Bold new economic development plan aims at bringing new industry cluster opportunities to King County

Hoping the economy turns around isn’t enough.

Action is needed, according to leaders of enterpriseSeattle. This is especially true in light of the fact that Boeing will build a second 787 production line in South Carolina – rather than here in the Puget Sound region. With that and the current economic doldrums as backdrops, enterpriseSeattle leaders have taken the bold step of creating a new Economic Action Plan for King County to try to build up and bring to the region additional industry clusters that will add to the region’s economic base.

“We hear a lot of talk about ‘hoping’ the economy will turn around,” said Martha Fuller, Chair of enterpriseSeattle and EVP/CFO for Vulcan. “But hope isn’t a strategy. We need a plan for action and that’s what the King County Economic Action Plan is all about.”

For the past five years, enterpriseSeattle, a public-private, economic development partnership for King County and the 39 cities, has focused its attention on five top “industry clusters” where this region exceeds the national average in terms of job concentration.  These clusters include Life Sciences, Clean Technology, Information Technology, International Trade and Logistics, and Aerospace. Each cluster has a business development expert assigned to assist companies in those clusters stay here, come here and expand here.  In doing so, these clusters are strengthened and King County is better positioned for global economic competition.

But that isn’t enough. It’s time for the organization – supported with both public and private dollars – to more forward and explore additional industry clusters, say the leaders who will kick off the new action plan at the 38^th Annual Economic Forecast Conference on Jan. 14.  If this region doesn’t do so, we will be outpaced by economic competitors throughout the world ramping up their programs.

David Allen, former chairman of enterpriseSeattle and Executive Vice President for McKinstry Co., is seeing the competition first hand. His company has received queries from Austin, Texas; Montana, and even Canada offering expansion opportunities to his Seattle energy efficiency company. McKinstry has opened offices in nine different cities in the past four years; McKinstry’s workforce has grown from 1000 to nearly 1800 over the last five years.  Allen says, “If we don’t strengthen our competitive profile, Puget Sound could very well be left behind in the 21^st century economy.  And, we need the business community to play a stronger role in the effort than we have in the past.”

The King County Economic Action Plan (KCEAP) is designed to accelerate the expansion of the jobs and tax base of the region.  KCEAP has two elements: a “basic plan”, based on existing resources, will continue to target the top five industry clusters in the region already supported with a business development program:  Life Sciences, Clean Technology, Information Technology, Internationals Trade and Logistics and Aerospace. The second element is an “enhanced plan” focusing on six emerging industry clusters that leaders believe are opportunities within the King County economy that can be developed. These include:

•         Business/Financial Services: Business services ranks within the top five in job concentration in Puget Sound; with Russell Investments and JP Morgan Chase now in downtown Seattle there is an opportunity to develop a Business/Financial Services cluster.

•         Pacific Rim Trade: Many companies that do business in Pacific Rim trade are fleeing California because of its poor business climate and dysfunctional State and local government; King County, with its international port, is positioned as the best alternative for Pacific Rim companies looking to relocate.

•         Fashion and Apparel: Washington State University has already developed a curriculum supporting the 21^st century fashion and apparel industry which is now driven by computerized design; direct retailer involvement; international ports, and global markets all tied to the Pacific Rim; King County is positioned to be a leader in this cluster. 

•         Global Health/Philanthropy: With the opening of the new Gates Foundation building in 2011 in Seattle, King County is poised to be the world hub for non-profit, philanthropic and global health organizations.

•         Defense/Space:  More than 116 companies in King County received $135 million from the U.S. Department of Defense in 2008 and with defense spending is expected to be $6 trillion over the next 20 years, a potential for job growth exists for King County.
   
•         Healthcare: One-sixth of the U.S. economy is undergoing major changes from advanced research; technology innovation; national public policy; an aging population and a burgeoning global market. With its strong life sciences and global health sectors, King County is poised to be a leader in the broader healthcare sector.

At this point, only the “basic plan” of the KCEAP is funded through enterpriseSeattle’s $1.4M budget.  To assess and develop the potential opportunities in the “enhanced plan” an additional $450,000 is required.  These resources will support an economic baseline study identifying companies, jobs and revenues now generated from these emerging clusters. It will also assess the prospects for and impediments to their growth in King County and whether an on-going business development program to support them is justified. If the potential job growth in a cluster is significant, enterpriseSeattle will establish a business development program – as it now has in the five major clusters - to grow the companies and clusters and assist King County cities capture those jobs locally. In addition, an aggressive business recruitment program targeting California companies in both existing and emerging industry clusters in King County will be implemented.

Local economic development officials believe that despite successes of the past, strengthening our competitive profile is essential for a successful economic future in Puget Sound. The region has benefitted from the emergence of many very successful global companies – Boeing, Microsoft, Amazon, Nordstrom, Starbucks, Costco, etc. But that’s not enough. “The great thing about the Puget Sound is we’ve been blessed in the last 50 to 100 years with incredible companies that everyone knows,” Allen said. “What’s happened is we seem to feel we don’t have to compete because we’re a frontrunner in livability. As a citizenry, we’ve fallen back on our laurels and not caught up with the fact that being a winner in 21^st century economic clusters is incredibly competitive. And, we need to strengthen our collective effort to do so.”

If enterpriseSeattle increases its annual budget to nearly $1.9 million, that would raise the per capita annual investment in economic development in King County to $1 per capita. Economic development professionals consider $1 per capita as a “competitively-resourced” program even though some domestic competitors like Denver, Austin and others are in the $3-4 per capita range; foreign competitors like Singapore invest even more.  Tom Flavin. CEO of enterpriseSeattle says, “The winners in the 21^st century competition for good-paying jobs and growing tax bases will be those regions that that position themselves on the front-end of economic opportunities; develop and execute a focused business plan; are competitively-resourced; and, never take their economic well-being for granted.  I believe these factors will separate the economic haves from the economic have-nots.”      

Since 2007 enterpriseSeattle has helped expand or recruit 42 companies, creating nearly 4,200 primary jobs, over 8,000 secondary jobs and $1.4 billion in new economic impact. And the business development staff is working with an additional 195 companies now considering expansion or relocation to the area.  This is done by assigning industry experts with insights in each cluster to assist new and expanding companies. “We do business development work on behalf of the community, helping new companies get started, expanding existing companies and reaching out companies in other markets in these clusters to let them know this is the place they can be most successful” said Jeff Marcell, who as chief operating officer of enterpriseSeattle runs its business development team. “Our team is made up of specific industry cluster experts that act as consultants and advisors.  They work on behalf of the community to help companies connect with resources and overcome challenges like identifying financing sources, meeting workforce needs, or introducing companies potential partners, new clients, or new customers. There’s a model we’ve built for each of these clusters that has been successful.”

One example is the Washington Interactive Network (WIN), an enterpriseSeattle initiative for game developers throughout the world to learn about this industry cluster in King County. It recently held its annual “Power of Play” event in which 150 developers came together in person and 100 more connected via the Internet from around the world to participate. “It illustrated all of the work that enterpriseSeattle has done in the cluster has helped put this region on the map as an international center of the interactive media industry,” Flavin said. “International business opportunities for our companies are resulting which strengthens our position as a global leader in this cluster.  But, we can’t rest on our laurels because Singapore is aggressively pursuing a leadership role in this cluster.”

The organization has helped spawn similar success in the Clean Technology industry cluster.  In addition to providing assistance to industry entrepreneurs, enterpriseSeattle helped establish the Washington Clean Technology Association, was a founder of the inaugural Pacific Northwest Clean Tech Open - a three state business plan competition for clean tech companies.  One of enterpriseSeattle’s client companies, Hydrovolts, won the National Sustainability Award.  Similar success is occurring in the Life Sciences cluster and International Trade clusters.  enterpriseSeattle has also been a leader in the aerospace cluster advancing recommendations for improved competitiveness and the initiative to secure the Air Force Tanker project for this region.  

Because State and local government organizations are facing severe budget shortfalls, enterpriseSeattle is looking for the businesses community to step up. “Business community involvement and support for economic development is the big differentiator in successful economic development programs across the country.  Not only do they bring additional resources to the effort, but they bring a culture of competitiveness and innovation which drives today’s economic development.  We want the business community not only involved but to be the leaders of the program in King County.”

According to Martha Fuller, “If the region doesn’t move forward, it will fall behind. The situation with Boeing moving its production line to South Carolina is a wakeup call for all of us. It has gotten people’s attention and now we need to translate that into action,” she said. “We are going to have to work harder and smarter than our competitors if we want to succeed in the 21^st century global economy.  No region is the country is better positioned to do so.”

38th Annual Economic Forecast Conference Thursday, January 14, 2010 ~ 7:30 a.m. - 1:30 p.m.

Washington State Convention & Trade Center

What will the Pacific Northwest economy look like in 2010? What is the outlook for the commercial and residential real estate markets? What sectors will lead the region during the recovery? 

Don't miss your chance to join the dialog, learn what lies ahead for the region, and connect with other regional leaders including Governor Chris Gregoire at the largest forecast event in the Northwest. Gain insight into critical business issues with timely forecasts from nationally recognized experts including representatives from The Conference Board, and the Puget Sound Economic Forecaster as they cut to the bottom line at this must-attend event. 

For more than 35 years, enterpriseSeattle's annual Economic Forecast Conference has been helping business and community leaders translate economic trends for the region, the nation, and the world into competitive intelligence to successfully plan for the future.

Space is limited -- Register your group today! <https://www.123signup.com/register?id=jypfy>

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President-elect Barack Obama recently recognized Seattle-based construction and energy-services contractor  McKinstry as a "model for the nation", in its work focused on retrofitting schools and office buildings to make them more energy-efficient.

McKinstry’s Executive Vice President David Allen, who serves as Board Chair for enterpriseSeattle, credits his initial involvement and participation in the organization for introducing McKinstry to the opportunities in the Clean Tech sector.

Since 2005 the company has expanded and added over 400 jobs directly related to its energy and Clean Tech work.

"It really all began when I joined enterpriseSeattle and became aware of the opportunities in Clean Tech." said Allen.
    
"enterpriseSeattle is at the forefront of a number of emerging industries in the region and I encourage other businesses to get involved - it can truly be a win-win for everyone."

Read more from the Seattle Times here