Economic Development 101. Prepared for the La Plata County Planning Commission Date August 28, 2014

Transcription

1 Economic Development 101 Prepared for the La Plata County Planning Commission Date August 28, 2014

2 About the Economic Development Alliance Formed in 2011 Nonprofit, public private partnership 60% private funding, 40% public La Plata County: $60,000 per year Focus on primary employers Director background

3 About this Presentation Economic Development Theoretical Foundation Economic Development in Practice Recruitment versus Retention The La Plata County Economy Planning and Economic Development

4 What is Economic Development? Wealth creation for the benefit of a community or place

5 Theoretical Context: Urban & Spatial Economics Urbanization (Density) Agglomeration scaling advantage of businesses locating together Clusters advantages of businesses in same industry locating together: specialized resources and knowledge Spatial Regional Endowments : labor, natural resources, capital Trade comparative advantage and specialization Mulitple equilibria Endowments, comparative advantages, specialization, costs, equilibria, change over time

6 Theory, In Short Markets influence the fortunes of a community (for better or worse)

7 So Why Economic Development? To keep your community viable and prosperous in the face of constant change.

8 Economic Development Goals Wealth creation Job creation Economic diversification Higher wages Community Development Tax generation

9 Economic Development Tools Human Capital Business development Redevelopment Local purchasing keep the money here We will focus today on human capital and business development

10 Human Capital Capacity building: build self reliance and entrepreneurship Education: Prepare individuals for today (or tomorrow s) jobs

11 Human Capital (Cont d) Training: new skills for employees or displaced workers Attraction: bringing talent to the region for key jobs

12 Business Development The Core of Economic Development Bringing new money into the community Primary employers

13 The Evolution of Business Development Phase 1: 1940s: Recruitment Railroads and utilities Industrial policy Business parks Cost oriented Tax incentives

14 The Evolution of Business Development Phase 2: 1990s: Start Ups Small businesses as the engines of growth Silicon Valley University research Business incubators Venture capital

15 The Evolution of Business Development Phase 3: 2000s: Business Retention Littleton, CO: Economic Gardening Gazelles Customized services Talent Quality of Life

16 The Philosophical Debate Business Retention Vs. Business Recruitment

17 Business Development Perceptions Recruitment Pros: image, capital investment, quick job creation Cons: low success rate, expensive, branch plants Retention Pros: patient, local connections, existing firms drive job growth Cons: incremental, taken for granted

18 Business Development Reality Population Growth = Births + Inmigration Minus Deaths + Outmigration The same is true for business growth

19 Business Development Reality Both retention and recruitment Need to know what helps and hurts business success locally Similar needs (workforce, space, market access, specialized skills)

20 Quiz Time! Which of the two following businesses were founded in Southwest Colorado? A) StoneAge B) Mercury C) SoundTraxx D) Osprey E) United Pipeline

21 Answer A) StoneAge (Durango) (70+ employees) B) Mercury (New York) (400 employees) C) SoundTraxx (Boston) (30 employees) D) Osprey (California) (70 employees) E) United Pipeline (Edmonton, Canada) (90 employees) Fact: 55 businesses that moved to Western CO now have more than 2,000 employees

22 Economic Landscape of La Plata County JOBS In 2012, there were over 35,000 jobs in La Plata County 10% of all jobs are in primary employers La Plata County added 7,400 jobs from Job growth driven by: Self employed and small businesses (86% of all new jobs in these two categories) Oil & Gas (over 1,000 new jobs from ) Health Care (over 700 new jobs since 2000) Source: YourEconomy.org and BLS.gov

23 Economic Landscape of La Plata County COMPANIES 45% of all jobs in La Plata County are found in firms with fewer than 10 employees (small businesses) There are 6,000+ establishments in La Plata County The average firm employs 5 people This has decreased since 2000 (7 people in 2000) Relocations (in and out) are increasing Spin offs decreased as a share of total firms Source: YourEconomy.org

24 Economic Landscape of La Plata County SALES La Plata County firms sell about $2.8 billion of goods and services each year This is up slightly since 2000 (more than statewide or nationally) Sales for primary employers decreased slightly Greatest growth in sales for local firms and large (500+ employees) firms Source: YourEconomy.org

25 Economic Landscape of La Plata County WAGES Real wages increased in La Plata County from Driven by oil & gas and construction Affordability improved in La Plata County:

26 Did You Know? La Plata County primarily gains residents from Houston, Fort Worth, Prescott, Flagstaff, and Southern California and loses residents to Denver, Grand Junction, Farmington, and Portland (OR)? La Plata County has the 19 th highest share of home based workers of any county in the nation? La Plata County has a higher than average share of part time workers? 42% of all residents have a bachelor s degree or higher? 38% of all real properties are owned by non county residents? Sources: IRS, La Plata County Assessors office, US Census, Headwater Economics, analysis by La Plata Economic Development Alliance

27 LPC Key Industries Oil & Gas Tourism Food and beverage manufacturing Technology (Mercury) Key business sectors by Town Durango: Real estate and finance Bayfield: Construction and utilities Ignacio: Gas/oil and agriculture

28 La Plata Business Growth Population growth and growth in new businesses is almost the same Planning helps accommodate growth for people and business.

29 How Can Planning Help Economic Development? Space Time Infrastructure

30 Space Finding or building adequate facilities Finding facilities Current (County): Use by Impact (Class 1&2 Permits) Zoning (Durango, Bayfield, Ignacio): Use by Type Building facilities Challenge to find multi acre sites with utilities Several companies have dispersed locations Difficult for companies and county infrastructure

31 Time Time = money Return on investment Revenue generation Example: Lawrence, KS relocation prospect

32 Infrastructure Classic Infrastructure: Roads (corporate or clients) Water Sewer Power (3 Phase) The New Infrastructure: Internet (workplace and homebased) Airport/air service Compatible uses Helps scale sales Helps prevent conflicts

33 Planning for Job Growth Business Goal: Certainty when acquiring or building facility that you can use it as you want (space) Quick process for approval to meet company s and investor s schedule Infrastructure in place, affordable, & enabling market access Ideal: Shovel ready site Shovel ready sites = housing for businesses Most people by existing homes or approved lots Most businesses want to find the same for their operations

34 Questions? Comments? THANK YOU!!! Roger Zalneraitis, Executive Director 1211 Main Ave, Ste 2, Durango, CO