By Gary Ballew, CEcD
VP of Economic Development, Greater Spokane Inc.
I admit it. I am an economic development wonk. To understand economic development, you need to understand the history of where it came from. Once you understand it, you can make it better.
The roots of economic development stem from the 1930s and the federal investments called “The New Deal,” implemented by President Franklin D. Roosevelt, in response to the Great Depression to restore prosperity to Americans. These unprecedented federal investments like the “Works Progress Administration,” and “Civilian Conservation Corps” not only put people to work, they pumped public dollars into the economy to prop it up during this time. Many of these infrastructure projects became catalysts for developing the economy, as we came out of the Depression and entered World War II. That war ended and the Marshall Plan began to rebuild the infrastructure and economies of Europe.
Around that same time comes the story of Leonard Yaseen and his father-in-law, Felix Fantus. Felix had moved his chair manufacturing business from Chicago to Indiana in 1919. Felix did in-depth research into both regions, looking at available land and buildings, transportation, utilities, wages, and taxes. After moving his business, he started to provide this information to similar companies looking to move. Leonard thought they could sell this information to the companies, but Felix kept giving it away. Leonard decided to move to New York and give his idea a shot. Long story short, the idea worked. He was so successful, that he purchased his father-in-law’s real estate business in Chicago and created the Fantus Factory Locating Service. A service that grew a lot during the Depression and the post-WWII industrial boom.
Fast forward to the 1960s. The “Great Society” is passed during the Lyndon B. Johnson Administration. This package of legislation created a slew of programs enhancing the social safety net, seeking to eradicate poverty. The legislation also included the Public Works and Economic Development Act, creating the Economic Development Administration to make investments in communities with persistent poverty. Many communities started creating economic development strategies in response to this federal funding opportunity.
Remember Leonard? By the 1970s his business and others like his were booming. Changing economic conditions and international trade were changing the economies of many communities. Combined with a major recession, many of these communities were anxious to fill gaps left by the closures of large employers, mostly manufacturing facilities. Site selectors, what we call the area of commercial real estate started by Leonard, realized that communities would be willing to compete for clients. Not only through pro-growth policies and tax structures, or enhanced public infrastructure, but through direct cash incentives and tax breaks. Cities and counties across the U.S. began to compete for these companies and site selectors became measured by the number of incentives they could bring to their clients. This was the era of “smokestack chasing,” a colloquialism used to describe economic developers, sometimes still to this day.
In the 1980s we started to see a rapid expansion of the economic development practice. There are now a number of practices in the economic development world, including business retention expansion, entrepreneur support, economic gardening, talent pipeline, tourism, creative economy, downtown/main street, tech-led, tourism, and a host of other practices. Site selectors and business recruitment remain an important part of economic development. At Greater Spokane Inc. we still pursue companies in targeted areas, focusing on life science, advanced manufacturing, and tech. While an important piece, recruitment is just a part of a much larger strategy to grow the economy that includes helping new companies start and existing companies grow through varied programs and practices.