Politics from the Palouse to Puget Sound

Monday, September 25, 2006

Lesson From the Coalfields

There has been much talk lately about what can be done to improve Pullman and Whitman County's economy. Particularly, what can we do to bring in more high-paying jobs?

An Associated Press story on rural high-tech industry yields some interesting insights:
From the outside, the house looks like any other in the coalfields of eastern Kentucky. But inside, industrial cubicles sprawl across a well-worn hardwood floor, placing uniformed programmers and high-speed computers within arm's reach of an antique fireplace.

This is the headquarters for DataFutures Inc. — a $5 million company that makes software to track school finances and lunches for school districts nationwide, but chooses to operate in 2,050-population Harlan.

"The thing about technology is you can do it from anywhere," said Charleen Combs, CEO and co-founder of DataFutures.

Experts say Combs' viewpoint is becoming more common among young professionals and high-tech entrepreneurs, many of whom are ditching the big-city scene and taking advantage of the lower costs and comforts typical of rural towns.

"Anecdotally, I really believe it's a trend," said Lawrence Gelburd, an independent consultant and lecturer on entrepreneurship at the Wharton School of the University of Pennsylvania.

"The costs are so much lower in these rural areas," he added. "The value that they get, the pace of life and the ubiquitous nature of technology makes rural areas more attractive."

The employees at these rural businesses are a mix of local hires, often college graduates who don't mind working back home, and professionals who are tired of traffic and high costs associated with working near big cities.


Mallet said businesses in rural areas have a main advantage: lower costs.

"The business sector has changed completely," said Mallett, whose mystery shopping company plants undercover consumers to evaluate retail services for his some 200 clients nationwide, including Foot Locker Inc. (FL), Darden Restaurants Inc.'s (DRI) Hardee's chain and Dunkin' Donuts. "The Wal-Mart mentality has changed the world. It's all about cost now."

Entrepreneurs like Combs and Mallett enjoy office space that comes at a fraction of the leasing costs in big cities. The cost of living is less, so wages are lower, yet still appealing to their employees. And, with hardly any traffic, there's less money wasted on high gas prices and less stress among employees.
Harlan, KY, three hours from the nearest major airport and two hours from an interstate, is even more remote than Pullman. Only 5% of the work force in Harlan has a college degree and only 3% a graduate degree. 44% of adults over 25 in Pullman have Bachelor's degrees, and 19.9% have graduate degrees. That ranks Pullman nationally in those categories for small towns. Our commutes are short, just like Harlan. So why aren't high-tech companies lined up at our door?

Read the story above carefully. The key factor is LOW COST. The average price of a home in Harlan is $73,137. In Harlan County, it is $56,778. The average home price in Whitman County is near $200,000.

Harlan has also has a Wal-Mart, which also helps explain the lower cost of living.

Our attracting high-tech industry to the Palouse has nothing to do with a "knowledge corridor" or any of that other mindless sloganeering. Ed Schweitzer, the Bill Gates of the Palouse, has said it over and over again. Get rid of all the the restrictive housing and zoning regulations. Make Whitman County more business friendly by welcoming ALL businesses, regardless of size. Then they will come.

1 comment:

Paul E. Zimmerman said...

Great article! It makes me think of this past weekend, which I and a business partner spent at the Evergreen State Bodybuilding Competition. We were there to promote N22 and Pump-X, the flagship product of a subsidiary company we started, Xtreme Sports Supplements.

Many of the competitors and general public who stopped by our booth asked, "why Pullman?" We told them the exact same thing mentioned in this article: costs.

Of course, we're all renting right now. When it comes time to buy homes or factory space for our company, Garfield is probably where we'll end up. NOTE TO PULLMAN: you're going to lose another one - change your attitude!