By Michael C. Randle
Who said, “Eighty percent of all new jobs are created by existing industry?” Really? Wrong and lately it hasn’t even been close! We have heard ad nauseam for decades by old school economic developers and politicos the fable that 80 percent of all new jobs are created by existing industry. Existing industry, as in those with plants or offices that expand in the same place or nearby.
New, as in a new project that has not operated before in the place they have chosen in the South. That could be a greenfield project built on open land or a certified industrial site, or a new user of an existing building that is available in that particular county. Of course, many of those buildings were constructed as speculative buildings to lure industry as they are an important recruiting tool.
Maybe 80 percent of all jobs created in the South were generated by existing industry 30 to 50 years ago, but no more. It is simply not true. New vs. Expanded projects are a different percentage in the South every year now. In other words, the percentage changes and is in flux in any given year depending on industry location trends. To believe the 80 percent is the standard is absurd.
The South is home to 90 million new people over the last 70 years. New companies followed them.
I can take a guess on why the 80 percent has become fiction and no longer fact. For one, when I was born in 1955, the Northeast, Midwest, and the South (not the West at the time, as it was the lowest populated region in the country) all had about the same population. Back then, all three regions had about 50 million residents each.
Today, the South is home to more people than the Northeast and Midwest combined. That means millions of people have relocated here and thousands of companies have announced new projects in the region over the last five or six decades. Economic development projects follow the people. Many of those over the last 10 years have been new economic development projects.
Fact is, the last five years or since COVID, new projects have outbid expansion and relocations in dominant fashion. Think data centers and A.I. and all of their suppliers. Think elephant in the room as the A.I. industry is dominating deals throughout the region.
