Regionalism’s ascent: why Western states should expand economic development efforts

Economic development in the West is big business. In Colorado, at the state level, the investment in programs and people has almost doubled since 2012. Today about 60 full time employees staff the Governor’s Office of Economic Development and International Trade.

It’s become a state-by-state competition, and success is measured in jobs, in spending and investment, in start-ups and relocations. The stakes are high, including political payoffs if you win and liabilities if you lose. Kevin Grantham, Colorado state senator from Canyon City, said as much in a Denver Business Journal op-ed last week attacking the jobs record of the Hickenlooper administration. “We compete primarily with states in our region. Colorado’s total employment growth during the four-year period since the recession ended in 2009 has not matched that of Utah, Nebraska, Wyoming or most of our neighboring states,” he wrote.

Grantham has an ax to grind, but his political adversaries would likely agree that comparing Colorado’s growth to that of our neighbors is an important metric.

But is it? Can Colorado, Utah, Arizona, or New Mexico and Wyoming for that matter, compete alone in the increasingly global market? The population of the entire mountain West is about 17 million people, with an economy around $800 billion, or just 5.2% of the nation’s total. Michael Gallis, in his important analysis and advocacy of regional rail transportation, notes the totals are substantially less than a single Chinese city, Shanghai, which clearly has global ambitions to become a center of economic growth and innovation.

"..it’s a good bet that in the future industry and government will realize that hyper-localizing the economic discussion short-circuits a broader regional opportunity to drive growth."

When should self-interest give way to support a cohesive regional development message?

Gallis and others are making the argument, and it’s a good bet that in the future industry and government will realize that hyper-localizing the economic discussion short-circuits a broader regional opportunity to drive growth. Here’s why:

· Six of the top 11 cities in Forbes ‘2014 Best Places for Business and Careers’ feature were in Colorado and Utah, and seven of the top 20. A common denominator is the influx of smart, educated young professionals migrating to the region for quality of life and bringing with them career aspirations in a lifestyle economy. The region’s a draw. Not just Colorado. Or Utah.

The story of Mercury Wheels relocating to Odgen from Oxford, Mississippi, is typical. Boulder and Ogden were clear frontrunners in the relocation decision. Ogden won - but so did the region. As Forbes confirms, Boulder, Greeley, Provo, Salt Lake City and Denver are winning their share.

· This key migration of talent is resulting in regional first-mover status in lifestyle industries connected to the West’s tourism and recreation draw. Cycling, skiing, backcountry exploration, and other regional pursuits are driving growth in equipment, apparel, and accessory maker businesses.

· The ‘Made in America’ movement has deep roots in the region and is poised to drive more growth. Industries like natural and organic foods, craft beer, energy and mining, clean-tech, aerospace and aviation operate from regional hubs and enjoy international-leading market positions. A new, progressive, retooled manufacturing sector is materializing in the west - one with international reach and a massive upside.

· Western state’s most pressing economic development challenges are regional in scope. Colorado’s water crisis is Arizona’s and Utah’s, New Mexico and Nevada’s. Workforce issues plague manufacturers regardless of state lines. Likewise, opportunity will derive from bold, region-wide solutions. Modern air and rail infrastructure will help each state that invests. But a collective effort to connect region offers exponential benefits.

Hercules Industries operates regionally, including Denver and Salt Lake City, and utilizes rail transport both east and west, avoiding the cost of traversing the Divide. Vestas, in a CompanyWeek profile, notes the rail advantages of Colorado’s central location. Osprey Packs has moved its distribution center from Durango to Salt Lake City. Regional connectivity has never been more important.

· We also know that state-level efforts are fleeting. What will become of Colorado’s development efforts if the governor’s office changes this November? With each new administration comes a different vision for how the state should be marketed.

The intrigue surrounding Tesla’s new battery mega-factory has been framed as a competition between Nevada, Texas and Arizona. I’ve not yet read the editorial celebrating Tesla’s decision to narrow its decision to the western U.S. It’s no surprise. Media will deconstruct the decision as economic development pros will – as a win or loss, with a local spin.

In the future, for the future, it may be good business to root for a broader, regional perspective to emerge in the West.