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Growth on the horizon, EDC says

Tuesday, January 8, 2013

By DEBBIE HALL - Bulletin Staff Writer

Local economic development activity has been stalled for several months but that is expected to end soon, clearing the way for progress in 2013, according to Mark Heath, president and CEO of the Martinsville-Henry County Economic Development Corp.

The presidential election, the fiscal stalemate in Washington D.C., the cost of insurance and new environmental regulations have prompted “a wait-and-see attitude between some of our clients,” he said.

Others are waiting to determine the costs of the new health care legislation and “a vast number of new regulations” before implementing plans for the future, he said.

For example, the legislation to avoid the fiscal cliff that was passed by Congress Tuesday includes $12 million for wind energy credits, Heath said. But he noted that the funds to finance those credits “have got to be made up somewhere.”

As a result of those and other uncertainties, many companies “have been a lot on the sidelines waiting” for issues to be resolved, Heath said, adding that is true especially among smaller companies with up to 250 employees.

Smaller companies tend to be more cautious than larger companies in uncertain economic times. They also create the majority of new jobs, Heath said.

“I don’t see this (lull in activity) as an extremely long-term situation. It has made people cautious, but at some point, people have got to decide whether they are in business or not. I think it’s getting to the point where people will have to say, ‘We’ve got to get on with things,’” he said.

When businesses are confident again, “they will move forward” with expansion or other plans, he added.

Heath predicted “there’s going to be some more pain” before the economic outlook improves. Those pains will “not be easy or convenient, and we are not going to turn this around overnight.

“Does that mean that I think there won’t be good news? No. I think there will be good news, but to think that we’re just going to get a new Congress and snap our fingers and everything will go back to the way it used to be” is unrealistic, he said.

Also, “we can’t wait for Washington” to lay the framework needed to drive development in Henry County and Martinsville, he said. The EDC, county, city and other officials/agencies must continue that work.

For instance, obtaining permits to begin developing Commonwealth Crossing Business Centre industrial park, maintaining available sites and developing new ones are “critical and we’ve got to continue” focusing on all of those areas, Heath said.

Education however, “is just as important” because it is needed to train the workforce in skills needed by companies, he said.

“Skill sets go hand in hand” with economic development, and at the moment, “there is a skills gap” locally, with some of the work force lacking skills needed by companies that have or may locate here, he said.

That is not just a local or even national issue, but “it is a global issue,” Heath said.

To underscore the importance of education, he explained that company officials visiting the area often ask what level of math is being taught in certain grades. “That’s just one example,” he said. Officials also visit existing industries and ask company officials if they are getting employees with the training and skills they need.

“The old days of thousands of jobs just churning are long gone. This is a fight that we’re in, and education is important, if not the most important piece” of economic development, Heath said.

The EDC is working with New College Institute, Patrick Henry Community College and K-12 educators to ensure people receive the training and skills they need to get jobs, he said.

“People are trying to get skills and trying to better themselves” by returning to school, but many cannot find work even after that, he said.

“We’ve got to help them” by researching and developing education programs that are needed by 21st century companies, Heath said. “There is just not going to be one size (education program) that works. I think there are going to be jobs all across the spectrum, but it’s not a one size that fits all in the world anymore.”

Companies can locate anywhere, but “the theory is that they are going” to move into areas with a skilled labor force, Heath said. “The places that figure that out” ahead of time and work to put appropriate training in place “will be ahead in the game.”

Overall, “I do expect progress this year, but I’m not going to sit here and tell everybody it will be easy. We have got to work to make it happen,” Heath said. “It’s not going to just fall out of the sky.”

 

 
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