Download 2 - SCKEDD

2. IN-DEPTH ANALYSIS OF ECONOMIC AND COMMUNITY
DEVELOPMENT PROBLEMS AND OPPORTUNITIES:
The Greater Wichita Economic Development Coalition hired Site Selection Group to
update its competitive analysis and target industry strategy. The Strategy was completed
in April, 2010. The previous study was done by Whittaker Associates, which at that time
was six years old and covered six county members (Butler, Cowley, Harvey, Reno,
Sedgwick and Sumner Counties). The new study covers mainly Sedgwick County and
takes into consideration the other counties in the MSA (Butler, Harvey and Sumner).
…Wichita has many assets and also liabilities. One of its strongest assets is that it
is technically superior; an asset that is transferable across many industry sectors
which require complex processes. Wichita has skill in engineering, design,
research and design, and manufacturing. This complex manufacturing experience
and knowledge from design to manufacturing is transferable to some desirable
and growing industry sectors.
Based on the results of the community assessment on a statistical analysis, SSG
recommends the following industry functions as targets. … They should also
bring projects with large capital investments and/or significant job creation.
Specific functions are indicated in each target industry sector, as those business
activities that are most likely to be a good fit for the assets and liabilities in the
Greater Wichita region. The four industry sectors are aerospace, medical,
alternative energy and business and professional services. Other potential
industry functions considered were logistics, information technology and food
processing. In our opinion, Wichita’s appeal to the other industry functions was
not as strong as the four (4) recommended industry sectors.
TARGET INDUSTRY – AEROSPACE
Retention of existing business in following functions:
 Aircraft Manufacturing
 Aircraft Component Manufacturing
 Aerospace Research, Design, and Engineering
New business recruitment and retention in following functions:
 Engineering Materials Manufacturing
 Engineering, Research, and Design
 Product Development and Testing
 Aerospace Systems Integration
TARGET INDUSTRY – MEDICAL
New business recruitment and retention in following functions:
 Engineering materials manufacturing
 Medical device manufacturing
 Materials research and design
 Medical equipment and supplies manufacturing
TARGET INDUSTRY – ALTERNATIVE ENERGY
New business recruitment and retention in following functions:
 Wind turbine and component manufacturing
 Solar component manufacturing
 Biofuel development and manufacturing
 Engineering materials and manufacturing
 Research, design, testing, and product development
TARGET INDUSTRY – BUSINESS AND PROFESSIONAL SERVICES
New business recruitment and retention in following functions:
 Wichita divisional headquarters and regional headquarters
 Shared service centers (accounting, IT,HR, etc.)
 Back-office operations
 Processing centers
RECOMMENDATIONS:
Based on the results of our research, SSG identified four (4) core initiatives that
Wichita should undertake to transition the community from “Good” to “Great”.
These initiatives include:
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Create a dedicated and flexible long-term funding stream to enhance
economic development competitiveness
Build a coalition to create large, shovel-ready sites
Strengthen and promote Greater Wichita’s value proposition
Align Coalition resources to achieve and sustain the area’s desired
level of competitiveness
…In the final analysis, Wichita must determine the level of sustainable
investment required to fund its long-term efforts at business retention, existing
business expansion, and new business attraction. Such determination will require
a clear consensus regarding the level at which Wichita will compete to preserve
its existing business base and expand its employment and capital foundations.
Those efforts will concentrate on aligning local, regional, and State resources to
resolve the issues below:
 Economic incentive funding;
 Dedicated capital;
 Real estate investment;
 Staffing; and
 Marketing and sales expense.
Equally, achievement will necessitate the development of a mutually-agreed
action plan and performance metrics to carry out targeted marketing efforts as
described herein.
The 2003 study conducted by Whittaker Associates brought forth information that is
relevant to all economic development found in the studies ‘Recommended Industries and
Tactics’.
In order to create wealth within the area, it is helpful to think
of the local economy as a nation in which the balance of
payments determines the level of wealth created. The goal is
to bring money into the region in excess of the money
leaving the region. This can be accomplished in a number of
ways. One of the most common is to generate income by
exporting value-added products or services outside of the
area in excess of the income spent for goods and services
purchased from outside the area. Once money is brought into
the area the goal becomes to keep it there and let it recirculate as many times as possible before it leaves the area
to pay for goods or services purchased from outside the area.
However, the primary goal of an economic development
strategy is to make the economic pie bigger rather than recycle what is already there. Historically, manufacturing has
been the economic sector that has given the “biggest-bang for
the buck” by providing the highest value added for the inputs.
Traditionally, the inputs have been land, labor, and capital.
In the rapidly evolving global economy the inputs have
expanded to include knowledge, innovation, and
communications.
There are several methods to bring money into the area.
Tourists, second home buyers, retirees, retirement homes and
regional medical centers transferred into the area by the
government in the form of welfare payments, social security
and grants.
Other methods by which the economic pie can be made
bigger is through expansion of existing business by assisting
them in increasing the size of their market. Expansion of
existing firms offers the greatest return on investment of all
economic development activities. An often cited figure of
70-78% of new jobs within the area are said to come from the
expansion of existing businesses. Therefore a key component
of any economic development strategy is the retention and
expansion of existing businesses.
Yet another tactic is the attraction of economic activity
(business) from outside the region. It is one of the more
difficult and costly tactics to implement. The ability to
recruit and retain talented workers is rapidly becoming a
competitive factor as we approach the demographic shift
brought about by the pending retirement of the “babyboomers”.
How does SCKEDD fit into these opportunities to help its 14 county members to expand
and or diversify their economic base? SCKEDD has been able to develop expertise
within specific areas. We provide gap financing to existing and expanding businesses.
The financing programs SCKEDD uses are from:
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Microloan funds borrowed from the Small Business Administration
(SBA)
Microloan funds borrowed from Rural Development through the Rural
Microenterprise Assistance Program
Microloan funds made available through contributions to SCKEDD
under the Rural Business Development Tax Credit Program
Revolving Loan funds granted by the Economic Development
Administration
Intermediary Relending Funds borrowed from Rural Development
504 funds from the Small Business Administration (SCKEDD is a
SBA Certified Development Company)
SBA loan guarantee programs
Community Development Block Grant funds for Economic
Development
Community Development Block Grant funds to counties for
microloans
Rural Development Business and Industry Loans
We work with communities and counties to provide the infrastructure needed by the
businesses for their expansion.
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Economic Development Administration
Community Development Block Grant funds for
Development
Rural Development
Kansas Department of Transportation funds for
Development
Economic
Economic
SCKEDD’s opportunities are in helping those businesses that expand the economic pie of
the region, and those that assist in providing services to their community. Staff is made
aware of the opportunities through its Board members, city and county economic
development persons, and their other private contacts.