By now Tacoma’s movers and shakers have done about all they can – short of public and abject begging – to convince Russell Investments not to decamp from Tacoma and move to Seattle. Whatever the factors that will ultimately make up Russell’s (or Northwestern Mutual’s) mind, a few more tweaks and goodies to the various proposals probably aren’t going to make much difference.
So while the city awaits a decision – supposedly due by next month – it can keep itself occupied by turning to consideration of Plan B, should such an alternative be required.
Here is one helpful suggestion for just such a plan:
Figure out how to keep some of Russell’s people, and especially their experience and expertise, in Tacoma, even if the company headquarters and executives bolt.
We’re not talking here about hoping for a crumb like a back office or satellite facility just to keep the Russell name on a door that happens to be located in Tacoma.
If Russell decides to move to the old WaMu Center or South Lake Union or some similar supposedly greener pasture, there may be at least a few employees who do not relish the thought of commuting to Seattle or relocating their residence to King County to shorten the daily trek.
Might a few of those be encouraged to take the entrepreneurial plunge, to start investment-advisory, money-management or financial-service companies of their own, one or several of which might someday grow into new Russells?
Obstacles abound. No doubt Russell will not happily and passively bid farewell to employees whose experience and expertise were gained on Russell’s dime, and who may be starting ventures competitive to what Russell does. The company may even wave non-compete clauses at those contemplating venturing out on their own.
But opportunities abound as well. The Wall Street meltdown has rearranged the competitive landscape in the money business, going so far as to eliminate some well-established players. It’s an era in which boutique-sized firms and start-ups, unencumbered by the baggage of the meltdown, have a decent shot at winning business.
And it’s not as though starting a business in the financial-services sector is the same as – to pick an industry out of thin air – trying to build a passenger-jet manufacturer from scratch. Capital is required, depending on what the firm intends to do. But far more important are the aforementioned experience and expertise – knowing the markets, the clients, the regulations, the opportunities. Those are intangible assets embedded in the employees themselves, not in physical assets like plant and equipment.
To get to the point at which Russell veterans and alumni are launching financial-service start-ups, however, will require at least one other intangible asset, one that has been in relatively short supply in Tacoma – an entrepreneurial climate.
Yes, people start businesses all the time in Tacoma. Those stores and eateries and professional practices and small offices that fill industrial parks, strip malls and commercial developments all over Pierce County represent thousands of individual dreams and plans to create lasting businesses.
That’s not quite the same, though, as a communitywide mindset that takes company formation, success and, yes, failure, as a given in specific industries with the potential to produce high-growth companies providing considerable employment – much the way entrepreneurialism is taken for granted in the technology sector in East King County.
Can you build an entrepreneurial atmosphere in financial services, and in Tacoma? It’s not inconceivable. Tacoma and Pierce County have been full participants in the new-bank-formation wave of the last two decades in this state. People around here do know how to start financial-service companies.
If Tacoma undertakes the admittedly difficult task of building both an entrepreneurial climate and a financial services sector minus its signature company, more than a few communities around the state will be watching for lessons they might pick up. Among those with more than passing curiosity: Seattle and King County, which may need to know soon whether it’s possible to have an aerospace sector if its founding and flagship company leaves town.
Bill Virgin’s column on business and economics appears Sundays in The News Tribune. He is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at firstname.lastname@example.org.