A prescription to fix Illinois' economic scorecard It can be hard to accurately gauge how well or how poorly Illinois is doing economically when compared to other states because much information used by elected officials, civic leaders and others is typically anecdotal or lacking in statistical depth. This year, the Illinois Chamber Foundation took a step to change this by creating an Illinois Economic Competitiveness Scorecard to provide accurate and timely information and perspectives on how Illinois is doing compared to other states in far-reaching categories. This benchmark study was conducted with the expectation that it will be used by both the private sector and public officials when addressing long-term issues critical to improving the state’s competitive edge. We had no preconceived notions when we retained GrowthEconomics—a firm specializing in the growth dynamics of states and regions—to accomplish this task. We just asked them to compare and contrast how Illinois is doing economically against the other 49 states so we all would have a better sense of what we should be paying attention to if we are to improve Illinois’ competitiveness. When we saw the results, it made us feel like parents who had just seen their child’s report card. Overall, Illinois is still above average in many categories, but we’re slipping where some key economic measures are concerned. The report finds Illinois has slipped from sixth to 16th in per capita disposable income. We’ve slipped from 10th to 13th in per capita state Gross Domestic Product (GDP). Illinois is ranked 49th out of 50 in its regulatory environment. Given what we’ve seen from our state government and heard from Chamber members, we knew we were in a troubled business environment in the state. But 49th out of 50 is startling. The report’s findings were not all bad. Illinois is well-endowed with solid building blocks that could sustain a more dynamic business environment in tomorrow’s high-flex economy. Our energy costs are at an average level and Illinois has strong service sector productivity and economic diversity. Illinois also ranks and scores well on K-12, post-secondary education and a strong graduate school reputation as well as on workforce preparedness. The state continues to be a magnet for out-of-state talent but its attraction to well-educated foreign workers has slipped. Still, the overall theme is clear and troubling. Illinois cannot settle for being good but slipping. That’s not the economic environment that lends to business growth and investment. The purpose of the Chamber’s study was not to lay blame but rather to establish solid benchmarks that we can learn from and continue to measure for progress. The report provides a path to pursue in order to improve our state’s competitiveness. Here’s my prescription for dealing with Illinois’ economic challenges: Education & Workforce We should build a stronger compact between employers and educators so we’re preparing our children for the jobs of today and tomorrow—whether that job demands a college education, a graduate degree, skills training in community or technical colleges, high school degree or union apprenticeships. Workforce capability is a critical component of Illinois’s future. Thousands of jobs are going begging for lack of a prepared or skilled workforce. There is demand for high tech workers and skilled craftsmen. There is demand in the industrial sector for a new generation of workers to replace the baby-boom retirement bubble. The simple point is that we cannot afford to have uneducated, unskilled, untrained and non-productive citizens and expect to have job growth and prosperity. Entrepreneurs We need to engage in a stronger dialogue with the entrepreneurial sector and create an environment where people who do R&D in this state decide to create companies and jobs in Illinois instead of heading for the coasts. Commercializing inventiveness may be easier said than done, but nurturing creativity, innovation and helping small businesses find success and grow at home is a worthy undertaking. Helping existing employers expand and recruiting their business partners to take advantage of location synergies is a proven growth formula. International Trade Whether linking Illinois companies to global business or bringing international companies to Illinois, we must expand our ability to be part of the global economy. A third of the state’s GDP is already attributable to international trade. There is no doubt that boosting global markets for Illinois based goods and services is a key to our future. Chicago’s O’Hare International Airport is an established gateway to the world. The concentration of foreign consulates and ethnic diversity of Chicago are indicative of a world-class city. Measured by container cargo traffic alone, Chicago is ranked the third busiest port in the world. Fast Company magazine recently named Chicago and London the “coolest” cities in the world. Illinois is well positioned to take advantage of opportunities in global markets. Play to Our Strengths Illinois is blessed with a diverse economy. We should enhance those strengths that are the foundation of Illinois’ economy while promoting those elements that hold the most potential for future investments and job growth. Agriculture, transportation, energy production, health care, financial markets, hospitality, professional services and, yes, manufacturing are fundamental to our state’s economic well being. Education, research, electronics, technology, international trade, healthcare, and the pursuit of alternative energy sources and efficiencies are keys to tomorrow’s jobs. Despite manufacturing job losses in the last decade Illinois remains one of the nation’s leading industrial states. Manufacturing is not dead, but has become more efficient, highly productive and significantly invested in global trade. Government’s Attitude Last but not least, we need to change the conversation in Springfield and Cook County. Unfortunately many of our elected officials seem to have taken their eyes off the prize when it comes to economic policy. They are sending the wrong signals to employers in our state and to employers who might be looking to expand their business into our state. Investors want to have confidence that the state can work for them instead of looking for ways to raise fees, raise taxes or otherwise set regulations that make their ability to have a successful business more difficult. Public policy makers must appreciate the fact that Illinois’ situation is not static. Where multi-state investments are concerned most investors have a multitude of choices. Accordingly, multi-state business comparisons and studies, personal experiences with existing facilities and those of their business partners, as well as subjective factors such as anti-business rhetoric, workers’ compensation costs, litigation awards and unstable political actions contribute to investment decisions. Business owners want professional government employees who aren’t afraid to make a decision and appreciate the need for a sense of urgency. Owners of public companies respect thoughtful politicians who are more interested in resolving problems and finding solutions than engaging in headline-grabbing grandstanding. Politicians need to understand there are real economic consequences for shareholders as well as the state’s economic future when they engage in inflammatory, threatening or unflattering rhetoric. Some obvious examples of the prevailing attitudes that frustrate employers and investors are the experiences proposed business expansions continue to encounter in Illinois. Whether it is at industrial sites like power plants and refineries, transportation investments by railroads and pipelines, or opening big box retail centers, all have experienced delays and roadblocks instead of helping hands trying to resolve issues and expedite investments. We can’t tax our way to prosperity. Yet that appears the choice preferred by the elected leaders in the governor’s office, the office of Cook County Board president and the mayor of Chicago, each of whom has sought to raise taxes and the costs of doing business in their jurisdictions. Our state’s political leadership needs to realize that if the state’s economy was hitting on all cylinders and if our state was growing jobs at a pace that matched the national average, the tax revenue shortfalls that have troubled them might not exist. The Clinton notion, “It’s the economy, stupid” is still relevant. Working together, we can turn economic trends around. It is not acceptable to settle for good but slipping. We must raise our economic competitiveness. To do so requires a long-term commitment to policies that enhance and promote job growth. Now is not the time to accept either mediocrity or economic complacency. Many of our state’s economic trends have been going the wrong way. It is time we concentrated our attention on reversing them and bringing Illinois back to a place of prominence and growth. The Illinois Chamber Foundation’s Economic Scorecard provides direction. The full report may be accessed on the Illinois chamber (www.ilchamber.org). Printed copies of the Scorecard and the executive summary are available. Contact Illinois Chamber president and CEO Doug Whitley at dwhitley@ilchamber.org.

Posted on Tuesday, September 16, 2008 (Archive on Tuesday, September 23, 2008) Posted by jstoltz  Contributed by jstoltz

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