Before long we’ll be knee-deep in the throes of another campaign season here in Maine, in the course of which we can expect to hear from just about all candidates that they support business expansion and economic development.
I should hope so. Several recent national surveys have stigmatized Maine’s business climate, perhaps unfairly, but all too often the medium is the message. The unfortunate truth is that many observers will accept these surveys, rightly or wrongly, at face value. The impression an outsider gathers is that government in Maine is not friendly to business.
Why should we care? Like it or not, government is an important player in the quest to attract, develop and retain employers, if for no other reason than every community, every state in the United States, every province in Canada, indeed virtually every country in the world is working to develop a more vibrant local economy. In other words, governments everywhere are seeking to develop the right balance of educational offerings, training programs, legal infrastructure, tax relief and so on that can be made available to employers, so that economic opportunities can be created.
Those that develop the right balance will be the winners in this high stakes international competition. The losers face continuing declines not only in jobs, but in their prospects for future success, as well.
Economic opportunities translate into jobs, tax revenues and the consequent municipal, county and state services that preserve and maintain many aspects of our quality of life. Taxes are the price we pay for a civilized society, or at the very least a society that protects its most vulnerable citizens and offers the essential services upon which we have come to depend.
How businesses decide whether and where to expand, and how communities and governments can influence those decisions, have been the subject of innumerable studies. Time and again businesses are surveyed and government programs are inventoried to determine what businesses want, and what governments can and should offer. Depending upon whose ox is being gored, you’ll hear that the government is too supportive and too generous with incentives designed to retain or attract businesses (“corporate welfare.”) Or you’ll hear that the state “does nothing” to keep businesses here: why, just next door they offered me millions to move my plant across the river.”
Whatever your attitude happens to be towards government involvement in fostering economic growth or business development, there’s little doubt that what government does (or doesn’t do) makes a difference. Thus, those of us concerned with the economic climate here in Maine would do well in this upcoming campaign season to seek meaningful answers from the candidates on the question of an economic development strategy for the state of Maine.
In the end, the programs and incentives that we offer – and there are many – make the most sense if they are part of an overarching, long-term and sustainable strategy that provides direction and reflects a consistent approach to economic development. What businesses want – and what government is in a position to provide – is a stable, predictable environment that allows a business to plan for the future.
This goes beyond simply wondering whether Maine legislators will or won’t support tax relief on business equipment (although that’s important). It means being able to say to an investor active in an industry Maine people consider desirable, here is what we will do to support you, if you go to the expense of coming to our state.
The kind of support I am talking about is not simply tax relief. It’s also to be found in the conceptual understanding and acceptance of that business’ value to the state’s overall economic mosaic. Which, of course, requires that we define our overall “economic mosaic.”
Just by way of example, the Washington Post recently noted that the state of Michigan was re-tooling its economic development policy, shifting from its longstanding and historically appropriate focus on automobile and value-added manufacturing to emerging technologies that build on Michigan’s expertise in automotive development. The state concluded that the future of many automotive industry jobs (currently in conventional engine production) would be in alternative power-train technologies, alternative fuel cell technology, electronics and so on, jobs that build on industry trends which can be exploited by the existing workforce and automobile plant capacity.
The policymakers said, in essence, we’ve got a great workforce, but they are skilled in an industry that is evolving beyond their current skill sets. We can build on the expertise and the enormous infrastructure that exists, but only if we identify the trends we believe will be sustainable. Let us no longer invest in what has no future; let us put our resources where we get return on our investment, in the form of better jobs with staying power.
Such an approach requires guts and a hard-headed approach to economic development. In an environment of scarce resources, where should the state invest public money? What industries should it support, and why? What is the overall plan that justifies favoring one industry and not another?
These questions should be part of the inquiry voters make of future policy leaders. We should expect our candidates to have thought through these issues, and not merely to say that they “support small business,” or that “we have to create an environment conducive to growth.”
If Maine is to prosper and grow in turbulent economic times, we must strike an appropriate balance between supporting industries with a robust future and those industries that even the most traditional among us know are in decline. This is not to say that traditional industries should be neglected and hung out to dry. It is to say, however, that where public money is spent to foster economic opportunity, rational choices will have to be made as to how that money will be spent.
When the candidates are out on the hustings in the not too distant future, it will be instructive to learn whether they are developing an economic development strategy that considers the future, reflects business trends, builds upon Maine’s strengths and frankly confronts our difficulties, or whether they will simply rely on heartfelt platitudes about our quality of life being sufficient to overcome anything the global economy throws in our path.
Perry B. Newman is executive director of Atlantica Group LLC in Portland.
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