MAY 25–JUNE 21, 2018 • THE CSRA’S MONTHLY BUSINESS MAGAZINE
In the middle of things. Page 4
DIVERSE ‘PORTFOLIO’ CREATES STABLE ECONOMY WHY A GOOD MIX MATTERS BY GARY KAUFFMAN
“Augusta is a great location for transportation, which makes it a great place for manufacturing,” Franza said. “Manufacturers need to get raw materials in and product out.” Interstate 20 and the proximity to several other major highways, ports in Charleston, S.C., and Savannah, Ga., and a major airport in Atlanta give manufacturers the access they need. Augusta is also diversified within the industrial sector, with companies including
In 2008-09, when an economic recession raged like a tornado across the United States, I was in the heart of the worst of it — Elkhart County, Ind. For a variety of reasons, Elkhart County has become the RV capital of the world. Many of the top recreational vehicle brands are built there — Coachman, Jayco, Keystone, Forest River, Monaco, Newmar — as well as number of lesser-known brands. Not only do those companies employ a lot of people, but by 2008, many smaller businesses also had been established to supply parts for the manufacturers, deliver the RVs and, of course, sell the RVs. In addition, other small businesses, like high-end furniture and cabinet manufacturing, had started, based on the buying power of those who worked in the RV industry. My advertising/marketing business worked with those secondary markets. It was an all-eggs-in-one-basket economic approach. And, for a while, it created an amazing economy. It actually verified President Ronald Reagan’s belief in a trickle-down economy. But when the recession hit, Elkhart County became the poster child for unemployment. It ranked first in the nation in unemployment numbers, officially somewhere north of 20 percent, but that didn’t account for people who
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The medical district, left, and the Hull McKnight Georgia Cyber Center for Innovation and Training are two bedrocks of Augusta’s diverse economy. A diverse economy creates solid growth and guards against another economic recession. Photos by Gary Kauffman
CSRA STANDS FIRM ON TWO ECONOMIC PILLARS BY GARY KAUFFMAN
Just like a good investment portfolio, diversity is important for the economic strength of a city. And Richard Franza, dean of the Hull College of Business at Augusta University, believes the Augusta area has a strong portfolio. “We have a couple of recession-proof bedrocks in government and health care,” Franza said. “When you have two bedrock industries, it’s like bonds in a portfolio. They may not be high risk but provide stability.” Franza said cities should think of their economies as a diversified portfolio rather than have an eggs-in-one-basket mentality. “Not all industries will be surging at the same time,” he said. “Rarely is everything clicking at the same time. Diversity in the portfolio reduces risk. We have a little more immunity from economic downturns.” Diversification is a strength in the CSRA, starting with the two pillars of government and health care.
Two Economic Bedrocks
Franza pointed out that there will always be a need for health care, and Augusta is rich with hospitals, clinics and medical research facilities. The government pillar may be changing from a Department of Energy emphasis at Savannah River Site to a strong Department of Defense presence at Fort Gordon. “The post size of Fort Gordon obviously enhances the economy, and it’s going to grow even more,” Franza said. Fort Gordon is only a year away from becoming the Cyber Command Center for the U.S. Army, and Franza believes that the government pillar of the economy will become geared more toward cyber and technology. In addition to Fort Gordon, the state of Georgia has invested $100 million into the Hull McKnight Georgia Cyber Center for Innovation and Training. “Cyber is going to have a significant impact,” Franza said. “We’re just seeing the front end of the wave that’s coming
because there will be a lot of government money available (for cyber).” Like health care, he said, everyone has some stake in technology that will require cybersecurity. But beyond the two economic bedrocks, Augusta has several other strong pieces of a diverse economy.
Diverse Economic Sectors