“Smokestack chasing” is not a well-known concept. Not unless you work in any number of America’s local government offices, especially the economic development area. If this is the case, you’ve likely been involved in chasing for smokestacks or know someone who has.
One of a local government’s main objectives is to create jobs. Traditionally, and still to this day, this involves convincing medium and large firms to establish or relocate their factories (smokestacks) and offices to their city. This is accomplished through incentives, tax breaks, and a host of other mechanisms to sway a company’s decision. Yet, as the pandemic upended how many industries engage in their day-to-day business, some cities are turning their attention away from smokestacks and more to the individual workers themselves.
Greensburg, Indiana has a population of around 12,000 people. The largest employer is Delta Faucet Company and a Honda automobile plant. The town cites traditional small-town charm, low crime, and family-friendly living as its core advantages. Yet, it’s still Greensburg, Indiana with just 12,000 folks. Attracting smokestacks might be welcome by some, but it’s a long-shot proposition. Last year Greensburg employed a different strategy. Recognizing the exodus of people who could work remotely from big cities during the pandemic they initiated a program to offer incentives for remote workers to move to Greensburg. The only requirements were to be at least 18 years old, be eligible to work in the US, and have a remote position that was based outside of Greensburg.
The incentives to move to the sleepy mid-western town were $5,000 to cover moving expenses, a year’s membership to the town’s co-working office, a membership at the local YMCA, free babysitting services, and a host of gift cards to local restaurants and farmers markets. The deal was enough to pluck an Amazon engineer out of San Francisco, and Greensburg hopes to attract a handful of remote workers per year moving forward.
A similar program out of Tulsa, Oklahoma, might be the best example of this new economic development initiative. Tulsa Remote commenced in 2018, pre-pandemic, when remote workers only made up 3% of the workforce. By October 2021, an astounding 45% of full-time workers were managing their jobs remotely and Tulsa Remote rode the wave. While Greensburg’s talent attraction program depends on the city’s budget (paid for by taxpayers), Tulsa Remote is funded by the George Kaiser Family Foundation. The foundation is based in Tulsa and finances a range of programs designed to enrich civic life.
Estimates point to Tulsa Remote bringing 2,400 plus folks to Tulsa by the end of this year. Last year the program attracted 1,360. The Economic Innovation Group revealed that for every two people Tulsa Remote brought to the city, one new job was created. The program has earned itself national prominence and is being replicated in similar size towns across the US. The clear advantage is a well-funded philanthropy financing the recruiting and retention costs, but that does not mean cities aren’t interested in bolstering their development initiatives.
While this new form of “smokestack chasing” is turning heads, economist Enrico Moretti reminds us of some hard facts. When an average size tech firm moves to a town, a new high-wage tech job is capable of creating five more jobs in the service, education, and healthcare fields. Smokestacks are still where it’s at, but economic development folks now have a new tool in their box.