Newspapers across North Carolina picked up on an announcement by Governor Pat McCrory that he wants to shift the marketing of economic development to public-private partnerships like it was something new. It really isn’t a new idea.
Focused on story value, the news media, especially short-handed as it is today, appears to have little interest in corporate memory even if clues are buried in their own archives.
Unfortunately, many in political circles are even less inclined to historical context, dooming progress at best to “two steps forward and one step back” or as it seems in the NC General Assembly for several years, “two steps backward and one step forward.”
Many governors have tried what Governor McCrory outlines. Hopefully, his vision goes far beyond the usual attempt to shift costs to the private sector. I also hope this isn’t the attempt to make things less transparent that we’ve seen in other states recently or heaven forbid as merely a means to put the “fox in charge of the chicken coop” as some have tried.
Generally, something similar to the current proposal was pitched more than two decades ago during the administration of Governor Martin, another North Carolina Republican, but it was shouted down by members of his own party I suspect because it was floated by a Lieutenant Governor from another party.
It has also been tossed around many times in North Carolina tourism circles with an eye to leapfrogging the draw backs of retro-approaches in Florida, Georgia and Alaska. Many favored the more dynamic and self-sufficient California model which is an adaptation of the approach modeled long ago for produce such as Washington apples.
However, while tourism and business recruitment are both housed in the state commerce department, they are fundamentally very different approaches. The former is demand-driven and the latter supply-driven making a one-size fits all impractical. However, integration and leveraging of the varying roles and skill-sets needed is imperative.
Where they intersect is that more than 80% of business executives who are considering relocating or expanding to North Carolina come here secretly as visitors first. Another fundamental difference in demand-generated and supply-driven economic development is that the former is expert at branding and marketing and the latter is sales-focused.
I believe Governor McCrory genuinely seeks to be transformative, but regardless of how revolutionary the proposed retooling is will depend on how well these inherent cultural differences are understood and addressed.
Approaches such as the one to which the Governor is intimating are usually inhibited because politicians - and those in business even more so – according to place-marketing gurus such as Dr. Philip Kotler have a hard time understanding marketing in general or that the marketing of “places” such as states and communities is inherently very different than the marketing of individual businesses or corporations.
Lumping huge swathes of counties under non-profits, as the state did many years ago as an outsource conduit for economic development funds also does not a place make. These are merely layers that can aid decisions but at the end of the day, the decision is about specific locations in specific cities, towns and counties.
Even more important though to economic development are state responsibilities that were long ago severed from the department responsible for commerce. Economic development success regardless of tourism or business recruitment is reliant on being attractive to “talent” which has more to do with “quality of place” than anything.
Being an attractive state for talent is at its core about clean air and water, forest canopy including urban area and along roadsides, preservation of scenic character as well as sense of place, well-maintained infrastructure – green, gray and brown - and the vitality and uniqueness of individual cities, towns and counties.
Ironically, all things that are under attack by many in high positions of state leadership and members of the Governor’s party.
We all got to vote for who would be Governor, but we didn’t get to vote for the power-brokers in charge of lock-step caucuses in the legislature nor the lobbyists who have undue sway there, brokered in part, by donations to campaign funds.
No amount of retooling of the economic development apparatus can outweigh the importance of quality of place. Corporate graveyards are littered with businesses who believed marketing could make up for a degraded product. The same is even more true of “places.”
If he wants to truly revolutionize economic development, the Governor first needs to align the legislature in support of a long forgotten and oft-ignored amendment embedded by a 7 to 1 vote in the North Carolina constitution in 1972:
“It shall be the policy of this State to conserve and protect its lands and waters for the benefit of all its citizenry, and to this end it shall be a proper function of the State of North Carolina and its political subdivisions to acquire and preserve park, recreational, and scenic areas, to control and limit the pollution of our air and water, to control excessive noise, and in every other appropriate way to preserve as a part of the common heritage of this State its forests, wetlands, estuaries, beaches, historical sites, openlands, and places of beauty.”
So-called “privatizing,” even to non-profits, is a step backward, not forward as the Governor seeks. However, North Carolina leadership doesn’t have to look far though for a successful model and as with many so-called innovations, it has been honed right here in the Tar Heel state.
When North Carolina’s local option lodging occupancy tax was pioneered here in the early 1980s to self-fund community-destination marketing and visitor-centric economic and cultural development, it took a decade but the NC General Assembly instituted some best-practice stipulations:
- The organizations responsible are public-private but in the form of public authorities.
- This enables them to secure the best talent possible and to be free of limitations that make state employees less effective.
- However, this approach ensures transparency, public accountability and financial oversight and audit by a state commission and the North Carolina treasurer.
- Proprietary information is still secured away from competitors. The authorities can combine public and private funds but for a mission and purpose that is strictly legislated.
- Governing boards are appointed to not only represent the public and private sectors but balance within economic sector and by size of enterprise and geography.
- Guidelines protect the authorities’ missions from political pressure and special interests, public or private.
- Stipulations provide for incentivizing facilities or events but not at the expense of the core mission and only when the authority receives all of the funding it is meant to have.
This approach in cities, towns and counties now drives 80% of the revenues generated for North Carolina on the tourism side. This is a better approach than the non-profit model because it has all of the benefits but with transparency.
Adapting it would further Governor McCrory’s transformative vision by leveraging and adapting a by-product of the state’s innovation and this is how most innovation evolves.
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