State officials there chose recruitment.

"Put yourself in the place of the local mayor. Where would you rather

have your picture taken? At a groundbreaking for a 100-employee operation

or shaking hands with one of the two owners of a new business?" Waterhouse

Kentucky recently changed its approach and added a "Cabinet for the New

Economy," Waterhouse

"I think you'll see more and more of that kind of focus because it's a

specialty," he

plants need a different knowledge base than people that are talking about

e-commerce."

Wise criticized, as small-business advocates have in the past,

Underwood's tax reform plan, the super tax credit and the Capital Company

Act.

Underwood defended his tax reform package. It provides "simpler taxes"

and eases "the heaviest burden on manufacturing," he

Wise disagreed. "It unfairly shifts a lot of the tax burden from the

mining industry ... and shifts it to the kinds of industries we're trying

to develop - service and technology," he

The super tax credit forgives up to 80 percent of taxes for as long as

13 years for business owners who announce 50 to 1,000 new jobs. Grumbles

about the tax credit are not uncommon for staff at the Business &

Industrial Development Corp., said Bill Goode, president.

"We often hear that some of the incentive programs are geared toward

... for an existing company to add 250 new jobs, that's a lot," Goode

Sixty percent to 80 percent of new job growth comes from

existing companies, Goode

During fiscal year 2000, 169 companies

announced new investments in the state; 57 of those were out-of-state

companies, according to the West Virginia Development Office's annual

report.

"Because we have so many small companies in West Virginia, to have a

big impact statewide, each one of those little companies has to add a

person, and that will be as big an impact as bringing in that one new

company," he

In his economic development plan posted on his campaign Web

opportunity for existing businesses as well as to attract new businesses."

Rick Clonch, a longtime coal company executive, recently started an

e-commerce exchange for the coal industry, ImixInc. com. In January,

Clonch opened an office in Charleston with one administrative assistant.

In the past six months, he's added 12 employees. By next year, he hopes to

hire another 30 people.

"I think there's a lack of venture capital that's in West Virginia, and

I think whatever can be done and whatever needs to be done - it'd be nice

to see things addressed in the next Legislature regarding the New

Economy," Clonch

West Virginia has a venture capital program called the Capital Company

Act. Since 1987, more than $100 million of state money has been given to

investors who start venture funds. It is debatable whether that money has

produced the type of new job growth for which it was intended.

Wise said he wants to reform the Capital Company Act. He also wants to

high-risk business start-ups.

Underwood responded that Atlanta consultant Mac Holladay is conducting

an in-depth analysis of the state's incentive package and venture capital

office will revise its policies, he

Development office employees have been receptive, but unable to help

Clonch's start-up company. Clonch's biggest challenge is finding workers

"Maybe they [development officials] don't have the capacity because of the

structures of the laws and things of that nature," Clonch

"That's my impression. That their hands are tied and limited because of

the resources and the legislation," he

To contact staff writer Kelly Regan, use e-mail or call 348-5163.

This is the latest in an occasional series focusing on the issues,

records and platforms of the state's candidates for governor. Today's

installment focuses on the economy.

Republican Gov. Cecil Underwood and his Democratic opponent for

governor, Rep. Bob Wise, offer similar economic catchphrases:

technology, diversification and work-force development. Their means to the

end, however, are as different as a Sunday sermon from a Catholic and a

Protestant.

Underwood prides himself on the out-of-state companies that have opened

which has dropped from 6.4 percent in 1999 to 4.9 percent this year.

Wise wants less emphasis on recruiting out-of-state companies. He

prefers encouraging existing businesses and individuals who want to start

their own businesses.

Wise disputes Underwood's unemployment rates by pointing out that by

Mississippi's. In 1998, Mississippi was the only state with a lower per

capita income than West Virginia's $19,362.

Last year, West Virginia's total job growth was less than 1

percent. The increase in female workers entering the work force was more

than 2 percent, which helped fuel the state's low unemployment rate.

Two weeks ago, Underwood explained in his Capitol office why two New

York-based companies in Clay and Mannington are exactly the type of

economicgrowth he wants for the state if re-elected.

"New industry locating in rural areas ... I think this is the direction

we need to go," Underwood

Last month, Filcon opened with 20 employees in a former Rite Aid store

in Clay. Employees manufacture heavy-equipment filters. They make $6 to $8

an hour.

In June, Molecular OptoElectronics Corp. hired 40 people in an old

Mannington industrial building. Employees assemble fiber-optic connectors.

They make $8 to $10 an hour.

"We're a state of small towns," Underwood

been a problem that led to isolation. That's different now with interstate

highways now in place ... and the electronic network."

"High-tech companies" like MOEC chose West Virginia for its available

and low-cost labor, higher education system and outdoor recreation,

Underwood

is a direction where we can keep the momentum going," he

During a telephone interview from his Washington office, Wise talked

more about fostering a "spirit of entrepreneurism" in West Virginia.

"There needs to be some change in the effort to encourage retention and

development from within, as well as industrial recruitment from the

outside. I don't think there is enough development from within," Wise

"I can't predict every job that's going to exist." But, Wise said, "my

hope is that we are actually conceiving and creating many of those jobs."

Wise emphasized "individuals getting the training, the skills and the

financing they need to make a success for themselves and whatever business

they're starting."

Recruit out-of-state or grow in state? It's an old debate that

typically pits politicians against non-profit grass-roots development

groups. That's changing.

Lately, more politicians like Wise are choosing the "grow from within"

approach, said Mark D. Waterhouse, former chairman of the American

Economic Development Council and president of Garnet Consulting

Services in Connecticut.

Since the North American Free Trade Agreement, factory expansions and

relocations are harder to come by. States are increasingly competitive

with high-priced incentive packages when luring new industries. And the

Internet has spurred high-profile, fast-growth companies that

Ten years ago, Waterhouse worked for Kentucky's Economic

Development Partnership, a business group similar to West Virginia's

Council for Community and Economic Development.

Ideally, states emphasize both outside recruitment and inside

expansion, but limited resources force decision-making. Kentucky "went

through the same sort of debate about where to set priorities," Waterhouse

"Put yourself in the place of the local mayor. Where would you rather

have your picture taken? At a groundbreaking for a 100-employee operation

or shaking hands with one of the two owners of a new business?" Waterhouse

Kentucky recently changed its approach and added a "Cabinet for the New

Economy," Waterhouse

"I think you'll see more and more of that kind of focus because it's a

specialty," he

plants need a different knowledge base than people that are talking about

e-commerce."

Wise criticized, as small-business advocates have in the past,

Underwood's tax reform plan, the super tax credit and the Capital Company

Act.

Underwood defended his tax reform package. It provides "simpler taxes"

and eases "the heaviest burden on manufacturing," he

Wise disagreed. "It unfairly shifts a lot of the tax burden from the

mining industry ... and shifts it to the kinds of industries we're trying

to develop - service and technology," he

The super tax credit forgives up to 80 percent of taxes for as long as

13 years for business owners who announce 50 to 1,000 new jobs. Grumbles

about the tax credit are not uncommon for staff at the Business &

Industrial Development Corp., said Bill Goode, president.

"We often hear that some of the incentive programs are geared toward

... for an existing company to add 250 new jobs, that's a lot," Goode

Sixty percent to 80 percent of new job growth comes from

existing companies, Goode

announced new investments in the state; 57 of those were out-of-state

companies, according to the West Virginia Development Office's annual

report.

"Because we have so many small companies in West Virginia, to have a

big impact statewide, each one of those little companies has to add a

person, and that will be as big an impact as bringing in that one new

company," he

In his economic development plan posted on his campaign Web

opportunity for existing businesses as well as to attract new businesses."

Rick Clonch, a longtime coal company executive, recently started an

e-commerce exchange for the coal industry, ImixInc. com. In January,

Clonch opened an office in Charleston with one administrative assistant.

In the past six months, he's added 12 employees. By next year, he hopes to

hire another 30 people.

"I think there's a lack of venture capital that's in West Virginia, and

I think whatever can be done and whatever needs to be done - it'd be nice

to see things addressed in the next Legislature regarding the New

Economy," Clonch

West Virginia has a venture capital program called the Capital Company

Act. Since 1987, more than $100 million of state money has been given to

investors who start venture funds. It is debatable whether that money has

produced the type of new job growth for which it was intended.

Wise said he wants to reform the Capital Company Act. He also wants to

high-risk business start-ups.

Underwood responded that Atlanta consultant Mac Holladay is conducting

an in-depth analysis of the state's incentive package and venture capital

office will revise its policies, he

Development office employees have been receptive, but unable to help

Clonch's start-up company. Clonch's biggest challenge is finding workers

"Maybe they [development officials] don't have the capacity because of the

structures of the laws and things of that nature," Clonch

"That's my impression. That their hands are tied and limited because of

the resources and the legislation," he

To contact staff writer Kelly Regan, use e-mail or call 348-5163.