Ken Miller, a commissioner of the Tacoma Housing Authority, is one of the city’s most thoughtful guys. He’s written this analysis of Tacoma’s prospects; a shorter version appears in tomorrow’s print edition.
By Ken Miller
We hear a lot about whether Tacoma is “open for business” and the strategy for growing our economy.
It’s an important but puzzling conversation. I decided to study up.
Just the Facts
My first step was to find out whether Tacoma is actually losing business, and if so, at what rate. I contacted the city’s Tax and License office, where business licenses are issued and cancelled. If you sell goods or services, you need a license. It’s the best way to get a business headcount.
At the beginning of 2011, Tacoma had 22,243 active business licenses, ranging from Greyhound Bus to doggie day care. Through September – nine months later – 435 businesses closed. This is bad. But 1,883 businesses opened, which is good. Even better than 2010, when Tacoma added a net total of 1,345 new businesses.
A Little Theory
It’s not that simple, though; otherwise everyone in the business community would be happy, right? So I turned to a couple of theorists for help.
First I considered the late Jane Jacobs. In The Wealth of Cities she distinguished between a business that re-circulates local money and a business that exports value. This is the difference between the corner candy store and Brown and Haley.
Jacobs asserts the only way to grow the local economy is to be a net exporter of value. It’s the only way to put more money – new money – into the local economy.
This is the distinction underlying the downtown-vs- neighborhoods debate, or the choice between clean water enterprise zones versus tree-lined streets full of shoppers. It’s the difference between Go Local and “think globally, act locally.”
Next I looked at Michael Porter’s Competitive Strategy. After all, we’re working on a competition problem: how can Tacoma attract or keep businesses, rather than losing them to South Carolina or Federal Way? Tom Pierson, President and CEO of the Tacoma Chamber, made this point in his recent op/ed in the News Tribune. He described two recent out of state “raids” on local businesses.
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