Wanted: Successful Economic Development

According to the March 30th edition of the Commercial Appeal, a recent study concluded that Memphis' economic development program is the "most underfunded in the nation." Here's the scoop, since access to the March 30th article appears to be hit-or-miss over at CommercialAppeal.com.

Memphis Tomorrow--a public-private group of chief executives that includes both mayors, the Memphis Regional Chamber and local businesses--commissioned the study as part of a broader economic growth initiative called Memphis Fast Forward that will focus on crime, government efficiency, economic development and education, and workforce development.

Atlanta-based Market Street Services prepared the study that compares the Memphis/Shelby County economic development budget to peer cities such as Louisville, Nashville, Knoxville, Charlotte and others. It found that the 2005 budget for Memphis' current economic development plan, Think Memphis, was $324,000 compared to Nashville's 2005 budget of $3 million for Nashville 2010 (incidentally, Market Street Services also developed Nashville 2010). Other examples in the article paint a clear picture that Memphis' economic development efforts are woefully underfunded. A little digging unearthed information suggesting that this is not a surprising or new trend. Think Memphis' Partnership for Prosperity report indicated that Memphis' 2002 economic development budget of $4.8 million placed it dead last in comparison to--you guessed it--Nashville, Louisville and Charlotte (see p. 17 of the report).

Referring to the Memphis Fast Forward economic growth initiative, the article mentions that it will target four key industries: logisitics, music/film, biosciences and tourism. Its goal is the creation of 49,395 jobs that will generate $53.3 million in tax revenue for the city and $32.1 million for the county after five years. The plan is being prepared by Market Street Services as well. A subsequent Commercial Appeal editoral on April 1st entitled "Mayors prime new jobs pump" considered the finer details of the plan and it is available here (apparently the CA has access to the plan that the general public has not been granted). The editorial noted that "one of the plan's most useful elements may be its list of 15 disparate strategies for progress in Memphis that engage our attention from time to time but are rarely considered as parts of a coherent whole." Hold onto that thought for a second.

Smart City.org has been tracking Memphis' economic development for quite some time and well-acquainted with many of its key players. If you are interested, I highly recommend heading over to the Smart City Memphis blog and check out its' April 1st post entitled "The money: First step in a long journey" where the author(s) (presumably Carol Coletta) suggest that while more funding is necessary to market Memphis, there needs to be a "new reality that is conducive to economic growth in the first place." This "new reality" is the understanding that a convergence, or alignment, of factors that are not generally considered in the realm of economic development--things such as sustainable communities, civic health, green spaces--is necessary to attract and retain valued businesses and labor. This is very similar to the sentiment expressed in the CA editorial statement quoted above. And it appears that a Refocused Chamber is working to organize along this principle as well.

There are a lot of issues at play here. Does successful economic development require a more holistic approach? If so, does Memphis need to change its perspective on economic development? How might a holistic perspective to economic development affect public and private funding in other areas? Does it make sense to provide additional funding for marketing the city--since that's really what the economic development budget is--without a viable strategy for "connecting the dots" in place? If we do need to connect the dots, should this initiative be generated by the economic development sector or by another sector, such as the mayors' offices?

This is fascinating stuff, y'all. Take a few minutes and check it out.