Why should the new kid on the block have all the fun? While incentives for new industry are considered critical to growing the economy of Mississippi, the existing base of industry and business is the foundation for the state’s economy. And the Mississippi Development Authority (MDA) in partnership with local economic developers and private business is leveraging technology with its e-Synchronist program to help existing business stays healthy and competitive.
David P. Rumbarger, president and CEO of the Community Development Foundation (CDF) of Tupelo/Lee County, said the CDF has had a close and working relationship with its existing industries for a long time. That is one of the secrets to the Tupelo/Lee County success model.
But Rumbarger said using MDA’s e-Synchronist program allows them to address industry concerns in a more formal, proactive and methodical way insuring that all companies are called on and that many different perspectives are considered for existing industry success.
“The CDF takes the viewpoint that it is imperative to be pro-active in supporting existing industry, rather than taking a wait-and-see approach,” Rumbarger said. “This holds true not only in identifying downsizing and potential closing threats, but with expansion opportunities as well. e-Synchronist definitely is an example of leveraging technology to help retain and grow business. The technological database aspect of the program is good from an aggregate reporting capability, although it is the structured questions, and face-to-face time with a company, that make the difference.”
Local and global
Rumbarger said the program has been useful in various ways. It helps them gain a better, more in-depth understanding of particular industries and the challenges they face both domestically and internationally.
“We have taken the workforce data attained and used it to work in conjunction with our community college partner to broaden the scope of workforce training courses offered,” Rumbarger said. “The e-Synchronist program has helped us identify and prioritize companies that need to have a visit made to their corporate headquarters.”
To give one example of how the program has been beneficial, an injection molding company was experiencing power surges and outages at least three to four times per month, particularly during rain. This was a major issue in the fact that each time there was a surge, injection molding machines shut down. This not only wasted raw material but caused each machine to have to be cleared and restarted, potentially causing damage.
“At times the outages were several hours long causing a loss of complete productivity for the facility,” Rumbarger said. “Their injection molded product is a major component for one of Lee County’s largest manufacturers. The problem was impacting not one, but two manufacturers. The plant manager had discussed this problem with the power supplier several times prior to our visit, with limited results. The utilities section of the e-Synchronist questionnaire gave this plant manager a forum to discuss this issue with us. The CDF was able to get involved in the process and eventually a monitor was put on the line and the cause was identified and corrected.”
Finding the factors
This new tool is being used by MDA’s Existing Industry and Business Division (EIB) to evaluate business retention and expansion within the state. Using the Web-based software program, various economic development groups can determine what factors will assist businesses in their communities to expand and create jobs as well as determining a company’s role in a community’s economic future. Based on the informational interview results from companies, the software reports whether a company is pleased, somewhat pleased or in need of special attention.
Deloise Smith, a member of the EIB team, said studies show 40% to 80% of all new jobs come from existing firms rather than recruiting new firms.
“Economic vitality is essential to Mississippi’s growth and business climate,” Smith said. “Our top businesses are our competitor’s top prospects. Therefore, MDA’s pro-active economic development approach to our portfolio (existing industries and businesses) enhances our ability to retain existing industries as well as attract new businesses.”
Smith said the essential precept of business retention and expansion is not merely to “hold onto” businesses operating in the state, but to help them expand as well as encourage new growth through stronger industry clusters and company research and development. The knowledge gained from survey responses allows MDA to build company-specific knowledge, identify and solve company problems and build relationships with company executives.
“This allows us to maximize value, minimize risk and align expectations with opportunities,” Smith said. “The software provides a competitive intelligence approach to business assessment.”
An example of how the program has been useful is that a major company in Northeast Mississippi was interviewed in 2006 with a high risk number in which several issues were identified that possibly would hinder expansion. Working with local leadership, MDA was able to assist the company with its expansion efforts ultimately creating 350 new jobs and retaining 500 jobs with a capital investment of $54 million.
EIB has regional partnerships with local and regional economic development organizations as well as Entergy, Mississippi Power Company and the Tennessee Valley Authority, as well as MDA’s Regional Services Division that utilize and manage this economic development information system.
Chandler Russ, project manager, Mississippi Region, TVA Economic Development, one of the utility partners involved in the project, said the program is a valuable tool that adds value on the front lines of economic development.
“The program is designed to be a proactive compliment to the efforts of the local economic developers’ existing industry business and retention program on an annual basis, the survey information allows communities and developers to better understand both business growth opportunities and areas of risk in advance,” Russ said. “Existing industries are our ‘bread and butter’ and the more information we have in regard to their needs to insure success, the better all the stakeholders will be prepared to handle both risks and opportunities in the business cycle.”
Mark Loughman, director of economic development for Mississippi Power Company, said being proactive is a major benefit of the e-Synchronist program.
“We definitely believe that it’s better to be pro-active with our existing customers,” Loughman said. “Our first priority is to provide reliable, affordable electric service. And we work with customers to make sure they use their power as efficiently as possible. We want to do whatever we can to help our customers be more competitive in the global market.”
Loughman said by working with the other partners in the program on existing industry interviews, the e-Synchronist program provides a good tool for identifying issues and problems, as well as opportunities for growth. Oftentimes their marketing reps find out about possible expansions early on in the process.
“They contact us and we follow up to make sure that the company takes advantage of the incentive programs offered through the state,” Loughman said.
Chuck Ueltschey, manager of community services for Mississippi Power Company, said e-Synchronist is the first state-wide program for existing industry that is “real time.” The program is based on interviewing a large percentage of industry in a set format and then recording the information in a secure web-based program.
“Under these conditions, we know what the challenges are to our existing industries throughout the state,” Ueltschey said.
Contact MBJ contributing writer Becky Gillette at email@example.com.