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Economy Watch
Saturday, February 26, 2005 Here are the best economics articles from last week. U.S. data shows economy on solid ground US economy shows solid GDP growth Running on empty Q4 GDP Revised Up on Stronger Exports Vital Signs for the Week of Feb. 28 Top Economists See US Economy Motoring in 2005 Social Security overhaul unlikely? Is U.S. Inflation Target Behind Low Bond Rates? posted by Ed | Teen entrepreneurs in Cleveland: Use idle MEMS equipment Here's a good story out of my backyard. Colin Drummond and Bob Schultz are civic entrepreneurs in Cleveland. Both are involved in MEMS development. (MEMS stands for "microelectromechanical systems" They are very small devices and machines fabricated using techniques generally used in microelectronics. So, for example, the sensors to trigger your car airbag are MEMS devices. Learn more.) Colin and Bob developed a MEMS training course for high school students and called it the Microsystems Academy. Now these students have come up with another idea: Develop an on-line business to enable start-up companies to use idle equipment at larger companies and research institutes. Learn more. posted by Ed | Shared kitchen incubators Friday, February 25, 2005 Here's another example of a shared kitchen incubator. It's a small movement, but it's growing. Read more. This project is an initiative of The Rogue Initiative for a Vital Economy (THRIVE), based in Ashland, OR. THRIVE is a not-for-profit working to grow the regional economy by helping independent, locally owned businesses connect with each other. The organization has held a Food Connection conference to encourage collaboration between the buyers and sellers of locally produced food. THRIVE is very similar to the Appalachian Center for Economic Networks (ACEnet) in Southern Ohio. ACEnet runs a very successful food business network. Learn more. posted by Ed | Innovative IP agreement in New Mexico Seven research organizations in New Mexico have signed a novel agreement to coordinate their licensing of intellectual property (IP). The agreement will allow quick bundling of patents to accelerate business development. As one participant commented, "The agreement will allow a company to easily access patents from a number of New Mexico research organizations and have one party represent these institutions in the transaction." Read more. posted by Ed | New marketing alliance in Eastern Tennessee A ten county region in Eastern Tennessee has come together with an economic development marketing alliance. As one participant explained, "[The] purpose is to eliminate any duplication of efforts and establish a global marketing strategy." The proposed budget is $1 million a year, with 70% coming from the private sector and 30% from local governments. Read more. posted by Ed | Trying to slow the brain drain Thirty-three states experience a net loss of young college graduates. Here's an interesting story of what states are doing to try to make their states "sticky" for recent college graduates. Unfortunately, there's little evidence that financial incentives work. In sum, despite politicians' efforts to the contrary, there's no short term fix for this loss of talent. Read more. Trying to attract older college graduates to come back, as Maine is doing (see the next story), may make some sense. It's certainly cheaper putting up web sites and sending e-mails to alumni than giving tax breaks. posted by Ed | Web Watch: Maine alumni site The University of Miane has launched a new site designed to encourage its graduates to move back into the state. The site contains information on starting a business or finding a job, among other resources. Visit the site. Read more background. posted by Ed | Public attitudes in Northeast Ohio In an effort to learn more about citizen attitidues toward regional economic development, the Cleveland Foundation has been conducting an annual telephone poll. The project, called the NEO Barometer, is in its third year. Few regions have the money to spend on polls to explore citizen attitudes for regional economic development. Northeast Ohio has a strong philanthropic community willing to invest in this project. This year's report, released today, shows a growing interest in regional approaches to economic development. Learn more. posted by Ed | New ED center at University of Southern Mississippi Officials at the University of Southern Mississippi broke ground on the Trent Lott National Center for Excellence in Economic Development and Entrepreneurship. The $23 million center will house the university's department of economic development in a 53,000-square-foot, three-story building. Read more. The masters in economic development program at USM is about 20 years old, and it is growing. In 2002: 7 degrees awarded and 17 students enrolled; In 2003:10 degrees awarded and 20 students enrolled. In 2004: 15 degrees awarded and 30 students enrolled. posted by Ed | Setting the record straight in Louisiana Thursday, February 24, 2005 Both Ed Bee of Taimerica Management Groupand Jay Garner of Competitive Strategies Group are involved in providing guidance to Mike Olivier, chief EDPro in Louisiana. (Ed and Jay are good friends of mine and regular readers of EDPro Weblog.) There's been some confusion with a Baton Rouge newspaper article implying that Ed was being hired to review Jay's work. Not so. The two assignments were completely different. This incident illustrates how the business press can needlessly confuse a situation with lazy reporting. Read more. posted by Ed | Toyota Watch Here's the latest on the pending Toyota expansion: Toyota confident of expansion Toyota to announce new plant site by year's end, Arkansas visited Tennessee courting Toyota posted by Ed | Another critic of "the creative class" Here's an interesting and thoughtful critique of Florida's Creative Class. The author makes the point that when you dig behind the headlines, Florida's 3T formula -- technology, talent, tolerance -- may not have added much insight after all. Read more. posted by Ed | Incentive Watch Louisville is trying to jump into the UPS consolidation game. The company announced that it would shut down a sorting hub in Dayton and consolidate the work at one of its other existing hubs. Kentucky jumped in with a $20 million incentive package proposal. The package amounts to about $50,000 per job. Read more. Momentum Mississippi has hit a speed bump. Their proposal to authorize the state to issue $24 million in bonds to fund incentive programs has died in the legislature. Read more. Download a copy of the proposal. In Missouri, the state's new top EDPro indicated that he will move ahead with plans to revamp the state's incentive programs. The new program will follow the Oklahoma Quality Jobs model. Read more. Under this approach, the state pays a tax credit based on the number and wage level (quality) of the jobs created. (Created in 1994, the Oklahoma Quality Jobs Program provides quarterly cash payments of up to 5 percent of new taxable payroll. The cash is paid directly to qualifying companies for up to 10 years. To qualify for the Quality Jobs benefits, a company must be either a central administrative office, a manufacturer, a research and development concern, or a specified service company. In addition, qualifying firms must have 75 percent of their total sales to out-of-state customers. Learn more) Massachusetts Governor Romney has proposed a $600 million economic stimulus package. One part of the proposal would provide cash grants to companies that move to or expand in the state. Read more. Peabody, KS joins a list of other rural communities that will give away free land to new residents. Read more. In part as a reaction to the way the Dell deal was handled, the North Carolina Press Association continues to argue that the state need more public disclosure of incentive deals. Read more. In New York, a state legislator is trying to pass a proposal that would keep the state from providing incentives to companies that create jobs out of state...another gesture to deal with outsourcing. Read more. (To learn more about what states are doing to counter outsourcing, read this review article. Meanwhile, in Texas, the governor is hinting that a big deal is in the works for San Antonio. Read more posted by Ed | The global connections of U.S. cities Researchers at Brookings are always interesting to read. Now they have come up with a metric on global connections. The summary concludes: "As cities aim to position themselves better economically, they must remember that they operate in a global marketplace. Cities able to grow and attract globally-connected, high-value service firms can access, and benefit from, a worldwide array of customers, workers, and contracted services, ultimately boosting quality growth at home." You can read more and download the report from this page. posted by Ed | Making a future in Kalamazoo Wednesday, February 23, 2005 Kalamazoo is an interesting case of a city that is making its own future. In the words of Governor Granholm, the city "gets it". Southwest Michigan First provides the engine for getting stuff done. Learn more. posted by Ed | Expanding cooperation between Washington, Oregon The governors in Washington and Oregon are committing to expand their economic development cooperation. Most of their initiatives are focused on agribusiness development. Learn more. posted by Ed | Arizona manufacturing workforce study announced Arizona is launching an expensive project to learn the skill needs of high tech manufacturing in the state. Batelle will complete the $312,000 study. The goal is to define the skills manufacturing employers will need over the next five years. Read more. posted by Ed | Supreme Court considers limits to eminent domain Earlier this week, the U.S. Supreme Court heard arguments in the case of residents of New London, CT who are challenging the city's use of eminent domain authority. The residents live on land that the city would like to clear for a developer with to build a convention center and mixed use development. Specifically, the question presented to the Court is: What protection does the Fifth Amendment's public use requirement provide for individuals whose property is being condemned, not to eliminate slums or blight, but for the sole purpose of "economic development" that will perhaps increase tax revenues and improve the local economy? The decision in the case may increase the standard of "public use" that must be met before a local government can exercise eminent domain. Learn more. A decision is likely in June. In 1954, the Supreme Court decided the case of Berman v. Parker, in which the Court allowed the District of Columbia to use eminent domain authority to clear slums. State courts have used the Berman case to expand the definition of "public use" to include economic development projects. In 1981, the Michigan Supreme Court decided that a local government met the "public use" standard of the Fifth Amendment in the case of a project to build a General Motors plant. In 2004, the Michigan Supreme Court overturned this decision. The Court decided that Wayne County could not use eminent domain to consolidate control over 1,200 acres for a private development near the airport. Learn more. This issue has direct impact on EDPros, especially those working in downtowns. For example, in Lincoln, NE, a hotel developer wants the city to use eminent domain to clear land for a new hotel. Read more. posted by Ed | Anatomy of a Deal: ZyStor Therapeutics Last November, ZyStor Therapeutics announced that it would move from St. Louis to a an incubator at a research park in Milwaukee. The business is small -- it occupies only 4,200 square feet -- but the folks in Milwaukee see the project as a significant milestone in the development of their research park. The firm has VC funding from investors in Missouri, Michigan and Wisconsin. The Wisconsin Investment Board has committed $135 million to VC firms based in Wisconsin, and two of the firms are investors in ZyStor. Learn more about the deal here and here. posted by Ed | An update on the Scripps deal For those of you interested in the on-going soap opera of the Scripps deal in Florida, here's an update. Earlier this week, the Palm Beach County commissioners voted to keep the Scripps project firmly on two paths. As Yogi Berra said, "When you come to the fork in the road, take it." Read more. (Professor Berra also came up with another favorite of mine: "You've got to be very careful if you don't know where you're going, because you might not get there.") posted by Ed | Developing high school entrepreneurs in Michigan Michigan has an interesting initiative underway in Muskegon County to encourage entrepreneurship in high school. Local partners are developing the "E in me" curriculum, as well as a post secondary certification. Learn more. posted by Ed | Setting work expectations for young people Tuesday, February 22, 2005 Here's a common complaint. Employers find that young people coming out of high school are generally unprepared for the workforce. Aside from weak skills, many employers find young people are undependable. In Barry County, Michigan, EDPros are trying to do something about the problem. Learn more. posted by Ed | Toledo tries to keep a corporate headquarters Toledo is trying to keep Owens Illinois from moving its headquarters out of downtown. Here's a good article that gives you some insight into the changing dynamics for corporate headquarters. Read more. posted by Ed | Promoting young leaders One way to get young people fired up about getting involved is to give them some ink. Here's a good example of how Milwaukee's paper is acknowledging the community contributions of young leaders. Read more. posted by Ed | Economy Watch Sunday, February 20, 2005 You can download a copy of the 2005 Economic Report of the President from this page. Here are the best articles from last week. The other side of prosperity: Debt-financed growth could be our undoing at feet of rivals PPI Spike Could Shift Terms in Fed Rate Debate Vital Signs for the Week of Feb. 21 Fewer People Looking For Work Despite Decent Economy, Hiring Bush's economic report argues the benefits of free and fair trade Greenspan says economy, inflation in good shape Highlights from Greenspan's Senate testimony Q&A Fed Study: Budget Cuts May Not Trim US Current Account Gap Much posted by Ed | Don't try this at home Allegheny County officials had a unique response to an overly aggressive real estate developer. They treated his e-mails like spam. Read more. posted by Ed | A roadmap for Phoenix Saturday, February 19, 2005 The new head of the Greater Phoenix Economic Council, Barry Broome, outlines his thoughts on economic strategy in an interview. Read more. posted by Ed | Oregon and Washington: Different attitudes to higher education Some interesting insights emerge from contrasting how two states, Oregon and Washington, invest in higher education. For decades, leaders in Washington have understood the economic significance of higher education investments. In Oregon, the direction is not so clear. Oregon has three research universities, all competing for state money. In Washington State, research funding is concentrated at the University of Washington. There are other differences. Unlike Oregon, Washington has made a sustained commitment to higher education over the years. As a consequence, the University of Washington is now more of an economic generator than the three research universities in Oregon. Read more. posted by Ed | New report on Indiana manufacturing The popular business press often gets the story about manufacturing wrong. They see a decline in manufacturing employment and believe that manufacturing is "dead". Nothing could be further from the truth. In fact, the nature of manufacturing is shifting dramatically. A report on manufacturing in Indiana illustrates the point. The report's author notes, ""It's surprising to me even, the growth in wages per job. Yes, jobs are declining, but productivity is increasing and there are still many, many good paying jobs in Indiana." Read more. You can download an executive summary of the report here or a copy of the full report here. posted by Ed | Resource: Report on U.S. position in global innovation The United States is in danger of losing its leadership role in science and innovation, a position it has held with a firm grip since the end of World War II. That's the message this week from The Task Force on the Future of American Innovation, a coalition of high-tech industry, scientific societies, and higher education associations. The report uses a set of benchmarks to show that other regions and nations, particularly the rapidly developing economies of Asia, are aggressively pursuing the U.S., and may soon catch up. You can find the report on the Task Force web site. Go. Read this report in parallel with the final report of the National Innovation Initiative, released in December 2004. Download the report. My brother, Hunter, and I were discussing these reports this weekend. (Hunter was the city planning director for Cleveland for 20+ years and now runs an economic development center at Youngstown State. Learn more.) He analyzed the situation this way: "For the American economy, innovation is like breathing. When you stop, you die." posted by Ed | Texas moves ahead with renewables Texas is moving ahead with its plans to promote renewable energy. Read more. In Austin last week, the chamber announced a plan to create a Clean Energy Development Council. The City of Austin is providing $100,000 a year to make Austin the nation's "clean energy capital." Read more. Meanwhile, in West Texas, civic leaders are promoting wind energy. Read more. posted by Ed | More innovation in Asheville The folks in Asheville, NC are steadily building an innovation economy. Here's the latest project: AdvantageWest and its local partners are renovating a lab in order to house a start-up company. The business uses a proprietary technology to screen chemical compounds at the molecular level. The company is a client of a client of the region's growing innovation network: AdvantageWest's Blue Ridge Entrepreneurial Council and the Blue Ridge Angel Investors Network.Read more. posted by Ed | Resource: Clear explanation of the climate change issue If you're like me, all this talk about climate change can get confusing. In a week that saw the Kyoto Protocol go into efffect, the UK magazine, New Scientist, published a clear, concise summary of the issue. Read more. posted by Ed | Georgia tackles the problem of dropouts Here's a step in the right direction. Educators and business leaders in Georgia have announced a plan to reduce the drop-out rate among high school students. Read more. Dropping out of high school creates a lifetime economic disability. This decision is the single most important economic decision that a young person makes. Yet, most young people are making this decision without adult supervision. (We are more upset about underaged drinking.) Dropping out of high school costs a young person $200,000 in lost lifetime earnings, compared to high school graduates and about $800,000 compared to college graduates. There are common sense strategies to reduce drop-outs, and to learn more, you can visit the National Dropout Prevention Center at Clemson University. Part of the problem is the woefully inadequate career guidance in high school. It is not uncommon for high school counsellors to have 200 or 300 students to advise. (Translation: there's no real career guidance going on.) Meanwhile, in Michigan, a state legislator has introduced legislation to increase the age at which a young person can drop out from 16 to 18. Read more. posted by Ed | Incentive Watch The North Carolina Press Association wants to reform the state's open records laws to find out more about economic development incentive offers to companies. Read more. In Georgia, matters are moving in the opposite direction. The House has passed legislation to shield talks between companies and State representatives. A Senate committee is now considering the legislation. Supporters say the legislation is necessary to protect Georgia from other states that might steal prospects. Read more. Critics in Georgia, though, believe that this approach will lead to abuse. As the editorial staff of the Macon Telegraph writes, "HB 218 strips away - except to those in the inner circles of power - information important to our future and our fortunes. A small group of people, at the local level or in Atlanta, could work out details of an economic development project, hiding whatever information they deemed harmful, until the deal is approved." Read more. The Indiana Senate has passed legislation to enact a package of targeted tax cuts to stimulate investments in R&D, capital equipment, auto racing, and new companies. Read more. Meanwhile, across the border to the south, a critic of the governor makes the point that to attract business, Kentucky should not keep cutting taxes when significant investments in education go unfunded. Read more. EDPros in Idaho have formed a task force on incentives and released a report that advocates additional tax incentives for business. Read more. In Texas, labor leaders are shouting into the wind with a proposal to "prohibit the state from investing in any company that in the previous two years had created jobs overseas that could have been done in the United States." More than two dozen states have similar legislation pending, although no state has enacted the proposal. As the article notes, "[T]he proliferation of these bills is an expression of frustration with the inability of government and labor organizations to control job growth and movement in a world economy". Read more. The Michigan Economic Development Corporation last week announced $40.4 million in tax credits and training grants. Daimler Chrysler will recevie about 71% of the money. Read more. Meanwhile, in the Triad region of North Carolina, the march of Dell suppliers is starting. Between ten and twelve companies may move into the region, and as one EDPro notes, "I'd be shocked if the suppliers didn't request incentives." Read more. That may be true, but providing incentives to Dell suppliers strikes me as pretty dumb. Their operations are already tied to Dell. There's no reason to throw in (in the words of my Louisiana friends) lagniappe -- a little something extra -- to get these companies. posted by Ed | Fairfax County connects to Korea Fairfax County Economic Development Authority in Fairfax County, VA continues to build global connections. The FCEDA already has established offices in London, Frankfurt, Tel Aviv and Bangalore. Now, it adds a marketing representative in Seoul, South Korea. Read more. posted by Ed | Economic impact of stadiums Denver's mayor gives some good insights into stadiums as economic development engines. One quote: "Given the condition of our schools, it's somewhat galling the amount of money we spend for stadiums." Read more. P.S.: The Thing Theory of economic development is dead. (The Thing Theory holds that if you build a really Big Thing -- stadiums, convention centers, and casinos -- you will create economic development.) Today, brainpower and innovation networks drive economic development. posted by Ed | Web Watch: Access Louisiana Louisiana has launched a new web site on business resources in the state. The site took over two years and $500,000. The site includes a database of over 88,000 businesses. The site needs a better front end, though. The portal is too spartan and does not invite the user to interact. Even more serious questions: How will different people use and update the information? The site needs more work, despite the money invested so far. For example, if you search for nanotechnology experts in Louisiana, you get a list of 8 people at Louisiana Tech. Click on a name, and you get an error message. Read more about the site. Or, visit the site. posted by Ed | Building a food cluster in Oregon Food processors in Oregon are starting to form a cluster, but I'm not sure they're going about it in the right way. One of their first steps: Find $279,000 for a study of the cluster. Read more. First of all, that's a lot of money for any kind of study. Second, it's not clear to me that studies are the way to start. Clusters are networks, and to form networks you first need to identify nodes and then you need to build links. Often, people don't know all the potential nodes. So, for example, in Northeast Ohio, we are spending a lot of time identifying the potential participants in different networks, like clean energy. To identify the nodes, we create events in which people can self-select to become part of a network. We are then using social network software to understand the linkages. To surface the network and build the linkages, we move toward action steps quickly. Building trust and connections, takes action, not words. posted by Ed | The emerging trend of angel investing I have no evidence to prove what I am about to write: The important emerging trend in development finance is the formation of angel capital networks. My evidence is anecdotal. I'm seeing more articles like this one from Grand Rapids. posted by Ed | Building biotech in Houston is no slam dunk Not every city is going to flourish with biotech. And the chances are even worse if you build sports stadiums instead of labs space. Some folks in Houston are beginning to figure this out. There may be reason for hope, though. Rice University in a national leader in nanotechnology research, and that opens the door to new possibilities. Read more posted by Ed | Finding a place for Scripps Florida This deal has more twists and turns than a roller coaster. Here's an overview and an update on what Florida officials hope to do with the Scripps Research Institute. Learn more. posted by Ed | The business of base closures Friday, February 18, 2005 The decisions base closures are supposed to be above politics. If that's so, how did it become a full employment act for expensive lobbyists and retired generals? An editorial writer in Fort Worth explains. Read more. posted by Ed | Anchor investments in rural tourism Tuesday, February 15, 2005 Here's a story about the Ralph Stanley Museum and Traditional Mountain Music Center in rural Virginia. Read more. There are several important dimensions to the story. First, it underlines the importance of making anchor investments in tourism. Developing tourism entails creating visitor experiences. To develop a clearer understanding of this perspective, read The Experience Economy. Next, though, the article points to the importance of packaging experiences. Stand alone attractions are likely to fail. If tourism is driven by experiences, it's important to package these experiences and brand them. posted by Ed | The tough world of auto parts suppliers Auto parts supplliers are facing a tough road ahead with increasing cost pressures. Here's a good article that reviews the situation in the industry. Learn morre. posted by Ed | Regeneration in Kalamazoo Kalamzoo, MI's brownfield redevelopment program stands out as one of the best in the country. Over the weekend, the local paper reviewed the program's progress and the larger story it tells about combatting sprawl: Unclean to green City proves adept at reclaiming brownfields Slow sprawl with incentives not mandates posted by Ed | Resource: Review of state ED initiatives Monday, February 14, 2005 The National Governors Association has released a report that reviews recent state economic development initiatives. You can read more about the report here. Or, you can download a copy. posted by Ed | Economy Watch Saturday, February 12, 2005 Here are the best articles on the economy from last week. The Budget's Misguided Parsimony George Bush's "lean" budget Study Documents Negative Impact of U.S. Trade Deficit with China Immigrants bring economic boon Vital Signs for the Week of Feb. 14 Dollar Down as Trade Gap Worries Reemerge Tighter budget could lead to easier Fed--Gramlich Capitalists are grabbing a rising share of national income at the expense of worker posted by Ed | Oklahoma City and "homeshoring" Mid-sized cities and rural areas are becoming the new investment frontier for "homeshoring". The term refers to the investments that technology companies are making in places like Oklahoma City. They take advantage of lower wages and higher productivity as an alternative to outsourcing. Read more. It's exciting to see Oklahoma City mentioned. In 1994, I drafted Oklahoma City's first five year economic development action plan, Forward Oklahoma City. Learn more. Back when we started, few people saw Oklahoma City as a destination for technology-based firms. (Most folks were still stuck in the oil bust.) Now, ten years after we began, perceptions (and reality) have shifted in a big way. posted by Ed | North Carolina launches first mini-hub North Carolina has launched its first mini-hub, a multi-county technology park designed to move development into the rural areas surrounding Research Triangle Park. The mini-hub serves as a magnet to draw business to the region through the combined efforts of the five counties. Read more. Kerr-Tar Regional Council of Governments received a 2004 Innovation Award from the National Association of Development Organizations (NADO) for the idea. Read more. You can visit the web site, download the feasibility study, and download the implementation plan. posted by Ed | Tax incentives for small businesses in Georgia Georgia's governor has introduced tax legislation targeted to accelerating capital investment in small firms. The proposal would enable small firms to expense a significant portion of capital investment, instead of recovering their investment over time through depreciation. Read more. posted by Ed | Leadership in Blue Springs, MO One of the important lessons of complex systems is that small steps can have big consequences. Here's an example. In Blue Springs, MO, the chamber and the city are coming together in an economic development partnership. Learn more. Why should we congratulate the leadership in Blue Springs? A couple of reasons come to mind. First, for those of us who work in local economic development, we understand that collaboration -- building trust -- is not a trivial challenge. It takes leadership, constancy, and discipline. Any community that can bridge historical divisions has accomplished the first step toward a prosperous future. Second, we are competing in a new type of economy, an economy based on the generation of knowledge, not the control of resources. Value networks are replacing value chains. Control is a less powerful concept than collaboration. The Internet has become both a practical tool and a powerful metaphor. In this world only those communities that learn new civic habits of collaboration are likely to survive. One more thing: On the way to civic collaboration, people discover that they have more fun. They find that learning is more pleasant than arguing; faith is more fulfilling than fear. posted by Ed | Start-up summit in Colorado Here's an idea for more regions to model: A start-up summit. Colorado State University Center for Entrepreneurship, Northern Colorado Idea Lab and Northern Colorado Business Report are combining to host the event. Learn more. posted by Ed | Milwaukee and TIF districts Milwaukee has tax increment financing (TIF) districts, but a recent report says that the city is not sufficiently aggressive in using this regeneration tool. Read more. You can download the report here. If you'd like to learn more about TIF districts, here is a good explanation of a TIF district, from Oakdale, IL. posted by Ed | Resource: Report raises questions on muni wireless networks A new report raises questions about the viability of municiapl wireless systems. The authors recommend library-based wireless systems as an alternative. Read more. You can download the report here. posted by Ed | Review of Bush ED proposals The conservative think tank, The Heritage Foundation, has weighed in on President Bush's proposed reforms of economic development and community development programs. Read more. posted by Ed | Resource: Job impacts on trade with China A new study from the U.S.-China Economic and Security Review Commission highlights the impact of trade with China on job losses. The report provides state level estimates. You can read more about the report here. You can also download a copy. posted by Ed | Incentive Watch A national site selector told EDPros in Arkansas what most people already know: incentives do not make or break big "superdeals". Read more. The Wichita City Council is reconsidering its incentive policies after it provided a package to help a dental insurance company move from downtown. Read more. The Georgia House has touched off a controversy after it passed legislation to shield incentive deals from public disclosure. Read more. An economist in Iowa estimates that jobs must pay at least $28,500 per year, or the state loses money. Lower paying jobs cost more in government services than they return in taxes. Read more. Rhode Island is trying to keep the headquarters of Brown & Sharpe, a venerable machine tool maker, from moving out os state. The management is reviewing the incentive package. Read more. Mississippi is trying to put together a $100 million deal to lure a steel mill. Read more. Controversy continues over whether the Iowa Values Fund wastes taxpayer money. Read more. Dave Swenson from Iowa State provides some insights into the problems with incentives directed at companies. Read more The Washington House of Representatives has passed a bill requiring a state audit of the 500 or so tax breaks that business receives. This type of tax expenditure analysis makes sense, since these tax breaks have the effect of narrowing the tax base and putting upward pressure on rates. Read more. posted by Ed | Finding their way in Spokane Friday, February 11, 2005 No doubt, branding is an important component of economic development strategy. But most communities focus on branding and attraction too soon in the process. Branding is really one of the last steps in "strategic learning" about your region, not one of the first. Because many EDPros move to branding too quickly, the exercise of branding focuses on graphics and logos, not the meaningful experiences that support an effective brand. In economic development, effective branding is grounded in the stories we tell about ourselves to ourselves and to others. It seems that Spokane, WA is heading down the branding path too fast. The civic leaders have started out by focusing on "their problem": Nobody knows about Spokane. Read more. Instead, their strategy would develop more clearly if they focused on the assets and opportunities that can drive their community forward. This exploration needs to go beyond the vapid ideas of "a great quality of life" or "a great workforce". Cluster analysis can be a useful starting point, but the core challenge is to focus on the existing networks of business development in the region and how these networks can be strengthened. posted by Ed | The reality of biotech in Minnesota Minnesota's business leaders got a dose of reality about biotech development this week. The challenges of building these businesses are complex and expensive to overcome. The article underscores a cautionary message for political leaders: Avoid the inflated rhetoric and manage the public's expectations. Read more. posted by Ed | Making a place sticky for graduates One of the challenges we face in colleges and universities is this: How do we connect our students to the regional economy? How do we make our place sticky, so that graduates don't leave so easily? Here's one approach from New Orleans. Read more posted by Ed | Johns Hopkins signs agreements in India More evidence of the emerging importance of international partnerships. Johns Hopkins University has signed agreements with a range of research institutes in India. The agreements cover faculty exchange and joint research activities in computer science, informatics, electrical engineering and micro electrical engineering. In addition, the State of Maryland has established the Maryland India Business Roundtable to explore and facilitate strategic alliances and collaborative opportunities between India and the State of Maryland. Read more. posted by Ed | Bond proposals for economic development Governor Granhiolm in Michigan has announced a $2 billion bond proposal to create jobs in advanced automotive development, new life sciences technologies and other high-tech industries. Read more. Here's another perspective. Meanwhile, in Maine Governor Baldacci has announced the details of a more traditional infrastructure bond plan. His proposal includes $22 million for a statewide biomedical research and development fund.read more. posted by Ed | Toyota Watch: Arkansas audit An industry expert forecasts that over the next ten years four or five new assembly plants will be built in the U.S. Arkansas, even though it was on the short list for the Toyota truck plant, has obstacles to overcome. Read more. Predictably, Arkansas and other states will go after these plants in a big way, even though the big opportunities lie elsewhere: with investments in building brainpower, innovation and entrepreneurship. posted by Ed | The emergence of San Antonio The purchase of AT&T by SBC is another major turn in the road for San Antonio. City leaders see the region on the edge of a new day. In the past week or so, a number of articles have appeared exploring different facets of San Antonio's emergence. AT&T purchase is expected to raise Alamo City's profile Extreme Makeover: The changing face of San Antonio Alamo City star is rising posted by Ed | Tax incentives for venture investors Here's an interesting Washington Post article on how Maryland hopes to use tax incentives to attract technology investors. There's not much evidence that these policies work, but political leaders like to try them anyway. Nineteen states have similar policies. Read more. In most cases, the problems of early stage investment are traceable to two issues. First, the lack of high quality business plans. If you can't produce good business plans, chances are you can't find solid investors. Second, even with good business plans, the markets for early stage capital are imperfect. It's hard to connect investors with entrepreneurs. This is the challenge that William Wetzel (director emeritus of the Center for Venture Research at the University of New Hampshire) first identified the process of angel investing. Effective investment comes from developing trusted networks of angvel investors. As Wetzel notes, "The problem is not lack of supply. The problem is buyer's and seller's not being fully informed about one another in this inefficient, ineffective private equity marketplace." Read more. So, for example, Elkhart, IN this week announced a new economic development initiative to connect entrepreneurs with angel investors. Read more. You can learn more about angel investing from this overview article from Wisconsin. Here is a report on angel investing from the Angel Capital Assocaition. View a list of resources from this page. posted by Ed | Web watch: New Hampshire web site of growth management resources University of New Hampshire’s Center for Integrative Regional Problem Solving has launched a new web site of resources to help civic leaders manage growth in the state. You can read more about the site here. You can also visit the site. posted by Ed | Indiana reforms its economic development organization Indiana has passed legislation that abolished its department of economic development and establishes the Indiana Economic Development Corporation to replace it. Read more. There is a great deal of uncertainty among EDPros in the state as to whether the new corporation signals that the state will push resources into recruitment and away from programs that support innovation and entrepreneurship. For example, Purdue is launching a new initiative to help the state's manufacturing sector. The university is looking to the state legislature for $5 million a year to support the Advancing Indiana's Manufacturing Initiative. Read more. Purdue is also moving ahead with plans for a new technology park. posted by Ed | Bush budget proposal cuts economic development Tuesday, February 08, 2005 Here's a summary of the president's budget released yesterday: The Commerce Department budget would increase 49 percent under Bush's budget, to $9.4 billion in budget authority. But that is because Commerce would gain control over a wide range of economic development programs that were previously run by other departments -- and which would undergo cuts in funding of about one-third. These programs, the biggest of which is HUD's Community Development Block Grants, got about $5.7 billion in funding for 2005. Under Bush's fiscal 2006 budget, they would be folded into the new "Strengthening America's Communities Grant Program" and funded at $3.7 billion. Bush is again proposing a deep reduction in the Manufacturing Extension Partnership program, which provides training and advice to manufacturers and their employees. The program would be funded at $47 million, 60 percent below the 2005 level. As in previous budgets, the president is also proposing to eliminate the Advanced Technology Program, a Clinton administration favorite that helps fund promising technology ventures. You can download budget documents from this page posted by Ed | Economy Watch Saturday, February 05, 2005 Here are the best articles on the economy I came across last week. Greenspan sees deficit hope U.S. payrolls growing slowly Vital Signs for the Week of Feb. 7 US Jan job gains disappoint, jobless rate 3-yr low CIA Report Predicts That American Global Dominance Could End in 15 Years George Bush’s state-of-the-union address Fretting about inflation posted by Ed | Resource: The business of nanotech Business Week has published a special section on nanotechnology. The lead article, The Business Of Nanotech, outlines how nanotechnology is moving from the lab to markets. A supporting article, Why the Old Rules Don't Apply explains why nanotech brings something different to material science. Nanotech's Heartland Lift, illustrates how nanotechnology business development can be accelerated by leveraging the core competencies of older industrial regions, like Northeast Ohio. posted by Ed | Clemson opens advanced materials lab Clemson University opened its new Advanced Materials Research Laboratory. EDPros in South Carolina are betting that anchor investments in research facilities will be a strong draw to companies competing in fast moving markets. Read more. Learn more about Clemson's strategy in advanced materials. In 2002 the South Carolina General Assembly passed the Research Centers for Economic Excellence Act. This legislation allocates $60 million to fund those research initiatives in the state. posted by Ed | Marketing Wise County, VA Developing a tight branding message is all part of effective economic development. Wise County, VA has some new marketing material. You can read about their multi-media presentation here. Or, you can view it from this page. (One caution: Be careful when you are doing multi-media presentations for the web. It used to be okay to optimize for Internet Explorer. Now there's a risk. The Wise County presentation page does not display well with Mozilla's Firefox browser, and Firefox is gaining share in the browser wars.) posted by Ed | Connecting to the world through Atlanta Business leaders from the Triad region of North Carolina are making a smart step to build global connections. They are establishing relationships with consulates in Atlanta. Read more. posted by Ed | Myrtle Beach is not quite sure Civic leaders in Myrtle Beach say they are looking for a regional plan that considers the whole enchilada: growth management, education, transportation, water quality and job growth. By the look of the consultant's presentation, the leaders in Myrtle Beach aren't really sure what they want. The consultants have estimated the price tag for their services at anywhere from $50,000 to $1 million. Why the wide range? Myrtle Beach's civic leaders are not clear enough about what they want or how they will get there. So, not surprisingly, the consultants are probably guessing at this stage. Advanced economic development now entails investments in a range of different areas: building stronger education systems; establishing innovation and entrepreneurship networks to generate wealth; creating quality, connected places to keep smart people around; and promoting an effective brand that "tells your story". All of these investments are not possible without firmly established civic habits of dialogue and inclusion. So, before Myrtle Beach heads off with a consulting contract, they probably need to do some research on how regions can come together around common agendas. As Yogi Berra once said: "If you don't know where you are going, you might wind up someplace else." posted by Ed | Consolidating in SE Virginia The civic leadership in Southeast Virginia has moved to merge their ED efforts. According to the press release, civic leaders are simply following well established business trends. Here's how the move is seen in the regional press: Region's economic development alliances will merge Regional economic alliances OK merger Economic groups to merge posted by Ed | New thoughts on technical training Here's an article to pass along to any educators you know. Most of us operate under the illusion that the best career path for young people is to graduate from high school and move on to four years of college. In truth, today's economy demands more than a high school education, but most good jobs do not require four years of college. Read more. You can download a copy of the article to pass on here. We need to update our thinking, especially about "vocational education". The truth of the matter is that anyone who wants more than entry level wages needs technical skills. Whether you get these skills in a community college, in an apprentice ship program, in medical school, or law school doesn't much matter. But if you want to earn more than about $10 an hour, you need technical training of some sort. Right now, we are not producing enough people with technical skills. We have shortages of math and science teachers, air traffic controllers, nurses, pharmacists, long haul truck drivers, and the list goes on. posted by Ed | Development in Alabama's Black Belt Mayors in the Alabama's Black Belt have been meeting to share insights and ideas on economic development. (The Black Belt refers to group of 12 Alabama counties that are among the poorest in the nation. These counties include Bibb, Bullock, Choctaw, Dallas, Greene, Hale, Lowndes, Marengo, Macon, Perry, Sumter and Wilcox.) Congressman Arthur Davis provided some interesting insight to frame the discussion: "We need to abandon the dependence on low paying jobs that don’t really help our citizens. Some jobs don’t help growth. We need to get away from the gambling and landfill type and pursue industry that will stimulate economic growth and the up-lifting of our citizens.” Read more. Think of it in these terms. Economic development involves three types of money. "Good money" comes from businesses that trade outside your region. They generate wealth. (Michael Porter's work at Harvard suggests that wages for these traded businesses are about one-third higher than "sheltered" businesses.) "Neutral money" comes from businesses that circulate revenues within an economy. You buy haircuts from me, and I buy lawn care from you. "Bad money" comes from business transactions that export wealth from an economy. Many people think that Wal-Mart falls into this category. Except in relatively rare cases, casinos fall into this category as well. Congressman Davis is arguing that the Black Belt needs to focus on the first type of business, not the other two. posted by Ed | Different investors in Cincy tech initiative Now here's something that you do not see everyday. A university and a major health system have invested heavily in a local effort to accelerate technology-led economic development. It's happening in Cincinnati, where the University of Cincinnati and the Cincinnati Children's Hospital Medical Center have invested in CincyTechUSA. Both institutions have pledged $250,000 in cash and in-kind services for each of the next three years. As part of the deal, CincyTechUSA will move its offices closer to the UC and Children's Hospital campuses. Read more. posted by Ed | Jax on Super Bowl Sunday Jacksonville on Super Bowl Sunday: The city hopes for a big branding payoff from its investment. Read more about the details. Here's another view posted by Ed | "I nearly lost my cheesecake" Wednesday, February 02, 2005 That's how one Florida business leader responded when he heard that Scripps was not planning to put a technology transfer office in Florida. After investing big bucks to recruit Scripps, the last thing Florida business leaders want to hear is that decisions on commercialization of Florida-based research will be made in California, not Florida. Read more. posted by Ed | Atlanta planning new branding campaign Part of economic development entails telling your story, developing a brand. Atlanta is launching a new initiative to do just that. Read more. posted by Ed | Incentive Watch Here's what has been happening on the incentive front this week. Taking a page out of the Boeing playbook, Bombardier appears to be leveraging New Mexico to get a better incentive deal from its home province of Quebec. Read more. To the local paper in Charlotte, some local incentives appear to be simply wasted. Why pay food distribution company $200,000+ for 80 jobs they would have created anyway? Read more. Texas lawmakers want more "oversight" (read: influence) over the huge Texas Enterprise Fund. Read more. Louisiana Pacific has landed an incentive package equal to about $130,000 per job. Read more. Iowa's top EDPro defends incentives, but Iowa's top academic expert on incentives say they waste a lot of public money. Read more. A report by a Washington-based advocacy group, Citizens fora Tax Justice, points to the loss of state tax revenue from state tax incentives. Read more. Download the report from this page. NFL owners know how to play hard ball. Los Angeles doesn't have an NFL team. Here's an interesting article about how NFL owners use that fact to extract concessions from cities like New Orleans. Read more. Some Arizona legislators are trying to limit the use of incentives within the state. Read more. posted by Ed | Tucson looks to Austin In a series of articles, the Tucson newspaper looks at Austin to find the secret sauce for a technology-driven economy. HIGH-TECH BLUEPRINT: Austin, Texas Tucson's high-tech dreams face hurdles Austin recruiting: It's still a top model for courting high-tech industry Comparing cities The Visionary: George Kozmetsky transformed Austin Youth drives high-tech economies posted by Ed | Massachusetts business leaders launch school reform effort A coalition of business and school leaders in Massachusetts are announcing a plan to turn around 100 of the state's worst performing schools. An old friend of mine, Gloria Larson, is heading up the effort. The key incentive for business: They see the handwriting on the wall. Weak workforce skills spell competitive problems ahead. Read more. posted by Ed | Michigan Information Technology Center In March, the Michigan Information Technology Center will open its doors. Funded in part with a $10 million grant from the Michigan Economic Development Corporation, the $20 million facility offers a high capacity IT infrastructure. Read more. The tricky part of investing in facilities like this is not assembling the capiital, but coming up with a business model that covers operating costs. Hopefully, this project will work out. But it's hard to put an incubator in high cost space without operating subsidies. posted by Ed | An annual economic development address Here's an interesting idea from an EDPro in Barron County, Wisconsin. He is delivering an annual "Barron County State of Economic Development Address". Learn more. This type of proactive marketing makes sense. EDPros can use this approach to shape public expectations about what's possible and what's not. Equally important, this type of address can inform and educate your civic leadership. You can use articles from EDPro Weblog to illustrate what other communities are doing. posted by Ed | Venture financing in Albany Albany has been undergoing a major economic restructuring. The next piece appears to be an effort to assemble a $100 million venture fund. Read more. posted by Ed | More conventional advice A Bloomberg business columnist weighs in on the convention center building binge. His advice: Stop the madness. Read more posted by Ed | NC higher education leaders on a tour Tuesday, February 01, 2005 Higher education leaders in North Carolina are making a smart move. They are on the Staying A Step Ahead Listening Tour. By visiting communities throughout the state, the higher education leaders are triggering conversations on the the changes sweeping the economy. The tour gives them a good opportunity to explain higher education's shifting role in economic development. Learn more. Read more from their tour here and here. posted by Ed | New life in a small town in Kansas Rural communities have new opportunities to attract people, both residents and visitors. Here's a story out of Kansas that illustrates the point. Read more. posted by Ed | |
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