Tuesday, January 31, 2006

Where Have the Kids Gone?

“None of my 13 brothers and sisters, nor my wife’s six siblings live in Storm Lake,” Ron Sippel, who accompanied me back to his hometown, told me during our trip. I’ve know Ron for almost 20 years and found him to be one of the best economic minds I know. He went to Chicago and made his fame and fortune on the Chicago Mercantile Exchange.

Ron’s father was a farmer and was the local postmaster. His wife Maureen’s father was the city engineer. Both were from successful middle class familes who like what I see in many small towns, raise great families and instill a wonderful work ethic in them. The unfortunate fact is that many of our small towns don’t offer the types of opportunities that can keep those young people in their hometowns or attract them back.

Ron graduated from Iowa State in Ames, one of my top 100 agurbs®, and wanted to go to Chicago to trade commodities, having worked on the Board of Trade during the summers. But, he didn’t have the capital to get started. He thought of going to work for a local bank, but knew that he could make more money quicker at the local packing plant. So, for two years he worked de-boning hams and cleaning up the plant in order to save $20,000 which he used as a grubstake in Chicago. It was tough at the start but Ron stuck with his dream, multiplied his fortune many times over and is still one of the nicest people that I know.

He and Maureen still get back to Storm Lake and give back to their hometown. He and I talked about the impact of the Awaysis Project that I blogged about yesterday and how he could help to leverage that wonderful project. Ron is always thinking!

Ron Sippel & I in IA Posted by Picasa

Monday, January 30, 2006

Storm Lake—Jump Right In!

“We got over 70% approval on two bond issues to do the $30 million Awaysis project,” Gary Lalone, executive director of the Storm Lake Chamber and Area Development Corporation told me as we toured Storm Lake, IA (population 10,076) during my visit there to talk at their Annual Banquet. He was talking about a new project to be built on the shores of Storm Lake’s 3,200 acre namesake lake. Storm Lake is looking to fully utilize one of their main assets for the future, especially as the aging baby boomers look for more recreational alternatives.

The Awaysis Project (www.awaysis.com) will include an 80 room lodge, indoor water park, 65’ light house and playground. The project also revamps the town’s municipal golf course and adds 30 condos right on the lake. The city is also spending $1 million per year on improving the quality of the lake by dredging the long-term silt buildup from farm fields.

Putting a project like Awaysis together is a monumental task. It involves various groups working together in a cooperative manner, putting egos aside and tearing down the silo mentality of leaders who only look at what is in it for their organization. Over 180 volunteers worked on 23 committees to achieve Awaysis. It is wonderful to see!

Storm Lake is a very diverse community. It has historically been a meat packing town, with Tyson and Sara Lee currently hiring 2,500 people in their hog and turkey operations. About half of the children in the school system are of immigrant parents of Hispanic, Asian and Sudanese backgrounds. Storm Lake is the only town in IA or MN with a Buddhist Temple! Channeling the entrepreneurial spirit of these immigrants and their children into new businesses should be a focus for Storm Lake in the future.

Another major asset in Storm Lake is the 1,300 student Buena Vista University. It is well endowed and had some incredible gifts from alumni. It is situated picturesquely on the banks of Storm Lake.

I hope to return to see the Awaysis when it is completed in a year. Storm Lake’s new brand of “Jump Right In!” is very appropriate for a town on the move.

Storm Lake's Awaysis Project Posted by Picasa

Storm Lake, IA Posted by Picasa

Sunday, January 29, 2006

Promoting to the Heads in Your Beds

I was flipping thru the channels in my hotel and was intrigued by a program on the history of a small town that was nearby. The previous weekend my wife and I stayed at Union Station in St. Louis where we had watched a video on the TV on the history and rebuilding of that wonderfully historic building.

Then a light bulb went on. Why don’t I see these type of videos in small towns as I travel around? Every big city has a program on the closed circuit TVs in the hotel rooms, which highlights attractions and the history of their city. Why not in small towns?

It would be a fairly simple and relatively inexpensive program to produce. The small town hotels surely have the same systems as the big cities. And, it could grab those overnight guests for maybe a few more hours or even days touring in the town.

If you don’t have enough hotel rooms in your town to justify, why not do something on a regional basis, bringing together several towns or counties on a joint project? It could act just like the Handmade in America, that I’ve blogged on numerous times, has redone western NC.

Saturday, January 28, 2006


At the beginning of the year I identified my top 10 trends for the Agurbs® in 2006. Number ten on that list was Homesourcing, in which companies bring offshored call centers back to the USA, placing them in rural homes.

In the past two weeks, two major business publications, The Wall Street Journal and Business Week, reported on this phenomenon. One called it “Outsourcing Jobs to the Den” and the other “Call Centers in the Rec Room.”

Business Week reported that homesourcing was about 30% less expensive than a typical call center with a much higher level of productivity. “More than 75% of home agents have some college, vs. 20% in call centers. Home-based agents are also far more experienced and radically more loyal.”

Let me know if your town is doing anything to jump onto this bandwagon. I’d like to report more on this futuristic trend.

Friday, January 27, 2006

Morrill Worcester's wreaths at Arlington National Cemetery Posted by Picasa

Wreathes For Fallen Heroes

Thirteen years and 52,000 wreaths later, Morrill Worcester’s annual trek to Arlington National Cemetery took place as planned in December. Worcester Wreath Company of Harrington, ME (population 882) has been taking wreathes there every year since they started the tradition in 1992 when they had a surplus.

That first year it took Worcester and five other volunteers more than half a day to put out all of the wreaths. “Now it takes us only about an hour,” Worcester said. “We’ve got so many volunteers, we’re turning people away.” Typically the wreaths are placed in older sections of the cemetery where the deceased are separated by many generations from their living relatives.

Harrington is in far eastern Maine, one of the poorest sections of the state where the medium household income is only $28,311, in the lowest 15% in the country. Worcester runs the largest mail order wreath business in the world (http://www.worcesterwreath.com) from that small town, where he is giving back to those who gave their all.

Thursday, January 26, 2006

Chicken Feet?

I'm in Southern Mississippi getting ready to give a talk at the Jones County Junior College Foundations's "Economic Future of the Pine Belt" conference along with Rich Karlgaard, publisher of Forbes. Be sure to read his blog today about our conversation last night regarding chicken feet. Chicken feet!

Go to http://blogs.forbes.com/digitalrules/

Wind Map of MT from US Energy Dept. website Posted by Picasa

Wind Power

“Our corporate goal is to have 10% of power coming from renewables by 2010,” Ron Harper, CEO of Basin Electric Power Cooperative told the group at 7th Annual New & Emerging Technologies Conference of Touchstone Energy Cooperatives in Phoenix. Basin is a coop of 120 member systems, which serve 1.8 million consumers in 9 western states. I was there to give a talk and to learn more about what was being developed in power generation.

I learned of the challenges with renewables like wind, “40% of the time we are operational with wind, at best, in the west. To get power at the flip of a switch is difficult under those circumstances. Gas is really the only thing that you can offset it with.” Coal is a much steadier source but you can’t just flip on and off coal fired plants at will. The problem with gas is the extreme price fluctuations of the past year.

The cost of generating electricity with larger, more cost efficient wind turbines has dropped the operating costs dramatically. A report by the US Department of Energy shows this cost dropping from 40 cents/kWh in 1979 to 3 to 4.5 cents today (www.windpoweringamerica.gov).

Wind farms are going to be more prevalent in rural America. There are some benefits for the local land owners and a way to continue to diversify the economic base for rural communities.

Wednesday, January 25, 2006

Changes at Davos

Today opens the 2006 World Economic Forum in Davos, Switzerland. This high-profile economic and political event is frequented by the elites from around the world. But this year’s conference is different from past years.

In the recent past most of the focus of Davos was on the economic subjects of outsourcing and China. The new topics for 2006 are innovation and India. Why is this significant? It shows the transformation that has taken place in how companies are moving beyond a focus solely on cutting costs and looking more at value creation. While there will continue to be attempts to continue to wring dollars out of the supply chain and manufacturing process, in the long term the CEOs are realizing that there is more value to developing with innovative new products and designs.

For small towns I sense that the push to move production from your communities to China has peaked. Yes, there will still be companies that will take that path, but it will not be as frequent as what we have seen in the past five years.

Keep your eyes open for the reports from Davos and get a better understanding of what will be the key business issues for the future.

Tuesday, January 24, 2006

Challenges for Transitional Towns

“Only 18% of the land area is privately owned in the state. The rest is owned by the Federal and State Governments,” was a surprising retort to a comment that I made about relative high land values in Willcox compared to other rural areas that I visit. Willcox is starting to see developers come out of Phoenix and Tucson, even though they are hours away, because of the rapid growth of those towns and the shortage of developable land. My guess is that Willcox and other small AZ towns are on the cusp of dramatic growth because of the changing demographics in the USA and the lure of AZ’s weather.

One of the main challenges of small towns with the potential of a Willcox is how to manage the growth in a way that maintains the heritage and feel of a small town while at the same time creating new opportunities for the citizens of the community. Willcox is not a wealthy town, 27% of the citizens live below the poverty level. But, the interest conveyed and the passion that many expressed for their community showed me that they had a very serious interest in doing what was best for the community.

Towns like Willcox need to proactively decide what they want to be and make sure that they set their bar high as they begin the process of transforming their community, hopefully for the better, in the face of the onslaught of rapid growth. Strong leadership with a clear vision of the future could make for a very interesting transformation.

Monday, January 23, 2006

Sandhill Cranes in Willcox, AZ Posted by Picasa

Sandhill Cranes in Flight; Willcox, AZ Posted by Picasa

Wings Over Willcox

“The air is filled with Sandhill Cranes for as far as the eye can see,” Andy Terry told me as he gave me an early morning tour of Willcox, AZ (population 3,733) where I was doing a half day session with their new economic development group and local citizens. Willcox had just completed their 13th Annual Wings Over Willcox, which brings in many birding enthusiasts to see the 122 species of birds that winter there, including 30,000 to 40,000 Sandhill Cranes. We saw several Vs of birds flying over when doing our tour in the agricultural area outside of the town.

Willcox is a quaint town that was built as a railroad town and has maintained its old downtown adjacent to the railroad tracks. It wouldn’t take a lot of renovation to turn the downtown into more of a tourist attraction like neighboring Tombstone and Bisbee.

Willcox is in the north of Cochise County, the SE most county in AZ. Cochise is a huge county, covering 6169 square miles. It is big enough to fit the states of RI and CT inside with land left over. With a population density of only 20 per square mile, it is still very rural but growing quickly. In the past 30 years it has more than doubled in population and every indication is that the growth could be accelerating.

One of the main attributes of the area is its rich, diverse agricultural potential. With over 40,000 acres of cropland surrounding Willcox supported by an easily accessible irrigation water farmers grow everything from hay to exotic Asian Pears. We drove by apple, peach and pistachio orchards. Several wineries are in the works. Willcox is also known for its U-Pick Orchards, which bring in visitors from Phoenix and Tucson.

The new ED group has some rich resources to work with as they develop a strategy for bringing in new jobs and creating new opportunities in Wonderful Willcox.

Sunday, January 22, 2006

Growing Impact of Wildlife Recreation

“From 1998 to 2003, the hunting and trapping industry grew 25 percent in the number of firms and employment and 50 percent in terms of payroll,” was one of the main findings of a new study The Impact of Wildlife Recreation on Farmland Values by the Federal Reserve Bank of KC (http://www.kc.frb.org/Publicat/Reswkpap/PDF/RWP05-10.pdf). “In Texas, 68 percent of land market professionals indicated that hunting and fishing was a dominant motive for land buyers.”

The research paper utilizes a number of research sources to document and show the impact of hunting, fishing and also wildlife watching, which is one of the fastest growing spectator sports in the USA. TX was a major focus of their research due to their dominant position as the leading state for wildlife recreation at $1.5 billion/year. The 2nd thru 10th states in this category are: PA, NY, WI, AL, OH, TN, AR, GA and MI. A study by John Baen in TX found that “the hunting value averaged 25 percent of the market value of farmland. In some counties, the hunting value accounted for more than two-thirds of the market value of farmland.”

The KC Fed report confirms what I’ve been seeing and reporting to you from the road for the past two years. The importance of recreational land and activities has the potential to transform towns and regions. What are you doing to capitalize upon this natural resource in your area?

Saturday, January 21, 2006

Resiliency of Galesburg

“Unemployment will be in the teens or low twenties” was a comment I heard often when I was in Galesburg last year, touring the town and giving a talk to their economic development group. Nearly 2,000 high-paying manufacturing jobs were being lost with closings at Maytag and Butler Manufacturing.

Eric Voyles, president of the Galesburg Regional ED Association said, “It definitely could be so much worse than what it is. We’re still holding our breath, but at last we’re not 20 feet under holding our breath.”

Galesburg’s unemployment, just below 7 percent, is still higher than it should be, but recent expansions at area manufacturing plants, growth at the BNSF local rail yard and retail expansions have helped to keep the rate much lower than many had originally feared.

Galesburg recently opened a 350 acre city-owned logistics park on Interstate 74 with access to the BNSF Rail Road. The park was financed through a city sales tax and is an indication of the drive and determination of the community.

Galesburg is a wonderful agurb® that is showing its resiliency. It is poised for better things.

Friday, January 20, 2006

Mining For Land

Land for development is virtually non-existent in many mountainous areas. It limits what can be done in the towns, restricting opportunities and forcing many young people to flee for better paying jobs. The town of Pikeville, KY (population 6,295) is taking a different approach in trying to work with a local coal company to create about 800 acres of flat land for the town.

Normally a coal company is required to restore mountains to their original contour when they are finished mining the site, but a clause in the law allows mining companies to leave it flat when it better serves post-mining purposes. Pikeville is taking advantage of that clause, utilizing a natural resource and hoping to make themselves a better town as a result.

Thursday, January 19, 2006

More on Branson

“Branson was where we drove through to get to Rockaway Beach,” was how Mark Welytok, who was born and raised in Arkansas and is now an architect in Branson, explained the transformation that he has seen in Branson in the past decades. I was in Branson to study some of the theaters in hopes of helping a local entrepreneur do a similar project in my hometown.

Branson has always intrigued me with how it has so proactively gone about taking on new projects, taking the community to heights that a community ten or twenty times its size of 6,050 would drool over. Their new $420 million convention center and shopping area located between Lake Taneycomo and the downtown area is one such project, which will be inaugurated in 2006. The town set a record of $121 million in new construction during 2005 or $20,000/capita!

Branson is involved regionally in economic development. They are building a new regional airport south of town that could have a similar impact to what I saw occur with Bentonville’s regional airport. The Chamber is in the process of starting a political action committee (PAC) to assist them in future political fights. During 2005 the Chamber lobbied against a proposed casino in neighboring Rockaway Beach, in support of state funding for tourism and changes in vacation club regulations.

Branson is a phenomena that isn’t resting on its laurels. I’ll continue to study it and report to you on what I find out.

Wednesday, January 18, 2006

Resource Curse

“The resource curse is a theory in political science, economics, and international relations positing that an abundance of easily obtainable natural resources may in fact encourage internal political corruption, underinvestment in domestic human capital, and a decline in the competitiveness of other economic sectors, thereby actually hurting prospects for growth and democratization.” That is the definition at Wikipedia of a phenomenon that has been observed on an international basis. A Google search of the word turns up 2,540,000 mentions of the phrase.

The resource curse is why countries like Saudi Arabia, Iran, Nigeria, Venezuela and other resource rich countries that should be among the richest in the world are often bogged down with corrupt, top-heavy regimes that have a very small upper class, a tiny middle class and an increasingly restive lower class that often feels disenfranchised. The lack of political freedom in these often repressive regimes only adds to the frustration of many of its citizens.

While we don’t have the political issues in the USA of these repressive regimes, my travels throughout the USA have shown regions of our country that have gone thru booms and busts due to a reliance upon their natural resources rather than upon the “brain resources” of their citizens. Too often they’ve looked upon an oil, ag or mining boom as the norm rather than an aberration. Rather than taking advantage of the windfall from the resource boom, too many of these regions have let it slip through their fingers. Later they look back, wishing that they had done something differently.

The economy in 2006 and historically high prices of a number of commodities, offers another chance for some of these regions in the USA to reinvest their sudden windfall into their “brain bank.” If you are in one of these resource booms, what are you doing to leverage your sudden resource riches?

Tuesday, January 17, 2006

Outsourcing to the Indians of SD

Unemployment is close to 80% and substance abuse is rampant, but the Oglala Lakota Sioux in the Badlands of SD are taking advantage of the globalization of information. They are on the cutting edge of a technological change, hoping to develop a niche that they can capitalize upon. If they are successful, it will mean that young people will no longer have to leave the reservation to find employment.

Lakota Express, a USA-Chinese joint venture, was set up on the reservation to verify the accuracy of electronic documents that are transcribed by Chinese workers who often can’t figure out American handwriting.

Reverse outsourcing is occurring on other Indian reservations like the Northern Ute and Cedar Band of Paiutes in Utah. The Navajo are working with Ford, Dell, Capital One and others to perfect a similar model.

When the Chinese saw the bison on the Lakota Sioux reservation, they immediately thought of exporting buffalo meat. If the 1.3 billion Chinese take a fancy to buffalo meat, we’ll have to worry about Lou Dobbs complaining about the buffalo becoming extinct.

I’m seeing an increasing spirit of entrepreneurism on Indian reservations. It is still small, but rapidly growing phenomenon that you’ll want to keep your eye on.

Monday, January 16, 2006

Mom’s Reflections

“All of these negative things that the media keeps reporting on about Wal-Mart remind me how people attacked Sears Robuck when I was a kid,” Mom told me during one of my daily visits to her. She lives only a couple of blocks from my office and I try to stop by each day that I’m in town. She laughingly refers to them as “Jack Stops” because I don’t stay very long, but until I find the door locked I’ll continue to stop by.

Mom and I were talking about how Wal-Mart seems to be the company in the barrel right now that everyone wants to try to take a swipe at. “They did the same thing with A&P and Sears. We didn’t have an A&P in T-Town but my mother used to save a lot by being able to buy sewing material from Sears for 25 cents/yard when it was 50 or 60 cents at the store uptown.” T-Town is short for Teutopolis (population 1,559) where both sides of my family were born and raised. I lived there until leaving for college.

Mom’s family was a typical working class, blue-collar family. George and Clara Adams had eight children and money was tight during the Depression. Being able to buy material to make dresses for less than half the price from an upstart like Sears was a huge savings, even if everyone had on the same outfit for church.

Mom didn’t know that there were actually towns that tried to get the Sears Robuck catalog outlawed in their towns. Evidently there were people back then who thought banning a more cost effective model might slow it down, just as I see people today wanting to stand in the way of progress.

Today’s also my birthday. Fifty-four years ago Mom went thru a very long and difficult labor to deliver the first of her eight children. She’s been giving me sound advice and counsel ever since.

Sunday, January 15, 2006

Another Law of Unintended Consequences Impact?

I’m betting that 1,000+ new jobs were just frittered away by a state legislature in a poor, rural county. I have to admit to you that I’m not certain of this outcome, but have seen it happen over and over…a legislative body passes a law hoping to do one thing and usually ends up with a completely different outcome than what they had anticipated.

Wal-Mart was planning to build a new distribution center in Princess Anne, MD. These facilities and the efficiency of their distribution system are some of the main reasons why Wal-Mart has won the battle with K-Mart and the other major retailers. Having their DCs in largely rural areas is part of this winning strategy.

This past week the Maryland Legislature passed a bill into law that singled out Wal-Mart, forcing them to pay 8% of their salary in the state to medical expenses. The law was crafted in a way so that Wal-Mart’s large size resulted in it being the only company affected by it. The anti-Wal-Mart forces combined to pass this legislation.

Princess Anne, MD is a very rural town (population 2,313) in Somerset County (population 25,863), which is one of the poorer counties in the state. The medium household income is less than $30,000 and 19.2% of the county is classified below the poverty rate. A planned new 1 million square foot DC with 1,000 higher paying jobs could have a very positive impact upon an area such as this. Wal-Mart announced such a plan last year after it secured the land for the project.

My bet is that Wal-Mart will scrap those plans after this vote, moving the facility to either neighboring Delaware or Virginia. The state lines of each are less than 25 miles on either side of Princess Anne.

Why can’t our state legislators let the free market work, rather than trying to intervene, usually really messing things up?

Saturday, January 14, 2006

WOW in NJ!!!

I received the following email on some incredible things going on in Millville, NJ (population 26,847) from Don Ayres. I was very impressed with how they started to turn things around with their decision five years ago to create an arts district in their decaying downtown. Look at how one positive project can lead to other great things for a town. Here is his email.

Jack: I wanted to follow up briefly regarding the City of Millville, New Jersey’s continued progress on a number of fronts:

1. Final site plan approval of the New Jersey Motorsports Park (NJMP), a $100 million, 1,500 job, complex that will include auto racing, tourism and hospitality, education, research, and industrial components. A spring or summer of 2006 groundbreaking is anticipated.

2. Construction start for Union Lake Crossing, a $70 million regional shopping center that will be anchored by Target and create 1,000 new jobs.

3. The commencement of a process to create a 2.5 mile Strategic Riverfront Redevelopment Plan along the center city portion of the Maurice River waterfront. It is expected that this plan will facilitate the redevelopment of vacant glass factories and cotton mills into mixed-use projects, transforming Millville’s downtown and central neighborhoods.

These efforts began with a decision in 2000 by Millville’s Commissioners to create an arts district in the City’s declining downtown. At the time, there were no artists or galleries in the area. This initiative, backed by a $2.3 million City bond, has been a huge success. 65 new businesses, including galleries, studios, specialty retailers, restaurants, and pubs have opened in the last 5 years. The vacancy rate has gone from 60% to 5%. Property values have doubled and the first new downtown construction in 30 years is underway.

Everyone agrees that the Commissioners’ commitment to create the Glasstown Arts District was the critical action needed to begin Millville’s rebound.

Friday, January 13, 2006

Kitchen Incubators

Kitchen incubators are another trend that I’m seeing more of in my travels. I saw my first in Athens, OH, which is also the home of the National Association of Business Incubators. I’ve talked with a number of people who are looking at starting similar operations because of the perceived great interest of people in developing their own unique food products.

Late in 2005 the largest food incubator east of the Mississippi River opened in Huntington, WV. Called Mountain Bounty Kitchen, the $2 million, 14,000 sf USDA certified facility will be open 24/7 in order to accommodate all types of businesses. The money to build the incubator was raised from federal, state and local sources.

Kay Kingry was one of the first clients in the incubator. She had been cooking her homemade meat sauce in her kitchen since 1999, distributing it under her brand name Dark Hollow Foods. At Mountain Bounty Kitchen she will be able to produce in one day what takes her three days in her home kitchen, allowing her to expand her sales into larger supermarkets.

Do you have small food companies or aspiring food entrepreneurs that could benefit from a food incubator? If it is too big for you to do in your own town, why not look at this as a regional effort? It could be a great way to build bridges with area towns and change the economy at the same time.

Thursday, January 12, 2006

Why So Glum America?

“We have the highest net worth and net income in history in real and inflation adjusted terms. Since the rather mild recession of 2001, the economy has grown at a rate of over 4%/year in real terms. This economy is adding 6,000 new jobs/DAY! We are the most productive economy in the world. Germany is second, but falling rapidly behind us. Yet, 43% of the population thinks that we are currently in a recession. Why is that?” Steve Appel, portfolio manager for Fifth Third Bank’s $3 billion investment portfolio was in Effingham last week sharing his insight at a local Chamber of Commerce monthly meeting.

He blamed part of the misperception of reality on the media, “They put murders on page one and births on page 26. You expect births but murders are out of the norm.”

He also referred to Rich Karlgaard’s column on the subject in this past week’s Forbes. Karlgaard is my favorite business writer who is able to frame subjects in very insightful ways. Karlgaard writes that politicians, economists and journalists all view the world as a zero-sum game, because they all occupy a zero-sum world. This zero-sum thinking believes such things as: “the world is running out of resources; people consume more than they contribute; and wealth is a zero-sum distribution game. History overwhelmingly refutes these ideas; otherwise, humankind would still be living in caves, sharpening spears for the hunt.” You can read the article at http://www.forbes.com/forbes/2006/0109/031.html?_requestid=3352.

Appel went on to sum up, “The economic pie is not static. We can work to make it bigger and should. When I graduated from high school in 1967, the highest tax rate was 75% and only 1 out of 25 households made over $100,000/year. Compare that to six out of 25 today. And, both comparisons are in constant 1994 dollars.” He attributed much of our gains in the USA to the benefits of free trade and fantastic gains in productivity.

I couldn’t agree more with either Appel or Karlgaard. What they both report on a national basis is applicable on the local. Too often we dwell on the negatives rather than looking at the number of positive things going on. Are you focused upon a static pie or finding ways to grow the pie bigger?

Wednesday, January 11, 2006

Viewpoint from Down Under

“I knew zilch about Montana, so I asked some guys at my local golf club—but all this ageing pool of knowledge could offer was grizzly bears, the Rockies and the Horse Whisperer movie,” was how Rod Brown from Australia (www.capinc.com.au) started off his article about the state. Rod works in the ED arena and was in Billings relating the issues of rural Australia and hoping to find mutual clusters that could offer information exchange and joint ventures. It is often interesting to get new perspectives and bringing in someone from Australia is about as far away from home as you can get. I’ve been corresponding with Rod and a number of people from other countries since I published Boomtown and wanted to relate some of his perspective on a rural American state.

Rod was impressed with the way that the various politicians at the ED Summit worked together, even though they were from competing parties. He thought that “Big Sky” Montana had many attributes similar to Tasmania, Far North Queensland, the Flinders Ranges and areas of New Zealand and that there could be a cross pollination of ideas to promote environmental, food and lifestyle industries.

He also notes his talk with Russ Fletcher of the Montana Associated Technology Roundtable, which has one of the best weekly ED newsletters (www.matr.net). Rod quoted Russ on the subject of ED, “Take a look at Ireland, Michigan, Maine or any number of successful economic development areas. The first thing that had to be done was to engage all politicians and not make it an ‘if’ but a ‘how much’ when their dedication to economic development was discussed. If they didn’t put 110% of their efforts behind ED, they weren’t in my office very long.” Words well said.

Don’t stay in your own world. Look at how you can get ideas from other successful areas, even it they might be half way around the world.

Tuesday, January 10, 2006

Making it on the Web

“Monk and Velda Dotter were able to semi-retire by selling on the internet.” Laura Girty, Community Outreach Specialist for the OK Department of Commerce, was telling me of a number of OK companies that have either built or transformed their businesses over the internet. It is a trend that I am seeing as I travel around the country and one that I believe will change the dynamics of many small towns, making them more vibrant. In some cases towns that “really get it” will become meccas for internet businesses.

Laura went on, “They travel by RV most of the year, picking up antiques that they sell at their antique store in Cherokee, OK when they are in town.” But it was the internet that gave them that freedom, something that they can do even when they are on the road. The Dotters have helped another local store owner, Jan’s Collectibles, to learn the internet business, allowing her to expand twice because of internet sales.

Other OK businesses that Laura cited to me were:
Lorenz’s O.K. Seeds (www.lorenzokseeds.com) in Okeene, OK sells both wild and domestic seeds over the internet.

Dave Rose started Mid West eServices (www.mweservices.com) to sell totaled cars and has expanded into selling storefronts in small towns to out-of-staters “looking to relocate to an area that has better work ethics and lower operating costs.”

Connie Moore started Fifth Sister Art Gallery in tiny Waynoka, OK selling art on demand.

She also told of several ranches that have expanded their marketing internationally, bringing in tourists from all over the world. Her favorite is www.flyingwonline.com, which was recently featured on reality TV. The state’s website (www.travelok.com) also links to many other ranches.

Find those small, start-up entrepreneurs in your town who are beginning to sell over the internet. Encourage them. Help them. Some are going to build incredible businesses. Why not in your town?

Monday, January 09, 2006

Spice Blending

My travels and writings put me in contact with an incredible number of people who are starting businesses and recreating their small towns. I get emails from someone virtually every day and wish that I had a way to easily post more of their stories. Here is an email and picture that I received last year from Kim Pontius.

I just got done reading your latest blog and something occurred to me. In addition to my duties at the college my wife and I have owned a spice blending business www.suttonsbaytrading.com for the last five years in Fort Wayne. Recently we moved our home and now our business (see picture attached) to a small rural community on the outskirts of Fort Wayne called Huntertown. Our original plan was to move it to Suttons Bay, Michigan just outside of Traverse City but alas, this may take awhile. What struck me though was that after being around folks such as yourself we began to see the real value of locating in small communities. Because of my involvement in the SATS program one of the criteria was access to small regional airports (there are 2 within 10 miles) as I see this as a benefit in the coming decade. People find it hard to believe that a firm that buys and sells products all over the world can reside in a small town. With the Internet anything is possible. This immediately made us somewhat of a celebrity in this small community which we now take a great deal of pride in being a part of. Thanks for your efforts out there in the Hinterlands.
Kim Pontius

Kim Pontius' Sutton Bay Trading Posted by Picasa

Sunday, January 08, 2006

Mayors as Developers

“Mayors are not in the municipal services business. They are mixed use real estate developers,” was how Leland Speed, head of the MS MDA, viewed the job of mayors in today’s society. I wrote yesterday about Leland and his visionary ideas on recreational land as a catalyst for small towns and rural counties.

Leland told me about Jim Storer, who moved back to Magnolia, MS (population 2,071) after retiring from the staff of the Medical School at Tulane University. He has personally bought 15 old houses in Magnolia and fixed them up. “He’s brought in a call center and really has things hopping in the town.”

Leland also has several sites laid out for large lakes in these rural areas, hoping to do them as joint ventures between the county and state. He has an 850 acre lake sited near Picayune, a 1,250 acre lake in Kemper County which has the second lowest population density in the state and a $5 million lake project planned for Dekalb County.

I’d never thought of mayors in quite that light, but think that Leland is onto something. The towns that I’ve seen from my travels that seem to be doing the best are the ones that are aggressively developing their downtowns, leveraging their resources and finding new job opportunities for their citizens.

Stay tuned. I’ll be with Leland later this month and should have more great tidbits from my talks with him.

Saturday, January 07, 2006

True Visionary

“Within a five year period you will see the emergence of the ‘Ritz Carlton of Hunting Clubs.’ You’ll be able to go (to) any number of places to hunt. You’ll pay a $250,000 to $1 million upfront fee and some type of annual fee that will give you a combination of hunting and recreation. It will be another one of those roll up opportunities that Wall Street has done many times.” I was talking with Leland Speed, head of the Mississippi Development Authority (MDA), one of my favorite state ED people. I’ve written several times about Leland, who is one of the true visionaries that I love to talk to. He is a self-made man who started two public REITS and took the job as head of MDA a couple of years ago for $1 per year because of his love for his home state of MS.

He went on, “Let me give you an example of what is possible. Toxey Haas is in West Point, MS, a good ol’ boy from NE MS. He started Mossy Oak, a camouflage clothing company there in an old furniture store. Toxey told me, “Everyone thinks that I am in the camouflage business, but I’m really in the intellectual property business. We only design the clothes then have Russell make it for us.” Today he is the largest producer of hunting and fishing videos. He has 400 real estate franchises coast-to-coast that sell hunting and fishing land. He is today designing Mossy Oak communities that will allow you to buy a cabin and have access to a hunting area.” West Point is a town of 12,145 in NE MS.

Since I had that conversation with Leland in October I’ve been on the lookout for signs that this recreational land phenomenon is a major trend and continue to see it virtually every week. I was in Pike County, IL where brush ground that was worth $200/acre ten years ago is today worth more than $3,000/acre farmland. I’m observing it from pheasant lodges in SD to elk-hunting resorts in NM.

Keep your eye on this trend. It has the potential to transform small towns and regions that develop their niche and exploit their natural attributes.

Leland Speed & I after a NAIOP panel Posted by Picasa

Friday, January 06, 2006

Resurrecting the Arts

“A lot of artists have no place to come back to and I don’t want them to become too comfortable where they are now so that they don’t return,” was how Gwen Impson explained her quest to me of trying to find the 200+ artists who made their homes in Hancock County, MS (population 45,933). Hancock’s Waveland and Bay St. Louis were the epicenter of Hurricane Katrina. USA Today named Bay St. Louis as “one of the top three small art towns in America.”

Gwen is president of The Arts of Hancock County. She and her husband John moved back to area when they retired in 1998 from government service in Washington, DC. “What drew us back was family in the region and the art scene,” John told me to which Gwen quickly added, “Plus the food. You can’t beat the food.”

Their home was one of seven that were about 200 yards from the Gulf and 18 feet above sea level. “But the waves were 35 to 40 feet above sea level and all that is left on our entire street is ruble. You have to go at least 2 miles to find anything that is still standing,” Gwen told me. They intend to rebuilt but think that it will take them until 2007 to complete. Meanwhile they are living in a travel trailer in a friend’s back yard and working to reconnect with their local artists. Check out their artists at www.hancock-art.com when their website gets back up.

Gwen & John Impson Posted by Picasa

Thursday, January 05, 2006

Smaller boxes

What do flat screen TVs have to do with small towns? I’m always looking for trends that could impact our business and the agurbs® in which we work, so a research report on trends that Bob Costello, Chief Economist of the American Trucking Associations saw for the new year caught my attention as I was laying on the beach this past week.

“Mr. Costello sees the general ‘slimming down’ of electronic merchandise as leading to a structural change in the dry van trucking segment. The move toward flat screen computer monitors and TVs should have a negative impact on many dry van haulers volumes, in his view. For example he spoke with one carrier recently who used to pack 400 computer monitors in one dry van trailer. Now, though, his customer can fit 1,200 of the smaller, flat screen monitors into his trailer, which means he lost a lot of business from this particular customer.”

This downsizing isn’t a new phenomenon; it is one that has been going on for decades, if not longer. Imagine how much cheaper it is to ship I-Pods than the old boom boxes.

I witnessed the impact of this downsizing in an earlier career when agricultural chemicals changed from being applied in gallons/acre into ounces/acre. Products were no longer shipped in 50 gallon drums but rather in much smaller cases. It was easier to ship but security concerns became greater because of the value/shipment.

The agurbs® should gain from the security issues, but there might be a need for a lesser number of distribution centers as products shrink in size. It is a trend that I’ll be following in the future.

Wednesday, January 04, 2006

Encouraging Brain Gain

What are you doing to stem the “brain drain” of trying to keep highly trained college graduates in your community? City Councilman John Crawford of Ft. Wayne, IN along with two other city council members set their salaries and some special income tax funds into a “Brain Gain” Fund under the supervision of the local community foundation.

This fall they awarded the first of three college loan-repayment grants of $2,500/year for four years to April Bledsoe, Aaron Diers and Jeffrey Newcomer. Two of the winners already have master’s degrees and the third is working toward it.

Crawford said of the program, “This program is truly in its infancy, but these individuals each have excellent credentials and fit the profile for the program perfectly.”

Are you doing anything to add to your own “brain gain?”

Tuesday, January 03, 2006

Artist Relocation

Even small towns are jumping onto the arts trend that I outlined yesterday in my top 10 trends. I received the following email from a town of 1,366 that is close to home, right along the Wabash River. I hope to go visit soon, after receiving Carol McGahey’s following email:.

Dear Mr. Schultz,

I could not believe it when I read your article on Monday, January 2, 2006 about the Agurb trends for 2006. Your number 2 (Arts & Culture) describes our town, Palestine, Illinois (yes, the little town that is only 1 hour from you). Palestine has started an "Artist Relocation Project." we have been working on getting more artist to our small community, we already have a few artist that work and live in our community. Last month we had a family move from Chicago to start a small studio.

We also have purchased a building for an Artist Co-op. Once we get the building remodeled we will be opening it up for artist who need help in starting and running a business and for those that do not feel they have the time or money to keep a business opened.

We meet every Friday morning at 8 am. Our goal is to have everything up and running by this summer. By they way, this is all done with volunteer people that want to keep our small town alive. Please come visit our town.

New Aircraft Navigation System Unveiled

“This is a game-changer,” was how Marion Blakey of the FAA viewed the new navigation system that was unveiled during the holidays. With a price tag of only $20,000/approach at an airport, this system has the potential to bring low-visibility landings to smaller airports. It is another step forward to bring big city transportation advantages to increasingly smaller airports.

The new system, called Required Navigation Performance (RNP), is based upon the Global Positioning Satellite System (GPS). It allows an airplane to descend safely to 475 feet, at which point the pilot must be able to see the runway to complete the landing. This compares to the current 720 feet for a radar based system, a huge difference in bad weather.

RNP will be used in 2006 in NYC, Houston and Chicago. Watch for it to spread quickly. If you are involved with your local airport commission, make sure that you get on the list to install this system at your airport in the near future.

Monday, January 02, 2006

Agurb® Trends for 2006

Here are my top 10 trends for the agurbs® that I’ll be watching in 2006. I’ll be reporting on these and other trendsetters for small towns as I travel around the country to new cities and states.

1. Entrepreneurs—You can’t have enough of them. There are some interesting ones doing some incredible things in the agurbs®. Many new entrepreneurs will be setting up new businesses in 2006.

2. Arts & Culture—There are some great examples of a few small towns that are making themselves incredibly attractive for the development of artists. They are on the forefront of creating special “senses of place” in their communities.

3. Downtowns—Again, it’s creating that special “sense of place”, usually in the downtowns, that are driving some small towns to new heights. You can’t create that special historical feel in a new development or big box.

4. Recreational Land—It is becoming more important and valuable than rich agricultural land in many areas. If it has water or you can build a lake on it, it’s a goldmine! The first baby boomer turned 60 yesterday and this huge wave of retirees is looking for places where they can spread out.

5. Brain Banks—Increasingly, towns and regions are reaching out to their brain banks of alumni who grew up or went to school in the community. They are enticing them to move back with their unique skills and love for the town. Many are starting new businesses.

6. Regionalism—The more progressive places are realizing that artificial borders set by surveyors in the 19th Century are not how people are running businesses or deciding on where to live. They are focused more regionally in job creation and retention. This is a tough one for many towns to get out of because they’ve viewed their neighbors as competitors for too many years.

7. Clusters—It’s a lot like regionalism. The synergies of working together and developing businesses regionally are major waves of the future.

8. Community Foundations—The transfer of wealth that will take place in the next decade is unprecedented. Communities are realizing that if they can capture only 2% or 5% of that transfer, they can transform their communities. Older Community Foundations are doing some wonderful things to transform their towns that I hope to report to you.

9. Internet—This medium is finally having the impact that was predicted of it in the late 1990s. Virtually every town that I visit has one success story emerging of a business that is booming based upon the internet. A recent study showed that 750,000 Americans are making their livings on eBay, an industry that didn’t even exist a decade ago.

10. Homesourcing—It’s tied to broadband availability in rural America. Increasingly, companies are setting up call centers and outsourcing work to rural households.

It’s going to be a fun year. I hope that you enjoy my journey of reporting on my search for Boomtown. Let me know what you think or give me ideas of what to look for. Email me at jschultz@agracel.com

Sunday, January 01, 2006

Great New Article

Waiting for me at home was the January, 2006 issue of Illinois Country Living where “Welcome to Agurb”—Where There’s a Will, There’s a Way (Rekindling the fire in Smalltown, Illinois) was the cover story. You can view the entire story at http://www.icl.coop/.

Illinois Country Living Magazine Cover 1/06 Posted by Picasa

Great to Be Back

It’s great to be back with my blog, after taking the Christmas holidays off with my family. We traveled to Cancun with our sons and our German exchange student, having a great time. We were pleasantly surprised at how well the area had been cleaned up after Hurricane Wilma.

This starts my third year of being out on the road giving talks and doing a blog of my travels. I call my journey “In search of boomtown” and am having a wonderful time seeing the incredible things that are being done in small towns all over the USA. I hope that I see many of you on my journey in 2006.

Family in Cancun Posted by Picasa