Starting over on economic development

Newly redeveloped organization readying a more proactive and collaborative regional effort to improve the sluggish growth of past decades and create a more vibrant economic future for the Cape Girardeau Area

1. Background:

In July 2021, Cape Girardeau Area MAGNET, the area’s sole economic development organization, announced renewed organizational plans focused on improving future economic development opportunities. It expanded its board of directors for the first time in decades to include private business leaders who personally invested in the organization, as well as appointees from local city and county governments who historically funded the organization and served on the Board.

The new private business members were part of an informal local group who had engaged with the existing MAGNET board in late 2020, to share concerns about the results of an independently conducted benchmark analysis it commissioned. The quantitative study compared our community with notable regional hubs in proximity across a broad set of economic and demographic elements that assess community vibrancy. The results found concerning sluggish local employment, wage, and working population growth between 1990 and 2020, especially compared to peer communities who experienced tremendous growth during the same 30-year period.

The newly organized board immediately postponed plans to begin an executive search for a new Executive Director. Instead of speculating on the specific expertise and experience needed by its new executive director, the board sought a professional independent analysis of the organization’s current activities and effectiveness compared to peer regions, as well as an assessment of current and future needs and opportunities that would provide the focus for a comprehensive multi-year strategic plan. The comprehensive plan, the first of its type in recent history, would help direct the search for an ideal executive to lead implementation and the organization.

The board reviewed proposals from several qualified organizations and ultimately engaged with Ernst & Young LLP Economic Development Advisory Services (EY) to facilitate a strategic planning process. The strategic planning process immediately began and was to consist of three phases: a Competitive Assessment, Vision Creation and Goal Setting, and a Strategy and Implementation Plan. Over the course of several months, the consulting team used new 2020 Census data to complete a regional Benchmark Analysis. They engaged with hundreds of stakeholders through interviews, focus groups, a community survey, and webinars. Lastly, they conducted workshops with a strategic planning subcommittee made up of a variety of community stakeholders. These efforts culminated in a report the consulting team provided to the MAGNET board near the end of 2021.

The Competitive Assessment revealed the continued development from 2015-2020 of several critical challenges to future economic stability or prosperity in the Cape Girardeau Area.

- Sluggish employment gains continued, with job growth being less than half of the national average. In early 2021, there were fewer jobs in Cape Girardeau County than in 2001.

- Widespread regional population declines continued. While Cape Girardeau County’s overall population increased modestly, the 25-44 working age group declined nearly 6%.

- Average annual wages in Cape Girardeau County were nearly 20% less than Missouri and trailed nearly all the benchmark counties.

- The vast majority of local job creation was propelled by locally-serving healthcare providers in a region experiencing significant population decline and an industry aggressively consolidating.

- The region has been unable to attract and retain talent, especially young professionals, and was the only benchmark community without sufficient skills-based technical training programs.

- The Cape Girardeau Area invested substantially less per-capita on economic development than all the benchmark counties. For instance, Jonesboro, Arkansas, invests 70% more in its efforts.

- Public safety was the only frequently cited threat to the area’s quality of life. In 2018, the FBI reported per-capita violent crime was higher in the City of Cape Girardeau than 75% of the cities in the U.S. with populations more than 25,000 that provide information to the FBI. Cape Girardeau no longer provides this data to the FBI.

The consulting group also summarized its findings from the qualitative assessment completed through surveys, focus groups, webinars, and workshops to the strategic planning subcommittee.

- Nearly 60% of the residents participating rated the area economy as “excellent” or “above average” and only 5% believed it was “below average,” a strong indication that they are unaware of the empirical deficiencies the region experienced compared with other communities in the EY report.

- Participants overwhelmingly lacked understanding of MAGNET ‘s role, plans, or activities, and were confused by an absence of reporting outputs and outcomes from the organization’s efforts.

- Leaders across the Cape Girardeau area are invested in its future, but lack a shared economic vision or commitment to economic development priorities.

- MAGNET lacked strong allies in business and industry, higher education, local government, or state government to invest in and participate in its efforts.

- Like most volunteer boards, the MAGNET board relied heavily on its executive staff to carry out the organization’s work.

2. The Need to Redevelop MAGNET

Upon completion of the first two phases of the strategic planning process, the Ernst & Young team strongly encouraged the MAGNET board, in late February of 2022, to reconsider its next steps. The consulting team indicated it did not believe MAGNET, in its current form, had the organizational capacity to successfully carry out an implementation plan of economic development strategic priorities. They suggested that realizing the long-term economic development goals of the Cape Girardeau Area were likely to be far more successful if MAGNET was redeveloped to build an inclusive coalition of allies to actively engage in the difficult work that would be necessary to address emerging and long-term threats to economic vibrancy. Therefore, although initially conceived as a traditional five-year economic development plan, the strategic engagement with Ernst & Young turned to an immediate effort to organize the rebuilding of the MAGNET organization.

The organizational redevelopment framework provided by Ernst & Young consultants consisted of three distinct phases:

- RESET: activating the MAGNET board to build a better community-wide understanding of current economic challenges and buy-in for why more proactive, collaborative, and regional economic development is important for the future.

- REIMAGINE: identify how the organization can leverage the assets and opportunities of the Cape Girardeau Area, and with strong economic development champions, strategic partnerships, increased resources, and a high-quality organizational team, create a diverse and more prosperous economic future.

- REBUILD: activating the programs and resources necessary to achieve the Cape Girardeau Area’s economic development goals.

The Ernst & Young consulting team estimated this multi-phase approach would take between 12-18 months and would require considerably active engagement by the MAGNET board and allies.

3. Progress: Board Members Called Into Action to Create New Goals

Since the completion of the engagement with the Ernst & Young team, the MAGNET board organized itself into four working action teams. The teams were organized to lead and support functional activities of the redevelopment plan, including ally engagement, communication, personnel, and programs and initiatives. Several board members with economic development experience or strong relationships with business and industry also began scheduling meetings with various stakeholders throughout the Southeast Missouri region.

While the group confirmed many of the stakeholder perceptions and concerns reported by Ernst & Young, it also found a community of leaders ready to engage, as well as investment in new collaborative efforts that are more aligned with current needs and opportunities. There was confidence that these efforts could improve economic outcomes for local companies and organizations and increase opportunities for the workers and residents throughout the community. The board also took time to review a considerable number of strategic plans developed by economic development organizations in other communities, especially from those regions included in the benchmark analysis, which had enjoyed greater past and recent growth and success.

Based on the considerable input and data the board received, it established the following set of strategic goals for the next five years:

GOAL 1: BUSINESS GROWTH & INNOVATION

Goal 1: Grow Cape Girardeau Area’s economy by strengthening high-performing companies and industries, diversifying businesses and career opportunities, and fostering a culture of entrepreneurship and innovation.

1.1: Strengthen existing businesses, especially regional and external revenue-generating companies, to grow high-quality jobs and capital investment by closing talent and skills gaps, as well as increasing overall economic competitiveness.

1.2: Accelerate the diversification of the economy, especially in technology, professional services, and agriculture sectors, and support growth-oriented entrepreneurial companies.

1.3: Fill gaps to a well-connected entrepreneurial ecosystem that links startup businesses with quality entrepreneurship support organizations, educational institutions, established businesses, consultants and coaches, funders, and each other.

1.4: Amplify recruitment of new businesses, targeting those that will strengthen key existing and strategic industries and companies leveraging available resources and incentives, and supporting regional partner communities in the same.

GOAL 2: TALENT & WORKFORCE DEVELOPMENT

Goal 2: Expand Cape Girardeau Area’s skilled workforce by closing gaps in affordable and accessible trades, digital, and professional technical training, and attracting and retaining students and workers needed to grow the local economy.

2.1: Create career pathways for trades, digital, and professional technical occupations, connecting secondary and postsecondary students and incumbent workers, to high quality training programs that provide employable skills demanded by local and regional employers.

2.2: Reduce barriers to students and incumbent workers, especially those from economically challenged backgrounds, to high quality trades, digital, and professional occupations by creating more awareness of training and employment opportunities.

2.3: Launch a talent attraction marketing campaign focused on Southeast Missouri State University students (including non-matriculating), graduates, and alumni, and talent from southeast Missouri and surrounding states.

BRANDING & MARKETING

Goal 3: Bolster Cape Girardeau Area’s business development and talent attraction efforts by clarifying, evaluating, and leveraging the area’s brand identity.

3.1: Redefine the area’s pro-business, pro-talent, and career-opportunity brand essence and identity, and strive for those core themes to be adopted by other visible local organizations.

3.2: Integrate the new brand essence into all business recruitment, talent attraction, and marketing efforts.

3.3: Strengthen outbound marketing, talent recruitment, and business recruitment activities, proactively engaging with regional, national, and international companies.

3.4: Promote the new brand essence among residents to create a sense of shared identity and cultivate more allies for the area.

4. New Organization: New Brand

Moving forward, as the organization’s goals extend beyond simply trying to recruit new businesses the board saw the need to change the name to better signify the scope of efforts and communicate its new ethos. The new name of the organization is Southeast Missouri Regional Economic Development, Inc. The abbreviated name and associated logo describe the organization’s goal to be more regional, proactive (ready for the future), and more collaborative (ready to partner).

In addition, the organization website is being updated and a new social media presence is being developed on Linkedin.

5. What’s Next: Initiatives, Programs, and Investment

The continued development of SE MO REDI’s strategic implementation plan and the associated initiatives and programs it plans to deploy to achieve its new goals, is being guided by board members who are leading working committees of community stakeholders with interest and expertise in:

1. Talent & Workforce Development - Vocational Trades

2. Talent & Workforce Development - Digital Trades

3. Entrepreneurship & Innovation

4. Business Recruitment & Retention

The working committees are researching and assessing initiatives, programs and activities that have been used successfully in other regions to achieve the desired outputs and outcomes SE MO REDI hopes to generate to attain its new goals. Committee members are also meeting with partners in the area to align these efforts with existing programs or initiatives in hopes to leverage or enhance existing resources and talent.

The working committees plan to complete their work and make recommendations to the SE MO REDI Directors before the end of the year. The recommendations will include implementation plans for each of the tactical areas, which will include detailed estimates of outputs (activities) and outcomes (impact). These outputs and outcomes will be used to create a dynamic scorecard, which will be used to report progress to the public, investors, and stakeholders on an ongoing basis.

As previously indicated, research conducted by Ernst & Young indicated that the Cape Girardeau Area invests substantially less than its peers. To generate more economic and social impact from a more comprehensive economic development plan, it stands to reason additional investment is going to be required. To achieve any measure of the success of our peers, we will need to also invest at similar reasonable levels.

At other times when the government entities in the local area had less resources, it may have been more challenging to prioritize investments for the future. However, our local governments are experiencing unprecedented revenue generation and given the extension and passage of new local taxes, there’s no data that suggests this will end soon. And with the mounting evidence of economic stagnation and uncertainty, it seems appropriate to invest a very small portion of these revenues into activities that benefit local individual, families, and businesses, which have generated substantial economic returns in other similar communities.

In the next B Magazine issue, SE MO REDI will provide an update on the initiatives and programs it plans to deploy, estimated economic outcomes that could be generated, and the estimated investments required to do so.