South Bend's New Economic Direction

A New Economic Direction for South Bend

Vision

South Bend needs a new economic direction to create jobs that will stay here—and pay well—for the long run. This means supporting new employers based on the research that already takes place here, while making it as easy as possible for existing employers to thrive. The new mayor must also aggressively market South Bend’s advantages, especially in distribution and Internet infrastructure, to large national and international players ready to make investments that could create jobs up and down the economic ladder. The city must move boldly to provide simple, user-friendly economic development services to both existing and prospective businesses that want to work with the city in a responsible way. We must confront poverty head-on, ensuring that our low-income residents have a path to economic security. And we must invest in human capital by ensuring a good match of skills to employer needs, ensuring a culturally rich, tolerant environment that can retain talented workers, and supporting the best possible quality of life for all residents.

Table of Contents

I) Helping Responsible Existing Employers Grow (Situation, Vision, Mayoral action items)

II) Cultivating New Homegrown Businesses of Tomorrow (Situation, Vision, Mayoral action items)

III) Competing for Investments Nationally and Globally (Situation, Vision, Mayoral action items)

IV) Well-Coordinated and User-Friendly Economic Development (Situation, Vision, Mayoral action items)

V) Confronting Poverty (Situation, Vision, Mayoral action items)

VI) Investing in Human Capital and Quality of Life (Situation, Vision, Mayoral action items)

Conclusion

References

 



 

I. Helping Responsible Existing Employers Grow 

Situation:

It’s time to confront the fact that South Bend may never again have employers as large as Studebaker and Bendix, and waiting for new employers that size to set up shop here is no substitute for an economic strategy. We can be a very successful community with smaller businesses that employ fewer than 500 people—and many such businesses are already succeeding in our community. But many existing employers are struggling to grow, and the city must do everything possible to help our best businesses continue to hire.

Local unemployment is higher than the state average by .7% at 10.1%, but many employers here are growing.[1] Locally owned businesses account for the majority of job opportunities in our area,[2] and several local firms actually export products made in South Bend to Asia rather than the other way around. These employers point the way to a future in which working families can prosper, rather than remain vulnerable to distant and seemingly uncontrollable economic forces.

Vision: 

A prosperous economy begins with strong, responsible, homegrown businesses rooted in our community. Our strategy for economic growth must include the following priorities when it comes to keeping and growing our existing employers:

  • Regular communication between the city and the business community
  • Support to make local businesses as competitive as possible, with emphasis on businesses that compete by producing products of superior quality
  • User-friendly city services for responsible local businesses seeking to grow
  • Strong connections between employers and educators

Mayoral action items:

  • Personally lead communication between city government and the business community. The city needs to regularly and proactively check in with our top employers to see how they are doing and understand their concerns. I will set the tone for this by personally visiting local businesses regularly to talk with owners, operators and workers. I will also ensure that a top member of my staff is responsible for ensuring frequent and open communication between employers and my office. In addition, in partnership with local organizations, I will host an annual South Bend Economic Forum that brings participants from here and from around the country together each year on a different area of excellence in our local economy. 
  •  Create a Competitiveness Strategy for advanced manufacturing. We may never make Studebakers here again, but certain kinds of manufacturing have a promising future here. We need to adopt a competitiveness strategy that supports manufacturing companies that compete not on price alone but by delivering products of superior quality. We already have such companies working in areas ranging from precision metal machining to signage, and these companies tend to pay good wages and have a lower likelihood of being outsourced to China—in fact, many of them export their goods already. South Bend city government must be involved in maximizing their competitiveness by coordinating with these employers in decisions about infrastructure, taxation, labor and economic development.
  • An improved process for permitting and city services. Employers seeking to expand in our city have expressed concern about the ability to quickly get consistent answers from city government. Many decisions go through multiple bodies in a complex process that costs us time, revenue, and opportunities. I will re-invent our economic development processes to cut unneeded bureaucracy and simplify the process for responsible businesses that need quick answers in order to grow.
  • Equipping our workers with the skills to succeed. The job market has been shifting more rapidly than our ability to train students and workers to succeed. When I am visiting businesses in our community, I often hear that they struggle to find the right mix of skills in our local work force. We are experiencing mismatches between employees’ preparation and the needs of advanced manufacturers. If we cannot meet the needs of local employers as they grow, they will leave. I will personally convene leaders in our K-12 educational system, vocational schools, community colleges, businesses, and labor organizations to align our educational outcomes and skill mix with the needs of employers who want to hire locally for good-paying jobs.

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II. Cultivating New Homegrown Businesses of Tomorrow

Situation:

The surest sign that a company will stay here is that it began here. When it comes to growing new businesses, South Bend is taking some steps in the right direction, with efforts such as Innovation Park that give us a chance to start the kinds of new companies that will create good-paying jobs in the future.

Small businesses have accounted for 64% of net new jobs over the past 15 years in the United States, and half of all private-sector employees in America are at small businesses.[3] A spirit of entrepreneurship is central to our ability to succeed and grow. But a recent study found that of the eight highest growth industries throughout the nation, our area is under-represented in seven.[4] 

Vision:

We must be strategic in the way we grow our economy. The emphasis we choose for new business development will affect our industry mix for the future, and the choices we make now about new business growth can make or break us for the long term. My strategic vision emphasizes:

  • Strategic use of our strengths, including geographic location, inexpensive electrical power, and higher education
  • Emphasis on industries that will be growing nationally
  • Facilitating connections between outside investors and local start-up companies
  • A chance to compete for new businesses, including minority-owned and women-owned enterprises

Mayoral action items:

  • Promote our greatest strengths. The city must make sure that investors and entrepreneurs are aware of our strengths, and have access to our best resources. This means ensuring that, with five colleges and universities, we secure the benefits traditionally associated with a college town. It also means publicizing the logistical advantage of being here, with access to major roadways that put 40.2 million households within one day’s reach. And it requires a standing body that can connect the city with the leading universities here, to ensure their presence is aiding our local economy in every possible way, especially when it comes to creating new business.
  • Identify the areas that are growing most quickly, match them to where we can compete, and double down on growth in these areas.  A recent report, “Benchmarking South Bend,” found that our area has low concentration in growing industries like life sciences, security, financial services, and logistics. We need a dedicated strategy to grow in these areas, and the mayor can help by connecting local players in this field to leaders who might invest here based on our built-in advantages. 
  • Stimulate access to capital. What start-up employers usually need most is not tax breaks or zoning variances; it’s seed capital. I will review the most successful startup-oriented cities for examples we can emulate to use every available resource, from the city’s Industrial Revolving Fund to outside investor groups, to make sure cash is available to our most promising new small businesses and start-up employers. 
  • Ensure a seat at the table for underrepresented kinds of small businesses, including minority-owned and women-owned business. Too often, I hear of businesses that learn of chances to bid on work only after it’s too late. I will ensure that city purchasing takes place on a fair playing field, which includes making important business opportunities known to leaders of minority-owned and women-owned small businesses that only want a chance to compete for official business opportunities.

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III. Competing for Investments Nationally and Globally

Situation:

We must ensure that South Bend is on the map for national and global enterprises prepared to make job-creating investments. Even if we cannot entice companies to relocate headquarters here, something that happens only rarely, we can often invite large firms to open facilities here, creating good paying jobs for our city.

Globally renowned universities represent just one of our strategic advantages as a place for investment. We are the second-best location in the United States in terms of population that can be reached by road in 24 hours from here. South Bend is within a single day’s drive of more than 40.2 million Americans.[5] We also have superior Internet infrastructure: South Bend’s high-capacity fiber optic network is running throughout 70% of the city’s existing conduit,[6] putting local businesses within two milliseconds of the Chicago National Network. [7] Our emerging Medical Mile ties together a cluster of five respected medical institutions at the heart of our city. These are tremendous assets that can make our community a competitive place to invest and create jobs.

Vision:

These and other strengths can drive our competitiveness for investment—if we market and develop them in the right way. Mayoral leadership is required in order to make the most of these advantages, including:

  • Mayoral participation in establishing a new “brand” for our community for national and international investors
  • Leveraging the connections of our universities, firms, and families
  • Communicating our geographic advantage for logistics-intensive employers
  • Continued use and advertising of assets like the our fiber-optic Metronet

Mayoral action items:

  • Mayoral involvement in branding the city.  South Bend must develop a reputation as being open for business, with the mayor leading efforts to communicate our value nationally and internationally. I will be in close coordination with businesses, chambers, the state, and other entities that can promote investment in our area. I’ll know when to stay out of their way, and when to get involved, including personally traveling to meet with decision-makers in other places who might invest in our community.
  • Create a “South Bend Affinity Roster” of people who can help us with investment opportunities around the world.  I will work with our universities, as well as firms and families in our city that have broad connections, to ensure that South Bend is on the map for national and international investors. My administration will create a roster of people in key cities, companies, and industries around the world who have a connection to South Bend through family, business, or university ties. This list will be ready for use whenever an opportunity emerges that requires quick action and access to friends of the city in faraway places.
  • Use our geographic advantage to compete in logistics. Transportation and logistics is a growing area, and South Bend has access to more destinations by road within 24 hours than almost any other location in the continental United States. My economic decision-making and strategies will reflect this geographic advantage, especially when it comes to attracting outside investment.
  • Develop and advertise South Bend’s fiber optic wealth. Beneath our city sits a hidden economic treasure in Indiana, a fiber optic loop that gives us superior bandwidth with national implications. I will incorporate this into city communications and strategies to ensure this entices investors as it should.

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IV. Well-coordinated and User-friendly Economic Development

Situation:

South Bend and our area have over a dozen entities working on economic development. These organizations have talented and well-intentioned staff, but are not always on the same page. Mayoral leadership is needed to better coordinate our economic development efforts, and ensure that business decision-makers know where to go for efficient solutions.

Vision:

The city government should not “own” all local economic development activity, but the city and the mayor’s office do have a key role to play in ensuring that we have a user-friendly economic development landscape that is “open for business” to responsible employers seeking to create jobs. This means:

  • Better coordination by economic development players in our community
  • A closer relationship between employers and city government
  • Ease of doing business with the city
  • Outstanding relations with federal and state counterparts in economic development

Mayoral action items:

  • Convene a summit of economic development players, and commit to an action plan. Our economic development agencies need to rally around a coordinated strategic business plan for the community, and they need support from the mayor’s office to stick to the plan going forward. In my first 90 days in office, I will convene all key stakeholders to agree to a new action plan, with clear division of labor among city, nonprofit, and large and small business entities.
  • Create a rotation program to exchange personnel between the city and business community. I will launch a rotation program that brings mid-level executives from major local businesses into the city administration on loan so that they can build relationships and trade expertise between government and business. I have seen this work in other cities to bring new knowledge into government processes, and give businesses a better working understanding of how local government works.
  • Evaluate customer service outcomes in the city. I will use surveys, interviews, and simulations to determine how our paperwork can be simpler for businesses trying to get things done with city government, and within my first year in office, lay out a plan for simplifying and speeding any processes that can be improved without losses in accountability.
  • Reach out to state government and agree to concrete steps to improve economic development. The Indiana Economic Development Corporation has announced very few projects in our part of the state. I am not interested in assigning blame for this fact; I am interested in changing it. As soon as possible after taking office, I will meet with IEDC leadership to discuss and propose several tangible near-term steps for cooperation that will create results for our community.

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V. Confronting Poverty

Situation:

South Bend’s poverty rate stands at 23.9%,[8] and currently almost 70% of students in our school system are eligible for free or reduced lunch.[9] We have almost double the national average rate of families living in poverty.[10] Median income in our community is 13% below the national average.[11] This situation is the result of a painful economic transition that has been underway for decades, and it has led to an unacceptable state of affairs for too many families who live here. Many excellent organizations are working on the problem, and they need partnership from the city.

Vision:

South Bend must lift up every resident, and provide economic opportunities for all while confronting the cycle of poverty that keeps many of our residents at arm’s length from the American dream. Our city’s priorities must include:

  • Awareness and prioritization of low-income issues
  • Action along our entryway corridors to the city
  • Access to financial services for low-income residents
  • Answers on the vacant housing issue in our most troubled neighborhoods
  • Transportation options that make it easier for low-income families to keep a job

Mayoral action items:

  • Require that city initiatives be reviewed for their impact on low-income citizens. My office will prepare assessments on economics-related executive orders and on major proposed Council ordinances to evaluate their impact on poverty in our community. This approach has been used in the past to ensure that decision-making processes at the federal level keep the interests of our most vulnerable citizens front and center.
  • Make swift, tactical improvements on entryway corridors. Tackling poverty requires long-term solutions, but I will also launch short-term steps such as improving the facades of vacant retail outlets that set a tone of blight on entryways that provide many visitors with their first impression of our city.
  • Launch “Bank on South Bend” to provide financial services to low-income residents. When people don’t have access to financial services, they are often victimized by predatory lenders that only deepen their economic hardship. We must make financial inclusion a priority for low-income and minority residents. I will lead South Bend’s entry into the “Bank on Indiana” program, which uses a number of tools to enable low-income families to join the financial mainstream and open bank accounts.
  • Use new tools to address the vacant housing problem. South Bend has numerous vacant and abandoned homes, and in many cases the biggest obstacle to dealing with them has to do with determining who owns them. I will stand up an investigative team responsible for cutting through smokescreens and identifying absentee landlords of vacant homes so that the city can hold them accountable or buy them out.
  • Work with Transpo and other agencies to secure workable transit options for low-income workers. The availability of good public transportation is essential for low-income families to get to work and break the cycle of poverty. I plan to use the convening power of the mayor’s office to draw together neighborhood, nonprofit, and transportation system leaders to ensure the needs of low-income workers are met.

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VI. Investing in Human Capital and Quality of Life

Situation:

Quality of life drives our ability to compete for human capital, which is critical for economic development. South Bend has five colleges and universities, but does not have all the quality-of-life and economic advantages typically associated with college towns. We have a magnificent river, but are not the river town we could be. And we have a budding arts and entertainment scene that deserves more publicity and help to grow.

Vision:

I envision South Bend building the reputation of a dynamic small city, tolerant of diversity and capable of delivering the advantages of living in a college town and a river city. This includes:

  • Making the most of the river that gives our city its name
  • Ensuring that city employment practices favor working families
  • Promoting and celebrating arts and culture in our city
  • Developing our work force to its fullest potential

Mayoral action items:

  • Declare a city-backed arts and entertainment district along the river. The area along the river opposite Century Center is showing early signs of developing into the kind of arts-and-entertainment cluster that attracts young professionals and retirees, and can help create jobs. The city should support this concentration of cultural, artistic, and commercial entrepreneurs and help them grow. This is a key part of ensuring that South Bend makes the most of our river and delivers on its cultural and economic potential.
  • Review enforcement of labor practices. Worker mis-classification and other violations of labor law and agreements can undermine the city’s reputation for keeping its word on agreements. I will ensure that agreements enacted by the city and those required by state law are enforced, and that they are fair to workers.
  • Convene businesses and educators to close labor market gaps. In my visits to businesses around the city, I have learned of a mismatch between what employers need, and the skills our school system has been able to produce. I will connect employers and education leaders from the K-12 system, vocational institutions, community colleges, and universities to improve this matching so that businesses can put our young residents to work quickly in productive, good-paying jobs.

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Conclusion

I am convinced that South Bend’s brightest days are yet to come. We have the potential to become a dynamic small city, known widely for our ability to adapt to economic change and to provide economic security for all parts of our community. The building blocks of this brighter future are all around us. 

This economic plan represents a series of steps by which the next mayor can lead our city in a new economic direction. The plan is a down payment on the action-oriented style I plan to bring to the office, and I hope that it sheds light on how I will use new ideas in setting economic development priorities for our city. But it is just a beginning.

Fixing what’s wrong with our economy will take imagination, courage, and discipline. But it is absolutely within reach for a city willing to embrace a fresh start.

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[2] Walls & Associates, National Establishment Time Series (NETS) database.

[3] Small Business Administration: http://www.sba.gov/advocacy/7495/8420

[6] City of South Bend, “2011 State of the City”: http://www.southbendin.gov/doc/Mayor_2011StateoftheCity_Final.pdf

[7] St. Joe Valley Metronet Zing: http://www.metronetzing.org/about.cfm

[8] City of South Bend, “Census Simplified”

[9] South Bend Community School Corporation: http://mustang.doe.state.in.us/SEARCH/snapcorp.cfm?corp=7205