Economic Development Blog

A new report released by the Business Research and Economic Development Center (BRED) at Boise State University identifies and analyzes key metrics that provide a depiction of the state of economic growth and development of Idaho compared to the other 47 contiguous states.

Idaho business environment study (photo – idaho.gov)

Nine metrics were chosen for comparison, including firms, employees, net job creation, mortality and birth rates for establishments, and the Kauffman Index of Entrepreneurial Activity.

The report, put together by BRED director Dr. Brian Greber, is based on data for the period of 2001-2010, mostly provided by the Bureau of Labor Statistics, the U.S. Census Bureau, and the Bureau of Economic Analysis.

Similar to overall population, Idaho ranks low in the number of firms, establishments and employees (38th, 38th and 40th respectively in 2010), but proved to be one of the fastest growing states in each of these three metrics.

In 2008, however, during the peak of the recession, Idaho transitioned from one of the fastest growing to one with the fastest declining.

Between 2001 and 2010, establishment birth rate regularly ranked in the top 10. During that time span, Idaho had an average establishment birth rate of 10.38 percent.

While establishment birth rates in Idaho seem favorable, establishment mortality rates do not. Idaho consistently ranks near the bottom of this measure, especially between 2008 and 2010.

Even more distressing for new business growth in Idaho is that the mortality rate of establishments five years or younger is even higher. In 2010, Idaho ranked last among the states considered, with a mortality rate of 21.13 percent for young firms. This is a dramatic reversal from their earlier success in this measure during 2006, when Idaho was ranked second.

The study therefore suggests that public policy should direct more of the state’s resources towards helping existing businesses succeed rather than enticing out-of-state businesses to relocate.

The report also suggests that Idaho may want to examine the creation and support of organizations that provide mentorship to entrepreneurs, along with implementation of tax policies that help businesses attain second-stage growth.

Read the full BRED “Competitive Benchmarking in Economic Growth and Development” report – Download (pdf)

www.washingtonpost.com/

The region of Potlatch, Idaho is looking forward to boosting economic development by attracting manufacturers in the ammunition and gun industry.

The area of Potlatch has a very small community that has housed a large population of workers in the local pine sawmill.

The community suffered as the Lumber Company Mill closed down and left many of the workers without a job.

The economic future was dire for Potlatch until an ammunition maker relocated to the region from the area of Seattle. The company that moved to Potlatch is called PNW Arms. Many of the local leaders were deciding what type of industry would best suite Potlatch but due to the movement of PNW Arms, political leaders and businesses were encouraged by the progress.

A Marketing Consultant whose name is Gary White elaborates on how Potlach was developing a marketing plan to attract businesses and they decided that the best niche would be the firearm industry. The region of Potlach went from a lumber region to a firearm town. Set apart from attracting firearm makers, the region hopes to expand housing that is hunter themed and developing the retail sector in the area. The Mayor of the region whose name is David Brown states that he wants to attract people from out of the town as well as out of state.

There are many states that have restrictive policies against guns and the region of Idaho is known as a gun friendly state. The Department of Commerce in Idaho is making recruiting a priority for many of the firearm makers. The Department wants to make sure there is less regulation for many of the gun makers. The firearm industry is actually quite large as it is valued at $3.8 billion dollars and employs approximately 90,000 people.

Overall, the area of Potlach is going to get a much needed boost in regards to development.

Read More

Potlatch, Idaho was a small lumber town with a population of 800 until 1981, at which time the Potlatch Lumber Co. shut down and left the town without an economic base. Now the community is aiming to morph from a timber town to a “gun town.”

Potlatch, Idaho (photo - Potlatch.com)

The idea has been gathering speed after PNW Arms decided to relocate from Issaquah, WA to Potlatch because ammunition maker ATK was already located in Lewiston, ID and its business is booming.

Potlatch is trying to make the most of a national trend where firearms and ammunition makers are looking to relocate their manufacturing plants in the Northeast and Midwest where gun control laws and lawsuits are heavily biased against them.

For instance, there’s a bit of controversy going on over $6 million in ED grants to two gun-makers in New York State who opposes the passage of a bullet microstamping law favored by law enforcement. The bulk of the money, $5.6 million, went to the Remington Arms Company.

Remington has recently threatened to relocate from the state if NY passed the bullet microstamping law. Remington has nearly 1,000 employees in Upstate NY, which is the result of $3 million in grants provided by the Empire State Development Corp. (ESDC) to lure Remington into moving a plant from Massachusetts to New York. Then they got another $2.6 million to move another plant from CT to NY.

At that stage, Remington’s site selection team was considering sites in Kentucky, Missouri and Massachusetts. If the ESDC has not doled out the grants, NY would have lost 892 existing jobs.

Now, all these grants provided by the ESDC are under fire because the company is in opposition to popular gun control legislation in NY and it might end up moving out of the state anyway.

Idaho, on the other hand, has passed laws that explicitly limit lawsuits and the right to recover damages against firearms or ammunition manufacturers, trade associations and sellers.

The law states that – “State agencies, counties and cities cannot bring suit against firearms or ammunition manufacturers relating to the design, manufacture, marketing or sale of firearms or ammunition to the public… No firearm or ammunition shall be deemed defective in design on the basis of its potential to cause serious injury, damage or death.”

With the dice loaded in their favor, Potlatch, Idaho has come up with a marketing plan and ED resources to attract gun and ammo makers. The effort is a partnership between the utility company Avista, Potlatch Corp which owns the mill land, and city and county governments. They have set aside 26 acres of the former lumber mill land for firearms and supporting companies.

stateimpact.npr.org/

Many democratic leaders for the state of Idaho proposed economic development and job creation bills.

The democrats pinpointed the importance of economic development and job creation for the state of Idaho. Brian Cronin who is a democratic representative for Boise elaborated on how the legislature must work actively to bring prosperity back to the state of Idaho.

Brian pointed out that prosperity will not be brought to the community of Idaho through cuts in the public school system and the education budget. There were also nearly 6 job creation bills that focused on utilizing tax incentives so that investments can be made in the business sector. Cronin states that prosperity will be realized again if the state adopts the strategies proposed by the bills.

The first component of the job bills focuses on giving a 50 percent tax credit for investment in equipment for agriculture processing. The ultimate intention of the tax credit is to encourage farmers to keep money in Idaho and enhance the amount of exports. A “finder’s fee” will also be implemented if businesses are able to encourage suppliers to move to Idaho. The state wants to award companies who are able to bring new business to Idaho.

Any company that does relocate to Idaho will be given a $500 dollar tax credit for each individual job that is created. The job must also last for the duration of approximately 2 years or more. A committee would also be created by the state in order to determine if a partnership bank would benefit Idaho.

The purpose of the partnership bank will be to utilize issue bonds to ultimate spur economic growth in the state of Idaho. Lenders of the community will work together with the state to expand the amount of capital.

Overall, the proposed economic development and job bills will assist the state of Idaho with setting its feet on solid ground.

Read More