The Spring Toolbox, Tuesday, May 16th – A Look Ahead

17 Spring Toolbox Postcard for RoblyIn economic development sharing best practices and growing good relationships is imperative to being successful. I have enjoyed volunteering on the Education Committee to develop The Spring Economic Development Toolbox and co-chairing this year with Kimberly Marrone, Economic Development and Communications Director, City of Oak Park.

Some of the topics that will be covered:

  • Understanding the Implications of Federal Foreign Policy Changes

What will it mean for trade in a major manufacturing state? How will it impact our state’s relationships with foreign companies? Will the dynamics of foreign workers shift? And what will the impact be on our university’s admissions of international students and the local economies of communities they reside in?

  • Opportunity for All: Strategies for Inclusive Economic Development

Although residents in many communities are thriving, there are those who are experiencing declining incomes, low or no participation in the labor force, and living in increasingly concentrated poverty. Expanding economic opportunity for these residents impacts a region’s ability to grow its economy and be the best it can be. A review of a paper presented at IEDC explores the issue of economic opportunity from a developer’s perspective, and highlights best practices from nine case studies.

  • Streamlining the Development Process: Applying One Stop Ready Principles in Local Communities

One Stop Ready is Oakland County’s economic development program to provide local communities with the resources, tools and trainings needed to capitalize on local strengths, improve processes, and make its vision a reality. A review of best practices and of the Benchmark Self-Evaluation Tool.

  • Educational Attainment as an Economic Driver for States, Regions, and Communities

How the result of this co-learning project is making an impact and why economic developers should pay close attention to credentials.

Visit www.medaweb.org/springtoolbox to view the full agenda and to register.

Author: Maria Nevai, Michigan Economic Developers Association Education Committee Co-Chair, Vice President, The Opportunity Group Alliance – Capitol Area Opportunity Group and Principal/Consultant, Maria Nevai, LLC 

Foreign Trade Zones Remain an Important Tool in Economic Development

We all know manufacturing exports create wealth, and firms which export tend to be more stable and prosperous. Yet US-based producers need access to globally priced supplies and inputs to survive on a level playing field with their offshore competitors. According to a St. Louis Fed study in 2013, a 1% rise in imports is associated with a .04% increase in manufacturing output. The study concluded, “Intermediate goods imports and capital goods imports are the lifeblood of US output.”

The US Foreign-Trade Zones Act is intended to expedite and encourage foreign commerce, and provides a tool to help level the global playing field for job creation to occur in the United States. As foreign direct investment from Europe and Asia continues at a strong pace, economic developers should be mindful of the benefits Foreign Trade Zones (FTZ) can bring for companies locating or expanding operations in the US.

In sum, FTZs allow a firm to reduce, delay, or altogether eliminate US Customs duty on the raw materials or inputs it must import, thus reducing costs of performing value-added work in the US. Other advantages include cost savings on filing merchandise processing fees with Customs and direct delivery of goods upon arrival in the US.

Michigan makes good use of this tool, with seven Foreign-Trade Zones active across the state. Last year, Michigan FTZs exported merchandise valued at more than $500 million. According to recently released FTZ statistics for 2012, Michigan fared well in comparison to the 50 states and Puerto Rico:

  • FTZ warehouse / distribution activity: Michigan  ranked 13th in merchandise received and ranked 9th in exports
  • FTZ manufacturing / production activity: Michigan ranked 18th in merchandise received and ranked 18th in exports

Every FTZ must be affiliated with a port of entry. With the longest freshwater coastline in the US, the second longest overall coast line after Alaska, and several inland ports, Michigan has 21 ports of entry. Michigan’s proximity to its largest trading partner (Canada), and proximity to Chicago – the third largest container port in the world and the only place in the hemisphere where all six Class 1 railroads meet — Michigan is well-positioned to take advantage of the benefits of Foreign-Trade Zones.

I I Stanley Co., Inc., Battle Creek, MIFort Custer Industrial Park is one of the premier international business parks in the Midwest and North America! We are pleased to have some of the world’s most successful companies among the more than 90 companies employing more than 9,400 individuals.

Inside the Fort Custer Industrial Park

Foreign-Trade Zone 43 at the Port of Battle Creek was established in 1978, and serves a 14 county region in Southwest Michigan. It provides a text book example of FTZs encouraging domestic and foreign manufacturing investment and expansion. Many of the 23 foreign-based manufacturers in Battle Creek’s Fort Custer Industrial Park have utilized FTZ services during start-up operations. Others take occasional advantage of the public warehouse located at the Battle Creek port. “Subzones,” manufacturing sites beyond the service area of FTZ 43, utilize FTZ benefits as well.

Foreign-Trade Zones are unique economic development tools in that they are not direct participants in business attraction and retention, instead offering a service. By federal legislation, FTZs must operate as public utilities, offering like services to all who may apply. With that independent, public utility distinction, FTZs must operate in accordance with other federal regulations. The charter of every FTZ establishes its geographic service area – thus providing equal access to FTZ benefits at any location in Michigan.

My colleague Jan Frantz of Battle Creek Unlimited is the administrator of FTZ 43 and is a leading expert nationally in FTZ utilization and development. Frantz chairs the board of directors of the National Association of Foreign Trade Zones, a 700-member trade association whose goals include ongoing advocacy in Washington DC on behalf of zone programs.

For more information about Foreign-Trade Zones, you should review the National Association of Foreign-Trade Zones website, http://www.naftz.org/, read Battle Creek’s FTZ newsletter, http://www.bcuknowledgenow.com/Upload/files1059/FTZ%20Newsletter%2012%20%20(2).pdf or contact Jan Frantz at frant@bcunlimited.org.

Authored by: Karl Dehn, President and Chief Executive Officer, Battle Creek Unlimited, Inc. Karl serves as a Member at Large on MEDA’s Board of Directors