CEO Corner: September 2018
Monday, September 24, 2018
The EDASC Board of Directors just held its semiannual retreat at the conference room at Peace Health/United General Hospital in Sedro-Woolley. In addition to the regular (but abbreviated) monthly meeting, the Board heard presentations from individual board members and focused on the theme of “Economic Development in a Time of (Virtually) Full Employment.” These semi-annual retreats, which we started three years ago, give the board the opportunity for a deep dive into particular issues of importance to EDASC and the local economy.
First, board members from the health care/insurance, manufacturing, and construction sectors presented in a “forces of change” panel. Board members Chris Johnston (Peace Health/United General) and Tammy Masalonis (McGregor Benefits) discussed current trends in health care, particularly heading towards more wellness and clinic-based care, and the uncertainties in the political winds regarding insurance that affect business costs. Representing manufacturing concerns, board members Mike Nelson (Dakota Creek Industries), Scott Holley (Eddyline Kayaks), and Phil Stephenson (PACCAR Technical Center) reported strong growth prospects, uncertainties with tariffs and the resulting materials pricing, and continuing difficulties acquiring qualified talent. The construction sector, represented by Michelle Hurteau (TRICO Companies, LLC), Justin Clary (Maul, Foster and Alongi), and Brian Gentry (Landed Gentry), all cited material costs affected by tariffs as a potential factor, as well as workforce supply. In addition, the availability of buildable lands and ease and predictability of development projects being approved were identified as concerns needing to be addressed. This session left me more impressed than I already was with the caliber of our board members, their contributions to our business community, expertise in their respective fields, and dedication to progress in our community.
Next, the board discussed what economic development means and should look like in a time of statistically full employment. Economists generally define full employment as in the 4% range, and Washington and Skagit County are in that range. Typically, Skagit County's unemployment rate is a full point higher than the state rate, but currently the county lags behind by just .2%. Research shows that, while in urban areas 76% of new jobs come from existing business growth, fully 90% or more of new jobs in rural areas result from existing business growth. Add to that labor and housing shortages and we have some definite challenges to address.
What does that mean for the practice and goals of economic development?
Business retention and expansion is the lifeblood of a productive economic development organization. This effort takes many different forms:
- Helping existing businesses expand, and--particularly with competitive expansions where the company could relocate entirely or expand in another location--obtaining incentives (grants, tax exemptions, or otherwise such as expedited permit processing or workforce training programs) to encourage these businesses to stay and expand in Skagit County.
- Assisting business owners with data, succession planning, business transitions, day-to-day business advice and resources, or as an intermediary with governments and potential suppliers or customers.
- Matching people looking to acquire businesses with those looking to sell, and facilitating the process as needed.
- Providing business planning, marketing, financing and other advice for new and small businesses and entrepreneurs as coordinated through EDASC, the Small Business Development Center, Service Corps of Retired Executives (SCORE), and a host of other organizations. T his kind of organic business growth keeps any community healthy and thriving.
Business attraction must continue because it is a long term relationship-building process, and we won’t be able to flip a switch and start it up from scratch when unemployment cycles higher as it inevitably and eventually will. EDASC will continue to promote Skagit County as a location for businesses that fit and complement our economy, labor market, and land and utility resources, because these infusions of new business blood help keep an economy healthy.
Capacity building refers to all activities we as a community can undertake to improve the lives of our residents, current and potential, and continue to make this a place where people will want to stay or locate. Even if EDASC is not “in charge” of a particular issue, EDASC participating in, convening or facilitating efforts and conversations directed at moving the issue forward. Some examples include:
- Workforce Development and Education: EDASC regularly works with WorkSource, Skagit STEM, Career Connected Learning and apprenticeship programs, early learning and child development organizations, and the school districts to connect businesses and business needs and opportunities with education to make sure training needs are met and to facilitate exchanges to ensure our students graduate with skills appropriate for the labor market. This is critical to the ability of our businesses to expand and new businesses to locate here.
- Recruit Labor: Even more important than recruiting companies these days, recruiting labor is critical to business survival, growth, and location. Finding people with the right skills to make a company succeed requires collaboration between EDASC, the private sector, and for some purposes, government. Aside from the right jobs, something also critical to recruiting labor is available and affordable housing. EDASC has been working with developers and municipal governments to relieve the barriers to creating more housing for our workforce.
- Placemaking! This (not yet really a word) refers to things we need to do to make our communities even more attractive to the people we want to attract as well as the ones already here. This could range from adequate broadband for work at home, to all the cultural amenities in a community, to an attractive downtown area featuring festivals, shopping, dining, and entertainment opportunities for free time pursuits. We already have the benefit of the natural beauty and all the outdoor recreational opportunities so that puts us many steps ahead to start with!
- Equity and Inclusion: We must ensure that every segment of our population is positioned to succeed in today’s economy. That means joining in efforts, to support school success and workforce training for underserved parts of our community as well. In addition, we cannot let language be a barrier to business success, so EDASC provides the same business counseling in Spanish as in English. Leadership Skagit develops leadership potential in Skagit County, and NextExec provides opportunities for management training locally. EDASC is always looking for new ways to support community efforts to position everyone in Skagit County to benefit from economic opportunities that will lead to a higher quality of life for us all.
In summary, EDASC is the organization working on broad economic issues for all of Skagit County, including the ports, cities, towns, county, and private businesses. EDASC frames these issues and works on policy solutions to address them, while carrying out programs that make a difference to individual businesses and sectors, and therefore the localities they call home. We value your support in these efforts.
- John Sternlicht, CEO
Category: CEO Corner, Business Attraction, Business Retention and Expansion, Capacity Building, Small Business