Casting For A Better Future In Economic Development Depends On Casting Off The Past

We subscribe to a John Calipari theory of economic development – it’s all about talent - and a Fred Smith model of public investment – it’s all about entrepreneurship.

Everything else is pretty much a distraction.

Memphis needs a new strategy for economic growth, and we begin by casting off our traditional economic development thinking, the thinking that seems rooted in the belief that our city’s future can be found in the old economy and that creating a low-skill, low-wage workforce in the age of a knowledge-based economy makes sense. In other words, we need to resist the temptation to fight for jobs that are no longer competitive, because Memphis’ long-standing precepts about the economy are now our biggest obstacles to success.

Cities are sometimes like members of a dysfunctional family. Even when they realize things are bad, it’s hard to change, because it all feels so familiar. That’s always been a problem in Memphis, because although it’s becomes clear at times that we are ill-prepared to compete in the new creative economy, we just can’t make a clean break from the past. As a result, Memphis has been slow to adapt and compete in a global economy transformed by the dual mega drivers – technology and globalization.

Losing Ground

Now’s the time for new thinking.

Memphis is not only losing ground in today’s economy, but key indicators for the future economy are pointing in the wrong direction. In the Milken Institute rankings, Memphis is now ranked 159th, down 25 places from only a year earlier (Nashville is # 52, Knoxville #54, and Chattanooga #112).

Worst of all, many cities have already embarked on this journey and are already executing “creative city” strategies, the kind that converges art, technology and commerce to create a cauldron of innovativeness that spills over into all that it does.

Creative cities have a strong sense of place, and its people have a shared narrative. It’s the kind of place that develops, attracts and retains the most coveted workers in the new economy – young, highly-educated professionals. The connection between a high percentage of adults with college degrees and success of cities in the knowledge economy couldn’t be clearer, and that’s why we need to get serious about tracking the in-migration and out-migration of these workers, and building policies around them to attract and keep these creative workers.

The Regional Platform

Meanwhile, it’s no surprise that the new platform for economic competitiveness is the region. What is surprising is how little progress Memphis has made in this regard. After all, Memphis has spent a decade talking the talk of regionalism, but little has been done to walk the walk. Today, state economies are all but irrelevant, because they are political entities, and regions are now are economic units of competition.

In other words, the need for a new agenda right now couldn’t be more compelling. And it’s an agenda that has to focus on knowledge-based jobs in an entrepreneurial economy that depend on creative talent. If we haven’t quite figured out yet that we can’t compete with China and India for low-skill jobs (98.73% of workers in transportation, material moving and distribution are below the mean U.S. household income), we surely aren’t prepared for a future when these same countries will compete with U.S. regions for high-skill industries.

That’s why we’re paying the price right now for state government’s cuts in funding for higher education in the past. At the precise time when higher education, and more to the point, higher education research, is the key competitive necessities for creative cities, our universities have cut enrollments, hiked tuitions and reduced courses.

Entrepreneurial Universities

Memphis will never reach its potential as an entrepreneurial city as long as the University of Memphis is mired in the anti-entrepreneurial educational bureaucracy of the state. In this regard, it’s past time for every one in Memphis to tell Governor Bredesen that their support for his reelection hinges directly on his pledge to reinvent our state’s higher educational structure.

More to the point, our state universities should be given the autonomy that allows them to serve their regions more effectively and more entrepreneurially. Our universities have to be as resilient and flexible as the economy in which we compete. Meanwhile, we need to turn loose Superintendent Carol Johnson to innovate in ways that teach the coursework and soft skills needed for success in the interconnected world in which we live and work and produce the principals and teachers uniquely prepared for this mission.

More independent higher education institutions are as vital to our infrastructure as transportation, airports, communications and water. Included with universities in a higher position of importance to Memphis are other elements of infrastructure that have been largely ignored, such as a “green infrastructure,” a network of outdoor recreation, parks, waterways and greenbelts that are pivotal in the successful recruitment of talent.

Qualities Of Place

Quality of place has never been more important. It’s a definitive factor in attracting new jobs and companies. And yet, as important as the tangible quality of life are intangibles like tolerance (a distinct problem for Memphis), and being perceived as welcoming to all religions, ethnic groups and people of all sexual orientations. Because attracting immigrants is more and more a factor in a city’s success, these are more than just admirable characteristics. They are in very real ways economic benefits for cities, and in a world characterized by nothing so much as its diversity, Memphis should trumpet its diversity as an asset for our future, rather than running from its future as the nation’s first majority African-American MSA.

But as successful cities have shown, there is absolutely nothing more important to economic growth as new leadership. That’s because transforming Memphis’ attitude toward economic development demands that every one gets off the sidelines and into the game – politicians, business leaders and nonprofit leaders.

And in keeping with the regional realities of the global economy, the new leadership must be developed on a regional basis, particularly if we are to have the clout to get concessions and funds needed from state governments in Tennessee and Mississippi on regional issues like transportation infrastructure and air and water quality.

Racing To The Finish

The lesson of the Governors’ Alliance on Regional Excellence – announced with great fanfare about eight years ago and whose report cost almost half a million – is that if there is no strong regional ownership of a regional agenda, its recommendations are destined to become an impressive tome on shelves with little action taken to change things.

Finally, failed policies concerning tax policies and tax freezes are overdue for reforming. They are nothing but vestiges of the old economy thinking that we need to reject. There is little evidence that tax cutting and tax freezes work as an economic growth strategy. If they did, we wouldn’t find that states that have higher taxes also have above average per capita income and more knowledge-based companies.

The race for economic growth in the future will be the hardest competition Memphis has ever been in. But we begin by abandoning the old and embracing the new. It’s a race to the finish, and cities that compete by the same old rules have already lost.