Area economy growing but faces challenges, GNO Inc. leader says

Instead of recounting the publications that bestowed a superlative economic development designation on the New Orleans region in 2013 as testament to the area’s rapid growth and success, Michael Hecht used his keynote address at Greater New Orleans Inc.’s annual meeting Thursday to warn the region’s business and political leaders of coming “growing pains.”

“For the first time in decades, we’re going to experience the challenges associated with growth,” said Hecht, GNO Inc.’s president and CEO. “Because for the first time in decades, we’re actually growing.”

The most pressing challenge will be finding enough skilled workers to fill the demand from companies in the petrochemical, biomedical, software and other fields that want to locate in the region.

“This is THE issue,” Hecht said. “If we don’t address this, then our recovery is going to stall out.”

GNO Inc. is the regional economic development agency for 10 southeast Louisiana parishes. Its board recently agreed to renew Hecht’s contract for five more years.

Hecht said the organization defines its mission as creating jobs and wealth through business development and product development.

Business development is going “incredibly well,” he said.

Last year, some former area companies, including International Shipholding Corp., returned to the region after having relocated to other states, he said. Meanwhile, some longtime local companies, like Pelican Energy Consultants LLC, are expanding, and new companies, including Dyno Nobel, are choosing to make the 10-parish region their home.

According to GNO Inc.’s Regional Economic Growth Index, the region’s economy has been growing by about 3 percent a year since 2009. The index, called REGI for short, was introduced at Thursday’s meeting. It measures 13 indicators including the region’s gross domestic product, changes in the number of jobs, violent crime rates, the percentage of the population living in poverty and the value of venture capital deals.

Several parishes, including Plaquemines, St. James, St. Charles and St. John, each recorded $1 billion in business investment last year, Hecht said.

“Folks, in past years if we had $1 billion worth of projects in the entire state, it was a decent year,” he said. “Now we have a billion dollars in each parish.”

But as the region grows, it is experiencing “growing pains,” Hecht said. He said five pressing challenges, chief among them a workforce shortage, will have to be addressed to continue the economic development.

“Building a skilled workforce is our biggest challenge,” said Patricia LeBlanc, who was installed Thursday as the 2014 chairwoman of the GNO Inc. board of directors. “We can’t miss the opportunities that are on our doorstep by failing to prepare young men and young women in our community to meet those opportunities and capitalize on all that is great in our community.”

Hecht said the region is having trouble finding enough workers, both blue collar and white collar, to meet the coming demand from a variety of industries. GNO Inc. is trying to find ways to both train and recruit workers to fill the gap, he said.

Other issues are a shortage of development-ready sites for all the projects interested in finding a home in the 10-parish region and a lack of equitable participation in the region’s recovery by all races, classes and genders, he said.

There needs to be a dedicated effort, for instance, to support and nurture minority entrepreneurs, Hecht said, referring to a program launched for that population this week.

“If everybody is not participating in the recovery, it’s going to be hollow in the middle and it’s not going to be stable,” he said.

The region also needs to make sure that it plans for future growth even as it enjoys the current wins and works to train the next generation of leaders, he said.

“These are growing pains,” Hecht said. “These are a good thing.”