Regional Economic Development Michael Morrison President Jamie T

Regional Economic Development Michael Morrison President Jamie T. Zanios Director

The Need for Change

Demography is Destiny: Unless We Do Something About It!

Iowa Counties Population Changes

North Iowa Area Schools Enrollment Under 18 1975 -2001

Projected Population Changes, 2000 to 2015 Population Projections from Woods and Poole

Iowa In National Context

The Economy

Business Vitality Index - Entrepreneurism

Net Gain/Loss of Iowa Residents

States’ Ability to Produce Graduates vs. Ability to Keep and Attract Graduates 400 Low Production, Importer of Capital High Production, Importer of Capital State New Economy Index Scores (2002) 300 NV Top Tier Middle Tier Low Tier GA 200 AK CA OR WA MD NC FL TX 100 HI Migration Rate of 22 - to 0 29 -Year-Olds with a College Degree KY NM -100 -200 CO AZ TN VA MA IL NY DE MO SC OH MI ID AR OK AL LA MS UT WY WV NJ MN CT KS WI IN NE VT MT NH RI PA SD -300 -400 IA ME ND Low Production, Exporter of Capital 7. 5 15 High Production, Exporter of Capital 22. 5 30

Net Migration of Residents 22 -29 with Bachelor’s Degree or Higher, 1995 -2000 73, 509 Iowa Pennsylvania Indiana -17, 643 -16, 902 -9, 763 -13, 488 -10, 534 Michigan -9, 687 -9, 246 Wisconsin Ohio Utah Alabama -7, 241 -6, 934 -8, 420 Oklahoma Louisiana West Virginia -6, 903 -6, 670 Nebraska Arkansas South Dakota -3, 510 -3, 579 -3, 854 -4, 966 -4, 591 -5, 530 North Dakota Mississippi Vermont -2, 996 Montana Maine Rhode Island -2, 899 -4, 447 Kansas New Hampshire Wyoming -1, 503 New Mexico -1, 385 Kentucky -661 Idaho -498 Missouri -303 645 Connecticut 960 Delaware Hawaii Tennessee Nevada -34, 642 14, 557 24, 470 Maryland Oregon Arizona Minnesota 25, 875 North Carolina New Jersey Washington Massachusetts 27, 216 Virginia 50, 000 Georgia Illinois New York Florida Colorado 29, 603 30, 363 28, 998 13, 666 10, 946 9, 752 2, 337 3, 295 1, 190 South Carolina Alaska Source: U. S. Census Bureau, Public Use Microdata Samples, 2000 32, 564 35, 307 40, 060 43, 837 44, 216 49, 421 -50, 000 Texas California 0 191, 070 200, 000 150, 000 100, 000

Aggregate Personal Income Inequality Grows Between Iowa Counties, 1969 -2002 15. 52% increase in inequality since 1969

Enough! No more prizes for predicting rain!

Bold, New Initiatives Are Required

Nine New Initiatives 1. 2. 3. 4. 5. 6. 7. 8. 9. Pappajohn Entrepreneurial Center North Iowa Growth Partnership Labor Shed Analysis Cluster Analysis North Iowa Accelerator Business Incubator North Iowa Venture Capital Fund North Iowa Growth Marketing Partnership Regional Economic Development

Why Should We Do This? • Iowa’s future depends on it! – Bold, new initiatives are required • • • We are appropriately “positioned” to do it It is strategic to do it! It’s aligned with State and Federal economic development initiatives & plans • ROI

I. Pappajohn Entrepreneurial Center • Produce and cultivate a culture conducive to entrepreneurship • Provide entrepreneurs the tools for success • Provide promising entrepreneurs access to capital

NIACC John Pappajohn Center …Step by Step • Step 1: Classes, workshops and technical support • Step 2: Integration with EDC’s (i. e. company recruitment) and others • Step 3: Access to Capital • Step 4: Deal Flow • Next Steps 5: A Wider Reach

Entrepreneurship Education: A wide array of programs Degree Programs • Associate of Science Degree and Certificate Degree – Opportunity Recognition – Foundation Courses – Hands on Learning – Interdisciplinary • Creating a Way of Thinking • Job Creators vs. Job Takers Necessity and Opportunity Based Education • Fast. Trac New Venture • Fast. Trac Planning • Angel Investing Seminar • ON-LINE Intro to Entrepreneurship • E-Commerce Workshops • Start your Own Business Seminar

Entrepreneurship Awareness and Education To offer expanded programs which may include populations that might otherwise not be exposed to the concept and option of entrepreneurship and self employment. • • Communication Courses Faculty Training Collegiate Entrepreneur Organization Credit Class - The Entrepreneurial Process – 2 s. h. evening course

NIACC and ISU Collaboration • Allow students to network and provide entrepreneurial support to start-up and mezzanine level businesses. • Develop best practices in cross curriculum entrepreneurship education • Increase the ties between Regents Institutions and Community Colleges

• • Small Business Development Center: AREAS OF ASSISTANCE Feasibility Analysis Business Planning Sources of Capital Financial Planning Cashflow Analysis Loan Proposals Loan Applications Human Resource Planning • • Market Research Market Planning Strategic Planning Government Procurement Accounting, Recordkeeping Information Technology International Trade Inventions

SBDC : Supporting the Entrepreneur A wide array of workshops • • • Smart Start Program On-Line E-Z Start Growing your Business Effective Marketing SCORE Workshop Financial Management/Cash Flow Workshop • IRS Tax Workshop –Codes Update • Iowa Sales Use and Local Sales Option Tax • Deductions and Expenses • Iowa Payroll and Employment Taxes • Taxes for Construction Contractors • Taxes for Landscape Contractors • SBDC Franchise Workshop • Women’s Technology Workshop • OSHA’s Knocking, Are You Ready?

Iowa Entrepreneurial Consortium: New Business Starts Statewide Over 4000 participants Over 400 new business starts Locally 130 + new business starts

NIACC and Lean Manufacturing • NIACC leads the State of Iowa in “Lean Manufacturing” training and results and Iowa leads the nation. A strong program delivered by the college in conjunction with Iowa Workforce Development and part of 260 E and F training funds. • Over $148, 000 in realized savings reported by the industries served!

Additional Activities • Youth Entrepreneurial Academy – Summer 4 day, live and learn on campus, with business visits. Final is business plan presentation to Prominent Business Persons. – 20 students attend free of charge for the academy which includes training, room, board, evening activities, field trips and more. – Last year resulted in two student run businesses being developed and launched. • Entrepreneurship Exchange – Gathering of entrepreneurs at the JPEC for short topical presentations and networking with each other.

Next Steps : A Wider Reach • Intra Entrepreneurship – Introducing entrepreneurial thinking into Iowa’s many mature industries • Entrepreneurial Symposium for Elected Officials • Entrepreneurship Introduced Early in a Child's Education • Business and Student Incubation • The Entrepreneurial Community Colleges of Iowa

Some Results • 98 Students Enrolled in Entrepreneurial Credit Course and 23 in the degree program (First Year). • Seven student business plans from the NIACC JPEC were submitted for the state wide business plan competition sponsored by the JPEC’s statewide. • Nineteen Scholarships were awarded to students in the JPEC Entrepreneurship Degree Program.

Some Results • 30 new businesses started this fiscal year with a total of 66 employees as a direct result of our programs. • The JPEC delivered over 65 entrepreneurial and small business programs throughout the year and reached over 1, 500 Iowans. • The North Iowa Venture Capital Fund has reviewed over 50 deals and funded 5 for a total of $800, 000. 63 new jobs in North Iowa will be the result of one deal and retention of 30+ in a second. • The new North Iowa Business Accelerator has consulted with over 10 businesses in less that half a year, with state funding and jobs as a result.

II. North Iowa Growth Partnership Partners: • Mason City EDC • Clear Lake EDC • Cerro Gordo County • Alliant Energy • NIACC

III. Labor Shed Analysis

Traditional Labor Shed • Narrow geographic focus • No or little cooperation among competing EDCs (Economic Development Corporations) • Resulting in no time synchronization for the analyses • Mind set – “win/lose”; no “win-win”

Traditional Labor Shed • Meaning that when a prospect comes to our region we have: – Narrow labor sheds – Dated labor sheds – Labor sheds that cannot be aggregated because they are not conducted at the same time – EDCs not cooperating, thereby failing to leverage regional assets and resources

Solution to the Labor Shed Issue • • • Nine-county labor shed Conducted at the same time Establish comprehensive partnership: – NIACC, IWD, and EDCs • Thereby, leveraging resources for cost effectiveness • Aggregate the 9 county labor shed data to demonstrate our POTENTIAL to business prospects

Solution to the Labor Shed Issue

IV. Cluster Analysis

Critical Need • What is absolutely critical for North Iowa is to find its competitive advantage. • Therefore, NIACC is partnering with IWD and each EDC in our region to complete a comprehensive 9 county cluster analysis to determine our competitive advantage.

Clusters • Clusters: critical masses in one place, linking industries that enjoy unusual competitive success in a particular field. – Example: Silicon Valley • Cluster analyses identify competitive advantage – The key is to identify regional strengths to leverage new business development through the identification of “multipliers”

Cluster Analysis

V. North Iowa Accelerator Business Accelerators: Organizations that foster the accelerated growth of new and existing businesses. Partnership: IDED, Community College regions 1, 2 and 3; and IWD

North Iowa Accelerator • NIACC is among the first organizations in the State to be honored and selected by the Iowa Department of Economic Development as a “Business Accelerator”. • Our “territory” extends to Areas I & III, through cooperative arrangements with my colleagues in those areas. • Assistance to meet the needs for Areas 1 and 3 is provided by IWD

Significance of the “Business Accelerator” • Rural economic is important to the State of Iowa – Represents a vision that all of Iowa needs to prosper • Represents a paradigm shift in the “way we think” about economic development – Fishing and gardening – Look internally to invest in ourselves • Vote of confidence in NIACC and our region • Demonstrates that Community Colleges are well positioned to lead these efforts

VI. Business Incubator Leveraging existing resources: Pappajohn Center SBDC Iowa Workforce Development Center Business Accelerator New Jobs Training Program

VII. North Iowa Venture Capital Fund

North Iowa Venture Capital Fund, LLC • Comprised of 61 accredited angel investors and/or businesses Capitalized and raised $1. 7 M Look to invest in Northern Iowa Investment strategies will vary from start-up to expansion businesses • Angel Investment Motivation: ROI • • •

What’s Possible Today for Seed and Start-up Business? Wellmark Venture Capital Fund $10 -50 K North Iowa Venture Capital Fund, LLC $50 -160 K Wellmark Additional Funding $50, 000 Bank Financing $10 -50 K Angel $10 -100 K Venture and Equity Fund Network Available Capital for a Seed/Start-up Business $10 K-1 M $100 -500 K plus North Iowa and Iowa now have access to more early stage equity capital then ever before.

VIII. North Iowa Growth Marketing Partnership

North Iowa Growth Marketing Partnership • Seven Counties

IX. Regional Economic Development

Current Status • Our region “strikes out” too often. • Most often, we’re not even “up to bat” – Des Moines, Cedar Rapids etc hit the home runs before North Central Iowa knows there’s a ball game. • Resources are not leveraged • Cities & counties act as if their competition is “just down the road”

Current Economic Development “Organization”

Future Vision for Economic Development Organization

Future Vision for Economic Development Organization First Steps: 9 County Labor Shed 9 County Cluster Analysis Business Accelerator Business Incubator North Iowa Venture Capital Fund North Iowa Growth Marketing Regional Economic Development

Conclusion • Someone once asked Winston Churchill, – “Mr. Churchill, why are we fighting this terrible war? ” – Churchill responded, “If we don’t, you’ll understand why later. ” • The same analogy holds now for the decisions we must make. We must take action now to change the paradigm of economic development in our region.