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life in rural nebraska

Incenting People Powered Economic Development

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Detroit from Space

I spent a bit of time this morning listening to NPR’s Steve Inskeep document the economic decline in Detriot and the massive shift in economic development in Michigan.  You can read more on it here, as well as listen to the entire clip.

To my surprise, Richard Florida, guru on economic theory and the creative class, was the featured guest.  Florida outlined a strategic idea that very well could assist Detroit emerge from this economic collapse, much as Pittsburgh had after the exodus of steel in the latter part of the 20th century.

In Florida’s own words: “Instead of bailing out the auto firms, and giving industrial incentives to companies that are going to try and come and create low skill dead end jobs, why not use that same money to enable business start ups?”

Well said.  It makes me wonder if our own state economic development organizations, especially in communities experiencing population decline, would be better served to incent start-ups rather than chase smokestacks.

Valley County and Ord have enjoyed a pretty tremendous track record over the past nine years doing this – over 78 new business openings in a town of 2200 and a county of 4500.  Our low-interest loan program plays a significant role in that, which you can read more on here.  More importantly, I think the success belongs more to the our entrepreneurial culture that has evolved here rather than business attraction.  Entrepreneurship has been a core fundamental in our economic development strategy for nine years – something that may lend to the idea that this community is a national model for economic development.

I’m not discounting business attraction as a core competency in overall economic development strategy; not at all.  But in a time of seismic shifts in economic behavior, especially in one that has experienced so much turmoil, attention should be paid to entrepreneurship and the ability of innovation to drive economic growth.

If the methodology of economic development fails to evolve, like the business it chases, it’s just as liable to fade to irrelevancy.

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Written by Caleb

April 22, 2009 at 8:31 pm

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