4/26/2019 12:00:00 PM
Trying to attract businesses from outside the community or launching startup businesses are key economic development activities. However, economic developers generally agree that the most practical strategy for growth is Business Retention and Expansion, or keeping established businesses in the community.
Enticing Businesses to Stay, co-authored by Michael Darger, University of Minnesota Extension, and Cameron Macht, DEED, looks at results from DEED’s Business Employment Dynamics dataset and provides insights and examples from ongoing business retention and expansion projects in Barnesville, near Fargo-Moorhead, and Cottage Grove, metro area.
Most employment analysis looks at net change – comparing the total number of jobs in one time period to the total number of jobs in another time period – to gauge progress. But that doesn’t tell the whole story. Behind that net job change, Business Employment Dynamics data, which measures job churn, shows that the vast majority of job gains in Minnesota come from existing businesses. This bolsters the focus on retention and expansion.
The U of M Extension model involves three main phases: research, prioritize and implement. The result is a set of priority projects and directions to guide business retention and expansion efforts. For example, as a result of visits and survey findings, a natural gas provider decided to invest in providing this form of energy in Barnesville.
Business succession is a particularly important priority for a rural community. Barnesville helped the U of M Extension see how critical business transition is, leading to a new program to help communities with business succession.
Cottage Grove’s employer mix includes large manufacturers and health care establishments that need skilled workers, so it wasn’t surprising that the workforce emerged as a leading concern. However, there isn’t a technical college in Cottage Grove that businesses could easily partner with. Park High School teachers and administrators reached out to other metro school districts and Minnesota State campuses at Century College and St. Paul College to learn more about responding to business workforce concerns.
This year, Park High launched its new class, How to Make Almost Anything, in its new Inventor Space. With $142,500 in startup funding from local businesses and foundations, the program is available to all students including learners who don’t plan to go to four-year colleges and who tend to remain in their home district at higher rates.
Both the Business Employment Dynamics data and Business Retention and Expansion stories illustrate why it’s important to pay attention to existing businesses. Read Enticing Businesses to Stay in the March issue of Minnesota Economic Trends.