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Fri February 11, 2011
Economic gardening? What's that?
When the Governor gave his State of the State speech, I was standing on the crowded floor of the House of Representatives. Governor Rick Snyder outlined his plans to get Michigan back to work. We all listened as he said the Michigan Economic Development Corporation would lead the way.
“The MEDC will recalibrate its efforts and become a better partner with these regional groups to enhance economic gardening, talent enhancement, and support service to companies.”
I was thrown by the phrase “economic gardening.” Certainly, it conjurs up some images: tending to needs of the economy, nurturing business, growing jobs. But, really, what does it mean?
To find out, I called up the guy who is most associated with ‘economic gardening.’ His name is Chris Gibbons and he’s the Director of Business and Industry Affairs at the City of Littleton, Colorado, a suburb of Denver.
He took ‘economic gardening’ from an academic exercise to creating jobs in his town. He says this is not ‘economic hunting,’ as in trying to lure companies… and it’s not business retention… just trying to keep companies from leaving.
“Our focus is on entrepreneurs and growth. And that takes you down different roads in terms of the kinds of tools and the kinds of things that you do.”
Gibbons says they target so-called ‘stage 2’ companies, typically ten to 100 employees and about $1-million to $50-million in sales that have the capacity and the intent to grow. Why those and not others? Because they create the jobs.
“Those ‘Stage 2’ companies, even though they’re typically between five and ten-percent of the population, usually are generating around 30-35-percent of the total jobs that are out there.”
This economic gardening is not just tax breaks or government loans, Gibbons says they help with mapping out strategy, researching the competition, exploring potential markets, and helping find employees with the specialized skills a company might need.
To do all that, an economic development agency gathers all kinds of databases and programs and resources that help companies find out where their challenges and opportunities are. And they do it fast. If they meet with a company in the morning, the expectation is they’ll have something for them that afternoon, not the typical, “We’ll get back to you in a week or two.”
And it seems to work. Where ‘economic gardening’ has been done correctly, the jobs have come. Although one economic development expert familiar with economic gardening says it should not be pursued to the exclusion of other approaches.
But, because it’s been such a success, the economic gardening model has been used by cities and regions around the country. Now states are picking it up. Michigan is one of nearly a dozen states looking at it or implementing economic gardening.
Finney says embracing economic gardening means a change in how his agency works with Michigan businesses.
“We were simply visiting companies and asking pretty simple questions or routine questions: ‘Are things going well,’ ‘Is your business growing,’ ‘Thank you, very much. I’ll see you in a year.’ What we really need to do is we need to probe it deeper. We need to understand beyond if a business is growing or not. We need to understand where their opportunities are.”
And they cannot do that from Lansing efficiently. So, the Michigan Economic Development Corporation will be working much more closely with the regional economic development groups around the state. Governor Snyder says he wants those state workers in the same offices as the local and regional people, getting to know local businesses better, finding out how they can help.
“So, economic gardening really takes it to another whole level where we really become very knowledgeable of a business’ challenges and growth opportunities and we find creative ways to assist those businesses.”
But before that happens, it appears Finney, his crew, and the Governor are going to have to get the rest of the state up to speed.
The Center for Local, State, and Urban Policy at the University of Michigan regularly surveys local government leaders throughout the state. Tom Ivacko is one of the researchers who reports on the surveys.
“There is, I think, not a great understanding among Michigan local officials about what economic gardening is today. We did ask whether or not local officials are providing support to existing businesses in terms of economic gardening and among all jurisdictions in the state, just over a quarter of these jurisdictions say they are doing something like this, providing support to existing local businesses.”
But, that means 75-percent either never had heard of ‘economic gardening’ or they weren’t using aspects of the approach.
Ivacko says it appears that at least some of the local government leaders see it as some kind of approach to business retention…
“The most common type of activities that these local officials report undertaking are more of the old-school type economic development activities, things like providing tax abatements. That’s not a core activity in a pure sense of economic gardening.”
Ivacko says a few local governments are using aspects of economic gardening, but it’s not clear whether they actually realize they're engaged in that approach.
Mayors, city managers and county commissioners are going to be hearing a lot more about it in the very near future.
At the Michigan Economic Development Corporation, Michael Finney says business leaders like the idea that the State of Michigan is planning to commit a lot of its resources to assist existing companies with growth.
"The message that we’re getting back is that this concept of economic gardening is one that makes an awful lot of sense. Existing companies are enthusiastic about it. And it should help us grow companies that are already here.”
Michael Finney says getting the state's economy back on its feet is going to be helped by quickly assisting certain existing businesses to get the information and the help they need to grow. Rather than every business or every regional economic development group having to invest in huge amounts of money for research material, the state will gather it, make sense of it, work with companies to see how it applies to them and if it all goes according to plan, economic gardening could produce jobs.