Community Vitality Update

December 2003

Issue No. 2

The CVC newsletter is designed to provide community leaders, economic developers, entrepreneurs, and other Iowan’s interested in community vitality with features on innovative development strategies, policy updates, and information about upcoming conferences and networking opportunities.

Reports on Industry Cluster-Based Economic Development Released

During this past year, the Community Vitality Center has partnered with the UNI Institute for Decision Making to examine how the broader concept of industry clusters might be used by local leaders and economic developers. State economic development efforts have recently targeted 3 industry clusters: “life sciences, advanced manufacturing, and information solutions.” A new series of reports containing the results of this project are now available on the CVC web site: www.cvcia.org . The series includes an overview analysis that examines the concept of industry clusters, the use of industry clusters in economic development strategies, and the results from applying the industry cluster concepts. In addition, there are individual reports for the three pilot areas analyzed including: Southeast Iowa, the Iowa Great Lakes Region, and the Carroll area.

The executive summary states that, “Economic efficiencies and cost factors are the ultimate driving force behind why industries cluster and individual firms decide on a specific [cluster] location”. The varied reasons for clustering include buyer-supplier relationships, commonality of labor markets, technologies and support services, regional interaction between firms, and geographic proximity. The reports suggest that it may be important for economic developers to examine and better understand the existing industry clusters of their region. This may lead to identification of more specific opportunities and strategies to strengthen and sustain the existing industry clusters and to evaluate the attractiveness of a region’s resources for new industry clusters.

Economic Development Corporation Merger Allows Specialization

The West Central I-80 Development Corporation recently expanded from a two county organization to a three county group that includes Greene, Guthrie and Adair Counties-- a tier of counties to the west of the Greater Des Moines area. Adair and Guthrie have been working together for more than a decade, but recent discussions about regional incentives for economic development coupled with the timing of an executive director opening in Greene County, created an opportunity to examine the structural alternatives for reconfiguring the provision of economic development services.

Under the merged organization, each county contributes roughly $60,000 to the new entity’s budget. A 25-member board meets quarterly and has at least 8 members from each county. A smaller executive committee meets monthly. Each county has 8,000 to 12,000 in population. The larger pool of resources allowed the new entity to hire more staff, conduct more marketing, and assemble greater specialization of expertise. The staff expanded to four members, including the executive director, regional planner/grant writer, marketing director, and economic development specialist. Greene County retains a half-time staff position on their own locally to help with communication and to maintain liaison with local groups and activities. For more info see: http://www.iowadevelopment.com/

USDA and SBA Reach Agreement on Rural Business Investment Program

USDA and the SBA recently announced an agreement on administrative rules to implement the Rural Business Investment Program (RBIP). As part of the 2002 Farm Bill, the RBIP will receive funding through the Commodity Credit Corporation to support $280 million in guaranteed debentures and grants for technical assistance. Under the agreement the USDA will enlist SBA’s expertise in venture capital financing to implement the program. Newly formed rural Small Business Investment Companies (SBICs) will be able to leverage private capital funds with government financial assistance and to obtain both government and private grant resources for technical assistance. In turn, the new rural SBICs will support the financing of new and expanding businesses, increase the amount of capital available for investment, and provide a new resource for technical assistance to businesses in order to stimulate investment and job creation in rural communities.

Acceptance of program applications is expected in six months. The preparation and publishing of the guidelines for participation must be completed before funds can be distributed. In the interim, the SBA has offered special consideration to rural applicants through its Small Business Investment Company (SBIC) program. Information on how to seek SBIC financing can be found by visiting http://www.sba.gov/INV/howtoseek.html. RBIP information on program implementation can be found at the USDA’s web site at www.rurdev.udsa.gov or in the Federal Register. At least one group in Iowa is interested in submitting an application for a regional/statewide rural venture capital SBIC entity. For more information on their effort contact Burt Chojnowski, President of Fairfield Entrepreneurs Association at: burt@coolcall.com .

Community Entrepreneurship Seed Grant Program Announced

The Community Vitality Center has announced funding for approximately six $10,000 community entrepreneurship pilot projects that implement innovative concepts for supporting entrepreneurs that are locally generated or help to extend the lessons learned from existing innovative models to other communities. All Iowa communities are eligible. Projects will be selected to provide the widest variety of innovation and lessons learned from the proposals submitted.

Two page project proposals must be submitted by December 31st, 2003. Projects will be selected by January 31st, 2004. Pilot project subcontracts must be submitted to USDA for final approval with a start date planned for Summer 04. Proposal submission forms, a list of allowable expenses, and a sample budget are available by clicking the left hand menu item “Mini Grant Proposal Submission” on the CVC web site: www.cvcia.org . You can also learn more about Entrepreneurship Pilot Projects from last year and ideas suggested at ten local forums on entrepreneurship and community vitality by clicking on the hot topics at the top of the CVC web site. Additional questions should be directed to the CVC director.

Correction on IPRT Assistance Contact for SBIR/STTR Proposals

The November newsletter announced the availability of program solicitations for the U.S. Department of Energy’s Small Business Innovative Research (SBIR) Program and Small Business Technology Transfer (STTR) Program for FY 2004. This is a program that targets small businesses with grants to conduct feasibility studies on specific goods, services, or technologies desired by federal agencies. The ISU Institute for Physical Research and Technology (IPRT) contact for SBIR/STTR assistance is now Vitaly Pecharsky, Jr. For more information contact Vitaly by phone at 515-294-9062 or by email at: redsolar@iastate.edu . IPRT lends assistance to enhance the number of proposals submitted from Iowa to the federal government for funding consideration.