International Consensus on Regional Development

Map of USA with Midwest highlighted
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Nearly two years ago, I was in many meetings with the leadership of the United States Department of Commerce and the Economic Development Administration.  They clearly articulated that they now had research that proved that the only real economic engine was the region and that they wanted to help us achieve a true regional plan, and effective actions.

This new report, Past Silos and Smokestacks: Transforming the Rural Economy in the Midwest, by Mark Drabenstott is a very concise explanation of the research supporting the critical nature of regional economic development.

I have highlighted some of the key points of the summary, and pointed toward the research findings, in this synopsis.

I can’t help but highlight some of the statements from the summary:

The rural Midwest could have an economic future as bright as

its vibrant past. But it is basing its twenty-first-century future on a

twentieth-century playbook. This is not a recipe for success. Towns

and counties compete with neighboring towns and counties for jobs

and investments. Industrial recruitment—“smokestack chasing”—is

the norm. Economic development agencies spend millions on infrastructure

and tax breaks to lure companies from afar instead of creating

new jobs at home. Boosters sell the rural Midwest as a cheap

place to make things, ignoring the region’s many other economic

assets—its natural resources, its hard-working people, its central

location, its schools and universities, and its scientific base, among

others —that could all be leveraged into a competitive new economy.

The path to stronger economies in the rural Midwest is plain.

Partnering regionally to compete globally is what’s needed. This pathway

will lead to scores of multicounty, self-defined regions across

the Midwest. Only by combining their forces to create new businesses

and good jobs at home will the towns and counties of the

rural Midwest compete and thrive in a global economy where this

sort of collaboration is fast becoming the norm.

The rural Midwest needs a bold new development strategy to

transform its economy. The strategy developed in this report stands

on four legs:

• Help rural communities and counties think regionally to compete

globally.

• Focus public investments on transforming economic opportunities

rooted in distinct economic strengths, not on

smokestack chasing.

• Spur innovation and entrepreneurship, turning ideas and innovations

into economic progress.

• Create a world-class entrepreneurial climate and innovation

culture to grow a landscape of new companies, in the process

recycling the region’s considerable wealth.

This is a brand new game plan—a bold game plan.

At the local level, county economic development boards and local chambers of commerce

dominate, preserving the lines in the sand that hinder regional action…

…These examples point to what is needed to embark on a new path

of Midwestern rural development—a more regional approach. To

succeed, regional leaders will need a neutral “safe space” where new

partnerships can be forged. They will also need “coaches” that can

effectively bring local players out of their traditional silos and combine

their strengths on a new economic team. A critical challenge is

that both the safe spaces and the coaches are in very short supply.

The time is now for significant progress in our initiatives for regional development.

What do you think?

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Getting Started

World map of GDP real growth rates.
Image via Wikipedia

Pat Baird, CEO of AEGON USA, has very concisely outlined the need for a regional approach to economic development, in a piece published today, November 1, 2009 in The Gazette.  That piece will also be featured in the Corridor Business Journal.

As a place to get started in the discussion, I think Pat’s words set the stage.

On Tuesday, November 3rd, a forum will be held at Kirkwood’s Center for Continuing Education exploring the merits of regional economic development.   Great news.   It’s time for a coordinated economic development strategy for the Cedar Rapids/Iowa City corridor.

As a 30 year employee of AEGON USA, I’ve seen communities where we have operations become transformed into regional heavyweights simply by changing how they think and react to economic development opportunities.  With all the advantages we have in this area, we can do the same.

AEGON USA has increased its workforce in Cedar Rapids from 800 jobs in 1993 to just over 3,600 today.  While we employ over 12,000 nationally in cities such as Baltimore, Louisville, Los Angeles and others, Cedar Rapids is by far our largest site.  The costs are reasonable here, the workforce is well educated and the work ethic is second to none.  In addition, the State of Iowa and its secondary educational institutions have done a great job of supporting the insurance industry.

While many of our employees come from the area, as I do, we still recruit many nationally and even internationally.  Those of us who live here know the advantages:  a great quality of life, outstanding educational institutions, short commutes, safe neighborhoods, Big 10 sports and close proximity to countless recreational and cultural opportunities.

Iowa City and Cedar Rapids, together with the surrounding communities in between, are indeed all very different places.  When we recruit new employees from outside the area, we sell not only the collective advantages of life within the Corridor, but the uniqueness of each community.  These differences among our local communities are very much a positive.  It is rare that one of our local communities doesn’t fit a prospective employee’s needs.

Because commute times are relatively short, we have learned over the years that workforce demands can also be met by the success of other companies.  When we learn of a new company adding new jobs or relocating employees from other locations, we know that spouses and other family members of those new hires present us with additional workforce alternatives.  A win for Iowa City is a win for those of us growing a business in Cedar Rapids, and visa versa.

Correspondingly, flood recovery for this area is also a direct form of economic development.  During this past year, I have had the privilege to serve the State of Iowa on the Ijobs Board, which awarded both competitive and noncompetitive grant monies to communities to jump start flood recovery projects as well as to provide economic stimulus.  The Board had a “geographic diversity” mandate to spread competitive grant monies throughout the state.    It is important to note that the Board, in achieving this mandate, examined the State by quadrant, and not by city or county.

Other communities where AEGON USA conducts its business have recognized economic development has gone regional, and some have even gone so far as to regionalize their government.  The City of Louisville, in particular, has regionalized their government solely for purposes of promoting economic development.   While no one is promoting this idea for our area at this time, it illustrates the thinking and efforts of other communities with which we compete to attract new employers and/or encourage the expansion of our existing employers.

It is for these reasons that we endorse and will support the initiative to develop a coordinated economic development strategy for the Cedar Rapids/Iowa City Corridor.  The fact that somewhere on a map are dotted lines which divide the region into cities and counties is totally irrelevant to business and to economic development.    The attributes we share in this region are far more valuable than those things that divide us.   It’s time we focus the efforts of our local Chambers of Commerce, economic development groups and academic institutions on these attributes.  It is also time our local governments form a collaboration among themselves and with the regional economic development groups to ensure they are constructive partners in regional economic development.  It is also as important never to allow the parochial interests defined by these dotted lines on a map to become a deterrent to what is right for the Corridor.  If we accomplish this, we all win.

What do you think?

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