What is Economic Development?

Today I served on a panel and focus group for Thrive, an economic development group here in Madison. They are working on a plan for economic development for Madison and its surrounding counties called “Advance Now”, which is described as follows:

Advance Now: Madison Region’s Strategy for Economic Growth is a comprehensive, action-oriented regional economic development strategy that will systematically move the Madison Region’s economy forward. The eight-month development process will engage citizens, as well as public- and private-sector leaders from throughout the region, to define a shared vision for sustained economic growth. The project will culminate in a detailed implementation plan that includes tangible performance metrics, capacity assessments, and one-to-five year action plans.

The panel was interesting to me, since it was composed of entrepreneurs and fellow CEO’s of small businesses in Madison, including friends of Hardin DD Matt Younkle from Murfie, Chris Meyer from Sector67, and others. They were interested in what we thought was Madison was doing right to encourage entrepreneurs, and what it wasn’t. This led to a much more interesting discussion, which is: what is economic development? Most economic development committees I have encountered in the past have been devoted to encouraging real estate development and thus driving tax revenues for cities, but it seems like a more hybridized approach is necessary to build not just real estate and tax revenues, but also continue to create true prosperity by actively encouraging other businesses by making capital more easily accessible, and by enhancing the hiring process beyond simple job fairs at the university. I’m not implying that Thrive is necessarily the answer for Madison, but they do have some interesting ideas:

Advance Now will position the Madison Region as one of America’s leading job creation engines and most livable communities. It is our goal to build a world-class business infrastructure as seriously as we invest in our quality of life. To this end, we’ll focus on such outcomes as business retention and expansion, sector development, and capital attraction.

In the tech space, our biggest issue is finding and retaining talent. Unlike some other fields, we see almost full employment, and so it is vital that the city of Madison help us as its tech employers not just hire entry level talent from the UW, but also find ways to help attract existing talent from other cities. Madison is an amazing city to live in, with an incredible average overall quality of life. I hope that the city’s economic development plans take advantage of this and recognize that bringing in and retaining talented employees is every bit as vital as constructing new buildings.

If you’re interested in sharing your thoughts on future economic development in Madison, I’d encourage you to not only post here but also take Thrive’s economic development survey, which will be used to help make decisions and prioritize the development of future economic development programs.

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3 Responses to “What is Economic Development?”

  1. Jenn Post Tyler

    Jon – Thanks for joining the discussion today, and spreading it via your blog. Recruiting and retaining key talent is a crucial issue, as you point out. I hope your readers will share their thoughts on talent and other issues via the survey, which closes October 11. Everyone can keep track of the process via advancenow.thrivehere.org – we’ll post the reports and strategies as they emerge, and ask for feedback each step of the way.

    Thanks again!

    Best,
    Jenn Post Tyler
    Interim EVP, Thrive

    Reply
  2. admin

    Thanks, Jenn! I’ve had some discussions with people at Thrive (last February, I think) about getting a “job showcase” website setup to help connect talent with tech startups and other tech businesses in downtown businesses as part of a solution to the problem I outlined in my post. What are your thoughts on a project like that? I had offered to help build it, as I think it could augment the university’s efforts which are primarily geared towards helping students find employment.

    Reply
  3. hardin

    Dave Cieslewicz had some interesting thoughts on Thrive in an article on his blog that I thought were worth sharing:

    What does Madison have in common with Janesville? Janesville is a fine city with a beautiful downtown full of historic buildings, and its people have a proud tradition of hard work. That’s true of Madison as well, but the comparison pretty much ends there.

    Janesville is a manufacturing town that lived and died with General Motors. Madison is a university and government town that is weathering the Great Recession better than most places. Fifty-one percent of Madisonians over age 25 have a bachelor’s degree or higher while the comparable percentage in Janesville is only 22%. Janesville took the recession on the chin while Madison stubbed its toe.

    So why are Madison and Janesville both part of the same “region” as defined by the private-public economic development entity called Thrive? There is simply no good reason for it, and the wrong definition of the region is hurting Madison and Dane County, while it isn’t doing much for the other seven included counties either. Thrive is a fine idea, and a good organization led and staffed by bright people, but it’s fatally flawed by its size.

    This post is prompted by a story in this morning’s State Journal with a headline that reads: “City falls short in key areas.” But if you read the article, you’ll learn that the city of Madison is not being compared to the cities of Des Moines, Lincoln, and Austin — the respective state capital city regions were being compared. A better headline would have been “region” falls short, which is what the paper used for the online version of the story.

    Actually, the city of Madison is doing well in a direct comparison with those other cities. Madison has a higher per capita income and a much higher education achievement level than those other three communities. In fact, the much-vaunted Austin has a per capita income of $50,236 compared to Madison’s higher $51,288, and the percentage of the adult population with a BA or higher is only 43% in Austin compared to the 51% level in Madison.

    Moreover, Dane County’s education level, median income and size of the economy bears no likeness to the other seven counties in the Thrive region.

    In summary, there are more firms in Dane County alone then there are in the other seven counties combined, Dane County’s median income is 7% higher than the next closest county, and its educational attainment level is more than twice that of the median among the other seven counties.

    We could look at similar numbers for crime, where high crime numbers from Rock County make our region look worse than if you were just looking at Dane County alone.

    All of this argues for an amicable divorce. New economy expert Rebecca Ryan made this point (although she didn’t directly call out Thrive) in an excellent column in a recent edition of Madison Magazine.

    I believe that the overbroad region will be the death knell for Thrive. The regional numbers don’t help sell Dane County, but rather do the opposite. And how much attention can and should the other counties get from Thrive when so much of the economic output of the region comes from Dane County? This marriage isn’t working for anybody. Let’s admit we made a mistake, and move on with our economic development lives.

    Reply

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