by Pete Julius
For the past several years, this country has witnessed many U.S.-based corporations laying off domestic employees in order to establish more cost-efficient operations in a foreign country. It does not matter where these operations are going because this trend will continue to occur in China, India and other developing countries around the world. What matters most is how to deal with the situation. Economists and politicians are spending too much time crying like little babies, pointing fingers and playing the blame game. We should be spending our time, energy and effort figuring out how to find jobs for those displaced workers affected by this inevitable and endless trend.
As a result of this trend, most communities are left with the task of finding jobs for undereducated, undertrained people in an innovative, knowledge-based economy. In addition to this unprecedented skills gap, the personal income gap is growing bigger and bigger by the day. This country is becoming one of haves and have-nots. Most communities have been affected by this trend in some fashion, with rural communities hurting the most. These communities host workers with inadequate skills and low levels of education, and they lack nearby educational and training programs. As a result, the old philosophies and principles of economic development need to change.
Most economic development organizations are still focused on and measured by the number of jobs generated and the number of new and expanded facility announcements per year. In today’s economy and in the future, this approach will not maximize their results. These philosophies and principles will not address the biggest challenges faced by many of the hardest-hit communities. Under such a system, an economic development organization appears to be successful for generating low-wage, low-skill jobs. In many instances, these jobs were developed for displaced workers and often times do not pay as much as their previous jobs. So what can communities do to provide better, higher-skilled and higher-wage jobs?
Identify, develop, connect and retain talent – Create an inventory of the skill sets of the local and regional workforce. Domestic corporate expansions and locations are driven primarily by the availability, ethical standards, knowledge and skills of a community’s labor force. This inventory should be used as the centerpiece of any marketing initiative. More importantly, communities must avoid the “brain drain” scenario by putting systems in place that develop the skills of the regional workforce and connect them with necessary tools, such as job training.
Develop entrepreneurial programs – Communities must establish an entrepreneurial program that will provide entrepreneurs with the tools necessary to develop and grow a business. Entrepreneurs drive innovation and the development of innovative, value-added products and services. Systems must be put in place that will provide entrepreneurs with the tools they need to prosper. This could include access to capital, available work space, networking opportunities and small-business assistance programs.
Merge economic development and education strategies – Communities that do not combine their economic development and educational strategies will struggle tremendously in the future. This does not just entail higher education and workforce-training initiatives. It also includes K-12. A lot of communities are faced with the challenge of graduating high school students who have not been properly educated and trained for the jobs that exist within their area. Graduates then take jobs for which they aren’t trained or leave the area to find work. Local businesses, government, economic development organizations, schools, parents and others must all be a part of this initiative. These strategies should be combined at the local, regional and state levels. Ideally, the national government should be involved, but the U.S. government just does not get it. This country has waited too long for our national government to respond and provide assistance. It is time for local, regional and state governments to get involved.
Identify and eliminate obstacles – Too often, laws, permitting processes, tough regulations and policies, and negative press get in the way of creating and growing a knowledge-based economy. Lengthy permitting processes can force a company that needs to build a new facility within a two-three-month window to locate in a community that promises to meet a short building timeline that you can’t make. A local news station or paper that is consistently filling headlines with negative images and events within a community can hurt a community’s growth potential. Businesses do not want to locate in communities where there is great potential for being negatively portrayed in the local news.
Change measurements – Most economic development organizations continue to be measured on the number of new jobs generated, the increase in the tax base and the number of new facility and expansion announcements over the course of a fiscal year. This way of measuring must change. The number of expansions and relocations are nowhere near the levels that occurred prior to our most recent recession. In addition, current project sizes are smaller in number of jobs and investment. As a result, most communities need to adjust their economic development strategies to reflect this trend. Most jobs that are currently being generated in this economy involve innovation and a higher skill level. In order to counter this trend, communities must measure themselves via criteria that are in line with developing and growing a knowledge-based economy. The new measure criteria could include the number of new businesses, number of patents filed within the community, educational attainment, and income levels.
Establish career ladders – Many communities, especially rural ones, struggle with the lack of career-advancement opportunities. This is another reason people leave a community. Educational institutions, job-training facilities, economic development organizations and businesses must all work together to create an environment where everyone has the chance to work and live in the community of their choice, especially their home towns.
These are not very easy initiatives to undertake. If they were, everyone would be employing these tactics in their economic development programs. Undertaking these tactics will involve a lot of time, energy, effort and risk. The majority of the people who are unemployed in this country do not have the skills and education necessary to fill the jobs of the future. In order for our economy to grow and continue to dominate, we must employ initiatives that focus on developing and growing our people.