Developers hope to boost businesses close to home

LEWISTON – Economic development can conjure ideas of 500-employee call centers and 100-employee manufacturers moving to rural Idaho from fast-paced California cities.

In reality, a slight growth in businesses in the five north central Idaho counties is the result of a quieter form of economic development.

“I call it the twosies and threesies,” says Jill Thomas-Jorgenson, regional director of the Idaho Small Business Development Center at Lewis-Clark State College.

Small businesses are hiring one or two employees that, without the glitter of a large enterprise moving in, have helped create jobs in the five-county region.

That doesn’t necessarily equate to more jobs in the region. Last spring, the Idaho Department of Commerce and Labor reported Nez Perce County had lost more than 1,000 jobs in the previous year.

If a larger business closes and two small ones open, the total number of jobs still may slump.

But the jobs offered by small local businesses are more stable, notes Doug Tweedy, regional labor economist for the commerce department at Lewiston.

“Employers are real conservative when they are small,” he says. They don’t hire new employees without a plan and without confidence, he says, and when they hire it’s usually with the intent that the positions will be permanent.

The growth of businesses on the Camas Prairie and up the Clearwater Valley can be partly credited to economic development specialists, according to Tweedy.

“To fill in the gaps, these economic development specialists have helped not only nurture the small businesses, but have helped build buildings.”

Specialists hired with money allocated by the commerce department have been involved in the business incubators being built at Elk City and the Orofino Industrial Park.

When Grangeville residents started looking at economic development 20 years ago, recruitment was done by volunteers, according to Jeff Kutner, chairman of the Ida-Lew Economic Development Council at Grangeville.

After years of working with little gain, it became apparent a staff person was needed to work on economic development full-time.

In 2001, Gov. Dirk Kempthorne backed a plan to set aside $500,000 to help communities hire economic development specialists and finance rural development programs.

Twelve specialists were funded by the Rural Idaho Initiative in counties with populations of less than 50,000. The 12 boards that oversee the specialists each received $41,500 from the state to fund the positions. The towns in those counties participate as partners, contributing money for office space, travel and other expenses.

Three years into the program, the specialist for Idaho and Lewis counties and another in Clearwater County deal not so much with recruitment of big businesses, but with nurturing small local businesses.

“I’ve got people walking in the door almost daily with questions about starting a business,” says Chris Kuykendall, economic development specialist for the Clearwater County Economic Development Association, based in Orofino.

As a result, she headed the first boot camp recently for about 20 aspiring entrepreneurs and small business owners.

Shaun Maxey is the economic development specialist for Idaho and Lewis counties, based in Grangeville.

“It’s easy to fall into the trap of recruiting business and ignore existing businesses that just need a little help,” Maxey says.

By helping those businesses, he says, all business benefits.

“We might not do anything for you,” says Ida-Lew’s chairman Kutner, “but the two jobs we saved in the next town may shop at your store.”

Other areas represented by specialists around the state have had bigger job growth than north central Idaho, says Doug Thompson, business development specialist for the commerce department at Boise.

But that doesn’t tell the whole story, he adds.

“North central Idaho has some unique obstacles that really make Shaun and Chris’ work tough.”

Those include rebuilding the economy of a resource-dependent region with inadequate transportation and technology infrastructure.

“The more successful economic development focuses on job retention and expansion amongst existing business,” Thompson says of economic development statewide.

Recruiting business into north central Idaho has been difficult.

First, the cost of moving a business is staggering, as Ray Anderson of Anderson Aeromotive at Grangeville found out.

Anderson’s company overhauls large radial aircraft engines.

“The initial cost was hard to anticipate and it ended up costing more,” he says of his move from Stockton, Calif., three years ago.

As a result, it took longer to see profits increase. But that’s happening now, he says, and profits are only part of the upside of moving to Idaho.

“I could go on for hours on that,” Anderson says of the perks of the area, listing low crime, recreation, lower population, housing prices and a generally lower cost of living.

“It has been a great move.”

While transportation and communication haven’t been stumbling blocks for Anderson’s business, they can be restrictions for many industries.

That’s why Thompson of the commerce department thinks Idaho is better off focusing on homegrown businesses first.

“It makes headlines and it is always neat when you recruit out-of-state businesses into Idaho,” he says, but it is riskier.

Large industries see larger fluctuations in employment, says Tweedy, the labor analyst at Lewiston. That’s why business creation is up in the region, but jobs are down.

“Recruitment is just a hard thing,” adds Kutner, of the Ida-Lew Economic Development Council. “You are competing with everyone in the universe.”

If 35 local businesses hire or are able to keep one employee, that’s equal to years of trying to recruit one large business, notes Kutner.