Economic development strategy — sequel to the casinos issue
Massachusetts has been losing manufacturing jobs for decades and some segments of our labor force are giving up on work.
How do we sustain economic growth in the face of global competition, rising energy costs and looming environmental limits? How do we assure that all of our citizens can participate in growth?
The House, the Senate and the Governor are all riveted by these
questions. Many
other issues have great importance, but inclusive development remains a
central concern, year after year.
Fundamentally, most agree that we need to build on our strengths. Most job
creation comes from within existing firms and sectors. The businesses that
are already here are the ones best adapted to what we have to offer. We can
help them create jobs by removing barriers to their expansion.
Most policy-makers recognize that they need to listen carefully to how
businesses perceive the barriers to their expansion. Based on the
conversations that have gone on over many years, there seems to be a
consensus agenda for economic development.
First, we need to make it easier to develop new facilities. Our complex web
of state and local regulations can add years and huge uncertainty to any
decision to expand locally.
As an environmentalist and neighborhood advocate, I would be among the last
to suggest a wholesale elimination of “red tape”. But better planning can
facilitate development. Communities need to map out the areas in which they
will welcome development and streamline procedures within those areas.
Second, we need we need to increase the availability of attractive housing.
High housing costs affect the recruiting and retention of employees for many
firms. Solutions to the housing problem come back to the need for more
forward planning by municipalities, but also depend on the adequate funding
of education, other municipal services and housing subsidy programs.
Third, to support both new housing and new facilities, we need to fund a
high quality infrastructure. The leaders of the 80s set in motion the mega
projects that upgraded Logan airport, connected Logan to the turnpike,
depressed the central artery and cleaned up the harbor.
Our next major challenge is to catch up on the maintenance that was deferred
as we funded the mega-projects. Policy-makers are gun-shy of new large
projects, although there is much we could do to strengthen public
transportation.
Fourth, we need to protect our export-oriented technology cluster –
including life sciences, clean energy and information technology. Other
governments are offering strong incentives to these businesses. At the same
time, we need to appropriately respond to the special needs of other
clusters — financial services, higher education, health care and visitor
industries.
Fifth, we need to invest in our people. There are opportunities for
improvement in education all along the spectrum from pre-school to adult
worker education. We also need to improve the systems that match education
programs to commercial needs and job-seekers to present opportunities.
A sixth concept has begun to appear on most lists – “green jobs.” It
appears likely that efforts to cut fossil fuel consumption may create a
number of moderate skill jobs, accessible to persons not well integrated
into the high tech economy – installation of insulation, installation of
solar panels, etc. While the need is clear, it is too soon to evaluate how
many jobs this sector will create.
To embrace this consensus agenda is easy enough. But executing is hard.
The stability and level of taxes– both individual and corporate – also
affect business psychology. So, the desire to hold down taxes constrains
the state’s ability to make the investments outlined above. Although many
now recognize that the state is not doing all that it should for
infrastructure and education, there is still little appetite for broad-based
new taxes among leading politicians.
Moreover, our options for development may be narrowing as we face rising
energy prices and the prospect of climate change.
So, despite the strong consensus, the way forward is far from clear. The
available data and theories simply do not objectively answer questions about
relative value: What is more beneficial overall for the Commonwealth,
spending $1 billion in targeted life sciences investments or spending $1
billion to build a better transit connection between Kendall Square and the
Longwood Medical area? Or would it be better to invest that billion in
improving local schools or cutting local property taxes?
In the uncertainty, the legislature and successive Governors struggle to
make balanced progress on all of the identified priorities, while also
keeping in mind the tax and other cost issues that affect both businesses
and individuals.
Coming from a local government background, my personal bias in economic
development strategy is towards traditional government roles and priorities
– local and regional planning, education, public safety, infrastructure and
cost control, as opposed to business-specific investments. But, at this
stage, I am not prepared to reject more targeted measures that have broad
support – for example, the life sciences initiative.
For an overview of what the legislature has been doing on these issues over the past few years, see: Representative Rodriques report on measures to grow the economy and jobs.