Washington Gov. Bob Ferguson last week announced an Economic Development Council to “identify practical actions that strengthen Washington’s economy, expand opportunity and help more Washingtonians succeed.”
To Ferguson’s credit, he may finally be recognizing that Washington’s business climate is deteriorating.
While he didn’t admit any responsibility for that decline, the number of companies and highly successful job creators that have said “Bye Bob” and taken jobs to other states — Starbucks and Janicki Industries to name two recent examples — cannot have escaped his attention.
Who’s who
The council’s composition gives us a glimpse into the governor’s economic mindset. Unfortunately, it isn’t forward-looking.
There are more nonprofits and governmental agencies than businesses. Except for one small homebuilder, none of the participating companies were founded this century. Calling the council a “historic convening” is unintentionally apt.
There is zero representation from entrepreneurs, the startup ecosystem or anyone building the industries of the future. The mayor of Cleveland remains better plugged into our startup community than any politician in Washington.
The largest participants on the governor’s new council are notable for mass layoffs and shifting their workforces out of the state.
Amazon and Microsoft have each cut tens of thousands of jobs, as they become more capital-intensive and lean into AI-driven productivity. Boeing now has nearly two-thirds of its employees outside Washington state, and that shift continues.
Oblivious to AI
Also missing from the governor’s framing is the single biggest force shaping the economy today: AI.
He namechecks quantum computing, advanced manufacturing, and clean energy, but omits AI.
New jobs overwhelmingly come from young growth companies, and AI is driving new company formation.
Beyond startups, AI is going to dramatically reshape knowledge work and boost productivity in every single organization (including, hopefully, government).
It is impossible to talk about “the next chapter of economic prosperity for our state” without discussing the implications of AI.
The committee agenda
“The council will meet quarterly and submit advisory reports to the governor with its findings and recommendations.”
The first report, in its entirety, should say “STOP DRIVING BUSINESS AWAY.”
Starbucks, perhaps not surprisingly, was not invited to participate on the council, though Gov. Ferguson tells The Seattle Times he understands the coffee giant’s importance to the region and “has a direct line of communication with them.”
The governor suggests he “would be open to more aggressive financial incentives to attract out-of-state business,” but why not prioritize keeping companies that are already here?
The zero-sum view of job creation — that you must pay to lure companies from other states — reflects a profound ignorance of the magic of economic growth.
Just nurture an environment conducive to growth. Effective and efficient delivery of public services, predictable taxes, and sensible regulation. But that would require changes in how state government operates today.
In other words, grow what you’ve got.
Learning from Cleveland
I have argued that the software era is ending, and we need to find our next economic act in Washington state. Prosperity is precarious and can’t be taken for granted.
The governor was invited, through a representative, to join GeekWire’s recent visit to Cleveland but never responded. I still hope he can learn from Cleveland as part of his interest in economic development.
Cleveland’s experience after its industrial economy fractured painfully demonstrates the potential downside we face. More than a half century later, that city is still working extraordinarily hard to recover.
The mayor of Cleveland observed that when the Rust Belt started to rust: “We didn’t pivot fast enough, and the world left us behind.”
Today, every level of government in Ohio is laser-focused on jobs, economic growth and prosperity. Our state should be just as focused, especially as our economic tectonic plates shift.
It is a very positive milestone that our governor is seeking “the next chapter of economic prosperity for our state.”
But committees don’t drive economic growth. It starts with “first do no harm.”
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