Wednesday, March 18, 2015
I mentioned in a previous publisher's note that I've been taking a course from New York University in its "Creative Cities" program, and I wanted to let you in on a surprising pattern I've been seeing over the past few weeks of study.
Spoiler alert: The punch line is public education.
One of the first things we talked about in the class is the idea of a "cluster" of related businesses that benefit one another. We studied, for instance, the technology cluster in Silicon Valley and the wine cluster in Northern California.
The theory is that if you want to boost the overall economic health of your region, it's a good idea to figure out what you're already good at and find ways to develop that strength. It might be through direct investment (if Jackson's potential cluster is medical technology, then perhaps we build an incubator around UMMC), or through marketing ("hey, Jackson is awesome for medical technology, c'mon!"), or by promoting industries and infrastructure that complement that cluster, such as—I don't know—laser or battery development or long-distance screen-sharing technologies. (Go with me here.)
In essence, the idea is that a strong cluster actually helps the companies and the workers in that area, because it creates a pool of both. When I think of all of the WorldCom and SkyTel orphans that we still have in the metro Jackson workforce, it seems to stand out as an example of not being in a cluster. There aren't enough similar businesses to soak up the failure of a (rather large) outlier company like WorldCom.
If Jackson develops a strong medical technology cluster, we might see a number of different places that could both attract talent and where talent could land when things need to change.
Something else we've studied and discussed is the notion of "startup cities." Urban environments are best situated to incubate the startup businesses that can be a good fit with your cluster as well as the businesses that support quality of life in those places, including restaurants, entertainment, education, and "third places" for personal development, spiritual growth, exercise and so on.
A city that attracts with a high quality-of-life quotient—particularly one that also has a well-identified and incubated cluster of businesses in some specific industries—can build prosperity both in businesses related to that cluster and the support businesses that increase quality of life.
So here's what frequently doesn't work well: corporate welfare. Reaction to this idea of "incubating businesses" tends too often to skip the quality-of-life stuff and focus on making it cheaper or more economically attractive for a business to locate here, by offering free land, tax abatements, financing, etc., in order to encourage big businesses or manufacturing plants and so on to locate in a given area.
To some extent that works, and smart incentives are essentially non-negotiable in today's United States. But focusing too much on incentives is a big gamble.
How big? The New York Times has a database of incentives by state as of 2012 (jfp.ms/nyt_incentives). The top five for Mississippi are part of what I'll coin the "Haley Barbour Victory Tour": SiliCor (alternative fuels, $76 million; failed), Kior (alternative fuels, $75 million; failed), Stiton (solar power, $75 million; 200 jobs in Hattiesburg), Twin Creeks Technologies (solar, $54 million; failed), HCL CleanTech (wood into sugar, $75 million; company bought by Virdia, which was then bought by a Finish conglomerate, Mississippi plant's future murky).
Clearly, having the government gamble on startups can be problematic, particularly since startups have a high propensity to fail.
Incentives have, indeed, become a huge issue around the country. In class, we studied a Harvard Business Review case study on North Carolina in the mid-1990s, which throughout the 1980s and 1990s was known for not offering many financial incentives to relocate companies because the state offered so many other features, including a remarkable community college system for educating its workforce, great infrastructure, a mature manufacturing base and great universities.
Eventually, however, the state was forced to get deeper into the incentives game because so many larger companies expect the incentives and desire them in order to pad their bottom lines.
Yet so few of those incentives offer any sort of guarantee from the recipient corporation that too frequently the jobs don't materialize, or they aren't as great as we'd expected, or the cluster doesn't develop around them that the government had hoped to see.
What's more, in the creative economy that is centered in cities, quality of life often trumps incentives. After all, a company that's looking for a specific economic cluster to join—one that offers a lot of talent that it can pull from—will often be drawn to the city that (a) has strength in that cluster and (b) offers a strong quality of life for it citizens. Tax breaks are secondary.
So here's what's crazy. The one word that seems to pop up and highlight itself more than anything else as I've studied quality-of-life issues is—education. In fact, public education (or, in some cases, access to inexpensive private schools) comes up a lot in these creative economy discussions. Why? Because a lot of cities have challenges with education, and when people move out of the city because their kids reach a certain age, the clustering effects on the creative economy are dissipated.
Conclusion? Mississippi needs a sea change in our investment in public education. From K-12 through community colleges, we should be putting more money into those issues—fully funding MAEP, encouraging magnets and more creative classrooms, and putting our weight behind programs such as Alignment Jackson, if they can be shown to make a difference.
If Jackson and Mississippi are going to compete in the creative economy then we need to address two fundamentals right now: an educated workforce and the quality of place that comes with great schools in Jackson.
How? Start by holding your representatives accountable for their MAEP votes—and remind them of the hundreds of millions of dollars in bad investments on the Haley Barbour Victory Tour. Tell them to chart a smarter course.
Let's get together—focused, engaged, and civic-minded—and fix our schools. Our creative economy depends on it.
Todd Stauffer is publisher, president and co-foundation of the Jackson Free Press. Emal him at firstname.lastname@example.org.
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