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State of urgency-It’s not the economy. It’s the state economy, stupid.

What is economic development? Most economists say economic development is the process of improving the well-being of a community, city or state through organized planning. The focus can be on jobs, education, transportation or business incentives.

Tom Sowa – Staff writer

It’s not the economy. It’s the state economy, stupid.

When 450 business leaders and state agency officials meet this week in Spokane, their topic will be restoring Washington’s flagging economy.

The two-day event — the Governor’s 2002 Economic Development Conference — marks the first time government leaders have brought together business and policy specialists to address the issue of statewide economic development.

To put a twist on the phrase that became synonomous with Bill Clinton’s first presidential campaign, it’s not just the economy, it’s what state leaders can do to fix itThe conference starts Thursday against the backdrop of a state unemployment rate in July of 7.1 percent, compared with the national average of 5.9 percent.

Translated into human terms: In July, Washington had more than 212,000 people out of work, according to the most recent state data — an increase of 24,000 people from July 2001.

The state’s trademark industry, airplane manufacturing, is also on the decline, which will likely be heavy on the minds of conference participants this week. Boeing Co., which moved its corporate offices from Seattle to Chicago last year, plans to trim its work force by 30,000 workers. So far, Washington state has shouldered 20,000 of those layoffs. About 180 Boeing jobs are already gone in Spokane.

"People in Washington probably feel a numbness," said Creighton University economics professor Ernie Goss. "It’s a major change from better times."

It’s not surprising Gov. Gary Locke will start the conference Thursday at the WestCoast Ridpath Hotel with a speech titled, "Taking Action to Secure Washington’s future."

What is surprising to some is how long it took government leaders to organize a public response to the economic situation, said Paul Polzin, an economist at the University of Montana in Missoula.

"The governor had to do something. He has an obligation to address the state’s economic issues. In this case, not doing something would be worse," said Polzin, who tracks economic development in Montana.

"He’s the captain. He’s held responsible for what happens to the ship, whether he really has control or not."

The conference is meant to be a "street-level" gathering of planners, economic development groups and state advisers, said Robin Pollard, a department director with Washington’s Office of Trade and Economic Development.

Sessions include information on how to partner with Indian tribes for community success, tourism development, the permitting process and downtown revitalization strategies.

"Our economy has taken a hit," said Pollard. "We’re trying to provide leadership and focus on what it takes to help our communities and businesses compete more successfully."

Pollard said the conference is also a chance to deliver the message that Washington intends to be more active and less reactive in economic development.

The state has hired New York marketing company DCI to develop a business recruitment campaign that will also help build a stronger state image and aid companies in pooling their resources.

Pollard, formerly the state’s tourism director, said Washington has never attempted a branding makeover tied to economic development.

The campaign — still being developed — will attempt to establish a Washington "brand," but "we haven’t defined an exact phrase or tagline," Pollard said.

"The marketing effort will focus on Washington as a state of innovation."

The effort will cost, at a minimum, $500,000, she said.

Does Washington need a brand? Pollard insists that state needs help. DCI’s research, gathered with the help of site selection specialists across the country, found that Washington’s image is bland or nonexistent.

"Favorable image or not, we found Washington is not on the radar screen when talking to CEOs or site selectors," she said.

The state’s efforts to boost the economy — whether through a marketing campaign or job creation — is part of a national trend, said Goss.

While most successful economic development happens at the local level, state leaders realize they have a role to play, he said.

"They can make sure that local governments are not competing with each other" for jobs, said Goss.

The state must also ensure that highways are adequate, taxes aren’t burdensome, and growing companies are helped along, said Goss.

"It’s also about schools and training workers. Real economic development is long-term, it’s not short-term. And providing quality education is vital to that."

Washington’s Oregon, Idaho and Montana neighbors have mounted their own versions of state-directed economic development.

Oregon has divided itself into 13 regions, with a team of five commissioners who meet regularly and serve on a statewide economic development commission.

While the focus is at the local level, Oregon’s Economic and Community Development Department (OECDD) passes out several million dollars yearly for regional development projects.

In a state with even worse budgetary problems than Washington, Oregon’s economic development agency will hand out $15 million for grants, loans and infrastructure projects.

All the money comes to the OECDD through the Oregon lottery, said Mike Burton, the department’s assistant director.

Washington doesn’t have any programs comparable to Oregon’s, said Scott Morris, president of Avista Utilities. Three years ago, while living in Oregon, Morris was appointed one of that state’s five development commissioners.

Morris, who will attend this week’s conference, said Washington needs to follow Oregon’s lead.

He and other Washington business leaders recently completed a study that recommends creation of a nine-person development commission. The main question is how to fund the plan, Morris admitted.

Morris said Locke is willing to create the commission by executive order, but the plan’s long-term survival depends on legislative funding.

"And that’s the tough part," said Morris.

In Montana, Gov. Judy Martz convinced legislators a year ago to create the state’s first-ever economic development director.

The new director, Dave Gibson, has created a team of business advisers who are drafting a statewide comprehensive economic development strategy.

Another goal in Montana, said the University of Montana’s Polzin, is to build a useful set of measurements to track what happens in the state.

Idaho doesn’t have a statewide commission, and it hasn’t assigned the job of economic development to one person, but officials have drafted a statewide comprehensive plan that’s meant to guide legislators and local communities in improving the business climate, said Georgia Smith, a spokesperson for the Idaho Department of Commerce.

Like Washington, Idaho leaders have targeted the gap in wealth between its urban and rural communities. Legislators in Boise approved creation of a program called Gem Communities that sets aside block grants to boost the well-being of rural areas.

Last year about $400,000 went to rural Idaho for improvements in transportation, broadband networks and other business services.

Like Goss, University of Washington researcher Paul Sommers believes the state can add its energy to the local development efforts of cities like Walla Walla, Spokane and Newport.

"All good economic development is local," said Sommers. "But it takes money to make it happen. And we don’t seem to have much now at the state level."

By contrast, Michigan has set aside $100 million a year from its settlement of the federal tobacco lawsuit for economic development.

Washington should do the same, Sommers said. Instead, the state has earmarked its tobacco settlement proceeds — about $4 billion over the next 25 years — for public health programs.

Sommers is currently working on two reports for the Brookings Institution. He’s convinced Locke and state legislators need to do more than make a knee-jerk reaction to the current economic malaise.

"We need consistent and dedicated economic development efforts. Our state has wavered a lot because of budget problems," said Sommers.

"It may be popular to get up now and show you’re doing something. But it takes long-term, consistent efforts by the state for real economic development to occur."

All space for the two-day economic development summit has been taken. For information on the event, contact the state office of OTED at (360) 725-4000.

http://www.spokesmanreview.com/news-story.asp?date=090802&ID=s1211994&cat=section.business

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