Quad City Times, IA
12-11-06
Economic development in Q-C Calling for young replacements
By Tom Saul
The Quad-Cities faces the potential loss of jobs and businesses unless it does
something to stem an expected decline in the number of workers.
It is not people leaving the area, but rather the number of workers
approaching retirement age that has some community leaders concerned about
the region’s future.
Bill Leaver, president and chief executive officer of Trinity Health System, hit the
point as he stood on the stage of Davenport’s Capitol Theater in October to
present the recommendations of a task force that wants to see the region’s
economic development efforts run more efficiently and aggressively.
In the next seven to 10 years, anywhere from 10,000 to 20,000 jobs in the QuadCities are expected to turn over as a wave of baby boomers retires, Leaver said.
“We need to be creating a work force to take those jobs,” he said. “If not, those
employers can choose to go somewhere else. We cannot afford to lose these.”
Pointing out the urgency of ramping up the Quad-Cities’ job attraction and
retention efforts, the task force said flatly that the “region is not growing.”
Continuing demographic changes “will drive need for aggressive/smart work
force development, i.e. replacements for retiring baby boomers.”
Further, other communities are better organized and funded to grow jobs. “Our
fragmentation is outweighing our regional advantages in this competitive
environment,” according to a task force report.
Growing population and attraction of young people and families is a fundamental
reason for doing economic development, said David Swenson, a scientist and
lecturer at Iowa State University’s Department of Economics.
“You want jobs and job growth to be of the numbers and kind that can sustain
households,” Swenson said. “The idea is to induce in-migration and induce
young families to come into your community, because that is where people come
from. Are you adding jobs that will entice young families?”
Two Iowa cities that have had some success in those areas are the Cedar
Rapids region and the Des Moines metropolitan area, Swenson said. Both have
reconfigured their economies by recognizing looming problems and acting early.
But both also have advantages not shared by the Quad-Cities, Swenson said.
Des Moines’ status as a state capital city gives it an inherent ability to draw
interest from banks, insurance companies and financial services firms. A state
capital also is a prestigious place to locate a corporate headquarters.
Cedar Rapids has been aggressive in fundraising and diversifying its economy
and is part of Iowa’s “technology corridor,” which includes Iowa City, Swenson
said. The Cedar Rapids metropolitan area has also seen a 34 percent population
growth from 1984 through 2004, compared to just 3 percent for the state during
the same period.
The Quad-Cities gained just 255 residents from 2000 to 2005, according to
estimates from the U.S. Census Bureau. From a peak population in 1980 of
403,244, the number of Quad-Citians declined last year to 376,309, according to
a Census estimate, a loss of 26,935 residents.
Economic development and government officials say they think the decline has
come from company downsizing, retirees who leave the area and Iowa’s
continuing problem of keeping young people in the state.
The median age of Quad-Citians also continues to creep higher, according to the
Census Bureau. After the 2000 census, it was 36.5 years of age. After last year’s
estimates, it was 39.5.
At the same time, from 2001 to 2005, the number of Quad-City jobs in all
industries has increased by just 1,196, according to the U.S. Department of
Labor’s Bureau of Labor Statistics. Most of those came in the service sector,
which saw an increase of 4,002 jobs in that time period. Manufacturing jobs saw
a decline of 1,620 positions.
While there are fewer manufacturing jobs in the Quad-Cities and across the
country, there is not less manufacturing activity, said Richard Ballman, a
professor and chair of the economics department at Augustana College.
Manufacturers rely on more technology and automation.
The vast majority of new jobs that are being created are in service fields, Ballman
said. People who think of service employees only as those who cook or serve
food in restaurants, stock store shelves or clean office buildings misunderstand
the extent and depth of the service economy and its employment.
“The people who take care of you in a hospital are service employees, and many
of them are very well paid,” Ballman said. “Lawyers are service employees.
Those in the insurance business have service jobs. Managers of stores and
restaurants have service jobs.”
Service jobs can pay well, but many also require more extensive education,
Ballman said. The Quad-Cities’ interest in manufacturing jobs probably stems
from its history as an industrial center, “and it may take a while for people here to
adjust” to the changing focus on the economy, he said.
As the number of manufacturing jobs in the Quad-Cities has declined, median
household income has increased over time at a rate just barely ahead of inflation,
according to Census data. From 1995 to 2003, median household income went
up from $35,419 to $42,807, $863 more than the rate of inflation.
Those who practice economic development in the area say they have launched
initiatives to help grow jobs that are able to sustain households. Among them are:
* The D1 Initiative 2005-2010 by DavenportOne. It got $5.5 million in pledges
earlier this year to continue a four-year effort to focus on business growth,
creation and retention, attraction and retention of workers and creation of an
environment in Davenport that supports growth. Among its goals will be to help
existing businesses reach their growth potential and redevelopment of key
business corridors.
* The New Venture Center at 331 W. 3rd St. in downtown Davenport. Its aim is to
help entrepreneurs create and grow new businesses that may some day blossom
into large enterprises employing more workers. The center takes entrepreneurs
as clients, “connecting entrepreneurs with capital, markets and business
expertise,” according to its Web site. Clients can either lease space in the center
or contract for services in eastern Iowa or western Illinois.
* Blueprint 2010 by the Illinois Quad-City Chamber of Commerce. It was
completed earlier this year and is in the process of raising $2.5 million in pledges
to fund a five-year effort to attract and retain residents and workers, help retain
and expand existing businesses and assist the Illinois Quad-City Growth Alliance
to accelerate job creation and residential growth.
In the meantime, said Thom Hart, who has been president of the Quad-City
Development Group, the partnership of public- and private-sector members is on
its way to its second-best year this decade in terms of job growth and retention
and its best in terms of investment in new facilities.
So far this year, 1,811 jobs have been committed from new companies, growth of
existing companies and retention of businesses that could have left, according to
a QCDG report. There have also been commitments to build $271.5 million in
new facilities.
The largest is the Triumph Foods pork processing facility planned for East Moline
that will include a $135 million plant and 1,000 workers. River Gulf Grain will build
a $100 million ethanol plant in Buffalo and create 45 new jobs. TMT
Manufacturing, a high-tech maker of metal parts, announced plans for a new
plant in Davenport at a cost of $1.7 million that will employ 24 workers.
That follows six years of mostly anemic job growth that hit bottom in 2003, when
figures showed that 157 jobs were created or retained and $5 million invested in
new facilities.
Job creation in circumstances where population growth is flat or declining poses
a difficult hurdle to overcome for those who are tasked with marketing and selling
a community as a place to either grow a business or relocate one, Hart said.
“Job growth vs. population growth is a chicken-or-egg type question,” Hart said.
“You need people to fill jobs, but you also need jobs to draw people.”
In any given year, Iowa has roughly the same rate of business “deaths,”
companies that cease to exist, as it does business “births,” those that open their
doors for the first time, Swenson said. In essence, jobs created by new
companies in a given community roughly replace those that are lost through
closings.
Urban areas with greater access to talent and technology also face the hurdle of
creating greater efficiency when it comes to economic activity, Swenson said.
“Over time, you would expect downward pressure on the number of firms and
workers,” Swenson said. “The more you move toward an urban area, you would
expect that pattern to be more pronounced.”
The Quad-Cities age demographic has a shrinking population of 18- to 28-yearolds, even though there are more than a dozen colleges, universities and trade
schools in the immediate area, said Pat Keir, chancellor of the Eastern Iowa
Community College District. If they can be attracted to live here while still in
college, they tend to remain rooted.
Crafting a program that offers breaks on college tuition for graduates who agree
to stay in the Quad-Cities for a period of years may offer a way to keep more
young people here, said Jerry Messer, president of the Quad-City Federation of
Labor.
Chet Culver, incoming Iowa governor, has promised a series of efforts to make
college educations more accessible and affordable to young people. They
include more state funding for public universities and community colleges to keep
tuition low, programs to make the first year of college free or low cost to new
students and changes to allow seniors to earn college credits while still in high
school.
In recent years, the Quad-Cities has done a good job of making the region more
attractive to young people and families by building amenities such as The Mark
of the Quad-Cities, a revamped John O’Donnell Stadium, plans to redevelop the
riverfront, more housing alternatives and better night life, Messer said. What is
needed now is more effective marketing of those improvements.
Networking and other programs geared to young professionals that are run by
DavenportOne and the Illinois Quad-City Chamber of Commerce benefit the
region, but there needs to be a more concerted effort in that area, said Rock
Island Mayor Mark Schwiebert.
“Maybe what we need is an emerging professional network where we target
college students and nurture them, so they stay here,” Schwiebert said. “Young
people are our future leaders, and they will be filling the jobs and leadership roles
as those of us who are getting older step aside.”
Job creation is much more than an act of will, say chamber officials, city
economic development officers and others. The state of the economy nationally
has a significant impact on the ability of any location to attract new businesses or
help existing companies to grow.
“From 2000 to 2004, the economy was not good, not nationally and not here,”
said Dan Huber, president and chief executive officer of DavenportOne.
“Economic development is tied to the state of the economy.”
That hit home as the Greater Davenport Redevelopment Corp. had difficulty
selling industrial land during the first half of the decade in the Eastern Iowa
Industrial Center, a 300-acre industrial park in northwest Davenport. The
redevelopment corporation is a partnership of the City of Davenport, Scott
County, DavenportOne and MidAmerican Energy. DavenportOne manages it.
After sale of a lot in 2002 to a distributor of John Deere products, there was
nothing. Then, last November and again this May, a pair of manufacturers —
PCT Engineered Systems and MMS Thermal Processing — that use advanced
technology announced plans to move into the park, Huber said.
In the layered economic development infrastructure in place in the Quad-Cities,
the QCDG, the chambers and cities rely on the development group to market the
area while the chambers help to create a favorable business climate and entice
business that want to locate here or expand, said Rick Baker, president and chief
executive officer of the Illinois Quad-City Chamber of Commerce.
In the case of the Illinois chamber, some of those activities have included efforts
to attract and retain young professionals, seeking improvements in transportation
and advocating for legislation that is favorable to business development, Baker
said.
But not all municipalities in the Quad-Cities share the QCDG’s focus on attracting
jobs in manufacturing, food processing, financial and information services and
logistics and distribution.
While those who want to see change in the area’s economic development effort
say that attraction of a new business to the Quad-Cities benefits everyone, no
matter where it lands, Bettendorf sees itself as a niche community that is
concentrating on businesses “that push mountains of data,” said Steve Van
Dyke, the city’s director of economic development.
Bettendorf partners with the QCDG and others but also markets itself to attract
the kinds of business that it thinks will best solidify its future, Van Dyke said.
There are “product differences” among the municipalities that make up the QuadCities. Bettendorf takes representatives of the QCDG along on business
prospecting trips, but it also promotes its own interests.
“The notion that we should market ourselves as one community, we applaud that,
but we are not all the same thing, and if a prospect comes along, they have
options to choose where they can go,” Van Dyke said. “Bettendorf has to market
itself and what it has.”
Tom Saul can be contacted at (563) 383-2453 or tsaul@qctimes.com.