Editor’s note: Stephen Moret is wrapping up his last week as secretary of Louisiana Economic Development, a position he’s held since 2008. In an exclusive, three-column series for Daily Report, Moret reflects on his tenure at LED (Part 1); makes the case for robust, diversified economic growth to be Louisiana’s top goal (Part 2); and offers a roadmap for how to accomplish that goal (Part 3).
Let’s consider what’s possible for the future of Louisiana. I’m going to share what more we could accomplish if we are willing to dream big enough—and work hard enough—to get there.
Louisiana is a state blessed with incredible geographic assets, including its Gulf Coast location, the Mississippi River, and abundant natural resources.
Over the course of decades, these assets enabled the development of several major industries here, including timber and wood products, agriculture and agriculture-related businesses, energy, petrochemicals, and shipbuilding.
Unfortunately, these industries haven’t been enough to provide our state with sustained, healthy growth over long stretches of time, at least not in comparison to the nation or the South overall.
At the same time, New Orleans, once the largest city in the South, gradually lost its leadership position as one of America’s top cities for commerce.
In modern times, this reality was particularly evident during the 25-year period from the summer of 1980 through just before Hurricane Katrina in 2005. During that time, our state’s economy so heavily underperformed the South and U.S. that we were the only state in the South to experience almost 25 years in a row of net population out-migration, as more than 600,000 people left Louisiana in search of better job opportunities elsewhere.
Fortunately, from January 2008 to today, Louisiana’s private-sector job growth ranks second-best in the South and seventh-best in America. Moreover, U.S. Census data indicate we have gone from strong out-migration every year to a balanced situation, with slightly more people moving into Louisiana than moving out.
Looking ahead, Louisiana is in the early stages of an unprecedented manufacturing investment boom, which could spark renewed activity in the Haynesville Shale. We also now have a rapidly expanding software development industry.
We are at an inflection point in our history.
What will we do with this opportunity? Will we become complacent (like we too often have been in the past), or will we seize this moment to enact a compelling economic strategy and make targeted investments that will position us for sustained prosperity?
If we look back at the last few decades prior to the Great Recession, states such as Georgia, North Carolina and Texas regularly were growing 2% a year or better. That may not seem very fast, but for Louisiana that growth rate would represent about 40,000 net new jobs per year.
A Louisiana growth rate of 40,000 jobs per year would be transformational.
Based on national growth forecasts from Moody’s, that growth rate would make Louisiana one of the fastest-growing states in the South and U.S. over the coming decades.
With a surplus of new jobs, more Louisiana citizens could achieve the American Dream right here at home. Poverty would decline. Crime rates would decline. Education outcomes would improve. There would be more support for arts, culture and nonprofits. Provided that we make reasonable adjustments to our tax structure, we would experience growing tax revenues with no increase in tax rates.
What would Louisiana’s future look like if we were able to grow consistently at a rate of about 40,000 jobs per year?
By 2018, our state’s population would hit five million. Just five to six years from now, after the 2020 Census, we would regain the congressional seat we lost after Katrina. By around 2026, a million people would have moved to Louisiana from other places to pursue opportunities here. Imagine Louisiana with a million new residents contributing to our economy and workforce—that would mean more concerts, more art, more ideas, and more domestic and international flights.
After the 2030 Census, increased migration and population growth would enable us to capture back another congressional seat—the one we lost after the oil bust in the 1980s.
By 2034, our population would reach seven million. We will have become one of the great growth states of the South—and the country. Also by 2034, our job total would hit the three-million mark for the first time.
What about the people in our state who experience economic hardship? By about 2037, our poverty rate would drop below the Southern average for the first time in the recorded history of poverty statistics in the United States.
After the 2040 Census, we would gain a third congressional seat, giving us a new, all-time record high of nine congressional House members, and enabling Louisiana to have substantially more political influence on the national stage.
Imagine for a moment how communities across Louisiana could both contribute to and benefit from this growth. Keep in mind that Louisiana isn’t really a single homogenous economy, but rather a collection of eight distinct regional economies, each anchored by a city and each with both urban and rural communities.
Northeast Louisiana is home to some of the poorest zip codes in America, but it also has two of our state’s biggest growth opportunities. Home to CenturyLink, our state’s largest Fortune 500 company, Monroe could become a hub for tech jobs associated with CenturyLink’s top technology suppliers. Already IBM has announced a 400-job technology center there that will serve both CenturyLink and a variety of major corporate customers nationwide; that announcement could be just the tip of the iceberg. In addition, while there hasn’t been a greenfield auto assembly plant announced in the U.S. for about seven years, we think there will two to three of them in the next few years; I believe we can convince one of them to locate at the Franklin Farm mega site just 30 minutes from Monroe, creating several thousand jobs in the process.
With the announcement of CSC’s 800-job technology and cyber security center, the Shreveport/Bossier area is fulfilling its long-held dream for the National Cyber Research Park to become a hub for federal defense contractors such as Boeing and Lockheed Martin. That development, coupled with the magical, Oscar-winning animation of Moonbot Studios and a growing manufacturing sector, positions northwest Louisiana to be one of the growth engines of Louisiana’s economy.
Central Louisiana, anchored by Alexandria, historically has been known for its wood products industry, but the region has a national gem in its former air force base, England Airpark. We can leverage this unique asset as the catalyst for the creation of Louisiana’s Center of Excellence for Advanced Manufacturing, with significant opportunities in the aerospace, automotive, and machinery sectors that can build on existing manufacturing anchors, such as Union Tank Car and P&G.
Home to huge chemical plants and oil refineries that drive the regional economy, Southwest Louisiana will be the epicenter of America’s manufacturing renaissance catalyzed by cheap natural gas, with companies such as Sasol, Cheniere and Sempra and its partners investing tens of billions of dollars there.
The most entrepreneurial community in our state, Lafayette has long been known for Cajun innovation in oilfield services, and it is becoming so much more. New opportunities are already on the horizon with Bell Helicopter’s new Jet Ranger X manufacturing facility. With CGI and other tech companies announcing significant projects there, Acadiana also is emerging as a hub for digital media and software development.
Over the next decade, the Bayou Region will be the biggest beneficiary in the U.S. of the coming recovery and growth in ultra-deepwater oil-and-gas exploration activity, as companies such as Shell, Chouest and Danos position themselves for renewed growth, creating thousands of new jobs in the process, and the shipbuilding industry there also could experience renewed growth.
In Baton Rouge, possibility abounds with LSU, an unrivaled petrochemical corridor and a bold business community. The region is capitalizing on its new software development sector with big names such as EA and IBM, while also developing new opportunities in engineering and water management, as well as manufacturing in the outlying parishes.
Finally, New Orleans could become known as one of the greatest comeback cities in the history of the United States. The area will experience continued growth in its high-tech sector, in health care, entrepreneurship, and trade-related commerce, with the Port of New Orleans leading the way for the state in cargo volumes. It also is poised to become the surprisingly robust new go-to location for corporate headquarters relocations, not only in New Orleans proper but also on the Northshore.
This is all really exciting stuff—at least it is to me—but growth at a rate of 40,000 jobs per year in Louisiana won’t just happen on its own, at least not yet. My next (and final) column will talk about what it would take to get there.
