^ 3 ^ Magaziner, international business hose states which are truly blazing Ra h t o io d n e s Is b l y a n c d a , pf i a ta cl t i i s ot n /la a bliz o e r, d D fo e r m g o e c n r e a r t/ Republican and ethnic divisions, recently saw its voters reject one of the most far- reaching economic development programs ever designed by a state. The badly- defeated referendum on the $250 million, seven-year industrial revitalization plan which promised to create 60,000 new jobs in the tiny state, sent its proponents back to their drawing boards. Yet, the compact received unprecedented support from the state’s major political leaders, the AFL- CIO, Chamber of Commerce, minority and women’s organizations and all five major newspapers in the state. Though the political will was lacking, largely because the economy had improved, bluntopposed to trickling it down), through community development corporations, worker owned co-ops and various entrepreneurial approaches; 3) strong support of public education, research and development. In rapidly, often traumatically changing times, this serves as an investment both in information, and a disciplined, creative intelligentnew ground building their ing the immediate need for the overhaul, it opened new avenues of possibility for such programs. Tagged the Greenhouse Compact, it was conceived by 35-year-old Ira state Employment Division, says the AFL- ClO submitted one of the best plans in the state to the legislature, including detailed research and recommendations concerning in-state pension fund investment, best use of the business and resource base peculiar to Oregon, assistance and retraining for displaced workers, the problems of plant closures and the tax structure. But they lacked the political power to push this agenda through. Another exciting program is Lane County's Buy Oregon effort, which connects local businesses that are not currently doing business together (see box). The object is to create jobs by replacing imports. Created on a literal shoestring, the program was cited as one of “10 Innovative Ideas” by the Joint Legislative Committee on Trade and Economic Development. No single strategy will pull us out of our malaise. We must build on our strengths, fortify where we are weakest and learn from the best models available. What really seems to be blocking development in Oregon is the Janus-like nature of our state’s persona. One face is the independent maverick, the free-thinking pioneer with roots in the ground to whom people/ nature-centered quality of life is more important than the quick returns (and blights) of politics/business-as-usual. The opposing face is that of the cranky hermit, the ignorant provincial who shuns the invasion of the real world, struggling to maintain the pristine wilderness of innocence even to the point of poverty and disarray. Though the innocence has faded and we’ve become more brazen, courting all and sundry, a look at other states’ efforts in the area of economic development shows we’re currently playing the benighted crank rather than the intrepid scout. sia to make the most of it; and 4) strong maintenance of the public facilities (roads, sewers, schools, etc.) and policies (such as zoning and annexation requirements) which are the underlying requirements for any form of economic expansion. While the objective worth of such alternative programs is often dismissed, knee- jerkily, on ideological grounds (excessive governmental intervention in the marketplace), it is one of those deliciously simple twists of fate that the most progressive programs today are virtual blueprints for the old conservative ideals of states’ rights, self-reliance and entre- preneurialism. consultant who led a ’60s student rebellion at Brown University and 44-year-old Terrence Murphy, head of the state's largest bank. Keyed to the maxim “Allowing the marketplace simply to eliminate jobs and bankrupt regions is not appropriate in a civilized society,” a Strategic Development Commission laid out a plan based on massive research into the state’s economy. Magaziner reported in the Dec., 1983 issue of The Entrepreneurial Economy, that “our commission and its 139 volunteer researchers carefully examined all aspects of the Rhode Island economy, analyzing 35,000 corporate tax returns, interviewing officials of more than 500 companies, tracing 3,650 new companies and examining 178 failed companies over the past 11 years. “We concluded that foreign competition was threatening industries with 55% of the key jobs in the state. Industrial wages ranked nationally ahead of only Mississippi and North Carolina. Our goals became to develop new industries more insulated from foreign competition, and help older industries strengthen management, switch to more profitable products and find new markets, and to raise the average hourly industrial wage to within 10 or 15% of national levels .. Outlined in the plan were financial incentives to existing companies which would have created new jobs or worked to pull them out of the economic'quagmire. It proposed loans to companies creating new products or with reasonable hope of getting out of the red. The most innovative element was “grant notes" for each $8-per-hour job created. Companies maintaining these jobs for at least four years would have had to pay back only the interest on the notes; others would owe the principal. economies have drawn from a populist blend of both liberal and conservative ideas, a transcendence of the us-vs.- them conflicts of the past. Central to the development programs of several leading states are elements of these four approaches: 1) the diversion of large reserves of state employees’ pension funds from international common stocks and bonds into investments chosen for their potential to both create jobs and bolster the state’s economy; 2) legislation and grants designed to stimulate growth from the bottom up (as I M0 SINGLESTRATEGYWILL PULL US OUT OF OUR MALAISE. WE MUST BUILD ON OUR STRENGTHS, FORTIFY WHERE WE ARE WEAKESTAND LEARN FROM THE BEST MODELS AVAILABLE. “The centerpiece of our plan,” Magaziner states, “... are four non-profit research centers — ‘greenhouses’ — to develop high technology products and new techniques. We are looking at several fields, including robotics, cancer drugs, gerontology, underwater electronics, clinical trials for new medicines and medical techniques, and ‘thin’ film materials for semiconductors, aircraft engines and other industrial uses.” Other planks included matching grants for firms which would establish day care centers, special employment programs RHO DE ISLAND’ S G REENHO USE Clinton St. Quarterly 11
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