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BBA Digest: Why Regionalism

Why Regionalism

Scale matters, which is why regionalism in economic development matters. If you are essentially selling a bigger universe, you will have more assets to tout, more of a story to tell.

In competing for talent, export markets, and foreign direct investment, partnering with neighboring economic development organizations simply makes a whole lot of sense. The truth is that corporate investors typically will not pay much attention to political borders.

Projecting a shared and common identity to outside business entities looking in -- "tire kickers" as I call them -- is best accomplished when there exists a backbone organization that coordinates marketing activities for a multi-county region.

Another benefit is the shared costs that go into marketing. What can be accomplished with a group of EDOs pooling their money is typically far greater than what any one of organizations can do alone.

The challenge, of course, for a regional EDO, something it must continually work on, is to be viewed as a "fair referee" by its member EDOs.

Local elected officials who want jobs and projects confined to within their respective jurisdictions do not make that goal any easier. Nor does, believe it or not, high school football, where community rivalries become almost baked into the landscape and hamper cooperation.

Our Common Values

Make no mistake, big city life, which is what I experience in Dallas, and rural life, which is what I've known most of my life, are different. Population density changes everything.

My wife is now placing online orders for groceries from multiple vendors and have them delivered to our door. There are some rural places where getting to just one grocery store entails a long drive, much less having a broadband connection.

But the differences, the values of country and city folk are actually quite similar. Beneath it all, we share a lot of common values. The economy, health care and the environment are the three most important issues — in that order — regardless of where people live, according to an Axios/Survey Monkey poll.

Rural and urban respondents are equally likely to attend a religious service once a week or not to. Rural areas, however, have a higher share who attend more than once a week.

Big city residents (53 percent) were just as likely as rural respondents (55 percent) to say they often feel like a stranger in their own country.

"We do find a lot of similarities between people living in urban and suburban communities," Juliana Horowitz, associate director of research at Pew Research Center, told Axios. "They’re dealing with similar problems even if they feel like people aren’t sharing their problems."

Men (Not) at Work

In what is ostensibly a good economy, experts have been trying to figure out why so many adults remain on the sidelines and are not working.

Why do nearly 37 percent of all potential workers now stay out of the market even with the unemployment rate at a low 3.6 percent?

Federal Reserve Chair Jerome H. Powell, who says getting more people in the labor force is a “national priority,” blames the nation's rather low labor participation rate, now at about 63.4 percent, on our education system and the opioids epidemic. It is not, Powell asserts, because of welfare.

When Sen. John Neely Kennedy, R-La., asked Powell recently in a Senate hearing if “the richness of our social programs” makes people less inclined to work because they can get a government check for not working, Powell dismissed that idea.

“It’s very hard to make that connection, and I’ll tell you why,” Powell said. “If you look in real terms, adjusted for inflation, at the benefits that people get, they’ve actually declined, during this period of declining labor force participation.”

Most economists agree. Said Johns Hopkins University economist Robert Moffitt: “The U.S. has gotten very stingy on giving support to people who aren’t working.”

Economist are concluding that jobs for men without college degrees are declining and pay has also been falling, making work less attractive. Inactive men increasingly have little attachment to the labor force. A 2018 study by Congress' Joint Economic Committee found 83 percent of inactive men in 2015 hadn't worked in at least a year. That was up from 73 percent in 1988.

The fact that the U.S. labor force participation rate remains near long-term lows suggests an ever-larger part of the population is leaving the workforce — permanently. That does not speak well for future economic growth.

When a Town Does Not Show Well

The truth is that some places don't "show well." More often than not, the reasons are rooted in poverty and neglect over an extended period of time, often in the wake of a once prominent industry having left an area.

If a community is isolated and hard to get to, meaning that it is more than an hour from the nearest interstate highway, chances are this is a rural small town that has seen better days. Now this is not always true, but frequently the case.

I was recently in such a town, on behalf of a corporate client, where upon entering the outskirts, I noticed that abandoned and/dilapidated houses were commonplace. The downtown had empty and boarded up storefronts, although there were some going concerns.

The population of this small town was larger 100 years ago than it is today. So I had to ask myself -- what company would come here to start a new operation? Not many, and I hate to say that. Maybe heavy industry not palatable in other places.

The people that I talked to were exceptionally nice, which is what I would expect. All communities are unique and have their own stories. But for many that are outside growing metro areas, a common denominator is often that of decline. Even in this "good" economy.

We Humans Do Have Our Strengths

The Fourth Industrial Revolution, enabled by extraordinary technology advances in digital technologies, is changing the way we live, work and relate to one another. It's something that I frequently talk about when I speak to economic development groups because it affects us all.

More than 75 million jobs may be lost in the next four years as companies shift to more automation. But the good news is that another 133 million new jobs will emerge as a result of changing technology, according to a 2018 World Economic Forum study.

Most jobs will be transformed in some way. “Middle-skilled jobs” like cashing checks, approving mortgage applications, selling airline tickets, typing and formatting letters, and taking tolls, that are being partially or fully automated by computer programs. Some of these jobs disappear, and others become more complex and interesting as the computer takes over the routine tasks.

There will be a mismatch of skills between existing and future jobs and that will prove painful to some. And while computers are good at speed and accuracy, humans are superior to machines in three important ways:

1. People can explore, ask questions, and be open to new ideas. Machines cannot compete with people on creativity.

2. People can build meaningful relationships with other people by simply being human. We can express empathy, make people feel good, and take care of others. We can be artistic and creative for the sake of creativity, expressing emotions and vulnerability in relatable ways. We can make others laugh and cry.

3. Machines can process and analyse significant amounts of data, but if external factors change, the original algorithms may no longer work. A computers’ strengths lie in speed and accuracy, while humans’ strengths are all about flexibility. We're better at solving for problems in which the rules do not currently exist.

Human beings, yes, they can be tiresome at times, but I think I'll keep them.

No Banjo, No Death by PowerPoint

For the record, when I speak to groups around the country, I do not accompany myself with a banjo. Mark Twain accurately said that "a gentleman is one who can play the banjo but doesn't."

I speak on a variety of subjects. They include the Fourth Industrial Revolution and the future of work; how immigration powers economic growth; and trends behind the tight labor market.

Those on the "other side of the tracks" -- America's working poor -- as well as "America's invisible crisis" -- why so many men choose not to work at a time of low unemployment -- are also subjects that I like to explore.

At no additional cost, I can come a day early and tour your community in which I will ask probing questions and probably make some suggestions. There is a good chance that I might reference something worthy that I learned about the community in my talk to stakeholders.

Here are some speaking engagements recently scheduled:

Economic Development Association of Alabama was last month (that was fun); Indiana Municipal Power Agency's Annual Board Meeting, April 4; New Castle Henry County Economic Development Corporation in Indiana, April 16; South Carolina Economic Development Association Spring Conference, May 7; Logistics Development Forum in Vail, Colorado, Aug.3.

No banjo. No death by PowerPoint. I promise.

What We're Reading

They Sold Human Beings Here The New York Times

How Google Earth Mapped 98% of the World Medium

The future of local newspapers just got bleaker. Here’s why we can’t let them die. The Washington Post

Technology is poised to upend America’s property market The Economist

Not connected and no Netflix: ‘It’s frankly embarrassing’ in these Kansas towns The Kansas City Star

The search for extraterrestrial intelligence moves up a gear The Economist

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