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Let’s Recruit Travel Agents

Monday, October 3, 2016 5:25
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(Before It's News)

My recent encounter with how many people in Florida think about economic development made me think that if Joseph Schumpeter, who first wrote about how economic progress is a process of creative destruction, were at this conference his face would be red from the hundreds of face palms. Let me explain.

This week’s Future of Florida Forum provided an opportunity for state business and political leaders to discuss the path of the Florida economy. One speaker wisecracked about the days of “travel agents” and the economic ancient history they now represent.  But most of Florida’s business and political leaders at the conference missed the joke’s connection to creative destruction in the 21st century.

A quick primer: 

New firms are the primary driver of job creation in the United States.   We all know that after the first year many of these  young businesses fail, taking jobs out with them.  This is also called job destruction, a term sparsely heard at the forum. But at the same time, many succeed. And by bringing something new to market they often shift consumers from old products to new, causing job destruction in the old firms.  This “creative destruction” is how the modern economy moves forward replacing existing products and services with new and better ones.

Now, one would be laughed off the stage if they stated the title of this article because in hindsight we know those jobs are already gone.  No amount of “incentives” or “business climate” could have “created” travel agent jobs in Florida.  They were displaced because of improved innovation in travel scheduling and we should let them go because it represents economic progress in our economy.  

No one argued that we should selectively spend tax dollars in order to “create” travel agent jobs in Florida by financially incentivizing them to re-locate in Florida before they close up shop in a few months/years – it doesn’t make any sense – but that’s what our economic development strategy is doing. It’s the equivalent of arguing that we need more travel agents in the age of Expedia.  It is arguing for manufacturing jobs in the midst of the robotic revolution.  It’s borderline economic lunacy. 

On one hand, we accept that these jobs like travel agents become obsolete and go away, and even make jokes about them.  But for some reason, so many business and political leaders in Florida are hell bent on “recruiting” dying industry such as manufacturing to the state. Celebrating with ribbon cutting and balloons a firm moving from one location to another as if that “creates” jobs, while ignoring the real challenges to entrepreneurs and creating new startups—and thus really creating jobs—is counterproductive if not downright harmful.

Those Florida leaders are pushing back against the inevitable forces of economic progress and let me tell you, Florida will lose this fight.    The state’s economic development strategies are off base and will leave Floridians even more under employed than they already are. Net job creation is Florida is lagging, as Florida is ranked 24th out of 25 of the large states for growth entrepreneurship. We need truly new jobs to replace the ones that are not coming back.  

Fortunately, the Future of Florida Forum also highlighted some interesting programs designed to help foster bottom up job creation.  Florida leaders should be paying close attention to stuff like the Florida Institute for Commercialization of Public Research and The FAN Fund. The businesses fostered by these people will employ the Floridians of tomorrow.

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