Anyone who knows me, or has spent five minutes with me in a professional environment knows I love economic development. There is little I enjoy more than brainstorming opportunities, mulling over key challenges, of facilitating one of my trademark roundtables. But recently I have stumbled on a problem that strikes at the heart of traditional economic development philosophy.
Economic Developers across Canada are schooled in the art of competitive investment attraction. But the rationale for Investment Attraction is based on a very complicated set - a logarithm - of unconscious assumptions, that I want to start unpacking here. First, most elected officials view economic development as a means of improving the quality of life of residents. To be happy, then, they need services, and economic opportunities. Businesses provide taxes and jobs. Taxes pay for services, jobs support residents and voila - a higher quality of living. Hidden inside this corollary are many false assumptions.
For example, what if the jobs are not good jobs? What if the town practically gave away the land, or provided other incentives to attract the business? What if the business hires people from outside the community, who are not residents? What if the business pollutes the environment that the residents live in? What if the business finds another community willing to provide more incentives? And the list goes on and on….
What if on the other hand, we started with the simple things we wanted to see happen, and strategized in simple terms around how we can make them happen. Want good jobs and local services? Leverage local assets and support local entrepreneurs to build exciting businesses that meet local needs. Want investment? Leverage local RRSP’s to build a community investment fund. Want clean energy? Unleash local capital through a power cooperative. These are calculated risks compared to attracting investment from around the world, crossing your fingers, and hoping they are not just in it for a quick buck.
More importantly, time, energy and resources spent attracting investment might fail to result in a single dollar invested or job spent. International prospects are going to say, Sorry, we decided not to build in your community, but what other kinds of business would work?". By contrast, time, energy and resources spent supporting local entrepreneurs is a save investment in the communities future, because even if the first idea doesn’t work, you are helping local entrepreneurs who are committed to creating economic opportunities for local residents. Isn’t that what you really want?