Here's the latest news on the economy from last week.

Economy slows sharply in the spring as consumers cut back on spending
U.S. Economy Grew More Slowly Than Expected in Spring
Economy Cools Amid Shopping Slowdown
Vital Signs for the Week of Aug. 2
What Impact Will E-Commerce Have on the U.S. Economy? Download the article
Fed: Belief in hell makes economy sizzle
Economic Optimism Surges According to PwC's Manufacturing Barometer
World economy strong enough to weather oil rise - IMF
U.S. job quality improving with economy-Fed study

Dell is expanding in Cincinnati (a distribution center), Oklahoma City (a call center) and, possibly, North Carolina (a manufacturing facility). Here's a review of the incentive packages involved. Read more.

Tucson's civic leadership is putting together a new effort to strengthen the collaboration among the 30+ public and private groups that workin economci development. The new entity represents an impressive collaboration among elected officals, private setor leaders, and university and community college leaders. Read more.

A new Accenture report highlights the major failings in our workforce development systems. Only 17% of the executives participating in the survey see their workforce as "industry leading". Read more.

A new collaboration among foundations in Northeast Ohio, the Fund for Our Economic Future, released the list of its first investments last week. Read more.

Collaboration among our regional foundations is a good step forward. The next opportunity for the Fund will come in establishing an on-going collaborative partnership with our region's colleges and universities.

Right now, the Fund considers our region's higher education institutions as vendors, not partners. Instead of inviting colleges and universities into their strategy discussions, the Fund is asking our colleges and universities to bid on two Requests for Proposals.

This approach is largely a legacy of industrial economy thinking: the notion that you get your "best ideas" from a competition among your vendors.

A more appropriate approach for the Fund arises from a different starting point. The best ideas on regional economic transformation come from collaboration and networks.

The foundation community in Minnesota is taking this more open, collaborative approach to regional economic development. Learn more. Minnesota foundations see their role as "realigning systems" through expanded collaboration. The McKnight Foundation, which is leading the Minnesota alliance, could provide some useful insights to the Fund for Our Economic Future.

(To understand, in part, why colleges and universities are central to regional economic development, read this article.)

Oregon is a bit of a long-shot when it comes to building a globally competitive cluster in nanotechnology. But civic leaders in the state have come up with an innovative strategy, and Oregon scored a significant victory last week. The feds are starting to pour money into the collaboration.

The Oregon Nanoscience and Microtechnologies Institute forms the centerpiece of the state strategy. It is a collaboraation among Oregopn Stgate University, the University of Oregon and Portland State University. Read more.

To lure Rubbermaid to Atlanta, Georgia agreed to a $1.3 million incentive package. Now that Rubbermaid is undergoing a major corpoate restructuring, the company is moving only a fraction of the jobs to Atlanta. Georgia is renegotiating its deal. The state wants to reduce the package from $1.3 million to $400,000. Learn more.

Philadelphia's CEO group is extending its geographic reach into Delaware and New Jersey. The CEO Council for Growth focuses on initiatives to expand collaboration among different economic development groups in the region. Read more.

Here's another case of a state implementing innovative foreign economic partnerships. Enterprise Florida has provided support for a new strategic alliance between the University of Miami and McGill University in Quebec. The alliance focuses on engineering and information technology. :Read more.

Why is this important? Three reasons. First: in the knowledge economy, it's is all about brainpower. Many state legislators don't get this point yet, but colleges and universities are the core of our future economy.

Second, globalization is short-hand for the integration of global markets. As markets integrate, national government policies (trade policies, primarily) become less important. Regional economic policies, on the other hand, become more important. States that recognize this fact will move more aggressively to support these alliances. To compete globally, you need to think regionally.

Finally, strategic alliances are the name of the game. In a world of networks, no one organization can survive alone. Strategic alliances -- either across neighborhoods or across the globe -- are the primary vehicles through which wealth will be created. Strategic alliances are replacing the large, vertically integrated organizations of the Industrial Age.

Arizona has posted detailed economic profiles for its local communities. Read more. You can download them from this page.

The Department of Commerce has calculated detailed location quotients for communities, based on six digit NAICS codes. In addition, they have a brief write-up for each community. The files are in a variety of formats, so you can manipulate the data, if you like.

Another step in the analysis would help most communities, though. The information is still dense, and EDPros in mpost smaller communities don't have the time or inclination to sort through what all this means.

New Mexico universities are setting aggressive goals for technology transfer and university spin-outs. For example, the University of New Mexico hopes to generate three new businesses in the next year. Read more.

Armed with $1 billion from the federal government, Governor Bush went shopping and landed The Scripps Research Institute. Local governments threw in another hefty sum -- up to $667 million -- for infrastrcuture. Scripps got a great deal: an East Coast site at no cost.

Governor Bush claims that this seed will grow into 50,000 jobs and 500 businesses. Others are not so sure. The controversy continues. Read more.

Wichita is reviewing its tax incentive policies, and from the looks of it, the review is about due.

The City provided tax incentives to a local health club to expand. Read more. The deal violates one of the basic rules of economic development: not all businesses are created equal.

Sheltered businesses -- firms that survive on local customers -- do not create long term wealth. We generate wealth from traded businesses that conduct business outside our regional economy. So, giving tax incentives to health clubs redistributes wealth (from taxpayers to owners of health clubs), but it does little to generate any net benefits for Wichita.

In most economies, about one third of the employment is in traded businesses. These firms generate higher wages, and they represent the economic drivers of the economy.

You can think of it this way. In economic development there are three types of money. "Good money" comes from selling goods and services outside the economy and importing income. "Neutral money" comes from businesses that circulate money within the economy. Hardware stores, retail shops, and health clubs all deal in neutral money. "Bad money" represents funds that we send to outside suppliers. This is money that has leaked out of the economy. David Morganthaler a noted venture capitalist and close adviser to REI, provided me with this quick explanation.

Georgia EDPros held their monthly meeting in Macon. They learned how a community can leverage its assets through collaboration and focus. Read more.

The Dallas Cowboys will be trying to convince the voters in Arlington, TX that they should pay for half of a $650 million new stadium. They will focus on economic development, despite the fact that there is no evidence that stadiums generate additional investmetn. (This is especially true for football stadiums that are idle all but 8 days a year. Read more. (Free registration required.)

If you have any doubts about why broadband matters, read this article.

Wisconsin has about 250 biotech companies that employ more than 19,000 workers. From this base, state EDPros hope to build a stronger industry cluster based on bio-manufacturing. This strategy will provide opportunities for some of the factory workers that have been laid off from other manufacturing companies. Read more.

If your community is considering an incubator strategy, you might connect with Fort Smith, AR. Davie Spindle, the EDPro who heads the city's economic development department, is circulating a plan to create incubators in a seven county Oklahoma/Arkansas region. Read more. Visit the Fort Smith web site.

Oregon is moving ahead with a strategy to build a cluster in secure networks, and their experience carries some valuable lessons in how clusters form. Read more.

Tucson's civic leadership is moving in the right direction by rethinking the roles of economic development. Learn more

The traditional categories that we are using -- attraction, retention and expansion -- do not focus on the underlying "drivers" of our economy: brainpower and innovation (both of which are embedded in regional innovation systems, called "clusters"). Further, these tradiitonal categories give too little attention to building quality, connected places -- the type of places where innovation can flourish. (We tend to view these investments as "community development", another line in the sand.)

Our basic economic development categories are seventy years old. Attraction strategies started in Mississippi in the 1930's. Business "retention" is a term that focused on what Northern states could do after firms started moving to the South. That wave started with textiles in the 1950s. Workforce development has its roots in federal programs that date to the 1960's.

By thinking in old categories, we close ourselves off from the new opportunities in front of us.

Here are good articles from last week:

Disposable income is where politics, economy meet
Forecasting economy a bit like shooting craps
Wavering voters have doubts about Bush, worries about economy
Leading economic indicators decline in June
Consumer confidence stands still
U.S. economy picking back up -- Greenspan
Greenspan's remarks on economy send mixed message

If you do not know what you are doing in workforce development, you might call the folks in Grant County, Indiana. They are moving ahead with a program based on Work Keys. Learn more.

This type of skills-based approach makes sense. Work Keys tends to be relatively expensive, but the basic focus on skills bridges the language gap between employers and educators. Learn more.

The concept for Work Keys is rooted in the Secretary's Commision on Acheiving Necessary Skills (SCANS) that concluded its work during the first Bush Administration. If you are new to workforce development, start here. The SCANS reports provide you with an understanding of the basics. Visit the SCANS web site.

Alternatively, start with a really good book, Teaching the New Basic Skills. You can buy is used on Amazon for less than a buck. Go.

Sports arenas and stadiums are often promoted as economic development engines, but -- in truth -- they have limited impacts. And in some cases the net impact is negative. Here's an opinion article from Sacramento that explores the myth. Read more.

If you are interested in reading more about sports stadiums and economic development, here's a good report: Stadiums, Professional Sports, and Economic Development: Assessing the Reality. Here's another article from the Brookings Instituteion. Sports, Jobs, & Taxes: Are New Stadiums Worth the Cost?

This morning's Atlanta paper carries a good article on the future of manufacturing in the U.S. In the later decades of the 19th century, manufacturing in the U.S. moved from small job shops to mass production. The railroad and telegraph created opportunities to reach a mass market. Tapping new energy sources -- first coal, then electricity -- enabled manufacturers to create a factory system capable of producing to meet these markets.

High volume production appeared first in process manufacturing -- petroleum (Standard Oil), steel (US Steel), soap (Proctor and Gambel), cereal (Pillsbury, Quaker Oats), and processed food (Swift in meat packing, Campbells in soups). When Henry Ford introduced the Model T, he set the stage for another transformation in U.S. manufacturing. He introduced high volume manufacturing in sophisticated fabrication and assembly. Alfred Sloan at GM then integrated mass production with sophisticated mass marketing.

We are now facing a new transition for American manufacturing. The trends have been underway since the late 1970's. And the new directions are becoming clearer. Read more. (Free registration required.)

As the article hints, over the longer term, U.S. manufacturing can move into high end manufacturing processes (composites, powdered metallurgy, nanotechnology), design integration (design simulations, rapid prototyping), and systems integration (systems design and support). All of these new directions will require stronger manufacturing networks among companies.

Part of the short term challenge is simply to adopt sound manufacturing processes. A recent seminar in Washington State illustrates the point.

A recent report from Pennsylvania suggests that companies that respond to the challenge by becoming faster, better and more cost-effective will best position themselves to compete. To succeed, the study pointed to the need for Pennsylvania manufacturers to pay special attention to increasing sales through process and product innovation. An article this morning from Mississippi shows how manufacturers are upgrading to boost productivity.

We need to accelerate the change in our thinking. This challenge is the biggest one we face: breaking the brain barrier of old habits. Read a good opinion article from a manufacturer in New Hampshire.

For a view of manufacturing from the UK, read the recently released report from the Department of Trade and Industry. Manufacturing is now giving the UK economy a boost. Read more.

Building an entrepreneurial economy involves redrawing mental maps, as much as anything else. It means starting to see the world differently, by looking for connections and opportunities. Most economies that stagnate have a leadership preoccupied with fears, limitations and destructive rivalries. These places need a collective leadership head adjustment.

Here's a good story on how a high tech entrepreneur started to shift perceptions in Louisville. Read more