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Celebrating Economic Development Week: Economic Growth vs Economic Development

By CREDC President, Mike Bomar

As we wrap up the first annual IEDC Economic Development week, I thought it would be appropriate to reflect on my thoughts around the CREDC‘s purpose. Specifically, what it is that we do in this community to add value. I believe it’s critical, no matter what type of organization you belong to, to ask yourself, at least once a year, why do we exist? If you don’t have a good, genuine answer to that question, it might be time to reevaluate your mission or shut the whole thing down.

All living things experience growth and decline. For certain entities, this happens in a wave formula in which growth and decline happen repeatedly in various amplitudes over long periods of time. Others experience a bell-shaped curve of growth and decline until they reach a period of death or obsolescence. The factors that lead to both growth and decline are often numerous, if not infinite. It is difficult, if not impossible, to fully account for (much less predict) all of the drivers at any given time. Economic growth and decline can be understood in this way. If economic growth (even in highly controlled economies) have a life of their own, so to speak, what this is the value of economic development agencies?

In most of my interactions with community members over the past two years, I have been praised either individually or as an organization for all of the economic gains Clark County has experienced. While I very much appreciate the sentiment, I strongly believe the praise to be slightly misdirected. Experienced economic developers know this well, and yet there is still a constant pressure for EcDevr’s to view and justify their existence (and their budgets) in terms of current economic growth. There are indeed projects in most areas that have resulted in new jobs, capital investment and tax revenue that would not have otherwise occurred if not for the work of the local economic development team (past and present). The impact of these projects are often many millions of dollars that can justify an organization’s budget for many years over. That said, if the effectiveness of economic development agencies is judged by these projects alone, we are missing the point of the exercise.

To view economic development vs. economic growth, let’s consider a gardening analogy. Having spent many hours this summer pulling weeds, I can speak with authority that growth happens whether you want it to or not, and often in places you don’t want it to. Unfettered growth also creates some amazingly beautiful natural scenes along with some amazingly unpleasant smells. Through gardening, one seeks to maximize the beauty, foster the kind of growth that is desired, and rid the environment of unwanted growth. Too much gardening carries its own risk (see the Gardens of Versailles). Attempts to too tightly control growth result in massive amounts of energy and resources used to achieve results that are less impressive than what nature (or the market) would otherwise provide, leaving those involved feeling exhausted and out of place. Conversely, not enough gardening leads to dead plants and smelly, aggressive weeds that make the space unattractive and useless. 

The appropriate role of economic developers is to ensure the right kind of environment where growth can happen in a way that adds value to a community and reflects or enhances the character of a place. This involves bringing together a broad range of players to help determine what type of place we want to live in. In Clark County, we do this through the Comprehensive Economic Development Plan and through the regular interaction between public & private sector partners. It also includes, making sure we have the right kind of business climate (soil) where we can encourage innovation and entrepreneurial-ism (plant seeds that will grow) and give our existing companies the nutrients they need (workforce development, tax structure, infrastructure investments, lands for jobs) to stay and grow here. Finally, it does include seeking out new companies (transplants) that will enhance the character of our community. 

As tempting as it is to say that we create jobs or investment, the truth is we are better understood as servants in a community garden. The more involved and connected we are in conversations about our future, the more likely it will be that we will see growth that we can be proud of and companies that reflect our values.

For any economic developers reading this, I understand that I am adding nothing new to the conversation. Perhaps I just realized that it was my time to contribute a verse. 

Special thanks to Scott Bailey and the Pacific Northwest Regional Economic Conference for partnering with us this week to celebrate the role economists and economic developers play in making our world a better place.