A Look at the Economic Development Field's Professional Status

I. Is Economic Development a Profession?

I get this question often from young people who are giving consideration to economic development as a field of endeavor for themselves. It is a very fair question. If you were asked this question, could you answer it with any degree of confidence?

My answer to them is that economic development is an emerging profession with considerable work ahead in solidifying its knowledge, practice and ethical bases. A few have asked me the question: How long will it take for economic development to reach a full professional status? My response has been: 1) it will take as long as it takes to solidify our base; and 2) we need to think of professionalization as a process with stages. This means we need to look at the history of the field and how it has evolved.

II. Short History of Economic Development

The economic development field started in the 1920s and 1930s as "industrial development," which was all about recruiting industry, mostly manufacturing companies. In its early years, the "business" largely consisted of a focus on real estate (industrial parks), site location, labor force, transportation, utilities, some incentives, and area promotion activities. It stayed that way until the mid-1970s, which is when I happened to enter the field.

Stage 1 covered the 1920's/1930s through the mid-1970s. Stage 1 drivers were: building upon manufacturing's rapid growth, and stimulating growth based upon the agglomeration economics of the major Northeast and Midwest urban markets. Starting in the 1960s, considerable attention was given to industry relocation to the low-cost rural South. The interstate highway system was a major driver in opening up new areas for growth. The model of the economic development practitioner during those days was the "industrial developer."

The business began to steadily broaden its focus beyond industrial development in the late 1970s and early 1980s to include other economic sectors (the service side of the economy) and other economic development functions (existing business retention and expansion, a broader approach to marketing, international recruitment and international trade, workforce development, urban redevelopment, rural development, economic development finance, business climate, early stage target industry development, and an initial focus on small business and entrepreneurship.)

Stage 2 covered the late 1970s through the 1980s. The primary drivers for Stage 2 was early-stage globalization, combating rising cost economics, and changing demographics. The model of the economic development practitioner during this stage was the "diversified economic developer," with a broader focus on developing places and economic sectors.

In the early years of the 1990s, economic development shifted again. This time the direction was driven largely by technology and globalization, although the new demographics was also a major influence. IT was the biggest technology driver in the 1990s with growing help from biotech and the life sciences. On top of those new activities spawned in the 1980s, a new set of activities developed, including entrepreneurship, technological innovation, tech business startup, foreign business recruitment, international trade, sustainable development, seed and venture capital, technology and business parks, workforce development, regional cooperation, new approaches to existing business development, industry targeting, industry clusters, a major build-up of incentives, and new strategies for workforce development. The model of the economic development practitioner in this third stage was the "technology-oriented economic developer."

The world changed after 9/11, and so did economic development. Security concerns and terrorism made all of us much more aware of the our "global connectivity and interdependence." The field began its 4th generation (stage) with the turn of the century. While technology, globalization, and demographic factors continued to act as underlying drivers, these factors have morphed and accelerated. Global demographics, the modernization of the emerging nation-states (China, India, Vietnam, etc.), next-generation life science and IT technology, rising energy challenges, accelerated globalization of most all industries, and network economics are the drivers for the newest stage of economic development's evolution. How long will this stage last? That remains to be seen. A lot depends upon the curve that technology and human values follow in the future. My hope is that this new stage will give greater attention to: sustainability, realizing the full potential of human beings, place and people connectivity and networks, and an emphasis on meaningful work across the world. The model of the economic development practitioner in this 4th stage is the "globally-conscious sustainable economic developer."

III. Perceptions of Professionalism in Economic Development

My impression is that most people working in economic development (economic developers) do not spend a great deal of time thinking in-depth about whether they are a professional. My experience indicates that most "assume" they are a professional in a general sense. That is, they believe they "conduct themselves in a professional manner," drawing upon whatever skills and knowledge that are at their disposal. But does that mean economic developers are professionals in a true sense? While I would agree that most economic developers conduct themselves in a professional manner, I would argue that is not the same thing as "being a professional in a demonstrable sense."

The professional status of economic development is a cyclical issue in the field. I believe we are about to revisit this vitally important question in the not too distant future because: 1) a growing number of geographic places and people are jumping into the economic development game worldwide; 2) competition for economic development opportunities, especially the "good stuff," has grown very intense; and 3) we to continue to struggle with the nettlesome questions of "what really works," and "can we confidently predict results and outcomes under various defined courses of action." The third issue is perhaps the most important. And no, simply jumping to performance measures and mimicking the Business field's Balanced Scoreboard approach is not enough. There are tougher underlying issues we must address that relate not only to knowledge and skills, but also to professional conduct in a ethical sense.

For some time I have said, that as a body of practitioners serving society, we (economic developers) should be confronting head-on the challenges associated with making economic development a true profession. We have made some progress in raising skill and ethical standards in the field. The Certified Economic Developer (CEcD) designation is a step in the right direction, but it remains more a practice of artists judging artists than scientists judging scientists. The CEcD process is practice-driven, which is what most economic developers want; at least for now. I have a suspicion that many economic developers are looking for something more, something deeper, and something that equips them with much more powerful analytical, decision-making, management, and leadership competencies. Right now, they will not find these deeper competencies in the CEcD certification process.

My bias is that I believe, as important as practice-based training is, theoretically-based education has a greater long-term impact on a person's overall personal and professional development. In reality, a new, better integrated mix of training and education is needed in the economic development field.

The Basic Economic Development Courses, the Economic Development Institute (EDI), and various training programs offered directly by the International Economic Development Council (IEDC) are valuable learning experiences for people working in economic development, but they do not fill the deeper knowledge and educational needs of people working in the economic development. Furthermore, I am not sure they even should. As I discuss later, that may well be the role of university educators, with considerable help from practitioners.

I would be the first to admit that we have made considerable progress, but we have so much further to go. As I look back over my past 30 years in the business, my assessment is that what we have really accomplished is two things: 1) advanced our practical skill base in many new and valuable directions; and 2) made the practice of economic development more "professional-looking." In my opinion, that is not enough to make economic development a real profession. Later I will provide a litmus test we might consider using to determine where we are on the "professionalization curve."

Several years ago, I wrote a article that predicted that at some point in time economic developers would need to be licensed, much like the licensing of practitioners in other fields considered to be professions. We have dodged that bullet for now, but it is still out there. Will we be required to hold legal licenses to practice some day? As we advance into becoming a full-fledged profession, I believe we will.

As I look ahead, I believe concerns over the accountability of economic development practitioners to the public will be a greater issue in the years ahead. When the consequences of our policies, strategies, and actions impact the lives of large numbers of people in society, it is not enough for professionals to simply be accountable to themselves. They must demonstrate that their actions are truly in the best interests of the public. The use of public dollars to fund business incentives is perhaps one of our largest challenges in this regard.

Let me ask you this question: Should economic developers be accountable to society? If so, what are your ideas on how they might best accomplish this objective? My position is that we should be. Nearing the completion of my new book on leadership in economic development, I have formed the impression that we need to think much deeper about the issue of our professional responsibility to society. It is not enough for us to think about our accountability solely in terms of the governing boards we work for.

IV. Possible "Litmus Test" for Professional Development

When I look at medicine, law, accounting, engineering, architecture, psychology, real estate, and other well-established and well-recognized "practicing" professions, I see five defining characteristics common to all of them. Put them together and they could provide us with a "litmus test" to assess where we are on the professional development curve. The five characteristics are:

1. Specialized knowledge, which can be clearly documented and tested for its validity. Knowledge derived from theoretically-based research is badly needed in our field.

2. Specialized skills, which can be clearly documented and certified in terms of their presence. We need to go beyond self-proclaimed professionalism.

3. The ability and right to make (professional) judgments about truly important issues to society at large. Do we have the true abilities needed to perform our jobs effectively? By what right do we practice economic development on behalf of society?

4. Responsibility to perform critical activities within known limits of success. In other words, do we know our probabilities of success when we act. Greater reliance on statistical analysis and logical reasoning could help here.

5. Professional ethics, which reflect the best interests of society at large, and embody the recognized standards of practice and conduct suitable to the profession. We have at present a well-regarded code of practice, but is it an highly agreed upon code of ethics with society's interests evident in our work nationally and internationally?

We must confront the complex philosophical issues underlying economic development. For one, should economic development blindly serve as a hidden arm of unfettered consumerism? Another is our most fundamental view of nature and life, and how the business of economic development impacts upon the natural environment and human life. Some might say these are remote issues of no concern to practicing economic developers. I would argue they are core unconscious motivations inside all of us that drive our consciousness about what we do and how that relates to the whole of life. Virtually no attention is being given to these issues by any of us.

While there are continuing efforts by our national associations and other groups to come to grips with aspects of professionalizing the field, we have not committed ourselves to a systematic assessment of the extent of our professionalism in the field in light of the five defining criteria listed above.

Admittedly, this is no simple job, but it is an important one we must go to work on, and not in a piecemeal unconscious fashion. How might we tackle this job? I suggest approaching it from the standpoint of "gap analysis," which would allow us to assess where we are now in relation to a clearly articulated and performance-based vision of what constitutes a "true economic development profession." What is an appropriate vision of economic development as a well-grounded and ethically-sound profession? How does our work compare to that vision?

I would like to know where we are on the curve of professionalizing economic development and what issues we must tackle to move us further along that curve. Wouldn't you?

One key issue I mentioned earlier and would like to add to here is professional education. I know of no true profession that does not have recognized and approved university-based education programs (accredited degrees) for those with a desire to work in the field. (And yes, there are a few masters degree programs across the world.) As a body of practitioners, we should be working openly with the academic community nationally and globally to advance the quality of professional education offered to economic developers. (As a matter of information, I am well-aware of what is offered now by universities, professional associations and various other groups.) My assessment is we need to take the next step beyond today's "training offerings."

I believe we could be on the threshold of significant progress in advancing economic development as a profession, if we pursue honest answers to the questions raised in this article.

V. Starting Recommendation

So, what action steps should be taken to advance economic development as a profession? Here is where I suggest we begin.

State of Economic Development Assessment Project

Initiate a 2-year process to systematically examine the economic development field in its major applications, and assess where the field is currently located on the professional development curve. Beyond the assessment, a recommended action plan should be developed outlining the vital steps required to advance economic development over time as a full-blown profession. And yes, I believe we should be looking for some fast-tracking strategies to move us along.

I suggest a $2 million grant be sought from two leading national foundations and the Economic Development Administration (U.S. Dept. of Commerce) to finance this project. The process should include all the key stakeholders to this process, including the practitioner organizations, the university community, key economic development funding sources, business, government, education, citizens, and other key actors in the local economic development process. A carefully selected leadership group should be created to guide the project.

Should the project have an international focus? This is an important design question. If an international focus is considered, should it be restricted to North America or broaden to include any country anywhere?

I suggest some international focus, but to keep the scope manageable it may be best to focus mostly on the U.S. Perhaps parallel projects in other countries would make some sense. While there are similarities in economic development practice globally, there are also major differences grounded in economic structure, government, human values and culture. These should not be ignored.

One thing we should not be doing is blinding selling largely untested U.S.-based local economic development policies and practices abroad. That is a serious mistake since we (U.S. economic developers) still are unable to define with confidence that what we do really works in terms of predictable outcomes. Where is the proof? In this case, I am from Missouri, so show me! Am I saying we should not be sharing our ideas about economic development idea with our counterparts abroad. Not at all. Clearly, this dialogue is important to improving all of us in the field.

If Canada and Mexico wish to participate, they should be asked to contribute financially and provide leadership representation. I'm sure our colleagues in these countries would agree. The practice of economic development should be examined in a global context since that is clearly where we are headed in the future. But in my estimation, the scope of the project then grows to a project that is closer to $4 million in budget and might take 3 years or more to complete.

There are many important design issues that need to be considered. I would be quite happy to discuss these issues with anyone wishing to engage in a dialogue about this idea.

I invite your comments and questions. Thank you.

Don Iannone can be contacted by email at: dtia@don-iannone.com and by phone at: 440.449.0753.

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