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Home My WebLink About1656RESOLUTION NO. I (,S'h A RESOLUTION of the City Council of the City of Kent, Washington, adopting the city's 2003-2008 Economic Development Strategic Plan. WHEREAS, the Mayor and the City Council have had a longstanding vision to adopt an Economic Development Strategic Plan ("the Plan") for the City of Kent; and WHEREAS, the Plan expands on two of the City's five overall Strategic Plan Goals: A Vibrant Downtown and a Strong Local Economy; and WHEREAS, m February 2002, the Kent Chamber of Commerce, m partnership with the City, the Kent School District, the Kent Downtown Partnerslnp, Green River Community College, Highline Community College, Renton Technical College and many community volunteers began a strategic planning effort for Kent's economy. This planning group divided into four subgroups: "Workforce of the Future," "Downtown Center ofExcellence," "International City," and "Manufacturing Center," and made short- term and long-term recommendations; and 1 2003-2008 Economic Development Strategic Plan WHEREAS in August 2003, the community representatives Identified above confinned the priority short-tenn and long-tenn recommendations of each subgroup at a Kent Economic Summit; and WHEREAS, the City's Plan mcludes the priority community recommendations and includes other City priorities; and WHEREAS, the Plan also includes recommendatiOns from an "Industry Market Trends in South King County and Kent" study completed in September 2003 by the University of Washington Evans School of Public Affairs; and WHEREAS, the Plan fonnalizes the City's economic development policy, sets a five-year workplan for the City's Economic Development Manager, and IS a marketing document for the City's business attraction, retention, expansion and investment efforts; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT, WASHINGTON, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1: The City Council adopts the 2003 through 2008 Economic Development Strategic Plan and the Technical Appendix, attached and incorporated as Exhibit "A", which shall also be filed with the city clerk. PASS ED at a regular meeting of the City Council of the City of Kent, Washington tills __ day of October, 2003. 2 2003-2008 Economic Development Strategic Plan CONCURRED in by the Mayor of the City of Kent, this __ day of October, 2003. JIM _ ................. _ ... --/ ATTEST: .. -/ .. ......., . BRENDA JACOBER, ITY CLERK .......... -.... _ APPROVED AS TO FORM: TOM BRUBAKER, CITY ATTORNEY I hereby certify that this is a true and correct copy of Resolution No. /t:..S ~. passed by the City Council of the City of Kent, Washington, the _2__ day of October, 2003. P \Ctvli\Resotut:Jon\200J.2008EconDevStratPian doc A, X' ,R. .. J ~AL) BRENDAJACOBER,CI~CLERK 3 2003-2008 Economic Development Strategic Plan ECONOMIC DEVELOPMENT STRATEGIC PLAN 2003-2008 WASHINGTON Positioning Kent as the Premier Location for Business and Community Vitality DRAFT September 2003 2 Acknow/eP6ements A specl~f thank yw to. the Kent;Cnambe,( oteommerce,· ~ tacllitate.da. ~l~m~tl1••• · • · eco.?o.tr.k?: da~/0/:ift):.mtstrat~~q~~~~~f .. . pl'Ot:eSS: w1tfl~~ter 1\~nttommcii:ll& • ThJSproq~ ~e~Xii:las the touitcteJIOIJ r~t:. · the City's fconom(ci Development Plan: Thank you to the Kent.Downtown Partner- ship, the Kef'l{~ahbofDisfrict, Green River eommunity College, Highfme Commumty Colts,e aflf} Rffff.lcn. Technical .OOtl. ;; • · aff were key.p#at:fruf)rs:in t~ ~mmt.rf1.11Y l 0 ' ~ I ' , 1 , 1 I dialogue. . • •··•· On the cover -Images of Kent Sounder commuter tram, RJVerbend Golf Complex, CenterPomt Corporate Park, and a VIew of Mount Raimer Photos courtesy of Sound Trans1t, CenterPomt Corporate Park and the City of Kent I 11'1 CityofKent • Jim White 1 Mayor . . · .. City qouncil Tim Clark Connie Epperly Leona Orr Julie Peterson Bruce White Judy Woods Rico Yingling Mike Martm, Chief Administrative Officer PLAN PURPOSE AND PROCESS This f1ve-year Plan sets forth an ambitious yet achievable strategic economic development agenda for the C1ty of Kent and 1ts business and community partners. The Plan 1s keyed to two of the City's overall 2002-03 Strategic Plan goals - a Strong Economy and a Vibrant Downtown The Economic Development Plan's purpose 1s to articulate a set of measurable strategies and actions to facilitate continued economic growth and new opportuni- ties for the City's business districts and neighborhoods, and to clearly define the roles and responsibilities of the City's econom1c development partners 1n achieving successful outcomes. The Plan Will serve as a workplan for the C1ty's economic development team, prov1d i ng focus and d 1rection for future resource allocation and decision making. As part of development of the Economic Development Strategic Plan, the City of Kent contracted with Dr Paul Sommers at the University of Washington Evans School of Public Affairs to research industry market trends 1n Kent and South K1ng County, as well as best practices in eco- nomic development throughout the U.S Th1s resulting report is included in the Technical Appendix. Ttle City's 2002-03·Strategic Goals 1. Vibrant Downtown 'A strong Jacal economy 1s one of the· pril'(18ry goals m the Ctty's .Strategic Plan. Our Ct!y under- ·. ,stands that a; prosperous economy ·enhances tfie vitality ahd livdbili'ty ' ofour·community; • · . . Mayor Jim Wh1te City of Kent 3 Plan Purpose & Process KENT CHAMBER OF + COMMERCE On A~;~gu~t 4, · 2003, at the Kent Economic S~;~mmit, the subgroups' . recommendations were confirmed by cdmmumty repre$8ntatives. 4 1leeenl!MIIestones In iteni'S History Kent incorporated m 1890 with 763 residents Business & Community Partners Chamber of Commerce-Facilitated Economic Development Strategy Teams Provide Significant Input to this Plan. The City mamta1ns a close relationship with the Kent Chamber of Commerce-a nonprofit, membership-supported organ1zation dedicated to promot1ng a better economic climate in the Kent area In February 2002, the Chamber, 1n partnership w1th the C1ty of Kent, the Kent School D1stnct, Kent Downtown Partnership, Green R1ver and H1ghhne Community Colleges and Renton Technical College, and many community volunteers began a strategic planning effort for Kent's economy Local businesses and civic volunteers met to discuss Kent's compet1t1ve advantages and disadvantages, and develop 1n1tial economic strategies The Kent Economic Strategic Planning Group divided into four subgroups. "Workforce of the Future," "Downtown Center of Excellence," "International C1ty," and "Manufacturing Center" Each group identified gaps, made short-term and long-term recommendations (see Technical Appendix) and identified community leads for each recommendation. Pnonty short-term and long-term recommendations from each group are included in the Plan. Boeing Airspace Plant comes to Kent Kent institutes 1% for human services-now provides partial fundmg for 20 1964 1989 local non-profits 1993 18-hole C1ty-owned golf course at Riverbend opens, currently bus1est m State 1993 Starbucks Roastmg Plant opens m Kent Kent Downtown Partnership Plays a Key Role. The C1ty of Kent helps fund the Kent Downtown Partnership (KDP) efforts to revitalize downtown. The KDP, formed 1n 1992 to work on downtown business retention, development and recruitment, was a key participant in the Kent Chamber's Downtown Center of Excellence strategy team The recommendations crafted by th1s subgroup and the KDP's goals and work plan, are encompassed 1n this Plan's f1rst goal -"Create a Vibrant downtown to serve as a destination retail and commumty gathering place." Green River Community College 1n Auburn (6,360 full time equ1valent (FTEl students), Highline Community College in Des Moines (6,240 FTE students) and Renton Technical College m Renton (5,020 FTE students) serve the Kent area and prov1de degrees and certificates m academ1c, professional and technical programs, as well as courses in contmumg eduction and development education. The Kent School District (KSD) is the fourth largest school d1stnct in the state, with more than 26,000 students and 3,165 employees The D1strict boundanes encompass 73 square m1les and Jnclude four high schools ' q ) <H < "" ;·rne t(ent c~ihmoolt¥ :,;., Cfty go~J!riJ(iJeflt; schools, ./:tusmesi!~ ~ J;Jafu>h~ tMJt ihe ~ fq fn.~~ing'g~~(ii;fl'!pi!,~~·~ :WOi/finq t~ther; · Qr,.rr.co.tnPf~~ ~)!hf~ve m.Jl. di:o11'f/d :f!J.tllm:.' · . , · · ' ' '' "' ' ~ I ~ ~,- ,, ",,' ':::, ~;' ~,~; ,, }!~~,'-'';:,~!~') (Ja{JMi11f1etrHtmr. Bli::o YifJI.litt&l ' City et kent . • · · GMI\ Comprehensive Plan 1995 1996 3,372 acre Meridian annexation adds approximately 20,000 to Kent's population Employment in the C1ty surpasses 60,000 1997 Plan Purpose & Process C0~~1Jti\1V COL1.tGE 4!il!ll$ Renton Technical College A rKI KENT SCHOOL DISTRICT Great Wall Mall opens - Grows to 80,103 sq. ft. of retail space and home to 39 ethnic 1998 busmesses by March 2003 1999 ~ 5 Plan Purpose & Process 'I have always beim impressed by theGity~:<Jbilfly.to I:Je a ie<Jder in SoutlJ • K{n, Cou~ty in terms of addressiilg the n~ of economic deVelopment; ~ng, growth man- agement tssues and tJublic safety ' 6 Dini Duclos . . Exeeutwe Director . !tfultl~ Ser;Vn;e (;enter OitVI'Me Strat~~~ Pl~n. 1999 2001 C1ty completes 196th St. Corridor Project and 1ts part of 277th St. Corrior Project Planning Context Comprehensive Plan. The C1ty of Kent adopted 1ts Growth Management Act (GMA)-mandated Comprehensive Plan m 1995. The Comprehensive Plan sets broad policy guidance for the C1ty 1n the areas of land use, commun1ty des1gn, housmg, human services, transportation, parks, ut11it1es, cap1tal facil1t1es and econom1c development The Economic Development component of the Comprehensive Plan articulates the v1s1on for an expanded economic base for Kent. Th1s Plan is cons1stent w1th the Comprehensive Plan. Consolidated Plan. The Consolidated Plan was prepared by the City to qualify for U.S. Department of Housmg and Urban Development Community Development Block Grant funds, beginning 1n 2003. It describes an assessment of housing, human serv1ces and commumty development needs 1n Kent and outlines the C1ty's f1ve-year housmg and homeless, economic development and employment, livable commun1t1es, and antipoverty strateg1es, and a one- year act1on plan. The Economic Development Strategic Plan is comm1tted to promotion and implementation of the Consolidated Plan's econom1c development polic1es, which benefit low and moderate income fam11ies and IndiVIduals who live, work or want to start a bus1ness 1n Kent. Permit Center opens - 90% of perm1ts are produced on-time by years end 2001 2001 C1ty purchases Kent Station property-embarks on public/private partnership to create destination Downtown City partnership creates one of the largest 1ce arenas m the Pac1f1c NW December 2001 Downtown Strategic Action Plan. The 1998 Downtown Strategic Act1on Plan built on the C1ty's long-standing commitment to downtown revitalization, provided downtown subarea-spec1f1c development goals and policies, and laid the framework for the Kent Stat1on development. As part of the Downtown Strategic Act1on Plan, a VISIOn for downtown was established, market opportun1t1es and development potent1al were analyzed and a development strategy was 1dent1f1ed. Downtown Ana ·As a des1gnated urban .center cmder the $tate of Wash· ington's Growth Man21gement ACt (GMAJ, Downtown Kent sef'lks as the. City's core, ~nd mcfu(ies King County's Re- gional Justice Center, City Hall and cf/;ler City offices, the PoliCe Station, King Cwnty l.ibr;IJY, Kent Senior Center, and Kent Commons,· tile city's recr~tion center. May 2002 November 2002 El Grulla, Mexico becomes Kent's s1xth sister c1ty The State Office of Financ1al Management announces population statistics-Kent moves from 8th to 7th largest city in State -84,210 residents October 2002 City secures water supply for future- through 2020 Apnl 2003 Plan Purpose & Process 2004 C1ty starts construction of 228th St. Corndor ProJect ~ 7 has a $0Wnd h~ory of fir ~11,1t .. '[~Ma:p. Council· the. ~~'ff Wi(!dership have earned Kent's exceJient t;xmd rating and thertrost of the business community.' .. Barb iWJOOv -Exe.cutive orrector . Kent Chamber of com~ce 8 ECONOMIC DEVELOPMENT GOALS GOAL 1 Create a Vibrant Downtown to Serve as a Destination Retail and Community Gathenng Place GOAL2 Strengthen and Grow the City's Major Manufactunng and Busmess Centers GOAL3 Invest in Neighborhood Livability and Development of Neighborhood Centers GOAL4 Promote the City's Image in the Region through Creation of Destination Activities, Marketing and Business-Fnendly City Services GOAL 1 Create a Vibrant Downtown to Serve as a Destination Retail and Community Gathering Place ACTION STRATEGIES Quality Down town Development A Develop Kent Stat1on as the number one destmation 1n South K1ng County by completing construction of at least two phases of the project by 2008. Phase I will be an entertamment and educational center, and Phase II shall mclude at least one additional retail anchor. B. Encourage Green R1ver Community College to attract a umversity-level program as part of 1ts presence m the Kent Station Project by 2008. C. Encourage redevelopment and development of at least two key downtown properties by 2008, which may 1nclude K1ng County Metro's surplus Lincoln Park and Ride lot property. D. Partner with Kmg County or a pnvate developer for devel- opment of all or part of the Mumcipal Lot block, which mcludes City and pnvately-owned parcels, by 2008 Con- Sider public parkmg, residential and commercial uses on the s1te, in addition to a municipal park/public plaza. ( H< > .. i)QWlltOWI;t.Kerrt:· . The City has a lr~lfl$landing viswfl· to create a mote vital and idtfntifi- able Downtown, wtth retail, office, res- Idential and entertainment uses /QCI!Ited adjacent to transit. To further this Vision, the Cny has made strategtc investments: In 1~9, the City agreed to contribute $4 million to· Sound TransJt toward construction of structured parkmg at · the CommuterRal1 Station Commuter rail service canrl/f!Cted Kent commut~ ers to downtown Seattfe. (and eJVentu- al/y Tdcoma) Jn February ~001. The parking structure pp~ned m Marctl 2002. The statfon: wi/J become a major Klng County-Metro bus stop. The. City P.urchased nearly 2rJ acres of property adjacent to the station to st1mulate and control redevelopment; of prime downtown property. Tarragon Development IS the lead developer for ttle Kent Statton site. Phase f of the project will include a multiplex cinema, a branch campus of Green River Com- munity College, multiple restaurants and additional reta11. Future phases of the project wflf include more. re- tail, office space and housing uses .. ~ 9 Vtbrant Downtown -Retatl Desttnatton & Communtty Gathenng Place Soulld~r Cam muter Rail 'We hav~ been m bU~J1:/ess in Downtpwn,Kent for 21 rears, and we'Ve seen a ~ot of piJsitiVe changes. However, the cflange we are md$t enthu&astlc about is the addition and comp/Fqtion of Kefit ~ttOfl ,. I , " I() Jur:Je McEffl'tmm ' eo-owner , Kent B,usin~s ·: · E. Encourage the development of at least 200 units of new market rate housing downtown by 2008. Cons1der mcen- tives for new housing construction such as: • Reduced or wa1ved permit development fees. • Bu1ld1ng code changes to allow f1ve stories of wood frame construction above a concrete base. • Extending the mult1fam1ly tax exemption program to rental market rate housmg. F. In partnership with the KDP, attract a conference and meeting center by 2008 that can accommodate at least 300 people. The center could mclude a hotel. Down town Transportation Improvements G. Make downtown Kent the transportation hub of South Kmg County: • Ensure that Sound Trans1t completes the Phase II Sounder commuter rail serv1ce expansion to 18 tra1n stops daily by 2008 • Lobby Kmg County Metro to mcrease Bus Route 918 service to link Kent Valley w1th every new commuter rail train that IS added. Bu sines s Grow th and Reten tion H. Attract two new businesses to downtown annually. (KDP has lead role.) I. Persuade three existing retail busmesses annually to ex- pand their evening/weekend operatmg hours. (KDP has lead role.) Down town I mage, Act ivities an d Ped est rian Exp er ien ce J. Create a downtown streetscape and pedestrian plan (in conjunction with KDP) for key areas of downtown by 2006 Community Dialogue -Economic Development Strategic Plan (See page 4 for background mformatton) 10 Downtown Subgroup Recommendations In the short-term: • Create and tmplement a marketmg strategy and Kent downtown brand to attract desired busmesses, remam open some evenmg hours. (KDP has lead role, wtth Ctty and Chamber mvolvement.) The plan may mclude gateway features, s1gnage, wayfind- mg, banners, public art, street furmture, landscaping, and other des1gn features, as well as consideration for street vendors and performers. Phase I of the project shall focus on an attractive corndor along 2nd Avenue between Kent Station and the ex1sting downtown. A later phase shall mclude Central Avenue. K Provide matching grant fundmg to at least f1ve downtown busmesses through a pilot Fa~tade Improvement Program funded through federal Community Development Block Grant (CDBG) dollars by 2006. L. Prov1de new landscaping and paint at least three build- Ings 1n downtown that front along the Burlington Northern Railroad corndor by 2008. This corndor is Kent's front door to Amtrak and Sounder train riders. (KDP has lead role.) M. Support the L1on's Club efforts to return the farmers' mar- ket to a C1ty-owned outdoor location in downtown Kent by 2004 N. Create a comprehensive special events strategy that bnngs people to downtown who Will shop in downtown businesses. (KDP has lead role.) Support Kent Down town Partnership as an Agen t of Down town Rev it al izat ion 0. Continue to contract on an annual basis and partner with the KDP to complete C1ty des1gn, promotion and economic development goals for Downtown. P. Complete a downtown branding strategy and recruitment package and host a brokers event to unveil the brand by 2005. (KDP has lead role.) Q. Create a KDP website by 2004. (KDP has lead role.) Vtbrant Downtown -Retatl Destmatton & Commumty Gathenng Place 'The downtown core of Kent ts pOised to turn the corner, and once again become a vtbrant downtown. • Sruce Anderson Kent Property Owner and Developer Kent Station Plan • Market downtown school success stories to Kent Citizens, realtors, develop- ers, employers, prospectiVe employers and housmg buyers. (KSD has lead role, w1th Chamber and KDP mvolvement) In the long-term: • Attract a conference center and/or hotel w1th meetmg space to hold 300- 500 seats. (KDP has lead role, w1th City and Kent Lodgmg Assoc1at10n mvolvement.) ~ 11 Kefit}s a rtJajor 'flan~cturing ce(lter ~ " / 0' "'' \.J>L ' f ~f, GOAL2 Strengthe n and Grow the City 's Major Manufacturing and Business Centers . f,fau""fal;tur.ingdrives·t" economy in the Kent Valley. over &t®PeoP/e at:~:~m(:Jk:Jyed in the manufacturmg industry in kent, Federal Waj~etJtQit, Auburn and Tukw!la. Manufactunngcontinues tosupporthtgh-wage jobs: statewide aver- age manufacturing wages for 2001 exceeded $48,000 per year, the higheSt of all maJor industry grovps. In King County, evel}' manvfac- ; . ; tl:ititlg:fo>badds anather ome antta half to ·three jobs to the region's , eteP??'r'Yr dile to large $uppfliN arid distributrpn networks. · Kentiflas invested rr:lOlf:! thflf'i $87 mifllo('i m three major east-west · · ttarlsportatlori corridors; to enhance the future of its manufacturing ·and:iridustrial centers; . . . : \lfqrl<~ traminq. and e~.ucatlon IS a vital strategy to ensure that . Kii!nt'sjlfJung: and dl\18($8 wo~ has the training and expenence neflaed to reach li;iab/il W/Jgaemptoyment, and to fill sk1!1-mtensive . jQbs:ln:tne f1!8.rrufadturihi $eqtqr. ¥any of Kent's residents com- •ifre CitY Js.a ga(rdjJfaee ro be whether yo/J are a df:!vefaper oi . a builder or aeypooy. • · :· . m~!Outslae•the the· City should corwider strategies : to .tri/.i;ro.\le the ac'ce~i . Kents jobs to Kent residents. ',:,'~~~~ ~,, l 'I >Hf:><: () '' ( ) Mattti/af;turing. ha$ ;~ong ~f:!~rl suoJect to tne ups and downs or 12 ~ry 1/qiCJ:Iqk · ce Cr:»rlmer(r;a.l · · trl(lrket c¥cleE> and t{tJe PfeSSUres cf an increasingly competi- • " (market .. G/0~/iu.t/pn and the abJ/ity bf othercountnes .. :. to e;rpoit deflation Have tal.{s~ some U s. manufacturers to lose : ·: · pricing ppwer.. In the pa~t. ten years, South King County manu· · f/ilcturers have built their success on being the low-cost producers · ofhigh-quality products. Some of these firms may need outs1de ass1stance to make the strategic change to a focus on mnovation. Community Dialogue -Economic Development Strategic Plan (See page 4 for background mformattOn) In the short-term: Manufacturing Center Subgroup Recommendation • Work collaborattvely w1th the Chamber to clearly defme the needs of Kent's manufacturers and d1stnbutors Conduct a Strengths, Weaknesses, Opportunities and Threats analysiS. (C1ty and Chamber took lead roles m completmg th1s task m 2003.) See page 14-15 for long-term recommendatiOns ACTION STRATEGIES Center for A dvan ced M anu factu ring A. Partner with the Kent Chamber of Commerce and area Colleges to create a Center for Advanced Manufacturing for South King County by 2008, wh1ch would mclude a research institution to transfer technology to commercial applications, a public access research library and librarian, and a teachmg facility to develop a skilled workforce. Resid!!nce ~f. Employe!!~ .. Working In Kent's lnd\lstrial Areas· Kent lndll#d!llempl~yers di'IJW bi'Dadlyfmm the labrJt markftin. twp countie$ · King a~ 'P.iercs; Interestingly, firm · a · · come fiWn :S.eattiS; ~·. Tacoma-. . · ·· ' · . Note: TIJe~psno~ ~ned; tor . ' . The tit~tkest ar~l'l$ • est (fcnGentratiOns Cf ttip;origins:pr~r acre . .. •·Source: Puget Sound Regional Council (2000data) Workforce of the Future Subgroup Recommendation • Build real life work problems mto curnculum Teachers should JOb shadow at busmesses, carry back mdustry mformattan and mcorporate mdustry standards mto the curnculum. (KSD has lead role w1th mvolvement of the Colleges) International Subgroup Recommendation • Wnte a 21•' Century Commumty Learnmg Center federal grant m order to offer adult educatiOn and after-school actw1t1es for English-language learn- ers. (KSD took lead role m completmg th1s task m July 2003.) • Offer busmess ass1stance and trammg targeted to small, ethnic busmesses. (Highlme and Green R1ver Commumty Colleges have lead role.) Strong Manufactunng & Bus1ness Centers ~ 13 Strong Manufactunng & Busmess Centers 14 "And the (transportation) improvements the City has made ... Now it 1s world r;fa$5. • .Dean Conti w~· P.resident Alpha PreciSion Manufi!Cturing, Inc. alid Member of tha fxe~ve OQmm~ ~~: · tbe Chamberfs Board " ~ < ' I ~ <i " ~Crross.V~Uey Corf1Cf0r Investments Improve .. Access ahd AC:eessibility to Markets Kertt h(Js taken the lead in the Seattle-Tacoma area in addressing transportation and fr&ghtmoblllty challenges by Investing more than $87 million and Jeveragmg an additional $120 mil/Jon m the construe- . tio~ ofthree east-w~;sttran~~ftation corridors. These corridors link . · Kent'$~rrufactur:iflg ana inaf!.Str(al centers with Interstate 5 and the :v.awtey E~y ($R~l~J);~lid separate these three roadways from ·.·Kent~ r<JIIroad traffic . .. WI.t'llc ...,,r ..... • Community Dialogue -Economic Development Strategic Plan In the long-term: Manufacturing Center Subgroup Recommendation • Create a Kent Valley/South County Transtt10nal Manufacturmg Economtc Plan and Center for Advanced Manufactunng. The Center may concen- trate on one manufactunng subsector and/or dtsctplmes common to key subsectors, and offer research mstttut10n to transfer technology to com- mereta/ applicatiOns m South County; a cleannghouse of best practtces and natiOnal research; and trammg, curriculum and courses to develop a Business Retention and Attract ion B. Provide direct assistance to 25 ex1stmg Kent businesses annually targeted towards retention and expansion. Pro- mote the long-term stabi I ity of Kent bus messes by pro- VIdmg assistance to those who purchase their own real estate. C. Contact or provide recruitment assistance to a mm1mum of 25 busmesses annually. Focus on busmesses that could be recruited because of Kent's locat1onal advantages and competitive property and lease rates. < 3' '; r ' 1 > f l ~ ~, > J Strong Manufactunng & Busmess Centers D. Partner with Green River Community College to open a Small Business Development Center (SBDC) m Kent by providing partial funding through CDBG dollars, by 2004. The SBDC shall provide technical assistance and loan preparation serv1ces to a minimum of 30 Kent bus messes or res1dents annually. ·:Kent/shame to many of the 'region's.emptoyers , , ', Transportation Improvements E. Support and pursue fre1ght mobility transportation Im- provements to State highways that benefit Kent and the reg1on, 1ncludmg: • Improvements to the Valley Freeway (HOV Improve- ments between 15th Street SW to 15th Street NW, Improvements between 2771h Street and SR-516, and a w1der bndge structure at SR-18). • Completion of SR-509, which will provide a continuous fre1ght corridor between Kent, Sea-Tac International Airport and the Port of Seattle. • Completion of the SR-167 connection to 1-5 (access to Port of Tacoma). ' ' F Pursue additional funding for the South 2281h Street Exten- sion and grade separations project and begm construction In 2004. 196th Street Improvements skilled workforce With a focus on qua/tty efflctency practtces. (Chamber has lead role with Ctty, Washmgton Manufacturmg Servtces and Colleges as partners.) International Subgroup Recommendation • Kent Jumor Htgh becomes a htgh-achtevmg netghborhood mtddle school May mclude math, sctence, language and/or mternattonal busmess options. (KSD has lead role w1th C1ty, Chamber, KDP, and Colleges as partners) ~ 15 Strong Manufacturmg & Busmess Centers 16 'We, came here because the ptjce a~~,~~the infrastructure is a IoU!Jetter in Kent .• ~ ' ' ~ Dou&MacLe,an President Vectr8 Fitness, Inc. cerutkoi , Row~tlal'lal ~ CorpcrBfior; Property Redevelopment G. Complete environmental rev1ew and plattmg act1ons neces- sary for the future development of vacant parcels w1th m the Pac1f1c Gateway Business Park and Boemg's Space Center, and for redevelopment or occupancy of any sur- plused buildings w1thm Boemg's Space Center by 2004. H. Create an mventory of brownf1elds property m Kent by 2005 and pursue assessment grants, cleanup grants and loans and remedial act1on grants from the Federal Environ- mental Protection Agency (EPA), the State Department of Ecology (DOE) and the State Department of Community, Trade and Economic Development (CTED). I. Support and use tools that encourage redevelopment of key parcels 1n Kent, mcludmg supportmg future legisla- tive efforts to amend the State Tax Increment Fmanc1ng (TIF) leg1slat1on and adoptmg a C1ty-bmd1ng s1te plan ordmance. Workforce Develop men t J. Partner with the Chamber and work collaborat1vely w1th Green R1ver Community, High line Community and Renton Technical Colleges to develop a consortium of training programs and niches servmg the aerospace, furn1ture, manufacturmg and construction sectors. K. Work w1th the C1ty's Housing and Human Serv1ces Division and the C1ty's Human Services CommiSSIOn to annually fund Economic Development and Employment strateg1es as outlined m the City's Consolidated Plan to benefit low- and moderate income persons and promote sustamability and upward mobility Strategies could mclude: 196th Street Corndor Ribbon Cutting (2001) • Fund literacy-based, on-s1te basic skills train~ng and soft-skill trainmg to increase employee sk1lls at Kent busmesses. • Provide child care scholarships to Im- prove the abil1ty of low-and moderate income wage earners to mamtain and progress in the1r JObs L. Consider strategies to mcrease the per- centage of Kent residents who fmd employ- ment w1th1n the C1ty. Partnerships and Collaboration M. Contmue to work w1th the Governor and the Legislature on policies that impact the C1ty's major manufacturing and busmess centers. Focus on developmg opt1ons for the State's sales tax streamlining legisla- tion, to m1n1m1ze revenue Impacts on the City of Kent N. Contmue collaboration and coordmat1on on econom1c development 1ssues and opportun1t1es w1th the Kent Chamber of Commerce, the Port of Seattle, the Port of Tacoma, the Economic Development Counc1l of Seattle-King County, the State Office of Commun1ty, Trade and Economic Development, and local educatlonalmstl- tutions. 0. Through a publ1c relations and education effort, work w1th local elected off1c1als, the School Distnct, colleges and area lead- ers to reinforce the importance of Kent's manufactunng and industnal center. Strong Manufacturmg & Busmess Centers RHidence of all Kent Workers: Jc:tbs·Housing Balance Tha£e w/w, Wfll'k in Kent l:ome from all over the regio~:~;, ~here are two JObs per housmg umt m Kimt. !his qompares to 1.8 jobs per housmg unit for King:({~ 1.0 tor Pierce County, and 1.4 for tfie tnree-a~~ty tegion. Note: 7:hi!J;Tllf!P:!if10'Ns origination of all work-related tnps destined: for t/TP Cil.y of Kent. 7:he darkest areas show the highesfCcncentratiQns of trip origins per acre. Source: :,.,,, · Puget S~~IJP, '!(f~iot'!rJI (iounctl (200() data), Wash- ,: ingt/)TJ .Stat,~ EtJt~OJ!'fl'le~ $ecurlty f2epartment and W~~~§~IF ('}fflp~ bf FkiahC?Ial ft4a~;~agement ' ~ ~ ; f ' ' 't: ~,T,T'i'' ~ ~ ~ 17 A Focus on Neishbqrhood LivabilitY and Quality Business Centers CominitmenHo lite {;Jty•s Nerttiborboqas. At ine >2003 City . Counc1/ Strategic Planning Retreat, · the Council determined that. an em- pha~sond~Pi~s~ongn~$hbo~ hoo(is snould bfl elevated to a Citywide strategic goal. . Thrs po/lcy reflects a s~engthened ~ommitment to neigh· : borhood involvl!ffT)ent ahd broadened communications.~ netghbor- lrcods. and tile City, . , · . . . A· New: Neishborh.ood Jmprav.e-. mentl'r.oafam will bf./;,aull.f:lred. I The City has an opportuntf¥toencot~r age neighborhood• resli:JerJts, gr\}ups ond orgamzatiOns to propose a broad · array of ne)gbborhi!Jod.Jnltl;fte(i/ and community,.Ddente(i improvements. Orgeniting 'imd plan'!1ing. proJects· . have encoui!iged connections pe• · tween neighbors; ftiJ;tered ciVlc in-. · v:a/Vemeqt, increaSed neigflborhQdcJ safety ana C(Jmmunizy own8/$,hl'f).ln : atheir clffes {such as Renton <itnd Se-. · attle) that fund such pfogram~: An Oppo.r·tu,~i~r, ;fd E:'Ahli:PCe .· Neigbbor.hO«l ~mbtfr. A Cil}i~ • livability Is greatlyd~¥rmlhed by the quality and.character of itS neighbor- hi!Jods. The City has an appprtun~ty, · thro1,1gh redevelo/Jmentofkeyparcels, · to create interesting new commercial anr:r residential dev:e/Qpment in ne/ghborhi!Jods throughol,lt the City. By encouragmg quality C/e':(elopment of ~y·neighl:ior/:lq(Jfi commerdal and resk.lentl~farea$, 'the City can help to si)Onsar VIbrant neighborhood cen- tersrthat Will serv:e as a focus for the " neighborhood serv:ices, parks and r:;fvic facilities essential for a high quality of life. 18 GOAL3 Invest in Neighborhood Livability and Development of Neighborhood Centers ACTION STRATEGIES Neighborhood lmprovem ent Program A. Initiate a neighborhood-sponsored matching grant pilot program by 2006, to create commun1ty Improvement projects and to foster neighborhood 1dent1ty and connec- tions. Midway A rea Red evelo pment B. Encourage redevelopment of commercial property, includ- mg the M1dway Dnve-ln theater s1te. C Implement recommendations from the Univers1ty of Wash- Ington graduate student Midway Subarea Plan, mclud- ing • Preparation of a market1ng and demographic prof1le for the neighborhood by 2004. • Establishment of a business association through a new organization or partnership w1th the Des Memes Chamber of Commerce by 2005. • Creat1on of distmct architectural gateways at key entry pomts mto the M1dway neighborhood by 2006 Other Key Neighb orhood Location s D. Support the business and the redevelopment of key business d1stnct parcels in Kent E. Sell the C1ty's Reservoir Property to a quality home-builder by 2005 to create a new neighborhood 'We consider it a privilege to work in this City.' · · · iGai}'Yaung · . ·Senior Vice ·President Po(il'.¥ciii'morthwe$t Compaf!y ReservoirPmpef1i~~flte. J~ l983the City of Ket/t purchased appraxtmafeJY 2E68cres of property In unmcorporsted King County tor a municipal water impoundment reservoir. In 2002, tf7e City purchased additional wate~ rights from the Tacoma P5 Pipeline projer;t, which resolves the water supply concerns that , previJ:!usly JUStified the reseNDir project Consequently, the City wilf be selling' the property, which is located , within Auburn's PotentialAnnexation,~rea. ~ ' ' The Midway Neighborhood Pmsents an Opportunity for Revitalization. Located along Pacific Highway South and directly west of Interstate 5 at the City's western boundary, the Midway neighbOrhood has experienced little redevelopment acbvitY in recent years. Recent and planned improvements to Pacific Highway by the City of Kent tmd thepa~ntlalfQt' red(lvetppment of large parcels represent key tt'f>r;o/'tunitfes, to revftaffze thf~ neighbot/U1Pd and to oulfd 'I# :Sensi:J of dommutlity. Reservoir Property/ .J Impoundment Site Ia ~ Located Outside CHy Limits Benson East Hill A 25-mile network of ~lorcte and walking trails link many of ~nt's parks 20 K~nt Has A"Good Story to Tell Akeyelementoifhesucaessful implementation otthis Plan is" communicating Kent's story toe businesses aons1dering 'toaating In ~nt, current residents and to visitors who enJOY K(Jnt'~ destination recreation and sports fac!lttJes. Ke11,t,'s story is i:itJe ,9' accqmplishment. Kent is receptive and resporiSi'lf!l to business and citizen needs :'-as demqnstrated;througflout this Plan and by the CJty's continued c{)IT!mitment to maintain a high qua!Jty of life and to foster an e(lvironment for busmess success. Key messages:, ' ., ,l{~t has I'Qimrrm~f9W. Kent, can communicate the City's a/J\Ifi(l.,'fO the development commumty, in· , c/Uf!!ing its kiJx location in the Seattle-Tacoma region and tlie df#nagra/Jhics to support business investment. The aMity to prO'(ir/e fast, ef{ictent and dependable permits fs also a s/tmiffc~mt competitive advantage " ' •,, A hiB,h ,'qu.ltfl~ lmf JJ~rvice,city. Kent's commitment to Jts citi~ens IS re~ted lfl fhe City's CIJ(fflltfaci/Jt/es, , : , , , Kent ' ' '' tinuous stra(egfc Investments ' , , fn pa , mrf, hutnan services, public safety ai'Jr:Jtrans/:10~. Kent intends ro continue attract- ing Murists, •t:r:.rrifer4fJnces, sportmg events and other recreatioQ~t ~rtunlt1es. • DestiliBtlM:K~~t' Kent is an international community with recreatton dhalces that include the State's bust- est 18-hole golf course, one of the Northwest's largest ice arenas and bicycle trails that /mk many of Kent's parks. Citr··OW£113r:i ,,f?i~!fl;iel7d Golf the':b~rlfS,t l8-hofe ; .cotJ~~:irt r~~ ?tate GOAL4 Promote the City's Image in the Region through Creation of Destination Activities, Marketing and Business-Friendly City Services ACTION STRATEGIES Tourism, Culture and Destinations A. Work w1th the Sounders professiOnal soccer team to locate a soccer stad1um and soccer field complex within Kent on a City-owned property w1th easy freeway access, by 2008. B. Issue annual or sem1-annual request for proposals for non- profit organizations to use lodging tax dollars to promote hotel stays, beg1nmng 1n 2005 or earlier, if resources al- low. C. Partner with the Kent Lodging Association to attract soc- cer, golf and softball tournaments with a regional draw to increase hotel stays D. Pursue the feasibility of promoting Kent as a location for filmmaking. Dragon Boat Festival Jlt Cornu,copia Days ~ 21 Destmat1on ActJvJtJes, Marketmg & Busmess-Fnendly C1ty ServJces 22 'J am always Impressed when 1 come. b/lck to Kent ... the qualifj{ of life that f obserie around this com- mumty, the way that you support your families, your children ·;md your schoe{l t:f.istrict. • · Mike Heinisch . . . . . . . . : a/rector Valfeyil;amJ/y & Y~J.Jth services Marketing Program E. Develop an overall community and economic development marketIng plan and a med 1a and real estate broker outreach strategy for the C1ty by 2005, to 1m prove the C1ty's 1mage 1n the region and to attract new Investment, development and residents. Consider marketing efforts targeted towards people who work but do not live m Kent. Market Kent's quality school district and diversity of housmg options F. Produce City marketing matenals by 2004, mcludmg a community profile and brochures on Kent's park and recreat1on facilities and Investments in transportation comdors. G. Promote Kent through development of marketing maten- als as an International Commun1ty that welcomes and promotes diversity and IS tied to the global marketplace, by 2004 Bu sines s-F riend ly City Services H. Continue to Improve, momtor and market the perm1ttmg and inspection process for development: • Establish a protocol for consistency between develop- ment mspections and plans examiners by 2004. • Explore the feasibility of developing an on-lme permit- tmg system and allowmg on-line completion of permit application forms by 2005. • Market the success of the new permit center and improved permitting times. I. Develop and promote a one-stop busmess license process for C1ty and State busmess licenses by 2004. J. Institute a C1ty transportation mit1gation fee program by 2005 to prov1de pred1ctab11ity for the development com- munity. K Enhance the C1ty's 1mage and improve accessibility to C1ty mformation and serv1ces by redes1gmng the City's website L. Improve the City's Economic Development webs1te by 2005, by add1ng more graphics, pictures and improving navigation Monitor hits to the website before and after the Improvements. M. Promote the City's Economic Development Manager as an advocate and ombudsperson w1thm the C1ty for the business community. ' ,, ' 'I I lid'" q ' ' ~ f" "'" ' ' " '' ' \ Destmat1on ActiVIties, Marketmg & Busmess-Fnendly C1ty Serv1ces Real Estate Database. fn 2002, the City of ~Kent invested in an up-ta•date, prtvate sector-maio- talne,d real estate dat<rbas1Nhat alf industrial, office .:ind ca cia/, properties for lease · ar safe in Kent. The database is usecl by the City for business attraction and retention acttvities i'lnd is used as a resource far firms considering locatmg in Kent. New Petmit Center. In 2001. the City of Kent ~, ope(ied a state-of·the-arf f)l?rmJt center combinmg building and planningservices, fife prevention and public works engineering. As a result of improved coordination, on-time issuance of permits requiring plan review increase,d from 49% an-time in January 2001 to 97% m October 2002 ' , "!((. ttr¥1 ~"'st three to four years we lJave seen a ittr/J'rl<ed Improvement as to~ the efficiency and · &rprec~lflgPfr.~its,. We;Qe/Jeve the . mpttlfiBs ?nd'Qu!f(lty 9.f sff!Wf'f$' is dJrectlv · · reftited to thla itionles expf#nded.l::tlthd 'City to ad~ staff and tinprave services. •:::: · · · Bruce Anderson Kent Prof)l?fty OWner aqd Dev~~t:'::. ~ 23 WAS~IHOTOH For more Information, please contact: Nathan T orgelson Economic Development Manager Telephone: (253) 856-5703 Fax: (253) 856-6700 ntorgelson@ci.kent. wa. us http://www.ci.kent.wa.us/ 220 Fourth Avenue South Kent, Washington 98032-5703 '"'"" "''1111"' TECHNICAL APPENDIX ECONOMIC DEVELOPMENT STRATEGIC PLAN 2003-2008 WASHINGTON Positioning Kent as the Premier Location for Business and Community Vitality September 2003 Technical Appendix Table of Contents Results of August 4, 2003 Kent Economic Summit Downtown Center of Excellence Subgroup Manufacturing Center Subgroup Workforce of the Future Subgroup Kent: The International City Subgroup Results of Community Dialogue Downtown Center of Excellence Subgroup Manufactunng Center Subgroup Workforce of the Future Subgroup Kent: The International City Subgroup Maps Population Density Morning Peak Origination of Kent lndustnal Employment Morning Peak Ong1nat1on of Kent Commercial Employment Work-based Tnps Originating in Kent Morning Peak Origmation of all Kent Employment Economic Development In Kent: Page 2 Page 6 Page 8 Page 10 Page 13 Page 16 Page 18 Page 19 Page 21 Page 22 Page 23 Page 24 Page 25 Industry Outlook and Recommended Economic Development Strategies, August 2003 Dr. Paul Sommers and Kursten Holabird Table of Contents Executive Summary Industry Analysis Best Pract1ces 1n Economic Development: Review of Selected Strateg1es Technical Appendix ~ Economic Development Strategic Plan Page 27 Page 28 Page 36 Page 63 Page 1 Results of August 4, 2003 Kent Economic Summit In February 2002, the Chamber, in partnership w1th the City of Kent, the Kent School Distnct, Kent Downtown Partnership, Green River and H1ghline Commun1ty Colleges and Renton Technical College, and many community volunteers began a strategic plann1ng effort for Kent's economy. Local busmesses and civic volunteers met to discuss Kent's compet1t1ve advantages and disadvantages, and develop 1n1t1al economic strategies. The Kent Economic Strategic Planning Group divided into four subgroups: "Workforce of the Future," "Downtown Center of Excellence," "International City," and "Prosperous Manufactunng and Wholesale." Each group identified gaps, made short-term and long-term recommendations and identified community leads for each recommendation. The following sect1on of the Technical AppendiX summanzes recommendations resultmg from an August 4, 2003 Kent Economic Summit -where the subgroup's recommendations were confirmed by community representatives. A complete listing of each of the subgroup's findmgs and prel1mmary recommendations follows the Kent Econom1c Summit recommendations. Downtown Center of Excellence Subgroup Goal 1: Improve downtown Kent's K-12 student achievement levels to drive improved housing Short-Term Recommendation: Market downtown school success stones to Kent c1t1zens, realtors, developers, employers, prospective employers and housmg buyers. Lead Responsible Parties: Kent School D1stnct & Kent Chamber of Commerce; Staffing: Kent School Distnct Problem Statement: The schools must be attractive to homebuyers and parents who hold high standards for the education of their children. As the Kent School D1stnct embarks on establishmg a world-class educational system, there needs to be ample and d1verse communication to constituents (e.g., realtors, developers, employers, etc.) surrounding the success stones of our youth m our Kent schools Recommendations and Timeline: Date Act1on October 15, 2003 Prov1de area serv1ce clubs w1th hst of potent1al school success programs (too1c, speaker, contact) to feature m meet1ngs November 3, 2003 Prov1de realtors, developers, and chamber w1th comp1lat1on of Your (with monthly updates) Investment At Work stones descnbmg productively workmg KSD graduates January 5, 2004 Develop and prov1de to chamber mformat1on packet descnbmg Kent School D1stnct January 5, 2004 Create Kent downtown school fact sheet on test score resu Its, for 1 nsert1on m KDP marketmg matenals Techn1cal Appendix ~ Economic Development Strateg1c Plan Results of Kent Economic Summ1t Page 2 Goal 2: Create a destination center with world-class amenities; K-12 educational achievement, higher education and cultural activities Short-Term Recommendation: Create marketmg strategy and Kent downtown brand to attract desired businesses, some evenmg hours (such as ethmc retailers, farmers' market, entertainment) Lead Responsible Party: Kent Downtown Partnership (KDP); Other partners: C1ty of Kent and Chamber of Commerce Long-term recommendation: Implementation of downtown marketmg strategy (TV ad campaign, etc.) Lead Responsible Party: Kent Downtown Partnership (KDP); Other partners: C1ty of Kent Problem Statement: The Downtown Center of Excellence Subgroup identified lack of positive information and an image, or brand, for Downtown Kent as a current gap. The result IS that people are less likely to come to Downtown Kent. Even Kent residents are not likely to v1s1t downtown often. Just 43% go downtown at least once per week, according to a telephone survey of 400 Kent residents done this Spring. [2003 C1t1zen Survey Report]. That figure IS down from 53% In 2002. Accomplishments to Date: The Kent Downtown Partnership Economic Development Comm1ttee has completed the process of art1culatmg downtown Kent's strategic messagmg and brand personality and is ready to build on this foundation w1th a marketing brochure and marketmg strategy that is designed to attract new businesses and customers to Downtown Kent. The public relations f1rm we are already working with has advised that we put less emphasis on trad1t1onal med1a like newspaper, T.V. and radio and more emphasis on physical Improvements, community- build mg. loyalty campaigns ("shop locally"), events, med1a relations and "guemlla" marketmg. They advise that we target both shoppers/visitors and potential retail tenants. Date Action July 2002-Apnl 2003 KDP Economic Development Comm1ttee conducted a survey of busmess owners m downtown and a survey of 100 busmess customers and over 200 c1ty employees to learn frequency of shoppmg and dmmg downtown, perceptions, and 1deas of needed busmess; obtamed demographic mformat1on about Kent's trade area and sales surplus and leakage; and h1red a public relat1ons f1rm to do a branding/pos1t1onmg strategy for downtown. Apnl 2003-July 2003 Brandmwoos1t1onmg completed July 2003 S1gned contract w1th public relations f1rm that did brandmg to des1gn and oversee production of brochure and mserts to be used m recru1tmg busmesses/v1s1tors to downtown Kent Techmcal Appendix ~ Econom1c Development Strateg1c Plan Results of Kent Econom1c Summtt Page 3 Recommendations and Timeline: Date Act1on Budget August 2003 -October Des1gn and pnnt brochure w1th inserts $29,000 2003 August 2003 -Feb. 2004 H1re public relat1ons/marketmg f1rm to defme the $12,000 scope of work and determme strategies, budget, and timelme for marketing. Work w1th public relat1ons/marketlng f1rm to develop market strategies mcludmg such thmgs as events downtown, carefully placed med1a features, a "shop locally" campa1gn, d1rect mall to area residents, and other appeals to shoppers and potential reta1l tenants. February 2004 -December Implement marketmg plan (Includes $200,000 for $318,500 2005 phys1cal Improvements to downtown Kent) Staffing: Add to work plan for Jacqu1e Alexander, KDP Execut1ve Director; Nathan Torgelson, C1ty of Kent Economic Development Manager; Barb Ivanov, Executive D1rector, Kent Chamber of Commerce. Volunteers: KDP Economic Development Committee Potential Resources: City of Kent Economic Development Section budget, Langly/Tarragon budget, KDP Fundra1sing, Kmg County Journal Grants Goal 3: Create a destination center with world-class amenities; K-12 educational achievement, higher education and cultural activities Long-term recommendation: Attract conference center and/or hotel with meeting space to hold 300 -500 seats Lead Responsible Party: Kent Downtown Partnership (KDP); Other partners: City of Kent and Kent Lodgmg Assoc1at1on Problem Statement: The Downtown Center of Excellence Subgroup 1dent1f1ed the lack of a major hotel and conference center as a current gap 1n downtown Kent. The C1ty of Kent IS currently considered underserved 1n terms of the available conference and exhibition facilities Kent Commons is a City-operated commumty center m downtown Kent that is able to accommodate banquets for up to 600 people. Kent Commons is heav1ly used throughout the year for weddmg receptions, consumer shows and events, as well as for recreational and commun1ty act1v1t1es. Numerous consumer shows and events are turned away each year due to lack of suitable space and as a result of City parks and recreation events. This usage level and demand indicates market potential for a more upscale dedicated meet1ng facll1ty m downtown Kent. The Kent area hotel market consists primarily of lim1ted service properties w1th mmimal meetmg space. As a result, little hotel demand accommodated in Kent 1s related to meetmgs. The Technical Append1x ~ Econom1c Development Strategic Plan Results of Kent Economtc Summtt Page 4 majonty of room demand 1s generated by the local area commercial base and government presence m the area. The presence of a hotel/conference center would greatly benef1t downtown merchants and restaurants. Recommendations and Timeline: Date Action Budget January-June 2004 H 1re local hospitality/real estate consultant to review $50,000 Convent1on Center Market Analysis (Report done by Hunter Interests m New York, Apnl 2000) and update market feasibility g1ven current market and rev1ew convention fac1lit1es and hotel occupancy rates in other CitieS January-June 2004 Identify preferred locations for Hotel/Conference Center: consider Kent Station, Mun1c1pal Lot Block and Kent School District property. Talk to Kent Stat1on developer about hotel/conference center in future phase of proJect June Assess market and feasibility of project June-October 2004 Assummg favorable market, put together recruitment package and strategy and select and meet With hotel/convention mvestors Staffing: Add to work plan for Jacquie Alexander, KDP Executive Director; Nathan Torgelson, City of Kent Economic Development Manager; and Raul Vaca, Kent Lodging Association Director; Volunteers: KDP Economic Development Comm1ttee, Kent Lodging Association Committee Potential Resources: C1ty of Kent Lodging Tax Dollars, KDP Fundraising, City of Kent Economic Development Section budget Technical Appendix ~ Econom1c Development Strategic Plan Results of Kent Economic Summ1t Page 5 Manufacturing Center Subgroup Goal 1: Kent Valley/South County Transitional Manufacturing Economic Plan & Center of Advanced Manufacturing Long-Term Recommendation: The Puget Sound manufacturing community has formed a partnership to address the distinct, m1ssing capability m the South County manufacturmg center of Washmgton State: the development complement of a research facility. This proposal Will move South County toward a more divers1f1ed, innovat1on-based economy, while at the same t1me acknowledging and strengthening the ex1 stmg manufacturing base. The Center may concentrate on one manufactunng subsector and/or disciplines common to key su bsectors, and offer: • Research institution to transfer technology to commercial applications m South County • Clearinghouse: locatmg best practices mformation, d1ssemmat1on of nat1onal research, public access research library -onlme & searchable. Libranan support serv1ces to nat1onal audience. • Center for Quality Manufacturing. Offer ongoing trainmg, curriculum and courses to develop skilled workforce, w1th focus on quality efficiency pract1ces. The Center Will teach manufacturmg process improvement practices, mcluding: strategy development, implementation assistance, product1v1ty Improvement, workforce and organizational development, and busmess process Improvement to create successful organizations An excellent example of this type of fac111ty is Battelle Memorial Institute next to Ohio State Un1vers1ty 1n Columbus, Oh1o. Germany has a network of these institutions known as Fraunhofer Institutes that are highly regarded by both industry and academics. Lead Responsible Party: Kent Chamber of Commerce; Staffing: Kent Chamber of Commerce and C1ty of Kent Partners: C1ty of Kent, Washington Manufacturing Services, Washington Technology Center, Green R1ver & H1ghline Community Colleges, Renton Techn1cal College Background: Manufactunng dnves the economy in South King & East P1erce Count1es The Kent Valley 1s the most diverse mid-market manufacturmg center in Washmgton State. Over 67,000 employees worked in the manufacturing sector in the core South County C1t1es -Kent, Federal Way, Renton, Auburn & Tukwila -m 2002. Problem Statement: Manufacturmg has long been subject to the ups and downs of regular market cycles and the pressures of an increasingly competitive global market. But the mcreas1ng pace of globalization and the ability of the world's new manufactunng floor -Chma -to export deflation, has caused US manufacturers to lose all pricing power. Kent/South County manufacturers have developed good cost control 'lean' pract1ces, but cannot compete in a global market on pnce, alone. Techmcal Appendix ~ Econom1c Development Strateg1c Plan Results of Kent Economtc Summtt Page 6 How Will the region manage the potential loss of thousands of Boemg Company manufacturing JObs? Our h1stoncal advantages have been based on cheap land, a willing workforce and an excellent transportation system. How will we develop a new competitive advantage to succeed 1n the future? In the past ten years, South County manufacturers have built their success on being the low cost producers of high quality products. They will need outside assistance in order to make the radical strategic change to focus on innovation Jun. 2003 June 2004 June 2004 Dec. 2004 -Source funding & apply for techn1cal ass1stance grants -Research South County manufacturers unmet needs & determine benef1ts of tech transfer to them. F1rst cut Kent/South County trans1t1onal manufactunng econom1c County trans1t1onal manufactunng In kind $ 70,000 $150,000 $275,000 Technical Appendix Results of Kent Econom1c Summtt Page 7 ~ Economic Development Strategic Plan Workforce of the Future Subgroup Goa/1: Create High Performance K-14 Educational System Short-Term Recommendation: Curriculum mcludes real-life work problems Teachers job shadow at busmesses, carry back industry information and incorporate such standards in to the curriculum. Lead Responsible Party: Kent School District; Partners: Commun1ty and Technical Colleges Problem Statement: Kent School District is focused on prov1dmg students w1th real-l1fe work problems throughout the K-12 continuum. Because Career & Technical Education programs prov1de the environment where students can ut1l1ze their academic skills m a technical setting, real-l1fe work problems are an integral part of the curnculum. It is cntical to keep the Kent School D1stnct Career & Techmcal Education programs up-to-date w1th the goal of be1ng able to prov1de our local commun1ty with a skilled workforce. Action Plan and Timelines: Date Act1on Rev1ew process happens Keepmg the technology used in the classroom current w1th local busmess tw1ce each school year Ongomg Techmcal Appendix standards The Kent School D1stnct IS currently on a three-year replacement schedule for tbe computers used m the Career & Technical Educat1on computer labs. The three-year timeframe IS necessary m order to tra1 n students on current software that needs up-to-date computers to operate properly. Each year our advisory comm1ttees rev1ew the computers and other technology equipment that 1s being used m our classrooms and makes recommendations as to what equipment needs to be replaced dunng the current school year. The Kent School District 1s in the process of changmg the curnculum used m our keyboardmg courses to meet the current standards for D1g1tal Commun1cat1on. This new curr~culum Will mcorporate what had been taught m keyboardmg and also mclude tra1mng w1th scanners, d1g1tal 1magmg, and vo1ce recogn1t1on software. Th1s IS an example of how a course's curriculum 1s changmg to keep up with the technology used 1n businesses. Prov1dmg teachers with the opportumty to v1s1t local employers to 1dent1fy the skills needed by employees The Kent School D1stnct will contmue to encourage the Career & Technical Education teachers to take every opportun1ty to VISit local employers. This experience IS valuable m determmmg if the curnculum bemg used m the classroom IS meeting the needs of the students and local employers. Durmg the school year 1t 1s very d1ff1cult for teachers to leave the classroom to VISit employers due to the severe shortage of available substitutes. It would be benefiCial 1f teacher VISits could be arranged dunng school breaks or the summer. A central mformat1on source of employers that would be w1llmg to host teacher VISits could be facilitated by the Career & Technical Educat1on ~ Economic Development Strategic Plan Results of Kent Economic Summit Page 8 2003-04 school year department. Th1s same procedure could be used to 1dent1fy employers that would be w1lhng to host student f1eld tnps dunng the school year. This would allow both the teacher and students to benefit from the on-s1te experience. Gather real-l1fe work problems from employers that could be used m Career & Technical Education curnculum to demonstrate to students how the skills they are learnmg are used m the workplace An act1on step for the Career & Technical Educat1on advisory comm1ttees w1ll be to gather real-life work problems so these examples can be mcorporated into each curriculum. Each advisory committee Will recommend a problem for students to solve dunng the fall meetmg. The solution to each problem Will be presented to the advisory committee at the spnng meetmg. Add1t1onal real-l1fe work problems can be submitted through the Kent Chamber of Commerce Education Comm1ttee and distributed by the Career & Techn1cal Education department to the appropnate program area Requests for volunteers Will Encourage part1c1pat1on 1n Career & Technical Educat1on advisory comm1ttees be made one month pnor and student leadership organizations to advisory comm1ttee There are 20 adv1sory committees that are the curnculum rev1ew and meetmgs or student recommendation body for the Kent School D1stnct's Career & Techn1cal leadership organ1zat1on Educat1on programs. There is a need to mcrease the membership of the events committees so mput can be gathered from as many sources as possible to help focus the programs on the current needs of the busmess commun1ty. The student leadership organ1zat1ons (FBLA, DECA, Sk1IIUSA-VICAl are contmually looking for commun1ty members to part1c1pate as JUdges and contest organizers. Most of the contests focus on havmg students solve real-l1fe work problems. Requests Will be made through the Kent Chamber of Commerce for volunteers to serve on the advisory committees and w1th the student leadership orgamzat1ons. Techmcal Appendix ~ Economic Development Strateg1c Plan Results of Kent Economtc Summtt Page 9 Kent: The International City Subgroup Goal 1: Community welcomes diversity, immigration, international students, business and tourism Short-Term Recommendation: Partner to write a 21'' Century Community Learnmg Center federal grant that includes adult educat1on and after-school activities Lead Responsible Parties: Kent School Distnct & Commumty Colleges, Staffing: Kent School District Problem Statement: G1ven that the divers1ty m the Kent commumty is growmg, there is a need to prov1de adult education to the number of English-language learners (both fam1ly members and students) who l1ve and work in the wider Kent community and whose children attend Kent School District schools. In order to help develop business and language skills as well as to celebrate the diversity within the community, a 21" century grant may help umte fam1l1es, communities and schools under a common purpose of adult education and family literacy. July 2003 Wnte a 21" Century Community Learnmg Center Grant If approved, the Kent School D1stnct w1ll partner w1th commumty based agenc1es and non-profit orgamzat1ons to prov1de: • Adult education classes offered at the schools and local library • Parentmg classes • Fam1ly literacy programs (e.g., Motheread/Fatheread, Family Math Night) • Home Safe • Bndgmg Assets program to promote mteract1on between 1mm1grants, ethnic groups and the schools • After-school act1vit1es After-school "--·~"" Completed: August 4, 2003 Short-Term Recommendation: Business assistance for small, ethnic busmesses Recommendations: The SBDC counselors and staff will increase outreach efforts to mmonty owned small and medium sized busmess. Outreach efforts would include contacting businesses, local community groups and assoc1at1ons. Follow-up meetmgs and presentations will be determined by the cl1ent needs. Outreach efforts Will be evaluated on a quarterly basis with a goal of doing three presentations/meetings per quarter. The outcome of these meetmgs could result m individual assessment meetings, which are free to the client. Individual client meetings can vary in length, from a min1mum of one hour to on-going assistance based on the client needs. Techn1cal Appendix ~ Econom1c Development Strategic Plan Results of Kent Econom1c Summ1t Page 10 The SBDC, in conjunction with the continuing education programs, Will provide trammg opportunities focusing on specific challenges that mmonty owned small and med1um s1zed busmesses. The training programs will be developed, on a quarterly basis or, on an as needed basis, as determined by the outreach efforts of the SBDC staff. In cooperation w1th the SBDC staff, the Centre for Global Education and Training (CGETl Will work provide programs and resources targetmg small and medium s1zed business that have an interest in expanding their busmess to mclude exporting products or services. Trammg Will be developed, on an as needed basis as determmed by the outreach efforts of the SBDC staff and other college, c1ty and chamber initiatives. Access to resources for businesses includmg, mmonty owned businesses, will be available on the md1v1dual SBDC web pages and the CGET. These resources will be updated on a regular basis. As a result of individual client needs, staff from the SBDC and the CCET can connect the clients with mentors, prov1de them with information regard mg opportunities to ut111ze college students, includmg mternational students, for Internship or cooperative work-study opportunities. Timeline: To be completed by August 2004 Staffing: Highline and Green River Community Colleges Long-Term Recommendation: Kent Junior High becomes a high-ach1evmg neighborhood school Course options may 1ncl ude math, science, languages, and/or mternat1onal business. Lead Responsible Party: Kent School D1stnct; Partners: C1ty of Kent, Kent Chamber of Commerce, Kent Downtown Partnership, and Community Colleges Problem Statement: The Kent School District has recently announced plans to close Kent Junior High School for one year and reopen as a middle school in the fall of 2005. This provides an opportunity for members of the Kent community to provide the district w1th ideas on how the new middle school (which IS now Kent Jr. High) can better meet the needs of the children who live within the school boundaries. Though the middle school will remain as a neighborhood school, decisions about what other programs that may be housed there have not been determmed at th1s time Techmcal Appendix ~ Econom1c Development Strategic Plan Results of Kent Economic Summ1t Page 11 Recommendations and Timeline: Convene a Steering Committee compnsed of parents, commun1ty members and d1strict staff to des1gn and develop a new middle school that will open 1n the fall of 2005. A t1meline for the committee process and ensu1ng recommendation to the Kent School Board w1ll be as follows. Date Action March 12, 2003 Charge from KSD Board to study KJ repurposmg with a t1melme established for act1on March 19, 2003 Work Sess1on w1th KSD Board to cons1der the exploration of the followmg: • Repurposmg KJ conceptlrat1onale • lmphcat1ons (e.g., boundanes, staff transfers, etc.) • Remodel and des1gn plan • T1melmes • Costs March 26, 2003 Superintendent Recommendation to KSD Board May 14 2003 KSD Board decision re~ardmgreourposm~ June 25, 2003 KSD Board to "commiSSIOn" boundary and repurposmg comm1ttees October 22, 2003 Boundary recommendation to KSD Board November 12, 2003 Repurposm~ "f1rst draft" to KSD Board Techmcal Appendix ~ Econom1c Development Strategic Plan Results of Kent Econom1c Summ1t Page 12 Results of Community Dialogue Downtown Center of Excellence Short-Term Recommendations Cultural issues: How to connect ethn1c groups Identify bu1ldmgs with h1stonc value C1tv and KDP Missing businesses: (anchor retail, vanety of reta1l, entertamment, meeting space, off1ce space, hotel, dmner restaurants. ch Government: C1ty lacks tools for redevelopment(EDGE, perm1ttmg, traffic flow, trams vs. street traff1c)Tools to assure future supply of water, energy Increase bus Cultural issues: How to connect ethn1c groups Housing: not enough (X%) owner-occupied Brokers recept1on to recru1t busmesses (could be I KDP and Chamber held at vacant space) Jazz-up C1ty webs1te to promote downtown C1ty and KDP Offer two to three cultural events per year w1th I C1ty and KDP ethnic theme (mclude ethn1c theme at Canterbury KDP and Chamber Schools: attractiveness to homebuyers and/or parents w1th I Obtam math coaches for g~rls' clubs and h1gh I KSD and Chamber Technical Appendix ~ Economic Development Strategic Plan school nrn~>r;lm<: Results of Commumty Dta/ogue Page 13 Government: C1ty lacks tools for redevelopment (EDGE, perm1tt1ng, traff1c flow, trams vs. street traff1c)Tools to assure future supply of water, energy Increase transportation opt1ons· Sounder, bus Housing. not enough (X%) owner-occupied Serving 9 AM - 5 PM population, only: 9 - 5 commun1ty is separate from 24 hour commun1ty Cultural issues: How to connect ethnic groups Technical Appendix ~ Econom1c Development Strategic Plan Create fun entrances to downtown (with lights, water, I C1ty and KDP fountam) and beaut1fy tram comdors Offer fmanc1al mcent1ves to upgrade all downtown I KDP and KLA buildmgs Create grand promenade/boulevard out of Central Avenue I C1ty workmg w1th Create fa1r and equ1table permit process C1ty and Chamber Master plan roads, pedestnan lmks and parks m I C1ty downtown C1ty and other Redevelopment of mumc1pal parkmg block (Hamson I property owners between 2nd and 4th) that mcludes Offer comprehensive h1gher-ed program (MBA, Busmess I GRCC and Chamber Admm1stratlon) at GRCC downtown center at Kent Stat1on Restaurant row of ethn1c food (glass covered, sidewalk I C1ty and KDP cafe-1sh look) Build performmg arts center with 400-600 seat Build pre-school/elementary children's park Kent Performmg Arts Orgamzat1on and C1ty C1ty and Serv1ce Clubs Educate commun1ty regardmg Kent History (art, Kent I Kent H1stoncal H1stoncal Soc Results of Commumty Dtalogue Page 14 Cultural issues: How to connect ethmc groups I Offer mcent1ves to property owners to preserve and KDP, C1ty, federal, restore bu1ldmgs w1th h1stonc value state and Missing businesses: (anchor retail, vanety of retail, I Co-locate KDP, Chamber, SBA Assistance Center entertamment, meetmg space, off1ce space, hotel, dmner and C1ty Econom1c Development KDP, GRCC, C1ty and Chamber ch1ldca Schools: attractiveness to homebuyers and/or parents w1th standards (not settmg world-class How to defme a soph1st1cated world-class destmat1on center? Technical AppendiX ~ Economic Development Strategic Plan Mamtam and expand busmess-educat1on I KSD and Chamber m between Chamber and KSD Develop programs where elementary school children mteract With semor c1t1zens at the Semor Center, semor housmg or KSD C1ty Department KSD Parks and Results of Commumty Dialogue Page 15 Center Short-Term Recommendations Improve Kent's poor brand image: No regional plan for I Create manufactunng recruitment matenals and I C1ty and Chamber South County mfg. ctr. Little public knowledge of Kent send Kent team out mfg. success stones Little support for manufacturing entrepreneur: No smgle contact and suooort: no mcubator nrnar"m PR/med1a campa1gn to Improve perception of manufactunng sector (societal benefits) Puget Sound Manufactunng Association, C1ty, hamber Chamber Labor: I Offer low cost and/or free classes K-14 on soft I KSD & Colleges, • Education system not producmg enough problem-skills, crit1cal thmkmg APICS solvmg, analytic, reliable employees w1th good work ethic ESU1mmigrant 1ssues • Shortage of high-skilled production techmc1ans • H1gh-cost housmg • Shortae:e of aualif1ed entrv-level aool1cants Transportation network congested: Lack of public support for fundmg for mfrastructure PR campa1gn educatmg voters regardmg value of needed I transportation Improvements Seattle Chamber, Puget Sound Mfg. Business climate is expensive: • Commun1ty/cit1zen economic literacy 1s low • Lack of progressive leadership • Ergonomic -potential losses • Health care costs escalatmg • Taxes: State uncompet1t1ve w1th some -sales tax & 8&0 • Ut11it1es-potential mcrease Ul & L&l rates nsmg H1gh nrnnPrtv tax Technical Appendix ~ Economic Development Strategic Plan Assn., Good Roads Assn., Engmeenng rms Results of Commumty Dialogue Page 16 Poor industry visibility: • No state mfg. assn. • No rndustry promrnence at UW • No commumty knowledge regardrng careers Business climate is expensive Labor Transportation network congested Ltttle support for manufacturrng entrepreneur Techntcal Appendix ~ Economic Development Strategic Plan mfg. Fund Washrngton State Econom1c Development program to recrUit manufacturers and distnbutors State legislators rn Kent area, KCC, SKCEDC, WMS Restructure state tax code (best pract1ce states) revtew of other I AWB, Seattle Chamber, KCC • Start ups-2-year tax holiday on B&OB • Ul, L&l • Bundled rncentlves to lure compames to locate rn Washrngton (workforce fundrng and tax rncentives) Improve flexibility and pred1ctab11ity of regulatory climate to facilitate busrness expanston (water, ftsh, L&l) Marntarn low-cost energy supply Create magnet and/or charter school(s) dedtcated to techntcal careers rn manufactunng Improve transportation system: • Fretght mobtlity • South County mass trans1t system Create rncubator programs (rndustry experts as mentors, frnance) Governor, AWB, Compet1t1veness Commtttee, EDCs, Kent legtslators BPA-State energy offtce, PSE- rnmn~n1es Governor & Krng County Council· leads State legislators C1ty, KCC, APICS, UW, WSU, GRCC, RTC Results of Commumty Dta/ogue Page 17 Workforce of the Future Short-Term Recommendations H1gh percentage of K-12 graduates don't KSD lacks system to support busmess mvolvement H1gh percentage of K-12 graduates don't employability standards meet I Colleges prov1de employability "to work" program for under-oreoared students Create database (with staff support) for busmess- educatlon n"rtn<>r"h meet I School career centers 1dent1fy JObs available "H1re me f1rst" HCC,GRCC, RTC KSD & Kent Chamber KSD & colleges KSD & 1 Separation between trad1t1onal academ1c & career-Academic faculty facu JOb shadow wtth career tech I KSD techmcal nrm>r"m Lack of focus, by trad1t1onal academic mst1tut1ons, on I Industry guests m classrooms Boemg students to succeed m workforce Little commumty understandmg of workforce opportumttes I PR campaign by Chamber regardmg manufactunng I NAM & Kent Chamber Small compames underserved by system Develop college program regardmg entrepreneunal I Small Busmess tbtllttes Educatton mstttutions lack system to 1dent1fy employers' 1 Employers adopt skill standards needs Lack of knowledge and/or mcentlves for employers to I Fundmg for daycare Educatton mstttuttons lack system to 1dent1fy employers' 1 Develop predtcttve model for sk1ll demands needs Techmcal Appendix ~ Economic Development Strategic Plan Kent Chamber, P1erce & Kmg Count1es Tech Prep Consortium Ctty Colleges Results of Commumty Dialogue Page 18 Attractive to mternat1onal students?. • Few mternsh1ps for commun1ty colleges Welcommg to diverse populations? · • F1rst generation 1mm1grant busmess owners may lack busmess skillS· • Little/no mteract1on between ethmc groups· • Lack of celebrations & VISibility of d1verse populations· • D1ff1cult to communicate: Schools & 1mm1grant fam1iles Busmess not leveragmg ex1stmg connections South County colleges pool resources to create and Colleges, State staff career center to recru 1t busmesses that want Board for interns Commumty & Techmcal M1x and learn from mternat1onal students at I KCC, KAPLAN, commumty events serv1ce orgamzat1ons, S1ster C1ty groups, World Trade Centers Host monthly mternat1onal educat1on senes (at I Omar Lee, POS, Great Wall Ma How to m1x and learn from mternat1onal students?· 1 Cultural programmmg on publ1c access stat1on City, ethmc commumt1es • No platform/venue to m1x fa1th communities • No central mformat1on source· • D1ff1cult to get US busmesses, educators, and students to go overseas for more than two weeks International knowledge base? Lack of ongomg structured I Model UN program for h1gh school and college learnmg approach: students KSD, Seattle World Affa1rs Counc1l, TDA, HCC, GRCC, RTC, S1ster City groups • Languages· • Geography· • H1story· • Culture· • Med1a Techmcal Appendix ~ Economic Development Strategic Plan Results of Commumty Dialogue Page 19 International knowledge base? Lack of ongoing structured I Model UN program for h1gh school and college learnmg approach: students KSD, Seattle World Affairs Council, TDA, HCC, GRCC, RTC, Sister C1ty groups • Languages· • Geography· • HIStOry· • Culture· • Med1a Busmess not leveragmg ex1stmg connections Connected to other countnes?· • Informal & formal relationship· • Cultural & Welcommg to diverse populations? · • Ethn~c entrepreneurs· • Ethnic commun1t1es With cnt1cal mass to create a Technical Appendix ~ Economic Development Strategic Plan Create central mformat1on source (web page and I C1ty, KCC, KSD, pnnt p1eces m multiple languages). Could be one ethn~c newspapers, of busmess U.S. students study abroad International f1lm festival w1th d1scuss1on at Kent Stat1on Ed1th at GRCC, Performmg Arts Center, KCC, C1ty Parks Results of Commumty Dta/ogue Page 20 Maps The following maps were produced in conjunction With the development of the Economic Development Strategic Plan. Population Density The map below shows population dens1ty around the Puget Sound. The darkest areas show the highest concentrations of population. • orP , ' j .. , Source: Puget Sound Reg1onal Council (2000 Data); US Census (2000) Technical Appendix ~ Econom1c Development StrategiC Plan , -4.- 0 • .. ' I ~ Maps Page 21 , ..... ~ Morning Peak Origination of Kent Industrial Employment The map below shows origination of all tnps destmed for Kent's industnal areas. The darkest areas show the highest concentrations of trip orig1ns per acre. -\ Issaquah I ' • -~' • Source: Puget Sound Regional Council (2000 Data); US Census (2000) Techn1cal Appendix ~ Econom1c Development Strategic Plan 0 • .. ) I • "L ,........_... Maps Page 22 Morning Peak Origination of Kent Commercial Employment The map below shows origination of all tnps destined for Kent's commercral areas. The darkest areas show the highest concentrations of trip ongms per acre I ' • ... r ' Source: Puget Sound Reg1onal Councrl (2000 Data); US Census (2000) Technrcal AppendiX ~ Economic Development Strategic Plan -, ,. .. ' Maps Page 23 , Work-Based Trips Originating in Kent The map below shows the destmation of all work-related tnps origmating m Kent The darkest areas show the h 1ghest concentrations of trip destmations per acre. I ' - ""'' CovingtoP ' ' Source: Puget Sound Regional Council (2000 Data}; US Census (2000} Technical Appendix ~ Econom1c Development Strategic Plan , .. ' 0 Maps Page 24 Morning Peak Origination of All Kent Employment The map below shows origmat1on of all trips destmed for Kent. The darkest areas show the highest concentrations of tn ps origin per acre. Source: Puget Sound Reg1onal Council (2000 Data); US Census (2000) Technical Appendix ~ Economic Development Strateg1c Plan .. ' Maps Page 25 ECONOMIC DEVELOPMENT IN KENT INDUSTRY OUTLOOK AND RECOMMENDED ECONOMIC DEVELOPMENT STRATEGIES Final Report August 2003 Paul Sommers and Kursten Holabird iii UNIVERSITYof Daniel J. Evans WAsHINGToN ·fl II IIIIi School of Public Affairs Techntcal AppendiX Industry Outlook and Recommended Econom1c Development Strategies ~ Econom1c Development Strategic Plan Page 26 TABLE OF CONTENTS Executive Summary Introduction Methodology Industry Analys1s lndustnal Mach~nery, Including Computer Equipment Plast1cs Furniture Truck Manufactunng Aerospace Metal Fabrication Warehousing Printing and Publishing Engineering Serv1ces Construction Food Processing Review of Selected Strategies Mov~ng K-14 Education System to H1gh Performance Fore1gn Direct Investment (FDI) Improving Incumbent Workers Productivity Investing in a Higher Funct1on1ng Workforce System Technology Transfer Technical and/or Bus~ness Educat1on Manufacturing Extension Partnership Marketing Plans for Key Sectors Attracting International Tourists, Businesses and Students Using Arts and Culture to Attract International Business Page 28 Page 33 Page 33 Page 36 Page 38 Page 42 Page 45 Page 47 Page 50 Page 52 Page 54 Page 56 Page 57 Page 60 Page 63 Page 67 Page 70 Page 72 Page 76 Page 83 Page 85 Page 88 Page 90 Page 91 Techmcal Appendix Industry Outlook and Recommended Economic Development Strateg1es ~ Econom1c Development Strategic Plan Page 27 EXECUTIVE SUMMARY This report examtnes the competitive status and outlook for eleven major industnes located tn the city of Kent and the surrounding South King County region. The analys1s considers what may happen in the future under alternative scenanos about economic development policy by answering four questions for each Industry: • Will this sector grow (or declme) more or less rapidly than 1t has in the past? • What are the key roadblocks that are preventmg faster growth in the Kent region and what are the critical 1ssues for these sectors? • What could happen tn these sectors in Kent 1f the C1ty does noth1ng? • What act1ons could the C1ty, Kent Chamber, and other agenc1es take that would tnfluence the future growth of these sectors. Both quantitative and qualitative information IS used to answer these questions. Employment data complied specifically for Kent and the South King County region are analyzed using locat1on quotients (values over 1.0 indicate competitive strength) and shift-share analysis (positive competitive sh1ft effects indicate growmg competitive strength). These metncs are def1ned tn the text and prov1de alternative measures of competitiveness and changes in compet1t1veness over time. Compet1t1ve strength of industnes 1n the Kent area was assessed between 1996 and 2001. The earl1er year was chosen as a benchmark year dunng the strong period of econom1c expans1on in the mld-1990s, and 2001 was the most recent year available. Projections of future growth are also included in the analysis, usmg the Washington Employment Secunty Department's long term projections for the second half of the current decade (2005-2010) Qualitative information from interviews, webs1tes, and other literature is used to enrich the picture of each tndustry denved from the quantitative analys1s. Key results are summarized in two tables below. The seven tndustnes at the top of the table above are the most compet1t1ve Industries in the Kent area at present, as indicated by the location quotient values. However, several of them are los1ng some of that strength as shown by the shift-share analysis (competitive shift column in table above). In addition, only industrial machinery and plastics are expected to grow more rap1dly than the overall rate of growth tn the county from now to 2010. These projections, created by the Employment Security Department about a year ago, may be quite outdated given compet1t1ve threat that has emerged tn China and other Asian countries tn recent months. Rap1d mnovat1on Will be requ1red to mamtam health U.S. manufactun ng industries given th1s threat. A technology center, support from education programs at local h1gh schools and community colleges, and stronger entrepreneunal development efforts are needed to offset the compet1t1ve threats Kent area f1rms face. These three recommendations show up frequently in the qual1tat1ve summary 1n the table below. The last four industries are not as strong tn the Kent area, but Construction and Engineenng Serv1ces have a foothold in the area and good growth prospects. Stronger education programs and broadband service quality are two factors that could ass1st these industries. The recommendations address all of the tndustries studied m th1s research project. It 1s temptmg to identify those mdustnes that are the strongest at present and to focus always scarce public resources on those areas of strength. However, Harvard's Professor Michael Porter, the Technical Appendix Industry Outlook and Recommended Econom1c Development Strategies ~ Economic Development Strategic Plan Page 28 leadmg researcher on industry clusters in the Umted States, counsels public agencies to be helpful to all industnes or clusters that can benefit from publiC programs. As shown 1n th1s analysis, industries such as food processmg, wh1le not highly rated 1n the aggregate, can have strong individual firms and could benefit from technology or workforce programs that may be designed around the needs of the currently strong players. Other industries may gam strength over t1me w1th appropriate mtervent1ons. Unanticipated changes m the macroeconomic environment may change the pos1t1ons of the players on the scorecard over time. Consequently, the best adv1ce is to design programs around the needs of all mdustnes, making sure that the key needs of major players are addressed but without excludmg the opportunity to offer assistance to other mterested firms. Techn1cal Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 29 Key Findings and Recommendations Industrial I 2.51 -I 1557 I 2.9 Machinery Plastics -867 2.3 Furniture + 796 1.2 Truck I 3.71 * I * I * Manufacturing Techn1cal Appendix ~ EconomiC Development Strategic Plan I Not a strong mach me buildmg Technology center to foster regton; spectalty ftrms have mnovatton and new product done well; threat from low cost development; support tech countnes center wtth educatton programs and seek Foretgn Dtrect Investment Not a maJor plasttc mdustry Butld cluster lmkages to center but strong spectalty transportation equtpment, ftrms, e.g., vmyl windows mdustnal machmery; use technology center to develop new products & processes; butld plastics curnculum at local col Strong regtonal compettttve Butld a furntture program at posttton and growmg local communtty colleges; uttltze offtce furmture market; weak technology center to tmprove growth projectton may be a producttvtty; build lmkages to data aggregation problem; local ftrms wtth many reta1l threat from low cost countnes outlets I Smgle major ftrm tn area; Examme potenttal to butld tndustry ts senstttve to cluster by 1denttfymg component busmess cycle, cluster of needs and production/quality supplters could be reqUirements of lead ftrm; use strengthened, gtvtng maJor ftrm technology center to help lead a stronger reasons to stay tn ftrm tnnovate the area Industry Outlook and Recommended Economic Development Strateg1es Page 30 Aerospace Metal Fabrication Warehousing Printing and Publishing Technical Appendix 3.7 * 2.9 4.0 + 1.1 ~ Economic Development Strategic Plan 5000+ 1264 3970 1078 * 1.7 1.5 0.0 Boemg plant and some Boemg subcontractors m area, 9111 and War on Terronsm hurtmg commerc1al airplane mdustry, m1ss1le and space group has Metal fabncat1on f1rms support other manufacturers, construction, and manne mdustnes; threat from low cost countnes MaJor, defmmg mdustry for Kent area; strong lmks to ports; key advantage 1s low cost labor but technological change 1s rap1d m mdustry nat1onw1de Growth of on-line advert1smg and mformat1on d1stnbut1on may lim1t future market for pnnted matenals; few maJOr f1rms m Technology center could help subcontractors enhance competitiveness; commumty college can ass1st Boemg and subcontractors w1th skilled labor su Technology center could help f1rms Improve processes or develop new products; entrepreneunal program could ass1st startups and growmg f1rms Technology center could help f1rms ut11ize mnovat1ve technology and strengthen linkages to sh1ppmg and land transportation compames; progress needed on freight mfrastructure None 1dent1f1ed Industry Outlook and Recommended Economtc Development Strategtes Page 31 Engineering Services Construction Food Processing 04 + 1.9 + 1.1 + 1038 2.4 1648 2.1 1404 0.1 Not a strong mdustry m Kent although 1t ts qutte large m Kmg County urban centers; local publtc sector market wtll expand; lifestyle entrepreneurs may destre a Kent locatton Good prospects m public sector heavy constructton and Spectalized research factlittes tn technology center may help; pursue htghest posstble broadband servtce standards to enable ftrms to overcome the dtsadvantage of bemg outstde the urban ce Emphastze constructton trades programs at commumty colleges Mature mdustry but mnovattve Technology center could asstst products sttll posstble; new wtth process and packagmg process technology key to technologtes; entrepreneunal contmued competitiveness program could asstst startup unless product IS very ftrms *Employment data from Washmgton Employment Secunty Department; astensk mdtcates data that cannot be dtsclosed to protect conftdenttal mformatton; aerospace esttmate from Ctty of Kent. Techntcal Appendix ~ Economtc Development Strategtc Plan Industry Outlook and Recommended Economic Development Strategies Page 32 INTRODUCTION This report prov1des an examination of the competitive status and outlook for eleven major industnes located in the city of Kent and the surroundmg South Kmg County reg1on stretchmg from Renton south to Kent and Auburn, and west to the Puget Sound, embracmg Tukwila, Covington, Federal Way, SeaTac, Burien, and Des Moines. The focus of the analysis Js on the firms located in Kent, but set in the context of broader South King region because this region shares significant charactenst1cs w1th Kent as shown m pnor research.' This report considers what may happen in the future under alternative scenarios about economic development policy by answering four questions for each industry: • Will this sector grow (or decline) more or less rapidly than 1t has m the past? • What are the key roadblocks that are preventing faster growth m the Kent reg1on and what are the cnt1cal Jssues for these sectors? • What could happen m these sectors m Kent if the City does nothing? • What act1ons could the City, Kent Chamber, and other agenc1es take that would mfluence the future growth of these sectors. The suggestions made m answering the last quest1on draw on a review of best pract1ces in economic development provided in a second chapter to this report. METHODOLOGY The report uses quant1tat1ve forecasts prepared by the Washington Employment Secunty Department as part of the1r most recent long term occupational forecasts for the period from 2000 to 2010 for Kmg County. In tables provided in the industry sections below, the long term forecast for each industry IS presented for 2000 to 2005 and 2005 to 2010. Locat1on quotients are prov1ded for each mdustry in the sect1ons below to assess the competitive strength of each industry 1n Kent and the South Kmg reg1on as compared to Kmg County. Locat1on quotients are ratios with the numerator cons1stmg of the proportion of local area employment (Kent or South King) m a particular mdustry as compared to total employment in that same reg1on, and the denommator showmg the same proportion for Kmg County as a whole. If the local area has a larger percentage of its total employment in a particular mdustry, then the location quotient will be greater than one, and the local area IS said to have a compet1t1ve advantage in that mdustry relative to the county. Conversely, 1f the local area has a smaller percentage of 1ts employment in a particular industry, then the location quotient will be less than one, and the local area IS sa1d to lack competitive advantage m that mdustry. In add1tion, a shJft-share analysis was conducted comparing employment changes from 1996 to 2001, companng changes 1n employment in Kent and the South Kmg reg1on to those that 1 Hebert Research, Inc South County Economic Engine Economic Analysis/StallS fica/ Profile, November 2002 Technical Appendix Industry Outlook and Recommended Economic Development Strategies ~ Economic Development Strateg1c Plan Page 33 occurred in King County as a whole.' These two sub-county regions are compared to the county following the sp1nt of econom1st Charles Tiebout, creator of the Tiebout theorem T1ebout argued that residents of a metropolitan area "vote w1th their feet," choos1ng a particular town to l1ve 1n based on package of serv1ces, taxes, and local charactenstics they f1nd most appealing 3 If businesses are assumed to do likewise, then an analysis comparing trends 1n employment for sub-regions compared to a larger region will reveal the comparative advantages of the sub- regions, i.e., the 1 ndustnes that are most compet1t1ve 1n particular sub-reg1ons. Shift-share analysis disaggregates total employment growth into three components: • Growth due to overall expansion of the countywide economy: o Countywide Growth Effect, sector i, reg1on r = E(r, i)*g(s) • Growth due to the expansion of each industry group countywide: o Industry M1x Effect for sector i in reg1on r = E(r,l)*(g(s,l)-g(s)) • Growth due to the unique pattern of growth at the regional level within each mdustry: o Compet1t1ve Effect for sector I in region r = E(r,l)*(g(r,l)-g(s,i)) For each mdustry rev1ewed below, the location quotients and sh1ft share components are est1mated usmg confidential establishment level data supplied by the Washmgton Employment Secunty Department under a data sharing agreement. Establishment level data were sorted by the address 1n the database for each establishment, permitting estimat1on of industry employment for establishments located 1n Kent, in the entire South King region, and in Kmg County as a whole. This use of establishment level data is a unique aspect of the analysis 1n th1s report since Employment Security does not publish data at a sub-county level due to conf1dent1al1ty 1ssues. The tables provided below have been carefully screened to ensure that they comply with the confidentiality rules established by the federal government The General Macroeconomic Outlook Smce February the overall macroeconomic outlook has slowed due to the response to the war on Iraq and a generally tepid pace of recovery, accordmg to the latest forecast from Global lns1ght (formerly DRI-WEFA). The US will lead the world economy with Asia and Europe expenencmg very slow growth. Even China, which is posing a major compet1t1ve threat to US manufacturers, 1s growmg at a slower pace than in the recent past, contnbuting to the overall sluggishness in Asia. Inflation and mterest rates will remain low in this macroeconomic scenano, and GDP will begm growmg at about 4 percent annually by the forth quarter of 2003. Employment growth will likely begm to recover nationally by the end of the summer, but 1s not expected to exceed 2.5 percent at any t1me out through 2005. Through the end of 2004, most busmess mvestment w1ll 2 Several versions exist of tlus techmque for decomposmg change m a series over tlme I have used the method la1d out by Richard Barff and Prent1ce Kn1ght, "Problems Associated w1th Comparative Static Approach," http //www- rohan.sdsu edulfacultv/fstutz/shlflshare.htm (Apnl2003). 3 Tiebout, C M 1956 "A Pure Theory of Local Expend1tlires.". Journal ojPoiltzca/ Economy LXIV 416-24 October Techn1cal Appendix Industry Outlook and Recommended Econom1c Development Strategies ~ Economic Development Strategic Plan Page 34 be m computers and software, not structures or other equipment. "Conflict sens1t1ve sectors" have been slowed by the Iraq war (airlmes, tounsm, luxury goods).4 The tepid pace of growth expected for the national economy is a factor mfluenc1ng current perceptions of the outlook for each sector m Kent and the surroundmg reg1on. Th1s state 1s likely to lag the nat1on 1n recovering from the recession smce Boeing is expected to contmue to reduce its workforce somewhat dunng the remainder of th1s year and possibly some more m 2004 There 1s no major force for growth to offset the drag created by further manufactunng job losses m the year or so ahead." Rather than dwellmg on the lingenng impacts of the recess1on, the long term outlook is stressed m the industry rev1ews below, based on long term forecasts from Employment Secunty as well as review of published industry sources, interviews With businesses 1n the reg1on, and focus groups w1th manufacturers arranged by the Kent Chamber of Commerce 4 Notes from presentatton by Nanman Behravesh, chief economist, Global Instght, at the Pactfic Northwest Regional Economics Conference, Spokane, May 2003. 5 Office of the Forecast Council, PrelunznaryJune Forecast for Washmgton, Olympia, June 2003 Techmcal Appendix Industry Outlook and Recommended Econom1c Development Strategies ~ Economic Development Strategic Plan Page 35 INDUSTRY ANALYSIS This section assesses the competitive strength and growth prospects for eleven major industnes that constitute the economic base of Kent and the surroundmg South K1ng region. The future of these industries will determme the overall level of employment and mcomes m this area because these basic industnes create opportumt1es for secondary industries such as reta1lmg and services through a multiplier process created by the payrolls of the basic industnes as well as their purchases of goods and serv1ces from other firms. With the possible except1ons of construction and engmeering services, all of the industries below can be considered bas1c m the sense that they draw income into the area from outside by selling their products or serv1ces to customers outside the area. Industrial Machinery, Including Computer Equipment Industrial/commercial machinery Industry 1996 2001 Change LQ Kent 1547 1557 10 2.5 South K1ng Reg1on 2385 2359 -26 1.2 Kmg County 7648 9184 1536 Shift Share Analysis Countywide Growth 325 500 Countywide Regional Industry Competitive Growth Shift -14 -301 -21 -505 Source: Employment Secunty and author's calculations The mdustnal and commercial machinery industry IS a relatively large manufacturing industry 1n the area, and 1t had an average wage of $46,534 countywide in 2001. Industry growth rate in the county was less than the countywide all industry growth rate; therefore the industry shift effect is negat1ve for both Kent and the South King region. South Kmg lost jObs m this industry, making the compet1t1ve sh1ft effect very negative. Kent gamed 10 jobs m this industry, resultmg in a small positive compet1t1ve shift effect for this mdustry m Kent INDUSTRY lndustnal Machmery Estimated 2000 and Equipment 9400 Source Employment Security Projected 2005 9200 Growth Rates 2010 2000-2005 2005-2010 10600 -04% 2.9% The state's long-term projection for this industry is a slight decline in the f1rst half of the decade, followed by fairly strong growth m the second half Based on a survey of members, the Assoc1at1on of Equipment Manufacturers anticipated a 2 percent expansion in US orders for construction equipment in 2003, accompanied by a 3.2 percent expansion m the Canadian market and 3.3 m the rest of the world. Crane, forklift, and other lifting equ1pment manufacturers anticipated declmes in their markets in 2003 as of Techmcal Appendix Industry Outlook and Recommended Econom1c Development Strategies ~ Economic Development StrategiC Plan Page 36 February, but at a slower pace than in early 2002 foreshadowing a recovery 1n th1s market (see http://www aem.org/News/). Employment levels 1n key occupations 1n these industnes are projected to grow at a slower pace than the average of all jobs through 2010 according to BLS Occupational Outlook for lndustnal Machinery Installation, Repair, and Maintenance Workers. More automated product1on equ1pment is coming mto many industnes, requiring more sophisticated maintenance skills for some tasks. However, the equipment often comes w1th self-diagnostic software, ultrasonic measunng tools, laser shaft alignment, and other sophisticated technologies that can reduce the need for mamtenance workers or "de-skill" these jObs to some extent. Lower pa1d workers in classifications such as electronics techn1c1ans will assume some installation and ma1ntenance duties. The net result of these trends is that most job openings will stem from a need to replace workers who ret1re or move on to other occupations (see http://www.bls.gov/oco/ocos19l.htm). Growth Prospects. The industrial equipment mdustry has strong long term growth prospects accordmg to the state's long term forecast and Kent has a strong competitive position 1n th1s industry relative to the county and the South King region. However, there was negligible growth from 1996 to 2001 -a net mcrease of only 10 jobs. Compared to major mdustrial equipment manufactunng reg1ons in the Upper Midwest states, this region does not have a ternbly strong base in this industry. Consequently, the industry in th1s state may not do as well as Employment Secunty's long term projection, but end up performmg more like the mdustry nationally with a slow pace of expansion. Key Roadblocks. Low cost manufactunng serv1ces are bemg offered by many Asian countnes, as well as Mexico, Eastern Europe, and Russia, expandmg the range of opportunities for out- sourcmg. G1ven the cost pressures on manufacturers today, many f1rms 1n the Kent area feel that they must out-source most part manufacturing and routme assembly operations. Even the leading firms in the area such as Flow and Red Dot are under S1gn1f1cant pressure at present, and the entire nature of manufacturing may shift with most of the part manufactunng done offshore, wh1le des1gn, eng1neenng, marketmg, and customer serv1ce may surv1ve 1n domestic establishments Unless there are dramat1c sh1fts in relative exchange rates or other factors affecting global commerce, the US manufactunng mdustry may change qu1te dramatically 1n the years ahead. Flow Research was founded in Kent, specializing in water jet cutt1ng technology. An offshoot of this firm, Quest, remams 1n the area, prov1dmg "laser based instrumentation solutions for dimensional mappmg" of the mterior of tubular surfaces. This advanced technology 1s used to inspect pipes 1n nuclear equipment at Hanford The innovative technology of these f1rms g1ve them strong market positions in niche markets. Other firms in the sector w1ll need to establish comparable market pos1t1ons in specialized technologies to brmg up the overall pace of growth 1n th1s mdustry. The much larger mdustnal equipment centers in the Midwest will likely contmue to dommate the Industry overall 1n the US, but w1th strong compet1t1on from European and As1an f1rms. Technical Appendix Industry Outlook and Recommended Economic Development Strategies ~ Econom1c Development StrategiC Plan Page 37 No Action Scenario. If the c1ty does nothmg to stimulate growth m th1s sector, leadmg firms could conceivably decide to move to a stronger mdustrial machinery center at some pomt and other firms could languish, posmg a substantial risk of decline m th1s sector rather than the strong growth projected tor the second half of the decade. Positive Action Recommendations and Outcomes. This sector could benefit from creat1on of an advanced technology center w1th links to univers1t1es, nat1onal laboratories, and major mdustnes requ1nng advanced mdustnal equipment. Such a center could influence the research agendas of the major research mst1tutions (University of Washington and Battelle-operated Pac1f1c Northwest National Laboratones) and ass1st existing local firms in commercializing technologies developed m these institutions. The center could also function somewhat as an incubator, w1th services to assist startup firms created around these technologies. With a technology transfer center as the centerpiece, technical education and other workforce programs at the community college could play an important supportmg role in Improving the product1v1ty of ex1stmg firms and supply1ng a labor force tor startups. Foreign direct investment would also be a possibility, smce the weaker dollar 1s enhancing the prospects for exports from the Un1ted States, and German and Japanese mdustrial equipment manufacturers have an added mcentive to consider Investing m plant capac1ty m the Umted States to bolster their own market position. Kent should look for f1rms in these two countnes in particular who might be Interested in the key technology areas emergmg from the research 1nst1tut1ons. International programs of the c1ty may help m Identifying target companies in these other countries. Plastics Rubber, plastics Industry 1996 2001 Change Kent 985 867 -118 South King Region 1313 1914 601 King County 2471 2901 430 LQ 4.2 3.0 Shift Share Analysis Countywide Growth 207 275 Countywide Regional Industry Competitive Growth Shift -35 -289 -47 373 Source: Employment Secunty and author's calculations Note that the mdustry t1tle comes from the Standard lndustnal Classification system, but rubber is not a major mdustry in the Puget Sound, whereas plastic extruders are a modestly SIZed industry m the area. The rubber and plastics industry declmed by nearly 120 employees in Kent from 1996 to 2001, leavmg an industry that still has a very high location quotient of 4.2. The average wage in the rubber and plastics industry was $33,126 in 2001. Kent clearly has a comparative advantage in the plast1cs 1ndustry, but it is a rather small industry in th1s area, and the negat1ve competitive shift suggests a declining advantage m Kent. South Kmg, on the other hand, has gained substantial employment in this industry and has a strong Techn1cal AppendiX Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategic Plan Page 38 positive compet1t1ve shift. This industry also has competitive strength tn the whole South King County region, as shown by a locatton quottent of 3.0. INDUSTRY Petroleum, Coal, Estimated 2000 Projected 2005 2010 Plasttcs 3600 3300 3700 Source: Employment Security Department Growth Rates 2000-2005 -1.7% 2005-2010 2.3% According to the state's most recent projections for King County, the petroleum coal, and plasttcs tndustry, a somewhat larger aggregated category than used in the previous table, is expected to decline qutte sharply tn the first half of this decade, and then rebound at a slightly htgher rate tn the second half of the decade, resulttng in a net employment gain of 100 employees countywtde over the enttre decade. Thts growth is most likely due to expanston of the plasttcs component of the aggregated category, since there ts no acttve coal production tn the area, and petroleum refintng is a very capttal intenstve industry that ts not likely to add much employment. The basts for the projected growth tn the second half of the decade is not apparent; 1t would represent a reversal of trends in the late 1990s as well as the first half of this decade. Plastic industry notes from "Sites and Parks" magazine • Used tn practically every industry • New uses constantly created • Industry present everywhere but especially strong in Californta and 0 hio • New uses may come at expense of metal products that are displaced -metal products shnnking as plasttcs expand • 26% increase tn employment, 1991-98 Plants Sites & Parks magazine, February/March 1999 These notes describe a large open market for plasttcs products that can be met by plasttc extruston plants. Plastic can be used to create so many products that there seems to be no upper l1m1t for the industry. On the other hand, barners to entry into this tndustry are modest, and 1t is difficult to carve out a defensible niche that other firms cannot tnvade. Consequently, margins are often low and competition from many states and many other countnes is possible. Accordtng to the Soctety of the Plasttcs Industry (SPI), Washington had 20,010 plasttcs tndustry JObs in 2001, 22"" rank tn the natton. Employment increased from approximately 13000 tn 1995. Industry shipments of $3.48, 25" rank nattonally, were up from about $168 in 1995. http://www.plasttcsdatasource.org/facts/wa.pdf County level stattsttcs from SP I: Employment Sales (mill) Plants Snohomtsh 1060 212 24 Ktng 4206 931 130 Pierce 1944 408 41 http.//www.plasttcsdatasoyrce.org/facts/seattle.pdf Techntcal Appendtx Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategtc Plan Page 39 Clark College IS the only WA Community or Techmcal College program l1sted on the SPI webs1te (http //www.plastlcsindustry.org/outreach!lnstltutions!lndex.htm). This mdustry could represent an opportu mty for Kent area colleges smce the md us try has a strong presence m the Kent Valley. Clark College could provide a curriculum to get a program gomg m the Kent area. SPI's Plastics End-Market Snapshots released m 2001: • Light trucks-market has grown rapidly, low mterest rates help, but future sales uncertam • All other transportation equipment-growing market share for plastics but weak economy limiting demand growth • Med1cal devices-expandmg market but major cost pressures will limit prof1ts • Packagmg-demand follows consumption patterns, lots of consolidation squeez1ng prof1ts • Construction-one of the stronger markets m the current economy • Appliances-demand follows housing but over-capacity in the mdustry • Electrical/electronic eqU1pment-wa1tmg for the recovery in the tech economy Th1s list of major customers for plastics companies suggests another advantage of focusmg on this industry 1n the Kent area. Aircraft, trucks, boats, medical devices, and construction are all major mdustries m the area, suggesting a number of markets m wh1ch local plast1cs companies could compete. However, as noted above, competition IS f1erce in th1s mdustry and umque market niches may be necessary to succeed. A typ1cal current product in the area, vinyl windows, 1s subject to competition from f1rms in many other areas. The pressure to improve product1v1ty and cut costs in what has become the low end market standard for home construction is intense, and absent new, h1gher marg1n products, this mdustry is not likely to prov1de a lot of jOb growth in the Kent area. Market trend data from the mdustry are shown m the f1gure on the next page. Transportation equipment and construction products appear to be the most rapidly growmg market segments for the plast1cs industry. Composites are d1splacmg both traditional plastic and metal matenals in many appl1cat1ons. According to the Amencan Compos1tes Manufacturers Association, composites can be defmed as "a polymer matrix, either thermoset or thermoplastic, reinforced w1th a fiber or other matenal with a sufficient aspect ratio (length to thickness) to provide a d1scernable reinforcing function m one or more directions". Composites are used in many products mcluding structures (sw1mmmg pools, concrete formmg pans, cooling towers, sandwich components, highway delineators and signs and pre-manufactured homes, bathroom components and fixtures. In add1t1on there are many appl1cat1ons m transportation equipment, appliances, and vanous consumer and mdustnal products. Techn1cal Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategic Plan Page 40 Composites Industry Market Segment Trends 1400 Source: http.//www.cfa-hg.org/industr:y/statlstlcs.pdf (May 2003) Local plastics companies may need to develop capabilities to integrate composite products in the1r product line in order to survive or to develop additional product lmes that w1ll enable growth. For example, Paccar has substituted compos1te matenals for steel 1n the1r large truck products to save weight and establish more streamlined profiles that reduce fuel consumption. Boemg IS very aggressively adoptmg new technologies us1ng composites to 1mprove the fuel effic1ency of 1ts products. These two major manufacturers represent substantial market opportumt1es for 1nnovat1ve "plastics" firms. In addition, home and commercial construction projects are incorporating many engineered matenals, mcluding plastic and composite matenals, again representing opportunities for innovative f1rms. Growth Prospects. Th1s industry has been in decline in the Kent area, and county-level projections suggest contmued shnnkage in the first half of the current decade, followed by a rev1val. The analysis above suggests that the key to the rev1val is high rates of innovation, bnngmg new technologies mto the mdustry and carving out defensible market n1ches based on high rates of 1nnovat1on for higher margin products. Key Roadblocks. The mdustry has not developed distinctive, high value products in this area and is accordingly competmg in relatively low margm markets such as plastic construction matenals. Foreign as well as domestic competition is rife is such markets. No Action Scenario. Continued declme IS more likely than a revival of the industry 1n the second half of the decade 1f no act1on is taken to alter the prospects of firms in th1s 1 ndustry Techmcal Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 41 Positive Action Recommendations and Outcomes. A technology center as recommended for industnal mach1nery 1s the key recommendation for this industry. New process technologies and development of new products using innovative matenals such as new compos1te matenals 1s needed to change the competitive pos1t1on of the mdustry. E1ther startup f1rms or ex1stmg compames may lead the transformation. Economic development agenc1es workmg w1th the Industry and the proposed technology center can choose between a focus on startups or ex1stmg f1rms, or ideally fmd ways to work with both. The technology center should collaborate w1th the community college around workforce 1ssues as they anse and as new technolog1es and processes are Introduced by for-profit firms in the area. Ex1stmg f1rms use a relatively low skill workforce These firms constantly need new workers because turnover tends to be high 1n low skill manufactunng jobs. These f1rms would benef1t from stronger links to vocationally oriented programs m the K-14 education system. Furniture Furniture and fixtures Shift Share Anal~sis Countywide Regional Countywide Industry Competitive lndust!I 1996 2001 Change LQ Growth Growth Shift Kent 549 796 247 5.3 115 43 89 South Kmg Region 919 1617 698 3 1 193 72 433 Kmg County 1816 2340 524 Source. Employment Secunty and author's calculations The furniture industry grew by 45 percent m Kent from 1996 to 2001, and it has a very h1gh locat1on coeff1c1ent of 5.3 indicating strong comparat1ve advantage The average wage in the furniture industry m 2001 was $31,172. The Kent-based f1rms constitute 30 percent of the countywide employment base in this industry, and 60 percent of mdustry employment 1n the South Kmg region. South King also has a high location quotient for th1s industry, but not as h1gh as Kent's. Shift share analysis suggests that th1s mdustry IS contmuing to cluster in Kent and the South King region, w1th positive competitive shifts for both Kent and the South King reg1on. The sh1ft m comparative advantage IS especially s1gnif1cant for the South Kmg reg1on, where the growth was at a somewhat faster pace (76 percent expansion) than in Kent (45 percent). INDUSTRY Other Durable Goods Estimated 2000 8,200 Source: Employment Secunty Projected 2005 2010 8,300 8,800 Growth Rates 2000-2005 2005-2010 0.2% 12% Techmcal AppendiX Industry Outlook and Recommended Economic Development Strategies ~ Econom1c Development Strategic Plan Page 42 The state's most recent long run projections do not show th1s industry separately, but as part of a miscellaneous "other durable goods" sector. The other durable goods sector 1s expected to expand by 0.2 percent in the f1rst half of the decade and by 1.2 percent 1n the second half. Th1s group of industnes seems to have less volatility through the busmess cycle than other parts of Kent's industrial base, w1th a smaller decline than other manufacturmg industnes m the recession of the f1rst half of the decade, but also a less robust rate of expansion in the generally stronger economy expected m the second half of the decade. Forecast Notes. Nationally the off1ce furniture market has not done terribly well due to the recess1on. Busmess mvestment drops dramatically m a recession, but can p1ck up equally rapidly in a recovery, thereby be1ng one of the primary acceleration forces in business cycles. Nat1onal sources indicate that the off1ce furniture Industry outlook is consistent w1th that for most forms of non-residential investment -modest growth m the year or so ahead due to a generally weak outlook for investment by busmesses (see Off1ce Furn1ture Outlook Weakens for 2002, Gradual Improvement Expected m 2003, www.mastio. com/pt/outlook.html) Automation 1s l1mitmg the demand for furnisher finishers; some jobs movmg offshore, most job open1ngs w1ll be due to retirements, according to the more recent notes from occupational forecasters; see lnd1ana Career Center http://icoac.md1ana.edu/ careers/ careemrof1les/l 0009l.xm I/ em pout. The Puget Sound is not known as a center for furniture manufacturing. However, like any major urban center, architectural woodworking firms and a variety of custom off1ce, restaurant, and other commercial furniture manufacturers supply n1che markets w1th h1gh value products. Dunng major expansions m commercial space such as occurred in the last few years, off1ce and other commercial furniture manufacturers have many opportunities m the local market. In add1t10n, major retail chams such as Starbucks commission projects that can be installed over a wide geographic range m order to ach1eve a standard corporate image consumers readily recogn1ze. The currently over-bu1lt office market in downtown Seattle and the Easts1de w1ll probably mean a slow pace of new orders in the next several years for the architectural woodworking firms and other manufacturers makmg products for off1ce Interiors. For others, unique trends in each n1che market will be qu1te vaned. Starbucks continues to expand qu1te rapidly. Turnover m restaurants seems to guarantee a business for f1rms that make restaurant interiors. Development of several major projects 1n South Lake Un1on suggests a market for office and biotechnology lab furnishings. Growth Prospects. While the national market for furn1ture manufacturers IS slow at best, the Seattle area market has several un~que charactenst1cs that create a stronger environment for furn1ture manufactunng: • Substantial commercial real estate development act1v1ty • Nat1onal and global retailers requ1rmg standardized store furnishings • A cohort of young and wealthy individuals who are in the "nest bu1ldmg" stage of their lives, resulting 1n the construction of very large homes with high end furnishings • A market for commercial furniture products in Asia that may recover from its current doldrums; th1s regional market includes mamland China, a country that has "slowed" to a Technical Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 43 7 percent annual growth rate and rema1ns a major prospect for export oriented building products compames, includmg very high end intenor furnishings. Consequently, the state's outlook for the "other durable goods" category 1s not representative of prospects for furniture manufacturing in this area. No quantitative forecast IS available, but a long run growth rate tw1ce the rate ant1c1pated for "other durable goods" is easily possible. Key Roadblocks. The uncertain timing of the nat1onal and state econom1c recovery IS the smgle biggest obstacle to the sale of durable goods including commercial furniture. Corporate investment has been very sluggish for over 2 years. Over-building in the commercial off1ce space market locally may imply a weak market for another 2+ years in the Puget Sound. However, other markets such as high end retail interiors, new investment in the South Lake Un1on area, and export markets for high end products in Asia may create opportunities for f1rms w1th the nght product m1x. In a stronger economy, labor supply is often a roadblock for manufacturers. No Action Scenario. In the absence of any new programs in the Kent area that could benefit manufacturers, this industry is likely to expand at least at the overall rate of expansion of the Puget Sound regional economy, and most likely faster if the right product mix 1s present to meet the requirements of tenants of new buildings in South Lake Union and 1n offshore markets. At the same time, manufacturers m this industry will face strong compet1t1on from name brand f1rms in the national marketplace, and from very low labor cost competitors in Asia. The product market may expand, but the competitiveness of domestic producers and the market share they earn 1s less certain than the anticipated market expansion. Positive Action Recommendations and Outcomes. Innovative design and continuous productiVIty Improvement are both gomg to be needed for f1rms to rema1n competitive in furniture manufacturing. A program targeting both of these key issues could be created at a Kent area college. Such a program combming design and manufacturing issues would be a un1que contnbut1on in the commun1ty college system's vocat1onal and professional programs around the state. As such, it would likely draw students from outside the immediate reg1on as well as serving the long run needs of local furniture manufacturers. Models for th1s sort of curriculum can be found in Europe (in Rosenheim, near Mumch, Germany, and 1n B1ele, Switzerland). In the early 1990s, staff of the Northwest Policy Center at the Evans School, University of Washmgton, led a Northwest delegation on a study tour of European approaches to educat1on in the wood products industry The Washington sub-group from th1s study tour also v1s1ted programs 1n the Vancouver, B.C. area modeled after the cumculum at Rosenhe1m (but w1th less emphasis on des1gn Issues). If there 1s interest 1n pursuing a furniture design/manufacturing Initiative, new contacts with the Rosenheim and 81ele schools should be m1t1ated. International student exchanges are one way to get some trans-continental learnmg underway. In the past, one Biele student was placed in an internship at a company in the Tacoma area, and the key institution 1n Vancouver, the BC Institute of Technology, has facilitated placements of European students with Canadian secondary wood product manufacturers. Workmg with wood and metal fabrication f1rms in the Kent area, 1t IS likely that a full-fledged mternational exchange program could push the local furniture industry to a new level of excellence, w1th substantial long term employment and income gains. The furniture sector in the Kent area is too small to sustain such ln1t1at1ves on 1ts own; such an aggressive initiative would have to be launched on a regional Technical AppendiX Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strateg1c Plan Page 44 bas1s, with strong support from f1rms throughout the South Kmg region, and in Puyallup and Tacoma. Truck Manufacturing Due to the presence of Boeing m the aircraft mdustry and Paccar in the truck industry, the aggregated category "transportation equipment" cannot be broken down mto more detailed categones without violating the confidentiality rules Th1s broad category mcludes sh1p and boat bu1ldmg and repa1r, and subcontractors to the two major firms m the aircraft and truck sectors. The average wage in Transportation Equipment m King County in 2001 was $65,098. In the Kent and South King reg1ons, Boeing, Paccar, and their subcontractors are the major mfluence. Due to the cycl1cal nature of these industries as well as shifting market share between these two major firms and the1r respective competitors, many of the subcontractors have sought other markets for their transportation equipment products elsewhere in th1s country, overseas, or m other mdustries domestically or internationally. Transportation Equipment Industry Kent South King 1996 2001 * 5000+ Change * LQ 3.7 Countywide Growth Shift Share Analysis Countywide Regional Industry Competitive Growth Shift * * * Region 21034 21329 295 1.7 4413 -4447 328 King County 58632 58539 -93 *Data suppressed to protect confidentiality; 2001 estimate provided by C1ty of Kent based on public data on employment levels at Boemg and several subcontractors operating plants m Kent Source. Employment Secunty and author's calculations As the table above shows, there has been little change in overall employment in th1s sector of the economy m Kmg County between the two years 1996 and 2001. Employment in the South Kmg reg1on would have expanded by over 4400 jobs if the countywide overall rate of growth had been realized m th1s sector. Smce the sector actually experienced a slight decline at the county level, an offsettmg Industry growth effect counter-balanced the county growth effect. The South King region ends up with a small posit1ve competitive effect. INDUSTRY Other Transportation Equipment Source: Employment Secunty Estimated 2000 4,200 Projected 2005 2010 3,400 3,600 Growth Rates 2000-2005 2005-2010 -4.1% 1.1% The long term outlook is presented above for "Other Transportation Equipment," a category that mcludes both ship/boat bu1ldmg and repair, and truck manufacturing (aircraft manufactunng is reported separately at the county level in these projections a discussed below). The other Techmcal Appendix Industry Outlook and Recommended Econom1c Development Strategies ~ Economic Development Strategic Plan Page 45 transportation equipment sector 1s expected to decl1ne 1n the first half of the decade, and then expand at a very modest pace of 1.1 percent per year from 2005-10 Forecast Notes. Truck manufacturers "d1d not enjoy a banner year 1n 2002;" shipments for the year in the fell m the 145 thousand un1ts range as compared to 300 thousand un1ts 1n 1999. A "bnght spot" is Class 8 truck trailers (the largest category, over 8,000 pounds, due to EPA regulations forcmg companies to invest in new equipment. http://www.bizsites.com/2003/jan/article.asp?id=225. Fortunately for Kent/South King reg1on, Class 8 tractor trailer rigs is exactly what Paccar produces at its Renton facility. Growth Prospects. Th1s IS not an "mdustry" in the usual sense but a smgle large firm w1th a collection of subcontractors 1n the surroundmg commun1t1es. Consequently, it is probably only an historical acc1dent that Paccar continues to manufacture large trucks in th1s area The absence of key parts suppl1ers w1thm a reg1onal cluster is a lim1t1ng factor for future growth of th1s "mdustry." Key Roadblocks. The lack of a complete cluster producmg the mynad parts that go mto a large truck IS a key handicap to the truck building industry in the South King region. If other types of transportation equipment and the common components used across these d1verse end products were rolling out of nearby factories, one could be more confident that truck manufacturing w1ll remain a s1gn1f1cant employer in the reg1on. No Action Scenario. In the absence of any pos1tive action to keep Paccar in the area as a manufacturer of trucks, it is conceivable that someday Paccar will close 1ts doors, outsourcmg most of the manufacturing process or movmg fmal assembly to another state as Boe1ng is contemplating. In the best of future worlds but m the absence of any public 1n1t1at1ve, the Renton facility will contmue to produce 18-wheel rigs for a nat1onal market, relying increasingly on components and systems manufactured 1n other cities. Positive Action Recommendations and Outcomes. According to Harvard economist Michael Porter, the keys to success in an mdustry cluster mclude: • Multiple firms in a metropolitan area that compete for customers, suppliers, and labor, • Demandmg local customers who push for Increases in quality, • Supportive mstitut1ons especially research un1vers1t1es or other research institutes, and • Support industnes that are eager for the busmess of the core manufacturers m an Industry. These four key success factors constitute Porter's "diamond theory" of cluster-based economic development. The nearest competitor for Paccar in truck manufacturmg 1s m Portland, Oregon, so 1t 1s hard to meet the f1rst cntenon for success (unless Kent takes the lead m recru1tmg m additional truck or other transportation equipment manufacturers). The truck market is national, so local customers are not large enough to meet the second critenon. Thus, the possibilities for enhancmg the competitiveness of th1s mdustry fall mainly in the last two corners of Porter's d1amond Technical Append1x Industry Outlook and Recommended Economic Development Strateg1es ~ Econom1c Development StrategiC Plan Page 46 Research institutions could be supporting mnovation 1n truck equipment by developing more effic1ent engines or better vehicle des1gns to improve fuel economy, or 1mproved communications systems to allow truckers to stay in frequent or contmuous contact with the1r customers. The creat1on of Wi F1 hot cells at truck stops is an example of an innovation that allows truckers to communicate better with the1r customers. A local truck stop is allegedly beta testing such a system that could be rolled out nationally. Just as Boemg IS adding on-board mternet serv1ces to its a1rcraft, Paccar could work w1th local information technology hardware and software companies to add new commumcat1ons capab1l1t1es to its large trucks, thereby makmg them more competitive 1n the national marketplace. Similar JOint ventures with other f1rms could add new layers of sophistication to the truck itself to make diagnosis and correction of maintenance issues more reliable and timely, reduc1ng long run mamtenance costs on costly p1eces of equipment. The composites technologies used 1n a1rcraft manufactunng may have applications 1n truck manufacturmg as well, another area for technology development by Paccar or key subcontractors 1n the area. The technology center proposed for the Kent area could play a key role 1n brokering pro1ects on topics such as these, and 1n helping startup f1rms access Small Busmess Innovation Research grants or other federal funds to carry out product development programs, assuming that Paccar 1s Interested in such an approach. Creat1on of new support mdustnes through technology-led econom1c development efforts of the sort discussed in the prev1ous paragraph may be the best bet for the support mdustry corner of the diamond. Prior attempts by Paccar to mduce local manufacturers to bid for 1ts busmess or to sh1ft with them to new technologies have not always met w1th success, and Paccar rel1es on a global network of suppliers to produce 1ts truck products. Aerospace The industry trends and sh1ft share analysis presented in the trucking section above are reproduced below; due to the major influence of Boeing in th1s aggregated Transportation Equipment sector, the aerospace industry cannot be shown separately. The average wage in Transportation Equipment 1n 2001 was $65,098, a figure that reflects the predommant mfluence of Boeing in the sector. Boeing and some of 1ts subcontractors clearly have a major mfluence on the Kent and South King regions. Transportation Equipment Shift Share Anallsis Countywide Regional Countywide Industry Competitive lndust~ 1996 2001 Change LQ Growth Growth Shift Kent * 5000+ * 3.7 * * * South Kmg Reg1on 21034 21329 295 1 7 4413 -4447 328 King Count:t 58632 58539 -93 *Data suppressed to protect confidentiality Source: Employment Security and author's calculations; Kent estimate from City of Kent based on public mformation about Boemg and other companies operating facilities m Kent. Technical Appendix Industry Outlook and Recommended Econom1c Development Strategies ~ Economic Development Strategic Plan Page 47 Projected Growth Rates INDUSTRY Estimated 2000 2005 2010 2000-2005 2005-2010 A1rcraft and Parts 53,100 42,500 45,100 -4.4% 1.2% Long term projections are available at the county level for aircraft and parts. Th1s Industry is expected to contract substantially m the first half of the decade, and to expand at a very modest pace of 1.2 percent annually from 2005 to 2010. Forecast Notes: • 9/11 1mpacts lingering -recovery was 7 % below pre-9/11 volume--Aerospace Industry Association • After 9/11, the U.S. aerospace industry lost about 80,000 JObs • In the general aviation sector-all a1rcraft other than military and commercial airlines- manufacturers delivered 17 percent fewer airplanes m the first half of 2002 • For the fourth year in a row, the industry set a new record for busmess Jet shipments. Total shipments of busmess Jets increased 3.6 percent between 2000 and 2001. • Outside the Un1ted States, China's air transportation market will expand at a rate of 7.6 percent annually and is expected to become the second-largest av1at1on market in the world, according to Boemg http://www.bizsites.com/2003/jan/article.aso?id=225 The five major pomts above are a m1x of good and bad news for Boemg. The busmess jet market 1s the only bright spot in the outlook but th1s is in effect a small side market for Boemg, because 1ts product line is too large for most bus1ness Jet applications. China remains the big open market for large jet transports, and Boemg is doing well in that market. However, 1t may be forced to eventually build much more of its products in China in order to compete effectively for orders from Chmese a1rlmes, limit1ng the potential benefit to the Puget Sound reg1on. At meetings of the Governor's Forecast Counc1l, conf1dent1al data on the prof1tab1lity of US and mternat1onal airlines has been discussed. Few airlines anywhere in the world are makmg prof1ts in the post-9/11 environment, and some experts are skeptical that a recovery in a1rline profitability is feasible Without major reorgamzat1on of the route structure and pncmg. In other words, an even more drastic cnsis may be necessary before the mdustry can recover to an extent that it can afford to buy a substantial number of new airplanes. Consequently, the outlook for Boe1ng, one of two manufacturers of large commercial jet aircraft globally, 1s rather bleak m the long term in this key market segment. The military market is going to contmue to be very important for Boeing, with the decision just made to use creative financing techniques to allow the Pentagon to lease 767-tanker aircraft from a pnvately financed company that w1ll acqu1re them from Boeing. Th1s decision w1ll keep the 767 line operatmg for several years, providing a predictable market for subcontractors m the area as well. Alan Mullaly, head of Boemg Commercial Airplane DIVISion, spoke at the Technology All1ance luncheon m Seattle on May 12; 2003. He sa1d that the future of the Commerc1al Airplane D1vis1on is nding on the new 7e7 model. This new plane w1ll be a massive technology sh1ft relat1ve to the 777 which is the most advanced model now. He adv1sed reg1onal leaders Technical Appendix Industry Outlook and Recommended Economic Development Strategies ~ Economic Development Strategic Plan Page 48 interested 1n mfluencmg Boemg's decision about where to build this plane to move ahead on all outstanding 1ssues affecting the busmess climate, 1ncludmg congestion, education, taxes, and regulat1on Various sources indicate that there will be far less local content in the new model airplane, includmg less work performed by Boemg employees as well as the likely prospect of less work for subcontractors m the area since major portions of the plane Will be shipped 1n from Japan and other countries. The Boemg Company has smce published 1ts cntena for makmg the site dec1sion. Water access 1s a critenon on wh1ch the Puget Sound appears to have a clear advantage, but labor and overall busmess costs may place this region at a disadvantage relative to other areas competing for this production facility. Recent act1ons of the state legislature to reform the unemployment msurance system and to create special tax abatement incentives for Boeing 1f and only if 1t builds the 7e7 plant in this state may 1mprove the compet1t1veness of th1s state's proposal to Boe1ng. Whether that package of incentives IS enough to swing the deCISion will be known m a few weeks. Boemg has hired a consulting company based in South Carolma to advise the company on the site selection process. McCallum Sweeney Will be reviewing proposals from states Interested m host1ng this plant. Proposals were due by June 20, 2003, and a decision is likely before the end of 2003. See the following websites for more details: http://www.mccallumsweeney.com/news.php?ni=36 http://www.boelng.com/commercial/7e7/crlteria.pdf Boeing' defense and space busmesses seem to have stronger busmess prospects, at least for the next several years as the nat1on struggles with d1ff1cult secunty issues. Recent penalties for federal contract law violations notwithstanding, Boemg is a major mil1tary contractor with a strong pos1t1on m several fields. The Boemg plant m Kent specializes m space and defense products and that plant has been hmng new staff lately, accordmg to the Kent Chamber of Commerce, while the commercial airplane division has been reducmg its workforce quite substantially. Growth Prospects. Growth prospects for Boeing and 1ts key suppliers in the Puget Sound appear to be limited by shortage of profitable a1rlme customers worldwide, and post-9/11 sluggishness m the air transportation mdustry. The most rapidly grow1ng commercial airplane market open to Boe1ng 1s in China, but competition with Airbus and requirements for local content are lim1tmg the potential benef1t to local workers and companies. If the 7e7 truly represent the future of the Commercial Airplane DIVISion of Boeing, then the outcome of the 7e7 plant sitmg process 1s a key factor m assessmg future growth (or decline} of th1s sector. On the defense and space products s1de, the market outlook is stronger, at least for the next several years. Key Roadblocks. Sluggish markets driven by unprofitable airlines are the major roadblock to growth of the market for large jet transports. Local busmess climate, infrastructure problems, and labor costs are listed by Boeing as 1nh1b1tors to its potential expans1on 10 th1s metro area. Whether these business climate 1ssues will also affect future dec1s1ons of the defense and space business groups at Boemg 1s unclear. Tech meal AppendiX Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategic Plan Page 49 No Action Scenario. Absent any substantial act1on beyond those taken by the state legislature 1n 2003, the l1kely "no act1on" scenano IS contmued long run declme in aerospace employment 1n the Puget Sound. Positive Action Recommendations and Outcomes. The City of Kent 1s a very small jurisd1ct1on to deal effectively w1th a giant global corporat1on such as Boeing. Beyond general support for leg1slat1ve responses to Boemg's demands, the most productive course for Kent would be to work w1th local subcontractors to help them develop new products and processes to meet needs of Boe1ng and other customers through the proposed technology transfer center. In addition, workforce programs at Kent area colleges could ass1st Boeing and other manufacturers in trammg a qualified, h1gh-skilled manufacturing workforce. While these efforts may not mfluence Boe1ng's dec1s1ons to any great degree, they may have substantial 1mpacts on part1c1patmg subcontractors Metal Fabrication Fabricated metal products Shift Share Analysis Countywide Regional Countywide Growth Industry Competitive Region 1996 2001 Change LQ Growth Shift Kent 1372 1264 -108 2.9 288 -238 -158 South King Reg1on 1714 1684 -30 1.4 360 -298 -92 Kmg County 5291 5482 191 Source: Employment Secunty and author's calculations The fabricated metals Industry has shrunk sl1ghtly 1n Kent and the South King region, while expanding a bit at the county level, from 1996 to 2001. A small loss of compet1t1ve advantage is suggested for Kent and South King in the sh1ft-share analysis despite the strong locat1on quot1ents shown for th1s Industry. In 2001, the average wage 1n th1s industry in Kmg County was $37,410. INDUSTRY Fabncated Metals Estimated 2000 5,600 Source: Employment Secunty Projected 2005 2010 5,700 6,200 Growth Rates 2000-2005 2005-2010 0.4% 1.7% Th1s industry expected to grow very slightly from 2000-05 and a modest pace from 2005 to 2010. Forecast Notes: • Foreign competition is a major factor 1n the outlook for the fabncated metals mdustry; much lower labor costs are available in Asia and Mex1co, and many manufacturers are out-sourcing production. Technical Appendix Industry Outlook and Recommended EconomiC Development Strategies ~ Econom1c Development Strategic Plan Page 50 • Replacmg retiring workers IS very difficult-at both the engineenng and mach me operator levels-and skill requirements mcreasing as machines get networked 1n the plant. • The shortage of tramed workers means the local availability of custom trammg programs has become more Important than ever as a s1te selection cntena for metal fabncators, says Bob Pnce, a pnncipal w1th Lockwood Greene Consulting 1n Somerset, N.J. http;//www.bizsites.com/2000/JJOO/industry outlook.html The metal fabncat1on industry m the Puget Sound serves the local construction market, Boemg, ship/boat bwld1ng and repa1r mcluding ferries, f1shmg vessels, and other commercial vessels, and a spec1alty recreational vessel market. Other customers include electromc or other component manufactunng companies needing a box to house their equ1pment; Heart Interface and Red Dot Manufactunng are examples of such compames. These companies are a stable presence in the mdustnal area stretchmg south from the edge of downtown Seattle, Renton, and throughout the Kent Valley Growth Prospects. The growth prospects for th1s mdustry are not good g1ven grow1ng fore1gn compet1t1on m many manufacturing fields, except for companies that have a unique product or process, and except for job shops that are linked to unique product companies. That IS a very big and Important exception. A company l1ke Red Dot with a line of state of the art environmental control systems may contract with local metal fabncators, heat treaters, power coaters, etc. Some of these job shops may have unique capabil1t1es that foreign competitors cannot eas1ly match given the unusual nature of the final products bemg manufactured in the area (e.g , water jet cutting equipment). For companies that have un1que market niches, prospects may be good, but the temptation to out-source all part manufacturmg to low wage countries such as Mex1co or Chma IS very great. Key Roadblocks. Local labor costs are a roadblock to expansion unless new technologies can be employed to use more soph1st1cated equipment and processes to drive down total costs, or unless very rapid product development cycles are used to stay ahead of fore1gn compet1t1on, creat1ng very high margin, innovative products with short life cycles. Regulatory 1ssues are also a problem for firms that must find ways to cut costs on a contmuous bas1s. No Action Scenario. In the absence of any init1at1ve by local jurisdictions or the state, much of the local metal fabrication sector may fade away except for very specialized manufacturing services and some local HVAC systems fabrication linked to local construction. "It doesn't pay to sh1p a1r" 1s an old adage m the manufactunng arena that may preserve a market for HVAC fabricators. Positive Action Recommendations and Outcomes. A technology center could ass1st f1rms m developing unique capabilities or products, or in getting involved in the supply cha1n for a unique product or an Original Equ1pment Manufacturer pursuing the rapid product development model. Subcontractors m such a supply chain should expect s1gnif1cant pressure for cont1nuous productivity Improvement, however. If such strategies prove successful, metal fabncat1on could survive, and perhaps expand in the years ahead. Techn1cal Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategic Plan Page 51 Warehousing Motor freight transportation/warehousing Shift Share Analysis Industry 1996 2001 Change LQ Kent 3266 3970 704 4.0 South King Region 5053 6587 1534 2.5 Kmg County 11933 12026 93 Source: Employment Secunty and author's calculations Countywide Growth 685 1060 Countywide Regional Industry Competitive Growth Shift -660 679 -1021 1495 Warehousing and assoc1ated transportation serv1ces are a key Ingredient in the Kent area. Th1s IS a relatively large mdustry that is growing, both in Kent and the South King reg1on. The average wage 1n th1s industry m 2001 was $36,466. Both Kent and South King have very strong locat1on quotients for th1s mdustry, with the level of 4.0 in Kent show1ng that this is one of the strongest components of the Kent area economy The sh1ft share analysis demonstrates a strong competitive sh1ft for Kent and South Kmg because the industry as a whole 1n King County has not been growmg very much. One factor 1nfluencmg these trends 1s that older warehouses 1n Seattle's industrial area are no longer competitive with the more modern operations in the Kent Valley. Other Transportation Serv1ces Source: Employment Security Estimated 2000 27,200 Projected 2005 28,800 Growth Rates 2010 2000-2005 2005-2010 31,100 1.1% 1.5% The state's long-term employment forecast for "other Transportation Serv1ces," a category that mcludes truckmg, warehousmg, and municipal transportation services, IS for modest growth rates 1n both the f1rst and second half of the decade. In contrast to most of the manufactunng sectors, growth IS projected dunng the recession-plagued f1rst half of the decade. On the other hand, not much of a bounce IS projected for the second half of the decade when the economy should be domg better overall. Forecast Notes. Major trends in the warehousing industry: • Continuing labor shortages • Increased matenals handling automation • Rapid penetration of new technologies: dimens1onal bar codes, rad1o frequency responder tags, and speech recogmt10n, systems integration http:Uwww.manufacturing.net/mmh/index.asp?layout=articleCurrentWeb&articleid=CA144 853 • The number of warehouses contmues to shrink; and there are a small number of new facilities, which tend to be large 1n s1ze and located in the West or Mid-Atlantic reg1ons Techmcal AppendiX Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategic Plan Page 52 • Consolidation and mcreased use of 3"' Party Log1st1cs Providers. Modern Materials Handling, November 1, 2002: htto://www.manufacturing.netlmmh/index.asp?layout=articleWebzine&stt=OOl&articleid= CA26154l&pubdate=l2%2F01 %2F02 The warehousing mdustry is expenencing a substantial amount of technological change. There 1s a trend towards increasmg use of automated handlmg systems and trackmg technologies permitting customers to track their shipments through long, multi-modal shipment processes. Globalization, supply cham management, just-in-t1me production processes and an interest m m1nimizmg mventory costs on the part of both manufacturers and reta1lers, place warehouses 1n a key position in evolvmg market structures Large sophisticated warehouse operations strategically located at i ntermodal shipment pomts have a solid future. Smaller and less progressive operations may be squeezed out in a relentless search for "cheaper, better, faster" ways of domg busmess. Even qu1te new and soph1st1cated operations have no guaranteed future in a globally lmked and very dynamic economy. For example, in mterv1ews conducted m another study, the author learned that Amazon had opened a state-of-the-art warehouse facility in the Atlanta area about two years ago, and then closed 1t 18 months later as that company found a less expensive way of gett1 ng 1ts products to customers in the southeast. Kent appears to have benefited from its strategic location and ab1l1ty to serve needs of intermodal shippers moving goods from ships to other forms of transportation lands1de. Seattle area warehouses have not been able to take advantage of th1s grow1ng market due to land constramts 1n the older mdustrial area. This h1stoncal advantage IS linked, however, to the competitive advantage of the ports themselves. Seattle and Tacoma compete for west coast bound traffic with Los Angeles/Long Beach and Vancouver, BC. As sh1ps get larger and make fewer port calls, the market share of Seattle and Tacoma is by no means certam, even though the total traffic through the west coast ports is likely to continue to grow due to lmkages between the US and As1an reg1ons. Growth Prospects. The growth prospects for th1s mdustry are good, provided that the two key ports contmue to expand containerized shipments. However, compet1t1on for market share 1s mtense among West Coast ports, especially LA/Long Beach and Vancouver, BC as conta1ner sh1ps contmue to grow larger, suggesting a substantial downside nsk 1n an otherw1se rosy outlook. Key Roadblocks. Fre1ght mob1l1ty is a key issue for th1s industry. To stay compet1t1ve, the ports, railroads, and truckers need to contmue to work closely with the warehousmg industry to convince state and local authorities to move ahead on freight mobility projects such as separated rail/road crossings, highway capacity expansion, and state-of-the-art mtermodal fac1l1t1es. No Action Scenario. Decades of expansion in this key industry may be reversed 1f act1on IS not taken on fre1ght mobility issues, or if the ports fall to mamtam or expand their market share v1s a vis competitive West Coast ports. Positive Action Recommendations and Outcomes. The rate of expansion ant1c1pated m the long term ESD forecast may be achieved of t1mely act1ons are taken on freight mob1l1ty. As they have 1n the past, Kent area leaders should continue to press for resolution of these key mfrastructure Technical AppendiX Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategic Plan Page 53 1ssues. Aggressive implementation of new technologies may represent an opportunity to 1mprove competitive advantage by g1v1ng customers more Information about where their goods are m the transportation system and by 1mprovi ng the flow of goods from sh1p to truck or tra1n and on to the next inter-modal transition somewhere in the Midwest. The proposed Kent area technology center could foster this transformation by developing partnerships among transportation companies, smart device manufacturers, communications companies, and software developers Printing and Publishing Printing and publishing Industry 1996 2001 Change Kent 1226 1078 -148 South Kmg Region 2018 1927 -91 Kmg County 11652 11883 231 LQ 1 1 0.7 Shift Share Analysis Countywide Growth 257 423 Countywide Regional Industry Competitive Growth Shift -233 -172 -383 -131 Source· Employment Security and author's calculations Printing and publishing IS a modestly sized industry in the Kent and South Kmg reg1on; the bulk of the industry 1s located elsewhere 1n King County. The average wage 1n pnntmg and publishmg m King County m 2001 was $42,598. Very modest growth from 1996 to 2001 in the county as a whole was accompanied by declines in Kent and South King. Kent's location quot1ent 1s slightly above one, but the decl1ne m employment dunng a f1ve year penod, when the industry was growmg countywide, suggests that competitive advantage 1s sl1ppmg away from Kent and the South K1ng reg1on as a whole. Th1s 1s confirmed by the shift-share analysis wh1ch shows negative competitive shifts tor Kent and South King. Pnnting and Publ1shmg Source: Employment Security Estimated 2000 12,200 Projected 2005 12,100 Growth Rates 2010 2000-2005 2005-2010 12,100 -0.2% 0.0% The state's long term projectiOns for the pnnt1ng and publishmg mdustry suggest a small declme of 100 employees in the first half of the decade and stability afterwards m the second half of the decade. Forecast Notes. Drivers of local printing industry m Kmg County include newspaper advertising, direct ma11 advertismg, and technical manuals-NPC study m mid-1990s. Technical manuals have sh1fted to CDs and/or the web -there 1s much less actual pnntmg, but CD or on-line Technical Appendix Industry Outlook and Recommended Econom1c Development Strategies ~ Economic Development Strateg1c Plan Page 54 manuals st1ll requ1re document design work. The 63'' largest med1a company in the US IS m Seattle-the Seattle T1mes. However this IS the only Top 100 media company in Washmgton. http://www.adage.com/page.cms?pageld-940http //www.adage.com/page.cms?pageld=940 A 0.2 percent declme 1n pnnting and publishmg employment is expected nationally from 2000- 2010, while overall employment in the US will expand by 16 percent m the same t1me penod according to the Bureau of Labor StatistiCS OccupatiOnal Outlook Handbook, 2002-3. Competition from non-print media, mcludmg the Internet, and increasmg computerization of printing processes that displace skilled labor are major factors in th1s decline at a time when the economy 1s likely to be expanding. Companies that used to contract out much of their pnntmg requirements are d01ng more of 1t in-house usmg new software and hardware tools. Newspapers face mcreas1ng compet1t1on from broadcast and mternet news services, and the advertising market is adjustmg to these consumer trends by cutting back on pnnt advertising. Periodicals, includmg professional, scientific and technical JOUrnals, are expected to be a relatively strong segment of the printmg and publishmg market. However, this segment is rapidly migrating to web-based publications as libraries cut back on publication budgets. The handbook summanzes key issues at an occupational level: "Employment growth w1ll differ among the various occupations in the pnnting and publishing mdustry, largely due to technological advances. Processes currently performed manually w1ll be automated m the future, causing a shift from craft occupations to related occupat1ons that perform the same funct1on using electronic equipment. For example, employment of desktop publ1shmg specialists is expected to increase much faster than the average for all occupat1ons over the 2000-10 penod as the elements of pnnt production, including layout, des1gn, and pnntmg, mcreasmgly are performed electronically. In contrast, demand for prepress techmc1ans and workers who perform these tasks manually, including paste-up workers, photoengravers, camera operators, film strippers, and platemakers, IS expected to decl1ne. Job printers, however, are expected to expenence growth as some f1rms contract out typesetting and compos1t1on work to small shops, where JOb pnnters are primarily employed. In response to the growth m electronic pnntmg, employment of press operators 1s expected to grow very little, as are bookbinders and bindery workers." In short, absent the growth of penod1cal publishers or other specialized n1che market pnntmg operations, the outlook for printing and publishmg m the Kent area 1s not terribly strong. One of the d~ily newspapers in Seattle may shut down 1f the Joint Operating Agreement between the Times and PI IS dissolved, wh1ch would either throw the display ad industry into turmoil, or induce further sh1fts to the Internet or other non-pnnt media. General growth of the economy in the Kent area w1ll dnve some demand for locally produced pnnted matenal, but th1s 1s not likely to be a growth sector unless some new entrepreneunal energy coalesces around a new market Growth Prospects. In the face of compet1t1on from non-print media, no growth 1s expected m King County in this industry. Key Roadblocks. An apparently irreversible shift to non-print med1a 1s underway for d1splay advert1s1ng, d1rect mail, technical manuals and professional penod1cals. Techn1cal Appendix Industry Outlook and Recommended Econom1c Development Strategies ~ Economic Development Strategic Plan Page 55 No Action Scenario. In the absence of any action by local or state authont1es, contmued slippage in employment 1n pnnting and publishing IS likely. Positive Action Recommendations and Outcomes. No positive act1on has been 1dent1f1ed that could change these trends. Engineering Services Engineering, accounting, and research services Shift Share Analysis Countywide Regional Countywide Industry Competitive Industry 1996 2001 Change LQ Growth Growth Shift Kent 479 1038 559 0.4 100 161 297 South Kmg Reg1on 1739 3051 1312 0.3 365 585 362 King County 29668 45880 16212 Source Employment Security and author's calculations Engineenng services are aggregated with several other professional serv1ce mdustnes, mcluding account1ng and research services, in the employment data. In the Kent and South Kmg reg1ons, these sectors are relatively small but growmg at substantial rates. These 1ndustnes more than doubled 1n size in Kent from 1996 to 2001, and they expanded by 75 percent 1n the ent1re South King region. However, Kent and South Kmg have very low locat1on quot1ents relative to the county as a whole. This industry is strongly concentrated in the major urban centers The shift share analysis shows positive components for both county wide industry growth as well as the reg1onal shift component. G1ven the dramatic growth of these sectors county-w1de, the Kent and South Kmg regions may be getting some spillover of the creat1on of over 16,200 jobs 1n these mdustries countywide from 1996 to 2001. The average wage 1n engineenng and management services 1n Kmg County was $55,323 1n 2001. Estimated Projected Growth Rates INDUSTRY 2000 2005 2010 2000-2005 2005-2010 Engmeering and Management Serv1ces 43,100 48,400 54,400 23% 2.4% Source: Employment Security The engmeenng and management services industry 1s listed separately from accounting and research services in the long term employment projections from the Employment Secunty Department Th1s sector is expected to grow quite strongly 1n the recessionary f1rst half of the decade and in the second half as well. Th1s 1s a relatively large component of the county economy, and w1th strong growth projected throughout the decade, the Kent and South Kmg regions could continue to receive the spillover that is suggested 1n the historical data. Forecast Notes. No industry assoc1at1on or trade JOurnal forecasts have been located for engmeering services. However, a number of public sector transportation projects Will be mov1ng Technical Appendix Industry Outlook and Recommended Economic Development Strateg1es ~ Economic Development Strateg1c Plan Page 56 forward 1n the next several years, including the monora1l, light ra1l, and highways and fernes 1ncluded in the legislative transportation package that passed in 2003. General population growth in the Puget Sound Will bnng other opportumt1es for civil engmeenng f1rms. Should Washington succeed in Boemg's 7e7 competition the design and construction of the plant will provide major engineenng opportunities for subcontractors who want to remam part of the "Boeing team." Fmally, enhanced interest in security followmg 9/11 and the Iraq war will create opportunities for f1rms expert m designing security systems for airports, marine ports, and a vanety of public facilities. Growth Prospects. This mdustry has excellent growth prospects county w1de. The 1ssue for Kent 1s how to attract more of that growth given that the industry tends to concentrate in major urban areas, possibly due to a need for many college graduates and advanced degree holders who prefer to locate near a umversity, research libranes, or clients such as public agencies and major development compames who themselves tend to be located in urban centers. Key Roadblocks. Kent and South King are "locat1onally disadvantaged" for this industry, but Will get some expansion as the industry as a whole expands. Good research facilities at the commumty college branch m downtown may help to overcome th1s obstacle, as well as excellent broadband links including v1deo conferencing. No Action Scenario. G1ven the growth expected at the county level, th1s mdustry will cont1nue to expand modestly m Kent and South King Without any act1on by local leaders. Positive Action Recommendations and Outcomes. Creation of spec1al1zed research capacities m the proposed technology center, and development of state-of-the-art broadband serv1ces mcludmg very affordable high resolution videoconferencmg may help to overcome the disadvantages of a location well removed from the urban centers where government agenc1es and major developers cluster. ln1tiat1ves of th1s sort could result in attract1on of more engmeenng serv1ces companies mto Kent to take advantage of lower space rents or propmqu1ty to local south county projects. Construction Construction-special trade Shift Share Anai):Sis Countywide Regional Countywide Industry Competitive lndust~ 1996 2001 Change LQ Growth Growth Shift Kent 2377 4025 1648 1.9 499 754 South King Reg10n 5611 10130 4519 1.2 1177 1780 King Count~ 25401 38788 13387 Techn1cal Appendix Industry Outlook and Recommended Econom1c Development Strateg1es ~ Economic Development Strategic Plan Page 57 395 1562 Heavy construction Shift Share Anal~sis Countywide Regional Countywide Industry Competitive In dust~ 1996 2001 Change LQ Growth Growth Shift Kent 386 539 153 1.3 81 -30 102 South Kmg Region 1756 1726 -30 1.4 368 -134 -264 King County 5087 5765 678 Building construction Shift Share Anal~sis Countywide Regional Countywide Industry Competitive lndust~ 1996 2001 Change LQ Growth Growth Shift Kent 461 354 -107 0.4 97 48 -252 South Kmg Region 2054 1871 -183 0.5 431 214 -828 Kmg County 12148 15963 3815 Source: Employment Security and author's calculations The construction mdustry p1cture is a bit complicated smce there are three separate subsectors to track. The h1stoncal data are presented in the table above for these three 1ndustry segments, and the long run forecast Information follows th1s paragraph. Building construction, also known as general contractors, is the least competitive segment 1n the Kent/South King reg1on, With low location quotients and declining employment withm th1s region. It IS also the segment proJected to grow the least in the future. The average wage 1n Kmg County in th1s Industry was $46,641 1n 2001. Accordingly, 1t Will not be discussed further. Heavy construction -roads, bndges, and other Infrastructure construction, is a strong industry as indicated by location quot1ents, but has grown only modestly 1n Kent and it has declined 1n the South Kmg reg1on as a whole The average wage in th1s mdustry in King County was $52,365 in 2001. Substantial growth IS expected countywide 1n both the f1rst and second half of the decade, reflecting the large public transportation projects and general population growth in the Puget Sound. Special trade construction -plumber, carpenters, electricians, etc. -is an even stronger industry segment in Kent and the South King region. It IS also larger and growing more rapidly than heavy construct1on, and IS expected to grow fa1rly strongly 1n the second half of the decade after tread1ng water 1n the f1rst half. The average wage 1n th1s mdustry 1n King County was $42,396 In 2001. Percent Percent Change Change INDUSTRY 2000 2005 2010 00-05 05-10 CONSTRUCTION 66,600 67,000 74,200 0.1% 2.1% General Building Contractors 19,100 19,100 20,600 0.0% 1.5% Heavy Construction, Except Buildings 5,900 6,200 6,700 1.0% 1.6% SQecial Trade Contractors 41,600 41,700 46,900 0.0% 2.4% Source: Employment Secunty Technical Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 58 Forecast Notes. Due to low interest rates, construction has remamed fairly strong nationwide through the recess1on. Even 1n the Puget Sound, a region that has been h1t harder than many other regions 1n the recess1on, construction has held up due to several factors: • Contmued but slower in-migration • Increased housmg affordab11ity • Public construction (e.g, Seattle mumc1pal complex and library; road construction, SeaTac a1rport expansion) • Overhang of commercial projects bemg fmished desp1te overall slack demand for commercial space. Because of the strength through the recession, there is less of the pent up demand that normally accompames a recovery, and therefore there will not be qu1te the acceleration of construction that normally leads the economy out of a recess1on According to the ch1ef econom1st of the Associated General Contractors "the months ahead are likely to be uneven." In many states, a slowdown in public sector construction IS ant1c1pated. http://rockproducts com/ar/rock experts m1xed construction/ However, 1n Washmgton, due to the gas tax increase just passed by the 2003 Legislature, the on- going Sound Trans1t and monorail projects, and the th1rd runway project at SeaTac, public sector construction should be fairly strong. If employment growth resumes as projected later th1s year and continumg on mto 2004 and 2005, home construction should stay at least at present levels. In add1t1on, continued concerns about secunty 1ssues may lead to new projects at a1rports and manne ports. Growth Prospects. The best prospects for growth 1n construction in Kent appear to lie 1n the qUite small heavy construction industry 1n the area, driven by public sector projects. In add1t1on, w1th regional population continuing to grow, and developable land in the Kent area, special trade contractors will also be a growth area. Key Roadblocks. Countywide, labor scarcity has been a problem for construction compan1es 1n recent years. As the Puget Sound recovers from the recess1on, t1ght labor markets for construction workers may well re-occur. This could be a significant roadblock to expansion of this mdustry. No Action Scenario. The heavy construction industry will benefit from public transportation projects, to the extent that Kent area f1rms can compete for a port1on of the ant1c1pated construction. Positive Action Recommendations and Outcomes. Additional efforts by the local community college to expand the supply of skilled workers could ass1st the spec1al trade contractor mdustry. In addition, heavy construction has a number of very highly skilled and specialized equipment operator and mamtenance occupat1ons, as well as requirements for surveyors, engmeenng techmc1ans, and other fields that can be tramed at commumty colleges. These occupational needs may represent an opportumty for expansion of commumty college techmcal/profess1onal programs. Successful programs at the community college could help local f1rms gain a larger Technical AppendiX Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategic Plan Page 59 market share in the regional construction market due to their ability to attract qualified workers out of these programs. Food Processing Food and Kindred Products Industry 1996 2001 Change LQ Kent 1224 1404 180 1.1 South King Reg1on 1677 2502 825 0.9 K1ng County 15757 13360 -2397 Shift Share Analysis Countywide Countywide Industry Growth Growth 257 -443 352 -607 Regional Competitive Shift 366 1080 Source: Employment Security and author's calculations The food processing mdustry had an average wage of $44,219 1n 2001. Food processmg has a location quotient of just over 1 in Kent and JUst under 1 1n the South Kmg region as a whole. These figures suggest relatively low levels of compet1t1veness relat1ve to many of the other manufacturing sectors rev1ewed in this report. However, the mdustry grew m both of these sub- regions of the county from 1996 to 2001, while it shed nearly 2400 JObs county-w1de. Consequently, there are substantial compet1t1ve sh1fts in favor of Kent and the South King reg1on. INDUSTRY 2000 2005 Food and Kmdred Products .3,600 13,500 Source: Employment Secunty 2010 13,600 Percent Change 00-05 -0.1% Percent Change 05-10 0.1% The long term employment projections suggest an almost stable mdustry, declinmg 0.1 percent in the f1rst half of the decade and expandmg by 0.1 percent in the second half. That projection, together with the historical shift m compet1t1ve advantage, suggests that food processmg may continue to expand by a few hundred JObs over the decade in Kent and the South Kmg reg1on. Forecast Notes. Food processmg 1s a mature mdustry with little employment growth foreseen m the regional labor market. However, the best known f1rm m the entire region is probably Starbucks, a firm that has maintained a high rate of growth for many years by being a leader and mnovator 1n the coffee mdustry. Any substantial expansion of the industry is likely to come from exports or by mtroducmg new products that capture the domest1c consumer's attention as Starbucks has. Many of the mnovat1ons 1n recent years have come m packaging and marketmg, accompanied by process control and waste management mnovat1ons to reduce costs. A substantial d1scuss1on of these factors can be found on the International Labour Organization website: Techmcal Appendix Industry Outlook and Recommended Econom1c Development Strateg1es ~ Economic Development Strateg1c Plan Page 60 http· //www .1lo.org/pu bl1c/engl1sh/d 1a logue/sector/sectors/food/research. htm New technology in food processing IS the subject of major mternat1onal conferences; see for example a spnng 2003 European food mdustry conference w1th 200 participatmg companies discussed at the following s1te: http://www.foodproductlondally.com/news!news asp?ld-2629 Top1cs discussed at th1s conference 1ncluded: • Accessing over 200 food-related technology and research organizations • Artificial VISion for grading, process control, quality control, and secunty • New developments 1n enzymes • Aseptic packagmg Other research notes include the cla1m that Fmnish companies are leading the way in biodegradable packagmg, including "eco ties" for bakery goods. Fmland leads the way in biodegradable packaging made from a "blo- plastlc. "http //www. food prod uct1onda1 ly.com/news/news.asp ?id-2684 These claims from Europe Indicate the Importance of staymg on top of research and technology trends in th1s mdustry. Equally Important are track1ng consumer preferences, supply cham management, and global sourcing opportunities. Food processmg, not typically thought of as a "high tech" industry 1s, however, an industry that makes extensive use of advanced technology to remam compet1t1ve. Growth Prospects. Th1s industry has only modest prospects for cont1nued growth. Growth is most likely to come from export markets or through mnovative technologies and novel product development. Combining these factors into mnovative products for export markets may be a successful strategy. For example, a m1cro-brewery in Oregon developed a speciall1ne of products for the Japanese market 1n the early 1990s, with Japanese language labels and product names chosen for their appeal 1n the Japanese culture. Th1s m1crobrew was the first entry by a m1crobrewery 1nto the Japanese market. Strong innovation and export product market1ng systems need to be built to foster growth by these means. Key Roadblocks. The key roadblocks to expansion of food process lie in the mature nature of the mdustry and a tendency by American consumers to spend any increases in disposable income on other types of products, or on restaurant meals rather than home-cooked meals. Innovative companies have to fmd ways around these roadblocks through exports, mnovative products, or pre-processed products for the expandmg restaurant industry. No Action Scenario. In the absence of any new mit1atives, employment m th1s industry 1s likely to remain stable or decline at a slow rate of decline. Positive Action Recommendations and Outcomes. Innovation in the food processmg industry can come from many sources: • Publicly funded technology research and development programs resultmg m process and packaging improvements; • Education programs emphasizing product development, and Tech meal Appendix Industry Outlook and Recommended Econom1c Development Strateg1es ~ Economic Development Strategic Plan Page 61 • Individual company product development programs such as the effort by Flow to enter the food processing equipment market. These observations suggest two possible intervention pomts: • Commun1ty college programs tra1mng students for careers in food processmg, w1th an emphasis on product development • Un1versity technology programs emphas1zmg cost-reducmg process technologies. The first program could be an innovative tw1st 1n the usual commun1ty college culmary arts program that could be funded by the State Board for Commumty and Techmcal Colleges. The second type of program could be Incorporated m the proposed Kent area technology center. Small Busmess Innovation Grants, available through several federal agencies, would be one way for a startup f1rm to finance part of the requ1red process technology development costs. A program at the Washington Technology Center offers mformation to manufacturers about SBIRs and other federal programs. The likely outcome of such efforts would be to modestly mcrease the growth rate of this industry through successful startup companies, and/or add1t1onal competitive strength for existing f1rms. Technical AppendiX Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 62 Best Practices in Economic Development: Review of Selected Strategies This chapter rev1ews best practices in economic development on selected top1cs requested by the C1ty of Kent. The rev1ew is based on literature review, web searches, and mterv1ews w1th leading pract1t1oners and thmk tank representatives. The following top1cs are mcluded: • Movmg K-14 education system to high performance • Fore1gn D1rect Investment (FDI) • lmprov1ng mcumbent workers productivity • lnvestmg in a higher funct1omng workforce system • Technology transfer • Techmcal and/or Business Education • Marketmg Plans for Key Sectors • Attract1ng International Tourists, Bus1ness and Students In rev1ew1ng matenal on these top1cs, the authors have focused on ways 1n wh1ch these strategies can affect two key desired outcomes in the Kent area: • Increase start-ups 1n sectors as 1dentif1ed in the sector analysis, and • Help develop/transition entrepreneurial small compames mto professionally managed national/global corporations. Moving K-14 Education System to High Performance The following section discusses four strategies to Improve the performance of K-14 education system. The d1scuss1on mcludes results of independent evaluations and examples of other local commun1t1es or states that have implemented the strategy. 1) Develop a commission or council to address reform in local K-14 schools Impacts of school-to-career programs: School to work programs (Internships and apprent1cesh1ps) have documented pos1t1ve results for both students and part1c1patmg businesses. Measurable benefits to employees mclude: • Reduced recruitment costs; • Reduced training and supervision costs; • Reduced turnover; • Increased retention rates; • Higher productivity and promotion rates of School To Work program graduates who are h1red compared with other newly hired employees. School To Work IS also directed toward mcreasmg teachers' understanding of the sk1 II sets required by employers. To that end, programs have been created to bring educators up to speed on current skill requirements of employers: Technical Appendix Industry Outlook and Recommended Econom1c Development Strategies ~ Economic Development Strategic Plan Page 63 • Educator in the Workforce, a program that placed 92 teachers from Adam, Franklm and York count1es placed m work environments for the summer, and • Prepanng Students for the Future Workforce, a professional development course offered jomtly by Millersville University and MANTEC • http //www.mantec.org/press/newsletters/Augl999.pdf Accordmg to studies m W1sconsm, Philadelphia, Boston and M1ch1gan, students have lower rates of absenteeism and drop-out, choose more ngorous college preparatory courses and have h1gher grade pomt average when they can t1e their academ1cs to the world of work. School-to-Career mitiat1ves result in more serious, motivated students who understand the relevance of what they're bemg taught. The partnering and networking that School-to-Career encourages -from teacher internships m the workplace to collaborations with college faculty -lead to professional development that educators say is ennchmg and rewarding. Educators say they feel their vital role as teachers IS enhanced because of School-to-Career partnerships. School-to-Career g1ves employers a proact1ve, hands-on approach to 1mprov1ng educat1on. Employers can work with educators to develop curnculum ideas and can get involved m one-on- one instruction to better Rhode Island's future workforce through School-to-Career. Because School-to-Career is a partnership between schools and the community, it offers parents new ways to become involved with the1r children's learning. School-to-Career also provides a reason and a structure for parents to d1scuss-beginnmg at an early age-careers in which their children are interested. http·//www.nstc.org/general stcneeds htm Examples of school-to-work programs: Rhode Island's School-to-Career is part of a nat1onal movement to link schools and work that was prompted by mdustry's need to keep pace w1th the global economy. The 1992 Rhode Island Skills Comm1ss1ons report, "Rhode Island's Choice: H1gh Skills or Low Wages," identified the 1nextncable lmk between education and the economy and recommended the development of h1gh standards for all students, performance measures of student achievement, and the development of multiple paths for student success that would link school-based and work-based learning. School-to-Career IS based on the prem1se that education works best -del1venng the highest standards and prepanng students to get the best JObs -when students can connect their academics to the world of work, the1r future careers and the1r daily lives. School-to-Career seeks to enhance educat1on w1th strong business, community and fam1ly involvement Technical Appendtx Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategic Plan Page 64 School-to-Career initiatives take many forms. These experiences can take place at school, at a workplace or in an act1v1ty that mtegrates the two. These activ1t1es can Include: • Job shadowing, mentoring, internships and apprenticeships: Job shadowmg gives students a glimpse of a typical day at work. Mentonng allows students and employers to work together to build knowledge and set goals. Internships and apprenticeships teach students an occupation in a structured program sponsored by employers, labor un1ons or employee assoc1at1ons. • Enhanced school curricula: School-to-Career activ1t1es prov1de relevancy for academ1c lessons, giving students another mcentive to learn and an opportunity to apply classroom learning mother settmgs. • Job exploration· Career fairs, workplace tours and classroom visits by employers can expose students to the range and requirements of different careers. • Technical preparation: These programs comb me the last two years of h1gh school w1th community college work toward a technical degree. • Career academies: These schools w1thin schools are focused on a s1ngle career theme, such as travel and tounsm. The curriculum integrates academ1c learning and on-the-Job sk1lls training. • Career awareness: Students do research or choose course work that helps them learn more a bout future careers. • Enterprise projects: Students Identify community needs and develop projects to meet them. • Cooperative learning· Part-t1me jobs are coordinated w1th school-based learning to prov1de students w1th another enriched experience. The Boston Private Industry Council has been recogn1zed as a leadmg mtermediary bnngmg Boston's Public School System together with local employers. The main goal of the Council is to design mnovat1ve programs for students who do not plan to attend college to make a smoother trans1t1on from school to career. See http://www.bostonplc.org for more details. The Manufacturing Industries Careers Alliance (MICA) was created by the Nat1onal Alliance of Manufacturers to promote manufactunng career opportunities for young people; address declming student partiCipation in training and preparation for manufacturing careers; and improve the quality of the available training and work-readiness of students. See http://www nam org for more mformation. Minneapolis Public Schools-Work Opportunity Center The WOC uses a seven-step process for students to create an individualized Life Work Portfolio. The process prepares all students for the transition from school to a career and adult life. All enrolled students are encouraged to complete the graduation portfolio process in order to prepare for adult life. Outcomes of th1s process have been tracked smce the 1991/92 school year. About 90% of the student populat1on completes a portfolio. Students are able to use the process to prepare themselves for both work and post-secondary education. The process IS used to prepare for internships during school and summer as well as employment w1th busmesses m the community. The process 1s promoted as on gomg and can be repeated periodically through adult work life. Techmcal Appendix Industry Outlook and Recommended Econom1c Development Strateg1es ~ Econom1c Development Strategic Plan Page 65 The seven performance assessments making up the portfolio tnclude: 1. mterests and learning style 2. resume preparation 3. application to work and post-secondary instttutton 4. placement exams required 5. fmancial atd FAFSA 6. essay of past, present, or future autobiography (English mstructor, volunteer graduate students, and Media Specialist assist wtth this step) 7 letters of recommendation. For more mformatton see http://tct.umn.edu/all/awardstte 17 .html 2) Fund institutions based on demonstrated performance (outcome based system). Educattonal institutions can be rewarded for developing educatton and training programs that support industry clusters. In Colorado, public post secondary instttuttons receive tncenttve funds for better than predicted performance on 10 indicators mcludmg enrollment and graduatton rates of low income students and achievement scores on professional and graduate exams. 3) Seek greater equity in the formula between noncredit career and technical classes and more traditional academic degree programs. Thts would provide a stable source of revenues to support lifelong learning. Californta, North Carolma and Texas provtde per-pupil fundmg for noncredit career and techntcal classes while Oregon provides the same level of funding for professional and techntcal educatton programs. This sends a clear message about the Importance of workforce tratntng 4) Promote greater participation and choice when modifying financial aid policies Barriers to financial aid for non-degree or part-time study should be removed. Polictes should be created to promote the broadening of eligibtlity for federal and state grants and loans to include students who attend school less than half-ttme, are m non-degree programs, or who are seeking a certtftcate. Also, tuition waivers and supplements can be offered to low-mcome students to make up for gaps tn Pell fundtng, because these gaps particularly affect part-ttme students and those m non-credtt programs. Often these students are enrolled m vocattonal and professtonal programs that focus on prepanng students for careers. Too often, financtal atd IS restncted those gomg on to a traditional 4-year umverstty program. Also, progressive education systems promote greater use of federal and state tax mcenttves supportmg post secondary education and trainmg. For example, colleges can make sure that students are aware of the HOPE and Ltfettme Learntng tax credits, which pay for tuition and fee expenses. Techmcal Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Economtc Development Strategtc Plan Page 66 Foreign Direct Investment (FDIJ FDI refers to International mvestment in wh1ch the mvestor obtams a lastmg interest in an enterprise m another country. Most concretely, 1t may take the form of buying or constructmg a factory in a fore1gn country or adding improvements to such a fac11ity, in the form of property, plants or eqUipment. FDI is d1stmct from financ1al investments, 1.e., just buying stock m a publicly traded corporation w1thout accumulating a significant percentage of the company's total stock value. Due to fore1gn mvestment, the US economy IS no longer a 'domestic' economy 1n the traditional sense. The total of foreign investments grew from $748 b1ll1on in 1982 to $6.6 trillion 1n 1998. The U.S. economy 1s heavily reliant on foreign capital inflows, which have led to the establishment of new industries as well as job creat1on 1n the U.S FDI 1s calculated to include all kmds of capital contributions, such as the purchases of stock 1n a company, as well as the remvestment of earnings by a wholly owned company mcorporated abroad (subsidiary), and the lending of funds to a foreign subs1d1ary or branch. The remvestment of earnmgs and transfer of assets between a parent company and 1ts subsidiary often constitutes a significant part of FDI calculations. An mvestor's earnings on FDI take the form of prof1ts such as dividends, retained earnmgs, management fees and royalty Foreign D1rect Investors tend to look at a number of factors relatmg to how they will be able to operate m a fore 1gn country: • the rules and regulations pertammg to the entry and operations of fore1gn Investors • standards of treatment of fore1gn affiliates, compared to 'nationals" of the host country • the functioning and efficiency of local markets • trade pol1cy and privatization policy • bus1ness facilitation measures, such as investment promotion, mcent1ves, improvements 1n amenit1es and other measures to reduce the cost of domg busmess. For example, some countnes set up special export processing zones, wh1ch may be free of customs or dut1es, or offer special tax breaks for new investors • restnct1ons, 1f any, on bringmg home ('repatnatmg") earnings or prof1ts m the form of dividends, royalties, Interest or other Impacts of foreign direct investment: The World Trade Organization produced a report that examines the mteraction of trade and FDI, 1ncludmg the impact of FDI on trade of home and host countries. The report rev1ews the perceived costs and benefits of FDI, and considers the 1mplicat1ons of competition for FDI among host countnes. The report also contains a rev1ew of the regulations governing foreign mvestment, together with a brief discussion of ex1stmg mvestment-related WTO rules and disciplines See www wto.org and search the s1te for fore1gn d1rect mvestment Techmcal Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 67 An example of a state Foreign Direct Investment plan: International Trade Division (ITO} of Ohio's Department of Development Oh1o's international off1ces promote Oh1o to foreign companies as an excellent locat1on for building a busmess. The mternational offices work closely with mternat1onal busmess l1a1sons for Asia, Europe and Canada, housed w1thin the Ohio Department of Development's Econom1c Development Division, to 1dent1fy prospects for fore1gn direct Investment in Oh1o and gu1de them to successful Investment within the state. Fore1gn direct mvestment activities compnse a significant part of the workload m the Oh1o Asian Office in Tokyo, the Ohio European Office 1n Brussels, and the Ohio Canadian Office in Toronto. These act1v1ties also comprise a portion of the workload in the Ohio Off1ce of East and Southeast As1a m Hong Kong, the Oh1o Mexico Off1ce in Mex1co C1ty, and the Oh1o Eastern Mediterranean Off1ce lTD orgamzes Ohio bus1ness miss1ons, often led by the Governor, to international markets. These busmess missions focus on promoting foreign d1rect investment in Oh1o and on promoting International trade opportumt1es for Oh1o companies. Investment missiOn delegations are compnsed of economic development executives from across Ohio. Trade mission delegations are comprised of Ohio companieS seeking export sales and other Ohio orgamzations, such as universities, chambers of commerce, and port authont1es, seeking long-term, mutually benef1c1al mternational relationships. http //www.exportoh1o state.oh.us/1 nvestment.htm Ohio's five ways to foster foreign direct investment: 1) Trade shows. lTD identifies the best trade shows and encourages Oh1o compames to participate in one of two ways -as exh1b1tors at the shows or via catalog w1th lTD representation. In add1t1on, trade shows often serve as tools to promote fore1gn d1rect investment m Ohio. 2) Education and recognition. International Trade Division staff members orgamze events and produce publications designed to raise the level of awareness of international opportun 1t1es m the Ohio busmess community. Among the highlights of these activities in 2001 were the followmg: lTD significantly enhanced 1ts Web site, www.exportohio.state.oh.us. Improvements made the Web site more user-fnendly and increased the mternat1onal trade content available to Ohio companies 3) Seminars and workshops In an effort to educate Ohio companies about international trade opportunities and lTD's services, ITO staff participated in many seminars and workshops throughout the state by presentmg information regardmg exportmg and international trade 4) Quarterly newsletter lTD contmued to publish Export Ohio, a quarterly newsletter with exportmg adv1ce and informat1on, d1stnbuted to more than 5,000 Ohio companies and orgamzat1ons. Techmcal Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 68 5) Build Partnerships lTD recogmzes and values the contnbutions of many organizations comm1tted to enhanc1ng mternat1onal trade opportunities for Ohio companies. lTD has developed strong partnerships with these orgamzat1ons, includmg the U.S. Department of Commerce, the Greater Cleveland Growth Assoc1at1on and World Trade Center Cleveland, the Reg1onal Growth Partnership (Toledo), the Greater Cmcinnat1 Chamber of Commerce, the Miami Valley International Trade Assoc1at1on, the Greater Akron Chamber of Commerce, the Greater Columbus Chamber of Commerce, and many other local and regional chambers of commerce and economic development organizations. As th1s last pomt about partnerships makes clear, effective use of a state program often requires local level partnerships. In the Puget Sound, the Trade Development Alliance of Greater Seattle IS such a partner, working w1th the state Department of Community, Trade, and Economic Development and on its own Initiative, to organize trade miss1ons, host VISiting foreign delegations, and otherwise promote two-way trade with selected countnes and busmesses 1n the Puget Sound. Kent area businesses w1shing to develop international busmess can work directly with CTED's International Trade Div1sion or the Trade Development Alliance. One way the Kent area could move local firms to a new level of performance 1n the international arena would be to establish a trade adv1sory office linked to the Trade Development Alliance or CTED. Techmcal AppendiX Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 69 Improving Incumbent Workers Productivity Impacts of secondary career and technical education. A study commissioned by the Washington State Workforce Training and Education Coordmating Board reached the followmg key conclusions: • Career and technical education has s1zeable positive impacts on employment and earn1ngs • Career and technical education substantially enhances the lifetime earnmgs of program completers. Gains in earnings and employee benefits far outweigh the costs of career and technical education to the public. Another study completed by the Workforce Alliance reveals the documented effectiveness of sk1lls train1ng A growmg number of stud1es have shown that: • Skills training can increase earnings. Recent studies of tra1ning programs serving low- income adults have documented annual earnings impacts of anywhere from 10 percent to 156percent beyond what s1milar job seekers had been able to gain Without traimng or w1th job search serv1ces only. Many of these increases were the result of access to jobs with h1gher hourly wages, as well as increases in the number of work hours available to them. • Skills training can improve access to employer-paid benefits. Several studies have shown that low-mcome part1c1pants m skills tra1nmg stand a better chance of gettmg jobs with benefits (e g , employer-provided healthcare, retirement plans and paid leave) than do non-participants, or than they themselves were able to access prior to trainmg. • Skills training can increase steady work. According to several studies, trammg graduates worked more regularly than they had pnor to receiving training, or more consistently than individuals who did not receive training. • http· //www. workforcea II iance. org/Sk Jlls%20Tra in i ng%20 Works%20Report. pdf Examples of increasing productivity in incumbent workers: 1) The Eastern Washington Agriculture and Food Processing Partnership helped to transform a traditional labor market 1nto an mdustry prepared for the future. This mnovative public/private partnership was created to meet the needs of employers to upgrade the skills of incumbent workers m two of Washington's largest and most labor-intens1ve industnes --food processmg and farm mg. Six state agencies, organized labor, four Workforce Development Councils, five Eastern Washington community colleges, the U.S. Department of Labor, Community Based Organizations, traming prov1ders, and many employers worked together to fmd solutions to closing a WJdemng skill gap problem. Federal and state agencies contnbuted nearly $1.3 m1ll1on and extensive expert1se to the project. PartJCipatmg employers responded pos1t1vely by contnbuting $1.5 1n 1ndustry match. The Northwest Food Processors Association and the Washington Growers League guided the partnership by identifying jobs common to both Industries and by settmg skill standards Technical Appendix Industry Outlook and Recommended Economic Development Strateg1es ~ Economic Development Strategic Plan Page 70 associated w1th these jobs. An existing labor-management comm1ttee provided leadership and project overs1ght The Tri-County Workforce Council provided administrative gu1dance. Results of th1s customer driven m1t1ative: • Created 26 customized trammg courses offering cert1f1cation and opportun1t1es for spec1f1c career advancement. • Delivered trammg events for more than 32 companies at 70 work s1tes. • Exceeded Governor Gary Locke's goal of trammg 400 employees by more than 75 percent, ultimately providing 785 trainmg opportunities for current workers. • Achieved tramee wage mcreases due to mcreased product1v1ty. Workers earned an additional $300 to $600 over a 4-month period follow 1ng training • http://www.co.yaklma.wa.us/e&Vagfood.htm 2) Incumbent workers training-manufacturing Washington State Tri-County Workforce Council. (Yakima, Kittitas, and Kl1ck1tat Counties) The Workforce Development Board endorsed the use of local mon1es to upgrade sk1lls w1th the current workforce, and subsequently, appealed to the Washmgton State Employment Secunty Department to expenment by using "WIA" Incentive Monies" for mcumbent worker trainmg m mdustries central to Tri-county economic development. WIA Incentive Monies were used for training mcumbent workers in the Manufacturing Industry. The Tri-County WDC has embarked on an mcumbent worker traimng program with manufactunng compames 1n the three-county region. Th1s project came about as a direct result of the two earl1er projects which identified skill upgrade needs in the Woods, Metals, and Plast1cs mdustnes. Th1s recent project has mcluded 20 compames from the 3 count1es, tra1nmg approximately 50 mcumbent workers as well as one busmess outreach lia1son from each WorkSource Center and aff1l1ate s1te throughout the Tn-County region. www .co.yak1 ma. wa. us/e&Vmanufactun ng htm 3) Florida incumbent worker training program Th1s program IS funded by the Federal Workforce Investment Act and is administered by Workforce Florida, Inc. Th1s program us a grant to prov1de training to currently employed workers to keep a company's employees competitive and to retam ex1stmg busmesses. • Can be provided through Flonda's community colleges, school d1stncts, area vocational- technical centers, state umvers1t1es or licensed and certified private institutions (when approved) • Can be conducted at the busmess's own fac11ity, at the training provider's facility or at a combmat1on of s1tes • Instructors can be e1ther full or part-time educators or professional trainers from the business Technical Appendix Industry Outlook and Recommended Econom1c Development Strateg1es ~ Econom1c Development Strateg1c Plan Page 71 Investing in a Higher Functioning Workforce System Challenges of the 21'' Century Workforce 1) Workforce systems do not reflect market needs 2) Public education is falling short in preparing individuals for the New Economy 3) Workers need to navigate a changing career path 4).Many low-wage workers need work supports 5) Shortage of workers and diversity in the workforce Impacts of workforce development The Anme E. Casey Foundation published an extensive analys1s 1n Econom1c Development Quarterly: Learning from the Field: Economic Growth and Workforce Development in the 1990's that addresses some of the challenges above. The abstract IS as follows: Although attention to labor market preparat1on, access, and retention for disadvantaged workers has experienced a dramatic turnaround 1n the past 6 years for economic and policy reasons, senous challenges remain. Today's workforce development 1mpl1es more than employment training 1n the narrow sense: It means substantial employer engagement, deep community connections, career advancement, integrative human serv1ce supports, contextual and mdustry-driven education and training, reformed community colleges, and connective tissue of networks. Th1s art1cle discusses s1x areas of workforce development learnmg: (a) retention and advancement, (b) employer and JObseeker customers, (c) regions and neighborhoods, (d) race and labor markets, (e) best practices and replication, and (f) labor market reform. In add1t1on to inevitable economic downturns, optim1sm should be tempered by three b1g challenges: the underlying patterns of wage and income inequality, the persistence of race and gender inequalities, and our historic failure to create effective lmks between schools and labor markets. For more Information: Economtc Development Quarterly, vol.14, no. 4 (November 2000) Ways to address the five challenges listed above The following section discusses f1ve pnmary ways to meet the challenges of the 21" century workforce. 1) Connect workforce development to economic needs • Organize workforce development programs around industry clusters The Occupational Supply and Demand Study for the Washmgton State Board for Community and Technical Colleges has identified key workforce gaps for major mdustry clusters w1th1n 7 mult1-county regions 1n Washmgton State and for the 12 reg1onal Workforce Development Areas. • Encourage local economic development officials to broker relationships between employers and education and training providers to develop qualified workers and link them to jobs. Example: Seattle Jobs ln1t1ative (SJI) IS a non-profit commun1ty based orgamzat1on that brokers relationships. SJI links low-income residents to beginning family wage jobs by Techmcal Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategic Plan Page 72 meet1ng the needs of two critical customers: Seattle City res1dents and local employers. SJI also addresses other challenges faced by low income clients through support serv1ce programs (transportation, ch1ld care, fmancial plannmg, etc ). See www.seattle1obsm1t1at1ve.com for more info. 2) Expand opportunities for continuous learning • Increase the use of community colleges for workforce training. Over the past few years, Washmgton State has been Implementing reg1onal workforce pol1c1es where local employers and commun1ty colleges are working together to Identify and des1gn trammg programs that are region spec1f1c. Train1ng could include adult base educat1on, English as a second language, vocational skills, and entrepreneurial tra1n mg Th1s strategy works the best if an area has clearly designated industnes to orgamze around. • Link adults with low skills and language barriers to continuous learning opportunities. Adult basic education (ABEl and English as a Second Language (ESU are v1tal resources m a diverse workforce such as Kent's. There have been numerous, mnovat1ve ways to address th1s need mcludmg offering classes on the job, commumty colleges and commumty based organ1zat1ons. Example: Rhode Island Workforce Literacy Collaborative (RIWLC)--a group of 15 agenc1es funded by the Human Resource Investment Council to provide workforce or works1te literacy services to adults in Rhode Island. These services are des1gned to upgrade the literacy serv1ces of those who are employed or seekmg employment in order to help Rhode Island achieve a high-performance workforce. In addition to the1r Individual projects, the agencies come together as the RIWLC to work toward the development of a seamless system for servmg adults 1n need of literacy services in the state. The RIWLC has a set of objectives to help ach1eve 1ts goals of cont1nuous Improvement for individuals and agencies providing educational services to the workforce. These goals mclude staff development, shanng best practice, the use of a common referral form among literacy organizations, and mvolving employers 1n the discussion about literacy. • Promote workplace learning opportunities. Supporting workplace learnmg IS an Important strategy for worker advancement and increasing productivity. Expenence w1th custom1zed trammg programs md1cates that investing in courses offered through employers increases employer investment 1n traming. Example: MISSion College 1n Santa Clara, CA provides full degree programs at work s1tes through courses that are customized to meet the needs of the employer and employees. The college developed assoc1ate degree programs for employees at Intel, C1sco Systems and National Semiconductor. This program required collaboration between employers, commun1ty college system and the public workforce development system. 3) Enhance workers ability to manage their careers. Efforts in this area can be led by workers, employers or the educational institutions. Techn1cal Appendix Industry Outlook and Recommended Econom1c Development Strateg1es ~ Econom1c Development Strategic Plan Page 73 • Promote the use of skills based assessment and credentials. These have proven to be effective for a few reasons. One, workmg adults who are balancmg work and family respons1b111t1es are likely to mcrease the1r sk1lls incrementally by part1c1patmg m on-the-jOb formal and mformal trammg. Two, sk1lls based learnmg can create learnmg pathways to higher education by paving the way for educational institutions to award cred1ts for certain work expenences and accomplishments outside a formal classroom. 4) Strengthen work supports to promote employment retention and Career advancement • Encourage outreach efforts of social service agencies with employers to make employees aware of the benefits that they are eligible for. Th1s is especially Important in mdustnes that high a high number of immigrant and or low-wage workers. Prov1dmg worker supports has been shown to be a successful way to retain workers. For example, the State of Idaho has programs that go to businesses that hire h1gh numbers of imm1grant farm labor to encourage them to educate the1r employees. Example: In Lacey, Washington there IS a program called "WebMatch-An Employers Assistance Project." Bas1cally, 1t IS a tool to match workers w1th employers. Collaboration is built and mamtamed through the Local Area Planning Execut1ve Council which includes all partner agenc1es (DSHS, ES, WDC, Commumty Act1on, Community College, The Career Trans1t10n Center, Division of Child Support, Department of Vocational Rehabilitation, CTED, Chamber of Commerce) and the Consort1um wh1ch mcludes representatives from all community soc1al serv1ce agencies, front line staff, contractors and members of the execut1ve council. The WebMatch technology provides an interactive experience for the user. Each web page is created specifically for the mdividual user's requirements of the moment. 5) Career Ladders Boston Workforce Development Council The Coalition's Career Ladders Committee has been workmg for two years to develop and promote career ladders for entry-level workers. The purpose of the Committee is to help develop opportunities for low-income and entry-level workers to move up to better-paying, more responsible and skilled positions. • Work w1th employers and busmess groups to assist them m developmg pathways, structures, trammg and support for workers to move up. • Encourage employers to invest in the1r current workforce by puttmg career ladders m place, retaining and better ut1lizmg their current workers. • Show mdustry how their dollars may be better spent training, encouragmg, and promotmg the1r current workers than on recruiting and hiring new workers constantly m a 'revolvmg door" for entry-level workers. Over the past year, the Career Ladders Committee has focused on two different sectors of the economy: Long-Term Care and Telecommunications. In both sectors, there has been effect1ve partnering with employer groups, and development of the pathways that workers and employers need 1n place to support career ladders. Technical Appendix Industry Outlook and Recommended Economic Development Strategies ~ Economic Development Strategic Plan Page 74 The Center for Community Economic Development, at the University of Massachusetts 1n Boston, has conducted s1gn1f1cant labor market research for the Boston Workforce Development Council, wh1ch helps to target 1n1t1at1ves. The Career Ladders Comm1ttee mcludes about 50 community-based organ1zat1ons, un1ons, public agencies and employers who meet together every month to plan the Coal1t1on's career ladders work. The Washington State Early Childhood Education Career Development Ladder is a $4 m1ll1on pilot program that directly addresses key factors m the quality of ch1ld care. The Career Ladder uses wage mcrements linked to education, experience, and responsibility to reduce staff turnover and prov1de an mcentive for child care workers to Improve their education and make ch1ld care a lifelong career. Participating in the pilot project are 1500 child care workers who work m 124 centers around the state and care for 20,000 children. For more mformation on the Career Development Ladder, visit the Economic Opportun~ty Institute at www.eoionline.org Techmcal AppendiX Industry Outlook and Recommended Econom1c Development Strategies ~ Econom1c Development Strategic Plan Page 75 Technology Transfer Technology transfer is the process by which ex1stmg knowledge, fac11ities, or capabilities developed under federal research and development (R&D) funding are ut1l1zed to fulfill public and private needs S1nce 1980, major legislative changes have been implemented to more fully opt1m1ze the pnvate sector utilization of the research results and research capabilities of the federal laboratories These changes were fueled by the realization that although the Un1ted States was a world leader in sc1entific research, we were laggmg behmd our all1es in applymg the fru1ts of our research. There are over 700 Federal laboratories employmg more than 100,000 sc1ent1sts and eng1neers in every area of science and technology. Academia, Industry, and the federal government all real1ze many benefits from technology transfer activities. Cooperative Research and Development Agenc1es (CRADAs) with pnvate mdustry and academia Improve the knowledge and product1v1ty of government and private-sector employees. These cooperative efforts result 1n better products for the taxpayer and Improve the national economic competitiveness. CRADAs enable partners to reduce costs by leveraging the1r mvestments during all stages of Research, Development, Test and Evaluation (RDT&E). For more information, see http://www.afrl.af. mi 1/techtran/handbkltransferdocs/lntroduction. pdf A menu of technology transfer best practices For more information about the topics below, see, http://www.mlllkern.com/rkcarr/flpart2.html Transferring technology locally Laboratories and state and local econom1c development authorities in many areas have an interest 1n usmg federal labs to spur local technological and economic development Several technology transfer techn1ques appear to have encouraged such Investment. Location Incentives in Licenses: Some federal labs offer more favorable license terms for f1rms that agree to locate 1n the state or locality around the federal lab. In addition to the mvestment that could occur as part of the license commercialization process, licensee firms may also move some of the1r sc1ent1sts to locations near federal labs 1n order to be close to cont1numg developments. Technical Assistance to Local Industry: An effective method for transferring technology to the local economy is through part1cipat1on 1n local or reg1onal technology ass1stance or extension networks. Often federal labs participate along with local universities as the back end of networks developed and managed by the state government or a reg1onal orgamzat1on. These networks connect local f1rms havmg technology-based problems w1th the technologies and know-how of the back end mst1tut1ons. Techn1cal Appendix Industry Outlook and Recommended EconomiC Development Strategies ~ Econom1c Development Strategic Plan Page 76 Organizing the technology transfer function A number of organizational models for technology transfer are bemg used at the federal labs and research un1vers1t1es surveyed. The most act1ve technology transfer labs tend to have technology transfer organized at least at the diVISion level w1th technology transfer policy and operat1ons combmed within the same orgamzat1on. Management Encouragement and Support: Another technology transfer cliche states that a successful technology transfer effort requ1res support from the highest levels of lab management This 1s certainly true, but several technology transfer professionals have pomted out that support from gJJ. levels of management 1s equally Important. Technology Transfer Networks: Several labs have created formal or informal technology transfer networks. In general, these networks l1nk the central technology transfer office and the group level and are made up of personnel in groups who are interested m and knowledgeable of technology transfer. Changing the Culture: The culture of many federal laboratories does not encourage the identification and commerc1al1zat1on of inventions. In fact, many scientists and other lab employees many not recogn1ze potential mtellectual property. Tra1n1ng and familianzation of technology transfer officials, members of technology transfer networks and scient1sts themselves to recognize Intellectual property w1ll contribute to changmg part of the laboratory culture which works agamst technology transfer. An Inventor-Friendly Disclosure and Patenting Process: The disclosure and patenting process is complex and t1me consuming. If too much of the burden IS lev1ed on the inventor, 1t Will become a disincentive to disclose. Therefore, the many labs strive to make the process as simple and effortless as possible to the mventor. Incentives for Inventors: Many institutions have found 1t worthwhile to provide incent1ves to mventors, not for domg good and useful science, but for part1c1pat1ng in the patent process. Federal legislation and un1vers1ty practice grant significant percentages of any royalties to mventors. However, these are distant and often minimal rewards. Thus, many mst1tut1ons also offer 1ncent1ves to Inventors for patents applied for or received (or both). Marketing laboratory technologies The ch01ce and 1mplementat1on of a marketmg strategy IS bounded by the mst1tut1on's mterpretat1on of 1ts obl1gat1ons under fairness of opportumty stnctures and by the human and fmanc1al resources available to the technology transfer off1ce, among other things. The following are among the more effective strategies: First Contact Marketing Strategies: Institutions that use thiS strategy, mclud1ng many universities, attempt to locate a licensee from mformat1on provided by the inventor or from the technology transfer off1ce's own knowledge of f1rms. lnst1tut1ons employing this strategy w1ll often conclude a l1cense, even an exclus1ve l1cense, w1th the first firm with which demonstrates suff1c1ent mterest Technical Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 77 and capability. Proponents of this approach argue that it conserves scarce technology transfer resources A simplistic explanation of their argument IS as follows: Contacting and negotiating w1th only one company requ1res as little as one umt of technology transfer resources. Unless multiple licensees are mtentionally sought (1.e., a non-exclusive license), contactmg many f1rms will ut11ize many un1ts of technology transfer resources to conclude the same l1cense, transfer the same technology and eventually produce the same royalty mcome. MIT, wh1ch uses the first contact marketmg strategy, produces a licensing volume equal to the entire DOE laboratory system w1th only seven technology transfer professionals and an equal number of sup port personnel. Focused Publicity Marketing Strategies: Some inst1tut1ons use a focused publicity marketing strategy wh1ch usually cons1sts of a press release announcmg the ava1lab111ty of the technology w1th distribution to trade publications. In addition, some mst1tutions use carefully targeted ma11ings. Labs and un1vers1t1es taking the focused publicity approach believe that firms wh1ch are seriously interested in acquinng external technologies will be momtonng the trade press and feel this level of publicity is adequate to meet fa1rness of opportunity requirements. lnst1tut1ons wh1ch use focused publicity usually take Simultaneous proact1ve measures to locate licensees as do those employmg the first contact strategy. Bulletin Boards Bulletin boards are a subset of the focused publicity marketing strategy. There are a number of computer bulletin boards wh1ch I 1st new and available technologies, usually by type. Advert1smg technologies on one or more bulletin boards is a relatively s1mple matter, requiring min1mal resources on the part of technology transfer off1ces. lnst1tut1ons can advertise more w1dely (in the Commerce Bus1ness Daily, for example) that all the1r technologies are to be found on a particular bulletin board, and assume that mterested firms will momtor the boards. The NIH technology transfer program uses a bulletin board as 1ts pnncipal method of advertising technology transfer policies, methodologies as well as l1censing and cooperative research and development agreement (CRADA) opportunities. Preparing the technologies for commercialization Most federal lab inventions are far from a commercial stage, even though they may appear to have great potential. Much additional development is usually requ1red before they become part of a commercial product or process. Furthermore, 1t IS much more d1ff1cult to mterest f1rms 1n Immature technologies unless a proof of concept or prototype ex1sts. Several techniques are used to make inventions more attractive to firms. Using technology transfer intermediaries Several interesting models involving intermedianes have developed to facilitate the transfer of technologies from federal labs and un1vers1t1es These models employ intermediary organizations wh1ch are private sector ent1t1es, operationally Independent of the laboratory or university and Technical AppendiX Industry Outlook and Recommended Economic Development Strategies ~ Econom1c Development Strategic Plan Page 78 thus are free from some of the restraints Imposed on technology transfer act1v1ties in public mst1tut 1ons. ARCH: The Argonne Chicago Development Corporation IS a not-for-profit [501(c)(3)] corporation which is affiliated with the University of Ch1cago, the DOE contractor for Argonne National Laboratory. ARCH has a contractual agreement w1th the Umvers1ty under wh1ch 1t can take title to mtellectual propert1es developed m Un1vers1ty and ANL research. ARCH focuses 1ts efforts on foundmg start-up companies, but 1t also employs other commercialization methods, mcluding joint ventures with private industry, technology l1censmg, and combmat1ons of all three. ARCH 1s an expenment des1gned to bridge the gap between the d1fferent cultures of the Un1vers1ty/Laboratory and the business sector. It has its orgamzat1onal home m the Chicago School of Busmess, where 1ts CEO is an Associate Dean. It employs the serv1ces of Business School graduate students to work on ARCH commercialization projects and has hired a number of B usmess School Graduates. Industry Associations: The Department of Agnculture's Agricultural Extension Serv1ce and the Technology Transfer Information Center at the National Agricultural Library are undertaking a project m which they are workmg with an industry association to foster technology transfer based on genuine market pull. The project began w1th the Jdent1f1cation of an mdustry association (Jn th1s case the Hardwood Research Council) which represents a large number of relatively small f1rms. The industry assoc1at1on served as a forum m wh1ch to 1dent1fy the technology-based problems faced by the industry as a whole. Once the problems were Identified, the serv1ces of a technology agent were employed to produce reports which contain (a) a thorough technical discussion of the problem and the defiCiencies of the available technologies; (b) the industry parameters within wh1ch the technologies must work; (c) an analysis and evaluation of the potential technologies compared to the industry-established parameters; (d) a recommendation on which technologies should be investigated further for possible commercialization; and (e) a busmess opportumty statement that discusses the size of the market for the commercialized technology, replacement cycles, cost constraints, and other pertment factors. Venture Capital Firms: Some institutions use venture capital (v.c.) firms as 1ntermed1anes to develop start-up f1rms. MIT is perhaps the best example of th1s approach. In the last f1ve years, MIT has spawned 40 start-up companies, in sp1te of a policy of limitmg the Institute's direct role in the formation of start ups. Its approach is to locate a v.c. f1rm interested m an MIT technology, and then to pass further start-up responsibilities to the v.c. firm (i.e., doing a market analysis of the technology, writing a business plan, locating management and organizmg the company). The mvention IS subsequently licensed to the start up created by the v.c. firm. Involving a v.c. firm at the earliest stages of a start-up venture limits the Tech meal Appendix Industry Outlook and Recommended Economic Development Strategies ~ Econom1c Development Strategic Plan Page 79 involvement of the MIT Technology Licensmg Office, and increases the mfluence of the market on the process of forming the new venture. MIT does not have an m house venture capital fund and does not invest m its own start ups, preferring to let the market make all the dec1sions about the commercial v1ab1l1ty of such endeavors. However, it does take equities, often in l1eu of up front fees and 1n1t1al royalties. These equ1t1es are managed by the MIT Treasurers Office wh1ch handles them as 1t would any part of the Institute's portfolio, making further decis1ons (e.g., to sell) JUst as they would for any equity m the1r portfolio. Battelle Memorial Institute: The Battelle Memonal Institute (BMI) operates Pacific Northwest National Laboratones and has a un1que relationship w1th the lab Battelle 1s a not-for-profit corporation which has s1gn1ficant R&D operations beyond those undertaken by PNNL at its Richland, Washington s1te In fact, PNNL IS a float1ng subset of the BMI Richland operation, wh1ch can grow or shrink almost on a weekly bas1s as BMI resources are sh1fted m and out of DOE contract work. The Institute often uses 1ts own funds to enhance technology transfer act1v1t1es based on federally-funded inventions. BMI also uses 1ts own funds for scale-up activities based on government funded technologies. BMI employs an Innovative concept m 1ts technology transfer operat1on. The BMI Off1ce of Technology Transfer has portfolio officers, who unlike the1r counterparts in other technology transfer offices function as 1dea managers. They take responsibility for ideas wh1ch come to the attention of the Off1ce of Technology Transfer as mvention disclosures or through the I nst1tute's technology transfer network. These idea managers Will take a new idea all the way through to commercialization. They have the responsibility for evaluatmg the commercialization potential of the technology, recommendmg additional R&D funding from the Institute (approved by a panel) and carry1ng the 1dea through to licensing or, in a few cases, a start-up company. Technology Brokers: There are a number of commercial f1rms m the United States and elsewhere (Research Corporation Technologies, British Technology Group) which market technologres developed in labs and universities. It Most technology transfer professionals feel that using these firms can be advantageous to smaller, less well known R&D mst1tut1ons, particularly those which do not have the internal resources for patentmg, marketmg and l1censmg 1nvent1ons. Generally, such firms w1ll relieve the institution of the costs of patentmg, marketmg and licensing m exchange for a percentage of the eventually royalty stream. Such firms generally skim the cream of institution's invention disclosures, effectively leav1ng the rest unpatented and unmarketed. The California Technology Venture Corporation Proposal: The Un1vers1ty of California's Off1ce of Technology Transfer is preparing a proposal to the University Regents to establish a technology commercialization venture to be called the Cal1forn1a Technology Ventures Corporation (CTVC). The CTVC 1s visualized as a prof1t makmg frrm created to bridge the gap between the University and the pnvate sector. The Techmcal Appendix Industry Outlook and Recommended Econom1c Development Strategies ~ Economic Development Strategic Plan Page 80 current proposal env1sions the Umversity of California with majority ownership of the CTVC and private h1gh technology f1rms (a number of such firms have already expressed an interest) w1th a m1nority interest. The University would not 1nvest 1ts own funds 1n the corporation, the pnvate mmonty owners prov1d1ng all the liqu1d investment. CTVC's purpose would be to fund further development of UC mventions (I.e., prov1de maturation funds) in order to produce a prototype or otherwise enhance the commercial potential of the technology. The commerc1al1zat10n development funded by CTVC would take place in the University laboratory which made the invent1on QI would be done by a commercial engineenng or technology firm, as appropriate. Other examples of technology transfer programs: University of Arkansas As a nationally-competitive research institution, the Umvers1ty offers mdustry partners considerable sc1ence and technology resources 1n specific fields of 1nqu1ry. The Office of Research and Sponsored Programs and Technology Transfer (RSSP) prov1des access to the Umvers1ty research community, campus lab fac111t1es, and the intellectual property portfolio. From centers of excellence 1n reta1l1ng and poultry science, advanced spatial technologies (CAST), sensmg technologies and research (CSTAR), high density electronics (H1DECl, from alternat1ve pest control to better methods of assessmg and ma1ntammg highway quality, from ant1bactenal f1lms to materials coatings to animal vaccmes to microelectromechanical systems, the U n1versity 1s a source of research and development expert1se and mtellectual property assets. One example of a technological innovation that has resulted from the technology transfer program is the method to extrapolate a substrate with metal, no matter how rough the substrate. Electroplating onto a rough substrate IS complicated by the tendency of electrodeposit1on to occur only at the peaks of the rough surface. This 1s because, on a rough surface, the electric fields are far stronger at the peaks than in the valleys, and all the charge accumulates there. Th1s IS the same phenomenon that IS at work w1th lightnmg rods. To counter th1s, the rate of oxidation is adjusted so that there IS no excess charge. Electroplatmg then occurs mside the valleys, smoothening the surface. Example of a technology transfer with a federal laboratory rather than a university Air Force Research Laboratory Low Cost Composite Processing (LCCP), centered on non-autoclave processable matenals technology, has effectively demonstrated a tremendous potential for improvmg the affordability of composite structures for aerospace and automotive applications. Research in this area, conducted at the Air Force Research Laboratory (AFRL), w1ll lead to dramatic cost savings '" the future through increased freedom to design large, complex, unitized structures and decreased tooling costs. Research conducted by the AFRL Materials and Manufactunng Directorate led to the development and technology transfer of LCCP methods that use lightweight aerospace Technical Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategic Plan Page 81 compos1te materials based on resms that can be cured at temperatures much lower (60°C) than those used for conventional compos1te matenals (177°C). The result IS a major reduction in the cost of applymg orgamc matrix composites to aerospace structures, through the ellmmation of parts processmg requ1rements m autoclaves. Autoclave processmg typically utilizes h1gh temperatures and pressures, and requires expensive and long lead-time autoclave-hardened tooling. Research w1th Boeing-St-Louis enabled a 40 percent reduction in fabrication cost for a composite a1rcraft wmg, usmg non-autoclave processing versus conventional processing. For more 1nformat1on, see" www federallabs.org Techmcal Append1x Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 82 Technical and/or Business Education Community colleges are Important technical educat1on resources m many communities. By offering degree and certificate programs, and short-term customized training m f1elds desired by local compan1es, such colleges become an important element m the local workforce development system The key element of best pract1ce is understandmg the needs of local compames with respect to entry level and incumbent workers. That understanding has both quantitative dimens1ons (how many openings m particular occupational fields) and sk1ll set Implications (what do these students need to learn to be compet1t1ve applicants for the JObs that become available). Each state operates an occupational forecasting system in its employment agency that is tasked with answering such questions. Colleges typically have adv1sory committees for all vocational and professional programs that also work on these 1ssues. Successful technical education programs often go beyond these standard mechanisms, using student and faculty mternsh1ps in local compames to gain a deeper understanding of changmg technologies and work pract1ces that affect sk1ll requirements, and developing relationships between placement off1ces at the college (often at an mformal departmental level rather than a central college office) and human resource departments or executives of local companies. In add1t1on, marketing staff who work closely with curriculum developers are needed at business-sens1t1ve colleges to assess needs among local companies for customized tram1ng programs. While considerable expertise resides in this state's State Board for Community and Technical Colleges, especially m the Workforce Division, and at selected colleges, the 35 1 nst1tutions are managed mdependently and show varied levels of commitment to techmcal and professional education, and varied levels of skill 1n 1mplementmg such programs. One source of expertise on these 1ssues IS Reg1onal Technology Strategies, Inc., in North Carolina. The f1rm's pnnc1pal IS Dr. Stuart Rosenfeld, who has forged a working consortium among technology-oriented community colleges m the US and Europe. For additional 1nformat1on, see: http·//www.rtsmc.org/, especially the1r publications page and the report ent1tled A Governor's Guide to Creating a 21st Century Workforce. Example of a best practice college program: Cuyahoga Community College: Manufacturing and applied technology division The Manufactunng Center provides you with affordable, high-quality trammg that results m portable sk1ll credentials. The Center offers cred1t, non-credit, certificate, and custom1zed programs 1n manufacturing foundation skills, manufacturing technologies, applied industrial mamtenance, pre-apprenticeship and apprent1cesh1p training. The Manufactunng Center features over 12,000 square feet of completely renovated shop floor space that supports the latest equipment that reg1onal manufacturers either currently use or Will use in the future. Tra1mng programs also emphasize "soft skills," such as attendance, communications and teamwork. All of the Manufacturing Center's courses are des1gned to meet the growmg demands of reg1onal MANUFACTURERS. Most Importantly, they are des1gned to meet your needs for qual1ty, affordability and career advancement. Technical Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 83 Programs Include: • Aoplied lndustnal Maintenance Technology • Computer Aided Des1gn (CADl • Computer Numerical Control Machming (CNC> • Manufactunng Technology-Apprenticeship Tra1n1ng (AITl • Manufacturing-Technical Readiness • Prec1s1on Machining Technology (PMJ)-Fast Track Certificate Programs • Weld1ng Technology Cert1f1cate Techmcal Appendix Industry Outlook and Recommended Econom1c Development Strateg1es ~ Econom1c Development Strateg1c Plan Page 84 Manufacturing Extension Partnership Manufacturmg Extens1on Partnership. MEP 1s a nationwide network of not-for-profit centers m over 400 locations nationw1de, whose sole purpose IS to provide small and med1um s1zed manufacturers w1th the help they need to succeed. The centers, servmg all 50 States and Puerto R1co, are linked together through the Department of Commerce's Nat1onal Institute of Standards and Technology. Centers are funded by federal, state, local and private resources to serve manufacturers. That makes it possible for even the smallest f1rms to tap into the expert1se of knowledgeable manufactun ng and business spec1al1sts all over the Umted States. These specialists are people who have had expenence on manufacturing floors and m plant operations. Each center works directly with area manufacturers to provide expert1se and serv1ces tailored to their most cnt1cal needs, wh1ch range from process Improvements and worker trammg to busmess pract1ces and applications of mformat1on technology. Solut1ons are offered through a combination of direct assistance from center staff and outside consultants. Centers often help small firms overcome barriers in locating and obtammg pnvate-sector resources. Smce the beginning of MEP, we've assisted over 149,000 f1rms and growing Impact and Results By measunng short-and long-term impacts, NIST MEP can assess economic returns on the federal mvestment m manufacturmg extension serv1ces. Many stud1es are fmdmg that small manufacturers who work w1th their local NIST MEP center show dramatic Improvements. For example, m a survey of NIST MEP clients served from October 2000 through September 2001, 4,800 compames around the country reported that, as a result of NIST MEP services, they· • created or retained 25,000 JObs • increased or retamed $2.2 billion in sales; • realized $442 million m cost savings; and • invested $681 million in modern1zat1on, including plant and eqUipment, information systems, and workforce and training. The Off1ce of Applied Econom1cs, National Institute of Standards and Technology published an art1cle m the Economtc Development Quarterly (February, 2001) that indicates that two Illinois manufacturing extensiOn centers affiliated with the nat1onal manufactunng extens1on partnership have 1mproved the performance of small Illinois f1rms and the lllmo1s state economy. During a 2- year penod, the centers directly helped client f1rms create $22.5 m1llion 1n sales and create or retam 483 jobs. These benef1ts, through their direct and indirect effects on the state economy, generated an est1mated $119 million in new state output and 450 new state Jobs dunng a 4-year period. State and local tax revenues increased by $9.5 mill1on dunng the same penod, companng favorably With the $6 million 2-year funding for the two centers. These cl1ent-f1rm impacts occurred in mdustries Important to state economic growth, h1gh-wage employment, and compet1t1veness relative to the rest of the nat1on. Example of a manufacturing extension program: Cleveland Advanced Manufactunng Program (CAMP Inc). 1s a non-profit, professional organization that delivers expert, hands-on, engmeenng, busmess and trammg serv1ces to Techmcal Appendix Industry Outlook and Recommended Economic Development Strategies ~ Econom1c Development Strategic Plan Page 85 manufacturers and other technology-based partners. The m1ss1on 1s to help manufactunng and emerging technology-based companies excel and grow through understandmg, adopting and implementing innovative methods and technologies. S1nce 1984, CAMP has ass1sted more than 1,500 manufacturers w1th hands-on manufacturing Improvement projects, resultmg in more than $410 million of economic impact on Northeast Ohio compan1es. Engmeers, trainers and mdustry experts work w1th regional manufacturers developing and implementmg practical solutions that promote contmuous improvement throughout the organization. Topics CAMP has worked on w1th local f1rms include: • Manufacturing Process ImProvement • Quality Systems • Business Systems & Strategies • Innovation & Commercialization • Product & Process Development • Workforce & Organizational Development • Manufacturing Process ImProvement Skilled engineers and consultants enlist a wide range of tools 1ncludmg: • Analysis & Strategy Development • Lean Training & Fac1l1tation • Lean Implementation Assistance • Occupational Health & Safety Quality Systems Experts can help f1rms Implement an approved Quality system using: • ISO/QS • Productivity Improvement • S1x S1gma Process Improvement Business Systems & Strategies From plannmg through implementation, Busmess Systems and Strategies group supports f1rms by employing· • Information Systems Plannmg, Selection, Des1gn and Implementation • Bus1ness Process Improvement I Lean for the Off1ce • Busmess Analys1s & Strategy Plannmg • Web-based Application Design, Implementation and Integration Technical Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Economic Development Strategic Plan Page 86 • Security Vulnerability Assessment, Testmg, Recommendation Implementation, Mamtenance • Strateg1c and Tact1cal Marketing • Asset Management Evaluation and Planning Product & Process Development Investments in new product des1gn and advanced manufactunng technologies pave the way for contmuous improvement and a stronger competitive edge for a company. CAMP's expenenced and skilled engineenng staff offer: • lnlme Test and Inspection Systems • Product Des1gn & Development • Instrumentation Design & Development • Custom Automation Des1gn & Development Innovation & Commercialization Building Businesses through Innovation, Learning & Doing, otherwise known as CAMP's "BUILD" mitiative, provides an entrepreneur or emergmg company with the cnt1cal serv1ces, mfrastructure and networkmg needed to launch a successful technology-based business. Services include: • Technology Assessment • Market Research & Strategy Development • Busmess & Fmanc1al Planning Assistance • Fundmg Source ldent1f1cat1on • Management Team Mentonng • Intellectual Property Services Workforce & Organizational DeveloPment Empower employees with the knowledge, motivation and skills they need to improve product1v1ty m your organization. CAMP provides customized programs based on the compames specific needs m • Management & Supervisory Development • Organ1zat1onal Development Technical Skills Tram1ng & Development Web-based Trammg Techmcal Appendix Industry Outlook and Recommended Econom1c Development Strategies ~ Economic Development Strateg1c Plan Page 87 Marketing Plans for Key Sectors Governor Booth Gardner created "Team Washington" to mvolve any busmess person v1s1ting clients 1n other states or nations 1n Washmgton's external marketing program. The idea was that an additional call or two could be squeezed into many busmess travelers' schedules to market the state as a location for busmess. Persons agreemg to join the "Team" were enrolled in short training sessions and designated as "ambassadors" for the state. In add1t1on, the Department of Trade and Economic Development was created and several key mdustry programs were created (software, b1otech, and forest products). Staff at DTED assigned to lead these programs worked with private assoc1at1ons and Industry members organized 1n steenng committees to develop work programs designed to use the capabilities of DTED to solve problems faced by each mdustry, such as: • developing marketing strategies, • access1ng cap1tal, • negot1at1ng the1r way through complicated regulatory processes, • ident1fy1ng opportun1t1es for other inter-firm collaborative strategies such as formmg flexible networks, and • assisting Industries in forming industry associations to move these activities into the pnvate sector. One program used extensively by these key mdustry representatives was the International DIVISion of DTED, which ass1sted firms 1n entenng fore1gn markets w1th adv1ce on regulatory and export procedures, and provided contacts in each country through export off1ces located 1n Japan, Russ1a, and Europe Several mdustry assoc1at1ons were formed as a consequence of these efforts mcludmg: • WSA (formerly Washington Software Alliance, mit1al staffmg provided by DTED) • Washington Biotechnology and Biomedical Association (in1t1al staffmg prov1ded by DTED) • Washington Aerospace Alliance (contracts subsidized association costs for several years using a defense diversification grant from the federal government) • Evergreen Wood Products Association (contracts ass1sted th1s association in develop1ng fore1gn market strategies including a "Washmgton Village" development 1n the Kansa1 reg1on 1n Japan to demonstrate western 2x4 construction technology 1n a real housing development). As state budgets tightened under Governors Lowry and Locke, all of these sectoral programs were elimmated. The International Trade Division st1ll ex1sts and limited support 1s provided for other external marketing programs by DTEDs successor, the Department of Commumty, Trade and Economic Development. Oregon offers another example, called the Key lndustnes program. This program also started 1n the mid-1980s. The state's Off1ce of Economic Development designated 14 key industnes based on an analys1s of the state's economic base. Programs for each key mdustry were developed in partnership w1th representatives of the mdustry, including a number of marketmg efforts that were subsidized w1th state funds. Th1s program ex1sted for only 2-4 years, after Techmcal Appendix Industry Outlook and Recommended Economic Development Strategies ~ Economic Development Strateg1c Plan Page 88 which a dedicated fundmg source, the Oregon State Lottery, was partially re-allocated to other state programs. In both of these examples, there was no natural role for municipalities or local economic development programs. States formed partnerships with industry representatives, leaving local government and local economic development somewhat out of the picture. However, there IS no conceptual reason why a local jurisdiction could not mount a s1m11ar effort. Best pract1ce lessons denved from these state programs include: • Form close partnerships with industry representatives to ensure the thrust of the program 1s beneficial to industry, and to leverage public resources with private resources • Focus on ways to trans1t1onlng the effort 1n to pnvate associations or other organ1zat1onal structures such as pnvate JOint ventures to ensure susta1nability of the effort • El1mmate cumbersome and uncertain regulatory processes by 1dent1fymg the key regulatory bottlenecks faced by the target industry Techmcal Appendix Industry Outlook and Recommended Econom1c Development Strateg1es ~ Econom1c Development Strategic Plan Page 89 Attracting International Tourists, Business and Students Durmg the mld-1980s and early 1990s, attract1on of fore1gn direct mvestment was a staple of Washington State's econom1c development pol1cy. Team Washington ambassadors who happened to be on fore1gn tnps were encouraged to call on busmess people in that country to market the state as a location for foreign d1rect mvestment. In addition, a senes of fore1gn off1ces were opened to look for export opportumt1es for Washington businesses as well as to look for potential investors in foreign countnes who m1ght want to open a plant located 1n Washington to penetrate the US market or to export goods back to the mvestor's home country. Successes of th1s program included wood products plants located on the Olympic Peninsula that shipped metric dimension lumber and pulp products back to Japan, the home country of the investors. Governor Mike Lowry continued these efforts, personalizing the approach w1th several high profile trade missions to Asian countries. In addition to these state initiatives, Edmonds Commun1ty College established a branch campus 1n Japan that prov1ded mstruct1on 1n English to students who needed to learn English as a second language, or for expatriates m Japan who wanted to contmue the1r education 1n English. Several c1t1es, most notably Seattle, established a number of sister city relationships. A major purpose of these relationships was to promote trade between the s1ster c1t1es. Cultural exchanges were a constant feature of these exchanges, but educational exchanges were not a major feature of these programs. Tie-ins between economic development programs and fore1gn students studying at Washington colleges and un1vers1t1es were never contemplated. Techmcal Appendix Industry Outlook and Recommended Econom1c Development Strateg1es ~ Economic Development Strategic Plan Page 90 Using Arts and Culture to Attract International Business The Econom1c and Technology Policy Studies reports on how states are using arts and culture to strengthen the1r global trade development. As new international trade and mvestment treaty negotiations by the federal government progress, governors will be called upon to promote thw states' businesses 1n a t1ght budget environment. Several states -lookmg for a greater edge 1n an mcreasingly compet1t1ve marketplace -are incorporating arts and cultural exchanges in their International trade and busmess development approaches. Th1s aspect of state-level diplomacy undergirds and complements more trad1t1onal trade promotion efforts that focus on generatmg Immediate exports. One state official descnbes these act1v1ties as building a network of personal t1es, or 'a human Infrastructure,' that is an md1spensable tool for expanding trade. Relat1onsh1ps of understanding, respect and trust with other nat1ons will not alone guarantee expanded trade development, but they can form an effective foundation upon which trade partnerships rest. Some successful approaches that states have used to mcorporate arts and culture mto international trade development mclude: • initiating cultural exchanges with fore1gn countnes; • developmg 'sister state" relations hips; • including cultural leaders on trade miss1ons; • making grants to communities and educational mstitutions that are 1n1t1atmg contact abroad; creatmg state-level comm1ss1ons and signmg bilateral agreements that For more mformation, see: http://www.nga.org/center/divisions/ 1, 1188,T_CEN_ECON_ TECHAC_ISSU E_BR IEF"D_5271 ,OO.html Techmcal Appendix Industry Outlook and Recommended Economtc Development Strategtes ~ Econom1c Development Strategic Plan Page 91