Jobs Through Recycling Market Development Roundtable

Jobs Through Recycling Market Development Roundtable April 16 and 17, 1998 Chicago, Illinois Introductory Remarks Terry Grogan of the U.S. Environmental Protection Agency (EPA) gave opening remarks and welcomed everyone to the roundtable. Mr. Grogan discussed how market development is essential to sustaining recycling. He also discussed the continued growth of the Jobs Through Recycling (JTR) program and the importance of its partnerships which link states, tribal organizations, local governments, and other business service providers. Ken Sandler of EPA followed with a brief overview of the JTR program. He began by discussing EPA
s Recycling Means Business Strategy, which provides a framework for the JTR program. Mr. Sandler then highlighted the major goals of JTR: linking recycling and economic development, forming meaningful partnerships, and establishing a permanent recycling infrastructure. JTR helps make recycling a permanent, stable, and sustainable part of our country
s industrial economic base. Mr. Sandler presented the results to date of the 1994 JTR grants: approximately 2,500 jobs created, $330 million invested, 3.6 million tons of recycling capacity created, 1.3 million tons of material processed, and 2,000 companies assisted. To date, the JTR program has provided more than $7 million in grant funding to 36 states, 3 multistate organizations, and 5 Native-American tribes. These grants are intended to serve as seed funding for selfsustaining programs. Many of the grants went towards innovative projects such as investment forums that bring together investors with businesses seeking financing. EPA encourages JTR grantees to build partnerships and infrastructure, obtain and measure results, and share information with others in the field. In addition to grants, JTR also creates opportunities for information sharing and facilitation and develops tools such as a web site , tool kit, JTRnet list server, and events such as the roundtable. In the future, EPA will place more emphasis on results, opportunities for mentoring and replication, and increased information sharing and facilitation. Specific projects include a financing project with the National Recycling Coalition (NRC), a recycling information report with the Northeast Recycling Council (NERC), more support for recycling technical assistance, and outreach to key audiences including economic development agencies and possibly state legislators. Questions and Answers Q: What is the future budget for JTR? A: Funding is allocated from year to year, which makes it difficult to predict future funding. Q: Has anyone looked at a national study to estimate the economic impacts of recycling? A: NERC reviewed existing state and regional studies that estimate the economic impact of recycling. Based on this research, they prepared a methodology to conduct a national study. The next step will be to obtain full funding and support to conduct the study. 1 Keynote Address Scott Bernstein, Center for Neighborhood Technology Mr. Bernstein presented a historical perspective of market development with stories that highlighted risk, efficiency, and the future value of trade. In addition to the lack of a clear goal, he identified major barriers to increased recycling market development. First, Mr. Bernstein discussed the lack of market data. The U.S. Department of Interior
s Bureau of Mines, for example, used to be a prime source of data on the flow of recovered materials. The bureau has not collected this information since 1994, however. Market developers need clear, consistent data. Next, he emphasized the need to bring recyclables supply and demand into balance. This balance will involve building capacity to use recovered materials on a regional level to reduce transportation costs. Too often, new manufacturing facilities are large and few and far between. Next, education is needed to increase the awareness of recycling and remanufacturing. JTR can help by providing a forum for people to interact and increased training opportunities. Mr. Bernstein also stressed the importance of intermediaries or those that can assist businesses in obtaining financing and increasing access to capital. Finally, he emphasized the need for improved scorekeeping. This involves tracking the success of market development efforts such as state, regional, and national studies. As possible solutions, he suggested looking for community reinvestment opportunities with banks and continuing to find new ways, such as investment forums, to tap into financing for recycling businesses. Topic One: Leveraging Private Investment in Recycling and Reuse Businesses Edgar Miller, NRC Mr. Miller gave an overview of NRC
s financing initiative, which is designed to increase private sector investment in recycling businesses. Existing NRC resources include a financing guide, videotape, and a 1997 market development directory. Mr. Miller briefly reviewed existing financing strategies, which include investment forums and networks, individual investors, community development financing initiatives (CDFIs), venture capital and equity financing, mergers and acquisitions, and state grant and loan programs. New strategies include recycling development banks (CWC is working in this area), recycling investment funds, community investment act credits, small business investment companies, economically and socially targeted investment funds, small business innovative research, and asset-based lending and project development. As part of the financing initiative, NRC is currently networking and conducting outreach to CDFIs and working with partners to develop an investor marketing study, investor
s guide to the recycling industry, alternative financing strategies for startup and small recycling businesses, and a 1998 market development guide. Future projects include a new web site, financing case studies, a tool kit of financing strategies, and a workshop at the upcoming NRC conference in September 1998. Mr. Miller requested assistance from states in documenting financing success stories. 2 Ted Campbell, South Carolina Department of Commerce Mr. Campbell discussed recycling market development in South Carolina and his experiences with investment forums. To date, Mr. Campbell
s office conducted three investment forums to introduce entrepreneurs to potential investors. A total of 63 companies, 40 investors, 60 state market development officials, and 95 others participated in the forums. Of the 24 companies that presented in the first 2 forums, 6 obtained financing. In addition to possible financing, the forums offered media exposure, training, and networking opportunities. Mr. Campbell pointed out that investment forums offer a longrange approach; success does not happen overnight. Also, he offered the following tips and strategies:

Set realistic expectations. Establish a selection committee early on with banking and investor community representatives. Begin identifying sponsors and set a date at least 1-year prior to the event. Sponsors can provide valuable financial support. Establish a database to target businesses and investors. Promotion and outreach are key. Be sure to provide ample lead time, and work closely with partners to get the word out. Conduct joint advertising with other forums, and secure advertising support from trade journals. Use speakers at the event to educate recycling businesses and investors. Focus on training presenting businesses beforehand. This is critical to the success of the event and can drastically improve the quality of business presentations.



Bob Schall, Self-Help Credit Union Self-Help is a nonprofit community development bank that lends money to businesses for financing needs that cannot be served by their local banks. Self-Help has provided financing since 1984 and has $160 million in assets. With the assistance of the North Carolina Recycling Business Assistance Center (RBAC) and others, Self-Help has specialized in providing financial assistance to the recycling industry. In preparation for this initiative, Self-Help thoroughly researched the recycling industry and spent 1 year marketing their services and learning how to approach recycling businesses. This involved educating the staff, staffing booths at trade association meetings, writing newsletter articles, targeting equipment dealers, and contacting recycling businesses. To date, Self-Help has approved 18 recycling business proposals for $4.5 million with an average loan size of $215,000. This financing has primarily been used for equipment and buildings for processing and manufacturing facilities. Mr. Schall noted that obtaining a reliable supply of materials is often the most difficult challenge for businesses. Long-term contracts are one possible solution. Also, recycling businesses tend to deal with new materials as they become available rather than developing a consistent business with the same material and customers over time. Keys to success are information on supply, pricing, and changes in the regulatory environment. In implementing its financing initiative, Self-Help obtained valuable support from organizations that can reach businesses directly (RBAC, Manufacturing Extension Partnerships, and banks), not through direct mail or advertising in recycling publications. To build on its success, Self-Help is considering broadening to an environmental loan fund beyond just recycling companies. 3 Questions and Answers Q: Do you place any preference on startup versus existing companies? Or geographic location? A: Self-Help looks at who
s running the companythe business management. They
re also very sensitive to competition. Self-Help looks at whether there are other players and if there
s enough room in the market for a new business. Also, they offer above market interest rates, not low-interest loans. Self-Help finances those who cannot get financing otherwise; they do not intend to compete with banks. Q: How many businesses who have applied for investment forums have been selected? A: South Carolina has accepted a lot of businesses but has maintained a standard of quality for participating business. Also, through training, South Carolina prepares businesses for the event and helps refine their presentations. South Carolina places an emphasis on business plan development and works with other service providers in the state to help develop solid business plans. Q: Could you replicate the recycling business training outside of the investment forum process? A: Sure, you could hold a business plan development workshop. There are small business development centers (SBDCs) available to help with this. The biggest challenge would be getting entrepreneurs there. The added pressure of the forum helps make South Carolina
s training successful. Q: Are there organizations in other states like Self-Help? A: Yes, there are about 300 community development financial institutions in the United States. For more information, contact the National Community Capital Association in Philadelphia at 215 923-4754. Several CDFIs are experimenting with recycling investment including lenders in Maine, Vermont, and Washington State (e.g., Shore Bank is working with CWC in Washington State). Q: It seems that lenders, such as Self-Help, only reach a small percentage of recycling businesses looking for equity financing and what
s really needed is development financing. Any comments? A: CWC did a study with Shore Bank that found that banks shied away from development financing because of the high risk involved. To address this issue, CWC is looking into establishing a $10 million loan fund comprised of 80 percent debt and 20 percent early stage seed capital financing. CWC projects a 10 percent return on investment. The fund could be national in scope. CWC is currently working to identify a fund manager. 4 Topic Two: Public Sector Financing Programs John Smith, California Integrated Waste Management Board (CIWMB) Mr. Smith provided an overview of public funding approaches for recycling-based industries. Developing a public funding program can take up to 2 years. The first step is to identify funding needs and to target industries. Successful programs leverage other sources (e.g., they have a 50 percent match from the private sector) and tailor financing to meet business needs. Methods of funding include grants for research and development, royalty payments, reimbursement for equipment, and tax incentives. Two other methods are loans and bonds. In California, loans (e.g., loss reserve, loan guarantee, direct loans) usually range from $1 to $2 million. Bonds (e.g., general obligation or revenue bonds) typically range from $2 to $15 million, based on the revenues businesses will generate, and are backed by the ability of the state to repay them. The three main sources of funding are the federal government (e.g., grants and guarantee loans), state governments (e.g., bonds, grants, loans, tax incentives), and local governments (e.g., limited grants and revolving loan funds). In California, there are limited grants available for tires, household hazardous waste (HHW), and secondary processors. Recycling Market Development Zones (RMDZs) offer direct loans averaging $460,000 for working capital and specialized equipment. The current RMDZ process is too cumbersome and costly for borrowers, however, and is under revision. CALCAP is a reserve loss program. Pollution Prevention Bonds are more suited for larger businesses. Small issue bonds range from $250,000 to $1 million, while large issue bonds range from $1 to $20 million. Economic development sources include state and federal guaranteed loans (e.g., Small Business Administration, USDA-RDC guarantee) and federally funded local revolving loan programs (e.g., community development block grants). Since 1990, California
s recycling equipment tax credit program has helped divert 4.7 million tons with $4.8 million, although it needs to be better targeted. Overall, the state
s program has developed strong partnerships and continues to improve the image of recycling businesses. In the future, California is moving from annual loan programs to a revolving loan fund and is hoping to host its first investment forum by 1999. John Hendren, Wisconsin Department of Commerce Mr. Hendren discussed his agency, the Wisconsin Recycling Market Development Board (RMDB), and its loan programs. The Wisconsin RMDB offers a number of funding programs to Wisconsin
s recycling businesses including a recycling loan program, a recycling technology assistance program, and a recycling early planning grant program. The RMDB has offered more than $15 million in loans, targeting plastics, construction and demolition (C&D) debris, food scraps, and organics. These loans have diverted more than 450,000 tons and created between 2 to 3 jobs per project, according to initial estimates. Other state funding programs include the Department of Natural Resource
s demonstration grant program and the University of Wisconsin solid waste research program. Mr. Hendren estimates that more than $200 million is needed for the state
s recycling infrastructure. Mr. Hendren then discussed the Wisconsin RMDB
s program development process and areas of long-term commitment. In the future, the RMDB will target its investments towards composites and engineered feedstock; computers and electronics; C&D debris, including asphalt shingles and drywall; and high-value uses of industrial byproducts such as foundry materials and paper mill sludge. Keys to success have been 5 both in-state (state recycling organization, universities) and out-of-state (MACRO, JTRnet list server) partnerships, performance and results based programs, and strategic planning and targeted investments. Questions and Answers Q: What are RMDZs? A: RMDZs are partnerships between the CIWMB and local governments designed to promote regional markets for recyclables. Today, there are 40 RMDZs in California covering 40 percent of the population. Within the zones, businesses are eligible for low-interest loans and other technical and business development assistance. Q: How do your programs reach businesses? A: It is a difficult process but there are a variety of approaches, including other service providers such as Manufacturing Extension Partnerships (MEPs) or university extension programs. Also, targeted marketing efforts (e.g., ads in computer and electronics publications) and fact sheets work well. In California, there was an initial flood of businesses seeking loans. Then, as the program became more competitive with banks, applications tailored off. Now, CIWMB uses Dun & Bradstreet lists to identify businesses and relies on local bankers. Also, they mail flyers and follow up with phone calls. Try reaching businesses by focusing on the supply chain instead of manufacturersespecially since many companies are beginning to outsource materials. This might require training for contracting companies and could have a ripple effect. Actually, auto makers are already doing this. Recovered materials, for example, are being used in luggage racks, bumpers, and other automobile components. Q: Do any of you fund source reduction and reuse projects? A: In general, in Wisconsin these programs are funded through education or demonstration projects. California has expanded its programs this year to include manufacturers who incorporate source reduction in their practices. Q: What types of businesses has the RMDB assisted in Wisconsin? A: The Wisconsin RMDB has issued 61 loansone third for startup businesses and two thirds for those in business a long time or that recently developed a new line of products using recyclable feedstock. Not all businesses that apply are approved for funding, however, because they might lack the management or technical expertise to be successful. Q: How do you ensure credibility with loans? A: Wisconsin sets reporting requirements and maintains auditing procedures. Businesses must also sign a document verifying that all information provided is accurate. In California, business applications must meet certain conditions. Q: What happens when there
s a problem with a company? A: Stay in touch with businesses. California offers technical assistance to businesses through its R-Team. Wisconsin has restructured loans in the past. Also, conduct site visits to help identify problems and tap into other sources of assistance such as university extension programs with engineers. Wisconsin also has a provision that if a technology obtained through a state loan fails a business, the state will forgive the loan. Because businesses have this as a safety net, in some ways, these loans work like a grant with a 6 $100,000 limit. Many state programs are designed to assist companies, yet businesses also must meet certain criteria to be awarded financing. This creates a funding gap that organizations like Self-Help can fill. Q: Do you have any information on eco-industrial parks? A: Although it is a popular concept right now, do not rush into it. Review the studies that have been done. These parks involve more than just recyclables; they often handle industrial waste materials, as well. The California Resource Recovery Association (CRRA) just had a workshop on this topic. There are two basic models. In the first, no waste is generated and businesses are located in close proximity to one another. The other model covers a broader region, which means you cannot get to zero waste as easily. Q: Can you provide more information on California
s recycling equipment tax credit? A: It was offered from January 1, 1990, to December 31, 1993. Under the program, secondary processors and manufacturers could access up to $250,000 in rebates. Q: What are your sources of funding and how long will they last? A: In Wisconsin, market development efforts are funded through a business surcharge through 1999. This fund has raised roughly $300 million with a small percentage allocated to market development. The state is also looking at a number of options including a tax on solid waste services and equipment, landfill tipping fee charges, or raising the state income tax. In California, all programs are funded through a surcharge on disposal. From this, the loan fund will receive roughly $5 million per year until 2002. This will provide steady funding but won
t allow for many new programs. Q: What are your states doing to recycle used computer equipment? A: Wisconsin is under a lot of pressure from the business community about this. Many companies are interested in upgrading their equipment to deal with the year 2000" issue. As a result, Wisconsin is working with a lot of dismantling companies right now. Topic Three: Helping Recycling and Reuse Businesses Become Better Businesses (Business Planning and Related Assistance) Ann Schneider, University of California Santa Cruz Business Environmental Assistance Center (BEAC) Ms. Schneider talked about a variety of strategies to assist recycling and reuse businesses. Below are some of her tips and suggestions:
Form partnerships. Work with local and state governments, advocacy groups, and business and economic development groups, among others. Get to know whom you can trust. This way, when you make a referral you
ll have confidence that they
ll follow through. Develop a referral list and network. Keep a binder and phone list handy. Also,

7 commercial recycling service providers can help source material for clients. Use government agencies as sources of information. Keep copies of manufacturing equipment manufacturers literature.
Build reference material. Collect information from trade shows. Keep other states
information for possible networking. Take courses in marketing, financing, and business planning. Continuing education at local universities and institutions can enhance your professional development. Read the trade journals. Branch out beyond just economic development and solid waste to architectural and wood and forestry magazines. You don
t have to read them all, just scan them for relevant articles and information. Work the trade shows. Meet people and ask lots of questions.


Overall, Ms. Schneider thought the most important thing is to just listen to businesses. Help them decide, for example, if they should apply for grants versus loans. She has found that many businesses have not networked very well. Introduce them to recycling leaders at the state and local levels and give them suggestions for developing their own networks. Also, do not expect immediate success. Ms. Schneider noted it takes about 3 years for businesses to get established and begin to make sales. Chris Cloutier, Minnesota Office of Environmental Assistance Mr. Cloutier talked about market development as business assistance and how and when to leverage assistance. Over time, market development has evolved to helping markets develop efficiency, consistency, and profitability. To begin, Mr. Cloutier talked about when businesses usually need help: when they ask (it is usually out of their control at that point), when they ask for money (this is a big step as they are required to open up their business to you), when problems in the business are apparent (e.g., they are missing payments), and when you hear about a great new idea but the last three have failed. Mr. Cloutier then gave several examples to illustrate how to provide assistance. The first showed the importance of a business plan. Often, writing a business plan requires a business to think critically and make key decisions. The second showed that it is OK to say no. It might be helpful for a company to steer them on another, more fruitful course. The last example emphasized the value of helping companies focus their efforts. Overall, he advised market developers to let their programs evolve, learn when and how to help, and identify others who can help. Bill Bree, Oregon Department of Environmental Quality Mr. Bree began with an overview of the history of market development in Oregon, and then discussed tips and strategies for providing effective market development assistance. Over time, recycling evolved from a resource management program to a business planning and development program. He noted that businesses usually need market development assistance right before they ask for help and state market developers are usually the first person they find. Next, do not focus first on whether there
s an adequate 8 supply of recyclables available for a business; rather, focus first on the product the manufacturer is producing. Also, work with companies to develop a business plan and look for the missing elements. You can provide a great service to businessesaccess to information and education as well as financial assistance through grants and loans. Currently, although there is a demand for market development assistance, Oregon has no grant programs or funding sources to move programs forward. Mr. Bree then provided examples of some everyday projects he worked on. He worked with a large oil company with a commitment to oil recycling. He provided the company with access to the regulatory community and a variety of business and technical assistance. Although the company had good management and technical resources, they decided not to go through with the project because its competitors built a facility for virgin base stock just before final approval. This created excess supply in the marketplace. In addition, Mr. Bree worked with a small startup recycled shoe company that grew quickly but then failed. Part of the problem was that the company could not return investment quickly enough for its investors, venture capitalists. The owner is currently launching a new publicly financed recycled shoe manufacturing company, however. Questions and Answers Q: Can you explain Oregon
s tax credit program? A: Oregon offers both a pollution control tax credit and a plastics tax credit. Both are effective programs designed to provide credit for new economic activity. Also, both are tied to capital investment in recycling equipment. Q: How do you get clients in the door? A: The panelists use a variety of approaches: marketing through business organizations, attending business meetings, making phone calls, and being listed in resource guides. Ms. Schneider has developed a good referral network from business assistance programs and is active with her state recycling association. Also, someone suggested compiling all of the recycling directories in one place. NERC accumulated directories from states and trade associations as part of its work. Q: Is your assistance mostly one-on-one? How do you reach a wider audience? A: One state found that the best results come from one-on-one interaction. They handle about 100 calls per month. It can be time-consuming, but this interaction is essential to helping some companies move forward. Also, Ms. Schneider has seen a growth in the number of businesses seeking help in selling their products. In addition, as recycling matures and becomes more mainstream, market development is reaching a wider audience, such as architects. Topic Four: Providing Technical Assistance in the Development and Promotion of, and Conversion to, Recycling Technologies David Dougherty, CWC Mr. Dougherty focused his remarks on working with entrepreneurs and existing recycling companies to develop processing and manufacturing capacity. In his experience, market development is underfunded in the United States compared to Europe and other areas. He advised market developers to be smart about creating capacity. Do not develop too much capacity so that it offers diminishing returns. He also stressed the importance of understanding the engineering properties of recovered materials. CWC, for example, identified 72 uses of glass. As part of this research, CWC identified the engineering properties 9 (e.g., strength, compaction, processing capabilities) of glass. Mr. Dougherty also discussed the importance of material quality. Many products must go through a rigorous process of American Society for Testing and Materials (ASTM) product testing. CWC, for example, is working with a company that manufactures basketball courts made from recovered materials. Several NBA teams have played on the surface and all liked it. Even so, it is currently going through the ASTM process, which could take years to complete. Market development is a long-term process. Often, you help a company make a series of decisions over several years. When working with companies on feedstock conversion, offer a range of options (e.g., using 20 to 80 percent recovered feedstock). This will provide some flexibility as prices change and will help make the company more competitive. If a company wants funding for technology validation, be sure to require the company to do a literature search. Also, never give money directly to the business. Be sure to fund its service provider. This way, the business just gets information and it helps ensure that the business won
t keep the information for themselves. Also, establish an outside board to review the research. These boards could involve an academic expert from a local university or a venture capitalist and will add credibility to the project. Continue to develop best practices for different commodities. EPA funded CWC to research and compile best practices for processing and end uses. Share these with the local industry early in the development process. With each study, we learn more and more about different commodities. Diane Minor, North Carolina Recycling Business Assistance Center With JTR funding, the North Carolina RBAC focused on feedstock conversion in the plastics industry. Partnerships and collaboration are one of the strongest aspects of the programthe Polymers Extension Program, in particular, served as a key partner. The RBAC began by surveying the plastics industry in the state to identity processors and manufactures interested in feedstock conversion and to learn more about the industry. This was followed by telephone surveys and site visits to select companies for assistance. Although the RBAC encountered several barriers, including concerns about material quality and apprehension towards working with state officials, the project proved successful. Ms. Minor summarized the RBAC
s success with two plastics companies on feedstock conversion. The first is a contract injection molding assembly operation that manufacturers 35 to 40 million dye tubes annually, using approximately 7 million pounds of polypropylene. With the RBACs assistance, the company is now recycling 5 million pounds per year. The second company manufactures plastic foam extrusion products. Today, the company recycles virtually all of its scrap polyethylene foam internally or markets it to other manufacturers. Examples of current projects include working with a conveyor belt manufacturer, developing a new product from mixed plastics, and assisting a satellite dish manufacturer. The RBAC is also working with companies in the forest products sector. Chris Cloutier, Minnesota Office of Environmental Assistance (OEA) Mr. Cloutier provided case studies of both successful and unsuccessful technology development with businesses in Minnesota. A major window company, for example, approached OEA because it was 10 interested in using a polyvinyl chloride (PVC) and wood composite to manufacture doors and windows. Existing operations created 72,000 tons of wood waste. With a grant from the state, the company determined the engineering characteristics of the material and decided to move forward. The company now plans to establish between three to five $15 million plants to manufacture doors and windows containing 40 percent recovered material with wood and PVC/wood composite. Mr. Cloutier also discussed OEA
s work to develop a technology to reintroduce waste fiber reinforced polyester (FRP) into the fiberglass manufacturing process. Approximately 37.5 million pounds of FRP scrap are landfilled annually in Minnesota. OEA facilitated a series of forums on FRP recycling across the state and provided extensive outside engineering assistance. After exploring the economic and technical feasibility, a specific technology was determined to be feasible. After arranging financing for the company to further develop the technology, the company, unfortunately, wasn
t willing to follow through. Lessons learned include that the state cannot drive technology developmentthe opportunity and need must exist first. Also, innovation demands opportunity, focus, creativity, funds, and time. Questions and Answers Q: What are you doing to increase consumer demand for recycled products? A: CWC surveyed consumers and 80 percent said their purchases were affected by environmental considerations. After observing their buying habits, it became apparent that they were not practicing what they preached. The key is qualityconsumers want recycled products to perform as well as virgin. Recycled content is a lesser priority. On the other hand, for the past 2 years, the city of San Francisco conducted a consumer buy recycled and waste prevention effort and measured the results of consumer purchases. The Ohio Get in the Loop Campaign documented a 22 percent increase in recycled content products. The key is to continue buy recycled marketing efforts over the long term to sustain those high purchasing levels. Q: What was the main driver in working with businesses? Cost savings? A: In some cases, companies had a strong environmental ethic. In other cases, it was strictly an economic issue with factors such as the cost of disposal or liability. Keep in mind that when you work with a company, their lifeline is at stake. They are usually not interested in the number of jobs created or the environmental benefits. Convince them with the economics. Focus on the bottom line and the performance of products. Q: How do you address confidentiality concerns? What other materials beyond traditional recyclables deserve attention? A: Confidentiality is a concern with many businesses. Minnesota goes to great lengths to protect information, but the state has a right to certain technology based on its projects. In terms of other materials, the key is to fill in the gaps in information with materials such as paper or plastics. States should cooperate to use resources efficiently. 11 Topic Five: Measuring the Environmental and Economic Results of Market Development (JTR Core Measures and Beyond) Ed Boisson, Northeast Recycling Council Mr. Boisson talked about the importance of measuring the success of market development programs. Possible approaches include stories and anecdotes, economic models (e.g., the REMI model used in Minnesota), and environmental measures such as energy savings and reduced pollution. He discussed a variety of challenges, which include finding the time, establishing a baseline, getting businesses to cooperate, overcoming apprehension towards government, verifying the numbers, defining measures in a standardized manner, and interpreting vague information by businesses. Mr. Boisson then presented a number of strategies to collecting needed information. These include using forms and surveys (e.g., via fax, phone, or e-mail), conducting repeated followups, getting a signed commitment from businesses upfront, setting performance targets, taking advantage of leverage (i.e., money or even credibility), networking and using media contacts, and developing good relationships. Measuring the benefits of the recycling industry as a whole demonstrates its overall importance to the community and captures the attention of the business and financial community. So far, the following states and regions have conducted economic impact studies: Massachusetts (1992), Maine (1993), NERC (1994), Florida (1996), Southern States (1996), North Carolina (1996), Washington (1996), Arizona (1997), Iowa (1997), Nebraska (1997), and Minnesota (1997). The biggest challenges are identifying businesses and obtaining data. NERC is working on a Recycling Economic Information Project, with the goal of measuring the economic impact of recycling nationally. NERC recently developed a methodology and is currently working with NRC to obtain adequate support to conduct the study. Mr. Boisson explained the opportunities for states to sign on as sponsors. Jackie Badders, New Hampshire Department of Resources and Economic Development As a Recycling Economic Development Advocate (REDA), Ms. Badders provides technical and business development assistance to recycling companies throughout the state. She is supported by a steering committee with public and private sector representatives. Ms. Badders is housed in the state economic development agency, which allows her to make important contacts and stay clued in to various opportunities. Ms. Badders discussed a range of barriers to data collection. These include the negative perception of government, difficulties in trying to reach small companies with limited resources, dealing with concerns about proprietary technology, and a general reluctance to share company information. With no grant or loan programs and limited funding, she has no carrots to work with. So, she must develop strong relationships to get good numbers. Despite these barriers, she offered a variety of helpful strategies: take time to foster relationships, give respect to get respect, gather information incrementally, and learn to listen. To develop core measures, she counts only measures related to manufacturers and directly resulting from assistance. Every 6 months she pulls together numbers by reviewing her notes, contacting referral agencies, and contacting companies directly. To save time, she focuses on those companies she thinks will have core measures. 12 People (legislators, in particular) do not understand the connection between recycling and economic development. Half the challenge in obtaining continued funding is educating these key constituents about recycling
s economic benefits. Linda Jacobs, New York State Office of Recycling Market Development Ms. Jacobs presented a new model for measuring the success of market development programs. Like many other grantees, New York found it difficult to follow up with companies and obtain core measures. The state had no system in place to aggregate its numbers and satisfy requests for specialized data. Out of this, the Recycling Investment Program was born. This program provided more than $5 million in 1997 for recycling businesses. This outcome-oriented framework changes the role of government from funder to investor. In allocating its grants, New York looks for return on its investments and weighs the risk of each grant carefully. Ms. Jacobs then focused on the state
s technical assistance program. A key component of this program is working with contractors to set targets and measure results. As a first step, contractors define the need and scope of each project. Contractors then identify performance targets that include a schedule with milestones and methods to verify data and progress towards goals. All of this goes into the contract. In short, it involves a lot of upfront work but makes reporting easy by forcing contractors to think things through at the outset. Ms. Jacobs showed examples of performance targets, milestones, and time lines for existing contracts. She explained how parts of the framework might work for other states. Questions and Answers Q: What are good sources for recycling facts and statistics? A: Try the Environmental Defense Fund report that was issued in response to the Recycling Is Garbage article in the New York Times. The Natural Resources Defense Council also published a report with energy factors. Yale University published an interesting report, What Won
t Get Harvested When and Where? EPA
s work with climate change examines how recycling relates to this long-term, global issue. Also, EPA has just published a booklet on the economic, environmental, and social benefits of recycling entitled, Puzzled About Recycling
s Value? Look Beyond the Bin, EPA Document Number: EPA530-K97-008. You can order it through the RCRA Hotline at 800 424-9346. Q: What has been the experience with INPLAN, RMS, and other measurement models? A: Florida and Minnesota are currently using measurement models. California and EPA are looking at models for measuring source reduction. Q: How do you get employment and other data from companies? A: Introduce questions through casual conversations. Don
t pose it as, I need this... Share the questions with companies upfront and show them the benefits of collecting the data. 13 Topic Six: Promoting and Sustaining Market Development Programs Kathleen Gray, North Carolina RBAC Ms. Gray discussed key strategies for promoting and sustaining market development programs. Regarding promotion, the first step is identifying the target audience. Next, decide how best to reach them. Options include outreach materials (e.g., brochures, newsletters, market directories, jobs and business studies), presentations (e.g., seminars, conferences, legislative sessions and special commissions), and the general media (e.g., newspaper, journals, TV, radio). Fine tune your message and emphasize the return on dollars invested. Finally, identify partners, such as state public information staff or others in the economic development community, to help get the word out. To sustain your program, the first step is to evaluate your options. Successful strategies include obtaining funding from the state legislature, tapping into departmental budgets, establishing or merging with an existing nonprofit organization, or securing soft money such as grants. Be sure to recognize and seize opportunities. Try looking for commodities that lack assistance, major initiatives in state government, or simply what
s in the news. Establish a broad base of support to help you follow through. Finally, find a champion. Identify potential supporters and educate legislators to keep your program going strong. Leisha Barcus, Recycle Iowa Recycle Iowa successfully developed recycling information and data, built partnerships, and conducted outreach to recycling businesses. They conducted a variety of market assessments and studies on the state
s recycling industry. Also, partnerships are a key to their successno one can be everywhere at the same time. Ms. Barcus advised others to join forces and team up with those with similar programs such as state recycling organizations. Recycle Iowa worked with the Iowa Waste Exchange and the Buy Recycled Business Alliance, among others, to reach businesses and was successful in implementing instate and out-of-state marketing plans. In marketing your services, she recommends identifying your audience, key messages, implementation strategies, and measurement approaches. Recycle Iowa is working to position Iowa as a leader in market development. In the future, the organization will develop a business advisory committee to help learn industry
s needs, continue to learn about market flow and pricing, and initiate training for those doing technical assistance. Matt Ewadinger, North Carolina RBAC Mr. Ewadinger discussed how North Carolina effectively promoted and sustained its market development program. The North Carolina RBAC began by establishing an identity including a logo and brochure. Over the past several years, it initiated considerable promotional activity through publications, presentations, and booth displays. Through its newsletter, the RBAC communicated key information to those involved in market development in the state and nationwide. The RBAC offered workshops to train solid waste officials on recycling economic development. Mr. Ewadinger advised others to know what
s hot (e.g., the economics of recycling and full cost accounting) and what
s not (e.g., recycling as a resource conservation strategy) and to recognize opportunities. Also, he stressed the importance of promoting recycling as a net job creator and of developing recycling industry forecasts for business expansion. In terms of sustainability, the RBAC is a 14 real success story. By gaining the support of key legislators, a bill was passed to establish and fund the RBAC on a permanent basis. In the end, however, there is no one right answer to sustaining your program. Being successful takes a little bit of everything. It also takes a little luck. Questions and Answers Q: Is there a more prominent role for nonprofits (as opposed to states) in market development? A: Certainly, nonprofits have been successful. Just look at NERC, CWC, and NRC. Also, possibly at the NRC conference in September, we could pull the states and nonprofits together to explore funding opportunities further. Q: How can states extrapolate from North Carolina
s jobs study? A: Any state could use the studies and simply plug in their data. To develop your own study, look to others for help, particularly universities. This approach proved successful in Iowa and California. Q: Have you done much outreach to the environmental community? A: Doing so is like preaching to the choir. The RBAC, however, has held workshops with North Carolina economic development organizations. This helped create cross referrals with local economic developers. Market development, in general, needs to become more industry-driven. Q: Will future JTR funding priorities incorporate waste prevention? A: Reuse is already an integral part of JTR. Clearly, however, waste prevention is something to look at. Some programs already link with pollution prevention groups and take advantages of the natural synergies that exist. Closing Remarks Ken Sandler, EPA, closed the roundtable by thanking those who helped make it happen, and expressing the hope that none of the market development officials in attendance feel like lone rangers anymore. 15