The 50-year economic development war in the U.S. is over; the South won.
By Mike Randle
The title of this issue's Southbound column doubles as the title of a book I am currently writing; like I got all kinds of time for extra writing. I won't be writing the book from scratch, though. I have plenty of material to pull from over the past two decades of covering economic development in the world's fourth largest economy.
It is my first book, unless you count the one Joe Hollingsworth and Trisha Ostrowski wrote in 2003 titled “The Southern Advantage.” Joe and Trisha collaborated on that one, but they used much of the material I wrote from 1993 to 2003 for research. Joe was nice enough to include me as a co-author. As for Trisha, she still writes for SB&D and has a piece in this edition in the Tennessee section.
Yes, the U.S. economic development war is over. Some would disagree with that claim. But if you talk to economic developers in the South, particularly the state-level chiefs, there are few states left outside the region that the South competes with anymore for major projects. Today, the vast majority of job and investment recruitment ends with a few Southern states slugging it out with no states outside the region even in the running.
Sure, Kentucky battles with Indiana and Ohio, Virginia with Maryland, and Missouri with Kansas for projects. But those are border battles or more like incentive-laden skirmishes. For the most part, Southern states battle each other for most of the big projects in the U.S., especially large manufacturing deals. That being the case, that 50-plus-year economic development war is over. The South won.
My opinion that the South has won the economic development war in this country doesn't mean the South's economy is the best regional economy in the U.S. This region faces more challenges than any other region by far. We remain the poorest region in the country. But we are also ground zero for in-migration in the U.S., and because of that, the South creates about as many new jobs as the other three regions combined.
Rising population is one of the South's biggest challenges, and it has been that way for 40 of the 50 years this nation's economic development war has been fought. The South is where people migrate to find a job. What economic development challenge can there be when your population is stagnant for decades? I mean is there really a sense of urgency to create jobs in a state like Connecticut, which has had the same population since 2000? And then there is Michigan, which has lost population since 2000, the only state to do so.
In comparison, North Carolina has gained 1.7 million people and Georgia had added 1.8 million since 2000. Texas has gained 6 million residents and Florida more than 3 million since 2000.
Every Southern state has seen population gains since 2000 and 16.7 million more people are living in the region today than when the century began. You can’t have economic development without people, and the South is far and away the largest U.S. region.
I have used this statistic for two decades now. When I was born, the South, the Northeast and the Midwest all had about the same population. Today, the South's population is larger than the Northeast and Midwest's combined. Yes, the war is over. The South won.
While this nation's 50-year economic development war is over, another economic development war has formed and the battles are huge so far in its formative years. Southern states vying for job generating projects don't compete with the rest of the U.S. today because the South competes with Mexico for those projects.
I did an interview with Tennessee ECD Commissioner Bill Hagerty for this edition (see Tennessee section, page 49). I asked Bill if Tennessee sees competition from states outside the South like Indiana, Michigan or Ohio. His answer was “almost never.”
But Hagerty did say that competition coming from Mexico is fierce for his state. “The Mexican competition has been there since I got here. When I first got here, the competition was used as a stalking horse more than it is now. Today, Mexico is probably the strongest competitor we have other than another Southern state.”
And with reshored projects doubling each year, competition with Mexico is only going to get fiercer. Yes, the U.S. economic development war is over. The South won. Now, the region embarks on another economic development war. This one is with Mexico. The South needs to win that one, too.