Remarks at the Graduation Ceremony
for Certified Public Managers
by Edwin Dorn
Southwest Texas State University
June 18, 2001
I am a native Texan. I grew up here in the 1950s and '60s, when the economy was dominated by manufacturing and agriculture. Those also were the days--and a few of you in this room may remember this--when we measured distance by the six-pack. It was about a six-pack from Dallas to Houston, if I recall.
That rather interesting way of measuring distance was an artifact of the way the state legislature had written the laws about drunk driving. In those days, it was illegal to drive while drunk. But it was not illegal to drink while driving. Eventually, the legislature figured out the cause-effect relationship, and rewrote the law.
In those so-called "good ol' days," our political leaders also had a pretty good sense of the relationship between public policy and the economy. The old Texas economy was based on abundant natural resources--land and oil. All our politicians needed to do was ensure that businessmen had cheap labor, low taxes, and decent roads on which to move product to market.
The Texas economy has changed profoundly during the past 30 years. But our basic policy prescriptions haven't changed. Some of our political leaders are still using the same old formula: cheap labor, low taxes. If it was good enough for oil baron H. L Hunt, they seem to reason, it ought to be good enough for computer maker Michael Dell. But it isn't! We have not matched our public policy to the needs of the new economy.
The Challenge
Over the next few years, our political leaders--with help from academics, business leaders, community activists and civil servants--must figure out how to sustain the new economy. Simultaneously, they also must build an infrastructure that will nurture the new, new economy. For, just as surely as heavy industry replaced agriculture and computers replaced heavy industry, so something else will take the place of computers and telecommunications as the drivers of the Texas economy. Anticipating the mix of physical and social capital needed to support economic change is one of our largest intellectual and political challenges, and we aren't even close to meeting it.
So far, I probably haven't said anything that you haven't heard a dozen times. Let me try, however, to offer a different perspective on the challenge we're confronting.
Think about how economic change has altered our patterns of geographic mobility, and about the implications of mobility for community leadership. Historically, the most mobile portion of our population has been the poor. They're the ones who moved when things were tough. If you couldn't make it in Ireland during the 1840s, you hocked all your worldly possessions and booked steerage on a boat headed for America. If you couldn't make in the crowded cities of the East Coast, you loaded all your possessions in a wagon and headed West. If you couldn't make it in the overfarmed hills of Tennessee, you scribbled GTT Gone to Texas on the side of your cabin as you closed the door for the last time. If you were a poor black Southern sharecropper being victimized by white racism, you migrated toward industrial jobs in the North or West.
By contrast, the middle and upper classes have tended to stay put. They had no reason to move, because they were well off economically and with economic well-being came social status. Further, they had to be near the sources of production, and the sources of production were immobile. You can't move a ranch or an oil field, and it's pretty hard to relocate a steel mill or an oil refinery.
The geographically stable middle and upper classes formed the leadership base of our communities--not just the political leadership, but the cultural, moral and civic leadership. They made sure that every town had a library, a fire department, a hospital to care for the indigent sick. Call it philanthropy or civic duty or noblesse oblige, the point is that our communities were made livable because they were home to multiple generations of stable middle and upper class families.
In recent decades, however, the class aspects of geographic mobility have changed considerably. Increasingly, it is the poor who stay put, and the middle class that moves. Austin is a dramatic example because so much of its growth has been in high-tech. High-tech executives are very mobile; they tend to relocate every few years to fill a management need somewhere on the globe. Further, in high-tech, the most important sources of production are not raw materials or large, fixed plants: the most valuable assets in high-tech are those that are carried in someone's head, or in a laptop computer.
Dell Computer is the closest thing Austin has to heavy industry. But the Dell facility just north of Austin can be replicated almost anywhere on earth, and it has been, several times. To do business, Dell doesn't need to be close to a natural resource; all it needs is a favorable business environment. Today, companies can find favorable business environments all over the world, from Texas to Ireland to the People's Republic of China.
So far, the Austin community has been fortunate that so many of these very mobile executives have chosen to stay in our community. Michael and Susan Dell, Tom and Lynn Meredith, Mort and Angela Topfer--they're committed to this community, They've become part of the civic leadership, and their example trickles through the rest of the company. But they're here by choice, not because of any extraordinarily smart strategy on the part of our city or state.
We shouldn't count on a continuing run of such good luck. We need to figure out how to attract talented people, get them to make Austin home, and incorporate them into the community's civic leadership.
Of course, we also need a much more robust strategy for developing local talent. One infuriating irony is that our high-tech firms are importing workers from halfway around the world because our political leaders have failed to provide the resources needed to develop local talent. We have been very short-sighted in this regard, and we may pay a heavy price for it down the road.
When today's corporate executives make plant location decisions, they're not just looking for the lowest tax rates and the cheapest labor. They are considering a host of factors, including some of the intangibles that constitute a good quality of life. Instead of looking for the lowest possible taxes, executives are looking for a clear relationship between taxes and public service outcomes. They're not just looking for cheap labor, but for a well-trained, flexible and energetic labor force. They're not just looking for good farm-to-market roads; they are looking for an integrated transportation system with redundancies and options sufficient to protect against disruption.
In recent years, Dell has dramatically reduced the time--and thus the labor costs--associated with assembling a computer. It also has dramatically reduced its on-site inventory, and thus its storage costs. Since Dell only produces computers on-order, it has lowered its market risks and thus the costs of borrowing money. With the costs of labor, physical plant and money cut to the bone, what's left? Transportation. Transportation is now one of the highest costs in the Dell manufacturing process. This means that a shipment that's stuck in traffic on I-35 for an extra 30 minutes is eating into the bottom line. While our political leaders are debating exactly where to locate a beltway and whether to supplement roads with rail, corporate executives are focusing their location decisions on areas that already have resolved these questions.
We don't know all the keys to sustaining the current new economy or to establishing the preconditions for whatever will follow it. We do know, however, that the public sector will be under greater and greater pressure to give good value. That's one of the things you've been preparing to do in the Certified Public Manager program: use your resources better. Each of you has come out of this course with a few ideas about how to do some things better.
You also know how to keep getting good ideas--how to stay on the cutting edge. One way, of course, is to follow closely such programs as the annual Ford Foundation Awards in Government Innovation. We need new ideas. But I suspect that one thing you absorbed during the CPM program is that it isn't enough just to have a good idea: you must have the leadership ability to put that idea into action.
Conclusion
Let me conclude by pulling some threads together. For many of you, this program represents a turning point. Most of you have built your careers on your expertise. People know you as experts on public health or public safety or financial management. But you've reached a point where expertise is no longer sufficient. What you need now, what your bosses expect of you, is the ability to marshall the expertise of others, to set goals and to motivate others to achieve those goals.
This is one of the features that we're trying to build into the LBJ School curriculum. We want to produce high quality public policy analysts. We also want to help our students prepare for that time in their careers when they're no longer being hired for their expertise, but for their leadership ability.
Effective leadership means working with diverse groups of people, breaking down barriers, finding common ground. I hope that this program has helped you appreciate the importance of finding common ground.
When I was in college in the 1960s, I had an attitude that business and government operated on entirely different moral planes. Government, I felt, was trying to improve the lives of people, while business was solely about making money, even if that meant exploiting people. I spent four years on the UT campus and never set foot inside the Business School. I just didn't think I'd have anything in common with the folks who studied business.
I now appreciate that the public sector, the private sector and the nonprofit sector all have important roles to play in making our society work. It is important that we not oversell the role of any sector, and that we not confuse their basic roles. It is fatuous, for example, to say that government should run like a business. That's just as silly as saying that businesses should operate like legislatures. And, while the nonprofit sector is crucial to the working of our society, it is folly to suggest that nonprofits can fill the gaps left when government programs close down. What we need to keep in mind is that all three sectors--public, private and nonprofit--have roles to play.
Your task, over the remainder of your career, will be to figure out those specific instances in which the distinctive attributes of a government agency, a business or a nonprofit organization can be brought to bear most effectively on a problem. The burden on you will continue to grow, because people expect government to be more responsive and more efficient. Your expertise, your leadership and your innovativeness will be put to the test every day. As graduates of a first-class program in Certified Public Management, you're up to the challenge.
Congratulations on becoming a Certified Public Manager. You're now more ready than ever to serve the people of Texas.
