Do economic development gimmicks work?

In the short term?  Maybe.

In the long term? Never.

Communities, especially small communities, have a particular vulnerability with economic development schemes. It is called the monorail syndrome.

Several years ago Red Wing had SmartCard fever.  The idea was that the SmartCard Alliance company would take a small percentage of a retailer’s sales and and donate a percentage of that take to the do-gooding non-profit of the customer’s choice.

In other words, a third party would take a percentage of the retailers sales and the non-profits would take a percentage of that percentage.

The logic used was that customers would be so motivated to contribute to their favorite non-profits via SmartCard that they would spend more than they might otherwise.

Except it didn’t work.  The retailers suffered with less overall take and the non-profits never saw a dime.  And SmartTown Alliance quietly disappeared with all of the money.

So, if it sounds too good to be true, it is.

And if you have to ask yourself if it is a gimmick, it is.

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