HomeMy WebLinkAboutBozeman ED Strategy Update_11-2016_FinalCOMMISSION RESOLUTION NO. 4730
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
BOZEMAN, MONTANA, ADOPTING THE 2016 ECONOMIC
DEVELOPMENT STRATEGY UPDATE.
WHEREAS, On August 3, 2009, via Commission Resolution 4195, the Bozeman City
Commission (the "Commission") adopted Bozeman's 2009 Economic Development Plan (the
2009 Plan"); and
WHEREAS, the 2009 Plan established an advisory committee, the Economic
Development Council, to review the City of Bozeman's development review and permitting
process, evaluate development issues and make recommendations for policy and procedure
changes to the Commission; and
WHEREAS, the 2009 Plan designated a qualified city employee with economic
development responsibilities and a role as the community business advocate in coordination with
the Economic Development Council on the implementation of the 2009 Plan; and
WHEREAS, the recommended priorities identified in the 2009 Plan's Implementation
Matrix that could be addressed and completed have been; and
WHEREAS, local economic conditions present upon adoption of the 2009 Plan have
changed;
WHEREAS, the Economic Development Council led the effort to coordinate internal
and external stakeholders and supports the 2016 Economic Development Strategy Update (the
112016 Update") and the recommendations contained therein; and
WHEREAS, the Commission remains committed to facilitating mid- and high wage job
growth and economic strength and diversification in the City and the region through updated and
timely economic development planning, strategy and policy updates; and
WHEREAS, the Commission supports the primary tenets of the 2016 Update:
a) retention and growth of existing businesses, while welcoming and
encouraging new businesses; and
b) investments in infrastructure as a mechanism to drive economic
development; and
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Resolution 4730, Adoption ofthe City ofBozeman's 2016 Economic Development Strategy Update
c) education and workforce development initiatives to provide businesses with
qualified workers.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of
Bozeman, Montana, that:
Section 1
The 2016 Economic Development Strategy Update is hereby adopted and shall be as
follows:
See Exhibit A.
Section 2
Effective Date.
This resolution shall be in full force and effect upon passage.
PASSED AND APPROVED by the City Commission of the City of Bozeman,
Montana, at a regular session thereof held on the 14th day ofNovember, 2016.
CARSON TAYLOR
Mayor
ATTEST: OF! BO '
ROBIN CRO1UdH A ,
City Clerk -- 3
C. u
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Resolution 4730, Adoption ofthe City ofBozeman's 2016 Economic Development Strategy Update
APPR VED AS T FORM:
GREG kDELIVAN
City Attorney
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City of Bozeman | Economic Development Strategy Update
November 2016 Page i
Acknowledgements
Bozeman City Commission
Mayor Carson Taylor
Deputy Mayor Cynthia Andrus
Commissioner Chris Mehl
Commissioner I-Ho Pomery
Commissioner Jeff Krauss
Economic Development Council
Mayor Carson Taylor, Commission Liaison
Erik Garberg
Steve Holland
Chris Kukulski
Kris Kumlien
Rebecca Marhurin
Cheryl Ridgely
Daryl Schliem
Economic Development Council Subcommittee of Local Business Leaders
Terry Alborn
Jim Ness
Alistair Stewart
Penny Zacharisian
Economic Development Department
Brit Fontenot
David Fine
Prepared By
Leland Consulting Group, Inc.
610 SW Alder Street, Suite 1008
Portland, Oregon 97205
503.222.1600
City of Bozeman | Economic Development Strategy Update
November 2016 Page ii
Table of Contents
Introduction ..................................................................................................................................................................... 1
What is Economic Development? ........................................................................................................................ 2
Talent ........................................................................................................................................................................... 5
Skilled Workforce ...................................................................................................................................................... 6
What is the Benefit of an Economic Development Vision and Strategy? ................................................. 7
Background .................................................................................................................................................................... 9
Stakeholder Interview Themes .............................................................................................................................. 9
Citywide Survey Themes ........................................................................................................................................ 10
Business Owner Survey Themes .......................................................................................................................... 11
Montana Photonics Industry Alliance Member Survey (2014) ..................................................................... 14
Strengths, Weaknesses, Opportunities, and Challenges (SWOT) ............................................................... 14
Economic Profile .......................................................................................................................................................... 15
Population Growth .................................................................................................................................................. 15
Employment Growth .............................................................................................................................................. 16
Commute Patterns .................................................................................................................................................. 16
Median Age .............................................................................................................................................................. 17
Distribution of Employment.................................................................................................................................. 17
Income Distribution ................................................................................................................................................ 18
Education Attainment............................................................................................................................................. 19
Industry Clusters .......................................................................................................................................................... 20
Photonics .................................................................................................................................................................. 20
Software/IT ............................................................................................................................................................... 23
Outdoor .................................................................................................................................................................... 24
Tourism/Recreation ............................................................................................................................................... 26
Biotechnology ......................................................................................................................................................... 28
The Strategy ................................................................................................................................................................. 30
Current Strategy ..................................................................................................................................................... 30
Strategy Update ...................................................................................................................................................... 30
Goal 1: Expand the Existing Base ......................................................................................................................... 31
Goal 2: Support Business ...................................................................................................................................... 33
Goal 3: Regional Connections ............................................................................................................................. 35
Appendix A: Action List
Appendix B: Stakeholder List
City of Bozeman | Economic Development Strategy Update
November 2016 Page 1
Introduction
The modern global economy consists of rapidly changing market trends.
The one economic certainty that pertains to any industry is the increasing
need for skilled talent. Unfortunately, complex issues driving income
stratification and workforce skills gaps are making it more difficult for all
citizens to realize positive personal economic growth in keeping with
business growth. In order to plan for this modern economy, communities
must consciously foster a diverse economic base and skilled workforce to
weather inevitable negative and positive cycles.
Coupled with global economic trends, the city of Bozeman is growing
rapidly, which introduces new challenges regarding affordable housing,
traffic, and public service provision. It is important for the City to
consciously manage growth aligned with the desired economic base in
order to retain the small town and outdoor qualities that make Bozeman
unique, while remaining competitive in the global modern economy.
Finally, city government plays a unique and distinct role in economic
development. They are the key stakeholder among many engaged
organizations that significantly invests in infrastructure and guides land use
policy. Fortunately, the City of Bozeman has a strong culture poised to
facilitate collaboration among departments including public works, finance
and community and economic development to thoughtfully align
objectives that foster a healthy economic base.
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What is Economic Development?
Economic development can be defined as efforts that seek to improve the economic well-being and
quality of life for a community by creating and/or retaining middle and high income jobs and
supporting or growing incomes and the tax base through diversification of the local economy. These
jobs are generally defined as two different sectors with distinct needs in terms of workforce and
business location. In addition, the City must provide different types of support and investments for
each sector. These sectors are distinguished for clarification regarding strategy objectives and
actions.
Traded Sector vs. Local Sector Jobs
Traded sector (also referred to as basic sector) businesses include industries and employers which
produce goods and services that are consumed outside the region where they are produced and
therefore bring in new income to the area (e.g., outdoor gear, photonics, software). Workers in the
traded sector tend to be better educated, work more hours, and earn higher average wages than
local sector business.
As the traded sector increases employment and wages, it also enables entrepreneurs to develop
skills and resources to foster innovation and start new businesses and increase employment
opportunities. Furthermore, certain traded sector companies foster a supply chain effect that create
the need for additional companies to supply components of a product that is manufactured.
Tourism is a unique traded sector industry to Bozeman in that it brings new income into the region
and it leverages Yellowstone National Park as well as numerous outdoor assets not found elsewhere
in the United States.
Local sector business consists of industries and firms that are in every region. They produce goods
and services that are consumed locally in the region where they were made, and therefore circulate
existing income in the area (e.g., drug stores, physician offices, restaurants). These businesses are
important as they make a community distinct and provide amenities to attract young professionals
and families that drive the new economy. A sampling of traded vs. local sector businesses in the
Bozeman region is indicated in Figure 1.
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Figure 1. Representative Traded Sector and Local Sector Bozeman Businesses
Traded Sector Local Sector
Table 1 highlights the average wage difference between traded sector jobs and local sector jobs in
the U.S. Also of note is the difference between Gallatin County and U.S. average wages. The
community is well aware of this disparity and that it is currently an advantage for employers.
However, business leaders interviewed as part of this economic development strategy process
expressed an understanding that this is not a healthy trend. For businesses to continue to attract a
highly skilled workforce, there need to be more companies here. When there is a larger job base, it
is more attractive to employees because they have options for career growth. In turn, once the
employment base grows, competition will occur and ultimately increase wages. Montana is starting
to realize gains in this area with real median household income increasing by 6.8 percent between
2014 and 2015 per American Community Survey statistics.
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Table 1. 2015 Annual Average Wages by Industry Sector
NAICS Industry Sector United States
Average
Wage 2015
Gallatin County
Average Wage
2015
Mesa County, CO
(City of Grand
Junction) Average
Wage 2015
Traded Sector
55 Management of
Companies & Enterprises
$116,745 $60,078 $101,797
51 Information $95,038 $56,541 $44,836
54 Professional, Scientific, &
Technical Services
$ 89,785 $66,648 $53,640
42 Wholesale Trade $ 73,363 $56,074 $55,629
31-33 Manufacturing $64,305 $41,516 $43,293
Local Sector
23 Construction $57,009 $46,908 $49,377
61 Education Services $47,968 $25,908 $21,404
62 Health Care & Social
Assistance
$47,296 $44,891 $45,897
71 Arts, Entertainment,
Recreation
$36,128 $25,840 $16,454
44-45 Retail Trade $29,742 $29,319 $27,194
72 Accommodation & Food
Services
$19,415 $18,307 $16,888
Source: Quarterly Census of Employment and Wages - Bureau of Labor Statistics, May 2016.
The lower average wages in Gallatin County are further impacted by the higher cost of living in
Bozeman as compared to similar communities as identified in the following table. As an example,
Grand Junction, CO with a similar size population as Bozeman has similar average wages as
indicated in Table 1. However Grand Junction has a lower Cost of Living Index score as identified in
Table 2, which provides more purchasing power with the wages. The composite Cost of Living Index
score is based on six categories – housing, utilities, grocery items, transportation, health care, and
miscellaneous goods and services. The national average composite index is set at 100 each period;
so the index conveys relative price levels at a specific point in time.
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Table 2. Cost of Living Index Results (Q2 2016)
Source: Prospera Business Network, September 2016.
Talent
The national economy is becoming increasingly more talent/knowledge-based than resource-based
meaning people over raw materials are the most important asset to a company’s value and
prospects for growth. This applies to all industries including manufacturing, professional services,
and technology.
Articulating this further
is the following chart
defining the shift in
market assessment for
the world’s most
valuable companies. As
illustrated in Figure 2, 10
years ago the most
valuable companies
consisted largely of
natural resource
extraction and now they
are largely technology
companies with values
based upon people
Figure 2. The Age of Tech
City of Bozeman | Economic Development Strategy Update
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generating innovative ideas and processes. This is not to suggest that Bozeman needs to focus their
industrial base entirely on technology companies, but to understand that the modern economy
thrives more on skilled people than natural resource extraction.
A significant cohort of the talent in demand consists of the “Millennial” generation (generally ages 19
to 35 in 2016) made up of approximately 76 million people – the largest demographic group our
country has seen. As this generation grows and shapes our talent-based economy, it is important to
understand what motivates them and the communities they choose in such a highly mobile
environment. Such an environment includes the following elements:
Job Base. Talent moving to a new community wants to know that there are other
opportunities if the job that brought them there does not fulfill expectations.
Simple Commute. Many Millennials are not defined by the automobile, and do not want
to drive if they don’t have to. As reported in Urban Land Institute (ULI) Emerging Trends 2016,
miles traveled by car for those people 34 years old or younger are down 23 percent
nationally. Locally, the average miles travelled by any mode – walking, driving, biking, or
taking transit – is the lowest for Millennials.
Urban Lifestyle. They tend to prefer density with alternative transportation modes and
retail nearby, which provides alternatives to owning a car. This urban lifestyle does not mean
that an entire community must conform to urban densities. What is important is that some
element of an urban lifestyle through either a healthy Main Street in a traditional downtown
or denser town centers in suburbs is provided.
Amenities. Millennials are looking for ample amenities, especially restaurants and access to
outdoor recreation.
Open Culture. They embrace social or ethical causes1 and communities that are more
diverse, accepting, and open to change.
Skilled Workforce
When planning for a future economy it is important to understand that all industries are dependent
on a talented workforce that has technical skills and/or higher education attainment. Bozeman’s
future economy requires a skilled workforce with training in career technical education (CTE) and
access to higher education science, technology, engineering, and mathematics (STEM) degrees.
Career Technical Education (CTE) Training
CTE training is targeted toward middle-skill jobs, which require education and training beyond high
school but less than a bachelor's degree, and are a significant part of the economy. Of the 55 million
job openings created by 2020, 30 percent will require some college or a two-year associate degree.
1 Brookings Institute, 11 Facts about the Millennial Generation, June, 2014.
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It is important to foster partnerships with Gallatin College and local primary and secondary schools
to encourage youth to consider this career path. By engaging youth early, they may be more likely
to attend Gallatin College or obtain other skills training and either start their own enterprise or apply
their critical skills with local companies in Bozeman. An example of CTE training includes culinary
programs that support the hospitality and tourism industry, and photonics technician training with
Computer Numeric Control (CNC) machining skills development that supports high-tech
manufacturing.
Higher Education
Globally, positions requiring substantial independent judgment and decision making are now in high
demand. Increasingly employers are demanding a workforce that has technical skills, including
manufacturing jobs that involve the operation of sophisticated machinery requiring some advanced
training beyond high school. Science, technology, engineering, and mathematics (STEM) workers are
increasingly in demand and in short supply, especially in the private sector which needs software
developers, data scientists, and those in skilled trades. Bozeman is fortunate in that it is home to
Montana State University (MSU), which provides several degrees and research facilities to equip
students with these technical, interpersonal, and entrepreneurial skills that are in high demand.
What is the Benefit of an Economic
Development Vision and Strategy?
In order to prepare a community to proactively respond to rapidly changing trends, it must have a
strategy in place. Without a strategy, efforts are often reactive, non-collaborative, and not connected
for meaningful impact. An economic development strategy will:
#1: Document a Playbook
For economic development to succeed, numerous partners and organizations must be engaged and
collaborate toward common goals. At the same time, it is essential for public and private entities to
recognize that they are partners in economic development efforts, as one cannot be sustained
without the other. To efficiently and effectively align goals, a community must understand,
document, and achieve consensus on its vision, values, opportunities, and objectives. Bozeman has
established a solid foundation with the three economic development pillar strategies defined below:
1. Support retention and growth of existing businesses, while welcoming and
encouraging new businesses;
2. Invest in infrastructure as a mechanism to drive economic development; and
3. Support education and workforce development initiatives to provide businesses with
qualified workers.
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The world’s economy is changing rapidly. An established “playbook” provides enough broad goals
to recognize opportunities when they arise, and also clear direction regarding the City’s roles to help
determine projects that should be pursued and those that are better implemented by other
stakeholders. To effectively implement a strategy, it is as important to say “no” to certain
opportunities as it is to say “yes” to others.
#2: Identify Specific Actions and Metrics
Once goals and objectives are defined, action must be taken. Often these actions will appear minor
without the overall context of the plan. Furthermore, some actions will build momentum and have a
meaningful impact, others will fail, and some may not occur due to limited stakeholder interest or
resources. The intent of the strategy is to provide several action items by several partners, all
working toward the same overall goal. This is a flexible document that will be shaped as
opportunities arise. Finally, it is important to revisit the document annually and determine where
progress is being made, where other areas are deficient, and acknowledge that progress is being
made. It will be necessary to update the document every three to five years in keeping with the
rapid pace of change in the economy.
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Background
In developing the economic development strategy, it is important to obtain information from local
businesses and employees. We have achieved this through personal interviews of stakeholders
identified in Attachment B and survey responses from the business community. Consistent themes
from the interviews and surveys are summarized below and are reflected in the strategy.
Stakeholder Interview Themes
In August, 2016 Leland Consulting Group and Bozeman Economic Development staff held several
meetings with industry representatives, small business organizations, the Economic Development
Committee, and City staff to determine opportunities and challenges to fostering economic
development in the Bozeman region. Consistent themes and comments are noted below.
Hard to attract and hire senior level talent. Often want to also bring professional spouse but
may not have a position for that person. This is referred to as a “trailing spouse issue”.
Need to tell Bozeman business story (outdoor recreation story is done well already).
If more companies are here, it is more attractive to employees because they have options for
career growth and competition which ultimately increases wages.
Need to make sure existing companies have place to grow. They want to stay within the
Bozeman city limits but that opportunity is becoming constrained by costs and lack of
building sites.
Protect access to and quality of outdoor life and ecosystem (aquifers, trails, streams, views).
This is vital to Bozeman.
Emerging growth and economic development issues must be addressed on a regional level.
Need to start thinking regionally.
Financial resources are constrained. Need to work together (private/public) for proactive
solutions.
Accommodate and welcome new businesses interested in Bozeman, and balance other
economic development priorities with recruitment of companies.
Work with industry clusters to determine gaps in supply-chain and target companies needed
to fill the gaps.
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Citywide Survey Themes
The City of Bozeman is undergoing a Strategic Planning Process, which included outreach to the
local citizens via survey. They received over 530 responses, including the following, which represent
consistent themes in answering “What is your vision for an innovative economy?”
Higher wages, more appreciation of workforce, less concentration of wealth in the hands of a
few privileged folks
Promote growth on the micro level by opening doors and lightening unnecessary restrictions
that were written with larger businesses in mind. We need more people manufacturing or
running businesses out of their homes and vehicles as the cost of brick and mortar
businesses has become prohibitive to smaller startups.
Small, entrepreneurial businesses are the key. They are flexible, hire the most individuals and
adapt better than large businesses to a constantly changing economy!
Thriving business community, lots of growing startups, full employment, opportunities to get
training to improve your position.
Easy to start a business, easy to get funding.
A varied economy that continues to make quality of life a priority.
Economy based on multiple legs – technology, recreation, other skilled employment
Utilizing local talent and businesses.
Develop a plan to improve jobs and employment opportunities for residents wanting to stay
in the area equally matched with recruiting out of state residents for current and future
openings for employment. Develop training programs for workforces underrepresented, like
skilled trades, high-tech, and service work such as hospitality, landscaping, or unskilled labor.
Jobs that pay enough to let you live here.
Global, technology based businesses and other clean industries.
I would hope that Bozeman is an outdoor industry hub, has more than high-tech as options
for well-paying jobs, and has direct educational opportunities for residents who want to
pursue jobs in Bozeman.
Bozeman has a healthy mix of industries, including thriving high-tech companies who are
based in Bozeman.
That Bozeman would not become a mini Silicon Valley, even though high-tech businesses
are here. We need to make sure Bozeman remains diversified enough that we have a variety
of business that offer a variety of positions from skilled labor to Ph.D....not just all jobs
requiring a high amount of education.
A diversified economy that provides high paying jobs but doesn't detract from our natural
environment.
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Business Owner Survey Themes
City of Bozeman staff in partnership with Prospera, Bozeman Chamber of Commerce, and
Downtown Partnership distributed a survey to over 2,000 businesses. A total of 107 responses were
submitted. The company make-up is shown in the following chart and predominant themes are
summarized below.
Figure 3. Types of Businesses Responding to Survey
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Figure 4. Where Bozeman Companies Find Talent
Figure 5. Ideal Location for Bozeman Companies
0
5
10
15
20
25
30
35
Manufacturing Retail/Restaurant Professional services Tourism
Outdoor Photonics Bioscience Software/IT
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Business Owner Survey Comments
I work with businesses who are hiring. Barriers include: No local job posting site, costly nature
of newspaper advertisements, many businesses don't offer any type of health insurance (too
expensive), inability to be competitive with wages.
Available pool of experienced applicants, timing of students coming and going seasonally.
Hiring is done through word of mouth, online notices, in-store notices; university job board
and local Job Center.
If you could locate anywhere, where would it be:
o Downtown
o Northeast Bozeman
o Four Corners
o West end of Huffine
o MSU Innovation Campus
What do you like about your current location:
o Easy access to I-90 for shipping. Central.
o Downtown – close to services, culture, active main street.
o Easy to get to, easy parking, close to MSU campus.
o In the heart of the western expansion of Bozeman.
o Don't like current location with too much traffic and no place to walk. Suburban.
I'm not a "Bozeman native," I moved here in 2003. So I realize I'm part of the "growth
challenge." I believe there are ways we can grow responsibly, put infrastructure first (so we're
not handling those issues in "reactive mode" five years from now), and foster a sense of
community downtown and beyond, so we don't lose the fine qualities that drew us to
Bozeman in the first place. We do need to look at establishing more live/work/eat/play hubs
outside the Bozeman Main Street. That will be the toughest shift I imagine. Our single-street
downtown is so beloved by so many, but as the valley continues to grow, that Main-centric
mentality will get even harder to sustain. Thriving cities find a way to establish micro-hubs
and self-sufficient mini communities in rays branching out from the main downtown. We
don't have that yet, but it's where we need to go.
The City needs help implementing a system that would work more efficiently for small
business owners. It shouldn't take as long as it does to get permits approved.
Thank you for this opportunity to give input.
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Montana Photonics Industry Alliance Member Survey (2014)
The Photonics Alliance issues an annual survey to its membership. One specific question is “What are
the three most important things that the city/county government could do to promote the success
your organization?” This question helps guide specific actions the city should take to foster
economic development. The three most common answers were:
Support the Montana Photonics Industry Alliance (20 percent).
Support a campaign to increase awareness of the growing Montana photonics industry and
the attractiveness of this area for photonics companies and employees (20 percent).
Support infrastructure projects such as increased internet bandwidth and better business
travel connections (20 percent).
Strengths, Weaknesses, Opportunities, and Challenges (SWOT)
The following strengths, weaknesses, opportunities, and threats (SWOT) are derived from
stakeholder input, survey responses, and general research.
Strength (internal) Weakness (internal)
High-wage and knowledge-based industry clusters
MSU and Gallatin College programs and
increasing enrollment in both
Bozeman Yellowstone International Airport
Outdoor recreation opportunities
Vibrant downtown
High net-worth population
Small-town feel
Strong K-12 system
Sustainable culture
Regional retail hub (important for talent attraction)
I-90 access
City has great GIS data sharing capability and
culture
Limited affordable housing
Low salaries (also a strength for business)
Limited rail freight loading
Isolated location
Lack of cultural diversity
Limited access to venture capital and startup
ecosystem
Hard to attract senior level talent
City permitting process perceived as difficult
Broadband infrastructure
Limited site availability for business expansion
Lack of activities to support youth programs,
especially teenagers
Lack of larger conference/convention facility
Opportunity (external) Threat (external)
Yellowstone National Park tourist attraction
Big Sky Resort business leader attraction
Millennial talent pool is mobile and seeks quality
location
Population growth in mountain states
MT #6 best state for business tax climate
Limited STEM education workforce
State dependence on energy economic base
Increase in fuel prices
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Economic Profile
The following information provides a current snapshot of economic conditions in the city of
Bozeman that provide direction regarding strategy actions. These data points can be used over
longer periods of time as a point of reference in gauging if the City is achieving overall goals.
Population Growth
The city of Bozeman’s population increased from 27,509 in 2000 to 39,123 in 2014 for a 42.2 percent
change in population. Population is projected to continue to grow at an annual rate of 4.2 percent.
This trend will continue to compel the City to consider strategic infrastructure investments that can
foster efficient development patterns that will support this growth.
Figure 6. Percent Change in Population (2000 to 2014)
Source: U.S. Department of Commerce. 2015. Census Bureau, American Community Survey Office, Washington,
D.C.; U.S. Department of Commerce. 2000. Census Bureau, Systems Support Division, Washington, D.C.
Produced by Economic Profile System (EPS) September, 2016.
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Employment Growth
In line with population growth, employment grew at an average of 3.2 percent annually in Gallatin
County from 2004 to 2014.
Table 3. Gallatin County Annual Total Employment
2008 2009 2010 2011 2012 2013 2014 2008
to
2014
2010
to
2014
Gallatin County 49,081 45,324 45,043 46,419 47,718 50,315 55,533 6,452 10,490
Annualized Employment Growth -7.7% -0.6% 3.1% 2.8% 5.4% 10.4% 2.2% 5.4%
Source: U.S. Census LEHD Leland Consulting Group.
Commute Patterns
Commute patterns reflect how much of the workforce lives and works within the city of Bozeman.
Ideally, the workforce lives and works within the city to reduce congestion and retain spending
dollars within the community. Table 4 shows there is an increase of employment and residents within
the city between years 2010 and 2014. What is remarkable is the minimal increase in people
commuting into Bozeman for a job and living outside the city. Instead there is an increase in people
living and working in Bozeman, as well as the number of people living in Bozeman but working
outside the city. What this suggests is that the workforce prefers to live in Bozeman. Therefore, if an
employer locates a business within Bozeman they have a competitive advantage in providing a
desired location that reduces commute times and congestion and more access to local sector
businesses.
Table 4. City of Bozeman Commute Patterns
2010 2014
Employment in City 24,384 27,317
Employed Individuals Living in City 13,737 18,266
Commute into City for Employment and Live Outside 16,370 16,637
Live and Work in City 8,014 10,680
Live in City but Leave for Employment 5,723 7,585
Source: U.S. Census LEHD Leland Consulting Group.
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Median Age
The median age in Bozeman is 27.5 years versus
the U.S. average of 37.4 years. The distribution of
ages within Bozeman is shown in Figure 7. As
evidenced, the Millennial cohort dominates the
Bozeman population. This average age is largely
influenced by Montana State University, but still has
a significant influence on the culture and design of
the community quality of life elements.
Distribution of Employment
Table 5 reflects the distribution of employment
within Bozeman in comparison with U.S. averages.
Of note is a smaller percentage of manufacturing
employment at seven percent compared with a
national average of 10.4 percent. This likely reflects
the nature of small manufacturing facilities within
the city. There is a higher percentage of arts and
entertainment at 14.8 percent compared to the
national average of 9.5 percent which reflects the
unique tourism industry within Bozeman.
According to projections by the U.S. Department of
Labor, service-providing sectors are projected to
capture 94.6 percent of all the jobs added between
2014 and 2024. This trend toward the service-
producing sectors emphasizes the importance of
focusing on talent based industries that require
skills and some additional education.
Figure 7. City of Bozeman Average Age
(2014)
Source: U.S. Department of Commerce. 2015.
Census Bureau, American Community Survey
Office, Washington, D.C.; U.S. Department of
Commerce. 2000. Census Bureau, Systems
Support Division, Washington, D.C. Produced by
Economic Profile System (EPS) September, 2016.
City of Bozeman | Economic Development Strategy Update
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Table 5. Distribution of Employment by Industry (2014)
Bozeman, MT U.S.
Goods-Producing/Non-Service
Ag, Forestry, Fishing & Hunting, Mining 2.2% 2.0%
Construction 6.4% 6.2%
Manufacturing 7.0% 10.4%
Wholesale Trade 1.8% 2.7%
Service Related
Retail Trade 12.9% 11.6%
Transportation, Warehousing, and Utilities 2.2% 4.9%
Information 1.5% 2.1%
Finance and Insurance, and Real Estate 4.6% 6.6%
Professional, Scientific, Management, Admin, & Waste Management 11.4% 10.9%
Education, Health Care, & Social Assistance 27.6% 23.2%
Arts, Entertainment, Recreation, Accommodation, & Food 14.8% 9.5%
Other Services, except Public Administration 3.8% 5.0%
Public Administration 3.7% 4.9%
Source: U.S. Department of Commerce. 2015. Census Bureau, American Community Survey Office, Washington,
D.C. Produced by Economic Profile System (EPS) September, 2016.
Income Distribution
In the 2009 to 2014 period, the income category in the city of Bozeman with the most households
was $50,000 to $74,999 (19.3 percent of households). The income category with the fewest
households was $150,000 to $199,999 (2.5 percent of households). In the 2009 to 2014 period, the
bottom 40 percent of
households in the city
of Bozeman
accumulated
approximately 10.7
percent of total
income, and the top
20 percent of
households
accumulated
approximately 52.6
percent of total
income.
Figure 8. City of Bozeman Household Income Distribution (2014)
Source: U.S. Department of Commerce. 2015. Census Bureau, American
Community Survey Office, Washington, D.C. Produced by Economic Profile System
(EPS) September, 2016.
City of Bozeman | Economic Development Strategy Update
November 2016 Page 19
This income
distribution is
summarized by a Gini
coefficient, which is a
commonly used
measure of inequality.
In the 2009 to 2014
period, the city of
Bozeman had an
average income
distribution between
high and low-income
households (Gini coefficient of 0.47) similar to the U.S. average income distribution (Gini coefficient
of 0.48).
Education Attainment
As discussed, the modern global economy thrives on a skilled workforce. As indicated in the
following table, Bozeman is fortunate to have a highly-skilled workforce based on education
attainment. This is especially important for the types of industry clusters driving the Bozeman
economy that require a highly skilled workforce.
Table 6. Educational Attainment (2014)
Bozeman
% of Total
U.S. %
of Total
No High School Degree 2.5% 13.7%
High School Graduate 97.5% 86.3%
Associates Degree 6.6% 7.9%
Bachelor's Degree or Higher 54.4% 29.3%
Bachelor's Degree 35.6% 18.3%
Graduate or Professional 18.8% 11.0%
Source: U.S. Department of Commerce. 2015. Census Bureau, American Community Survey Office, Washington,
D.C. Produced by Economic Profile System (EPS) September, 2016.
Figure 9. Gini Coefficient (where 1 represents inequality)
Source: U.S. Department of Commerce. 2015. Census Bureau, American
Community Survey Office, Washington, D.C. Produced by Economic Profile System
(EPS) September, 2016.
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Industry Clusters
Industry clusters are groups of similar and related traded sector businesses in a defined geographic
area that share common markets, technologies, worker skill needs, and which are often linked by
buyer-seller relationships. Industry clusters represent distinct qualities of a community and help
define what makes one community different from another. As they convey distinct qualities, it is
important to be specific in the definition of a cluster. For example, rather than promoting “high-
tech,” a community should focus on “software or photonics” to convey the type of product being
manufactured and its unique workforce and supply chain needs. Promotion of clusters helps
reinforce to existing businesses and interested outside talent the unique community assets and why
it is good place to stay and grow. When interviewed, business leaders agreed with this approach in
that it helps convey an understanding of the distinct industry assets in the region. The City has
identified the following key industry clusters it can support and grow:
Photonics
Software/IT
Outdoor
Tourism/Recreation
Biotechnology
Each cluster benefits from partnership with the significant higher education assets of Montana
universities and colleges. Furthermore, the city’s infrastructure, unique assets, and existing company
base serves to support these industries. In defining specific clusters and fostering collaboration, new
business opportunities arise, workforce training needs can be met, and physical site expansion needs
can be addressed.
The following summaries by cluster will vary in the amount of detailed information depending on the
level of business alliance organization behind each cluster and the research invested to date. Those
with more information provide a good benchmark for the level of information desired from business
retention efforts and fostering formal business alliances for each group.
Photonics
Overview
Optics and photonics are a significant component of the southwestern Montana economy. On a per
capita basis, Bozeman has one of the highest densities of optics companies found anywhere in the
United States. Many of these companies were founded by Montana State University graduates, often
through MSU technology transfer.
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Companies
There are at least 30 photonics companies within the Bozeman region
(http://www.montanaphotonics.org/members/). Anchor companies that founded the cluster and are
larger employers include Quantel, ILX Lightwave, Lattice Materials Corporation, and FLIR. Sixty-three
percent of the companies reported fewer than 20 employees, while 18 percent had 21 to 50
employees, and another 18 percent had 50 to 100 employees.2 A sizeable majority of the firms in the
cluster were formed since 2000, and they tend to be young, small, and innovation intensive.
Industry Growth Projections
According to the following excerpt from Multiannual Strategic Roadmap 2014 – 2020 by the
European Technology Platform Photonics21, the opportunities for the photonics is significant:
“Photonics is everywhere around us: from communications and health, to
materials processing in production, to lighting and photovoltaics and to everyday
products like DVD players and mobile phones. Yet the full disruptive potential of
photonics is only now becoming clear. New advances in photonics will
revolutionize healthcare and provide new ways of detecting, treating and even
preventing illness. In manufacturing, laser processing will be a basic prerequisite
for high-volume, low-cost manufacturing.”3
The report continues to identify significant opportunities clearly conveying how photonics is
becoming one of the most important industries for the future.
According to a Montana Photonics Industry Alliance 2015 Member Survey, total industry
employment is 517 and they forecast headcount growth rate of nine percent for the year.
Distinct Resources
Many of the companies have a strong connection to MSU’s Optical Technology Center (OpTec) and
its associated nonprofit Spectrum Lab. OpTec plays a prominent role within the optics cluster as a
networking center for research and talent development. Spectrum Lab was “spun out” of OpTec in
1999 to further development technologies from MSU’s research facilities. Spectrum Lab serves as a
kind of optics “application incubator” for faculty and industry and as a bridge between MSU labs and
the private sector.4
2 Imagining a Future for the Big Sky Optics Cluster, RTS Inc., October 2012.
3 Multiannual Strategic Roadmap 2014 – 2020 by the European Technology Platform Photonics21, April 2013.
4 Imagining a Future for the Big Sky Optics Cluster, Regional Technology Strategies, October 2012.
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Montana Manufacturing Extension Center (MMEC) is an important organization fostering growth of
the cluster as well. The MMEC at Montana State University’s College of Engineering in Bozeman is a
statewide manufacturing assistance center that provides technical support and training to Montana
businesses. MMEC is also a part of the National Institute of Standards and Technology (NIST)
nationwide network of centers created to assist small and mid-size manufacturers, the
Manufacturing Extension Partnership (MEP). MMEC offers a wide array of services to Montana
manufacturers including business management, design and product development, lean enterprise,
process improvement, and quality systems services as well as a variety of training courses.
Workforce
The photonics industry is able to access a skilled workforce from both MSU and Gallatin College
through the following programs.
Montana State University:
Bachelor of Science (BS) Degree in:
o Chemical Engineering
o Computer Engineering
o Industrial Engineering
Masters of Science (MS) Degree in Optics and Photonics
BS, MS, PhD in Physics
Gallatin College:
Associate of Applied Science (AAS) Degree
o Photonics, Laser, Optics Technology.
o Design Drafting
o Production Management Course for Manufacturing (proposed)
Certificate of Applied Science (CAS) Degree
o Welding
o Machining
Industry Alliances
The Montana Photonics Industry Alliance is a strong organization serving the Bozeman area. They
perform annual surveys of members and have identified that they most need support from the City
regarding organizational support and employee attraction. Through their industry collaboration they
worked with Gallatin College to create the Photonics AAS degree that started Fall, 2016.
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Software/IT
Overview
The majority of software/IT companies within the Bozeman region provide Enterprise Software
(SaaS) services. These are companies with a software distribution model in which a third-party
provider hosts applications and makes them available to customers over the Internet. This
distinguishes Bozeman’s clusters from other regions that may specialize in consumer-facing or
gaming products.
Companies
Bozeman is fortunate to be home to a major facility of a globally recognized company, Oracle,
which serves as a significant anchor company for the region. Other growing companies include
Workiva, Zoot Enterprises, and Wisetail.
Industry Growth Projections
In 2016, spending on public cloud infrastructure as a service hardware and software is forecast to
reach $38 billion, growing to $173 billion in 2026. SaaS and Platform as a Service (PaaS) portion of
cloud hardware and infrastructure software spending are projected to reach $12 billion in 2016,
growing to $55 billion in 2026.5 Trends driving the market growth include geographic expansion,
industry customization, developer focus, expanding professional and managed services, and
enhanced security, governance, and compliance.
The Montana High-Tech Business Alliance (HTBA) includes software companies as well as high-tech
manufacturers. The HTBA 2016 Member Survey indicates that Montana’s high-tech companies
anticipate growing almost seven times faster than the Montana economy as a whole. HTBA
members (23 percent of all responses) most often reported that attracting talent and hiring skilled
technology workers was their firm’s largest impediment to growth.
Distinct Resources
A robust broadband network is critical for the growth of this industry. The City’s leadership role in
planning this infrastructure is a significant action toward fostering the growth of this industry.
Continuing to ensure access to convenient business flights to major software/IT regions is important
for talent attraction and access to capital will be important as well.
5 Statistica: Public cloud Infrastructure as a Service (IaaS) hardware and software spending from 2015 to 2026, by
segment (in billion U.S. dollars).
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Workforce
The software industry differs slightly from the business survey results regarding source of hiring. As
this industry has strong demand for talent that is highly mobile companies often extend beyond
Bozeman and Montana to hire employees. However, they can access a skilled workforce from both
MSU and Gallatin College through the following programs:
Montana State University:
BS, MS, and PhD in Computer Science
Bachelor of Science Degree Computer Engineering
Gallatin College:
Certificate of Applied Science (CAS) Degree
o Network Administration Technology (Fall 2017)
Industry Alliances
The Montana High-Tech Business Alliance (HTBA) consists of more than 300 high tech and
manufacturing firms and affiliates in Montana. It consists is a broad range of companies including
pharmaceutical, semiconductor, software, and manufacturing using high-tech methods. If Bozeman
wants to foster a distinct software cluster, it can benefit from a distinct industry alliance that is
focused on their unique culture of collaboration, fostering startups, and addressing their need for
talent.
Outdoor
Overview
Leveraging the unparalleled access to outdoor recreation, Bozeman has a growing industry tied to
this asset. The outdoor cluster consists of firms that design, develop, manufacture, market, distribute
and sell apparel, footwear, and gear for active outdoor recreation. While manufacturing is a key
component to the industry, it also hosts highly skilled knowledge-based workers in design,
marketing, and managing product development.
Companies
A key Bozeman regional anchor company is Simms Fishing Products, with its significant brand
awareness and large workforce. Other Bozeman companies include Mystery Ranch, Sklar Bikes, Buck
Products, and Sitka.
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Industry Growth Projections
Outdoor recreation is an economic powerhouse in the United States, each year generating $646
billion in consumer spending.6 Outdoor recreation in Montana generates $5.8 billion in consumer
spending on gear, vehicles, trips, travel-related expenses, and more. Over the next five years, as total
recreation expenditure expands, demand for hiking and outdoor equipment is anticipated to grow.
Industry revenue is $4 billion within Montana, with an annual growth of 1.8 percent.7
Distinct Resources
Outdoor manufacturers such as Simms place a high value on the Montana Manufacturing Extension
Center (MMEC) due to its practical and meaningful consulting services that help a company improve
production efficiencies. Bozeman’s easy access to the outdoors helps attract workers in this industry
to the region.
Workforce
The outdoor industry is made of a variety of skills and degrees tied to design and manufacturing.
Local industries benefit from tailored training programs offered by Gallatin College:
Associate of Applied Science (AAS) Degree
o Design Drafting
o Production Management Course for Manufacturing (proposed)
Apprenticeship
o Sewing Apprenticeship - According to Gallatin College staff, they are currently working
with Extended University-MSU, and Career Transitions (non-profit) and some outdoor
industry manufacturers to put together an industrial sewing apprenticeship or short-term
training, likely through a non-credit course path.
Business Alliances
Several Bozeman companies are members of the Outdoor Industry Association, which is a national
organization focused on the broader advancement to encourage outdoor recreation. Local
Bozeman manufacturing companies could benefit from an organized effort to promote their
companies tied to the Bozeman tourism/recreation industry. There is a ready opportunity to
leverage the messages and collaborations developed in the recent Bring it to Bozeman outdoor
video. Additionally, they can continue to partner with higher-education partners to grow the
workforce base.
6 Outdoor Recreation Economy, Outdoor Industry Association, 2016.
7 Climbing high: Revenue trends upward as recreational spending rises, IBIS World, September 2015.
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Tourism/Recreation
Overview
The tourism industry cluster consists of a very wide range of businesses that benefit from travelers.
Buses, automobiles, airlines, rail, and other transportation companies bring travelers into an
economic region. These consumers in turn purchase products and services offered by local lodging
establishments, restaurants, amusement, recreational and entertainment establishments, and general
retail outlets. This process creates many employment and business opportunities, all of which help
sustain and expand the local economy.8
Companies
This industry cluster is supported by numerous local sector businesses including hotels, restaurants,
tour guides, and retailers.
Industry Growth Projections
In 2015, Yellowstone National Park experienced record visitation. One reason is that this iconic
national park is a draw for many international visitors. Pair that with reduced visa requirements in
China, for example, and there is a sudden boom. Nationally, the number of visitors from China to
the U.S. currently ranks as the 7th highest visitor group. By 2020, Chinese visitors are expected to be
one of the largest groups of visitors to the U.S.9 This trend is reflected in the National Park Service
recent addition of Mandarin speaking translators at the Park. Projected growth in the industry is
highlighted in Figure 10.
8 The Economic Review of the Travel Industry in Montana, Institute for Tourism & Recreation Research, University of
Montana, December 2014.
9 Montana Economic Report, Bureau of Business and Economic Research, 2016.
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November 2016 Page 27
Figure 10. Total Travel Expenditures in the U.S.
Source: The U.S. Travel Association, June 2016.
Distinct Resources
The Bozeman Yellowstone International Airport, direct access to Interstate 90, and nearby access to
Interstate 15 in Butte are critical infrastructure assets for the tourism industry. The continual trend of
the Bozeman Yellowstone International Airport outpacing Billings in passenger volume remained in
2015. Bozeman, with its population growth and nearby attractions (Yellowstone and ski resorts),
should remain Montana's busiest airport for visitation in the state. Additionally, distinct assets such as
Yellowstone National Park, Big Sky Resort, and Bridger Bowl Ski Area are important to the vitality of
this industry.
Workforce
The tourism/recreation industry consists of a variety of skills and degrees. Local industries benefit
from tailored training programs offered by MSU and Gallatin College:
Montana State University:
BS, Hospitality Management
Gallatin College:
Associate of Applied Science (AAS)
o Culinary Arts AAS Fall 2017
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Business Alliances
The Bozeman Convention and Visitor Bureau and the Bozeman Area Chamber of Commerce
currently promote local businesses and attractions for visitors. There is an opportunity for these
organizations to align events, marketing, and promotions to highlight and promote traded-sector
outdoor companies. The alignment between tourism and outdoor gear marketing can effectively
help the existing traded-sector companies expand their market base and revenues, which in turn
allows them to grow the company.
Biotechnology
Overview
Southwest Montana has developed its own distinctive biotech infrastructure that includes several
medical/bioscience research institutes, hospitals with research and clinical trials capacity, and a very
strong life sciences and related engineering presence within its two major universities.
Nearly 61 percent of all bioscience jobs in Montana are in the Research, Testing and Medical
Laboratories category, compared to 56.5 percent in the U.S. Bozeman has the largest concentration
of bioscience companies, with 33 percent of all Montana companies being located in Bozeman.10
Companies
The broader Southwest Montana bioscience cluster is anchored by the GlaxoSmithKline
manufacturing facility in Hamilton, Montana. Within Bozeman, companies include Takeda,
Microbion, ProPharma Group, and ADVR Inc.
Industry Growth Projections
Entering the second half of this decade, most life sciences organizations appear to be adopting an
attitude of cautious optimism. Significant opportunities exist in the global marketplace but challenges
exist as well. Spending growth in pharmaceuticals (pharma), biotechnology (biotech), and medical
technologies (medtech) is projected to follow an upward trend due to increasing demand, but
pricing challenges are still an issue. Industry margins are being eroded by high discounts, retail
sector price controls, public sector purchasing policies, and the move to value-based care. Biotech
drugs (vaccines, biologics) continue to gain traction in the life sciences sector. Of the top 10 pharma
products by sales in 2014, the majority of them were biotech drugs, including monoclonal antibodies
and recombinant products. Treatments for rheumatoid arthritis, Hepatitis C, and cancer figure most
prominently in the list of the most sales generating drugs.11
10 Montana Bioscience Cluster Revisited, RTS Inc., 2013.
11 Global life sciences outlook, Deloitte, 2016.
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GlaxoSmithKline shut down its vaccine R&D branch within its Hamilton facility and laid off all of the
unit’s 27 employees in 2015. (No layoffs have occurred for the manufacturing portion of the
Hamilton site, where the bulk of the company’s employees work.) In addition, Takeda
Pharmaceutical Company will close its vaccine facility in Bozeman by 2017 as part of a company-
wide consolidation. While these companies have announced their relocation, some staff have
indicated that they will not leave Bozeman and instead start new companies. This is a significant
testament to Bozeman’s ability as a community to retain talent and continue to grow industry
clusters from the ground up. Furthermore, according to interviews with local business bioscience
leaders, the industry holds promise with the recent addition of Dr. Renee Reijo Pera highlighted
below, which will only further support the talent base determined to stay in Bozeman.
Distinct Resources
Montana State University lab facilities and technology transfer services are critical to the growth of
this industry. Dr. Renee Reijo Pera, an internationally recognized stem cell scientist and former
director at Stanford University is the new Vice President for Research and Economic Development at
Montana State University.12
According to business leaders, there is approximately 40,000 square feet of private wet lab space
available for lease. This is a highly valuable asset that should be highlighted and promoted to retain
and grow local companies. Additionally, development of the Montana State University Innovation
Campus has gained momentum and is attracting interest in development.
Workforce
The biotech industry is able to access a skilled workforce from MSU through the programs listed
below. Gallatin College currently does not have specific training programs tied to this cluster,
however staff indicated that they are willing to work with the industry leaders to develop new
programs as needed.
Montana State University:
Bachelor of Science Degree in Biotechnology
PhD in Bioengineering
Business Alliances
Montana Bioscience Alliance is an organization that serves as a hub for Montana’s biotechnology
companies, entrepreneurs, laboratories, hospitals, clinics, and universities to commercialize, grow,
and sustain globally competitive bioscience companies. Business leaders expressed in interviews that
it would be beneficial to work with this organization with more concentrated focus on Bozeman
companies and MSU opportunities for commercialization.
12 Bioscience Under the Big Sky, Montana Bioscience Alliance, 2014.
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November 2016 Page 30
The Strategy
Strategies must continuously evolve as economic situations change, actions are accomplished, and
new opportunities arise.
Current Strategy
The City of Bozeman has established a solid approach to economic development with its current
strategy that is based on the three economic development pillar strategies below.
1. Business Growth: Support retention and growth of existing businesses, while welcoming and
encouraging new businesses.
2. Infrastructure: Invest in infrastructure as a mechanism to drive economic development.
3. Workforce: Support education and workforce development initiatives to provide businesses
with qualified workers.
Strategy Update
The strategy update builds on the current work to date with a consideration of broader economic
development trends. Specifically, within this recent economic growth cycle, the nation has seen large
regions boom with innovation and employment that largely benefits a workforce with significant
education and skills development. Many of these areas are now struggling with complex issues tied
to increased traffic and limited affordable housing for the middle and low-income workforce. The
city of Bozeman is at a critical point in growth and has an opportunity to learn from these larger
regions. Fortunately, civic leadership is looking ahead to retain the exceptional quality of life in the
city, while also growing the economic base that is so vital to the health of a community. A critical
question that was heard throughout the development of this strategy was “Can we maintain the high
quality of life Bozeman citizens expect while increasing wages to compete regionally and nationally?”
The answer is yes with a commitment to the following outcomes, which are the foundation of this
strategy update, and shape the three explicit goals outlined below.
Strong Economic Base
Increase middle and high wage traded sector employment and diversify the economic base
by supporting existing businesses and strategically growing the local supply chain.
Support local sector businesses with a seamless permitting process and awareness about
existing small business programs.
Invest in infrastructure projects identified on the capital improvement plan (CIP) that the
business community needs and wants by leveraging the City’s proactive culture to foster
collaboration across departments and commitments to identified projects.
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Strong Community
Protect the outdoor environment by guiding efficient industry site development within the
city limits.
Foster an environmentally and economically sustainable community with an active
transportation network (transit networks, bicycle routes, trails, and sidewalks) that employers
and employees desire.
Offset livability costs for citizens with conscious infrastructure and workforce investments that
improve access to job opportunities with the understanding that several other stakeholders
are focused specifically on affordable housing.
Goal 1: Expand the Existing Base
Why this Goal?
The Bozeman area is fortunate to already host a robust base of knowledge-based industries that are
poised for more growth. However, these existing industries are challenged with attracting a skilled
workforce. Due to Bozeman’s high quality of life, it can attract and retain this needed talent with a
concentrated message and outreach effort. When there is a larger employment base, it is more
attractive to employees because they have options for career growth. In turn, once the employment
base grows, competition will occur and ultimately increase wages.
Objective 1.1 Develop strategic approach to business retention visits
City staff must have a good understanding of the existing industry base to effectively support it.
Meeting with businesses and documenting opportunities and challenges is an important first step to
gain industry insights, resolve challenges, and foster collaboration. Furthermore, based on the
significant amount of appreciation for outreach identified in the survey, it is clear this effort is desired
and needed.
Actions
Prepare list of existing targeted traded-sector companies that are within industry clusters.
Become familiar with workforce services and grant programs that can help business. May
want to include workforce representative as appropriate on visits.
Identify companies that are facing retirement and need to transition ownership or need
assistance in scaling up facility.
Based on interviews with businesses, identify any barriers to growth. Compile responses from
business to find common themes of strengths and weaknesses of working in Bozeman.
Obtain quotes from CEOs to authentically promote Bozeman.
City of Bozeman | Economic Development Strategy Update
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Objective 1.2 Invest in infrastructure and employment areas desired by traded sector business
expansion
It is important to understand where different industries can locate. For example, bioscience needs to
be near MSU research facilities and photonics is sensitive to vibration and can’t be near rail. With this
understanding of site needs, the appropriate infrastructure improvements can be made in the right
locations to foster growth.
City staff has the unique role in guiding infrastructure investments, land use policy, and the
permitting process. Removing barriers to site development and proactively fostering site readiness
tied to business needs is a critical role in economic development. Furthermore, development in the
desired downtown core is more complex than standard “greenfield” development and requires
hands-on engagement with staff.
Actions
Work with industry clusters to understand their unique siting needs and help them find
locations. Leverage planning and investment in broadband with site determination process.
Establish list of infrastructure needs tied to facilitation of site development.
Collaborate with Public Works, Finance, and Community Development Department to
determine if the needed infrastructure serves multiple properties and is on the Capital
Improvement Plan (CIP).
Ensure enough appropriately zoned land in desired employment areas.
Based on this understood need, apply for grants or apply Tax Increment Financing (TIF) funds
for projects in appropriate districts. Consider applying for a federal EDA Public Works grant
for infrastructure serving multiple employment sites.
Objective 1.3 Foster industry cluster collaboration
Industry clusters can thrive with a concentrated effort to bring research, workforce training, and
business together. In doing so, innovation is commercialized, business opportunities are fostered,
and training needs addressed. Cluster collaboration is realized through events, business assistance,
infrastructure investment, workforce training, mentorships, education, and marketing.
Actions
Continue to provide staff support for the photonics industry alliance.
Provide funding and staff support to implement a software industry alliance that includes
stakeholder representatives.
Provide funding and staff support to implement an outdoor industry alliance that includes
stakeholder representatives.
City of Bozeman | Economic Development Strategy Update
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Provide staff support to engage existing tourism organizations to align events, marketing and
promotions to highlight and promote local outdoor companies.
Provide staff support to engage Montana Bioscience Alliance locally to further a bioscience
industry alliance that includes stakeholder representatives.
Determine if there are gaps in the supply-chain requiring a specific company presence to
bolster industry cluster strength. Partner with industry leaders to fill supply-chain gaps with
known sites, market demand, and workforce opportunities.
Objective 1.4 Strategically market for talent attraction
The number one asset and need for any industry is talent. In expanding the existing base, it is
important for businesses to easily retain and attract talent. In preparing the strategy, almost all
industry sectors expressed the need to build one compelling website that aggregates the business
case for Bozeman and why talent will want to come here. Additionally, in the business survey
responses it was expressed that limited pools of applicants and no central site for postings is a
barrier to hiring. The website could serve as important tool as a portal for hiring.
Actions
Pending private industry match, hire consultant to build basic website for talent attraction
that supports all industries. Consider annual maintenance in budget and strategy to engage
industry for use and upkeep. Based on meetings with business groups and BRE visits,
determine key messages to attract talent.
Goal 2: Support Business
Why this Goal?
New businesses account for nearly all net new job creation and almost 20 percent of gross job
creation. Furthermore, companies less than one-year-old have created an average of 1.5 million jobs
per year over the past three decades.13 People generally start businesses in the places they are
already located, and many of the resources they access are at the local or regional level.
New local sector businesses are important as they make a community distinct, provide amenities to
attract young professionals and families that drive the new economy, and serve the tourist industry.
Many of these businesses need “brick-and-mortar” locations often requiring tenant improvements
and building permits, which can be a daunting process. These businesses often benefit greatly from
business planning and consulting as well. For these business owners, having one point of contact to
navigate the process of starting a new business is extremely valuable.
13 The Importance of Young Firms for Economic Growth, Kaufman Foundation, September 13, 2015
City of Bozeman | Economic Development Strategy Update
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New traded sector startups generally stem from university research or an existing industry cluster.
These new businesses have limited space needs and may just be starting out of the home or garage.
These businesses need access to capital and industry networks for collaboration and support.
Objective 2.1 Provide resources to local businesses to help them grow and expand
Often owners of new businesses have never experienced permitting and development of a business
place nor are they aware of the many programs offered to support their growth. City staff has a
unique role as an important point of contact for these new business owners and can make the
process more seamless and supportive.
Actions
Create a role for a specific person in economic development department to be first stop for
permitting and process concierge. Introduce businesses to existing small business programs.
Continue to proactively share GIS data and information to help businesses determine new
locations.
Objective 2.2 Support existing startup infrastructure
It is important to support an ecosystem where startups are supported and celebrated to create new
jobs. An entrepreneurial culture not only serves to create new jobs, but it provides an environment
that supports “trailing spouses:” a person who follows his or her life partner to another city because
of a work assignment. In a tough hiring climate, promoting this asset is important.
Actions
Collaborate with the startup organization to define roles and objectives. The City’s role is to
help promote awareness of programs. Promote existing programs through business license
renewal or City mailings.
Promote the MSU Blackstone Launchpad, which is an entrepreneur resource for students,
alumni, and faculty offering coaching, ideation, and venture creation support.
Collaborate with MSU Tech Link (formerly Tech Transfer Office) staff to foster partnerships
with industry clusters.
Promote the Blue Ocean Innovation Center, which is an existing private co-working space, as
resource for startups.
Promote Startup Bozeman as networking resource for startups.
City of Bozeman | Economic Development Strategy Update
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Goal 3: Regional Connections
Why this Goal?
Complex issues driving income stratification and workforce skills gaps are making it more difficult for
all citizens to realize positive personal economic growth in keeping with business growth. In order to
plan for this modern economy, communities must consciously foster a diverse economic base and
skilled workforce to weather inevitable negative portions of the economic cycles.
Objective 3.1 Regional focus
The economic development issues facing Bozeman do not adhere to geopolitical boundaries. In
order for the City to effectively achieve goals of efficient, sustained and diverse economic growth, it
must collaboratively work with County staff. Furthermore, if new financing tools are to be secured, it
will take a unified regional voice.
Actions
Establish economic development implementation group with County economic development,
planning and public works staff.
Consider how tourism funds can be incorporated into economic development efforts.
Align economic development legislative agendas on a regional level for stronger voice and
actions to preserve existing economic development tools and diversified funding stream for
new opportunities.
Support Gallatin College in finding a location for a 100,000-square-foot facility and aligning
regional funding.
Objective 3.2 Workforce training partnerships
To succeed in the modern global economy people must develop skills. In order to ensure economic
opportunities for Bozeman citizens, it is important to foster interest in job opportunities at a young
age and make training programs readily available.
Actions
Build project-based learning partnerships between industry and K-12 programs. Have
students visit manufacturing facilities to make education relevant.
Continue to support Gallatin College and training programs by commuting needs of
businesses.
Explore opportunity for a coding school. These are fully-immersive coding boot-camp
programs and a part-time course designed to produce or enhance highly employable
software developers ready to work in Montana’s thriving community of startups and tech
businesses.
City of Bozeman | Economic Development Strategy Update
November 2016 Page 36
Objective 3.3 Strategically invest Urban Renewal
With a conscious investment in active transportation, the City provides the crucial infrastructure to
foster affordable lifestyle (not just affordable housing). With a focused effort to promote infill and
building housing and employment along corridors, individuals are less compelled to own an
automobile, which translates into $9,000 in personal annual savings.
Actions
Understand where different types of workforce lives and their employment locations.
Determine if there are commute barriers/opportunities.
Collaborate with transit authority to determine if routes and service are matching with
employer and employee locations.
Support efforts to build higher-density housing near transit and active transportation routes.
Enhance bike and pedestrian connections throughout the city to offer low cost active
transportation options.
End of document.
City of Bozeman | Economic Development Strategy Update
November 2016
Appendices
Appendix A: Action List
Appendix B: Stakeholder List
Business
Growth Infrastructure Workforce Actions and Metrics 2017 2018 2019
Years
4 and 5
Staff and
Resource Partner Metric Outcome
Expand the Existing Base
√
Prepare list of existing targeted traded-sector companies that are within
industry clusters. Become familiar with workforce services and grant
programs that can help business. May want to include workforce
representative as appropriate on visits.
X X X X
Project
Manager /
new staff
Prospera, Chamber,
Gallatin College, MSU,
and other similar partners
Identify how many business visits made in what
sector. How many training programs utilized by
business and what skills traiing is provided.
Identify companies that are facing retirement and need to transition
ownership or need assistance in scaling up facility. X X X X New staff Manufacturing
Partnership
List how many companies are facing this situation
and resolution by what organization.
Based on interviews with businesses, identify any barriers to growth. Compile
responses from business to find common themes of strengths and
weaknesses of working in Bozeman.
X X X X
New staff Brokers, developers,
engineers
Identify the barriers to growth and how are they
resolved by staff.
Obtain quotes from CEOs to authentically promote Bozeman.X X X X New staff NA Document quotes and utilize on website.
√√
Work with industry clusters to understand their unique siting needs and help
them find locations. Leverage planning and investment in broadband with
site determination process.
X X X X
Project
Manager
Brokers, developers,
engineers, MSUIC
Identify how many infill projects were developed.
Establish list of infrastructure needs tied to facilitation of site development.X X X X Project
Manager
Brokers, developers,
engineers
Document needed infrastructure projects.
Collaborate with Public Works, Finance and Community Development
departments to determine if the needed infrastructure serves multiple
properties and is on the captial improvement plan.
X X X X
Project
Manager
City staff Identify how many ED projects on CIP and where.
Ensure enough appropriately zoned land in desired employment areas.X X X Project
Manager
Community Development
Department
Identify how many sites available for expansion and
where.
Based on this understood need, apply for grants or apply Tax Increment
Financing (TIF) funds to projects in appropriate districts. Federal EDA Public
Works grant for infrastructure serving multiple employment sites.
X X
Project
Manager
City staff Identify how many grants and dollars have and/or
can be obtained to fund infrastructure.
√√
Continue to provide staff support for the photonics industry alliance.
X X X X
Director /
Project
Manager
Photonics companies,
MSU, and Gallatin
College
Determine barriers to growth within industry and
how they align with regional legislative agendas.
Build industry support for determined infrastructure
needs.
Provide funding and staff support to implement a software industry alliance
that includes stakeholder representatives.X X X New staff
and $10,000
Software companies,
MSU, and Gallatin
College
Organization Chair identified and first meeting
held.
Provide funding and staff support to implement an outdoor industry alliance
that includes stakeholder representatives. X X New staff
and $10,000
Outdoor companies,
MSU, MMEC and Gallatin
College
Organization Chair identified and first meeting
held.
Provide staff support to engage existing tourism organizations to align
events, marketing and promotions to highlight and promote local outdoor
companies.
X X
New staff Tourism organization and
chamber
Staff attending meetings to determine if there is an
opportunity to align with outdoor industry.
Provide staff support to engage Montana Bioscience Alliance locally to
further a bioscience industry alliance that includes stakeholder
representatives.
X X
New staff Biotechnology
companies, MSU, and
Gallatin College
Organization Chair identified and first meeting
held.
Determine if there are gaps in the supply-chain requiring a specific company
presence to bolster industry cluster strength. Partner with industry leaders to
fill supply-chain gaps with known sites, market demand, and workforce
opportunities.
X X X
Director /
new staff
Industry cluster
organizations
Identify company gaps internally and outreach
strategy to address.
√√
Pending private industry match, hire consultant to build basic website for
talent attraction that supports all industries. Consider annual maintenance in
budget and strategy to engage industry for use and upkeep. Based on
meetings with business groups and BRE visits, determine key messages to
attract talent.
X X
$15,000 +
maintenance
Industry cluster
organizations
Website created.
Business attracts
talent more easily.
Glossary Strategy Overall document that guides economic development department workplan for up to five years. Goal An overarching principle that guides decision making.Objective Specific area of focus to implement goal.Action Specific task undertaken by staff to meet objective.Outcome
Three Pillar Strategies
Result of actions.
Objective 1.3 Foster industry cluster collaboration
Objective 1.4 Strategically market for talent attraction
BOZEMAN ECONOMIC DEVELOPMENT STRATEGY (2017 to 2022)
Objective 1.1 Develop strategic approach to business retention visits
Objective 1.2 Invest in infrastructure and employment areas desired by traded sector business
Business
opportunities are
fostered,
innovation
encouraged,
training needs
addressed, and
barriers removed,
all strengthening
and growing
industry base.
Local industries
grow with the
removal of barriers
to growth and
nuturing of assets.
Construction of
infrastructure to
employment areas
desired by
industry.
Business
Growth Infrastructure Workforce Actions and Metrics 2017 2018 2019
Years
4 and 5
Staff and
Resource Partner Metric Outcome
Three Pillar Strategies BOZEMAN ECONOMIC DEVELOPMENT STRATEGY (2017 to 2022)
√
Create a role for a specific person in ED to be first stop for permitting and
process concierge. Introduce businesses to existing small business programs.X X X X
New staff DDA, SCORE, SBA,
County, Chamber, and
similar partners
Identify how many businesses supported and the
services provided.
Continue to proactively share GIS data and information to help business
determine locations for new business to help determine where infrastructure
investments should be made.
X X X X
Director /
new staff
City staff Identify how many business licenses issued annually
in what sector and where.
√
Collaborate with the start-up organizations to define roles and objectives.
City’s role is to help promote awareness of programs. Promote existing
programs through business license renewal or City mailings.
X X X X
Director /
new staff
Launchpad, Tech Link,
Blue Ocean, Startup
Bozeman, and other
Document number of promotions provided for
each start-up organization.
Promote the MSU Blackstone Launchpad, which is an entrepreneur resource
for students, alumni, and faculty offering coaching, ideation, and venture
creation support.
X X
Director /
new staff
Startup Organization Highlight information in website.
Collaborate with MSU Tech Link (formerly Tech Transfer Office) staff to foster
partnerships with industry clusters. X X Director /
new staff
Startup Organization Highlight information in website.
Promote the Blue Ocean Innovation Center, which is an existing private co-
working space, as resource for startups.X X Director /
new staff
Startup Organization Highlight information in website.
Promote Startup Bozeman as networking resource for startups. X X Director /
new staff
Startup Organization Highlight information in website.
√√√
Establish economic development implementation group with County
economic development, planning and public works staff.X X X X Director County Organize committee and hold at least two
meetings.
Consider how tourism funds can be incorporated into economic
development efforts.X X X
Director Convention and Tourism
Bureau, Chamber, and
other similar partners
Meet with partners and identify potential projects
for funding that support both tourism and
economic development.
Align economic development legislative agendas on a regional level for
stronger voice and actions to preserve existing economic development tools
and diversified funding stream for new opportunities.
X X
Director Chamber and other
similar partners
Prepare aligned legislative agenda items for focused
efforts. Identify how industry leaders can specific
support efforts.
Support Gallatin College in finding a location for a 100,000 square foot
facility and aligning regional funding.X X
Director Gallatin College, County,
Chamber, Prospera, and
other similar partners
Work with partners to determine specific college
needs and fundraising strategy. Leverage
established partnerships.
√
Build project-based learning partnerships between industry and K-12
programs. Have students visit manufacturing facilities to make education
relevant.
X X X X
Director /
new staff
Gallatin College, MSU,
industry organizations
Align with ongoing efforts to define and promote
programs when visiting businesses.
Continue to support Gallatin College and training programs by commuting
needs of businesses. X X X X Director /
new staff
Gallatin College, industry
organizations
Document training needs identified in business visits
and document follow up as to how need is met.
Explore opportunity for a coding school. These are fully-immersive coding
boot-camp programs and a part-time course designed to produce or
enhance highly employable software developers ready to work in Montana’s
thriving community of startups and tech businesses.
X X
Director /
new staff
Sofware companies,
Gallatin College, MSU
Based on business visits determine industry support
and need. Document need and next steps with
partners.
√
Understand where different types of workforce lives and employment
locations. Determine if there are commute barriers/opportunities.X X X X Project
Manager
Brokers, developers,
engineers
Map desired areas and if there are infrastructure
gaps.
Collaborate with transit authority to determine if routes and service are
matching with employer and employee locations. X X X X
Project
Manager
HRC, businesses Map employment and employee areas and desired
transit routes. Determine opportunities for new
services lines and necessary revenues.
Support efforts to build higher-density housing near transit and active
transportation routes.X X X X Project
Manager
Community Development
Department
Document and map new housing projects.
Enhance bike and ped connections throughout city to offer low cost active
transportation options.X X X X Project
Manager
Public works Document and map new projects.
Objective 2.1 Provide resources to local businesses to help them grow and expand
Objective 2.2 Support existing startup infrastructure
Objective 3.1 Regional focus
Objective 3.2 Workforce training partnerships
Objective 3.3 Strategically invest Urban Renewal
Business starts and
grows more easily.
Regional Connections
Local workforce is
strengthened with
enhanced skills
and training.
Community has
awareness of
existing start-up
community and
more start-ups
may emerge.
City builds the type
of place
employees and
employers want to
live and work in.
City and County
partners effectively
and proactively
address complex
issues facing the
region.
Support Business
City of Bozeman | Economic Development Strategy Update
November 2016
Stakeholder List
City Staff
Craig Woolard, Public Works
Shawn Kohtz, Public Works
Chris Saunders, Community Development
Natalie Meyer, Sustainability
Mitchell Overton, Parks and Recreation
State and Community Partners and Resource Providers
Paul Reichert, the Prospera Business Network
Rob Gilmore, Northern Rocky Mountain EDD
Chris Naumann, Downtown Bozeman Partnership
Karyl Tobel, Montana Department of Commerce
Heather Grenier, Human Resource Development Council
Tracy Menuez, Human Resource Development Council
Jackie Haines, Human Resource Development Council
Stephanie Gray, Gallatin College
Bob Hietala, Gallatin College
Warren Vaughan, Gallatin County
Daryl Schliem, Bozeman Area Chamber of Commerce
Les Craig, Blackstone LaunchPad and the Montana State University Innovation Campus;
Anya Frey, Small Business Development Center at Montana State University
Sarah Ferguson, Montana Community Development Corporation
Luke Howard, Southwest Montana Building Industry Association
Business Leaders
Jim Ness, Big Sky Western Bank
Bob Gieseke, Rocky Mountain Bank
Matt Johnson, First Interstate Bank
Andrew Hull, Elixiter
KC Walsh, Simms Fishing Products
Andy Wunch, Sitka Gear
Rob Irizarry, Oracle
Justin Bigert, Wisetail
Ken Fichtler, Lattice Materials, Startup Bozeman
Michael Monaghan, Beartooth Radio
Cody Sauer, StartUp Bozeman
Bob Wall, Iron Core Labs
Robert Goodwin, Takeda Pharmaceuticals
Larry Johnson, Montana Photonics Industry Alliance
Pete Roos, Bridger Photonics
Tim Sheehy, Bridger Aerospace