Economic Development Three core components of Economic Development 1)Business Attraction i.Marketing & Promotion ii.Trade Shows iii.Sector specific initiatives iv.Statistical information 2)Business Retention i.Labour force recruitment ii.Local, Regional, Provincial & Federal Regulations 3)Business Expansion i.Export markets ii.Network connections iii.Land and building search

Why Business Retention and Expansion? Existing businesses in a community are responsible for approximately 80% of future employment growth Happy existing businesses help attract new businesses Identify problems and new opportunities Gain a better understanding of the status of the local economy Strengthen linkage between local government and business community Retention visits lead to business expansion initiatives Identify companies at risk of closing/relocating Identify barriers to growth

Background Economic Development Strategy identified the need for a BR+E Program Project supported by City of Vernon, Community Futures and the Province of BC Initial target sectors included Manufacturing & Technology Hired consultant to complete 100 Surveys Executive Pulse – largest BR+E database provider in North America Phase 2 – Downtown retail & professional services Phase 3 – Agricultural Sector

Where did we interview/

BR+E FINDINGS

Years in Business Years In BusinessPercentage < One Year3% 2-4 Years7% 5-9 Years12% Years12% 15>66%

Life Cycle

Succession Plan

Labour Over the past three years 43 percent of businesses have maintained a stable workforce 36 percent of businesses increased their workforce 69% plan on increasing amount of full time employees over next 3 years. Total number of employees at the businesses surveyed breakdown as follows: Full-time employees - 2,482 Part-time employees Temporary employees Total employees - 2,807

Availability of Workers 51% ranked availability of workers from Average to Low

Quality of Labour Force 52% ranked quality between Average and Low

Stability of Labour Force Stability is ranked High 86% stated that the number of unfilled positions today was stable

Skill Levels and Wages 48% of companies believe that the level they pay is greater than others locally 20% of companies have problems retaining employees Skill Level and Wages Skill Level (%) Wages (PH) Skilled/Professional 53%$29 Semi-skilled 24%$19 Entry Level 20%$14

Unfilled Positions 55% are having difficulties in finding employees Job Type (difficulty on finding) (%) Business Administration11 Clerical4 Computer technology/programming11 Machinery operators4 Marketing4 Plant operators6 Sales15 Skilled trade43 Unskilled labour15 Other36

Other Key Labour Findings 85% of companies find employees locally (note: different than three years ago) 51% of companies have a training budget for employees 58% of companies do not have a formal workplace training program in place 87% of companies are non-unionized. Of those that are, 100% rank relations as good or excellent. 74% of company employees are middle aged

Sales

North Okanagan companies indicate that they are doing better than the industry average Historical Sales Trend Facility (%) Within Industry (%) Increasing5621 Staying the same2040 Declining2436 Not applicable03

Sales 59% of company sales are located outside of geographic area

Export 48% have Export Sales Status Export Markets include USA, China, Mexico & Europe Export Sales (%) Increasing29 Staying the same37 Declining13 Not applicable21

Facility and Equipment 58% own their facility (42% lease) 83% indicate that the condition of the current facility is good or excellent Usage of facility 43% use more than 90% of facility 24% use 76-90% 20% use 51-75% and balance use less than 50% 87% rank equipment as good or excellent Usage of Equipment 33% use more than 90% of equipment capacity 25% use 76-90% 29% use 51-75% and balance use less than 50%

Facilities (expansion) 46% of companies have expansion plans within the next months 68% indicate they have room for expansion at current site 74% of those planning expansion indicate that it will occur within the North Okanagan. 53% of those planning expansion indicate that they will expand at current site – balance will need to find new land or facilities Estimated total investment of those planning expansion is $58,000, ,000 sq.ft. of new space will be required to accommodate the expansions 209 New Jobs will be created through Expansion

Facilities (expansion) Other includes – water restrictions, parking and global economy Expansion Restrictions % Broadband access6 Finance47 Identifying and accessing new markets14 Lack of skilled staff19 Lack of suitable premises36 Local regulations e.g. zoning47 Problems with DAs14 Roads3 Transport/freight3 Warehousing3 Other (please specify):28

Services and Costs Municipal and Regional Services Inspections and Licensing – 52% rank as average to poor Development Approval Process – 70% rank as average to poor Availability of Land – 73% rank as average to poor Cost of Doing Business Permit Fees – 74% rank average to poor Land Costs – 83% rank average to poor Building Costs – 84% rank average to poor Leasing Space – 76% rank average to poor Taxes – 74% rank average to poor

Business Climate Some concerns raised regarding both local & regional government Local and Regional Government Local/Regional Government (%) Taxation (%) Excellent41 Good18 Fair5046 Poor2629 No opinion26 Totals100

Business Climate dd Business Climate today vs 5 Year ago (%) Business Climate 5 years from today (%) Better today 2069 No change 1622 Worse today 616 No opinion 33 Totals100 71% overall had a positive attitude toward the community despite some concerns

Strengths as a Place to do Business Location Quality of Life Support from other businesses New focused economic development program Support services (Community Futures, Chambers of Commerce, Vernon EDC) Large Customer base Workforce – dedicated employees Lifestyle can attract labour Support amongst businesses

Weaknesses as a Place to do Business Location Lifestyle Workforce Local and Regional Governments (bureaucracy) Lack of Land and Facilities Non-supportive attitude to entrepreneurism and small business community Expensive *most of these were identified also as a barrier to growth

Other Findings 93% of companies were rated as having little to no risk of closing or downsizing 29% of Manufacturing companies spend more than 3% of annual sales on R&D

Recommendations 1)Review Local and Regional Government approval processes 2)Develop labour force recruitment Packages 3)Assist companies in recruitment process 4)Consider developing an HR website for use by companies seeking employees 5)Complete a Land and Facility Inventory 6)Complete a BR+E Program for other sectors 7)Introduce companies to BC Trade & Investment representatives in USA, Asia, and Europe 8)Create a Sector Alliance for Manufacturing

Questions Kevin Poole Economic Development Officer City of Vernon Tel: