ECONOMIC DEVELOPMENT PRIMER PREPARED FOR CITY OF BEAVERTON
ECONOMIC DEVELOPMENT PRIMER PREPARED FOR: CITY OF BEAVERTON PREPARED BY: CHABIN CONCEPTS, INC.
Definition Economic Development is simply wealth generation
How the Local Economy Grows New or Expanded Business in the Local Economy New jobs, Additional Income to Area, Increase in Tax base Attraction of Linked Activities Initial Multiplier Effect Additional Jobs, Income, Taxes New Public & Private Investment in Infrastructure & Services Additional Jobs, Income, Taxes Secondary Multiplier Effect Economic Development (wealth generation) New Regional/Local Threshold
Identifying Opportunities for Beaverton Targets Where should Beaverton try to influence the local economy growth cycle? What types of companies should Beaverton focus on to make the greatest positive impact on the community? Find out through a Target Industry Analysis: Analytical method to identify a community’s best fit with traded-sector industries that bring value to community in the form of investment, jobs, payroll and local purchasing
Why do a Target Industry Analysis? Build on growing industries Diversify the local economy Know who you are and what industries fit with Beaverton’s assets and limitations Know what sites and buildings are needed now and in the future Understand infrastructure needs and priorities to support business investment/job creation Know what workforce skills need to be developed Focus marketing efforts on industries where you compete well
Target Industry Analysis Methodology To identify best fit targets for Beaverton, the Chabin team conducted a quantitative and qualitative analysis of industry trends and Beaverton's assets/liabilities. 1. 2. 3. 4. 5. Historic Industry Trends: Economic baseline for the City and Portland Metro Area to determine growing industries locally and nationally Business Climate Interviews: Confidential discussions with local employers and external audiences Corporate Location Assessment: Mock project RFI and Site Visit Compatibility Screening: Based on findings from Business Climate Interviews and Corporate Location Assessment, determine what industries fit in Beaverton Niche and Emerging Industry Sectors: Emerging opportunities for Beaverton based on local assets
Traded Sector Industries versus Non-traded Sectors The Target Industry Analysis focuses on Traded Sector Industries because… Traded Sectors (a. k. a. Basic Industry) bring new wealth from outside the community Export goods or services outside of Beaverton. Could be global exports but not necessarily. Typically manufacturing, distribution, back office, R&D or HQ operations Payment for goods and services brings wealth into the community through company income and wages paid to employees Essential for building wealth Has a greater positive impact to the local economy than non-traded sector businesses Non-traded sectors include everything else Such as retailers, restaurants, and service businesses Dependent on traded-sector industries Re-circulates money instead of bringing new wealth to the community Essential to preventing leakage so that wealth from Beaverton’s traded-sectors are not lost to external communities Poor investment for incentives because non-traded sector businesses do not grow the local economy
The Multiplier Effect New traded sector businesses bring income and employment…. . Leading to related generation of new traded-sector and non-traded sector income and employment Result: Economy grows more than the original traded sector growth
Context The Target Industry Analysis is set in the context of the global economy. The next few pages present an overview of the typical site location process and factors that impact decisions. Communities must do everything right to win the business location and even the expansion of a local business.
Changing Nature of Location Decision Making • Decisions are more complex – more information, more variety • S P E E D – less time to deliver and analyze data • More location options – competition is around the corner and around the world Due to the complexity of location decision-making, speedy timelines and more competition, your community must be prepared with policies in place and partners aligned so that everyone engages with the prospect in a coordinated, thoughtful and quick manner. It is not the time to develop policies and create new initiatives when the prospect is considering your community.
Location Selection is a Process of Elimination Business / Site Consultant creates long list of Strategies / Location Alternatives Screen down to Favorable Strategies / Regions / Candidate Cities Screen further to Short List Locations Finalists Selected Location
Keep Your Community in the Game Avoid Providing Reasons for the Potential Investor to Walk Away Strategy Development Location Investigation Evaluate Strategic Alternatives Screen & Evaluate Communities/Sites Get on the Radar Screen with Your Brand Conduct Due Diligence Demonstrate You are the Right Place Due Diligence Control Property Deliver on Your Promises – be prepared to do what you say in your sales pitch. Company does not have time to wait. Negotiate Incentives Acquisition / Lease Agreements
Attractiveness of a community’s business environment is determined by many factors
Another way to look at it If your community is not ready, the company will move on to a community that is ready to meet their timeline.
Corporate Location Assessment Rating Site Selection Factor Beaverton’s Rating* Community Reception Good Building/Sites Good Labor Very Good Utilities Good Transportation Good Community Appearance Very Good Community Stability Good Schedule Neutral Sustainability Good Community Support Good Intangibles Good *Based on assessment by Austin Consulting, international site location consulting firm
Leading Strengths Identified from Business Climate Interviews Talent Pool – extensive labor shed of skilled and highly- educated people, accessible through multi-modal transportation system Transportation – especially leading-edge public transportation Livability – an essential factor for Beaverton's strength as a talent destination; workers move to area even before they have a job Sustainability and “green” culture – embedded in business and government Nike – symbolizes reception for quality global company
Beaverton Industry Target Recommendations
Beaverton’s Role in Renewable Energy Located in the center of Oregon’s high tech “Silicon Forest” and an area that draws the best technical skills in the region, Beaverton is well positioned for opportunities in the emerging field of Renewable Energy. Although Renewable Energy is not identified as a target industry cluster on its own, two areas should be pursued. Solar R&D and Technical Support Component Manufacturing Smart Grid/Buildings Market Growth Elements of these targets falls within Beaverton’s target clusters of R&D and Electrical Equipment.
Example Beaverton Companies Research & Development Maxtek Corp Si. Onyx Oregon Primate Research Center Mc. Afee Virus Research Center Software & Information Services Axium Software Vernier Software Lin. Bit Gemstone Systems Scientific & Medical Instruments Welsh Allyn Protocol Acrymed PM Industries Electrical Equipment Axiom Electronics Bi. Amp Micro-Power Sporting Goods & Apparel Nike Columbia Sportswear Leupold Stevens Yakima
Next Step The next step in the project is to develop the implementation plan. This plan will be the Economic Development Roadmap for Beaverton's economic development activities – including: Strategic initiatives Specific action steps to implement Budget Resources and templates 30 -60 -90 -day launch schedule There will be a presentation of the Economic Development Roadmap to Council on July 19 th.
City’s Economic Development Goals for the Roadmap The City aims to add value for businesses by fostering a business climate that supports job creation while generating revenues for the city to operate and provide services to businesses and residents. As a result… Local employers will be advocates of Beaverton, offering referral leads to the City. There will be lower vacancy rates for office, industrial and commercial space. Beaverton will be a major regional player in economic development, positively perceived by the external market.
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