Rethinking economic development

The second decade of this century didn’t begin, for me, until Friday, Sept. 9, 2011. Working in then-Gov. Mike Beebe’s office, I received a call that Georgia-Pacific would be idling plants in Crossett, eliminating 700 jobs. Two hours later, my phone rang again, and I learned that my friend and mentor, Maria Haley, had been rushed to the hospital with symptoms resembling a stroke. She never regained consciousness.

The following Monday, Gov. Beebe sent me to the Arkansas Economic Development Commission “to make sure that Maria’s people are OK and that they can continue her work.”
It was a temporary assignment that lasted until January 2015.

I had worked in the Fortune 500 world and helped launch a successful start-up, but I knew nothing about “economic development.” Arkansas remained in the grip of the Great Recession, and although the AEDC staff was continuing to work projects, the outlook wasn’t rosy.

In three-and-a-half years, that group lured $7 billion in new investment and thousands of jobs to Arkansas, including the $1.1 billion deal for Big River Steel, the largest economic development project in the state’s history. How did the accidental AEDC director wind up with a record like that? In many ways, it was easier than you might imagine.

Over the past 25 years, the industry that is economic development in the United States has fully matured. It has its own rules, language and customs. Every state participates, and each would tell you that they “do it differently” from the other 49. While some states’ wallets are fatter than others, all use the same incentives, and every professional in the business has the same degrees and certifications. Everybody is working on the same projects, using the same tactics, because all are chasing the same quarry.

It’s an article of faith that the jobs worth chasing are advanced manufacturing jobs that pay a wage higher than the statewide average. Think Big River Steel, Dassault Falcon Jet, ABB motors. We signed a lot of those deals, and Gov. Asa Hutchinson and Mike Preston have signed lots more. These are great companies, and these deals are good for Arkansas. The folks at the Arkansas Department of Finance and Administration can show you, with charts and graphs, exactly how good they are.

But if you do that job for any time at all, you start to wonder about the true impact of the work, and over the past five years I have wondered a lot. The more I’ve wondered, the more I’ve been forced to confront unpleasant facts.

We pursue the same strategy despite the lack of evidence that it delivers any benefit to most of our cities’ neighborhoods and has neglected or even shortchanged people of color, immigrants, and low-income communities. The new, better jobs aren’t helping us to fight systemic poverty and blight. These Arkansans and their neighborhoods are, clearly, not connected to the local, regional or national economies, and nothing in our strategy is designed to do anything about it.

In 2019, Frank Scott Jr. was elected mayor of Little Rock, and he asked me to reevaluate the city’s economic development efforts to help him to chart a new course for the future.

“What we’re doing isn’t working for everybody, but everybody is paying for it,” the mayor has said. “We need a new approach.”

Under the mayor’s leadership, Little Rock will pursue a two-part strategy for economic development and neighborhood revitalization. Soon, the Port of Little Rock will finalize the creation of one of the finest industrial sites available in the U.S., which should make Little Rock extremely competitive for the largest projects coming to market in this decade. We will pursue these opportunities aggressively, but not in a vacuum.

We must inaugurate a city strategy that focuses on equity in investment in all neighborhoods and uses infrastructure and amenities such as streets and curbs, gutters and storm sewers, parks and playgrounds to raise property values and encourage private investment in areas where redevelopment has lagged the rest of the city.

Little Rock has not been alone in our historic approach to economic development, and many other Arkansas cities of all sizes have sacrificed infrastructure and the integrity of their neighborhoods to pursue big deals.

We finally got good enough at chasing the big fish to start catching more than a few, but as the turn of the calendar takes us into a new decade, it’s time to evaluate whether we’ve really won.

Editor’s note: Grant Tennille is a volunteer adviser to Little Rock Mayor Frank Scott Jr., and is the former executive director of the Arkansas Economic Development Commission. The opinions expressed are those of the author.