government economic developmentThere are some who argue government has no business getting involved with economic development.  They believe economic development is not a government function. Conversely, there are others who maintain economic development is the primary function of any American Government; they assert ‘The business of American government is business’.  I’m not sure which side is correct; however I believe the answer lies somewhere in between.

Here is what I know regarding government and economic development. The Louisianan purchase {827,000 sq miles west of the Mississippi in 1803) would not have been possible without the United States Government’s involvement.  Likewise Stewards’ Folly – the purchase of Alaska {586,412 square miles from Russia in 1867} would not have been possible had the federal government not interceded.  If neither of these economic development actions occurred we would not be singing that famous line “From Sea to Shining Sea” in America the Beautiful today.  Quite possibly the western half of the North American continent could have been the home to other sovereign foreign nations.

What about the Erie Canal, the Panama Canal and the Saint Lawrence Seaway? If various units of federal, state and local government – had not had worked together all these vital transportation infrastructures which catapulted our nation’s economic development would not have occurred.

For anyone who reads my articles regularly you know I am not an expert on Federal or State government issues; my expertise is local economic development.  A former County Administrator, I saw the devastating consequences when locally elected public officials abdicated their responsibilities and failed to pursue aggressive local economic development initiates for their communities.

Seldom do local jurisdictions expand their public airports.  Why? It results in increased local property taxes. Seldom to do local governments invest in ample entrance and exit ramps on their highway projects? Why local property taxes would increase.

The vast majority of local public officials believe economic development in their community’s is a coincidence – similar to lightening striking their water tower; there is nothing they can do to create it.  They can’t, or refuse, to see a correlation between their lack of planning and the economic stagnation taking place in their dying communities.

There are five predominant reasons why public officials in especially in small communities need to embrace economic development.  Over and over I have seen these reasons so they should be crystal clear.  The five reasons to have an economic development plan in place are:  Obsolesce, Bankruptcy, Mergers, Relocations and Deaths.

Read carefully:  At one time there were literally thousands of livery stables and buggy whip makers across America. With the advent of the automobile all those businesses became obsolete. As a boy I remember just about every community had a Television Repair store; but when transistors and motherboards replaces vacuum tubes it became cheaper to buy a new TV rather than repair an old one.  Consequently local TV stores, repairman and the store employees suddenly became obsolete.  New technologies create obsolescence.

So many once thriving employers, especially in small towns and villages, have gone out of business do to financial mismanagement.  Small business bankruptcy is extremely common.  As more and more college grads with business degrees emphasize economy of scales more and more business mergers and consolidations occur. Local shipping centers and assembly plants are then closed.

The offspring of many business owners who are giving the helm of the family business frequently develop a national or global perspective. They often relocate to be closer to their suppliers or move to areas where the cost of labor less. Business relocations take a staggering toll on small communities across America.

Finally death.  Though often overlooked, it’s a fact – when old Jacob or Samuel pass on neither their spouses nor children want to be burdened with owning the family business.  The land and building are sold and all employees who were devoted to the founder are let go with no job prospects in sight.

Economic development needs to be a priority in every township, village, city, school board, county and parish?  Local public officials need to actively seek and recruit new businesses large and small?  Every elected council, board or commission needs a plan in place for continued economic development?

Gabe Gabrielsen is a former County Administrator who helps local units of government create effective – results driven economic development plans.  Connect with Gabe on Linked In at www.linkedin.com/in/gabegabrielsen

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