By Mary Miller
(From: ShoreLine, Volume 21 #7, July, 2008)

A recent Economic Development Forum was organized for residents, business owners and officials of Accomack and Northampton Counties by the Shore’s three Chambers of Commerce and was held at the Eastern Shore Yacht and Country Club on May 29. Delegate Lynwood Lewis and his staff as well as representatives from Senator Ralph Northam’s office were present. Also attending were most of the Northampton County Board of Supervisors and Planning Commission, the County Administrator and the Superintendent of Schools. Representing Accomack County were the Director of Planning and a planning commissioner. Many business owners from both counties were also present. Mary Miller attended the forum and lends insight to the presentations.

The Hard Realities.

The information isn’t new – every economic development workshop or forum held on the Shore delivers the same message: without an educated workforce there will be no economic development. This time it was delivered in a new hard hitting statement: “The #1 and #2 questions companies ask about doing business in a Virginia locality,” said Liz Povar, Director of Business Development for the Virginia Economic Development Partnership – “Will the workforce show up for work?” and, “Will the workforce commit to lifetime learning and training?” If the answer to one or both is “no” or “I don’t know,” the conversation is over!

Both Povar and Gary Larrowe, Carroll County Administrator and Economic Development Director, pulled no punches about what it takes to compete in the new global economy. Trends are easy to spot says Povar, and a county that doesn’t pay attention to them is going to be left behind. Manufacturing, including food processing and distribution, is a dying segment of the U.S. economy. Almost all future, well-paying job creation will be in the fast-growing, vibrant service sector – and all those jobs will require technology. All that technology will require a personal commitment to life-long skills training starting in elementary school, and it will require a community commitment to constantly updated infrastructure, particularly broadband and high speed internet access.

Rural counties need to understand what a tiny speck they have become in the global economy. The competition for opportunity is no longer within the state or even in the country – the competition for economic growth is global. Back office employment, like data entry and other record updating, can be done anywhere technology is available. Northern Virginia firms are finding it more economical to farm out some of those operations to less expensive rural areas. Although Virginia counties compete for that back office business, so do rural areas of Mississippi and Alabama, and the business will go to the area with the most talent.

And it isn’t nearly enough to show that a good workforce is available now. Companies are looking for a “pipeline” of skilled, educated and trained workers for the future – they’re even asking about kindergarten curriculum! Prospective businesses want to know about regional support for business. They want to know about the area’s innovative problem-solving – in infrastructure, in protection and use of resources, and in education – they want to know about innovation which is already underway. They look for Enterprise Zones but not for local business tax incentives. They want to see partnerships, especially with the state, in support of business. And they look for strong, stable governmental and educational leadership. Those communities which can’t demonstrate these qualities are often ranked as “low performing” and don’t get a second look.

As Carroll County Administrator Larrowe stated, governments don’t create jobs. Local governments create the framework and the environment in which entrepreneurs, professionals and companies can do business. It’s up to the rest of the community, individuals, families, schools and colleges, churches, civic and faith-based organizations, the existing business community and continuing education providers to create the nuts and bolts of an area’s successful economic development environment. These institutions determine the character of a community and help to create the healthy families; educated, motivated young people; a skilled workforce; a low crime rate; a high graduation rate; consistently high individual and school system scores on state and national tests; educational attainment; a family and community commitment to education as a valuable tool and a life-long endeavor; a stable family life, training for the community’s available jobs, adequate infrastructure (or a demonstrated willingness to provide it), and a proven record of cooperation and collaboration among localities in a region.

Companies looking for a new location hire consultants to find the best performing localities. Unless these nuts and bolts, these basic assets of a region, are clearly apparent and compellingly attractive, companies and their consultants looking to relocate or expand, capital firms looking to invest and entrepreneurs looking for a home base will do an “automatic rule out” of a whole region. No matter how skilled an Economic Development Director, no matter how clever a marketer hired by a locality, a region without the basic assets for successful economic development will have no competitive product to sell.

The Information Highway.

How does the business world find out about an area’s assets? A few clicks on Google is all it takes – and the locality won’t even know it’s been looked at. From the Bureaus of Census and Labor Statistics, the U.S. Departments of Commerce, Agriculture and Housing and Urban Development, and a community’s own websites, all those statistics are there to be viewed and compared.

In addition, there are counties in Virginia that now have separate websites designed for “relocation clients,” on which all the county’s assets are available to see in accessible, attractive formats. And even worse for those localities without competitive assets to market, they won’t even know they are being considered, they won’t get a phone call to set up a meeting because they won’t even make the first cut. Even though a community might offer an appealing quality of life to prospective businesses, this alone will not be the “deal maker” it has been in the past. As global competition increases, business decisions for expansion or relocation are based first and foremost on a community’s hard data.

Virginia Examples of How to Do It.

It might be useful to see what rural counties around the state are doing to make their “community assets” more attractive to business. Governor Tim Kaine has acknowledged that not all areas of the state have shared in Virginia’s prosperity, and he has committed resources to reduce the disparity and increase access to technology. But localities need to prepare themselves for forward motion.

Caroline County is working on a program to increase the SAT scores of its high school students, and Patrick County has begun a concerted effort to engage “adult learners.” Both these initiatives will be used as statewide models. Russell County has instituted a workforce development program, through public/private partnerships, that extends from kindergarten through college. The Town of Damascus and its surrounding area served by The Crooked Road, a traditional music trail and are marketing themselves as a tourism mecca. Carroll County, under the leadership of Larrowe, has created the state-funded Crossroads Institute, and the Center for Lifetime Learning, and the county has been named the first certified entrepreneurial locality in the state. The Center provides a business incubator, entrepreneurial training and support, and a technology center. Marketing of this Blue Ridge Crossroads Community has attracted some significant business relocation and expansion, which in turn has made possible a variety of entrepreneurial small businesses. All these examples are highlighted on the internet for businesses and consultants to consider.

Also, according to a recent article in The Washington Post, the old industrial corridor in central and southwest Virginia, with its unemployed but already skilled workforce, and millions of dollars in tobacco settlement money now being used to upgrade infrastructure, is beginning to attract off-shore manufacturing companies looking for a way to reduce transportation costs of their products to the U.S. markets.

What About Northampton and Accomack?

Demographics, of course, play a significant role in defining a community’s assets, and this information is also available on the internet. Although Carroll County, Northampton and Accomack are all rural counties, there are some significant differences. Carroll County had a displaced workforce of several thousand former factory workers, so there were already skilled workers available when new industries were considering relocation. The area also has four interstate highway interchanges which connect the county to the rest of the country.

While Carroll County is extremely homogenous, there is much more social and cultural diversity in the two Shore counties. Although, according to the Census Bureau, age, unemployment rates, poverty levels, educational attainment, percentage of Social Security recipients and median household incomes are similar for all three counties, there is a noticeable difference apparent to anyone used to looking for statistical inconsistencies – the per capita federal direct transfer payments to Northampton and Accomack County residents and landowners measurably exceed such payments to residents of Carroll County. Northampton’s per capita direct federal transfer payments are 425% higher than Carroll County’s, while Accomack’s are 225% higher. Farm-related payments account for a small percentage of these totals; but, in other words, many Eastern Shore residents are receiving direct, non-farm federal transfer payments of some sort that are not being received in Carroll County. An analysis by an economist and/or a sociologist would be needed to assess the impact, if any, of these direct federal transfer payments on economic development potential and whether these figures would actually be significant to a company looking at either Shore county’s data?

Is there any good news?

Is there any good news for the Shore? The answer, a qualified “yes.” Although it was hard to hear about the region’s lack of competitive community assets which would attract the attention of outside businesses, this may be what is needed to bring that reality to the discussion of both counties’ economic development plans. The good news came from Povar and Larrowe more in the form of what we could do to help ourselves, rather than how we could compete right now in the global economy.

The first, and most important suggestion was to improve education – raise test scores, increase technology services, start with the very youngest children, encourage school and business partnerships, and ensure that there will be opportunities for life-time learning. Make sure the whole community understands that without an educated workforce, there will be no economic development.

Other suggestions from Povar and Larrowe included:

• Be realistic about what the community has to work with.

• Build an economy based on local assets.

• Forget about attracting large employers.

• Shift any available resources to retaining, supporting and expanding local industries – after all, that’s where 80% of the new jobs in rural areas will be created.

• Accept that rural areas will have underemployment.

• Work hard to create a supportive environment for entrepreneurial small businesses – new talent in the community, like early retirees, will respond to that support.

• Provide, or enable, adequate infrastructure – rural areas are using innovative wastewater systems, both to protect their environments, and to provide small-scale infrastructure to scattered commercial and residential enclaves.

• Promote the research potential which can use the region’s natural assets. Academic research has low start-up costs but can evolve into viable, low impact economic development.

There were a few pats on the back from the speakers for what we have achieved and are working towards. We are doing an outstanding job of protecting our natural resources, a quality valued by businesses which are now “thinking green.” We have capitalized on the successes at Wallops and have a road to sustainable expansion of businesses there. We have recognized the potential of high value niche market enterprises like Southport, in Cape Charles. We are capitalizing on our natural, cultural and historic resources by marketing our tourism industry. Research centers at both Wachapreague and Oyster make use of the region’s unique coastal assets. And we have committed resources and capital to our new Workforce Development Center, which will be the region’s direct pathway to creating the educated, trained workforce we need for sustained economic development.

The final suggestion – always strive for cooperation and collaboration between and among the counties and towns of the region.

Callout #2: Without an educated workforce, there will be no economic development.

Callout #1: No matter how skilled an Economic Development Director, no matter how clever a marketer hired by a locality, a region without the basic assets for successful economic development will have no competitive product to sell.