Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Greg Wise Professor and Community Development Specialist Center for Community and Economic Development University of Wisconsin-Extension Sauk County Development Corporation Board of Directors December 1, 2014 Sorting Out Business Development, Economic Development, and Community Development

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper What is economic development?  Is there a distinction between business development, economic development, and community development?  How are they related?

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper What is economic development?

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Growth versus development  more businesses, more jobs versus sustained business activity and quality jobs  expanding tax base versus services and revenues in balance  any growth is good versus growth that promotes a community’s values  bigger is better versus better is better

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Triple Bottom Line & Community Capitals Framework Source: Cornelia Flora, Jan Flora, Susan Fey, Mary Emery

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Industrial Recruiting 1950s to 1980s Cost Competition Early 1980s to Early 1990s Regional Competitiveness Early 1990s to Present Driver Export Base Scale Economies Innovation & Entrepreneurship Strategies Financial incentives to firms Industrial parks Industrial consolidation and cost cutting Deregulation Entrepreneurship Clusters Commercial research Keys to Success Government funds for subsidies and tax breaks Industrial infrastructure Health of existing industries Distinct regional assets such as: Human Capital, Higher Education, and Amenities Source: Mark Drabenstott, Kansas City Federal Reserve Bank and Rural Policy Research Institute (RUPRI) Eras of economic development

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper The “new normal” economic development Traditional ModelNew Model Attraction Industrial Recruitment Entrepreneurship Small Business Startups  The relative amount of attention given to the three major ingredients is reversed  The nature of the three ingredients themselves fundamentally change from narrowly conceived approaches to broadly defined strategies  Traditional Model: Local and Competitive / New Model: Regional and Cooperative Expansion Retention Source: Adapted from Brian Dabson, Rural Policy Research Institute (RUPRI)

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Regions or clusters? Regional Economic Development Organizations  Renewable Energy Manufacturing  Agriculture, Dairy, and Food Processing  Software Development  Medical Device Manufacturing  FIRE (Financial Services, Insurance & Real Estate) Sources: Wisconsin Economic Development Corporation; UW-Extension Center for Community & Economic Development Clusters

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Asset Based Community Development  75% of Americans under 28 believe a “cool city is more important than a good job” (Rebecca Ryan)  Young people “insist they need to live in places that offer stimulating, creative environments” (Richard Florida)  Young people want: a place to raise a family; safe streets; affordability; good schools; and scenic beauty (Will Andresen) Sources: Rebecca Ryan; Richard Florida; Will Andresen

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper What does the evidence say?  Economies with higher rates of entrepreneurial activity are stronger and more competitive—70% of economic growth comes from entrepreneurial activity  35% of the Fortune 500 companies are displaced every 3 to 4 years  Firms of fewer than 20 employees generate the majority of new jobs  Each year 7 to 8% of all jobs are lost; they’re replaced in the following ways: 55% of new jobs come from expansion of existing firms; 45% of new jobs come from new business startups; and 1% of new jobs come from business relocations Sources: Global Entrepreneurship Monitor Project; National Governor’s Association; Public Forum Institute; Goetz

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Establishments by employment size Source: YourEconomy.org, Edward Lowe Foundation Resident — stand-alone businesses in the area or businesses with headquarters in the same state Nonresident — businesses that are located in the area but headquartered in a different state Noncommercial — public institutions and nonprofit organizations Wisconsin, % 6.6% 3.1% 59% 28% 11.8% Stage 3— 1.0% Stage 4— 0.2% Stages — classifications of businesses by the number of persons they employ

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Establishments by employment size Source: YourEconomy.org, Edward Lowe Foundation Resident — stand-alone businesses in the area or businesses with headquarters in the same state Nonresident — businesses that are located in the area but headquartered in a different state Noncommercial — public institutions and nonprofit organizations Sauk County, % 6.8% 2.9% 56% 28% 14.4% Stage 3— 1.5% Stage 4— 0.14% Stages — classifications of businesses by the number of persons they employ

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Sauk County establishments by employment size, 2013 Establishment sector  Non-commercial: 286 (6.8%)  Non-resident: 120 (2.9%)  Resident: 3,776 (90.3%) Resident firm stage  Self-employed: 1,166 (27.9%)  Stage 1 (2-9): 2,341 (56%)  Stage 2 (10-99): 607 (14.5%)  Stage 3 ( ): 62 (14.5%)  Stage 4 (500+): 6 (0.14%) Resident — stand-alone businesses in the area or businesses with headquarters in the same state Nonresident — businesses that are located in the area but headquartered in a different state Noncommercial — public institutions and nonprofit organizations Stages — classifications of businesses by the number of persons they employ 90 percent of the firms are resident and 84 percent of the resident firms are 9 employees or less in size—that’s a significant market segment!

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Wisconsin establishments versus jobs Resident — stand-alone businesses in the area or businesses with headquarters in the same state 90.2% of establishments are resident 78.0% of jobs are resident Percent of Resident Establishments by Stage, 2013 Source: YourEconomy.org, Edward Lowe Foundation

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Wisconsin establishments versus jobs Resident — stand-alone businesses in the area or businesses with headquarters in the same state 90.2% of establishments are resident 78.0% of jobs are resident Percent of Resident Establishments & Jobs by Size, 2013 Source: YourEconomy.org, Edward Lowe Foundation

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Sauk County establishments vs jobs Resident — stand- alone businesses in the area or businesses with headquarters in the same state 90.3% of establishments are resident 78.3% of jobs are resident Percent of Resident Establishments & Jobs by Size, 2013 Source: YourEconomy.org, Edward Lowe Foundation 78 percent of the jobs are resident and 67 percent of the resident jobs are in firms with 9 employees or less in size—that’s a significant market segment … as are the 10,000 jobs in the 68 resident firms employing 100 persons or more!

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Growth or decline in establishments Resident — stand-alone businesses in the area or businesses with headquarters in the same state Nonresident — businesses that are located in the area but headquartered in a different state Noncommercial — public institutions and nonprofit organizations Percent Growth of Establishments, Percent Change Source: YourEconomy.org, Edward Lowe Foundation

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Growth or decline in jobs Resident — stand-alone businesses in the area or businesses with headquarters in the same state Nonresident — businesses that are located in the area but headquartered in a different state Noncommercial — public institutions and nonprofit organizations Percent Growth of Jobs, Percent Change Source: YourEconomy.org, Edward Lowe Foundation

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Wisconsin resident establishments by stage Establishments Total establishments increased 32%; high of 411,206 in 2010 Self-employed increased 36.5%; high of 168,211 in 2010 Stage 1 increased 34.5%; high of 204,514 in 2010 Stage 2 increased 11.6%; high of 38,370 in 2013 Stage 3 & 4 increased 22.3%; high of 3,673 in 2012 Source: YourEconomy.org, Edward Lowe Foundation

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Sauk County resident establishments by stage Establishments Total establishments increased 24.2%; high of 5,096 in 2008 Self-employed increased 28%; high of 2,000 in 2008 Stage 1 increased 25%; high of 2,538 in 2008 Stage 2 increased 11.9%; high of 511 in 2004 Stage 3 & 4 increased 31.3%; high of 49 in 2008 Source: YourEconomy.org, Edward Lowe Foundation 1995

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Wisconsin resident jobs by stage Jobs Total jobs increased 19% Self-employed increased 36.5%; high of 168,211 in 2010 Stage 1 increased 22.9%; high of 618,776 in 2008 Stage 2 increased 14%; high of 13,209 in 2004 Stage 3 increased 20.7%; high of 563,154 in 2012 Stage 4 increased 20.2%; high of 495,275 in 2013 Source: YourEconomy.org, Edward Lowe Foundation 2013

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Sauk County resident jobs by stage Jobs Total jobs increased 25.2%; peaking at 34,832 in 2008 Self-employed increased 27.9%; high of 2,000 in 2008 Stage 1 increased 14.2%; high of 7,843 in 2008 Stage 2 increased 15.6%; high of 13,209 in 2004 Stage 3 increased 33.6%; high of 7,399 in 2013 Stage 4 increased 65.5%; high of 4,670 in 2006 thru 2008 Source: YourEconomy.org, Edward Lowe Foundation 2013

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper This is the tip of the iceberg

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Worker Flow for Sauk County – 2011 CountyCountShare Sauk County, WI14, % Dane County, WI2,8259.6% Columbia County, WI1,8256.2% Juneau County, WI1,1844.0% Richland County, WI9993.4% Adams County, WI6712.3% Iowa County, WI6252.1% Monroe County, WI4151.4% Grant County, WI3731.3% Vernon County, WI3621.2% All Other Locations5, % CountyCountShare Sauk County, WI14, % Dane County, WI5, % Columbia County, WI2,8709.9% Milwaukee County, WI1,0053.5% Waukesha County, WI8312.9% Iowa County, WI5571.9% Richland County, WI3581.2% Fond du Lac County, WI3141.1% Rock County, WI3021.0% Juneau County, WI2961.0% All Other Locations2,0617.1% Employees Working in Sauk County Place of Residence (n = 29,325) Employees Residing in Sauk County Place of Employment (n= 29,055) Data Source: U.S. Census Bureau OnTheMap LODES Data

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Framing economic development with quality of life assets  Natural…environment, recreation and leisure  Cultural…arts and culture, community  Human…education, health, home  Social…community, learning, safety, self-sufficiency  Political…community, safety  Financial…home, self-sufficiency, work  Built…home, environment, recreation and leisure

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Growing the economy takes everyone  The private sector creates jobs  But the public sector influences the conditions regulatory reform reducing the tax burden adequate infrastructure necessary public services a skilled, reliable workforce a support network

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper A prescription for business development  Create climate and culture in which business (entrepreneurs and entrepreneurship) can flourish  3 organizing principles: community-driven regionally-orientated entrepreneur-focused  Does it make sense for an agency such as SCDC to help promote community development in order to be effective at economic and business development? Source: Brian Dabson, Rural Policy Research Institute (RUPRI)

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper SCDC’s unique challenges  Is the job of the agency different when the economy is good versus bad?  What’s different about a multi-community entity?  What is the value-added proposition that SCDC offers it’s community partners?  What can’t [insert name of city or village or business interest] do effectively on it’s own?  How does SCDC engage those partners and communicate with them?

Center for Community and Economic Development People Who Excel – Businesses That Innovate – Communities That Prosper Discussion