When Outsourcing Works
Oklahoma City successfully farmed out economic development.
Many public services are now outsourced. From education and transit to garbage pickup and park maintenance, there’s a notion that nongovernmental organizations can do things better. Certainly, privatization has seen its share of successes and failures. But one of those successes is economic development -- at least in Oklahoma City.
Since the beginning, economic development in Oklahoma City has been handled not by a public entity as in many cities, but by the Chamber of Commerce. Putting the chamber or other private groups in charge of economic development has long been common at the local level. And as my colleague Alan Greenblatt wrote in these pages late last year, it’s starting to catch on in states, too.
Outsourcing job creation can be controversial. Private economic development agencies have been accused of favoritism and sweetheart deals. But Oklahoma City’s approach has largely been free of these accusations. According to Roy Williams, president of the Greater Oklahoma City Chamber of Commerce, the city has always relied on its business establishment to make major decisions about growth. It contracts with the chamber to do economic impact studies, develop its workforce, recruit outside businesses, assist with site location and issue permits, among other things.
This makes sense, given the intersection between economic development corporations (EDCs) and chambers. A typical EDC aims to dictate a city’s growth agenda by determining the industries and locations worth investing in. Chambers collect donations from businesses and then provide them with information, networking opportunities and lobbying. There is enough overlap that merging both organizations would seemingly reduce duplication. That’s been the case in Oklahoma City, says Mayor Mick Cornett. By contracting with the chamber, the city pays solely for services, rather than having to fund its own EDC office and workforce.
Cornett says the partnership prevents cronyism by “getting the politics out of the economic development side.” In many EDCs nationwide, the staffers are political appointees, and the target businesses are large and well-connected. But chambers -- at least local ones -- have long been more egalitarian, representing businesses of varying sizes. This has compelled them to advocate for a better overall business climate, rather than one that carves out special favors.
The chamber’s role has also enhanced the already-strong relationship in Oklahoma City between government and business. Williams, who frequently travels with the mayor, says that in other cities he’s often found that “the business community and governmental entities have no relationship, and in fact sometimes are at odds.” In Oklahoma City, he says, the two fit “hand in glove.”
Williams says this is why Oklahoma City has, since 2000, been solidly in the upper half for job and population growth among America’s 50 largest metros. The city has also enjoyed one of the nation’s strongest downtown revivals, thanks to several public-private developments organized by the chamber.