Friday, February 24, 2006

Wonderful Clusters

Nappanee, IN (population 6,710) lies about midway between Elkhart (population 51,874) and Warsaw, IN (population 12,415). These two towns have each developed their economies around two wonderful clusters that have generated incredible wealth and high paying jobs for each town and the region. Nappanee has benefited from each cluster.

Elkhart accounts for 52% of worldwide RV manufacturing. The cluster started in 1932 when several of Elkhart’s businesspeople were looking for good investments at a time when the USA was in the depths of the Great Depression. At the Columbian Exhibition in Chicago they saw a prototype for a “trailer coach”—a prototype of the travel trailer.

The early trailers were cheap, retailing for $168, and closely tied to know-how from the auto industry in Detroit, 200 miles to the east. Elkhart had available capital, cheap land for the big parking lots and skilled, dependable labor. From that small beginning hundreds of companies have sprung up, transforming an entire region.

Warsaw’s orthopedic cluster was equally a matter of being at the right place, or rather having the sheriff’s daughter from the right town. Reverend DePuy was a traveling salesman from Niles, MI. He fell in love with the sheriff’s daughter in Warsaw, marrying her. When she couldn’t adapt to life in Niles he moved back to Warsaw starting the company that bears his name.

J. O. Zimmer was a salesman for DePuy who over a disagreement over ownership set up Zimmer, Inc. In the mid 1980s some Zimmer employees set up Biomet. And that is how three of the top five orthopedic device manufacturers are all headquartered in a town of 12,000.

In Warsaw I visited the Kosciusko County Community Foundation, a $26 million foundation that has given out over $1 million in local grants for each of the past two years. I continue to be amazed by the level of giving in so many small towns that I visit.

1 comment:

Richard Pletcher said...

Your comments about community foundations in Warsaw is echoed in Elkhart County as well. The Elkhart County Community Foundation (ECCF) was established in 1989 and is one of more than 700 community Foundations in the United States. Because of the Lilly Endowment vision and challenge grants all 92 counties in Indiana are covered by a community foundation; two percent of the U.S. population has 13% of the community foundations. Finally, Indiana has done something noteworthy. The ECCF administers more than 300 funds and scholarships bequeathed by individuals, other agencies, corporations and foundations. In fiscal year 2005, the ECCF granted $1.7 million from their endowed and unrestricted funds to the community of Elkhart County.

2005 Grants
Arts & Culture $105,535
Community Development $287,958
Education $263,870
Youth Development $105,689
Health & Human Services $391,366
Scholarships $584,874