It's a whole new world in economic development

In terms of economic development, the effects of the Great Recession are game changing.

It's a whole new world in economic development.

John Gunstad, economic development specialist with the Brainerd Lakes Area Development Corp., recently attended a week-long economic development course in Duluth.

Gunstad said speakers looked at what does and doesn't work and what the trends are going forward in this changed landscape.

Two huge trends for the future include data centers or technology centers and health care, Gunstad said.

In terms of marketing areas and working to encourage economic growth, Gunstad said they were reminded that much like the jobseeker of today, communities looking to attract companies are part of a crowd looking for a few opportunities.

"Now everyone is knocking on the same door," Gunstad said. "Forget quality of life. Everyone touts it."

Instead, CEOs are now wired into the cost of doing business. It's about the bottom line. Getting those potential businesses to think of the area may now mean creating an event.

That was something BLADC was already working on in terms of creating a gathering that would bring people together that may not otherwise rub shoulders such as entrepreneurs and investors.

The Upper Midwest Basic Economic Development Course was hosted at the University of Minnesota's Labovitz School of Business and Economics in Duluth. This course provides comprehensive information and instruction on the theory and practice of economic development fundamentals.

Topics covered during this 5-day event included business retention and expansion, strategic planning, marketing/attraction, and small business and entrepreneurship development.

Another advocated move was business retention visits to thank companies and find out more about them. In addition, it's an opportunity to learn what services complement them and what could be a useful addition to the community. Business visits have been a long-standing BLADC effort.

With money difficult to come by from banks and government sources, Gunstad said going forward the conference pointed to the need to develop a local investor pool.

The conference was the eighth for Elaine Hansen, director at the UMD Center for Economic Development.

"The current theory is you develop your own," she said, adding almost every place has people who are willing to invest in their community and things they know rather than outside it. They just need to be asked, Hansen said.

She noted Minnesota has a lot of people who aren't obvious about the money they've accumulated. They live in modest homes and don't drive new cars each year.

"They are willing to invest and they want to be asked," Hansen said.

In terms of trends in economic development, Hansen said communities need to look at strengths and build on them by turning to businesses that can grown and expand. Working with those companies creates a strong economic base and serves to attract complementary businesses to the area. Sometimes, Hansen said, a hurdle for an existing local company's growth is one that can be resolved without a lot of effort.

"Large business doesn't just happen," Hansen said. "It grows from smaller business."

An existing company already has a vested interest in staying with ties that led its ownership to develop here in the first place. Hansen said BLADC's efforts to network to people who vacation here also has merit noting major technology companies that picked expansion sites near favorites ski vacation spots.

Other development tools recommended was putting together information on the hottest trends and sectors so when an entrepreneur comes in with an idea, the list may point to an appealing area to start. Shovel-ready sites, or those already set so a developer knows they can walk in and the ground work is done from soil borings to title searches, is another key in being able to act quickly when an opportunity presents itself.

"The economy is working but it has changed and people that were able to get loans over the last 10-15 years are not able to because they have not shown they are a good credit risk," Hansen said. "If you have been paying your bills, if you are fiscally responsible, you can still get a loan."

Hansen said they have worked with owners of small businesses to help them get into a position where they are looked upon favorably by lenders by looking at the books and watching monthly expenditures. For businesses, the process has been much the same for consumers who are now much more focused on savings accounts and spending without accumulating debt.

The economic development course looked at the four active generations in the workplace and the diverse options to reach them. Hansen noted one of the people in her office is younger than 30 and has never used a telephone book. While change is difficult, Hansen said not changing with the times is a problem for business. But with people using their smart phones to find companies for everything from coffee to car repairs, being on Google Maps takes on added economic importance.

Communication has changed and changed quickly. Hansen said businesses need to be aware of the changing technology and what is out there. Hansen said she hates to using the term social media because people think solely of Facebook. But, she said, it's more than that as wireless technology changes how people do business, communicate and relate to each another.

And it will continue to change with a potential risk to those who don't at least keep up with the new tools that are out there and being used by their consumers.

The magnitude of change in the last 100 years, a remarkable amount, will be compressed into the next 10, Hansen said.

"If we are looking at growth the way they did 10 years ago, it isn't going to happen," she said. But she said if businesses make changes and utilize the resources that are there, they will grow. Hansen said she sees a lot of businesses coming out of this difficult time much stronger than they were.

Gunstad said he picked up a lot of useful information at the conference and learned something else.

"We are doing a lot of things right," Gunstad said. "It was a validation of what we are already doing here."

RENEE RICHARDSON may be reached at renee.richardson@brainerddispatch.com or 855-5852.