Economic Development in West Virginia
The conflict is not some sinister plot, but rather a manifestation of government’s desire to meet the obligations it has assumed towards the governed. The tendency of government’s economic development has been to increase the tax base through increased employment. The major problem with this approach was the short sightedness in the types of jobs created.
Another part of economic development efforts of the State government was directing fledgling businesses to capitol sources, primarily lenders at interest. This, too, has a conflict of interest with the health of the businesses.
When a business borrows the money for expansion, the profits from the expansion generally go to the lenders. Once the expansion takes place, it becomes very difficult to scale the business to meet changing demand on any short term basis. Servicing debt becomes the goal of business when there is a decline in demand instead of managing the business size to suit demand.
Primarily, the government can have a positive influence on economic development, but West Virginians must realize that while the government is not against economic development, government’s short term primary interest is increasing the tax base so promised services can be delivered to the public. Real economic development is going to be accomplished, if it is accomplished, by a coordinated effort from the citizens of the State.
Developing a Plan
Primarily, a plan for the development of
If there is any one factor
Success is based on not only individual effort, but also team effort and achievement. All businesses know that success depends upon their clients’ succeeding. In the same manner, the community is a success if the members of the community enjoy success. Filling in the community’s gaps in goods and services becomes a primary goal, and expanding the variety of goods and services available a direction for enriching the community.
The basic concept of helping the community,
Basics of Business
Several principles can be applied which will lead to development of small businesses in
Value Added Principle
The development concept is one of adding to the State’s production. Shipping coal out of the State provides jobs for coal miners, but turning the coal into kilowatts of power adds more jobs. There are many other areas where such application is quite possible, but roadblocks sometimes get in the way. This concept itself is not new.
During the early history of the
Perhaps a good example where this principle could be applied would be the timber industry. Equipment costs for woodworking have gone down, and an opportunity for small furniture and woodworking shops has gone up. When we consider that much of the State’s timber industry is small, family owned businesses, the potential for these operations to produce goods in addition to their primary business of logging is there if there’s a viable marketing structure for these goods.
Demand and Supply
The principle of supply and demand deserves some attention in developing the economy, but perhaps not in the sense most consider it. The demand for many goods already exists and is being filled by someone. The trick is in who, exactly, is meeting the demand.
In most cases, if there is a demand, there is a search for a supply. This practice can be altered somewhat with interesting results. Commodity markets do this all the time, and it’s referred to as buying futures. A local hardware store here in Charleston developed it’s own list of suppliers for varied wares, and that hardware store is still known for having just about anything a customer would want. That can be taken a step further.
The ‘trickle down’ theory advocated by a former President didn’t work very well as we all know, but there’s another way of approaching this very same theory. In practice, it would be something like, ‘Never give your money to anyone who has more than you.’ Quite honestly, this holds a lot of potential for both individual business success and economic development.
The benefits to a growing business would be rather apparent if the question is asked, ‘If the company is less than a percent of a supplier’s business, how important is it to keep the company business to the supplier compared to a supplier that’s primarily selling all it’s goods to the company.’ The trick to trickle down is for startup businesses to create their own suppliers by supporting either small existing businesses or contracting future purchases with individuals. Plainly, if these companies or individuals contracted have less than the startup, both have a stake in the success of the other.
Where the Skills Are
The development of skills takes on many different faces, and to set artificial limitations is perhaps one of the biggest mistakes of today’s regulatory and business climate.
The Campus
There’s a place where government can play a fairly substantial role in business development despite the apparent conflict of interest. That’s in the area of bringing skills together for business startup, particularly
With growing tuition costs at State colleges, most students are graduating saddled with debt, and they are less likely to consider investing their time and remaining resources in starting a business. Sadly, this trend is accelerating, and potential entrepreneurs are becoming fewer each year.
The State colleges could, however, provide an elective course geared towards networking across college campuses for the purpose of business startups. Three hours a year with encouragement in partnershiping along with some outside resourcing could accomplish a great deal. The final semester ‘P’ could be based on having staffing and business plan in place for a business. ‘Entrepreneuring’ would be a great course title.
Apprenticing
Apprenticing has a place in today’s workplace just as it did hundreds and even thousands of years ago. Until the mid seventies, all the managers at C&P Telephone started with the company as janitors including the CEO. This is a true and interesting fact.
There are benefits and drawbacks with this approach to skills development. The benefit is having individuals with an intimate knowledge of a business and promotions are available within an organization. One drawback is that many of the skills learned are specific to a particular company and don’t transfer to other organizations easily. Another drawback in today’s labor market is that graduating students are not in a position to start at a bottom rung with their huge debt load.
Hobbies to Business
Many skills are developed through hobbies, and these skills sometimes lead to full time employment. The rural lifestyle of varied tasks also leads to specializing in particularly profitable or personally enjoyable tasking. Videoing activities to movies, fishing to guides, there are many different areas where personal activities can lead to a profession.
Other Areas
Many cannot afford higher education costs or don’t have the resources to seek formal education but still enjoy learning and developing new skills. The skills developed at home can be a valuable asset to any company. The list of how marketable skills can be developed is almost endless, and, to be quite honest, the corporate world doesn’t give the public credit for intelligence and the ability to learn skills the public deserves.
Encouraging Activities Leading to Business
The activities leading to business often include a demonstration that the activity is potentially profitable. A hobby such as filmmaking might show promise if a film wins a contest or receives favorable comments from the general public. A microbrewed beer might be of a quality that individuals would want to purchase it after drinking a bottle at a party. Economic development is aided when individuals and groups are encouraged or encourage others.
The different groups that can affect change are varied in structure and purpose, but each can have a positive influence on economic development. Government can remove roadblocks, and the Optimist Club members can mentor and support new entrepreneurs in fledgling businesses. WVPBS could sponsor a filmmaker’s contest where the top six films would be aired, and the public could decide the winner. The potential for business development is present, and encouragement and support can amplify that potential.
Direct and Indirect Competition
Direct competition lowers general cost to the public, but adding diversity in already low profit businesses can act to develop a larger public.
If there’s an Italian food restaurant on one block, opening another Italian restaurant two doors down doesn’t offer the public much choice and would probably cost in terms of potential. Opening a Greek restaurant two doors down would offer variety, something that might make tourists’ visits more enjoyable.
Opening another whitewater rafting business where there are already three other companies providing the same service doesn’t make good sense, but offering a mountain safari with pack burros and guides might draw more tourists. Again, the offering of diversity would encourage tourists to return and bring others with them.
When you think about a baseball game, there is a player for each area on the field. Sometimes their coverage overlaps and sometimes one steps in to cover when another is pulled out of position. The team goal is to cover the whole field without fighting over the ball and to offer assistance to others when the opportunity exists.
Summary
The building of a team spirit within the public sphere towards economic development could make a huge difference in the State’s future. It would take an awareness of the team’s activities and a willingness to offer moral and fiscal support to the players. Above all, it would take thinking outside the box.