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Speaker: Retention of local businesses key to development
Laith Wardi, certified economic developer and president of Executive Pulse, talks about the future of economic development Tuesday during a presentation to members of the local business community and others. Wardi said the 19,000 jobs lost in the area the past 20 years likely will not return. (Bulletin photo by Mike Wray)
The majority of the 19,000 jobs lost in Martinsville and Henry County over the past 20 years are not coming back, and any that do return will look different than when they left, according to Laith Wardi, certified economic developer (CEcD) and president of Executive Pulse.
A focus on educating the workforce and retaining/expanding local businesses are keys to a prosperous economic future, Wardi said.
Wardi, who has worked in and around the economic development profession for more than 20 years and has extensive experience in business retention, was the first speaker in a series of four presentations to be held throughout the year, according to Mark Heath, president/CEO of the Martinsville Henry County Economic Development Corp.
In his presentation at Chatmoss Country Club, titled “Beyond the Basics — New Strategy for Business Retention/Expansion,” Wardi said the community must divorce itself from the losses of the past and realize that although the 19,000 job loss “is devastating,” there are signs that a recovery is occurring.
“The stock market is looking great and everything seems to be turning a corner, except jobs. Jobs are not coming back,” Wardi said.
Henry County and Martinsville are like most localities in the U.S. in that “creating net new jobs is never going to happen again. Unfortunately, you’re going to do economic development,” but it may not result in job creation, he said.
That does not mean economic developers are not needed, Wardi said.
Advances in technology are partially responsible, he said.
For example, when traveling by air years ago, “you interacted with a human” at the ticket counter, he said. Now, there are robotic kiosks. Music also has changed, as digitally mastered music eliminates the need for a corner music store.
“How about retail,” Wardi asked. “Best Buy’s biggest problem” is that people go there to look and touch products, and then they go home and buy them from an online retailer like Amazon or eBay, he said.
Zappos offers free shipping on shoes, Wardi said. Customers can try the shoes on and return the unwanted pairs with “no harm, no foul,” all often within 24 hours and with no shipping charges.
Wardi said that “technological unemployment is unemployment due to the discovery of technology” — relating a quote by John Maynard Keynes from 1930.
Also, companies are downsizing, investing in equipment rather than people to help make a profit. “Companies are getting leaner and meaner,” he said. “It’s not the same world ... Bigger is not better.”
Also, companies build plants where there is a demand and a market for their products, Wardi said. He noted that Brazil, Russia, India and China either are seeing, or will see, net job creation as companies such as UPS, DuPont and others locate there.
There are three finite ways to grow jobs in areas such as Henry County and Martinsville — entrepreneur development, business recruitment and business retention/expansion, Wardi said. He added that the first two are not viable options.
For several reasons, the most viable option to grow jobs is retention/expansion of existing businesses, he said.
“It allows you to interact and get feedback from local customers, provides 80 percent of jobs and investment” and is already here, he said. Also, it is “10 times cheaper to keep and grow” existing firms/businesses.
However, retaining those businesses is a team effort that requires the community to help, Wardi said.
“Business retention by definition has us all working together,” he said.
He added that the community is fortunate to have someone of Heath’s caliber heading the EDC.
Wardi praised local stakeholders — The Harvest Foundation, higher education institutions, workforce training programs, the EDC and others — for “pulling together in the right direction. I haven’t seen this type of cooperation” in other localities, he said, and encouraged residents to also get involved in the grassroots movement to grow jobs.
“The love you give is equal to the love you make,” Wardi said. “What you put into this” is what the community will reap.
He also suggested The Harvest Foundation consider ways to attract educated young people to the area, such as paying student loans for new hires, which he said is being done in Kansas and Niagara Falls.
“The reality is what you’re doing (at The Harvest Foundation) is your ace in the hole” and gives the area a chance to distinguish itself from other communities, Wardi said.