“Green” Policy and Regional Development: First Observation

October 28, 2009 by Emsi Burning Glass

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For the introduction click here

First Observation: Chasing Trends Versus Being Demand Driven

Imagine that for the past 20 years you have been laboring under the hood of your region’s economy, working with local industries, educators, and other leaders to craft better strategies, develop the workforce, and encourage business in the region. Let’s also say that a lot of the folks you have been working with represent companies and industries that have been around for a long time, and thus are extremely well established and represent large numbers of jobs and earnings for the region.

Now, if you remember, during the ’90s there was this thing called the “dot-com bubble.” Dot-coms grabbed a lot of attention all over the country and were generally accepted as being the next big thing. As a result, many regional developers tried to get into the game, and some failed miserably. When the bubble burst, many were left empty-handed and embarrassed that they had essentially just wasted a lot of the public’s time, energy, and money on something that they frankly didn’t understand or have any real reason (in a regional context) to be pursuing. In addition, local stakeholders (e.g., business leaders) most likely had a hint of “told-you-so” about the whole thing and were a bit irritated that their own business interests were overshadowed by some “Johnny-come-lately.” The pain of that sort of lesson sticks and taught developers to be skeptical of trends that could lead the community down the wrong development path. In more recent times we have seen the mortgage bubble burst, and a lot of people are wary of any sort of fast trend full of great promises.

As a result, many are more willing to take a wait-and-see attitude before they start investing public resources toward something new. In some ways, this is where we are with green. So its not all that surprising that green is being met with skepticism by some local planners, who can and should be rigorously dedicated to spending their dollars wisely and only on things that will advance their region’s businesses and people. This dedication seems to come from the fact that:

  1. The mission statements of things like community colleges, workforce boards, and economic development organizations are essentially to be “demand-driven” and in touch with needs of the local community,

  2. When you live and work in a specific community, you actually begin to identify with its needs and interests. These needs and interests can and will run strong (think of the Rust Belt or communities that depend on agriculture), and

  3. Much of the motivation for regional development can be traced back to the needs of local industry. The activities, interests, and employment of local industries directly and indirectly drive much of the employment and earnings in an area (the concept of an economic base). This is where many colleges and workforce boards are focused.

Now, the basic problem with making something like a workforce board invest its resources into an emerging sector or a new policy, such as green, is that there simply isn’t the demand, the number of jobs, or the background to justify the efforts. Workforce boards tend to focus on the thickest part of the pyramid, and as industries grow and start to offer more opportunities, workforce professionals can begin to focus and justify their efforts. This is why WIBs and community colleges typically focus on sectors like manufacturing and health care. There are many companies, a lot of demand, and tons of middle-skilled jobs to be had. In a recent blog post, we explored the top job openings by occupations for three major metros. Across the board, we found that the greatest need was for computer specialists, nurses, accountants, software engineers, sales and marketing managers, and customer service reps—not exactly green jobs. These are areas that workforce professional will tend to focus.

Conclusion:

Trends will come and go, and the challenge for the regional developer is to evaluate what makes the most sense for the region. Local planners should therefore understand what sectors “drive” the economy, and they should become familiar with how policies and spending plans might impact those industries. It is also important to determine how current development efforts can be augmented or supported by the green movement. If green policy is going to have a big impact on the economic drivers in the economy, then it’s going to be important to be familiar with “how.” Finally, familiarity with green policy will help local business leaders who might also be confused or concerned about the issue.

Click here for Second Observation