What is so bloody hard about “regionalism.”

The idea that we would act in a concerted fashion for the betterment of the entire area just makes sense. Or, does it?

To the participants (government, businesses and individuals) cooperation is rational only when they benefit from it. Otherwise, it does not. Consequently, whether you are for or against “regionalism” depends on what “it” is and how it is executed.

The first problem is that there is no common definition of “it.”. The Kingsport Times-News recently published quotes from local leaders. The statements were generally on the topic, but the specifics were all over the board.

We must be definitive about what we are trying to do collectively (as opposed to those things individual entities are doing). Are we trying to create jobs? Are we trying to increase tax revenue? Are we trying to recruit employees? New residents?

To say, “yes” to all, is to make the statement meaningless. It will justify almost any action or inaction.

Second, even if we develop a common definition of “it,” we lack a way to translate a broad concept into execution. We need to understand how to “think” about the problem, a way to structure actions that promote regional growth without compromising the benefits currently derived from the existing order.

The fundamental precept is to appreciate the difference between absolute benefit and relative gain. Each actor is not only interested in how much they advance from their original situation, they want to ensure that they maintain or improve their position relative to everyone else (or at least those against which they measure their worth). City to city. Region to region. State to state.

This only makes sense. Free market economics is founded on the notion that each individual will act to maximize the benefit to them. Our objective is to optimize our wealth/revenue, constrained by the resources we have to dedicate to the task. The same is true for a business or government.

In many respects, regionalism is like free trade. In theory, it benefits all who play the game. If everyone cooperates, each will be better off than if there is no collaboration. However, if one person “cheats” (imposes tariffs or in our case, recruits businesses on the side), they may gain a relative advantage.

Cooperation does not mean you will gain relative position, it only means that you will be better off than you would have been on your own. But, what matters? Are you really better off if you have $100 more when everyone else got $200? Is it possible to share the gain? If I am a winner, do I even want to share? How do I know I will be a winner (or loser) until the game is played?

To overcome this, we must identify which components of economic activities are primarily based on relative competition and which are focused on absolute benefit.

Because Tennessee has a site-based sales and property tax system, specific location matters immensely in retail and real estate activity. Here, gaining a new store within my jurisdiction is all that matters. The tax money directly benefits the municipality in which it is located. Other than some marginal impact (e.g. having greater shopping choices), there is insignificant marginal benefit to the other regional actors.

This is about relative gain and we simply will not (and from a fiduciary responsibility point of view, should not) cooperate. This activity must be off the table in the negotiations.

However, business and job growth create far more overlapping benefit.

We see this with our large employers (like Eastman). The plant is located in Kingsport, but employees live and shop throughout the region. Actually, this is one of the great irritants of Kingsport’s elected officials. But, it simply shows that to a significant degree, where a business physically locates (particularly larger enterprises), is less consequential. The benefit is more broadly spread throughout the region. Everyone gains in an absolute sense if it is within the region. And, everyone is lessened if it does not locate in Upper East Tennessee.

Bingo! We have now defined the start point for regional cooperation. And, we have done so in a framework that is understandable (aka, salable) to all the participants.

The process now gains focus.

When we define “regionalism,” it cannot be the usual namby-pamby, vague notions which has characterized our attempts at regionalism in the past. It must be very specific.

Next, recruit “active” participants dedicated to putting their efforts and prestige on the line (as opposed to the usual collection of the suspects who politely agree without substantive debate then act in opposition to the goal).

Also, it might be nice for once for to broaden the tent and incorporate some of the small and medium business leaders. They are critical to its acceptance.

If all you have is representatives from the “behemoths” (pencil in whatever large company you like) and the governmental and chamber bureaucracies, you will fail. I will be viewed as yet another attempt to jamb an idea down our throats for their own self-interest.

We must also align our expectations, because initially this will amount to a “lowest common denominator” (not optimal) outcome. However, once you have real consensus on a set of objectives, based on real and absolute benefit to the participants, you can develop specific strategies to execute the plan.

Given a cursory look at the range of economic activity, it would appear that external industrial/business recruiting and outdoor recreation are activities primed for a regional approach.

Implementation will be tough. For example, it would entail the consolidation of some organizations currently under parochial control, like Networks and the Northeast Tennessee Regional Economic Partnership. This is where leadership and willingness to put yourself on the line is critical.

Regionalism is possible, but not likely without a substantive change from past efforts. The scope needs to be narrowed, the objectives specifically defined, and the participation expanded. Most of all, it requires bold, dedicated leadership.

One definition of insanity is “doing the same thing over and over and expecting different results.” Let’s hope this time will be different.