Let’S Begin A New Hunt For Elephants

For most hunters in the region, deer season is over.

But for Inland Northwest hunters of economic opportunity, elephant hunting season is just beginning.

In Boise, the economic “elephants” have names like Micron (10,100 jobs) and Hewlett-Packard (4,000 jobs).

When they roar, all of Southern Idaho listens.

And the Inland Northwest is listening more attentively now, too, thanks in part to the informative reports last Sunday by my colleagues Betsy Russell and Tom Sowa.

In comparing the growth of the high-technology sectors in recent decades, Betsy and Tom chronicled how booming Boise recovered from a mid-80s malaise by riding the wave of Micron and HP, but also by creating an environment that nurtured spin-offs and other start-up firms.

Meanwhile, Spokane, which had some early technology successes decades ago, including Key Tronic, ISC and a smaller HP plant, has not been able to recruit full-sized elephants or grow small pachyderms into industry giants.

Our largest tech-sector companies include Agilent and Telect, each with about 1,200 workers here.

The issue of economic elephants arose last Thursday at the Inland Northwest Partners annual regional economic forecast.

John W. Mitchell, longtime Western region economist for U.S. Bancorp in Portland, talked about the continuing cloudy climate for agriculture and timber and the drastic possibilities for smelters and others now that our “birthright of cheap energy” has crashed to a halt.

An up-cycle in aerospace should help Seattle, Mitchell said, but the only other bright spots for next year seem to be semiconductor manufacturing in Portland and tech-sector growth in Southern Idaho, which “has done extraordinarily well” in growing tech firms and call-center operations.

“A lot of the technology stuff takes place in an agglomeration, especially on the service side,” Mitchell said, adding, “there’s a lot of jealousy and envy” from places where the growth is not occurring.

The Spokane area beat the state average for employment growth from 1992 to 1994, but has significantly lagged behind the state average since then, said Mitchell, who taught for 13 years at Boise State University and whose observations are frequently included in this section’s quarterly economic reports.

“When I think about Spokane, I think about the problems in agriculture, the forests and mining,” Mitchell said. “But you have a large industry in medical services and you have other advantages. However, to land something like a large (computer) chip plant — it’s a lot like hunting elephants. And there aren’t a lot of elephants out there.”

Picking up on the metaphor, another speaker at the forum, Jim Simmons, told the crowd of 250, “if we can’t shoot elephants, maybe we should shoot, what, wolverines.”

Simmons, president and chief investment officer for ICM Asset Management in Spokane, admitted the wolverine reference came out “because I was a Michigan State Spartan and we hated (University of Michigan) wolverines.”

“The simple reality,” Simmons said, “is we (in the area) have to do this ourselves. The state is not going to create enough incentives for growth and jobs here.”

Showing a chart listing 15 specialty venture capital firms in Seattle, compared with one (Northwest Venture Associates) in Spokane, Simmons said, “We need to provide more early-stage risk capital, because it’s easier (to recruit and grow businesses) when you create a conducive environment to ask firms to move in.”

He added: “We have a chronic lack of money in the seed stage - what we call friends-and-family financing.”

Simmons also said tech assembly jobs are not the answer. He thus echoed a point made in last week’s Boise comparison: the HP plant there, despite its large staff, does little assembly of laser printers. Much of the work there involves researching and developing new technology products.

“We need to create our own intellectual property businesses in this region,” he said. “Low-cost manufacturing will always be cheaper elsewhere.”

Indeed, Key Tronic years ago moved its keyboard assembly jobs to Mexico and China and has had some limited success marketing its custom design and manufacturing expertise.

Looking at the banner of forum co-sponsor Inland Northwest Partners, Simmons said Eastern Washington and North Idaho “need to be more than partners; we are attached at the hip.”

Noting that “a remarkable number of companies in the Spokane Region have four employees or less, he said “Spokane and North Idaho together need to create job opportunities for people to move to.” He added that includes places to land if a first tech job doesn’t work out for some employees moving to the area.

After the presentation, Simmons said, “We absolutely need to hunt elephants,” and shouldn’t just shoot for smaller animals in the economy’s wild kingdom.

Given the aging of the population and burgeoning medical needs, areas such as medical services and biotechnology may be a fertile hunting ground for the Inland Northwest. Or perhaps we could pursue a piece of the growing wireless world of communications.

But before we hand out the safari hats, it might be good to remember Spokane’s once-famous elephant, Taro.

Longtime residents might recall the hoopla over the 4-year-old Indian elephant given to Spokane in 1968 by the Portland Zoo.

Volunteers, including area school children, raised thousands to build a “pachy-dorm” at the Interstate Fairgrounds. After a naming contest it became “Taro’s Terrain.”

All of that effort resonates now for finding a high-tech elephant or two - communitywide effort, interstate cooperation, local investors, nice environs.

Taro became the poster pachyderm for Spokane’s effort to build a zoo, and in the fall of 1973 was moved to the Walk in the Wild site in the Spokane Valley.

Alas, by 1976, news files reported that Taro had grown “too large and ornery to be cared for” and the elephant was sold to a zoo in Irvine, Calif.

Walk in the Wild is gone too, replaced by the Mirabeau Point complex.

High-tech firms can be a lot like Taro. Products and cycles come and go. On Taro’s leaving, a young columnist named Chris Peck wrote about Spokane’s “white elephant.”

But the point is not about keeping the technology Taros of the world. Rather, it’s important that the Inland Northwest, if it is to grow and prosper, learn how to marshal its resources and work together to land some elephants, large and small.

It must befriend the Gates, Ballmers, Ellisons and others who own, raise and grow elephants.

It’s the age-old parable about the value of learning how to fish, rather than just being given a fish. The area has enough going for it to land and grow some big firms.

Maybe even this year’s daunting dot-com shakeup and shakeout is a blessing in disguise. Survival of the fittest elephants.

So it just might be a good time for Spokane and the Inland Northwest to reload and start the hunt anew.