The agency missed its job creation target nine out of the past 10 years. The solution: a lower target.
By Nigel Jaquiss
Oregon Journalism Project
- Amid a flagging economy, Gov. Tina Kotek’s Prosperity Council is poised to rebuild the state’s economic development agency, Business Oregon.
- Business Oregon missed its job creation targets in nine of the past 10 years.
- Critics say the agency needs a tighter focus, stronger backing from Kotek and the Legislature, and perhaps, new leadership.
When Gov. Tina Kotek’s Prosperity Council releases its final report in the last week of June, it’s almost certain the panel will recommend an overhaul of Business Oregon, the state’s economic development agency.
The reason isn’t hard to find.
Business Oregon spends more than $1 billion a year on everything from funding for regional theater groups to tax breaks for multinational corporations such as Intel, Amazon, Facebook and Google.
Its stated mission is to “promote a globally competitive, diverse, and inclusive economy.” But by a basic measure—jobs created—it has failed that mission nine of the past 10 years, often by wide margins.
The response to that record: lower the target. As a result, the agency cleared its goal last year — by eight jobs.
The Prosperity Council’s verdict on the 200-employee agency is not kind. According to a confidential draft of the council’s report obtained last month by OJP, stakeholders describe Business Oregon as “underperforming relative to peer states” and plagued by a “lack of responsiveness, limited ability to influence peer agencies, small scale of programs, and diffuse focus.” In that draft, the panel recommended beefing up the agency and remaking it into a “Department of Commerce.”
The Prosperity Council’s assessment lands against a backdrop of bad economic news. Oregon’s unemployment rate stands at 5.2%, higher than in all but four states. A June 2025 report by the University of Oregon’s Institute for Policy Research and Engagement put it plainly: “Businesses are leaving the state. Job and population growth trail national trends.”
That report’s conclusion—that Oregon “lacks a coordinated, comprehensive statewide economic development strategy” — points directly at the agency charged with providing such a strategy.
Professor Bob Parker, co-author of the UO report, examined other states to see what economic development strategies are working. His conclusion: Successful states elevate economic development as a top priority for their governors and deploy a centralized, hierarchical strategy.
Oregon does the opposite, Parker says, perhaps a result of a long-standing ambivalence about economic development, which goes back to the late Gov. Tom McCall. “Come visit us again and again,” McCall said in 1971. “But for heaven’s sake, don’t come here to live.”
Parker says that except for the 1980s, when then-Govs. Vic Atiyeh and Neil Goldschmidt focused on recruiting tech companies, McCall’s successors have generally embraced his attitude.
Oregon Business & Industry, which represents most of the state’s large employers, wants Kotek and the Prosperity Council to both streamline Business Oregon and elevate its role.
“The governor and the Legislature need to take economic development more seriously,” says the organization’s CEO, Angela Wilhelms. “We believe that a robust Department of Commerce could provide an overarching, consolidated structure for related functions currently split across multiple agencies.”
The Prosperity Council’s recommendations will likely shine a light on Business Oregon’s director, Sophorn Cheang, whom Gov. Kate Brown appointed in 2021 to run the agency. Prior to her appointment, Cheang served as Brown’s director of diversity, equity and inclusion.
Cheang, 45, emigrated from Cambodia when she was 19. She earned a degree in finance from Portland State University and an MBA from Willamette University, and worked in real estate and then as a digital media strategist for Kroger. She left that job in 2014 to work at the Immigrant and Refugee Community Organization, a Portland nonprofit, before joining Brown’s staff.
Since Kotek won election to succeed Brown in 2022, she has changed directors at the Oregon Health Authority, the Departments of Human Services, Forestry, and Transportation, and the Oregon Liquor and Cannabis Commission (twice), but not at Business Oregon.
Speaking on background, several business leaders and lawmakers question why Cheang has held on to her position and whether she has the relevant skills and experience to lead Business Oregon.
— Business Oregon photo
Business Oregon spokesman Nathan Buehler says Cheang’s critics are wrong.
“Beyond our director’s diverse and well-rounded professional background (leading this agency for the past five years, a director-level position in the governor’s office, leadership of IRCO, and multiple business positions prior to that), she has proven leadership abilities to run a complex agency with a complex budget,” Buehler says.
He adds that after taking over the agency during the pandemic, Cheang put her foot on the gas.
“She oversaw a shift in our more longer-term development work to oversee fast, get-it-out-the-door funding to help businesses immediately—from hundreds of projects we’d do in a year to thousands in a span of months,” he says.
Two state lawmakers sit on the Business Oregon Commission as nonvoting members. Both—Sen. Mark Meek (D-Gladstone) and House Minority Leader Lucetta Elmer (R-McMinnville)—are small business owners who have served on the commission that oversees the agency for the past three years. Neither shares Buehler’s characterization of the agency’s effectiveness.
“The feedback I’ve gotten is that Biz Oregon doesn’t really support businesses the way it should,” Meek says. “They’ve finally come to the conclusion they’re trying to do too many things — mission creep — but change happens at a snail’s pace.”
Meek declined to comment on Cheang’s performance. Elmer says Business Oregon does a good job helping individual companies but is hamstrung by state policies that have resulted in excessive regulation and taxation. She says blame for that goes above Cheang’s head.
“I don’t believe Director Cheang was handed the necessary cards for success,” Elmer says. “Agencies are constrained by the policies passed by the Legislature and the whims of the chief executive [Kotek].”
One of the ways lawmakers judge all state agencies are performance measures that are part of agency budgets.
Business Oregon has 10 key performance measures: The first tracks the number of jobs directly created by agency programs. That indicator paints a dismal picture: In nine of the past 10 years, the agency failed—often by big margins—to hit job creation targets.
Last year, the agency exceeded its job creation target for the first time since 2015, when the target was more than twice as high.
Buehler says it’s unfair to place too much emphasis on the job creation measure —the agency has done better on others such as job retention and helping fund capital projects. He notes that the Legislative Fiscal Office, not Business Oregon, sets the job creation target and that indicator counts only jobs created with direct cash incentives from the agency, which are just some of the jobs the agency helps to create.
“Some of the most important job creation tools the state uses aren’t counted in the measure because they aren’t directly financed by the agency,” Buehler explains. “Property tax abatement is a large one, which is why we added that as a separate performance measure a few years ago.”
But, Buehler acknowledges, Business Oregon could do better: “We certainly want to see this number continue to grow.”
Meek is unhappy with the agncy’s job creation performance. “I think because of the lack of awareness of what it takes to create a job, they have missed the mark and have been failing on that level,” he says. Adds Elmer, “It’s hard for anyone to look at these outcomes and think we’re crushing it.”
Kotek’s Prosperity Council will unveil its final recommendations June 25.