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Open Source Economic Development: A Disruptive Innovation in Cleveland
Monday, June 27, 2005 This week, I'm departing from the normal format of EDPro Weblog. Read on and you'll learn why. For the past seven years, I have been developing a new model of economic development: Open Source Economic Development. This approach takes the most innovative concept (open source) from one of our most innovative industries (information technology) and applies it to the task of transforming regional economies. Open Source Economic Development encourages the formation of open networks of innovation: clusters. Years ago, Michael Porter from Harvard began moving our focus toward clusters. He showed us what clusters were, and how to identify them in our economy. But he didn't really provide the practical tools that economic developers need to actually build clusters. I developed Open Source Economic Development to provide economic developers with the practical frameworks and tools we need to build clusters. We have been applying it in Northeast Ohio with some remarkable success. We are forming new clusters in preventive health care, biodiesel production and distribution, electric commuter vehicles. This model of economic development is more open and inclusive than other approaches. It requires both open participation and leadership direction. The results are impressive. Here are some comments from our partners that echo our success. In Indiana, Open Source Economic Development is transforming the way regional leaders think about their economies. I've spent the last six months conducting regional forums throughout the state. Two weeks ago, I made a presentation on this approach to the 2005 Indiana Leadership Summit. We are moving from old style industrial economic development -- with a focus on recruitment of big industrial facilities -- to a new type of strategy in which recruitment plays a relatively small part. We are focusing instead on the new and expanded role of colleges and universities. Making this transition comes with some costs. Open Source Economic Development is disruptive to old patterns of thinking, old patterns of behavior, old patterns of control. It can be very threatening to established leaders. That's OK. Good economic development is inherently disruptive. Places like Cleveland face a difficult transition away from hierarchies and toward open networks. That requires us to open ourselves to new possibilities and move away from "command and control" industrial mindsets. Failing to make these transitions is one reason why Cleveland -- and Ohio -- lag in employment and income growth. We cannot "command and control" our way to prosperity. This is a difficult lesson for the Greater Cleveland Partnership and our local foundations to learn. Through applying Open Source Economic Development, we have pulled together a remarkable, diverse, energized, crazy network of entrepreneurial thinkers who, like all true entrepreneurs, are driven by their ideas, vision and passion. They have little patience with the wet blanket approach taken by the traditional business organizations. During the 1980s and into the early 1990s Cleveland bristled with a sense of civic entrepreneurship that allowed many new and crazy ideas--from the Rock Hall to Playhouse Square to building new housing and shopping centers in the city. The fact that the City was bankrupt swept away the plodding and unproductive approaches to economic development that characterized the Perk administration and opened the way to much broader and more aggressive thinking. My brother, Hunter, was the planning director at the time, and he guided the translation of many of these big ideas into reality. His work literally remade the skyline of the city. This period of innovation began to die about twelve years ago. In part, the change was the result of the then mayor's personality and management style: He was a closed and controlling person, not open to new ideas that were not his own. It part, complacency set in with the business community after Cleveland returned to the bond market and accomplished the major projects that they set out to build. Partly it can be attributed to a changing of the guard to a more cautious, managerial leadership. The Greater Cleveland Partnership (the chamber) has been trying to remake the region's economy with a closed loop, and largely unproductive strategy. Since I arrived in Cleveland, I have been focused on developing a new approach to regional economic development. This strategy requires changing the attitudes of the business and foundation community toward our area colleges and universities. So, for example, our business leadership has a hard time understanding, in my view, the role of colleges and universities in building knowledge-based clusters. Read more. Enter a new dean for our business school. In my opinion, he quickly aligned himself, not surprisingly, with the downtown business leaders, dominated by older retail real estate interests. He and I clashed, and last week, in a rather clumsy move, the dean fired me from the Center for Regional Economic Issues. You can read more about my termination in these three articles: Download the articles. (I leave it to you to characterize the dean's position.) The deeper question is why all this has happened. We are seeing an old industrial region trying to come to grips with the competitive challenges of a global economy. Old industrial strategies focus on a tight top-down civic culture. Secretive and controlling. "Getting to scale" means consolidating, building bigger organizations. I call these strategies Curve 1 strategies. Cleveland is dominated by people thinking in terms of Curve 1 strategies. Curve 2 strategies focus on building open networks of collaboration -- clusters. In this thinking, "getting to scale" focuses on building networks with tight cores and porous boundaries. Some regions are moving successfully toward Curve 2 strategies. These are the regions I am highlighting with stories in EDPro: Places like Albany, Eastern Tennessee, Western North Carolina. Older industrial regions have a harder time making the transition. They have some tough, entrenched interests: Civic leaders who do not want to open the agenda. They fail to realize that the issue is not "top down" v. "bottom up". Curve 2 strategies are based on open networks that require both open participation and leadership direction to build. The problem in Cleveland comes in trying to build Curve 2 strategies with a Curve 1 mindset. This approach involves industrial policy. You cannot command and control innovation. You must treat your colleges and universities as full partners in the innovation process, not simply vendors. You cannot create effective Curve 2 strategies by bolting a public process on to an otherwise closed deliberation. And, most important, civic leaders need to adopt a new leadership style of openness, service, transparency and accessibility. We are still struggling in Cleveland with all these issues. (To give you an example, our foundations recently sent out a Request for Information to solicit the opinions of economic development "experts" on the future of the regional economy. The RFI restated the foundationns' commitment to a "transparent process", but asked us not to share the RFI with anyone.) Meanwhile, I have moved to set up I-Open, the Institute for Open Economic Networks. You can read more about it here. Join the I-Open network to learn more about these new strategies of economic development. You can join by clicking here. In the weeks ahead, I will be remaking EDPro to provide you with more insights into Open Source Economic Development. Next week, I'll be asking your opinion of how we can -- together -- make EDPro more helpful to you. I'll be returning to the regular format of sharing stories. But you may want more opportunity to share ideas and build our national community of economic development professionals. For example, I'll be asking whether you would like to learn about Open Source Economic Development, and how we might be able to give you the training you need to transform your economy. Meanwhile, I'll keep you up on what is happening in Cleveland. It's a fascinating story of a region in transition. posted by Ed | Economy Watch Sunday, June 26, 2005 Here are the interesting articles on the economy from last week. Report: More productivity may shrink prices Big week, big worries Vital Signs for the Week of June 27 U.S. House Approves Cuts in Health, Jobs Spending Makeover for MBA Programs U.S. Economy: Incomes, Low Rate Bolstering Existing Home Sales Asinine Way to Treat Ultimate Asset: People U.S. Economy: New Home Sales Rise, Business Investment Slows Agency reports Iowa has nation's fastest-growing economy (You can see how your state did in 2004 here) posted by Ed | Incentive Watch The new law suit over the Dell incentive package in North Carolina dominated the news last week. Here are some articles: Group sues N.C. over Dell incentives Suit challenges Dell incentives package North Carolina residents sue Dell to keep their $270m Dell subsidies suit asks for injunction, payback You can read a copy of the complaint here. The Dell suit overshadowed another important bit of incentive news last week. Roanoke and the State of Virginia are seeking the return of $1.4 million in incentives from Johnson & Johnson. They say the company failed to meet job targets. Read more. In other news, Louisiana has paassed two important incentive provisions. The first involves creative media. Read more. The second involves incentives for angel investors. Read more. Here is an interesting story that contrasts how Connecticut and Massachusetts are responding in a contest over a corporate headquarters. Read more. Last year, Indiana approved tax credits to encourage venture-capital investment. Only a portion of the available tax credits have been claimed. Read more. In Rhode Island, the state to have succeeded in keeping one of its oldest manufacturing companies, Brown & Sharpe. Read more. posted by Ed | CAFTA delegation visits Silicon Valley The U.S.-Central American Free Trade Agreement (CAFTA) will be coming before Congress shortly. Learn more about CAFTA here. Last week, a delegation from the five CAFTA states -- Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua -- visited Silicon Valley to learn how they could connect with that region. Read more. posted by Ed | Iowa connects to New Zealand Here is another example of how states and regions are developing their own foreign economic partnerships. Iowa and New Zealand have signed an agreement to to expand the business and education exchanges. For the past two years, business and education leaders have been exchanging visits. The new agreement formalizes these relationships. Read more. posted by Ed | Arizona's technology initiatives Branding is important for regional development. For example, one of the latest initiatives in Arizona involves branding the 101 Science and Technology Corridor. The Corridor includes Scottsdale, Tempe, Chandler and the Arizona State University Research Park. Read more. Also last week, Southern Arizona Tech Council designated the Greater Arizona eLearning Association as seventh industry cluster it supports. Read more. posted by Ed | Don't try this at home During the high profile BIO 2005 meeting in Philadelphia last week, Enterprise Florida officials decorated their booth with a big twenty foot map of the Sunshine State. Only one problem: They left off the Research Coast, one of the sponsors of the Enterprise Florida booth. Read more. posted by Ed | BIO 2005 in Philadelphia Last week, the annual meeting of the biotech industry organization in Philadelphia concluded. Philadelphia is trying to capitalize on the momentum of the meeting. During the meeting, the Milken Institute released a report that ranked leading metro areas in biotech development. You can read more about the survey here. You can download a copy of the survey from the Milken Institute web site. Go. posted by Ed | Fearing failure A new report from Milliken University in Decatur, Illinois outlines some interesting attitudes toward entrepreneurship. According to the report, fear of failure stands as a big obstacle to business development: 49% of the residents in the region would shy away from actually starting a business because of their fear of failure. Read more. In my own view, this fear of failure reflects relatively weak networks to support entrepreneurs. In my experience, this sense of fear comes from isolation. At the same time, building up peer, mentor and professional support networks can help overcome this emotional obstacle. posted by Ed | Clouds forming in San Diego Trouble in paradise. San Diego is facing some serious challenges ahead in its continued economic development. The San Diego Association of Governments has released a report warning that the region's dynamic economy will be unsustainable without making housing more affordable and reducing congestion. In addition, regional leaders need to focus on improving education. You can read more about the report here. You can download a copy of the report here. posted by Ed | Resource: Federal Role in Economic Development My colleague, Kim Mitchell, an architect with the firm Morgan Hill Sutton & Mitchell, pointed me to an interesting report by mark Drabenscott of the Kansas City Federal Reserve Bank: A Review of the Federal Role in Regional Economic Development. Download the report. Kim writes an insightful blog on the future of communities: Competitive Communities. posted by Ed | Bridging the gaps between business and education Here's an interesting story out of Arizona. Teachers and business leaders are collaborating to improve the communication between business and then secondary educators. Teachers are learning what companies look for when they hire new employees. They're also learning the practical skills that students need on-the-job. These types of collaborations appear to be small steps, but they can have significant impacts over the long term. Read more. One of the major challenges facing regions today involves bridging the communications gap between educators and business managers. The problem has a number of different dimensions. On one level, business people and educators often do not speak the same language when it comes to education. Educators think in terms of graduation requirements, while business people think in terms of hard and soft skills. At the same time, cultural differences can arise in many cases. Educators are often unfamiliar with business settings and how businesses operate. Business managers often do not understand the pressures that educators are under with new state and federal requirements. Practical collaborations between business and educators help bridge the gaps. posted by Ed | Airbus picks Mobile After another public search, Airbus has selected Mobile, Alabama as a site for its new aircraft manufacturing facility. Read more. In January, Airbus announced its site selection process. Over 70 communities responded. Last month, Airbus narrowed its search to four sites: Mobile; Melbourne, FL: Kiln, MS; and North Charleston, SC. Here are some additional articles on the deal. Alabama lands Airbus with superior package Airbus picks Alabama site for tanker factory Airbus To Build Assembly Plant in Alabama Aircraft setback (Story from South Carolina) posted by Ed | Finding the "Big Mo'" for Momentum Mississippi Mississippi's Governor Barbour is trying once again to get his new package of economic development incentives, called Momentum Mississippi, passed the Legislature. Read more At the same time, he is trying to curb the legislative practice of relying on state bond funds to finance even small community projects like sidewalk repairs. Read more. posted by Ed | Mesa: Canary in the cage? In fast-growing regions of the South and Southwest, communities will be facing severe consequences of unplanned growth. Take the case of Mesa, Arizona. Without much careful thought, Mesa is growing based on a dramatic expansion of residential development. There's only one problem. Residential development doesn't generally pay for itself. At the same time not enough is being done to build a sustainable economic base for the city. For these fast=growing regions, Mesa may be "a canary in the cage". Read more. posted by Ed | Dealing with the nursing shortage Across the country, communities and regions are facing severe shortages of health care workers, especially nurses. Northern Virginia has decided to take this issue head on. Civic leaders have endorsed an aggressive plan, and launched a new web site. Governor Warner has also endorsed the effort. Read more. Visit the site. Regional solutions to the nurshing shortage represent a prototype of the types of responses that regions will need in other skill areas. We are entering a period of chronic skill shortages as Baby Boomers enter retirement. The regions that figure out how to respond collaboratively -- wiuth fast, flexible solutions -- will prosper. In the past, people moved to be near companies. In the years ahead, companies will locate near skilled people. South Carolina has taken an important policy step in this direction. The Education and Economic Development Act provides a flexible way to encourage young people to make career choices early. Read more. posted by Ed | Seven PA communities coordinate brownfields Regional collaboration is emerging in a range of different contexts across the country. Here is another example. Seven communities along the Allegheny River in Pennsylvania are coming together to create business ready sites for new commercial and industrial development. This step is significant because Pennsylvania's political landscape is fragmented. The state has a relatively large number of local jurisdictions. In the past, these local jurisdictions have frustrated efforts to improve regional collaboration. Read more. In a recent report, the Brookings Institution cited the local government fragmentation as one of the major challenges facing the state. You can read more about the Brookings report from this page. posted by Ed | Triad coming up with a new vision The Triad region of North Carolina has been moving quickly to improve its regional collaboration. Next week, the Piedmont Triad Partnership will be holding its 2005 annual meeting. At the meeting, they will release a new vision plan for the region. Read more. You can also read some additional background materials here. posted by Ed | NASCAR's Northwest play In another effort to establish a toehold in the Pacific Northwest, NASCAR has identified a site near Bremerton, Washington for a new track. Read more. posted by Ed | The Supreme Court's eminent domain decision Last week was a busy one for economic development. The Supreme Court announced its decision on the the Connecticut eminent domain case. The court held that local governments can seize property for private economic development. At the same time, states are free to impose more severe restrictions on the use of eminent domain authority. Read more. Read the Supreme Court Decision. In response, legislators in Connecticut are considering additional protections against the use of eminent domain by local government officials. Read more. Here is the view from North Carolina, one of thirty-two states without specific state statutes regulating eminent domain for economic development purposes. Read more And in Texas, new legislation has been quickly introduced to limit the powers of eminent domain in that state. Read more. posted by Ed | Downtown living in the Twin Cities Cities reach a new level in their development when the demand for downtown living spurs new residential development. That is exactly what is happening in the Twin Cities of Minnesota. As the mayor of Minneapolis points out, though, achieving this objective takes decades of consistent work. Read more. posted by Ed | Baton Rouge leaders going to Raleigh, NC Civic leaders from Baton Rouge are planning to visit Raleigh, North Carolina in September. Among other things, the Baton Rouge delegation will explore health care as an economic development strategy. Read more. posted by Ed | Web Watch: Washington State The State of Washington has launched a new web site for site selectors. Visit the site. posted by Ed | The emergence of biodiesel With record high prices for oil, we are starting to see new development in buyout diesel and ethanol. Here is an article about a new biodiesel manufacturing facility in New York. Read more. In Oregon, state legislation to promote ethanol and biodiesel is floundering. Business lobbyists, seeing a popular measure moving through the legislature, have attached an anti-pollution tax credit. That over-reaching has lost the bill some support. Read more. Meanwhile in Iowa, long a leader in ethanol, producers are working on biodiesel production from ethanol by-products. Read more. Researchers from North Dakota have converted canola oil into biodiesel. Read more. posted by Ed | Collaborations in West Texas energy Economic development professionals in West Texas are taking steps in the right direction. The West Texas Energy Technology Initiative represents a effort to build a new cluster of technology-based energy businesses in the region. Read more. posted by Ed | Texas A&M Extension As we move toward new thinking in economic development, university-based extension services will provide an important tool for adjusting, especially in rural economies. Recently, the extension service at Texas A&M produced a roadmap for its future. The publication provides a good view of a clear strategy. Read more. Download a copy. posted by Ed | Florida's aerospace strategy Florida is rethinking its strategy with regard to aerospace development. Leaders in the state are increasingly worried that other states are moving ahead in commercial space development. Recently, the governor appointed a new Commission on the Future of Space and Aeronautics in Florida. Here's another article that provides some background. Read more. posted by Ed | Building smaller downtowns Wayland, Michigan is located 23 is miles south of Grand Rapids. In a recent meeting, civic leaders learned about steps they can take to revitalize their downtown. This initiative is part of the Cool Cities program that Michigan is developing to improve downtowns in smaller cities throughout the state. The meeting included some interesting, practical advice. Read more. posted by Ed | Vermont's new industries Saturday, June 18, 2005 Vermont has embraced the idea of building a creative economy. The Vermont Council on Rural Development is promoting an idea that has taken hold in Europe. Specifically, creative industries provide an opportunity to generate dynamic businesses and higher incomes. Read more. Vermont has also embraced another approach to building wealth: value added agriculture. Read more. posted by Ed | Building innovation infrastructures in Pennsylvania Here's a good commentary on building innovation networks in southwest Pennsylvania. Read more. posted by Ed | More on business plan competitions Business plan competitions can be an effective way to do the effective way to stimulate entrepreneurship and build your innovation networks. Here is an example of a business competition from New Hampshire. Read more. Michigan runs a more developed program called Great Lakes Entrepreneur's Quest. They recently announced some new winners. Read more. posted by Ed | Building innovation in Tempe Here's another example of how communities are focusing on building innovation and entrepreneurship networks. In Tempe Arizona, a monthly networking meeting called Techie Tuesday brings together young mix of investors, entrepreneurs, lawyers and students. Read more. posted by Ed | Angel investing in York, PA Angel investing is becoming an increasingly important component economic development. As our focus moves more toward a innovation and entrepreneurship networks, angel capital networks become an important part of the equation for a dynamic region. In York, Pennsylvania, a new angel capital group has formed around a proposed Keystone Innovation Zone near York College. Learn more. posted by Ed | Walla Walla assessment The region around Walla, Walla, Washington includes five counties. The Council on Competitiveness, and economic development firm based in Washington, DC, recently released an assessment of the region. Read more. posted by Ed | Wisconsin's brainpower In a brief report by Northstar Economics, civic leaders in Wisconsin received a glimpse of one of the the emerging trends in economic development. Instead of spending so much time and money on recruiting, new economic development thinking is focused more on brainpower and innovation. You can read more about the report, titled "Human Capital and Brain Power in the Wisconsin Economy", here. You can download a copy. Go. posted by Ed | Starting businesses in Dallas Here's a good article on STARTech, an interesting you business incubator in Richardson, Texas near Dallas. Read more. posted by Ed | Charleston, SC's cluster focus Charleston, SC has a new focus on the cluster development. The Charleston Regional Development Alliance recently commissioned a study from AngelouEconomic to identify the clusters on which they should focus their marketing activity. Angelou recommended that the region focus on the following industries: biosciences, aircraft, automotive, advanced security, and the creative industries. Read more. posted by Ed | New strategy in Montreal Montréal, Québec, has developed a new strategy plan called Success@Montréal. The plan represents the first economic strategy for the city in 13 years. Read more.Download a summary. posted by Ed | Funding biotech start-ups The year's big bio meeting, the Biotechnology Industry Organization's annual trade show, is taking place in Philadelphia this week. Read more. As this Business Week article notes, biotech still holds enormous promise. Learn more. But not all is well in the business. Here is a report from North Carolina that outlines how biotech startups are having a difficult time finding venture capital. Read more. This morning's Boston Globe carries a good commentary on why biotech companies are having difficulty attracting startup capital. Read more. posted by Ed | Iowa passes Values Fund but with an old time mindset Iowa has passed a revised Iowa Values Fund. The new legislation authorizes $50 million a year over a 10-year period. In the first year, the Iowa Department of Economic Development will spend $35 million on business incentives and marketing. Another $15 million will be invested in state universities, community colleges, and other programs. Read more. The allocation of funds reflects the current distorted thinking in economic development. 70% of the money will be spent on marketing and incentives to companies. In today's economic development climate, we need to be investing more aggressively in building brainpower and innovation networks. Dave Swenson, an economist at Iowa State University, rightly points out that "investments" in business firms by public taxpayers are not really investments at all. Read more. Iowa would have been better off if it had invested no more than 30% of its funds in marketing and incentives to companies. The balance of the money should go to building innovation networks and strengthening the state's colleges and universities. The affordability of Iowa's colleges and universities has deteriorated dramatically in the last decade. posted by Ed | Milwaukee and the new demands of civic leadership Civic leaders in the Milwaukee area have come together to support a comprehensive strategy for promoting the seven county region. In announcing an update on the initiative, one of the leaders had an interesting comment: "Now is the time for strong, cooperative, regional leadership on the issue. This will take time. It will also take trust." Read more. The issue of trust in economic development is never really been addressed fully. Howard Gardner, a noted education professor at Harvard, has written an interesting article in the Boston Globe this week on the subject of trust. Read more. Economic development takes place in the civic space outside the four walls of any one organization. No command-and-control structures work here. Effective leaders must be able to develop trusting relationships in order to align various different organizations. So, the issue of building trust becomes central to effective economic development. Trust is not the only leadership dimension along which we need improvement. In another interesting commentary, former Congressman Lee Hamilton talks about the need for leadership to develop a longer time horizon. We cannot simply focus on the immediate problems, we need to do assess long-term challenges. Read more. posted by Ed | Economy Watch Sunday, June 12, 2005 Here are the articles from last week. Greenspan says US economy firm, signals rate hikes U.S. pushes China to unlink currency U.S. Economy: Trade Deficit Widens Less Than Expected Vital Signs for the Week of June 13 When Offshoring, Think Functions Not Factories Wise enough to play the fool? Evans On The Economy -- Can GM Survive? Economic oddities can be traced to competition Europe vs.North America: Who's winning the innovation race and why? U.S. First-Quarter Productivity Probably Rose 3% posted by Ed | Incentive Watch The mayor of Tempe, Arizona wants to develop a collaboration with Scottsdale to eliminate tax subsidies to developments along their shared border. Read more. Ohio's Attorney General is appealing to the U. S. Supreme Court to overturn a decision on the use of tax incentives to help businesses expand. Read more. In Massachusetts, District Improvement Financing provides a new tool for downtown development. The incentive allows municipalities to issue bonds for infrastructure improvements. These operate like TIF districts. Read more. In Illinois, a taxpayer's group has outlined a series of porkbarrel provisions that were included in the recently enacted Illinois budget. Read more. Download the report. Iowa is providing a $500,000 state grant to a California company if it moves its headquarters to Iowa. Read more. Johnson & Johnson recently announced a consolidation plan, and the that plan may trigger an effort by Roanoke to recover some of its incentive money. Read more. But here is an article from Iowa but explores the difficulty of evaluating the cost and benefits of tax expenditures to businesses. Read more. posted by Ed | Wind project off the coast of Savannah The Southern Company and Georgia Tech are collaborating on an offshore wind project near Savannah. Read more. Wind farms are more common in Europe, and they are still controversial there. Read more. In the U.S. wind farms are also controversial. See, for example, a proposal to establish a wind farm near Roanoke. Read more. The difficulty of siting wind power onshore has led to offshore siting proposals. Perhaps the most noteworthy offshore project in the U.S. has been planned off the coast of Cape Cod. Read more. Nevertheless, places like West Texas are embracing wind power as a potential economic generator. Learn more. And folks in rural Washington seem to have figured out how to deal with wind power. Read more. posted by Ed | Unwired cities Intel has released its latest list of the 100 most unwired cities. You can learn more here. posted by Ed | Detroit's entrepreneurial climate changing? Detroit's inner city is bleak, but there are signs of a turnaround. Five companies from Detroit made Inc's annual list of the fastest-growing urban businesses in America this year. Read more. posted by Ed | New Mexico's workforce challenge (They are not alone) New Mexico, like many other states, faces a significant challenge in producing enough high-quality workers to sustain a high income economy in the future. Last week, to education experts traveled to New Mexico to deliver a grim outlook for the New Mexico workforce. Read more. posted by Ed | Florida evaluates its life sciences strategy Three statewide economic development groups in Florida have decided to launch a study on the state's future in life sciences. They have hired the Milken Institute to conduct their report. Read more. The new initaitve comes at a good time. Florida is trying to regain its momentum after fumbling with the Scripps deal. Learn more here and here. posted by Ed | Research Triangle measures new strategy Research triangle Park in North Carolina stands as a leader in regional economic development. Following a 2001 study by Michael Porter of Harvard, the region began retooling its economic development strategy around emerging clusters. This new strategy is beginning to show results. Read more. Earlier this spring, for the first time in the Research Triangle’s history, a coalition of 25 chambers of commerce and economic development organizations came together to launch a comon economic development legislative action agenda to promote job growth in the region. posted by Ed | Connecticut growth management The Connecticut legislature is considering legislation to provide a stronger state framework to manage growth and reduce sprawl. The legislation, now pending before the state Senate, would establish a list of priority funding districts. The idea is to encourage the clustering of development around established regional centers. Read more. posted by Ed | A New England roadmap to compete as a region The New England Council has released a new report outlining how that region can compete more effectively in the global knowledge economy. A major challenge facing the region comes in the relatively high structural costs of the economy. These costs are generating higher taxes and, potentially, slowing innovation. Read more. posted by Ed | Texas' Emerging Technology Fund The new Emerging Technology Fund in Texas is likely to change the innovation landscape in that state. The legislation, recently enacted, will establish regional innovation centers. These centers will operate as partnerships among universities, companies, and nonprofit organizations. Read more. posted by Ed | Indiana's BioCrossroads launches a seed fund Last week BioCrossroads, the life science initiative in Indiana, launched a new seed capital fund. The fund is designed to promote startups in the state's life sciences cluster. The fund will provide working capital in the range of $50,000-$500,000 to promising companies. Read more. posted by Ed | Manufacturing jobs as career jobs One of the misconceptions that EDPros must confront is that manufacturing is "dead". In fact, manufacturing is shifting toward higher productivity and higher skills. This trend is not new. It has been underway for over 20 years. Now, manufacturing firms face a difficult future. Not enough young people are looking to manufacturing as a highly paid career. At the same time, our manufacturing workforce is aging. This article from Spokane outlines the major forces at work. Read more. posted by Ed | The value of 2 year degrees Here's a good article from Montana that highlights the growing importance of postsecondary education. A high school diploma is no longer a ticket to the middle class. At the same time, most new jobs do not require a four year degree. Two-year degrees, however, provide a most people with the career path they need to move into a higher paying job. Read more. posted by Ed | Connecticut retools cluster strategy Connecticut was one of the first states to embrace a cluster strategy. Now, an outside consulting firm will provide a new look at the state's strategy. Read more. posted by Ed | Manufacturers connecting to universities In Indiana, smaller manufacturers are turning to universities for assistance in improving productivity and innovation. Led by the new advanced manufacturing center at Purdue University, businesses are forging new relationships with universities. Read more. posted by Ed | Michigan communities cooperate on marketing Wednesday, June 08, 2005 Five communities in Michigan, plus the Michigan Economic Development Corporation, are collaborating in marketing the state at the Medical Design and Manufacturing trade show in New York June 13-15. Read more. As one participant noted, "We'll be talking to businesses that are matches for our own communities, but we'll also be pooling our resources and sending that information back to the MEDC." posted by Ed | Resource: Rural Entrepreneurship News This is one of my favorite newsletters. If you are an EDPro working in a rural area, you need to subscribe to Rural Entrepreneurship News from Center on Rural Entrepreneurship. For example, the latest issue has an interesting report on microenterprise lending: Opening Opportunities, Building Ownership: Fulfilling the Promise of Microenterprise in the United States. Download the report. To subscribe to Rural Entrepreneurship News, compose an e-mail message and insert the following information: To: ruralenews-request@ruraleship.org Message: subscribe posted by Ed | Don't try this at home Monday, June 06, 2005 When you launch a new branding campaign, be sure you secure the Internet domains before you make a public announcement. In Edinburgh, Scotland, they launched a new advertising slogan, "Inspiring Capital". A disgruntled citizen acted fast and got the domain, www.inspiringcapital.com. Read more. posted by Ed | Upgrading Pennsylvania's plastics cluster The U.S. Dpeartment of Labor is providing $3.75 million to Penn State for a retention and expansion initiative in the state's plastics industry. The grant is designed to upgrade worker skills in the cluster. As a PSU representative notes: "Recognizing that the face of manufacturing is rapidly changing with higher and different skill sets in critical jobs, it is imperative that increased emphasis be placed on innovation and training to produce a productive and responsive workforce." Good point: Manufacturing is not dying, it is shifting. Read more. posted by Ed | The impact of CAFTA Today's Indianapolis Star carries an article on the potential impact of the Central American Free Trade Agreement (CAFTA). Read more. CAFTA promotes trade liberalization among the United States and five Central American countries: Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. Modeled after the ten-year old North American Free Trade Agreement (NAFTA), CAFTA opens the door to the larger Free Trade Area of the Americas (FTAA). This broader agreement would encompass 34 economies. CAFTA must be approved by the U.S. Congress and by national assemblies in the Central American countries before it becomes law. You can learn more here. posted by Ed | Impact of Toyota in Georgetown, KY Here's an interesting article on the impact Toyota has had in Georgetown, KY. Read more. posted by Ed | Economy Watch Sunday, June 05, 2005 Here are the best articles on the economy from the last week. Weak U.S. Job Growth in May Renews Fears Payroll growth smallest amount in 2 years GOP getting down to business Self-employment is rising Vital Signs for the Week of June 6 Reports on economy are mixed U.S. Economy: Labor Costs Rise More Than Forecast posted by Ed | Incentive Watch Here are the articles from last week on incentives. The Mississippi governor is calling the legislature into session at the end of June to consider the Momentum Mississippi package of incentives. Read more. The Gold Leaf Fondation, founded in North Carolina to help diversify the economies of tobacco dependent counties, is considering direct incentives to companies. Read more. Mississippi has bailed out of the beef business. A failed loan cost the state a bundle. Read more. A bill proposed in Congress would provide tax breaks for braodband deployment in rual and underserved markets. Read more. Oregon is considering legislation to provide tax breaks to food processors. Read more. Demographics and workforce skills, not incentives, turned the trick for a high tech firm in Tampa. Read more. Texas Governor Perry asked for $600 million in economic development incentives for his Super Fund and a new technology fund. The legislature delivered $380 million. Read more. Vermont is considering legislation to tighten its tax creidt program. The legislation includes a two year sunset provision. Read more. Indiana's new incentive legislation is getting mixed reviews for local EDPros. Read more. posted by Ed | Paying for talent at Innovation Philadelphia In Philadelphia, the city is made a major investment in Innovation Philadelphia. The strategy involves launching a series of related initatives to build the city's infrastructure for high-growth firms. One potential public relations problem: The City pays the top executive at Innovation Philadelphia a bundle. Read more. posted by Ed | Denver's new branding initiative The Metro Denver Economic Development Corp. has launched its new branding campaign. The brand is built around the idea of Denver's smart and energetic people. Read more about the branding initiative. posted by Ed | Self-employment rising The small business administration has been conducting some interesting research on self-employment. According to its most recent report, self-employment rates are increasing across the country. Read more. posted by Ed | New Jersey's innovation zones Before he left the governor's office, James McGreevey designated three areas in New Jersey as innovation zones. This strategy is also followed by governors in Michigan and Pennsylvania. The idea is to retain and attract new businesses around the university campuses. Now New Jersey is considering expanding its program. Read more. posted by Ed | Recruiting retirees Here's a small story that touches on an important topic, especially for smaller cities. A university study suggests that recruiting retirees directly translates an improved income prospects. In Meridian, MS the City employs a retirement coordinator. She indicated that recruiting one retiree household is equivalent to about 3.7 the factory jobs. Read more. posted by Ed | Consider military procurement a growth industry The North Carolina Military Business Center issued a series of reports (a Gap Analysis") that outlines how military procurement can push innovation and technology development in the state. The Gap Analysis was structured to assess the future procurement needs and contracting requirements of the Department of Defense and compare these needs to the capacity of North Carolina companies to meet these requirements. The Angelou Economics study recommends that the state consider military and defense contracting as a growth industry. Read more. posted by Ed | Difficult future for California? Some of the fast growth regions of our country are rapidly running up to significant physical limits to growth. Last week a report from the Public Policy Institute of California outlined a bleak future for the state. Current patterns of growth will result in a poorer air quality, and more traffic congestion, an increase in house prices. Read more. Visit the web site. posted by Ed | Building Carolina North The Board of Trustees of the University of North Carolina met last week to close a small airport and remove one more obstacle from a major development called Carolina North. Read more. The Trustees also released an economic impact analysis of the project. Market Street Services from Atlanta completed the analysis. Read more. Download the study. posted by Ed | Regional nanotech effort Business and government leaders in Maryland, Virginia and D.C. are pulling together a regional effort to promote nantoechnology. Read more. posted by Ed | Pushing toward green energy Utliity regulators are spurring the development of renewable energy markets. In Arizona, regulators are pushing utility companies to rely more heavily on renewable energy. The state has adopted a "environmental portfolio standard" that requires electric utilities to get 1.1% of their power from renewable energy sources. The utility regulators are now considering increasing that requirement to 5% by 2015 and 15% by 2023. Read more. In Missouri, state officials are promoting ethanol production. Read more. posted by Ed | Collaborative arts and crafts marketing We're starting to see more coordinated marketing activities by arts and crafts businesses. In Oregon, for example, Oregon Crafted is an economic development initiative to increase the revenues and improve the stability of arts and crafts businesses located in rural areas. Read more. Within the Colombia Gorge of Oregon, a new branding initiative is designed to build a regional identity by creating a logo for merchandise and packaging. Read more. 90. In Minnesota, arts groups in Eli are getting together to develop their own marketing plan. As one participant noted, quote I want to export the life via the Internet". Read more. 64 posted by Ed | On your Blackberry: Pay attention to education The CEO of the company that manufacturers the popular Blackberry mobile e-mail device provided some guidance to an audience in Pittsburgh last week. He recommended that regional leaders focus on improving investments in higher education. He noted, "if you invest in quality education, everything else falls into place." Read more. posted by Ed | Visiting Madison, WI Representatives from the University of Florida in Gainesville traveled to Madison, Wisconsin last week to learn more about university-sponsored research. The Gainesville Area Chamber of Commerce organized a trip to learn how Madison and the University of Wisconsin work together to build the economic development strategies. Read more. One idea worth considering: a collabroation council to encourage better alignment of economic development resources. Read more. posted by Ed | More regional efforts Regional efforts are continuing to take shape across the country. Three counties in Oregon and one in Washington state are moving together to develop a regional business plan. The plan is designed to set out a framework for economic development in the Portland metropolitan region. Read more. Here are two examples, one from Wisconsin and another from Northeast Ohio. posted by Ed | South Carolina's career pathways The South Carolina legislature has taken a strong step in improving career pathways for kids. The Education and Economic Development Act will require students starting in the 10th grade in to choose a career focus. This is an important step in improving outcomes from our high schools. Developing career pathways is an appropriate strategy for addressing the challenges of 75% of high school graduates will not go on to four years of college. Read more about what's going on in South Carolina. Go. posted by Ed | Supporting entrepreneurs Recently the Small-cap business Administration released a report on innovation and entrepreneurship. Like other industrial states in the Great Lakes, Michigan scores relatively low on its support of entrepreneurs. Read more. Part of the explanation comes from the industrial legacy of the Great Lakes. During the Industrial Age, the Great Lakes states generated wealth with large hierarchical organizations. Other regions, like Texas, North Carolina, and California, do not have this industrial legacy and have been more supportive of entrepreneurs. So, for example, Las Vegas is more supportive of entrepreneurts. Read more. posted by Ed | Building data grids Advancements in information technology are creating new types of infrastructure for EDPros to build. Some governments and nonprofit organizations are evaluating data grid technology as a means to spur economic development. A data grid is very similar to a computer grid. But instead of sharing computing resources from different systems, a data grid provides a a centralized view of data that is stored on the grid. Learn more. posted by Ed | Advice to entrepreneurs on creative financing Saturday, June 04, 2005 A panel of angel and VC investors provides some advice to entrepreneurs on creative ways to finance a start-up. Read the Knowledge@Wharton article here. posted by Ed | Wisconsin's plans to build clusters Some industry leaders in Wisconsin are working on plans to connect plastics companies in the state into an innovative cluster. This initiative is following a similar initiative in the printing industry. Learn more. posted by Ed | Toyota Watch Toyota may be making a decision on its new manufacturing facility later this month. Read more. posted by Ed | NC breaks ground on biomanufacturing support center North Carolina has begun construction on its Biomanufacturing Training and Education Center on N.C. State University’s Centennial Campus. This facility will provide support to the biomanufacturing, pharmaceutical and related agribiotechnology industries in North Carolina. The new facility will integrate faculties from engineering and agriculture and life sciences to research and teach methods of biotechnology manufacturing. Read more. posted by Ed | The coming of age of bio-diesel Wednesday, June 01, 2005 A recent study by Oak Ridge National Laboratory found that bio-fuels -- including bio-diesel and ethanol -- could meet about 30% of America's transportation fuel needs. Biodiesel is produced from vegetable oils or animal fats. Now in Michigan, school buses are using biodiesel in varying concentrations from 5% to 30%. Read more. According to our experts in Northeast Ohio: "At blends of 20% and below no modification of storage or injection systems is needed to use biodiesel. Existing petroleum distribution systems are completely compatible. When used by government, school bus, utility, delivery and other fleets, biodiesel fuel allows these organizations to meet clean air regulations without heavy capital expenditures." In Kentucky, the biodiesel push is coming from the Kentucky Clean Fuels Coalition. Governor Fletcher's state energy strategy calls for the increased used of biofuels. Read more. You can see a national distribution map for biodiesel here. posted by Ed | A nail in the coffin Whacky ideas in economic development often die hard. Take the case of building a huge new cargo airport in Lousiana, just south of Baton Rouge. For the past four years, at least, this idea has been occupying people's time and energy...despite the fact that there appears to be no market demand for a new airport. (Except the demand buzz that the promoters try to build.) There's no doubt. Airports can carry an hug economic impact. (See, for example, the case of Northern Kentucky.) The impacts are there because of market demand. So, hopefully, the Donaldonville airport idea will soon die. According to a state-sponsored study: "There is not a demonstrated purpose and need for a new airport in Louisiana specifically developed to accommodate air cargo activity." Read more. (This is the project that led to the firing of a state economic development official. He got his walking papers for sending an e-mail critical of the project. Read more. posted by Ed | |
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