COVER STORY – Fired up

Posted on Aug 1, 2012 :: Cover Story
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Posted by , Insight on Business Staff Writer

To Shannon Full, the numbers just didn’t add up.

When interviewing for the top job at the Fox Cities Chamber of Commerce, she was surprised to learn it spent $180,000 annually on economic development. As leader of the Cedar Rapids, Iowa, chamber, she oversaw a $1.8 million budget on the same initiative.

After she took over as chamber president in January 2011, Full was determined to shake things up when it came to economic development.

And shake it up, she has. Under Full’s leadership, the chamber hired the Atlanta-based consulting firm Garner Economics LLC to conduct a thorough analysis of the area’s economy. After presenting the results last November, she launched a new economic development alliance – Ignite Fox Cities – and embarked on an ambitious plan to raise millions of dollars over the next five years to fund the alliance’s efforts.

“I found it interesting when I first got here and started asking people in the public and private sector who our competition was and they answered hands down that it was Green Bay and Oshkosh,” Full says. “That tells me we need to do a lot more around economic development. We’re not even at the table with the people who should be competitors like Topeka, Cedar Rapids or Sioux Falls. Those areas have strong economic platforms that allow them to compete in a global marketplace. We’re not even thinking about that global marketplace.”

Full hopes Ignite Fox Cities will help business and government leaders take a wider view, which will lead to increased economic growth. She says the initiative is necessary even though New North Inc. and the Wisconsin Economic Development Corporation are also stepping up their efforts around economic development. “Even once you add in what New North is spending, we are still highly under-capitalized when it comes to economic development.”

Case in point: Topeka – ranked one of Kiplinger’s 10 Best Cities for the Next Decade – has a $5 million annual budget it uses to interest companies to expand or relocate in the area. Topeka’s Metropolitan Statistical Area has a population of 230,000 – which is 20,000 less than the Fox Cities’ 250,000.

Investing in economic development pays off, says Douglas S. Kinsinger, president and CEO of the Greater Topeka Chamber of Commerce and GO Topeka Economic Partnership. In the past year, the community landed a new $250 million Mars candy plant.

“If it wasn’t for the money we invested in economic development from public and private sources, we would not be competitive and growing our community and adding jobs,” Kinsinger says. “The ROI on economic development is real and felt throughout a community.”

Besides the $5 million Topeka’s economic development group receives from a half-percent sales tax in the area, the group also does private fundraising and is hoping to raise an additional $3 million over the next five years. Those funds have resulted in incentive packages for businesses and helped the region develop two large business parks – one is 500 acres and another is 1,000 acres. “Economic development is very competitive. You need to spend money on economic development initiatives in order to see a return,” Kinsinger says.

Making the case

Economic development doesn’t happen in a vacuum. Businesses go through a complex process deciding where to add jobs or invest capital in a new facility, equipment or technology. Economic development professionals play a key role in the process by helping businesses locate appropriate sites, find government funding or private financing or help with the permitting process.

“Business owners are interested in running a business. We don’t want them to become too frustrated in the process and not know where to get help to expand their business,” Full says.

Communication is central in helping businesses looking to expand wherever they enter the system, whether it’s contacting local municipalities, a chamber, the state or an economic development professional, says Steve Sengstock, executive director of Shawano County Economic Progress, Inc. and current chair of the Northeast Wisconsin Economic Development Partnership (NEWREP), an organization of economic development leaders from throughout the 18 counties that make up the New North.

“Collaboration is key when working together across the spectrum. We know we’re stronger when we work together,” Sengstock says. “Economic development professionals are geared to help local chambers and their members.”

Earlier this year, Full attended a conference with the nation’s top site selection firms. (The majority of companies use site selecting firms as they look at expansion projects to find the best fit.) Few of these key decision makers knew about the Fox Cities. Full says that’s directly related to the area’s underinvestment in economic development. Allocating more funds for economic development and creating a targeted marketing plan will raise the area’s profile and help it compete on a national – and global – stage, she says.

To make that happen, the chamber is in the process of meeting with business and government leaders to ask for their help to support the Ignite Fox Cities campaign. The chamber partnered with Resource Development Group on the fundraising campaign, which set a goal of $800,000 for each of the next five years, with a stretch goal of $1 million a year.

“So far, the response has been good,” Full says. “No one has said to me, ‘why do we need to spend money on economic development?’ They know that to add jobs in the community this is something we have to do. They know we need to step up our attraction, retention and expansion efforts.”

When the Fox Cities Chamber Board of Directors was looking for a replacement for retiring CEO Bill Welch, finding a person with a depth of economic development experience was essential, says board chair Linda Kennedy of Business Lending Group.

“We found that – and more – in Shannon,” Kennedy says. “All of us on the board knew the importance of economic development and that we were underfunded in that area. Economic development is important to all of our members – both large and small. We all want to grow the area’s economy.”

When meeting with local business and government leaders, Full acknowledges many are already contributors to the New North, Inc., but she says Ignite Fox Cities is something different. “New North is a macro-organization focused on a broad 18-county region; we are a micro-region just focused on Outagamie and Calumet counties and the northern part of Winnebago. You need to have both to be successful,” she says.

She also points out their differences. New North has put a lot of effort in growing the marine and defense clusters since they are strong players across the region. In the Fox Cities, those busineses play a smaller role while other industry clusters, such as high-value business services and food processing, play a much larger role.

Jerry Murphy, executive director of New North, Inc., says economic development happens on multiple levels and all are integral to overall success. When meeting with investors who question why they need to give to the New North and their local chamber, he uses a telescope analogy showing how economic development expands and contracts fluently over time. The state provides resources and overall strategy, regional groups like New North provide additional programs while the local level helps close out the “transaction” – when a business decides to make an investment, whether it’s in a new facility, technology or additional staff.

“When we go into businesses, they say ‘you’re all saying the same thing’ about economic development and my response is that it would be dysfunctional if we weren’t,” Murphy says. “We’re all working in concert together.”

For example, he says there are some initiatives that regions like the New North can do that local communities can’t. “Look at Wisconsin Wind Works – that is something that can only be done on a regional level,” Murphy says. “No one community has that many suppliers and resources to get it done. We all need to work together.”

That’s something Full completely agrees with. As she goes out trying to raise funds for the new initiative, Full says communication and transparency will play an integral role. Each investor will be invited to participate in a quarterly session where outcomes and metrics will be shared about what Ignite Fox Cities is doing.

“There are two things that will make or break us. One is having a very clear communications plan with our investors and the other piece is having solid metrics,” Full says. “We need solid metrics that show where we are, where we are tracking, what our uncontrollables are and other areas.”

When Garner Economics shared its report last November, few people were surprised at the results. It talked about the area’s strengths – strong workforce, high quality of life and good schools – as well as its weaknesses – high level of unionization compared to other areas, average wage increase lower than national average in the past 10 years and a lower level of entrepreneurism compared to the national average.

As part of the growth strategy, Full says it’s key to form and leverage relationships with companies already in the Fox Cities. “We need to find out what their challenges are and try to help them, for example with funding,” she says.

Kennedy agrees. “A big part of success in economic development is keeping what you have,” she says. “Our goal is to help businesses expand and to have the Fox Cities be top of mind as they grow.”

Another idea is to work with companies to find out who is in their supply chain and talk with other industries who may have the same suppliers and then work to bring those suppliers to the Fox Cities. “That would lower companies’ costs and improve their bottom line – since it would be cheaper if the suppliers were closer – while also adding jobs,” Full says.

She’s also impressed with the collaboration among communities when it comes to economic development.

“I’ve been overwhelmed with the positive support from the public and private sector and that people realize we need to invest in the region even though I’m from Neenah or Little Chute,” Full says. “They also understand that even though that expansion isn’t coming to my backyard that as a region, we’ll see more rooftops, additional spending and the tax base throughout the area.

“When I came here, people told me that it was very parochial, but I think there’s a difference between that and pride. There’s a lot of community pride, but there are many municipality leaders who are working hand-in-hand to improve economic development.”

The changing market

Chambers of commerce were initially formed as a way to bring business owners together. Today’s chambers are much more. They offer leadership programs, education programs, programs that help build a more competitive workforce, advocacy, affiliate programs (a popular one is health insurance for small businesses) and economic development services.

Full admits chamber members may not realize everything the organization does so she worked with her team to put together a helpful handout that clearly identifies all the areas the chamber is active in and the various services under each set. “We’re much more than a networking opportunity,” she says.

As for the economic development piece, about half of the nation’s economic development associations are run through chambers of commerce (as in Green Bay) while the other 50 percent are run as some off-shoot of the county (as in Sheboygan).

“Both ways are successful. We just felt in this particular case, running the economic development group out of the chamber made better use of our resources,” Full says. “For example, we can utilize the services of our competitive workforce staff member for both the chamber programs and the economic development initiative.”

Adding more to the chamber’s umbrella will require an infusion of capital to add resources, whether for additional staff or technology.

Full says the community’s response to the new initiatives has been positive. Whether it’s switching up annual events – such as combining the annual expo with the small business luncheon – or major initiatives like Ignite Fox Cities, Full is optimistic about the future.

“I couldn’t be happier where the chamber is going and the tremendous momentum we’re having in moving forward,” she says.

“Fox Cities” … not on the map

Those of us living in the New North are familiar with the name “Fox Cities,” but most people outside of the area have no clue where it’s located. That creates some challenges when it comes to economic development, according to Jay Garner, president of Garner Economics. When putting together a 161-page report for the Fox Cities Chamber of Commerce, that message became clear.

Garner advises that the chamber put together a unified external brand for the area. In addition, it shouldn’t rely on the name “New North” either since that is also a name not found on a map. Another concern is that the local airport – Outagamie County Regional Airport – uses the ATW initials. As part of Ignite Fox Cities, the chamber will conduct a brand identity and image survey and develop an external branding and marketing program for the area.

Industry spotlight

Ignite Fox Cities is focusing attention on four key industry segments as it moves forward:
» High-value business services
» Transportation equipment manufacturing
» Innovative technologies
» Food processing

The area will focus its marketing efforts in these areas, much like the New North, Inc. focuses its marketing efforts on the defense and maritime clusters.

The initiative is also divided into three main areas:
» Igniting Business Growth, which covers headquarters recruitment and existing industry retention and expansion
» Igniting Our Brand, which includes regional marketing and branding campaigns and promotions
» Igniting Our Community, which includes creation of a Center for Business and Economic Research, community benchmarking, working on shovel-ready sites, economic process development building and community lead initiatives for economic development success

Spending comparison

The Fox Cities Chamber of Commerce allocates $180,000 annually towards economic development. Here’s a look at what two areas similar in size to the Fox Cities spends on economic development annually:
» Cedar Rapids, Iowa: $1.8 million
» Topeka, Kansas: $5 million

Defining the Fox Cities

We hear the term a lot, but what are the Fox Cities? It’s an area of 18 cities, towns and villages with a total population of 250,000 people. Communities include Appleton, Kaukauna, Neenah, Menasha and Kimberly. For more on the Fox Cities and the chamber, visit www.foxcitieschamber.com.