Tyler: Taking the ‘boring’ out of economic development

February 7, 2013

From chippewa.com: “Tyler: Taking the ‘boring’ out of economic development” — On its face, fostering economic development seems to be a pretty straightforward process. But sometimes telling stories, not spouting statistics, is actually a more effective way to attract a prospect to an area’s business community.

That was the message delivered to an attentive audience by Woodville-based OEM Fabricators CEO Mark Tyler during the Dunn County Economic Development Corporation’s annual meeting last month.

He pointed out that a variety of very good reasons are touted to entice a new business to move to the region or for an established business to go ahead with that expansion project — things like being close to markets, an area’s attractiveness and quality of life, along with reasonably priced real estate, great educational systems, good workforce, access to transportation corridors and supply, and solid demographics.

“You still need to provide buildable sites in industrial parks, still need to provide the data … to do all that stuff,” Tyler said. “But if we’re really going to differentiate ourselves from others … we really need to develop some new stories and work in different ways.”

Drivers, followers

Part of redefining the story comes in acknowledging that the world of business is divided into two parts: Economic drivers and economic followers.

Economic drivers  — manufacturing, agriculture, education and mining — create what Tyler calls an “echo in the economy” and should constitute the focus of economic development efforts.

“You take a product, put it through some process, make it worth more money,” he explained. “You send it somewhere else, you bring your money here.”

While recognizing their importance in every community, Tyler contends that economic followers — banking, health care, insurance, retail and services — should not be the focus of economic development.

“The reason we don’t focus on them is that if we’re going to increase haircuts, we either have to make crew cuts stylish in men and women — or we have to have more people,” he said. “It’s a follower industry, not a leader industry.”

It’s the growers that create the value and increase the opportunities for the population to grow.

Blessed be Dunn County

Tyler pointed out that in addition to a strong foundation in leader industries, Dunn County is also blessed with good geography, specifically its proximity to the Twin Cities market to the west.

Little comes from the north and not much more from the south, he noted. “But most of what comes through is from the east and drives right through Dunn County. So from a distribution and logistics perspective, this is the Holy Grail for distribution [west] into the Twin Cities.

When it comes to attracting companies  to the area, Tyler said, “One of the things that’s always frustrated me about relocation is you never know who the decision maker is. Oftentimes it’s the owner’s or the plant manager’s spouse. They may not decide where they’re going to look, but they’re going to decide where they’re not going to go.”

And then there’s the issue of how best to encouraging those thinking about starting up new businesses.

“We certainly want all that fundamental stuff in place where we have Extension classes that talk about how to start companies … marketing … putting together a business plan,” Tyler said. “But how do we tell the stories that … starting a company is OK? To get past the fear of putting the mortgage on their house on the line or taking out a second mortgage?”

Unless other entrepreneurs — especially fairly new ones — share their experiences in a way “so people understand that it’s possible, it doesn’t happen,” Tyler said.

The art of collaboration

Collaboration — as opposed to simple cooperation — is key, what Tyler calls participants “getting out of our silos.”

To explain the concept, he shared OEM’s recent success story involving a project the company recently undertook involving Chippewa Valley Technical College and Baldwin-Woodville High School.

“Th three of us got together and basically we made the agreement that people resources were going to be on the table, financial resources. … If there’s rules that get in the way … we would gather to fight the rules and together make progress.”

The triad created what they call a manufacturing pathway that starts with ninth grade students exploring the world of manufacturing.

“By the 10th grade, they declare that they’re going on this pathway,” Tyler explained. “By the time they’ve completed high school, they’re working part time, they’ve earned a half a year of credit tuition free toward their program, whether it’s welding or machine tool or industrial mechanics or whatever [at CVTC].”

The result is a faster path toward gainful — and meaningful — employment that benefits the student, the college and the company. OEM covers the student/employee’s tuition while he or she works 20 hours a week.

“We’ve looked at all the components and solved the problems — the financial problems, the teacher credential problems, the block time scheduling at the high school problems — all the things we worked on collectively to solve,” Tyler reflected, adding that while there are still some issues being worked out,  “If all of us hadn’t put all our resources together, we couldn’t have got it done.”

Tyler estimates that OEM has hired more than 300 people over the past three years and spent $1.2 million recruiting, drug testing and training employees. He figures the new collaborative effort — at a cost of $4,000 to $4,500 per student — will provide substantial savings over the recruitment and training process.

Labor makes up 40 to 50 percent of the cost of doing business, and most manufacturers report difficulty in finding qualified workers.

“That’s their hot button,” Tyler said. “You solve any problem associated with that and you’re going to make some progress.”

Other avenues

On the administrative side of the business equation, Tyler pointed out that UW-Stout’s goal to have 100 percent of its students to participate in either a co-op program or internship could benefit local manufacturers and other economic drivers.

Noting that half of OEM’s management team are UW-Stout graduates, he said, “For about 15 years, we’ve been bringing in interns,” he said. “We found that about half of them never go away.”

Tyler said it finally occurred to them that perhaps OEM should recruit interns with the intent of keeping them on as future management staff. With more people leaving the workforce in western Wisconsin than entering, that kind of retention could have a dramatic impact on the region’s economic viability.

“I would really like to see participation and collaboration with helping build the talent pipeline,” Tyler said. “Workforce development and economic development are really the same thing in today’s climate.”

And in the meantime, keep those stories coming.


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