The old, legacy economy is passing. Old and large companies are continuing to shed jobs. Young and small companies are creating them. Nothing makes the point so well as the recent decision by US based and Aussie founded company LiveTiles to create an Australian regional HQ at Geelong. It will mean 500 jobs for a region struggling with the decisions over several years of traditional manufacturers to abandon ship and leave the region. Four years ago both Ford and Holden gave notice of their intentions to cease making cars in Australia.
Governments often react to such setbacks by relocating their own agencies or at least public sector jobs to affected regions. This is ok, but much better is to work with young star “higro” companies, preferably without the silly use of incentives.
Tech companies are especially helpful to transitioning economies. They bring skills and they embed skills. And, perhaps most important of all, they reward skills. Attracting companies that won’t up and leave later is to be prized. Even better are those that create new value for the local community and the economy. Creating “innovation hot spots” should be front and centre in the thinking of economic developers and strategists in government.
The story is well captured by media firm Smart Company which publishes StartupSmart News and Analysis. See the link.