C a s e S t u d y
Economic development and marketing program for Silistra
Summary
Under the Bulgarian Technical Twinning Program, the municipality of Silistra has worked with experts from the city of Kettering, Ohio. As a result of this cooperation, the two cities initiated the following projects.
n Create economic opportunities through local entrepreneurial efforts by developing a business incubator.
n Develop a set of economic marketing materials for Silistra.
n Determine incentives available for economic development in Silistra.
All projects are extremely important in light of ongoing economic changes and are aimed at creating employment opportunities and attempting to recruit new businesses into Silistra.
Problem Statement
During the last several years, the economic restructuring in Bulgaria proved not only necessary but also quite painful, both for the citizens and for the business community.
Between 1995 and 2000 many of the state-owned companies in the region of Silistra, which provided about 80 percent of the jobs, closed down or were unsuccessfully privatized. This has led to a high rate of unemployment and imposed the need of creating business opportunities through supporting local entrepreneurs and marketing the region. Silistra officials needed to find ways to spawn economic development in the community and to learn to operate within the free market economy.
The project implementation also required defining of funding resources especially for the redevelopment of the business incubator building.
Project Description
Economic development is a key component to the vitality of any community. Through the Twinning Program, Silistra identified three critical components to assist with the economic vitality of its city.
1. To create a business incubator to spawn local entrepreneurial efforts and drive the economy forward with new jobs.
During the first visit to Kettering, the Silistra delegation visited several incubators with the purpose of identifying the most appropriate type of incubator to implement.
The manager of the Hamilton County Business Center (Mr. Pat Longo) shared his experi ence and practice of setting up incubators including economic analysis for identifying potential business tenants, financial management and management structures, funding possibilities, and sustainability of the incubator.
After developing the outline of the business incubator development procedure, the Silistra team actively searched for grant possibilities to secure the incubator construction. That is how the municipality became involved in the Jobs Opportunities through Business Support (JOBS) Program, funded by the United Nations Development Programme (UNDP) and the Ministry of Social Care, which ensured the necessary funding for the redevelopment of an old building into an incubator.
The following exchanges expanded Silistra experts' capacity in managing the process of incubating small businesses. Some of them became members of the Board of Directors of the Agri-business Center and Business Incubator management structure.
Another issue that became important in relation with the incubator reconstruction activities was how to gain neighborhood support. It was quite relevant since the building allotted is located in a densely populated area. The neighborhood experience shared by the Hamilton County Business Center was highly appreciated and successfully adopted. As a result, not only a building was reconstructed into an incubator, but also its neighborhood was improved and turned into what is now known as "the incubator garden."
After a two-month process of seeking, evaluating, and approving tenants, about 60 percent of the incubator area were occupied and about 28 new jobs were created by the end of May 2002. This process was performed in accordance with the UNDP requirements and the skills acquired from the Technical Twinning Program.
2. Develop a set of economic marketing materials for Silistra.
Silistra was fortunate to be partnered with Kettering because the Kettering marketing strategy was highly recognized, and Kettering's marketing brochure won the ICMA 2000 award. The team working on the project shared the understanding that the brochure was only one tool of their overall marketing strategy. Several basic marketing principles were highlighted, and Kettering's economic development brochure and supporting materials were reviewed. From the very beginning it became clear that the project implementation required the efforts and expertise of different target groups, not just in Kettering, but also all over the Dayton region. These groups were identified and involved at different stages of the project.
To get a better idea of the city business atmosphere and advantages/disadvantages of doing business in Silistra, we developed a special questionnaire and interviewed about 40 local entrepreneurs. This flow of information presented the economic potential of the region together with the future prospects for development. As a next step, we created a profile of vacant lots and buildings.
We based the structure of the marketing brochure on the characteristics of the target audiences. A very attractive cover was designed, presenting the suitability of the region for small and medium-sized food processing factories and the electronic industry. The brochure contains a constant theme, containing regional information with a focus on the advantages of locating in Silistra. Two inserts were included in the brochure. One highlighted the quality of life in Silistra, and the second focused on available lots and buildings.
Municipal experts and city councilors first discussed the draft brochure. We held meetings with businesses, gathered testimonials, and then included the testimonials in the brochure. Local journalists, who were enthusiastic about their participation in the project, had a very positive impact on the brochure content, image, and layout.
The Silistra team acknowledged the contribution of the Peace Corps volunteers who not only helped translate the content into English, but also shared their marketing experience and ideas. Two advertising companies from Dayton also shared some professional ideas.
The printing of the packet of materials was funded by USAID through the TRANZIT program, administered by World Learning. After the marketing materials became a reality, a special promotion event was organized during the Investment Forum "Silistra - the City of Your Business," held in September 2001. In addition, we mailed the marketing packet to com panies in the U.S. and Europe, accompanied by a letter of explanation. In February 2002 the packet was recognized by FLGR as an exceptional contribution to a city's marketing efforts.
3. Determine incentives available for economic development in Silistra.
The project started in 2001 when legislative changes giving more freedom in local govern ment affairs were expected. Since no taxation amendments or business incentives on a national level were introduced, the team outlined some principles to be followed in providing support to businesses.
City councilors and members of the Privatization Fund Board discussed the draft incentive plan, and their suggestions were taken into serious consideration. The package of incentives is subject to further discussion by the city council before it will be implemented.
Implementation Timeline
The partnership between Silistra and Kettering began in September 2000, with the comple tion of agreed-upon projects in June 2002. The implementation timeline is as follows:
September 2000 - March 2001
Continue to research effective business incubators in Bulgaria and research basic operating rules for the incubator. The team also pursued grants for construction of the incubator business.
n Define target groups to be involved in the creation of the marketing tools.
n Seek funds for the marketing brochure.
n Develop a questionnaire on the business climate in the region.
March 2001-June 2001
n Develop marketing plans to seek incubator tenants. The location for the incubator was identified and technical drawings were prepared.
n Conduct interviews with local businesses. Review Kettering marketing materials. Agree on several marketing principles to be implemented. Draft the Bulgarian text and English text. Discuss the materials with different audiences.
June 2001-September 2001
n Include developing of the neighborhood area in the project tasks. Prepare the required technical documentation.
n Work on the design and layout of the brochure. Print the brochure.
September 2001-May 2002
n Redevelop the incubator building and the surrounding area. Criteria for the incubator tenants were discussed and decided upon. First tenants moved in. The incubator opened the third week of April and is already about 60 percent occupied.
n Promote the brochure during the Investment Forum in Silistra. Mail the brochures, accompanied by a cover letter, to American and European companies.
Solutions Overview
We achieved several major economic development accomplishments as a result of the work between Silistra and Kettering officials. The two cities:
n Created a marketing brochure for Silistra to be distributed throughout Europe, the United States, and other countries.
n Created a profile of all vacant industrial buildings that are available for reuse.
n Acquired marketing skills and capacity.
n Created employment opportunities for Silistra citizens through the incubator.
n Developed a management plan on how to set up and run a business incubator.
n Established criteria for businesses to lease space in the incubator.
Benefits
The Twinning Program has produced numerous benefits relating to the economic vitality of Silistra. One benefit that sometimes gets overlooked is the amount of participation by dif fer ent groups. With the incubator located in the center of the city, buy-in from citizens was crucial, so local citizens were encouraged to give input and ideas about the business incubator. Silistra officials also went out into the business community to obtain input regarding the marketing brochure, offering municipal officials a chance to perform retention and expansion visits. Spending time with local businesses makes business owners feel appreciated and even more a part of the community.
The marketing materials were publicly unveiled at the Investment Forum in Silistra on September 11, 2001. Not only were they well received there but since then have also won a national award in Bulgaria.
The business incubator project created several benefits for the local community. The incubator project allowed for the renovation of a vacant building in a neighborhood and brought economic development to the area - local citizens were employed as part of the renovation project. The incubator also created new jobs in Silistra; businesses now occupy more than 60 percent of the building.
The city of Kettering was impressed with the way Silistra's economic development staff worked as a team. The Deputy Director for Economic Development was in charge of the program, but incorporated the entire staff in the working sessions. Several meetings took place at which input from the staff dictated how the programs would ultimately operate. Several key decisions were made by staff members, which empowered them. This mana gerial approach has already proven itself effective and will make Silistra a better place to work and live.
Conclusion
The exchanges between Kettering and Silistra officials have laid a foundation for the outstanding working relationship that has existed over the past two years. While Kettering officials were first expected to educate Silistra officials in the workings of the free market economy, it quickly became evident that Silistra officials were much further along in the process than they may have given themselves credit for. The meetings together allowed Silistra officials to strengthen their skills and ideas relating to economic development. Meeting with Kettering experts regarding the incubator and marketing brochure gave Silistra officials the final pieces of information to turn their ideas into reality. Today the business incubator is open and more than 60 percent occupied, and the marketing materials that are being distributed worldwide have already netted Silistra recognition through a national award.
