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Massachusetts focuses on its bioscience "super-cluster"
Monday, December 30, 2002 Massachusetts faces a paradox. It is a center of innovation in the biosciences, but the state economy is choking on health care costs. How can this paradox be resolved? That's the challenge posed by the new efforts to boost innovation and productivity in the health care sector. Read more. Go Congress has shows increasing interest in federal payments for IT infrastructure. In its 2001 report, "Crossing the Quality Chasm: A New Health System for the 20th Century," the Institute of Medicine called upon Congress to create an "innovation fund" of $1 billion to subsidize promising healthcare information technology projects. posted by Ed | Florida has a secret Cuba Plan While the governor's rhetoric is strictly anti-Castro, Florida is preparing to move forward with economic ties to Cuba. A secret Cuba Plan, developed by Enterprise Florida, is quietly circulating among business and political leaders. As one Florida official notes, ""Due to our position, 90 miles away from Cuba, we need to be prepared to act immediately in case the sanctions are completely or partially lifted by the U.S. Congress, or in case a peaceful or violent transition to democracy takes place." Read more. Go posted by Ed | New Jersey moves ahead with higher education reform Friday, December 27, 2002 Governor McGreevey in New Jersey is moving ahead with his plan to reform higher education. He'd like to move New Jersey's institutions to the top tier of research institutions nationwide. Citing the loss of manufacturing jobs, the "export" of college students to other states, the growth of high-tech industries and the rising need for a highly skilled work force, the governor has called higher education a "top priority" and made the reorganization the centerpiece of his economic development agenda. But reforming higher education is tough, as battles in Kentucky, for example, have shown. But they can be won, and the state's economic future will be brighter, if higher education can be made more innovative, entrepreneurial, flexible and responsive. Go posted by Ed | Maryland starts to isolate critical success factors What does it take for a successful technology region to grow? Maryland's new governor has appointed a commission to answer the question. The Governor's Commission on Development of Advanced Technology Business will conduct a detailed analysis of successful technology regions. Learn more. Go posted by Ed | Charlotte heads down the incentive path Thursday, December 26, 2002 In a bid to reclaim portions of the city overlooked by developers, Charlotte is moving to boost incentives. The City Manager is developing a "toolkit" in an effort to make sure incentives are provided fairly. Read more. Go Charlotte uses incentives aggressively. According to the city's economic development director, the approach is "the best way to ensure the success of a business." I don't think so. The best way to insure the success of all businesses in the city is to improve K-14 education. Only 6 in 10 of Charlotte's high school students complete high school. The city should be focusing attention on this problem instead of incentives. Address the K-14 challenge in a meaningful way, and business development will follow. For example, instead of setting aside $100,000 per year in business incentive grants (one component of the Toolkit), set aside $100,000 per year in college incentive grants. Rather than paying incentives to developers to buy land, create incentives for teachers to upgrade their skills. Instead of providing grants to direct development along rail lines, provide grants to build K-14 career paths. posted by Ed | Technology jobs are shifting abroad Increasingly, companies are moving professional and technology jobs abroad. Back-office accounting and customer-calling work are already being shipped abroad. But in the future, professional positions in technology, law, art, architecture, life sciences, and business management will move as well. The information technology industry will lead the way. These will be jobs that average $41,200. In fifteen years, 3.3 million jobs will move to other markets at a loss of $1.36 billion in payroll. Forrester Research makes the predictions. Read more. Go posted by Ed | State information on higher education Monday, December 23, 2002 If you are interested in state-level information on higher education, this site has some good summary statistics. Among some of the interesting information: Only about 75% of college freshmen return for their second year. And only 51% of entering college fresmen will complete their college. Learn more. Go posted by Ed | State budget deficits: find out where your state stands The budget deficits at the state level will be getting worse next year. The deficits represent between 13 percent and 18 percent of all state expenditures. State support for economic development will be under the gun. Find out where your state ranks. Go Most states have balanced budget requirements. Given the magnitude of the deficits, states are highly likely to cut basic services, such as health care and education. New taxes will also be on the table. Expect cuts in the budgets for elementary and secondary education and child care, as well as more tuition increases at state colleges and universities. posted by Ed | Cleveland moves ahead with new development agenda Sunday, December 22, 2002 Cleveland, one of the great comeback stories in economic development, is shifting gears to build an innovation economy. Mayor Jane Campbell has announced an ambitious plan to generate jobs bases on technology in three areas: medicine, polymers and information technology. She wants to add an anchor to the region's biomedical cluster by attracting and NIH research institute in degenerative diseases. Her goal is ambitions but specific: attract 8 new companies to the city in each of the next three years. She has set the goal of assembling 100 new acreas of industrial land in the city. She also wants to attract more people to Cleveland. She is promoting 1,000 units of housing and improved 911 response times. She is also moving to make schools more tightly integrated to the neighborhoods. Cleveland is undertaking a major school renovation, and she wants neighbors ro each school to join in the planning. Her vision is to make the schools centers of community activities. Finally, she is adding open space to the city. Read more. Go posted by Ed | Albany collaborates to build its innovation economy Saturday, December 21, 2002 Economic development organizations no longer have a monopoly on economic development. Take the case of Albany, NY. Six companies and a university have teamed up to promote the region as a hotbed for alternative energy development. Read more. Go Albany is a leading region in a trend that will gain momentum in the next few years...previously isolated or competing organizations are coming together to promote regional economic development. In the past year: International Sematech, a consortium of 12 computer chip makers, and Tokyo Electron Ltd., the manufacturer of tools for computer chip makers, each joined with the state and UAlbany to create research centers here. Ten chambers of commerce have joined together to form the Tech Valley Chamber Coalition. UAlbany and Rensselaer Polytechnic Institute worked together to bring a U.S. Department of Energy conference to the region. The Charitable Leadership Foundation of Clifton Park donated $12 million to create the Ordway Research Institute, designed to recruit top scientists to the region and promote biomedical research at the Wadsworth Center, Albany Medical Center and the Center for Medical Sciences at the University Heights campus. GE Global Research Center and Albany Med forged a partnership to establish the Advanced Neuro-Imaging Research Center to study diseases of the central nervous system; RPI and the Tech Valley Angel Network announced plans to work together on screening companies making pitches to investors. The Saratoga Technology and Energy Park in Malta opened with its first tenant, Starfire Systems Inc. The park is a collaboration among the New York State Energy Research and Development Authority, Saratoga Economic Development Corp. and UAlbany. posted by Ed | Make the connection between arts and economic development Friday, December 20, 2002 Building an innovation economy means creating a cool place. That means integrating arts into economic development. That's what some innovative small cities are doing. Learn more. Go Still skeptical? Before Austin moved into computers and semiconductors, it developed a thriving music industry. The two are connected. Indeed, in restructuring its economic strategy to "keep Austin weird", arts are playing a central role. Learn more here and here. posted by Ed | Building biotech in San Francisco San Francisco, the birthplace of biotech, is -- for the first time -- coming up with a strategy to strengthen its cluster. Read more.Go This development points to an interesting insight about clusters...they emerge naturally. (How they come about is the subject of some interesting work on the theory of emergence, and here's a good book on the the topic. A closely related notion is that networks represent the dominant organizing principle as to how the world actually works.) So, it's interesting to see that biotech development in San Francisco is becoming an explicit strategy. Most of the effort, it appears, is focused on marketing. posted by Ed | The message: Brand or perish... EDPros face a stark reality. In a global economy in which technology, capital and people are mobile, you need to brand your region. Branding is arguably the driving concept of marketing to emerge in the 1990's. Applying branding to economic development is tricky, as the folks in Pittsburgh are discovering. Read more. Go posted by Ed | Development Report Card for the States released The Corporation for Enterprise Development has released the latest edition of its controversial Development Report Card for the States. Go The report card is controversial, because of both the framework it employs and the measures it uses. Traditional state economic development programs that are based on a recruitment strategy do not generally do well. The CFED report uses 71 criteria ranging from air quality to unemployment rates. So, for example, Arkansas' economic development chief calls the CFED ""a Washington think tank... made up of a bunch of pipe-smokers and dreamers." Read more. What we have here is a failure to communicate. The CFED report points in the right direction...but it is not communicating effectively with state legislators who need the most help. No one can get their head around 71 indicators. The point of keeping score is to find the right metrics to drive performance. Fewer is better. These metrics need to be clearly linked to factors that drive success in the knowledge economy. And the rationale needs to be quickly and easily communicated. Concepts like "development capacity" are non-starters for most politicians. There's also an underlying tone in the CFED work: We can get some of these people to change if we shame them into it. This approach does not play well. My advice: use the CFED indicators but drop the grading. The point is to measure improvements and to set measurable goals. Then use these goals to guide legislators to a more productive pattern of state economic development investment. Judging from the reaction in Arkansas, CFED should rethink its approach. posted by Ed | New report on sprawl ranks the large metros Thursday, December 12, 2002 A new report on sprawl ranks the largest 83 metro areas. The report, a product of three years of research by Reid Ewing of Rutgers University and Rolf Pendall of Cornell University, represents the most comprehensive effort yet undertaken to define, measure and evaluate metropolitan sprawl and its impacts. EDPros in these large metro areas should download the report to get the latest on this emerging economic development issue. Go Sprawl matters as an economic development issue for at least three reasons: First, sprawl tends to "hollow out" a regional economy, creating a divide between the "haves" and the "have-nots" (See Metro Politics, an excellent book by Myron Orfield on this issue.) Second. sprawl, as Orfield points out, tends to lead to more difficult regional politics. Unless the region can take steps like Louisville to establish a regional city/county government, political consensus is more difficult to reach. (For more on Louisville, see the recent Brookings strategy report.) Finallly, sprawl creates a higher "overhead" for an economy to support. More roads, sewer lines, public safety personnel and facilities. Pioneering studies at Rutgers in the 1990's by Robert Burchell point to a simple fact: sprawl costs more. (For more on the costs of sprawl, see this guide prepared by PlannersWeb.) posted by Ed | Publication announcement Monday, December 09, 2002 Over the next ten days, I will be traveling to China. Most of the time, I will be working at the site of our joint venture factory in Lantian County, outside Xi'an. Our venture produces mineral water for the family and school markets in Xi'an. We will be completing our business plan for next year. Internet connections in Lantian County are not easily available, so I will not be publishing regularly until December 19. My work in China provides a valuable perspective on economic development, an obsession in China. I will be sharing these insights with you on my return. posted by Ed | Massachusetts governor-elect hears about "Knowledge Corridor" Saturday, December 07, 2002 Governor-elect Mitt Romney is holding economic meetings throughout the state. Western Massachusettss hosted the first, and it provided the Hartford-Springfield Economic Partnership an opportunity to promote its efforts to develop the "Knowledge Corridor". Read more. Go. The Corridor includes counties in both Massachusetts and Connecticut and represents roughly the area within a 45-minute driving radius of Bradley International Airport. Twenty-eight institutions of higher learning and 116,000 full-time and part-time students fall within the region. Learn more from the Partnership web site. Go (The first "Knowledge Corridor" refers to a region between Oxford and Cambridge universities inthe UK. Learn more.) posted by Ed | Oregon's leadership to convene to discuss the Oregon Business Plan On Monday, Oregon's business and political leaders will gather for a full day to discuss the Oregon Business Plan, an effort to redefine the responsibilities of business and government to re-ignite growth. Governor-elect Ted Kulongoski and dozens of Oregon legislators are expected to attend. The Oregon Business Plan places much of the burden of change on the state's political leadership: "timid, small-minded and shortsighted public leadership", as one journalist notes. Here's the challenge: Can the state's leadership develop a collaborative approach to addressing these challenges? And here's the risk: the state's business leadership may not be speaking in terms that political leaders can or will understand. (Political logic is different than business logic, a fact too few business leaders appreciate.) Take, for example, the president of Associated Oregon Industries who today writes, "A recipe for an Oregon economic comeback: Fifty-four ways Oregon can save its own economic bacon." These type of laundry lists rarely do anything but inflame opposition. Read more. Go. posted by Ed | South Carolina uses lottery funds to build its innovation economy In an effort to stimulates its innovation economy, the South Carolina state legislature has set aside $30 million in lottery funds to finance research projects at three universities: Clemson, the University of South Carolina and the Medical University of South Carolina. Last week, the universities submitted 27 proposals, totaling over $100 million. Now it's up to the nine-member Centers of Excellence Review Board, made up of business leaders and former legislators, to decide which projects get funded. They expect to decide by next May. Read more. Go Momentum has been building in South Carolina for a change in direction in economic development. State per capita incomes are only 81% of the national average, compared to 91% in North Carolina and 94% in Georgia. A recent report by the Center on the Future at Clemson highlights the slow development of technology-based businesses in the state. Post secondary institutions have suffered under tight budgets in the state, but the lottery compromise should help. Among other steps, it establishes an Endowed Chairs program to build up the state's research base. THis approach makes sense, because it invests money in people, not bricks and mortar. Ultimately, the prospects for building the state's innovation economy come down to political commitment in the legislature. 2003 will be another tough budget year, and the legislature will be facing a severe challenge to keep its commitment to this new direction. In January, I start on a new strategy project in Charleston, so I will be watching this one closely. posted by Ed | Coloraodo is also investigating biotech Following a similar project in Arizona, Colorado's Biotechnology Council is undertaking a major study of the future of biotech in the state. Battelle, the same firm that conducted Arizona's project, will undertake the study for Colorado. The study is due to be completed this coming spring. Read more. Go posted by Ed | Now here's a well designed process to define results Friday, December 06, 2002 In Pennsylvania, Governor-elect Rendell is focusing on building communities in the state. To help define priorities for his administration, he is holding nine regional summits. The interesting aspect is how Rendell is designing and managing the process. A former mayor in Philadelphia, he knows how to balance consultation with action. Key features of Rendell's process: In each of the state's nine regions, Rendell will appoint a coordinator who will summon labor, business, governmental, educational and community leaders to meet. Regional coordinators will pick the participants to ensure that the group, while broad, can come to a consensus. Any disputes the group does not resolve regarding its plan or priorities will be decided by Rendell. Each group will come up with a regional development plan and a regional priority list. To establish this list, each group will hold at least one daylong meeting. Once that process is completed, each group will meet with Rendell for 4 to 6 hours of "frank exchange on how to increase jobs and economic development". I'm impressed. This looks like a carefully designed process, geared toward results. Learn more. Go posted by Ed | Maryland's new governor establishes technology commission Here's another indication of the shifting economic development thinking going on. As his first economic development initiative, Governor-elect Erhlich has established a Commission on Development of High Technology Business. The Commission will report in July with recommendations that the new governor hopes to present to the legislature in his second year. The focus will be on improving technology transfer and commercialization in the state. Maryland leads the nation in the amount of government research money its universities attract, but it ranks significantly lower in commercial technology development. Advocates for the Commission point out that other states invest more heavily on early stage business development. Each year, Maryland invests about $6 million on technology promotion and $8 million in tech startups. By coontrast, Michigan plans to spend $1 billion in tobacco settlement money over the next 20 years to build a "life sciences corridor." Pennsylvania spends $30 million a year on its network of business incubators and invests another $60 million in venture capital to help some of those companies get off the ground. Go posted by Ed | Tallahassee conducts forum on education as an economic engine Too often, secondary and postsecondary educators don't communicate effectively. Or, at all. You see these gaps in a number of ways. At times, administrators at community colleges and four year institutions behave like they are on different planets. At other times, you'll see extended negotiations between schools and post-secondary institutions over "articulation" agreements...arrangements under which students can transfer credits from high school to community college. Community leaders in Owensboro, KY, for example, have been trying to develop a K-14 initiative in their community. With all the complexity they have encountered, you'd think they were trying to devise a formula for Middle East peace. So the forum in Tallahassee is significant. Representatives from Florida A&M University, Florida State University, Tallahassee Community College, and Leon County Schools sat down to discuss how they can work together and help each other. It's the type of dialogue that more communities need to encourage. Read more. Go posted by Ed | Indiana's governor proposes big steps to build an innovation economy Thursday, December 05, 2002 Faced with an economy that is slowly losing its momentum, Indiana's Governor O'Bannon yesterday proposed a $1.4 billion, 10 year program to build an innovation economy. Business and research grants, college scholarships and investments in schools would be targeted to creating high-skill, high-wage jobs in four industry sectors: advanced manufacturing, life sciences, information technology and distribution. O'Bannon's plan will be the centerpiece of his legislative package next year, but it's no slam dunk. The state faces a $760 million budget deficit, and some legislators complain of borrowing against the tobacco settlement. (They seem to forget the other part of the equation...by investing these funds in research and education, the state generates significant long term returns.In addition, they ignore the financial leverage that comes from the state's investment.) The governor's plan hits the target. As I outlined in a speech before economic developers in Indiana last winter, the state's core economic development problem is a relatively low level of education and major imbalances in its education and workforce system. Each year, 41,000 young people enter Indiana's workforce with minimal skills, twice the level needed to supply entry level jobs. At the same time, the state faces a shortfall of 25,000+ workers each year with postsecondary skills. You can download my slides here. (You can also download a brief analysis of the Indiana program I prepared for the governor's staff in November. It demonstrates the power of financial leverage in the investment program.) You can learn more about the O'Bannon proposals here. You can download a booklet on the plan here. posted by Ed | Entrepreneurs in higher ed are key catalysts in the innovation economy Wednesday, December 04, 2002 In the innovation economy, some of the most important entrepreneurs are not in business, but in higher education. Take the case of Marshall University in West Virginia. President Dan Angel is leading the university's efforts to transform the regional economy. Marshall has announced a partnership with Dow Chemical's Technical Center and the university’s campus in South Charleston. This partnership will lead to the use of laboratory facilities at the Dow tech center to support Marshall graduate programs and associated research, the use of Marshall’s South Charleston facilities and faculty to provide additional educational opportunities for Dow employees, and the development of projects that advance biotechnology research and development. Learn more. Go At the same time, Marshall has announced plans for a $40 million biosciences center, as part of a $100 million biotech development plan. President Angel notes that Marshall needs four components to succeed: new facilities, top scientists, a business development center, and partnerships. This effort will take years to bring results, but this important step is to start. It is the type of focused, university-led biotech effort that is more realistic, in my view, than the broad-based approach Arizona is considering. Marshall's research base is relatively small, $35 million, but it is growing. With public sector and private support, the University could attract the researchers it needs to expand this base. The keys will be to follow a research plan that targets research investments in a few areas and adopt best practices in technology transfer, including faculty release policies and business development. Read more. Go. posted by Ed | Now here's a good idea: a regional "hands-off" pact among economic developers. In North Texas, EDPros have agreed not to recruit each other's industries. The Economic Development Cooperation Compact includes a pledge not to recruit corporations in nearby cities. In Texas, the temptation for smaller cities to recruit from bigger cities is stimulated by the state's sales tax for economic development. Learn more. Go At the same time, this type of regional cooperation -- in the form of an explicit agreement not to raid a neighbor's economy -- provides the foundation for a stronger regional development effort. posted by Ed | Arkansas may face a choice: Cut incentives to invest in education Last month, the state Supreme Court ruled that Arkansas isn't spending its $1.7 billion in school funds equitably among the 310 public school districts. Experts estimate that remedies will cost an additional $400 to $900 million dollars annually. Meeting this mandate could result in cutting the major incentives that Arkansas is using to lure companies like Toyota. If Arkansas is ever going to build a successful innovation economy, the choice is clear: Invest in eduction. Let's see if Arkansas' legislators respond. The next legislative session starts mid-January. Read more. Go posted by Ed | Michigan moving ahead with fuel cell research Tuesday, December 03, 2002 Michigan is moving ahead with an aggressive alternative energy program. The approach is purely practical: There's growing evidence that the internal combustion engine eventually may be phased out. This phase out could result in the loss of about 200,000 Michigan jobs and $10 billion to the state's economy. So, the state created the NextEnergy Center, next to Wayne State University in Detroit, to stimulate fuel cell research. The state has now tied NextEnergy Center together with its Renaissance Zone program. Created in 1996, the Renaissance Zone program creates virtually tax-free areas for business. This is the type of strategy that makes sense for Michigan...it builds of the economy's strengths and ties together industry with an established research base at Wayne State. Read more. Go The NextEnergy program has demonstrated some impressive clarity since Gov. Engler announced it in April. In October, the Michigan Economic Development Corporation announced a cooperative agreement with Stuttgart Regional Economic Development Corporation in Stuttgart, Germany. As part of the agreement, the corporations will develop online educational and training programs that will allow students, organizations and businesses leaders from both regions to participate. The groups also will create a Web-based marketplace exchange service. The exchange would include a list of companies within each region that have an interest in establishing joint ventures, direct sales, or networking partnerships in alternative energy. In September, MEDC announced a similar cooperative agreement with the North of England Inward Investment Agency in the United Kingdom. Learn more about NextEnergy. Go. posted by Ed | Will Arizona be placing some high risk bets in biosciences? Arizona is evaluating a proposed strategy to ramp up bioscience investment in the state. A new report by Battelle calls for heavy investment: $1.4 billion over 10 years. This approach to building an innovation economy is high risk. And the scale of the investment may crowd out other, more promising technology areas. Arizone does not have a strong base from whihc to start...In 2001, Arizona ranked only 27th in NIH funding with $117 million. And the state is losing share, as other regions are growing more quickly. Read more. Or download the Battelle report from the Finn Foundation site. Other regions are investing heavily here. A recent Brookings report pointed out that bioscience development is already concentrated in nine metro regions. These regions attract investment, because they have both a strong research base and strong entrepreneurial networks geared to the biosciences. Download the Brookings report. Putting these pieces together is very tough. I have some experience here. Twenty years ago, I founded the Biomedical Research Foundation of Northwest Louisiana. (In addition, my wife is a molecular biologist working on cancer research at the Cleveland Clinic, so I get a daily dose of recombinant DNA technology stories.) My experience tells me this: there is a reason why there is no Bill Gates or Henry Ford in biotech. Bioscience development is extremely complex and requires dense networks of skilled professionals. Converting the promise of bioscience into economic prosperity is a heavy bet with long odds. That's not to say that Arizona should not move forward. But I would advise making these investments with eyes wide open and as part of a broader strategy to build an innovation economy. Is $1.4 billion the right number? What are the alternatives? What's Plan B? posted by Ed | Albion College starts building an innovation economy Monday, December 02, 2002 On the surface, it appears that not much is happening in Albion, Michigan. It appears to be yet another old industrial city that has failed to make the transition to a new economic base. Last June, the city's largest employer, a foundry closed its doors. The City faces a 10% budget shortfall next year. But look deeper, you see the promising beginnings of an economic transformation, led largely by creative leadership at Albion College. The college organized an economic summit attended by about 36 alumni, students, faculty and community leaders. The college hatched the Briton Business Consultants, a nonprofit organization that allows students to apply what they've learned about business to the community. Thirty-one students work for the firm, which is owned by the college and managed by students. The consulting firm has taken on the task of marketing the city's incubator. The students are not the only ones involved. An active alumni network is contributing ideas. During the October economic summit, alumni from Michigan, Ohio, Indiana, Illinois, Pennsylvania, Florida, California and Canada participated in discussing some of the problems facing the city and ways to push economic development forward. Albion will be a good community to watch as they build an innovation economy, brick by brick, project by project. Read more. Go Read more about Albion, MI's economic challenges. Go posted by Ed | Louisville (pronounced "Lou-a-vul") is becoming a really cool place Over the past two or three years, Lousiville, KY has taken some really important steps to build its innovation economy. One of the biggest innovations has been in government...the merger of city and county into a metro government. Some time ago, the city also consolidated its economic development efforts under Greater Louisville, Inc. A lot else is happening, as well. A new riverfront park, revitalized arts community, downtown residential development. Learn more. Go Consolidated metro government is a key element to innovation in these larger communities. Louisville joins Indianapolis and Nashville, two other cities that consolidated city and county with strong local economies. Meanwhile two other river towns...Cincinnati and Memphis seem stuck with big plans and stalled projects. posted by Ed | |
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