Why Most Economic Development Efforts Fail

About the Public Sector, Trends

Why Most Economic Development Efforts Fail



economic.developmentThis is the second article in a four-part series on Why Local Governments Fail at Economic Development. The first article addressed how local government officials “fail to define and sell the sizzle” that makes their community attractive for a new businesses considering relocating there.  Local public officials love to pitch the fact that they have good roads, good schools, and a good workforce with high work standards.  They honestly believe these three things (roads, schools, and an ideal labor force) make them stand head and shoulders above other communities in competition for new business.

This article will focus on the second reason local governments fail to attract economic development.  Before I begin though, I want to state that most local governments do want new businesses in their communities; some however, more than others.  Most public officials, though not all, want their constituents to have access to good paying wages and most want their community residents to have access to a wide variety of jobs and retail options.

Many local government bodies think they have done everything possible and explored every option to facilitate economic development.  Many created a single point of contact for all economic development inquires and some have established a special staff to proactively sing the virtues of their community and recruit potential businesses.  So with all this going on, why isn’t economic development taking place?

My assessment is blunt – it will be brutal.  To dull the pain however, I will relate a personal story which perhaps many readers will relate to.  Prior to entering local government, I enjoyed a fantastic twenty-plus-year career in the United States Air Force.  The majority of my time was served in the Strategic Air Command (SAC) – the command responsible for nuclear weapons.   I had great assignments but one stands out from the rest. I enjoyed an assignment serving on a US Naval base.  I was able meet, observe, and work with numerous naval personnel.  I learned naval customs and even learned a little Navy lingo.

As a member of SAC in the US Air Force, I was taught the importance of OPSEC and COMSEC – Operational Security and Communications Security - programs that meant we did not divulge matters of security.  Over and over we were instructed to use discretion in everything we did and what we said to avoid security leaks.  While serving with the Navy, I learned what every sailor, young and old, understood – Loose Lips Sink Ships.

Now back to local government economic development.  I many communities lose out on wonderful economic development opportunities because too many local public officials had loose lips.  They could not keep their mouths shut.  They could not wait to boast about a potential business considering moving to their community.  For whatever reason, they could not wait to divulge the content of the negotiations taking place with potential employers.  The loose lips of local government officials sank many economic development ships that could have and would have entered their harbors.

Perhaps these public officials needed to impress their constituents that they were working on “big things”.   Or maybe it was because they wanted to show off to their family and friends all the great accomplishments they were doing.  Many, I believe, were for the first time in their lives “in the know” and they just couldn’t wait to boast and brag about it.  The let the cat out of the bag before the business owners were ready and thus soured the deal.

The evils of government secrecy are well known; that’s why every state that I am aware of has strict open meeting laws. However, even states with the most stringent open meeting laws allow for “closed session proceedings” and times of nonpublic disclosure.  For example, discipline hearings, employee evaluations, and potential purchases or sales of real estate, as well as preliminary union contract negotiations.  All these functions can and should be done – in a nondisclosure session.  Likewise, when governmental units are initiating preliminary discussions with businesses that want to explore relocation options, those negotiations should be done in a closed session mode until all significant issues have been hammered out.

However, time and time again I have witnessed local officials who couldn’t wait to run to a local coffee shop or jump on their personal blog to let friends and constituents know a deal was in the works.  Loose-lipped public officials who prematurely let the cat out of the bag, even though the employer involved as that things be kept quiet until all concerns were closer to being finalized, sabotage the economic development efforts underway.

There is no doubt that a major reason local governments fail to attract economic development is that they have some public officials who can maintain confidentiality and respect the wishes of pending employers during vital economic development negotiations.





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