Virgin on Business: Group Dynamics

The deindustrialization of Seattle was a trend, and an issue, long before the proposed hoops-and-hockey arena gave it renewed attention. As offices, retail developments, apartments and condos crowded in, manufacturers figured life would be less expensive and bring fewer hassles by going somewhere else.

So where, for Washington, is that somewhere else? Does it matter if theres a specific somewhere else?

Answer to the first question: Yes, there are identifiable industrial regions and corridors in this state. The Kent Valley, for one, from Renton to Auburn. The Yakima Valley, from Ellensburg to the Tri-Cities. The I-5 corridor, roughly from Centralia/Chehalis to Longview and Kalama. The Tacoma Tideflats. Moses Lake. Spokane. Vancouver. Grays Harbor. Pockets of smaller communities such as Bellingham and Port Angeles.

You could throw in a few other industry-specific clustersaerospace around Boeing, medical and electronic devices in the Bothell/Woodinville areaand while youd be missing some players, the list would still cover the bulk of what wed consider the industrial sector in this state.

As to the second question: Yes, it does matter, for several reasons.

One is that its a more efficient way to operate. Clustering industrial companies and their vendors, suppliers and support services in compact regions reduces the time and money spent moving people and stuff between them. Thats particularly important in an era of lean production schemes and keeping inventories low; just-in-time doesnt work well if the component you need just this minute happens to be sitting on a truck stalled in a two-mile traffic snarl on I-405. If you can keep that movement of people and goods out of the way of the rest of humanity and its travels, so much the better.

Speaking of staying out of the way, theres reason two. Whether by happenstance or design, having industrial operations concentrated in specific zones or regions reduces the potential for conflicts with the newly arrived residents who fail to see the charm of living next to a plant that stays up late at night making a lot of noisea collision of interests that has occurred along the ship canal through Fremont and Ballard and also in SoDo.

The cause and effectpeople moving in, businesses moving outof such conflicts isnt a new phenomenon for this state. As metro areas pushed homebuyers farther out in search of affordable houses, many of the new arrivals discovered that, the brochures notwithstanding, agriculture sometimes smells funny when experienced up close.

Clustering industrial operations also makes for more efficient and effective development and use of public infrastructure those companies needroads to get freight in and out, streets with sufficient room in which to maneuver a truck, water, sewer and power lines, rail and port access. Its why port districts and property developers have built industrial parks in many of the aforementioned locales. Better to spend money to serve industries in one place than have them spread hither and yon and have the cost be prohibitive.

Why all this matters is that where these industrial clusters have been created will drive a lot of spending and investment decisions by the private and public sector. Whether its the redevelopment of Hanford property as an industrial park for energy-industry manufacturers, as the Tri-City Development Council is proposing, construction of a connecting highway between the Port of Tacoma and State Route 167, the North Spokane Corridor, or all those industrial parks port districts around the state are trying to fill, theres a lot at stake, and not just in terms in money. OK, its mostly money, not just in what might be spent by government, developers and companies now, but also in the long-term jobs and economic activity that are created because an industrial operation figured locating in one of those clusters was a better bet than the alternatives.

Which include: Shutting down, or moving to some other state entirely, those being unattractive options for everyone except, perhaps, the condo resident living next door.

Bill Virgin is founder and owner of Northwest Newsletter Group, which publishes Washington Manufacturing Alert and Pacific Northwest Rail News.