Jeffrey M. Lewis
Economic development is about quality of life. It’s about prosperity for our citizens, strengthening communities, and building a strong foundation for opportunity. It’s about excellent transportation and communications systems, first class education systems that compete in the global economy, and a tax system that’s fair and offers employers a level playing field with domestic and foreign competitors.
Vermont does well in many areas in this regard, but we can do much better.
Vermont executes its economic development work through a combination of state programs and legally chartered Regional Development Corporations (RDCs). These two related but independent systems struggle to balance state initiatives and local needs. Detailed knowledge of companies is collected at the local, RDC level, while policy is developed at the state level. Depending on state administration and RDC leadership, cooperation and effectiveness varies.
Agreement and cooperation on goals and strategies is crucial to best leverage our economic development resources.
RDCs and the state, through its Department of Economic Development, should focus on three areas: strong relationships with our employers; improving the quality and size of our workforce; and the urgent development of systems that transfer intellectual property from our academic institutions to entrepreneurial efforts. Current efforts in these three key areas are disparate, uncoordinated, and ultimately ineffective because they are too small.
Vermont is a small state where relationships matter. Vermonters are good at collaboration and networking. We can build and sustain relationships with our employers, both those owned here and those controlled beyond Vermont’s border.
Here’s how. RDC’s are more able than folks from Montpelier to be the relationship managers. It’s part of our everyday routine to know what’s going on at the shop floors and offices of local employers. On the other hand, the state is a necessary player in solving problems, whether with the transportation system, the permitting process, or the tax structure.
With RDC’s on the front lines of contact with their local businesses, the state can help turn good relationships into solid partnerships. The extra value of a visit from the Governor or Secretary of Commerce, who have direct access to policy and resources, does wonders for relationship building. Further, relationship building can be enhanced by appointing talented, young business graduates to state/RDC teams aimed at fostering loyalty among our employers. The strategies of loyalty are well known and we need to practice them diligently. Specifically, we must give special focus to our strongest and largest employers, like IBM, GE and Goodrich, who are not Vermont based, but make decisions every day that affect Vermont jobs. Vermont should never miss an opportunity to help an employer grow, or be surprised by an employer’s decision to leave.
RDC’s and state officials need to know the key decision makers and business dynamics to sustain robust relationships with Vermont’s employers to grow prosperity for Vermonters. We need transparent and ambitious performance measures that measure the success or failure of our economic development efforts.
Further, it is our workers that most employers value about Vermont. We are known for talented, hardworking, stable and loyal workers. We just don’t have enough of them. Many employers have very difficult times hiring for everything from the shop floor to the executive suite.
Across Vermont, we need to devote ourselves to improving the quality of our existing workforce through training, continuing education, and career support. The recent Harvard analysis “Pathways to Prosperity”, found at the address below underscores the importance of this. The report calls for dramatic changes to our “middle professional” training systems and Vermonters should sit up and listen.
But, better training is not enough. No part of the state has enough talent or workers and in some parts the workforce is actually shrinking because we are not competitive with nearby opportunities. As a state, we need to work with employers to seek new workers from out of state, or out of the country. Vermont’s immigration rate from outside the US is among the lowest in the country, yet this is still a very attractive state in which to build a life and career.
Finally, Vermont has a strong university and community college system that is a source of business ideas and entrepreneurship. However, Vermont is below the US average, and significantly below both Massachusetts and New Hampshire, in measures of innovation. We need to build the pathways that lead a good idea in the lab to a great product in the market. This requires mentors who can recognize good ideas and turn them into businesses.
If loyalty and a superior workforce sustain us, innovation helps us grow. We need all three.
Jeffrey M. Lewis is executive director of BDCC, a Vermont RDC, and a founding partner of the Campaign for Vermont.