The keynote speaker at Springfield Business Development Corp.’s ninth annual Economic Outlook Conference on Sept. 18 pointed to uncertainty among businesspeople and politicians about how to best foster economic growth as the leading cause of stagnation.
“Uncertainty is a major drag on the recovery,” said keynote speaker Sean Snaith, Ph.D., who serves as director of the University of Central Florida’s Institute for Economic Competitiveness.
Snaith said the November presidential election should provide some resolution for the slow recovery from the Great Recession, and he expects either candidate elected to extend Bush-era tax credits to avoid driving the country over “a financial cliff.”
The political divide in Washington, D.C., has resulted in an uncertain future for transportation support, which holds back economic development, said Janet Kavinoky, executive director of transportation and infrastructure at the U.S. Chamber of Commerce. Kavinoky was among the three speakers to address a crowd of roughly 230 business and civic leaders at the University Plaza Convention Center.
While economic recovery has been slow, Snaith said the future is getting steadily brighter, pointing to the gross domestic product that is expected to increase by 1.7 percent in the fourth quarter, 2.1 percent in 2013 and 2.7 percent in 2014.
He said health care reform regulations and missed projections on the impact of the federal stimulus have fueled recent uncertainty in the business sector, and those with money have, as a result, held back capital and employment investments.
According to Snaith, economists projected President Obama’s 2009 $800 billion stimulus package would move the U.S. unemployment to 5.6 percent by July 2012. The national unemployment rate was 8.3 percent in July, according to the U.S. Bureau of Labor Statistics.
Snaith pointed to factors such as emissions regulations, aka cap and trade, controversial health care reform and Dodd-Frank Act banking reforms as keeping the lid on job creation.
“Together, it all foisted quite a burden on the financial sector,” Snaith said.
City Utilities board member Dan Scott of Jericho Development Co. said he’s anxious to see if the general election will be as pivotal as it seems now.
“So much seems to be hanging on the election, but whether it is or not, time will tell,” Scott said.
As a D.C. lobbyist, Kavinoky said she observes broad support for maintaining and improving the nation’s transportation systems, but the political reality is a national budget crisis.
In July, Obama signed the highway, safety and transit reauthorization bill dubbed MAP-21, which stands for Moving Ahead for Progress in the 21st Century. The two-year program eliminates more than two-thirds of the nation’s federal transportation programs and attempts to streamline the funding process by providing exemptions for environmental reviews. The bill, which Kavinoky described as a hard-fought victory through bipartisan cooperation, provides $105 billion in funding through user fees and general fund support. However, she said a looming budget standoff threatens appropriations.
She said with cars becoming more fuel efficient, the taxes on gasoline designed to fund continuing transportation development and upkeep already are insufficient, but in today’s heated political environment, Republicans and Democrats haven’t shown an ability to work together to do what’s best for the country. She said highway contractors are seeking predictable income before investing in new equipment or labor.
“The U.S. chamber’s Transportation Performance Index says that in 2008 and 2009, when our transportation system as a whole was underperforming, … we left $1 trillion of economic growth on the table in those two years because we weren’t investing in infrastructure,” Kavinoky said. “We believe that, but those arguments, when we are faced with a debt crisis, when we are faced with this huge fiscal cliff, the need for fundamental tax reform and a heated political environment, don’t carry the day.”
Brian Kelsey, the third conference speaker and founder of Austin, Texas-based Civic Analytics, touted the need to bring together education, workforce and economic development efforts as the best way to compete in an uncertain economic landscape.
He said those working in economic development, education and workforce development should recognize their mutual interests, and the results through innovation and collaboration could bring economic stability to a region such as southwest Missouri.
“The jobs of the future are going to be concentrated in regions that figure out the relationship between education, economic development and workforce training,” Kelsey said.
Nationwide there are roughly 10,000 organizations such as the SBDC fighting for the same pieces of the development pie, he said, noting the regions with an educated and trained workforce would emerge. “Post-secondary education is the best insurance policy in an uncertain global economy,” Kelsey said.
There are both recent and not-so-recent examples locally of post-secondary schools collaborating with the city to foster economic development.
On Sept. 10, the city of Springfield announced it was considering merging its workforce development programs with Ozarks Technical Community College. The proposed collaboration would transfer the city’s Department of Workforce Development to OTC, an idea brought forward following the spring resignation of Workforce Development Director Bill Dowling.
Missouri State University has been sewing the seeds to economic growth and entrepreneurship in the area since developing the Jordan Valley Innovation Center in 2007, with support from the city. JVIC is part of the university’s IDEA Commons, billed as an urban research park that will eventually cover 88 acres to foster innovation, design, entrepreneurship and the arts.
“Co-location along those lines is a great asset for regional economic development,” Kelsey said after the conference.
He said business incubators such as JVIC are fairly common at large universities, pointing to the IC2 Institute developed by the University of Texas. IC2’s Austin Technology Institute is credited with serving more than 150 companies that have generated $1.5 billion in revenue and created 10,000 direct and indirect jobs in central Texas, according to
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