1	Inland Northwest Economic Adjustment Strategy Phase 3 Regional Action to Support Local Solutions in Oregon, Washington, Idaho and Montana
2	Presentation Outline INEAS Purpose, Status, Outcomes, Guiding Principles Regional Socio-Economic Conditions Issues Assessment Phase 3 Action: Phase 3 Goals & Team Key Strategy Areas Business Clusters & Trends Priority Issues & Actions Implementation Options Next Steps
3	The INEAS Project Area
4	Why an Economic Adjustment Initiative Inland Northwest is highly dependent on natural resource jobs (14% vs. 6% nationally) Federal land policies have disproportionately significant impacts (some counties 75%+ federal ownership) Decline in timber harvest contributes significantly to socio-economic conditions 26 Inland NW counties in lowest national rankings on virtually every socio-economic indicator Proximate cause between federal resource policy decisions and the region’s economic distress
5	Strategy Milestones to Date Four-state partnership formed; supported by Governors Kitzhaber, Kempthorne, Locke, Martz Received three grants from EDA with financial support from the four states and ATNI Phase 1: Socio-economic Assessment P Phase 2: Issues Assessment; Strategy Develop’t P Phase 3: Strategy Refinement; Key Actions & Performance Measures; Organization Options; Funding Requests Phase 4: Implement and Realize Results
6	Desired Outcomes of INEAS Business development: diversification, expansion, new business start-up and recruitment. Living wage jobs, a skilled workforce and diverse economic base to create new wealth. Adequate infrastructure, funded by public and private investment. Local capacity and leadership to achieve good planning and restore economic vitality.
7	Desired Outcomes of Phase 3 Grassroots awareness and support for INEAS process. A Regional Economic Adjustment Strategy and credible organizational capability - supporting local priority projects and regional collaboration. Congressional support a federal economic adjustment package. Increased national awareness and visibility for a region that has been a major contributor to the overall economic prosperity of the country.
8	INEAS Phase 3 Guiding Principles Focus on Consequences, Not Policies. INEAS does not take positions on natural resource policy debates. We seek to address the socio-economic impacts of those policies on the region. Regional Cooperation. We are stronger as a region than we are as individual communities, tribes or states. Economic development in the Inland Northwest will be most successful as a regional effort between the four states and affiliated tribes. Local Focus. Locally-driven strategies and project priorities, consistent with local values, will be respected and encouraged.
9	Guiding Principles (cont’d) Community Leadership. Communities can improve their vitality, provided they have sufficient local leadership to adapt and embrace change. Supporting and investing in local capacity is key to the success of the Strategy. Technical Assistance. Information and technical assistance will help make community efforts more strategic and effective. Inclusiveness. The more people and perspectives involved in a decision, the greater the public acceptance of that decision, and the more likely it will address all concerns.
10	Guiding Principles (cont’d) Economic Perspective. Economies happen on a regional, national, and global basis, based on market forces. Communities that work together are likely to be more competitive in business and economic development. Public-Private Partnerships. Most jobs are created in the private sector, and job creation is a long-term process. Communities provide the infrastructure and the ingredients of financial, human, natural, and social capital that help make businesses flourish. Livability. Community development means more than job creation; it includes actions and policies that add to the vitality, wealth, and livability of the community.
11	Phase 1: Socio-Economic Assessment Economic Vitality Index Timber Industry Trends Agriculture Challenges
12	The Case for Assistance Regional economic distress Federal government influence on region: Key economic sectors (timber, mining, ranching/ag, tourism) Chronology of federal resource management and trade decisions, 1980-2000 109+ endangered or threatened species Public policy by litigation Many existing plans, but disconnected efforts
13	Regional Economic Vitality Index Measures economic health of Inland NW counties, using 6 classes of socio-economic indicators: Population trends in each county (% change, age) Income trends (PCI, public assistance, etc.) Labor force (unemployment, labor force participation) Economic base (value-added, exports, timber, grazing) Federal government influence (PILT, land ownership) Tribal indicators (pop’n, unempl., poverty, labor force)
14	Regional Economic Vitality Index: Measure of county vitality on a scale of 0 (Highest) to 20 (Lowest)
15	Over 13,000 Primary Forest Products Jobs Lost
16	Inland Northwest Federal Timber Harvest, 1989-2001
17	Inland Northwest Private Timber Harvest, 1989-2001
18	Mills Still Operating are Larger, More Productive
19	Consumption, Imports Up Exports, Inland Region Supply Down (Production has shifted to Coast)
20	Challenges for Agriculture Apples, Milk, Potatoes, Beef Cattle, Wheat Strongest commodity is beef cattle Prospects are grim for 3 commodities - apples, milk, and potatoes Prices for some commodities lower than in early 1980s; production costs rising Shipping costs increasing (fuel, loss of rail lines, challenges for ports)
21	Phase 2: Issues Assessment Analysis of local needs & issues - Reviewed 164 local/regional plans Magnitude and types of needs Identification of common themes Analysis of regional differences Analysis of barriers
22	Key Needs and Strategies
23	Needs and Strategies
24	Phase 3: Action Phase 3 Goals Phase 3 Team Key Strategy Areas Business Clusters & Trends Priority Issues & Actions Implementation Options Next Steps
25	Phase 3 Goals Prepare, secure and implement a federal economic adjustment package Grass roots awareness and support Leadership support within the region and nationally for a federal economic adjustment package Regional consensus for an organizational framework that is credible and fair (e.g., regional commission)
26	Phase 3 Goals (cont’d) Identify and implement Region-wide action based on: Findings from the socio-economic assessment Existing regional and community-level strategic plans Locally determined needs and priorities Stakeholder input Existing best practices and lessons learned Multi-county/state market-driven initiatives
27	Phase 3 Team Core Team 1 rep from ea. state, ATNI Consulting Team Steering Committee 3-4 reps from ea. state, ATNI Advisory Committee Invited key players to assist with Strategy Work Teams, Actions, Perf Measures Stakeholders Implementation Partners, Funders (Public, Private)
28	Key Strategy Areas Industry Development Business Development Infrastructure Investments Community Capacity-building Workforce Development
29	Regional Business Clusters & Economic Trends
30	Definition of “Clusters” “Geographically-bounded concentration of similar, related, or complementary businesses, with active channels for business transactions, communications, and dialogue, that share specialized infrastructure, labor markets, and services, and that are faced with common opportunities and threats.”
31	Cluster Study Methodology (4 States, 3 Reports) Data Used: NAICS (4-, 5-digit level), employment and revenue data Factors: high concentration of firms (Location Quotient, or LQ > 1), high wages, faster growth in employment than U.S. averages for specific industry Limitations: studies by different organizations using different methods of analysis; exclusion of non-employer firms; no in-depth analysis in ID
32	Montana: 6 Clusters Wood-Based Products Agri-Food Products Experience Enterprise and Tourism Creative Enterprise Life Sciences Information Technology
33	Oregon: 11 Clusters High Technology & Software Wood & Paper Products Food Processing & Agriculture Apparel & Sporting Goods Transportation Equipment Creative Services
34	Oregon: 11 Clusters Recreation-Related Metals/Machinery Nursery Products Professional Services Biomedical
35	Washington: 11 Clusters (6 in Report) Agriculture/Food Processing Forest Products Semiconductors Measuring Devices & Instruments Biotechnology Health Care
36	Washington: 11 Clusters (5 Others) International Trade Aerospace Aluminum Software/Internet Tourism
37	Idaho: 10 Clusters* Food Manufacturing Building Materials/Wood Products Computer & Electronics Transportation Information Construction/Heavy Equipment * Based on top-level analysis by Boise EDC
38	Idaho: 10 Clusters* Business Services and Support Veterinary Services Emerging Clusters: High Tech Instruments Outdoor Recreation Products * Based on top-level analysis by Boise EDC
39	Regional Cluster Themes Ag & Food Processing Wood-Based Products & Building Materials Info Tech, Electronics & Data Services Recreation & Tourism Biotechnology & Life Sciences Creative Enterprises Metals
40	Ag & Food Processing Cluster Farming, Ranching, Nursery Milling & Packing, Primary Processing Malt Beverages, Wineries & Bottled Drinks Prepared Meats, Fruits/Veg’s, Cheese, Processed Foods/Groceries, Baked Goods Refrigeration, Warehousing/Dist’n, Transp’n Machinery/Equip, Repair, Utensils, Research Wholesale, Retail, Restaurants, Exporting
41	Wood-Based Products Cluster Logging, Millwork, Planing, Log Imports Veneer, Plywood, Engineered Products Paper, Structural Parts, Flooring, Boxes, Posts & Poles, Log Homes, Pulp Prefab Homes, Furniture, Cabinets Machinery, CAD/CAM, Architects, Paints/Finishes Nurseries, Plant & Forest Management Services, Research, Pest Biocontrol, Irrigation Wholesale, Dist’n, Retail, Finance, Trans’n
42	Info Tech, Electronics & Data Cluster Hardware, Software, Communicatn’s Equip Measuring/Controlling Devices, Medical Instr., Search & Navigation Equip, Musical Instruments Semiconductors, Electronic Components Data Processing & Info Retrieval Services Engineering, Research, Testing Labs Machinery, Transformers, Broadcasting & Lighting Equip, Peripherals Facilities Management, Marketing, Distribution
43	Recreation-Related & Tourism Cluster Hospitality: Lodging/RV, Restaurants, Casinos, Outfitters & Guides, Visitor Info Services Products: Sporting Goods & Apparel, Galleries, Specialty Products & Foods/Beverages Attractions: Museums, Amusement, Parks, Festivals, Trails, Nat’l Forests, etc. Transp’n: Air, Car Rental, Coach, Rec Vehicles Promotion: Media, Tour Operators, Research Suppliers: Food & Bev, Furniture, Bed & Bath
44	Biotech/Biomed & Life Sciences Cluster Medical & Pharmaceutical Products, Bioinformatics Medical Devices & Equipment, Diagnostics Agricultural Applications: Crop, Veterinary Environmental Applications Research (Commercial, University) & Clinical Trials Food Security & Hazardous Substances Detection Labs, Contract Manufacturing, Compliance
45	Creative Enterprise Cluster Artists, Crafters, Entertainers, Writers, Performers, Musicians Production Companies, Entertain’t Venues Suppliers: Leather, Wool, Gems, Paper, Packaging, Fabrics, Lumber/Paint Equip: Kilns, Presses, Imaging, Sound, Software, Computers Services: Agents/Dealers, Ad Agencies, Studios, Printing, PR, Platemaking, Binding, Graphics
46	Metals Cluster Mining & Processing Fabricated Metal Products Electroplating, Polishing, Anodizing Foundaries Tools, Machinery, Cutlery, Mining Equip Valves, Pipe & Fittings Ornamental Metal Work
47	Regional Economic Trends Decline in # of sawmills and mill jobs But NW production é (consolid’n, move west) Loss of family farms (consolidation) Growth in tech sector, innovation, research Growth in trade, services & health care Growth in tourism, conservation sector More small businesses/entrepreneurs Aging population, newcomers seeking QOL
48	Major Trends Affecting Biz Dev’t Global economy Knowledge-based economy E-manufacturing Shift to services Small business dominance Demographics: aging population, ethnic diversity Focus on workforce & education By 2006, 2 workers departing for every 1 coming in Shortage of 10 million workers by 2008 Quality of life: “Sense of Place” Regionalism
49	Trends: What’s New About the New Economy Increasing % of growing companies globally integrated, pressing for open international trade Increasingly digital and information driven Transformation to “e-businesses” that use Internet-platforms for integrating entire operation Innovation leading to highly customized information, services, & products (e.g., flexible production and mass customization; supply chain management)
50	Trends: What’s New About the New Economy Highly networked entrepreneurs who both collaborate & compete with one another Growth areas characterized by high concentrations of knowledge workers & an ability to attract & retain these workers Highly mobile & skilled labor force (“job churning”)
51	Assumptions: “Economic Development” is Happening When The standard of living is increasing A “real” increase in the level of average household income is occurring The local tax base is meeting the escalating cost of government services Business and industry is investing more in the community than they are “costing” the community (More than just “body counts” of jobs)
52	Assumptions: The Process is Facilitated Through Development of a skilled workforce Investment in the physical infrastructure Creation of new jobs at higher wages Improvement of the business environment Availability of marketable land and buildings Maintenance of the environment Improvement of the quality of life Marketing and promoting the region
53	Our INEAS Challenge Economic Adjustment that “Connects the Dots” between Sectors, Communities, Businesses and Markets Economic Development in Communities that Improves QOL Tangible Actions with Measurable Results Real economic growth (“Where’s the Beef?”) Focused Effort (Can’t be All Things to All People)
54	Priority Needs/Issues: Industry Dev’t Assistance for value-added industry processing, networking, marketing Competitiveness in global markets Rural-urban linkages Better understanding of regional competencies E-commerce training
55	Priority Actions: Industry Dev’t Assess industry assets/competitive position Link industry to research/higher ed Increase processing assistance Educate industry about global markets/opp’tys Form industry cluster development councils Increase collaboration between agencies, states and land grant universities Link rural products to urban markets, urban services to rural markets (i.e., distance learning, telemedicine) Focus on 3-4 industries as top priorities
56	Priority Needs/Issues: Business Dev’t Entrepreneurial culture & training Equity capital Need for more focus on retention/expansion Rising costs of doing business (regulations, environment, power, labor, insurance) Business cooperation/networks Effective tech transfer
57	Priority Actions: Business Dev’t Increase business development training Enhance equity capital/loan funding options Foster business partnering/mentoring Support rural business incubators, tech transfer Emphasize retention/expansion vs. recruitment Address rising costs (regs, power, insurance) Publicize successes and outreach efforts
58	Priority Needs/Issues: Infrastructure Policy issues (scale of requirements, match funds required, etc.) “Disjointed incrementalism” in planning Telecomm/technology infrastructure Regional advocacy for infra needs Renewable energy infrastructure UCCs in Indian Country Short line railroads
59	Priority Actions: Infrastructure Develop regional inventory/assessment of needs (i.e., WA/OR CERT model) Assess economic impacts of infra needs on rural communities Enhance grant programs to leverage loan programs Pursue policy changes re. scale, match Evaluate regional transportation needs/linkages (highway, air, rail, barge)
60	Priority Needs/Issues: Cmty Capacity Need for more capacity-building efforts Leadership training Decline of downtowns Understanding joint venture agreements Sustainability of projects
61	Priority Actions: Cmty Capacity Foster networking of practitioners – sharing successes and best practices Develop “menu” of assessment products Provide assistance for community-based, market-driven planning Develop & deliver “just in time” capacity training as needed Provide methods/models for monitoring and tracking results
62	Priority Needs/Issues: Workforce Lack of health insurance/benefits Inadequate education system linkages to private sector needs (K-12, Higher Ed) Gaps between workforce development programs/funding and business/indiv. needs Personal obstacles (drugs, child care, transp’n) Telework training
63	Priority Actions: Workforce Create linkages between business and schools to address skill deficiencies Pursue more flexible workforce training funding for employers and displaced workers Deliver training via IT and outreach Use Workforce Investment Boards as funding partners Convene regional health care summit to discuss workforce issues
64	Regional Implementation: One Option is a Regional Commission
65	Advantages of a Regional Commission Highly Legitimized & Credible Shared Power – Federal/State/Tribal Flexible to Focus on Inland Northwest Issues Targeted to Distressed Areas Encourages collaboration, avoids duplication Leverages Other Grants Modest, but Relatively Stable Funding
66	Challenges of a Regional Commission Other Commissions Poverty-Oriented Socio-Economic Impact of Federal Policies Building a Regional Political Coalition Engaging the Bush Administration Remaining Locally-Driven Lower Funding Levels than Northwest Timber Initiative
67	Other Implementation Options Variation of regional commission concept Regional Certification Team (similar to Northwest Economic Adjustment Initiative in western WA, OR and N. California) Partner with another existing regional organization(s), such as PNWER
68	Next Steps Refine Strategy: Feedback from stakeholders (like MEDA) Identify & prioritize regional programs/initiatives, opportunities for immediate action/collaboration Determine performance measures Review organization options (e.g., regional commission, other) Gain support from state and federal elected officials Seek federal and foundation funding Implement actions, track results
69	INEAS is a chance for significant regional economic assistance. We Need Your Help! Join the INEAS Advisory Committee Help us identify programs/projects that are best practices and should be replicated in the region Encourage our Congressional delegation, Governors, and tribal leaders to support INEAS and work together as a regional coalition
70	Project Coordinator Contacts www.inlandnwregion.org The Hingston Roach Group, Inc. 208-983-2175 Lorraine Roach lroach@thrgroup.com Ruth Mohr rmohr@thrgroup.com Bootstrap Solutions 208-859-8878 Dick Gardner bootstrap1@msn.com James A. Birdsall & Assoc. 208-859-0730 Jim Birdsall jbirds@fmtc.com