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2 Responses to “Privatize Ohio’s economic development?”

1. John Polk Says:
   October 14th, 2010 at 3:34 pm

   It’s certainly worth debating how an enhanced “public/private partnership” might add some heft to the State’s economic development activities. But like many similar stories, this article miscasts the debate.

   The first problem is the implicit assertion that the State’s economic development activities are primarily focused on bringing outside investment into Ohio. That’s sort of a 1950’s characterization of the development process.

   Encouraging entrepreneurship, and addressing the existing market/regulation/cost of business disincentives are at least as important as recruitment.

   And to suggest that a private organization would be more nimble, responsive, transparent and accountable than a public development entity is to overlook the relatively lackluster performance of existing private-sector-based development organizations already in place throughout the state. GCP and Team NEO come to mind, but most other local Chambers do a pretty bad job of actually supporting economic development.

   It’s also a little naive, in the face of evidence from existing organizations, that a private-sector-led development effort would somehow take the politics out of a state’s development activity.

   It apparently comes as a shock to the author that both public and private development organizations tend to fudge their numbers in an effort to promote their effectiveness at developing new jobs This comes with the territory as well. Most private development organizations regularly report to their Boards that they’re working on hundreds of potential development prospects, but confidentiality forbids their saying too much about any or all of them. In general, economic development organizations are only slightly less notorious than fishermen when it comes to their stories.

   The question isn’t whether the best sort of organization to coordinate economic development should be public or private. Development organizations, whether public or private. operate best when they’re staffed by people who know what they’re talking about, have a good sense of the business they’re in, collaborate with other experts, and put their resources where it makes most sense.

   MOST development organizations don’t meet those criteria. But the successful ones do.

2. Ed Morrison Says:
   October 14th, 2010 at 5:30 pm

   John:

   I agree with your points. Economic development involves a mix of investments. Some of these investments are best led by the public sector. Others are best led by the private sector. In either case, you need competent economic development professionals.

   Without competent leadership, economic development efforts at the local regional or state level can be hijacked by narrow interests. There’s no guarantee that privatizing economic development provides any answers at all. It doesn’t much matter whether a state’s economic development apparatus is public or private, if the people running it don’t really know what they’re doing.

   I just posted an article from The Atlantic magazine on Oklahoma City. In Oklahoma City’s case we have both publicly-led and privately-led initiatives. Mayor Ron Norrick ensured that the publicly led projects were well managed and came in on time.

   An extraordinarily strong management team at the Oklahoma City Chamber, including the current president of Oklahoma State University, Burns Hargis, and the owner of OKC’s NBA franchise, Clay Bennett, guided our chamber strategy.

   In Cleveland’s case, run down the people who are charged with the responsibility for designing regional economic development strategy at the Greater Cleveland Partnership or Team NEO. You don’t see anybody with the experience of actually running a successful regional economic or workforce development strategy. Staff at the Partnership and Team NEO are “homegrown” with very little, if any experience outside Cleveland.

   At the same time, the volunteer business leadership has, in my view, been driven by the narrow interests of real estate developers. We have good professionals running Bio-E, NorTech and JumpStart, but they, it seems, must answer to a business leadership at GCP largely inept in these matters. Their record over the past decade is dismal.