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Distinguishing between tactical and strategic targeting
Thursday, October 31, 2002 EDPros can make a helpful distinction between "tactical targeting" and "strategic targeting". Tactical targeting involves taking advantage of your current assets and marketing them aggressively. Strategtic targeting focuses on areas of your economy where you are not currently strong, but where you could be. Today's papers include good examples of each. Baltimore's mayor is aggressively marketing his city's current attractions and is showing some success with his tactical marketing program. Read more. Go In New Haven, a project that started twenty years ago shows the results of strategic targeting. New Haven has built its relationship with Yale into a promising technology park. By building close relationships with Yale, New Haven's economic development program is reaping the benefits of strategic targeting. Read more. Go posted by Ed | The shifting economics of call centers Wednesday, October 30, 2002 Here's some new insight into the globalization of the call center industry. A Florida-based call center company has announced plans for opening a 500-seat call center in India's Gujarat province and a minimum 500-seat data-entry center in Ghana early next year, each with a local partner from that nation. The Ghana operation could grow to as many as 2,500 workstations within two years. Here's what company executives say: "Because of advances of telecommunications, it now becomes possible for calls to be handled in India, Africa and almost any place in the world...And when you factor in the dramatically lower cost of labor, service can be delivered at roughly half the price of what calls can be typically handled in the United States. "American call centers are going to have to modify their course of action, if they are going to survive in the long-term...We have to evolve from high-school graduates doing basic work to college graduates and Ph.D.s handling specialized work. "It's not just because of our labor costs but also technology. Voice recognition technology will put lots of people out of jobs in the future. We have to become a knowledge-based industry, offering employees with advanced degrees who can do work that machines can't do." To operate a work-station in the United States costs about $26 to $30 an hour, including salary and benefits, rent, administration and other expenses. Operating costs run maybe $12 an hour for the same workstation in India. Some U.S. call-centers are trying to keep business from moving overseas by cutting outbound-call rates as low as $19 an hour from the United States, but that means almost no profit. Expansion overseas can be a wiser and more stable option for U.S. call-centers long-term. Read more. posted by Ed | Miami-Dade shifts to retention strategy In yet anoother indication that EDPros are shifting their focus from recruitment to retention, Miami-Dade's Beacon Council announced yesterday that it will make retention and expansion of local businesses its top priority. The Beacon Council is a public/private partnership in charge of Dade County's economic development. The Beacon Council's new initiative, called the Local Business Priority Program, includes a marketing and public relations campaign, a direct contact program that involves visits by Beacon Council representatives to 2,000 local companies, and a business development survey that will determine what factors are most critical to businesses looking to expand or remain in Miami-Dade. Read more. Go posted by Ed | Follow CED's lead to build an innovation infrastructure Tuesday, October 29, 2002 North Carolina's Council for Entrepreneurial Development (CED) provides us with an excellent blueprint on how to build an entrepreneurial infrastructure. If you are looking to develop an innovation economy (and you should be) start by looking at how CED has organized its activities. They have training, mentoring and networking initiatives...all of the types of activities that any local economy can use to build its support for new business. Learn more. Go posted by Ed | This incentive is nuts The state of Kentucky is guaranteeing an $800,000 loan to a garment manufacturer, so they can consolidate their factory operations. Corbin Ltd. will close its factory in Huntington, WVA and relocate the 125 jobs to a factory near Ashland, KY, where another 125 people are working. One problem: it doesn't appear like the 125 West Virginia jobs are really there. According to the local union president, 12 people are working at the West Virginia plant, not 125. A company spokeman explains that the company is "between seasons". According to the spokeman, "We're between fall and spring, so the plant is on a reduced work force right now." The story is not convincing. Some time ago, Fruit of the Loom closed its manufacturing plants across the South and, in doing so, delivered an important message to EDPros: To build a prosperous community in today's global economy, we are going to need higher skills than the ability to sew underwear. This is the type of low skill manufacturing that is migrating to lower wage countries. You'd think that Kentucky would have figured this out by now and placed its scarce incentive dollars on a stronger bet. Read more. posted by Ed | Manufacturing dead? No, not really One of the challenges we face as EDPros is understanding trends in the broader economy. Too often, we have fallen victim to simplistic thinking. Perhaps the biggest simple (wrong) thought is that "Manufacturing is dead". It's not. Certainly, the number of manufacturing jobs is declining nationwide, but the productivity growth in manufacturing is one of the great untold stories of the U.S. economy. (This myth is promoted by bonehead comments, like those from Labor Secretary Elaine L. Chao. Earlier this year, she was quoted as saying that we are a service economy and no longer a manufacturing economy.) As EDPros we should be more concerned about productivity than jobs. Why? Because productivity measures how well we are producing income. We want jobs that produce lots of income for our communities. Manufacturing jobs do that. But not just any manufacturing jobs. They must be jobs that require higher levels of skills. Low skilled manufacturing jobs are moving off shore. (A recent AP news article outlined how maquilladora plants on the border of Mexico and the U.S. are closing up shop and moving to lower cost locations like China and Vietnam.) Higher skilled manufacturing jobs produce lots of income for a community. A good review article in Industry Week points to the trend. Communities across the country are finding important manufacturing niches to develop. Learn more. Go posted by Ed | Portland, OR is launching new ED strategy Monday, October 28, 2002 In a speech slated for delivery today, Portland's Mayor, Vera Katz, updates her city's economic development agenda. One disappointing note: she focuses on creating an economic opportunity fund to provide incentives to companies to either relocate or stay in Portland. Based on the recent dstrategy report completed for the city, this fund would be financed with between $4 million and $10 million a year. This is a genuinely bad idea. In her remarks, the mayor says the city has limited financial tools to compete with incentives offered by nations such as China, Singapore and Taiwan. This comment simply underscores how little she understands the dynamics of global competition. Blind pools for incentives are not what is important in this competition. One proposal that does make sense: Portland should promote a dedicated money source for education if the Legislature doesn't. The mayor also said the city should commit more than $5 million to the Portland State University School of Engineering and continue its investment in OHSU. These types of investments make sense. Download a summary of the Portland strategy. Go posted by Ed | Louisiana losing its brainpower Sunday, October 27, 2002 More and more communities and states are figuring it out: brainpower matters and "brain drains" can really hurt. Louisiana, for example, ranks 11th in producing science and engineering undergraduates, but 46th in employing them. A recent article about the loss of brainpower in the state highlights the problem. Go The article also highlights some of the challenges facing Louisiana. But, like most reports out of Louisiana, this article avoids the core issue facing the state. More than most states, politics in Louisiana suffer from corruption. Until the leadership starts to implement a credible strategy against corruption, the brain drain will continue, as people with technical expertise, entrepreneurial and managerial skills leave the state. This conclusion is not surprising. There is overwhelming statistical evidence that economies with higher corruption levels have lower economic performance. (For example, see this report prepared by the World Bank.) Corruption translates into a lack of transparency: public officials act for private gain, not public benefit. This lack of transparency creates the same type business climate that plagues many low-performing emerging economies. (See this article for a small example of Louisiana corruption. Bad Bet on the Bayou provides an excellent recounting of how gambling came to Louisiana. Read more.) At the same time, the state's relatively closed business and political system discourages innovation. For example, the LSU system suffers from overly bureaucratic and outdated technology transfer rules. In sum, Louisiana's problems are deep seated and not likely to be resolved. The article includes an interesting graphic of R&D in the thirteen Southern states. Download the graphic. posted by Ed | A new ED initiative: Workplace literacy programs Saturday, October 26, 2002 The elevation of technology in the workplace means that literacy skills are more important than they have ever been. But, according to the National more than 40% of the workers who are currently in the workforce have weak literacy skills. These poor skills translate directly into weaker companies. In Massachusetts, for example, recent research sshowed that 1 in 3 workers are ill-equipped for the shifting demands of the New Economy. (The report calls for expanded partenrships between community colleges and employers to address this need. Read more.) The problem in most states is that adult education programs do not meet the need of workplace education. In Arkansas, a new model "Lunch and Learn" program provides a smaller scale approach that can work in most communities. Lunch and Learn matches tutors with workers. This is the type of initiative that EDPros need to consider for their communities as a critical component of their retention and expansion program. The payoff: higher productivity, lower down time, fewer accidents, lower turnover. Learn more. Go posted by Ed | New BR&E program launched If you're planning to start a business retention and expansion program, you might check out Ottawa County, Ohio. They are in the process of launching their own initiative. Learn more. Go posted by Ed | Shaping public perceptions about ED challenges Friday, October 25, 2002 Too often academic centers are not geared toward providing helpful guidance to the public on critical economic development issues. In Arizona, the Morrison Institute (no relation) offers a different approach. The Institute makes a special effort to educate the public on the critical long term issues facing the state. EDPros shoud take a look at the "Five Shoes Waiting to Drop" web site. Then pass it on to business and education leaders in your community. This is a good example of how an academic institution can help EDPros shape the public debate over ED issues. I particularly like how the Morrison Institute has translated low education performance among Hispanic residents into dollars and sense. According to the Institute, the state could be earning an additional $2.1 billion in annual tax revenue if it could educate its Hispanic children as effectively as it does whites. (The figure is based on the assumption that Arizona Hispanics would be earning an additional $5.9 billion in annual income if their average education level was 13.5 years, the average for white Arizonans.) These are the types of comparisons that EDPros need to be promoting in their states. For example, a typi8cal high school drop-out costs a community between $200,000 and $300,000 in lost earnings. Read about how the Morrison Institute is improving the ED debate in Arizona. Go posted by Ed | Community college in Florida builds new enterprise center Thursday, October 24, 2002 Central Florida Community College (CFCC) has announced the construction of a new enterprise center on its campus. The center will bring together workforce development, economic development and education in a unique partnership. We need to keep our eye on this project. The center could develop into a new national model for community colleges. The two-story, 25,400 square foot facility will be built and operated by the CFCC Foundation. It should be ready for occupancy in January 2004. Learn more. Go posted by Ed | Colleges are inner city ED engines Tuesday, October 22, 2002 EDPros are figuring out that, especially in older cities, linkages to local colleges and universities are important. The Inititiative for a Competitive Inner City -- a Michael Porter project -- promotes the use of clusters as a strategy for the inner cities. In a redent talk in Rock Hill, North Caroline (near Charlotte), the director of ICIC made a concise statement of the six ways an inner city college or university can contribute to the local economy: as a purchaser of local goods and services, as an employer, as a real estate developer, as a business incubator, as an advisor/network organizer, and as a work force developer. Read more. Go posted by Ed | Hawaii's new ED plan Looking for a fantasy? Think about being an EDPro in Hawaii. Here's a report to help you along. It's the latest state strategy. You'll need to review it before your interview. Go posted by Ed | Arts and ED Monday, October 21, 2002 Economic development and the arts go together, especially in neighborhood and downtown settings. For EDPros interested in the connection, here are some examples of how EDPros are connecting the arts and economic development. In Sacramento, a task force of business and community leaders has unveiled a six-point plan to strengthen the arts in the Sacramento region as an asset for economic development. Learn more. . Planners in Kansas City are looking to Indianapolis, Pittsburgh and Minneapolis to see how arts, culture, sports and entertainment fit with economic development. And Cleveland is continuing its push to focus on the connection between arts and economic development. Learn more. posted by Ed | Building a regional innovation infrastructure Sunday, October 20, 2002 Whatever you call it -- the New Economy, the Information Economy, the Knowledge Economy -- innovation and entrepreneurship are the key to economic growth. Brainpower requires networtks to build businesses, and communities that understand this fact will prosper over communites caught in the old ways of doing things. Take the case of Fort Wayne, Indiana. EDPros who want to start building an innovation infrastructure in their communities should look at the Innovation Cener of Northeast Indiana. Here you will find the kind of web-based connections that provide a start to building this infrastructure. The Center has an impressive list of sponsors, and they can give you an insight into the type of companies that might support a similar effort in your community. One weakness: the home page features a presentation completed in February, 2001. (The news section of the site, however, is up-to-date.) Another element that needs work, it seems, is interactivity. The IC has no e-mail newsletter and no strong community features to its web site. Nonetheless, it is a promising start. In particular, both the organization and the design of the site are good models to follow. Review the site. Go posted by Ed | ED Forum in Albuquerque sees no clear vision Saturday, October 19, 2002 Frustration is boiling over in Albuquerque. An economic development forum in Albuquerque concluded the city has no idea, or vision, of what it wants to be in terms of economic development. It needs a goal and a vision and a strategy and timetable on when to get there. This is a good case study of what happens when a city fails to implement. Most economic development strategies fail to get into the hard-boiled world of implementation. If you want to judge quickly how good a strategy report is, look for an action plan. This is a clear table that lists who is going to do what by when. If there is no action plan, there is no strategy. You only have a general statement of sentiments, a wish list that leads nowhere. As Bob Hoffman of the Economic Forum noted: "We need five action steps and let's get them done and report back in six months. I've seen 150 mission statements in the past 50 years, and I want to see something get done — action!". Go posted by Ed | Results of the Wisconsin ED Summit The Wisconsin summit ended with some strong agreement on the future direction of the state's economy. Points of agreement include: The state's universities, colleges and technical colleges must be major players in making Wisconsin a winner in a knowledge-based economy. The summits have pulled them into active collaboration with other builders of the economy. It wasn't always this way, and there can be no retreat to the ivy tower. Workers who are often forced to change jobs and even careers in a dynamic economy must be able to move in and out of the education system in a user-friendly way. That seamless education is increasingly available as educators smooth out the kinks in their delivery. Economic development must concentrate on the drivers, the knowledge-based industrial clusters. Great clarity has been added to the development game with this more intelligent approach. It's choose or lose. The first cluster organizations are taking shape. Angel and venture investing must be souped up, and great strides are being made. Wisconsin should be E-land as well as Dairyland. "E" for Entrepreneur. Not by accident, but with a lot of strategy execution, spinoffs from universities, colleges and large companies are accelerating. We're getting better and better at technology transfer. New energy generation and transmission must be built in the near future. For the first time in decades, power projects are advancing. Learn more. Go posted by Ed | Austin Chamber heading to Southern California Friday, October 18, 2002 Austin Chamber of Commerce is leading a recrtuiting trip to Southern California. That's nothing new. What's interesting is the approach. Read the comments for the Chamber's head EDPro: "We are focused on building emerging industries ¡ª digital entertainment and bio IT. We need to understand more about their needs and requirements so we can develop more of an infrastructure in Austin." Now that's a good reason to take a recruting trip. Learn more. Go posted by Ed | Georgia wins bidding war Georgia won the bidding war for the Chrysler van plant. The short list included Savannah and a location outside Charleston. The plant's a big one: 3,300 employees, $750 million in investment. Georgia reportedly offered $320 million, or $67,000 per job (according to the state) -- the largest sum the state has ever committed to luring an industry. South Carolina offered a $340 million package. By my figuring, the incentive package was more like $97,000 for each direct job. It's tough to see how these incentive packages pay for themselves. Georgia says that the average pay for each job will be $44,000. That makes the total payroll about $145 million per year. State taxes in Georgia are about 6.2% of personal income. Even allowing for multiplier effects, it will be well over a decade before Georgia generates a cash on cash return. Even more worrisome: Georgia is willing to put cash on the table without linking it to job creation.South Carolina wasn't willing to take that step. My guess is that the people of Georgia would be better off if the funds were invested, with the returns going annually to fund R&D at the public universities in the state. Learn more. posted by Ed | Report on suburban sprawl ranks metro regions EDPros who are interested in smart growth issues will find this report interesting. It ranks metro areas by the extent to which their growth spreads out from the core. It's one of the emerging issues that define "quality of life". Learn more. This is important because metro regions with more compact development patterns will tend to have lower taxes...it costs less to provide public services and infrastructure. (A study Robert Burchell at Rutgers a while back indicated that more compact regions have infrastructure costs that are on the range of 30% less than metro areas that do not manage growth. To learn more about sprawl, check out this on-line guide. If you want to do some heavier reading, here's a report by the National Academy of Sciences.) Three of the top 4 sprawling areas are in the South: Winston-Salem, Raleigh-Durham, and Atlanta. The report ranks areas by population and housing density; the mix of homes, jobs and services; the availability and use of town centers or downtowns; and the street network. posted by Ed | Practical steps to bridge the gap between business owners and educators Thursday, October 17, 2002 One of the biggest problems I've found in workforce development is getting educators and business people to communicate effectively. They speak different languages, it seems. It shouldn't be surprising. Most business people left school decades ago, so they have no real understanding of the pressures educators are under. At the same time, teachers often come from "education" families, and they tend to have very limited exposure to the world of business. We've all seen how frustrations on both sides can run high. It's good to see communities taking practical steps to bridge the gap. In Marshall County, West Virginia, the Chamber is taking the lead by conducting a forum. In reading this article, you can see how to set up one of these forums. Go posted by Ed | University reseach and ED Here's a good article on how university research ties to economic development. The article summarizes some of the latest research on the connection, and it reinforces the point that EDPros should be strong advocates for post-secondary research funding. The staff director for the National Commission on Entrepreneurship wrote the article, and it summarizes a research report completed for the Commission. Go posted by Ed | EDA invests in wireless broadband for rural West Texas Wednesday, October 16, 2002 EDA, the folks that bring you water and sewer lines, is investing in a broadband wireless backbone to bring broadband Internet to rural West Texas. The backbone stretches from Hobbs, NM to Amarillo. EDA awarded $724,000 to Texas Tech University's Office of Economic Development. With a broadband backbone in place, Texas Tech and its partners can offer small business development and workforce training classes in the communities along the network. It also could allow Texas Tech, community colleges or public schools to share resources and classes. Learn more. Go posted by Ed | Rochester is starting to get its act together One of the keys to success in economic development, I've learned, is to stop doing stupid things. Public officials in Rochester seem to have gotten the message. It makes no sense to expect business people to find their way through a maize of public agencies when they want to expand or relocate. No one has the time. Public officals are beginnning to coordinate the efforts of 20 different publc agencies involved in economic development. Public ED organizations in Rochester are coming together to form Monroe County Development Corporation (MCDC) with representatives from 20 different agencies. The goal is to simplify life for expanding companies and site selectors. EDPros facing similar local fragmentation can use Rochester as an example of what to do. Rochester also has Greater Rochester Enterprise, a privately-led marketing group. The keys to success will lie in 1) how well MCDC comes together and 2) the type of relationship MCDC can forge with GRE. Read more. Go posted by Ed | Entreprise Florida promotes Florida as "Innovation Hub" This week, Enterprise Florida is launching a new $1.45 million campaign to promote Florida as the "Innovation Hub of the Americas." $1 million comes fromthe state legislature, the rest from Enterprise Florida's local partners. The campaign dwarfs past budgets, which have ranged from $250,000 to $450,000 a year. Much of the money budgeted for the campaign will be spent on advertising, while the rest of the budget includes public relations, special events and direct mail. There will be regional buys in AOL-Time Warner magazines such as Fast Company and Fortune. In the United Kingdom there will be ads placed in The Economist and tech executives will see the campaign in Red Herring. The initial six ads focus on technology developments in Florida and stress proximity to Latin America. Marketing oriented EDPros can read more details. Learn more. Go The key to success will be whether Florida has done its research to establish a clear value proposition for its message. Compare the example of Auckland. posted by Ed | Auckland uses the America's Cup to promote ED Tuesday, October 15, 2002 Auckland is conducting an investment promotion program around the America's Cup. It provides a good case study of how EDPros use event marketing (tourism) to build a stronger regional brand. New Zealand is aggressively moving ahead with an innovation-led economic development strategy. The City of Auckland is following the national government to promote New Zealand as a center fo innovation. Auckland has created the brand of Innovation Harbour to anchor their investment attraction efforts around the America's Cup 2002/2003. The program includes publishing a "fact book" that clearly outlines the value proposition for Auckland. This step -- preparing a marketing fact book that serves as the foundation for the brand -- is often missed in many U.S. ED organizations. Learn more. Go posted by Ed | Chattanooga launches entrepreneurial strategy The Chattanooga Chamber of Commerce has launched a new effort to promote regional entrepreneurship. A report prepared by the Kenan Institute for Private Enterprise at the Univeristy of North Carolina guides the Chamber's strategy. The report is built around a useful 4 step continuum to measure a community's commitment to entrepreneurial development. EDPros need to become comfortable with these measures, as they will become increasingly important in measuring the economic vitality of your regional economy. For some time, Chattanooga has been an innovator in ED strategies. They first picked up on the idea of sustainability. They also were one fo the first to invite Michael Porter to town to talk about clusters. The current planning effort began last year when the Chamber was asked by the Kaufman Foundation to participate in a study of regional entrepreneurship. Although the foundation decided not to continue that project, the Chamber has continued it by working directly with the Kenan Institute.You can download the Chattanooga report from the Kenan Institute web site. Go. posted by Ed | Virginia releases technology plan The Commonwealth of Virginia has released a new statewide technology plan. It includes a heavy focus on entrepreneurship. Among the interesting proposals is the creation of "e-business villages" and "e-forums" across the state. These villages would serve as the hubs for local networks of entrepreneurs. This new strategic plan offers some good ideas about how to jumpstart this effort. Download a copy. Go posted by Ed | Model program for entrepreneurship Monday, October 14, 2002 EDPros interested in building the entrepreneurial networks in their community should look at the web site of Start Up. An East Palo Alto, CA nonprofit, Start Up collaborates with Stanford Graduate School of Business to educate lower income people in entrepreneurship. Graduates learn how to write a business plan and the ABCs of running "micro-enterprises." The web site is impressive, because it provides clear, practical guidance to entrepreneurs, encourages on-line donations, and makes volunteering easy. Go posted by Ed | Understanding innovation at the firm level Increasingly, economic development will be led by innovation, not by minimizing costs. Companies will locate and thrive in areas where it is easy to innovate. At the same time, retention and expansion programs need to identify those firms that are most likely to grow. That means EDPros will increasingly need to be comfortable with promoting innovation among their existing businesses. Today's Cincinnati Enquirer has a good article that can help get EDPros up to speed on the dynamics of innovation within manufacturing firms. It's an interview with Michael Tushman, professor at the Harvard Business School. The interview focuses on a few key elements of the innovation process. Read more. Go For EDPros wantint a practical introduction to the dynamics of innovation -- the heart of any retention and expansion program -- read Tushman's Winning Through Innovation, a manager's tool kit for organizational change. posted by Ed | Use public relations to publicize your retention program EDPros in St. Louis have used effective public relations to publicize their expansion and retention efforts for small manufacturers. Reading the article will give you some ideas on how to "pitch" a similar story to your local press. Notice at the end of the story a list of available resources. Who is likely to read this story? First, small manufacturers, exactly the target you are trying to reach. These articles can also go a long way to building political support with an ED board or local politicians. Often, it is hard to build public support for retention and expansion programs. This story shows how to do it. Read the story. Go posted by Ed | Pittsburgh pushes to attract foreign firms Sunday, October 13, 2002 Last Friday, economic development leaders in Pittsburgh got together to review their progress in attracting foreign firms to the region. EDPros in Pittsburg are working to build a network of accessible resources for foreign executives. In addition, they are launching a new publication (10 times per year) for this market. Read more. Go posted by Ed | Wichita begins implementation of new strategy Business and government leaders in Wichita have formed the Economic Development Strategic Council to implement a cluster-based strategy. Wichita is facing the tough part of cluster-based strategies: implementation. Cluster strategies are inherently collaborative. To work, they require people to think and behave in new ways. One potential weakness: the Council will operate as a volunteer effort. There will be no paid staff. This latest effort at regional cooperation started 18 months ago. In June 2001, the Council on Competitiveness released a report on the Wichita regional economy. To strengthen the region’s innovation infrastructure, the report highlighted the need for increased investment in research and development (R&D), an integrated workforce development strategy, broadening of the aerospace cluster, an aggressive action plan in plastics, improved collaboration between industry academia and government, and investment in other nascent clusters that have been overlooked. In June 2002, Wichita business and government leaders met to form a series of committees to explore implementation issues. The Center for Economic Development and Business Research at Wichita State University managed the process. The Council on Competitiveness has conducted 5 regional cluster studies under the guidance of Michael Porter. He is the Harvard Business professor who actively promotes the use of cluster analysis. You can view the Council's national and regional cluster studies. Go. Learn more about Wichita's implementation plans. Go. posted by Ed | Wisconsin cluster groups forming Saturday, October 12, 2002 Wisconsin is going to hold its third economic summit next week, and a number of important industry cluster councils are forming. The Printing Cluster Council is the first out of the blocks. Others will follow. Wisconsin has identified eleven clusters -- some established, some emerging -- that are driving the state's economy. The Printing Council includes representatives from business, universities, and the technical college system. Wisconsin is taking steps to integrate its graphics arts management education from high school through college. It provides a good model of market-driven skill development. At the same time, the Council has identified that R&D at the university level needs more investment. Other elements of the Printing Cluster Council agenda will be presented next week. They include building a 2+2 career pathway and launching a marketing effort targeted at young people. Learn more. Go The agenda for Wisconsin's property and casulty insurance cluster is also starting to form. Read more. posted by Ed | Louisiana releases cluster based strategy report Friday, October 11, 2002 After spending $500,000 on consultants, the State of Louisiana and the Baton Rouge Chamber of Commerce are prepared to launched their Capital Region Competitive Strategy. The region covers nine parishes, centered on Baton Rouge. The targeted clusters are energy and petrochemicals; agriculture and food products; forest products; tourism and entertainment; transportation; health care and biomedicine; and information technology. The eighth cluster, environmental services and security services, is a "seed" cluster in its early stages of development. Download the report from their web site. Go While a cluster-based strategy makes sense for Louisiana, there's arisk of diverting attention away from even more critical issues facing the state. These include: fixing the state's primary and secondary education systems, building up the state's technology base at colleges and universities, and streamlining technology licensing. Learn more. Go posted by Ed | The move to regional strategies is accelerating EDPros are building regional alliances all over the U.S. A number of articles this week demonstrate the trend from a small community in Wisconsin, to eleven counties in the Hudson Valley, the seven county region in the Twin Cities, counties in Western North Carolina, and the metro region of Wichita. The message to EDPros is clear: if you are not part of a regional strategy, you need to figure out how to join (or start) one. posted by Ed | Looking for back office operations? You're competing with India Thursday, October 10, 2002 EDPros who have back office operations on their short list of recruitment targets are competing with a new factor: business process outsourcing. Not surprisingly, large companies started the trend: General Electric, American Express. GE employs 12,000 in India, and GE Capital has back office operations in Mexico and China. Today, 5% of U.S. corporations with revenues ranging from $100 million to $4 billion outsource overseas. But India is not the only game in town. Business process outsourcing is developing in Philippines, China, Czechoslovakia, Hungary, Jamaica, the Dominican Republic, Barbados, and Ghana. The trend will accelerate. If you are competing in this market, read a good article from Wharton on how this trend is developing. Go posted by Ed | State report card on higher education In the Knowledge Economy, the name of the game is Brainpower. Higher education drives income growth, and the trend will be stronger in the years ahead. See how your state is doing with new state report cards on higher education. In a highly interactive web site, the National Center for Public Policy and Higher Education makes it easy for EDPros to get a handle on the key issues facing higher education, as well as where your state stands. The report cards evaluate the following factors: Preparation: How well are students in each state being prepared for college? Participation: Are state residents enrolling in education and training beyond high school? Affordability: How affordable is higher education for students and their families? Completion: Are students completing their certificate and degree programs? Benefits: What benefits does each state receive as a result of having a highly educated population? Learn more. Go posted by Ed | Massachusetts report reinforces the importance of regions For years, Massachusetts has been setting the standard in analysis for economic development. So when Massachusetts issues a report, it's an event. EDPros can use these reports to get a graduate level education on economic analysis. Equally important, these reports often use effective graphics to tell their story. Visualizing information and building a story are both important parts of the EDPro toolkit. In the first major reassessment of the state's economy in 10 years, Massachusett's has released Building a New Prosperity. The report is significant in its focus on regional economies with in the state. It reinforces the notion that in the years ahead, EDPros need to think regionally. Local and state economies will still matter, but regional economies will matter a lot. Download the 4 page Executive Summary. Go posted by Ed | St. Augustine tries to move from vision to action Wednesday, October 09, 2002 For the past ten months, the citisens of St. Johns county in Florida have been developing a strategic plan. It's one of the best examples I've seen of a clear, well-managed, and well-documented process. The head of the Vision Steering Committee clearly states what the effort is all about: "Our vision is to identify the future desired by current St. Johns County residents to leave as a legacy for future generations." To that end, the St. Johns Vision outlines 4 key themes: 1. Provide the best possible educational opportunities for the county's children. 2. Emphasize the responsible stewardship of the environment. 3. Address the infrastructure needs of the county to keep pace with the growth that's coming. 4. Grow the business segment of the county to lessen the tax burden on the lower- and middle-class residents and small businesses. EDPros involved in a community-wide planning process should study this model. This approach is not cheap. The sponsors of the Vision Plan raised $250,000 to develop the plan and begin implementation. (The original time line is 18 months long or about $14,000 a month.) The City and the Chamber split the cost. Despite it's expense, it is a good step-by-step model of a "visioning" or grass roots approach to strategic planning. (You can reduce the expense a great deal by not hiring an outside consultant. Strategic planning is not rocket science. It's applied common sense and a commitment to a fair and open process.) You can learn more from their web site. Go One weakness to keep in mind: Although the plan is only 12 pages long, it reads like a laundry list. There's very little "story" being told. posted by Ed | For EDPros concerned with sprawl For EDPros concerned with sprawl, the American Farmland Trust has released a useful report. The report concludes that the problem of sprawl is not a problem of growth, but it is a problem of wasteful land use patterns: Too many 10 acre residential lots. The National Association of Homebuilders supports the conclusion that 10 acre residential lots are an inappropriate use of land. The home builders call for higher densities and smart growth. We are losing valuable farmland at a rate of 2 acres every minute. And the rate of farmland loss increased in the 1990's over the 1980's, so the problem is getting worse. You can go on the web and see the the counties in your state where the problem is most severe. Go. The report makes and important point: Wasteful land use is the problem, not growth itself. From 1982-1997, U.S. population grew by 17 percent, while urbanized land grew by 47 percent. Over the past 20 years, the acreage per person for new housing almost doubled and since 1994, 10+ acre housing lots have accounted for 55 percent of the land developed. Read more. Go posted by Ed | Wireless networks as an ED tool Palm City, Florida is working to become the first city in the state to own and operate a wireless network. According to one official, "We hope to use it as an economic development tool." The network would pay for itself in two to thee years, and the city would get part of the gross revenue the private contractor receives from home and business connections. The savings would come from eliminating current land-based Internet connection feess for city departments. The city is now crafting an RFP to implement the system. Wireless broadband connections represent the new wave of infrastructure for economic development. EDPros, especially those in smaller metros and rural areas, will need to learn how to implement broadband networks. The place to start is by learning what other cities are doing. Read more about Palm City. Go The model for a city-owned wireless network is not in the U.S., but in New Zealand. New Zealand's capital city, Wellington, is referred to as "Wired Wellington" because of Citylink. It is a single huge local area network (LAN) that covers Wellington's entire downtown business district. For EDPros who are technically inclined, you can get an excellent overview of the network from ZDNet. Citylink runs at Fast Ethernet speeds of up to 1,000Mbps, about 650 times faster than a T1 line. Learn more. posted by Ed | Innovation Philadelphia Tuesday, October 08, 2002 Innovation Philadelphia (IP) released its innovation benchmarking yesterday. The release of the Index coincided with the announcement of a $447,000 grant from US EDA to fund a series of studies that IP hopes will lead to a coordinated technology based, cluster driven, economic development strategy for the Greater Philadelphia Region. The focus of this research is impressive. It drills down to the level of detail needed to build clusters. Among the issues to be explored: innovation diagnostics, the research base for nanotechnology and life sciences, workforce development systems to support these clusters, university and industry technology consortia, angel investment, and knowledge partnerships for student engagement and retention. IP is a new public/private partnership with the following mission: "to enhance the global innovation economy of Philadelphia by increasing the research investment in strategic technologies from federal, state, private and industrial resources". The Innovation Index is another way to raise the visibility of innovation and entrepreneurship in a local economy. Massachusetts started compiling an innovation index some years ago, and the trend is catching on. Download a copy. Go posted by Ed | South Carolina has a long way to go The Palmetto Institute in South Carolina issued a major report on the state's economy today. Completed by DRI-WEFA the report makes the following points. First, the state needs to align its educatin system more closely to economic development strategy, particularly the development of clusters. (This is not an earth-shaking recommendation...most regions and states need to take this step. The tough issue is how do you take a set of institutions remarkably resistent to change and convert them into effective catalysts for growth.) Second, the report concludes that the state cannot compete on the basis of its current industry mix. It should focus on developing clusters that offer higher productivity and higher incomes. The report recommends tourism, transportation services, professional services, components and sub-assemblies. (This is a list drawn from existing economic data, and, as such, it does not reflect possibilities. For example, the real challenge for South Carolina in tourism is whether this base can be leveraged into something more, such as digital media. At the same time, these lists are rarely "actionable". What does it mean to develop the "professional services cluster"? What, specifically, is there to do? Finally, these lists are rarely complete. What, for example, should happen to South Carolina's medical devices cluster? Or its plastics cluster? Or its processed food cluster? Or its post secondary education and knowledge creation cluster? In dealing with clusters at a state level, a far better approach is to break the state up into metro areas and look at clusters within each regional economy. Connecticut has taken this approach.) The purpose of the report is to provide the Palmetto Institute with the economic research needed to formulate a strategy. That's the next step, but it is unclear when or how this strategy will emerge. At this stage, without something more, it is one more report for the shelf. Read more. Go posted by Ed | Memphis launches ED fundraising Monday, October 07, 2002 To finance its new economic development strategy, Memphis has launched a major fund raising campaign. Learn more. Go Prior to taking this step, the Memphis Chamber evaluated its initiatives with an Internet-based interactive interview. The interview enabled the Chamber to engage nearly 100 top business leaders in the region. The Chamber confirmed that a central challenge facing Memphis is an inability to attract and retain talented people. The Chamber stated the challenge this way: The Memphis region is one of the South's premier communities, yet we are not keeping pace with many of our peers in population and income growth. Nashville and other dynamic cities are attracting newcomers to their regions much more successfully than Memphis. By attracting nearly five times more newcomers to their area in the 90's, Nashville's ability to compete for skilled labor was far superior to Memphis. Over 60% of the business leaders agreed this challenge was serious. The interactive interview also clearly established the role of the Chamber in leading the new strategic initiatives. Read a summary of the interview. Go. posted by Ed | Milwaukee's launches new strategy today Milwaukee is an old manufacturing city (home of Harley-Davidson, for example) that is facing the twin challenges of globalization and an emerging "knowledge-based" economy. Today, Metropolitan Milwaukee Association of Commerce is releasing a strategic action plan to address these issues. The draft report is well-written: clear on themes, strong on specific targets. The biggest weakness: it does not provide a context; it does not explain; it does not tell a story. It does not help educate people on the shifting dynamics we face. Instead, the action plan reflects the political compromises needed to publish it. You can tell this from the headings. It is a "laundry list" not a strategy: "Education", "Infrastructure", "Diversity", "Taxes", "Health Care". One other gap: The integration of global markets is eroding the low end of Milwaukee's manufacturing sector, a trend you can see all over the country. At the same time, the region has a relatively strong university base, but it is not fully integrated into an economic development strategy. There's a big gap between the patents generated out of the universities and the number of start-ups. The draft report does not address this issue. Milwaukee could learn a lot from Pittsburgh, where efforts to integrate Carnegie Mellon into the region's economic development strategy are farther along. Philadelphia is another city with important lessons. Coincidentally, Innovation Philadelphia is releasing its Innnovation and Entrepreneurship Index today. At the same time, Milwaukee struggles with a burned out political leadership. In the vacuum, an entrepreneur in postsecondary education (Nancy Zimpher, Chancellor of the University of Wisconsin-Milwaukee) is emerging as a leader in the region. This is a trend we are seeing elsewhere: in the knowledge economy, some of the best new ideas are coming from leaders in colleges and universities. Read more about Milwaukee. Go posted by Ed | SC raids NC for a biotech firm South Carolina has successfully recruited a small biotech company from North Carolina. The investment: $500,000 per job. According to reports in both states, economic development officals in South Carolina included land for a processing plant, a $4 million equity investment and $3 million in grants. The investment is in an early stage company. Pilot Therapeutics has 14 employees and generated a loss of $3.7 million in the first half of this year. At the same time, Pilot, which has a small product pipeline based on technology developed at Wake Forest University, contributes to a biotech cluster that is starting to form in the Charleston region. CropTech, a Virginia company that makes medical treatments from tobacco plants, broke ground on a $40 million headquarters in the region two weeks ago. Learn more. Go and Go. posted by Ed | Austin moving to develop ED plan Sunday, October 06, 2002 The economic slump has hit Austin hard, and the City is moving to become more aggressive in economic development. Two members of the City Council are teaming withthe chamber and a local consulting firm to produce an economic development "white paper" by the end of the year. The plan will likely address the city's ailing semiconductor sector (employment dow 7% since last year), as well as emerging sectors the region wants to develop: biotech, film and multimedia. This project will be a good one to watch. More than most regions, Austin has its act together when it comes to workforce development. At the same time, early talk is focusing on traditional incentives as well -- tax abatements and ultility discounts. How will these be balanced and coordinated between outside prospects and expanding, Austin-based firms? Will Austin make the same mistake so many other regions have made by not supporting local, growth-oriented companies? Compare Memphis to Austin. Memphis is focusing its efforts on a "talent magnet" strategy. It's problem: how can we attract a lot of smart people? Austin already has a lot of talent, so how will its economic development strategy evolve from the basic approach developed by the Chamber in the mid-1980's? More important, what role will the development of entrepreneurial networks play in the new strategy? The key to building a resilient economy is creating dense networks of innovation. It will be interesting to see whether this new "white paper" moves in this direction. Learn more. Go posted by Ed | Pennsylvania's economic strategy criticized Saturday, October 05, 2002 According to a recent analysis, Pennsylvania has lagged behind the rest of the nation in job growth, largely because the the state lacks a strategic, encompassing approach to economic development. The report recommends investments in clusters, training partnerships, and state colleges and universities. Download the report. Go This report, written by a left-of-center grassroots research organization, reflects trend I'm seeing across the country: an absence of ideology at the local level. While our national politics are still animated by fierce ideological divisions, state and local politics have become much more pragmatic. In the 1970's community development corporations, for example, often picketed outside banks to get their point across. Now, they are more likely to be shaking hands with bank officers who helped finance high proifile neighborhood projects. posted by Ed | Georgia Southern University launches new ED School GSU's new school offers an undergraduate degree in regional economic development and will focus on rural economic development issues. Learn more. Go posted by Ed | West Lousville's strategy Thursday, October 03, 2002 Michael Porter, the Harvard Business School professors who is the chief promoter of clusters, has long argued that cluster analysis can porvide insights on how to rebuild our inner cities. He first put forth his case in a Harvard Business Review article. Porter is no ordinary academic. He invests in his ideas. The Initiative for a Competitive Inner City is replacing the traditional focus on urban blight and community deficiencies with a more constructive focus on market opportunities. ICIC has sparked new thinking about the business potential of inner cities. It's approach is opeing the door to creating jobs and wealth for inner-city residents. Learn more about ICIC. Go ICIC has, in turn, triggered focus on the Inner City 100. Each year ICIC and Inc magazine team up to create the Inner City 100 -- a list of the fastest growing companies in America's inner cities. West Louisville is one of a number of areas following the ICIC cluster strategy to rebuild their local economy. The West Louisville strategy project is implementing a plan for job and business growth based on key clusters: automotive, transportation and logistics, medical devices and health services. Download the report. Go the West Louisville Economic Alliance spearheads the strategy. Here's a new idea. To build understanding among local residents on the dynamics of economic development, the folks in West Louisville have come up with Champions for West Louisville Development. Twice a week from September through December, about 65 people are taking part in meetings with local economic developers. After completing the program, the participants will become part of the West Louisville Economic Alliance. This approach is a thoughtful way to build a balanced, knowledgeable group of volunteer residents -- not just a bunch of hot heads. One of the biggest problems in economic development is balancing the demands of an open process with control. You need an open process, but you also need to be able to direct it to clear objectives. (This problem often comes up when new public/private partnerships form as non-profit corporations. Should they have members? If so who qualifies?) The West Louisville solution strikes a good balance. Set up an economic development boot camp. Those that make it through are both informed and motivated to stay engaged. Learn more. Go posted by Ed | How rural communities can compete in the Knowledge Economy Wednesday, October 02, 2002 Trying to figure out how rural economies will compete in the Knoweldge Economy is a tricky business. Many rural ewconomies are suffering, as low wage manufacturing jobs are moving offshore. The State and Local Policy Program at the Humphrey Institute is tackling this tough issue. They predict that the new survival model for rural towns is "knowledge clusters". They recommend the following approach: 1. Understand the local knowledge base. Identify the specialized knowledge that drives the most successful local enterprises and build on it. Understanding what makes a community different may help in discovering its current or potential competitive advantage. 2. Foster ties between firms and the local institutions that support them. 3. Promote innovation around rural knowledge clusters by stimulating new product development and encouraging technology transfer among local firms. Offer technical assistance and venture capital funds to start-ups and spin-offs. 4. Don't go it alone; promote a regional vision to guide local strategies. Read more. Go You can also download a background paper. Go posted by Ed | Report from Bejing: 4 Here's a story that demonstrates the growing strength of China's industrial R&D and underscores the importance of continued investments in colleges and universities in the U.S. Dell Computer Corp.has established a research and development (R&D) center in Shanghai. The center is the first Dell has located outside the Untied States. According to Chinese press reports, Ken Lanshe, general manager of the Dell (China) Product Research & Development Center, said Dell made the decision to open the center because it is confident in the Chinese economy and in other parts of the Asia Pacific region. He also claimed that the abundant human resources, convenient transportation and logistic support systems are other major reasons Dell selected Shanghai as the location for its first R&D center outside the United States. The R&D center, which is located in the Multimedia Industrial Park in Changning District, will accommodate around 270 researchers, and 1,000 in the next few years. posted by Ed | Report from Beijing: 3 Tuesday, October 01, 2002 China is likely to become a high tech power to challenge the U.S., but this will happen in decades, not years. China's major advantage is its primary and secondary school system. The quality of this system exceeds the U.S., where we have made little real progress in the past two decades. (Learn more about how U.S. education compares internationally. Go.) China lacks, however, a system of world class universities. Sending promising students to study in the West is a stop gap. In the years ahead, we will see major new investments in postsecondary education in China. The results are already appearing. Last month, Taiwan Semiconductor announced a letter of intent to invest $898 million in China's first ever semiconductor fab plant. Read more. With this as a backdrop, I find it particularly disheartening that states like Ohio are cutting back on their commitment to postsecondary education. Take the case of Youngstown State University (YSU). YSU is the only economic engine that is likely to bring back this region of closed steel mills. Yet, as President (and EDPro) David Sweet notes, "Just two years ago, the state provided almost 55% of YSU's general fund budget; today, the percent is down to 40 - an amazing and alarming reduction. In the next fiscal year, the state share is likely to fall even further to around 35%." Read more. EDPros need to help our politicians connect the dots. In a Knowledge Economy, brainpower is everything. Our colleges and universities are our factories of the future. posted by Ed | |
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