Ball State University economists David Terrell, right, and Michael Hicks speak on changing economic development policies in the state and across the nation during a special presentation at the Goshen Theater Wednesday night.
Ball State University economists David Terrell, right, and Michael Hicks speak on changing economic development policies in the state and across the nation during a special presentation at the Goshen Theater Wednesday night.
GOSHEN — Hoping to attract more workers to your community? If so, you need to improve your quality of life offerings first.

That was the major takeaway from a special presentation by economists Michael Hicks and David Terrell held Wednesday evening at the Goshen Theater in downtown Goshen.

Hicks is a professor of economics and director of the Center for Business and Economic Research at Ball State University. Terrell is the executive director of the Indiana Communities Institute at Ball State and the Rural Policy Research Institute (RUPRI) Center for Local and State Policy.

The two economists, who were invited to speak before a gathering of Goshen City Council and Goshen Redevelopment Commission members, spoke on the topic of how economic development policies nationwide are increasingly shifting emphasis from recruiting industry to recruiting talent, with a specific emphasis on how enhancing quality of life offerings may determine how competitive communities such as Goshen will be in the future.

According to Terrell, when most communities talk about economic development these days, the crux of the issue always seems to start with the phrase “We need jobs.” Yet the question that really needs to be asked, he said, is “how” we get those jobs into our communities.

“A lot of people will say, ‘We need more jobs because it will grow our population,’” Terrell said. “That’s number one. In our minds, job growth equals population growth.”

However, he noted that current data shows that belief is, for most communities, just not the case.

“The first thing we need to understand is, job growth does not equal population growth,” Terrell said. “In fact, jobs follow people. People live where they want to live. Jobs follow people. We need to understand that.”

In addition, he noted that the traditional model for economic development has typically relied on things like trying to attract or lure investments and jobs with things like tax incentives, and trying to lure workers with the promise of higher pay, etc. Yet today, that mindset is holding many communities back from their economic development goals, he said.

Instead, the better tactic would be for communities to focus on things like improving housing options and availability, working to develop and train an educated workforce, and putting a major emphasis on creating and expanding the amenities and quality of life offerings that will ultimately attract people, and new businesses, and higher wages, to our communities, he explained.

“Change has happened,” Terrell said, referencing the changing economies and demographics that have occurred in most communities since the development of the traditional economic development model. “Our fundamental understanding, and the model that we’ve been using traditionally just has not changed to adapt to the realities of our communities.”

Speaking specifically to communities like Goshen, which have a very high percentage of manufacturing jobs, Hicks noted that while job growth in the city’s manufacturing sector has been phenomenal recently, bolstered in large part by the booming RV industry, he warned that looking ahead to the future, such jobs are going to be increasingly vulnerable to things like automation — a reality he said the community needs to be preparing for now.

“Automation in the reverse affects high income categories very little,” Hicks said. “It’s the low income workers that are at far greater risk of having their job automated, in part because high income workers are far more likely to have skills that allow them to adapt to the new technology, and create their new job.”

Along those lines, he noted that current data shows that between 60 to 67% of current jobs in Elkhart County have the potential to be automated moving forward.

“So, automation and technology are going to strip a lot of jobs,” Hicks said. “In this county, any place that has a lot of manufacturing, and a high share of manufacturing, is at some risk. But it also cuts across all kinds of other technologies that apply to services and elsewhere.

“Does this mean that this is going to happen right away? No,” he added. “But the risk is very real. And when people say, ‘I know, but we assemble RVs here, and RVs are really customizable, and it’s really hard to make a robot that will do the customizable work there,’ I just remind you that we landed somebody on the moon with robotics in 1969. It’s a matter of cost, not technology, and once the cost of doing that gets less than the cost of hiring, and providing healthcare, and dealing with absenteeism, that’s going to get automated. It’s a ticking time bomb.”

So, when faced with the need to attract more, preferably highly skilled workers to help grow and diversify one’s community, Terrell again pointed to the importance of realizing that jobs follow people, not the other way around, and that people are increasingly choosing where to live based on a community’s available quality of life offerings.

“I want to reinforce what Mike said, that people might move to a state or a region because of a job opportunity, but they’re going to pick your community for these qualities,” Terrell said. “That’s the challenge that each of our communities have, is attracting and keeping that population.”

Hicks agreed.

“High quality of life places are job attractors,” Hicks said. “A low quality of life place is a job deflector. So, if you want to attract people and jobs, it’s really quality of life that’s driving it, this complex idea that people are choosing a place to live because they like it, and that the challenges on communities is to ascertain what that is that they like.”

This realization, Terrell said, has in turn led to a new approach to economic development which he and Hicks call “community economic development,” which uses a more place-based, people-focused model as its foundation.

“We’re not saying don’t do incentives,” Terrell said. “We are saying have the right conversations about resource allocation across the community, and where those investments should be. ... At the end of the day, people want quality places.”
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