Session Date: August 18, 2005
Annual Meeting Session Summary: Fostering Business Development
By Rebecca Japhet
Communications Specialist, Washington Legislature
This summary is provided for information purposes only. NCSL does not endorse any views it contains.
SEATTLE - A panel of experts explained how states can use tools such as tax incentives, regulatory reform, venture capital programs and higher education resources to promote business development. The panel spoke at Fostering Business Development, a session during the National Conference of State Legislatures' 2005 "Strong States, Strong Nation" Annual Meeting.
Dr. Steve Van Ausdle, president of Walla Walla Community College in southeastern Washington, kicked off the discussion by describing the school's new program aimed at supporting the area's burgeoning wine industry.
While Eastern Washington has long been known for its wheat production, the area's rich soils also produce world-class wine. The industry now pumps $3 billion a year into the state's economy and $100 million into the local economy. The number of wineries in the Walla Walla area has grown from 19 to 350, with 3,000 new wine-related jobs expected by 2006.
To meet the needs of these local wineries and encourage the industry's growth, Walla Walla community college opened a new Center for Enology and Viticulture, with a focus on wine, food and the arts. The program is pumping out graduates that can move easily into the industry and meet its growing demand for skilled workers.
Van Ausdle said it's a move that makes good economic sense. "The economic return we get on 8,000 acres of wheat can be achieved with just 300 acres of wine grapes," he said. "In addition, the wine tourist pumps more than twice the amount of money into our economy than the average tourist. This new program represents a strong partnership between the public and private sectors, and is a great example of how community colleges contribute to local economic prosperity."
Connie Marshall with the U.S. Small Business Administration's Office of Advocacy spoke next, focusing on how states can eliminate unnecessary rules and regulations she says are squeezing small businesses.
"There are 23 million small businesses in the U.S., and they produce half of our nation's gross domestic product," Marshall said. "Yet they are disproportionately burdened by regulation. States can help change that."
The SBA is actively supporting regulatory flexibility legislation on the state level that would require agencies to consider the impact new laws will have on small businesses. Ten states and Puerto Rico are considering such legislation, and 30 states have some form of the law.
"Legislatures across the nation are beginning to view regulatory flexibility legislation as an economic development tool," said Marshall.
Karl Seidman, a principal at Karl F. Seidman Consulting Services in Cambridge, Massachusetts, was on hand to explain policies and tools states can use to help companies start up and grow in their states. He encouraged lawmakers to consider ways to expand the availability of funding sources for start-ups, including state loan guarantee programs, loan packages and origination services through local EDCs. Finally, Seidman offered specific ideas for ways the public sector can help, from directly supplying capital to firms and projects to creating state lending programs.
Finally, Bill Baxter, Seattle entrepreneur and founder of several start-up companies, spoke about what factors go into the decision about where to locate a start-up.
"It's important for lawmakers to understand the location decision process," Baxter said. "While there is no single factor, there is a definite order of priority."
The first thing entrepreneurs look at, Baxter said, is quality of life. The second is availability of workforce. A good K-12 and higher education system is key, and having access to a research institution is especially important to fostering a cluster of high-tech companies.
The third element companies look at is whether a state has a business-friendly environment. Tax structure, labor laws and reasonable regulatory levels all play a part, Baxter noted.
Finally, Baxter said businesses are looking for a good entrepreneurial environment, including access to funding sources and seasoned mentors from whom business people can learn.
NCSL is a bipartisan organization that serves the legislators and staffs of the states, commonwealths and territories. It provides research, technical assistance and opportunities for policymakers to exchange ideas on the most pressing state issues and is an effective and respected advocate for the interests of the states in the American federal system.
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