Bo Beaulieu & Michael Wilcox

Purdue Center for Regional Development &Extension Community Development Program

Transforming Your Local and Regional Economy – Gibson County

September 4, 2014

Special Thanks

• Economic Development Administration,

Chicago Regional Office

• Kim Howard, Southwest ISBDC

• Our Purdue Extension Colleagues

Something to Ponder

The literature on job creation has frequently found that most jobs are created from existing employers, yet many local economic development organizations continue to emphasize new industry recruitment.

Daniel Davis

The Federal Reserve Bank of St. Louis.

May 2011

Our Focus Today

• Examine the economic resources and opportunities that exist in your county/region (but are often overlooked) o The stages of your local establishmentso Regional competitive assets

• Highlight entrepreneurship as an important aspect of your economic development stategies.

• Identify ways you can cultivate entrepreneurship in your county & region

A Look at the Four Stages

1st 2nd

3rd 4th

Data Source: NETS 2011, Edward Lowe, IEGC, PCRD

Establishments in Gibson County, 2011

Total 1,427 Stage 1 1,184 Stage 2 219 Stage 3 23 Stage 4 1

Employment

Total 14,692 Stage 1 3,734 Stage 2 5,818 Stage 3 4,565 Stage 4 575 Sales ($) in 2011

Total $1,474,693,400 Stage 1 299,961,689 Stage 2 461,615,609 Stage 3 655,906,502

Stage 4 57,209,600

Definition of company stages

• Stage 0 (self-employed)

• Stage 1 (2-9 employees)

• Stage 2 (10-99 employees)

• Stage 3 (100 to 499 employees)

• Stage 4 (500+ employees)

• This table is based on the National Establishment Time Series (NETS) database

• The definitions for stages are based on research by the Edward Lowe Foundation

• A firm can have more than one establishment within the same county

Establishments in Gibson County :The Four Stages

Data Source: NETS 2011, Edward Lowe, IEGC, PCRD

Gibson CountySales Industry Establishments NAICS Employees

Stage 1 (2-9 employees)8,276,000 Fertilizer and fertilizer materials 424910 86,000,000 Grain elevators 424510 62,700,000 Pipelines, nec 486990 9

2,285,700 Gases, liquefied petroleum (propane) 424720 8

2,227,500 Gasoline service stations 447110 3Stage 2 (10-99 employees)

23,375,300 Electric services 2211 6020,000,000 Supermarkets, independent 453110 8016,875,000 Bowl covers, plastics 326199 5013,235,300 Automobiles, new and used 441110 309,739,700 Electric services 2211 25

Stage 3 (100 to 499 employees)136,356,100 Electric services 2211 350126,000,000 Distribution, electric power 221122 36051,873,691 General medical and surgical hospitals 622110 26050,000,000 Motors, electric 335312 25043,740,000 Department stores, discount 452112 225

Stage 4 (500 + employees)57,209,600 Seats, automobile 336360 575

Top Five Sales Establishments by Company Stage, 2011

A Look at Your Working Labor Force

9

Gibson County, IN

Gibson County Commute and Labor Sheds CommutingVariable Count, 2011 % Share

Employed in Gibson County 16,561 100

• Employed in county but living outside 10,127 61.1

• Employed and living in county 6,434 38.9

Living in Gibson County 16,045 100

• Living in county but employed outside 9,611 59.9

• Living and employed in county 6,434 40.1

• Gibson County is an employment center given that larger number of workers are commuting into the county for work than are commuting outside the county for work.

• Net commuting (In- commuters minus out- commuters) is positive in the county with a gain of 516 commuters.

• Gibson County residents are commuting to only a handful of counties, mainly to Evansville metropolitan area for purposes of securing work.

• On the other hand, residents from several surrounding counties are commuting to Gibson County for employment purposes

• The footprint of Gibson County as a workplace extends well beyond the boundaries of the county.

Source: OTM, LEHD, U.S. Census Bureau; PCRD

10,127

6,434

9,611

11

Gibson County Commuting

Gibson County as a Home Jobs Count, 2011 Share Cumulative Share

Gibson County, IN 6,434 40.1% 40.1%Vanderburgh County, IN 3,681 22.9% 63.0%Knox County, IN 511 3.2% 66.2%Marion County, IN 504 3.1% 69.4%Warrick County, IN 443 2.8% 72.1%Dubois County, IN 351 2.2% 74.3%Posey County, IN 302 1.9% 76.2%Pike County, IN 220 1.4% 77.6%Tippecanoe County, IN 179 1.1% 78.7%Lake County, IN 161 1.0% 79.7%All Other Locations 3,259 20.3% 100.0%

• Gibson’s commute shed touches major metropolitan area of Indianapolis, Tippecanoe and Lake Counties (Chicago metro area)

• Major economic ties with Vanderburgh County (Evansville metro area)

Source: OTM, LEHD, U.S. Census Bureau; PCRD

Gibson County as Home

12

Gibson County WorkplaceGibson as a Workplace Jobs Count, 2011 Share Cumulative Share

Gibson County, IN 6,434 38.9% 38.9%

Vanderburgh County, IN 2,665 16.1% 54.9%

Warrick County, IN 1,157 7.0% 61.9%

Wabash County, IL 768 4.6% 66.6%

Knox County, IN 583 3.5% 70.1%

Pike County, IN 557 3.4% 73.4%

Posey County, IN 467 2.8% 76.3%

Dubois County, IN 348 2.1% 78.4%

Daviess County, IN 290 1.8% 80.1%

Henderson County, KY 248 1.5% 81.6%

All Other Locations 3,044 18.4% 100.0%

• Gibson’s labor shed extends to one adjacent county in IL and KY• A labor shed is a region from where a job center (Gibson County) draws its labor force.

Ten counties provide around 82% of the labor force.

Source: OTM, LEHD, U.S. Census Bureau; PCRD

Gibson County Region, IN

Based on commuting patterns, the region includes the following counties:• Wabash county in Illinois• Dubois, Gibson, Knox, Pike, Posey,

Vanderburgh, and Warrick counties in Indiana• Henderson county in Kentucky

Source: RDM, PCRD & ESRI

Economic & Demographic Attributes Value Remarks Source

Population (2013) 452,555 People living in the region Census

Jobs (2013) 266,343 Full and part-time jobs EMSI (QCEW, BLS; BEA)

Average Earnings (2013) $44,060Include wages, salaries, supplements and proprietor income

EMSI (BLS; BEA)

Exports (2012) $39,432,507,683$ earned from selling goods and services to foreign and external domestic regions

EMSI model (BEA)

Imports (2012) $33,308,068,999$ spent on procuring goods and services from foreign and external domestic region

EMSI model (BEA)

Data Source: EMSI 2013.2 & Census

Economic Attributes of Gibson County Region

o Trade balance (exports minus imports) is positive

Gibson County Region

Note: Label includes cluster name, LQ 2013 and Employment 2013

Data Source: EMSI 2013.2, industry cluster definitions by PCRD

Gibson County Region

Note: Label includes cluster name, LQ 2013 and Employment 2013

Data Source: EMSI 2013.2, industry cluster definitions by PCRD

P e r c e n t G r o w t h i n S p e c i a l i z a t i o n

L e

v e

l o

f

S p

e c

i a l

i z a

t i o

nTransforming

StarsMature

Emerging

Gibson County Region, Industry Cluster Analysis, 2008-13

• Defense & Security• Fabricated Metal Product

Manufacturing • Mining

• Manufacturing Super-Clustero Electrical Equipment,

Appliance & Component Manufacturing

o Primary Metal Manufacturing • Transportation & Logistics

• Advanced Materials• Agribusiness, Food Proc. & tech• Apparel & Textiles• Biomedical/Biotech (Life Sciences)• Chemicals & Chemical Based Prod• Energy (Fossil & Renewable)• Forest & Wood Products• Glass & Ceramics• Transportation Equip Mfg

• Arts, Entertainment, Recreation & Visitor Industries

• Business & Financial Services• Computer & Electronic Product

Manufacturing• Education & Knowledge Creation• IT & Telecommunications• Machinery Manufacturing• Printing & Publishing

Data Source: EMSI 2013.2, industry cluster definitions by PCRD

Star clustersPrim

ary M

etal Mfg

Chemicals

& Chemical...

Transp

ortation Equip....

Mining

Advance

d Materia

ls

Mfg Su

percluste

r

Energy (

Fossi

l & Rene...

Elec. Equip, A

pp. & Co...

Mach

inery M

fg

IT & Teleco

mm.

Fab. M

etal Pro

d. Mfg

Glass & Cera

mics

Biomedical/B

iotechn...

Fore

st & W

ood Prod.

Transp

ortation &

Logis.

..

Defense &

Secu

rity

Apparel &

Textiles

Agri. &

Food Pro

cess.

Business

& Financia

l S...

Comp. & Electr

n. Pro

d...

Printing &

Publishing

Edu. & Knowledge

Arts &

Ent. $-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000 Gibson County Region, Average Earnings, 2013

o IN average earnings; $44,298o Gibson county region average earnings, $44,060

Gibson County Region, Industry Clusters, 2013

Data Source: EMSI 2013.2, industry cluster definitions by PCRDRed numbers in parenthesis are negatives

Cluster Name 2013 Jobs 2013 LQ Percent Change LQ, 2008-2013 2013 EPW

Competitive Effect(Shift-share),

2008-2013

Biomedical/Biotechnical (Life Sciences) 25,231 1.24 1% $51,387 (350)Energy (Fossil & Renewable) 16,896 1.50 11% $72,040 1,470Manufacturing Supercluster 16,002 1.82 (2%) $73,035 (548)Business & Financial Services 15,584 0.47 (4%) $44,514 (1,165)Advanced Materials 15,014 2.00 1% $74,845 (230)Chemicals & Chemical Based Products 11,613 3.81 13% $79,225 1,154Forest & Wood Products 9,589 4.31 14% $49,956 1,019Transportation & Logistics 9,178 1.15 (1%) $49,155 (245)Transportation Equipment Manufacturing 8,045 3.61 17% $77,258 1,030Agribusiness, Food Processing & Technology 6,372 1.63 4% $44,840 128Arts, Entertainment, Recreation & Visitor Industries 6,166 0.59 (8%) $21,003 (724)Information Technology & Telecommunications 4,700 0.50 (2%) $63,400 (189)Defense & Security 3,947 0.49 17% $46,866 496Education & Knowledge Creation 3,478 0.57 (14%) $27,862 (606)Primary Metal Manufacturing 3,135 5.39 (15%) $85,490 (624)Printing & Publishing 2,592 0.57 (15%) $42,873 (487)Apparel & Textiles 2,003 1.03 18% $46,570 282Fabricated Metal Product Manufacturing 1,789 0.85 10% $54,638 130Glass & Ceramics 1,266 2.95 28% $54,603 253Machinery Manufacturing 1,226 0.73 0% $65,569 (31)Electrical Equipment, Appliance & Component Mfg 934 1.67 (51%) $67,429 (1,033)Computer & Electronic Product Manufacturing 873 0.54 (2%) $43,592 (41)Mining 706 0.91 8% $75,399 37

Note : ** presents “Star clusters in 2012”Data Source: EMSI 2013.2, industry cluster definitions by PCRD

Regional Requirements, Expenditures & Leakages, 2012

Electrical EquipmentGlass & Ceramics **

Apparel & Textiles **Education & Knowledge Creation

MiningPrinting & Publishing

Computer & Electronic ProductMachinery Manufacturing

Arts, Entertainment & Visitor IndustriesFabricated Metal

Forestry & Wood Products **Defense & Security

Primary MetalAgribusiness & Food Processing **

Transportation and LogisticsBiomed/Biotechnical **

IT & TelecommunicationsChemical and Chemical-based Industry Clsuters **

Transportation Equipment **Business & Finance

Energy (Fossil & Renewable) **Advanced Materials **

Manufacturing Supercluster

Satisfied in region

Strengthening Clusters throughImport Substitution

Seek to Identify:

• Industries that support the cluster

• Goods and services purchased from outside the region

• Capacity for supplying these inputs regionally

• Resources needed to help promote the creation, retention/expansion or attraction (recruitment) of businesses that can supply these inputs

Takeaways

Consider focusing on first & second stage enterprises in your county as part of your economic development efforts.

Assess the opportunities that exist at the regional level; find and build on the region’s competitive strengths

Explore ways to reduce the economic leakages associated with your “star” and “emerging” clusters

Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.

Cultivating Entrepreneurship in Gibson County

Michael Wilcox and Bo BeaulieuExtension and PCRD

September 4, 2014Presented in Princeton, IN

Data Source: NETS 2011, Edward Lowe, IEGC, PCRD

Establishments in Gibson CountyTotal 2,303Stage 0 876Stage 1 1,184 Stage 2 219 Stage 3 23 Stage 4 1

EmploymentTotal 15,568 Stage 0 876Stage 1 3,734 Stage 2 5,818 Stage 3 4,565 Stage 4 575

Sales ($) in 2011 Stage 0 54,565,782 Stage 1 299,961,689 Stage 2 461,615,609 Stage 3 655,906,502 Stage 4 57,209,600

Definition of company stages

• Stage 0 (1 employee)

• Stage 1 (2-9 employees)

• Stage 2 (10-99 employees)

• Stage 3 (100 to 499 employees)

• Stage 4 (500+ employees)

• This table is based on the National Establishment Time Series (NETS) database

• The definitions for stages are based on research by the Edward Lowe Foundation

• A firm can have more than one establishment within the same county

Local Industry Establishments: The Five Stages

Data Source: NETS 2011, Edward Lowe, IEGC, PCRD

Top Five Sales Establishments by Company Stage, 2011Gibson County, Indiana

Sales ($) Industry Establishments NAICS EmployeesStage 0 (1 employee)

500,000 Hardware stores 444130 1500,000 General farms, primarily crop 111998 1300,000 Television repair shop 811211 1300,000 Single-family housing construction 236115 1296,400 Pipelines, nec 486990 1

Stage 1 (2-9 employees)8,276,000 Fertilizer and fertilizer materials 424910 86,000,000 Grain elevators 424510 62,700,000 Pipelines, nec 486990 92,285,700 Gases, liquefied petroleum (propane) 424720 82,227,500 Gasoline service stations 447110 3

Stage 2 (10-99 employees)23,375,300 Electric services 2211 6020,000,000 Supermarkets, independent 453110 8016,875,000 Bowl covers, plastics 326199 5013,235,300 Automobiles, new and used 441110 309,739,700 Electric services 2211 25

Stage 3 (100 to 499 employees)136,356,100 Electric services 2211 350126,000,000 Distribution, electric power 221122 36051,873,691 General medical and surgical hospitals 622110 26050,000,000 Motors, electric 335312 25043,740,000 Department stores, discount 452112 225

Stage 4 (500 + employees)57209600 Seats, automobile 336360 575

Data Source: EMSI, 2014 - Self-Employed - EMSI 2013.3 Class of Worker

Self-employment in Gibson County, 2007-2012

NAICS Code Description 2007

Jobs 2012 Jobs % Change

2013 Avg. Earnings Per Job

11 Agriculture, Forestry, Fishing and Hunting 191 200 5% $23,080

23 Construction 145 118 (19%) $18,616

31 Manufacturing <10 <10 -- --

42 Wholesale Trade 11 18 64% $16,042

44 Retail Trade 62 61 (2%) $21,201

48 Transportation and Warehousing 39 40 3% $29,430

51 Information <10 <10 -- --

52 Finance and Insurance 18 13 (28%) $35,181

53 Real Estate and Rental and Leasing 29 21 (28%) $18,742

54 Professional, Scientific, and Technical Services 50 43 (14%) $34,707

56 Administrative and Support and Waste Management and Remediation Services 93 83 (11%) $7,362

61 Educational Services (Private) <10 13 -- $13,700

62 Health Care and Social Assistance 52 47 (10%) $54,534

71 Arts, Entertainment, and Recreation 14 <10 -- --

72 Accommodation and Food Services 17 <10 -- --

81 Other Services (except Public Administration) 183 86 (53%) $19,867

Total 927 768 (17%) $22,810

To assist targeted communities in Indiana as they transform their local economies through the development of key components required for entrepreneurship and small

business development.

Purpose

Three ways in which entrepreneurship plays a critical role in economic development…

Entrepreneurship – the link between assets and finding new sources of competitive advantage and economic opportunity

Entrepreneurs – recognize opportunity and bring together resources to turn opportunity into a viable business venture

Entrepreneurial communities and leaders – understand their assets and mobilize to employ these assets through entrepreneurship development

Relationships and Roles

Entrepreneurs and small business owners play an important role in local economic development, specifically…

As Employers: creating new jobs and playing a significant role in hiring part-time workers and new workforce entrants

As Tax Revenue Generators: broadening tax base, thus generating greater property and income tax revenues

As Economic Supporters: buying and supplying local products and services. Income generated typically not exported out of local community

Entrepreneurship as a Development Strategy

and…

As Property Owners and Renters: leasing space from local property owners and filling vacant storefronts downtown

As Providers of Economic Stability: small homegrown firms are, by definition, owned and operated by people who have a personal stake in the community and are more likely to remain

As Providers of Economic Diversity: entrepreneurs diversify the mix of business types and sectors which contributes to economic resiliency

Entrepreneurship as a Development Strategy (cntd)

Interconnectedness between rural and urban• Regionalism = rural and urban linkages

• Systems = rural and urban resources

• Assets = unique rural and urban strengths and markets

• Ensure that urban and rural neighbors serve their region as equal partners

The New Paradigm Needs to Embody Four Policy Principles

• More entrepreneurs• Increase the numbers

• Stronger entrepreneurs• Increase the survival rate

• More high growth entrepreneurs• Increase the number that create jobs and wealth

Policy Goals

These policy goals translate into program goals…• More entrepreneurs in the pipeline• More entrepreneurs staying in their community• Better informed entrepreneurs• Better skilled entrepreneurs• More job creating entrepreneurs• Greater business productivity

Program Goals

Entrepreneurship and Economic Development Research suggests that:

• Growing firms from “within” is a more cost effective means of creating profit centers, tax base and employment per job created.

• Small, home grown firms play a significant role in job creation in both urban and rural areas.

• Communities should take a balanced approach to economic development and complement recruitment, business retention and expansion activities.

• Your community is what brings it all together!

“An effective entrepreneurship development system integrates a wide range of programs and tailors products and services to meet the diverse needs of entrepreneurs. It should be comprehensive, flexible, culturally sensitive, and integrated, and should require providers to collaborate rather than operate independently or in isolation”

- Dabson, 2005

An Entrepreneurial System

Supportive Environment Entrepreneur Networks

• Supportive environment: creating community and civic environments that celebrate and support entrepreneurs.

• Be Entrepreneur-focused• Create ‘No wrong door’ • Celebrate entrepreneurs

Component #1: Supportive Environment

Supportive Environment

Entrepreneur Networks: facilitating opportunities for informal gatherings of entrepreneurs to share experiences and information.

• Facilitate, but don’t lead• Networks should be “by and for” entrepreneurs

Component #2: Entrepreneur Networks

Entrepreneur Networks

Training & Technical Assistance: the creation of systems of advice, expertise and training appropriate to the needs of entrepreneurs – can be public, private, educational or nonprofit agencies.

• ID your community’s “coaches”• Help entrepreneurs navigate the system

Component #3: Training & Technical Assistance

Training and Technical

Assistance

Access to Capital: in the form most useful for the stage of business development• Connect entrepreneurs to local lenders

• Increase the banking IQ of local entrepreneurs• Increase the business IQ of local bankers

• Leverage regional and state funding• Incentives and assets

Component #4: Access to Capital

Access to Capital

Youth Entrepreneurship: programs to excite young people in schools, community colleges and universities about the possibilities of creating their own businesses

• Build a pipeline of future entrepreneurs• Engage young people

Component #5: Youth Entrepreneurship

Youth Entrepreneurship

Where do We go from here?Creating an Entrepreneurial System in Gibson County

According to Markley et al. (2005), communities that are “ready” have:

• Particular capacities in human, financial, and physical infrastructure

• A supportive business/entrepreneurial climate• A strong self-image with positive citizen and

community attitudes• Open and creative community leadership, or

leadership environment, that encourages and nurtures emerging leaders

Entrepreneurial Community Readiness

Community Readiness Questionnaire

The Results

Awareness

What is?Who are?How many?Networks?Impacts of?

Organization

Which?How?CollaborationBuy-in

Planning

What assets?Opportunity?Vision?Goals?Scope?

Projects

FocusInvestmentsIncentivesImplementationImpacts

Evaluation

MeasurementCelebrationSustainabilityCommitment

The Process

Let’s create a list of institutions and associations that can assist us in the creation of a regional entrepreneurial system…

Who else?

Who?

• Purdue Extension• Purdue Center for Regional

Development• Local Initiatives Support Corporation• Chambers• LEDOs• Community foundation• Utility companies• Local governments• Revolving loan funds• United Way• Producer groups• Farm Bureau / Advocacy groups• Elevate ventures• 4H / FFA• Economic Growth Council

• Variety of local “Boards”• _____________________• _____________________• _____________________• _____________________• _____________________• _____________________• _____________________• _____________________• _____________________• _____________________• _____________________• _____________________• _____________________• _____________________• _____________________

Who?

Purdue University Cooperative Extension Service is an equal access/equal opportunity institution.

Thank you!

Michael Wilcox and Bo Beaulieuwilcox16@purdue.edu and ljb@purdue.edu

September 4, 2014Presented in Princeton, IN

To Learn More about the Purdue Center for Regional Development, check our new website:

https://pcrd.purdue.edu/