Economic Development: Industry Recruitment and Retention
Through the years, economic development has been primarily defined by industrial/business recruitment and retention. And while that is still the case, today our roles have evolved to include more than industrial/business recruitment. We are now focusing on retail opportunities, workforce challenges and also how we can best help local innovative entrepreneurs start and grow their businesses.
The reason that most economic development organizations focus on recruitment of manufacturing companies is that they typically make major investments in a community. Large buildings and expensive equipment = increase in ad valorem
taxes which support education (as well as other county entities). They also hire skilled labor with certain education attainment which = higher paying jobs and benefits.
As with all industry and business, changes and shifts are occurring in economic development, requiring us to deal with trend changes and disruptions that can dramatically change the way economic development organizations (EDOs) operate and deliver services. The OADC staff and board of directors continue to advocate for Okmulgee County and do their best to help diversify and increase the tax base for Okmulgee.
RECRUITMENT: Industry recruitment has always been a long shot. Even in “normal” times (whatever “normal” might be defined as!). These deals or opportunities for deals are very few and far between, and usually have a lengthy window of processing. A company that is considering a relocation within the US or the state will have a list of their criteria - which will include existing buildings, available land, skilled and educated workforce, plenty of capacity for utilities and they will also likely be seeking some sort of incentive. Quality of life issues, plenty of single family housing and neighborhoods, and a great education system is not always on their initial criteria list, but ultimately will be part of the final decision as they include family and staff into the decision making. Individual companies primarily hire a site selection consultant who then funnels the information through another third party (for instance Department of Commerce) who THEN sends it out to communities like Okmulgee.
When OADC receives an RFI or RFP (request for information or proposal), we have no idea who the company is, where they are currently located, or what they do. And even if we DID know, this information would be confidential to our organization as per the requirements of the potential client. Once we respond to the RFI/RFP (and there will likely be dozens if not hundreds of other communities that respond), we may not know for months, even over a year, if ever, what the outcome was.
Recruitment, from this perspective, is a long-game strategy and involves a great deal of paperwork, research and phone calls, photographs and images, and whatever it takes to support the questions that the consultant presents. If Okmulgee is chosen as a potential site, there would be site visits and lots of negotiations. With COVID-19, site visits are in the pivot process to be virtual in nature as opposed to physical visits.
One of the biggest challenges that Okmulgee has with industry recruitment is that many companies want an existing building to purchase or rent. To date, in 2020, OADC has received and responded to 10 RFPs. Four of those 10 required an existing industrial building - from 15,000 - 85,000 sq feet. Okmulgee does not have an inventory of available industrial buildings, but will always pitch a ‘build to suit’ for the client. Sometimes the client will consider that, but often that throws us out of the running. Some communities build ‘spec’ buildings but that’s a risky endeavor as well with the risk being a large capital investment and waiting for a long time for the ‘right’ business.
On the other hand - Okmulgee County does have other assets that are particularly attractive to industry:
Lots of industrial land available, with existing infrastructure and for the most part our land prices are competitive
Access to multiple modes of transportation for exporting goods across the nation or internationally (rail, truck, water, air)
Central location in the USA
High quantity and quality of water
OSUIT and Green Country Tech for specific workforce training
Proximity to Tulsa Metro
A tremendous track record supporting manufacturing
Low Ad Valorem Property Taxes
RETENTION: The overwhelming majority of new jobs are created by existing companies within our own community. In a recent report by IEDC (International Economic Development Council), it is estimated that only 2% of new jobs come from relocations within the US; the remainder comes from expansion of existing facilities and birth of new companies. Business Retention & Expansion (BR&E) is an economic development strategy of proactively connecting with existing businesses (typically manufacturing/distribution companies with more than 10 employees) to understand and respond to local business needs and concerns. A business retention program is time and labor intensive, and requires building and maintaining good relationships with existing businesses and connecting them to available resources that might help them expand. Several of our manufacturing companies are in various stages of expansion, which includes additional jobs (CP Kelco, PolyVision and Covington Aircraft are some great examples). This results in additional buildings/construction and equipment purchases (which again, support ad valorem taxes which supports the schools and other county projects) and as well as a ramp up on jobs.
Although a small community, Okmulgee County has 9 value added manufacturers (mostly within city limits, a few are in the county). Five ship their product globally and two are dominant players in their fields. Four of these companies employ 100 people or more. Many communities, especially of our size, do not have the diversity and quality in their manufacturing sector.
Questions? Comments? Drop me an email at deb@chooseokmulgee, give us a call at 918-758-1131 and be sure to “like” our ChooseOkmulgee FB page. And don’t forget to check out our website at www.chooseokmulgee.com.
About the Author
Deb Marshall is the Assistant Executive Director of Okmulgee Area Development Corp (OADC). She is a native of Kansas City MO. Deb spent nearly 20 years in community and economic development in the Tulsa metroplex and Tanzania East Africa. She loves using her superpowers of being a connector and a communicator to help Okmulgee thrive. Contact her at Deb@ChooseOkmulgee.com.