Economic development corporations across America are looking for ways to revitalize their local economies. They wish to provide higher paying jobs, cleaner industries and monetary inflows. This of course is a great goal for a regional economy, however economic development agencies would be advised to carefully study from which new industries in which market sectors they recruit.
High-tech office parks often provide higher paying jobs, which is a boost to the local economy. Indeed, it would be great to have all local jobs with high salaries. In economic development associations they need to consider that if they are willing to recruit high-tech industries they will need to have in place prior to do business is moving in a good manufacturing and service base economy. High-tech business parks need support businesses in ancillary industries to carry out their missions.
Simply attempting to recruit high-tech companies in the latest and greatest industry is not necessarily the best way to go. Just because bio-vaccine-tech is in this week or carbon nano tech is in; in the future, does not mean that these technologies may not be leapfrogged by another technology. Or that another region somewhere else in the world or the country will end up the mainstay for that particular industry.
Let’s take for instance Silicon Valley where all the computer companies had set up. If you were an economic development association trying to get going and focused all your efforts all the computer industry at that time you may have run into the few problems. For instance you might have missed out completely on the incredible growth if you got in too late or you may have recruited a few very good companies, which had no support to and therefore the later moved out of your region taking the jobs with them and leaving you a big giant vacant building. This of course does not serve your regional economic vitality.
The service sector is essential to any high-tech industry whether it be E85 ethanol research development or the latest in RFID chips and components. And by service sector, I mean everything from inert gas distributors to next day shipping suppliers. The high-tech company or a group of companies set apart in a brand-new high-tech office park will need such a support structure to function, take advantage of the market and give you in your region those high paying jobs that you are trying to recruit for.
So often economic development associations will go out of their way along with city councils to give away tax credits, provide local financing and even the initiate college courses at the local college to provide additional job base for the region. Simply running out and trying to recruit companies there and vault in the latest and greatest new technologies to put your region on the map and for something else for you to tout is a dangerous short term tactic, which can backfire on your economic growth, as well as costs at local taxpayers billions of dollars in giveaways.
I urge every economic development association across America to take a hard look at what is truly feasible and what is not feasible and rather than make your decision on pie in the sky, look at the supply chain needed for those businesses to succeed, prosper and inevitably win the market. You must consider this a team effort and you must commit yourselves to be in it to win it. Please consider this in 2006.
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