Saturday, September 03, 2005

New Chamber President Can Usher In New Era For Memphis Economy

The following blog from early August is worth revisiting now that the Memphis Regional Chamber has taken a "more of the same" approach to its future with the selection of its next president. The new head of the Chamber will need to be a quick study to undertake the overhaul of economic development strategies that the knowledge-based economy demands, not to mention the beleagued taxpayers who are footing the bill for Chamber 's overreliance on strategies that start and stop with tax freezes. These tax freezes now amount to more than $60 million a year, more than half of all property taxes waived in the entire state of Tennessee.

Intending no criticism of the final choice, it is clear that Memphis must be the world champion in "national searches" that just happen to pick someone who's already on the inside of the organization. Meanwhile, the Charlotte, NC, chamber conducts its search for a new president. It is a process that is attracting applications from the leading chamber executives in the U.S. Someday, we need to figure out why we don't attract this kind of talent, or why we don't aspire to it.

But until then, we offer up again this blog on the challenges for the new Chamber president.


With the search for the next president of the Memphis Regional Chamber now down to five candidates, the decision looms as one of the most important that will be made in setting the course for the city’s future.

It has not always been this way. Traditionally, there are few ripples in the community when a new head of the Chamber is named, because he normally has spent most of his time focused on membership campaigns and fundraising. In recent years, cracks have appeared in the Chamber’s partnership with local governments, and the weaker relationship led to cuts in public funding.

In the end, restoring and strengthening the relationships with city and county governments is a priority for the search committee that is charged with finding an impact player as the new president. And for this reason, few committee members are interested in settling for someone to continue the status quo, and they are instead looking for a nontraditional leader for the Chamber or a Chamber executive with nontraditional skills.It wouldn’t come at a better time.

As we said on August 1: “Memphis’ economic development programs are caught in the commodity trap. It stems from our background as an agricultural center and continues with our pride in being a distribution center. We sell products that tend to be seen as commodities, to a consumer making a decision based on the lowest price. ‘Commodity economic development’ is forever in a race to the bottom to offer the cheapest prices (which of course puts pressure on employee wages to go lower)…Cities with commodity mentalities think they can grow their economies with low wages, low land costs, low utilities, low taxes.

In a commodities world, these are seen as the factors that must be controlled to keep prices down. But when we are competing with workers in Southeast Asia, Mexico and Bangladesh, it is an approach doomed to inevitable failure.” That is why ultimately, the search committee has more than just the chance to fill a job. It has a chance to touch the future of Memphis. Because at no time in history has Memphis been more in need of new and entrepreneurial thinking than now, as it stakes out its claim to the global economy and to the knowledge workers who fuel it. In the past, the city could afford for the Chamber president to stay below the radar, to concentrate on internal management of the organization and to spend his time on finding more members to join.

But now, the city’s economic future is at stake. A continuation of old economic development policies will eventually pit Memphis workers against those in third world nations. It is not a fair fight, and that’s why it’s a fight Memphians can’t win. That’s also why the new Chamber president needs to be someone who can define a different future for Memphis, who can articulate an alternate vision and inspire public and private leaders to pursue it.With this in mind, the Chamber search committee needs to hire someone who can create model programs like those in Portland, Oregon – the Portland Development Commission and the Mayor’s Business Roundtable.

The committee needs to hire someone who can build a culture of creativity and innovation that pervades business and civic life in Memphis; someone who can create a 21st century workforce for Shelby County; someone who can retain and attract people and income to produce a net gain in population and total wealth; and someone who believes that Memphis' future is not based on getting cheaper, but getting better. The committee needs to hire someone who is not esconced in the traditional Chamber way of doing business, because in the global economy, the traditional Chamber way doesn’t work. What is needed now in Chamber presidents are practitioners of new approaches to economic growth – approaches like economic gardening which focuses on existing entrepreneurs rather than corporate relocations, on biological models of business and entrepreneurial policy and new economic theories and philosophies.

The words of a specialist in economic gardening seem especially prescient to Memphis: “There was another, darker side of recruiting that bothered us. It seemed to be a certain type of business activity – the branch plant of industries that competed primarily on low price and thus needed low cost factors of production…cheap land, free buildings, tax abatements and especially low wage labor. Our experience indicated that these types of expansions stayed around as long as costs stayed low. If the standard of living started to rise, the company pulled up stakes and headed for locations where the costs were even lower. This was the world when we proposed another approach to economic develompent: building the economy from inside out, relying primarily on entrepreneurs.”

Memphis pioneered similar breakthrough policies in the Memphis Talent Magnet Project, Memphis 2005 and the Governors’ Alliance on Regional Excellence. In the end, all of these were taken under the wing of the Memphis Regional Chamber, and critics say the Chamber adopted the language of the reports, but never internalized their real meaning. Chamber leaders reply that fragmented local leadership, conflicts about priorities and declining funding were the roots of the problem. Whatever the cause, Memphis lost its position as a leader on the issues of the creative class, regionalism and strategic economic development, and as a result, it lost its chance to claim the competitive advantages that went with each.

These should be the thoughts on the minds of some members of the search committee as interviews are scheduled for the president’s job, forming questions such as: How does Memphis make better use of this key economic development position, and how does the Chamber president assume a much-needed role as an innovator and thinker on the economic challenges facing Memphis?


Free iPods said...
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Smart City Consulting said...

Having read new Chamber president John Moore's comments in The Commercial Appeal, I am concerned about his emphasis on "bringing jobs" to the city. Certainly, recruitment must always play a role in economic development. But new and existing firms contribute far more to jobs growth. Too often, the importance of their contributions are overlooked or deemphasized. I hope that Mr. Moore will make this a key part of his work plan as he begins his new assignment.

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