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U.S. Assistant Secretary of Commerce For Economic Development David A. Sampson East Mississippi Business Development Corporation Annual Meeting
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| Thank you Congressman Pickering for the kind and gracious introduction. This
is my second visit to Mississippi since I was nominated by the President to
be his Assistant Secretary for Economic Development. Earlier this year, I had
the opportunity to visit Biloxi and speak to a gathering of Mississippi State
economic development professionals who are doing a fine job of working to diversify
and enhance the state's economy.
Earlier today, I toured the Riley Education and Performing Arts Center site,
which will serve as a catalyst for downtown revitalization. Mississippi State
is a major economic engine. I also toured the highly successful Peavey Electronics
Corporation and the Sonny Montgomery Industrial Park. Both are excellent economic
drivers for Meridian and Mississippi.
We meet at a unique and pivotal moment of history in which our liberty and
very survival are at stake. And not only for us, but for all civilized nations.
The potential that economic development holds for our nation, states and communities
is meaningless if we remain vulnerable to terrorists and tyrants, who have weapons
of mass destruction at their disposal and the will to use them. President Bush
has told us that Iraq is a "grave and growing" danger to the United
States. We still face potential further terrorist attacks, there is trouble
in the Middle East, we are experiencing an uneven recovery, and corporate credibility
issues have shaken our confidence. To be sure, many Americans are uncertain
about the future, and President Bush understands that. But, ladies and gentlemen,
as President Bush recently said, "The foundation for economic growth is
strong."
I want you to know that the President is focused on assuring the Nation's taxpayers
that their government is pursuing a budget based on fiscal responsibility. As President Bush said recently, "If you overspend, it creates a fundamental weakness in the foundation of economic growth." This means that we must set priorities. The most immediate threat to our country is from those who wish to kill our citizens and destroy our economy. And so our most important priority, when it comes to budgeting and time and effort, is to protect American citizens, to enhance Homeland security, and to ensure our National security. The President is optimistic about the future on all 4 fronts. Tonight, I want to focus on the economic front. The fundamentals for growth in the American economy are strong. " Inflation and interest rates are low; " Auto and retail sales are strong; " New home sales are setting records; " Wages are rising faster than inflation; and " Consumer spending remains strong. Our Nation is on track for sustained economic growth and one of the reason why the recession was one of the shortest and shallowest in history was because the President's tax cuts were well timed. The tax cuts will create 800,000 new jobs this year and they pumped $40 billion back into the pockets of consumers just when they needed it most. Just think of where our economy would be now if we had listened to those who opposed the President's tax cut in the spring of 2001. However, you can be assured that the President won't be satisfied until every American who wants a job can find a job, and all Americans have economic security. The President also knows that economic turnarounds cannot, and should not, come at the expense of our ethics and values. As you know all too well, corporate scandal has been rocking the confidence of investors, workers and average citizens in this state and across the nation. President Bush is deeply concerned about what he believes is a breakdown of ethics in corporate governance and the effect these breakdowns have been having on families and the economy. President Bush led the way in creating a new ethic of responsibility in America's corporate community. In July I was honored to join the President in the East Room as he signed legislation that exposes and punishes acts of corruption, moves corporate accounting out of the shadows, and protects small investors and pension holders. Throughout the decade of the '90's, we were told that personal integrity had no impact on the discharge of our public responsibilities. We now see all too clearly what happened when that mindset permeated the nation's boardrooms. We now know that there was not enough scrutiny of what was going on in the 1990's. Capitalism and the market economy are the foundations upon which our American business community is built - but the foundation, if designed and constructed through shortcuts, quick fixes and slight of hand, will surely crumble, taking our way of life and our nations' place in history - down with it. As the President continues to pursue his agenda to create jobs; open foreign markets to American goods; help Americans save, invest and keep more of their money; and foster a new ethic of corporate responsibility; our economy will continue to grow. I believe, as I know all of you believe, that development of strong regional economies is imperative to rebuilding confidence and prosperity for all our citizens. We simply must press forward. Everyone in this room, including me, has our work cut out for us during the coming months. We must work together in new partnerships and pursue market driven development strategies to enhance employment opportunities and long-term prosperity. Americans expect and deserve no less. EDA has been working intensely to generate more economic impact per dollar of input than any other federal agency involved in economic development. To accomplish this, EDA has adopted an economic development strategy based on enhancing regional competitiveness, fostering innovation, increasing productivity and developing industry clusters. How will we know if we are successful? There are three measures to gauge structural economic change/diversification - all quantifiable. Here I am indebted to Rutgers University for their work on this topic through an EDA funded research grant. These measures interpret forces that create an increasingly sophisticated and technical regional economy: " Economic diversification " An increase in earnings per worker " The movement from more basic to more value-added, skilled industries So, what role does the federal government play in working with you to promote economic development? There is a significant federal role in economic development activities. However, the country needs a smarter federal effort, both in the sense of what is expected of it and in the sense of how it is designed and managed. Expectations profoundly influence how we conduct economic development efforts and when expectations are unfilled they lead to disappointment, disillusionment and erosion of credibility. It is the policy goal of the Bush Administration to increase the productivity and wealth of the American economy. After more than a decade of generally successful business efforts to compete effectively in a global economy, it is still important that public policies encourage and strengthen American firms to become more innovative, competitive, productive and profitable. Second, it is the policy goal of this Administration to ensure that all communities share in economic opportunity. Even after a decade of dramatic expansion of the national economy, some communities still have chronically high unemployment and low incomes. President Bush believes it is important for government to promote a favorable business environment to enable all Americans to participate more fully in the American dream and national prosperity. However, we need to understand that Federal economic development programs have only a limited direct impact. EDA, Rural Development, HUD and the Delta Regional Commission can help. But, it is market forces, rather than the decisions of government officials, that are the primary force driving both the overall rate of economic growth in our 10.4 trillion dollar economy and also the geographic location of economic activities. Economic and workforce development programs cannot counteract these powerful forces but they can work in tandem with them. Economic development programs can help private businesses build links with institutions for collaboration, like schools, universities, community colleges and research institutions. They can assure that public infrastructure is available and that public services are provided to attract economic growth. They can help emerging businesses navigate complex regulatory or work force development systems. When the market place bypasses certain geographic areas or when regional economies are experiencing structural economic change, economic and workforce development programs can help build a more favorable business climate to attract private capital investment by encouraging new partnerships and new institutions to respond to these market opportunities. This will minimize the risk and maximize the return on investment. Over time these economic development activities can help to influence both the rate and location of economic change. But federal agencies cannot undertake these activities on their own, especially in a highly diverse and decentralized economy. Without a sustained concerted effort by states and communities themselves, federal efforts will have little or no impact. Communities can attain real economic improvement, even if they are currently experiencing economic distress. First they must mobilize a broad based and well-conceived effort to increase economic opportunity. Second this effort must generally be consistent with market forces and take advantage of the opportunities that markets create. Finally this effort must be sustained over many years - perhaps even decades. Helping such communities get started and contributing to their momentum are realistic goals for the federal government. The economic reality of the 21st century economy is that higher levels of private capital investment drive the creation of higher-skill, higher-wage jobs. Therefore, our mission at EDA is to help foster a positive business environment among America's distressed communities - both rural and urban - to attract private capital investment to produce goods and services and increase productivity thereby providing higher-skill, higher-wage job opportunities. The challenge for Mississippi's officials and policy makers is to fashion strategies to ensure they are positioned not to just compete, but to thrive in the new economy. Fortunately you can draw on what we already know about promoting sustained regional economic growth and prosperity. EDA funded research done by ICF International in 1998, has identified four basic rules for economic development in the 21st century. Rule number one: Think regionally to compete globally. Competing in the global market requires the resources of all businesses, academic institutions, and communities within a region. That is today's reality. More and more, certain regions tend to have specialized knowledge and capacity that is of a scale and form that distinguishes them from other areas. Industry no longer cares about political boundaries - except when they're a barrier to business. What they do care about is competitive advantage. And that's where EDA and all of us in economic development come into play. We must cooperate regionally, think regionally to avoid fragmentation of resources, and build a strong economic platform for growth. So thinking regional should be the key point of departure for defining economic development needs and goals. Rule number two: industry clusters drive regional performance. Industry clusters are groupings of industries, suppliers and supporting institutions within a region that export to national and global markets. They are a set of industries that have a lot in common in terms of technology, worker skills, finance, and logistical inputs. As a result, they tend to congregate near one another, sharing innovative practices and economies of scale. Industrial clusters are very important to a region because while they typically account for only 25% of the employment base, their economic multipliers account for much of the balance of the region's employment. This makes them the driving force of economic development. Rule number three: Economic input-advantage fuels cluster competition. The rise in competitive clusters is due to the ability of regions to provide them with distinctive sources of economic input advantage - for example: adequate financing, available infrastructure, advanced communications, and most importantly, a skilled workforce. In other words, industry clusters won't come to, or expand in, regions that fail to provide at least one input advantage for product design, production, or distribution. Finally, rule number four: Collaboration achieves economic advantage. If industry clusters are the center of action in the global economy, how do they become, and how do they remain, competitive? By collaborating. Citizen leaders, both public and private, must agree on a long-term development strategy that creates a competitive climate. They need to agree on the investments in regional assets ... education ... research ... physical infrastructure ... institutions for collaboration and quality of life over time. Only with such a strategy in place, will you attract the private investment and employment that leads to a high and rising standard of living. Only then will you build a "platform for economic growth." In the next generation economy that regions are seeking to build, the hallmark of vitality will be the agility of institutions and their leaders to recognize and to collaborate in the improvement of existing - or creation of new-sources of economic input advantages. Communities that fail to realize this, that fail to come up with a long-term development strategy, will either decline, or they will stagnate. Our job at EDA is to capitalize on this market-based strategy to seize the economic development opportunities of tomorrow. We believe this competition-based, regional approach to development works. It's based on solid research and reflects the realities of the global market place. At the end of the day, the key to building economic prosperity and security is leadership at every level. You, the elected business and economic development leaders of your region and the state of Mississippi have a critical role to play. Insist on infusing a leadership culture in your organization. "The Four E's of leadership:" " The personal Energy to welcome and deal with the speed of change " The ability to create an atmosphere that Energizes others " The Edge to make tough decisions " The ability to Execute Let me end by saying we see this as a truly pivotal moment in history for all those involved in promoting economic growth and economic security for America. As business and community leaders, your efforts in this regard will make a huge difference for the future of Meridian, for the state of Mississippi, and the entire country. I look forward to taking this journey with you as we work to build long-term economic opportunity for all Americans. (Check Presentation) And now, as a solid example of forward-looking, efficient use of federal dollars helping local matching dollars build a climate in which jobs are created, I 'd like to ask the following individuals to come forward; Congressman Pickering, Mayor Smith, Craig Hitt, (President, Lauderdale County Board of Supervisors). Gentlemen, on behalf of the Economic development Administration and the department of Commerce, I'm pleased to present this $1,500,000 investment check to develop a new industrial park east of downtown Meridian. Congratulations. | ||
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