Cargo Cults Don't Build Vibrant Communities

Is Northwest Florida’s economic development approach a Cargo Cult?  Paraphrasing a segment of CJ Cornell’s book “The Age of Metapreneurship”: During World War Two, American military forces used tiny islands in the South Pacific as safe stopover points where supplies were delivered by parachute from cargo planes, some of which were given to the natives. For the natives this was a magical event as the crates floated down from the sky.  And then the war ended and these islands were abandoned. But the natives still yearned for the treasure that came from the sky. In an attempt to bring back the supplies, the islanders created structures resembling control towers and carved headphones out of wood. Every morning, they would stand on the strips of cleared land with their arms extended and using palm fronds make motions forward, right or left – just like they saw the airmen do when the cargo planes emerged from the sky and landed on the runways. They had faith that, if they recreated what they saw, and imitated the motions, then they would achieve the same result: cargo from the sky.

Connell went on to say “What is a Cult: Using term “cult” is inflammatory hype, right? Here are a few excerpts from dictionaries. Let’s see if definitions of “cult” are appropriate:

  1. great devotion to a person, idea, object, movement, or work… {The area appears to be committed to the big score to lure companies to a locale with insane incentives}
  2. some have members practice certain rituals or follow a set of principal rules. The group usually believes its way is the only correct way to live life, and all non- members are doomed to some horrible fate if they cannot be persuaded to join… {The area appears to believe a secretive ritual of responding to RFPs and taking high visibility, low productivity road trips (e.g. Paris Air Show) will yield cargo from the sky.}
  3. a misplaced or excessive admiration for a person or thing… {The area appears to have an admiration of the fantasy big employer}.”

Cult is an apt metaphor that describes in my opinion the economic development approach of the greater Pensacola/Escambia County Florida area.  If it walks like a duck, talks like a duck, it must be a ……!

The area’s strategy appears to be driven by Public Sector leadership, shotgun recruitment, low cost positioning, cheap labor, roads, big industrial parks, and transactions focused largely on what the area doesn’t have while treating quality of life as unimportant.  For years the City, County, and private sector have spent millions of dollars to attract companies with little to show for it.

A typical result is that in the fiscal year ending October 2017, despite spending almost $1.2 million on formal economic development and recruitment, no new investment or jobs were brought to the area. Over the fiscal years including 2014 – 2105, 2015 – 2016, and 2016 – 2017, an estimated $3.5 million was spent on formal economic development efforts that yielded 85 jobs and $21 million of investment from new recruited companies and 712 new or saved jobs along with $95 million of new investment from existing companies.  Even with these results, the formal efforts are estimated to have been divided 70% recruitment and 30% retention.

Recruitment costs were almost $29,000 per job while the retention costs were about $1,500 per job.  These results strongly suggest the area should focus on “what it has” versus “what is does not” as Ed McMahon suggests!

In contrast, Ed McMahon, the noted urban planner, stresses that a vibrant community’s economic development strategy is based on public/private partnerships, laser recruitment strategy, high value position, highly trained talent, and education infrastructure driven by an overall vision that focuses on “what the area has” with quality of life as a key factor.   Largely through a public private partnership that adopted Ed McMahon’s strategies led by the visionary Quint Studer and other key citizens in partnership with the City, efforts were focused on building a vibrant Downtown Pensacola.

The result in the same fiscal time period, Ed McMahon’s approach yielded $150 million new investment in the Urban core resulting in a taxable value increase of nearly $250 million.

In March 2018 the renowned Brookings Institute concluded economic incentive policies should be aligned with four principles:”

  1. Grow from within by prioritizing firms in advanced industries that drive local comparative advantage, innovation, productivity, and wage gains. Economic development incentives disproportionately go to firms in advanced industries. On average, advanced industries account for about 20 percent of economic output but receive about one-third of all incentives.
  2. Boost trade by facilitating export growth and trade with other markets in the United States and abroad in ways that deepen regional industry specializations and bring in new income and investment. Economic development incentives disproportionately go to firms in exporting industries by more than twice as high (25 percent) as the economy as a whole (11 percent).
  3. Invest in people and skills by incorporating workers’ skill development as a priority for economic development and employers so that improving human capacities results in meaningful work and wages. Black and Hispanic workers remain underrepresented in industries that receive economic development incentives, and a low share of incentives go to firms for job training purposes.
  4. Connect place by catalyzing economic place-making, and work at multiple geographic levels to connect local communities to regional jobs, housing, and opportunity. Within this principle, many cities focus incentives on addressing blight and distress in communities of concentrated poverty.”

How many of these principles have been adopted by your community?  The success of applying Ed McMahon’s principles in Downtown Pensacola should be a lesson to all communities and the balance of Northwest Florida.