Business parks, tax breaks and other tried-and-true perks just aren’t enough anymore, say economic development officials struggling for new ways to attract and retain companies.
Governments still must provide cash incentives to lure companies or stop them from moving, but the importance of work force training, strong school districts and arts and culture is increasingly on the minds of people responsible for luring development.
“I don’t think there is one universally accepted definition to economic development,” said Patrick Drinan, president of the Wisconsin Economic Development Association. “It means a lot of different things to a lot of different people, and I think that is part of the reason why it has become a broad-ranging topic.”
Municipal leaders in Wisconsin are wracking their brains over how to replace the build-it-and-they-will-come industrial park model, said Ed Huck, executive director of the Wisconsin Alliance of Cities.
Service jobs are becoming more common and important than the manufacturing jobs that communities created in business parks, he said. But attracting white-collar workers — many of whom can work at home instead of an office — takes a different type of carrot, he said.
“The service and quality of life issues are going to be more important for jobs of the future, even more than they have been,” Huck said, “because people who are going to work from their homes are going to want to take advantage of quality education.”
One example of the new approach is The Kalamazoo Promise, which aims to attract more business to the area around Kalamazoo, Mich., by improving the quality of education in the area.
The program, paid for with private donations, has given $11 million in scholarships since it started in 2005. Its efforts were aided by another $10.5 million from the nonprofit Wisconsin Alliance of Cities. It is too early to gauge how successful the program might be in attracting businesses to Kalamazoo, said Kalamazoo Promise Executive Director Janice Brown, but the program is not intended to generate the immediate benefits of subsidizing individual projects.
“Throwing out $20 million bucks is not that much money for economic development, No. 1,” Brown said. “This is very long-term, very widespread.”
Work force programs are important to the future, but government officials also feel pressure to keep up with immediate company needs as they try to retain employers, said Jennifer Alexander, president of Thrive, the brand name of the Madison Region Economic Development Enterprise. Thrive is charged with attracting development to Dane County and seven surrounding counties, and has tried to shift area governments from competing against each other to a cooperative approach.
“The challenge before regional economic-development groups like ours, and there are several in the state, is to be relevant in a very difficult economic time,” Alexander said, “and focused on issues that are immediate, but at the same time keep your eye focused on long-range economic development.”
The Milwaukee region also needs to offer incentives of the past while focusing on the needs of the future. The region received $70 million in tax credits to support existing companies and attract new ones.
“The incentive-driven economy is certainly here,” said Patrick Schloss, West Allis community development manager. “You just heard Oshkosh Truck is looking for $40 million. Mercury Marine got what it got.”
Although the region still needs incentives such as tax credits, there also is a rising need for skilled workers to fill area manufacturing jobs, Schloss said.
The region needs educational programs, too.
As groups throughout the state look for ways to satisfy today’s needs for subsidies and tomorrow’s need for broader programs, the Wisconsin Economic Development Association is raising money to study what makes Wisconsin attractive to development, said Drinan, city of Brookfield economic development coordinator.
The completed report will have recommendations on how to make the state more attractive by modifying some programs or giving more money to others, he said.
The report will be released in late spring or early summer 2010 and is intended to make economic development a focus of next year’s gubernatorial election, Drinan said.
“Everybody is doing economic development,” he said, “and it is difficult to address, especially at a global level, all of the different elements.”