Bagels, beer, bullets, coffee and fish

Juneau Economic Development Council Notebook

Posted: Thursday, June 06, 2002

So I'm having a great cup of morning coffee and eating what is sure to be one of the best bagels in the world, when I realize I am holding economic prosperity in my hand. Juneau is fortunate to have local businesses that produce, among other things, excellent bagels, the best beer in the state, and world class smoked salmon, and coffee.

In the last two JEDC columns, I have tried to illustrate how Juneau's economic engine runs on government payrolls, services and only about 10 percent from resources and manufacturing. Manufacturing is a small, but extremely important component of our economy. Its like the nails that hold up the walls that hold up the roof.

Let's look at local manufacturing's recipe for success. Heritage Coffee imports relatively low-value, high-bulk, green coffee beans. They add Juneau hydroelectric power to roast the beans to produce terrific coffee. Silverbow Bagels brings in flour (low-cost, high-bulk) grains and yeast, adds water and uses hydroelectric power to boil and bake to perfection. At no extra cost, they will toast it for me. Taku Smokeries goes one better, they buy local fish, import sugar, salt and other products, use the power of water running downhill, and process, freeze, chill and smoke salmon. Alaska Brewing Co. also ships in malt, grain, bottles and yeast, adds Juneau water, and electricity to brew, bottle and chill. I detect a trend: Import raw materials, use our abundant natural resources, make the best product possible, and sell it. Alaska Bullet Works imports raw materials, uses low-cost power to make a unique product and exports all over North America.

One ingredient that I neglected to add is expertise, dedication to excellence and a commitment to the community. These business not only hire local workers, pay sales and property taxes, and work year round, they achieve the ultimate goal of economic systems: They bring in new money. Every case of beer, side of salmon, box of bullets or bag of bagels that leaves Juneau brings in money that lived somewhere else.

Local products also help keep Juneau money in Juneau. A local product in the store means less money going out of town to Seattle, Portland or somewhere else. Juneau has some hurdles to success. It costs more to ship things here, it costs more to hire people, and it costs more to ship things out than it would someplace down South. By positioning a product at the high end of the market, Juneau businesses can meet the intrinsic high overhead and prosper. Make something so good that it can be exported, and local folks will buy it too.

One thing I find a bit troubling is that these products are things people want. They are not necessarily things people need (morning coffee notwithstanding). When a good or service is a choice, there is little a business or town can do when the market decides not to buy. For example, the tourism industry is based on people choosing Alaska over some other destination. When they choose to go elsewhere the industry crashes.

They say that the fortunes made on the gold rush were by the people selling groceries, dry goods, picks and shovels. Supplying a need is much more dependable than supplying something that people want. So what does Juneau have that businesses need? We have hydroelectric power, a clean environment, transportation hubs, and a talent pool of local residents.

What are the things that new technology needs in the 21st century? How about data security? We are remote, with clean renewable hydroelectric power, and have an educated workforce. What if Juneau became the data storage center for the Pacific Northwest? Data can flow over fiberoptic cable and be stored in computer vaults. We even have a bunch of tunnels that can be recycled. What other opportunities are looking for what Juneau has to offer? It's time to start looking.

In the meantime, I can take comfort that while I'm eating my bagel with smoked salmon with a cold Alaskan Amber, I'm doing my part to support the local economy.

Mark Jaqua is an economic development planner for Southeast Conference and works in association with JEDC.



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