I work in a small town in Montana that has struggled for years to solve the problem of “economic development.” It seems like everyone wants to talk about the issue as if it is something you can magically solve with more meetings, focus groups or quasi-governmental agencies. I disagree. It is the jobs, stupid. Create more jobs and the concept of “economic development” goes away. Jobs give people money, money gives people economic freedom. That is what economic development looks like to me.

Throughout the history of the United States job creation in mass has come from a few key areas. One solution has been to go to war. During World War II for example, 17 million jobs were created (it effectively ended the great depression). However, I’m doubtful I can convince our small town to invade the next town over as a job creation tactic.

Another solution has been to spend money on infrastructure. Our federal government is currently spending boatloads of money to stimulate the economy and job growth. I hate to be a downer but the last major study of Federal Highway funding (2004) showed that the equivalent of 34,000 jobs were created by a $9 billion expenditure (about $264,000 per job). Not a great return on an investment in my book and I am doubtful our town wants to borrow $26.4 million to create 100 jobs.

The best solution to job creation has historically been small businesses. Small businesses have created 60 – 80% of all the new jobs in this country over the past 30 years. If that is still the case (I have no evidence to the contrary), why don’t we focus on creating an environment that encourages small business job growth? That environment to me would include lower taxes, less regulation of business and better access to capital for people who want to start or expand businesses. While not revolutionary ideas, they certainly seem out of favor now.

So I think I will stop engaging in the endless loop of discussion about “economic development” and start trying to convince my small corner of the world to create an environment favorable to job creation. To me, it’s the jobs (stupid).