Ken Stewart: Now’s time for state to get aggressive

By Maria Saporta
Friday, July 2, 2010

After three years of having to significantly cut his budget, outgoing state economic development chief Ken Stewart says now is a strategic time to reinvest in marketing Georgia for tourism and business.

Before spending his last week as commissioner of the Georgia Department of Economic Development traveling on a trade mission to China, Stewart sat down for an interview to talk about his three and a half years in his post and what he sees lies ahead for the state. Stewart’s last day in the office was June 27.

In mid-July, Stewart will go work at Georgia Tech to help the university build global relationships with companies interested in commercialization and research.

As he leaves his economic development post, Stewart acknowledged the difficulty of managing his department through drastic budget cuts. But he expressed appreciation for the work his staff has accomplished and hope for the opportunities that Georgia has going forward.

“The last couple of years have not been go-go years. The budget is down 30 percent,” Stewart said, adding that he enjoys challenges.

For the department’s economic development division, it was important to preserve as many of its employees who had relationships with companies around the world. For the tourism area, it is more important to preserve the state’s marketing and advertising efforts.

When he joined the department in January 2007, there were 208 authorized positions with about 200 employees. Today, there are 168 authorized positions with 160 employees.

“We have maintained our commitment to our global commerce initiative, recognizing the value of our international relationships,” Stewart said. “We put our collateral materials in seven different languages.”

During the economic downturn, the state attracted 62,000 new jobs and another $11.4 billion in investment, and Stewart said that the state’s research shows that Georgia has gained market share during the downturn.

But as the economy begins to recover, Stewart said that now is the time to reinvest in the state’s economic development efforts.

“For anyone that’s marketing and selling during downturns, it typically is not a good time to reduce your marketing and sales budget,” Stewart said. “We are at the bottom of the business cycle, and we are beginning to move up. It’s right now when we should take advantage of that by being more aggressive than ever.”

China presents one of the state’s greatest opportunities.

“China is a country of the future,” Stewart said. “They need access to this marketplace very badly. The state that does the best in understanding their culture and helps them be successful in starting up and running their businesses is going to be the recipient of the cluster effect.”

Stewart would hope Georgia would become a hub for Chinese companies just the way it became a desired spot for Japanese companies three decades ago.

Another one of Georgia’s strengths is being the home of Delta Air Lines Inc., which had several inaugural flights to international destinations during Stewart’s tenure — who calls it “a really big deal” for Georgia every time there are new nonstop flights.

One bright spot for Georgia has been the film, music and digital bureau, which is benefiting from the passage of attractive tax incentives. “Activity is up exponentially,” Stewart said. “We will have 70 productions that will be done in Georgia just this year.”

In terms of challenges, Stewart said, “We have been a victim of our success because a lot of our employment is tied to growth.”

When the economy entered a recession, industries dependent on growth — real estate and banking in particular — were particularly hard-hit.

Surprisingly, Stewart said that traffic and congestion are not top of mind when he meets with economic development prospects. Companies looking to invest in Georgia are more interested in labor costs, logistics and energy expenses. But Georgia can’t just sit back and hope the state will remain competitive.

“We need to continue to invest in our infrastructure — utilities, airports, roads and bridges,” Stewart said. “We need to continue to invest in quality-of-life items. We also need to continue to invest in our institutions of higher learning.”

Another area of emphasis is increasing the coordination among the various economic development entities in the region and the state. A recent study for the Metro Atlanta Chamber said that one of Georgia’s weaknesses was the fact that the different agencies would work independently rather than together.

“We talk a lot, but talk is cheap. Action is much better,” Stewart said. He added that recently he has been meeting with Metro Atlanta Chamber President Sam Williams and Georgia Chamber of Commerce President George Israel.

“We are trying to figure out how we can avoid duplications and how we can leverage the resources to our best advantage,” Stewart said.

Looking forward, he believes Georgia has all the fundamentals to attract new companies and investment to the state.

“I’m very excited about the future of Georgia,” Stewart said. “And we are convinced that we are poised to accelerate out of the downturn.”