Is There Too Much Economic Development Happening in the Puget Sound Region?

I sort of wanted to title this post “Weekly C-POW: the Controversial Proposal of the Week.” We already have our “weekly” B-MOW and REDEW features, so what’s one more? But I’m not sure that I want to start ending each week with pronouncements that will leave people angry over the weekend. We’ll see how this one goes. For now, here it is: “I think that we might have too many economic development organizations in the four-county region.” Let’s discuss.

As a part of our upcoming Regional Economic Strategy development process, we’ll be doing a “network mapping” of all the economic development related organizations in the region. And I don’t know how many we’re going to find, but my guess is that there may be more economic development organizations in the four counties than there are transportation agencies (128 according to that Stanton-Rice Commission report from a few years back). Think about it. You’ve got economic development departments in each county government, plus a lot of the cities. You’ve got the economic development councils, the trade associations, the chambers and the downtown associations. There’s economic development folks at the Ports, in the labor councils, and even the universities (not to mention the university tech transfer offices). Not to mention new initiatives and multi-stakeholder collaborations around projects. And on and on.

Now, you know I love me some economic development, and I think that we definitely need more, not less (contrary to what my provocative blog post title might have teased). But I worry that we have too many organizations doing this work, and it creates three main problems:

  1. Harder to stay regionally coordinated and ensure that “all the oars are rowing in the same direction;”
  2. Harder for a business that wants help to negotiate the landscape and find what they’re looking for;
  3. Spreading limited resources thin, rather than concentrating them.

Especially during this financial downturn, that third issue is of concern. In the good old days, we could afford a little duplication of effort or some inefficiency. In tight times, that gets harder and you get a bunch of folks starving rather than a few full people. And interestingly enough, some folks have started to make some changes. Take Project Concentrus, the unfortunately named but exciting transition that just completed in Snohomish County where they merged two of the chambers (Everett and South Snohomish) and their economic development council. They believe that this greater coordination is going to make them more effective and more financially sustainable, and you can definitely see how that might be the case.

Now, here’s the part where I list all of the organizations that I think are duplicative, and who they should merge with. NOT! (as the kids used to say in the early to mid-nineties) And not because I’m afraid of upsetting people, but because I don’t have the data yet. However, in my orientation sessions with folks on the Regional Economic Strategy process, I’ve been very upfront about the fact that this is something we need to at least look at and see what we find. Maybe we need to merge organizations or maybe we just need to ensure greater coordination.

There’s also another interesting model to consider, that wouldn’t necessarily deal with the number of organizations, but with funding. From the business perspective, the more organizations there are, the more asks that businesses get – for dues, memberships, sponsorships, grants, etc. Now, businesses used to have this same problem with the arts – getting too many asks from the multitude of arts organizations in the region – and so they formed the Corporate Council for the Arts (now ArtsFund). ArtsFund gets big checks from a bunch of different businesses and then runs the grant process to distribute those funds to arts organizations. What corporations get is the opportunity to tell all those arts organizations to “apply to ArtsFund and leave us alone” while feeling comfortable with the efficiency, accountability and transparency of the ArtsFund grant process. And the arts organizations (at least the ones that qualify for ArtsFund money) get something too: access to corporate money in one application, rather than having to run all over town soliciting.

Does our region need an ArtsFund for Economic Development? Or as I would call it, Invest Puget Sound? It certainly would make sure that businesses aren’t getting overwhelmed with requests. And an effective grant process would weed out those organizations that aren’t able to prove their impact, forcing the issue of mergers or consolidations.

What’s the downside? Well, you worry that the whole doesn’t equal the sum of its parts in terms of private sector contributions (a company that gives $10,000 each to 10 organizations may feel like they only have to give $75,000 to the pooled fund), but that doesn’t seem to be the case for the arts organizations (in fact, for the most part, businesses give more because they feel so confident in their return on investment). And many businesses give directly to arts organization in addition to their ArtsFund gift, for a variety of reasons (not the least of which the desire for more individual recognition). The other concern would be regional equity: if I’m a Pierce County business, do I trust the regional fund to invest as much in Pierce County as it brings in? But there are plenty of ways to ensure that the funding is appropriately balanced in the allocations process. Or, maybe only the large regional corporations play in Invest Puget Sound, and the smaller local companies continue their direct giving.

There are lots of possibilities. And now might just be the time to give them all a hard look.

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5 Responses to Is There Too Much Economic Development Happening in the Puget Sound Region?

  1. Alex Pietsch says:

    Interesting notions, my friend. I imagine there could be some efficiencies if there were consolidations in some tiers of the EconDev strata (say, EDCs), but I don’t believe you could have a regional entity that could have the on-the-ground real estate intel or the business liaison/omsbudsman skills that many of us do at the municipal level.

    Just my two concentruses.

    • ericschinfeld says:

      Totally agree, Alex. You couldn’t get rid of every single city economic development organization, nor would you want to. But you could definitely strengthen the resources and capacity of the bigger, multi-jurisdictional organizations such that they could provide more services, more technical assistance and be more complementary to those local efforts.

  2. We couldn’t agree more. We monitor many blog postings on economic development from around the U.S. (and elsehwere too, but what I have to say pertains to the U.S.)

    A third of the postings are about the economic development agencies need to work together more so we’re forming a compact of some sort to allow that to happen.

    A third of the postings are about disputes between two or more existing economic development agencies or authorities. (E.g., the city and the county are fighting, or more often the city government is fighting with the private chamber of commerce or a quasi-public economic development agency that the city can’t completely control.)

    And the other third? About half are personal feuds involving economic development professionals. The other half of them are about true economic development activities that might produce something. So all told, we conclude that about a sixth of economic development chit-chat goes into something that might result in economic development.

    Now that’s a bit of an exaggeration to make a point, as obviously the organizational structure can help or impede economic development activity. But you get the picture.

    Good luck in your intention to make sure that more than 100 agencies and entities shrink down to a few visible points of contact, both for the sake of existing businesses and for potential future businesses.

  3. Interesting ideas and having been involved in a similiar mapping project in another region I suspect your number is in the ballpark. That mapping project was driven by the business community who was grapping with the funding requests from multiple entities as the resources were more limited.

    I believe that I am part of this group though I missed the first meeting, so I look forward to future meetings and discussions around this exercise.

    Ellie

  4. The issue of productivity given limited resources is, of course, the economic challenge of every business enterprise, and consolidation is certainly a proven strategy. Unfortunately, when consolidation is done poorly, it can become one organization trying to replace efforts on a variety of fronts. The result is a cloudy understanding of the new organization’s mission.

    And I believe that specialization based on mission is key to this conversation. Perhaps I’m stuck on this because of a great quote I was given recently by my favorite sci-fi author, Robert Heinlein: “In the absence of clearly defined goals, we become strangely loyal to performing daily trivia until ultimately we become enslaved to it.”

    As the sole Economic Development employee of the fair City of Shoreline, I can try to do a little of everything, or I can focus and complement. For example, I can try to recruit regional and national businesses, but probably it will become a treadmill of trivial tasks that aren’t particularly effective. Or, I can collaborate with enterpriseSeattle & Prosperity Partnership who make recruitment their mission!

    And since I’m collaborating with others with clear missions, I am freed up to advocate for business in Shoreline itself. I am able to foster entrepreneurial spirit among the existing Shoreline business and property owners.

    What is helpful, then, is knowing the specific mission an organization is attempting to fulfill so that I can build a balanced economic development approach for my City.

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