Testimony of June Holley, President Appalachian Center for Economic Networks (ACEnet)
August 8, 2000

The Appalachian Center for Economic Networks (ACEnet) is a community economic development organization that works with others to create a strong regional economy and many new, quality jobs. Our strategy is to build two highly competitive sectors or clusters in Appalachian Ohio_a specialty food sector and a technology sector. We have enabled many new businesses get started, providing technical assistance to more than 200 businesses in the last few years and mobilizing scores of new resources. Our goal is further mobilize resources so that at least 50 local businesses can grow to $1 to $5 million in sales in the next three years, leading to the creation of 1500 new jobs.

Funds from the Appalachian Regional Commission have played an essential role in our success. First, ARC funding leveraged additional funds from the State of Ohio and area bunks that were used to construct and expand our Food Ventures Processing Center. This center is a licensed processing facility where entrepreneurs rent the use of an automated bottling line, banks of commercial ovens, or other specialized equipment to make their products without having to invest in expensive equipment. In addition, the family has a large warehouse, wit substantial dry, frozen, and refrigerated storage. Access to this space means that businesses can buy raw materials in hulk and can offer a single pickup spot for major distributors, who then move local products into regional and national markets.

Next, ARC funds supported the expansion of our food industry services, enabling us to tap into the food science expertise of the Ohio State University and the Center for Innovative Food Technology. The resulting low-cost consulting services we offer assist funs to certify the safety and quality of their products and thus make them more appealing to large regional and national markets. In addition, ARC funds helped ACEnet set up a new venture fund, ACEnet Ventures, which has already provided investments to 14 food businesses to facilitate their rapid expansion.

In the technology sector, ARC funding helped us develop and introduce a computer entrepreneurship program to area high schools. This year-long course teaches advanced computer and e-commerce skills at the same that it enables hi∈ school juniors and seniors to earn income from their own computer consulting businesses. This program will be offered in seven high schools this fall. We are confident that it will play an important role in lessening the deleterious effects of the "digital divide" in our communities.

Our only concern about ARC funding is that it is short-term, generally lasting only one year. Because of this, we find ourselves continually scrambling for new funding, or cutting back on services, when ARC funding ends. We recommend that ARC support successful projects with multi-year funding.