BBA Economic Digest
Chop Wood, Carry Water
The Japanese words kai (change) and zen (good) are used together to form kaizen, which means "change for better.”
It is a philosophy of continuous improvement and serves as the basis for the Toyota Production System and what Nick Saban, the University of Alabama's football coach, calls "the process." I believe kaizen can and should be adopted in economic development.
Focus on team, respect and getting the fundamentals right. Concentrate on the task at hand, no matter how big or small, eliminate outside distractions, and become the best that you can be. There is always room for improvement.
“The key to the Toyota Way and what makes Toyota stand out is not any of the individual elements … But what is important is having all the elements together as a system. It must be practiced every day in a very consistent manner, not in spurts.” -- Taiichi Ohno, father of the Toyota Production System.
"Eliminate the clutter and all of the things that are going on outside and focus on the things that you can control with how you go about and take care of your business. Take the other team out of the game and make it all about you and what you do." -- Nick Saban.
"Before enlightenment, chop wood, carry water. After enlightenment, chop wood, carry water.” -- Zen proverb.
BBA helps economic development organizations develop processes for continous improvement through our Coach & Ally program.
A Small Town Advantage
Many of the places where I do economic development consulting frankly need our help. They are often smaller communities outside of metro areas that have experienced little or no population growth.
Some have been on a decades-old decline, even during "good" economic times. The people there have watched as their sons and daughters have left for college, never to return except to visit family. They've seen large manufacturing employers go, too.
Instead of fighting the trend of knowledge workers clustering in big cities, economists from Princeton and the Federal Reserve in Richmond say it may be best to just let that trend run its course. They contend that tech workers are more productive when they’re close to each other.
Smaller communities, they argue, would do better to attract workers with different skills. Do I agree with that? Kinda sorta, but not entirely. (How's that for a wishy-washy consultant's answer?)
It's true that virtually no small town outside a major metro area is likely to remake itself into a tech hub. But smaller communities that are 30, 40, even 50 miles from a major central downtown often offer investors/business owners a value proposition that is hard to resist -- lower operating costs while still providing the needed workforce.
I recently listened to a restaurant owner rail against a certain big city because of the permitting and regulatory climate there. He said code enforcement was unreasonable and uncaring. To top that, he was also paying $40 a square foot for his lease and having to cope with miserable traffic congestion.
Then he started looking at a small town about 40 miles away, still within the metro area but on the outskirts, what many would call an exurb. There he found a growing community with a totally different business vibe, one that was friendly and welcoming.
What's more, he found a very suitable building where the lease rate was, believe it or not, $1.50 per square foot. Leave it to say, he moved his business out of the big city to the small town.
His story rings true, which lends itself to a broad-brush statement that is not always true: the larger the city, the more bureaucratic, the more unsympathetic it is to the needs of business, particularly small business owners.
It may sound overly simplistic, but a welcoming business climate married with a prepared workforce in a less congested, expensive environment, and you're cooking with gas.
Starry, Starry Night
Living in a big city truly wears on the soul. It hit me a few weeks ago when I was able to escape Dallas and spent two nights atop a remote mesa in the Texas Hill Country.
I stayed at the home of a friend who lived outside of Blanco, Texas, about 50 miles north of San Antonio and 50 miles west of Austin. On two successive nights, I witnessed a starry night sky that took my breath away in its awesomeness.
It had been way too long since I had seen such a thing. My blood pressure dropped. I felt at peace and at wonder.
Fast forward to last week when I spent time in Hays and Caldwell counties in Texas, courtesy of the San Marcos Partnership. There I learned of but did not visit the town of Dripping Springs, the first International Dark Sky Community In Texas.
Alarmed that future development could bring light pollution, concerned residents organized to protect the area’s famously dark night skies, passing ordinances on how lighting is configured.
Dripping Springs hosts a Texas Night Sky Festival, which can be viewed as a form of eco-tourism, and thus economic development. I hope to attend, if for no other reason than to escape my big city confines.
A Lifetime Stain
I'd like to hold my head up and be proud of who I am. But they won't let my secret go untold. I paid the debt I owed them, but they're still not satisfied. Now I'm a branded man out in the cold. From the song "Branded Man" by Merle Haggard.
It was the largest single-day commutation in U.S. history. More than 450 inmates in Oklahoma were released last week. Outside the state's prisons, former inmates tearfully reunited with their loved ones.
But what kind of future do these men and women face?
Across the country, more than 10,000 regulations restrict people with criminal records from obtaining occupational licenses, according to the American Bar Association.
The restrictions are seen as a way to protect the public, but they make it difficult if not impossible for the formerly incarcerated to enter fast-growing industries such as health care and some mechanical trades.
Ironically, many of these former inmates trained for some of these very jobs while in prison. The fact remains that incarceration carries a stigma, and many employers are leery of hiring anyone who has spent time in prison.
States with the strictest licensing barriers tend to have higher rates of recidivism, according to research done by Stephen Slivinski, an economist at the Center for the Study of Economic Liberty at Arizona State University.
“In many states, a criminal record is a stain that you can’t wash off,” Slivinski told the Washington Post. “There is no amount of studying that can take away this mark in your past if a licensing board wants to use it against you.”
What Rural "Experts" Should Be Talking About
Digital adoption/literacy has to be a primary focus if rural America is going to hold its own in terms of job creation and economic vibrancy. It's a theme that I go back to over and over again, because it's that important.
Giving people certain foundational digital skills enables them for lifelong learning and being in future demand by employers. Not surprisingly, it should start early in the schools. I refer you to four different studies (there no doubt are more) that strongly suggest that we can ill afford to have digital blindspots, especially in rural places.
First, a 2018 study by Deloitte estimates about two-thirds of today’s 5-year-olds will work in jobs that don’t exist yet. (A safe bet is that these future jobs will use digital technologies in a big way.)
Second, a 2017 study by McKinsey -- Jobs lost, jobs gained: What the future of work will mean for jobs, skills, and wages -- says that 60 percent of jobs today could have nearly a third of their work activity automated with the application of already-existing technology.
Third, a report earlier this year by the U.S. Chamber of Commerce and Amazon concluded better adoption of online tools and digital services by businesses could create 360,000 new full-time jobs in rural areas and add more than $140 billion to the U.S. economy over the next three years.
Fourth, a recent Census Bureau report reveal significant overlap between areas of limited broadband access and concentrated poverty.
"Income inequality is at a 50-year high, and many states with the highest poverty levels — Mississippi, New Mexico, Louisiana, West Virginia and Arkansas — are also the most disconnected," Francella Ochillo, executive director of Next Century Cities, writes for Axios Expert Voices.
Any consultant who bills themselves as an expert in rural economic development (there are plenty out there) who are not talking about the Fourth Industrial Revolution, broadband access, and digital literacy does not deserve the title. Harsh words, but it's true.
Break Out of the Pack
You can play it safe and try to please everyone or you can play to your strengths, knowing full well that your business, or in the case of economic developers your community is not for everyone.
This is niche marketing in its essence. There is a degree of honesty and even vulnerability to it that I find refreshing. It's breaking out of the pack, to say this is who we are ... or who we are striving to be.
Conversely, economic development organizations that market their communities as being ideal places for all businesses are not being honest, either with themselves or others.
There are better places and then there are better places. And then there are some places that are just not a good fit period.
Here at BBA, we will decline business if we are not confident that we can serve a client well. Rather, we pick our spots and strive to continuously improve.
It's not so much about what you want, but rather who you are and what you are willing to do. I believe communities can remake themselves if they have visionary leadership and are willing to put in the necessary teamwork to achieve goals. It takes a lot of work. There is no magic button to economic development.
Food Deserts in Farm Country
An estimated 37 million Americans live in what the United States Department of Agriculture (USDA) classifies as a food desert – not living within a mile of a grocery store in urban communities or 10 miles of a grocery store in rural areas.
The lack of healthy food options has devastating effects on the health of communities, leading to higher incidents of obesity, diabetes, and heart disease.
An exodus of grocery stores has also created doubts and fears as to the economic future of some rural communities as to whether they can retain people and businesses. Some are fighting back by starting their own tiny, community-run markets, and some states are taking action.
The loss of a grocery store in a rural area that feeds much of the world is especially ironic. And yet many farm communities are becoming food deserts as traditional grocery stores are closing.
In North Dakota, 82 percent of towns have fewer than a thousand people. Among communities with 2,100 people or fewer, there are 98 full-service grocery stores, down from 137 in 2014, according to research from the state’s association of rural electric cooperatives.
More than 50 percent of rural North Dakota stores have a weekly sales volume of $20,000 or less, compared with the U.S. average of $320,000. They have an annual net profit margin of $18,000 or less.
Alabama enacted a law in 2015 providing low-interest state loans to new or existing grocery stores in needy areas. Oklahoma created a revolving fund in 2017 for rural food retailers looking to finance the construction, renovation or expansion of their stores.
Nevada lawmakers earlier this year introduced a bill to create a $10 million loan program to attract grocery stores to under-served communities. However, an amendment removed the $10 million appropriation. The bill signed by Democratic Gov. Steve Sisolak in June provides tax credits for eligible fresh food retailers.
In March, a bipartisan cluster of lawmakers in Washington proposed a new tax credit for grocery stores in food deserts.
What We're Reading
My Neighborhood Was on Fire. My Neighbors Came Together to Save It. The New York Times Magazine
The FBI Lost Our Son Wall Street Journal
My Friend Mr. Rogers The Atlantic
The Changing Demographics of America's Suburbs CityLab
What Do We Do With Robert E. Lee? The Delacorte Review
Meet the Tiny Austin Company That Wants to Disrupt the Trillion-Dollar Construction Industry With Its 3-D-Printed Homes Inc.
Parting Thoughts: An American Moses
My wife's voice cracked with emotion. She had just seen the movie "Harriet," about the life of Harriet Tubman. I had telephoned her that evening as I was out of town on business.
Born Araminta “Minty” Ross around 1820, Tubman used the Underground Railroad, a network of safe houses and routes from southern "slave states" to northern "free states," to escape from Maryland to Pennsylvania. She then returned to Maryland 13 times and led at least 70 slaves to freedom.
As the Underground Railroad’s most famous “conductor,” she earned the nickname Moses, a reference to the biblical figure who led his people from slavery. During the Civil War, she assisted escaped slaves in Union camps, acted as a nurse, and worked for the Union Army as a scout and spy.
In 1863, she led an armed expedition into Confederate territory. After the war, she directed her efforts toward women’s suffrage.
Why only now, 106 years after her death, is there a film about Tubman? “It’s only recently the industry found it viable to make a film with a black female protagonist,” director Kasi Lemmons told the Houston Chronicle.
Three Chords and the Truth (Click and Ye Shall Find.)
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Thanks for reading! We'll see you next week. If you like BBA Economic Digest, forward it to your friends. Sign up here and never miss an update. Like to catch up on past Digests? You can browse here. Dean Barber is the principal of BBA. Visit us at www.barberadvisors.com