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BBA Digest: Every Dog Has Its Day

Some states have begun the reopening process. Politicians and public health experts are sparring over when and how to allow businesses to reopen and Americans to emerge from their homes. Leave it to say, it's complicated.

Meanwhile, the Congressional Budget Office said that it expects the federal budget deficit to hit $3.7 trillion for the 2020 fiscal year, its largest size as a share of the economy since World War II. It projected the economy to shrink by 5.6 percent over the course of this year, ending 2020 with an unemployment rate of 12 percent.

Every Dog Has Its Day

The economic developer wanted me to see his new and improved webpage devoted to buildings and sites. I looked at it and it seemed to navigate smoothly.

But I had to tell him the "featured properties" to his website, really his entire website, was geared totally to industrial recruitment. How about a website that reflects a more balanced approach to economic development? It would include equal if not more emphasis on business retention, entrepreneurial development and worker training.

That's a more realistic model, as your primary customers should not be those who you want to come to your community but rather those who are already there. If changing lives is your mission (and it should be), then the workers and existing employers of your community take top priority. They are your primary customers.

Those to be recruited are secondary customers, as the vast majority of jobs created in most places are created by existing employers.

In short, the business recruitment-only mission -- encouraged by many consultants -- is the dog that had its day. It worked when it worked, but should no longer be the exclusive focus.

Recruitment, which even in good times was always a long shot, should not be abandoned, but the new normal in a post pandemic world will not give it the primacy that it once had. Nor should it.

Finding solutions for existing employers and workers to better weather this storm should be the primary mission. And I believe that to be true after this storm passes.

There will be little need for economic developers to travel to an event to kiss anybody's ring.

The Office Will Change

Will things fundamentally change for the long-term because of the pandemic?

When people suggest -- and I've been one of them -- that some things will never be the same, we’re talking about our habits, norms, and ways of living.

For about 20 years, I worked in newspaper newsrooms. Often crowded and rather noisy affairs, they epitomized the open office, and I had no problem working in that environment. Actually, I kinda liked it.

In my first job in economic development, they put me alone in an office between two ferns. Initially, I felt quite isolated, but came to adapt. Those ferns were pretty good listeners. I believe the physical layout of offices will change because of what we're going through now. The big open office that so many companies had come to prefer, packing in people like sardines (similar to the airlines), will come into disfavor. Companies will do quite the opposite and increase physical distancing between people. In an attempt to limit the spread of germs, expect more walls or at the very least cubicle barriers going up.

The coronavirus may also lead to a decrease in demand for office space as companies will look for ways to cut costs. Fewer employees will be coming into the office, because of layoffs, an increased trend of working from home and an acceleration of AI and automation.

I am most interested in seeing what happens with call centers, which by their very nature have a greater risk of exposure for employees due to the tight spaces, shared equipment, and people coming and going for shifts. I think you will see a lot more work-from-home capabilities expanded. And how will all this play out for future office space and vacancy rates? Stay tuned.

A Good Goat is Hard to Beat

There is something a bit tiring about video conferencing, especially when you are doing a lot of it. I try to space them out whenever possible. One or two in the morning, same in the afternoon. In a longer zoom conference morning, I shifted from a stuffy indoors to outside on the porch where it was a beautiful 80 degrees yesterday in Dallas. My cold-weather cohorts noticed. (What they didn't see was my bermuda shorts.) Not every video call actually needs to be a video call. I've also found that if there are just a few of us, patching a call together via my cell phone usually just works fine. There's no need for us to be looking at each others mugs. Sweet Farm, an animal sanctuary in Half Moon Bay, California, is offering people the opportunity to invite a llama, goat, cow or other farm animal to make a cameo appearance on a live video call. The Silicon Valley non-profit launched its "Goat 2 Meeting" initiative on March 25.

Every One of Us Wants It

In a Facebook post and interview, Jay Timmons, the head of the National Association of Manufacturers, sharply criticized demonstrators who have defied social distancing protocols. His Facebook post began with a single word in all capital letters: “IDIOTS.”

Mr. Timmons' frustrations show the stark divide between the small-but-loud groups of protesters who are marching on state capitals to demand an immediate lifting of restrictions on economic activity and business leaders who have called for more gradual and careful steps toward reopening.

“These people are standing so close together without any protection — with children, for God’s sakes,” Mr. Timmons said in a video call. “And they have no concern, and it’s all about them, and it’s all about what they want.

"And you know what? Every one of us wants it. Every one of us wants some sense of normalcy. But I can tell you this: We’ll never have it if our manufacturing workers can’t do their jobs, if they can’t get that personal protective equipment manufactured, so that everybody has access to it to go back out into public.”

An Irked CEO

Comments that I made in a recent online webinar about how many if not most companies are pulling back on capital spending did not sit well with a CEO of a sizable Midwest manufacturing operation.

Apparently he thought I was being too negative, whereas I was only repeating recent findings by Goldman Sachs and PricewaterhouseCoopers. Goldman Sachs says companies will reduce cash spending by an annual record of 33 percent during 2020.

Those findings fall in line with PwC’s survey of American CFOs which found 82 percent are now focused on reducing costs.

"Companies are cutting costs and putting planned investments in technology, workforce and capital expenditures on hold while they try to weather an unprecedented economic storm." said PwC Chief Clients Officer Amity Millhiser.

"Before this pandemic hit, many businesses were focused on long-term growth. Now they are being forced to think short-term and protect liquidity."

The irked CEO said his company had increased hiring and and was looking to increase capital spending.

Well, that's all very good, and I'm happy for him. But I don't think most manufacturers, who were in a slump pre-pandemic, would say the same right now. (He said I needed to "get out.")

The CEO and I did agree that we'll get through this. How soon? Well, that's a matter of conjecture.

My experience: Some folks don't want to hear what they don't want to hear. It's that simple. Said one economic developer who messaged me after the webinar: "It’s great to be optimistic but we must be honest about the challenges ahead of us."

Quotable Quotes

"Stay home. Listen to the scientists. There is nothing essential about going to a bowling alley or getting a manicure in the middle of a pandemic." -- Atlanta Mayor Keisha Bottoms

“Hell no, we’re not opening on Monday. What happens if we open too soon and contribute to an outbreak? Traced to the Plaza Theater! You know what that would do to my business? I wouldn’t have one.” -- Chris Escobar, owner of the 485-seat Plaza Theater in Atlanta

“As a global leader in health and hygiene products, we must be clear that under no circumstance should our disinfectant products be administered into the human body.” -- Reckitt Benckiser, maker of Lysol, in a statement on its website

“There are more important things than living, and that’s saving this country for my children and grandchildren and saving this country for all of us.” -- Texas Lt. Gov. Dan Patrick

“My optimistic side says the virus will ease off in the summer and a vaccine will arrive like the cavalry. But I’m learning to guard against my essentially optimistic nature.” -- Dr. William Schaffner, a preventive medicine specialist at Vanderbilt University

“OK, let’s have all the states declare bankruptcy — that’s the way to bring the national economy back.” -- New York Gov. Andrew M. Cuomo on Kentucky Sen. Sen. Mitch McConnell's statement that cash-short states should consider filing for bankruptcy

“Assume everybody is a carrier. And then you start from an even slate. And tell the people what to do. And let the businesses open and competition will destroy that business if, in fact, they become evident that they have disease, they’re closed down. It’s that simple.” -- Las Vegas Mayor Carolyn Goodman

Non-Virus Stories We're Reading

The True Story of the White Island Eruption Outside Magazine

For Sale: An Abandoned Cold War Missile Launch Site by the Side of the Road Atlas Obscura

On Dolly Parton and Being Seen Longreads

To Run My Best Marathon at Age 44, I Had to Outrun My Past Wired

A Way Back: E.O. Wilson's Big Ideas for Saving Nature and Humanity Along with It Longreads

You might have consumed this beaver sac excretion without knowing

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