Don’t DRED their help in job creation

The New Hampshire Union Leader originally published this column on July 20, 2012:

What individual has the incentive to promote a state as a place in which to do business? No one — and everyone.

Help wanted: Seeking Boston-area representative to poach Route 128 tech companies. Persuade them to relocate or expand in our area instead of Boston. For more information, contact any candidate running for governor of New Hampshire.

That’s the gist of a real job posting — applications are due Monday if you’re interested — but it wasn’t listed by any candidate. It’s an opening with the Fairfax County (Virginia) Economic Development Authority.

Government’s role in job creation has emerged as a major debate in the presidential and gubernatorial elections. Channeling Massachusetts U.S. Senate candidate Elizabeth Warren, President Obama said last week, “If you’ve got a business, you didn’t build that,” and implied that individual success is impossible without government help. Libertarians argue that government has no role to play in job creation. Reality is more gray.

Fairfax County thinks government has a marketing and promotional role when it comes to job creation. The Washington, D.C., suburb has a population of 1.1 million, nearly as big as New Hampshire (1.3 million). Fairfax maintains recruitment offices in Los Angeles, London, Munich, Seoul and Tel Aviv, and is hiring in Bangalore as well as Boston.

“The successful firm will qualify and contact companies throughout India to identify their potential interest in establishing an office in the U.S., build long-term relationships with the targeted companies, develop a marketing activity plan to promote and create an ongoing interest in Fairfax County as a business location. Major target sectors include defense/homeland security, aerospace, telecommunications, enterprise and mobile applications, health IT and software development,” the ad reads.

New Hampshire counters efforts like that with a three-person office within the Department of Resources and Economic Development (DRED) given a $100,000 budget for recruitment and in-state business retention. It can’t afford out-of-state travel, let alone field offices around the globe. It cannot offer “incentives” — tax breaks or other government subsidies — that other states dangle. When the office attends bio-tech conferences or trade shows, the trips are funded by private sector partners, such as Public Service of New Hampshire or Cate Street Capital.

Michael Bergeron is the business development manager and has worked at DRED for 15 years. When he hears about a recruitment or retention opportunity, it’s his job to pick up the phone and say, “I’m from the government and I’m here to help.”

“What we do with a smaller budget is meet with folks face to face,” Bergeron says. Lots of factors go into a decision to relocate a business, Bergeron explains, with taxes, energy costs, unionization and the availability of labor among them. But intangibles including quality of life, culture and local schools. Bergeron says the businesses his office is successful with tend to be family owned and are interested in making a permanent move as much for intangible factors as ones that show up on a profit-and-loss statement. And even in limited government New Hampshire, some sort of government program is often in the background to lubricate the choice.

His office worked with Sampson Manufacturing, which makes parts for weapons and has about 25 employees, when the company moved from western Massachusetts to Keene, helped by a community block grant. Safran USA, which makes parts for airplane engines, has opened a 275,000-square-foot facility (that’s nearly five football fields) in Rochester promising 400 jobs. Funding came from the state Business Finance Authority, and a special training program provided by local community colleges was part of the deal.

Bergeron is well aware that poachers prowl New Hampshire business parks, so his office plays defense as well. Lindt Chocolates opted to expand in Stratham rather than in Massachusetts, in part through discussion with Bergeron’s office. There are plenty of dry wells, too. IKEA, the furniture company, considered placing a facility in Whitefield, but ended up in Virginia instead.

Limited government conservatives generally allow that government has a role in doing things with collective benefits that individuals can’t or won’t do, such as building a road. What individual has the incentive to promote a state as a place in which to do business? No one — and everyone.

Bergeron sidesteps the political arguments. The more businesses grow, the more opportunities there are for everyone.

Fergus Cullen, a freelance columnist, can be reached at fergus@ferguscullen.com.

Author: Fergus Cullen

Fergus Cullen is a former chairman of the New Hampshire Republican Party (2007-2008) and an editorial page columnist for the New Hampshire Union Leader.

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  • Dstarr

    If we really wanted to attract industry to NH, we could pass right-to-work.  That would make NH the only right-to-work state for 500 miles in any direction.  Corporations won’t build plants in states that don’t have right-to-work laws.