Features

Mineral County’s Role in the Global Economy

By: Mona Ridder

Executive Director, Mineral County Development Authority

Often times when I talk about the global economy and how much we are a part of it, people’s eyes tend to glaze over.

I think they might be surprised if they knew how many of our local businesses trade in the global marketplace and travel frequently to sometimes exotic locations to conduct their business.

As I watched some of the news broadcasts in November about President Barack Obama’s visit to Asia, particularly India where he announced export contracts with that nation that will create jobs here at home instead of shipping them out, I thought to myself, some of those contracts could have a direct impact on jobs in Mineral County. Very likely businesses here in this county will have pieces of those contracts.

It is those kinds of contracts with other countries that will help correct the trade imbalance between U.S. imports and exports that have occurred in more recent times. When you import more than you export, there is definitely an economic problem.

Since I visit with local businesses on a fairly regular basis, I know of many businesses not just in Mineral County, but in the region, that export globally. Products such as automobile parts, lumber, poultry, building materials, metal fabrication and many others that are shipped all over the world, including the Asian countries of China, India, and Korea.

Other materials from the U.S. are shipped to countries like Mexico and Canada, assembled into finished products and returned to the U.S. for resale. An example is the recently announced Fiat 500 which is to be sold by Chrysler Corp. Chrysler will ship the components to its plant in Mexico, where the cars will be built and then shipped back to the U.S. Chrysler dealerships for sale. I suspect this is the same plant in Mexico that was building the Chrysler PT Cruiser, which is no longer part of the Chrysler line-up.

Both the state of West Virginia and the federal government offer seminars and workshops that provide businesses with opportunities to take part in the import/export economy. There are also opportunities for economic development personnel to participate in trade missions and travel abroad to learn more about the global economy and its impact on U.S. business.

A Kanawha County economic development agency went to China last April for a trade mission and it was so successful that they are going again this year. It’s all part of networking and networking is important when you are doing business whether it’s with the guy next door, in the next town, in the next county, in the next state, or in the next country. When you take the politics out of it we all want the same things, jobs for our people – jobs that will allow them as employees to prosper while also creating prosperity for the employer and the community.

Let’s look at China or officially, the People's Republic of China, which now is the world's second largest economy after the United States with $8.77 trillion in purchasing power in 2009. China is the world's fastest-growing major economy, with average growth rates of 10% for the past 30 years. China is also the second largest trading nation in the world and the largest exporter and second largest importer of goods.

Now, if you are my age, what you learned about China, beginning in elementary school and high school, is that China, in 1949, became a communist country and was ruled by Mao Tse Tung and his Red Army for the next 30 years. While we were busy watching the Berlin Wall come down and the Soviet Union dissolve in the 1980s, China reinvented itself, too, and we weren’t paying much attention.

Today China is a far cry from what it was in the 1950s and 60s and 1997 was apparently a pretty good year for the fledgling capitalist county (yes, I said capitalist). Economists from around the world have watched China grow and analyzed the country’s focus and potential for the future in the world economy. The following information includes some of their observations:

In 1997, China’s economic growth reached 8.8 percent, a much more sustainable and less inflationary rate than the earlier double-digit growth rates. Total foreign investment increased 13 percent while inflation was less than 1 percent. According to a Chinese newspaper, the country’s exports which play a critical role in the economic growth, increased 20 percent, reaching $180 billion and generating more than $40 billion in surplus.

The country’s economic transition, which was based on government reforms that began to be implemented after 1978, reached a critical state in 1997.

China generally had implemented reforms in a gradual fashion. As its role in world trade has steadily grown, its importance to the international economy has also increased. China's foreign trade has grown faster than its gross domestic product for the past 25 years. Its growth comes both from huge state investment in infrastructure and heavy industry and from private sector expansion in light industry instead of just exports, on which some consider that the country has been too dependent. The smaller but highly concentrated public sector, dominated by 159 large state-owned enterprises, provided key inputs from utilities, heavy industries, and energy resources that facilitated private sector growth and drove investment.

With the beginning of the worldwide recession, in 2008 thousands of private companies closed down and the government announced plans to expand the public sector to take up the slack caused by the global financial crisis.In 2010, there were approximately 10 million small businesses in China.

The Chinese government's decision to permit the country to be used by multinational corporations as an export platform has made it a major competitor with other Asian export-led economies, such as South Korea, Singapore, and Malaysia.
Here’s the important part: China has emphasized raising personal income and consumption and introducing new management systems to help increase productivity. The government has also focused on foreign trade as a major vehicle for economic growth.
The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in gross domestic product since 1978.

Some economists believe that Chinese economic growth has been in fact understated during much of the 1990s and early 2000s, failing to fully factor in the growth driven by the private sector and saying that the extent at which China is dependent on exports is exaggerated.Key bottlenecks are still constraining growth. Available energy is insufficient to run at fully installed industrial capacity,and the transport system is inadequate to move sufficient quantities of such critical items as coal.

Local exporters who have visited the country have seen first hand that the country is hungry for building materials and other items that the citizens of China want as their economic circumstances improve. Local businesses have a ready market, not only in China but in India and other Asian counties.

For additional information on import/export opportunities for West Virginia businesses contact Mona Ridder, Executive Director, Mineral County Development Authority, 304-788-2233 or e-mail info@wv-mcda.com

Retention & Expansion

By: Mona Ridder

Executive Director, Mineral County Development Authority

In the economic development world, retention and expansion of an area’s existing businesses is key to growth and development of a community.

In Mineral County we are fortunate to have a diverse business community. Many of our businesses were initially entrepreneurial in nature, that is, someone had an idea that was the basis for a business and it grew until now they are small to mid-size companies that provide products and services to clients around the world. These are among our most important employers.

That is not to say that the large manufacturers are not important for our employment. They are, but small business makes up 90 percent of the nation’s economy. That is not just something to say. It is true and the more small and mid-size businesses we have the more we are likely to grow and prosper.

Even successful small and mid-size businesses need help occasionally. Sometimes a business needs assistance to reinvest in new technology or training or retraining for employees on new equipment or processes. A business may want to expand in its existing location or locate a new facility at another location.

Those are things that the Mineral County Development Authority can help with through local, state and federal programs that offer business incentives, tax credits and training dollars as well as site selection and even relocation assistance, if necessary.

As the executive director of the Development Authority, I, along with a state development office representative, regularly visit the larger small and mid-size businesses in the county as well as the larger manufacturers. These visits have helped with expansion opportunities for companies and provided assistance with training.

If a company is interested in expanding there are incentives based on the increase in the number of jobs that will be created, tax credits for the purchase or lease of equipment and low-cost loans that can assist the company. A team of state economic development representatives can help the business put together a program based on the company’s business plan and goals for the expansion. There are even local tax incentives for the right project that will enhance the county’s economic development base.

Business incubators can foster entrepreneurial and small business growth but an incubator requires a lot of nurturing of its own in order to be able to nurture ideas that become successful businesses. A business incubator is more than a building that provides low-rent space for startup companies, though that is a place to start.

There is no business incubator currently in Mineral County and before we think about starting one there are a number of questions we need to ask ourselves first, according to information available from the International Economic Development Council.
The first is to know the goals for the incubator and to recognize that such a project is a long-term strategy not one that is likely to pay enormous dividends in the short-term.

What would be our goals?
Is it to diversify the local economy?
Is it to create jobs?
Or maybe, is it to revitalize a neighborhood?
How about, reuse an empty building?

Perhaps all of these goals and others could be incorporated into a business incubator project, but we must be realistic. The process to set up an incubator can take at least two years – from completing a feasibility study to applying for funding, renovating or building the space and getting a manager in place. A manager/director is key to the success of an incubator. This is the person that is going to come into daily contact with the businesses, discussing with them their needs and successes. The goal is for the business to be successful enough that it can move out on its own within a specified period of time as stated on the company’s original contract with the incubator.

Again, business incubation is a long-term economic recovery strategy, not one that will help employment immediately after a factory or other business closes.

This is a thought that really hadn’t occurred to me until I got more interested in the possible need for a business incubator: “An incubator is a business, not a real estate deal.” Not just any old empty building can or should be an incubator facility.

As a rule, a business incubator needs to be self-sufficient as a business after three to five years. Here, also, it becomes very important to understand that the manager also is key to the success of the project as a business and the businesses that graduate from it.
And graduate from it, businesses must. An incubator needs to be able to do more for its clients (entrepreneurs) than just to boost the bottom line with low-cost rent. It needs to get these fledgling companies on their feet and move them out into the real world with the tools, skills and knowledge to be successful.

That means learning opportunities must be provided to the incubator clients. This is where partnerships come in. Partnering with vocational programs in local public schools as well as higher education offer a wide range of programs to improve skill sets for employees of small businesses, whether they are located in an incubator or not.

Through local Small Business Development Center programs, entrepreneurs have entrée to assistance in doing business plans, classes in marketing, finance and bookkeeping as well as business hospitality. It is the business incubator manager who can coordinate these activities, not only for the incubator clients but other small and mid-size businesses that may wish to participate.

It may be an idea whose time has come for Mineral County or it may be that there are better opportunities with a virtual incubator, economic gardening or other partnerships in small business development.

For additional information on business incubators or other economic development issues, contact me, Mona Ridder, Mineral County Development Authority, Grand Central Business Center, Suite 3011, Keyser; call 304-788-2233 or e-mail info@wv-mcda.com

North/South Project Objective: Jobs

By: Mona Ridder

Executive Director, Mineral County Development Authority

Question: Why should Mineral Countians support a north/south highway through the region?

Answer: (in a word) JOBS

That’s right, jobs is the number one reason for supporting construction of this project in three states.

About 10 years ago, Pennsylvania, Maryland, West Virginia and Virginia undertook a study for a north/south highway that could alleviate some of the already increasing traffic on Interstate-81 as well provide a connector between the regional east-west highways, the Pennsylvania Turnpike and Interstate-68 and I-68 and Corridor H now under construction.

The study indicated that such a north/south highway would best serve the region’s economy by being located along U.S. Route 219 north of I-68 to the Turnpike and U.S. Route 220 south of I-68 to Corridor H.

Pennsylvania had already constructed a portion of what they expected to become part of the north/south project near Meyersdale. Then internal issues within the state ground the project to a halt when Bedford and Somerset counties began lobbying for parallel routes from the Turnpike to I-68. Bedford County wanted it to continue on U.S. Route 220 while Somerset County believed it was in the best interests of the region to have it follow U.S. Route 219.

The results of the original study had indicated the combination 219/220 would provide some 30,000 jobs overall, 20,000 of which would be construction jobs while the remaining 10,000 would be permanent private industry jobs resulting from the increased access to and from north and south markets as well as improved access to the east/west highways, namely Interstate 79 and Interstate 81. It would also have the effect of relieving north/south traffic on I-81 which in more recent years has become extremely intense.
While Virginia was part of that original study, the state opted out once the study was complete, leaving Pennsylvania, Maryland and West Virginia to go forward without that state’s support. An update of the study, completed by Frostburg State University, has just been released. The update confirms the original economic development impact, noting possibility even more private sector jobs after construction.

For a time, Pennsylvania continued to have issues over where to put the northern segment of the highway while Maryland and West Virginia moved forward with a Tier 1 environmental study of the southern route that would select a path from among five suggested to take the road from I-68 in Allegany County, Md., to Corridor H. Mineral County lies just south of Cumberland, Md. It is situated almost equidistance from I-81 to the east and I-79 to the west, roughly 65 miles away from either.

Two of the original five paths being considered as part of the Tier 1 study were eliminated and three are currently under consideration. Of those, two call for following the existing U.S. Route 220 from Cumberland through Keyser initially then continuing to follow existing 220 to Moorefield or branching off onto U.S. Route 50 west to State Route 93 to Scherr to connect with Corridor H.

The Tier 1 study in Maryland and West Virginia ran into problems, however. As the recession loomed, states began bracing for an economic catastrophe and started looking at where they could cut their budgets. Maryland officials chose to use the matching money that had been slated to be used as match for the federal funds tied to the study for other things. West Virginia had received $1.5 million for the Tier 1 study. Maryland had received $500,000. Both states were required to provide a match. West Virginia’s Division of Transportation, as the lead agency on the project, moved forward with the study, completing approximately 90 percent. Maryland had completed only about 40 percent and was not inclined to fund the remainder of its match.

The members of the Greater Cumberland Committee then got into the act. Realizing the importance of the highway to existing businesses and the potential for expanding the region’s economic base if this highway is completed, the group took moving it forward as its top priority in 2008. As a result of the coalition that has been formed due to the efforts of the Greater Cumberland Committee, funding was restored and the Tier 1 study began moving forward again. The study is now expected to be completed later next year.
Pennsylvania had moved forward and support ultimately swung to the Somerset U.S. Route 219 route. Then when the transportation package passed Congress in 2005, toll tax credits, on which Pennsylvania had depended for many years as part of its matching money was no longer allowed to be used to match those federal highway dollars. This prohibition applied only to Appalachian Regional Commission states (ironic considering that the ARC was created primarily to help build highways in Appalachia). While we have yet to learn why that prohibition made it into federal legislation, we have lobbied diligently to have it removed from the next federal transportation budget.

Over the last year, a delegation of representatives from Pennsylvania, Maryland and West Virginia visited every U.S. Senator and Congressman from the states and to a man/woman they indicated they would support removing this language from the upcoming transportation bill. Governors from all three states indicated their support with letters and discussions in Washington. With the election, however, we will likely be returning to Washington to plead the case again, not only for the removal of the prohibition on using toll tax credits (by the way, West Virginia has used those credits as well, some on Corridor H), but in support of the highway projects generally based on potential economic impact.

Construction of Corridor H speeded up recently and design/build options were put into place that will shorten the construction period. The highway construction has been completed from the Virginia line westward through Moorefield to Foreman. Currently under construction is the section from Foreman to Scherr, with contracts being let for construction from Scherr to Bismarck in Grant County. At the other end of the Corridor H project highway has already been built from I-79 to several miles east of Elkins. By the end of this year only about 15 miles of the project will remain undecided and unfunded and environmental questions are probably the key to that segment.

If you wish to know more about this very important project and its potential impact on the local and regional economy, please contact me, Mona Ridder, Mineral County Development Authority, Grand Central Business Center, Suite 3011, Keyser, WV; 304-788-2233; e-mail info@wv-mcda.com.

Mineral County Day: A Showcase for Local Businesses

By: Mona Ridder

Executive Director, Mineral County Development Authority

Every January, Mineral County Day is co-sponsored by the Mineral County Development Authority and the Mineral County Chamber of Commerce to kick-off the opening of the State Legislature at the Capitol in Charleston, WV. It is an excellent networking event attended by county officials, business owners and members of civic committees to discuss opportunities with their elected representatives.

The event was first initiated by the Chamber of Commerce in May of 2000. It was then decided that during the Legislative session might be a more opportune time to approach senators and delegates on the issues affecting the county and to encourage the drafting of specific bills to address business issues.

The fruits of these 250-mile treks to the state capital each year have included funding and interest in a wide range of projects that have benefitted Mineral County residents and businesses. And while it is agreed that they might have occurred without that lobbying effort, it definitely would have taken a lot longer to have attention focused on the issues by state officials.

Water and sewer projects have moved forward steadily in the last 10 years as the state has recognized it is not only an economic development issue but a health issue as well. People must have these basics and you cannot have economic and residential growth without them.

The Northern sewer system in Frankfort District of Mineral County is in the first phase of construction with continuing lobby efforts for the second and ensuing phases. This project will open an entirely new area of the county for economic development.

Water projects at Wiley Ford and Burlington were the result of Mineral County Day efforts and will provide more growth opportunities in those communities.

Transportation infrastructure is another issue in the county that starts with safety and is basic for goods to come into and out of the county. It includes not only roads and highways but air and rail transportation as well. However most of the transportation issues that have been presented in Charleston include safety upgrades and improvements to state highways … and by the way, West Virginia is one of the very few states in the country that does not have county roads, the state Division of Transportation maintains all roads and highways, including those highways that are main thoroughfares through municipalities. The cities and towns maintain the adjacent streets within their city/town limits.

Participants in Mineral County Day have lobbied for and won safety upgrades to some of those roads. One, in particular, was the establishment of a turning lane and traffic light on U.S. Route 220 at the intersection of Pin Oak Lane, south of Keyser where the new Potomac Valley Hospital is located. Others include widening and passing lanes on state and federal highways in the county which have been the scenes of fatal or near-fatal accidents.

A new bridge for U.S. Route 220 crossing the North Branch of the Potomac River from McCoole, Md., into Keyser, seemingly faced delay after delay until the county delegation to Charleston brought it to the top of the priority list. The bridge is currently under construction and should be completed in about 18 months or less.

The top highway project now is the regional effort to upgrade U.S. Route 220 as a north/south connector from Interstate 68 in Maryland to Corridor H, under construction from Foreman on Patterson Creek to Scherr and Bismark in Grant County. Corridor H has already been completed from the Virginia line through Moorefield to Foreman.

A regional coalition has been formed that includes organizations and businesses in Mineral, Hardy and Grant counties as well as Garrett and Allegany counties in Maryland. The northern portion of the project will connect the Pennsylvania Turnpike with Interstate 68 via U.S. Route 219 and the coalition includes those representatives as well.

Other successes for Mineral County Day at the Legislature include tourism grants such as those that have helped the continuing restoration of Carskadon Mansion in Keyser and the Traveller’s Rest along U.S. Route 50 near Burlington.

The legislative representatives in the Senate and House of Delegates have been very helpful in responding to the need for partnership grants that are helping with establishing the Friends of Jennings Randolph Lake, a membership group that is working to open a new hiking trail at the lake as well as identifying and recruiting vendors to the lake to expand the tourism opportunities there. Still other partnership grants have assisted with projects such as Allegheny Mountain House which provides recovery assistance for addiction and other projects that tend to enhance the quality of life in Mineral County.

As interest grew in the Mineral County Day event, which was long ago established as the opening day of the Legislative session, the Development Authority joined as a co-sponsor.

The agenda focuses on attending the Governor’s State-of-the-State address and the next day, meeting briefly with the governor before attending meetings with staff of the various departments, including transportation, health, the development office, tourism, and others. A luncheon is provided to the lawmakers and their staffs at the Capitol and until this coming year was catered by On Track Concessions of Keyser. The On Track personnel volunteered much of their time and paid their own expenses in Charleston to help with the project.

This January, the Potomac State College Hospitality Classes, including students and Chef Thomas Vieli, will provide the luncheon. Students will also have an opportunity to tour some of the sights of a state capital.

Several years ago, a reception was added to the agenda. It takes place at the Embassy Suites Hotel in Charleston in the evening following the meetings. Legislators, their staffs, as well as department heads and their staffs are invited to participate. During the evening, Mineral County businesses have the opportunity to showcase our economy.

If you wish to participate, either by traveling to Charleston with us, having a display and/or providing a donation, we welcome your support.