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Episode 15 – Winning the War on Economic Development

Site Selectors Guild
Episode 15 - Winning the War on Economic Development

Rick Weddle: Welcome to “Site Selection Matters” where we take a close look at the art and science of site-selection decision making. I’m your host Rick Weddle, President of the Site Selectors Guild. In each episode, we introduce you to leaders in the world of corporate site selection and economic development. We speak with members of the Site Selectors Guild, our economic development partners, and corporate decision makers to provide you with deep insight into the best and next practices in our profession.

In this episode, we have as our guest Chris Lloyd, Senior Vice President and Director of Infrastructure and Economic Development for McGuireWoods Consulting. In this capacity, Chris represents clients nationwide in their site selection and in city of negotiation efforts. Today, Chris will talk with us about how to win the economic development war. And I can’t wait to get into that discussion. Join me as we welcome Chris to “Site Selection Matters.”

Chris, what exactly do you mean when you say, “The economic development war?”

Chris Lloyd: What I’m talking about, Rick, is I think that economic development, or at least the perception of economic development, has changed a great deal. It certainly has changed in the over 25 years that I’ve been doing economic development, both in the public side and now on the private side. In that, you know, when I started, and I think a lot of people in the economic development profession have been at it a long time, you know, economic developers walked on water. And it was apolitical, and people were always excited when there were new project announcements or activities taking place to benefit a community. And I think you’re seeing, particularly over the last 5 years, that economic developments become much more politicized. And that’s by both sides, both the left and the right, whether you call it corporate welfare or crony capitalism, or you’ve got the attacks on, in our current political climate, on billionaires and wealth tax that people are just suspicious of companies, suspicious of growth, suspicious of government support for economic development and economic-development activities.

And so, you’ve got these political forces, again, at both sides of the political spectrum, that have some serious questions regarding economic development.

Rick: So, I was gonna say…so you’re saying a little bit it sounds like that economic development and positive support for it is no longer a given.

Chris: Absolutely that’s the case, it’s no longer a given as the way it used to be.

Rick: As you frame this discussion about this kind of war discussion, put an interesting choice of words, you talk about how industry is changing and that the forces that are driving that change. Could you take a minute and walk our listeners through your specific views on this change and what do you think the underlying cause is?

Chris: Sure. I think some of it is, you know, the industry is changing, economic development used to be a lot of just smokestack chasing. And I think you’re now seeing an expectation, by either the companies we’re working with, either as site selectors or as economic development professionals, and by citizens that they’re expecting a whole lot more from economic development. They’re expecting economic development more holistic, to include talent strategies, which is obviously a big topic now. They’re looking for people to help them with entrepreneurship, with international trade, with helping with supply chain issues and other issues related to the success of a company. So, there’s higher expectations with regards to economic development. At the same time that I think people are questioning the amount of money that’s being spent on economic development. And so, this kind of push-pull of companies and citizens expecting more but also questioning whether these investments are having a return on…whether the money spent has a good return on investment is what’s causing some of these challenges.

Rick: And that return on investment, it’s not any more patient money. The leadership is interested in a more immediate return perhaps than it was in the past, I guess.

Chris: I think that is absolutely the case. Yeah.

Rick: In all of this change that’s underway, which is really tied to disruption in industry, the different things that are going on, it kind of sounds pretty scary. And you would think that some of this change is likely to happen but some of you would say, “Well, it just can’t really happen to us anytime soon.” Any comments on that?

Chris: Sure. Well, think about a little bit, Rick, how much economic development has changed just in your professional career, my professional career. We now have information at our fingertips through the internet. When I started economic development, if you wanted to learn about a community, you had to go to the library, you had to go to get census data. Now you’ve got information regarding the community truly available instantly 24/7. You can do virtual tours of a community.

There is the expectation that economic development moves much more rapidly than it used to. You know, some of us would have 1 year, 2 years, 3 years to work a prospect. I’ve had projects where we’ve gone from the first phone call to me to an announcement in 30 days. You know, the whole concept of shovel ready is I think an expectation that people now have. And so, these are the forces of instant data, of wanting to make decisions very very quickly is causing a great deal of disruption. And it’s disrupting, again, what people expect of economic development, it is disrupting how economic development is being delivered. And whenever you have a period of disruption, that creates uncertainty and questions regarding the profession and the amount of money that is spent on it.

Rick: Chris, you get me to date myself a little bit when you talk about how it was when I got started in this business, but it was all paper and ink really back then. And a company, when they would come to your community to visit, to start a site-location process, often brought, you know, as many as a half a dozen different executives. They stayed several days, they had time for what the old days would be called “wining and dining” with community leaders. They were largely there learning about the community because they had no way…unless they already had facilities there, they had no way to really understand that up front. Today, it seems like they already know what they need to know and they’re using the community visit for verification or validation more than additional discovery. Is that similar to what your experience is?

Chris: Completely agree with that. I’m lucky if I get a half day in a community once we do those site tours.

Rick: When’s the last time you saw…I mean, you know, in those days, there used to be lunches at the country club and fancy dinners, now it seems like picking up box lunches on the go and the clients in on the first plane and out on the last plane of the day. There’s not much spare time for entertainment.

Chris: That’s correct. Not for entertainment or for really getting a good feel of the community.

Rick: Interesting. You know, you mentioned that there are political forces at play in economic development today, in part maybe tied to how few people really understand economic development and the changes that threaten the roles we play in our communities. Can you explain that a little bit?

Chris: Sure. By that I mean…I always put it the way I analyze it or analogize it is I never get invited to [inaudible 00:07:17] at my kids’ school. Try explaining to a 4th grader or an 8th grader what economic development is. And the same very few people understand what economic development is. There are very few degree programs in it, it’s not like people understand or grasp what economic development is. And if they understand it or they have a remote understanding of it, they either think that economic developers are, what my wife refers to as the scallops wrapped in bacon [inaudible 00:07:41], that she thinks I just go around the country having, you know, meals with people and expensive hotels and expensive meals.

Or the opposite extreme is they think that economic development is all about paving over paradise and putting in a parking lot, that you’re destroying the quality of life and quality of place of a community just to build more strip shopping centers or more industry and pollute the air and the environment.

And so, when people don’t understand economic development, when people fear and people…they attack things that they don’t understand. And as a profession, I think we all need to do a better job of explaining what we do and the positive impact that economic development has on the community.

Rick: You know, you say people don’t understand but it sounds like you’re saying as much that we, as economic developers, really haven’t done a very good job communicating the value that we contribute and creating awareness of how we connect to job creation in the economy. Is that true?

Chris: I think it is true to some degree. And you said earlier, Rick, that it’s not as much of a given that people want economic development or understand economic development. And I think some of us are just coasting along and think, “Oh, well, it’s just the way it was 10, 15, 20 years ago,” that people understand what we do. And so, maybe we have rested on our laurels a little too much and not going out and doing the hard work of educating people, being transparent, being accountable. Showing people, elected officials, and citizens the importance of economic development so that they understand what we do and how what we do contributes to, not only their personal bottom line, but also improves the community going forward.

Rick: You know, years ago, this was largely a transaction business and the economic developer was a salesman, was the super salesman, I guess, for the community, the region, the state. But you mentioned earlier talent development, talent and occupational position attraction, that sounds a lot more like systems than it does transactions…

Chris: Systems and relationships, I would say.

Rick: And how does that economic developer shift into that new role of being a talent manager or being a connector of those systems compared to the old super salesman?

Chris: I think it’s a different skill set that someone has. And it’s learning, it’s becoming more educated about the assets in a community, becoming more educated about the shortcomings of the community, being a problem solver to address those shortcomings. It’s about being more of a collaborator, you know, instead of the economic development who focused by yourself on the community and just was in that sales person role, going out and building relationships with universities, with the K-12 system, with the small business-development centers, with private-sector allies, and the utility companies, and law firms, and accounting firms, and engineering firms so that you get kind of a 360-degree view of your community so you understand its strengths, its weaknesses, you have other people to call on who can address issues as they come up as, you’re dealing with prospects or dealing with citizen expectations, that you have that whole view.

Rick: Does that change the role the economic developers’ kind of interface as they kind of…they’re really moving into the space in the community that they haven’t been in before. Is there any turf issues that you’ve seen arise where maybe someone, at the community college or at the university, might say, “Well, you know, that’s really my business. Why are you working in this vineyard?”

Chris: I think there’s obviously the potential for that to happen. But I think, if someone approaches it in a collaborative way, then you can mitigate some of that. And secondly, it’s not as though that the role of our stakeholder partners isn’t changing as well. People are looking for them to be more collaborative and to be less protective of turf and looking for them to up their game in the holistic way that they approach their jobs. So, I think that, if you can work together among all those stakeholders, then you can avoid some of those turf issues. And you all understand, if you all share a common vision and a common purpose of, “What we’re doing is to move the community forward,” then you can help address some of those challenges.

Rick: So, put on your Site-Selector-Guild hat for just a second and be on the corporate side, the site-selector side, how has your role in that capacity changed?

Chris: I think it has changed over time in that I think that our clients look to us to help guide the economic development professional more. To help prep them, to help them understand that we don’t have the 3 days in the community, to help them be more focused during the site visits, to be more focused in the responses that we get. So, we’re holding the hand, not only of our client, but also working closely with the economic developer to better meet the needs of our client. I think they’re looking for us to be more collaborative and not just provide a numbers analysis of where is the best place to do business, from a financial perspective, but also look at the talent pipeline, to look at the supply chain, to look at the quality-of-life aspects. They’re asking…meaning the client is asking us to be more comprehensive and holistic in the way that we view things. So, I think the expectation is for us to take on some of the attributes that I think the economic-development profession itself needs to embrace more fully.

Rick: So, looking out on the horizon, what happens if we, as a group, as individuals and as a group don’t respond to these challenges ahead and the change that’s coming down the pike? What happens? And then, what do you see maybe in your crystal ball as you kind of look out on the horizon?

Chris: Right. I mean, obviously, what happens if we don’t do a better job of educating the public and educating our elected officials regarding the importance of economic development, what we do is less funding, it’s fewer incentives, it’s more regulation, it’s more of an anti-business, anti-corporatist sort of atmosphere in the country. Whether it’s at the local level, at the state level, at the federal level. I would hope that, you know, we can avoid that. Again, there are large forces at play on both sides here. But again, I think, through that education and through being transparent, through being accountable and getting out there and really embracing…explaining what we do, embracing, you know, more open and transparent way to go about the profession, then I think we can avoid that. If not, the problems are pretty significant.

Rick: To be sure. And, you know, we’re currently with unemployment in the country, not only at the lowest historical levels, but at levels, when I came through school, that we didn’t think were even possible. You know, it was below, we’re above full employment. But at the same time, we’re hearing all sorts of discussion about possible recession, manufacturing troubles, trade barrier issues, and trade wars, and things. And it could be some storm clouds on the horizon. If that happens and we suddenly find ourselves back in the environment we used to be in, it’s almost like deja vu all over again. We’ll be back to job creation being important perhaps.

Chris: I would certainly think that would be the case. But again, I think people could say, “Well, wait a second, why didn’t the economic-development profession step forward to make sure this didn’t happen?” And there could be pointing of fingers and people will go, “Well, wait a second, we invested all that money when the economy was good, how can we be sure that similar investments, when the economy is on the downturn, are gonna give us long-term prosperity?” So, traditionally, normally, I would say you’re right, Rick, but I think we’re entering in such a politically charged environment regarding economic development right now that some of those normal rules may not apply.

Rick: It reminds me of that old Bob Dylan song, “The Times, They Are A-Changin” because there’s gonna be a lot of things on the horizon that will be different that will require us to do a lot of different things. Chris, you’ve given us a lot to think about today. What a great conversation. I fear we just scratched the surface of it. But that’s really all the time we have today. So, let me say thank you for talking with us today on this episode of “Site Selection Matters.”

Thanks for listening to this episode of “Site Selection Matters” and a special thanks today to Chris Lloyd for helping us understand what he means when he talks about winning the economic development war. What an informative discussion, and certainly one that leaves us with a lot to think about going forward. Again, I’m Rick Weddle, President of Site Selectors Guild. We hope you will subscribe to “Site Selection Matters” podcasts on Apple Podcasts, on Stitcher, on Spotify, or wherever you listen to your podcasts. We look forward to bringing you some great discussions in the year ahead. Until next time, good day.