Citizen journalist: City and county need less government, more private enterprise

by Mike Martin

May 2,2008

Despite a flagging economy, both locally and nationally, Columbia isn't spending any real money on economic development.

That's one of many startling conclusions in 5th Ward councilwoman Laura Nauser's most excellent plan, A Change in Direction on Family and Youth Issues for the City of Columbia, Missouri.

In 10 years, her report details, we've spent a paltry $3.2 million on economic development, compared to a hefty $106.3 million on parks and recreation. Just whom are we hoping to attract and retain with all those beautiful parks and trails if not prosperous people who are fully employed in high-paying jobs or happily creating new businesses?

Linking crime with economic inertia, Nauser reports that our community has one of the highest high-school dropout rates among Missouri school districts of similar size; approximately 12 percent of workers haven't earned a high school diploma; some 27 percent of our workforce is underemployed; and our median household income is $42,000 annually, a full $500 per month below the $48,000 national median.

For the city Forbes magazine recently ranked America's "11th Smartest," these statistics aren't encouraging. They shed light on a booming crime problem Nauser hopes to address and reflect the unfettered growth of a government sector that largely redistributes—rather than creates—wealth.

"The citizens of Columbia must not continually rely upon the top five employers in our city to provide new job growth," Nauser's plan explains. "It is important to note that our top five employers are all government agencies."

New development: Property versus intellectual property                                                                                                      Two cultural issues help drive our area's economic ethos: an abiding trust in government and a conservative investment environment that prefers hard assets, like land and buildings, to soft assets, like intellectual property. For this reason, Columbia is more likely to grow a Wal-Mart Supercenter than a Google and is more likely to build a new city-owned parking garage than a Microsoft.

Shifting this ethos will take local government action, because it is in local government we've vested most of our power—and invested most of our money. From Boone County's growing downtown building empire to our biggest recent expenditures—tens of millions of dollars on university properties, including stadiums—we've gradually sacrificed broad-based growth for narrowly focused stability. Sure, our university, two largest hospitals, city, county and school district aren't going anywhere, but economically, neither are we.

To change this environment, private investors who can receive incentives to invest in historic preservation, transportation development districts and tax increment financing—all real estate enterprises—also need incentives to invest in great ideas.

Otherwise, why would they change their portfolios?

Clean and green                                                                                                                                                                                As early-stage private investment goes, Centennial Investors seems to be the only game in town, a troubling circumstance given venture capital's well-documented worldwide track record. Our other new venture enterprises—the University Center for Innovation and Entrepreneurship; the life sciences incubator; and Discovery Ridge—are all university-centric and university-driven.

For the next Bill Gates, Michael Dell or Sergey Brin, that leaves—not much. On graduation from MU, those entrepreneurial minds are likely to leave town.

To keep them here, and attract others, we should build a knowledge-based, rather than just a development-based, economy. The logic of using great ideas to diversify Columbia is multi-fold, especially in a community perennially divided over the costs and benefits of land use.

Knowledge-based economies are clean and green. They generate high-paying jobs and well-compensated entrepreneurs more likely to use land in a way many Columbia residents consider enlightened—a LEED-certified company headquarters with a large greenbelt, for example.

Knowledge-driven entrepreneurs are also more likely to avail themselves of the assets that have made us one of the nation's smartest cities—MU, Stephens College and Columbia College.

But Columbia and Boone County will have to give to get, a philosophy that isn't practiced much at the local government level. City Hall's use of the $22 million Federal Pednet grant to install bicycle racks downtown—and add to its parking monopoly—is a perfect example. Instead of removing the parking meters, they've left them, charging a "voluntary fee" to park a bike, with the public proviso that this "green" endeavor will end if not enough people pay up.

It's sadly typical—and no way to incentivize new investment or encourage new ideas.

Private sector booster                                                                                                                                                                     For Columbia to stay competitive in a worldwide wealth race, we must seek true private investment without all the government funnels and filters. We need private incubators, private venture capital, private grants and private loans that don't rely on the Small Business Administration (SBA) or some other government provider or guarantor.

But to get all that, local government is going to have to do what it always preaches to us: give up and give back.

The public sector can be a fine thing when it's balanced with private enterprise. But too much government can hinder the very ideals it seeks to protect. In Columbia, those ideals include education and environmental sustainability. But without so-called "green collar" jobs and knowledge-based enterprises, it's all lip service that doesn't create sustainable lives.