The Folly of Chasing Amazon

The Folly of Chasing Amazon

Politicians Waste Precious Time and Resources Chasing Out of State Businesses

Wayne D. King

The folly of youth may be the kindest explanation for the amount of time and precious resources that have been squandered in the Governor’s recent Quixotic attempt to tilt at the windmill known as Amazon.

It does, however, generate a whole lot of ink and pixels. A quick search on Google shows nearly 70,000 hits from a search on combinations of the words Sununu and Amazon. A cynic might judge this as the primary motivation for the Governor. In fairness to the Governor, New Hampshire Democrats did their fair share of egging on the Governor and got their fair share of pixels and ink as well. I suspect the reason for the Democrats was more likely to be that they wanted to embarrass Sununu into a hopeless battle, which he would undoubtedly lose allowing them to beat him up for that.  All of this demonstrating that it’s good politics to chase the white whale even if it’s not good policy.

Yet, despite it all, it is also a very instructive case in point worth exploring as New Hampshire continues to chart its economic future. Perhaps the Governor will accept some sage advice from someone not interested in replacing him.

Let’s start with the obvious. If attracting new businesses turns into a bidding war for tax breaks, economic incentives and other such largess, New Hampshire will always lose that battle. We have little to give when it comes to those kinds of deal sweeteners. Nor should we wish that we could. Most states that have ponied up such large incentive packages have come to regret it and those who have not are usually the ones who have passed the cost off onto working class people through laws like the “Right-to-Work” law that our legislature has had the good sense to reject for nearly 40 years.

Twenty years ago when first Republican Senate President Ed Dupont and then Senate President Ralph Hough (R-Lebanon) had their attention laser focused on New Hampshire’s economy - and Democrats and Republicans were known for working together - we faced that reality head on and asked ourselves some difficult and revealing questions about the kind of leadership we should be providing and where the hard-earned tax dollars of New Hampshire citizens and businesses should be directed to get the most economic bang for our buck.

Senator Dupont created the first Senate Economic Development Committee, focused solely on economic development issues. After Senator Dupont retired and Senator Hough was elected Senate President I was honored to be appointed Chair the committee. Our committee, not content to simply respond to bills offered up by other legislators brought in noted experts and asked them to lead us through an analysis of what New Hampshire needed to do to strengthen our economy in both the short and the long term.

We also held a statewide Economic Summit at the Center of New Hampshire organized by a brilliant graduate of the London School of Economics, Michael Kitch and Jeff Barr of Bristol who brought a fine mind and an ability to organize to the tasks. The Summit was simulcast on both NH Public Radio and NH Public Television for an entire day and featured Robert Reich, Secretary of Labor, Michael Porter noted Economist from Harvard University, Dennis Meadows Director of the Policy and Social Science Research Center at UNH, Dean Kamen, Gary Hirshberg, Cathy Schoen, Russ Thibeault, Ron Rioux and Everett Barnes among others. A veritable collection of New Hampshire finest economic thinkers gathered for a full day of panel discussions and breakout sessions.

The result of that summit was a series of comprehensive bills with broad bi-partisan support.  They represented New Hampshire solutions to New Hampshire challenges: bills focusing on workforce development, infrastructure, education and access to capital.

What we learned during four years of intense study and action is applicable even today. New Hampshire’s best hope for economic prosperity and well-paid jobs lies right here at home. If we focus our efforts and resources on building a robust economy here then others will want to come here to share in our success and we won’t need tax breaks, deal sweeteners or any other special enhancements. Chasing out-of-state businesses is a waste of money, and most especially time - time that should be invested right here to benefit all New Hampshire businesses.

Here’s why:

Homegrown Businesses are Here for the Long Haul

Businesses that start here are most likely to remain here as they grow.

When Pat Gallup and David Hall founded PC Connection in 1982 the two had only recently met on an AMC Trail support work group. They started the company on $8,000 and a dream. Today, now called “Connection” the company has more than 2,500 employees and still calls New Hampshire home, though they have moved operations from Marlborough to Merrimack.

In 1973 Nathan Schwartz, who had moved his boot making operations to Newmarket NH in the early 1960s, officially launched the Timberland Company. Today, with more than 5,000 employees worldwide, Timberland is a world renowned brand and consistently voted among the best companies in America to work for, and still based in New Hampshire.

In 1984 When I visited Sam Kaymen and Gary Hirshberg at a little farm in Wilton, New Hampshire where they were making yogurt organically, I had no idea that they would go on to develop Stonyfield Farm one of the most widely popular yogurt and health food brands anywhere, donating 10% of their profits annually to charitable causes.

Both New Hampshire and Vermont can lay claim to C&S Wholesale Grocers which has been a valued employer in the Monadnock and Brattleboro regions for almost 50 years. With 14,000 employees nationwide they are proof positive that homegrown business sets roots deeper than any other.

A Focus on the Fundamentals Creates a Tide that Lifts all Boats

Sure businesses care about tax rates; but, all things being equal, they are closer to the bottom of the list of fundamentals than the top. Businesses want to know that they can count on a well educated workforce, an infrastructure that provides them with reliable and safe ways to move products to market and employees and raw materials to the workplace; A quality of life that keeps young people here and is alluring to others; and a culture of entrepreneurship beginning with enlightened policy makers who actively work to create opportunities for new companies to start here, grow here and remain here.

Playing to your Strengths Makes Them (and us) Stronger  

Of the top 100 companies in New Hampshire more than 11% of them are Universities and Colleges; 13% are hospital and medical centers and a significant number of them are technology companies. Focusing on how these core businesses can be leveraged to produce spinoffs and businesses that together create synergies enhancing growth is a far more constructive way to direct our energies and resources.

Making Strategic Investments in Infrastructure Yields the Most Bang for the Buck

New Hampshire doesn’t have a lot of tax revenue to throw around. Strategic investments in Infrastructure like the Manchester Airport; the Pease Tradeport and the Port of NH are important components of our critical infrastructure. In addition to these, carefully chosen investments can power economic opportunity and growth.  The NH Innovations Research Center at UNH which has, since 1992, awarded more than $5 million, in 176 grants benefitting 125 companies is one such example. The NHIRC funds partnership projects between New Hampshire companies and academic institutions via the Granite State Technology Innovation Grant. Grants are awarded through an RFP process and are matched by company contributions. Past projects have been in the areas of materials science, environmental technology, nanotechnology, plant biology, medical technologies, and more. A small amount of funding from state government served as the seed capital for the NHIRC initially and modest funding has gone a long way for New Hampshire.

In 1993 we took the first steps to establishing the UNH Institute for Earth Oceans and Space. In just a little more than two decades EOS has become UNH’s largest research enterprise and receives more than 41 million dollars in external research support from NASA, NOAA, The National Science Foundation and other Federal agencies. Some of the most important and ground-breaking research on climate change began as EOS projects under the guidance of giants like Berrien Moore and Paul Mayefsky.

Sometimes these investments may require a leap of faith. I suspect that Governor Sununu was wishing that we had a plan in the works for high speed rail between Boston and Nashua as he walked out of his meeting with Amazon, but a “deathbed” conversion has no authority when the moment is at hand.

Making Education the Centerpiece

Education has always been our most important “currency” for economic growth. According to the NH Forum on the Future, an alliance of Educational, Business and Policy leaders, 7 out of 10 of New Hampshire’s fastest growing jobs over the next 10 years will require a post-secondary degree. Furthermore, producing students who are lifelong learners is no longer just a good idea, it is an economic imperative. We live in the most dynamic and rapidly shifting economy the world has ever known, and it’s only going to get more complex and more dynamic in the future.  If we short change our kids, we short circuit our future.

If we fail we risk becoming an economic backwater. It’s time for Republicans and Democrats to work together, to forget the sacred cows and to make New Hampshire’s education system second to none from Pre-K through college and beyond with job and classroom based training for both displaced workers and those needing new skills to meet the challenges of a dynamic marketplace.

There’s no magic bullet when it comes to creating such an education system. All of the simplistic “solutions” whether it’s vouchers or merit pay or any of a hundred other ideas (or fads) may have a place within the firmament of options and experiments but if we create an education system that leaves the children of the poor and working class families behind to benefit those who could already afford to supplement their child’s education themselves then we will suffer the consequences. Truly, we need a system in which no child is left behind and no adult is without options for enhancing their knowledge base.

This is a task that requires every shoulder to the wheel: teachers, parents, taxpayers, policy makers, businesses . . . all of us; leaving behind our preconceptions and seeking common ground. Exercising our intellects and our imaginations. Being willing to experiment and accepting the reality that failure, now and then, is a valuable teacher; but failure of the mission is not an option.

About Wayne D. King: Wayne King is an author, artist, activist and recovering politician. He was a three term State Senator,  who Chaired the Senate Economic Development Committee and the NH Senate Economic Summit. In 1994 King was the Democratic nominee for Governor and most recently the CEO of MOP Environmental Solutions Inc., a public company in the environmental cleanup space.  His art is exhibited nationally in galleries and he has published three books of his images. His most recent novel "Sacred Trust"  a vicarious, high voltage adventure to stop a private powerline has been published on Amazon.com as an ebook (http://bit.ly/STrust ) with the paper edition due soon. He lives in Rumney at the base of Rattlesnake Ridge. His website is: http://bit.ly/WayneDKing