December 2006

First it’s our kids, then it’s our money

Economics and ergonomics may sound a lot alike but they seldom tie together in any meaningful way unless, of course, you live in Pennsylvania.

Loosely speaking, economics is primarily about money and the ability to retain assets while ergonomics is more geared to the physical consequences of things like repetitive motion. Where they come together in Pennsylvania is in a common gesture that people in our neck-of-the-woods seem to demonstrate far too often.

Waving goodbye.

Much attention has been paid over the past decade or so to the number of young people who grow up here, become educated here and then take-off for better opportunities, better climate, better anything. I had someone tell me recently that his daughter had moved to Minnesota to be closer to the Mall of America. That’s one determined shopper with a rather unusual set of priorities. I’m not even sure we should wave goodbye to her.

The mass exodus of our young people has been deemed the “Brain Drain” by those creative types in Harrisburg who have proven to be more adept at developing clever names for our problems than they have in helping to solve them. If you look closely at the legislative initiatives developed since the coining of Brain Drain, you’ll be hard-pressed to find any that would provide incentives to keep young people at home. When your state is regarded nationally as one of the most hostile to business growth, word gets around. And our young people have heard it.

Goodbye.

While lamenting that loss and fretting over the fact that very little new money is coming into Pennsylvania comes the realization that buckets full of the money that’s here are being dispatched elsewhere. We’ve always suspected some leakage. Yet somehow we were never sure how much. And statewide, we still don’t know. But we’re hot on the trail.

The “we” in this case is our Chamber’s Business Opportunities Committee. Nearly two years ago, that committee was given a videotape detailing an effort by several chambers in the Greater Lehigh Valley to ascertain how much business spending was taking place outside the Greater Lehigh Valley. Committee members were so intrigued by the information in the video that they called together representatives from the chambers in the other six counties that comprise the Alleghenies region and the “Chambers of the Alleghenies” was born.

The first project of the new group was to issue a survey to the Chamber businesses within the region, asking a variety of questions related to business purchasing. The project was overseen by two professors from the University of Pittsburgh at Johnstown who had conducted similar surveys, knew what type of information was valuable and what level of participation was necessary to gain accurate results.

Those results, announced at a news conference a few weeks ago, were staggering. Our seven-county region loses $7.2 million-a-day on products and services that businesses purchase outside the region. That’s figured on 365 days-a-year rather than just on a five-day workweek. And that’s only on discretionary spending and not on items such as utility costs. Consumer spending, which was not included in this survey, probably accounts for lost revenues of about a billion more.

The sunny side of the situation, if there is one, is that we might be able to turn some of those dollars back around. Unlike the more complicated task of reclaiming our young people, which depends to a large degree on political wheeling-and-dealing, we simply need to put purchasing in a perspective where it hasn’t been before.

A high percentage of the survey respondents admitted that they either haven’t developed a mindset for buying locally or they aren’t aware of what products and services exist here that currently match their buying needs. Nearly 80% indicated that they would be open to regional purchasing if the costs were comparable. It then becomes the responsibility of the sellers to make sure that they take care of their end of the bargain.

By retaining even a modest 5% of lost dollars from business purchasing, the region could add nearly 11,000 new jobs. Some of those jobs might even be filled by young people. Imagine that. The task ahead is a formidable one but also highly attainable. At a time in our history when it seems like we have so little control over the things that matter most, we’ve got a great opportunity to impact the quality of our lives and those who come after us.

We need to do it before any more of our future slips away. We need to do it so we can stop saying goodbye.

Past Chamber Notes

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