Job talk: St. Louis must find its competitive advantage, says Webster University's Benjamin Akande
This article first appeared in the St. Louis Beacon, Jan. 8, 2010 - As the U.S. economy heals from the worst recession since the Great Depression, the St. Louis region must define its new competitive advantage, says Benjamin Akande, dean of Webster University's School of Business and Technology.
"This is an opportunity not only for St. Louis but for many cities around the Midwest,'' Akande told the Beacon during a recent interview. "The cities that are able to embrace creativity and innovation and refuse to remain flat-footed are going to own the future.''
Akande said the region must be forward-thinking in developing new strategies to create new jobs.
"What are we going to call our competitive advantage? What can we do that nobody else can do -- that nobody else could do if they wanted to,'' Akande said. "It begs the question: Is St. Louis going to be relegated to the past? Or, are we going to be prepared to play an even more important role in the area of health care, in the area of alternative energy, in the area of new technology in rails and transportation that will replace the old technology of automobiles.''
Akande believes that many of the jobs lost in the recession were going to be lost eventually due to the competitiveness of the global economy. Companies will transfer operations to other places where their costs of doing business are lower -- and there is no way to mandate that they stay, he added.
The local auto industry took a big hit, as did Anheuser-Busch and Pfizer after those companies were involved in major mergers, he said. But he points to recent expansions of local companies such as Edward Jones, Express Scripts and the Centene Corp. -- despite the recession -- as a sign that St. Louis could be finding a new competitive advantage.
Akande said that developing a new strategy is not all up to the government.
"It's going to take individuals, foundations that have been fortunate to survive the recession and have significant resources available to them to be able to say, 'This is the area where we're going to plant some seeds that will help St. Louis,' '' he said. "We have an opportunity here. Will this opportunity be allowed to pass us by or are we going to grab it and make it something significant?''
Here are more of his perspectives on unemployment and the local economy:
On local re-employment
Although there are signs of the recession ending, it will be some time before companies begin hiring again, Akande cautioned.
"This is a very steep valley; we're in deep. For us to be able to emerge out of it is going to take some time, but we're starting to move out of that valley,'' he said. "A lot of organizations are very cautious about hiring again. They're stretching themselves, trying to do the work as long as possible with what they have. That is the missing ingredient of this recovery. I believe that we will not begin to see any sort of significant uptick on that until the middle of the first quarter of 2010.''
Akande said that as the region defines its competitive advantage, resources should be targeted to retrain workers in those areas.
"We've got a lot of folks who are unemployable because they don't have the skill sets that are transferable. They're sitting at home from the assembly line of Chrysler, and they're thinking, 'What do I do next?' '' he said.
On the recent White House jobs summit
Had he been invited to President Barack Obama's summit on jobs in early December, Akande said that -- among other points -- he would have encouraged reform of the federal capital gains tax.
"You don't punish people for investing in companies and stocks, and you don't levy huge taxes on them when they make these kinds of purchases or when they sell them,'' he said. "I think that would be a great boost especially to small businesses in the U.S. looking for fresh capital."
Allowing businesses to expense immediately up to $250,000 of certain capital investments (such as equipment) would also help with business cash flow, Akande said.
"And, again, what this does is it gives small businesses a cover and would reduce the cost of capital and may eventually spur the employment market, which, in essence, is frozen right now,'' he said.
Akande would advise against another economic stimulus plan similar to last February's $786 billion package that he said was designed around "a grab bag of money dedicated to so-called public works and funding that have done nothing so far to really help revive the economy.''
"The most significant portion of that money is yet to be spent,'' he said. "The problem with that is by the time it is spent, it's not going to have the impact it was meant to have. Compare that to China that was able to infuse significant spending in areas where they were able to boost their infrastructure and economy. And as a result, China is essentially out of the recession.''
Akande would also warn against unlimited deficit spending.
"It's not just spending but good economic management and decisions by the government -- and holding people responsible for what has put us into this mess in the first place,'' Akande said. "I would like to see a very strong financial regulation put to vote in the next few months that would ensure that what has happened will not happen again.''
On the Pfizer layoffs
Akande believes the region should be actively working to provide an "economic blanket" for scientists and researchers who want to create new businesses in the region after they are laid off from Pfizer. Most existing unemployment programs are tailored toward assisting workers with less education and experience.
"This is an opportunity for St. Louis, and I want to believe that there is a conversation taking place at the very highest levels of the city and county about what to do,'' he said. "What do we do in terms of making sure that we can harness their skills and keep them in St. Louis? What are some of the possibilities? Are they even talking to the scientists as to what some of their ideas might be? Do we set up a think tank that enables these scientists to take their ideas and convert them to businesses? We provide offices, facilities and resources to assist those who have ideas about creating the next Pfizer.''
Akande said he worries that, in fact, little is being done to ensure that St. Louis retains these highly skilled workers.
"They're going to go somewhere where the opportunities exist,'' he said. "Where the chances are stronger that they are going to be able to regain their careers and lives.''
Akande said he has met a number of Pfizer employees -- many of them top scientists with doctorates from some of the top schools in the world.
"You're looking into their eyes and they're telling you, 'I've got credentials here. I've worked hard to be where I am. I'm a contributor and I'm out of a job,' '' Akande said. "And they look around and there's nothing. For me I think it's pretty devastating for St. Louis because I don't think St. Louis knows what to do with them.''