Spokane

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Corporate Expansion & Relocation

Spokane invests in focused economic growth

Area economic group develops strategy

Technology centers rank as potent economic development tools.

By Ken Olson

Birds of a feather flock together. It’s an instinctive survival behavior that many of today’s technology-based companies are adopting as a long-term business strategy. And communities focused on attracting clusters of these companies, and the high-wage, high-skill jobs they generate, are taking note.

Strategic clustering is an emerging paradigm in the business of business today. In California’s Silicon Valley, some 200 established technology-based firms, including Apple, Sun and Hewlett-Packard, are supported by a growing network of specialty suppliers of related products, services, resources and components. Washington state’s Puget Sound region boasts similar clustering in a high-tech corridor that extends from aerospace leader Boeing to software giant Microsoft. And in smart, mid-sized cities like Spokane, Wash., efforts to build focused economic growth in targeted industries are developing into community-wide initiatives.

The ripple effect generated by emerging clusters can spell good news for economic development agencies — especially in communities like Spokane, which seek to speed transformation from resource- to technology-based economies. But cluster-building strategies must recognize that high-tech companies and webs of supporting firms have needs that differ from operations that depend on heavy manufacturing equipment, require surface transportation of goods and materials, and consume large quantities of natural resources.

To encourage clustering, communities will need to demonstrate core capabilities that reflect the priorities of technology-based businesses. That means the ability to offer a skilled, accessible work force, universities and research and development centers, state-of-the-art telecommunications and air transportation infrastructure, and an appealing quality of life.

A skilled work force

High-tech companies have fast become the darlings of economic developers across the nation. And why not? These businesses rarely generate pollution or consume natural resources, and they pay better than average wages. But to get and keep these sought-after companies, communities must be able to offer a flexible, productive work force with high-level technical skills.

That means no refugees from McJobs with little training beyond high school, and maybe not even holders of four-year college degrees in non-technical areas of study. What these businesses are looking for are motivated technicians with two-year degrees and skills-based certificates, strong communications and problem-solving capabilities, and on-the-job-experience.

Many communities are finding the most efficient way to build a world-class work force is to grow and train one at home. In Spokane, progressive regional school-to-work education initiatives are helping local young people build certified technical and basic skills and gain valuable job experience. These and other skills-based training courses are becoming community-wide priorities here and in other areas seeking to attract and retain technology companies.

Retraining programs, funded in part by state and federal grants, also contribute to work force quality and help deepen local pools of skilled technicians. Additionally, technology-based companies favor strong local education systems to keep workers’ skills honed to fine points and provide industry-specific training to upgrade certifications as technologies advance. A community that offers to partner with companies to share training and continuing education costs can score valuable recruitment or retention points.

Clustering and a quality work force go hand in hand largely because skilled technicians and professionals tend to migrate, or be recruited, to where the action is in terms of employment opportunity. Conversely, a superior work force that attracts high-tech businesses can be a key determinant in where clusters emerge and expand.

Universities/R & D; centers

For entrepreneurial start-ups and established companies alike, locating near centers of learning, research and development can spark innovation, encourage the cross pollination of ideas, and generate results. That’s why technology-based clusters so often emerge around universities, not only with research capabilities and brainpower to tap, but with facilities and funding to develop, test and build prototypes; identify commercial applications for good ideas; and generate strategies to bring them to market.

Innovation and commercialization centers such as the Spokane Intercollegiate Research and Technology Institute (SIRTI) and others around the nation, leverage the resources of colleges and universities, state and federal funding, and industry partnerships to take good ideas off drawing boards and into the marketplace. In the past two years, a fair number of home-grown Spokane software development and high-tech businesses have expanded and created technical jobs here as a result of local R & D; and commercialization opportunities.

Technology centers also rank as potent economic development tools when jointly-sponsored partnerships and projects spin off new businesses — businesses which may join clusters as suppliers, vendors or service providers to established companies, or position themselves for individual growth.

Transportation and communications

Today even the smallest entrepreneurial firm can be a global player if it can get its product in front of customers cost-efficiently and fast. These priorities underline the crucial need of technology-based companies and clusters for easy access to reliable air transportation.

Although a company’s network of suppliers and service providers may be around the corner, customers, manufacturers and other vendors may be around the globe. With air transportation so vital, it’s no surprise that nine out of ten major entrepreneurial metropolitan centers feature international “hubs”. And it’s no surprise that smart economic development organizations, with a focus on clustering, are making airport expansion and upgrades a top priority in their communities. At the Spokane International Airport, where passenger and cargo traffic have been growing at a rate of more than 10 percent each year since 1992, more than $40 million in construction projects are helping to prepare the airport for future growth.

The need to serve customers also makes state-of-the-art telecommunications infrastructure a competitive must, especially for technology-based companies that may go on-line more than they go by truck, rail car or ship. Sophisticated telecommunications capabilities can widen a company’s range of possible business locations to include non-traditional communities and regions, without sacrificing fast access to customers and suppliers.

On-line business also presents expanding opportunities. In Spokane, a partnership between SIRTI and U S West has already given more than 100 local companies access to FACNET, the federal government’s electronic procurement network, and has generated contracts worth more than $1 million.

The value attached to advanced telecommunications systems by technology-based businesses also has fostered a growing interest in “smart” buildings and business parks. Wired with sophisticated fiber optics, these facilities offer sought-after capabilities for high-tech companies and potential clusters at sites with comparatively low operating costs and a high quality of life.

Quality of life

For smaller entrepreneurial businesses, and for many established ones, the decision of where to locate rests largely with the CEO. The nature of the high-tech industry makes remote or non-traditional locations feasible. For that reason, site decisions, with a requisite eye on bottom line and competitive considerations, are often made in favor of “a nice place to live”. This region’s quality of life influenced a significant number of the more than 90 companies that moved to the Spokane area during the past decade, edging even bottom-line factors as a top relocation requirement.

Quality of life issues include community attributes such as overall economic vitality, affordable housing, good schools, pleasant climate, easy commutes and abundant recreational, cultural and educational opportunities. More intangible is the attitude of the community toward its businesses. Do economic development professionals spend as much time wooing new companies as they do keeping local business healthy, happy and home? Are local governments actively involved in helping companies solve problems that arise from doing business in the community? Is there open communication between business leaders and local officials?

An appealing quality of life also can be a factor in attracting a strong local work force — a top priority for technology companies and part of the culture medium that generates clustering. Many companies can gain a competitive edge in recruiting highly skilled technicians, professionals and other personnel if they can offer not only an exceptional place to work, but to live.

Economic development organizations that seek to encourage the flocking together of high-tech “birds” and nurture the development of strategic clusters, will increasingly tailor their incentives to the specific cultures and needs of these businesses. For major cities, or smaller, growing communities like Spokane, that will mean significant investment in developing new capabilities and expanding current ones. And it will mean adopting a long-term, focused approach to quality economic growth to yield long-term returns.

Ken Olson, CED, is interim president of the Spokane Area Economic Development Council, a private non-profit organization working to promote quality growth and development of the region’s economy. Further information is available at 1-800-SPOKANE, or by writing to PO Box 203, Spokane, WA 99210. The EDC web site is at http://www.spokanedc.org.

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