Wanted: Job Creation – cheap, green and easy?

By Mark Lautman

Published 1/28/11


Last weekend’s New York Times Magazine feature story on the president’s new economic strategy led with the headline, “The White House economic team is acutely aware that everything the administration dreams of accomplishing rides on vanquishing unemployment. And doing it on the cheap. Ideas anyone?”

You can bet most governors and mayors are thinking the same thing. For that matter, so are most legislators, business owners and, certainly, the unemployed. Economic development on the cheap wasn’t possible back in the good old days when consumption rose every year, commercial credit was plentiful and every community was flooded with eager, qualified workers who could actually read a ruler and pass a drug test.

What makes them think we can do it now?

Given the vortex of forces working against economic development today, economic development on the cheap, if it is possible, will take a quantum leap of innovation and, almost certainly, a new business model. This is a tall order for the economic development profession, which, despite two decades of evangelizing the importance of innovation, uses a business and organizational model that is unchanged since the first half of the last century.

This column is called Reinventing Economic Development, so I figured we should start putting some new ideas on the table. A winning innovation will have to be fast, cheap, green and measurable. Oh yeah, and it would be nice if it worked in rural communities, too.

Most innovations seem so simple and obvious that we wonder why we didn’t think of them ourselves. So the first thing to look for would be any sectors of footloose economic base jobs that traditional economic development programs ignore. And there is a big one.

While traditional economic development program efforts focus exclusively on economic base employers with 1,000, 100, and even 10 jobs, we can find no practical programs anywhere that are focused on systematically recruiting, starting up and expanding the reach of solitary, home-based workers. We have no game. This stealth sector of the market for economic base jobs looks like it’s the largest, fastest-growing, highest-paying and greenest sector of the job creation market.

Home-based, economic base jobs have many names: lone eagles, location-neutral workers, third-bedroom workers, home-based workers and mobile workers. They can be 1099 contractors, sole proprietors or corporate employees allowed to work at home. The work includes medical transcription, editing, writing, digital animation, customer service, legal, information technology, art and so much more. Look around. They’re everywhere.

If you work from a third-bedroom office, or your garage, and your clients and customers are mostly out of state, then yours is an economic base job. The work you do makes the state and local economy bigger because it brings in out-of-state money. Yours is just like a job at Intel    ! You don’t need an industrial revenue bond or commercial credit. You don’t need more highway lanes for a commute. You don’t need a new facility heated, cooled and financed for 30 years. You’re green, baby!

There are only three ways to create new jobs — expand existing firms, start new ones or recruit new ones from out of state.

Regarding expansion, we should be doing everything we can to improve the business ecosystem for home-based workers. We should be waiving their impact fees and supporting Geek Squads and shared services centers to help relieve them of their administrative burdens so they can stay in business and expand their earnings.

Regarding startups, every person who shows up at a local labor office for income maintenance or help finding a job should be screened for their interest and aptitude for jobs that can be done from home, and directed to entrepreneurial programs and placement services.

Regarding recruitment, a community trying to revive its homebuilding industry or absorb some of its excess housing inventory could lure high-net-worth, home-based, economic base workers from places that are too expensive and no fun to live in. It’s basically your community’s tourism pitch, with a Realtor on the back end.

The challenges to putting these strategies on a measurable program footing can be solved, thanks to advances in digital communications. We have some people working on it. So economic base jobs anywhere — fast, cheap, green and measurable — might be possible after all.