MORE FOREIGN investment in Illinois, better coordination among the many advisory groups that work with the Department of Commerce and Community Affairs (DCCA) and high-powered help from the state's business network are some of the goals of DCCA's new Illinois Development Board (IDB). The formal organization of the board was announced in March by Gov. James R. Thompson. As the primary private sector advisory board to DCCA, the IDB is just beginning its work. Illinois Issues interviewed some of its members to discover their views on the Illinois economy and what can be done to bring more jobs to the state.

The IDB was the idea of its present chairman, Herbert F. Rothschild, president of the Rothschild Realty Group, a commercial real estate firm headquartered in Wilmette. "The state of Illinois has not had a board. . .to oversee factors in the state to get industry in. We've had 30 different groups advising DCCA. Some were just appointees to placate somebody. We didn't have a thrust to help DCCA do what they needed to do."

"Other states have extremely effective organizations similar to IDB," says board member William Guyton, vice president of the international division of A. T. Kearney Inc. of Chicago and chairman of DCCA's international trade and port promotion group. "North Carolina and Georgia have been very effective. Some time back, Georgia had one new business a week. Not all of it was going to the major cities either." Industries in Illinois should be scattered over the state, Guyton says, noting that the IDB recently held a meeting in DuQuoin to discuss economic development in southern Illinois.

To prove the value of the development board concept, a steering committee was formed in late 1982. Members of the committee evaluated DCCA's small business program; coached DCCA staff members on marketing techniques and helped establish an Illinois Office in Tokyo (see Illinois Issues, December 1982, p. 35).

Rothschild emphasizes that members of the board are expected to be at meetings and to spend their time and sometimes their money as unpaid consultants for the state. "I feel good about it," he says, "in that it is a blue-ribbon panel of people doing something rather than going to lunch and pontificating."

Illinois should make better use of its business networks, Rothschild believes. "Other states are far ahead of Illinois," he says, citing Florida and South Carolina which have prestigious "Committees of 100" composed of top business executives who sponsor (and pay for) tours and social events for businesses interested in locating in their state. "Among midwestern states, Ohio is more aggressive than Illinois. Even Michigan. We've just never had to be aggressive before."

One of IDB's subcommittees is now working on a long-range strategy for DCCA. The aim is not to change the structure of the department — members emphasize that DCCA already has the structure and the people to do the job — but to coordinate and set priorities. "We want to move as quickly as possible [on strategy for DCCA], as the business climate improves in the state," says Richard J. Lutovsky, board member and president of the Metro-Decatur Chamber of Commerce. Lutovsky also serves on DCCA's Private Sector Advisory Group which pushed for more aggressive promotion of the state (including the Magnificent Miles of Illinois campaign) and helped streamline the functions of the old Department of Business and Economic Development when it was merged into DCCA. In term's of Decatur's recovery, Lutovsky believes improvement in the national economic climate is of primary importance, followed by upgrading DCCA's services and improvement in the state business climate.

IDB subcommittees are also working on foreign and domestic banking problems and on using the barter system to trade with third world countries who need Illinois grain and heavy machinery but don't have the dollars to pay for them.

Recently appointed board member William Van Sant, vice president of Deere & Company, Moline, has not been active on the IDB, though he says he might be in the future. Deere has already done some limited bartering, and Van Sant believes that more and more large companies may have to do this over the next 10 years. Trading companies specializing in barter arrangements are beginning to form. Taking a hypothetical situation, Van Sant explains: "We might trade a tractor in South America for oil, then take the oil and trade in Europe for foundry castings which we need."

A major goal of both IDB and DCCA is more direct foreign investment in Illinois, especially from Japan. "A number of Japanese companies are interested in investing outside of Japan," says Guyton. "They recently constructed a $28 million facility in England. We would like even a $2.8 million facility in Rockford. . . . The connections that all of us have are being used to bring international companies to Illinois. It has been slow coming from Japan. But the time is very ripe, and we are in constant contact with Japanese firms here."

But Illinois is competing for foreign investment with other states. "Honda came to Ohio, Nissan to Tennessee. We haven't got one major Japanese firm," says Rothschild. What Illinois does have, he says, are the contacts it needs, and DCCA and IDB are trying to develop them. Meetings are being planned in Tokyo in May, and one is scheduled for Osaka in the fall. The aim is to develop an Illinois-Japan Association consisting of 100 top Illinois executives and 100 top Japanese executives. Rothschild would like to see the fall meeting develop into a gala celebration of Osaka Castle's 4,400th anniversary and the opening of the Illinois office in Japan. Robert G. Gibson, president of the Illinois State Federation of Labor, describes himself as the "token" labor member of the board and takes strong exception to foreign investment as a solution to the state's economic woes. "When we're in such dire economic straits, we will grasp at anything. The thing that worries me is that we'll get dependent on the foreign governments for our economic life. It is not much different from foreign development corporations building up holdings of American farmland. . . .I'd prefer to see U.S. institutions invest in our economic future. You talk to people in the steel industry. The banks did not invest in steel. They were lending that money at exorbitant rates in Latin America. I don't understand the banking mentality, especially in our state. I don't see why they prefer to lend money to these countries over established Americans firms." Moving plants means dislocating people and is a short-range solution for a U.S. corporation, Gibson believes. "You only need to go along the border of Mexico in Arizona and New Mexico: Companies are moving across the border to avoid health and safety requirements."

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Executive Report

Jim Anderson, IDB member and executive director of the bipartisan Illinois Commission for Economic Development as well as several DCCA advisory boards, agrees with Rothschild and Guyton that Illinois has probably not put enough emphasis on foreign investment. "If people are buying foreign goods, why not build them in Illinois? We are a worldwide economy. We'll never get back, I think, to a national economy," he says.

Anderson himself is just finishing work on the Commission for Economic Development's plan for Illinois on which the IDB has had some input. It differs from other commission and state reports in that it is a long-range plan. It was to be presented to the governor and the General Assembly in May. Very high on its list of priorities — "the key" Anderson says — is education, especially higher education and vocational education. Another premise is that the state can assist but not create economic development. Growth must occur at the grass roots. Anderson hopes the plan can be embraced by everyone. "There is a role for labor in the plan. It does and should take an active role in the development of jobs," he says.

Whatever their differences, all members seem to agree that the state's resources are awesome. "Illinois' assets are many, says Guyton. "There are young, aggressive people at DCCA. They're dedicated to doing something, and Illinois has long-range strengths. Among these, Guyton cites its central location and transportation system, which increases in value as transportation costs become more important to businesses. Another is the availability of supply and repairs shops for manufacturers, the vast regional markets for businesses which settle here, and the sheer vitality and ethnic diversity of Chicago and the state. Illinois has a growing international network, including small firms — some high tech and some not — which are successfully exporting their products. "There are tremendous things that can be done," says Guyton. "We have in our state the largest exporter in the country: Caterpillar. It is hitting rough times now, but it is a tremendous organization . . . .You can do business from Chicago, Rockford, Peoria, practically anywhere. We're putting our money where our mouth is. If nothing else, I am showing my enthusiasm." Says Gibson, "The machine tool industry of the nation, the heart of it, is located in Rockford. All the ingredients are there for a viable industrial base, but they still have to be financed, and there has to be a commitment from the industrial leaders to do it."

IDB has been formally mandated to: devise a comprehensive strategy to better the overall Illinois economy; advise on Illinois efforts to market the state and its products overseas; advocate for a diversified Illinois economy (and come up with specific ways to accomplish this); provide in-house training to DCCA staff and help DCCA market its services to the private sector. The board is composed of members of 18 public and private advisory groups now working with DCCA, plus new members drawn from businesses throughout the state. There is one labor member, one state agency member, and two legislators, plus ex officio members from DCCA and the governor's office. More members may be added, according to a DCCA spokesperson, including women since, at present, there are none on the board.

IDB membership

Members of the IDB are: Jim Anderson, executive director, Commission for Economic Development, Springfield; Calvin Campbell, president, Goodman Equipment Corporation, Chicago; Nelson Carlo, president, Abbott Products Incorporated, Chicago; Sen. Howard W. Carroll (D-l, Chicago); Thomas H. Coulter, executive vice president, Lester B. Knight & Associates Inc., Chicago; Charles Curry, manager of community affairs, Quaker Oats Company, Chicago; Rep. Thomas W. Ewing (R-87, Pontiac); Robert E. Feigenbaum, president, Turco Manufacturing Company, DuQuoin; Ralph Fujimoto, partner, Japan Business Group, Arthur Young & Company, Chicago; Robert G. Gibson, president, Illinois State Federation of Labor, Chicago; Gerald Gidwitz, chairman of the board, Helene Curtis Industries Inc., Chicago; William Guyton, vice president-international division, A. T. Kearney Inc., Chicago; Richard J. Lutovsky, president, Metro-Decatur Chamber of Commerce, Decatur; James B. Peterson, president, management consulting group, Lester B. Knight & Associates Inc., Chicago; Kenneth J. Riskind, president, Fullerton Metals Company, Northbrook; Herbert F. Rothschild, IDB chairman and president, Rothschild Realty Group, Wilmette; James F. Sheerin, senior vice president, Hilton Hotels Corporation, Chicago; R. W. Van Sant, vice president, Deere & Company, Moline; and Joe Williams, president, Arrow Services, Chicago.

Ex officio members are: Peter B. Fox, director, DCCA, Springfield; Ed Marlin, assistant director, DCCA, Chicago; Tom Morsch, governor's office, Chicago; and Mike Woelffer, deputy director for economic development, DCCA, Springfield.

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