Optimism Abounds for Economic Development Strategy Despite Set Backs

In the midst of the worst economic downturn since the Great Depression, the Greater Owensboro Economic Development Corp. remains optimistic about the economic development strategy created in 2006 to position the region for long-term economic vitality. 

EDC leadership stresses that it is important, now more than ever, to diversify the regional economy. 

“We have been watching this global economy evolve for a long time anticipating that we could be affected,” said EDC Board Chair Darrell Higginbotham.  “We have a three-year head start in adjusting to the shifting economic circumstances impacting us this year. “

The EDC Strategic Plan created a four tier strategy focusing on supporting existing businesses, targeted business attraction efforts, nurturing high technology company startups, and attracting and developing a highly skilled workforce. “Sitting face-to-face with individuals and companies impacted by this global downturn has further motivated us to work harder than ever on a multi-faceted approach to economic development,” said Higginbotham.  

EDC employs a business-attraction strategy, using a targeted approach to recruit new companies.  A thorough data analysis of the region’s economic base, supplier relationships, workforce skill location quotients, and innovations within industries has resulted in a more sophisticated approach in finding realistic targets.  This analysis is followed by targeted marketing efforts of high-growth companies in several sectors of the economy, including energy, advanced manufacturing, and professional services.

“We have conducted three coordinated campaigns this year,” said EDC President/CEO Nick Brake.  “One in green energy hoping to capitalize on stimulus dollars in that sector, one in back office and professional service areas similar to the jobs US Bank has in the region, and one in advanced manufacturing.”   Brake also indicated that EDC is a partner with the Kentucky Cabinet for Economic Development and Kentucky United, a group of regional economic development agencies that work to promote Kentucky to site selectors. 

Owensboro was ranked eighth last year by Site Selection magazine for most economic development projects among small regions.  Brake said EDC is planning additional targeted campaigns in 2010.  

Communities around the country are shifting economic development strategies in response to the recession.  For example, Atlanta has a new strategy that uses the same targeted approach EDC is currently employing.  Additionally, Kansas City is joining a host of other communities in focusing on entrepreneurship and innovation as opposed to industry attraction. 

“Owensboro continues to be proactive in its job creation strategy,” said Larry Hayes, secretary of the Kentucky Cabinet for Economic Development.  “During my recent visit with community officials, it was evident that they had laid the appropriate groundwork to accomplish their long-term economic goals.”

Support for existing industries is also a critical component of the EDC strategy.  Nearly two-thirds of new jobs in any given community are a result of existing companies.  In the past 12 months, EDC has worked with 16 companies on expansion projects totaling over $90 million in investment and more than 500 new jobs in the region.  

The existing industry program has also been busy working with companies such as West Irving Die Casting, GE, and Hon who have either shut down or will be closing their doors in the coming months.   The EDC coordinates with the Owensboro Community and Technical College and Green River Workforce Investment Board to assist in providing retraining opportunities to workers impacted by plant closings and layoffs. 

 “Our community college is a huge asset in the work we do with dislocated workers,” Brake said.  “While a plant closing is never a good situation, we’re able to provide affected workers the opportunity to receive free retraining all the way to a postsecondary degree.   This not only benefits the worker, but allows the community to retool its workforce in high-growth areas such as health care and energy.” 

Owensboro is feeling the squeeze that many other parts of the nation have felt with manufacturing.  Brake said the days of Owensboro being solely a manufacturing based economy are over.  “This is why the expansion of the Owensboro Medical Health System is so important.  It will further diversify our economy.”  Brake also says that hospitals and universities are increasingly drivers of small and medium size economies.   “The evidence is pretty clear that health care is no longer just a service industry—it is a significant economic base industry for many of the peer communities that we use as benchmarks.” 

EDC began an emphasis on high tech development and support for entrepreneurs thanks to funding from the state for the Emerging Ventures Innovation Center program headed by Madison Silvert.  Earlier this year, Silvert was invited to speak to the Kansas City EDC about the success Owensboro has had in nurturing entrepreneurs.  In the past three years, EDC has added significant infrastructure to support high tech company development in Owensboro.  Emerging Ventures has been successful in supporting newly formed companies and creating jobs with pay levels well above the median income in the region. 

“Working with entrepreneurs and high-tech startups has gained a lot of momentum with all of the plant biotech activities at Kentucky BioProcessing,” said Silvert.   “Our new business accelerator, the Centre for Business and Research will provide an opportunity of an entirely new dimension of economic development for this region.”

However, Higginbotham stresses that EDC has not put all eggs in one basket.  “Support for entrepreneurs is an important component of our overall strategy.  It just so happens that in times of economic distress, it is small businesses and entrepreneurs who lead the way out of these recessionary periods.”  

Hancock County Using College Credits and New Campus to Address Workforce Needs

As a potential workforce crisis looms in Hancock County, the local school system has created an innovative program to address the needs for a highly skilled workforce.  The needs are well documented.  According to Mike Baker, the economic development director in Hancock County, an aging workforce at many of the large aluminum and manufacturing employers means that as many as 42 percent of the skilled technicians could retire in the next three to five years.

That is a primary reason that Baker and other local officials have worked to create a satellite campus of the Owensboro Community and Technical College in the county.

Hancock County Schools Superintendent Scott Lewis has a vision that the new campus and the OCTC Discover College program that allows high school students to take college courses will mean that new graduates can meet the needs of local industries.


The project also will help the school district fulfill its vision for high school students to be able to take up to 60 college hours and have about two years of college credits "paid for" by the time they graduate, the superintendent said. "We're getting very close to having that plan worked out," Lewis said. "Students can do that now, but they pay for it. This would cost the school district, but it would be free to students."

The goal is for high school students to have the opportunity "to graduate with a vocational certificate and be employable or to have enough college credits to be close to an associate's degree," he said. Currently, students who are dually enrolled are "ones who would go on to college anyway," he said.  Local educators want to see more of their students who may not have thought about college to learn that they can succeed.

"A lot of our kids -- they may be the first in their families to go to college," he said.  The high school already has begun to align its curriculum with OCTC's, Lewis said.  "At the same time, that increases our rigor," he said. "We've done a good job of doing that in elementary and middle school, but our high school had stayed the same until now."

This model demonstrates the role that high school and community college collaboration can play in the economic development of rural areas.

KAN Members Share with Legislators the Importance of Aluminum Industry in Kentucky

Members of the Kentucky Aluminum Network (KAN) discussed the importance of the aluminum industry in the overall state economy to legislative leaders yesterday.  KAN members outlined the core issues and threats facing the industry to the Joint Interim Committee on Economic Development in Frankfort.  Top issues include the availability of cost effective energy, workforce development, facility infrastructure development, and informed and collaborative environmental policies.  Click here to see the presentation.  

Business Week Names Owensboro Best Place to Raise Your Kids in Kentucky

The combination of low crime, outstanding school test scores, and a low cost of living that makes Owensboro a great place to raise kids.  Check it out on http://www.businessweek.com/


http://images.businessweek.com/ss/09/11/1117_best_places_to_raise_kids/index.htm

Congressman Guthrie will announce $1 Million Federal Grant for Owensboro Centre for Business and Research

Congressman Brett Guthrie will be in town to announce the award of $986,800 in grants from the Economic Development Administration to the EDC and the City of Owensboro for the purchase of equipment at the Centre for Business and Research.  The grant, which was applied for with the assistance of GRADD, is for communities damaged by Hurricane Ike and the recessionary effects of the market in 2008.

The Centre for Business and Research will contain approximately 30,000 square feet of office space for high-tech business start-ups in the food science and plant therapeutic industries, and will offer companies the ability to rent laboratory facilities "by the bench."  The Centre, scheduled to open in the first quarter of 2010, seeks to be the region's premiere business accelerator for biotech companies.

The announcement will take place tomorrow at 10:30 am at the Centre for Business and Research, 1010 Allen Street.

New Hospital Catalyst in Owensboro's Shifting Economy

The following is the text of remarks by EDC President/ CEO Nick Brake at the Board of Adjustment meeting to approve the conditional use permit for the new hospital on the east-side of Owensboro:

Some in the community are approaching the opportunity of a new hospital from a 20^th century perspective. From this point of view the hospital serves the same basic function of a church or a grocery store in providing services to the people that live here. Hospitals are considered strictly a service industry and therefore do not count as economic development.

I am going to challenge us to view this opportunity in the context of our present global economic age—in this environment the drivers of regional economies especially in mid size or small regions are no longer just large companies—they are institutions like hospitals and research universities.

While it is certainly true that our hospital does take seriously their fundamental mission of taking care of our people, like other growing medical systems OMHS has successfully pursued an economic development mission that make it more than just a community hospital. And since we do not have-- nor ever will likely have-- a research university —our hospital is our driver. And as a result they have positioned Owensboro as a regional medical hub with innovative partnerships in research, teaching, and economic development. The location in eastern Daviess County adjacent to the I-65/ I-64 Corridor is the best location for the OMHS to expand for the good of our economy.

The economic development importance of hospitals is evident in looking at our peer communities. U of L economist Paul Coomes identified these regions for us as a way to benchmark ourselves against like communities. None of these communities have research universities; all are similar to Owensboro in terms of population and infrastructure. We have used these regions as benchmarks in examining the impact of the current recession. Those with a large percentage of workers in medical occupations have significantly lower unemployment rates, 6- 8 % during this recession. Those with the smallest concentrations of medical workers have the largest unemployment rates, between 13 -16%. Owensboro is right in the middle of the list of 12 peers.

A great example from one of our benchmark communities that has transitioned from manufacturing to health care is LaCrosse, WI. They have developed one of the largest medical clusters per capita in the United States. They do not have a research university—they have a regional university campus. We are positioned similarly with the growth of Western Kentucky University-Owensboro and other higher education partnerships, many of which are connected to OMHS. LaCrosse is a couple of hours from the Mayo Clinic and have numerous partnerships much the way OMHS collaborates with hospitals in Louisville and Nashville. The medical cluster in LaCrosse consists of almost 9,000 people; their bachelor degree attainment rate is 27%, a full 10 percentage points ahead of ours. During the recession over the past year their unemployment rate topped out at around 8% and has averaged at 6% for most of the recession. They have an active research and technology transfer component that has lead to the formation of new companies and new jobs. This is a great chance to transform our economy.

Given the way global economic forces have decimated many small regions throughout the Midwest and southeast-- not supporting the expansion of this hospital would be a betrayal to our future economic prosperity. The days of us being solely a manufacturing based economy are over. This expansion will further diversify our economy. We have seen these forces touch us in the past month at Hon and GE. The headline in the paper tomorrow will be about 100 more laid off at Daramic. We have a unique opportunity to retrain our workforce with these layoffs; many are already seeking retraining in the medical field.

The location on the eastern side of the county is strategically superior to the current hospital site on Parrish Ave. The clear opportunity for growth from a community hospital to a regional medical hub exists because OMHS will be in a position to capitalize on the Southern Indiana and north central Kentucky markets further away from Evansville and closer but not too close to Louisville. This location will enhance the hospital’s services as an export industry, which translates into more primary dollars circulating through out local economy.

I want to address the issue of the Parrish Ave campus. If you look at the former Mercy Hospital property on Ford Ave, OMHS has made that property very attractive and a functional part of their health system, focusing on wellness. I know the plans have not been finalized, but certainly there are exciting opportunities for the best use of the Parrish Campus. I mentioned earlier higher education and research—it would be a tremendous way to help aide the further expansion of allied health and applied research programs. The OMHS Campus is close to our new business accelerator the Centre for Business and Research—the Parrish Campus could be a fully functional technology park for many of these companies to grow into—the possibilities are limitless, the commitment from OMHS is strong, and the track record of previous property development is exceptional.

Lastly, I want to address the expansion of OMHS and the potential for planned, smart growth-type expansion along the new corridor. It is not a question of if development will occur along that corridor; it is more of a question of when. Allowing planned expansion of the hospital along that route puts the community in the driver’s seat to leverage sustainable development rather than allowing unplanned suburban expansion to occur as a consequence of a new highway.

The options are clear; if we want OMHS to be Owensboro’s hospital then they can stay where they are presently located. If we want them to be our region’s medical center and the catalyst of an economic change, then approve this tonight so that we that together we can take the next step helping this region be competitive in the 21^st Century economy.

Kentucky BioProcess collaborating in development of anti-rabies antibody with South African-based Council for Scientific and Industrial Research

OWENSBORO, KY – Kentucky BioProcessing (KBP) has signed an agreement with the South African-based Council for Scientific and Industrial Research (CSIR) to develop a commercially efficient process for RabiVir,—CSIR’s award-winning anti-rabies antibody developed in a start up venture with GreenPharm.

The announcement follows GreenPharm's achievement in the Innovation Fund’s SA Bio Business Plan Competition* at the end of 2008. CSIR plant biotechnologists walked away with an investment indication of up to R15 million (approximately $2 million US) and an opportunity for further training in the USA.

The start-up venture holds tremendous potential for using plants (in particular tobacco) to generate proteins used in preventative post-exposure rabies treatment and other complex therapeutic proteins such as HIV antibodies at a competitive price. Before finalizing the partnership, representatives from CSIR toured KBP.

Contract research and development manager at CSIR Biosciences, Fanie Marais, says, “KBP is well respected for its expertise in producing clinical grade biotherapeutics in plants. It has world-class good manufacturing production compliant (cGMP) facilities and provides contract services for bench scale, pilot and manufacturing process development in this field. cGMP conditions are essential for the production of antibodies that will go into early phase of safety testing.

According to the agreement with the CSIR, KBP will assist in the development of a process for the purification and preparation of clinical grade monoclonal antibodies (i.e high purity antibodies suitable for use in clinical development). The technology will be transferred to the CSIR and as part of the technology transfer process, CSIR scientists will spend time at KBP for training in all stages of process development. The agreement with KBP will help us speed up the commercialization process of RabiVir.

“We will also obtain the necessary documentation from KBP as prescribed by the USA Food and Drug Administration to enable registration of the antibodies with the regulatory authorities,” Marias said. “This development bodes well not only for the successful production and commercialisation of clinical batches of an anti-rabies antibody, which would be packaged as a post-exposure prophylaxis, but also for human capital development within South Africa.”