Tahlequah Daily Press

October 31, 2012

Economic gardening focuses on job growth

By TEDDYE SNELL
Staff Writer

TAHLEQUAH — When it comes to sustaining and growing a business, the devil is in the details.

According to Maureen Collins-Williams, directors of Entrepreneurship Outreach at the University of Northern Iowa, it’s not new businesses that are responsible for the lion’s share of job creation, but those that have entered “Stage 2,” and are looking to expand or innovate.

“If I were to take all the entrepreneurs in Oklahoma and put them in a pyramid, the bottom layer would be made up of what we call ‘microentrepreneurs’ – those with start-up costs of $35,000 or less, and have fewer than 10 employees. We recognize these as the art galleries, cake decorators – very small, but very passionate. These businesses tend to churn in and out and have a life expectancy of about three years.”

Collins-Williams said many view the microbusinesses as unimportant, that they don’t create jobs or have an economic impact, but she believes they are necessary to the overall business fabric of a city.

The next layer on the business pyramid includes the small businesses: those that offer services and goods key to the community, and have owners who seek to maintain a profit; the innovators; and finally, the venture companies.

But according to research conducted by the Edward Lowe Foundation, the Stage 2 companies – those that have undergone the growing pains of startup, and offer better-paying, stable jobs – are the linchpin to economic gardening, and ultimately, job growth.

“These companies have a proven business approach and have the basics down,” said Collins-Williams. “Lowe said that’s the group responsible for creating new business and has the most potential to grow jobs, based on what’s happened with technology.”

Economic gardening takes an entrepreneurial approach to regional prosperity. It’s often referred to as a “grow from within strategy,” and helps existing companies within a community grow larger. In contrast to traditional business assistance, economic gardening focuses on strategic growth challenges, such as developing new markets, refining business models, and gaining access to competitive intelligence.

“The concept was created by Chris Gibbons, in Littleton, Colo., as he believed economic gardening was better than hunting,” said Collins-Williams. “He felt it was important to invest in the ‘trifecta of service’ for existing businesses, which included access to information, appropriate infrastructure and connection.”

Gibbons proceeded to build information databases for local businesses and eventually refined the numerous databases to 15 to help grow existing companies.

Economic gardening represents a new way of supporting growth companies and letting business owners know how important they are to their local economies.

“Instead of offering traditional incentives like tax credits or real estate discounts, economic gardening programs offer strategic information that’s customized for his or her company,” said Collins-Williams. “What we’ve found is that these companies are ‘sticky,’ meaning they tend to stay in the community in which they’ve developed. Under Gibbons plan, Littleton doubled the number of jobs and tripled its tax revenue within 20 years, all without a single dollar paid in tax incentives.”

What the economic gardening team does is provide a strategic research team that mines databases and uses high-end tools to identify and prioritize sales leads and businesses opportunities, helps refine companies’ core strategies and business models; and uses social media to connect with customers and create buzz about product or services.

“The team analyzes information to affect change that in turn makes businesses more successful,” said Collins-Williams. “But, it’s not for every Stage 2 business. It is expensive, and on average costs about $17,000, which is not a good use of either public or private funds unless the company intends to do something with the information.”

Collins-Williams said many states have implemented economic gardening programs using a spoke and hub approach, in which a larger entity steps up to take on the larger portion of the costs, and shares that information with smaller participants.

Rogers State University Innovation Center Director Jeri Koehler said they began creating a team several years ago in Oklahoma, and the center has almost reached “hub” status.

“We’re almost a hub,” said Koehler. “To attain hub status, you have to have four certified specialists. We have two, almost three, including a new media specialist, who helps companies get found on the Internet, analyzes websites and social media; and we have a geographic information systems specialists. He puts spreadsheet data on a map, basically transforming data into a visually appealing format. For instance, if you wanted to open a sushi restaurant, he would take traffic counts, demographics, etc., and create a map outlining how those things work together.”

According to Koehler, RSU’s Innovation Center has aided a number of small businesses, including Lucas Metal Works in Ochelata, Architectural Fabrication Company in Dewey, and Sooner Coating in Catoosa.

RSU’s Innovation Center aids businesses with economic gardening plans through a grant from the U.S. Department of Commerce’s Economic Development Administration.

“Initial meetings are free, and depending on the strategy, some cost may or may not be involved,” said Koehler. “Our success is measured through job creation. We like to work with companies that move quickly to act on the information we provide.”