I am back. Sorry for the long delay in writing this column, but I have been deployed overseas on military duty. I was gone for six months, and things in the north country look different to me now than when I left.
The fundamentals of our economy and business community have not changed. Agriculture remains a base activity in our economy, and Fort Drum is still our largest economic engine. Public employment continues to act as a stabilizing influence, although even that has suffered a bit in the recent recession.Declining state budgets and the lingering effects of a national recession continue to suppress local economic growth. Jefferson and Lewis counties are doing slightly better than the national average on unemployment and a bit better than last year. St. Lawrence County still has much higher rates of unemployment than the nation or New York state, but things are a bit better than a year ago.
So what has changed in six months?
SUNY Potsdam and SUNY Canton are wrestling with a plan by State University of New York leadership to combine the administrative functions of the two schools, beginning with the offices of their respective presidents. The SUNY chancellor hopes to save money by sharing administrative expenses but promises to protect the colleges' unique differences.
These two goals may be mutually exclusive. Unless budgets and budgetary decisions are combined for the two institutions, little real savings is likely to result beyond one president's salary. If those budgets are combined under a single decision-making authority, then that authority will be forced to make trade-offs between missions and differing cash flows. The strongest incentives will be to trim and integrate programs and to move programs to the school where they can be most efficiently taught.
Any businessperson who has ever managed the marketing budgets for two different products will recognize the situation. It suggests that senior academic leaders should spend some time in business as well as in the classroom.
Cape Vincent will soon be home to a new boat-building plant. Metalcraft Marine, a Canadian manufacturer of boats, is expanding its U.S. presence in an effort to capture U.S. municipal orders for high-tech patrol boats. Because the company has already been operating in Clayton, the real impact to Jefferson County is limited. But the decision to seek a larger space and make additional investments is a reassuring statement of confidence both in the local work force and in the ability of the company to win the bids it is after.
Wind power groups continue to pursue acrimonious arguments with few facts and much emotion, but some evidence regarding land values has entered the debate. Scientific research into the impact of wind turbines on land values is limited and tends to not show any impact. To wind turbine opponents who hate the sight of the things, this seems counter-intuitive and suspect. Turbine supporters are delighted to have a scientific argument against one set of concerns.
While many of the studies appear to be sound as far as they go, they are far from answering basic questions about the likely long-term impact of wind farms on local land values and other issues surrounding this controversial topic. It's time for the local academic community to start some of this research.
Regional officials are struggling to build enough housing to accommodate an anticipated wave of soldiers returning to Fort Drum from deployments. In 2012, the post is expecting the temporary return of almost every assigned soldier. This will be a boom time for many local businesses but threatens to exhaust the supply of affordable housing.
Regional officials have been providing loans and other incentives to developers in an attempt to spur new construction. It is a little troubling to me to see government so heavily involved in what should be a free-market issue, but the market may not have time to react without the encouragement - and I am even more troubled at the thought of young soldiers and their families with no place to live.
Dairy farming continues to languish while wineries are growing. Dairy farmers are commodity producers whose price margins are constantly threatened by rising energy costs and volatile milk prices. The industry is trapped in a tangle of government programs and regulations that often appear ineffective but which we are afraid to do without. There is no obvious fix in sight, and the average age of dairy farmers continues to rise as their children go into more promising businesses.
In the winery business, however, things are looking up. Wine-making allows for the differentiation of products and saves vintners from the challenges of commodity production. A younger group of entrepreneurs is flowing into the business, many coming from outside agriculture altogether. Wine-making certainly has its own share of risks and challenges, but its promise is an exciting contrast to other areas of agriculture in the north country.
Perhaps the most significant change, and the most tragic, is the loss of Douglas Schelleng in an accident. Doug was an economic development official with the Empire State Development Corp. and had been a member of the local and statewide economic development community for over 20 years. Doug was a great friend and valued colleague who taught me a great deal about economic development and Northern New York over the many years we worked together.
Doug was a man of quiet courage and resolve who treated everyone with respect and was, himself, widely respected by the business and development communities across the state. He had developed a pragmatic and realistic understanding of our prospects and challenges while avoiding the cynicism and resignation that so often comes with pragmatism. He was a strong leader in good times and bad and never let his friends lose hope or succumb to defeat. Our economic development prospects are dimmer without his service on our behalf, and I miss him tremendously.
Six months really isn't a very long time for broad economic and business changes to manifest themselves, but it is a long time to be away from home and family. It is autumn in the north country, as the leaves begin to turn and sweet corn is sold by the bushel. The smell of wood smoke appears on colder nights and apples are headed for the cider mill. There is a new crop of excited and energetic freshmen on campus and a new set of seniors contemplating the future. It is good to be back.
Greg Gardner is an associate professor of business at SUNY Potsdam. His column on business issues in the north country is published monthly in Money Matters. Email him at email@example.com.