Monday, January 25, 2010
Business advocates remain hopeful
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The Roanoke Times
Hugh Keogh, president and CEO of the Virginia Chamber of Commerce, and Clinton Morse, a labor law attorney for LeClair Ryan in Roanoke and the new chairman of the Virginia chamber's board, talked about the role of business advocacy groups in an economic downturn.
How do the priorities of the chamber change during a recession?
Hugh Keogh: I think the answer is that job creation in a recession stays on the front burner. That the economic development quotient in Virginia, which is a great product and a great place to sell ... really remains the top priority. And that's certainly the case today. And we're pleased that the governor-elect has fairly sung that same song throughout his campaign and in the early days here before his inauguration. So we feel we have kinship in terms of the importance of job creation in Virginia.
Clinton Morse: In a down economy, the game plan is to grow your way out of it. And so we are going to strongly encourage the new governor, who has indicated -- said -- he is strongly in favor of business development in Virginia, and we're going to work with him to put into place hopefully the infrastructure to encourage workplace development.
Virginia for the past four years has been ranked the number one state in the nation to do business by Forbes. We have to go out and market that to the world and we have to have the tools to attract new business -- that is, economic incentives -- so that we can compete with neighboring states, the world to be sure.
But if you look at where the attractive business development opportunities are in the United States, it's in the southeast United States. North Carolina and South Carolina and Tennessee all have programs in place to offer businesses incentives and so they've gotten tremendous new jobs; you can drive down the road and go look at it. Virginia has got to do that. We've got to be competitive and in a down economy, what better opportunity to sell that as the way out of this?
What's your role in ensuring that economic development activities receive funding from the General Assembly?
Morse: It is a difficult situation, and as you probably know in a state budget like ours, about three-quarters of it is already committed money -- it is to schools and it is to Medicare. So you have a quarter of that budget which is still available for other things, and obviously as you've just said we have a $3.5 billion deficit we have to deal with ... that can only come out of that quarter. So how do we get money for economic development? And that is a very key question. ... The fact that the governor has emphasized his view of how to get out of the downturn is to grow our way out rather than raise taxes indicates he knows that business development and job creation is job one. And our job as the chamber is to reinforce that.
Keogh: The phrase I use is that we have to reorder our priorities. There will not be net additional money for these things. So we have to take the shrinking existing pot of money and reorder the priorities so that economic development marketing and the selling of Virginia reaches the top of the pile and becomes something all General Assembly members see as something they have to support.
While most of your job is to represent other businesses, how do you market the Virginia Chamber of Commerce? How has that role evolved and what has membership been like in recent years?
Keogh: Chambers are constantly faced with reinforcing their relevance and assuring their business community that it's essential they be part of the voice of business in their communities and at the state level in order to continue to protect the business environment that we have. The example I use is our own example. Our dues base, for the past year just completed, was $5,000 more than the year before, so essentially flat -- it's a struggle. We have some churn of members dropping out and some very healthy churn of members coming in, but the basic bottom line was just a tad higher than the year before.
It's a very real struggle for nonprofits these days. And the fact is that companies, particularly in the technology sector, are not as inclined to join advocacy organizations as their predecessors a generation ago. So we have to affirm our relevance and the role we have in selling Virginia, protecting Virginia's business climate, protecting our AAA bond rating and being a sharp voice for free enterprise, and I think we carry that out pretty well.
Morse: Well, certainly it's not a new plan that I will implement; the chamber's been doing it and certainly we want to build on it. I would say to all businesses that never has there been greater need for businesses to be in advocacy groups like the Virginia chamber, given the situation that businesses face in the United States. Not only a down economy, [but] philosophies in Washington that are fundamentally different than the free enterprise system that businesses have always supported.
The Virginia Chamber has been, historically, the effective voice for businesses in Virginia vis-a-vis the Virginia General Assembly. But we will be expanding what we started this year, which is to be effective advocates for Virginia business in Washington. And we're very well positioned to that because we're close enough to Washington where we don't have to fly there, we can drive there. And we have strong ties with the Virginia congressional delegation -- we visit with them on a routine basis. And as a result we plan to take the voice of Virginia business not just to the Virginia General Assembly but to Washington. So is it worth it to be a member of the Virginia chamber today? I would say it's imperative.
What's the voice of Virginia business saying right now?
Keogh: Virginia business is saying right now that there has to be a constant respect for free enterprise and the ability of companies to make a profit, because that will not only sustain the prosperity of Virginia but help it to grow. And in a downturn, with our unemployment rate in excess of 6 percent, we have to keep preaching values of free enterprise and the impact, the very positive impact, on the Virginia prosperity of the business community and the jobs they create. A business climate that emphasizes too much regulation or not enough marketing or puts other values ahead of free enterprise runs the risk of killing the goose.
How has the role of a chamber changed over the years?
Keogh: A generation ago, chambers probably were in the van in most Virginia communities in terms of tourism promotion and economic development promotion. That role has largely been taken over by local governments since about the 1980 time frame, and it's taxpayers' money now that's doing some of that. So chambers now find their niche in improving the product, the product that their community represents in the marketplace, or in our case what the commonwealth represents in the marketplace, and again assuring that it's an attractive, accessible and affordable place to do business. So it has shifted some.