Managing Editor
Jerry Mallot is executive vice president of the Jacksonville Regional Chamber of Commerce and president of the chamber’s Cornerstone Regional Development Partnership. Mallot joined the chamber Jan. 1, 1994. He recently discussed job recruitment and creation in Northeast Florida.
How did the recession affect economic development?
It affected it negatively in several ways. In Northeast Florida, virtually every company dropped jobs, some of them a fair amount, although we didn’t have any one company that dropped a huge amount. But it was across the board, and of course raised our unemployment to very hurtful levels. If you have a job, you don’t notice it as much, but it’s been really tough if you do not.
It also turned most companies around in terms of their projections for the future. Nationally and internationally, most companies, even if they were doing well, got scared off and cut their growth or expansion plans fairly dramatically.
For the most part, our pool of possible candidates for growth went from very large to very small. That is starting to change, and in fact we hope this will be a good year for our economy. We’re seeing the pipeline grow, and we’re seeing things come to fruition that are really meaningful, and we are seeing more to come.
We have tried to use this time to build our information pipelines, our website capacities, our relationships in the marketplace, and be prepared for the resurgence of the economy, even though it’ll be a slow resurgence, but it’ll be a resurgence. Hopefully we’ll come out of it stronger.
What sparked the resurgence? What are companies seeing that gives them confidence?
Several things. Some of it relates to companies that are deciding where they are going to consolidate functions. We have such a great environment here, and a cost-effective environment, so I think we have been and will be the recipient of consolidation decisions.
The second part is a lot of companies have been so cautious that even though their business may be getting better, they’ve been cautious about adding people, just in case it doesn’t work out. A number of companies are getting the confidence to go ahead and move forward with some plans.
There’s a third group of companies for which the recession creates opportunities, and those are going forward. But for the vast majority of companies, it’s still a relatively cautious environment, and I think it’ll still be another year or more before they begin to spend some money and keep going. They want firmer signs that we are in recovery that assures them that they are making good decisions.
What are those signs?
It depends on the industry. If they’re in the retail industry or consumer-related products, they want to see people buying more things consistently, they want to see banks lending money, because that has really been a tough part of our re-emergence. There is not enough credit available or the company doesn’t have the requirements that are needed. It’s harder to get money today, and that holds back business growth. But I think most people just want to see the economic indicators go up and their sales go up, and then they will react. Once they’re sure they’re on a solid path, then they’ll reactive positively.
What’s the job goal for the Chamber this year?
Our goal, a combination of both existing and new companies, is 2,500 jobs, with a stretch goal of 3,000. We want to make the stretch goal, and I think we will. We’re at about the 1,250 mark today, and we’re a little past the halfway point, but we have some things that we think will make it possible to make the stretch goal. We certainly hope so. We need it.
How many jobs were being created a few years ago when times were good?
Generally, it was in the 4,000 to 5,000 range. That was just direct jobs. Generally, the number that we were most comfortable using was that a direct job would create 1.25 new jobs in other areas, buying gas and groceries, providing other services along the way.
The Chamber has, at least twice, taken a really close look at the targeted industries for the area. Are you getting ready to do that again?
We are. We are applying for a grant from the Economic Development Administration, along with the Northeast Florida Regional Council. In fact they’ll be the lead partner for the grant, and we do want to do a couple of things. We want to evaluate our targeted industries, partly because we’ve been through such an upheaval, they are likely to change. We also hope to examine our strategy and our techniques and be the very best we can be. I am always about tweaking the process to get better. You can’t ever stand still and presume you do it the best today. By tomorrow, somebody else is doing it better, so we are trying to push the envelope in doing the best we can do.
Do any of those targeted industries come to mind that you think might be falling off? What about new industries?
We are very comfortable that what has emerged is something we are calling clean technology. It involves a variety of things, whether it’s energy or technology that’s related to green, or environmentally conscious activities, or using resources in a different way than we used to in the past. (The) Saft (plant in Cecil Commerce Center) would be in that area. We’ve got a number of prospects in that area, and we’re seeing it across the country. So we definitely are trying to tap into that and expect that will likely emerge as one of our categories.
Incentives to attract jobs have been criticized. With the recession and unemployment, has the mood changed?
I think it has, partly because jobs are so needed, and they’re so desired by every state and every community and region, and it’s a reality of our life. Most every company knows that when they are making site location decisions, they can ask ‘what can you do for me to help make this project go?’ and reduce the cost of putting in a new project, or expanding or relocating. I think both elected officials and business people understand (the need to) best pull together our assets and resources to make a deal happen, and that includes incentives. Unfortunately, it just has to.
When we look at unemployment in this area, we’ve lost a lot of jobs in a lot of areas. One of those is financial services. Does that work in the city’s favor to attract financial services companies?
First of all, I would tell you that the city’s loss has not been dramatic in financial services; in fact, it has actually done as well as anything, except maybe the life sciences or the medical industry. We expected to lose a huge amount. It didn’t happen because productivity, the level of work force expertise, the cost of doing business and great management, I really have to throw that in, made our major financial operations here show better than those in New York and New Jersey or Chicago or other places. In fact, we’re going to show the greatest job gains in financial services because of those characteristics. We are viewed well across the nation, particularly, as a place for financial services as an industry. We were in New York in late May, and visited with most of the major companies that have operations here, and they were singing the praises of Jacksonville and our region, the operations they had here and the net results they had relative to other places in the country. That’s been the biggest surprise of the recession.
Do you have any announcements coming up soon?
It’s possible we do. We hope that in the next 60 days or so that we’ll see some good things. (PNC announced 200 jobs Tuesday; Adecco announced 100 jobs.)
The school system has always been cited as an issue that Jacksonville has to overcome when it comes to recruiting. What are you seeing with that now?
In the eyes of a business, they’re concerned about whether or not they can find qualified people to do the work they need to have done, and do it well. With an unemployment rate of around 11 percent, they can find plenty of people to do it, and do it well, in about every position they need. It’s more the long-term issue that is of concern. We want to have people employed effectively. In doing so, we have to have the future generation of workers capable of completing high school and college and being effective in the workplace. That being said, our ability to recruit has been very good because when we bring companies in and they talk to other employers, and their experience has been so good, they tend to overlook what our test scores might be or (other) issues, as long as they believe they can be successful at what they do. Long term, we have to raise the level of success from our high schools and bring more people on with four-year (degrees) and beyond.
How politically active is the Jacksonville Chamber?
JaxBiz was formed because we felt like we needed to be more effective in identifying good candidates, and what’s come out of that, which is even more important than whether we take positions on candidates, is the Political Leadership Institute. We made a decision a couple of years ago, and with some great insight from folks like Preston Haskell and Peter Rummell and others, that we ought to identify and train future political leaders who have an interest in running for office down the road. We’ve done that for two years in a row now, and intend to keep it up. It’s an opportunity for people to think about whether they want to run, and then to become more educated about not only the process of running for office, but the issues that are important if you are elected to a position that relates to growing jobs and expanding the economy. I think we’re going to see some real results both in the short term and the long term.
The Chamber is a regional chamber, with seven counties. Do you have any changes coming?
No. We are at seven counties, and I don’t today envision being larger than that in the near future, and every year each of the counties has to evaluate not only how they’re doing but how they fit into the regional environment, and thus far, every county has said, ‘we want to be a part of Cornerstone,’ which is the regional economic development group. It’s not so much part of the Chamber, but of our economic development efforts. We’re becoming more sophisticated in the process. We are holding three regional forums a year, where we bring together political and business leaders. We’re getting a lot of momentum, and we’re going to see a lot of good things to come. But it’s critical that we work regionally. That’s just how the world works today. We’ve got to be working together.
City Council President Jack Webb, chair of the Tourist Development Council, would like to look at a regional tourism effort. We have regional transportation and regional economic development. Will a regional tourism effort work?
I don’t know if it’s going to work, but it should work. As an example, St. Johns County has a larger promotional budget than Duval County, but we’re all part of the same region. We have some world-class assets throughout the region and I know in the economic development world, we can do more in a more unified way and be more successful working together. I would presume the same would be true in the tourism arena. But they’re not easy things to make happen. I applaud Jack and his efforts to make it go, and we certainly would be supportive of that.
Downtown has had some struggles the past couple decades, and the recession hasn’t helped. What do you see happening Downtown? How easy is it to recruit jobs Downtown?
Well, it’s not easy, and the recession has probably been the biggest challenge. We actually had a very good momentum going from about 2000 through the (2005) Super Bowl. The recession really began not long after the Super Bowl. Business started slowing down, and many of the projects that were going to dot our skyline, either the financing didn’t go through or the projects were pulled because of an uncertain economy.
It’s really unfortunate that we didn’t get farther down the road in creating the synergy and the base of Downtown residents than we did. But the fact is that the recession has been very difficult for Downtown, as it has for maybe everywhere, but I think Downtown has suffered a little bit more.
But there are some good initiatives under way, and if there’s one thing I feel more than any other today, it’s that the key groups that may affect our future are working together trying to find solutions to make this a strong place to be, an important place to be, to provide the entertainment infrastructure, to make us want to be Downtown. The Jacksonville Civic Council hired a new executive director, who has a lot of background in that area. We at the Chamber have formed a strong committee with our board of governors, and there is absolute passion to do the right things. Of course, Downtown Vision and other groups and the mayor and his staff are deeply involved in this effort. It’s not easy, but I think there’s a common commitment to find solutions that will make a difference. One of the recent meetings we had related to parking, and the reality is that we have a lot of parking downtown, but it’s a very complex issue.
I know that (former Chamber chair) Ed Burr believes the issue of governance is one of the key elements that will help give real direction. He strongly believes that there needs to be a governing structure that provides the authority and flexibility of an entity to be able to direct Downtown and solve these issues holistically, not just one block at a time. Some good things [are] going on on Laura Street, and the new roundabout at the Landing, some really interesting proposals for the Laura Trio and the Barnett Buildings. I’m hoping all of those things will come to fruition at a level that will make a real difference.
Do companies really look at Downtown as a reason to come to a city?
Yes and no. I think everybody looks at Downtown to say, ‘What is this city about? What is it like?’ Most companies do not move here to move Downtown. They used to, but they don’t today. But they expect to see Downtown as the reflection of the city and the region. So it is in our best interest, whether they are going to locate Downtown or not, to create that vibrancy and to make sure we care for our Downtown area as a Downtown for the whole region.
Another economic development driver is small business. What is the health of small businesses?
Overall, small business has been hurt deeply by the recession. Small business covers every imaginable business opportunity, and if you look at where we probably lost the majority of our jobs, it was probably in small businesses, because you take thousands of businesses that may just lay off a person or two, and it adds up to big numbers. But the second part is, small businesses suffer more because it’s the toughest (for them) to get lending to provide the capital to grow and be healthy. That part’s been tough. People who may be starting new businesses start them with new ideas and looking at new niches in the marketplace that may allow them to be successful more easily than maybe a traditional business. Secondly, you hope that they start with some sources of capital that will allow them to get additional capital along the way. We’ve seen from past recessions that it’s these new businesses starting during a recession that sometimes have the greatest record for the next 10 years.
Do you think the recession’s over?
I think the ‘technical’ recession is over, but I don’t think you can have an 11 percent unemployment rate and say the recession is over.
When you look back on your time in the industry, do you remember any economic time that has been like this, in terms of this recession?
It’s the worst that I’ve experienced. I tell you that in 1970 in Wichita, Kansas, we had almost as bad a recession as we’re going through nationally today, because of the aircraft industry. One thing I know is we’re going to get through it and we’re going to be OK. We’ve had plenty of recessions between 1970 and today, and we always do get through them, and if we’re good at it, we get through them stronger and better.
There are always lessons in survival, and it makes you better at what you do. It makes you leaner and meaner, and better able to grow, once you’re through it. It does leave a mark on you, however.
What do you see as this area’s greatest strengths, economically speaking?
If we’re talking about logistics, then our location, our port, our natural river, and the interstates that we made decisions on many decades ago, and the railroads have given us a natural strength that others, for the most part, seldom have.
If you go into financial services, our greatest strength is the work force we’ve built over the last 50 years, starting in the late 1950s when Prudential came here as the first relocation from the north. It’s built into a very powerful knowledge base in the industry, which has been fueling our growth for a long time, and will continue. We will be one of the big winners in that industry.
If you look at the aviation industry, no doubt Cecil Field has given us a competitive advantage that few would have, with the runways, the land accessibility, the lack of encroachment at the end of the runways.
Our ability to be successful in headquarters is based on our quality of life here, because I think many headquarters decisions are made by the CEO or top executive group, and we have miles of oceanfront property, plus the Intracoastal, plus the river, and a climate that’s superb, except in August.
So it’s not any one thing, and it’s not for any one industry, but I think taken as a whole, it’s exceptional.
One of the things we’ve also been blessed with is leadership, and the ability to find good leaders in both government and business that have helped make good decisions and given us a chance to do better than we might have done otherwise. I expect that to continue as we go forward, and that’s certainly one of our great assets.
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