Regional Business Plan

Economic Development/Cluster Competitiveness Initiative
Retention, Expansion, Innovation, Start-up, and Recruitment
Building A Vision for Regional Economic Development

We must ask ourselves:
	Do we want to be the best in the nation when it comes to the work of retaining, expanding, starting, and recruiting traded-sector businesses?

While there is excellent economic development work occurring throughout the region, much of it in the public sector, we should strive to be the best and most innovative in meeting the economic development challenges presented by a global economy. This requires an increased level of private sector leadership and resources, and improved economic development partnerships with the public sector. The following principles and initiatives should be a starting point for discussion on how we can more effectively create jobs and build a regional brand to support economic growth in the region.

Overall Strategy Principles

We recommend the following principles as the foundation for the Regional Business Plan:

1. We must focus on retention and expansion of existing traded sector businesses in the region. The bulk of future job growth will come from businesses, large and small, already located in the region. Particular focus must be placed on retention of anchor businesses in clusters, because they create momentum in the overall cluster through their own activity and the spin-off and start-up opportunities that they spawn.

2. A strong entrepreneurial environment for start-up business and spin-off from existing cluster leaders is a close, second priority. We must be a great region to start, grow, and expand a business and align efforts, public and private, to achieve this goal.

3. Recruitment of traded-sector businesses currently not operating in the region is an important third priority. While third on the priority list, recruitment and marketing are the areas with the least resourced and organized private sector activity. Overall, the region is still perceived as relatively "unfriendly" to businesses at the national level. An aggressive recruitment and marketing campaign is necessary to conquer this perception.

Initiatives

Retention and Expansion

Build Public Sector Awareness of Regional Business Needs and Support Business Retention through direct contact with Regional Business Leaders.
Encourage and assist elected officials in the region to visit one traded sector business every month, to learn about specific business and industry needs, gain insight into the business environment and industry trends, and to align public sector actions and resources to strengthen the region's traded sector businesses.
Public and private representatives of the region's economic development agencies and interests should develop an annual coordinated retention and expansion work plan targeting specific clusters and companies.
Representatives of the region's public-sector economic development agencies, with support and assistance from the private sector, should strive to visit every traded sector business in the region at least once a year.

Innovation and Start-up

Develop Targeted Regional Cluster-Based Innovation Strategies and Initiatives with the Oregon Innovation Council, SW Washington High Tech Council and Oregon Business Council's Oregon Clusters Project.

The Regional Business Plan Steering Committee should explore in 2006 how to more effectively support innovation as a key initiative driving regional cluster based strategies for recruitment, retention and branding that directly connect to initiatives and strategies that will be developed by the Oregon Innovation Council and by the SW Washington High Technology Council. The Oregon Innovation Council includes many of the state's and region's leading business and public sector leaders. The SW Washington High Technology Council was formed five years ago as a CEO-level non-profit group representing some of the most important technology-related employers in the Clark County. Among them are WaferTech, Sharp Corp., SEH America, Underwriters Laboratories, Hewlett-Packard, nLight Photonics and New Edge Networks.

The Oregon Innovation Council, which was created by the 2005 Oregon Legislature, will provide advice to the Governor, the Legislative Assembly, public and private post-secondary educational institutions, public agencies that provide economic development and the private sector on issues related to:

Promoting agreements between public and private post-secondary educational institutions and private industry that increase technology transfer and the commercialization of research;
Promoting investment in specialized research facilities and signature research centers where Oregon has a distinct or emerging advantage for creating new products and businesses;
Stimulating seed and start-up capital investment and entrepreneurial capacity that will promote economic growth in Oregon traded sector industries;
Developing the entrepreneurial and management capacity critical to the competitiveness of Oregon traded sector industries and rapidly growing global markets;
Enhancing the international competitiveness of Oregon traded sector industries; and
Identifying workforce issues for occupations critical to the competitiveness of Oregon traded sector industries.

Through the legislatively approved Oregon Innovation Fund, the Council will have authority to coordinate innovation initiatives throughout the state. The Oregon Business Council plans to support the Oregon Innovation Council's efforts through the Oregon Clusters Project, which is an initiative to organize and development cluster-based strategies around the state through the networks of existing and new industry clusters.

The next phase of the Regional Business Plan should directly connect on a regional level to all of these efforts with active involvement and leadership from the region's private sector with appropriate support from the public sector.

Capitalize and Promote University Venture Seed Funds at OUS institutions and OHSU as established by SB 853 and Explore Access to Similar Resources in Washington State.

SB 853 enables universities within OUS and OHSU to establish "University Venture Funds" through the Foundation Offices, overseen by the State Treasurer. Funds can come from private (individual or corporate) donations and are eligible for an Oregon tax credit of 20% per year for three years (60% in total). Unlike other tax credits, 100% of the tax credits are repaid by the university funds. Each year, 20% of the university revenue derived from license agreements, equity positions, etc., that result from the activities enabled by the fund would be repaid to the state General Fund until 100% of the tax credit is recaptured. There is a cap of $10 million for the OUS system and $4 million for OHSU.

The funds can be used for three purposes:

Proof-of-concept funding for transforming university research and development concepts into commercially viable products and services;
Capital for university entrepreneurial programs that train students and incumbent workers on starting and growing businesses;
Technology transfer activities including intellectual property development and protection.

The region should explore access to similar programs in Washington State to promote university technology transfer and collaboration in the region as well.

Support Oregon Investment Fund initiatives to bring additional venture capital presence to Oregon and the Portland-Vancouver region.

The Oregon Investment Fund, a $105 million program approved by the Oregon Legislature in 2003 and administered by the State Treasurer's office to generate significant returns for Oregon pensioners and to encourage capital investments and small business growth in Oregon, has awarded $34 million in a first round of investments to four private equity funds. Additionally, the Oregon Growth Account is focused on generating returns for the Educational Endowment Fund by investing in emerging growth businesses in key Oregon industries. The region should support these efforts by successfully integrating established Portland-Vancouver venture and private equity firms into the greater Portland-Vancouver business communities as key economic development advocates for the region. Firms receiving recent Oregon Investment Fund funding to date include: Buerk Dale Victor of Seattle and Portland, Cascadia Partners of Portland, Evergreen Pacific Partners of Seattle and Portland, Riverlake Partners of Portland.

Support micro lending and small business funding programs designed to fund start up business ventures in the Portland-Vancouver area.

Small businesses and start-ups are critical components of the region's economy. We must ensure that entrepreneurs have access to a range of capital sources, such as micro-loans, for those innovative small businesses that contribute to our economy but for whom larger scale capital (such as venture capital) is not an appropriate fit. Great ideas and businesses come in all sizes; we should ensure that those ideas are nourished and grown with accessible capital.

Establish stronger ties to Pacific Northwest National Labs in Richland, WA to support additional innovation and technology commercialization and collaboration.

Pacific Northwest National Labs (PNNL) in Richland, WA, which is affiliated with five different national labs around the country, received over $700 million in federal research dollars each year. Over the past six years the PNNL has engaged in specific economic development strategies to build relationship in both Oregon and Washington. One of the most successful initiatives is the Oregon Nanoscience and Microtechnologies Institute, which is Oregon's first signature research center and is a powerful collaboration including Oregon State University, Portland State University, University of Oregon, Oregon Health and Sciences University and PNNL and many of the region's leading high technology companies. The business plan should begin working with the Oregon Innovation Council to explore additional strategic relationships to build the region's relationship with PNNL. Additionally, the region should engage in a strategy with PNNL to seek a physical presence in the region for Battelle Ventures, a $150 million venture fund seeded by Battelle and located in Princeton, New Jersey (www.battelleventures.com). The venture fund supports investment in Life Sciences, Information Technology, Homeland Security, Energy, Advanced Materials and Nanotechnology utilizing technologies from the five national labs in collaboration with the private sector.

Seek coordinated federal funding strategies that support targeted cluster development

The Regional Business Planning Steering should work with key constituencies to set up a coordinated strategy to work with the region's congressional delegation to seek additional federal dollars that would serve as a catalyst for specific economic development initiatives in the region. Such initiatives would be identified through a process to be determined and as part of a coordinated economic development agenda for the region that could include such projects such as defense-related procurement, Center for Manufacturing Engineering, transportation and infrastructure funding and work force development. We must examine the appropriate structure and decision-making process (including appropriate involvement of the various constituencies) during 2006 to implement this recommendation. The Regional Business Plan recognizes the recent establishment of the Regional Economic Development District under the Comprehensive Economic Development Strategy (CEDS) process, which will allow the region to have greater access to specific federal economic development dollars, will work with various constituencies to properly integrate this entity into recommendations in this area.

Recruitment and Marketing

Form a privately funded and privately led regional economic development entity dedicated to traded sector marketing and recruitment.
Appoint a Planning Board to design and initiate creation of the private entity, including definition of partnerships with public sector agencies engaged in economic development.
Draft Mission: Assist leading edge, innovative, traded-sector companies and entrepreneurs in the region, the nation, and around the world in choosing the metropolitan Portland-Vancouver region as the place to grow, start, and locate their business.
This entity will coordinate closely and work collaboratively with the public and private sector economic development professionals and programs across the region. In order to add value, all of our regional efforts must be highly organized and well executed through collaborative partnerships and leveraging of resources.

What this organization will do:

Bring consistent, region- wide, business-led, high-level strategic focus to the region's traded sector economic development activities.
Be action oriented and strategically selective. This organization will help make deals happen and provide focus for the region.
Serve as a recognizable focal point for private sector engagement and networks (bringing in leads and contacts).
Promote the regional "brand" (to be developed in next phase of the Regional Business Plan).
Provide private sector assistance to public sector retention and expansion efforts.

What this organization will not do:

Get involved in local economic development such as retail recruitment and location, or relocation competitions between local jurisdictions.
Issue advocacy and public policy, which is well accounted for within numerous business organizations and the Regional Business Plan Steering Committee.

Rationale:

We are behind. At this time, there is no region-wide, private sector-led economic development organization dedicated exclusively to traded-sector cluster recruitment and marketing. Likewise, an absence of consistent, region-wide, high-level private sector leadership on economic development has been identified repeatedly throughout the region.

This effort represents more effective organization of the private sector, with dedicated and focused resources, as an improved private sector partner to public sector economic development at the local, regional, statewide and federal levels.

Bring Coordinated and Collaborative Leadership to Regional Recruitment and Branding Campaign

The private sector should work with public sector leaders in bringing focus to a new recruitment and marketing campaign for the region. The Portland-Vancouver region can particularly benefit from renewed private sector focus and proactive leadership in this area. A multi-year marketing and communications program to key corporate business leaders in our targeted clusters, under the regional brand to be developed in the next phase of the Regional Business Plan, is crucial to our competitive success. Such a program should be coordinated and collaborate with various funded initiatives which are currently happening and which are proposed to enhance regional tourism and arts and cultural as key local economic development initiatives for more effective and comprehensive results.
Target business leaders identified by introductions and referrals from industry leaders in targeted clusters (already present in Portland and Vancouver regions)
Develop an annual campaign format including:
- Marketing through industry channels and capitalizing on "third-party" recognition as much as possible.
- Continue to designate key industry trade shows with the public sector (as PDC and Columbia River Economic Development Council have done) for the targeted clusters and establish increased consistent private sector presence. Recent efforts to build coordinated recruitment strategies with private sector leadership (such as display technologies, and work done by PDC) offer a good template for future work across key traded sector clusters.
- Regular, systematic contact with site selectors. Visit them twice per year for 45-60 minute updates.
- Visit with key site selectors at industry events, such as CoreNet and IAMC and ensure increased private sector presence and leadership to accompany the well-established presence of PDC and Columbia River Economic Development Council.
- Invite key site selectors to "familiarity" trips to the greater Portland-Vancouver region, expanding and assisting the work of PDC, Regional Partners and Columbia River Economic Development Council.