Last July, I gave a talk on economic development to the American Subcontractors Association of Mississippi.
Subsequently, several of those present at the meeting commented on it – both negatively and positively – and others requested copies of the outline.
Since it seemed to generate a good deal of interest, I am using it for my column this week. Hope you enjoy.
Who cares about economic development?
The success of our society depends on the health of our economy. The world is changing rapidly and we must change with it or be left behind. America is being
besieged by competition from all over the globe. Choosing to participate in the global economy is not really a choice at all. So, who cares about economic
development? Everyone should since everyone has a vested interest in the economy of our state.
For many years, Mississippi was content to be an agricultural society and agriculture was good to us for a long time. Unfortunately, we rested on our farming heritage
while other states became industrial centers. When agriculture mechanized, we were left with a limited number of employment options for our people. Mississippi
developed a reputation of being hard-working and offering cheap labor.
What is economic development?
In general, economic development is the improvement of the economic environment by creating new jobs and enhancing existing jobs. Our past efforts can be
described as a “buckshot” approach. We welcomed any and all new jobs to our state with open arms. In many cases what we got were companies seeking cheap
labor and offering minimum benefits. At the time, this was a good strategy and served to put many of our low-skilled workers to work.
Now that everyone who wants to work is working, it’s time to change the strategy.
The mission of economic development should now be to raise the per capita income of Mississippi’s workforce. This means that we need to attract higher-tech jobs
rather than low-wage jobs since we can’t raise the per capita income any other way. The problem is that our workforce is not adequately trained for high-tech jobs.
What are the tools of economic development?
Economic development tools consist of incentives to attract new business into the state and improving the plight of existing business. Specifically, some of these tools
• A trained workforce and access to job training
• Tax incentives offered by state and local governments
• Availability of facilities and infrastructure improvements
• A good business atmosphere
I believe that the most important of these incentives is workforce training. If our existing workforce can’t handle the high-tech jobs and we have no commitment to train
them to the point where they can, the high-tech jobs will not come to our state. Mississippi’s financial commitment to workforce training is a mere pittance when
compared with other states, such as the Carolinas and Georgia. Not surprisingly, these states are getting the lion’s share of the new high-tech jobs.
Earlier this year, the Legislature cut the funding for workforce training for next year. I think this was a serious mistake both in the actual effect of the cut and the
message is sent to prospective employers about our commitment to workforce training.
What should the ‘new economic
development strategy’ be?
Just as the boys tend to be attracted to the new girl in school, I fear we place too much emphasis on bringing new jobs to Mississippi. Our existing employers need
consideration too. We need to invest tax dollars in helping Mississippi businesses operate more effectively and, therefore, be more globally competitive. Increased
emphasis on technology and quality production would go a long way.
We need to set our commitment to workforce training in stone and not vary from it for any reason. The community college system in our state is great. In fact, it has
been used as a model by other states. In order to improve the efficiency of our training efforts, we should consolidate all adult workforce training under the community
colleges. The current effort is fragmented among six different state agencies and suffers from inefficiency.
We need to raise teacher pay to the Southeastern average with no budget strings attached. Hundreds of young prospective teachers are making decisions about their
future and whether a career in education is for them and where they will live. Until we pay teachers a professional wage and demand accountability, we will continue to
get what we have gotten in the past.
First, our existing workforce is the product we have for sale. If the product does not meet quality standards, it must be improved. Investing heavily in workforce
training through the community colleges is the solution. Second, we need to standardize our tax incentives offered to prospective new businesses to keep communities
from competing against each other at the expense of lower taxes to support local school districts. Third, we need to commit to funding education as our highest
priority, including increasing teacher pay to a professional level.
Joe D. Jones, CPA, is publisher of the Mississippi Business Journal. His e-mail address is email@example.com.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info