The economy might be less than ideal, but it's a perfect time for communities to pursue economic development, according to an expert in the field.

Jay Garner, president and chief executive officer of Atlanta-based Garner Economics, discussed the business of economic development at Montana West Economic Development's annual meeting Thursday night.

Before the meeting, he met with the Inter Lake to discuss what makes a good community for its people and for business development.

Garner's visit came at a crucial time in the Flathead, particularly in light of the area's economic situation and hopes for future growth, said Kellie Danielson, Montana West's president and chief executive officer.

"We, as leadership in the valley, need to decide how we're going to address" those challenges, she said. "How do we effect job growth? How can our standard of living continue to improve?"

The valley isn't the only area asking these questions. Communities across the country are using the recession as an opportunity to take stock of where they are and where they'd like to be, Garner said.

"It's an opportunity to remake themselves in this economy," he said. "There are things [communities] can be and should be doing ... now."

The most important thing communities need is good leadership, Garner added. All the communities his company has successfully aided had that factor in common.

"Really, it's the leadership that makes communities," Garner said.

Good leaders recognize that keeping costs low will benefit the community, Garner said. Low costs are likewise important for businesses, which exist to make a profit.

"If it can't make a profit in one location, it will move to a different location," he said.

In preparation for Garner's presentation, a staff economist studied Flathead, Lake, Lincoln and Sanders counties. The broad region was studied because employers don't care in what county their employees live, Garner said.

Garner said he was surprised at how far below the U.S. average the region is in terms of family income and per capita income.

He was pleasantly surprised to discover that the region and Montana have a higher percentage of high school graduates than dropouts than the U.S. average. There also is a higher percentage of people in Northwest Montana with some college or two-year degrees than the national average.

Northwest Montana does, however, have a lower percentage of graduates from four-year universities and people with graduate degrees.

"That's not surprising when you realize you don't have a four-year college here," Garner said.

The lack of a four-year university in the region is a challenge the area will likely have to overcome in the future, he said. Even getting an extension school, say the University of Montana-Kalispell, could benefit the area, he said.

"That helps in the retention of people and the recruitment of new businesses," he said.

The area does need to expand its resources, Garner said. In the Flathead, where the wood products industry is still prevalent, this means finding sites with rail service, Danielson said.

Montana West has identified sites with rail service that may be attractive to companies, she added. The group is trying to secure funding that would allow the Flathead County Economic Development Authority, supported by the county through mill levies, to buy the properties, which could house more than one business.

While the area's natural resources make timber and its related businesses a natural industry for the area, Montana West doesn't want to put all of its eggs into the wood-products basket, Danielson said.

"Diversification of business is extremely important," she said.

Garner agreed. "Diversification is the key to any success," he said. "Good leaders ensure that you have diversification."

Communities also have to make sure they have a strategic plan and ask themselves an important question, Garner said: "What is needed to be a dynamic community in the next five years?"

The global economy changes so rapidly that the plan might change during that time, he said. But communities can at least have a base plan to pursue.

The Flathead has yet to develop a really comprehensive plan, Danielson said. The area plans to try to attract gun and gun component manufacturers to the area, but beyond that, Montana West needs guidance about businesses that might work well in the Flathead.

That requires a practical approach, Garner said. The area's lack of proximity to an interstate highway means it probably wouldn't be a good idea to try to attract distribution centers.

But the area's high concentration of artisans and skilled laborers might make it desirable for other fields, Garner said. The Flathead also makes a good first impression.

"You're a community that shows well. You have what I call 'charm factor,'" he said.

When he visits a community that may become a client, Garner said the first thing he does is look around the airport. Airports and communities full of litter are likely a waste of time to work with, he said.

"Clean communities are important," Garner said, adding that he was favorably impressed when he arrived in the Flathead. "It shows well. It looks well."

The Flathead also has a strong history of public and private cooperation, which Garner said is another key to success.

"The best models for economic development are through public/private partnership," he said "You've got to have both sectors at the table to be effective."

On the Web:

http://dobusinessinmontana.com

www.garnereconomics.com

Reporter Kristi Albertson may be reached at 758-4438 or by e-mail at kalbertson@dailyinterlake.com