The Economic Development Connection
Steven E. DanielsUtah State University Extension
Presented at Utah State Council of Workforce Services Conference 12 October 2006
Today’s objectives
• Provide some information• Start a relationship• Begin a conversation
The Plan: Three “FYI” items to spur further conversation
1) Research bulletin on rural small business success
2) Latest legislative recommendations from the Governor’s Rural Partnership Board
3) Policy report linking IDAs and WIA/ITAs
FYI #1: Factors affecting rural small business success
National study prepared by a consulting firm under contract to the Small Business Administration
Studied factors correlated with rural business births and deaths; used appropriate statistical methods
Had access to firm-level data not generally availableLooked at two different economic periods:
Expansion (1997-99)Downturn (2000-02)
Also looked at six state-level case studies, with Utah being one of them
So what matters, nationally?
• Educational attainment matters: # high school graduates increases the number of businesses
• Amenities/attractiveness matters• Rural areas constrained by educated
labor force and necessary infrastructure• Policy and assistance have an impact• The focus is on entrepreneurship
How does Utah compare to the Nation?
• Growing rural income gap (more closely resemble nation)
• Rural wages flat over the past 15 years• Rate of business replacement substantially above
national averages• Unclear why the rate is so high; it might be policy
or might be personal preference• Educational attainment and quality are both
predictive of business formation at county level
Questions regarding this FYI?
FYI #2: GRPBGovernor’s Rural Partnership
Board established 2004 Mission is to make legislative
recommendations regarding rural issues, and co-ordination among rural programs
GRPB 2006-07 Legislative Recommendations
• Include broadband internet in telephone universal services fund
• Modify Industrial Assistance Funding authority to require a minimum rural exposure
• Push for a rural education initiative
Questions regarding this FYI?
FYI #3: Linking IDA and WIA/ITA
Caveat: I am probably the least knowledgeable in the room
Intrigued by a policy brief from Center for Social Development (inventors of the IDA concept)
Overview of Individual Development Accounts
• Have some broad similarity to IRA; assets that a person holds for specific purposes
• Targets low income/wealth families• Family contributions are matched• Funds may be spent on first home,
education/training, or starting a small business
WIA/Individual Training Accounts
• Training assistance is the highest “tier” WIA-related service
• Voucher based funding of training for qualified participants at approved training providers
Potential Benefits of Linking IDA and ITA
• Leverage multiple sources of funding to provide higher level of education than might otherwise be available (both IDA and ITA typically have caps)
• WIA-related counseling services assist efficient expenditure of IDA assets
• WIA funds provide the match to IDA contributions
Policy Recommendations
• DOL clarify IDA status as a personal asset
• DOL clarify ability to use WIA funds to match IDA contributions
• Modify WIA performance measures to remove disincentive to serving low income employed individuals
Policy Recommendations, cont.
• Allow WIA funds to provide support services to an individual with IDA-funded education IF an employment plan in place
• Include financial education as an intensive service funded by WIA (Senate WIA-reauth. S1021)
• Increase WIA appropriations
Questions regarding this FYI?
http://gwbweb.wustl.edu/csd/Publications/2006/RP06-09.pdf
Were today’s objectives met?
• Provide some information• Start a relationship• Begin a conversation