I read Ken Miller’s recent op-ed piece in the Tacoma News Tribune regarding Tacoma’s economic future and thought I’d share my own vision for the city. With the country still struggling from the lingering effects of the balance sheet recession beginning in 2008, it’s the best possible time for Tacoma to have a conversation about the current economic state and how to create a path to prosperity in a rapidly changing global economy. The most important question to ask is: what will drive economic growth in the 21st century? Tacoma’s economy reflects a second industrial revolution era in decline. How do we adapt to a new century, a world of seven billion people with finite resources and a competitive global workforce operating in an increasingly knowledge-based economy? I enjoyed Ken’s analysis and I’m glad he started such an important discussion, however, Tacoma won’t thrive if we simply focus on the “wild cards” of cultural tourism and Uncle Sam’s joint base. Both make for good sources economic activity, but Tacoma has the ability to be “different somehow” as well as become a manufacturing hub by leveraging the wild cards as catalysts for growth.
The high number of museums and local artists represents an underlying creative class that will be vital in driving a culture of innovation. We need to tap Tacoma’s creative minds and inspire a next generation of digital entrepreneurs to develop technology companies here. With all of the smartphones, iPads and laptops I see at Starbucks, Tacoma has the makings of a good test bed for consumer technology.
Also, JBLM is a huge resource as a manufacturing catalyst. Not only does it pump millions of federal dollars into our local economy, the military base also provides service men and women with very useful skills. Our military is on the cutting edge of technology and personnel are developing quality skillsets along with a strong work ethic. Sounds like a great recruiting base for high end manufacturing jobs. If we work to develop local manufacturing in the area and recruit companies to Tacoma, we’ll have added a strong pillar to our economy.
A recent McKinsey study dissected GDP growth last year and found the internet was the largest driver accounting for 21% of 2010 GDP gains in the US. Without a doubt technology is going to play a huge role in the new economy and it’s important for Tacoma to develop a thriving startup environment combining a technology incubator with co-working space and networks of angel investors, venture capital firms as well as digital entrepreneurs from around the country. Many people don’t realize how much startup funding has changed over the past few years. It’s increasingly inexpensive to get an internet / digital startup off the ground with high quality free open source software, increased computing power from the cloud and numerous other free resources online. Y-Combinator is the best example of this change. The seed stage incubator, founded by Paul Graham, is designed to give a small amount of funding to a couple dozen startups every year. The funding (average was $18,000 for 6-7% equity stake) covered basic expenses for the hard working and resourceful startup entrepreneurs over a short-term incubation period. Paul’s team provided a great deal of value by giving product and business model advice, as well as connecting the founding teams with a network of investors, engineering talent and other companies for potential partnerships. Chances are you’ve heard of Y-Combinator company: DropBox (Value: $5 billion), AirBnB (Value: $1 billion), Hipmunk, Heroku & Cloudkick to name just a handful. Getting a similar effort off the ground in Tacoma will be a difficult task, but being located just south of Seattle we’re primed to become another tech hub in Washington and draft Seattle’s innovation drive.
In a knowledge-based economy, it all starts with education. Tacoma’s branch of the University of Washington represents the best opportunity for us to develop local engineering and computer science talent. We might not have anything close to a $400 million grant like NYC is offering to Stanford or Cornell for a science / engineering campus, but there are many changes we can make to promote education in these two areas. It starts with pushing computer science in local middle and high schools. Google recently launched CS4HS, “an initiative to promote Computer Science and Computational Thinking in high school and middle school curriculum. With a grant from Google’s Education Group, universities develop 2-3 day workshops for local high school and middle school CS teachers. These workshops incorporate informational talks by industry leaders, and discussions on new and emerging CS curricula at the high school and middle school level.” Guess which university is already on the list to host workshops for local teachers? The University of Washington. The country needs to reinvigorate its manufacturing / export base and Tacoma is in a prime position to capitalize. Anchored by a port and rail transport infrastructure, on paper the city has the potential to develop a manufacturing industry. With highly skilled labor coming from JBLM and UW-Tacoma churning out a hundred or so engineering majors every year, we should be able to make the transition providing we create the environment for success. Organized labor across the country has come to realize if they don’t adapt to new economic realities, it’s going to be harder for them to grow the local workforce and retain jobs. The answer is not for the state of Washington to participate in the “race to the bottom” as far as pay and worker-comp goes, however, smart reform will be needed to increase our attractiveness. Organized labor should be out front on this issue by working with local politicians, business organizations and education institutions to develop a comprehensive plan to provide training for highly skilled manufacturing jobs and a plan to attract manufacturers to Tacoma. Such a plan coupled with the promotion of our deep water port, rail transportation infrastructure, reasonable average cost of living, the continued pool of talented engineers coming out of the University of Washington and the skilled workers from JBLM is a solid foundation for Tacoma to attract manufacturers to the area.
We can sell our cultural appeal and continue to pursue opportunities from JBLM in the near future, but how far can Tacoma go by focusing on these two pillars for growth? We must invest in our future and create the city we want our kids to grow up in. Nothing that’s worth doing is easy.