On November 17, the Iowa City Area Business Partnership (ICABP) and the Iowa City Area Development Group (ICAD) announced a decision to merge by July 1, 2023. Stop shop for all your needs. ICAD Vice President and Director of Strategic Growth Tom […]
Tom Banta, ICAD’s vice president and director of strategic growth, will become interim CEO in January, and Kim Casko, ICABP’s president and CEO, will remain in both roles until the merger in July. Current ICAD President Kate Moreland is stepping down to start her own business called Kate Moreland Coaching. She will continue to serve as a part-time consultant for the Better Together 2030 All In Vision.
The CBJ spoke to Ms Casko, Ms Moreland and Mr Banta to learn more about the rationale behind the merger, how they expect the region to benefit from the decision and where they see the future of economic development in the corridor.
What does the merger mean?
Both organizations, although now sharing similar names, have focused on helping the business world for decades.
Known as the Iowa City Chamber of Commerce in 1940, the ICABP has historically focused on helping local businesses. ICAD split from the group, then known as the Greater Iowa City Area Chamber of Commerce, in 1984 to focus on interstate commerce efforts. While ICAD helps companies do business across state lines, it also serves aspiring entrepreneurs and provides advice on site and expansion projects.
The November announcement wasn’t the first time that ICAD and ICABP considered joining forces.
“It was last in 2018,” Ms. Casko said, speaking of a six-month study called Project Penguin. “With ICR’s growing presence, we ultimately chose to remain separate.”
ICR, or Iowa City-Cedar Rapids, is a nonprofit organization formed in 2017 by ICAD and the Cedar Rapids Metro Economic Alliance focused on business attraction, people development and inclusion. The city’s relationship with the Cedar Rapids Metro Economic Alliance will not change as a result of a merger, Ms. Casko and Ms. Moreland agreed.
Other concerns at the time revolved around whether a combined organization would still have the best interests of small businesses in mind and whether those businesses would be harder to advocate for, she said.
Five years later, the two groups agree to merge, finally following the nationwide trend of combining a city’s chamber of commerce with business development. Of the 18 largest markets in Iowa, only Mason City and Iowa City do not have a merged organization under one roof, Mr. Banta said.
“I think it will take a long time,” he said.
Why merge now?
The two organizations decided against a merger four years ago, instead deciding it was better to work in that direction and share resources.
But in recent years, the roles and responsibilities of the two groups have overlapped to such an extent that maintaining the status quo has redoubled efforts and dulled the benefits of membership for participating companies and investors.
“When COVID-19 first emerged, we had two or three employees independently researching information and sharing information with the same stakeholders,” Ms. Casko said. “That was a big aha moment for us.”
The ICABP is part of the Iowa Chamber Alliance, a coalition of statewide chambers of commerce. They compared their situation to chambers in Cedar Rapids, the Quad Cities, Des Moines, Ames, and even across state lines like Topeka, Kansas, and saw that they were an outlier in a world where economic development and chamber activity are intermingled and inseparable are connected – more than ever before.
“Economic development has really changed,” Ms. Moreland said. “The workforce is a perfect example. This is one of the top issues in business development, but also a top issue for the chambers to help their local companies.”
The merger allows business owners to access the wide range of services already offered by ICAD and ICABP at MERGE in Iowa City, but under a single organizational structure to avoid confusion.
“ICAD has built much strength to serve entrepreneurs,” Ms. Moreland said. “At some point they will have to contact the chambers to connect them with other companies. Being able to have a front door in comparison [saying], ‘You’ve reached your point here, so let’s throw you over to this entity.’ Now there is a voice that is the trusted source.”
changes are coming
While all three leaders acknowledged that a deliberate listening period is important to ensure stakeholders are happy with the forthcoming changes, they reiterated that the move is in the region’s best interest.
“We’re not trying to cut things down,” Ms. Moreland said. “I want to reassure people that it’s about offering value and opportunity.”
One such area is interstate trade. With the advent of digital strategies and the acceleration of online trends post-pandemic, small businesses that traditionally catered solely to local buyers are now realizing the tremendous potential of shipping products and services across state lines.
“Those Main Street businesses that relied on foot traffic only had to expand,” Mr. Banta said. “It will require new skills and new capabilities that will change their business model.”
He pointed to a case study in which a small machining and metal fabrication company in Johnson County added a robot, giving the company the flexibility to manufacture products for business-to-consumer customers in addition to its traditional business-to-business customer model.
“The dynamics and the lines blur,” he said. “Our job is to connect companies to these resources. The world is changing.”
ICAD has seen steady growth in the number of investors in recent years, Ms Moreland said, and the organization has been fortunate to have just lost fewer than 10 small companies from its membership during the pandemic.
“We feel like we’ve been of service to the people during this very challenging time, and this is about being brave about what’s next,” she said.
They posit that the new organizations need a revised revenue model that allows companies to interact differently with the organization based on their wants and needs at all stages of a company’s life cycle.
“I’m really excited about this part because we’ve been wanting to reinvent our fee model for a while,” said Ms. Casko. “It’s a very traditional archaic chamber model and it’s complicated. Being able to move to a more modern model that includes subscription tiers will take us to the next level.”
What does the future hold?
A merger advisory board made up of board members is set to begin work on uniting the two organizations. By next summer, the organizations will vote again on statutes and statutes.
From there, a hiring process will begin to select a new President of the previously unnamed merged entity. According to a press release, it is not a foregone conclusion that either Ms. Casko or Mr. Banta will take on the position.
Ms. Casko acknowledged that July 1st may seem like a quick turnaround for the two organizations to merge, but that most of the basics have already been taken care of. She said the deadline is important because it is the start of a new fiscal year for ICAD, creating a sense of urgency to complete the process by then.
The merger, Mr. Banta believes, will only strengthen the solid foundations that many large companies in the region have.
“I think biotechnology plays a prominent role,” he said. “We have strong assets and strong capabilities within the university around the life science side of things. I also think we have tremendous resources and capabilities in the biomass and food ingredient industries as well. Cedar Rapids is one of the largest bioprocessing operations in the country. Fermentation is the focus and I think we’re building on that, but I think we’re well positioned in the bioeconomy.
“We are fully focused on education technology and leveraging the legacy we had with ACT and Pearson,” he continued. “They have top-notch manufacturing partners here like Procter & Gamble. We are home to the world’s largest manual toothbrush facility and have the only North American power toothbrush facility here.
“It all makes for a pretty robust, diverse economy with a lot of growth potential,” he said.
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