In anticipation of a turn around from the lingering national recession, the Regional Chamber and Growth Association (RCGA) is assertively
moving forward with a new four-part regional strategy that aims to increase jobs, investment, entrepreneurial growth, environmental sustainability, and the quality of life across the bi-state region.
The plan focuses on four strategic regional initiatives in the areas of: economic development, talent, locational advantage, and environmental sustainability. Just as the long-term strategic plan developed and led nearly ten years ago by then RCGA Chairman and Chairman-elect, Sverdrup’s Dick Beumer and Edward Jones’ John Bachmann—having a forward-thinking, strategic plan that takes a long view of developing the St. Louis region is important both in good times and vital during a recession, notes RCGA present Chairman Bob Reynolds. RCGA’s long-term plan back in 2000 focused on identifying what would become five distinctive industry clusters, marshalling region-wide support for the revitalization of the region’s central city, engaging the region’s business leadership in both a Forward Metro St. Louis public policy agenda and in infrastructure through the Private Sector Infrastructure Council. RCGA’s current Board members have spent the past 12 months identifying the high-leverage regional issues on which to focus as St. Louis emerges from the national recession.
While RCGA has committed itself to sustain its core missions of regional economic development and marketing, public policy and infrastructure, and nurturing a regional community—Chairman Bob Reynolds notes that members of the Board are highly committed to executing the elements of the four-part strategy and have constituted select committees to oversee the work involved in carrying them out. RCGA President and CEO Dick Fleming suggests that these initiatives will take not only effort from the RCGA Board, but also the various member companies, government agencies and nonprofit organizations that have actively partnered over the past decade to realize similar aspirations in the regional initiatives launched back in 2000.
For a detailed look at each of the four new Strategic Initiatives, and some observations from individual RCGA Board leaders who are actively engaged in implementing them, please read on.
Based on the experience of the past 10 years, and an in-depth research effort presently underway by Market Street Services, the RCGA will focus on vertical strategies on how the region positions itself around five industry clusters defined back in 1999 as promising targets for growth; namely, plant and life sciences, high-performance manufacturing, information technology, distribution, and financial services.
Much has changed in the world economy since the RCGA first identified those key industries in which St. Louis could establish leadership nearly a decade ago, notes RCGA Senior Vice President for Economic Development Steve Johnson. To stay abreast of how those changes have affected the region and the RCGA’s development efforts, the RCGA has engaged Market Street Services of Atlanta to make a detailed examination of how St. Louis positions itself within those industries and ferret out which subsections within them should be targeted for more intense marketing and economic development. It will look at sectors with the strongest potential for employment growth.
RCGA Board Chairman for Economic Development Danny Ludeman, president and CEO of Wells Fargo Advisors LLC, observes, “We believe the overall economy is going through a fundamental shift right now, and the work we’re doing with Market Street will help us better quantify and articulate St. Louis’ core competitive strengths as we emerge on the other side of this recession.”
“It has been nearly 10 years since the
St. Louis region began to identify itself through our five primary industry clusters: plant and life sciences, information technology, transportation and distribution, financial services, and advanced manufacturing. This process which RCGA is now undertaking will lead us to reaffirm, redefine, or recalibrate these clusters as the true drivers of our regional economy for the next 10 years, and beyond,” Ludeman further notes.
He concludes, “RCGA’s objective here is to identify a handful of narrowly focused industry subsectors for which Greater St. Louis is truly a world class competitor; based on core competencies and inherent strengths that cannot be easily bought, sold, or relocated. Much of it will revolve around people—the talents and skills that define the region—along with geography and the presence of certain of our companies who are the giants of their industries.”
Market Street will identify about two dozen companies that would be good development targets within each of those niches. The firm will be assessing them not only for potential to locate and/or expand operations in
St. Louis, but also the likelihood for hiring St. Louis workers. For example, they may drill down on health care and information technology, both of which are strong in
St. Louis, and look for an overlap and opportunity to develop an emerging industry such as digitization of medical records. They will also examine companies that are expanding or consolidating operations for their potential to locate or expand in St. Louis.
“This is very much a target marketing approach,” Johnson says.
Market Street’s report will be complete by the end of October. The firm has previously applied its approach with substantial success in Nashville, Tenn., and Austin, Texas. As the marketing effort moves forward, success will be measured by increased payroll activity, additional jobs created and more investment in the region, Johnson says.
“You’ll see a change in the way we prospect and market St. Louis,” he says.
In support of this initiative, the RCGA will extend by one year its current five-year economic development campaign for operational support. The chamber has asked all its investor members to continue their current level of funding for an additional year. At the same time, the Board and staff will be creating a plan for the 2011-2015 economic development campaign to ensure that the RCGA remains fiscally sound, competitive with other regions, and a continued good steward of investor support.
An abundant, educated, flexible workforce is one of the hallmarks of a strong and economically competitive region. Through its Regional Talent Initiative, the RCGA is firmly focused on making sure companies can get and keep the workers they need, says RCGA Board member, Doug Koch, senior vice president and chief talent officer at Brown Shoe Company, who is leading the effort as Chairman of the RCGA Talent Development Council.
This initiative is focused on building regional talent management infrastructure; retaining workers with experience; retooling talent for emerging demands; recruiting employees from local, national and global markets; and ensuring that the region stays economically competitive. “RCGA had the foresight to establish a “Talent Initiative” that focused on key strategic efforts needed to enhance the region’s workforce,” Koch comments.
“The goal is to develop and implement a strategy that is demand driven—focused on the needs of employers—and to attract, develop and retain the talent St. Louis area companies need to grow and prosper in today’s economy,” says Koch. He notes that the regional talent effort is critical because the national recession shows signs of changing and this region must be ready to meet the demand for a recovery.
“When the economy begins to recover, those regions that are prepared will be in a better position to compete,” he notes.
The RCGA’s talent initiative has already conducted focus groups of area companies to learn what their human resources challenges are. Next will be conducting an inventory of best HR practices to keep employees current and then publicizing those practices so that area firms can implement them as appropriate.
Blair Forlaw, director of Greater St. Louis Works, RCGA’s regional talent and workforce effort, says “the retooling aspect will involve connecting the many different organizations concerned with worker retraining and trying to help them share information and work collaboratively. There could be some economies of scale if these programs worked together,” she notes.
To retain experienced talent, especially those who have been laid off and might go elsewhere, RCGA will be expanding its successful Greater St. Louis Works “Bounce Back St. Louis” program, extended networking and re-employment sessions for information technology professionals to include other occupations. “We don’t want to lose our talent pool,” Forlaw comments.
Koch notes, “Keeping the region’s talent base here and well equipped for the future is critical to our business health. While it is difficult to impossible for one company to attempt to make this happen, the efficiently focused power of a united group of companies working with the community, government and local education institutions makes this viable.”
The Regional Talent Initiative also will be helping area workers find jobs in promising new careers such as green technologies, logistics, information technology, engineering, medical technology and services, and distribution as well as hot jobs such as bio-informatics, energy analysis and geospatial information. The plan is to hold four networking meetings a month to maximize opportunities to find work and four new-economy career forums where employers can discuss what the trends are, the skills they are looking for and types of jobs available.
Koch concludes, “RCGA will also be setting up a job referral network over the social media site Twittter.com that could become a national model. The outreach processes will include traditional mediums such as formal and informal networking meetings and training sessions, as well as more non-traditional, cutting edge mediums such as an on-line job referral network through ‘Twitter’ and ‘LinkedIn.’ ‘Job angels’ would help unemployed individuals one-on-one find work by tweeting about open jobs and mentoring their job search.”
“It’s really cool, and takes advantage of just-in-time information in a grassroots way,” Forlaw says.
To grasp the extent of trade between China and Missouri, Saint Louis University’s Boeing Institute of International Business is researching the topic with some interesting results.
Thanks to a three-year grant from the U.S. Department of Education, the Institute has been compiling data on Chinese exports, imports and foreign companies that invest in Missouri firms. Until the Institute launched its data drive, such information wasn’t available in depth, explains Dr. Seung H. Kim, director of the Institute.
“We have actually gathered trends for the last five to seven years,” he says. The data will be helpful as Missouri tries to attract a Chinese air freight hub to Lambert-St. Louis International Airport.
Kim says exports to China from Missouri have been increasing for the last decade and reached $12.5 billion annually. The majority of those are agricultural and health care/biotechnology products.
Chinese trade accounts for 90,000 jobs statewide and business for 4,000 exporters, Kim says.
Most recently, the Institute, in partnership with the RCGA and the World Trade Center, has been studying direct foreign investment in Missouri companies. So far, Kim calculates that there are 600 direct foreign investors in Missouri firms. The Institute is creating profiles of those firms just as it has of the Chinese importers and exporters it has been studying.
Kim estimates that direct foreign investment in Missouri companies equals $2 billion and has been rising over the last five years. Europe leads the pack, but China, the Middle East, Asia and Latin America are also investors.
To capitalize on that investment, more and more SLU students are studying Chinese and spending anywhere from two weeks to a year in China to augment their studies. About 600 Chinese students will come to SLU this year—an increase from 400 last year.
The University began offering basic Chinese language courses three years ago with 12 students. Now SLU offers three sections of basic Chinese and has had to turn away American students. They recognize the demand from U.S. companies for students who speak Chinese and understand the culture.
“I never thought American students would want to learn Chinese,” Kim says. “I am very pleased that young people are more open-minded these days.”
Because St. Louis is located in the center of the nation, the area has multiple advantages that need to be further developed to promote economic vitality, says Susan Stauder, RCGA vice president of infrastructure and public policy. The RCGA is pursuing several key elements under this initiative, with the most ambitious being locating an air freight hub for Chinese goods.
The hub, which has been discussed between area business and government, and Chinese leaders for more than a year, will enable China to import goods through Lambert-St. Louis International Airport, MidAmerica
St. Louis Airport, and other regional infrastructure facilities. Multi-state Midwestern goods would then fill the return flights to China to boost the region’s exports, generate regional jobs and investment, and help diminish the international trade imbalance. Former RCGA Board Chairman and Chairman, President & CEO of The Laclede Group Doug Yaeger underscored the opportunity for the region, “Interest in transaction and asset based investment by Chinese investors and businesses is growing dramatically, and that means real opportunity for the St. Louis region—by establishing a major economic hub to engage Chinese and Midwest businesses.”
The RCGA has been leading the charge in forging interest in China for the project and the negotiations to establish a hub. More people are joining that effort as it gains momentum. Earlier this year, state and regional public and private leaders, including the RCGA, jointly established the Midwest/China Hub Commission to further advance this effort. Yaeger, himself a member of the Commission, notes, “For our region to be successful in any major economic development endeavor, many organizations, institutions and governmental entities must come together around a common goal, I am pleased that this has happened concerning the China Hub initiative. RCGA should be recognized as one of the founding members of the Midwest/China Hub Commission and an active participant in its ongoing functions.”
The regional location initiative is focused on rail and ports as well as air, Stauder noted. In this regard, RCGA is actively supporting efforts to promote the multi-billion dollar high-speed rail line between St. Louis and Chicago. The line has been discussed for years but is finally moving closer to reality. Illinois already has committed $400 million to the project in their recently-enacted Capital Bill. The U.S. House Transportation and Infrastructure Committee has agreed to support $50 billion in high-speed rail funding over the next six years. President Barack Obama is also supporting the effort and included $8 billion in his stimulus package for high-speed rail. If fully funded, the ultimate St. Louis-Chicago line would run passenger trains at 220 mph, cutting the six-hour trip to just over two hours.
“It’s significant for us, and it’s the first piece of the Chicago Hub Network in the Midwest that would be put into place,” Stauder says. The St. Louis-Chicago high-speed rail project is the first leg of a 3,000-mile rail Chicago Hub Network system that would link eight Midwestern states to the Windy City. Priority links in the system are lines between Chicago and Detroit, and Chicago and Madison, Wis., Stauder says.
She says she is also encouraged by the Missouri Department of Transportation’s work on establishing better rail connections between Kansas City and St. Louis, which would strengthen Missouri’s position within the hub.
Rail freight and distribution also have a key place in the locational initiative. Freight-related jobs already account for 6.2 percent of employment in the St. Louis region, according to a study recently commissioned by the RCGA. But the region needs more detailed information about the trends and volume of freight flow through the area, as well as how to capitalize on those trends from an infrastructure and a regional marketing and development perspective, the RCGA analysis found. It will be pursuing funding for a detailed analysis to quantify these issues so that the bi-state region can fulfill its potentials in this area.
Through this initiative, the RCGA is aggressively pursuing environmentally sustainable initiatives to make a name for St. Louis as a green-friendly region. The St. Louis Climate Prosperity Project focuses on growing a green workforce of environmental services jobs, encouraging companies to capitalize on “green savings” by moving to sustainable business practices and generating “green opportunities” by creating sustainable industries.
“It’s going to make St. Louis a better, cleaner, greener more desirable region and better citizens of the planet,” says Tracy Hart, chairman of the Energy and Environment Committee for the RCGA and president of Tarlton Corporation “It’s just the way to do business today, and it’s good business as well as sound environmental practice.”
The goals of St. Louis’ green initiative were set out by the Climate Prosperity Project, funded by the Rockefeller Brothers Fund.
St. Louis was selected as one of eight regions that are part of the national project in developing stages over the past two years and formally launched as Climate Prosperity Inc. in June; the national venture is aimed at reducing the nation’s carbon footprint, while demonstrating the economic development advantages of doing so. The Pilot Communities—Silicon Valley, St. Louis, Seattle/King County, Portland, Denver, Southwest Florida, Delaware, and Montgomery County, MD—will work within their region’s civic, business and governmental leadership and among the Pilots to accomplish these goals. RCGA President and CEO Dick Fleming has been elected Board President of the national Climate Prosperity Inc. Board of Trustees, made up of national economic development and philanthropic leaders.
Metrics by which St. Louis will be measured are reducing greenhouse emissions (gross annual and per capita); promoting green savings such as reducing miles driven and total energy consumption annually and per capita; increasing green economic opportunities such as more venture capital for green businesses, clean technology ventures, and regional specialization in green products and services; additional environmentally-focused jobs; more buildings that meet U.S. Green Building Council standards; and use of more clean transportation and energy efficient standards.
Some of the work the RCGA is doing to begin the effort includes holding educational seminars, producing newsletters and a region-wide energy savings campaign to promote green practices, such as reducing paper waste, more recycling, construction following green building codes, and more. The idea is to encourage companies to get started with simple sustainability strategies and to build from there, says Eric Schneider, senior director of public policy research for the RCGA.
“We want to eventually be a top 10 region for sustainability,” Hart says. “We realize that’s quite audacious. But it’s really about building our future.”
The end result of a successful Climate Prosperity Strategy, besides a cleaner region, is helping the area’s businesses gain a reputation for being environmentally conscious and expert in sustainable business practice, as we grow the economy. That, Hart suggests, will attract more business for the region’s companies and retain employees who want to work for environmentally-conscious firms.
“It feeds directly into economic development by attracting businesses that want a viable workforce that can accomplish what their needs are, provide an affordable lifestyle, and have the best environment for new businesses,” she says.
(RCGA staff reporters also contributed to this article.)
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