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Posted: May 31, 2011

Economic development from the bottom up

Hickenlooper's plan is taking shape

Neil McKenzie

The "bottom-up" economic development plan initiated by Gov. John Hickenlooper is beginning to take shape. The idea was to consolidate the state's 64 counties into 14 regions which would prepare regional economic development plans. These regional plans would be then in turn rolled up into an overall state blueprint. The regional plans have been prepared and can be found at Bottom-Up Regional Statements. I encourage you to take a look at these plans and see how they might affect your region and its economic future.

The regional statements are diverse in ideas but they have several threads in common about getting our economy on a path to sustainable growth. Some of the ideas shared among the regions include:

• Tourism - Some regions in Colorado have a well-developed tourism sector and others are looking at tourism as a way to improve their local economies. The initiatives vary from continuing to grow traditional tourism activities to creating new ones like agri-tourism.
The region represented by El Paso, Teller and Park counties has put a special emphasis on including arts and culture into their tourism efforts. Most other regions did not mention arts as a driver to grow tourism. According to their plan they seek to, "Integrate arts and culture as part of the tourism product."

• Communications - It is interesting to note that several regions want to increase the availability of broadband and wireless access to their areas. It seems that many of the more rural regions have little access to the information superhighway - getting access may have a big impact on the future of these areas.

• Access to Capital - Almost every region cited a lack of access to capital for small business as an area that needs to be addressed. The ideas presented range from using micro-finance, startup and venture capital funds to state regulations on lending. The lack of access to capital is not just a Colorado problem and it will be interesting to see what local solutions we can come up with.

• Regulations - Many of the regions felt that regulation was a hindrance to economic development. Upon closer inspection it appears that the regions that rely on oil and gas exploration are referring to industry specific regulations. Some regions which wish to develop their local historic districts felt that the regulations were much more local in nature.

• Public Works / Infrastructure - Along the same lines of having access to the information superhighway several regions felt that they needed better transportation resources to move goods and people to their areas - one even mentioned needing a cheaper way to ship goods. One region had much larger plans such as moving the National Western Stock Show to their region and building a NASCAR track.

• Help With Marketing and Entrepreneurship - Many of the more rural regions stressed the need for entrepreneurial assistance to help develop their local businesses. Marketing assistance to promote the regions was also high on their lists. Helping these regions grow their small businesses and helping them to market is a good opportunity for our State's businesses and educational institutions to lend a hand.

Economic Development in the 21st Century

One of the challenges of bottoms-up economic development planning is to balance the interests of diverse regions with the capability of making meaningful change on a State level. The reality today is that economic development is more than just building a new stadium or giving large businesses incentives through tax breaks or other favorable treatment.
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We must build on what we have and create an environment that attracts and sustains businesses both large and small. Here are some things to consider:

• Economic growth of an area should build on an area's strengths - things they already do well. Trying to be the next Silicon Valley or medical research triangle will probably end in failure with a lot of wasted resources. Our economic development regions need to take stock of what they do well and leverage these things for the next step. One of the basic concepts behind business planning is to capitalize on one's strengths - economic development planning is no exception. Some of our strengths are tourism, energy, agriculture, technology and the creative sector.

• Businesses and entrepreneurs are attracted to areas that are high in creative capital. Richard Florida in his books on the creative class makes the case that entrepreneurs move to areas that have what he calls a high creative index - Colorado is just such an area. We have a diverse and well educated population, an appreciation for the arts and things cultural. In short Colorado is a place people want to live, work and start businesses.

• When creating our economic development plans we need to consider the world around us and how it is changing. Daniel Pink in his book A Whole New Mind has some interesting ideas on what it takes to succeed and flourish in today's global economy. He discusses three ideas about career choices that are needed to succeed - they are appropriate for our State's planning regions as well.

• Abundance - In an age of abundance people want and will purchase products and services with a high creative and design content. Good examples of this range from designer toasters to the iPhone. The idea is that we should be producing goods and services with a high creative and design content and leave the "generic" to someone else.

• Automation- It seems that every day some activity is being automated and this means a loss of jobs for some. Productivity has recently soared and this has meant producing more (or the same) with less (usually labor). This is great for a company's bottom line but not so great if you are one who has lost their job. We should not encourage occupations that are like to be automated. A better choice would be to be the one's designing the automation not those being replaced by it.

• Asia - In Pink's view, Asia is a term for off shoring. If a job, product or service can be produced in another country by using much cheaper labor then it probably will be. We must make sure that our economic development efforts are not throwing money after something that is likely to out-sourced. Jobs that are high in creative content are the least likely to be sent to a foreign land.

The Role of Government

The State government has an important role to play in economic development of the its diverse planning regions. Areas where the State can contribute include:

• Bringing the regions together to develop an overall set of goals and strategies that will help each economic development region.
• Help create a brand for Colorado and market it to the rest of the country and the world.
• Support education to make sure that we will continue to attract talented people and prepare our citizens for the skills needed to be successful in the future.
• Make sure that our infrastructure such as transportation and communications are adequate to thrive in a 21st century world economy.
• Assist in using existing agencies and educational institutions to improve the skills of our entrepreneurs.
• Promote our creative sector - "Colorado Creates" is a good start!

I would be interested in hearing you thoughts about how to move Colorado into a solid position of substantial and sustainable growth. Colorado like a lot of other states are at a crossroad with regards to plotting a future economic development course - let's develop a plan that will capitalize on our strengths and prepare us to take advantage of opportunities in a changing world.
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Neil McKenzie is an author, educator and consultant to artists and arts organizations in the areas of business and marketing planning.  His recently published book, The Artist’s Business and Marketing ToolBox, was written to take the mystery out of business for artists and other creative professionals. He has more than 30 years experience as a management consultant and corporate marketing executive working with hundreds of organizations including some of the world’s top brands. Neil is a visiting professor at the Center for Innovation at Metropolitan State University of Denver, where he developed and teaches Artrepreneurship; and at University College at the University of Denver, where he teaches the graduate course, Marketing for the Arts.  He is a frequent guest lecturer to artists and organizations in the creative sector and writes about the creative economy including several articles for Americans for the Arts, a national arts organization.  Neil can be reached at 720-339-3160, or






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Readers Respond

Jim, I've been there; done that before. Government "programs" rarely work and are almost ALWAYS a waste of time. I could name at least a dozen in my 40 years in business that are sitting on a shelf somewhere gathering dust and finally getting thrown away. That's a fact. I watched the teachers "take over" the meetings and knew that this would be just another. Business people are ACTION people and not "study" people. That's why we are what we are. Anyone who starts a process and doesn't take that into account is dreaming. It IS possible but not the way it was done. You CANNOT include anyone BUT business people to get something like this done. Some of the teachers wanted to include students. Wow, they just don't get it. Students don't create jobs and neither do teachers but that's all you go in your government "program." Sorry, but I don't have time for such silliness By John on 2011 06 14
Any job is a good job. Do we not try to find a job unless it fills certain parameters??? It's nice to dream about everyone making 100k/yr but it's NOT realistic. Are we trying to drag us out of a recession or change our social structure.Been there done that with government"studies". I KNOW what would have happened if my name would have still been on a meaningless "study." I can see the headlines now: Prominent local businessman supports Governors plan. Sterling businesses are no different than Denver businesses. Again, I go back to basic economics; MOST jobs will come from present businesses and that has been proven over and over again. Why are we trying to reinvent the wheel. High paying jobs are wonderful but are few and far between By John Wray on 2011 05 31
Note: This comment was in my initial comment, but was deleted to meet the 300 word limit. It’s not clear what kinds of jobs John Wray was referring to in his comments. Although better than no jobs at all, just creating low-paying dead-end jobs is not the goal. Many of us can empathize with his frustration with the NE region economic development group and not being able to convince real business people to join the process, but resigning from the group and leaving the plan to only government employees was counterproductive. What kind of high-value-creating jobs can the NE region business people create if "government gets out of the way?" Resigning from the region planning group certainly won’t help. By Jim Leonard on 2011 05 31
Brand new businesses are fine and achievable in the long run, but imo, the only new JOBS will be created by present businesses. The comments that all counties participated is technically correct but as far as relevance, incorrect. The input is from NON business people who generally don't have a clue how to create a job. I'm not bashing them; just being realistic. As I mentioned before, the REAL business people are discouraged by the current political atmosphere and are staying on the sidelines as far as investment. Any poll will attest to the fact that most jobs come from PRESENT businesses. All of these "dream" businesses are fine to talk about but will do little to help us now imho. I've been a businessman for 40 years and talk to many other businessmen every day and hear the same thing over and over again. By John Wray on 2011 05 31
Hick was correct in his campaign when he said “Colorado has to grow its way out of the budget deficit with innovation-based economic growth.” In a few words: designing, developing, and manufacturing products and services that will attract premium prices in national and global markets. It’s not evident that the Bottom Up process will accomplish this, but it brings every county into the process, which hasn’t happened before. However, the goal is to recreate an innovation-based, high-value-creating economy. Tourism is an important industry for many mountain counties, but it should not be emphasized for the entire State. It is not a high-value-creating industry and creates only low-paying jobs. Product development and advanced manufacturing must be part of the mix to achieve the economic growth goals. Two statements in the article emphasize the kinds of jobs we need to create in Colorado: - The idea is that we should be producing goods and services with a high creative and design content and leave the "generic" to someone else. - We must make sure that our economic development efforts are not throwing money after something that is likely to be out-sourced. Jobs that are high in creative content are the least likely to be sent to a foreign land. All of the other major ideas from the regions (access to capital, access to broadband, regulations, infrastructure, entrepreneurship) and the “Role of Government” list of actions will help create an innovation-based economy with high-paying jobs. One critical item not mentioned: Some of the above-mentioned investments (not all) have to be made at the front end for innovation-driven economic development to occur. To be credible, any economic development plan needs to be internally consistent, i.e. the plan must include credible sources of revenue to fund planned investments. By Jim Leonard on 2011 05 31
We also have 2 other very important things to remember. (1) Location! Colorado is in a central location to the rest of the U.S. Also, Denver has a great airport. We should be pushing Colorado as a great place for companies to have their Corporate Headquarters, as well as their Conventions. (2) Beauty! Colorado is a beautiful state. I think we should be giving away the use of the Colorado Convention Center -- knowing that we reap more benefits from having people here from out of state. They produce revenue while they are here, and get a chance to see the state we all love. That, in turn, will turn into more vacations and relocations to our state. Every day that the Convention Center is empty is a wasted day. By Jeff Taylor on 2011 05 31
I just re read the article and it confirmed my feeling from the first reading. I saw little in the article that actually had anything to do with creating jobs. The conventional wisdom is that big corps have lots of money but it's sitting on the sidelines. I suggest that is the case w/small business because of lack of confidence. All of this political and "educational" commenting just makes it worse. My bank informs me that it is cash flush but cannot make loans as it used to because of the "new" regulations. My wife who was one of only four female national bank presidents in the US, informs me that is the case pretty much everywhere. The banking system wants to lend but is severely restricted. This attempt of the government at all levels to control the economy cannot and will not work. I'm 70 and for the first time in 40 years of business experience, I'm pessimistic. I'm afraid that our entire system must be broken completely before it can be fixed. Too many "pseudo-experts" stirring the pot. By John Wray on 2011 05 31
I had hopes for this committee even though I had reservations about whether it would actually mean anything. It turned out to be just another political waste of time. I doubt that the Governor meant it to be that way, but it turned out that way in NE Colorado which is why I resigned from the committee. There are NO business people on the NE committee and it was dominated at all meetings by government people and teachers, NONE of which can create ONE job. I'm afraid that true business people are jaded about politics and I could not convince any to participate. I guess business people are like cats; not herdable. The teachers were concerned about saving their jobs and the government people also. I learned that the job "users" were better organized and smarter about this political process. I suspect that's what happened in Wisconsin and it certainly happened here. The teachers even got student input. I'm sure that was a good educational exercise but I haven't seen any jobs created by students. The true job creators have little confidence in our system,imho. Our economy will NOT turn around until govt can convince business people that they deserve trust. By John Wray on 2011 05 31

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