Monday, November 30, 2009

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.”  

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