GBIC Honors Senator Leahy at 62nd Annual Meeting

BURLINGTON – The Greater Burlington Industrial Corporation (GBIC) presented its highest recognition award today to United States Senator Patrick J Leahy, at its 62nd  Annual Meeting on June 16, 2016 at the Echo Leahy Center on the Burlington Waterfront.

Attended by approximately 300 members of the Northwest Vermont community, GBIC presented the 2016 C. Harry Behney Lifetime Economic Development Achievement Award our State’s Senior United State Senator and outstanding Vermont leader: to United States Senator Patrick J Leahy.  Given each year since 1995 in honor of past GBIC president C. Harry Behney, the Behney Award recognizes Vermont leaders for their significant contributions to advancing the economic well-being of the people of our community and promoting a climate that enhances the economic vitality of the state of Vermont.  GBIC is proud to award Senator Patrick J Leahy with the 2016 C. Harry Behney Lifetime Economic Development Achievement Award.

GBIC honors Senator Leahy for his many contributions to the people and the State of Vermont in supporting dynamic economic development, attracting investment and saving and growing jobs for Vermonters. In addition, Senator Leahy has been a leader in advancing entrepreneurship & innovation advancing opportunities for truly significant economic opportunities for Vermonters in our region and throughout Vermont.

Senator Leahy is the only person who has ever earned this prestigious recognition twice (2004 and 2016).

GBIC President Frank Cioffi said:  “GBIC thanks Senator Leahy for his many contributions to the people and the State of Vermont in the field of economic development.  Senator Leahy is an outstanding Vermont leader who always seeks to find answers, realistic solutions and resources to the challenges and opportunities facing our state.  Senator Leahy cares about improving the lives of working Vermonters and their families and he works hard every day to help our Vermont communities and our state improve our infrastructure and make our state the best place to live, work and raise a family.   We honor and thank Senator Leahy as one of Vermont’s most outstanding leaders and most tireless advocates for Vermonters and for Vermont.”

 

Senator Leahy 1

IBM Vermont

On June 23, 2014 GBIC presented a plan regarding a potential change in operations at the IBM Vermont campus in Chittenden County.

To read the plan, please visit our Reports & Publications:“IBM – the Vermont Plan”

Brigadier General Harris: Response to Boston Globe Article on the F-35

As a member of the community and the Vermont Air National Guard, I find the accusations made in a recent Boston Globe F-35 article unsubstantiated and disturbing. Ms. Kathleen Ferguson, Acting Assistant Secretary, USAF Installations, Logistics and Environment responded, but I did not see it printed.

She states:

There are a number of inaccuracies and misleading comments in the recent article about the F-35 basing process.  Most concerning was the assertion that the Air Force made its decision based on “older data.”  That is not correct.  I clearly explained to the reporter, and the Air Force has assured local officials in writing, that the analysis from the site survey shows that Burlington Air Guard Station would have made the F-35 candidate list even with the revisions.

The Air Force is still analyzing data and has not yet made a final basing decision. This important fact is buried in the story, and the article implies the Air Force has made a final basing decision based on criteria screening data.  When the Secretary and Chief of Staff of the Air Force make a decision later this year, they will do so based on current, accurate information to include a comprehensive Environmental Impact Statement.

Also, it was disappointing that the article lent an extraordinary amount of credence to an “anonymous pentagon official” who characterized himself as having insight into the Air Force’s basing process.  This is unfortunate because, again, no final basing decision has been made.

The USAF strategic basing framework is centered around a highly staffed transparent, repeatable, and defendable process. The overall decision is the balance between 5 categories: cost, capacity, mission, environment (which incorporates noise), and military judgment. To categorize a “preferred alternative” basing decision process to replace F-16s with F-35s in Vermont as “fudged” ignores the cumulative effect of all five contributing categories and the Air Force’s layered strategic basing decision process.

 

Brigadier General Dick Harris

Assistant Adjutant General for Air

Vermont Air National Guard

The Shape of our Manufacturing Future

Industrial development and urban areas have always shared a unique history. There were times when manufacturing was considered the heartbeat of a region and times when it has been castigated; it has appeared to be on the decline in favor of cheaper overseas options, yet at the same time a source of high-value local pride. The ideals with which employers associate the Vermont workforce come up again and again as the pillars of our industrial past; the appreciation for quality and value of a job well done.

But collectively, we’ve also come to understand the important nature of our natural assets. Vermont is home to many of these advantages, with mountains and a lake that equally characterize who we are. And with this recognition has come a shift in perception for how we grow our economy, some of the changes are real and some are perceived. But what is for certain is that the successful path to a prosperous economic future is not to have these ideals of value-adding manufacturing and natural space be at loggerheads.

The reality of our situation is that manufacturing jobs in Chittenden County account for more than 11% of the workforce. Projections for future growth in our County indicate that by 2035, we can expect another 55,000 individuals to join the workforce; the trend, even if the service economy is to grow, is that there will be around 5,000 more employees as a part of our manufacturing future.

The question, then, is where? We understand that space is at a premium. Greenfield development is not an ideal solution due to the finite nature of land, as well as the prohibitive costs associated with developing infrastructure to meet the needs of employers. The commercial market favors quicker returns, and has been ready and willing to produce office-space infill, the type of space that is quickly moved, and highly dense. The industrial market takes time; money is tied up until lots sell, or are leased.

The solution as GBIC sees the situation is that there are already existing locations in this County that have not yet been included in the industrial market for reasons of commercial willingness or timing. These spaces already have the required infrastructure, and would be infill on already industrially designated areas. Our high value-adding manufacturing future will rely on a collective willingness to create these “job-banks” for future Vermonters to find employment. It will require significant foresight and strong partnerships, both public and private, to ensure that we’re ready when the opportunity comes knocking.

 

Vermont for the F-35

Lately there has been quite a bit of discussion surrounding the potential basing of the F-35 fighter plane at the Burlington Air National Guard base.  The simplest overview of the situation is that the Air Force is retiring the F-16 fighter jet and replacing them with the F-35. The concern is that these planes are not exact analogues of each other; new and additional technology brings additional mechanical requirements. Thrust and weight alter, capabilities improve, and environmental impacts need to be modeled.

The argument isn’t about whether or not you support the men and women of the Vermont Air Guard; we all support them. The service they provide to our state and country through their duty, and the service they provide every day as members of our community. It’s not even about saying that they should have the best because they are the best, though that’s also true; our VTANG was selected as a preferred alternative due not just because of our location, but because of their quality.

What’s at issue for GBIC is really quite simple. It’s not the impacts as outlined in the Environmental Impact Statement, as almost all negative impacts are shown to lessen with a transition to the F-35. The issue is one of numbers, and one that we feel is quite easy to understand when the furor is stripped away.

This is about the 1100 guard jobs. It’s about the 53 million dollars in direct payroll. It’s about $2.4 million in fire and safety provided to the airport.

If the F-35 is based at the Burlington Air Guard, these things will stay and all of the associated economic activity from guard weekends, trainings, and community support will continue. It isn’t fear mongering to say that without these planes our VTANG as we know it would be on a limited time-table. The 158th are a fighter wing, and without a fighter plane the timeline for operations is a matter of what they have left, not what’s coming next.

Our Congressional delegation has shown support of the project in recognition of VTANG as one of the premier units in the country; Senators Leahy and Sanders as well as Congressman Welch recognize that the F-35 investment will secure the future of our VTANG for decades to come.  The net positive impacts on job retention, job creation and economic potential are too great to be ignored.

The Guard has been sensitive to the concerns of the community up to this point, and will continue to do so in the future. Flight operations with the F-35 will decline by more than 2500 patterns, flight times and days have been limited to mitigate impacts on the communities around the airport, and the current VTANG operations account for only 5% of the total traffic coming out of the airport today.

GBIC strongly supports the basing of the F-35 at the Burlington Air National Guard Base for the continued and significant community, social, and economic benefits provided by our Air National Guard.

Legislative Session: Some Frustrations, Some Disappointments, Some Progress

There’s an often quoted saying that one should never watch legislation or sausage being made; the process for both can be off-putting when attempting to enjoy the results. The 2012 Legislative session was what many would euphemistically describe as “spirited.” The final days were long as nerves grew short, but even at its most chaotic the process held together: compromises were made, decisions were rendered, and another session came to a close with the fall of the gavel.

GBIC entered the Statehouse in early January knowing that there were going to be two major issues that required immediate attention: ensuring the continued viability of our State’s economic incentive program (the Vermont Employment Growth Incentive), and rectifying a seemingly small taxation issue regarding secondary packaging equipment that was about to have huge implications for one of Vermont’s most beloved and highly regarded brands, Green Mountain Coffee Roasters.

What wasn’t known ended up being the most contentious and frustrating issue of our time in Montpelier. In late November of 2011, we learned that Vermonters were being charged sales and use tax on Software as a Service (SaaS). SaaS uses a cloud computing platform to provide software services to an end user, and the Tax Department had determined via Technical Bulletin that these services could, and should, be taxed as tangible personal property. Companies under audit were being assessed taxes plus penalties reaching back to 2006, and were understandably confused and shocked at the new interpretation. In late 2011, we had assumed that this issue was fairly cut and dry; it had an administrative solution in the form of correcting the Technical Bulletin, and it was a clear example of a misinterpretation of intent.

But seemingly straightforward solutions have an odd way of zigging when you expect them to zag. The issue piqued the interest of the Legislature and once it arrived under the golden dome, it became open season on the Cloud Tax. As is most often the case, the issue found champions and detractors on both bodies of the Legislature. A relatively simple issue that appeared complex on the surface became further obfuscated in the heat of committee room discussions. As testimony continued to come in, the issue moved away from the implementation of a new tax to how do we deal with an economy that is moving away from tangible goods and into a service-based model. It’s a valid concern, but one that unfortunately begs the question, and glosses over the way the tax originated.

Despite strong appeals from Vermont employers and information being provided up until the Conference Committee rendered their recommendation, Vermonters were left with a compromise of second best that failed to address the underlying lack of transparency. A one-year moratorium was applied to the collection and remittance of Cloud Taxation, and any retroactive payments collected (a number that was conspicuously vague throughout the process) will be returned upon appeal. Unfortunately, whether it was intended or not, by passing a moratorium the Legislature tacitly implemented a service tax that never was intended to be levied.

Over the next year GBIC will continue to work to clarify the issue and correct it moving forward, but until that time Vermont will have instituted and codified a broad-based tax on a growing service technology sector.

By the end of the session, the secondary packaging issue was generally regarded to be a no-brainer and with the exception of some posturing and point-making, it was included as a component of the “must-pass” miscellaneous tax bill. The VEGI program always raises a few more hackles. Economic incentives have sometimes been a point of contention among legislators, and this session was no different. After sunsets were proposed and eliminated, the program gutted and restored, there was compromise made that ensured the program’s near-term future with a five year extension on the sunset. Not the complete victory that we would have wanted, but an important action that will allow employers to make greater and more significant investments in Vermont.

And then it was over. The doors closed, the papers were filed, and legislators went home for another year.

Vermont has an Opportunity to Choose Prosperity

An op ed by Bruce Lisman

This financial crisis is a game-changing event that has Darwinian implications. We’ve already seen enough to know that something big has happened. And, it’s not done happening. Events this big are hard to process, but one sure thing is, that changes are under way wherever we look.

Countries we loved to applaud such as Ireland or Spain have been sent to the back of the pack and their citizens given a prescription for a lower standard of living. Countries we never spoke of, such as Peru and Estonia have an act we now applaud. The front side of the crisis brought ruin to countries, businesses, and individuals. The backside of the crisis brings a reversal of cosmic economic themes and a changed order of things.

We face headwinds that are bad for economic growth, bad for certain asset values, bad for personal income growth and bad for public policy that doesn’t grasp the changes afoot. All of this creates fabulous opportunities for those people and institutions that can see the outline of the new order of things. And, the history of America and for much of the world is that things get better over the longer term, no matter the dangers in the near term.

Adjustments are under way just about everywhere. Listen, Spain, Portugal, Greece and others are in the midst of re-structuring themselves and are giving recognition to the simple fact that a decade of spending programs was supported by economic growth built on an overheated financial system, real estate, and debt. Or put differently, it was economic growth that now seems illusionary.

The United Kingdom has promised to eliminate its budget deficit by reducing spending (80 percent) and lifting taxes (20 percent), and it’s being presented to the public in an alarming fashion—with remarkable transparency; Denmark is shrinking its social safety net; so is France; Sweden already has. Each of these countries is risking their citizens’ standard of living now in order to be ready for the next upturn. They are reversing a decade or more of public policy because revenues are lower than expected, deficits are large, and revenue growth may remain below expectations because of the structural damage caused by the recession.

In America the drive to reduce our deficit is setting us on a course to reduce current spending and long term obligations and placing standards of living at risk. Change indeed!

How is all of this different from what our states are experiencing? In some ways, it isn’t different at all. The same pressures exist: Large deficits from the sudden reversal of fortunes, the prospect of a drawn out recovery, a restive and angry citizenry concerned about the economy, jobs, how we got here, and what happens next. There aren’t riots here; instead, our citizens are demanding substantive change and demanding a new and different type of government. Sure, the Tea Party is one version of protest; but, so are the approval ratings of our national government and both political parties, and many incumbents at the state level. It reflects anger at a government that has become distant to its own citizens.

If the decades of the late 1990s and 2000s favored the states as recipients of vast increases in federal funds, higher real estate related taxes, higher income taxes, and capital gains taxes–then the years ahead will be very bad for most states, including ours as those trends are reversed.

Still, in Vermont we aren’t flat-lining like California or Illinois; our government isn’t dysfunctional such as in New York. And, we didn’t suffer the steep economic decline that has hurt other states. That’s good, and not the only thing that’s good in Vermont. We have a very diversified and sophisticated economy, a pair of powerful economic clusters—our hospitals and higher education institutions are outsized in our economy. We have among the best public education systems in America and a brand that is distinctive and well known.

Those are the kinds of things that dreams of becoming a more powerful center for job and income creation can actually be built upon. The states, including our own, and the feds are pursuing short-term remedies for a sluggish economy; simultaneously, our federal government and many states are attempting drag baseline spending back to 2008 or even earlier levels.

We should seize this moment to think bigger and imagine a bolder strategy that moves Vermont on a path toward becoming an economic powerhouse, but one that does not abandon values we hold dear. We can and should marry those essential Vermont characteristics of pragmatism and caring for our neighbors in support of that that essential theme: prosperity.

PROSPERITY NOW

Jobs are good, but economic prosperity not only sounds better, it is better. It requires a thought process that recognizes that things today are different and don’t resemble the recent past, and require public policy that has a different orientation.

Think about the value of economic prosperity; it’s the end product of a vibrant economy. All kind of jobs are created and it means rising incomes for our citizens. Of course we want jobs, but 94 percent of Vermont workers and 91 percent of American workers have jobs. Beneath the current malaise is a far more basic theme: We want a return to the security and insulating cushion that economic prosperity creates; and, the sense that tomorrow will always be better than today.

Economic prosperity is a magnet for workers—in our country, the labor force goes where the jobs are. Economic prosperity creates the ladder for the poor to reach economic health; it can supply jobs for those who want them and with that, we can imagine solving issues around crime, substance abuse and domestic violence, events that take place where jobs are absent. It’s a vibrant economy that provides the means to clean our lakes, train our unemployed and underemployed, protect those who need protection and give help to those that require it. It literally is the fuel for our “Social Contract.” There is overwhelming evidence that the quality of life correlates highly with measures of economic prosperity.

It’s a theme of transcendent importance—it literally towers over everything else that we can imagine. It isn’t equal to a quality education system; it doesn’t share the spotlight with affordable housing or saving dairy farmers, or promoting alternative energy. Without economic prosperity we’ll be hard pressed to afford any of those very good “wants.” But, economic prosperity is a theme that is virtually unknown to states and scary to governors and legislators more comfortable with near term goals and decisions sometimes made without full context or without a way to measure those decisions.

Is it worth pursuing this theme of economic vibrancy? Of gathering a consensus that draws citizens and its government to a common cause? It is if you believe that the consequences of financial crisis can be both great and well, deadly. So, imagine then, our state choosing this moment, at the very edge of an unknown future to embark on a bold path that says with clarity of purpose and mission that we will pursue economic prosperity on behalf of our citizens, but in so doing we will not abandon our values! In doing so, we will also dispense with those arguments from the right that would decry the social benefits created by our economy and the left for decrying the value of the economic machine that produces those social benefits.

Let’s choose a new path that recognizes our strengths and values. And, let’s choose it because we can’t afford the old.

Getting on the path to prosperity:

• Build a strong consensus in our state for pursuing economic prosperity, a transcendent theme central to our long term health. No creaky planning sessions, please. This is the moment that requires gifted leadership and an enlightened and enthused legislative body.

• Support that theme by building a different kind of government. One that offers maximum transparency of its budget. It would show where the money is spent, how it is spent, and what we expect to accomplish. But, it would also tell us how well it is spent and compare goals with results. Move to a budget logic that measures results, puts accountability into the mix, and declares how well we serve our citizens. Transparency and accountability will neutralize the high tax burden that is likely to remain; it would re-enfranchise those who pay the lion’s share of taxes, inevitably it will create efficiencies, and improve the quality of our government. Structure abhors change; accountability undermines structure.

• Let’s focus on the elements of our Social Contract. It’s a capital S and C. We believe in it. It matters to us. It defines us. However, we can’t measure its size, its quality, or its results. If it matters so much, then we should understand it and take pride not in its size, but in the quality of its work. Protecting “vulnerable Vermonters” is a good cause, but a poor defense of spending when we are ignorant of its results.

• Let’s build an economic environment—the platform upon which our businesses operate—that is welcoming to employers of all kind. Give up the notion of choosing favored businesses or attempting to see a future we’ve already proven we can’t predict. Let’s not merge social policy with economic development, nor pursue legislation that has unknown consequences to our economy.

• Let’s focus on the full mosaic of what a strong economic platform includes. Tax structure and affordability matter a lot. So do 15 other items that include predictability of regulation, the quality of transportation systems, access to broadband, access to arts, public education, availability of a well trained workforce, to name some.

• Recast Economic Development as the Department for Economic Prosperity. Recharge it with a higher calling, redevelop it as a consultative service to our businesses and give it goals that support economic prosperity.

• Capital availability marks the limits to growth; make our sponsored capital providers—VEDA and VEGI—more robust and broaden their mandate. Eliminate ‘Corporate Welfare’ from our official vocabulary and replace it with ‘Corporate Accountability.’

• New products created from R&D pack a powerful punch; expand VCET’s capacity and make it Vermont’s incubator by opening in Southern Vermont.

• Move to a principled based regulatory framework that declares what the regulation is attempting accomplish and than provide bright line interpretation so that the purpose is not compromised, even as we provide clear paths for applicants.

• The quality of the workforce is the fuel for economic growth; re-cast job training by consolidating and streamlining the myriad of programs. Offer training to anyone receiving state funds so they can upgrade their skill sets. Get them (and us) ready for the next up cycle.

• If tax structure is so important—it’s not only the plumbing for the government it is the biggest long term influence on its citizens—how can we have a ‘Blue Ribbon Commission on Taxes” without a grand theme underpinning it? Who provided context? Direction? A strategic aim? A purpose? This is a “are you kidding me moment.” This is planning without context; it ignores the interconnected nature of decisions and the importance of … well, purpose. Three very smart and passionate people can’t overcome a bad planning exercise. Recharge that committee with a growth orientation and send them back to focus on property taxes.

• Let’s look at the hospitals and higher education institutions with new perspective—sure, as economic stabilizers, but also economic engines.

Accept these concepts and you accept the notion that we need a strategic calling in our state. It’s a calling that recognizes the interconnected nature of decisions and one that dispenses with shallow arguments that are a call to meetings but little action.

Israel wanted to be an economic powerhouse; it is. Indiana chose to become their version of an economic powerhouse; it is. America chose to rebound from 9/11, a divided country in the 1960s and 1970s, and a Great Depression. It did.

So can Vermont.

Bruce Lisman, retired chairman of the JP Morgan Global Equity Division. He previously served as a senior managing director of Bear Stearns Companies from 1984 to June 2008. He is native of Burlington.

College & University Students Seeking Summer Internships in Vermont Businesses

Vermont is a wonderfully unique place; we’re reminded of this every time we step out of our doors and take in a sight of the Green Mountains, of our expansive Lake Champlain, or 30 inches of fresh powder in March. Most of us who have chosen to call Vermont our home understand these things, both in their beauty and in their challenges. But what has become apparent in the past few years is that the people who have chosen to call our unique landscape home have been pushing the demographics of our state higher. In more ways than one, Vermont’s present (and future) workforce is getting older.

Yet while our demographics show an aging population, Vermont has more than 30,000 students enrolled in our 23 institutions of higher education at any given time. Many of the employers state there is a challenge in finding top quality talent to fill vacant or nascent positions, while at the same time, many college and university students see a dearth of opportunity within the state. Very clearly there is both demand for, and supply of, talent in our state. The challenge, then, is to help this labor market reach equilibrium; that is, to pair eager young talent with companies that have immediate and real needs for intelligent, trainable employees.

In an effort to help bridge this gap, the Vermont Technology Council is proud to usher in the start of the second year of their Statewide Internship Program. The program partners with organizations across the state to develop communication and placement between higher education students and employers. Students are presented the opportunity to get in-company training that develops skills and the experience to hit the job market upon graduation, and employers benefit from access to motivated, intelligent students looking to match their education with the needs of Vermont businesses.

The Vermont Technology Council has recognized that pairing current students with future employers gives both parties a competitive advantage in their respective goals. The internships being developed are meant to best simulate the demands and rigors of the post-graduate world. The summer internships are paid positions that create necessary buy-in from businesses, while creating a higher expectation of added value from each student. Developing this pipeline of talent not only provides a framework for future business success within Vermont, but by exposing students to the opportunities already here, there is great potential to retain and develop a higher number of young professionals.

Any business that employs technology in their operations is encouraged to create an internship; positions may focus on any aspect of the operation, including sales, engineering, marketing, etc. The pool of eligible interns includes any student in a Vermont institution, as well as Vermont students in out of state colleges and universities. In an effort to support employers and to make the process as simple as possible, the Vermont Technology Council has appointed Michele Ferland Kupersmith as the Program Director. Ms. Kupersmith can aid in all phases of the internship development and marketing, and acts as a liaison between employers, partner organizations, and economic development organizations.

For more information, the Vermont Technology Council’s Statewide Internship Program can be found online at: http://www.vttechcouncil.org/internships.html.

New Year’s Resolution

It’s the start of the New Year, and for most people struggling to wake up from their food induced holiday coma that means one thing: New Year’s Resolutions.  NYRs can be rather tricky; emboldened by everyone else jumping into the same boat we often tend to set the bar a little high for ourselves; am I really going to go to the gym every morning before work and cut out carbs after eight?  An insatiable love of pasta and a number of late-starting football games have pretty much ruined those already, but there’s one resolution we truly hope for: that the new Administration and Legislature will work to solve our state’s challenges with focused and meaningful governance from the statehouse.

You might say that it’s an odd resolution given that as outsiders we have limited control over what is and is not discussed in the chambers and on the floor under the dome.  And yet, it means far more to me than cardio at 6am.  The reason is this: the solutions required to cut my own bloat are multitudinous and of my own design, while those required to handle what has swelled to a $150 million shortfall are complicated by history, connections, interests, economic and social wellbeing, and (of course) cost.

Therein lies the problem: without a strong plan and steadfast leadership, decisions are delayed and agendas become labyrinthine.  The challenge is that we don’t get a chance to set our own goals: either we close the deficit or we accept an unbalanced budget creating further instability next year.  With a new Governor coming into office, there are high hopes that bold steps will be the name of the game; however, as a state we need to realize that solving the $150M nut is not just a matter of cutting large swathes of budget.  There is a significant amount of value for our future in understanding that we must also focus on growing out of our deficit.  Strategically placed reductions will make government leaner, but if we don’t also fuel our economic engine and put it on a focused path, we will find ourselves stagnating.

GBIC is working with a consortium of partners on a HUD Sustainable Communities grant that will include an outreach process and document development for a strategic industry sector analysis and economic plan for Chittenden County.  These reports will have the capacity to drive not just discussions about how and where our economy can and should go, but to encourage and embolden action.  These results will not be immediate, and the development of the projects will likely take some time, however, as these processes and projects develop let me humbly recommend a resolution to employers of all sizes in the greater Burlington area: stay in contact with your legislators.  Let them know to call you if they have a question on a bill that may impact your business, and be sure to pick up the phone when they do.  Be proactive in ensuring that the on-the-ground effects of legislation are understood in the appropriate committees; GBIC and the LCRCC are continually working to message legislators with your voices, but nothing speaks more clearly than hearing it directly from the people who create jobs.

If you have questions regarding contacting your legislators, or would like help in finding the appropriate channels through which to voice your opinion, please don’t hesitate to contact our legislative team of Dawn Francis ([email protected]) and Cathy Davis ([email protected]).

Vermont’s Tipping Point?

Malcolm Gladwell took the concept of “The Tipping Point” out of the realm of epidemiologists and made it a must know phrase with his book by the same title.  Mr. Gladwell sought to describe the underlying factors that can make large impacts on social phenomenon; comparing fashion trends to disease epidemics in their often sudden rate of impact and ubiquitous presence.  The tipping point that Mr. Gladwell is fascinated by is not a new concept, but the depth of analysis presented in back-of-the-napkin format made his bestseller its own cultural epidemic.

In Vermont, employers have been trying to describe our current challenges as their own kind of tipping point.  The challenge is that you’re never quite sure where or when the tipping point will come into play.  For the state, we can see challenges looming: the bankrupting of our unemployment fund clearly shows a broken link in our social support system and our state deficit is currently on the frontlines as a target of concern, but whether or not (or when) one of these or the other will actually lead to a rapid decline in our socioeconomic sustainability is not known.  Within the business community, this discussion can be heard through the quiet comment of “death by a thousand cuts.”  It’s often a challenge to pinpoint that single thing that could cause a company to close its doors, either permanently or to complete a move to another state with perceived higher return on investment, however, we know that for every individual employer that limit exists.

It is often argued that small changes and tweaks to our tax rates, regulatory system, and other associated business costs have not made a dramatic impact on the number of high-wealth individuals in the state or on the overall composition of our economy.  And while this might have some historical validity, it fails to consider any sort of limit on when a slow trickle turns into a broken dam.  Yet these are things that are repeated as challenges on par with healthcare reform, economic competitiveness and power supply quality and rates.  The important thing to remember is that for each of these factors, there is an equal opportunity to effect positive change.  The movement towards a cultural epidemic should ignite a sense of opportunity as much as one of concern.

Part of the challenge is finding those factors, the “agents of change,” that can catalyze rapid restructuring.  The goal is to find and support those factors that can rapidly add value to a system that is otherwise in equilibrium.  We often think of these actions as revitalization of existing resources or in the creation of new assets with broad value.  An example might be the factors behind the expansion and renovation of the Dealer.com technology campus on Pine St.  The 300 person expansion is being heralded as a focal point of a growing technology community in the South End of Burlington that includes other Vermont employers such as Google analytics experts EpikOne.

Critical in the decision making process for that single employer was the value, both real and perceived, of the state’s three premier economic programs: the Vermont Employer Growth Incentive, low finance rate money from the Vermont Economic Development Authority, and the Vermont Training Program.  Dealer.com met their positive tipping point and decided to grow employment in our state 100%.  What we need is to promote a cultural shift that sees strength in retention of employers and increased growth in the addition of new companies, both from Vermont entrepreneurs and from out of state employers looking to be a part of our economy.  Governor-Elect Shumlin has been open about the fact that he has asked every one of his appointees what they will do to create jobs under their purview.  The question is the right one to ask; what we need is the support, vision and strength of implementation to ensure that we tip the scales towards growth of our value-adding employers – without strong action, we stand to tip in the other direction.