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Welcome to robbencini.com

Welcome to robbencini.com.  We hope you enjoy your visit.

Rob’s unique brand of economic development and strategic foresight and planning practice is unlike any you are likely to experience.  Rob has the unique distinction of being both a Certified Economic Developer and an author, focusing on a wide spectrum of economic and social trends in his book “Pardon the Disruption. The Future You Never Saw Coming” (2013Wasteland Press). He is also a multiple published author of articles with an economic development, education, local government and social trend focus, largely in “The Futurist”, the official magazine of the World Future Society.

Among the distinctive plans and policies he has written, many for a former employer (Guilford County, NC, population 560,000) include a Community & Economic Development Strategic Plan, an Economic Development Plan, two evolving Economic Development policies, and a Green/Sustainability plan.  His plans take  into account new concepts in economic development outside of standard thought.    Community activism and transformation, introduction of green practices, downtown revitalization, and emphasis on highly-educated and specially-trained high-wage workforce development are all wrapped in an intense study and inclusion of economic, demographic and socionomic trends.

 

More recently, he was the principal author of “Triad Tomorrow”, the Comprehensive Economic Development Strategy (CEDS) for the Piedmont Triad Regional Council (NC, 12 counties, 1.6 million population. Adopted February, 2014).

Within this website you will see evidence of his different eye-opening way of looking at business, the economy and economic development.  The Comprehensive Economic Development Strategy that he wrote builds upon earlier ground-breaking thought in building stronger communities and their economics.

Take your time in browsing the site, read and respond to his blogs and feel free to contact him to discuss bringing his unique view of the world to your jurisdiction or business.

Thanks for dropping by.

Comprehensive Economic Development Strategy (CEDS) for PTRC

I was the consultant and principal author of the Comprehensive Economic Development Strategy (CEDS) for the Piedmont Triad Regional Council (NC – 12 counties, 1.6 million population)

Comprehensive Economic Development Strategy

Final Report – Adopted February 19, 2014

project logoTriad Tomorrow, the Piedmont Triad Comprehensive Economic Development Strategy (CEDS), serves as the foundational economic development element of our region’s sustainable communities planning effort, Piedmont Together. The CEDS is designed to help stakeholders form partnerships to leverage existing resources that will revitalize the communities of our region. Building on existing regional and local economic development plans, Triad Tomorrow strategies focus on supporting collaboration among local and regional stakeholders within the economic development community, private industry, educational institutions, local government, foundations and the private sector. The CEDS is a responsive and flexible five-year strategic economic development plan, designed to be easily adjusted to meet the changing needs of communities throughout the region.

The Piedmont Triad Regional Council undertook development of Triad Tomorrow as part of the statewide NC Tomorrow Initiative, which aims to create a more uniform, coordinated approach to economic development planning across our state. In this initiative, led by the North Carolina Association of Regional Councils, regional CEDS are developed by each of the 16 regional councils across the state, with the ultimate goal of combining them to create a statewide strategic plan. This CEDS will benefit communities in our region in three important ways:

  • The CEDS is to be combined with those of the other regional councils across the state, and then submitted to the Economic Development Administration (EDA) for approval. Upon approval, organizations in our region will be eligible to compete for assistance under EDA’s public works program, economic adjustment program, and many of its planning programs.
  • The CEDS highlights key priorities on which the region can work together to achieve significant results. By marshaling resources and fostering collaboration, local communities and regional organizations can make progress in these critical areas.
  • The CEDS identifies important regional interests. Communities seeking to advance projects in these identified areas can use the CEDS to demonstrate that their projects are not just of local concern, but support broader regional interests.

Triad Tomorrow outlines the region’s four priority economic development focus areas:

  1. Competitive Advantage & Leverage – Sectors of the Piedmont Triad’s regional economy vital to our economic mix which are growing or emerging, and/or unique to the region. These include market clusters, entrepreneurship support systems and our quality of life. The primary goal related to competitive advantage and leverage is to build on and improve the economic sectors that are authentic to the Piedmont Triad region.
  2. Regional Infrastructure – Fixed assets of the region including transportation, utilities, support systems, broadband and the natural environment. The primary goal related to infrastructure is to build on and improve the fixed assets of the region.
  3. Vibrant Communities – The characteristics of communities with a high quality of life, including local leadership, housing stock, and community amenities. The primary goal related to vibrant communities is to provide resources that support a high quality of life in the region.
  4. Talent – The human assets of the region, including our workforce, education and healthcare systems and access to capital. The primary goal related to talent is to invest in the region’s human assets and support systems.

http://www.ptrc.org/index.aspx?page=490

Retail Woes Excerpt from “Pardon the Disruption. The Future You Never Saw Coming”

Retail real estate and sales trends excerpt from my book “Pardon the Disruption. The Future You Never Saw Coming”, published in November, 2013.  This abbreviated section describes the change agents that have disrupted retail sales to do and the impact social trends and rapidly advancing technological changes will have on the sector in the future.

 

d. Retail

Months ago, I took a drive up Battleground Avenue in Greensboro. Battleground Avenue is a major retail corridor that includes auto dealerships, restaurants, strip center retail and some small offices and residential spaces. It’s not much unlike any four-mile stretch of five-lane commercial development across the United States. Battleground Avenue is just an easily accessible example to illustrate my point. Several new retail buildings (especially on cross streets) have been built recently, providing a reasonable mix of old and new structures.

What I found amazing was the extremely high number of properties for lease and sale, with many spaces never having been occupied after being on the market for months. No doubt there are hundreds of retail opportunities on this stretch (including cross streets), but I counted 60 empty storefronts and buildings along my route. Since that time, several spots have been filled, but inevitably the silent killer that is vacant real estate will take its toll.

At face value it doesn’t look much different than past downturns.  Stores have closed before – or spaces never occupied – for a variety of reasons.  People have experienced cyclical recessions, and they understand that sometimes unfortunate things happen in tough times.

I contend that we are currently seeing something different.  This isn’t about a temporary real estate imbalance.  This isn’t about a nice city like Greensboro and a significant business corridor.  It isn’t all about poor management (poor stocking, wrong layout), a city in decline, a new transportation corridor rerouting traffic from the area, a shift in the economic or demographic composition of the area, or general economic malaise.  But because those are about the only reasons we have ever known for a stretch of empty stores to stand as these do, these old reasons are the only historical vantage points to guide our assessment of the principal cause.   And it has changed the business of retail and retail real estate values forever.

The disruptive technology here is simply the growing impact of internet sales on America’s commercial landscape.  It took years for online retailers to reach the scale of business they needed to make this new means of retailing viable.  A critical mass of Americans needed to be online, online shopping carts had to be developed, shipping costs had to fall, and, probably most importantly, there had to be a trustworthy, secure means of payment that gave shoppers confidence they wouldn’t suffer nightmarish repercussions from their shopping experiences.

Though intellectually people understand that more products are being sold on the internet, it is very difficult to visualize the extended impact that those sales have on real estate.  The cause and effect seems somehow clouded, so we throw traditional explanations at the question to provide the answers.

The technologies that made internet sales possible, and a lack of awareness of these trends as they were emerging, have converged to create a retail real estate bubble that the US may not overcome for decades – if ever. Amazon.com currently represents a sales juggernaut that is the online equivalent of Walmart – yet still in a high-growth mode. US retail sales are growing at a 0-2% annual rate. Internet sales are growing at 10%. It’s clear that all of the growth, and a growing percentage of existing sales, are being done online.

Buyers’ abandoning the only means of acquiring things they’ve ever known was no accident.   Traffic and parking hassles, poor customer service, and a perceived lack of security are less tolerated in a world where comparative shopping, immense selection and preferred pricing are only a click away.

Pair that with the massive overbuilding of retail spaces in the US, especially big box stores, and there’s a real estate bubble – with the concomitant bust and depression – in the making. In my small world, I have seen malls once filled with department and specialty stores close and even be leveled. Of the four malls that once stood in Guilford County, North Carolina, a county of 500,000 people, one was sold to a church, one to a private college, one has been razed, and one is still in operation.  General Growth Properties, the owner of Greensboro’s Four Seasons Mall (the one still there) and nearly 200 other mall properties, filed in 2009 for Chapter 11 bankruptcy protection on over $27 billion of debt, its stock price having fallen 97% from the previous year.

Remember Circuit City? Borders? Ames? Zayre’s? Service Merchandise? Montgomery Ward? Any Kmarts or CompUSAs nearby? Sears? Toys “R” Us? Blockbuster Video? Talbots? Pier 1 Imports?  And now Best Buy has announced the closing of 50 stores and its majority stockholder is taking the company private. Think America’s buying habits have changed?

All of this is not terribly surprising because not only is America migrating to online purchasing, but the overbuilding reflected in all the preceding is only the tip of a very ominous iceberg. An apples-to-apples comparison of US retail spaces to those of other countries is difficult because the measurements come in “retail space” and “shopping center” formats and are not in a consistent, measurable format.

According to the 2007 Economic Census, there were 1,122,703 retail establishments in the United States, and a total of 14.2 billion square feet of retail space. That equates to approximately 46.6 square feet of retail space per capita in the U.S.  Undoubtedly the depressed economy took its toll on the amount of operating retail space and the distinction between retail and shopping center measurement may be in play.

But according to The New Rules of Retail by Robin Lewis and Michael Dart, the US contains 22 ft.² per person in operating retail real estate. Number two in the world is Sweden, with 3 ft.² per person. Internet sales are growing; sales at retail sites are not. The U.S. has over seven times the per capita square retail footage of the country in second place.  This trend is headed one way – and it’s not towards increased retail real estate sites or construction.

Technology has changed the way we buy in other ways, too.  Time was, we did our shopping at local stores – the proverbial Main St. retail district with a hardware store, a department store, pharmacy, and so forth.  The advent of suburban strip centers and shopping malls shifted where we made the same types of purchases.  When there were more options, we did a simple price comparison among a couple of options and tended to make the cheapest choice.

Now, when we consider a purchase, we do what first?  Most of us don’t consider even a modest purchase of an unfamiliar item without checking the internet for pricing and availability.  The development of this trend has had a huge impact on the retail trade.  Once upon a time, we walked into Sears or a local department store and bought what we needed.  We were cognizant of the price – certainly looking for the best deal and keeping an eye peeled for sales – but true comparison shopping on a large scale was virtually impossible.  Retail margins were much higher under that system, which made retailing a much more profitable industry.  Blanket consumer ignorance of the best prices made us less knowledgeable shoppers.  Profit margins were boosted by that.  The stores listed above, which have now closed or are under duress, used to be “price busters.”  When price became the only purchasing decision differential, and people became empowered to find the lowest price, margins fell under siege – and that led to company and store closures.  In short, when Walmart beat Kmart on price, Walmart won.

Now, electronic retailers like Best Buy and Fry’s Electronics are regarded as “showrooms,” where shoppers check out the product and pricing at the store, occasionally buying on the spot, but mostly using a smartphone app or internet search to comparison shop for the best price.  Store traffic hasn’t dropped considerably, but the percentage of store visitors who leave with a purchase has.

As a futurist, I am trained to look beyond the obvious and search for other possible contributions to any outcome from other sources and must take them into account.  From the perspective of local government, there remain calls for increased retail building among town councils and county commissioners (small towns especially like the addition of fast food and chain restaurants).  These buildings and their operations provide a bump in property tax revenues and one of the few new sources of sales tax. But a greater desire for more buildings and retail sites to build a tax base will never successfully intersect with declining demand for retail space.

As a Certified Economic Developer (CEcD), having developed Guilford County’s Economic Development Strategic Plan as well as its Economic Development Policy, and having handled dozens of economic development projects involving financial incentives, I have a good handle on what the impact these projects have on local economies.  In March of 2009, the Chairman of the Guilford County Board of Commissioners proposed that the County give 100% tax rebates to anyone who built any commercial real estate improvements – new, expanded or upfit.  The intent was to invigorate the local economy through investment in real estate development by removing the local property taxes on those structural improvements for the first three years.  It was such a sweet gesture for developers and builders – and oh-so-wrong on so many levels.

First, North Carolina, though it allows economic development incentives, statutorily prohibits tax rebates.  The Commissioners themselves could possibly have been held personally liable for these rebate payments. Secondly, the incentive went to the builder and developer – not any lessee who might rent any property.  So it was no help to the small businesses that it was intended to attract.  Thirdly, the concept of subsidizing the development companies who might build the big box stores that put small retailers out of business was abhorrent.  Lastly, the glut of office and retail space that exists today already existed then.  Piling more office and retail space into an already oversaturated market would drive down rents, push builders, developers, and site owners into bankruptcy because of the lack of tenants and low lease rates, and perhaps even threaten the solvency of local lenders.  No legal counsel from any level of government would green-light the proposal, a point I repeated in a guest editorial for the News & Record.  The concept died a quiet death.

“The fundamental terror that capitalism exploits is that we might not want anything” – Adam Phillips

One other macroeconomic factor that has been largely overlooked but will meld compatibly with sections later in the book is this: Up to 70% of the US GDP has been based on consumer-based spending.  70%!  That is a fundamentally flawed and patently unsustainable economic model.  People are now figuring out – outside of a lousy economy – that it just doesn’t make sense to spend money the way we have in the past.  Until 2008, savings rates declined for decades as we spent and borrowed our way into acquiring more junk than we could ever use.  Families have yard sales every year to cash out on all the stuff they’ve bought, and use the proceeds to take a vacation or simply buy more stuff for next year’s yard sale.  Can you imagine your grandparents spending money that way?  Hardly.  Consumption bling is out; frugality is coming back in.  Not good news for retailers.

As I said before, on-site retail sales are not growing.  Except for neighborhood pockets of need or opportunity, only in rare cases have new stores not meant the demise of others.  Open one; close one.

Another new frugality mindset is going to land in other industries as well.  Somewhere along the line, Americans fell into the emotional trap of keeping up with the Joneses, for example owning automobiles that far exceeded basic, reliable transportation needs.  In one of the greatest behavior-changing value-system-altering marketing perversions in history, we bought into a mindset that ignored common sense – going into debt to make purchases in the second largest category of expenditures in our lives, financing a household asset that we know ahead of time will depreciate rapidly, lose utility, and, in time, become worthless.

Financing a high-priced new automobile knowing full well it will depreciate to near worthlessness is the near-equivalent of planning a $15,000 funeral and fretting over the style, quality, and price of a casket – gotta have the satin lining.  But funerals at least have a huge emotional investment and deep personal attachment associated with them, and for that we may somewhat forgive the extravagance.  But cars?  A commodity that loses $5,000-$10,000 in value the minute you drive it off the lot?  And $2,000-$5,000 lost in depreciation every year?  And two or three of them in every driveway?  For mostly casual use of less than two hours per day?  In the new world of frugality, we’ll bury this concept and regain our financial senses –because we’ll need to.

One off-topic observation:  Has anyone else noticed that where there were once two to four gas stations at every major intersection, there are now two to four chain drugstores?

Lower sales on an absolute basis, causing regular store closures, in a low-growth/lower-wealth local economy where purchasing decisions are shifting to the internet is not a formula for success on retail properties or investment.

A concept has evolved that dovetails nicely with this more frugal era we’re entering. It is the idea of “enoughness.”  Enoughness represents the thinking that once I have achieved what I need to support my family and myself, when I am happy in absolute terms with that things I have, when I’ve provided for what I believe is a reasonable retirement nest egg, I don’t need to make myself miserable to get more. I don’t need that 15th sweater or 40th pair of shoes. I don’t need to keep up with the Joneses for a larger house, a second house, two new cars sitting in the driveway, and the bragging rights of belonging to more clubs than I could ever visit. Enoughness means I can spend time with my family and do the things that are really important rather than work 18 hours a day to acquire things that truly aren’t important.

Enoughness, a new era of frugality, and a large, steady migration away from fixed-site stores in an over-built environment will continue to put severe stress on retail sales and retail real estate.

Real Estate Extra:  Just because the near future of retail real estate doesn’t look very cheery doesn’t mean that migrating to another area of real estate development will be any more profitable. The Great Recession also brought about the Great Homecoming. Elderly parents who were being challenged by health and aging issues, and finding their financial resources had dwindled in stock market drops, pension challenges, and increased healthcare and retirement costs, are increasingly moving back in with their kids. The recession also brought to light that huge numbers of Millennials, unable to find work, are moving back in with their parents. Today’s re-entanglement of the nuclear family took three households and melded them into one.  Increased apartment construction to handle those displaced by the Great Recession itself has been a hot market in some places, but at some point the risk of building more units appropriately diminishes the willingness to do it. With all that said, the outlook for single-family housing on a broad scale is not great.

Office space will be equally challenged. Time Warner Cable ran a series of ads not long ago that said “you don’t need an office.” And in many cases, they are right. Small companies without great need for storefront exposure are making money the old-fashioned way: by significantly reducing costs, in this case by moving the office home.

Next we’ll cover industrial space, but suffice it to say that new projects following the old industrial footprint model with plants exceeding 200,000 ft.² are going to become a rarity.

 

 

Jobs Excerpt from “Pardon the Disruption. The Future You Never Saw Coming”

Jobs excerpt from my book “Pardon the Disruption. The Future You Never Saw Coming”, published in November, 2013.  This abbreviated section describes the complete disconnect between government – at all levels – and the private sector in the efforts to create jobs.

 

JOBS! JOBS!  JOBS!

Somehow, with all this intense focus on the economy, employment, and jobs, analysts suffer a total blindness to any causative factor other than a traditional recession. And the measures undertaken today to counteract a slowed economy and massive joblessness are little different from the WPA program implemented by Franklin Delano Roosevelt in 1935. The theme plays over and over again: pump enough money (and cheap credit) into the marketplace, and the multiplier effect of the stimulus will reinvigorate the American economy.

Every generation has seen disruptive technology enter the marketplace and disrupt industry sectors, dissolving related jobs. It just seems to be happening faster now (again, the exponential effect of Moore’s Law). Masses of telephone operators, secretarial pools, the elevator operator, the full-service gas station attendant, the milkman, home ice delivery, chimney sweeps – all eliminated from the economy by some form of technological advancement (and some operational advances in business that promoted self-service when possible).

A central theme throughout the economic section has been that technology – whether it be robotic, 3-D printing, internet connectivity and retailing, Artificial General Intelligence, advances in medical science, or something else – will destroy both industry and jobs.  History has always confirmed that, as new technologies come along, older ways of doing things (and the associated labor) diminish or disappear.  But history has also taught us that as the older classes of jobs disappear, new jobs arise with the new technology that replace – and sometimes even increase – the level of employment.  It’s always worked this way, and whenever it seems that technology has overtaken the capacity of humanity and the economy to recover, economists assure us that this round will be like all the others and we’ll be fine.  A whole new realm of employment opportunities will appear in the replacement industries, and the economy will move on.  And again, it always has.  Until now.

Here’s why it’s different now.  It all comes back to the aforementioned concepts of Moore’s Law and exponential growth. Linear growth explains things that are on an absolute (or projected) increasing path at the same rate.  It can show a rising age or any other numeric progression and generally rises as a straight line at a 30-45 degree angle.  That is where we have been throughout history – again, until now.  For most of the path of exponential growth, the slope resembles that of linear growth.   Then it curves upward, rising from the straight line at a sharper and sharper angle. We are entering the last period of the exponential curve, before its slope becomes almost vertical.  This is a phenomenon we have never experienced.  This growth in technological advancement – Moore’s Law playing out – changes the game.  Today’s economists, pundits, and soothsayers refer to the old paradigm where the next generation of jobs seemingly just materializes at the demise of the old order.  Proven right time and again, there is an arrogant confidence that it will happen again.  But when computers, robots, AGI, and other technological advancements can self-replicate, self-generate, and create on their own, the game has changed.  They no longer need our input into the economy at the levels to which we’ve grown accustomed.  There is no “next job” for us to migrate towards; they are already filled by an entity that can do it better, faster, cheaper and more reliably.  That is the big difference.  Ray Kurzweil’s technological Singularity is playing out.

_ _ _

It is shocking to see how poorly government understands the mindset of the private sector. Harder still is figuring out whether government gets its opinion from the citizenry or vice versa, because both groups consistently cite job creation as today’s most important economic and political issue.

So let’s set the table. Most reasonable people believe there is good reason to have public sector employees. We believe we should have teachers and firemen, police and the military. The vast majority of our public sector employees fit one of these categories. The cuts to these groups as well as to other public sector employment have had a measurable effect on joblessness in the US.

Most reasonable people also agree that long-term employment – long-term productivity – is centered in the private sector. This is where the vast majority of us should be interacting with the economy. So, politicians and the public are both chanting Jobs! Jobs! Jobs!  But they don’t seem to see this from a potential employer’s perspective. Politicians keep trying to induce potential employers to take on laborers that they don’t want or need, and the public keeps blaming the politicians for not having successfully done so.

Please, do not equate the loudness of speech or the apparent depth of sincerity about addressing unemployment issues with the ability to do so in any politician, business leader or private citizen.  I will say it another way: Government has spent out.  They don’t have the money to hire directly.  Unless and until government – at any level, against the private sector’s will and to the detriment of its bottom line – can force the private sector to hire people,  or induce hiring at an outrageous cost, substantial progress to place people in “jobs” will not succeed.  And, of course, economists – you know, the ones sitting in the captain’s chairs that completely missed the call on the Great Recession – are chiming in: Jobs! Jobs! Jobs!

_ _ _

“Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong.    About the future, not so much.”

  • Ben Bernanke, Princeton Commencement Address, 2013

 

“… ‘Do we economists know anything?’ And it is a very legitimate question. Because if you don’t know enough to capture the most extraordinary event, economic event, in all of our lifetimes, what in the world do we really know?

  • Alan Greenspan, on economists. CBS Sunday Morning October 20, 2013

 

Many theorists admonish local business and government leaders to take an active role in curing local shortcomings in economic development – and this provides all the confirmation that politicians need that they can have a dramatic impact on the economy.  Doing “something” is certainly more acceptable than sitting idly by. Too often, in those collective aggressive attempts to do “something” – to have more entrepreneurs, more creative class members or successful industry clusters, more Jobs!  – the natural response is to try to induce them through sheer willpower and determination. But pushing the rope of artificially creating entrepreneurship, a creative class and cluster development is not working. The eternally-failing Global TransPark near Kinston, North Carolina is a glaring example of doing “something,” by encouraging the development of a cluster with little thought to the ultimate outcome. As evidenced by that project, over-aggressive efforts to do “something” may lead to bad mistakes and can be very expensive.

To my surprise, former North Carolina Governor Bev Perdue has shown a fuller understanding of the true reality of productivity than most elected officials.  At the North Carolina Economic Developers Association conference in March 2009, the newly-inaugurated governor was a featured speaker.  She expressed supreme optimism about the areas of the economy that she believed would be central to North Carolina’s economic future: green industry, the military, and aeronautics.

Then she went on to display an understanding of the economy that very few of our leaders possess.  (Paraphrasing)  “I believe the textile industry in North Carolina can still thrive,” she explained.  “They might have to cut the workforce to increase efficiency and profitability, but…”   WHOA! She said it!  She said what every business in America has said for the last five years.  Workers, with their rising healthcare and other costs; workers, who represent a huge percentage of business costs and unproductive overhead during tough times; workers, who are the human measure of these “jobs” elected officials fall all over themselves talking about; workers, who represent the biggest cost to virtually every company; yes, workers may have to be cut in order for the company to survive and prosper.  Businesses are charged with making profits (and in this economy, surviving).  Their disposition toward creating jobs is:  “You’ve gotta be kidding.  I’m trying to stay in business.”

I’ll give you an example of what I mean. In your next thoughts about job creation, try a little word exchange. I want you to replace the word “jobs” with the term “payroll expense.”  Because isn’t payroll expense exactly what those jobs mean to a potential employer?  Try it and see how it feels to say this: “We need more payroll expense!” or “Why haven’t you created more payroll expense?!” It sounds weird, doesn’t it?  But, again, isn’t that what a “job” represents to a company struggling to make it?   That’s what’s truly relevant because that’s how a potential employer sees the labor force. Her company is in survival mode in this economy; increased profitability is by comparison a lofty goal of secondary importance. Nowhere in our free-market economy or in any company’s set of goals is the objective to simply create jobs.

This disconnect between governmental attempts at job creation and retention through spending and other stimulus – and the virtually opposite goals of those who are expected to do the heavy lifting that solves the unemployment problem (the private sector) – is undoubtedly the most confounding economic enigma today. And it has not been even remotely discussed.

I can’t emphasize this enough.  The public sector – all the politicians from President Obama to Congress to Governors and state houses to local mayors and council members – all identify “job creation” as their highest priority.  The public at large agrees and holds the officials responsible for addressing the high unemployment rate.  And none of the above believe that the best means to do this is to undertake yet more deficit spending to hire a meaningful number of citizens in government jobs.  So the efforts at “job creation” and lowering unemployment are left to the private sector.  And the last thing the private sector wants to do is to add more payroll expense.  Guess what?  It’s not working.  Go figure.

Governments Confront Their Pension Deficit Disorder

My article, published in the November-December, 2013 edition of The Futurist magazine, the official publication of the World Future Society. The article highlights the threats to local and state governments from persistent deficits and debt from every source.

 

http://www.wfs.org/global_engine/download.asp?fileid=DD6FCF35-096E-471F-AB7F-AA978D07E6AD&ext=pdf

What Does Moore’s Law Mean for the Rest of Society?

My article, published in the July-August, 2014 edition of The Futurist magazine, the official publication of the World Future Society.  I presented from this article at WorldFuture 2014 in Orlando, FL.

 

http://www.wfs.org/global_engine/download.asp?fileid=77711FB6-63FE-4AB2-9373-0E1B6778675C&ext=pdf

Rob Bencini Bio

ROB BENCINI

Rob was born and raised in High Point, NC and earned his BS in Business Administration from UNC-Chapel Hill and MBA from East Carolina University.  His broad business background includes experience in manufacturing, sales and management, non-profit development and leadership, local government management and economic development.

He became Guilford County, NC government’s first Economic Developer, transitioning from standard economic development in business retention and recruitment to a talent-based emphasis over his career.  Individual highlights:

Certified Economic Developer (CEcD)

North Carolina Municipal/County Administration Course Alumni Association President (UNC School of Government)

Author:

Book:              “Pardon the Disruption. The Future You Never Saw                                         Coming” 2013. Wasteland Press

Articles:           The End of the Mediocre Private College

Say Goodbye to News at 6:00

Governments Confront Their Pension Deficit Disorder

What Does Moore’s Law Mean to the Rest of Society?

System of Regional Partnerships Needs a Paradigm Shift

The Last Days of the Economic Development Regional                                    Partnerships

Presenter:

“The Three Great Myths of Economic Development”

The Impact of Current Trends on the Future of Local                                     Government

What Does Moore’s Law Mean to the Rest of Society?

Trends in Economic Development

Plans and Policies:

“Triad Tomorrow” The Comprehensive Economic                                          Development  Strategy (CEDS) for the Piedmont Triad                                    Regional Council (12 counties; 1.6 million population).                                  Adopted February, 2014

Guilford County Economic Development Strategic Plan

Guilford County Economic Development Policy

Guilford County Green Plan

 

The Last Days of the Regional Economic Development Partnerships

My original article about the decline in the NC regional economic development partnerships.

THE LAST DAYS OF THE REGIONAL ECONOMIC DEVELOPMENT PARTNERSHIPS

 

On May 12th, an announcement came out of Asheville that five western North Carolina counties were banding together to create a new economic development entity. Called groWNC, the new organization is “designed to get the region thinking collectively about ways to develop the economy with a focus on sustainability.”  According to the article in the Smoky Mountain News, the group will focus on seven core areas: jobs and economic development; housing; natural resources; cultural resources; energy; land use; transportation; and health and wellness.

Without casting aspersions toward the AdvantageWest Economic Development Group (the state-designated economic development regional partnership), the five counties cited a different set of economic development and long-term planning needs.  According to the article: “Each of the (seven) committees has drafted a list of goals that it hopes to work toward that will promote growth and more inter-connectivity between the counties, rather than each county taking its own path.”

Last month, Montgomery County articulated a much more explicit message as talks were held in committee in the North Carolina legislature for the county to leave the Piedmont Triad Partnership and become funded individually by the state.  In very direct terms, Montgomery County leaders expressed the fact that they cannot point to a single economic development project in their county that emanated from the Piedmont Triad Partnership – ever. In a nod to their true geographic focus, the Piedmont Triad Partnership supports the rural county’s exit.

Since then, elected officials from Surry County have expressed the same sentiment and asked to be removed from the Partnership and also retain their representative funding.

This all may seem sudden, but it comes as no surprise. Two years ago in a column I wrote for the News – Record, I openly questioned that if the Piedmont Triad Partnership were to go away, who would miss it(?).  Even with good intentions, there are a variety of factors that make it difficult for the organization – or many of their sister partnerships – to make a substantial difference in the economic development landscape.

The first factor is related to the very nature of arbitrarily putting together “regional partnerships” of unrelated counties for any reason – in this case, the seven regional economic development partnerships.  Contrary to the beliefs of those who promote regionalism at every turn, regionalism doesn’t work in every case on every issue.  It certainly hasn’t in economic development.  The preponderance of evidence shows that cities are the principal drivers of any regional economy; the Piedmont Triad Partnership is tacitly acknowledging that by supporting rural Montgomery County’s exit.

The current PTP Board of Directors’ focus is now squarely on the urban area of the Partnership footprint – particularly the area that spans the I – 40 corridor from Alamance through Guilford and into Forsyth County. Neither Montgomery County nor Surry County fit in the Piedmont Triad Partnership economic development vision and both the counties and the PTP Board know that. At some level, all economic development is local – especially with the arcane tax laws currently on the books. Rather than not being included and feeling ignored, both counties are (at some level) opting out.

The second factor is that despite purporting to be the lead economic development agency for the Triad, the Piedmont Triad Partnership has not been in the economic development project role since its inception. The organization would occasionally participate in projects that, for instance, were in neutral territory like the Piedmont Triad international Airport property and the Skybus project. But principally, the organization had for years been an umbrella marketing organization for its member counties. In that role it had some reasonable successes, but the wide disparity between the urban center and the rural periphery ultimately made for an unworkable marketing message and much of the marketing has been returned to the counties’ ED operations.  Not long ago, High Point and Greensboro banded to create their paired marketing message independent of PTP.

The third factor is very simple: every member county in the Piedmont Triad Partnership (except currently, Caswell and only by proxy, Guilford), has its own substantial economic development organization and staff. All the cities and many of the towns have economic development staff as well. There just wasn’t a need for the duplication of economic development efforts that the Piedmont Triad Partnership brought to the table.

The fourth factor is a current trend and is completely out of the control or critical assessment of the Piedmont Triad Partnership. The economy just stinks. There is nothing they – nor anyone else – could have done about that; the Triad was just hit worse than other areas the country because of the nature of the job requirements and job losses in its legacy industries of textiles, apparel, tobacco and furniture. When times get tough, it seems everybody points a finger finding someone to blame. This case is no different: projects didn’t come to many areas of the Triad during good times and when times get tough elected officials and business leaders – in their frustration – look for reasons for their current situation and find a scapegoat. In that regard, the Piedmont Triad Partnership is low-hanging fruit. This very thing happens to quality staff in slow local economies and it will certainly happen within the loose connectivity with the regional partnership.

 

THE REGIONAL PARTNERSHIP STATUS

The function of economic development assistance from state or regional organizations will undergo significant transformation in the years to come.  The state rightly prefers to locate more opportunities in rural areas to mitigate poverty in high unemployment counties.  Regional partnerships can’t (or shouldn’t) play favorites among their member jurisdictions for economic project siting.  In their world, where jobs go isn’t site specific and doesn’t matter.  Counties don’t see it that way.  New economic development projects are their first line of sight for property tax revenue increases.  In their minds, with property taxes meaning so much to those counties, location matters because – location matters. 

Aside from the Piedmont Triad Partnership, the other six economic development partnerships have at least one major city at its core – with the exception of the 16-county Northeast Commission (covering the remote area in the northeastern part of the state) and the vast area of western North Carolina west of Gastonia and Asheville where 23 of the state’s 100 counties are regionally grouped into the AdvantageWest Economic Development Group.  Regional association and state assistance for the far western counties of North Carolina and the impoverished northeastern corner (perhaps adding rural counties to the west and south of the current Northeast Commission where there are no cities to draw from) makes sense.  Otherwise, there is ample evidence from the examples of self-association and partnership withdrawal that North Carolina’s regional partnership paradigm needs a complete overhaul, major reassessment or reduction to the two non-city affiliated areas of greatest need.

 

PART 2:  The Next Steps for North Carolina’s Economic Development Partnerships

 

*Rob Bencini (MBA, CEcD) is an Economic Futurist providing critical insight for business and government.  He may be reached at rbencini@earthlink.net or www.robbencini.com.