Sandhill Cranes

My wife and I chose to drive out to Steamboat Springs, taking with us a couple from Brazil, Orlando and Cleide Tonin, who have been friends of ours for over a quarter of a century. They are spending a couple of months with us and we’ve been trying to show them some of the highlights of this great country of ours. After 2,500 miles they’ve seen only a small portion of it.

We drove out through IA, NE and WY and returned home through KS and MO. In NE we stayed in Kearney which is the magical gathering place for 80% of the world’s sand hill cranes every spring. People come from all over the world to see these majestic birds on their trek from Alaska and Russia down to TX and Mexico.

While in Kearney, I learned that sandhill cranes are living dinosaurs. Fossils of their bones have been carbon dated back nine million years in the state. Like all cranes, sandhills mate for life. They typically lay only two eggs per year with only one of the chicks surviving the first year. The family of cranes typically spends about three weeks in the Kearney area along the Platte River.

Nebraska and other states have realized that bird watching is the fastest growing spectator sport in the nation and are investing resources to make the visiting bird watchers want to come back to check off birds on their life lists. Near Kearney, the Rowe Sanctuary and Crane Meadows are two excellent facilities for bird watching. Other birds of interest there are eagles, prairie grouse, whooping cranes, bats, hawks and owls.

Entrepreneurship Education Funded by Entrepreneurs

Some of the other ideas for new businesses at the Camp E3 that I wrote about yesterday were: Green House, a green house design center; The Heart, a movie, dance and laser tag club; Vibe, a coffee shop and dance club; and Crossroads Cultural Center, an international educational center. Some very creative ideas that these young people put together in only two days!

This fall we, as a county, are starting our first entrepreneurship course with five of the seven county high schools sending students to the course. The course originated as a community-altering idea of Joe Fatheree, Illinois Teacher of the Year in 2007. He and a group of local entrepreneurs raised over $150,000 in funds from local businesses and have the program funded for the next three years. Twenty-four students will take the hour and a half classes five days per week for the entire school year.

Effingham County entrepreneurs understand the importance of both education and of nurturing new, young entrepreneurs. What are you doing in your community?

Entrepreneurial Effingham

One of the major assets of my home county of Effingham, IL is the entrepreneurial spirit that permeates the community. I can’t tell you the number of times that someone from 20 or 50 miles away asks me, “What is it in the water there? Why do you have so many more entrepreneurs than other towns around? And, you always seem to get things done that no one else, even much larger towns, can even think of.” I don’t have a good answer for them, although I have to agree with their assessment.

This past week we had another example of what these entrepreneurs can do and how they are helping to shape the entire region for the future when the first Camp E3 took place. Billing itself as Energizing, Emerging and Entrepreneurial, Camp E3 came about when a group of entrepreneurs partnered with Eastern Illinois University’s Business School (EIU) to put on a two day camp for potential entrepreneurs ages 14 to 18.

Thirty students, seven college student coaches and Jeannie Dau, head of entrepreneurial activities at EIU, had an incredible time during the camp. One mother wrote me about her son’s experience, “He really enjoyed the program and talked about it at length every night when he got home. This speaks volumes for my son since I practically had to drag him to it.”

She went on, “And he was really tickled that they won, he told me repeatedly that one of two groups he labeled “the smarter kids” was going to win, so it was good for him to see that creating a successful business is about executing a good idea and not necessarily about who is the smartest…I think he got much more out of it than just a lesson in entrepreneurship.”

I wrote back to her that the common knowledge in entrepreneurial circles is that the ‘A & B kids’ are going to end up working for the ‘C ones’. I can’t tell you the number of entrepreneurs that I know here locally who barely got out of high school much less college, but today run wonderfully successful companies employing hundreds.

In being one of the judges for the business plans, I was incredibly shocked at how much knowledge teenagers could accumulate in only 48 hours because of the internet. I could see how the speed of business is only going to get faster.

The first place team developed a transit company for Effingham. Second place was a drive-in theater and third was a sports equipment store.

After the judging, the students were asked of the take-home value from the two days. Common comments were, “We really learned to work together as a team. I’m starting to understand the importance of financial statement. The details of what you put together can make or break you. You could really tell the speakers who had a passion for what they did. Failure is not permanent.”

Smart kids! Tomorrow, some of the other ideas and an incredible course put together by the business community.

Millennial Entrepreneurs in GA

Dara Barwick, who runs the entrepreneurial focus for GA ED, is an energetic advocate for youth entrepreneurs in her state. She shared several examples of ones who presented at their annual E-Summit at the Economic Gardening Gathering in Steamboat Springs, later sending me more information. They’ll go into my collection of the stories of these young people who are starting businesses at very young ages.

Haley Kilpatrick started Girl Talk in Albany, GA (population 77,730) at the age of 15 to help middle and high school girls develop team leadership skills, learn the value of community service and participate in self-esteem boosting activities all through the power of student-to-student mentoring. Today, her social entrepreneur endeavor has grown into the fastest growing nonprofit mentoring program in the entire USA, with programs in 24 states and several foreign countries. Over 30,000 girls are currently enrolled in the program and Haley’s goal is to more than double that number, reaching all 50 states by 2010.

Hunter Brock is a teenager who runs his own carriage company in Arabi, GA (population 456). His focus is primarily on weddings but he also offers relaxing rides in the country for birthdays, family reunions or any other special occasion.

If you’ve got examples of young people starting businesses, please send them to me. I’ve got dozens of examples but would like to expand my collection of their wonderful stories.

Entrepreneurial Websites

There were a number of websites that several people talked about at the Economic Gardening Gathering in Steamboat Springs. A couple really intrigued me.

Mark Lange head of the Edward Lowe Foundation in Cassopolis, MI, a foundation focused upon entrepreneurship that was started by the entrepreneur who turned cat litter into a gold mine, introduced YourEconomy. This wonderful new website ties together information from a number of data sources to allow people to take a closer look at the business activity in their local community.

Drilling down on the website, I found that in Routt County (Steamboat’s county), the percentage of jobs of Stage Two Companies (10-99 employees), which Lowe feels will “transform high-potential and steady-growth companies into gazelles”, is 44%. This compares to only 34% in the USA and 39% in CO. While all of the categories on the site aren’t completed, this is a site that I’ll have bookmarked and use extensively.

Kay Reynolds and Carolyn Usinger introduced a very powerful website called Tools for Business Success which can be seamlessly linked to a local website. This site provides all of the local, state and national forms needed to start a new business as well as providing valuable training and evaluation tools for small business. It is one of the best that I’ve seen.

Communities provide local pictures and special local websites and Kay and Carolyn set up the site for $200 plus a $125/month fee. Get on their site and be sure to check out their “grade your website” which allows you to evaluate the effectiveness of websites and also the financial scorecard tools.

Other websites that were mentioned at the conference that you might want to check out are: twitter.com and flock.com. Power points of the presentations are available at egeconomy.net.

After I did this post I had some difficulty in getting the link to Tools for Business Success to link up. The website is http://us.toolsforbusiness.info

BYOB--Not What You Think!

Sharon Gulick, Director of the University of Missouri’s ExCEED (Extension Community Economic and Entrepreneurial Development) Program, related some of the best practices that they have found in their three year place-based program in rural MO at the Economic Gardening Gathering in Steamboat Springs, CO.

She related, “We stress a BYOB approach.”

Now in my day everybody knew what BYOB meant. The first B was Bring and the last one was Beer.

But that wasn’t what Gulick had in mind for young entrepreneurs. Her message was to “Build Your Own Business.” I like her version much better!

Other tips were, “Send your local newspaper to all of your past residents to stay in touch with them. It is a very cheap investment and you never know when they might come back home.”

Another take home idea from her was, “Brookfield, MO has started a new tradition in their town. Rather than giving each new graduate a suitcase with a message to go out and do good, they give them each their own post office box with the message that you’ll always have a tie to your hometown.”

I learned later that they buy a big rural mail box with the red flag on it for about $9 and paint each students name on the side of the box. The young graduates take them to their graduation parties and take them with them to college.

MO is putting on an Entrepreneurship Summit November 6th and 7th in St. Louis, with a special focus on ag entrepreneurship. Hope you can make it to see the good things going on in the Show Me State.

Strange People

“Entrepreneurs are considered strange people in Japan,” Dr. Takashi Yamamoto, economics professor at Akita International University told the Economic Gardening Gathering in Steamboat Springs. When asked about some of Japan’s more famous entrepreneurs like Akio Morita who co-founded Sony in 1946, Yamamota responded, “Guys like Morita are more respected for the fact that they started and ran what became big companies, rather than because they were entrepreneurial.”

Yamamoto pointed out that Japan has one of the lowest entrepreneurial ratings in the world, with only France being lower. The USA, by comparison, has one of the highest ratings of developed countries.

He related the burgeoning Economic Gardening efforts that are beginning in rural Japan, “Ogata (population 3,000) is a small town that was completely man-made when a large lake was reclaimed, completed in 1974 when 580 families were moved into the town for purpose of growing rice. By 1975 Japan ordered all farmers to burn a percentage of their rice plants because of overproduction in the country and by the 1980s the rice coops in the country were struggling to find new marketing channels for rice.”

He went on, “Toru Wakui was a different type of farmer. He disobeyed the governmental policy to reduce rice production and decided to sell his rice directly to consumers. He started a rice marketing company that today has grown to 160 employees.”

Today, there are a number of entrepreneurs in Ogata and entrepreneurism is spreading in Japan.

The example of Toru Wakai from Japan is an example that I believe many of our American farmers would be well to follow. Rather than being good producers, you’ve got to find a niche and become a great marketer. Producing a commodity product is a tough business. You’ve either got to be a very low cost producer or achieve large economies of scale to be successful. The niches, like Wakui developed, are the wave of the future.

Lessons learned in a smaller and smaller world.

Economic Gardening Gathering

This past weekend I was at my second out of the six Annual National Economic Gardening Gatherings that have been held. This year’s event was hosted by the Steamboat Springs, CO ED cooperative with participants from 20 states, Japan and Australia. The event has grown from 18 participants at the first event to almost 100 this year.

The concept of Economic Gardening (EG) originated with Chris Gibbons in Littleton, CO who 20 years ago decided that it make more sense to work with existing, fledgling and new businesses in the town rather than trying to compete with the 35,000 other ED organizations in the country to recruit in businesses. It is a strategy that has worked well in Littleton and the dozens of other communities that have embraced the idea.

There were a number of great presentations, several of which I’ll highlight in the next couple of days. Don Macke from RUPRI in NE highlighted successes in Ord, NE (population 4,500) because of the efforts of three local citizens. Wally Kearns and Steve Radley of NetWork Kansas have a very impressive three year old program that has connected with 1,800 entrepreneurs in rural areas. Burt Chojnowski highlighted the entrepreneurs of Fairfield, IA which has the distinction of having more jobs than population and where 33% of the population is self employed.

Noreen Moore, head of the EG in Steamboat Springs, talked about “location neutrals” who can run their business from anywhere in the world. She related to the group, “We’ve got about 700 of these location neutrals here and we think that they account for about 10% of our overall economy.” It’s a wonderful demographic that other towns would be well to try to recruit to your town, but I’ll warn you, its going to be tough unless you’ve got a ski mountain and “sense of place” like Steamboat.

The downside for a town like Steamboat Springs is the cost of housing. Noreen related, “Our average wage is around $40,000 per year but our average home costs over $600,000, which doesn’t compute. On the hill (ski mountain) the average cost is $1,100/sq. ft.”

Steamboat has gone from having 15 private planes based at the local airport fifteen years ago to over 250, another indication of the growth in location neutrals. Another take home from Steamboat was a “Local Product Store” which unfortunately because of time I didn’t get a chance to visit.

High Fashion Retail from Rural Kansas

One of wife’s favorite catalogs is Peruvian Connection, a catalog that features hand crafted sweaters, dresses, purses and other accessories from Peru. It’s a business that you would expect to be located in NYC, Miami or some other large, globally focused city. But, if you look at the back of their catalog you will find that the company is headquartered on the Canaan Farm in Tonganoxie, KS (population 2,728).

This month’s catalog saluted Biddy Hurlbut, who co-founded the company with her daughter Annie in 1976. Biddy passed away last year at the age of 80.

The story starts on Canaan Farm where Biddy and her husband raised their three children. Annie was in the first graduating class at Yale to admit women, traveling to Peru for anthropology research on women in the Andean marketplace. The 19-year-old fell in love with the extraordinary hand woven mantas and ponchos there. For her mother’s 50th birthday Annie bought an alpaca sweater trimmed with the long haired fur of the alpaca.

With her friends fawning over her sweater, Biddy approached a local clothing buyer, who immediately ordered 45 of them! Very slowly Biddy and Annie built the business until a NY Times style writer interviewed Annie for a quarter-page article in 1979. Virtually overnight over 5,000 requests for their catalog poured in.

Today, that small business has grown to over 200 employees, several retail stores and a catalog that goes out to over 150,000 customers in the USA and around the world. Sales are over $10 million/year. The company today designs its products in Kansas and Peru, handcrafting them with artisans in Peru. Annie said, “We continue to work with the same cottage industries. Many of those have invested in their businesses; a lot are women-owned. We have relationships with our supplier base that go back 25 years, and we buy season after season from them.”

Globalism! From rural Kansas! The world is getting smaller and smaller and you can run a global business from anyplace in the world. Even a high fashion one!

Coming Home with a New Trap

John (age 27) and Brendan (26) Ready both fell in love with catching lobsters when they were seven and went out with their Uncle Ted to check his lobster traps near Cape Elizabeth, ME. They bought their first boat when they were nine and started running their own traps on weekends and during the summer.

When they went away to college in MA most of their friends told them, “There’s no opportunity in Maine or there’s no real business in Maine. They always hit us the wrong way because we always wanted to come back to Maine and grow something and really be able to share it,” John Ready told the Maine Biz magazine in a 2007 article.

They returned home in 2004 and set up Ready Seafood, a wholesale lobster and seafood distribution business, that is today doing over $10 million in business. They are another example of the Millennial Entrepreneurs that I’m continuing to study and collect their stories around the USA. It would be a good story if I stopped here but the Ready brothers are like a lot of Millennials who are taking their business to a new level.

Last year they launched “Catch a Piece of Maine” to directly bridge the gap between lobstermen and the consumer without going through the many levels of distribution. For $2,995 a customer can buy a Maine lobster trap that will be fished by the Ready brothers or one of the six other lobstermen who work with them. All of the lobsters caught in the trap throughout the season which runs from May through December, are credited to their account and they can get a shipment of lobsters at any time they wish. With a typical trap bringing in 75 lobsters per year (and customers are guaranteed at least 40/year) a customer gets to harvest their own lobsters. Each shipment also comes with a pound of steamers, a pound of mussels and all of the other necessities (from butter to bibs) for a bona fide Maine lobster dinner. They also get a DVD about Maine lobsters and a photo of who will be tending your lobster trap.

Based upon the reception of the women in my office, I think that the picture idea will help them in the sales. My guess is that I could probably get quite a few orders if I could get them to personally deliver their catch.

Millennial Entrepreneurs—You gotta love how they are transforming how to conduct business. They are going to change the USA for the better!

A New Paper Mill!

There hasn’t been a new paper mill built in the USA in over 30 years and in the past decade there have been 150 mills that have closed down, leaving only about 450 left in the country. Actually, this blog isn’t about someone building a new paper mill here, but rather how two guys helped to make sure that there was one that could reopen if and when the time came. This is their story….a real CAN DO story! Thanks to David Zembiec of the Tug Hill Commission in upstate NY who sent it to me. I was there earlier this year to do a talk to their regional group and fell in love with their region of the state which encompasses 1/3 of the land area but has only 3% of the state’s population.

The Newton Falls Paper Mill was started in 1894 by the Newton family. The tiny hamlet of a couple hundred people, too small to have its own census data, was essentially a one horse town with the mill being the major employer in the area after a nearby iron-ore mill closed in the 70s. When the paper mill closed in 2000, most of the former workers had to drive over 50 miles to find work.

Two of those workers, Andy Leroux (44) and Levi Durham, Jr. (51) both found work at another paper-making plant 44 miles away but when that plant closed a year later they worked some odd jobs as they developed a plan to revitalize “their” paper mill. After seeing part of the roof in the 400,000 sf building collapse due to a heavy snow load and sadly watching the plant fall into further disrepair, the two decided to take things into their own hands, or as Andy told the N Y Times, “We decided to stop thinking about our mill and actually do something to save it.”

The Appleton Coated Paper Mill, which still owned the plant, bought into their plan and agreed to hire the two to look after the plant as they desperately tried to sell the plant to anyone who would look at. I’ve seen many other such abandoned plants in my day, buying a couple of them, and generally what you find is that caretakers like this who used to work at the plant sit around playing cards and bemoaning the fact that the economic engine in town is dead. They sit around, hoping that the old times return. And, they never do.

If Leroux and Durham had taken that approach, they would have been correct. No one was ever going to reopen a plant that was in as bad of shape as the Newton Falls Paper Mill. But, they didn’t just sit around letting the building and equipment slowly deteriorate. Rather, they lubricated machines, shoveled snow, swept up debris and tried to make the plant look like it had just closed down. And, they kept that up for years as they continued to try to find anyone who would buy the plant to operate it rather than just scrapping it out.

In 2006, this two man ED organization approached Dennis Bunnell, who had once been president of the mill, showing him how they had maintained the building and paper making equipment. He put together a plan, some partners and purchased the long closed plant for $20 million.

On Sept. 7, 2007, the new Newton Falls Fine Paper plant reopened with 97 new employees, including Leroux and Durham. Over 600 applicants applied for those jobs with about half of the workforce having worked in the mill previously. Many left their new employment to return to “their mill.”

Raymond Fountain, head of the St. Lawrence County Office of Economic Development says of the new mill, “It is adding about $18 million to our local economy, including a $4 million payroll.”

And, it all happened because two “Can Do” guys said, “This isn’t going to happen to my mill. We’re going to do something to get it back going.”

First Ever Third Annual

Legend has it that Cape Girardeau, MO founder Louis Lorimier played the very first round of golf west of the Mississippi River in 1803 with Merriwether Lewis of Lewis and Clark fame in what is now downtown Cape Girardeau. Not only was Lewis a famous explorer but obviously a burgeoning golfer also, winning the match by six strokes!

For years the local newspaper editor Joe Sullivan dreamed of and wrote about dreaming of hitting golf balls from the Courthouse terraces and into the Mississippi River, some three blocks away. The more that he wrote about his dream, the more that others started to buy into his dream of the Cape Girardeau Open. And, the legend of that first Cape Girardeau golf match with it.

This next Sunday, June 22nd, Cape Girardeau will hold the First Ever Third Annual Louis J. Lorimier Memorial World Famous Downtown Golf Tournament and All You Can Eat Catfish Buffet in the downtown area on two specially created nine hole courses through the streets and up and down the Courthouse Park terraces. And, you can’t get any closer to the river than the picturesque sixth hole which runs on the river side of the levee.

Cape Girardeau’s motto of a town where the “River Turns a Thousand Tales” is surely reaching new heights with this newest golf tournament. What historic event can you convert into a tourist attraction for your town?

Farming Bill--Law of Unintended Consequences

The Law of Unintended Consequences continues to amaze me. Governments pass laws thinking that they are doing something to help those most in need and often exactly the opposite occurs. I’ve seen it happen over and over and think that there should be a committee set up at every governmental body to study what happens in the long term with governmental action.

This past month the U. S. Congress passed a new farm bill. In most of the Congressional press releases on the bill I read that the bill would help to “keep the family farmer going and provide a boost to young farmers.” Of course if you’d read those same press releases 20 or 30 years ago they would have said the same thing. How have we done over the past 30 years?

Every five years Iowa State University does a survey of Iowa Farmland Ownership which looks at who owns that state’s farmland. They just came out with their new study and to me the results are alarming.

Twenty five years ago, in 1982, about 11% of Iowa farmland was owned by those under 35 years of age. Today it is only 2%. During the same time, those over the age of 65 have grown their ownership from 27% to 55%!

Ownership by someone living out of state has grown from 6% to over 20%!

As alarmingly, the percentage of farmland that crop shared, meaning that the owner of the land shares in the cropping costs and risks, has fallen from 50% to only 21% today.

The farm bills of the past, and this new farm bill are not any different--all have attempted to take the natural economic swings out of farming, providing a safety floor to landowners and farmers. The end result of these policies is that they have driven up the price of land which makes it virtually impossible for a new farmer to enter the profession, focused production into a handful of crops, hurt small towns by diminishing farming diversification, pushed farm ownership into the hands of non-farmers and, in my opinion, seriously hurt rural America.

Congress has caused some major disruptions in rural America by incentivizing farmers in the wrong ways. Our small towns all across the country have suffered as a result. It is too bad that they don’t learn from their past mistakes and the Law of Unintended Consequences, leaving the market to sort out the winners and losers. America and especially rural America would be much better, if they did.

American Manufacturing--Booming!

“I have a good friend that owns a production machine shop. They produce parts for a variety of industries and are coming off their best quarter in more than 10 years. Much of their product is going to other manufacturers who are shipping overseas. Another friend it trying to find a tool and die shop to produce a part, but literally every shop in the Midwest is booked solid,” my brother Bob wrote in his new blog, late last week. His is mostly a political blog that he hopes to write from the Democratic National Convention as a Republican, calling his blog Republican Reporter. Check it out!

Another good friend, Don Altorfer, pointed out to me that the ADP Small Business Report, which reports on businesses with less than 50 workers, added 61,000 jobs in May even as the BLS showed 49,000 jobs lost nationally in May with the unemployment rate jumping from 5.0% to 5.5% in that report. As alarming as that jump was, most are attributing to some seasonal quirks with young people coming into the labor force. The unemployment rate, which is up 1.1% from its low in 2007 is composed of young people under the age of 24 which is up 2.4 points and those over 25 which is up only 0.4 points. Hmm!

Other economic indicators are also generally positive, especially in the manufacturing sector, where productivity is up 4% and real compensation is up 3.5% when compared to a year ago. Factory orders were up as was the manufacturing index in the latest economic releases. Sure there are industries in trouble, like the airlines, American autos and housing but others are booming in the energy and ag industries.

Intrade, an online site that lets people put their own money down on predictions of actual events, a pretty good indicator, shows a one in three chance of us entering into a recession in 2008. I’m guessing that the average person on the street might be shocked by that information, primarily because the media and presidential candidates have all but convinced them that we are already in one!

As I’ve reported to you in the past, our book of business at Agracel continues to grow and we are in the best of times for industrial expansions. This year we’ve got expansion projects under construction or planned in the following industries: food processing, ag equipment, animal feed, furniture, metal fabrication, machinery, medical equipment, printing and building accessories. None are huge but each will create new jobs and are sure signs that this economy is doing much better than the national media would have you believe. In the 22 year history of Agracel, we in fact, have never been busier.

If this is a recession, I hope that it continues like this into the future.

Home of Regionalism

It was great to be back in NC last week. The Regional Center for Economic, Community & Professional Development at the University of North Carolina at Pembroke had me in for their NC Small Town Summit with both my BoomtownUSA and Hometown Entrepreneurs talks featured. In addition, Jim Dittoe of Winning Community, who recently wrote “90 Days to a Winning Community” was also on the program. I wrote the forward for his book which takes the findings of our BoomtownUSA research and puts them into a practical guide of how to implement in your town. Great book!

Regionalism is a concept that is often foreign to many small town leaders. In my talk, I applauded the Regional Center for working to help build regions in the state, despite the natural tendency of many to fight the idea because of what I call the FNL Syndrome. It is unfortunate that the FNL Syndrome, better known as the Friday Night Lights Syndrome causes people to think that because they play each other on Friday Nights, that they can’t possibly get along with those same people on Monday mornings because there is so much more that can be accomplished in rural regions if done regionally.

One of the best long term examples of the success in regionalism is in NC where the Research Triangle, set up in 1959 across many political boundaries, has become a major job generator in the SE. It is an example that is widely studied and being emulated elsewhere.

Pembroke, NC (population 2,399) sits in Robeson County which is bisected by I-95 just north of the SC line. It is the halfway point on the drive from NYC to Miami. The county was historically a major textile, sewing and shoe center but as those industries have moved overseas has been challenged with reinventing itself. The three county region has lost over 20,000 jobs in those industries, including the 4,000 people who made your Converse tennis shoes.

Sylvia Pate, the head of the Regional Center, is developing some wonderful programs to assist the areas hit hardest by these industry dislocations, taking a regional focus. She pointed out some of the challenges in a county like Robeson, “We’ve got seven different Chambers of Commerce and six different school districts.”

The Regional Center has also developed a four module “Certificate Program for Small Town Leadership Development” that includes modules on leadership examples; meeting management; strategic planning and managing projects.

It was a fun, activity filled day back in NC.

Columbus Leads the Way--Again!

Columbus, IN is one of the many incredible agurbs® that I have found in my research and have had a chance to visit. I use it as an example in my talks of how a town can shape a vision for itself and then execute upon it. J. Irwin Miller, CEO of Cummins Engines, had a vision of his hometown being something different and executed a vision that today has tiny Columbus, IN ranked as the sixth most architecturally significant city in the entire USA.

Twenty years ago Columbus made a push to recruit in Japanese companies, bringing the first Japanese company to the state, and today there are several that make their USA headquarters there out of the 220 Japanese plants in IN. Part of the reason that so many located there was an act of kindness by Mr. Miller. When one of the first companies was looking at Columbus and the president of the company became ill, Mr. Miller flew him up to the Mayo Clinic in his corporate jet, helping to save the man’s life. Acts of kindness like that are seldom forgotten and often repeated.

This past month, the first Chinese company announced that they were going to build a plant in IN. Guess where they chose to locate?

Yep…Columbus, IN. Techtop Industries, a joint venture of two Chinese companies in the electric motor business, recently bought 36 acres of land to build their first plant in the USA.

Some communities are always a step ahead of others. Columbus, IN is such a town!

Emigrated from Sri Lanka--Huge Success Today

The 2008 Summit on American Competitiveness highlighted the need for us as a country to embrace and nurture more immigrants with high skill levels, especially in the area of engineering. The same day that I was contemplating the issue of immigration, an interview with Deepal Eliatamby was given to me by Todd Thoman, who travels the country for Agracel looking for new industrial opportunities.

Deepal, who I’ve come to know and respect in the past couple of years is also a partner with us on a spec building project in SC and in our newest LLC which has buildings in IL, KY and AL. Deepal immigrated to the USA in the early 80s with two bags and a backpack from his native Sri Lanka to get an engineering degree from the University of South Carolina. He finished his undergraduate work in 1988 and got his graduate degree in engineering in 1989.

After working for another company, the entrepreneurial bug bit him and he started his own engineering company four years ago with five people. Since then he has grown the business to over 40 employees, doing projects all over the SE.

He also sees a growing shortage of engineering talent in the USA, commenting “As a nation, we produce about 75,000 to 80,000 engineers a year. The emerging economies such as China and India are generating almost a million engineers a year.”

Deepal is a wonderful example of what is possible in this country. The American Dream is still alive and well. We need to do all that we can to grow and nurture those with dreams like Deepal to come to this country to make it their new home.

Entrepreneurism & Free Trade as the Future

A second major focus of the 2008 National Summit on American Competiveness was in the area of entrepreneurism and also free trade. Here are my notes from those sessions.

Jim Phillips, managing partner of Pinnacle Investments started off the session with, “More will be invented in the next 20 years than in the entire history of mankind. History shows that when there are problems, it is an incredible time to be starting new, innovative businesses.”

Steven Chen, an IL native who attended the University of Illinois but headed out to the Bay Area upon graduation to work for Pay Pal before starting YouTube commented on the different perspectives of the Midwest, “Back here I was looked down upon as an engineer, whereas I was looked upon as an Olympian in Silicon Valley. There is more of an openness there. We figured that all we needed were some servers and our credit cards to become operational when we started YouTube.”

Phillips chimed in, “Over 50 to 60% of the engineers are coming from overseas to go to our colleges and then when they finish we ask them to leave. Can you imagine what would have happened if we had our current strategy on immigration when Albert Einstein was trying to come here?”

John Koten who heads up Fast Company magazine had an interesting observation about immigrants, “Immigration is an entrepreneurial act. All of us in this country came from that entrepreneurial stock. We need to hang onto that spirit. All you have to do is look at the statistics on immigrants starting many more businesses than native born Americans.

Former Governor John Engler led the discussion on free trade, “We are going through the worst attack upon free trade since the 1930s. All of the data on trade is very, very positive even if the emotionalism of our current politics is against it.”

Bob Lane, head of John Deere, commented of the impact of free trade upon his American workers, “One-third of our U. S. production is exported. One-fourth of all U. S. ag production is exported. We’ve seen a fabulous humanitarian example of what can happen with free trade. When ¼ of the world is living on less than $2/day, raising someone from an income of $1 to $2, they are going to eat much better. They aren’t real interested in self actualization. We’ve got 2 billion people moving into the middle class on the world stage and huge opportunities as Americans to gain from that movement.

Jim Owens, CEO of Caterpillar echoed Lane’s comments, adding, “We are doing 70% of our business overseas today and it is growing at 20%/year. NAFTA has resulted in all three countries (USA, Mexico and Canada) increasing their GDPs and their wages when compared to the decade before passage of NAFTA. If we are going to have leading companies twenty years from now, we need to be competitive and to be able to compete.”

Later Owens pointed out that, “During the 70s and 80s Brazil, India and the Soviet bloc were all protectionists. Yet not one global business came out from those countries during those years. They opened up in the early 90s and now you have numerous examples in each of those countries of world class companies that are competing very effectively on the world stage.”

Mathew Slaughter, International Economist at Dartmouth College, pointed out, “A generation ago the U. S. was in the middle of the pack as to tax rates. Today, we are one of the highest in the world and we have one of the most complicated tax systems out there. It does a disservice to our workers when we have a system that is too complicated and expensive.”

Entrepreneurism. Free Trade. One is being elevated today in our society while the other is under a strong emotional attack. From every data study that I’ve seen, they should both be being elevated and revered.

American Competitiveness

I was privileged to be asked to participate recently in the 2008 National Summit on American Competitiveness in Chicago, put on by the US Department of Commerce. There were a number of “top shelf” presenters including: Secretary of Commerce Carlos Gutierrez; CNBC Anchor Maria Bartiromo (the “money honey”); YouTube Founder Steven Chen; Mayor Richard Daley; RUPRI Director Mark Drabenstott (formerly with KC Fed); Manufacturing Association head John Engler (former Governor of MI); Retired IBM CEO Louis Gerstner; John Deere CEO Bob Lane; Boeing CEO Jim McNerney; Governor Janet Napolitano (AZ); Caterpillar CEO Jim Owens; Secretary of Treasury Hank Paulson; Harvard Competiveness Guru Michael Porter (I was in his first class as a professor 30+ years ago); Governor Mark Sanford (SC); and several others.

I sat at a table with several interesting individuals who added insight to what they are seeing around the Midwest. Richard Wilkey, founder (1973) and CEO of Fisher Barton Inc from Watertown, WI, runs a number of businesses, one of which is exporting lawn mower blades to China. His company makes a lawn mower blade every 3 seconds. Adam Robinson is the founder and CEO of Illuma, a four year old business that helps high tech companies source workers. He told me, “We are not seeing any drop in the demand for skilled workers. There aren’t enough around to satisfy the demand that we are seeing.”

Secretary of Commerce Gutierrez had some interesting observations to start the conference, “The big advantage that we have in this country is our freedoms. It allows us the freedom to innovate, start new businesses and even gives us the freedom to fail. This innovation has to take place in the private sector and not be led by DC. Businesses that are less than five years of age create ½ of all of the new jobs in this country.”

He talked about the need for free trade, “Our exports last year were $1.6 trillion, up 12.5% from 2006 and we are estimating that they will be up another 18% in 2008. This is four years in a row that we’ve had double digit growth in exports. It is very unfortunate that there are those that want to try to tear down our free markets around the world and that we are today standing still on implementing new free trade agreements around the world.”

In a session entitled Roadmap to the Future, the heads of Boeing, IBM and Intel teamed up for a discussion with Michael Porter. The consensus of this group was that the USA needed to change their investments in order to make ourselves more competitive in the areas of education (falling behind the world in K-12 while universities are still world class); infrastructure investment (also falling WAY behind rest of world); Innovation (R & D) and the environment. Porter pointed out that last year Americans were granted 80,000 patents compared to 700 in China, 500 in India and only 200 in Russia.

All of the presenters decried our current immigration policies for high skilled workers, especially when you realize that by 2020, 80% of the worldwide consumers will reside outside of the USA and we must develop products and services for them.

The head of Intel drew the biggest laugh of the conference when he asked “how many of you think that doing away with the gas tax this summer will help us?” It is a short term fix, which Congress seems much too interested in rather than finding long term solutions.

The head of IBM cited a “1983 study that said if a foreign country had fostered our educational system upon us, we would have considered it an act of war and we haven’t done anything about it since then!” He drew loud applause when he added, “A great teacher makes as much as the worst teacher. We need a national will to fix these problems. It is not a money issue…we’re throwing lots of money at it. It’s not molecular biology, but we don’t have the political will in this country to fix it the way that it needs to be fixed.”

The head of Intel commented on the immigration issue, “You can see the consequences of the Law of Unintended Consequences. We can’t control the 13 million illegal immigrants in this country but we can control the 100,000 who want to come here legally. It is an inane policy! We bring in the best from around the world to the best universities here but then we tell them that they go home where they will compete with us, rather than encouraging them to stay here.”

In the area of innovation, Porter pointed out that we have a “mystical brew” that other countries haven’t figured out how to compete with, “Right now we are investing billions into energy research from hundreds of companies. Other countries can’t duplicate that environment. The old Soviet Union had the most scientists in the entire world but couldn’t innovate except on military products. We are being drug down by our high costs like medical insurance, our tax system and litigation.”

Tomorrow: Entrepreneurism in the USA as a Competitive Force

Not Only the Cabela's

A town like Sidney doesn’t just happen because of one family, even if that family is the Cabela family. As we drove around town on my tour, Gary Person pointed out entrepreneur after entrepreneur who has made major contributions to the town.

Some of those other businesses were a hitch-ball manufacturer, specialty wire and cable manufacturer, a heavy equipment parts supplier for Caterpillar, a shortline and warehousing operator, feed yard, apron maker, bird seed processor, trucking company and rail car repair facility.

We stopped by Convert-A-Ball Distributing Company to visit with Bob Van Vleet who started the company in Sidney. He told me, “I started out with absolutely nothing and after 50 years I’ve still got most of it left.”

Bob holds 18 different patents, the major ones of which revolve around his idea of developing, manufacturing and selling trailer hitch systems which allow you to easily and safely switch from one sized trailer hitch ball to another without the use of any tools. Today, he has just under 50 employees in the six different businesses that he runs.

One of those businesses grew out of his frustration with finding flags that would stand up to the strong winds of western NE after he led volunteer efforts to construct a Memorial to War Veterans in Sidney. His company makes flags out of football jersey material.

American ingenuity! American entrepreneurs! I love ‘em!

Summer in My Hometown

It’s a beautiful day here in Effingham. I’m sitting on our boat dock with not a cloud in the sky and a cool breeze blowing off of the water. Brats are on the grill. Summer is finally here! It was a l-o-n-g winter and we seemed to completely miss having anywhere near a normal spring. Winter just seemed to hang on forever.

We have a couple who were friends of mine from the town I lived in Brazil staying with us for a couple of months so we’ve been trying to find unusual things to do on the weekends and Betinha has been taking them to area attractions during the week. This weekend has been a full one with loads of things to do in Effingham.

Friday night we went to a new bank opening in Effingham, having been to another bank opening on Thursday night. And, I thought we had plenty of banks already!

Afterwards we went to the Rosebud Theater for a CD release party for a local singer, Matt Poss. It is his third CD and there were close to 2,000 fans that packed the theater which normally seats 1,550. This wonderful theater was built this past year through a public-private partnership of the City of Effingham, 30+ local investors and 6 local banks. Matt Poss is one of many who have packed the place and had the Rosebud rockin! He put on a wonderful show that highlighted his multi-faceted talent from country and rock to bluegrass.

Saturday afternoon we attended the duck race (plastic not live) fund raiser for the American Cancer Society and then a Bravo Company send off for our local company that is on its way to Afghanistan this month. The local Legacy Harley Davidson dealership put together a wonderful tribute and lunch for the 80+ local soldiers who are headed out.

From there we drove over to the VW Fun Fest at Mid America Motorworks. This annual event brings in over 1,000 VW Bugs and other air-cooled VW vehicles. Mid America also puts on a Corvette Fest in the fall that brings in over 15,000 Corvettes and their fans. Mike Yager, who I wrote about in BoomtownUSA, literally started the company out of the trunk of his Corvette with the help of a $500 loan. Today it has grown into a $50 million per year business with its own private museum and several events that bring tens of thousands of visitors to Effingham.

We capped off the day with a cookout in neighboring Newton for a Brazilian exchange student who was heading back home today. His parents came up from Sertonzinho and the girls of Newton High School gave him quite a send off.

All in all, it has been an activity filled weekend in my hometown. Now I’m just relaxing. And, the brats are almost done.