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Minding Our Own Business 

The Long View

Vermont's economic-development efforts to attract major manufacturing or service employers to Vermont have been largely ineffective, non-strategic and a waste of money. What's more, few in the economic-development sector would debate this conclusion. In the Douglas administration, leadership on the issue is MIA. This is arguably true in the tourism department as well. As one staffer recently commented, "It's mostly about the leaves."

This is a sad situation, and the saddest part is that plenty of good ideas exist that could spur sound economic-development initiatives, if only those in power would do more than pay them lip service. Former governors will confide, privately and without attribution, what the real challenge is: No qualified person in state government will step forward to take on the job. If that's so, why not hire a non-governmental entity to develop and execute a policy that will help the state grow strategically, and in a framework consistent with its social, economic and environmental values?

Developing a sound policy requires knowing where things stand and where they're likely headed. For example, Vermont is composed largely of small, entrepreneurial businesses. Current unemployment here is under the national average of 4-plus percent. The state's real problem is under-employment. Those who choose to live here know full well what their jobs will - or won't - pay.

According to Vermont Business magazine's top-100 list of employers, seven of the 20 largest are nonprofits. The State of Vermont itself accounts for 9000 jobs. Fletcher Allen and IBM each employ more than 6000. The number of multinational corporations here can be counted on one hand.

The state's "Please Look at Me" strategy is under-funded, out of date and, quite frankly, hopeless. Are we willing to spend the tens of millions of dollars in relocation subsidies and tax incentives it would take to realistically compete with South Carolina or Alabama?

People in the business community often whine about how awful it is to do business in Vermont. Their complaint is hardly unique. Wherever I travel, the mantra is the same: "[Insert state name] is hostile to business." But in fact Vermont has much to sell, and economic development is, at its most basic level, about marketing. Any sound policy considers assets (what do I have to sell?); channels (how do I reach likely buyers?); and markets (who are they?). Here's how Vermont stacks up.

Assets: Vermont's workforce is skilled and well educated. Dynamic communities, good schools, high-quality and accessible health care and human services, abundant natural resources, and transparent, corruption-free government combine to create a rare quality of life. The state's small scale makes it possible for a person, business or institution to make a discernible difference.

Channels: Our best opportunities are right here at home. We don't need a high-powered media blitz to trumpet Vermont's assets. And that's good, since we can't afford one. Rather than pursuing the political pipedream of luring Boeing to Wolcott, we should focus on the myriad enterprises already developing within our own economy.

Health care and its related industries are growing rapidly in Vermont. The 35 software companies here are expanding - even if most of you haven't heard of them. The value-added slow-food movement has taken hold and is piquing international interest. Higher education is also burgeoning. Some recent examples: President Marc vander Heyden's makeover of St. Michael's College into a world-class intellectual community with a Phi Beta Kappa chapter; the ongoing expansions at Middlebury College and the University of Vermont. These are just four of the niche sectors that promise incremental and sustainable job growth in the state.

Markets: The Internet has changed everything, opening a broad pipe through which most Vermont goods and services can be sold just about anywhere in the world. Ben & Jerry's pushes ice cream online. So do many of Vermont's emerging artisan food producers. With a few exceptions, the web makes it possible to sell directly to most consumers or businesses.

The concept of creating jobs by understanding local needs and cultivating existing companies is neither revolutionary nor original. Those in charge talk up the idea, but they do very little either to understand the growth challenges of indigenous businesses or to construct support services that will help them reach the next stage of development.

Many entrepreneurial businesses have the seeds of success in place but are held back in one area, be it fiscal management, production skills, marketing or distribution. Entrepreneurs generally start out doing everything themselves, and are most at risk when they must make the transition to a "delegation/management" stage. The state could help by understanding this risk and providing material assistance where appropriate. That might mean, for example, helping artisan food producers to develop a web co-op with a supporting distribution chain for selling their products worldwide.

A few effective examples of this already exist. Bruce Seifer at Burlington's Community and Economic Development Office helped form the Vermont Software Developers Alliance, a network for sharing resources, labor pools, ideas and strategies. The Vermont Business Roundtable's New Models Collaborative, a joint venture with the Vermont Forum on Sprawl, explores business opportunities and strategies. The Roundtable's Peer-to-Peer Collaborative also addresses the true nature and scale of economic growth potential in Vermont.

Casting into a fished-out lake in hopes of hooking the "big one" may be relaxing and make the angler feel important, but this type of approach hurts Vermont business. Montpelier should either get on board with real, responsive leadership or get out of the way, ceding its modest budget allocation to people who live and breathe the local business climate - not as it might have been, but as it is.

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Bill Schubart

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