Utilities are old hands at economic development. Have been for years for good reason. It is enlightened self-interest: A better business environment brings a more stable economy, good workforce and more predictable sales for the business of a utility. Lots of people win, including the public when it is done well. The Southeast has been well-represented in “best-of” lists in economic development.
Over the past several months one economic development effort – the Amazon HQ2 in New York – illustrates what is evolving in the economic development world. Raining money on a locality or politician’s territory is not sufficient to get economic results or even get a project off the ground. Photos of officials with over-sized checks and press releases about economic development grants are feel-good communications, not real results for the public.
What succeeds? Here ECC’s take: Real business activity, sustainable job development, improved quality of life for residents. Collaboration among stakeholders versus an insiders-only game. Measure real success for the short and long term, rigorous tests to see if grants live up to the hype. Some projects around the country start with great hopes and fanfare then do not attract new business tenants and new jobs, even to brand new industrial parks that are built.
Think of economic development grants and ask this question: Is that money spent and gone, or invested for the future? Some thoughts:
Real business activity: Something with legs. Products and services that build commerce beyond the locality. Activity that attracts dollars into a location.
Sustainable job development: Stepping up specialized skills or filling a niche that makes a place stand out to companies locating expansions. Jobs that tap into the high schools and tech schools to train people locally for jobs that support a reasonable family budget. Jobs that last.
Improved quality of life: Business activity that encourages investment in utilities, civic infrastructure and other businesses. Greater economic mobility for people.
Collaboration: This is likely the major issue that sunk Amazon in New York. Even though certain polls said most of the public wanted Amazon, enough didn’t, or enough felt it was an insider deal, and reduced the effort to ashes. Time was spent. Money was spent. Credibility was spent. In the end, wasted, when those resources could have been used to build economic progress somewhere.
This is all measurable. It is part of smart project management. Good planning, on a proper scale, matters. One economic development publication said about states that succeeded: “One major reason for these states’ successes is their comprehensive economic development programming. … robust and capable state-level economic development platforms.”
South Carolina has rolled up its coordination for economic development. The SC Power Team has been pitching the state and making plans for years now. It has aggregated funds to have a substantial pool of resources. North Carolina has a fund, too. Planning like this can make the Carolinas more competitive in an increasingly competitive business world.
Utilities add to a productive and competitive business environment. Business Facilities magazine noted, “Size counts, but when it comes to making our picks for forward-thinking utilities, so do smart grids, renewable energy and a seat at the table when economic development deals are negotiated.”
Economic development is more than money nowadays. A good plan has a lot of features, especially in energy. Green choices, heightened reliability, diverse fuels, how business savvy the utility is.
ECC believes larger utilities have a capacity to bring expertise, flexibility, networks and dollars for an edge in local economic development. Heft, more fire-power. Investor-owned utilities bring adaptability.
The bottom line, then, is the bottom line. For the public and customers. Economic development grants need to have a measurable, real impact on jobs, money flowing into a location and pass the test as part of comprehensive plans.