Money & You – October 2012

Economic Development

By Tommy Haws

Money & You Gallup JourneyThe term economic development is used a lot. Some think that it means a new place to shop or a new restaurant coming into town. It can be elusive and ambiguous, especially during a recession period such as we are going through now.
Recently a new entity, The Greater Gallup Economic Development Corporation, was created to help with the economic development process in the Gallup area. But as a result, I have been asked many questions about what new eatery is coming to town or if the group is going to be bringing in competition for the locally owned businesses. There is some skepticism about what is going to happen. I want to take this chance to explain the process of what is going on with a group such as this and what is true economic development.

A common misconception in our area is that economic development is measured only by the newest store in town or restaurant on 491. While there is no effort to restrict any sort of investment in town, there is not an effort to “slice the pie” any thinner. The goal of economic development needs to be on making the pie bigger.

A good economic development program focuses on one main thing: economic based jobs. There is a need for public and private investment to get that done, but it really is all about jobs. Jobs from the private sector will always drive jobs in every sector.

There is a difference between investment and spending. An investment always has an expectation of return. Return on investment always involves a sale or a production level to return to the investor something else. That investment and expectation of return always spurs more infrastructure investment, as well, since they work together. This means that jobs are further created – even in the public sector. All together, it starts with business making a sale of a product or service. This trade is the engine for which all economic development happens. In the long run there is a need to invite businesses to come to our area and get a new injection of cash and capital investment that will spur new jobs to create production and sales, increase the tax base to improve community quality of life, etc. It ALL starts with a sale of the goods or services, and starts the process.

In Gallup, we have wonderful assets in place that can be leveraged to take advantage of companies that want to use these assets. Among our strongest assets are: a class-1 transcontinental railway transecting our area, a busy interstate freeway that runs along side it, access to these assets in a strategically placed location, and a workforce that is ready to be trained and put to work. These make Gallup a targeted area for new growth – if we give companies a reason to come. They have to know what we have and where we are.

A powerful web presence is important in the process, too. Most site selectors for companies use the Internet to do most of the legwork for them. They want access to information and processes before they do the final selection. They have a job to do and if we can do much of the work for them, then they are more likely to see that they can spend other time on the process, too. The competition is fierce; other communities want new injections of capital and jobs, too.

In short, we all should want to see true economic development that expands the base of the area’s job market, which will allow that new place to shop or eat that we always hear about to come to town.

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