A Framework For A New Economic Development Approach
The following op-ed appeared in the News Journal:
In an increasingly competitive global economy, no single administration, no single piece of legislation and no single industry will be able to lead Delaware to economic success in the coming years.
Instead, Delaware’s government, business and community leaders must join together to fundamentally change our approach to economic development and nurture a growing entrepreneurship base in the face of intense competition for jobs, investment and talent. That’s the conclusion of the Delaware Growth Agenda, which was commissioned by the Delaware Business Roundtable.
Since its economy was pummeled by the Great Recession, Delaware has fought back. Governor Markell successfully steered the state through the post-recession years, and as a result, Delaware’s labor force participation rate grew the fastest of all 50 states from 2010 through 2015. The Delaware Competes Act and the Commitment to Innovation Act stand out as important steps taken by the Governor and the General Assembly to retain and attract jobs.
But while that has improved our footing, the sands of economic development are constantly shifting with the dynamics of the economy and intense regional and national competition for jobs, investment and talent. Our economic development efforts must be forward-looking, innovative and relentless, and we must collectively work together in the face of continual change.
The Growth Agenda provides a strategic framework for pursuing a new long-term approach to economic development in the state. Developed through a non-partisan, collaborative planning effort that engaged more than 100 state, business and community leaders, its goal is to focus economic development efforts on sustainable growth well into the next decade. The Growth Agenda includes public policy recommendations centered on three strategic goals to be implemented over the next five years:
Building an entrepreneurship and innovation ecosystem. This includes bolstering federal, state and private investment in higher education, and emphasizing the finance, healthcare, science and technology fields, engineering and entrepreneurship programs. The framework calls for the creation of an “Innovation District” as a destination for entrepreneurs and startups, as well as for marketing Delaware to regional and national angel investors and risk capital networks.
Pursuing a new approach to economic development. The framework calls for establishing a public-private economic development organization, crafting a new comprehensive statewide economic development strategic plan, and a marketing campaign that pursues new investment and jobs in key industries – including financial services, business services, education and knowledge creation, manufacturing, and distribution.
Enhancing Delaware’s business climate. The Growth Agenda says the state must ensure Delaware’s infrastructure meets the needs of a 21st century economy, including updating the Coastal Zone Act to provide greater flexibility in redeveloping brownfield sites. The framework also calls for improving the state’s public education system, taking a leadership role in facilitating more efficient development and permitting processes, and creating a Futures Council of Delaware.
Taken together, these strategic goals will help position Delaware as a global magnet for leading-edge technologies, talent and investment – which is achievable only if we create a more robust partnership between the public and private sectors to guide future success.
Why is this change needed? The Growth Agenda, conducted by TIP Strategies with the Delaware Business Roundtable, examined Delaware’s economic health compared to other states in the region and concluded:
Many of the traditional economic pillars of the state – including cars and chemicals – are no longer significant job generators.
Manufacturing accounted for about 20 percent of the state’s non-farm employment in 1990. By last year, it was just 10 percent of all jobs.
The state lost more jobs in manufacturing and corporate headquarters than any other sector between 2010 and 2014 – while health care and professional services sectors experienced robust job growth.
Delaware is home to a growing base on which to build a vibrant entrepreneurship and innovation ecosystem – and higher education must become the long-term driving force behind that ecosystem.
In a number of areas, such as private sector earnings growth and gross state product per capita, Delaware’s economic performance is trending negatively when compared to other states.
These findings demonstrate we are facing real challenges in need of a fundamentally different approach. That is why the Growth Agenda encourages a reset of economic development in Delaware over the next five years.
The Roundtable’s intention is for the Delaware Growth Agenda to spark a much-needed discussion of how to expand economic opportunity and jobs throughout the state during the 2016 election cycle that will result in concrete action thereafter. It comes on the heels of the Roundtable’s 2015 study of state finances, which clearly articulated the structural budget challenge facing the state as it wrestles with unsustainable revenue sources and spending patterns and strongly recommended that Delaware focus on expanding economic growth as one part of the solution.
It is obvious things cannot continue as they have because Delaware’s existing companies – nor the industry sectors themselves – will not be able to serve as engines of future growth. We must take a new approach, and the public and private sectors must work together to get it done.
Mark Turner is President and CEO of WSFS and Chairman of the Delaware Business Roundtable.