Washington’s Culture Shift in Economic Development

E-newsletter Issue #102 | October 11, 2012

The city of Auburn, Wash., had never had an economic development department.

So when Doug Lein was hired as the city’s economic development manager—with an eye toward gaining certification for an Innovation Partnership Zone, or IPZ—he and his team went big. They put a business plan for economic development and the certification process for the IPZ designation on track to coincide. They used the economic development plan as the basis for certification for the IPZ.

Innovation Partnership Zones is a state economic development model creating local partnerships among industry clusters, research, workforce development and governmental entities. Washington’s IPZ program is a 2012 Western region winner of The Council of State Governments’ Innovations Award.

“What the program does is recognize the intrinsic assets, vision and organic leadership naturally occurring in communities,” said Mary Trimarco, business development managing director in Washington’s Department of Commerce.

Gov. Chris Gregoire started the program in 2007 with the goal of creating jobs and investment in the state. The clusters generally focus on specific industries paired with research institutions that could help companies get technologies commercialized, said Trimarco.

In the Auburn area, it’s run a little differently, and that’s what initially threw the IPZ selection committee for a loop, Lein said. The Auburn proposal had multiple clusters; the other approved IPZs focused on one industry.

“We left them sitting, thinking we had been too aggressive,” said Lein.

So the Auburn economic development office refined the plan and educated the IPZ selection committee on why they had developed the plan in such a way. The Auburn team ranked the clusters 1 to 4 based on completeness of the cluster, then built the business plan around the idea that the board of directors would cover all the clusters.

“We could identify private sector components of a cluster that are there that could interact,” said Lein. “We could be full service to the region in that area.”

The IPZ identified clusters around ecosystems, aeronautics, construction and green technologies. The zone encompasses 2,100 acres.

“The idea is that the other clusters, we will obviously continue to recruit and foster and work with to get them organized and connected to research,” said Lein.

Each zone, said Trimarco, must have a private sector partner, a workforce development entity and university research capacity.

“That’s what makes these unique, because you’re getting groups together that don’t normally work together for economic development from the ground up,” she said.

“It’s a culture,” she said. “Part of the reason to create these zones is to develop that culture, to break down some of the pre-existing silos that could exist in these communities.”

Washington committed $5 million in capital funding to the six original zones when it began the program. But Trimarco said in the past four years, no operational funding has been available for the zones.

“Oddly, I think it’s worked in our favor because sometimes programs mutate around funding,” she said. “What’s happened is it’s a much more grassroots, bottom up effort.”

Even without the funding, participation in an Innovation Partnership Zone is a good deal for communities.

“It’s having the recognition of being clusters, giving us something as a local rallying point to say we’ve been recognized,” said Lein, “somebody outside has looked at our commercialization plan and they believe that it’s good.”

Diahann Howard, director of economic development and government affairs with the Port of Benton, which acts as administrator for that region’s IPZ, said the zones provide many benefits, even without the state investment.

“The best benefit has been the fact that it has provided us a shared vision to come together as a community to try to retain and grow jobs with our innovation partnership zone,” she said.

The Benton IPZ received $275,000 from the state for capital improvements, which the area combined with city, port and federal funds to reconstruct one of the main roads into the IPZ area.

That investment paid off; outside investors have contributed about $40 million in private investment funds the past two years, Howard said.

The IPZ is working for the Benton area. The zone, focused on clean energy and biosciences, has grown. The research district was a cornerstone to an even bigger vision of the community called the Mid Columbia Energy Initiative, in which the community is developing other partnerships and grant opportunities.

“It grows a larger pie,” said Howard. "It is allowing everybody to talk about it so they can figure out what they can do together, versus within their own scope of work.”

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