When Gov. John Carney signed legislation last month closing the Delaware Economic Development Office (DEDO), the agency had 42 employees. Nearly a month later, the exodus of staffers is underway.
“It’s been a pretty intense time,” said Cerron Cade, deputy secretary of the Division of Small Business, Development and Tourism, a new agency within the Department of State that has taken over economic development activities for the state.
About seven employees have already moved on, according to Cade, and another seven will leave by the end of the year.
The state plans to cut 17 positions in the wake of DEDO, a total of about $1.5 million in savings. That money will go towards a new public-private partnership — tentatively called the Delaware Prosperity Partnership — that will take over marketing and promotion of the state to outside employers.
Cade said the Division and the partnership will complement each other. But how exactly those tasks will be divided up is still being worked out.
“The last few weeks we’ve basically been continuing the same work that DEDO was tasked with,” Cade said. “In the competition to bring great jobs to Delaware, we can’t really take time off.”
In the long term, Cade said, the Division will focus more on supporting small businesses and entrepreneurs, while the partnership will largely work to attract big employers and innovative start-ups to Delaware.
The Division will also continue to manage and oversee the Delaware Strategic Fund, the main source of state subsidies for business.
Cade said the Division is talking to stakeholders, such as local chambers of commerce, and reviewing its current activities to figure out how to best streamline its operations. An overhaul of the agency’s organizational structure, he added, is also on the table.
DEDO had three main units, including tourism, business and administration. The Department of State will take over some administrative tasks, and tourism efforts will remain under the Division. But the business unit will likely see the biggest changes. A number of officials who have left DEDO over the last month or so came from the business development unit, which focused on business attraction and retention.
That unit did a lot of the legwork of attending conferences around the country and reaching out to big companies. Now those tasks falls to the public-private partnership.
Cade said the cuts certainly reflect a change of focus but stressed that the partnership will make up for any lost capacity (although the exact structure and staffing of the nonprofit also remain to be seen, according to many observers).
Alan Levin, DEDO director between 2009 and 2015, said the cuts represent a loss of knowledge and experience in economic development.
“These 14 people that were let go were, in my opinion, were people who were committed to DEDO and really committed to turning things around, and they did just that,” said Levin, reflecting on the state’s relative economic improvement since the Great Recession.
Levin noted that he would like to see former DEDO staffers get positions in the public-private partnership.
“We had a group of what was 42 people committed to the development and economic vitality of the state of Delaware,” Levin said. “Quite frankly, the board of the [public-private partnership], their commitment is to their company first, not to the State of Delaware.”
At least one former DEDO staffer, however, said the agency could afford some of the cuts.
“I recognized a duplication of efforts with the Department of Labor and the Department of State,” said Kirsten McGregor Wolfington, executive director of Open Bracket Delaware, who worked for DEDO for six months beginning in June 2015. “Resources could have been directed towards the strategic communications office within DEDO to market the state to businesses determining where to locate or relocate.”
She said the partnership could solve some of these problems, but she still sees a role for the state.
“Delaware’s economic development efforts should run similar to the Delaware Tourism Office, which ran like a separate, well-oiled machine efficiently utilizing state funds,” she added.
Cade said the process of overhauling the Division is well underway. He said he predicts that by the end of the year both the Division and the Delaware Prosperity Partnership will be working in tandem.