BUSINESS INCUBATION COMMUNITY READINESS ASSESSMENT Dalton-Whitfield County. October 17, 2012 Erin Rosintoski

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1 BUSINESS INCUBATION COMMUNITY READINESS ASSESSMENT Dalton-Whitfield County October 17, 2012 Erin Rosintoski 1

2 Outline 1. Introduction & Process 2. Data Collection 3. Analysis 4. Recommendations 2

3 Incubation Development Process STRATEGY DEVELOPMENT Community Readiness Assessment Business Model Frameworks Feasibility Study Preparation 3

4 Data Collection Economic characteristics Innovation characteristics Asset inventory Interviews/focus group 4

5 Economic & Innovation Characteristics Population Population growth in the Dalton MSA (Whitfield and Murray counties) was on par with growth across Georgia from Growth in the MSA was concentrated in Whitfield County, primarily in the unincorporated areas. Population Change, 2000 to Change Georgia 8,186,453 9,687, % Dalton MSA 120, , % Murray County 36,506 39, % Whitfield County 83, , % Dalton 27,912 33, % Cohutta % Tunnel Hill 1, % Varnell 1,491 1, % Unincorporated 52,331 66, % Source: U.S. Census Bureau 5

6 Percent of Total Population Percent Growth, Economic & Innovation Characteristics Population Population growth did not occur evenly across age groups; Population over 60 experienced the fastest growth. People aged 25 to 54 comprise the largest share of the total population. Composition of Population in 2010 and Growth by Age Group, Under and over Age Group Share of Total Population, 2010 Growth in Age Group Source: U.S. Census Bureau 6

7 Economic & Innovation Characteristics Educational attainment The population in the Dalton MSA is growing, and achieving higher levels of education, however, the adult population in both Murray and Whitfield counties remains behind the state s educational attainment levels. Educational Attainment, Population 25 and over, Murray County Whitfield County Georgia Change Change Change Percent of population 25 and over with at least a high school degree or higher Percent of population 25 and over with at least a bachelor's degree or higher Source: U.S. Census Bureau 7

8 Economic & Innovation Characteristics Employment Characteristics: Whitfield & Murray Counties 11.4% decline in establishments (paid employees), % decline in employees, in Dalton MSA 12.3% unemployment rate, July 2012 (3% higher than GA) 8

9 Economic & Innovation Characteristics 9 Change in Employment and Establishments in Whitfield County, GA Industry Change in Employment Percent Change in Employment Change in Establishments Percent Change in Establishments Health Care & Social Assistance % 29 17% Transportation & Warehousing 1,994 74% 11 15% Professional, Scientific & Technical Services % 25 18% Management of Companies & Enterprises % 1 7% Accommodation & Food Services 128 4% 7 4% Educational Services 22 37% 0 0% Finance & Insurance -75-8% 5 3% Mining declined declined -1-25% Utilities unknown unknown 1 50% Forestry, Fishing, Hunting, and Agriculture Support declined declined 0 0% Information unknown unknown 0 0% Arts, Entertainment & Recreation -5-3% -8-33% Admin, Support, Waste Mgmt, Remediation Services -73-3% -6-7% Other Services (except public administration) 20 1% -18-8% Real Estate & Rental & Leasing % % Construction % % Retail Trade -2,584-34% % Wholesale Trade % % Manufacturing -7,140-29% % Source: U.S. Census Bureau, County Business Patterns

10 Economic & Innovation Characteristics Employment by Industry, 2010, Whitfield County Industry 2010 Employment Share of Total Employment Manufacturing 17, % Retail Trade 4, % Transportation & Warehousing 4, % Health Care & Social Assistance 4, % Wholesale Trade 4, % Accommodation & Food Services 3, % Admin, Support, Waste Mgmt, Remediation Services 2, % Management of Companies & Enterprises 2, % Other Services (except public administration) 1, % Professional, Scientific & Technical Services 1, % Information %-2.1% Finance & Insurance % Construction % Utilities %-0,5% Real Estate & Rental & Leasing % Arts, Entertainment & Recreation % Educational Services % Mining % Forestry, Fishing, Hunting, and Agriculture Support 0-19 <1% Source: BLS 10

11 Economic & Innovation Characteristics Industry Specializations: Location Quotients Highest Location Quotients, Whitfield County, GA, 2011 Whitfield County, GA Industry Emp 2011 Pct of Total Emp 2011 LQ 2011 %Change in Emp Change in LQ NAICS 314 Textile product mills 12, % % NAICS 313 Textile mills 1, % % NAICS 323 Printing and related support activities % % 0.94 NAICS 493 Warehousing and storage 1, % % 3.75 NAICS 484 Truck transportation 1, % % 1.37 NAICS 325 Chemical manufacturing 1, % % 0.96 NAICS 441 Motor vehicle and parts dealers 2, % % 2.06 NAICS 442 Furniture and home furnishings stores % % NAICS 423 Merchant wholesalers, durable goods 2, % % 1.23 NAICS 322 Paper manufacturing % % 1.21 NAICS 337 Furniture & related product manufacturing % % 0.82 NAICS 326 Plastics and rubber products manufacturing % % 0.10 NAICS 447 Gasoline stations % % 0.09 NAICS 517 Telecommunications % % 0.15 Source: BLS 11

12 LQ 2011 Economic & Innovation Characteristics Industry Specializations: Strongest Industries* Industry Growth Analysis- Strongest Sectors (Location Quotients greater than 1.0. Not including textile mills) Printing & Related Support Activities Truck Transportation Chemical Manufacturing Warehousing & Storage Furniture & Home Furnishings Stores Plastics & Rubber Manufacturing 1.50 Motor Vehicle & Parts Dealers Merchant Wholesalers, Durable Goods Paper Manufacturing Furniture & Related Prod Manufacturing % 0% 200% 400% 600% 800% Telecommunications 0.50 %Chg LQ Source: BLS *Not including Textile Product Manufacturing 12

13 LQ 2011 Economic & Innovation Characteristics Industry Specializations: Pre-Emerging Industries Telecommunications Plastics & Rubber Manufacturing General Merchandise Stores % 0% 100% 200% 300% 400% 500% Repair & 0.80 Maintenance Health & Personal Care Stores Industry Growth Analysis - Emerging Sectors (Location Quotients less than Not including textile mills) Administrative & Support Services Electronics & Appliance Stores Management of Companies & Enterprises 0.20 Educational Services 0.00 %Chg LQ Source: BLS 13

14 Economic & Innovation Characteristics Business Characteristics 2,694 business establishments with paid employees in 2010 (an 11.4% decline*) 7,395 self-employed business establishments in 2010 (a 15% increase**) For every business with paid employees, there were 2.74 businesses with no paid employees in Dalton. * Change from 2000 **change from 2002 to new businesses opened in the Dalton MSA from July 2010 to June % in Whitfield County Primarily retail trade and services Industry New Business Openings, Q3 10 Q2 12 Total New Business Openings Percent of Total (Not including Nonclassified) Retail trade % Services % Finance, Insurance, Real Estate % Wholesale trade % Construction % Transportation/Utilities % Agriculture % Manufacturing 7 1.9% Public Admin 1 0.3% Mining 0 0.0% Not yet classified 154 Source: ReferenceUSA 14

15 Number of Patents & Applications Economic & Innovation Characteristics Research, Development, & Private Investment Federally-sponsored research (minimal) Technology transfer (none) Venture capital (none) Patents/trademarks (many). Majority are flooring-related; the remainder are diverse Patent Applications & Patents Summary by Assignee All Assignees: Total patents Flooring-related 64% Not flooring-related 36% Source: U.S. PTO 15

16 Asset Inventory An asset map that will help give shape to the sustainable business incubation ecosystem. Continue to identify and link together existing resources. Spot gaps in essential entrepreneurial needs. 16

17 Interviews 46 one-on-one interviews with local entrepreneurs and community leaders and a student focus group 26 interviews with entrepreneurs 20 interviews with community leaders 20 students from Dalton State College Industries Represented in Entrepreneur Interviews Service 34% Retail 28% Manufacturing 17% Finance, Insurance, Real Estate 7% Restaurant 3% Wholesale trade 3% Construction 3% Other 3% Leadership Representation Business/industry sector 35% Public sector 25% Public/private sector 10% Education 10% Nonprofit community 5% Business assistance 5% Industry association 5% Utilities 5% 17

18 Interviews Summary of Findings from Entrepreneur Interviews The entrepreneurs interviewed spanned a range of experience, age, and backgrounds. Resource cited as lacking most in the community is availability of funding. Respondents were asked about obstacles to the future success of their business; over half of responses were items that an incubation program could assist in addressing. Over 80% of respondents said they would be interested in being involved with an incubator to some degree-- both as mentors and as users. 5 respondents said they could see themselves using an incubator s services immediately. 18

19 Interviews Summary of Findings from Leadership Interviews Community leaders expectations of the form a potential incubator might take and outcomes a potential incubator might produce cover a wide spectrum. No one felt that the concept of business incubation has been shared widely enough with the general public. Elected leadership has a better grasp on the concept, but not enough yet. When asked what, specifically, is missing from the community that would be important for an incubation program to be a success, answers ranged from a united community vision and planning activities, to items that lead to entrepreneurial success, to community infrastructure. Despite having some unclear expectations of the process and potential outcomes, the community leadership was overwhelmingly in favor of the creation of a business incubation program. 19

20 Interviews Summary of Findings from Student Focus Group Students participating were part of an upper-level Management Information Systems course in the School of Business. Students were of mixed backgrounds; some were native to Dalton or Georgia, some were from other countries. Students possess a strong understanding of steps required to open a business 75% of students expressed a desire to open their own business Only 37.5% feel like they could start a business in Dalton. Obstacles to starting a business locally include access to capital, customer base, networking opportunities, and attraction. 75% of students felt that a business incubation program could succeed in Dalton. Students cited lack of social, entertainment, and cultural resources as reasons an incubator might not succeed. 20

21 ENTREPRENEURSHIP & INNOVATION 21

22 Core Considerations Strengths & Weaknesses: Entrepreneurship & Innovation Summary of Strengths: Community is rooted in innovation and entrepreneurship Many experienced, talented entrepreneurs living in the community Ease of starting a business locally Summary of Weaknesses: Community is weak in attracting entrepreneurs Minimal intellectual property among businesses, and/or it is not being properly registered and leveraged Few formal and informal networking groups 22

23 COMMUNITY SUPPORT & LEADERSHIP 23

24 Core Considerations Strengths & Weaknesses: Community & Leadership Summary of Strengths: Strong existing infrastructure Interest in participation in an incubation program A likely champion exists in the community Summary of Weaknesses: Public leaders and community not always in alignment on initiatives Unclear expectations among some stakeholder groups about incubator outcomes Low desire for public (financial) support of private enterprises 24

25 RESOURCES & CAPABILITIES 25

26 Core Considerations Strengths & Weaknesses: Resources & Capabilities Summary of Strengths: Extensive local technical and practical expertise Strong local academic institutions Many crucial resources and services are already present in the community Summary of Weaknesses: Lack of access to capital No formal private investment network Lack of centralized hub for entrepreneurs 26

27 Recommendation Conditional Go. Proceed, utilizing the recommendation plan outlined in the detailed report. The team concludes that the Dalton-Whitfield area would benefit from the introduction of a business incubation program, and that the community should move forward on its creation. However, the team proposes that the entity tasked with achieving this goal move with patience and caution, as there are significant key factors that must be addressed before an incubation program can be up and running. 27

28 Questions? Erin Rosintoski (404)

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