Economic development: time for radical change
As published in the Rochester Beacon.
The Boston Consulting Group is conducting a review of our region’s approach to economic development. It has done an impressive job of engaging representatives from many sectors of our community, including myself, as it conducts research.
Shortly, BCG will deliver a report that will include an assessment and recommendations. As Greater Rochester Chamber of Commerce CEO Bob Duffy articulated in his recent Rochester Business Journal column, we perform at an uncompetitive level that prevents us from achieving our region’s full potential. Bob’s tone in the article reminds me of his courage advocating for mayoral control of the school district. He doesn’t mince words about institutional dysfunction and the absence of clear goals and accountability standards. Kudos to Bob for taking this potentially controversial position.
The business leaders identified with funding this expensive engagement include CEOs of three of our largest companies: Wegmans, Constellation Brands and Paychex. I also applaud them for their engagement and commitment to improving the regional economy. For them, this is not charity. The health and vibrancy of our community contributes directly to their ability to attract and retain a talented workforce.
I have had privileged contact with leadership in cities that are often cited as recent success stories, such as Nashville and Columbus. In those communities, the business leaders are visible and driving economic development. When Rochester’s “Big Three” were healthy, there seemed to be clearer leadership from the business community. We now have greater business diversity and our new and small firms have become central to the economy. This community has not yet attained its deserved influence upon economic development policy. From my perspective, the politicians and economic development organizations in successful cities appear to have greater accountability to the business community.
Many Rochesterians seem to have acquired a misperception of government’s role in the innovation economy. Politicians do not drive a healthy economy. Nor do economic development officials. Go to Boulder, Austin or Portland, and you don’t see their state governments funding business plan contests or accelerators the way New York does. We have benefitted marginally from our state’s (or taxpayer) largesse, but I see this as filling a void left by the private sector.
The BCG process might appear closed to the general community. The Chamber and the project funders are members of a traditional segment. Albeit an important element of the community, this is 2019 and we need to engage new blood—the new generation of entrepreneurs and businesspeople. We are fortunate to have them in relative abundance.
I advocate for new thinking focused on engaging more, diverse elements from the business community. Some of these individuals might even include the many non-residents who manage companies with significant operations here. It is not uncommon for businesses in Rochester to grow after acquisition due to our talented workforce and reasonable costs.
Equally as important, I advocate for incorporating issues that touch upon our greatest social challenges, such as education, workforce development, segregation and poverty. The younger generations don’t see clear distinctions between innovation in commerce and social equity. As a venture capitalist, I recognized little difference between the mentality of a successful social entrepreneur and a founder of a high-tech startup. They both are attempting to solve problems in novel ways.
If we don’t openly identify our social problems, they will continue to fester and remain a drag on our economy. They divide our community and contribute to higher taxes. It is not unreasonable to see a confluence of innovation in the for-profit and not-for-profit spheres. This is often found in healthy entrepreneurial ecosystems.
I would like to suggest ideas for BCG and the stewards of this process to consider; ideas that aim to break through the status quo and release the energy and innovation present among the future leaders in our community.
The Chamber and GRE board members should retain a software czar, someone with direct industry experience, charged with developing a plan to support local companies and recruit others from major markets such as New York City, Silicon Valley and Boston. We have a distinct cost advantage and talent pool that is attractive to high-growth companies in those regions.
They should appoint a respected business leader to work with the University of Rochester and Rochester Institute of Technology to foster collaboration that promotes the region’s economy. Identify a minimum of three impactful ways the schools can forge new cooperative ventures. This might be a joint effort to market to major tech companies located in other metropolitan areas using both universities’ vast alumni networks. Joint initiatives might combine programs in artificial intelligence, big data and cybersecurity to create a 1+1=3 formula.
Before concluding, BCG should interview the new entrepreneurs represented by the RocGrowth community. They include founders of such companies as CloudCheckr, iCardiac and CaterTrax. Over four years, we have highlighted many of those individuals through our RocGrowth Candids series. The stories emphasizing their connection to Rochester have been recorded and posted on our website for all to see. The BCG planning process would benefit from the energy and vision the emerging tech company founders bring to their business. This is an opportunity for the organization to embrace the new economy and grow with it.
The Chamber and its leaders should also work to promote greater coordination among the state, county and city economic development programs. A leadership group appointed by the Chamber might meet monthly and report back in a few months with a specific plan. This feedback loop will help government officials understand more about the needs of high-potential businesses and make them more relevant.
Someone should take responsibility for initiating greater coordination among business leaders in Syracuse and Buffalo. Several local employers, such as M&T Bank, have significant operations in each city and have a regional perspective already. Our response to the HQ2 proposal incorporated a partnership with Buffalo, revealing an awareness that our combined resources make us more competitive. Between our three metros, we have 2.7 million people, placing us among the top metros in the nation, and are home to some of the leading institutions of higher learning. We compete in a global economy. Let’s exorcise ourselves of the petty, retrograde mentality that leads us to compete with our neighbors along the Thruway.
Finally, new committees or teams should include representation from a younger demographic with a bias toward diversity of gender and race. We have a diverse community, yet it often doesn’t feel that way. This is another asset we don’t always seem to exploit. It has been proven that diversity is a desirable characteristic for thriving economies.
Bob Duffy stresses improving our region’s ability to “work as a team.” I wholeheartedly agree. Now, let’s make sure we bring the right team to the game, and that it represents the emerging business leaders and other less-enfranchised members of our community.
Richard A. Glaser is co-founder of RocGrowth and People for Parcel 5.