Expansions are more important to the economy than new business
Published 9:24 pm Tuesday, July 23, 2019
The planned expansion at Meggitt Aircraft Braking Systems in Danville is great news for local job-seekers and the local economy overall. It also provides a good example of how it’s usually not new business that drives the economy; it’s old business doing more.
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Meggitt plans to add a whopping 139 jobs and invest a total of $22.78 million in its expansion. It originally planned to add 66 jobs; that number rose to 94 last year, then went up again to the current 139 figure in April, according to documents from the Kentucky Economic Development Finance Authority.
If a new business showed up in Danville tomorrow and announced it would be hiring 139 people and spending $22 million, it would make headlines not just here, but around the state. Because Meggitt is already here and is expanding its existing work, the project manages to fly below the radar to a certain extent.
But that doesn’t mean expanding business is any less impactful than new business. However you categorize it, 139 jobs is 139 jobs.
In fact, expanding business is a much more important and dependable driver for the local economy than new business.
When economic development evangelist Brad Thomas visited Danville in May, he pointed out exactly that. About 80 percent of a community’s new jobs come from reinvestments in existing businesses — in some places it can even be as high as 90 or 95 percent, Thomas said.
Danville is no exception to this. Besides Meggitt, numerous other local businesses have had or planned expansions in recent years: Denyo, Wilderness Trail Distillery, American Greetings, Hobart and IJW Whiskey are some of the most notable ones.
Meggitt is adding 139 jobs; Denyo has grown by 200 jobs since it arrived in 2010; Wilderness Trail Distillery has added dozens of high-paying positions since it moved from downtown Danville to its Lebanon Road farm; Hobart is in the process of adding as many as 24 jobs; American Greetings is adding more than 100 positions at its Danville plant.
Those expansions came with tens of millions of dollars of investment, as well, meaning construction workers got paid and new equipment was purchased.
Add up all the new businesses coming to Danville and they can’t really compete with those numbers. Don’t get us wrong — we like new businesses, too. After all, those new businesses can eventually turn into existing businesses interested in expanding.
But the temptation is to focus on what shiny new businesses can be pulled in, when the businesses that are here already have been dependable and are doing more than almost any new business could.
That’s why we think it’s important to celebrate expansions like the one at Meggitt for what they are — the foundation of a thriving economy.