It can be hard to accurately gauge how well or how poorly Illinois is doing
economically when compared to other states because much information used by
elected officials, civic leaders and others is typically anecdotal or lacking
in statistical depth.
This year, the Illinois Chamber Foundation took a step to change this by
creating an Illinois
Economic Competitiveness Scorecard to provide accurate and
timely information and perspectives on how Illinois is doing compared to
other states in far-reaching categories. This benchmark study was
conducted with the expectation that it will be used by both the private
sector and public officials when addressing long-term issues critical to
improving the state’s competitive edge. (The report was featured in the Sunday,
August 31 edition of the Springfield Journal-Register.)
We had no preconceived notions when we retained GrowthEconomics -- a firm
specializing in the growth dynamics of states and regions – to accomplish
this task. We just asked them to compare and contrast how Illinois is
doing economically against the other 49 states so we all would have a better
sense of what we should be paying attention to if we are to improve Illinois’
competitiveness.
When we saw the results, it made us feel like parents who had just seen their
child’s report card.
Overall, Illinois is still above average in many categories, but we’re
slipping where some key economic measures are concerned. The report
finds Illinois has slipped from number 6th to 16th in per capita disposable
income. We’ve slipped from 10th to 13th in per capita state Gross Domestic
Product (GDP). Illinois is ranked 49th out of 50 in its regulatory
environment. Given what we’ve seen from our state government and heard from
Chamber members, we knew we were in a troubled business environment in the
state. But 49th out of 50 is startling.
The report’s findings were not all bad. Illinois is well-endowed with
solid building blocks that could sustain a more dynamic business environment
in tomorrow’s high-flex economy. Our energy costs are at an average
level and Illinois has strong service sector productivity and economic
diversity.
Illinois also ranks and scores well on K-12, postsecondary education and a
strong graduate school reputation as well as on workforce preparedness.
The state continues to be a magnet for out-of-state talent but its attraction
to well-educated foreign workers has slipped.
Still the overall theme is clear and troubling. Illinois cannot settle
for being good but slipping. That’s not the economic environment that
lends to business growth and investment.
The purpose of the Chamber’s study was not to lay blame but rather to
establish solid benchmarks that we can learn from and continue to measure for
progress. The report provides a path to pursue in order to improve our
state’s competitiveness.
The full report may be accessed on the Illinois
Chamber web site. Printed copies of the Scorecard and the Executive
Summary are available. The Illinois Chamber will distribute copies of the
report and engage in related economic development outreach sessions and
dialogue during the balance of the year.
Here’s my prescription
for dealing with Illinois’ economic challenges:
EDUCATION &
WORKFORCE
We should build a stronger compact between employers and educators so
we’re preparing our children for the jobs of today and tomorrow – whether
that job demands a college education, a graduate degree, skills training in
community or technical colleges, high school degree or union
apprenticeships.
Workforce capability is a critical component of Illinois’s future. Thousands
of jobs are going begging for lack of a prepared or skilled workforce. There
is demand for high tech workers and skilled craftsmen. There is demand in the
industrial sector for a new generation of workers to replace the baby-boom
retirement bubble. The simple point is that we cannot afford to have uneducated,
unskilled, untrained and non-productive citizens and expect to have job
growth and prosperity.
ENTREPRENEURS
We need to engage in a stronger dialogue with the entrepreneurial sector and
create an environment where people who do R&D in this state decide to
create companies and jobs in Illinois instead of heading for the
coasts. Commercializing inventiveness may be easier said than done, but
nurturing creativity, innovation and helping small businesses find success
and grow at home is a worthy undertaking. Helping existing employers expand
and recruiting their business partners to take advantage of location
synergies is a proven growth formula.
INTERNATIONAL TRADE
Whether linking Illinois companies to global business or bringing
international companies to Illinois, we must expand our ability to be part of
the global economy. A third of the state’s GDP is already attributable to
international trade. There is no doubt that boosting global markets for
Illinois based goods and services is a key to our future.
Chicago’s O’Hare International Airport is an established gateway to the
world. The concentration of foreign consulates and ethnic diversity of
Chicago are indicative of a world-class city. Measured by container cargo
traffic alone, Chicago is ranked the third busiest port in the world. Fast
Company magazine recently named Chicago and London the “coolest” cities in
the world. Illinois is well positioned to take advantage of opportunities in
global markets.
PLAY TO OUR
STRENGTHS
Illinois is blessed with a diverse economy. We should enhance those
strengths that are the foundation of Illinois’ economy while promoting those
elements that hold the most potential for future investments and job
growth. Agriculture, transportation, energy production, healthcare,
financial markets, hospitality, professional services and, yes, manufacturing
are fundamental to our state’s economic well being. Education, research,
electronics, technology, international trade, healthcare, and the pursuit of
alternative energy sources and efficiencies are keys to tomorrow’s jobs.
Despite manufacturing job losses in the last decade Illinois remains one of
the nation’s leading industrial states. Manufacturing is not dead, but has
become more efficient, highly productive and significantly invested in global
trade.
GOVERNMENT’S
ATTITUDE
Last but not least, we need to change the conversation in Springfield and
Cook County.
Unfortunately many of our elected officials seem to have taken their eyes off
the prize when it comes to economic policy. They are sending the wrong
signals to employers in our state and to employers who might be looking to
expand their business into our state.
Investors want to have confidence that the state can work for them instead of
looking for ways to raise fees, raise taxes or otherwise set regulations that
make their ability to have a successful business more difficult. Public
policy makers must appreciate the fact that Illinois’ situation is not
static. Where multi-state investments are concerned most investors have a
multitude of choices. Accordingly, multi-state business comparisons and
studies, personal experiences with existing facilities and those of their
business partners, as well as subjective factors such as anti-business
rhetoric, workers’ compensation costs, litigation awards and unstable
political actions contribute to investment decisions.
Business owners want professional government employees who aren’t afraid to
make a decision and appreciate the need for a sense of urgency. Owners of
public companies respect thoughtful politicians who are more interested in
resolving problems and finding solutions than engaging in headline-grabbing
grandstanding. Politicians need to understand there are real economic
consequences for shareholders as well as the state’s economic future when
they engage in inflammatory, threatening or unflattering rhetoric.
Some obvious examples of the prevailing attitudes that frustrate employers
and investors are the experiences proposed business expansions continue to
encounter in Illinois. Whether it is at industrial sites like power plants
and refineries, transportation investments by railroads and pipelines, or
opening big box retail centers, all have experienced delays and roadblocks
instead of helping hands trying to resolve issues and expedite investments.
We can’t tax our way to prosperity. Yet that appears the choice preferred by
the elected leaders in the Governor’s office, the office of Cook County Board
President and the Mayor of Chicago, each of whom has sought to raise taxes
and the costs of doing business in their jurisdictions. Our state’s political
leadership needs to realize that if the state’s economy was hitting on all
cylinders and if our state was growing jobs at a pace that matched the
national average the tax revenue shortfalls that have troubled them might not
exist. The Clinton notion, “It’s the economy, stupid” is still
relevant.
Working together, we can turn economic trends around. It is not
acceptable to settle for good but slipping. We must raise our economic
competitiveness. To do so requires a long-term commitment to policies that
enhance and promote job growth. Now is not the time to accept either
mediocrity or economic complacency. Many of our state’s economic trends
have been going the wrong way. It is time we concentrated our attention on
reversing them and bringing Illinois back to a place of prominence and
growth. The Illinois Chamber Foundation’s Economic Scorecard provides
direction.
For further information regarding the Economic Scorecard and related Chamber
activities contact Tom Wolf, Executive Director of the Chamber’s Economic
Development Council at 312-983-7109 or twolf@ilchamber.org.
