Editor’s note: Jim Hill, executive director of the Sidney-Shelby Economic Partnership is starting a new column that will discuss issues related to economic and community development. Hill has more than 25 years of experience in economic development, business development, technology commercialization, entrepreneurship and workforce development. The column will appear twice each month. Please address any questions or comments to [email protected]
Economic development has changed significantly over the past decade. Personally, I started working in county-level economic development more than 25 years ago when the focus was primarily on growing and attracting value-added businesses. Since manufacturing businesses provided the largest economic multiplier, it was the primarily the role of a local economic development office to focus on attraction and expansion of “manufacturing jobs and investment.”
What is an economic multiplier, and is attraction of manufacturing jobs and investment still the primary goal? In simple terms, when you inject new money (income) into a local economy, that extra spending leads to more spending, which leads to more income. That investment cycle is commonly referred to as the “economic multiplier.” Industries like manufacturing, have larger economic multipliers. The Bureau of Economic Analysis (BEA) calculated that every dollar in manufacturing generates $1.48 in other services and production. This is widely accepted as higher than any other industry. So when Airstream or Honda spend a dollar, another $1.48 is generated by those who supply parts, transport goods, provide accounting services, provide maintenance to their machinery… Today, attracting manufacturing jobs and investment is still a valid objective, but additional economic factors have changed the dynamics to include several new objectives.
Next, I want to dig a little deeper into what has changed since I started working in this business 25 years ago. The graphic attached, depicts how traditional business development has expanded to include talent development and placemaking. Historically, employees have followed the jobs. If a business located in the community and offered to pay a fair wage, employees would follow. Yes, the company would have to recruit or relocate a small number of employees with specialized skills or experience, but for the most part the “if you build it they will come” philosophy guided most of the business investment decisions. All that began to change in the last decade as workforce patterns and skilled worker shortages began to dominate the conversation. More recently, the millennial generation put this trend on steroids. They didn’t have to send out resumes and move to the location where their employer wanted them to work because they were in high demand. Millennials could move to a place that offered the lifestyle and amenities they sought and then go find a job in that city or region. That trend, along with better labor force data availability, changed the face of economic development.
These workforce changes have given rise to the new expanded economic development focus that integrates traditional business development with talent development and placemaking. While an economic development organization is still working to grow and attract jobs, we are also focusing on actions that help our companies grow and attract talent. If a company is having trouble filling jobs it is not uncommon to see them relocate to an area where they believe the labor situation will be more favorable. Detailed labor data is readily available to companies and site selection consultants, so many communities are actually removed from the location list very early in the site selection process. workforce development has been elevated to the top priority in economic development. Talent development is very closely related to placemaking, so these items are tightly woven together.
Most talent-related actions and programs fall in the broad categories of talent development, recruitment and retention. Shelby County business and community leaders were early innovators in the area of workforce development. Private industry leaders worked closely with the Economic Partnership in 2013 to launch the Workforce Partnership of Shelby County, one of the first multi-sector partnerships in the state of Ohio. The Workforce Partnership focuses most of their efforts on developing talent through partnerships with industry and education. The remaining areas of talent recruitment and retention fall primarily on the shoulders of our private industry, but economic development and the broader community play a critical role in building an environment where businesses can be successful in the talent recruitment and retention endeavor.
Placemaking is a relatively new term used for how a community supports talent and businesses. Think of placemaking as the sum total of all the amenities a community offers that makes it a place where people would want to live. If skilled and in-demand employees can live wherever they want, then communities that offer more of the popular amenities are more likely to attract and retain talent. Communities that are successful in placemaking offer good schools, adequate and affordable housing, restaurants, shopping and vibrant downtowns with numerous entertainment options.
Now that I have provided a little background on the changing face of economic and community development, my next column will focus on the importance of adequate and available housing.
The writer is the executive director of the Sidney-Shelby Economic Partnership.