BY LINDA LIPP, Greater Fort Wayne Business Weekly
lindal@fwbusiness.com
A new target industry study commissioned by the Northeast Indiana Regional Marketing Partnership doesn't hold any surprises for those in the economic development community.
The study performed by Whittaker Associates, of Holland, Mich., ranks 15 industry segments - five primary and 10 secondary - that may be a good fit for northeast Indiana.
"A lot of this is self-evident," said John Stafford, director of the Community Research Institute at Indiana University-Purdue University Fort Wayne. "But it's a benefit to me to have someone come in with a fresh pair of eyes, not having, like me, 50 years' worth of perceptions and biases."
Whittaker collected data through site visits, interviews with business and community leaders and other research. The company then developed a statistical analysis based on 32 factors and created an algorithm to weight each factor based on its relevance as an indicator of industry behavior.
The result is a ranking of 15 industry areas that hold the most promise for economic development in the region. But Stafford said the study can't properly be called a "cluster study," which would be a much more in-depth look at a target industry and related businesses and services.
The area's transportation infrastructure, including interstates 69 and 80, air cargo service facilities and capabilities at Fort Wayne International Airport, central geographic location and history as a transportation hub all combined to make transportation and logistics the top-ranked industry to be targeted for expansion.
The next four industry areas are, in order, advanced materials, financial services, medical devices and food processing.
Hospitality and tourism ranked eighth on the list. Popular tourist attractions include the Fort Wayne Children's Zoo, which gets a half-million visitors each year and is undergoing a major expansion project expected to boost attendance, as well as a number of museums and the annual Auburn Cord Duesenberg Festival. But the area lacks a "destination" tourist spot, such as a theme park, the report noted.
The study looked at industries that could bring in money and jobs, as opposed to retail development, "which just tends to move money around," said Dean Whittaker, founder and president of Whittaker Associates.
"The objective is to create more wealth in the region," he said.
Although it may not be spelled out explicitly in the Whittaker report, wages were one of the most important factors considered in targeting new businesses. The "threshold level" was an average wage of $38,000, Whittaker said.
Some targeted industries, such as health care - sixth on the list - include positions with wages from entry level to upper level.
"You need that range of jobs. It's like needing a range of housing," Whittaker said.
The wages of residents in the northeast part of Indiana have been falling in relation to the rest of the nation for more than a decade. Average earnings in the 11-county northeast Indiana area in 2005 - the most recent year for which data is available - were $33,206, according to Bureau of Labor Statistics data supplied by the Community Research Institute. Nationally, 2005 earnings averaged $40,671, according to the BLS data.
Whether an average of $38,000 is a satisfactory threshold to ask of new companies depends on the industry and the geography, Stafford said.
"In rural LaGrange County that would be good. If you're talking about Allen County and the defense industry, you better not be talking about $38,000," Stafford said.
The Community Research Institute also has been working with the Regional Marketing Partnership to create a regional economic development strategy.
Whittaker's study "came up almost identically to what we're doing," Stafford said, but it took a broader geographic perspective.
"There are multiple economies in northeastern Indiana, and some industries are incredibly important in certain counties and not important at all in other counties," he said.
The Indiana Business Research Center at Indiana University and the Purdue University Center for Regional Development recently released a detailed study of the role of regional industry clusters on economic development in rural areas. The study developed an "index of relative rurality" that measures more precisely where individual counties fall on the rural/urban continuum.
Stafford believes it also helps explain some of the discord that often characterizes the relationship between Fort Wayne and the rest of the region.
"We go from fairly urban to really rural pretty fast, even within Allen County," Stafford said.
The city of Fort Wayne has more than 220,000 people, and the next largest city in the area, Huntington, is less than 20,000, he noted.
"There's nothing in the region in between. That's part of the reason for the tension," Stafford said.
The higher a county's index, the more rural it is, according to the IU-Purdue study. Allen County is 0.184, and the next closest is DeKalb, at 0.384. The remaining counties in the region are in the 0.4 range, and LaGrange, the most rural, is 0.536.
Whittaker Associates has already begun the second step of its commission, which is to develop a list of 100 companies on which the Regional Marketing Partnership should focus its efforts.
The companies will be ranked according to the target industry index and then grouped into levels A through D, depending on the feasibility they might move and/or expand in northeast Indiana in the next 12 to 18 months.