Economic development is happening now
July 2012: One year ago, a broad consortium of local business leaders launched the Missoula Economic Partnership with four clear goals: create 2,500 new primary jobs, attract $150 million in capital investment, help launch 25 local companies, and help relocate 25 “best-fit” companies to Missoula from outside the area. All in the first five years.
Twelve months into this ambitious project, we have achieved several important benchmarks we set for ourselves. We have also learned much about the path that lies ahead in our community’s quest for sustainable economic growth.
Our efforts of the past year focused largely on three key components that together form the bedrock of our strategy moving forward.
The first is a dedicated group of investors willing to contribute their time and money to the effort of improving Missoula’s economy. Fortunately for our community, 80 private businesses and individuals stepped forward to invest in the Partnership. In fact, the majority of the Partnership’s funding comes from these private sector investors with the balance coming from the city, county, The University of Montana and Missoula International Airport. In addition many investors give their time and expertise, serving on the Partnership’s board and working committees.
The second component is community collaboration. In this area our staff and CEO have done a remarkable job. In addition to our investor partners, the Partnership currently works with more than 30 strategic partners. These private, city, county, state and federal organizations provide a variety of tools critical to business generation and growth — such as workforce training, grants for expansion, business planning assistance and more. Thanks to our collaboration with these vital resources, the Partnership is now a gateway through which businesses and entrepreneurs can quickly and seamlessly connect to the help and information they need.
The third component is a portfolio of entrepreneurial programs. In sustainable economic development efforts, about 80 percent of new jobs created come from existing and home-grown companies. These are jobs created two, three, five at a time, rather than hundreds at a time. A big part of the Partnership’s work, then, is to set into motion programs that enable companies to grow and hire.
In our first year we established three such programs that are now up and running, providing resources once only dreamed of in the local community.
The MEP Angel Network connects Missoula-based investors with local, growing companies. The Partnership began the network by identifying and bringing together more than a dozen individuals with the financial means and desire to invest in young companies. We then created processes by which entrepreneurs can apply and be vetted for venture capital pitches. Our program includes coaching on presenting essential information that investors look for. Periodically we sponsor pitch sessions, where qualifying companies present to network investors.
The first MEP Angel Network pitch session was held in April. Of the four companies that participated, two have closed deals with investors and a third is in the due diligence process. The fourth was redirected to seek larger venture capital investment with the Partnership’s help. The growth potential of these companies over the next three years represents over 100 new jobs. It is possible that these companies could attract millions of dollars of additional investment to our community as they grow.
The Innovation Initiative brings together a variety of startup businesses and entrepreneurs to connect with one another and obtain guidance from seasoned business professionals. This joint venture between the Montana Technology Enterprise Center, Hellgate Venture Network and the Partnership provides presentations and one-on-one information sessions on topics such as securing venture capital, building a brand, search engine marketing, public relations, patent law, information technology and strategic planning.
Already the Innovation Initiative has hosted 21 sessions, with a growing list of future events on the calendar. In addition, the initiative will soon launch a Web hub where entrepreneurs can share ideas and seek help on a variety of business topics. This innovation incubator is helping a wide variety of businesses get the resources they need to grow and hire: The audience at one recent session included two dot-coms, a trade sales business, an organic pest control professional, a clothing line, a movie industry startup and a solar energy company. Importantly, this project keeps Missoula’s best and brightest talent here at home.
The Business Retention and Expansion Program exists to foster and amplify the successes of Missoula’s existing entrepreneurs. The Partnership staff — often in conjunction with our strategic partners — conducts diagnostic sessions with local companies to better understand their needs and to help connect them to financing, professional services and planning assistance. This is a significant portion of the work we do.
To date, the Partnership staff has provided more than 1,000 hours in free strategic planning assistance to more than 75 companies — that’s 25 visits beyond our stated goal. And the program is yielding growth results. For example, one local manufacturer added two full-time equivalent employees after a strategy session revealed a new market opportunity. Another manufacturer accessed federal funding for a major feasibility study around a planned expansion into a new industry. A Missoula tech company tapped into funding that resulted in growth, additional employees and the attraction of venture capital. Those are just a few of the program’s first-year successes.
Building on that Foundation
Beyond these specific programs and components, we are working to develop a business climate that nurtures our growing companies and attracts outside investment to our area.
One example is our lead role on the Air Service Task Force. The group’s first objective is to reduce business airfares by attracting a low-cost air carrier. Our strategy is similar to one that has worked in other Western markets: Provide a revenue guarantee fund to the prospective carrier to share the risk.
After just a couple of months of planning and assessment, the task force is in negotiations with Frontier Airlines — a carrier that could reduce airfares by as much as 20 percent — with a goal of landing a new route by spring of 2013. That would save Missoula businesses about $4 million-$5 million annually on travel. As business owners and leaders ourselves, we know the difference that kind of capital can make in terms of hiring and entering new markets.
Meantime, we at the Partnership work every day to attract relocating and expanding businesses to Missoula. We answer requests for information about the community, create detailed industry reports for prospects, show business sites such as the former Stimson Lumber Company mill to potential buyers and host site visits for companies considering Missoula. We also develop and execute plans to reach out to Missoula’s targeted best-fit industries.
For example, the Partnership attended the national Site Selectors Guild Conference this past January in Orlando, Fla. Site selectors are professionals who work with large companies to help choose relocation sites. We met with all of the site selectors in attendance at that conference, and made strong connections with six professionals who specialize in industries suited to Missoula’s location and workforce. As a follow-up, we plan to host several of these site selectors this fall for a familiarization tour of Missoula.
We also attended an event in San Francisco, coordinated by the Montana Ambassadors, that brought together dozens of leaders in the life sciences sector. The event helped us connect with organizations interested in Montana’s potential as a hub for life sciences companies.
As board members, we’ve learned a great deal about the business attraction process. Principally that it takes a significant amount of time — more than most of us would like — to close the deal on a major move. Companies considering relocation often take well more than a year to conduct due diligence on a community.
We’ve also learned that everything involved in that process — the company, its industry, its location, its size — is confidential. Nothing kills a relocation faster than a leak. That makes sense when you consider the company’s position. Oftentimes companies look at multiple cities. They have employee relations to consider. They may need to be concerned about backlash from the community they’re moving from. And so on.
All of that means that the “big employment wins” we look for are slow to occur, but sudden in their appearance. They might seem to come from nowhere, despite the fact that a team of people worked hard for many months to make them happen.
And that leads us to the most important lesson: We as a community must be both diligent and patient.
In economic development it is the continuous, positive effort that pays off — creating the right structure, connecting entrepreneurs to the right resources, developing sources of local capital, building relationships around the country, targeting professions and industries that make sense for the Missoula area, producing quality materials and sound statistics, and fulfilling the requests that come our way. All of it — every phone call, email, meeting, letter, Web visit and handshake — is another step toward sustainable, thriving economic development for our community.
Sometimes, diligence demands quick action. Late 2011, the Partnership parted ways with its original president and CEO. That same day his replacement, James Grunke, was named — first on an interim basis and later permanently.
As we end our first year of operation, the Partnership is on or ahead of schedule on all major initiatives. We can say without question that we have the right people and programs in place to succeed. Our foundation is solidly built. We have a strong community desire to boost our economy and our path ahead is clear.
With all this in mind, we look forward to working with the greater Missoula community to bring our collective efforts to fruition.
The Missoula Economic Partnership Board: Dave Beaton, Scott Burke, Brent Campbell, Steve Carlson, Jeff Crouch, Jean Curtiss, John Engen, Jeff Fee, James Foley, Grant Kier, George Lambros, Stacey Mueller, Tom Pew, Deb Poteet and Dirk Visser.
For more information on becoming an investor, please contact James Grunke at email@example.com or call 406.541.6461.