Environment Picture

Economic gardening: Looking within rather than outside for Michigan’s recovery

Michigan is, by right, obsessed with economic development. The convoluted array of incentive and subsidy programs we’ve built to lure new firms or build new industries is substantial, to say the least.

But the theory underlying most of these traditional economic development tools is changing. The shift—one with serious potential for environmental and community-minded folks—is fundamentally moving away from traditional “smokestack chasing” models toward what’s been dubbed “economic gardening.”

The difference is stark.

Rob Fowler, head of the Small Business Association of Michigan, suggests we shouldn’t consider it an evolution, but the emergence of a whole new approach to economic development.

Escalating arms race
The smokestack chasing model, or “hunting,” relies heavily on amassing and allocating incentives and abatement programs to attract or keep high-maintenance, big-employer companies. Michigan’s been pretty good at this escalating arms-race approach for decades—property tax abatements for the 500-employee factory, massive investments in highway interchanges to lure big-name retailers, big reimbursements for filmmakers who spend money in Michigan.

But the downsides are substantial. First, the whole approach pits one state or community against another in an adversarial, high-stakes game. Second, it doesn’t seem to work anymore. Small companies, by most counts, will supply most of the new jobs that will drive our long-term economic recovery. Larger companies are going global, decentralizing or simply using technology to replace large labor forces.

And lastly, and perhaps most importantly for MEC members, hunting approaches often disconnect the companies from communities. Incentives take the place of community involvement in big decisions—facility location, long-term costs, land use planning, environmental protection measures and the like.

Organizations as diverse as the rightist Mackinac Center for Public Policy and the left-leaning Good Jobs First think tank in Washington, DC, have critiqued and lamented the ineffectiveness and long-term destructiveness of the existing race-to-the-bottom approach. A legislative forum hosted by the Land Policy Institute at MSU in 2007 (Rebuilding Michigan: Effective Economic Development Incentives) was memorable for putting this lineup onstage, with the eerie result that the only speakers supporting the old hunting approach were the economic developers paid to implement it.

So in a state where unemployment rates are crushing, foundational industries are gasping for life and prospects for massive new investments slim, what should our many economic development agencies be doing instead of luring and lavishing favors on big companies?

Tending community gardens
According to the Michigan-based Edward Lowe Foundation, the old approach needs a healthy dose of something called economic gardening—basically, nurturing entrepreneurs to start new companies, or helping them grow the small companies they’ve already got.

Economic gardening was developed in the 1990s by Chris Gibbons in Littleton, CO. Its strategies are based on growing your own economy by investing in the people, companies and ideas already at work in your community.

The result, ideally, is that instead of a few large employers, your community and state gets a more diverse and resilient mix of homegrown companies.

While the tools of economic gardening are still emerging, some fundamental tenants are in focus. “What is clear is that this a fundamentally different set of tools,” says the Small Business Association’s Fowler. “It’s not tax abatements. It isn’t infrastructure. It isn’t, at first anyway, about training. Those are the traditional tools” of economic development, he says.

Instead, the focus of economic gardening is on providing critical information to small businesses and startup companies; developing an entrepreneurial culture of people and resources that includes talented employees and great places to live and work; and nurturing a network of people and information that helps small companies grow and succeed.

Great examples exist in Michigan, from the Technology Innovation Center in East Lansing to the Keweenaw Economic Development Alliance in the Upper Peninsula.

This is a trend worth supporting, for lots of reasons. It leads to more place-based economic strategies that can help Michigan rebuild its communities and its economy. It puts people at the forefront of economic development discussions, and focuses on nurturing what we have already rather than looking outside for the silver bullet.

As Fowler puts it, “There’s a temptation to believe that communities need to attract entrepreneurs. I would say that’s fundamentally not the way it works. Microsoft is in Redmond (WA) because Bill Gates lived there. Entrepreneurs tend to start their company where they are. Companies start where they are, and they tend to grow where they are.”

And couldn’t Michigan use a little more of that?

Where to find gardening tools
For more information on economic gardening, check out the following:
-Brad Garmon
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