WEDA 2002 Governor's Conference - Highlights

William Fruth, president of Florida-based POLICOM Corp., shared his insight on how local economies work, how Wisconsin's economy compares with others and what we need to do to succeed in weak economic times.

According to Fruth, the wealth of a community is continuously being drained.

"Communities that can import as much money as what is being drained will have a strong economy," Fruth said.

Fruth advised economic developers to identify which businesses in the local economy are importing money to the area.

Another portion of Fruth's presentation revealed data that measured strong and weak economies. Madison ranks number 10 from a list of the ten strongest areas in the U.S.

Fruth pointed out that the strongest economies have rapid consistent growth and are diversified, while the weakest are dependant solely on one contributory industry that goes into decline.

A look at Wisconsin revealed several things. The state had pretty average economic growth from 1990 to 1999. In comparison, Texas had the finest growth of any of the states.

A look at employment growth from 1975 to 1999 showed consistent average growth in most industries.

See policom.com to view these rankings and additional useful data.

Fruth discussed the need for quality growth in the local economy.

"The great myth is that creating any type of job helps the economy," Fruth said.

An economy can grow in size but decline in quality. A baseball analogy sums it up well. Look at the team batting average. If you add more players who are weaker, the team batting average goes down. You're bigger, but the quality of your team has declined. If you don't take care of your best hitters, you can lose them.

Fruth also revealed data that stressed the importance of adding private sector jobs that pay higher than the national average and/or the area average.

Furth's data indicates Wisconsin's growth in quality is beneath the national average.

According to Fruth, communities must create more primary industry jobs that pay wages higher than your area average.

According to Fruth, the high-tech industry will continue to grow well into the future but is difficult to recruit. He named other contributory industries including healthcare, insurance and others.

"While there has been good growth [in high-tech], most of your wealth still comes from less sexy industry" said Fruth. "Don't ignore them in your existing industry program."

Fruth doesn't expect the recession to end soon and advises the following:

Vist companies - find out problems, establish relationships
Accelerate approvals
Increase marketing activity - look for companies looking to consolidate
Bundle incentives and assets
Accelerate private, public construction projects
Increase funding for economic development. Don't lay off the sales force during a recession.

During a recession local company owners need help. Do everything you can to keep them afloat. If not locally owned, work with the plant manager to keep that plant open in your community. Build that relationship and get local officials on board.