Time for a Reset on Delaware’s Economic Development Approach
The following op-ed appeared in Town Square Delaware:
Economic development in Delaware is at a crossroads.
At a time when the legacy corporations that drove the state’s economy for generations have dramatically reduced their footprint and are no longer a source of sustainable jobs,, Delaware’s political, business and community leaders have an opportunity to work collaboratively to fundamentally change the way we attract businesses and create jobs in the state.
The Delaware Growth Agenda, commissioned by the Delaware Business Roundtable, calls on the state 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.
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:
1. 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.
2. 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.
3. 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 approach needed? In the Delaware Growth Agenda, TIP Strategies and the Delaware Business Roundtable compared Delaware’s economic health 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.
Delaware’s labor force participation rate from 2010 to 2015 showed the fastest percentage point increase among the states, but from 2012 to 2015 wages grew in Delaware by 3 percent while wages in the US grew by 7 percent.
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 a need for a serious 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.
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.
This is sobering news about the state of the economy. But it is timely news, because we have the opportunity to use the report’s findings to set a new, forward-looking course for progress and prosperity in Delaware.
Robert Perkins is the Executive Director of the Delaware Business Roundtable.