Many suggest that a lack of coordination between D.C., Maryland and Virginia politicians and institutions is holding our region back — that we could be attracting more innovation, and more jobs. Frankly, it’s a little simplistic to suggest that if we all just play nice, the region will be able to uniformly flourish.
People in the greater Washington region who talk about the lack of coordination among our jurisdictions often point to Northern California and suggest that its existence in a single state is an advantage. In a Lake Wobegon view of economic development, they suggest a nirvana where counties and localities don’t compete for new businesses or trumpet their advantages to new business formation.
After being in California again last month, doing business in San Francisco, Livermore, Redwood City, Palo Alto and Mountain View, what I saw reminded still belies that capital region argument.
San Francisco has spent considerable effort creating conditions for a technology corridor South of Market. Livermore has invested in an entrepreneur-friendly co-working space to keep startups in the East Bay. When I worked at a law firm in Palo Alto we were offered incentives to locate our offices in downtown Mountain View. The same competition for businesses that we criticize our region’s economic development leadership for pursuing occurs in Northern California, yet somehow that west coast region is successfully driving commercial innovation.
Yes, we need regional coordination in areas of shared resources such as transportation and roads — their interconnected nature requires a coordinated response. Our political leaders should be held accountable for those things. However, asking Virginia, Maryland and the District of Columbia to coordinate and innovate on business attraction and entrepreneurial support is not rational.
It’s unfair and unreasonable to expect individuals who owe their financial future to promoting narrow economic advantage to somehow zoom out and take on a regional perspective, particularly if they would undermine their own position in the process.
Let’s be realistic. We can ask our universities to coordinate across the region, but they each have objectives they must meet to satisfy their specific constituencies. Politicians are elected to serve a geographic region. Economic development experts are hired to serve politicians and universities. To ask them to promote broader economic development is both unlikely to succeed and also somewhat irrelevant.
Let’s remember that Northern California’s innovation and new business infrastructure grew up before any structures designed to attract them! Its growth was driven by a combination of federal research and development, an educated workforce and the emergence of a new industry — semiconductors. Even today, people will tell you they “work for Silicon Valley.” Similar stories of the emergence of innovation clusters exist across the country. To the which came first, the entrepreneur or the economic development, data show that generally, the entrepreneur comes first.
Healthy businesses are born when entrepreneurs find capital, necessary resources, a favorable regulatory environment and fellow entrepreneurs. More rapid business growth occurs where they can find a ready buyer for their companies, which is why you see a high level of vertical integration between startups and established companies in our nation’s leading innovation communities. To be blunt, entrepreneurs don’t really care where they are when those stars align, only that they align.
Our society uses free market competition as a mechanism to winnow and sharpen entrepreneurial focus — why shouldn’t the same apply to economic development activities that promote business formation and innovation?
Yes, other regions leading our national economy appear to enjoy a high level of coordination, but for the most successful and durable, this coordination is clearly led by the business and entrepreneurial communities.