Volume 10, Number 3 - September 2013
Welcome to the latest edition of EntreWorks Insights, a quarterly newsletter that reports on business trends, policy developments, and other issues affecting the business of economic and workforce development. You’re receiving this note because you’ve asked to subscribe or because you have some previous interest in the work of EntreWorks Consulting. If you wish to subscribe or be removed from this list, please send an email to info (at) entreworks.net. If you’re interested in the newsletter, please read on. Please feel free to share with friends, family, colleagues, and other loved ones. Comments and constructive criticism (and praise) are also welcome. You are also encouraged to visit and comment on the EntreWorks blog at http://entreworks.net/blog. Thanks for your interest.
Last month, my family made our annual vacation pilgrimage up to mid-coast Maine. Maine is a beautiful and fascinating place, but it faces a daunting host of economic development challenges. According to research from Maine’s Economic Growth Council, statewide GDP has been declining for years and Maine’s performance in supporting research and development and in building new technology-related sectors lags far behind national and regional benchmarks.
While much of the state faces economic challenges, there are many pockets of innovation and prosperity. Portland, Maine is booming and gaining a reputation as a mecca for foodies, hipsters, and assorted others. Many small towns are also thriving. During last month’s visit, I was particularly struck by the vibrancy and dynamism of the mid-coast town of Belfast. I think Belfast’s recent experience offers many useful lessons for other small town leaders striving to build prosperous and sustainable local economies.
Belfast is thriving today, but it wasn’t always that way. Belfast’s economy has evolved through a series of boom and bust cycles, or perhaps boomlet and bust-let are better terms. Shipbuilding was the area’s first industry, and in the 20th century, Belfast was a base for shoe manufacturing, food processing, and the poultry industry. For a long time, Belfast billed itself as the “Broiler Capital of the World.”
In the mid-1990s, Belfast seemed poised to enter the “new economy” when MBNA (now Bank of America) opted to set up a local customer service center, along with nearly 2,000 new jobs. This boomlet was short-lived as MBNA closed operations in the mid-2000s, shedding jobs and abandoning its massive regional headquarters complex.
Like so many other small town leaders, Belfast’s leadership was forced to scramble and come up with new plans for a new future. They ultimately arrived, not always by design, at a formula that seems to be paying dividends. Their current community development strategies are centered on several key planks:
Belfast’s downtown, chock full of funky stores and good restaurants, has become a destination. But, it wasn’t always that way and it didn’t happen automatically. It was part of conscious strategy, first kicked off in the mid-2000s, by the Belfast Vibrancy Project. This strategy was part of a wider community effort to build a more attractive downtown that would bring in more visitors and more people from the surrounding region.
Today, Belfast has become a town of festivals and it seems like there is a local event almost every weekend. Sponsored by diverse groups like Our Town Belfast and the Belfast Creative Coalition, Belfast hosts regular art fairs, concerts, and its well-known annual Celtic Festival. The town has long been a supporter of local foods, and is now capitalizing on its role as an early adopter of local food production. These events are fun, but they also brand the town and bring in new customers who stay in local lodgings, eat at local restaurants, and shop downtown.
Traditional anchor institutions, such as a community bank or a major employer, don’t really exist in many small towns anymore. But, smart communities are seeking to build on new anchors. In some cases, a major employer might opt to move into town. That’s what happened in Belfast with MBNA, but that economic anchor had a short shelf life. More sustainable anchors are needed.
Today, like many service centers, Belfast relies on its role as a health care and retail center. In health care, Belfast is home to a local hospital and has also attracted a branch office of Athena Health, a health IT firm.
Belfast’s role as a regional retail center is somewhat unique as the community is well-known for its antipathy to big box retailers. Belfast has a few large stores, but, unlike neighboring service center towns like Rockland or Ellsworth, it is not home to large big box stores like Walmart or Home Depot. Nonetheless, the unique mix of downtown stores and a small handful of larger retailers, such as large grocery stores, seems to be working for Belfast.
Belfast is not home to another common anchor, a local college or university. The University of Maine’s Hutchinson Center offers local classes, but it is not a major driver of economic activity.
In recent years, Belfast has also taken steps to further diversity the local economy. While attracting a major new employer with hundreds of new jobs seems unlikely, the City is working to become more business and entrepreneur friendly. In fact, Belfast was recently designated by Maine’s Governor as a certified “business friendly” city.
The community is also striving to build a real “working waterfront,” a goal for many communities across Maine. Back in 2007, real estate developers proposed a major condominium development on Belfast’s beautiful downtown harbor. While this project collapsed, an interesting mix of new uses has emerged. These include several restaurants, a brewery, a boat builder and the Front Street Shipyard, a growing ship repair and maintenance facility.
None of these new activities replace the thousand jobs that arrived with MBNA, but, by creating a more diverse base of employers, these firms help create a more resilient and hopefully more prosperous local economy.
The Belfast story aligns well with the findings of an ongoing research project that we’ve been undertaking for the Appalachian Regional Commission (along with colleagues at the University of Illinois, the Center for Regional Economic Competitiveness and the Center for Rural Entrepreneurship). This study, examining economic diversity in Appalachia, finds that successful communities tend to follow approaches similar to those pursued in Belfast. Successful strategies engage a wide swath of the local community, focus on unique local assets that tie into a wider regional economy, and embrace multiple tactics and approaches. There is no one best way to build a prosperous small town economy.
Belfast’s recent experiences are instructive because the City is really not that unique. It is scenic and beautiful, but so are thousands of communities across the U.S. Instead, Belfast succeeded because local leaders were committed to enhancing their competitive assets while also maintaining a distinctive and desirable sense of place—the “soul” of Belfast. If you’re ever lucky enough to make a visit up to Maine, put Belfast on your itinerary.
Besides visiting Maine, our summer has been spent kicking off a new project for
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