“Green” Policy and Regional Development: Third Observation and Final Remark

October 28, 2009 by Emsi Burning Glass

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Third Observation: It Needs to Be Data-Driven

In the United States, we have a huge amount of data at our disposal for development decisions. Our nation has over 1,800 (and counting) well-established industry codes (NAICS codes) that are standardized for the entire country. The 20 big industry sectors that compose our economy exist because of broad, long-lasting, nationwide demand. The data that are collected around these industries are highly useful for local and regional planning. Local developers can be expected to be both “demand-driven” and “data-driven” because these data are publicly available and because more and more technologies are being developed to help regional planners organize, integrate, and apply this information. This basically means that developers can focus in on what aspects of the economy create jobs, and they can do it in a very well-researched, objective manner (avoiding simply anecdotal reactions such as, “I think we should develop the entertainment industry”). The data help developers do things like determine which industries (or industry clusters) they should focus on, and it provides them with a very solid, well-defined structure on which to base important training, skills, and economic development decisions.

Currently, regional developers are just beginning to learn how to take advantage of this information to make the planning process more strategic and more objective. As a result, the US has an enormous competitive advantage over other nations that can only plan based on what they think might work. And when these data are harnessed and used to focus in on the most crucial sectors of a region, that is when communities, planners, and businesses can all be on the same page and see which direction makes the most sense in the context of the regional economy.

Our point here is that right now, local developers cannot take such a well-researched, data-driven approach to “green.” There are a lot of people who are highly in favor of green, but in many ways, they don’t bring the sort of objectivity that is needed or helpful when trying to hash things out for the sake of the local workforce. What if green actually isn’t a good idea for a specific community? Something like Biotech is great if you can have it, but if it’s not the right fit for the community, forcing it can be a bad thing.

Conclusion:

Getting data and conducting local analysis on green is not easy or even that feasible yet. EMSI has been doing some work with O*NET data that you can check out here. This data should give you a good sense of what industries and occupations are going to be most closely associated with green development efforts. The biggest thing you can do is to be out in the community, talking to local businesses and meeting with investors who might be trying to establish green developments in your area. Their input and perspective are likely going to be the most effective way for the workforce and education systems to respond to the potential needs of a community.

Final Remark

So here is the basic conclusion. For green to work at the local level, it needs to be demand-driven. It needs to be harmonized with local development efforts, and it must complement and not fight against regional economies. This means helping and not hurting local industries, not overburdening regions with too much regulation, and allowing regional developers to stay focused on longer-term efforts as opposed to short-term trends. Next, at the national level, green needs to mature before we can make massive efforts to supply it. There might be needs in various regions, but in many ways, green is still rolling up the on-ramp—trying to pick up speed.

Do we want green to succeed? Well, sure. Green in many ways is trying to become the new “Red, White, and Blue”—meaning it’s more of a way-of-life issue that encapsulates living in a smarter, cleaner, more efficient way. Therefore, we all want these sorts of ideals to come to fruition. We want energy to be cheaper and cleaner, we want the environment to be better off, and we want our products and services to be more sustainable. However, as the polls show, we don’t want these things at the expense of economic growth. All this is to say that people are going to be more supportive of the green movement insofar as it can hold itself to its own standard of sustainability—economic sustainability. The green movement and economic considerations are not mutually exclusive. If the economy continues to suffer, the green movement will suffer. If the economy recovers, there will be renewed interest in being “green.” Before the economy took a nosedive, green was the direction that people wanted to take, and we imagine it will be again once the economy gets to its feet again.

If you have thoughts and things you would like to add, please feel free to contact us. We would love to hear from you. In addition, if you need help looking at what sectors drive your economy and how “green” developments might impact those sectors, please let us know.

Rob Sentz (rob@economicmodeling.com).