The first pure session at the NLC event this past weekend dealt with an overview and some basics about community economic development. The goals of economic development, particularly that with tax payer support include:
- (Good) Job creation
- Private investment
- Tax base expansion
- Wealth creation
- Higher Quality of Life
- Higher Standard of Living
Believe me there are a ton of bad ways to do economic development. The worst is what is sometimes referred to as “Elephant Hunting.” This is where you throw every incentive and subsidy available to land some big new plant that will create some huge number of jobs. It is far more effective and sustainable to grow existing companies and industries.
Different types of companies require different items. Big manufactures surveyed wanted low labor costs, low energy costs, low taxes and incentives. We can have low labor costs by having uneducated and disorganized workers. We can have low energy costs by ignoring the environment. We can have low taxes by ignoring quality of life and public safety. No thank you to all of these…
Other types of surveyed businesses that require skill people that can choose where they wanted to live had a different list of what was important.
- Low Crime Rate (79%)
- Healthcare Facilities (68.4)
- Housing Availability (62.4)
- Housing Costs (61.5)
- Ratings of Public Schools (61.4)
- Climate (55.0)
- Recreational opportunities (52.7)
- Colleges and universities (50.7)
- Cultural opportunities (46.0)
Wow, consider Rochester we are among the best in the country with numbers 1, 2, 3, 4. We are very good at numbers 5, 7, 8, and 9. OK we suck at number 6… Notice that these types of firms didn’t prioritize taxes and incentives…
We also discussed 5 strategies.
- Business recruitment
- Business retention
- Business creation
- Creativity and talent cultivation
#1 just isn’t the best use of resources for rochester. We do a pretty good job at 2 and 3. We are getting better at working with a creative class #4.
Place making is what the future of Rochester is all about. We need to be the place to me for medical / and tech firms. We need a great downtown, greater historic preservation, and a continuation of our medical tourism industry. We need to find a way to keep and even attract retirees. Most importantly we need great arts and culture and a high quality of life. This is what will keep Rochester, not a low tax / low pay race to the bottom.
One of the key discussion items is how little incentives really matter. Companies that rely on talent will look a many items and by the time they are asking for incentives, they already know they want to be in your community. Incentives are a sweetener, but they will not make a bad place attractive. Lesson is we need to spend money on make this as great of a city as we can and focus less on the incentives.