Business report seen as promising

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Friday, March 30, 2012
— Anticipation of new products, increasing market share and a relative lack of global production all are factors that could lead local businesses to capital investments of $83 million.

That's one of the findings of a comprehensive business retention and expansion report by Rock County 5.0, a five-year public/private economic development initiative designed to reposition and revitalize Rock County's economy.

For the better part of two years, Rock County 5.0 has been meeting with the movers and shakers of Rock County businesses in an effort to open a dialogue and form lasting relationships that foster economic development.

The Rock County 5.0 team met with more than 100 decision makers at private-sector companies that employ nearly 17,000 people.

The report, released Thursday at Blackhawk Technical College, shows that 44 percent of the companies surveyed were balanced in terms of their production capacities. Twenty-two percent had too much capacity, a factor largely attributable to the departure of the county's automotive manufacturing industry in 2008 and 2009.

Thirty-four percent, however, were under capacity, and that presents expansion opportunities, said James Otterstein, Rock County's economic development manager and the author of Rock County 5.0's report.

Otterstein said 55 percent of the companies expect an increase in market share, and 85 percent have plans for new products.

"That translates into opportunities for growth and expansion locally, especially when you consider that so many of these companies are based in Rock County and make their decisions here," Otterstein said.

More literally, the report indicates, 60 companies were planning expansions that total $83 million.

"Granted, some of these responses were gathered 18 months ago," he said. "Some of the investments are under way, and some are not. They were planned at the time of the individual meetings."

With 60 percent of the companies planning to expand, 40 percent didn't share similar intentions.

"That's not necessarily a bad thing," Otterstein said. "Many said they were doing just fine, holding their own."

Others—more than half of those with no expansion plans—said they faced barriers centered on regulatory challenges, uncertain markets, taxes and other general costs of doing business.

Otterstein said Rock County 5.0 was most interested in perceived restrictions attributed to real estate and workforce issues.

"Several of the restrictions are things that we can't do anything about," he said. "But real estate and workforce issues are areas where we think we can have some influence."

Several companies said they were landlocked and struggling with the cost of relocation versus the costs of acquiring and developing neighboring properties.

Many also said they struggle to recruit and retain suitable employees, a "skills gap" problem Otterstein said is not at all unique to Rock County.

"Although Rock County, as well as many other Upper Midwestern communities, can point to generations of residents that possessed fundamental production-orientated skill sets and strong work ethics, times have changed," he said. "The combined impacts of the economy, demographics and technology have raised employment standards across the board."

Training programs have improved, he said, but employers maintain that too many job applicants struggle to meet basic employability skills.

"Based on feedback from employers, this issue must be addressed simultaneously, otherwise the resources devoted toward developing the hard skill sets will not be leveraged efficiently or effectively," he said.

Otterstein said since most growth comes from existing companies, ongoing, two-way communication is imperative.

Rock County 5.0., he said, will continue to meet with county employers to develop a database that should feed economic development decisions.

"I would certainly say that the respondents were welcoming, encouraging and open to a meaningful dialogue," he said. "This is a project that will continue."

Last updated: 7:50 pm Thursday, December 13, 2012

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