Good economic news? Not so fast

Carla Axtman

Over at The Oregon Economics blog, OSU Associate Professor of Economics and blogger Patrick Emerson, scratches his head over the excitement generated by the new Facebook facility in Prineville:

Don't get me wrong, any investment in the state is great, especially now, and especially for a community like Prineville. But the amount of attention that the decision by Facebook to build their first data center in Prineville is receiving is a little out of whack. For example, the Oregonian editorial board cheers this as a major statewide success story - but then these are the same folks that urged a no vote on 66 and 67, and I see a clear connection between the two.

You see, this type of investment is indicative of where Oregon has arrived in terms of its investment in human capital and in research and innovation. What comparative advantage the state has at the moment is in cheap power, cheap land and cheap labor. This is not a success story this is a failure story. What the state needs to be is a place where we have a comparative advantage in human capital and technology, and that means investments in education and in research in partnership with research universities. What we are is a poor and poorly educated state that is like a domestic developing country that will do the low value-added work because it is all we can get.

The emphasis bolded above is mine, not Professor Emerson's.

Emerson goes on to say that given the Oregonian Editorial Board's apparent lack of curiosity at what this signals for the state's economy demonstrates a fundamental problem: they don't understand the fundamentals of economic growth.

I think this is a fascinating take on the issue and deserves discussion. But since it's Professor Emerson's post at his blog, let's discuss it over there.

Comments will be closed here.

By Carla Axtman Jan. 26, 2010