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Tuesday, Sep. 30, 2014

Economic outlook changing

Sunday, April 3, 2005

(Photo)
David R. Kolzow, keynote speaker
SIKESTON - Economic development is not what it used to be: economies are changing and economic developers need to be more creative and effective than ever.

"Don't think the path you're on is an easy one," advised David R. Kolzow, keynote speaker for the Southeast Missouri Economic Development Alliance's spring conference Friday at the Sikeston Area Higher Education Center.

Kolzow, who resides in Hattiesburg, Miss., has almost 30 years of consulting experience in site selection, real estate development planning and community economic development. His past clients include some of the largest land developers in the nation in addition to numerous communities and states.

SMEDA is on the right track with its regional economic development strategy, according to Kolzow, as marketing and branding efforts aren't as effective for cities as they are for regions. When looking for a place to locate a business, "you are not going to start with an individual community," he said.

One advantage of regionalism is a greater influence on state and federal legislation. "When you come as a region, it gets a lot more attention," Kolzow said. "Lobby as a region, a united voice."

There are barriers to regional economic development, however, including competition among local governments, local pride, defining a region's boundaries and the lack of effective and viable regional strategic plans. Kolzow said it is also difficult to develop leaders at the regional level.

In marketing a region, transportation, higher education, workforce development, environmental improvements and water supply are among the important issues.

He cautioned that marketing is not really the first step. To be effective today, Kolzow said the focus should be more on product development and less about prospect development. "Until you build a product, you don't have anything to market," he said.

Traditionally people think of economic development as jobs, Kolzow said, but true indicators are when the standard of living is increasing, there is a real increase in average income, the tax base is growing faster than the cost of government services and the quality of life is improving.

Economic development is facilitated through developing a skilled workforce, investing in physical infrastructure, creating new jobs at higher wages, improving the business environment, and the availability of marketable land and buildings, according to Kolzow. He said 80-90 percent of site searches start with looking for available buildings.

Kolzow discussed major trends which impact regional economic development. Economic development used to be about "chasing smokestacks," he said. "That is shifting." Now the trend seems to be "build it and they will come."

Typical rural services industries include tourism, recreation, regional trade and catering to retirees while larger rural centers also attract back offices and customer service call centers.

In discussing the "new economy," Kolzow said things are becoming more digital and information driven. Innovation is leading to highly-customized information, service and products. Companies are finding themselves in relationships with competitors that are also collaborative.

Kolzow talked about the importance of "industry clusters" such as electronics in the Silicon Valley, plastics in northeast Ohio, or even entertainment in the Branson area because related industries "feed off each other."

To achieve growth, communities need to achieve a concentration of knowledgeable and skilled workers, Kolzow said, adding that skilled workers today are highly mobile. "It's a different day and age," he said.

Small businesses, defined as those with under 100 employees, now make up two-thirds of new jobs and employ more than half of all workers, Kolzow said, "so small business is where it's at."

Providing a higher quality of life is also essential to economic development. This includes quality, reasonably-priced housing; educational opportunities; low crime; access to medical and health care; retail/customer services; lodging and restaurants, smooth traffic flow and cultural/recreation opportunities. "People are always looking for recreation," Kolzow said.

Rural areas can offer things like agritourism, historical tourism and hunting-

fishing opportunities. "More people today want to get out of the city," he said.

Kolzow also discussed the changing role of downtown areas which are increasingly offering niche shops, boutiques, art galleries, antique stores, gift shops and restaurants.

Attracting entrepreneurs, which Kolzow defined as "someone who sees a market opportunity," is also important to economic development.

Entrepreneurs are creating the majority of new jobs and tend to be loyal to their community but need support services, supplies, local financing, business space and access to higher education.

Regionalism can increase image awareness, provide access to a greater pool of resources and result in a higher level of professionalism, but the most important benefit is the opportunity to create a more diverse economy, according to Kolzow.

In discussing the global economy, Kolzow said most manufacturing developments in the U.S. are from foreign firms in rural areas while American firms are more likely to invest offshore.

"Much of what we do has to be global in nature," Kolzow said. "We're in a global economy - it's going to change the dynamics of a lot of things."

The conference also included break out sessions on various topics and a discussion by U.S. Rep. Jo Ann Emerson and Southeast Missouri legislators on legislative changes affecting the business climate.