Never Waste a Good Crisis
Over the past three years, I have had the pleasure of accompanying many of Minneapolis-St. Paul’s civic, philanthropic and business leaders on an annual inter-city leadership visit to peer cities to learn about common challenges, innovative ideas and best-practice outcomes.
Simultaneously, I have been part of an emerging theme for our own regional economic development strategy called “Going from Good to Great!” Undoubtedly, our region does benefit from a baseline of great assets, including but not limited to market-leading private businesses that range from entrepreneurial startups through mature Fortune 500 firms; historically progressive government that attempts to balance fiscal discipline with socially inclusive policies and programs; a thriving philanthropic and civic community; a globally respected land-grant research university and a plethora of other niche universities, colleges and vocational training institutions; and great food, culture and arts amenities.
In addition, we possess unbelievable natural resources, including a full four-season experience, access to fresh water and food, and a world-class health care system that creates outstanding quality of life for Minnesotans. As great as those assets are, however, our undeniably greatest asset is our highly educated, hard-working people.
With the aforementioned assets, the theme of our regional economic development strategy seems well-founded, with the potential for one major flaw: We may have too much going for us. Most successful cooperative models aiming for sustainable change often require crisis as the incentive. For example, on my recent trip to Pittsburgh it was amazing to hear how the fading steel industry and associated mass exodus of jobs and talent led to a cooperative effort of political, social and business leaders to transform the culture and economy into a corporate and innovation center.
Here in MSP we have great assets, which makes us not recognize our emerging crisis and default to incremental change. However, the emerging crisis is in four real, conflicting conditions: 1) underfunded entitlements, 2) concentration of wealth, influence and voting power in the baby boomers, 3) a business community persistently asking for tax cuts, and 4) consistent requests for new investments in infrastructure, transportation, education, amenities, culture, etc. to meet the needs of the future. This crisis exists locally, regionally and nationally. This great challenge should help us avoid complacency.
Four central phenomena have a decisive bearing on our ability to solve problems. I highlight these because they do not always politely work in concert. In fact, they are often in opposition or conflict, which requires deep conversation, vulnerability and sustained effort to find the solutions that make us great.
Values | Most of us have grown up with two distinct core values: First, to take care of babies; second, to respect, heed and take care of your elders. These are foundational bedrocks of an enlightened and civil society.
Influence | In my last article, “Who Moved Your Cheese?” I discussed how influence tends to be held in older, wiser and wealthier parts of a community.
Money | Like influence, money tends to be more abundantly available to proven assets and evidence of past stewardship, yet higher returns are typically associated with pioneering, higher-risk innovation and invention. In addition, when we want municipalities to help attract business investment (here’s an ode to you, Amazon), that traditionally constitutes incentives, which usually means more tax rebates, reductions or deferments.
Time | Time, the key unit of exchange between all human beings, typically favors the younger parts of our community since they have more of it.
Let’s review an example of how all of this comes together in a regional economic development strategy.
- First, let’s assume we all concur with the value system that says we want to respect, heed and take care of our elders. This value system shows up in the entitlement models such as pension funds, Social Security and Medicare/Medicaid. These systems rely on the next generation workers (think baby boomers, then Gen X, then millennials, then Gen Z, etc.) to create enough of a tax base to cover the ongoing expenses of the previous group, from retirement to death, based on the previous group’s legitimate hard work and vast contributions. Unfortunately, actuarial forecasts show that life expectancy and worker shortages will lead to unsustainable and dramatic under-funding.
- Second, let’s assume the eldest group (currently the baby boomers) possesses most of the wealth and influence, and will most certainly vote themselves the benefits they deserve.
- Third, let’s assume that the business community supports tax reduction and economic incentives as a foundational aspect of their attraction, development and retention strategy.
- Finally, let’s also assume that to ensure a sustainable and resilient future we must simultaneously and adequately invest in infrastructure, transportation and transit, education, pipelines and pathways, innovative research and development, cultural competencies and amenities of the future.
Houston (or in this case Greater MSP), we have a problem. There is a crisis brewing in the mathematics. However, have no fear, because we are well equipped with a baseline of underlying assets—in particular, great people—to cooperatively solve these problems; it just may take intentional conflict and a good crisis to help us reach our true greatness.
In the meantime, take care of yourself and each other!
Ravi Norman (RNorman@ThorCon.net ) is the CEO of Thor Cos., a holding company for development, design, construction and consulting businesses. He holds degrees in economics, business management and finance from the University of Minnesota.