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Mon April 16, 2012
Nurturing Small Business Growth In The "Economic Garden"
It’s spring, and lots of us are busy in the garden, making things grow. Some experts on business development think it’s also time Connecticut’s towns and cities began gardening – economic gardening, that is. WNPR’s Harriet Jones reports.
Economic development, like any other field is prone to fashions. One minute it’s tax incentives, another it’s industry clusters or enterprise zones. But one city in Colorado came up with an idea more than 20 years ago that’s been slowly spreading ever since. Economic gardening.
“Economic gardening really is the idea that you can grow an economy from the inside out, from locally, that you don’t have to recruit people from the outside.”
That’s Chris Gibbons, from the City of Littleton and the father of economic gardening. He came to New London in 2010 to give a talk about the concept. The seeds planted by that visit are just beginning to show above ground. The Southeastern Connecticut Enterprise Region or SECTER is launching an economic gardening project, focused on what are known as second stage companies. SECTER’s Deborah Donovan.
“Startup companies of one to ten people have a very high rate of not succeeding. Big companies, are pretty well established and they also tend to be companies that might pick up and move. Whereas a second stage company in many cases tends to be a local company, often a family owned company and they are more apt to stay in a region.”
SECTER wants to help those locally owned businesses survive and thrive. Not necessarily by throwing money at them, but by visiting with them and asking what kind of business services they need to increase their sales and add jobs.
“Helping these companies find the information they need to expand or to find new products, new markets, new ways of doing things.”
Mary Fitzgerald is one of the people who might benefit from this approach.
“I’m a third generation wire fabricator. My grandfather and his brothers were in the wire fabrication business."
Fitzgerald is now President of a company founded by her father, Acme Wire, in Mystic. The business employs 42 people in a 75,000 square foot facility.
“Over here we have our powder coating line…..”
Acme Wire produces specialized, often custom parts for other manufacturers. Their most recognizable product is the wire facemask used on lacrosse helmets, and they also make fan guards, wire shelving, baskets and a host of other parts.
“We’re not the lowest cost producer of welded wire items even within the United States, but there’s a lot of benefits we feel we can provide to our customers, and we have seen a lot of customers contacting us, especially recently, where they’ve been purchasing things overseas and they want to have a domestic source.”
Acme Wire is exactly one of those successful, rooted-in-the-community businesses economic gardening is designed to help. Fitzgerald says as the initiative goes forward she’d love to see a manufacturers’ council organized in the region.
“You feel very isolated as a manufacturer because there’s not a lot of areas where manufacturers can come together and generate ideas where you can benefit from somebody else’s expertise.”
SECTER plans to support companies like Acme with access to business data that can be expensive for individual companies to procure – the initiative is supported financially by Connecticut Light & Power and Yankee Gas. Business Development Manager for those companies is Tom Marano.
“It takes a lot of people to make this happen. It takes the private sector companies who are stakeholders to make investments like this, because it is in our self interest to do so.”
Marano has been involved in economic development for 20 years, and he’s seen the fashions come and go. In the past Connecticut has focused either on luring businesses into the state with tax incentives, or on promoting industry clusters.
“All of that is great, and all that is a piece, but the economic gardening concept – every community can do that. Not every community can get involved in cluster analysis and cluster promotions and the like. This, they can do.”
Marano believes SECTER’s initiative is the first time a region in Connecticut has implemented economic gardening in an organized way. But the concept has been around in smaller pockets.
“It makes more sense to me to be able to invest in the companies that are already here.”
Fred Wergeles is President of the Connecticut Economic Gardening Group, or CT EGG. Wergeles is a business consultant by trade, and his efforts at economic gardening grew out of his role as an adjunct professor at the University of Hartford. As part of their coursework his students work with local small companies providing business analysis and other services.
“We were looking at one point to expanding it. Being able to take it to other universities, being able to offer the concept and all the work that we’ve done, but the resources just weren’t there.”
In 2006 he launched CT EGG and made a sustained effort to spread the word about economic gardening in some of his surrounding municipalities. But he says when he suggested investing tax dollars in helping existing firms to grow, he was turned away. That may be because, in contrast to Colorado, where the economic gardening concept began, towns here don’t collect sales tax, only property taxes. Wergeles says that gives municipalities a bias to new development as opposed to helping established businesses.
“The tax structure of Connecticut doesn’t necessarily incentivize the municipality to make their existing companies more profitable per square foot. The incentive is to have companies come in, develop new land and then be able to take the real estate taxes and property taxes and equipment tax from those companies. So at the municipal level, it became a difficult sell.”
Now, SECTER’s efforts in Southeastern Connecticut are getting off the ground with private funding. Deborah Donovan at SECTER says she’s still in the process of setting measurable goals for the project, but she says even starting with Mary Fitzgerald at Acme Wire, she can see how gardening might produce real fruits.
“It would be nice for this just one thing, with Mary, is to be able to find her a couple of companies, that call her up and say hey, we need this from you, and it creates a new job or two – that’s a real goal.”
For WNPR, I'm Harriet Jones.