Nurturing industry clusters beneficial to business

A supportive business environment is crucial to success, especially when it includes a group of like companies willing to set aside competition for the benefit of local industry. Manufacturers, as an example, benefit from clustering in an area. Grouping in a close proximity creates a critical mass and economies of scale that draw suppliers and bolster a workforce. Benefits include improved cost and quality controls.

It can also lead to leveraged marketing opportunities, as is the case in the northern Idaho and eastern Washington communities that share the Snake River and a growing boat building industry as a common link.

Six welded-aluminum jet boat manufacturers from Lewiston and Orofino, Idaho and Clarkston, Wash. have formed a joint marketing effort under the umbrella of the Snake River Boat Builders Export Program. The idea is to use their collective resources to draw global attention to their capabilities and products and develop viable foreign markets. And, of course, drive sales.

The group recently participated in the 42nd boot Dusseldorf, dubbed the “world’s biggest water sports show.” The show provided hands-on training for the boat manufacturers, contacts with potential buyers, a chance to see new ideas and technologies, and global industry perspective.

It was the return engagement to a European trade mission delegation that visited the Snake River Boat Builders last year. The group toured factories, tested boats and became the focus of the first annual Snake River Boat Expo.

Companies turning to programs that support business growth

Access to business incubators and other resources that support business development is an important consideration for any company. Such organizations and programs are valuable sources of grant money, knowledge, low-cost space and other benefits.

In the case of grant funding, the money can be used to jump start production that leads to increased revenues and creates jobs. The Sirti Foundation, which helps business-assistance agency Sirti to accelerate growth of technology-based companies in the Inland Northwest, is one such example. The privately funded tax-exempt entity recently awarded $1.5 million from its Energy Innovation Fund to:

• Demand Energy, which is developing distributed electricity storage devices and network management software
• Great Northern Spokane for a geothermal heat pump demonstration project
• Greenwood Clean Energy in support of enhancing EPA-approved biomass boiler manufacturing
• NuElement, Inc., a company commercializing bio-aviation, fuel battery extender auxiliary power unit
• WISErg Corporation, which is using an anaerobic digester to derive bioresources from municipal organic compostable materials

Sirti, an agency of the state of Washington, is a collaboration of business, higher education and government to accelerate the development and growth of technology-based companies in the Inland Northwest.

Manufacturing rallies in Spokane County

Manufacturing, a legacy industry in so many parts of the country, has been forced to reinvent its business model like so many others to stay competitive. Areas with inexpensive electricity rates, excellent infrastructure/transportation systems, strong regional workforces and favorable tax structures have emerged as major beneficiaries.

For those same reasons, the advanced manufacturing sector is on-the-grow in Spokane County, Wash. Employment increased 18 percent in the sector in during 2010, including more than 1,100 new jobs in the third quarter. The majority of advanced manufacturing firms – those working in chemical, composites, metal, energy and aerospace – employ 20-100 people.

Look for communities investing in workforce training

Specialized skills and workforce training are important to any successful business, large or small. Relocating and expanding businesses often make workforce quality a top priority because everything else becomes moot without it. Communities with a dynamic, demand-driven workforce system prove the best solution for a growing company.

Progressive communities are expanding their training offerings. These programs improve marketability for those just entering the workforce and retrain displaced workers who likely already have considerable skills, but need additional industry-specific training. The result is a better prepared employee for companies.

Voters in three North Idaho school districts recently approved two-year property tax increases to build a $9.5 million professional-technical high school. The Kootenai Technical Education Campus is a partnership between business and industry leaders, local school districts and manufacturers. The school will accommodate 180 students and initially provide specialty training in health occupations, welding, construction and automotive technology when it opens in 2013. Curriculum is being developed to expand the instructional offering to include training in hospitality, drafting, manufacturing, and airframe and power plant mechanics.

Those plans follow the opening of the Kalispel Career Training Center in Priest River, Idaho. Programs in advanced welding, metal fabrication and culinary arts are available. Additional programs are being developed to address upcoming workforce needs. Program partners include the Kalispel Tribe of Indians, Pend Oreille County Economic Development Council and Public Utilities District, Seattle City Lights, Cusick School District, Selkirk School District, Newport School District, Community Colleges of Spokane, Washington State University Extension Office, Port of Pend Oreille, Teck, Heater Craft, Work Source, Institute for Extended Learning, and Pend Oreille County.

Retaining strong companies important priority

Taking care of prospering companies is every bit as important as recruiting the next big thing, especially in these days of a “new normal” economy. Regions that can package affordable and available real estate, a talented workforce, and a reasonable regulatory environment in a supportive business climate have a leg up on their competition.

Schweitzer Engineering Laboratories (SEL) has found that in the Inland Northwest. The homegrown power protection industry leader is growing in its own backyard. Work is underway on a new 105,800-square-foot, mixed-use engineering office and manufacturing facility in Lewiston, Idaho. The site-cast concrete tilt-up building is being constructed on 25 acres in the Lewiston Business Technology Park, just across the state line from SEL’s corporate headquarters in Pullman, Wash. SEL is also planning a new 70,000-square-foot Solution Delivery Center in Pullman. The three-story building will include six customer-training rooms, conference rooms and engineering and research space.

SEL, which creates products that minimize blackouts and electrical damage, is part of a major federal Pacific Northwest Smart Grid Demonstration Project. The company benefits from its proximity to Washington State University and the University of Idaho, located eight miles apart in Pullman and Lewiston, respectively. Both have strong engineering schools, and WSU graduates have been ranked by the Wall Street Journal among the Top 25 most sought after by corporate recruiters.

Quality of life part of relocation decision

Companies looking at relocation or expansion consider the business case first. A clear understanding of real estate, labor, power and other costs of doing business are a must, especially in today’s economic environment. Communities without a business case that makes sense are excluded from consideration early in the process.

Once the numbers become enticing, evaluation typically turns to other factors. Quality of life is one of those hard-to-quantify, but important intangibles. Everyday influences such as housing costs, commute times and recreational opportunities all help set communities apart.

Titan Springs, an aerospace parts manufacturer founded in Southern California, moved to Hayden, Idaho. The ability of its employees to own a home without having to commute an hour and a half from Lancaster to Los Angeles was an important factor in that decision. Learn more about quality of life and its impact as a relocation consideration in this interview.

Talking about California's economy on "The Business of Life" radio show

Business consultant and radio personality Ron Tunick recently invited me on as a guest of his show, “The Business of Life” in Ventura, Calif. We discussed that state’s economic challenges and their impact on small business. Tunick offered several thoughts about California (“Our economy is in real trouble”), Idaho (“If I had to go to one place, it’d be Hayden Lake, Idaho. God lives there, am I wrong about that?), and Washington (On Spokane: “You talk about a sleeper city in this country where there’s great opportunity and a great workforce. And, for $250,000, you can buy all the home you want.”)

During the 30 minute interview, topics ranged from the disparity in tax structures and state budget troubles to commute times and air transportation. We touched on business considerations specific to small manufacturers. Tunick offered that California needs to get better business retention efforts, before concluding that under current economic conditions: “If you own a business get out of here get up there” to Washington and Idaho. You can listen to the interview here.