Winning Amazon is good, this is better

Think fast. How many jobs have left our state as companies have moved out over the last 24 years? How many jobs have we gained as companies moved in? Here are your options:

A. 0-1 percent of all jobs in the state

B. 2-4 percent of all jobs in the state

C. 5-7 percent of all jobs in the state

Most people choose C. But the answer to both questions is A. According to the National Establishment Time Series (NETS) database - the most extensive database tracking company movement - from 1989 to 2013, we lost 0.19 percent of our jobs as companies moved out of state and gained 0.18 percent of our jobs as companies moved in to our state.

Surprised? Given all of the negative press stories about businesses "fleeing the state," no one could blame you. But the fact is each year only a small fraction of our businesses move in or out of the state.

Instead, the vast majority of our job creation and loss comes from two other sources. The first is the expansion and contraction of our existing businesses. The second is the birth of new companies and the death of existing ones.

That's where our job challenge lies. Our rate of new and existing business growth has been below the national average for more than 20 years. The partisans will say that is because we have had too much government intervention or conversely not enough government intervention in the economy. But over a 24-year span that has seen both Democrats and Republicans control state government, it is clear that neither approach has made an appreciable difference.

So what is going on here? Part of the problem appears to lie with our mix of industries. Taken as a whole, the state's portfolio of industries can be thought of in the same way as a retirement portfolio. Perhaps that portfolio has a mix of faster-growing stocks together with more-stable, slow-growth investments. Illinois' portfolio of industries is much the same. We have a mix of high-growth industries and slow-growth industries. But our portfolio is too heavily weighted toward those slow-growth industries.

What can we do about it? The answer is not to get rid of our mature, slower-growth industries. These industries employ a lot of people and pay them good wages. We need them in our state. The answer is to have an economic plan that encourages an infrastructure, regulatory environment and workforce that will help our higher-growth industries to succeed as well.

That approach will produce far more jobs for Illinois than any company-attraction scheme ever will.

That doesn't mean we shouldn't try to do what we can to bring Amazon, Toyota and other new businesses to the state. To the contrary, winning Amazon would be great. But what would be better is to develop policies that focus on the businesses and entrepreneurs that are already here.

Dan Seals is the former assistant director of the Illinois Department of Commerce and Economic Opportunity.