Do ED Officials Understand Business Investment Drivers?

Good piece. "Advanced Manufacturing" is a political construction, not an economic sector. In a recent paper, I better defined Manufacturers as being at different places on a one-way continuum from labor intensive to technology intensive. EDs use terms like "Advanced Manufacturing" as a target (some say even to pick "winners & losers" in the incentive game) for recruiting or incentivizing with limited resources.

As a ED consultant ,I can honestly say that the vast majority of people placed in Economic Development positions in California do not have specific industry goals. The majority of them work for governmental or quasi-governmental groups.Their mission changes every election as the councils dictate what they think will improve their local economy.The big thing in California is retail, because it generates sales tax.California city budgets rely heavily on sales tax .California still has a anti - business ,anti-housing climate. Governments go out of their way to discourage new housing projects, new industrial buildings.The environmentalists now are the most powerful groups in California. Their actions have contributed to the very low business climate rating in the U.S.

I don't quite understand what it is that drives businesses to seek locations that are in the hottest, lower rated education states, states that don't compete on an even field in terms of taxes. Education and healthcare come at a tax price. Natural beauty, community attractiveness, community theaters, and orchestras to recruit workers all have a price. These are the things that should make Wisconsin one of the most attractive. I applaud Elon Musk and Tesla on their venture, but in the hottest, driest state, earthquake prone environment, where hundreds of workers will have to relocate? Tax incentives given by certain states and local governments undercut the very things these companies seek. Go ahead manufacture the very thing every middle class Amercian needs but can't afford. How about Boeing? What will happen when a hurricane blasts through their factory in South Carolina?

Adam, I think your posting is right on point. It's critical that EDPros go beyond the marketing words (ie: "advanced manufacturing") to the real granular work of understanding the key attributes of particular industries: the technology, the market, the supply chain, R & D in the field (and who's paying for the R & D). I've seen a lot of cluster reports that don't go beyond the general, and as such, are of limited value. Nice work.

David - Your kind instruction on the “descriptive category” that is “advanced manufacturing” is well-appreciated. With respect though, you are offering the sort of intellectual definitions that policy-makers think about, and well should they think about these things. You yourself suggest that advanced manufacturing is not an industry – and that was my point, so to reiterate, yes I think the issue is one of importance. If we don’t understand the specifics of the real-live industries that we are “targeting” for investment, economic developers will unfortunately talk a language that is broad and unspecific, which doesn’t help too many people except policymakers. Your short lecture seems to be making the case that the label “advanced manufacturing” is indeed important and I don’t quarrel with that at all. The underlying point is this: if economic development organizations are by their very own stated objectives to advise, market to and “attract” actual investments from real companies, then it is critical for those organizations to understand their targets. That is quite difficult when they are using sexy policy language – a space that policy advisory firms are very comfortable in as they produce studies and importance advice at probably a much higher level. The term might be helpful to support States/Provinces or local communities as a catch-all to show that they “get it”, that they are about tomorrow’s industries. That’s great, but then which of those specific business sectors are they targeting and offering tangible expertise and product solutions for issues like: workforce, core infrastructure (like water), a regional/super-regional supply chain that reduces cost and risk and global inbound/outbound supply chain connectivity. These are the sorts of things that can add real value to a company.