Economic development is changing, and those change agents should not be ignored by economic development professionals.
Anatalio Ubalde, the keynote speaker on the first day of the Pennsylvania Economic Development Association (PEDA) Spring Legislative Conference, delivered that message to more than 200 conference attendees.
Team Pennsylvania Foundation has a seat on the PEDA board and is the prime sponsor of conference attendees from the Department of Community and Economic Development and Governor’s Action Team.
“Economic development is experiencing a number of disruptions that are changing the profession and the way economic developers work,” said Ubalde, CEO, GIS Planning Inc. “Traditional methods are not working as well anymore, if at all.”
Here, then, is a summary of five disruptive trends highlighted by Ubalde:
Big Data – Data and software are changing how decisions are made and which companies and communities are the winners or losers. Gut decisions lose to data-driven analysis. Today, economic development organizations (EDOs) are using big data to refine the businesses they target for investment, convince businesses to invest in their communities, and support local business growth.
One such example is the Team PA-funded and administered site selection website pasitesearch.com.
Talent attraction – Research shows that talent has a greater impact on local economies than the industries located in them. Businesses are willing to pay more to be in places with a deep talent pool. The retirement of baby boomers is exacerbating the need for communities to attract talent. Talent will come from the next generation, retraining workers, outsourcing, immigrants, and robots.
Small businesses and entrepreneurs – Local businesses have a greater positive impact on local economies than big businesses, and small businesses create more new jobs than big businesses. The challenge for local economic development organizations is serving so many businesses. Technology like SizeUp is helping address this opportunity.
Site selection has changed – EDOs and CRE/Site selection consultants are often pursuing different industries. CREpros are not the exclusive gatekeepers to investment that they have traditionally been mythologized to be. There are new ways to directly connect with expanding businesses. Data-rich EDO websites with GIS help communities make the long and short list of locations for investment.
Fast & chaotic change – Just because your area is an economic winner today does not mean that trend will last. There is too much evidence to the contrary. EDOs are preparing for a future they can’t predict.
“The model of working hard/smart leading to a good job doesn’t come true for many,” said Ubalde. “Instability is normal. Globalization and technology are transforming work and jobs. Inequality is growing and eroding the US middle class.”
Ubalde added that solutions employed by EDOs are a mismatch to new problems because the tools economic development professionals invented don’t work as well in today’s economy.
“The past is holding EDOs back and alienates new economic development professionals,” Ubalde said. “Instead of innovating to solve problems the misguided EDOs just try to be different. The choice is to change or die.”