BROWNSVILLE, RGV – Other large metropolitan areas with a population of 2.5 million and above have an easier time developing partnerships between government, universities and private corporations than the Rio Grande Valley does.
That is the opinion of Dr. Mark Kroll, dean of the Robert C. Vackar College of Business & Entrepreneurship at UT-Rio Grande Valley.
Kroll made the point at an advanced manufacturing summit after Chris Wilson, deputy director of the Mexico Institute at the Wilson Center in Washington, D.C., spoke about involvement of the private sector as a key ingredient that is missing in the Valley’s efforts to take its economy to the next level.
Talking about comparable large metro areas to the Valley, those with 2.5 million people, Kroll said: “Those kinds of population centers tend to have an easier time of developing those partnerships with the private sector.”
Kroll said this is one important factor Valley leaders we need to keep in mind. “While we have a large population center here, we are not the headquarters of major multinational corporations. We don’t have the Halliburtons here. What we have are their cost centers. Those maquilas across the river are all cost centers.”
Among the major corporations producing goods in the maquila plants in Tamaulipas, according to Governor Francisco Garcia Cabeza de Vaca, are Mexichem, KSS, Emerson, Du Pont, Dura, Panasonic, ZF/TRW, Sony, Sabic, Posco, Motorola, LG, Valeo, PPG, Jabil, Eaton, and Sanmina. Most of these have plants just across the Valley in cities such as Reynosa and Matamoros
Among the countries represented in the maquila plants in Tamaulipas are the United States, Canada, France, Germany, Italy, Japan, South Korea, Chile, Netherlands, Venezuela, Sweden, Switzerland, United Kingdom, Spain, Belgium, Luxembourg, and Panama.
Kroll said the managers of the maquila plants in Reynosa and Matamoros do not have the authority to “engage in broad, long term partnerships” with regional leaders in the Valley.
“So, what are going to have to do is reach outside the Valley and impress upon decision makers in other communities that investments here are worthwhile because you will need to build these workforces,” Kroll argued. “We can’t get in the car and drive over to the headquarters of X, Y, and Z because they are not here. Relative to other metro areas, that is a distinct difference we have.”
Learning from Querétaro
The advanced manufacturing summit was hosted by Congressman Filemon Vela and held on UT-Rio Grande Valley’s Brownsville campus. Wilson, of the Mexico Institute, participated in a three-member panel discussion with Dr. Alexander Domijan, dean of the college of engineering at UTRGV, and Gilberto Salinas, executive director of the Greater Brownsville Incentives Corporation.
The panel’s moderator, Ron Garza, executive director of the Lower Rio Grande Valley Development Corporation, asked Wilson what other community the Valley might learn from as develops its economy. Wilson responded that when it comes to best practices, the Valley could learn a lot from Querétaro, Mexico.
“In terms of best practices, the one that jumps out and gets used a lot in terms of Mexico is Querétaro, which is between Mexico City and Guadalajara. It is experiencing great growth right now,” Wilson said. “People talk about two Mexicos. The Mexico that has growth rates that look like China’s. And the Mexico that has pretty stagnant growth. Querétaro is helping drive that, the China-level growth rates.”
Wilson has studied the development of Querétaro. “Aerospace is the industry that has really ignited growth there but there is definitely automotive as well,” he said. Manufacturing plants in the state of Querétaro do not build complete airplanes just yet, Wilson said, but they do make fuselages.
“It was because the community was ready for this, the government was ready for this. They built an aerospace university, with a combination of public funding and private funding. It was the coming together of the three pillars that people talk about all the time, universities and educational institutions, the government and private industry,” Wilson said, explaining Querétaro’s growth.
“All three of those coming together to be on the same page, working towards a single goal. That is the core of it. Once you have that, once you are actually doing that, all sorts of things can happen. Including landing a major company in conjunction with creating a pipeline for the workforce that that company needs. That is one example that we could look at in terms of ways to push forward.”
LRGVDC’s Garza asked if the Valley has all the building blocks in place to do something similar. All that might be missing, he mused, was “coordination.” Wilson said no, a disadvantage for the Valley is a lack of sufficient participation by the private sector. Wilson is working with Kroll and Brownsville businessman Carlos Marin on a presentation that will show how advanced manufacturing could flourish in the Valley.
“As far as I know economic development organizations that are working in (the Rio Grande Valley) are working basically with public funding. I don’t see the private companies coming in and saying, we believe in what you are doing, we believe that what you are doing is creating the workforce that we need, is adding sufficient value, we should not only be sitting at the table having a conversation with you but we want to actually throw money where our mouths are, and actually spend some money to build these institutions that are going to develop the region,” Wilson said.
“I think that yes, the pieces are all here, there is no doubt about that the pieces are all here. But I am not sure that they connections between the private sector, government and educational institutions are sufficiently activated to drive the region to the next level. It is still a challenge.”
What is referred to here as “economic development” is actually business development; true eco. development deals with socioeconomic outcomes, rather than in business transaction terms. What is your measure of “success”? Business metrics & the built environment, or human capital development in real terms? The first model is advocated by “urban” planners, the second by CED practitioners, which is Community Economic Development.
Yes, both are important goals, but “economic development” is heavily subsidized by public dollars; what does the public get in return? It’s getting the appearance of success, but the real benefit goes to the private sector. My city of San Antonio is a case study in this regard: we’ve had “economic development” success over 30 yrs, yet we remain a structurally poor city, ranking very high in economic segregation in national statistics. On paper, we are a success story, but in reality, let’s not talk about it.
Let’s not forget that “economic development” is a public term, not a private term. Businessmen don’t go into business to do “economic development”, they do so to make a net profit. Public officials are conflating public with private terms because they do not understand basic planning concepts, their objectives, or its metrics. Words & ideas matter!