Jackson, our own Jackson, was selected by Inc. magazine as a top city for doing business.
The March 2004 issue of Inc. listed the top 25 cities for economic development in each of three size categories: large metro, medium metro and small metro. Jackson is number 21 on the medium metro list.
I studied the criteria Inc. used to select the winning metro areas, expecting to find complex formulas weighing factors like crime, taxes, affordability, education. I was surprised to find they used simple criteria – job growth and diversification of jobs. Job growth was weighted two-thirds and balance among industries accounted for the other one-third factor.
Their rationale was that companies choose locations after giving careful consideration to all those factors and must have been satisfied with the results before relocating or expanding the operations. Pretty nifty thinking. They didn`t try to second-guess the corporate decision-makers; they merely reported the result of their collective decisions.
I`ll spare you the details of how the actual data was accumulated. That gets into standard deviations, indexes and such. If such things ring your bell, get a copy of Inc. and dig in. There is a complete ranking of 277 large, medium and small cities by major industries online at www.inc.com
For the most part, the top cities aren`t found on the fashionable coasts, or in the biggest, most famous metro areas. Many are in the Midwest and Southeast. Atlanta ranked No. 1 in the large category and Green Bay, Wisc., was top in the medium category.
Conspicuously absent are New York City, Los Angeles, Houston and Chicago. However, Riverside-San Bernardino, Calif., and Newark, N.J., did make the list, as did Orange County, Calif., and Austin and San Antonio, Texas.
With the latitude of extending the South as far north as Washington, D.C., 35 out of 75 (a whopping 47%) of the companies listed are in the Midwest and Southern U.S.
The high-tech rush of the late 1990s left many American cities vulnerable to stumbling when an entire industry went sideways. The Silicon Valley, Boston, Austin and New York City were all stung by the collapse of the dot-coms. Other areas, including Mississippi, have been hard hit by the relocation of manufacturing jobs offshore.
As we have all painfully become aware in recent years, over-reliance on a single business segment can result in catastrophe if that segment falters. Thus, the rankings reflect how diversified the job base is across industry lines. Similar to investing, diversification protects against upsets in any one industry.
The Inc. story said that “a strong history of creating new jobs means that regional businesses have expanded, created new demand, and pushed up area-wide disposable incomes. In contrast, companies don`t form or hire new workers when a region`s regulatory climate, costs or work force capabilities aren`t conducive to expansion.” And, that pretty much says it all.
What can we learn from the article? How can we work to improve our economic development situation? It seems to me that we have several things going for us that will serve us well in the years to come. Mississippi is known as a relatively low-tax state with a business- friendly government. Our cost of living is low enough to be an attractive factor to companies thinking of moving here, or existing businesses considering expansion. We are located at a geographic crossroads with excellent highway access and good rail and water transportation.
Now, for the problems. Education is our biggest problem. Some of the fault lies with our education system itself. A larger fault lies within our culture. In spite of all we say, preach and do, Mississippians still see education as something to be endured until we get a diploma or degree and that`s the end of it. Unlike many areas in the country, we are not committed to lifelong learning. Even worse, over 30% of adults are functionally illiterate. Folks, we have a problem.
I fear this is beginning to sound like a Baptist sermon, but we’ve got to train and re-train our workforce to handle the new, higher-tech jobs if we’re going to prosper as a state. There is no higher priority in Mississippi than education and training, both young people and workers alike. Everybody is talking workforce training these days and perhaps we`ll put our money where our mouth is and do some real training.
With the economic development tools we have that are working well, nothing stands in the way of prosperity except education. On a positive note, the reasonably new Superintendent of Education for Mississippi,
Dr. Henry Johnson, is pushing some creative changes in our public schools that will pay big dividends if he can stay the course. We need to support Dr. Johnson in every way we can. Likewise, our universities and community colleges are ready, willing and able to train us out of the quagmire we are now floundering in.
We have the tools to succeed, but do we have the will power to do what must be done to keep economic development happening in our state? That is the biggest question facing Mississippi today.
Thought for the Moment – Failure seldom stops you; what stops you is the fear of failure. – actor Jack Lemmon (1925-2001)
Joe D. Jones, CPA, is publisher of the Mississippi Business Journal. Contact him at firstname.lastname@example.org.