Thinking about economic development

It's fashionable to think that the key to Vermont's future economic growth is in green jobs, high tech jobs, jobs related to the arts or the environment, or jobs making Vermont's housing stock more energy efficient.  That's highly unlikely.

The real key is for existing firms to grow.   Like Blodgett Oven in Burlington, which just announced that after years of double digit sales growth, it has outgrown its existing plant and needs to find 200,000 to 250,000 square feet of new space, plus parking and room for future expansion.   And the ultimate source of Blodgett's success is pretty mundane:  America's, and the world's,  hunger for pizza--and pizza made quickly. 

The firm's management is upbeat about the company's prospects.  But the note of caution expressed by company president Gary Mick is interesting:

A fully permitted site would be helpful

His comment may be due to the headline he read in the previous day's Free Press:

After 7 Years, Lowe's Opens

Blodgett needs 250,000 square feet plus room for parking.  Permitting that size of facility is exactly what took Lowe's seven years to do. 

Stay tuned.

Comments

[Jon Harrison]

"The real key is for existing firms to grow." Okay. But what about attracting new Blodgett Ovens to our state? Let's take a three-pronged approach: 1) help the Blodgett Ovens of Vermont grow and prosper, or at least don't stand in their way; 2) get more Blodgett Ovens to come up here; 3) keep striving for those green jobs, the "Vermont as the Silicon Valley of the environment" vision.

We're starting from such a backward state of political economy, no one route will bring us to the goal. Diversify and perhaps we can pick up enough here, enough there, to get some real momentum going.

[Andy Potter]

I would think the Husky plant in Milton would be a good fit for Blodgett.

[James Ehlers]

Mr. Harrison,
Points one and two are well taken, but neither will be possible unless we address the growing state budget and the infrastructure neglect in the areas of transportation and utilities, both.

What do you consider a "green" job? Most of the jobs I have heard to referred to as such only increase demands on state infrastructure.

Sincerely,
James Ehlers

[Jon Harrison]

Good question, Mr. Ehlers. I was referring to the ideas floated by the governor and others about attracting companies and entrepreneurs with cutting-edge ideas in the environmental field - remediation, energy conservation, or any other technology that is "green" in its effects. Making Vermont, in other words, the Silicon Valley for research and development in the environmental field, rather as the Boston area is for biotech. The jobs created would not be "green" in the sense I think you mean, and thus would not create any special demands on state infrastructure (beyond those any new job entails).

I'm not qualified to say definitively if this is a realizable goal. But it might be worth a try - as one of several avenues toward the goal of growing Vermont's economy and providing good paying jobs for Vermonters. Nine dollar an hour jobs, such as the small, old-tech companies in our many little industrial parks offer, are never going to provide for a stable middle class this state.

[James Ehlers]

Dear Mr. Harrison,
Thank you. We are in agreement with respect to the scale of opportunity needed. I believe, however, we should focus on creating an environment here that attracts entrepreneurs with ideas, period. The market will decide which ideas are the good ones.

Sincerely,
James

[Jon Harrison]

I agree. I mentioned the environmental field in particular because it appears to be one that is particularly open at the moment - that is to say, opportunities abound for new technologies and products with "green" applications. We don't need more mail-order companies or widget makers (unless of course a truly revolutionary widget is out there) for the simple reason that the jobs they bring will be low skill, low pay. We need $15 and more an hour jobs. And given the global competitive environment, such jobs will only come from new ideas and technologies that the Indians and the Chinese don't yet have.

[James]

Dear Mr. Harrison,
On what do you base your conclusions?

Sincerely,
James

[Jon Harrison]

My conclusions on what? The need for high-paying jobs for Vermonters? The desirability of trying to make Vermont a Silicon Valley for "green" technology?

If you mean the latter, as I believe I indicated I'm merely regurgitating the mantra from the governor and some other leading figures in the state. Just sounds like a good mantra to me. As I wrote, "I'm not qualified to say definitively if this is a realizable goal." I presume one may use this site to try to provoke debate. I'd be delighted if you or someone else could tell us if the green idea has real merit. I'm not prepared to do so, and therefore don't want to waste anyone's time (including my own) trying.

If you mean the former (high-paying jobs needed in Vermont), I really think the need is so obvious, the facts so plain, that I shouldn't have to go into detail, at least not on time I'm not getting paid for.

If you're referring to my conclusions on some other matter, please enlighten me, and I'll try to respond.

[jason]

I have to agree with Jon. The tendency for manufacturing to migrate doesn't make me have much confidence in long term outlook. I also would like to optimize the effort and I view effort to directly create $10, $15, $20/hr jobs as suboptimal. The jobs that we target should be roughly $70-$150k/yr. That's entry level to senior level professionals. I would opt to create a regional center that leverages Vermont's existing businesses and has outreach from colleges/universities and vt.gov. For example, the efforts by RTP, Huntsville, Seattle/Beaverton, Austin, Cambridge, Silicon Valley, MESDA, and Nashua. These types of centers seem to do well eventually becoming established over the longer term and even draw attention from foreign investors/workers. They also allow for some diversity to provide stability. Green and technology seem logical targets due to the fact that Vermont already has a base of companies in those areas within the state such as IBM, GE, GroSolar, NRG, etc.

[Jon Harrison]

Well Jason, I don't think $70K and up jobs are enough. Or rather, I don't think it's possible to create enough of these jobs to fix the problem.

$70K plus jobs are, as you indicate, mostly administrative and professional positions. There needs to be a solid base of workers one level down, or there is no reason for most of these administrative jobs to exist.

Additionally, the population here contains many people who simply do not have the talent or drive to be six-figure (or nearly) earners. That's not peculiar to Vermont, of course.

We need those $15-20 an hour jobs desperately if we are to have a viable and growing middle class in this state. Without them, the tax base will be gone in a couple of decades.

Attracting professionals is a great idea, assuming it's the right type of professional. MBAs are fine. More good doctors would be great. On the other hand, as with the rest of the nation, I don't think we need any more lawyers in this state. Idle hands, as they say.