Campus Martius, Detroit
Over the last fifty years a range of economic development agencies, departments and entities have been created around the country. Their goals have primarily something to do with retaining and attracting businesses to a particular place in order to have more jobs in that place. While ideally those would be new jobs, created out of new ventures and entrepreneurship, for the most part they are about moving existing jobs from one jurisdiction to another. The most powerful tool most economic developers have are government subsidies – reduced taxes, government-owned property offered at a discount, cash grants and tax-exempt borrowing rates. But seldom to never is it possible to pinpoint what actually creates new businesses and jobs – actual economic expansion. Even in the best cases, economic development is usually a zero/sum game. Where a business in one place expands it is because it is, at best, taking customers from another firm in another city, another state or another country. We don’t have a firm understanding of where entirely new jobs and economic value come from.
Government also attempts to improve a local economy by moving a government function, and therefore government employees, to a particular place. On the biggest scale this could be a military base. In an urban setting it could be a large government office. In Jamaica, I was able to observe the impact on the community of the results effective lobbying efforts to attract a college, a one million square foot government office building, a court and a laboratory and office space to the community. One thing that I noticed was that government office workers rarely left their offices to eat or shop. Most employees came from outside the community. With electronic record keeping, the largest governmental office employer halved its workforce leaving a massive structure mostly filled with file cabinets. The multiplier effect from such a tremendously expensive project didn’t seem very powerful. When the jobs left, there was a vacuum. There was no real expansion to local economic activity. Only the college seemed economically connected to the community. Continue reading →
