BY JESSE L. WHITE JR.
CHAPEL HILL -- The headlines on two consecutive days said it all: Dell Computer closing shop and laying off over 900 workers and Cree Inc. adding almost 600 jobs. The difference: Dell - headquartered in Texas - was lured to North Carolina with the promise of over $300 million in incentives, while Cree - a homegrown business spun out of N.C. State University technology - requested no state incentives (although in fairness Cree did get an incentive a few years back to build an expansion plant).
When are we going to halt public expenditures on the "buffalo hunt" for footloose industry and instead focus our resources and efforts on the sector that produces by far most of the jobs - existing industry and homegrown business?
As a student of and participant in Southern economic development for almost 30 years, I have long been baffled and disappointed by the turn taken by this state in 1996 to enter into the incentives game. Until that time, North Carolina was seen as the leader in state economic development policies and investments - focusing on our great university system and infrastructure investments like the Research Triangle Park, the Board of Science and Technology, the Microelectronics Center, the N.C. Rural Economic Development Center, the community college system and the Biotechnology Center.
These investments built long-term capacity and supported the creation and maintenance of dynamic and growing businesses. Then, under pressure from the professional economic development community - including site selection consultants - the state enacted the William S. Lee Act, and we were off to the races in the escalating game of incentive-based recruitment.
The argument is not against all recruitment - after all the Research Triangle Park was built on a recruitment strategy. Nor is the argument against all public investments in economic development - for example, water and sewer infrastructure, railroad spurs, access roads, industrial parks, etc. But what is indefensible is incentive-based recruitment in which public money goes into the corporations' bank accounts in what amounts to corporate welfare.
We can see how easily it can get out of hand in hard times, as in the recently reported case of North American Aerodynamics in Roxboro, for which provisions of site selection competition and even the prevailing wage standard were waived!
In fairness, it must be said that the General Assembly has been willing to examine and change the incentives structure. In the past two years, legislators appropriated money for a major study of this subject by our Carolina Center for Competitive Economies in the Kenan Institute for Private Enterprise. There have been efforts to target the incentives to the areas of greatest needs (Tier I counties) and to make them "earned" by the companies instead of all granted up front.
However, the evidence is that these incentives do not redound to the benefit of distressed rural areas as intended. Dell, for example, was located in Winston-Salem.
The scholarly literature on incentives shows that they are a very poor investment of public resources. And, of course, the business sector has become expert at playing off one state against another in something akin to corporate extortion; and who can blame them?
Imagine if the South in general and North Carolina in particular had put all of the money spent on industrial recruitment into education, training and small business support. We would be watching even more Quintiles, Cree, PPD, Southern Seasons, Performance Bicycle and other homegrown entrepreneurial success stories all across North Carolina. And, although there are no silver bullets in economic development, homegrown businesses are more likely to stay put, invest in the local community, provide stable civic leadership and keep the control and wealth local instead of away at some remote corporate headquarters.
This policy of incentive-based recruitment began in the 1930s in my home state of Mississippi, still the poorest state in the union. It spread throughout the South until the last holdout, North Carolina, signed up for this dismal strategy in 1996. Our state needs to abandon this policy and return to its investments in education, technical training and small business support.
Not only is this sound economic development policy, it removes the insult to ourselves that only "outsiders" can create the jobs and that we have to pay them to bring the jobs to our people. We can do better than that.
Jesse L. White Jr., Ph.D., is director of the Office of Economic and Business Development at UNC-Chapel Hill. He is a former federal co-chairman of the Appalachian Regional Commission and executive director of the Southern Growth Policies Board.
Tuesday, November 17, 2009
Working together to create jobs
Southwest Florida counties seek strength in Economic Development Partnership
Published: Tuesday, November 17, 2009 at 1:00 a.m.
One lesson from the long, deep recession is that communities, regions, states and nations are connected by the economy.
We are all in this together, to a great extent, so collaboration and cooperation can reap far greater rewards than division and dissension.
Competition among cities, counties, regions and nations was long the norm in economic development.
But a new initiative is bringing together job-creation efforts in an area including Sarasota, Charlotte, Lee, Collier and Glades counties. The goal of the Southwest Florida Economic Development Partnership is to market the region and explore ways to encourage businesses to expand in, or move to, the five-county area.
The new organization is based on the model that led to the creation of the Tampa Bay Partnership -- of which Sarasota County is also a member, along with Manatee, Hillsborough, Pinellas, Pasco, Polk and Hernando counties.
Sarasota-Manatee ties are vital
It is encouraging that Sarasota County will remain in a partnership that includes Manatee. The geographic, economic, cultural and political links between the two counties are strong -- and offer some of the best opportunities for cooperation in commerce and government. The counties share a commercial airport, a road-planning organization, the two-county State College of Florida and the University of South Florida's Sarasota-Manatee campus.
The study that preceded the formation of the Southwest Florida partnership specifically noted that Sarasota County has strong connections to both the north and the south. The study also recommended that USF's Sarasota-Manatee campus become the future site of an "incubator" project that would help start-up businesses succeed.
Kathy Baylis, director of the Sarasota County Economic Development Corp., told us yesterday that her organization has had "pretty serious conversations" with the Sarasota-Manatee campus about such a project.
The need to generate jobs on a broader platform than tourism and real-estate development has become clear since the decline of the housing industry. As a result, each Southwest Florida county's economic development group has committed funds and resources to the new partnership.
With unemployment rates in Southwest Florida running in the 12 percent range -- higher than state and national averages -- building a more resilient work force is a priority for economic development efforts.
Despite its involvement in the Tampa Bay Partnership and reputation for being more aggressive than Sarasota in economic development, Manatee County has not been spared from 12 percent unemployment -- a reminder that partnerships are no panacea.
Still, there is value in collaborating, marketing and sharing information with other governments, and between governments and the private sector. Employing the theme "Southwest Florida, a brighter place to do business," the new partnership has launched a Web site and a marketing campaign aimed at promoting and branding the region.
The partnership concept was presented at a recent breakfast meeting in North Port that was hosted by the Economic Development Corporation of Sarasota County. It was noted that Southwest Florida often appears to lag other regions in job-recruitment efforts. The partnership will seek to change that perception and the reality.
As both Sarasota County and the city of North Port consider seeking authority from voters to use tax abatements as incentives for business relocations or expansion, it is helpful to know that the economic development officials in the region are trying to speak with one voice. It was pointed out at the breakfast meeting that, even though the counties will sometimes compete with each other for a particular prospect, the benefits of economic development are widespread.
The partnership organizers have made it clear they would welcome other counties and cities to join them. They have also opened the door to working with the Tampa Bay Partnership. These are good signs.
Common challenges
The long-term direction of the Southwest Florida group has not been determined, and the partners in this new effort are at different places on the spectrum of economic development. The Sarasota County EDC is an established organization that recently completed an aggressive goal-setting effort, but now faces the daunting task of implementation. Charlotte County's program has made significant strides in the past two years, but is still in its infancy.
Despite these differences, however, most counties in Florida have the common challenges of recovering from recession and building better economies.
This story appeared in print on page A6
Copyright © 2009 HeraldTribune.com — All rights reserved. Restricted use only.
Published: Tuesday, November 17, 2009 at 1:00 a.m.
One lesson from the long, deep recession is that communities, regions, states and nations are connected by the economy.
We are all in this together, to a great extent, so collaboration and cooperation can reap far greater rewards than division and dissension.
Competition among cities, counties, regions and nations was long the norm in economic development.
But a new initiative is bringing together job-creation efforts in an area including Sarasota, Charlotte, Lee, Collier and Glades counties. The goal of the Southwest Florida Economic Development Partnership is to market the region and explore ways to encourage businesses to expand in, or move to, the five-county area.
The new organization is based on the model that led to the creation of the Tampa Bay Partnership -- of which Sarasota County is also a member, along with Manatee, Hillsborough, Pinellas, Pasco, Polk and Hernando counties.
Sarasota-Manatee ties are vital
It is encouraging that Sarasota County will remain in a partnership that includes Manatee. The geographic, economic, cultural and political links between the two counties are strong -- and offer some of the best opportunities for cooperation in commerce and government. The counties share a commercial airport, a road-planning organization, the two-county State College of Florida and the University of South Florida's Sarasota-Manatee campus.
The study that preceded the formation of the Southwest Florida partnership specifically noted that Sarasota County has strong connections to both the north and the south. The study also recommended that USF's Sarasota-Manatee campus become the future site of an "incubator" project that would help start-up businesses succeed.
Kathy Baylis, director of the Sarasota County Economic Development Corp., told us yesterday that her organization has had "pretty serious conversations" with the Sarasota-Manatee campus about such a project.
The need to generate jobs on a broader platform than tourism and real-estate development has become clear since the decline of the housing industry. As a result, each Southwest Florida county's economic development group has committed funds and resources to the new partnership.
With unemployment rates in Southwest Florida running in the 12 percent range -- higher than state and national averages -- building a more resilient work force is a priority for economic development efforts.
Despite its involvement in the Tampa Bay Partnership and reputation for being more aggressive than Sarasota in economic development, Manatee County has not been spared from 12 percent unemployment -- a reminder that partnerships are no panacea.
Still, there is value in collaborating, marketing and sharing information with other governments, and between governments and the private sector. Employing the theme "Southwest Florida, a brighter place to do business," the new partnership has launched a Web site and a marketing campaign aimed at promoting and branding the region.
The partnership concept was presented at a recent breakfast meeting in North Port that was hosted by the Economic Development Corporation of Sarasota County. It was noted that Southwest Florida often appears to lag other regions in job-recruitment efforts. The partnership will seek to change that perception and the reality.
As both Sarasota County and the city of North Port consider seeking authority from voters to use tax abatements as incentives for business relocations or expansion, it is helpful to know that the economic development officials in the region are trying to speak with one voice. It was pointed out at the breakfast meeting that, even though the counties will sometimes compete with each other for a particular prospect, the benefits of economic development are widespread.
The partnership organizers have made it clear they would welcome other counties and cities to join them. They have also opened the door to working with the Tampa Bay Partnership. These are good signs.
Common challenges
The long-term direction of the Southwest Florida group has not been determined, and the partners in this new effort are at different places on the spectrum of economic development. The Sarasota County EDC is an established organization that recently completed an aggressive goal-setting effort, but now faces the daunting task of implementation. Charlotte County's program has made significant strides in the past two years, but is still in its infancy.
Despite these differences, however, most counties in Florida have the common challenges of recovering from recession and building better economies.
This story appeared in print on page A6
Copyright © 2009 HeraldTribune.com — All rights reserved. Restricted use only.
Study: Marketing Oklahoma economically benefits state
The Oklahoma secretary of commerce told a House committee Nov. 17 that right now is the best time to market Oklahoma.
Secretary of Commerce and Tourism Natalie Shirley spoke to the House Economic Development and Financial Services Committee during an interim study on marketing the state.
State Rep. T.W. Shannon, who requested the study, said he thinks that the crucial role marketing plays in drawing jobs and industry to the state makes it an important investment even in a tight budget year.
“The state is doing an incredible job of marketing itself, but there is more that we could do,” Shannon, R-Lawton, “All three speakers who presented today showed that we are getting a return on our investment. Even in a tight budget year, it is crucial to continue to work to bring high-quality jobs for Oklahomans to the state.”
Shirley said that because of how well Oklahoma is faring the recession compared to its neighbors, now is the time to attract industry to the state. The Oklahoma Department of Commerce is planning to spend $3 million in a media campaign to reach C-level executives –- CEOs, CFOs, etc. -– with a 13-week schedule promoting the state that includes advertising on national TV networks.
The secretary also noted that Oklahoma City has recently made the top of lists 26 times recently – lists like best-recession proof city and best place to start a small business. One problem the state has is that many business executives do not have a mental image of Oklahoma, a problem she is hoping the 13-week media campaign will solve.
For every tourism dollar spent, the state saw a $54.46 return in 2009, according to Hardy Watkins, executive director of the state Tourism and Recreation Department.
“Clearly, if we are getting that kind of a return on our investment, it’s worth it,” Shannon said. “Though the secretary of commerce did not ask for a specific amount, she said it is important that lawmakers continue to keep marketing in mind when crafting the state budget next session. I, for one, believe it would be a good investment.”
Secretary of Commerce and Tourism Natalie Shirley spoke to the House Economic Development and Financial Services Committee during an interim study on marketing the state.
State Rep. T.W. Shannon, who requested the study, said he thinks that the crucial role marketing plays in drawing jobs and industry to the state makes it an important investment even in a tight budget year.
“The state is doing an incredible job of marketing itself, but there is more that we could do,” Shannon, R-Lawton, “All three speakers who presented today showed that we are getting a return on our investment. Even in a tight budget year, it is crucial to continue to work to bring high-quality jobs for Oklahomans to the state.”
Shirley said that because of how well Oklahoma is faring the recession compared to its neighbors, now is the time to attract industry to the state. The Oklahoma Department of Commerce is planning to spend $3 million in a media campaign to reach C-level executives –- CEOs, CFOs, etc. -– with a 13-week schedule promoting the state that includes advertising on national TV networks.
The secretary also noted that Oklahoma City has recently made the top of lists 26 times recently – lists like best-recession proof city and best place to start a small business. One problem the state has is that many business executives do not have a mental image of Oklahoma, a problem she is hoping the 13-week media campaign will solve.
For every tourism dollar spent, the state saw a $54.46 return in 2009, according to Hardy Watkins, executive director of the state Tourism and Recreation Department.
“Clearly, if we are getting that kind of a return on our investment, it’s worth it,” Shannon said. “Though the secretary of commerce did not ask for a specific amount, she said it is important that lawmakers continue to keep marketing in mind when crafting the state budget next session. I, for one, believe it would be a good investment.”
Sunday, November 15, 2009
When going gets tough, TN towns buy advertising
Goodlettsville begins branding itself to lure more people to the small town
By Jennifer Brooks
THE TENNESSEAN
In boom times, there were so many people relocating to Middle Tennessee, the biggest problem communities faced was building enough schools and roads to keep pace. It didn't really matter if a business or a family chose your town or the town next door, because there were always more moving vans rolling this way.
But then the recession hit. People couldn't relocate because they couldn't sell their homes, and by this time last year, American mobility was at its lowest point in 60 years, according to the U.S. Census Bureau.
Suddenly, attracting new residents and businesses to fill half-empty developments and prop up sagging tax bases became a priority. But how does a Goodlettsville set itself apart from a Gallatin or a Greenbrier?
For the city of Goodlettsville, it started with a modest advertising budget and a catchy slogan.
"Wow, that's good. … No, that's Goodlettsville," read the ads that began running in national specialty magazines this year.
Branding used to be something that only big cities had to worry about. Nashville has a $10 million budget for marketing and promotions. The new Smashville ad campaign, inviting people to Lower Broad to watch the Predators play, was a glitzy prime-time ad campaign.
But more and more small towns are stepping up with plans to brand themselves as memorable destinations. Thompson's Station formed a marketing and branding committee to help the town create an identity separate from its larger neighbor, Spring Hill.
Williamson County invited residents to create their own tourism promotion videos, featuring themes like "I Love My Franklin." White Bluff unveiled a new city logo and Web site designed to draw newcomers: "History, Family, Community: Tennesseans love to live, work and play in White Bluff."
The worse the economy gets, the more creative community marketing efforts have become, said Ben Stewart, director of economic and community development for the Greater Nashville Regional Council.
"It's an increasingly popular way for communities to market themselves," he said. "I think everyone's trying to think outside the box right now."
Putting city on the map
Goodlettsville increased its efforts at community branding this month with 30-second commercial spots that began airing on local Fox television stations. It's also grabbing a bit of name recognition with radio spots and by sponsoring weather and traffic reports: "The Tennessee morning weather report is brought to you by the city of Goodlettsville."
The community has spent $10,000 to $15,000 on self-promotion in the past year, said Tom Tucker, Goodlettsville's director of economic development.
"We scripted our commercial so it's not coming across like we're better than anyone else," Tucker said. "But we kept hearing from people, 'I know about Goodlettsville, but I don't know how to get there.' "
Follow Interstate 65 north from downtown Nashville for about 15 minutes and you'll find Goodlettsville, straddling the Davidson-Sumner county line.
"We want to get Goodlettsville on the radar," Tucker said, ticking off his list of qualities he most wants to promote about this town of 16,000.
"We're a small town with a rich Southern tradition. … We have an abundance of eateries, shopping, churches to worship. … A lot of thought went into all of this."
The television spots feature a young couple and a toddler strolling past historic Mansker's Station and through the city sights — over an old bridge, past a church and into a restaurant for ice cream before finally reaching a shady subdivision.
"Wow, that's good. No, that's Goodlettsville," the ad begins. "It's the people that make this city a great place to raise a family and own a business. Goodlettsville is a community rich in Southern hospitality with many community groups, places to work and cultural activities."
By Jennifer Brooks
THE TENNESSEAN
In boom times, there were so many people relocating to Middle Tennessee, the biggest problem communities faced was building enough schools and roads to keep pace. It didn't really matter if a business or a family chose your town or the town next door, because there were always more moving vans rolling this way.
But then the recession hit. People couldn't relocate because they couldn't sell their homes, and by this time last year, American mobility was at its lowest point in 60 years, according to the U.S. Census Bureau.
Suddenly, attracting new residents and businesses to fill half-empty developments and prop up sagging tax bases became a priority. But how does a Goodlettsville set itself apart from a Gallatin or a Greenbrier?
For the city of Goodlettsville, it started with a modest advertising budget and a catchy slogan.
"Wow, that's good. … No, that's Goodlettsville," read the ads that began running in national specialty magazines this year.
Branding used to be something that only big cities had to worry about. Nashville has a $10 million budget for marketing and promotions. The new Smashville ad campaign, inviting people to Lower Broad to watch the Predators play, was a glitzy prime-time ad campaign.
But more and more small towns are stepping up with plans to brand themselves as memorable destinations. Thompson's Station formed a marketing and branding committee to help the town create an identity separate from its larger neighbor, Spring Hill.
Williamson County invited residents to create their own tourism promotion videos, featuring themes like "I Love My Franklin." White Bluff unveiled a new city logo and Web site designed to draw newcomers: "History, Family, Community: Tennesseans love to live, work and play in White Bluff."
The worse the economy gets, the more creative community marketing efforts have become, said Ben Stewart, director of economic and community development for the Greater Nashville Regional Council.
"It's an increasingly popular way for communities to market themselves," he said. "I think everyone's trying to think outside the box right now."
Putting city on the map
Goodlettsville increased its efforts at community branding this month with 30-second commercial spots that began airing on local Fox television stations. It's also grabbing a bit of name recognition with radio spots and by sponsoring weather and traffic reports: "The Tennessee morning weather report is brought to you by the city of Goodlettsville."
The community has spent $10,000 to $15,000 on self-promotion in the past year, said Tom Tucker, Goodlettsville's director of economic development.
"We scripted our commercial so it's not coming across like we're better than anyone else," Tucker said. "But we kept hearing from people, 'I know about Goodlettsville, but I don't know how to get there.' "
Follow Interstate 65 north from downtown Nashville for about 15 minutes and you'll find Goodlettsville, straddling the Davidson-Sumner county line.
"We want to get Goodlettsville on the radar," Tucker said, ticking off his list of qualities he most wants to promote about this town of 16,000.
"We're a small town with a rich Southern tradition. … We have an abundance of eateries, shopping, churches to worship. … A lot of thought went into all of this."
The television spots feature a young couple and a toddler strolling past historic Mansker's Station and through the city sights — over an old bridge, past a church and into a restaurant for ice cream before finally reaching a shady subdivision.
"Wow, that's good. No, that's Goodlettsville," the ad begins. "It's the people that make this city a great place to raise a family and own a business. Goodlettsville is a community rich in Southern hospitality with many community groups, places to work and cultural activities."
NEO 77 a joint venture by business groups to coordinate and fund regional economic development efforts
By Tom Breckenridge, The Cleveland Plain De...
November 15, 2009, 9:55AM
Top corporate leaders in Akron and Cleveland are quietly discussing ways to better align and fund economic development efforts in the region.
The strategizing is called NEO 77, in recognition of the Interstate highway that links the region's largest cities.
The talks include ways to broaden the financial support for six specialty development organizations in the region, whose missions range from attracting new business to growing minority-owned companies.
The efforts of organizations like Team NEO and NorTech are paying off, business leaders believe.
But the "alphabet soup" of organizations confuses some corporate leaders, whose companies are fielding multiple requests for funding.
"Major corporations have a person from NorTech coming in one day, then a person from Team NEO the next day," said Thomas Strauss, chief executive at Summa Health System and board chairman for the Greater Akron Chamber of Commerce.
Strauss said talks started this summer with Henry Meyer, chief executive of KeyCorp and board chairman for the Greater Cleveland Partnership, Cleveland's chamber of commerce; and Christopher Connor, chief executive of Sherwin-Williams Co., vice chairman of the partnership and board chairman for Team NEO, the region's business-attraction organization.
Strauss emphasized that talks were in an early stage and would include Canton business leaders, too.
Meyer and Connor declined to be interviewed. Their spokesmen referred questions to Joe Roman, president of the Greater Cleveland Partnership.
Roman said the chambers are considering how to better link their "dollars and leadership" in support of the economic development organizations.
"We're looking at how we can sustain what has been a very potent system," said Roman, whose chamber funnels hundreds of thousands of dollars yearly to the specialty development groups.
In the past five years, the six organizations had an impact valued at hundreds of millions of dollars on the region, by attracting public investment and venture capital and expanding payrolls, officials said.
"It's clear the programs we're pursuing in collaboration with the business community are working," said Brad Whitehead, president of the Fund for Our Economic Future, a pool of philanthropic and nonprofit entities that has directed $38 million to the six organizations the past six years.
But the Fund is in a new money-raising cycle now. There's no assurance it can raise a similar amount of money, or that it will even exist after the next three years.
That's why anxious leaders of economic development efforts hope NEO 77 results in more dependable financial support in the long run.
"Fund raising in general . . . requires a different approach from what we're doing today," said Rick Batyko, head of the Cleveland Plus Marketing Alliance, which supports Team NEO's business-marketing efforts. "To my understanding, that's what NEO 77 is primarily about."
Batyko watched his budget drop to $1.8 million this year, from $2.2 million, due to a cut in state funding.
Rebecca Bagley, new president of NorTech, which promotes high-tech industries, projects that her $2.4 million budget will drop next year.
That means she'll be spending more time raising money, with direct appeals to chambers of commerce outside Cuyahoga County.
NEO 77 should be an opportunity to consider establishing a regional council of business leaders, Whitehead suggested.
The council could help set economic development priorities and direct money to them, Whitehead said. A council would allow the region to act more quickly on business-building opportunities, Whitehead said.
"We hope [NEO 77] will lead to greater regional coordination among the business leadership," Whitehead said.
November 15, 2009, 9:55AM
Top corporate leaders in Akron and Cleveland are quietly discussing ways to better align and fund economic development efforts in the region.
The strategizing is called NEO 77, in recognition of the Interstate highway that links the region's largest cities.
The talks include ways to broaden the financial support for six specialty development organizations in the region, whose missions range from attracting new business to growing minority-owned companies.
The efforts of organizations like Team NEO and NorTech are paying off, business leaders believe.
But the "alphabet soup" of organizations confuses some corporate leaders, whose companies are fielding multiple requests for funding.
"Major corporations have a person from NorTech coming in one day, then a person from Team NEO the next day," said Thomas Strauss, chief executive at Summa Health System and board chairman for the Greater Akron Chamber of Commerce.
Strauss said talks started this summer with Henry Meyer, chief executive of KeyCorp and board chairman for the Greater Cleveland Partnership, Cleveland's chamber of commerce; and Christopher Connor, chief executive of Sherwin-Williams Co., vice chairman of the partnership and board chairman for Team NEO, the region's business-attraction organization.
Strauss emphasized that talks were in an early stage and would include Canton business leaders, too.
Meyer and Connor declined to be interviewed. Their spokesmen referred questions to Joe Roman, president of the Greater Cleveland Partnership.
Roman said the chambers are considering how to better link their "dollars and leadership" in support of the economic development organizations.
"We're looking at how we can sustain what has been a very potent system," said Roman, whose chamber funnels hundreds of thousands of dollars yearly to the specialty development groups.
In the past five years, the six organizations had an impact valued at hundreds of millions of dollars on the region, by attracting public investment and venture capital and expanding payrolls, officials said.
"It's clear the programs we're pursuing in collaboration with the business community are working," said Brad Whitehead, president of the Fund for Our Economic Future, a pool of philanthropic and nonprofit entities that has directed $38 million to the six organizations the past six years.
But the Fund is in a new money-raising cycle now. There's no assurance it can raise a similar amount of money, or that it will even exist after the next three years.
That's why anxious leaders of economic development efforts hope NEO 77 results in more dependable financial support in the long run.
"Fund raising in general . . . requires a different approach from what we're doing today," said Rick Batyko, head of the Cleveland Plus Marketing Alliance, which supports Team NEO's business-marketing efforts. "To my understanding, that's what NEO 77 is primarily about."
Batyko watched his budget drop to $1.8 million this year, from $2.2 million, due to a cut in state funding.
Rebecca Bagley, new president of NorTech, which promotes high-tech industries, projects that her $2.4 million budget will drop next year.
That means she'll be spending more time raising money, with direct appeals to chambers of commerce outside Cuyahoga County.
NEO 77 should be an opportunity to consider establishing a regional council of business leaders, Whitehead suggested.
The council could help set economic development priorities and direct money to them, Whitehead said. A council would allow the region to act more quickly on business-building opportunities, Whitehead said.
"We hope [NEO 77] will lead to greater regional coordination among the business leadership," Whitehead said.
Indiana officials seek economic development in California
MUNCIE -- Recent trips by local officials to Japan and China have made headlines, but an economic development junket to California has potential to boost one of Delaware County's newest companies and spark local employment.
Mayor Sharon McShurley and Terry Murphy, vice president for economic development for the Muncie-Delaware County Economic Development Alliance, accompanied Greg Winkler, director of project development for Brevini Wind, and Oliver Viehweider, owner of VAT, on the California trip in October.
"It was about a 40-hour trip," Winkler said. "It was very productive. What we're hoping is it results in an opportunity to build gearbox replacements for wind turbines already in the field, a whole other part of the business we're very excited about."
The California trip was prompted by contacts made during McShurley's September trip to Japan, Winkler said, referring to a two-week trip that also included stops in China.
During the trip to California, local officials met with one company -- which Winkler declined to name -- but when Winkler returns next week he'll meet with two companies.
If Brevini lands contracts with the companies, Winkler said, that not only means more work for Brevini's employees -- projected at 450 workers needed after production begins in 2010 at the company's western Delaware County facility -- but also for suppliers.
Winkler said having McShurley and Murphy along on the trip demonstrated to potential business partners the support of the Delaware County community.
"We very much appreciate the help, the relationship-building, that the mayor and Terry bring to the table," Winkler said.
"Terry was there to tell them how we as a community have supported Brevini and VAT," McShurley said. "I went out as mayor representing the city of Muncie. We became aware of the opportunity in Japan; we came back and connected those dots."
Mayor Sharon McShurley and Terry Murphy, vice president for economic development for the Muncie-Delaware County Economic Development Alliance, accompanied Greg Winkler, director of project development for Brevini Wind, and Oliver Viehweider, owner of VAT, on the California trip in October.
"It was about a 40-hour trip," Winkler said. "It was very productive. What we're hoping is it results in an opportunity to build gearbox replacements for wind turbines already in the field, a whole other part of the business we're very excited about."
The California trip was prompted by contacts made during McShurley's September trip to Japan, Winkler said, referring to a two-week trip that also included stops in China.
During the trip to California, local officials met with one company -- which Winkler declined to name -- but when Winkler returns next week he'll meet with two companies.
If Brevini lands contracts with the companies, Winkler said, that not only means more work for Brevini's employees -- projected at 450 workers needed after production begins in 2010 at the company's western Delaware County facility -- but also for suppliers.
Winkler said having McShurley and Murphy along on the trip demonstrated to potential business partners the support of the Delaware County community.
"We very much appreciate the help, the relationship-building, that the mayor and Terry bring to the table," Winkler said.
"Terry was there to tell them how we as a community have supported Brevini and VAT," McShurley said. "I went out as mayor representing the city of Muncie. We became aware of the opportunity in Japan; we came back and connected those dots."
Saturday, November 14, 2009
Smaller communities search for ways to stand out in economic development
Larger cities throughout the Northern Great Plains like Sioux Falls, Fargo and Bismarck continue to grab headlines for their relative economic strength in the midst of a recession. But recent research has indicated that a growing number of employers and workers are considering leaving congested major population centers in search of a simpler life in smaller communities with less crime and shorter commute times. More.
Factory losses strike deepest in rural Iowa
Kirk McCullough knows rural towns, heavily dependent on manufacturing, are in danger.
"It feels like the jobs are moving to big cities, metropolitan areas. But I'm not ready to say we're going to turn into a ghost town. We'll turn it around," McCullough said. He owns Seneca Foundry, a 100-year-old company in Webster City, the latest Iowa town to learn its largest employer will close its plant.
While few Iowa communities have escaped layoffs in the past year, the current recession has hit factory jobs harder in rural towns than in metro areas, new data from Iowa State University show.
Boone, Mount Pleasant, Ottumwa and other places with fewer than 30,000 residents have lost nearly 20,000 factory jobs since 2007, when the current recession began nationally. That's twice as many production positions than Iowa has lost in metro areas such as Des Moines, Cedar Rapids and Davenport, data from ISU economist Liesl Eathington show.
The loss of factory floor jobs may seem a remote concern for city office workers, but the fate of small-town manufacturing — usually high-paying jobs with good benefits — is crucial to Iowa's economy.
Production of grain bins, car crushers and cereal makes up the largest chunk of Iowa's economy at 21 percent, about $28.2 billion of the state's $135.7 billion gross domestic product, 2008 federal data show. Manufacturing contributes more to Iowa's economy than insurance and finance, construction, and agriculture combined. Iowa's economic dependence on manufacturing ranks second in the nation only after Indiana.
With the odds stacked against them, economic development leaders in Webster City and elsewhere are looking to renewable energy, entrepreneurs and existing companies to replace lost manufacturing jobs. One key will be worker willingness to retrain, experts say. More.
"It feels like the jobs are moving to big cities, metropolitan areas. But I'm not ready to say we're going to turn into a ghost town. We'll turn it around," McCullough said. He owns Seneca Foundry, a 100-year-old company in Webster City, the latest Iowa town to learn its largest employer will close its plant.
While few Iowa communities have escaped layoffs in the past year, the current recession has hit factory jobs harder in rural towns than in metro areas, new data from Iowa State University show.
Boone, Mount Pleasant, Ottumwa and other places with fewer than 30,000 residents have lost nearly 20,000 factory jobs since 2007, when the current recession began nationally. That's twice as many production positions than Iowa has lost in metro areas such as Des Moines, Cedar Rapids and Davenport, data from ISU economist Liesl Eathington show.
The loss of factory floor jobs may seem a remote concern for city office workers, but the fate of small-town manufacturing — usually high-paying jobs with good benefits — is crucial to Iowa's economy.
Production of grain bins, car crushers and cereal makes up the largest chunk of Iowa's economy at 21 percent, about $28.2 billion of the state's $135.7 billion gross domestic product, 2008 federal data show. Manufacturing contributes more to Iowa's economy than insurance and finance, construction, and agriculture combined. Iowa's economic dependence on manufacturing ranks second in the nation only after Indiana.
With the odds stacked against them, economic development leaders in Webster City and elsewhere are looking to renewable energy, entrepreneurs and existing companies to replace lost manufacturing jobs. One key will be worker willingness to retrain, experts say. More.
Economic development must move beyond taxes, freeways, railroads and land, to talent, education, innovation, and entrepreneurs
Every twenty years, South Carolina lands a major buffalo like BMW or Boeing. Attracting Boeing is terrific in itself, but it likely will reinforce the bad habits of the economic development community to focus almost all their efforts on industrial recruitment in order to land the next buffalo.
Need proof? In a recent meeting, the Anderson Independent reports that economic development leaders reemphasized the traditional industrial recruitment strategy as the path to prosperity for Anderson. “The tax structure here, the freeway, the railroads, this is a logical place for companies. But you have got to have a location for them to land on.” The economic development leadership “challenged Anderson County today to offer aggressive tax benefits and build inventory of available sites to try to land large industries.”
Is this view of economic development wrong? Well no, if the objective of your economic development strategy is to recruit the next branch manufacturer. But is this to best economic development strategy for the future of Anderson Country, or for the rest of the state for that matter? No. Not in the 21st century global economy.
Anderson needs to move away from trying get branch manufacturers to locate there because they have cheap land, cheap labor and incentives. As the singular focus of economic development, that strategy is obsolete.
The largest private employer in Anderson in AmMed. How does Anderson grow AnMed? And how does Anderson grow an ecosystem of small and medium companies and education institutions that make AnMed as the health care anchor of Anderson more innovative and productive? How does Anderson identify and support the high impact entrepreneurial company that starts-up to meet an AnMed need, and then can grow into a major company serving other hospitals across the country or even globally? Focusing on growing health care, and making it more innovative and productive, can grow thousands of well paying, stable jobs in Anderson.
There are eighteen high-impact companies forming the “Clemson cluster,” that have grown up in recent years around the university. How Does Anderson make sure that some of these seeds are planted in Anderson to grow into the next major company headquartered there?
Anderson has major production facilities, like Michelin, Bosch and others. How can Anderson grow an ecosystem of small and medium companies and education institutional around these anchors that makes them more innovative and productive? Recruiting BMW manufacturing was great, but that was followed by leveraging that relationship using Clemson as a magnet to attract the BMW Information Technology Research Center as a foundation of CU-ICAR. How can Anderson leverage their relationships with global companies to attract other, more innovative parts of those companies, especially around the Clemson Advanced Materials Lab which is located in Anderson?
Speaking of start-ups and small and medium sized enterprises, there are very talented and experienced people associated with Tri-country Technical College and Anderson University. How does Anderson incubate business opportunities spinning out of those institutions, as well as Clemson?
All of this requires top flight talent, which Anderson won’t have unless it reforms public education. Anderson has one of the better public school superintendents in Becky Bagley in Anderson District 5. How does Anderson support her and make sure the other public schools districts in Anderson are high quality? A national leader in Montessori education, Paul Epstein, is the head of the Montessori School of Anderson. How does Anderson makes sure more students benefit from this wonderful asset? Anderson has an incredible champion focused on early childhood education for children in poverty, Roy Jeffcoat. How does Anderson makes sure Roy’s program get the support it deserves?
Anderson needs to make sure that it hangs onto, and attracts more of, its best and brightest talent. I recently was in a meeting in Anderson, where an educated young woman said she had recently moved to Anderson after considering several other places in the Upstate, like Greenville. She intentionally chose Anderson because she thought it was a wonderful, walkable, green community. Anderson needs to grab hold of young people like her to understand and build on what they find great about Anderson so they attract and retain more of the best and brightest.
Am I being too harsh on the economic development community? I don’t think so. I hope they take this as a sobering call to action. Instead of focusing myopically on taxes, freeways, railroads and land, economic development professionals also should focus on talent, education, innovation, and entrepreneurs. The SC Department of Commerce, the Upstate Alliance, and the Anderson County Office of Economic Development need to develop and execute a comprehensive economic development strategy of which industrial recruitment is a part, but where cheap land, cheap labor and incentives are no longer treated as sufficient for Anderson to become the prosperous community its citizens aspire for it to be.
By John Warner, Courtesy of Swamp Fox
Need proof? In a recent meeting, the Anderson Independent reports that economic development leaders reemphasized the traditional industrial recruitment strategy as the path to prosperity for Anderson. “The tax structure here, the freeway, the railroads, this is a logical place for companies. But you have got to have a location for them to land on.” The economic development leadership “challenged Anderson County today to offer aggressive tax benefits and build inventory of available sites to try to land large industries.”
Is this view of economic development wrong? Well no, if the objective of your economic development strategy is to recruit the next branch manufacturer. But is this to best economic development strategy for the future of Anderson Country, or for the rest of the state for that matter? No. Not in the 21st century global economy.
Anderson needs to move away from trying get branch manufacturers to locate there because they have cheap land, cheap labor and incentives. As the singular focus of economic development, that strategy is obsolete.
The largest private employer in Anderson in AmMed. How does Anderson grow AnMed? And how does Anderson grow an ecosystem of small and medium companies and education institutions that make AnMed as the health care anchor of Anderson more innovative and productive? How does Anderson identify and support the high impact entrepreneurial company that starts-up to meet an AnMed need, and then can grow into a major company serving other hospitals across the country or even globally? Focusing on growing health care, and making it more innovative and productive, can grow thousands of well paying, stable jobs in Anderson.
There are eighteen high-impact companies forming the “Clemson cluster,” that have grown up in recent years around the university. How Does Anderson make sure that some of these seeds are planted in Anderson to grow into the next major company headquartered there?
Anderson has major production facilities, like Michelin, Bosch and others. How can Anderson grow an ecosystem of small and medium companies and education institutional around these anchors that makes them more innovative and productive? Recruiting BMW manufacturing was great, but that was followed by leveraging that relationship using Clemson as a magnet to attract the BMW Information Technology Research Center as a foundation of CU-ICAR. How can Anderson leverage their relationships with global companies to attract other, more innovative parts of those companies, especially around the Clemson Advanced Materials Lab which is located in Anderson?
Speaking of start-ups and small and medium sized enterprises, there are very talented and experienced people associated with Tri-country Technical College and Anderson University. How does Anderson incubate business opportunities spinning out of those institutions, as well as Clemson?
All of this requires top flight talent, which Anderson won’t have unless it reforms public education. Anderson has one of the better public school superintendents in Becky Bagley in Anderson District 5. How does Anderson support her and make sure the other public schools districts in Anderson are high quality? A national leader in Montessori education, Paul Epstein, is the head of the Montessori School of Anderson. How does Anderson makes sure more students benefit from this wonderful asset? Anderson has an incredible champion focused on early childhood education for children in poverty, Roy Jeffcoat. How does Anderson makes sure Roy’s program get the support it deserves?
Anderson needs to make sure that it hangs onto, and attracts more of, its best and brightest talent. I recently was in a meeting in Anderson, where an educated young woman said she had recently moved to Anderson after considering several other places in the Upstate, like Greenville. She intentionally chose Anderson because she thought it was a wonderful, walkable, green community. Anderson needs to grab hold of young people like her to understand and build on what they find great about Anderson so they attract and retain more of the best and brightest.
Am I being too harsh on the economic development community? I don’t think so. I hope they take this as a sobering call to action. Instead of focusing myopically on taxes, freeways, railroads and land, economic development professionals also should focus on talent, education, innovation, and entrepreneurs. The SC Department of Commerce, the Upstate Alliance, and the Anderson County Office of Economic Development need to develop and execute a comprehensive economic development strategy of which industrial recruitment is a part, but where cheap land, cheap labor and incentives are no longer treated as sufficient for Anderson to become the prosperous community its citizens aspire for it to be.
By John Warner, Courtesy of Swamp Fox
Economic development from Kelo case fails
By Steve Stanek
Commentary
One of the worst decisions in U.S. Supreme Court history is now linked with one of the worst economic development failures in history. We should not be surprised, as “economic development” failures cover the country.
Pharmaceuticals company Pfizer has announced plans to pull out of New London, Conn., where local officials spent $75 million to destroy a middle-income neighborhood of homes and small businesses. Jobs and higher tax revenues that had been promised have not appeared, and the homes and businesses have been flattened, leaving the 90 acres looking like a desert.
Instances of such government abuse scar the country. The New London case makes news because of the scale of the abuse and the infamy it produced:
the Supreme Court’s 2005 decision in Kelo v. City of New London, in which five so-called justices spat on the Constitution they had sworn to uphold.
They ruled no one has a right to their own property if someone else wants to use it in ways that might - might! - generate more tax revenue or jobs. The ruling prompted most states to rework their eminent domain laws to protect property owners from the impact of the court’s decision.
“Economic development projects like these have a horrible track record, yet city officials fall for them time and again,” said Scott Bullock, an attorney with the Institute for Justice who represented plaintiffs in the Kelo case. “The city remediated the property, spending huge sums to do that, and gave the property to Pfizer for a dollar. And it gave massive tax abatements that are expiring in 2011. Pfizer will be out one year before the tax abatements are shut off and they have to pay the full bill.”
What grand economic development plans they had! The city would seize the Fort Trumbull neighborhood’s nearly 100 homes and small businesses and turn the property over to Pfizer to build condos, corporate offices, and a conference hotel next to the company’s research facility. Those developments would in turn generate jobs and tax revenue for New London.
None of the development has occurred or will occur, and the adjacent Pfizer research facility - opened just eight years ago - will be cleared out as well, taking 1,400 existing jobs elsewhere.
One homeowner who meant nothing to city officials was Susette Kelo, who led her neighbors in a fight to defend their homes, their freedoms, and the Constitution. That document says government may take property only for “public use” after paying “just compensation.” For most of the nation’s history, public use was understood to mean things such as public roads or utilities.
The majority of justices in the Kelo decision perversely declared private, profit-making shopping centers, industrial parks, hotels, sports stadiums, upscale housing developments and similar projects also warrant to property seizures by government. Their ruling states a “public purpose” - not a “public use” - is enough to justify government seizing private property.
Justice John Paul Stevens wrote in the majority opinion, “promoting economic development is a traditional and long accepted function of government.” Under his ruling, property does not have to be abandoned or blighted to be seized. The government could seize a $1 million house from its owner to give it to someone who wants to build a $3 million house.
Then-Justice Sandra Day O’Connor rightly noted in her dissent, “The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more. The founders cannot have intended this perverse result.”
Can anyone doubt the truth behind O’Connor’s words?
Commentary
One of the worst decisions in U.S. Supreme Court history is now linked with one of the worst economic development failures in history. We should not be surprised, as “economic development” failures cover the country.
Pharmaceuticals company Pfizer has announced plans to pull out of New London, Conn., where local officials spent $75 million to destroy a middle-income neighborhood of homes and small businesses. Jobs and higher tax revenues that had been promised have not appeared, and the homes and businesses have been flattened, leaving the 90 acres looking like a desert.
Instances of such government abuse scar the country. The New London case makes news because of the scale of the abuse and the infamy it produced:
the Supreme Court’s 2005 decision in Kelo v. City of New London, in which five so-called justices spat on the Constitution they had sworn to uphold.
They ruled no one has a right to their own property if someone else wants to use it in ways that might - might! - generate more tax revenue or jobs. The ruling prompted most states to rework their eminent domain laws to protect property owners from the impact of the court’s decision.
“Economic development projects like these have a horrible track record, yet city officials fall for them time and again,” said Scott Bullock, an attorney with the Institute for Justice who represented plaintiffs in the Kelo case. “The city remediated the property, spending huge sums to do that, and gave the property to Pfizer for a dollar. And it gave massive tax abatements that are expiring in 2011. Pfizer will be out one year before the tax abatements are shut off and they have to pay the full bill.”
What grand economic development plans they had! The city would seize the Fort Trumbull neighborhood’s nearly 100 homes and small businesses and turn the property over to Pfizer to build condos, corporate offices, and a conference hotel next to the company’s research facility. Those developments would in turn generate jobs and tax revenue for New London.
None of the development has occurred or will occur, and the adjacent Pfizer research facility - opened just eight years ago - will be cleared out as well, taking 1,400 existing jobs elsewhere.
One homeowner who meant nothing to city officials was Susette Kelo, who led her neighbors in a fight to defend their homes, their freedoms, and the Constitution. That document says government may take property only for “public use” after paying “just compensation.” For most of the nation’s history, public use was understood to mean things such as public roads or utilities.
The majority of justices in the Kelo decision perversely declared private, profit-making shopping centers, industrial parks, hotels, sports stadiums, upscale housing developments and similar projects also warrant to property seizures by government. Their ruling states a “public purpose” - not a “public use” - is enough to justify government seizing private property.
Justice John Paul Stevens wrote in the majority opinion, “promoting economic development is a traditional and long accepted function of government.” Under his ruling, property does not have to be abandoned or blighted to be seized. The government could seize a $1 million house from its owner to give it to someone who wants to build a $3 million house.
Then-Justice Sandra Day O’Connor rightly noted in her dissent, “The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more. The founders cannot have intended this perverse result.”
Can anyone doubt the truth behind O’Connor’s words?
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