Economic development: Passing along an idea

Many years ago, I tried interesting some people in opening a brewery in Anderson. The brewery went nowhere but I will mention that my idea of about a high end product was not what killed the project.

Reading an article, Premium strategy proves successful for Pernod Ricard, in this Sunday's Glasgow Sunday Herald lead me to make mention of this brewery idea.

Because of its rarity, Royal Salute, labelled Stone of Destiny, sits squarely atop the high-value, super-premium category on which Pernod Ricard has pinned much of the future of its formidable stable of brands. "Looking at volume is one thing, we tend to look at value," explains Porta, who runs the stable from London.

Based on the rapid increase in wealth around the world in the past decade, and particularly in Asia, the up-market strategy lies behind the rapid recovery of Scottish brands such as Chivas Regal since Pernod Ricard acquired them through the takeover of Seagram in 2001. "We feel our successes in the premium markets have not been fully understood," Porta told reporters in Speyside this week.

Politicians favor economic development that favors mass employment. Large numbers of the unemployed tend to results unfavorable to the status quo. Mass employment means volume based businesses. Compare Auburn-Cord with General Motors. Auburn sold on a high-end basis and we all know that General Motors is a volume business. The Great Depression put an end to the Auburn Cord (see the Wikipedia article here), so dangers do lie in this strategy. Dangers lies in all business strategies.

Indiana suffers from relying on the largest volume industry of the last century - the automotive. Since 1964, Anderson starred as the poster child for Indiana's economic development.

Anderson needs a diversified economy but the only example known to our political leaders and to the general public is mass employment in the manufacturing sector. We need leaders who can think of more. We also must allow them to think about more than mass production and employment. We need a mix of the high-end production which may not employment mass numbers but provide the local economy with high incomes. Those high incomes should spend their dollars locally. Spending those dollars locally will increase the incomes of others. They may also attract other similar sized businesses. Even then, I would not expect the numbers employed to rival Delco-Remy during its heyday. Looking for or expecting low-skill, mass employment manufacturing to return to Indiana and to Anderson allows nothing but delusion and failure.