UNIVERSITY AND GOVERNMENT PARTNERSHIPS FOR RURAL ECONOMIC GROWTH: THE SOUTHWEST VIRGINIA MODEL Ronald E. Carrier Roger H. Ford Robert J. Pengelly H. Richard Priesmeyer Alfred G. Ziviello, Jr. James Madison University ABSTRACT This article describes an innovative economic development initiative which calls for the creation of a partnership between a four-year university and a two-year community college. Specifically, it represents the site-selection procedure used by James Madison University to choose one community college from several in Southwest Virginia as the site of a cooperative Business Development Center. The roles of the Appalachian Regional Commission, the Center for Innovative Technology, and the Small Business Administration in the project are also discussed. The model developed is suitable for similar site-selection applications. INTRODUCTION At the June, 1987 World Conference of the International Council for Small Business, United States Small Business Administration Administrator James Abdnor declared, "Economic Development in Rural America is a major goal for fiscal year 1988 at the SBA. We want to encourage entrepreneurship in rural areas so long dependent on agriculture." The failure of traditional economic development approaches to solve rural America's economic problems make it clear that new paradigms are needed. James Madison University has been addressing rural economic development on a local level through the work of its Center for Entrepreneurship, Small Business Institute, and other related programs. These programs provide outreach services, research, and educational offerings which promote the American entrepreneurial tradition while enhancing Virginia's economy by encouraging innovation and the creation of new enterprises. Recently, James Madison University took on a regional interest in economic development by undertaking a research and service project in the Appalachian Region of Virginia under the cooperative sponsorship of the Appalachian Regional Commission, Virginia' Center for Innovative Technology, and the Small Business Administration. The project called for developing a model which could be used to create developing business centers at community colleges in partnership with a four year university and local, state, and federal government agencies. The site selection procedure for the model has been developed and the first community college business development center (BDC has been established. This paper will describe the site selection procedure, its development and implementation. A future paper will describe the operational activities and report the degree of success of the BDC.

BACKGROUND The idea of a JMU-supported business development center located at a community college in Appalachian Virginia evolved from a discussion between the President of James Madison University and the Director of the JMU Center for Entrepreneurship. President Carrier, a native of the Appalachian Region, has long been deeply concerned about the economic conditions in the region. Other staff and faculty members of the center refined the concept and a cooperative funding proposal was submitted to the Appalachian Regional Commission (Federal), the Center for Innovative Technology (State), and the Small Business Administration (Federal). Each agency had a unique, yet related, interest in the project, and joined the others to form a partnership in support of the initiative. Each partner's unique perspective is discussed briefly below. APPALACHIAN REGIONAL COMMISSION (ARC) This agency, created in 1965, is concerned with the economic development of the 13 state Appalachian region. The ARC was interested in a model of four-year and two-year college cooperation to assist the economic development needs of the depressed, rural communities across the entire 13 state region. They have provided the majority of funding for the project and their support is exclusively for the model development and research effort. The model that results from the study will be offered to universities in other Appalachian region states to permit replication of the program begun in Virginia. CENTER FOR INNOVATIVE TECHNOLOGY (CIT) The CIT provided most of the funding to operate the pilot BDC. The site selected for the BDC was Virginia Highlands Community College in Abingdon, Virginia, and the center is now in operation. The CIT mission is, in part, to foster economic growth by mobilizing Virginia's scientific and technological resources. Previous studies had documented the seriousness of the economic difficulties in Southwestern Virginia (the Appalachian counties), (see Knapp, et al, The People and Economy of Southwest Virginia, 1986, for example) and CIT was receptive to forming a partnership to address the problem. One of the programs at the CIT is working to establish a state wide network of entrepreneurship centers. Creation of a BDC in the Appalachian region was deemed appropriate for support under this program. Although CIT had not yet funded two year colleges under this program, they were willing to innovate and granted JMU a contract for the initiative and the authority to subcontract to the community college selected by the model. SMALL BUSINESS ADMINISTRATION (SBA) The SBA, through the Small Business Institute (SBI) office in Richmond, was approached for support of the initiative. Since 1972, the SBA has offered compensation through case contracts to colleges and universities to provide business counseling and assistance to qualified applicants of the SBI program. The SBI program, however, has always been restricted to four-year institutions. An innovative solution was found to permit community colleges to participate in this program. The SBI increased JMU's SBI contract from 9 to 25 cases, and granted the JMU director authority to subcontract cases to the two year colleges involved in the Appalachian project. The SBI officials along with

the other sponsoring agencies, were particularly interested to learn how effective a partnership between a two-year and four-year school would be. MODEL DEVELOPMENT The number of two year colleges in the United States far exceeds the number of university SBI and entrepreneurship programs and other resources required to develop business assistance centers. Therefore, a procedure is necessary to target the institutions most likely to develop a successful BDC. Establishing a BDC at a community college requires selecting the most appropriate site and then supplying the new center with operational materials and training. The siteselection procedure requires considerable attention since it influences the effectiveness of the center. It also requires extensive objectivity since it tends to put each candidate institution in competition with the others. Community colleges are typically very appropriate for providing business development services as they work closely with local businesses, providing specialized training. They are also very suitable for entrepreneurial initiatives as they usually have both older students and close ties with local high schools. These characteristics simply emphasize the need for an objective and diplomatic site selection procedure. Virginia has 22 community colleges, with four of those in the immediate portion of the Appalachian Region under study. In addition a smaller four year institution was also considered, due to its proximity to the research area. The site selection procedure described below was used to select one of six community colleges as the site for the BDC. THE SITE-SELECTION MODEL The BDC site selection model requires six steps: pre-start-up considerations, identification of site selection criteria, community assessment, institution assessment, site selection, and announcement of the decision. PRE-START-UP CONSIDERATIONS A number of pre-start-up considerations were taken into account before the site selection project was started. The first was to define a generic entrepreneurship center which outlined the specific activities and programs of a BDC. The BDC activities identified in this study are classified into four topics; outreach, education, research and scholarly activities, and information services. Each topic and its corresponding list of activities is provided in Table 1. The basic services were considered required, optional services were valuable additional services, but were not considered essential. The research team also examined contractual requirements given by the funding authorities and itemized any possible political biases which might influence the site- selection effort.

When funding for the project was received, operating guidelines were established before any contact was made with any possible candidate institutions or the media. These guidelines included the site-selection procedure and job descriptions for each individual involved in the research effort. Four job descriptions were developed for the JMU initiative. One job title was the Task Force Administrator, whose role was one of a coordinator during the BDC site-selection phase. The incumbent should be aware of contractual requirements regarding the project, and should coordinate project efforts to assure compliance. Another position was that of Lead researcher, this individual was personally responsible for conducting an objective site selection analysis. The incumbent in this position was also responsible for establishing, communicating, and executing the research design. A third position was the Data Collector and Analyst. The incumbent in this position was involved in gathering, compiling, and performing limited analysis on community and institutional data. Specifically, the Data Collector and Analyst was responsible for assisting the Lead Researcher by gathering data and completing the community assessment and institutional assessment worksheets. A forth job in the project was the Liaison Consultant. The Liaison Consultant was an active coordinator between the Lead Research in the field and the Center for Entrepreneurship at the university. The incumbent in this position also visits each candidate institution on the third visit and serves as a link between the new BDC and the four-year school after the site has been chosen. Several other staff members of the Center for Entrepreneurship also provided assistance to the project as requested by the research team. The site-selection process was driven by a model that outlined the steps to be taken. The site selection model is given in Table 2. IDENTIFYING SITE SELECTION CRITERIA After the pre-start-up considerations had been addressed, the next step was to identify and define the site-selection criteria. Separate criteria were established to evaluate the candidate institutions and the communities they serve. Working definitions of each criterion were developed to aid in the evaluations. The criteria definitions may depend somewhat on situational factors, so another team of evaluators should give careful consideration to the way in which each criteria is defined. Some veto items were also established. Six community criteria were developed based on literature about commercial site selection (Mackenzie, 1972; Morgan, 1974; Setting Your Sites, 1978; Ross, 1980; Goodman, 1980; Abend, 1981; Kavanagh, 1982; Goldstein, 1985; Donev, 1986). Subcategories were also listed under each one.

Community Services was the first community criteria and included sub-categories such as public utilities, land availability, and hospital services. Another criteria addressed the community labor force, and included items such as wage rate, availability, and trainability of labor. Transportation was also evaluated, and included facts about the number of highways and availability of different forms of transportation. A fourth criteria was Economy, which examined the community growth rate and tax rate. The extent to which the community Chamber of Commerce, local government, and key business leaders supported the local candidate institution were also considered. The sixth criteria was community need and was defined as the extent to which a BDC would significantly assist the candidate community in stimulating additional economic growth in the area. Any other findings which evaluators felt were important to the success of the BDC were noted as relevant items in an "other" category. Weights were then established for each criteria, (sub-categories under an individual criteria were not weighted). Each member of the team, after reading the definition of a particular criteria, assigned a weight to each category independently. The weights were assigned according to the importance the individual placed on a particular criteria; evaluators did not have to agree on the weights for each criteria. A similar procedure was used to establish criteria to evaluate the candidate institutions. Criteria and veto items were identified and defined and weights were assigned as described above. The institution criteria focused on the degree of "fit" between the required BDC activities and the institution's current activities and attributes. The seven criteria used to evaluate the candidate institutions and some of their sub-categories are given below. A criteria regarding entrepreneurial education activities was included which considered such items as courses currently being offered, internships, and adult education activities. Entrepreneurial research activities were also considered. A few of the sub-categories in this area were; local data collection, subscriptions to entrepreneurship journals, and attendance at related conferences. Outreach programs were evaluated and referred to those programs which a school has that are outside the regular curriculum and support local businesses. Programs in this category included; product evaluation, feasibility studies, and venture assistance programs. The fourth criteria called for an examination of entrepreneurship information sources such as library selections, video media, and networks. The level of internal support given to the BDC by personnel at the institution was considered as support of key officials such as the president, chairmen, and directors was considered essential to success of the BDC. External support was also assessed. This criteria included organizations such as local businesses and the Chamber of Commerce. Lastly, institutional need was considered. Institutional need was defined as the ability of the BDC to make a difference in the economic welfare of the surrounding area. Any other important factors that would be useful in the evaluation process were also noted as "other" items.

The research team next identified the candidate communities to be included in the siteselection analysis. When the veto items were applied to communities in the region, likely candidate communities became more obvious. For example, the veto items called for the community college to be near the Appalachian Region of Virginia and be state supported; all community colleges not meeting those conditions were easily eliminated from consideration. When the community and host evaluation criteria were identified, defined, and weighted, the research proceeded to the data collection stage. Two forms were developed to collect data while visiting the target area.(1) These forms were used to keep a written record of the evaluator's assessment of the individual criteria at the different target areas. Photographs provided additional means of documentation characteristics of the candidate communities for those team members who did not visit the site. CANDIDATE COMMUNITY ANALYSIS Only the Lead Researcher and Data Analyst visited the candidate sites during the first two of three visitations. It was deemed beneficial for other team members to remain behind to provide an unbiased opinion of data collected. The first trip was dedicated to visiting and collecting data in the candidate community area. On these visits only data on the community were gathered; the institutions were not contacted. The evaluator made a serious effort to obtain information for all the criteria listed on the data collection form. Secondary data from agencies was occasionally used. In order to keep the collected data organized, it was convenient to create a community profile for each target area. The profile included all the community evaluation criteria, their sub-categories and the data collected for each one. The first page of the profile provided a map to show the location of the community. A list of key contacts in a particular county was also included. Once the data had been collected and compiled in an orderly manner, the research team conducted a community rating session. The procedure for rating session is described below. The Lead Researcher and Data Analyst presented the community data in an objective form to the others on the research team. All members of the team the provided an objective value or a subjective rating which indicated the extent to which each candidate community provided the criteria listed. On subjective ratings, a "default rating" of 5 was given unless substantiating evidence existed for a higher or lower score. The highest possible score was 10. The lowest possible score was 0. On objective values the default rating was the mean of all other ratings on that criteria. A software program, developed specifically for the project, was used to process the ratings. Each member of the team received results corresponding to that individual's unique community ratings and criteria weights. The index values of all the team members were averaged to provide one rating for each target community.

CANDIDATE INSTITUTIONAL ANALYSIS To evaluate the candidate institutions, a schedule of times and dates to visit each candidate institution was developed by coordinating with the presidents and other representatives of the institutions. Data gathered during the institutional visits was collected on the institutional data collection form, which consisted of all the evaluation criteria and their sub-categories. After the data was collected, an institutional profile was developed. A follow-up letter was then sent to each community college president, thanking the president for his time and the cooperation. The letter also requested some thought be given to considering the resources the community college could provide in support of the BDC. An institutional rating session was held using the same procedure described for the community rating session. After the ratings on each criteria for each institution were established the ratings and criteria weights were entered into the payoff matrix program. All of the team members' index values were again averaged to achieve one rating for each candidate institution. RESOURCE COMMITMENT LETTERS The research team then prepared for a final visit to the candidate institutions. The purpose of the last trip was to request resource commitment letters from each school. The letters described what resources a particular institution was willing to contribute in order to have the BDC located on its campus. Resource commitments needed not focus on money. Letters included offering qualified staff members to support the BDC or offers of existing facilities to house the center. The amount an institution was willing to contribute was considered a good indicator of the level of interest an institution had in the project. The emphasis at this stage of analysis was on "fit" between the proposed BDC needs and the existing resources of the candidate institution. FINAL SITE SELECTION The community and the institution data along with the resource commitment letters, were organized into individual profiles for each target site and an overall review of the information was made to select the optimum site. First, the proposals of each institution were reviewed. Then, the community and institution data was reviewed. All of the data was examined, not just the final averaged index score. If there were major discrepancies in the individual evaluators scores, they were resolved by discussion between the evaluators. It was useful to consider the community and institution data together and this was done using a scatter diagram and the index scores provided by the payoff matrix program. The Y-axis represented the "institutional evaluation' and the X-axis was designated "community evaluation" (see Figure 1). The site with the highest combined rating was generally considered the best suited candidate subject to the resource commitment letter. If the institution and community ratings of two sites were close, more weight was given to the resource commitment letters to make the decision.

ANNOUNCEMENT OF THE DECISION The site selection decision was confirmed with the candidate institution. The candidate institution was called by the college dean and a letter was sent notifying them of the decision. It was important to ensure that the candidate institution had confirmed the decision before any other steps were taken. After the selected institution had confirmed the decision, other interested parties such as the university president and the funding authorities, were informed. All of the other candidate institutions were also informed of the decision. A formal letter was sent to each of the other institutions notifying them of the decision. The evaluators also discussed the possible development of a smaller satellite BDC with one or more of the other institutions. Assistance is also being offered to help another institution develop its own BDC. It is important to recognize that the site-selection process does not have to be an all or nothing proposition; each candidate institution can benefit from the research effort. The media was notified of the decision only after all other principle participants in the project had been informed of the decision. SUMMARY This paper described a process for choosing a single location for establishing a community college business development center in partnership with a four-year university and a number of government agencies. The process itself, however, was complicated by the discovery that there was not, in reality, one superior institution and five other "inferior" institutions. In fact, most, if not all, of the colleges studied potentially could make fine settings for a business development center. The reality of limited resources, however, dictates that a site selection process must be used to identify that college most appropriate for this economic development partnership. The model presented here offers a new paradigm for rural economic development as applied by James Madison University. The site selection phase of the model has been completed with the announcement of Virginia Highlands Community College as the host for the Business Development Center. The effectiveness of the partnership that has been created will now be monitored and will be reported in subsequent papers. REFERENCES (1) Abend, Jules. 1981. Statistics Can't Tell You Where to Do Business Inc. 3 (10): 1314. (2) Donev, Stef. 1986. Setting Your Sites. Industrial Management (Canada). 10 (7): 1618. (3) Goldstein, Mark L. 1985. Choosing the Right Site. Industry Week. 225 (2): 57-60. (5) Goodman, Michael and Lilly W. Gorden. 1980. Plant Location for Profit Maximization. Management Today (UK). June: 116-130.

(6) Kavanagh, Michael J. 1982. Effective Management of the Office Facility Relocation Decision. Review of Business. 4 (1): 8-14. (7) Knapp, John L., Robert W. Cox, Mark V. Brown, and Shannon K. Mitchell. 1986. The People and Economy of Southwest Virginia. Tayloe Murphy Institute University of Virginia. (8) Mackenzie, Eillen. 1972. Finding the Ideal Plant Location. International Management (UK) 27 (8) 38-41. (9) Morgan, Douglas W. 1974. The Impact of State and Local Taxation in Industrial Location. Quarterly of Economics & Business. 14 (1): 67-77. (10) Ross, Terry, G. 1980. A Multicriteria Approach to the Location of Facilities. European Journal of Operation Research (Netherlands). 4(5): 307-321. (11) Setting Your Sites. 1978. Data Management. 16 (6): 47.

FIGURE 1 PLOT OF COMMUNITY AND INSTITUTION RATINGS Institutional Evaluation 100 90 80 70 60 50 40 30 20 10 0 0

| | | 6 | 1 3 | 5 2 | | 4 | | | |_________________________________________________________ 10 20 30 40 50 60 70 80 90 100

TABLE 1 FUNDAMENTAL BDC SERVICES 1.0

ENTREPRENEURIAL EDUCATION ACTIVITIES 1.1 Courses currently being offered 1.2 Independent study 1.3 Internships 1.4 Seminars, speakers 1.5 Adult education activities 1.6 Other: speakers, workshops, venture

2.0

ENTREPRENEURIAL RESEARCH ACTIVITIES 2.1 Local data collection 2.2 Membership in regional associations 2.3 Subscriptions to entrepreneurship journals 2.4 Attendance at conference 2.5 Other: academic studies, own publications

3.0

OUTREACH PROGRAMS 3.1 Specific programs unique to the area 3.2 Product evaluation (IEP) 3.3 Feasibility studies 3.4 Small business institute (SBI) cases 3.5 Other: mentor programs, business plan development

4.0

ENTREPRENEURSHIP INFORMATION SOURCES 4.1 Library selections 4.2 Small business and entrepreneurship reading lists 4.3 Video media 4.4 Networks 4.5 Other: electronic data base of local resources

TABLE 2 ARC SITE SELECTION MODEL 1.0

PRE-START-UP CONSIDERATIONS 1.1 Defining the generic entrepreneurship model 1.2 Identifying basic and optional BDC services 1.3 Identifying contractual or practical constraints 1.4 Identifying political biases and constraints

2.0

IDENTIFICATION OF SITE SELECTION CRITERIA AND WEIGHTS 2.1 Identifying community criteria and veto items 2.2 Identifying host criteria and veto items 2.3 Identifying other criteria and veto items 2.4 Identifying the target communities 2.5 Developing data collection instruments 3.0 NOTIFICATION TO PRESIDENTS AT TARGET SCHOOLS 4.0 COMMUNITY ANALYSIS 4.1 Visiting and collecting data in the target area 4.2 Collecting secondary community data 4.3 Analyzing community data

5.0

CANDIDATE INSTITUTION ANALYSIS 5.1 Scheduling of visits at candidate institutions 5.2 Preparing for visits at candidate institutions 5.3 Visiting and collecting data at candidate institutions 5.4 Analysis of candidate institution data 5.5 Requesting proposals

6.0

SITE SELECTION 6.l Reviewing proposals 6.2 Reviewing community data analysis 6.3 Reviewing host institution data analysis 6.4 Making the final selection 6.5 Confirming the decision with the candidate institution 7.0 NOTIFICATION OF DECISION 7.1 Notifying local authorities 7.2 Notifying the funding authority 7.3 Notifying all other institutions and communities 7.4 Notifying all principle individuals 7.5 Notifying the media