Economic Gardening

Economic-Gardening  The Right WayFlorida has touted the term Economic Gardening for several years now.

Many business, political and economic leaders have dropped the phrase many times. Is there something to it? What’s it all about?

More important: Is it working?

The subject has several parts. It would require an in depth study beyond the scope of this essay but let’s try and explore it a bit.

What is Economic Gardening?
I first heard the term in a Florida Trend article (which I have been unable to find online) several years ago. I believe it was an editorial on the current practice and some excellent suggestions on how to improve it. Hopefully someone will point out the source to me as a result of this essay.

Economic Gardening, simply put, is the process of planting and growing business in a specified region. All regional leaders, be it village, county, state or even nation share a common desire to grow their economy. All realize that starting, growing and cultivating regional businesses will accomplish that goal nearly all the time. Unfortunately the practices some regions use are less than optimal. Let’s discuss some negative practices and follow up with some positive suggestions.

What NOT to do
One practice that sounds good at first but is counter-productive in the long run is attracting businesses from out of the region by giving tax breaks for moving to the area. While this might be initially advantageous, it will eventually hurt the existing businesses, and history has shown that a high percentage of transplanted business get up and move once their tax breaks end. Well, of course. If they were eager to move once to save money, why not do it again?

Another practice that can be abused is marketing in other regions. Aside from being expensive, with travel and all, it hasn’t shown a large success rate. My own county used to pay one of its commissioners to make “marketing trips” to another state with the auspicious intent of attracting businesses to move down to Central Florida. The ROI on this effort was extremely poor. It was also discovered that this commissioner was combining family visits with nearly all the trips as well.

The final error I will discuss is the tendency to concentrate on larger businesses, and neglect the high potentials of smaller business. A region would benefit much more from 100 small businesses than one large employer. When a region is dominated by a large employer that employer starts to get too much power in the region, and creating many other problems.

Let’s do it RIGHT
One of the most enlightening features of that Florida Trend article that burned in to my memory was the concept that most of the “seeds” for the region’s garden are already here, in one form or another. There are startups all the time. Giving assistance to local startups seems like a good idea, no?

Another idea was that a lot of the businesses you want to recruit from other areas may already be visiting. In Central Florida we have a large tourist population, and many of those are business owners. The article even went on to say that it might be as simple as starting a conversation at one of the local attractions and including a comment such as “Wouldn’t it be great to live here year round? Wouldn’t your business do just as well or better in this region?”

My final suggestion is to spend more time on the smaller, high potential businesses, which are generating positive cash flow for the region. This would be companies that are creating an inflow of cash to the area, be it through the private sector or government contracts. Several local organizations here in Central Florida are working in this direction – GrowFL, UCF Incubator, SBDC to name a few.

As I previously stated, a large number of small businesses makes a more attractive economic environment than a small number of large ones. Keep in mind, that every large business at one time started as a small one. Next time you see a small business owner, encourage them. And you might ask them, “Hey, you know anyone in business from out of the area that might like to live here?”

Good business to you!