives which have little economic value. At the same time, a small industry of professional firms has grown up around these practices, and they profit from them. These professionals keep stoking the fires and pressing political leaders for more firm-based incentives. So, the game of stalking firms is not likely to go away anytime soon.
At the same time, this game is old, unproductive and expensive. It is playing itself out.
Finding Out What Works to Accelerate Innovation
More productive economic development organizations are looking at the data and finding that the key to job growth lies in a relatively small segment of high growth, second stage companies. Building more supports for these firms and for growth-oriented entrepreneurs -- the basic thrust of economic gardening -- looks like a sensible, promising, high leverage strategy. The Kauffman Foundation and the Edward Lowe Foundation have been critical players in reorienting the policy debate in this way.
These models are new, and they need evaluation. We are figuring out "what works" in economic development in this new era of open networks. As Eric Beinhocker has pointed out in his book, The Origin of Wealth, our economy is best seen as a set of open networks, embedded in other open networks. Our regional economies function as complex adaptive systems.
This new perspective in which wealth is created by open, innovating networks, requires us to find new foundations for the practice of economic development. The good news: We have some important insights about how to structure complex collaborations needed to co-create value. In an article earlier this year in the Harvard Business Review, Michael Porter explores the co-creation of value from the perspective of private firms.
The process of transforming economic development is well underway. Across the country, economic development professionals are doing the hard, focused work of transforming their regional economies. The example of Oklahoma City demonstrates how to build a balanced portfolio of collaborative investments and what happens when we do.
But Oklahoma City is not alone. Here's an example of how Ernest Andrade and I deployed open network models to build the Charleston Digital Corridor. Interestingly, in April, 2011, American Business Journals listed the top cities supporting small businesses. Austin ranked Number 1. Oklahoma City ranked Number 2, and Charleston, SC ranked Number 3.
McKinsey and Company recently released a report that outlined some of the major challenges ahead. We need to create 21 million jobs nationally to return to full employment by 2020. (Moving a firm from Illinois to Tennessee counts as a "0".)
At the same time, we face a shortage of trained talent and a large surplus of high school drop-outs.
In other words, we're sterring into some strong head winds as our economy moves toward full employment. We will meet these challenges by innovating. A recent video from the Organization for Economic Cooperation and Development makes the point.
We have designed a simple repeatable process for developing strategic collaborations quickly that yield expanded collaborative investments. We are developing the tools and frameworks civic leaders need to move their economies to the next level of prosperity.
Collaborate to innovate: that's the key message of Oklahoma City and Charleston. It's the future of economic development.
Sadly, This American Life missed the story of what's really happening in economic development.
Over the past decade or so, we've learned a great deal about "How to Create a Job".
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