Berkshire Business Outlook: New life in the Berkshire economy
Diversity, flexibility key to future Berkshire economy
"I'm still hearing it."
Brennan grew up in New York's Capital Region and lived in the Adirondacks before a job opportunity brought her to the Berkshires 11 years ago.
As a senior planner for community and economic development at the Berkshire Regional Planning Commission, Brennan deals with the local economy a lot. In doing so, she encounters this familiar refrain.
The specter of General Electric and the other major manufacturers that once employed the majority of the county's breadwinners has been hanging over the Berkshire economy like a dark cloud for a long time. But that shadow isn't as long as it used to be.
The Berkshire economy is changing. The pace of the transition has often been frustrating, especially considering the economic boom at the other end of the state. But it looks like there is new light shining in this storied landscape.
Those long-gone mass employers are being replaced by a much more diverse economy, full of small- and medium-size employers, and an economic eco-system that is more flexible than the old one, and better equipped to withstand the inevitable forces of economic change.
An added boost could come from the long-delayed Berkshire Innovation Center project at the William Stanley Business Park of the Berkshires in Pittsfield, which has finally received all of its additional funding commitments. Construction on the 20,000-square-foot workforce training/equipment center had been delayed when a $3 million funding gap in the building costs developed when the project first went out to bid three years ago. The project is poised to go out to bid again and construction is now projected to start this summer.
In this issue of the annual Berkshire Business Outlook, we examine some of those changes and adaptations, and how they are laying the groundwork for the county's future economic stability. There are still challenges.
Public transportation in the Berkshires is still limited, and the region's continued population loss is a nagging issue that has affected the area since the 1970s.
High energy costs hamper growth. With the unemployment rate low, finding skilled employees can be also an issue, but that's a symptom of a greater problem that goes beyond the Berkshires. Almost 90 percent of the state employers who responded to Associated Industries of Massachusetts' February Business Confidence Index indicated that the inability to find skilled employees is either a modest, large or huge problem. One third of those respondents believe it's a huge problem, 14 percent believe it's a large problem and 29 percent see it as a modest issue, according to Raymond G. Torto, the chairman of AIM's board of economic advisers.
In December, local officials released the latest version of Berkshire County's Comprehensive Economic Development Strategy, a document that is updated every five years. The committee established six goals and 31 objectives to guide the strategic process and future economic development as a road map for the region's economic growth and stability over the next five years.
Brennan who was involved in developing the 184-page document through her role at the Berkshire Regional Planning Commission, said the research shows the county's economy relies on the development and growth of small- and medium-size businesses.
"I think we're taking positive steps to have an entrepreneurial system that covers the kind of needs entrepreneurs need in a more holistic way than we did five years ago," she said. "What I'm seeing is better communication between agencies and organizations that have a part in this. No one organization can do it all. It takes a network and I think it's beginning to happen more effectively."
This diversity in the local economy has been operating under the surface for a while.
"Maybe part of it is that we've been identified as a region with one or two economies, either tourism and hospitality or manufacturing." Brennan said. "When the large manufacturers withdrew, I don't know if it was as obvious to everybody as it should have been that there were a lot of small firms still here. There's a lot going on that we don't hear about often."
More private than public funding has been invested in Berkshire County projects since the last economic strategy report was released in 2012. Six of the 13 privately-funded projects on a list of investments that accompany the 2017 report are in the tourism/hospitality sector. But private investment is also included in projects in the county's energy, manufacturing, and agriculture sectors, too.
"When you look at the list you don't just see investments in hotel and cultural venues," Brennan said. "There is a noticeable (investment) going on in non-tourism organizations. They're doing their thing under the radar. Look at Interprint (which has invested $12.2 million in an infrastructure improvement project). To me, I don't think those things are discussed as often."
David Curtis, an economic development specialist for 1Berkshire, said it's easier for startups and small firms in the Berkshires to find the capital funding they need to grow their ventures than it was before.
"There's a lot of available, what you might call traditional capital, through banks or with support from the Small Business Administration, that are willing and able to fund specific companies," Curtis said. "The bigger struggle comes when a company or an entrepreneur is not eligible for traditional financing. You have to look towards individuals and organizations that invest in those types of situations. We are blessed in that we have a couple of local investors investing — Jeffrey Thomas at Lever, and Mill Town Capital — that has been around about a year and a half now, that are looking at local firms and start-ups.
"It's a challenge, period," he said. "But I think it's better than it was."
"I think it's more of a symptom than a disease," said Williams College economics professor Stephen Sheppard about the access to capital that businesses have in the Berkshires.
"I think if we had a robust local economy we'd find the capital," said Sheppard, who studies the Berkshire economy. "I think the capital will flow where the economic opportunity and the rate of return is promising."
Like Brennan, Sheppard was not born and raised in Berkshire County. But he's also heard a lot about the old GE days.
"I think we need to move beyond it, rather than pull ourselves out of it," Sheppard said, "GE's not coming back, The world economy has changed. The economic environment has changed. We're better off with small economic enterprises and supporting them the best we can with transportation.
"As long as there are people who had careers (at those major employers) there's going to be nostalgia for what used to be," he said. "But the economy has moved on."
The county's economy is taking steps to do the same.
Business Editor Tony Dobrowolski can be reached at email@example.com or 413 496-6224.
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