House Speaker Shap Smith Convenes Economic Development Brain Trust

Feb 26, 2015

Five weeks ago, House Speaker Shap Smith issued a public plea for economic development proposals. He’s now assembled a panel of private sector officials to sift through the submissions, and help craft new legislation.

Smith’s public solicitation yielded more than 200 economic development strategies from about 75 individuals and organizations.

Most of them were relatively useless, according to some of the people asked to review the submissions. But Smith and others say the exercise yielded some promising ideas that could fuel economic activity in Vermont.

“If we can change our licensed lender laws to unlock capital that is sitting on the sidelines, to invest in smaller businesses that want to grow, I think that we could do something like that this year,” Smith says.

Licensed-lender laws set the rules of the road for investments in the kinds of young businesses that Smith says should be a focus.

Former Middlebury Rep. Paul Ralston, the owner of the Vermont Coffee Company, and chairman of the 11-person panel Smith has convened to shape his economic development bill, says existing statute makes it difficult for those businesses to secure investments of between $75,000 and $1 million.

“And the hole is really the sweet spot for entrepreneurial business growth in Vermont, so we need to do something to close that hole,” Ralston says.

Smith says he also wants to create a workforce development initiative that would tailor curricula at technical schools to the job requirements of existing openings at Vermont tech companies.

"So we can work with high-tech, but we can also work with the local technical schools to make sure that we're unlocking the talent that's out there and getting it into the workforce." - House Speaker Shap Smith

“So we can work with high-tech, but we can also work with the local technical schools to make sure that we’re unlocking the talent that’s out there and getting it into the workforce,” he says.

Smith’s economic development brain trust includes Betsy Bishop, head of the Vermont Chamber of Commerce, Tom Torti, head of the Lake Champlain Chamber of Commerce, Andrea Cohen, head of Vermont Businesses for Social Responsibility ,and Scott Mackey, a partner at the Statehouse lobbying firm, KSE partners, and formerly the chief economist of the National Conference of State Legislatures.

Cairn Cross, co-founder of FreshTracks Capital, a venture-capital in Shelburne, is also part of the group. Cross says lawmakers are contending with some daunting shifts in economic fundamentals.

“This is a lousy time to be a politician because the truth of the matter is that valuable companies are not going to employ as many people as they used to employ,” Cross says.

Cross says the days of anchor-employment behemoths like IBM are over. And he says the surest route to economic success is to lure the entrepreneurs that will create the Dealer.coms of the future.

Convincing those people to make their lives in Vermont, according to Cross, has more to do with clean lakes, quality schools -- and even great local beer -- than it does with tweaks to tax codes and business regulations.

"When you're considering economic development in a vacuum, you are beginning to look at the few levers you have to pull there. Meanwhile there's a whole bunch of other things that are important, like what do you do about the education system?" - Cairn Cross, co-founder of FreshTracks Capital

“When you’re considering economic development in a vacuum, you are beginning to look at the few levers you have to pull there,” Cross says. “Meanwhile there’s a whole bunch of other things that are important, like what do you do about the education system?”

Speaker Smith says he also hopes to find a way to expedite the deployment of broadband across the state. He says he plans to introduce economic development legislation after the town meeting break.