A story in The St. Ignace News' ongoing series bringing our readers fresh perspectives on the top issues facing the Straits area and the Eastern Upper Peninsula.

Lay the groundwork now for future community growth. That's the advice that economic development experts give to small communities that want to attract more yeararound jobs - and businesses to add dollars to their local tax base.

When a growth opportunity comes along, in the form of a company looking to build or relocate, for example, the towns with the best chance of attracting that company will be those that have already positioned themselves to supply the infrastructure, workforce, and support it needs.

"You need to plan ahead, not just wait until you need to respond to an opportunity," said Lois Ellis of Marquette, the vice president of economic development for the Lake Superior Community Partnership. Her agency was formed about a decade ago from the economic development arm of Marquette County and two chambers of commerce. Her job is to court companies, and "sell" her community to industries and corporations that may want to set up shop there.

Community leaders must first determine what properties and infrastructure they have available for potential businesses. They should think strategically about how they may be able to offer incentives. Smaller, entrepreneurial businesses have now replaced large, traditional manufacturing plants as the top growth industry that communities want to bring in.

It's also important, Ms. Ellis said, for communities to speak with "one voice" to the companies or industries considering coming into their area. In many counties, that voice would come from the economic development director. In her county, it's one of 10 staff members of the partnership, which has offices in Marquette and Ishpeming.

"You need to have that discussion ahead of time about who will be responsible to speak with that developer," she said. "Do what you can to make it smoother for the person on the other side of the table. Plan ahead so you're not scrambling. Know what you want to see in your community in the future. That's very important."

Jeff Hagan agrees. The executive director of the Eastern U.P. Regional Planning and Development Commission, he points out that cities, townships, and counties that want to successfully attract industry have to think in "business time."

An example, he said, is the inkjet toner recycling company that came into St. Ignace a couple of years ago and then moved to Sault Ste. Marie. Even though community leaders in St. Ignace worked to retain that company in town, "there was not adequate capacity in the area to accommodate the company's needs, no place to put that business. Economic development practitioners are thinking in 'business time,' because businesses cannot wait months or years for infrastructure and facilities to be developed or improved. Communities that don't think that way may not be positioned to offer what they need."

Competition is heavy

to attract new businesses An economic development director can help communities grow, Mr. Hagan said, "by actively marketing for new companies and new businesses, but also retaining and meeting the needs of existing ones. There is a balance to strike here."

Developing industrial parks is one way to help attract new companies, or help existing ones expand, but is it a method the experts would recommend?

"It's one marketing tool," Mr. Hagan said. "Across the state we are seeing a shift to high tech industries, because manufacturing is on the decline. It's going, and it's not coming back. Communities are having to diversify their economy to other areas, like high-tech, bio-science, and related industries."

Sault Ste. Marie, DeTour, Kincheloe, and Newberry have active, functioning industrial parks, he said, with "a good mix of tech businesses and manufacturing" and the Sault will soon have two more incubator facilities for prototype development.

The Kincheloe facility features Superior Fabrication, which makes specialized forklift components, including masts to ship overseas, and forestry products, while electronics, a thermoplastic component manufacturer, aeronautics, and the former St. Ignace inkjet company are examples of businesses at the Sault Ste. Marie park.

With the decline in traditional manufacturing plants has come a shift to more high technology industries, Mr. Hagan said.

In terms of attracting new business, "the first thing people think of is manufacturing. It's changed so much in even three or four years. There is so much focus on high tech. Now, it's thinking about the knowledge economy, a whole different way of thinking about it. In various ways, there is a trickle down effect [to creating other kinds of jobs]. Precision Edge in the Sault makes high tech blades and products, an example of a knowledge economy industry. Typically, those kinds of jobs are higher paying."

Along with a push toward developing more knowledge economy jobs, the state is promoting local tax abatement as an incentive for communities to attract business.

"The state is pushing hard for communities to advocate for and offer tax abatements," he said, pointing out that state agencies actively encourage meetings between businesses and municipalities, urging them to think about setting up tax breaks. Mr. Hagan considers the tax breaks a good tool for attracting business to a city or county.

"I think a lot of communities get scared off because they think they aren't going to get any taxes from the business. There is a learning curve here for communities, to really understand what is involved in abating taxes and the effect on the community. The community can set the terms and conditions of the abatement."

Incentive packages for companies can be useful tools, agrees Lloyd Matthes of the Central Upper Peninsula Planning and Development Regional Commission, but he cautions they should always be in the form of a building, equipment, or utilities in the ground.

"Watch how you give your incentives. Keep them in terms of things that can't be moved, like streets or sewers," he said. "Businesses that move in just for the incentives will move right out when they're gone."

"You've got to plan," Mr. Matthes said. "When a plant moved into Spring Hill, Tennessee, the city went bankrupt trying to provide services to a rapid influx of people. They didn't take into account there is no tax return [on the infrastructure investment] for two years."

Mr. Matthes has also written "six truths of economic development," reprinted here. (See sidebar story.)

Planning ahead to decide which potential incentives could be offered may give a community an edge when courting businesses - a process Kathy Noel calls highly competitive. Ms. Noel is president of the Economic Development Corporation of Chippewa County in Kinross.

"This economic development field is extremely competitive, and there are hundreds and thousands of other communities vying for that business that wants to expand," Ms. Noel said. "As soon as the economic community becomes aware of it, it's like sharks in a feeding frenzy. But in the EUP, there are no turf wars in this community. We are all willing to cooperate because we all realize any new business in the region benefits all of us.

"The end result is to get the economic development in your region. It doesn't have to be in your backyard, and you don't have to be hands on. [Understanding that] is a real strength I see here."

Shipping, diversification

are among EUP strengths

Another strong advantage for the region is the multiple modes of shipping offered by I-75, state trunklines, nearby port facilities, and rail service, she said.

"We are truly multi-modal," Ms. Noel said. "Speaking for the industrial and manufacturing side, there are myriad options for shipping in and out."

"I'm really high on the whole region. We have some tremendous opportunities."

In fact, more than 85% of the Eastern Upper Peninsula's economic development leaders are hopeful about the region's economic future, according to a February 11 survey.

While many metropolitan areas have made the mistake of tying their economies to a few huge employers, Ms. Noel said, EUP communities have always encouraged both large and small business development - another strength.

"In the EUP, we never turn our back on the small developer, even if he's going to employ five people," Ms. Noel said. "It's the small entities that are seeing us through. The old theory was the more employment positions to be created, the better the project was. That time has come and passed. The state still uses it as a benchmark, but as we've seen in the auto industry, the more laborintensive an industry is, they become less and less competitive. Those smaller workforces have been termed small business in the past, but these entrepreneurs have been the major growth market the last few years. We need increased information technology businesses. There are a wealth of opportunities" in that area.

Such information or knowledge economy businesses are those that rely on critical thinking and new technology to develop, test, design, or make products. Often smaller and entrepreneurial, they are replacing traditional manufacturing as a growth industry.

How can a small employer with 10 or 20 workers benefit the community and the region?

"Somebody coming in from the outside, who is going to connect to the global market, the benefit to the community is an infusion of dollars from the outside, not local dollars," Ms. Noel explained. "Someone may develop a concept and then farm out the development and fabrication. That's where the attachment to the global market comes in. And employers, big or small, bring the same benefit to the community. More small employers means greater diversification to the tax base."

The region has even been successful in turning a potential challenge into a strength, as in the case of winter conditions testing for automotive systems that takes place very winter at Raco and Brimley. General Motors tests its products in Raco through Smithers independent contracting company, and Continental company tests at Brimley.

"Snow could be a drawback in some places, but we've reversemarketed that," Ms. Noel said. "We took something that might be termed a negative and found a way to use it to our benefit. And it doesn't have to stop at vehicles."

Study underway: Is the region

well positioned to attract jobs?

In the EUP, regional leaders like Mr. Hagan are studying the workforce and the area to determine whether the region is well positioned to attract these knowledge economy jobs. To track it, they're studying several aspects of the Eastern Upper Peninsula: talent (the trained, available workforce), dynamism (a job turnover measure called "churning"), knowledge jobs (a tally of existing high tech or biomedical industries), globalization (how the region is interacting globally), and digital economy (how the region is using digital technology).

In the globalization category, plants like the overseas mast shipper in Kincheloe and the high number of foreign born workers who come here for seasonal jobs are positive factors for the EUP. In the last category, Mr. Hagan said, the lack of widely available broadband access here is a drawback.

Job churning, as in the frequent turnover seen among health care workers, is positive, because it means that companies coming in would have a dynamic, constantly refreshed pool of people as a potential workforce.

"If you have high job churning, that's a good indicator for your community," Mr. Hagan said.

The 18-month study, in partnership with Michigan State University Center for Community and Economic Development, is just getting underway. To carry it out, a new local strategy group called the Regional Economic Development Advisory Committee has been formed, and met for the first time February 11. The group includes public municipalities and agencies as well as private businesses, including all three hospitals in the region, the intermediate school district, Lake Superior State University, the St. Ignace Downtown Development Authority, some local chambers of commerce, and active economic development corporations.

"The main focus of the group will be to guide us in developing strategy for the region's economic development program," Mr. Hagan said.

Bringing together public agencies and private businesses in an effort like this might be a key to its success, according to Ms. Ellis. That kind of approach has worked well in Marquette County, where her Lake Superior Community Partnership has more than 800 public and business members who pay dues to belong, and take advantage of planning, development, and chamber of commerce services. The partnership has a contract with the county to offer these services.

"Having that public/private relationship is important for economic development," Ms. Ellis said. "The private sector brings the funding to the table."

One quarter, or less, of the money for the Marquette County projects come from the public sector, and the rest of the investments are from private businesses.

One example of how the private/ public partnership proved beneficial there can be seen in the relocation of the county airport about 10 years ago, she said. The matter was resolved with both business and government people at the table.

"The closing of K.I. Sawyer Air Force Base in Marquette County was a crisis here," she explained. "Early on, a tough decision was made. The county decided to move its airport from Ishpeming Township to the former air base to take advantage of that resource. It was hotly debated. The county board was looking forward in that decision, and some of the members took a lot of heat for it. But now, when you see the economic development that has taken place with private business around Sawyer, you can see it was a good decision."

Her agency is set up to act in the role of economic development director for the county. While it's an advantage to have one agency performing several functions, she acknowledges "it's probably hard to get there in a smaller community." She pointed out Marquette also has strengths in terms of staff, businesses, and population that smaller towns may not enjoy.

Even so, bringing community agencies and business together can result in good strategic planning, Ms. Ellis said, and she advises regular joint meetings to share information among agencies.

Mr. Matthes points out that communities that seem to be standing still in terms of growth are actually sliding backward, because technology and growth will be rapidly passing them by.

Actively seeking that growth is particularly vital for communities in these challenging economic times, Ms. Ellis says.

"If you're not helping yourself, no one else is going to."