DANIELS: Attractive communities will attract talent, jobs

January 16, 2016

Economic development professionals have long known this truth (even though it sometimes eludes government leaders): Competition among adjacent counties for workers and businesses is counterproductive and damaging to the potential growth of the state as a whole.

Young, talented people are looking for quality of life, and will choose a community with a rich lifestyle over a good job elsewhere. Companies know this, and they are more likely today to locate near “livable” communities—with bike trails, public transportation, and vibrant downtowns. Indiana has seen stagnating population growth at least in part as a result of our failure to keep up with this trend.

Enter the Regional Cities Initiative, championed by Gov. Mike Pence in 2015. The governor first asked the Indiana Economic Development Corp. to identify the major threats to economic development facing the state. IEDC’s 2014 report pointed to a shortage of talented potential employees, and the reluctance of such people to move to Indiana, as a significant threat to long-term economic development in Indiana.

Without these workers, companies will be reluctant to come here, fearing a workforce deficit.

In the wake of the IEDC report, Gov. Pence proposed a novel approach: The state would make $42 million in matching grants to communities in multiple counties that worked together on an economic development strategy.

The initiative required collaboration across county lines and proof of investment in the plans by the communities themselves. The state required the collaborating communities to show how they would execute their plan in the absence of state funding. An impressive panel including entrepreneurs and economic development experts selected the winners.

I formerly headed a federal grant-making agency, and I saw far too many applicants that gave lip service to collaboration and local commitment but were reluctant to put real skin in the game. When the federal funds ran out, even the best of plans failed. Local commitment, in terms of public-private collaboration and local funding, is critical to the success of any local initiative—a lesson well understood by those who drafted the Regional Cities Initiative.

The results so far are impressive. Such communities as South Bend and Elkhart agreed to work together for the first time. Institutions of higher learning became active partners, providing both leadership and funding to further regional efforts. The Northeast region, which had engaged in collaboration for a decade, broadened its approach to include significant grass-roots involvement in the visioning process.

Ultimately, three regions of the state were chosen to receive matching funds. The Lilly Endowment, understanding the benefits of regionally cooperative planning, put its own matching funds into the southwest-central part of the state.

Of course, there are critics. A professor criticized the state administration both for trying to pick winners and for investing in private-sector projects. An article was written bemoaning an alleged wasted effort by the East Central region, which had expended funds on the planning process but didn’t win state funding in the first round.

I submit that the exercise itself will benefit all these communities, even those that didn’t win an award this year.

They are eligible for funding in Phase 2 of the project. And the General Assembly, with bill sponsorship by Senate Appropriations Chairman Luke Kenley, is highly likely to infuse the project with another $42 million this year.

More important, participating communities have begun to engage in a planning approach essential to their success. If the initiative were to accomplish nothing more, that alone is a result worth celebrating.•


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