We have used this space frequently in the past to write about economic development in Lufkin and Angelina County.
It’s a catchphrase favored by business and political leaders because it implies a variety of different things without providing any specific guidelines. Economic development, in general, focuses on recruiting businesses, assisting in the startup of new businesses or supporting the expansion or retention of businesses.
In 1960, American economist W.W. Rostow wrote “Stages of Economic Growth,” one of the most influential development theories of the 20th century. He postulates there are five steps through which all countries must pass to become developed: 1) traditional society, 2) preconditions to take-off, 3) take-off, 4) drive to maturity and 5) age of high mass consumption.
His comprehensive treatise also is grounded in the historical and political context in which it was written: the height of the Cold War between the United States and Soviet Union.
The business cycle is the natural rise and fall of economic growth that occurs over time. Each business cycle has four phases — expansion, peak, contraction and trough. They don’t occur at regular intervals, but they do have recognizable indicators.
Longtime city and county residents have witnessed bigger industries repeatedly acquire local companies and maximize profits by sacrificing local workers over the last 20-plus years or so. If that doesn’t qualify as a trough, we don’t know what does.
But slowly and surely over the last couple of years, the efforts put forth by Lufkin’s 4B Economic Development Corporation, the Lufkin/Angelina County Economic Development Partnership and the Texas Forest Country Partnership are beginning to pay dividends.
Christian Fischer, Georgia-Pacific’s president and CEO, spoke about what being a successful business means during his keynote address at last week’s Texas Forest Country Partnership Economic Development Summit. Fischer toured the company’s Diboll Lumber Mill before delivering his summit address.
“The role of any business in society is really to serve customers better,” he said. “What does that mean? Provide them alternative products and services that are better ... we’ve got to constantly innovate because our customers constantly have new, better alternatives.”
He said a successful company must invest in its employees and allow the individual plants to invest in their community. This mutual cycle of success helps communities to grow and thrive so the business can, too.
Companies moving to or expanding in Lufkin and Angelina County over the last couple of years include Angelina Forest Products, Sterling, Twin Disc Inc., Lockheed Martin, Atkinson Candy Co., Hammer Equipment, Angelina Tank, American eChem Inc., LufTex Gears, Align Midstream Partners II, BP America Production Company and Dana Transport.
Once these new or expanding industries are up and running at capacity, the prospects for job growth will only improve. Unemployment rates released for October, the most recent month available, put Lufkin’s jobless rate at 3.8% and Angelina County’s unemployment rate at 3.9%.
We also believe the city’s decision to pursue a foreign-trade zone designation can only improve the employment picture. A foreign-trade designation would help lower a variety of customs duties, fees and taxes, and other related operational costs for companies engaging in international trade activity.
Increasing employment and economic growth are two characteristics of an expansion.
We’ll transition into the peak of the cycle when our economy is producing at maximum allowable output and employment is at or above full employment. Following the peak, we’ll begin the slow slide to a trough, from which the next stage of expansion and contraction will emerge.
But there’s no mistaking the fact that this is our success story waiting to happen.