On this episode of the Economic Development podcast, we discuss how COVID’s impact to the supply chain is driving the growth for the logistics and distribution sector in Memphis. Reid Dulberger, President & CEO of the Economic Development Growth Engine for Memphis & Shelby County, also shares how the organization is supporting the ecosystem to drive targeted industry growth for the medical technology and orthopedic device sector.
This market is positioning itself to capture an even larger share in the distribution space. Whatever the international supply chains look like coming out of this pandemic, we’re preparing for that by making improvements both at our airports and our river port.
- 01:43 – Reid shares the uncertainty and questions that many of his cohorts around the country are asking in a post-COVID world.
- 03:18Â – Reid discusses how the region is capitalizing on the growth of the logistics and distribution sector and how the interruption in international supply change is spurring the growth.
- 06:12 – EDGE is tapping into his existing entrepreneurial and business development resources to drive growth in industries like medical technology and orthopedic devices because Memphis is a major manufacturing center for orthopedic devices
- 08:54 – Small to mid-size businesses without the capacity are receiving financial support and survival support.
Reid Dulberger 00:00
One of the things that we have been doing as a community of economic development organizations here in Memphis, we came together early in this crisis and have been meeting weekly to make sure that we are connecting our technical resources – our Small Business Development Center – and connecting them to a broader spectrum of business. This is not just tech, and not just startup but connecting to resources and those very smart people who know how to do business, how to reposition businesses, how to rethink business plans. This helps position them with some of our more traditional businesses, be that medical device, be that ad tech, be that distribution, be that catering serving businesses, so that we are infusing those companies those with a better understanding of the world today, better understanding of what the world might be, and more most importantly, how they can capitalize on it.
Fabiola FleuranvilÂ 01:36
So let’s talk about recovery and resiliency, within your region. What does that look like right now?
Reid Dulberger 01:43
I suspect that just like a lot of regions, it’s mainly a wait and see while we are working with a lot of our local companies to help them survive and recover from the pandemic. The truth is, there is enormous amount of uncertainty in our world today. We don’t know what the post pandemic world will look like. What is brick-and-mortar retail going to look like in the future? What is office space demand look like, and hospitality, entertainment, and across the various spectrum.
There is more uncertainty today than at any point that I can remember. And when there was uncertainty, we see more than anything else is businesses pause. Because you’re not making the go-no-go decision or taking the wait-and-see attitude. What does the world look like afterwards? And uncertainty about international supply chain with where goods are going to be coming from and what we see is just an amazing amount of uncertainty in our world today.
Fabiola FleuranvilÂ 02:50
With that said, even in uncertainty and challenges and crisis, such as this current one, that’s where you also see a lot of innovation and ingenuity. Particularly as the dust is starting to settle. So with that, which one of your industries would you say is certainly rising to the occasion, have found a really good sweet spot, they’re pivoting, and you’re seeing where that could potentially lead to a potential growth opportunity for your region to explore in further leverage.
Reid Dulberger 03:18
For those that don’t know, Memphis is a major distribution and international freight hub. We boast the nation’s largest freight cargo airport by tonnage, high class railroads, and the nation’s fifth largest port. So we’ve traditionally been a freight distribution town, and the growth of e-commerce, spurred by the pandemic, has been good to us. It’s something that we expect will continue to grow.
And so this market is positioning itself to capture an even larger share in the distribution space. Whatever the international supply chains look like coming out of this pandemic, to prepare for that, we are making improvements both at our airports, but also long term with our river port. We’re doing so in order to better capitalize on trace flows, which we believe on the inland waterway system will move from essentially bulk cargo moving in open barges today and certainly to a more containerized world on the human waterway system.
Reid Dulberger 04:34
At the same time, we believe that as a community that has traditionally exported college educated talent, but also both the high quality of life and a low cost of living, that we will be well positioned for if the economy truly shifts to a remote workforce, particularly as it relates to technology and also to back office shared services positions.
We are talking with our real estate developers about office projects as part of mixed use developments, particularly in our downtown area, and to our telecommunications firms about enhancing the capacity for 5G and other advanced communications technology so that we can better position ourselves to leverage the fact that we are home to three Fortune 500 world headquarters, the home of Tennessee’s largest bank, and St. Jude Children’s Research Hospital.
Fabiola FleuranvilÂ 05:41
When you speak of exporting talent, that likely reveals an opportunity for also companies and major organizations that are looking for second headquarters or even other markets to continue to expand on. When you mention the transition in the shift into e-commerce, are you seeing a lot of new startups or even expansions in your existing tech businesses in this space that are taking on some of the challenges and opportunities that e-commerce is presenting these days?
Reid Dulberger 06:12
What we’re seeing is that existing companies in that space, companies that are in the first few years of their life, are seeing the opportunity of a lifetime. We have a robust entrepreneurial support ecosystem here in the city of Memphis and a series of accelerators and incubators and technical support organizations. Given the nature of our economy will come as no surprise when we see a fair amount of those related to the freight industry. We also see a fair number of those related to medical technology, particularly orthopedic devices, because we are a major manufacturing center for orthopedic devices. So, we had that kind of a base of support, but what those companies have seen over the last few months, in particular, is just this explosion of interest in what they’re doing, and what they might be doing, where they might be going. So it has been good for companies in that space.
Reid Dulberger 07:14
It has been challenging for some more traditional industries, particularly big brick and mortar companies that have been forced to close because of the pandemic. So, yes, we are seeing the pandemic help those companies in their startup space. We are also seeing existing major players like Amazon who now have several facilities in our community with a very large facility just coming online at the end of the year.
Fabiola FleuranvilÂ 07:50
I can imagine that, especially as there becomes more clarity and some of these trends perhaps your entity EDGE will likely start to see some initiatives or even investments wrap around some of these startups and the growth that you’re seeing around these innovation companies.
Reid Dulberger 08:08
That’s exactly right. As I mentioned earlier, right now, to a large extent, we are focused on helping existing firms survive the pandemic, number one. And secondly, to identify growth opportunities, because as you very correctly noted, crisis creates opportunity. So those companies that are looking forward will connect with the resources to do better.
We know that our small and medium sized firms don’t have that kind of capacity internally. They’re just not big enough. And so one of the things that we as a community of economic development organizations here in Memphis, we came together early in this crisis, and have been meeting weekly to make sure that we are providing financial resources to our existing firms.
Reid Dulberger 08:54
For example, my organization launched a new grant program for small local firms in our distressed inner city neighborhood. Today we’ve done 88 grants totaling about a half a million dollars.
Our peers have done similar programs. So yes, we’re providing financial support and survival support. We are a helping with technical resources, our Small Business Development Center, the assets at our University. We have a network of innovation and entrepreneurial support programs to connect them to a broader spectrum of business, not just tech, not just startup, but connecting them to those very smart people who know how to do business, how to reposition businesses, and how to rethink business plans. We’re positioning them with some of our more traditional businesses, be that medical device, be that can ad tech, be that distribution, be that catering serving businesses. So that we are infusing those companies those with a better understanding of the world today, a better understanding of what the world might be, and most importantly, how they can capitalize on it.
Fabiola FleuranvilÂ 09:06
I thank you for sharing that. Thank you for adding your thoughts and contributing it to the podcast.
Reid Dulberger 10:15
Truly my pleasure.
Fabiola FleuranvilÂ 10:17
Thanks again for tuning in to the economic development podcast presented by Blueprint Creative Group. There’s more episodes featuring economic development leaders throughout the country. And we thank all of the participants for sharing their perspectives. Check out all of the episodes in this series at blueprintcreativegroup.com/economicdevelopment.