Program aims to boost wood products jobs in Appalachia

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The U.S. Small Business Administration Deputy Administrator Douglas Kramer joins Ohio University officials and area economic development leaders to announce a significant investment to accelerate business growth in the Appalachian Ohio region. Voinovich School of Leadership and Public Affairs partnered with the Appalachian Partnership for Economic Growth and Rural Action to do research on area economics and innovation. (Photo: Jillyann Burns/Ohio University)

Appalachian Ohio is being targeted for job creation through the wood products industry.

Exactly how many jobs is unknown, but the 32-county region is one of three around the nation that learned this week it will receive up to $2.5 million over five years from the Small Business Administration’s regional innovation clusters initiative.

Clusters are public-private partnerships that center around a particular industry in one region to drive economic development, according to Douglas Kramer, SBA’s deputy administrator. The clusters act as a resource hub that helps small businesses navigate funding, procurement and supply-chain opportunities.

“SBA has built a strategic infrastructure of financing and consulting resources in key regions to help new companies launch and small companies grow, particularly in underserved communities across the country,” Kramer said.

Research tracking other clusters indicate that participating businesses grow up to four-times faster than those that don’t, said John Molinaro, Appalachian Partnership for Regional Growth president.

“It’s really about helping communities to diversify their economies,” said Wendy Wasserman, Appalachian Regional Commission communications director.

For Appalachian Ohio, the cluster project will aim to take advantage of the region’s strong forestry industry by expanding it into wood product enterprises, such as furniture and plywood manufacturing. Ohio’s wood products sector contributes about $22 billion to the state’s economy annually, mostly through low-end products that wind up exported, Molinaro said.

“We do have some wood manufacturing, but just a fraction of what can be supported by our forests,” Molinaro said. “Rural Action estimates we can increase the harvest (in Ohio forests) by about 40 percent and retain sustainability, so we have a lot of room to grow this industry.”

While Ohio’s Appalachian counties are expected to benefit the most, Molinaro said it will also benefit wood products companies located outside of the region.

Clusters receive $500,000 for the first year and can apply for more money, up to $2.5 million, over the subsequent four years. The money is used to strengthen small business opportunities through mentoring and education on showcasing and pitching events to prospective investors.

Rural Action, an Athens County-based grassroots organization focused on revitalizing Appalachia, Appalachian Partnership for Economic Growth, which aids business access to JobsOhio and Ohio Development Services Agency incentive and support programs, and Ohio University are leading the cluster initiative.

Ohio University’s Voinovich School of Leadership and Public Affairs will work to identify new markets and technologies to extend the wood industry and build a database to connect cluster participants with suppliers and export opportunities. Work on the project has begun and about 650 businesses in the supply chain have been identified and upward of 1,000 leads are anticipated for exporting, Molinaro said.

The target area for the wood products cluster is nearly the same as that most hurt by changes in the coal economy, such as closure of power plants, mines and generators. According to the SBA, the wood products industry requires similar workforce skills as coal and the industry is one of the state’s top five manufacturing sectors projected for employment growth through 2020.

Appalachia was one of three regions selected from more than 40 applicants for this year’s round of investments. Ohio already has clusters in two regions: the Cincinnati-area cluster targets environmental technology with a focus on water and the Cleveland-area cluster aims to expedite new entrepreneurs’ entrance into the job market.

From Chillicothe Gazette  |  October 19, 2015