With Better Capital Investments Come Rewards

Article excerpt

Byline: GUEST VIEWPOINT By Bryce Ward, Philip Taylor and Ed Whitelaw

At Wednesday's 21st annual economic forecast sponsored by The Register- Guard and the Eugene Area Chamber of Commerce, most attention will focus on forecasts of Eugene-Springfield's housing permits and prices; Lane County's jobs; and Oregon's jobs and housing prices for New Year's Eve 2012.

Short-run forecasts of such measures are inherently frustrating. First, they're proved wrong more often than not. Second, and more important, there's nothing we in Lane County - or for that matter, Oregon - can do to change the actual outcomes by Dec. 31.

Far beyond Oregon's boundaries, others and the forces they engage control our short-term economic fate. During 2012, we are, for the most part, birds in a badminton game.

But in the long run - measured not in months but in years, decades, and generations - we can improve our economic lot.

Economies are built on four forms of capital: human capital (workers and their education and skills), physical capital (private and public machines, buildings, roads, water and sewage systems), natural capital (mountains, valleys, rivers, coasts, grasslands and forests) and social capital (social networks and norms, laws and political systems). The conclusions are straightforward: more productive workers, firms and governments than in other cities means more economic growth - higher wages and more jobs.

So, how's Eugene- Springfield doing? Its per capita income is 10 percent below expectation. In this short column, we're offering only illustrative opinions, but they're highly suggestive of a better long-run strategy to make our urban area collectively richer and more prosperous.

And how's the Eugene-Springfield area doing with its investments in the four forms of capital? Consider them one at a time, while keeping in mind, of course, they are complements, not substitutes. No amount of industrial land, for example, could compensate for appreciable disinvestments in Eugene-Springfield's human capital.

Human capital: The Register-Guard recently reported that "just 32 percent of Eugene's high school students are taking a full load of courses." And ECONorthwest recently found that 21 percent of students in the Eugene, Springfield and Bethel school districts are chronically absent. Light course loads and chronic absenteeism most definitely qualify as appreciable disinvestments in Eugene-Springfield's human capital.

Physical capital: We find several developments remarkably encouraging: the cluster of new office, educational and residential buildings in the immediate vicinity of the Lane Transit District's Eugene Station and the Eugene Public Library; LTD's EmX service, the 11th Avenue couplet, and, yes, even the bike lanes linking the university with Eugene's downtown; and a development company's interest in making a major investment in university student housing near 13th Avenue and Olive Street. …