In the last days before a close runoff election, Louisiana's gubernatorial candidates have better things to do than think — like shaking hands and kissing babies; giving statements to sway whatever undecided voters are left, if any; and milking contributors for one last push to get out the vote.
But if John Bel Edwards and Eddie Rispone had the time Tuesday to hear Ross DeVol in Baton Rouge, they might have learned something about Louisiana’s prospects in tomorrow’s economy.
It ain’t pretty.
DeVol’s charts and analysis for the Milken Institute in California and now the Walton Family Foundation’s heartland project in Arkansas are generating new assessments of what works in America’s economy, and how it’s not working so well in states in the center of the country, Louisiana included.
“Many of the same factors affecting national economic growth affect regions’ economic growth,” DeVol told the 14th Louisiana Smart Growth Summit. Some parts of his analysis were more upbeat for Louisiana, a perennial dead-last or close to it in such ratings, because of oil and gas development.
But with the growing economic importance of knowledge-based industries, regions competing successfully for new jobs are the better-educated, not lagging in educational attainment as does Louisiana.
One of the smaller cities in the analysis of metropolitan areas is Lake Charles, where export facilities for liquefied natural gas are causing the economy to boom. Is that high ranking for Lake Charles sustainable in the national rankings? “If you look at it just in terms of growth, it’s been doing very well,” DeVol said, though noting that energy economies are notoriously volatile.
He praised Lake Charles’ regional leadership for seeking to make the investments needed to diversify its economy in the future. But the larger lesson of his presentation is that energy — small cities in North Dakota and Texas, among other places, have boomed because of fracking — is not the best predictor for long-term economic growth.
His key metric is the number of young firms, not startups but businesses that survive and start to grow in their early years. These create job growth and, particularly when employing better-educated workers, are the wealth-creators of the new economy. “You have to grow up young firms to be successful over the long term,” he said.
The states in the heartland — 19 states that are mostly in the Mississippi Valley — grew fewer young firms than the rest of the country. Louisiana, Arkansas and Iowa of the 19 actually lost young firms from 2010-16.
What are the solutions? If Edwards had been in attendance, he might have been pleased with DeVol’s insistence on colleges and universities as engines of not only innovation in the laboratory but job creation. The governor restored some of the tragic funding cuts made by one of Louisiana’s best-educated and least-forward-looking governors, Bobby Jindal.
However, an area where Rispone has been more involved, community colleges, are also part of DeVol’s argument about educational institutions that should have been expanded over the last decade and not given reduced investments by the states. So Rispone's harping on taxes is wrongheaded: Starving the institutions of growth hurts Louisiana going forward.
The core of the new economy is research and knowledge transfer, DeVol said. “Research universities are increasingly important to that.”
Email Lanny Keller at firstname.lastname@example.org.