Posts Tagged ‘Dell Computer’

Oregon media fails in covering economic development

State government officials across the US love to publicize their aggressive efforts to draw outside businesses to their states. And the news media rarely fails to serve up the publicity the government desires. Case in point, The Oregonian’s headline on the front of the business section yesterday: “Governor will woo Europe for eco-friendly industry.”

Being the green guy that I am, I suppose I should be at the airport on March 29 to shout my approval to the governor before he boards the plane to Amsterdam. Sorry, no can do. I long ago reached the fed-up point with economic development strategies that favor recruitment of out-of-state businesses over cultivation of in-state entrepreneurs and businesses.

My philosophy is let’s first take care of those already here. Only after public officials and programs have exhausted efforts to help our existing firms succeed should they turn their attention to business recruitment. Research I did a year ago for an Oregon economic development organization made clear to me that the state has only scratched the surface of what it could do for existing Oregon businesses and the Oregonians who want to start companies.

Author Michael Shuman says the reason for the government bias toward recruiting big investments from outside companies has much more to do with politics than economics:

Presenting the public with one deal providing one thousand jobs seems to have greater payoffs than presenting one hundred deals with ten jobs each. Politicians would rather be photographed cutting a ribbon on page A-1 than having to schlep around to a hundred places, on a hundred different days, always for page D-6 announcements in the business section.

Of course, if the media didn’t fawn all over these large recruitment coups, our politicians might change their behavior. Reporters tend to favor one factor above all when weighing the significance of business news: what’s the impact on jobs created or lost locally or statewide. Let’s say a local firm promises to add 10 jobs this year — without public subsidy. Now along comes an out-of-state corporation that is promising 500 jobs — with public subsidy. Which announcement do you think the media will pay more attention to?

The media rarely scrutinizes the ROI of public subsidies for the recruitment of out-of-state firms to Oregon. It’s considered the cost of competing in a global economy, as if there is no alternative. Instead, when an outsider chooses Oregon over other states (or countries) the media celebrates it as affirmation of Oregon’s quality of workforce and life. The promise of hundreds of jobs is all that matters; not whether those jobs actually are produced and at what cost to the taxpayer.

When Dell Computer without warning closed its call center in Roseburg (Douglas County) last August and laid off 220 employees, The Oregonian reported:

Douglas County’s economy went into steep decline along with the timber industry in the 1990s, so Dell’s call center was especially welcome when it opened in 2002. Economic development officials helped lure the computer retailer with state tax breaks worth $250,000, and with $2 million worth of employee training funds largely from private organizations.

Dell’s departure presented a perfect opportunity for the paper to investigate the wisdom of showering tax breaks on outside firms, especially mega-corporations like Dell. But no such report followed.

The media is failing the citizenry and the businesses that were started and grown in Oregon. At the very least, reporters need to examine closely what public officials are doing on behalf of Oregon-based businesses and entrepreneurs and weigh that against the investments in external recruitment. In other words, stop the puff pieces on the governor’s overseas junkets and ribbon-cutting ceremonies. And start asking whether any of it really makes a difference.

If not, we have thousands of homegrown businesses in Oregon that could use the governor’s attention and support. You know, the ones that don’t demand tax breaks to do business here.