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Economic GardeningCategory: News & General Info Published: Friday, October 30, 2009 Economic Gardening ....Part one of a three part article written by: Christian Gibbons AN ENTREPRENEURIAL APPROACH TO ECONOMIC DEVELOPMENT In 1987, the City of Littleton, Colorado pioneered an entrepreneurial alternative to the traditional economic development practice of recruiting industries. This demonstration program, developed in conjunction with the Center for the New West, was called "economic gardening." We have had many communities visit us and inquire about the program over the years. In an effort to provide a concise summary of our original thinking and the evolution of that thinking during the first years of the program, we present here a synopsis of our experience. THE SEEDS OF AN IDEA Leadville 1982 The seeds of economic gardening were planted in my mind in Leadville, Colorado in the early 1980s. At the time I was working in that community as a consultant after massive layoffs at the nearby Climax molybdenum mine. The community was interested in attracting new industry to town to offset an unemployment rate that was approaching forty percent. Understand that Leadville lies above 10,000 feet in elevation and experiences winter conditions much of the year. It was, perhaps, the extreme bleakness of the situation that set me on a different course of thinking. During my tenure there, I met two miners who had invented a resin bolt to keep the steel mats up overhead in the mine. A mechanical bolt does not touch the rock in all places on its circumference. A resin bolt consists of two liquids which, when combined, become extra hard—but even more important make one hundred percent contact with the rock. After the meeting, several things occurred to me. First, even in isolated Leadville, there were unique skills and knowledge that were marketable. Here were two guys who knew the mining industry extremely well and had invented something that would be very useful. Secondly, I thought about how many mines there were in the world that could use a resin bolt—a huge market. Third, I started thinking, wouldn't it be more productive if the community shifted its focus from trying to attract companies to a pretty harsh (albeit beautiful) environment and instead concentrated on growing local companies which had specialized expertise? The people most likely to live in and love Leadville were the people who grew up there. I never got very far with that newly developed idea in Leadville, but the concept never left my head. About five years later, the opportunity to try out the idea rose again—this time in Littleton. Littleton, 1987 In 1987, I was hired as the director of economic development for Littleton. At the time, the entire state was in a recession and Martin Marietta, the community's major employer, had laid off several thousand employees. There were nearly a million square feet of vacant retail space and downtown vacancies were approaching thirty percent. The Littleton city council expressed displeasure at having our future being dictated by out-of-state corporations and directed staff "to work with local businesses to develop good jobs." It was a perfect alignment of the stars—an idea and a need. For nearly two years Jim Woods (now city manager) and I researched the best thinking we could find on the subject, talked to experts, (including the Center for the New West, a think tank here in Denver), and fleshed out the concept. We kicked off the project in 1989 with the idea that "economic gardening" was a better approach for Littleton (and perhaps many other communities) than "economic hunting." By this, we meant that we intended to grow our own jobs through entrepreneurial activity instead of recruiting them. The idea was based on research by David Birch at MIT that indicated the great majority of all new jobs in any local economy were produced by the small, local businesses of the community. The recruiting coups drew major newspaper headlines but they were a minor part (often less than five percent) of job creation in most local economies. Further, we had a sense that successful recruiting programs existed primarily in those areas that were attracting new businesses any way, regardless of whether they had an economic development program. For every successful recruiter who represented a hot office/industrial park in a major metropolitan area, there were literally hundreds of economic developers in rural areas, inner cities and small towns who struggled without much real success. There was another, darker side of recruiting that also bothered us. If an outlying area was successful at attracting new industry, it seemed to be a certain type of business activity: the branch plant of industries that competed primarily on low price and thus needed low cost factors of production. Rural towns with cheap land, free buildings, tax abatements, and especially low wage labor would "win" these relocating businesses. Our experience indicated that these types of expansions stayed around as long as costs stayed low. If the standard of living started to rise, the company pulled up stakes and headed for locations where the costs were even lower, often Third World countries. This was the world then when we proposed another approach to economic development: building the economy from the inside out, relying primarily on entrepreneurs. We knew it wouldn't be glamorous work nor work which would get 40-point-type headlines. But we sensed that if we could develop a solid alternative model, even if it took years to implement that model, we would make a valuable contribution to communities all over the world. After two years of formulating and developing the idea, we launched economic gardening with the simple concept that small, local companies were the source of jobs and wealth and that the job of economic developers should be to create nurturing environments for these companies. Since then we have often compared our experiences to Alice following the rabbit down the hole to Wonderland. It has been a long journey with many bends and twists in the road and one that has been full of constant surprises. 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