By Philip Newswanger
Hampton is the latest municipality to join the growing crowd of economic gardening acolytes.
At its March 14 meeting, Hampton City Council approved $45,000 for the city's economic development authority to fund 10 companies for the program. The city council approved the shift in funds from the city's Hampton Manufacturing Assistance Grant program to the economic development authority.
The Hampton Roads Partnership is the focal point for economic gardening in the region, which is administered through its Innovate Hampton Roads brand affiliate in conjunction with the Edward Lowe Foundation, based in Cassopolis, Mich.
"We are entering into an agreement of $45,000 to service 10 companies that have not been pre-chosen," said Dan Girouard, asset manager for Hampton's economic development department.
Girouard said he hopes to have 10 companies picked for the program and the agreement in place with the partnership by April 1 to administer the program.
Interested companies can get more information at http://innovatehamptonroads.com/component/content/article/93.
Companies will be selected by the partnership, representatives from Hampton and members of the economic gardening program at the Edward Lowe Foundation and will be evaluated for their potential for growth. Only Hampton-based companies are eligible.
A team of experts from the Edward Lowe will provide technical expertise, such as identifying competitors, the rate of industry growth, and potential industries and customers, over a four- to six-week period.
The premise behind economic gardening is to grow local companies that have the potential to grow and create jobs, sales and tax revenue.
This contrasts with economic hunting. Under this scenario, localities and regions chase companies from other regions or countries for plants, offices and capital. This approach has been the philosophical underpinning of traditional economic development.
Many regions and localities are adopting both approaches to creating jobs and tax revenue as a cushion against future job losses.
YourEconomy.org, a website that tracks data on jobs and economies connected to the Edward Lowe Foundation, said existing, expanding companies contribute most to U.S. job creation, and from 1990 to 2008, existing companies generated 71 percent more new jobs than startups.
Business relocations account for only a small fraction of employment growth, according to the Hampton Roads Regional Competitiveness Study, published by the Hampton Roads Planning District Commission last July.
Most economic growth is driven by new businesses and the expansion of existing businesses, the study said. But not every company is eligible for the program.
The economic gardening experts choose certain types of companies to nurture. They bypass startups with 100 employees and target those with the potential for growth.
Targeted companies must have at least 99 employees and $1 million in sales or revenue, with the potential to grow.
The Hampton Roads Partnership launched its own economic gardening program last fall and chose five companies to participate. They were Citadel Logic LLC, E&E Enterprises Global Inc., ESRG LLC, SimIS Inc. and Unity Business Systems.
The companies were chosen because of their diversity and size. Most of them subsisted on government contracts for modeling and simulation and for cyber security.
But when the U.S. Joint Forces Command shut down and the cutback of defense dollars threatened, they decided to wade into the private sector for sales growth. nib