Regional Economic Regional Economic DevelopmentDevelopment

Michael MorrisonMichael MorrisonPresidentPresident

Jamie T. ZaniosJamie T. ZaniosDirectorDirector

The Need for ChangeThe Need for Change

Demography is Destiny:Demography is Destiny:Unless We Do Something About Unless We Do Something About

It!It!

Iowa CountiesIowa Counties

Population ChangesPopulation Changes

North Iowa Area Schools North Iowa Area Schools Enrollment Under 18 Enrollment Under 18

1975-20011975-2001

-29.90%

-35% -30% -25% -20% -15% -10% -5% 0%

Percent Change inArea 2 Enrollment

Under 18, 1975-2001

Percent Change

Population Projections from Woods and Poole

Population Projections from Woods and Poole

Projected Population Changes, 2000 to 2015Projected Population Changes, 2000 to 2015

Population Projections from Woods and Poole

Projected Population Changes, 2000 to 2015Projected Population Changes, 2000 to 2015

Iowa In National ContextIowa In National Context

The EconomyThe Economy

Business Vitality Index - EntrepreneurismBusiness Vitality Index - Entrepreneurism

Net Gain/Loss ofNet Gain/Loss ofIowa ResidentsIowa Residents

States’ Ability to Produce Graduates vs. States’ Ability to Produce Graduates vs. Ability to Keep and Attract GraduatesAbility to Keep and Attract Graduates

Migration Rate of 22- to 29-Year-Olds

with a College Degree

100

7.5 15 22.5 30

400

AK

NV

NM

GA

ID

FL

OH

NC

MI

MO

VT

KS

NE

ME

PARI

TXOR

AZ

WA MD

IL

VA

UT

CA

CO

NY DEMN

CT

NH

NJ

MA

0

State New Economy Index Scores (2002)

Top Tier

Middle Tier

Low Tier

OKLA

AR

MS

HI

KY

AL

TN

SC

WVMT

IN

SD

WI

ND

IAWY

Low Production, Importer of Capital High Production, Importer of Capital

Low Production, Exporter of Capital High Production, Exporter of Capital

200

300

-400

-100

-300

-200

Net Migration of Residents 22-29Net Migration of Residents 22-29with Bachelor’s Degree or Higher, 1995-2000with Bachelor’s Degree or Higher, 1995-2000

Source: U.S. Census Bureau, Public Use Microdata Samples, 2000

191,07073,509

49,421

44,216

43,837

40,06035,307

32,564

30,36329,603

28,99827,216

25,875

24,470 14,557

13,666

10,9469,752 3,295

2,337

1,190

960645

-303

-498-661

-1,385-1,503

-2,899

-2,996

-3,510

-3,579

-3,854

-4,447

-4,591-4,966

-5,530

-6,670-6,903

-6,934-7,241

-8,420

-9,246-9,687

-9,763

-10,534-13,488

-16,902-17,643

-34,642

Califo

rnia

Texas

Georg

ia

New

York

Illinois

Flo

rida

Colo

rad

o

Virg

inia

Massa

chuse

tts

Wash

ing

ton

North

Caro

lina

New

Jerse

y

Mary

land

Arizo

na

Ore

gon

Min

neso

ta

Tennesse

e

Nevad

a

Haw

aii

Ala

ska

South

Caro

lina

Dela

ware

Connecticu

t

Misso

uri

Idaho

Kentu

cky

New

Mexico

Wyom

ing

Kansa

s

New

Ham

psh

ire

Rhod

e Isla

nd

Verm

ont

Ark

ansa

s

Neb

rask

a

South

Dakota

Main

e

Monta

na

Mississip

pi

North

Dakota

Okla

hom

a

West V

irgin

ia

Louisia

na

Ala

bam

a

Uta

h

Mich

igan

Ohio

Wisco

nsin

Iow

a

Ind

iana

Pennsy

lvania

-50,000

50,000

100,000

150,000

200,000

0

Aggregate Personal Income Inequality Aggregate Personal Income Inequality Grows Between Iowa Counties, 1969-2002Grows Between Iowa Counties, 1969-2002

0.00

0.10

0.20

0.30

0.40

0.50

0.60

19691972

19751978

19811984

19871990

19931996

19992002

Year

Gin

i C

oef

fici

ent

15.52% increase in 15.52% increase in inequality since 1969inequality since 1969

Enough! No more prizes forEnough! No more prizes forpredicting rain!predicting rain!

Bold, New InitiativesBold, New InitiativesAre RequiredAre Required

Nine New InitiativesNine New Initiatives

1.1. Pappajohn Entrepreneurial CenterPappajohn Entrepreneurial Center2.2. North Iowa Growth PartnershipNorth Iowa Growth Partnership3.3. Labor Shed AnalysisLabor Shed Analysis4.4. Cluster AnalysisCluster Analysis5.5. North Iowa AcceleratorNorth Iowa Accelerator6.6. Business IncubatorBusiness Incubator7.7. North Iowa Venture Capital FundNorth Iowa Venture Capital Fund8.8. North Iowa Growth Marketing Partnership North Iowa Growth Marketing Partnership 9.9. Regional Economic DevelopmentRegional Economic Development

• Iowa’s future depends on it!Iowa’s future depends on it!– Bold, new initiatives are requiredBold, new initiatives are required

• We are appropriately “positioned” to do itWe are appropriately “positioned” to do it

• It is strategic to do it!It is strategic to do it!

• It’s aligned with State and Federal It’s aligned with State and Federal economic development initiatives & planseconomic development initiatives & plans

• ROIROI

Why Should We Do This?Why Should We Do This?

I. PappajohnI. PappajohnEntrepreneurial CenterEntrepreneurial Center

• Produce and cultivate a culture conducive to entrepreneurship• Provide entrepreneurs the tools for success• Provide promising entrepreneurs access to capital

NIACC John Pappajohn Center…Step by Step

• Step 1: Classes, workshops and technical support• Step 2: Integration with EDC’s (i.e. company

recruitment) and others• Step 3: Access to Capital• Step 4: Deal Flow• Next Steps 5: A Wider Reach

Entrepreneurship Education:A wide array of programs

Degree Programs• Associate of Science Degree and

Certificate Degree– Opportunity Recognition– Foundation Courses– Hands on Learning– Interdisciplinary

• Creating a Way of Thinking• Job Creators vs. Job Takers

Necessity and Opportunity Based Education

• FastTrac New Venture• FastTrac Planning• Angel Investing Seminar• ON-LINE Intro to

Entrepreneurship• E-Commerce Workshops• Start your Own Business

Seminar

Entrepreneurship Awareness and Education

To offer expanded programs which may include populations that might otherwise not be exposed to the concept and option of entrepreneurship and self employment.

• Communication Courses• Faculty Training • Collegiate Entrepreneur Organization• Credit Class - The Entrepreneurial Process –

2 s.h. evening course

NIACC and ISU Collaboration

• Allow students to network and provide entrepreneurial support to start-up and mezzanine level businesses.

• Develop best practices in cross curriculum entrepreneurship education

• Increase the ties between Regents Institutions and Community Colleges

Small Business Development Center: AREAS OF ASSISTANCE

• Feasibility Analysis• Business Planning• Sources of Capital• Financial Planning• Cashflow Analysis• Loan Proposals• Loan Applications• Human Resource

Planning

• Market Research• Market Planning• Strategic Planning• Government Procurement• Accounting, Recordkeeping• Information Technology• International Trade• Inventions

SBDC : Supporting the EntrepreneurA wide array of workshops

• Smart Start Program• On-Line E-Z Start• Growing your Business• Effective Marketing• SCORE Workshop• Financial Management/Cash Flow

Workshop• IRS Tax Workshop –Codes

Update• Iowa Sales Use and Local Sales

Option Tax

• Deductions and Expenses• Iowa Payroll and Employment

Taxes• Taxes for Construction

Contractors• Taxes for Landscape

Contractors • SBDC Franchise Workshop• Women’s Technology

Workshop• OSHA’s Knocking, Are You

Ready?

Iowa Entrepreneurial Consortium: Iowa Entrepreneurial Consortium: New Business StartsNew Business Starts

StatewideStatewide

Over 4000 Over 4000 participantsparticipants

Over 400 new Over 400 new business starts business starts

LocallyLocally

130 + new 130 + new business startsbusiness starts

NIACC and Lean Manufacturing

• NIACC leads the State of Iowa in “Lean Manufacturing” training and results and Iowa leads the nation. A strong program delivered by the college in conjunction with Iowa Workforce Development and part of 260 E and F training funds.

• Over $148,000,000 in realized savings reported by the industries served!

Additional Activities

• Youth Entrepreneurial Academy– Summer 4 day, live and learn on campus, with

business visits. Final is business plan presentation to Prominent Business Persons.

– 20 students attend free of charge for the academy which includes training, room, board, evening activities, field trips and more.

– Last year resulted in two student run businesses being developed and launched.

• Entrepreneurship Exchange – Gathering of entrepreneurs at the JPEC for short

topical presentations and networking with each other.

Next Steps : A Wider Reach

• Intra Entrepreneurship– Introducing entrepreneurial thinking into Iowa’s many mature

industries

• Entrepreneurial Symposium for Elected Officials• Entrepreneurship Introduced Early in a Child's

Education• Business and Student Incubation• The Entrepreneurial Community Colleges of Iowa

Some Results

• 98 Students Enrolled in Entrepreneurial Credit Course and 23 in the degree program (First Year).

• Seven student business plans from the NIACC JPEC were submitted for the state wide business plan competition sponsored by the JPEC’s statewide.

• Nineteen Scholarships were awarded to students in the JPEC Entrepreneurship Degree Program.

Some Results

• 30 new businesses started this fiscal year with a total of 66 employees as a direct result of our programs.

• The JPEC delivered over 65 entrepreneurial and small business programs throughout the year and reached over 1,500 Iowans.

• The North Iowa Venture Capital Fund has reviewed over 50 deals and funded 5 for a total of $800,000. 63 new jobs in North Iowa will be the result of one deal and retention of 30+ in a second.

• The new North Iowa Business Accelerator has consulted with over 10 businesses in less that half a year, with state funding and jobs as a result.

II. North Iowa Growth PartnershipNorth Iowa Growth Partnership

PartnersPartners::•Mason City EDCMason City EDC•Clear Lake EDCClear Lake EDC•Cerro Gordo CountyCerro Gordo County•Alliant EnergyAlliant Energy•NIACCNIACC

III. Labor Shed AnalysisIII. Labor Shed Analysis

Traditional Labor ShedTraditional Labor Shed

• Narrow geographic focusNarrow geographic focus

• No or little cooperation among competing No or little cooperation among competing EDCs (Economic Development EDCs (Economic Development Corporations)Corporations)

• Resulting in no time synchronization for Resulting in no time synchronization for the analysesthe analyses

• Mind set – “win/lose”; no “win-win” Mind set – “win/lose”; no “win-win”

Traditional Labor ShedTraditional Labor Shed

• Meaning that when a prospect comes to Meaning that when a prospect comes to our region we have:our region we have:– Narrow labor sheds Narrow labor sheds – Dated labor shedsDated labor sheds– Labor sheds that cannot be aggregated Labor sheds that cannot be aggregated

because they are not conducted at the same because they are not conducted at the same timetime

– EDCs not cooperating, thereby failing to EDCs not cooperating, thereby failing to leverage regional assets and resourcesleverage regional assets and resources

• Nine-countyNine-county labor shed labor shed

• Conducted at the same timeConducted at the same time

• Establish comprehensive partnership:Establish comprehensive partnership:– NIACC, IWD, and EDCsNIACC, IWD, and EDCs

• Thereby, leveraging resources for cost Thereby, leveraging resources for cost effectivenesseffectiveness

• Aggregate the Aggregate the 9 county labor shed9 county labor shed data to data to demonstrate our POTENTIAL to business demonstrate our POTENTIAL to business prospectsprospects

Solution to the Labor Shed IssueSolution to the Labor Shed Issue

• Nine-countyNine-county labor shed labor shed

• Conducted at the same timeConducted at the same time

• Establish comprehensive partnership:Establish comprehensive partnership:– NIACC, IWD, and EDCsNIACC, IWD, and EDCs

• Thereby, leveraging resources for cost Thereby, leveraging resources for cost effectivenesseffectiveness

• Aggregate the Aggregate the 9 county labor shed9 county labor shed data to data to demonstrate our POTENTIAL to business demonstrate our POTENTIAL to business prospectsprospects

Solution to the Labor Shed IssueSolution to the Labor Shed Issue

Solution to the Labor Shed IssueSolution to the Labor Shed Issue

IV. Cluster AnalysisIV. Cluster Analysis

Critical NeedCritical Need

• What is absolutely critical for North Iowa is What is absolutely critical for North Iowa is to find its to find its competitive advantagecompetitive advantage..

• Therefore, NIACC is partnering with IWD Therefore, NIACC is partnering with IWD and each EDC in our region to complete a and each EDC in our region to complete a comprehensive 9 county cluster analysiscomprehensive 9 county cluster analysis to determine our competitive advantage.to determine our competitive advantage.

ClustersClusters

• Clusters: critical masses in one place, Clusters: critical masses in one place, linking industries that enjoy unusual linking industries that enjoy unusual competitive success in a particular field. competitive success in a particular field. – Example: Silicon ValleyExample: Silicon Valley

• Cluster analyses identify competitive Cluster analyses identify competitive advantageadvantage– The key is to identify regional strengths to The key is to identify regional strengths to

leverage new business development through leverage new business development through the identification of “multipliers”the identification of “multipliers”

ClustersClusters

• Clusters: critical masses in one place, Clusters: critical masses in one place, linking industries that enjoy unusual linking industries that enjoy unusual competitive success in a particular field. competitive success in a particular field. – Example: Silicon ValleyExample: Silicon Valley

• Cluster analyses identify competitive Cluster analyses identify competitive advantageadvantage– The key is to identify regional strengths to The key is to identify regional strengths to

leverage new business development through leverage new business development through the identification of “multipliers”the identification of “multipliers”

Cluster AnalysisCluster Analysis

V. North Iowa AcceleratorV. North Iowa Accelerator

Business Accelerators:Business Accelerators: Organizations Organizations that foster the accelerated growth of new that foster the accelerated growth of new and existing businesses.and existing businesses.

Partnership: IDED, Community College regions 1, 2 and 3; and IWD

North Iowa AcceleratorNorth Iowa Accelerator

• NIACC is among the first organizations in NIACC is among the first organizations in the State to be honored and selected by the State to be honored and selected by the Iowa Department of Economic the Iowa Department of Economic Development as a “Business Accelerator”.Development as a “Business Accelerator”.

• Our “territory” extends to Areas I & III, Our “territory” extends to Areas I & III, through cooperative arrangements with my through cooperative arrangements with my colleagues in those areas.colleagues in those areas.

• Assistance to meet the needs for Areas 1 Assistance to meet the needs for Areas 1 and 3 is provided by IWDand 3 is provided by IWD

Significance of theSignificance of the“Business Accelerator”“Business Accelerator”

• Rural economic is important to the State of IowaRural economic is important to the State of Iowa– Represents a vision that all of Iowa needs to Represents a vision that all of Iowa needs to

prosperprosper• Represents a paradigm shift in the “way we Represents a paradigm shift in the “way we

think” about economic developmentthink” about economic development– Fishing and gardeningFishing and gardening– Look internally to invest in ourselvesLook internally to invest in ourselves

• Vote of confidence in NIACC and our regionVote of confidence in NIACC and our region• Demonstrates that Community Colleges are well Demonstrates that Community Colleges are well

positioned to lead these effortspositioned to lead these efforts

Significance of theSignificance of the“Business Accelerator”“Business Accelerator”

• Rural economic is important to the State of IowaRural economic is important to the State of Iowa– Represents a vision that all of Iowa needs to Represents a vision that all of Iowa needs to

prosperprosper• Represents a paradigm shift in the “way we Represents a paradigm shift in the “way we

think” about economic developmentthink” about economic development– Fishing and gardeningFishing and gardening– Look internally to invest in ourselvesLook internally to invest in ourselves

• Vote of confidence in NIACC and our regionVote of confidence in NIACC and our region• Demonstrates that Community Colleges are well Demonstrates that Community Colleges are well

positioned to lead these effortspositioned to lead these efforts

VI. Business IncubatorVI. Business Incubator

Leveraging existing resources:Pappajohn Center

SBDCIowa Workforce Development Center

Business AcceleratorNew Jobs Training Program

VI. Business IncubatorVI. Business Incubator

Leveraging existing resources:Pappajohn Center

SBDCIowa Workforce Development Center

Business AcceleratorNew Jobs Training Program

VII. North Iowa Venture Capital FundVII. North Iowa Venture Capital Fund

North Iowa Venture Capital Fund, LLCNorth Iowa Venture Capital Fund, LLC

• Comprised of 61 accredited angel Comprised of 61 accredited angel investors and/or businessesinvestors and/or businesses

• Capitalized and raised Capitalized and raised $$1.7M1.7M

• Look to invest in Northern Iowa Look to invest in Northern Iowa

• Investment strategies will vary from Investment strategies will vary from start-up to expansion businessesstart-up to expansion businesses

• Angel Investment Motivation: ROIAngel Investment Motivation: ROI

North Iowa Venture Capital Fund, LLCNorth Iowa Venture Capital Fund, LLC

• Comprised of 61 accredited angel Comprised of 61 accredited angel investors and/or businessesinvestors and/or businesses

• Capitalized and raised Capitalized and raised $$1.7M1.7M

• Look to invest in Northern Iowa Look to invest in Northern Iowa

• Investment strategies will vary from Investment strategies will vary from start-up to expansion businessesstart-up to expansion businesses

• Angel Investment Motivation: ROIAngel Investment Motivation: ROI

Available Capital for a Seed/Start-up

Business$10K-1M

Bank Financing$10-50K

Wellmark Venture Capital

Fund$10-50K

North Iowa Venture Capital

Fund, LLC$50-160K

WellmarkAdditional Funding$50,000

Angel$10-100K

What’s Possible Today for What’s Possible Today for Seed and Start-up Business?Seed and Start-up Business?

North Iowa and Iowa now have access to more early stage equity capital then ever before.

Venture and Equity Fund Network

$100-500K plus

VIII. North Iowa Growth Marketing VIII. North Iowa Growth Marketing Partnership Partnership

North Iowa Growth Marketing North Iowa Growth Marketing Partnership Partnership

• Seven CountiesSeven Counties

IX. Regional Economic DevelopmentIX. Regional Economic Development

Current StatusCurrent Status• Our region “strikes out” too often. Our region “strikes out” too often. • Most often, we’re not even “up to bat”Most often, we’re not even “up to bat”

– Des Moines, Cedar Rapids etc hit the home runs Des Moines, Cedar Rapids etc hit the home runs before North Central Iowa knows there’s a ball before North Central Iowa knows there’s a ball game.game.

• Resources are not leveragedResources are not leveraged• Cities & counties act as if their competition is “just Cities & counties act as if their competition is “just

down the road”down the road”

Current Economic Development Current Economic Development “Organization”“Organization”

Future Vision for Economic Future Vision for Economic Development OrganizationDevelopment Organization

Future Vision for Economic Future Vision for Economic Development OrganizationDevelopment Organization

First Steps:9 County Labor Shed

9 County Cluster AnalysisBusiness AcceleratorBusiness Incubator

North Iowa Venture Capital FundNorth Iowa Growth Marketing

Regional Economic Development

ConclusionConclusion

• Someone once asked Winston Churchill,Someone once asked Winston Churchill,– ““Mr. Churchill, why are we fighting this terrible Mr. Churchill, why are we fighting this terrible

war?”war?” – Churchill responded,Churchill responded, “If we don’t, you’ll “If we don’t, you’ll

understand why later.”understand why later.”

• The same analogy holds now for the The same analogy holds now for the decisions we must make. We must take decisions we must make. We must take action now to change the paradigm of action now to change the paradigm of economic development in our region.economic development in our region.