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Building wealth in the inner city
Friday, December 30, 2005 Civic leaders in North Carolina recently held a day-long session: “Minority Entrepreneurship –An Essential Community Economic Development Strategy". Read more. If this area of economic development interests you, learn more about the activities of the Initiative for a Competitive Inner City. In November, ICIC hosted a session in Chicago, "Summit 2005: Strengthening Inner City Networks". Learn more. (Explore the web site to download the presentations.) In October, the Ford Foundation held a roundtable on Regional Economic Development and Low Income Communities. You can also download these presentations form the same web site. posted by Ed | Michigan's recovery initiative for tool and die firms For some years, Michigan has been implementing an initiative to help its smaller tool and die shops. Last week, the State announced that five more firms will be added to the Tool & Die Recovery Zone program. Read more. This program frees participating firms from state and local taxes for fifteen years. Learn more. You can also download an insightful report: A Collaborative Business Model for the Tool and Die Industry. posted by Ed | Small business and job growth Here's a good review of the economic evidence on the role of small business in employment growth. Although it's written for a Minnesota audience, the author's conclusions apply more broadly. You can read the article here. posted by Ed | Tennessee governor outlines priorities In outlining his 2006 legislative priorities, Tennessee Governor Bredesen indicates that he wants to focus on small business development. But he also wants to keep the legislature's focus on education. Specifically, he wants to improve math and science. Read more. posted by Ed | BioCenter in San Jose Here's an interesting profile of BioCenter, one of San Jose's city-sponsored incubators. (According to the article, "[T]hree other city-subsidized incubators have graduated more than 220 companies that have raised more than $550 million in equity over 10 years".) Interestingly, the The San Jose State University Foundation, operates the incubators for the city. In return, the Foundation takes a 1 percent stake in each company. Read more about BioCenter. posted by Ed | Alabama hunts Kia Decatur, Alabama, Chattanooga, Tenn., Hopkinsville, Ky., and Aiken, S.C. are supposedly inthe hunt for a new Hynudai-Kia plant. Read more. The original preferred site was Meridien, MS, but company officials were apparently worried the the region did not have enough workers to support the plant. Here is the original Automotive News story. Earlier last week, Hyundai also announced that it would be investing $94 million into its Michigan R&D center. Read more. posted by Ed | Incubator targeting minority business development Here's an interesting story of a minority incubator in Lorain County, OH. As one of the organizers points out, "Lorain has almost 40 percent minorities, and less than 3 percent of its businesses are owned by minorities." Read more. posted by Ed | Fort Wayne looks at Louisville Thursday, December 29, 2005 Louisville stands as a poster child for city-county governance. Recently, a group of civic leaders in Ft. Wayne visited Louisville to attend the National Conference on Collaborative Government. Here is a commentary. Read more. You can learn more about the conference here. posted by Ed | Summit in Einstein Alley In New Jersey's Einstein Alley, civic leaders recently held a summit to explore some of the best practices in building innovation networks. The local Congressman who helped organize the summit had an insightful quote: "Local innovation and entrepreneurship, not top-down governance from federal and state leaders, is needed to strengthen Central Jersey's economic future." Read more. True enough. The old economic development programs do not work well in the new, networked economy. posted by Ed | The opportunity in renewables Wednesday, December 28, 2005 The news on renewables -- particularly biofuels -- is popping all around us. Here's a good article on renewable fuels in Minnesota. As one participant in the conference noted, "The future is going to be exciting. We're just starting to scratch the surface with renewables." Read more. In a recent speech to officials in Utah, former President Clinton urged his audience to take the initiative with renewable energy. In a speech earlier this month in Las Vegas, Clinton remarked, "If I were the economic development czar for America today or if I were in charge of economic planning for Las Vegas and Nevada today, I would start by making a complete and total commitment to a clean energy future because I think you can create more jobs there than anywhere else." Read more. (In response, a group of Nevada leaders have started a new company. Read more.) Pennsylvania Governor Rendell has suggested a new renewable energy strategy that he calls American Energy Harvest. Read more. And Indiana Governor Daniels commented at the opening of a new biofuels station in November: "There is no more important economic cylinder than agriculture, and there is no more important part of our agricultural strategy than renewable fuels. We are going to lead the nation in soy diesel." Read more. posted by Ed | Regional strategies in Charlotte Tuesday, December 27, 2005 Civic leaders in Charlotte have been committed to regional approaches to economic development since 1989. Here's a good interview of Charlotte's EDPros that explores the dynamic of the relationships. Charlotte provides a good case study of how the prevailing direction among economic developers are shifting from competition to collaboration. Read more. posted by Ed | Best economic development books of 2005 Monday, December 26, 2005 Here's my list of the best books I read this year. 1776 tells the compelling story of a remarkable year in our nation's history. As we face the many uncertainties ahead, we can reach backward for strength and perspective. No book makes these uncertainties more certain than The World is Flat. Friedman makes clear that the future will be nothing like the past (especially for economic developers). EDPros need to know how to think about the economy, and Joseph Ellis provides us with a clear, concise explanation of economic indicators. In the process, he cuts through the mumbo jumbo of most economists in his book, Ahead of the Curve. The Power of Impossible Thinking shares some of the important insights of cognitive science. The book illustrates that in the years ahead, management professionals will need to cultivate a new set of skills: managing thinking, mental models and shared meaning. For EDPros, the challenge will be to guide collective thinking about your community's future. As we move ahead, the prevailing model of economic development will shift from competition to collaboration; from recruiting companies to designing open innovation networks. Creating We explores how leadership is changing in this interconnected world. The book's basic premise is that today's leaders need to step outside of our self-centric worlds and learn to focus on creating shared environments where innovation can thrive. Collaboration and innovation will drive regions forward. The regions with civic leaders who figure out this strategy will thrive. The ones that continue stuck in old industrial ways of thinking will fall farther behind. We'll need new civic spaces for this innovation to take place and a new understanding of the value of diversity. No book underscores the importance of different perspectives to innovation than The Ten Faces of Innovation. As you can tell, I think books about innovation are going to become increasingly important for EDPros to read. I have three other favorites I'll mention: The Design of Things to Come, Blue Ocean Strategy, and Making Innovation Work. posted by Ed | A photonics cluster in upstate New York Wednesday, December 21, 2005 Upstate New York is quietly building its photonics cluster. Here's an update. posted by Ed | Crafting a vision at Marshall University Marshall University in Huntington, West Virginia is an interesting campus to watch. Its president is inviting the community to participate in the strategic planning process with an open agenda. He's focusing the discussion with some insightful questions. Read more. posted by Ed | Buffalo newspaper prints a year end review Good newspaper reporting can further the civic dialogue and keep leaders focused. Here's a good example from Buffalo. It's a year-end assessment of economic development progress. It includes constructive actions that leaders can take to keep their initiatives moving forward. It's the type of scorecard that is simple, but not simplistic. Read more. Send this article to your favorite editor and suggest they do the same. posted by Ed | Report: The Young and The Restless Cities are competing for young knowledge workers. CEOs for Cities, has issued a new report that explores the issue. It's another example of how economic development is shifting from a focus on recruiting companies to a focus on recruiting people. You can read about it here. You can download the report here. posted by Ed | Galesburg +2 Two years ago, Galesburg, IL lost 2,000 manufacturing jobs. The region is coping well, all things considered. As the lead EDPro states, "It definitely could be so much worse than what it is. We're still holding our breath, but at least we're not 20 feet under holding our breath." Read more. posted by Ed | Open Innovation, P&G style P&G is one company that understands Open Innovation. Recently, P&G representatives met with a number university researchers and companies in Massachusetts to explore potential partnership. Learn more. posted by Ed | Economy Watch Saturday, December 17, 2005 Here are the good articles on the economy I came across last week. Despite good economic news, wages don't keep pace New World Economy The American economy Lessons of 25 Years Strong growth ahead for world economy China rising Fox calls increased U.S. border enforcement 'shameful' Vital Signs for the Week of Dec. 19 Senators Launch Innovation Bill posted by Ed | Incentives Watch Here are some interesting articles on incentives from last week. Civic leaders in Evansville,IN are concerned that they are not getting a fair share of incentives from the state. (This is the same issue that has emerged in Western North Carolina recently). Read more. Chrysler has announced major upgrades to two plants in Missouri. State and local incentives total over $50 million. Read more. Here's an overview of Iowa's most recent incentive announcements. Read more. Arizona's two technology councils will be pursuing increases in R&D credits. Read more. The debate over incentives is heating up in Georgia. Read more. posted by Ed | Leveraging Nashville's health care cluster Nashville is taking steps to leverage its health care assets into another, related cluster of companies. Read more. posted by Ed | Promoting Philadelphia's creative economy Philadelphia is promoting the creative economy as an economic development strategy. Read more. This approach goes beyond Richard Florida's rather simplistic prescriptions. Instead, it focuses on building clusters of creative businesses. This approach first emerged in Europe in the late 1990's, and it has now spread to Australia and New Zealand. A few years ago, the New England Council introduced the approach to the U.S. Learn more. Vermont, Maine, and Rhode Island have all moved in this direction. posted by Ed | College literacy rates In another disturbing report, the literacy rates of U.S. college graduates appears to be dropping. Read more. This report carries a broader message: About 5% of the U.S. adult population is illiterate. That's about 11 million people. More disturbing, U.S. adult literacy levels have not improved since 1992. Read more. posted by Ed | Early childhood education in South Carolina In another example of how early childhood education is moving up the economic development agenda, South Carolina's Secretary of Commerce has authored an opinion piece, "Early childhood education offers huge economic returns". posted by Ed | Turning to Oklahoma's workforce system With two major plant closings announced recently, Oklahoma officials are turning to their workforce development system to respond. Read more. Last year, Oklahoma paid for an outside assessment of the state's workforce system. You can download the assessment here. posted by Ed | Google comes to Pittsburgh Increasingly, businesses will locate where they can find the brainpower. Example: Google's decision last week to open an engineering office in Pittsburgh. Read more here and here. posted by Ed | Balancing leadership direction and open participation A major part of the challenge of conducting regional economic development comes in developing a civic process that combines public participation with leadership direction. When you fail to balance these two, you can run into trouble. Leadership direction with inadequate public participation leads to a sense of inside dealing. Public participation without leadership direction leads to confusion and frustration. Civic leaders in SW Michigan are facing these challenges. Read more. posted by Ed | Don't try this at home The lesson from this reporter: No matter how much you love your work, make sure that you keep some distance. Download the video. (1.5 MB, Windows Media file) posted by Ed | City summits Here's an interesting idea: Last week, Kokomo,IN held an international summit. Read more. In Albuquerque, the mayor is holding a tech summit in early January. Read more. posted by Ed | New Mexico's new spaceport Last week, New Mexico's governor announced will build a $225 million spaceport in partnership with Virgin's Richard Branson. Read more here, here, here and here. posted by Ed | Regional computing grid in Indiana Grid computing involves high end computer networking. West Virginia and North Carolina have launched grid computing initiatives in part to promote economic development. Here's another one announced in Indiana. Read more. posted by Ed | NW Indiana's Regional Development Authority In Northwest Indiana, a new regional experiment is underway: A Regional Development Authority. Last week, the Indiana Finance Authority allocated $10 million to match $17.5 million raised within the region. Read more. posted by Ed | Looking for overlaps in Northeast Mississippi Civic leaders in Northeast Mississippi (around Tupelo) are studying whether the region's economic development groups are aligned. This approach makes some sense: Get an outside view to establish a common base of facts. Read more. Just don't spend too much time or money on this step. The real challenge comes in building habits of collaboration among people connected to different groups. The best way to establish this atmosphere of trust is to focus on small steps with clear mutual benefits. posted by Ed | Sandia's bi-national lab We hear a lot about the growing tensions along the U.S. Mexican border. So, I was surprised to learn about the bi-national lab to accelerate the development of businesses along the border. The idea originated at Sandia National Labs. "We got interested in this (bi-national lab) because we got interested in the whole concept of preventing conflicts in border areas" around the world by "leveling community wealth on both sides of a border", according to a representative of the Sandia National Labs. Read more. posted by Ed | Export promotion strategies Here's an area of emerging opportunity for most regions: export assistance. Exporting firms are generally more agile, more oriented toward growth than non-exporting firms. At the same time, relatively few economic development organizations focus on export assistance as a strategy (in contrast to economic development organizations in Europe, Australia and New Zealand). Here's an article that gives you some background on Louisville's export assistance center. Read more. And another example: Enterprise Florida, under its new president, is launching some important trade initiatives. Read more. The most likely success strategy in exporting is to encourage networks among exporting firms. The reason is simple: Business people learn best from other business people. Some years ago, I established the Greater China Business Network in Boston. The purpose was to introduce smaller growth oriented firms to opportunities emerging in the Greater China market (the PRC, Taiwan and Hong Kong). In 1990, we organized probably the first international videoconference to promote business opportunities. We focused on linking smaller U.S. environmental protection firms with business opportunities in Hong Kong. Using PictureTel (since acquired by Polycom), we conducted a videoconference for two hours. Immediately after, four of the six U.S. firms moved ahead with opportunities they uncovered. In the past decade, the U.S. government has become far more responsive to export opportunities. Visit the U.S. export portal. (In 1992, Congress passed the Export Enhancement Act to coordinate and focus federal export promotion programs.) posted by Ed | Science, math, innovation and economic development Improving science and math education is another issue that is starting to move into the orbit of economic development. A number of recent studies have documented the lagging performance of U.S. students in science and math. See, for example, this report from the Thomas Fordham Institute. Read two good overviews here and here. Commentators are beginning to take up the call. Read more. Increasingly, business leaders are worrying that by not keeping up, the U.S. could lose its leading position in innovation. China and India are catching up to the U.S. So we are seeing more of our leaders connecting the dots among science, math and innovation. Business leaders in the U.S. are focusing more and more on innovation. Here's a recent speech from former Michigan Governor Engler, now head of the National Manufacturers Association. Read more. The realization comes at an important time. Across the globe, countries are improving their ability to compete by copying the U.S. model of higher education. Read more. Big companies are hedging their bets and, through their investments, they are flattening the earth even more. In recent weeks, both Intel and Microsoft have announced new agreements in India to boost connections to accelerate innovation. Read more here and here. At the same time, Indian managers see the challenges ahead and are aggressively investing in innovation. Learn more. U.S. universities are also "flattening the earth" by investing in partnerships with Indian universities. Read more. So, back in the U.S., governors are starting to push again on science and math performance. Two weeks ago in Indiana, Governor Daniels convened a meeting to explore how innovation in science and math education could be accelerated. Read more. In Virginia, Governor Warner is pushing for additional science investments in his state colleges and universities. Read more. In South Dakota, the Board of Regents is pushing the legislature to invest in more research. Read more. In Arizona, civic leaders are recognizing that the game is shifting toward innovation. Read more. In Maine, a report issued earlier this month urged that the state double its investment in research and development. Read more. In Texas last week, the Texas High School Project announced the launch of the Texas Science, Technology, Engineering and Math (TSTEM) Initiative, a $71 million public-private partnership. Read more. In Kansas, the state legislature voted in 2004 to invest $580 million into the state's biosciences research and commercialization infrastructure. Read more. Georgia has been a leader in recognizing the emerging role of research universities in economic development. The recent annual meeting of the State Science and Technology Institute focused on the Georgia story. Read more. You can see that this article was posted from a very good e-newsletter published by Montana Associated Technology Roundtables You can subscribe to weekly updates from SSTI from this page. posted by Ed | Creating regional thinking in NE Pennsylvania The push for regional approaches in economic development can come from anywhere. Most commonly, businesses are in the forefront. (But at times, even business people need reminding.) Read more. In Northeast Pennsylvania, an academic center, the Joint Urban Studies Center, is leading the push. Read more. posted by Ed | Branding a corner of Michigan In today's economic development world, branding is becoming more important than ever. You can see that sense of urgency in this comment by a commissioner in Wayne County, MI. Read more. It will be interesting to see if Wayne County moves into a more regional approach, as we are seeing emerge in Wisconsin over the last month or so. (Civic leaders in Detroit are trying to push a more regional agenda.) Read more. In Wisconsin, at least two regional branding initiatives have been launched recently. New North and in Southeastern Wisconsin, around Milwaukee. Read more. posted by Ed | Regional artist network in SW Virginia A group of artisans in Southwest Virginia are forming a regional artist network. The first step involves identifying the artists in the region. Read more. The organizers are modeling the network after, Handmade in America, formed in 1995. That network is located in Asheville, N.C. and covers 22 western North Carolina counties. posted by Ed | Rhode Island focusing on worker learning Rhode Island's civic leaders met recently and reviewed how the state's workforce development initiatives were performing. The Rhode Island Policy Council is focused on improving the performance of the state's system. Read more. You can learn more about the Policy Council's activities from this page. posted by Ed | Economy Watch Saturday, December 10, 2005 Here are the best articles on the economy I came across last week: Greenspan: Santa or Grinch? Are you ready for the next workplace revolution? Productivity Rise Is Fastest in Two Years Waning era of the middle-class factory job Vital Signs for the Week of Dec. 12 The Best Of 2005 Report says bird flu could cost 5% of GDP The Politics and Economics of Offshore Outsourcing Productivity Numbers Soar posted by Ed | Incentives Watch Here are articles on incentives from last week. IKEA is getting a $2.8 million incentive package from Draper City, Utah. Read more. The incentives debate is heating up in Georgia. Read more. Colorado Springs is debating whether incentives should be used to keep companies. Read more. The folks in Evansville (like the folks in Western North Carolina last week) wonder what happened to their share of state economic development incentives. Read more. More details on the Nissan move from California to Tennessee. Read more. A Tennessee offical defends the deal. Read more. Anderson, SC is debating whether it is a good idea to provide incentives for public financing of a convention center attached to a Hilton Garden hotel. Read more. posted by Ed | New North collaboration launches in Wisconsin Civic leaders from eighteen Wisconsin counties are banding together to market the region as the "New North." New North will be based in Appleton and will coordinate development efforts among the counties. You can learn more here and here. You can read the background reports that led to the New North from this web site. The New North is similar to an effort that launched recently, the Southeast Wisconsin Regional Economic Development Initiative. posted by Ed | Engaging business in low income communities Friday, December 09, 2005 The Ford Foundation has released a new report on effective approaches to strengthen low income communities. Read more. You can download the report from this page. posted by Ed | Transportation and land use plan for the Triad The Triad region of North Carolina is embarking on an ambitious regional land use and transportation master plan. Read more. posted by Ed | Figuring a new approach in Detroit Detroit is having difficulty, in part because the old economic development formulas have not worked well for the city. Read more. Detroit has followed what we can call the Thing Theory of economic development. Build a Big New Thing (a hotel, a casino, a stadium) and economic development will follow. Not surprisingly, there are a lot of incentives that push the Thing Theory. Politicans like to broker the funds. Real estate developers like publicly financed anchors to open the door to more lucrative real estate development surrounding the anchor. And then, of course, bond lawyers, consultants, and investment bankers get their fees off the top. To my mind, the biggest problem in Detroit is rooted in the failure of the business community to take a more regional approach earlier. Contrast the deep involvement of the business community in the region around Chicago. Chicago's business community provides the major force behind Chicago Metropolis 2020. Now, a new regional approach in Detroit may be emerging. Read more. posted by Ed | Connecticut invests in manufacturing extension Connecticut is pumping some additional money into its Connecticut State Technology Extension Program (CONNSTEP), a manufacturing extension initiative. Read more. While reviewing the web site of CONNSTEP, I came across a couple of very good podcasts on the future of manufacturing in the U.S. You can access them from this page. posted by Ed | Stimulating business development at schools If you have a college or university nearby, you have the opportunity to build a new business base for your region. Here are two good examples from last week of smaller schools making relatively big commitments to business development. In Oklahoma, Rogers State University dedicated its new Innovation Center last week. Read more. In Georgia, Lanier Tech is moving to build an incubator. Read more. posted by Ed | Wireless Scottsburg Earlier this week, I attended a meeting of the Indiana Rural Development Council. I heard the inspiring story of Scottsburg, IN, as told by Mayor Bill Graham. Scottsburg risked losing business when telecommunications companies declined to provide broadband service to this small community. Despite being only thirty miles from Louisville, the people of Scottsburg were told that the only way to bring broadband to the town was by constructing an expensive fiber optic loop around the town. Taking matters into his own hands, the mayor figured out how to get his town hooked up. In the first year, they projected they would get 100 accounts. Five times that many people signed up. Earlier this year, the PBS show NOW highlighted Scottsburg's story. Read the transcript. In October, the Wireless Internet Institute announced the winners of the first-ever Wireless Communities Best Practices Awards, and Scottsburg won one of the awards. Read more. posted by Ed | Michigan's rural broadband initiative Michigan has announced a new rural broadband initiative. Read more. posted by Ed | The Celtic Cactus? Here's an interesting commentary on thinking big in Arizona. It highlights the lessons that Arizona (and other states) can learn from Ireland. Read more posted by Ed | Scripps still waiting for a site The troubled Scripps project continues to make news in Florida. The primary site for the major development -- Meccaz Farms -- must wait two years for environmental reviews. Meanwhile, owners of the alternative site continue to keep their fingers crossed. Read more. The Scripps case demonstrates to me the risks of popping a big project without adequate public review or understanding. The governor pulled this rabbit out of his hat, and while the project gained national exposure, it is now dragging. (Real estate is only part of the problem. The vision for the Scripps-led biotech park included a dynamic multi-university campus. Scientists from various schools could meet and exchange ideas over lattes or lunch. But building these connections has not worked very well.) The lesson: With big projects, by speeding things up, you can slow things down. posted by Ed | Global pressures are growing If you have any doubts that global pressures will increase on our economy, two announcements last week should help convince you. The first, by Microsoft, involves Bangladesh. In his first visit to the country, Bill Gates announced an ambitious program to train teachers and students in information technology. In a Memorandum of Understanding between Microsoft and the Education Ministry, Microsoft has committed to training up 200,000 students and 10,000 teachers across Bangladesh in the next three years. Learn more. In the second anouncement, Intel's chairman announced the company's latest commitment to Malaysia. Read more. Global pressures are growing, and no one is waiting around for us to figure this out. posted by Ed | Maryland's focus on tech transfer Maryland is leveraging the relatively heavy commitment of the federal government to research in the state. So, the strategy focuses on technology transfer. Learn more. posted by Ed | The transforming power of the arts In both rural and urban areas, the lines separating art and economic development are blurring. In the past, EDPros saw art -- if at all -- as part of a community's quality of life. True enough. But this characterization, to my mind, still marginalizes the role art can play in transforming a community. In a global economy running on brainpower, creativity and innovation, art becomes more than something you experience on a weekend. Here's a good article on how the arts are transforming smaller cities. Read more. Here's a simple idea that has worked wonders in Padukah, KY: an initiative to paint murals in the downtown. posted by Ed | Keeping brains in Upstate New York We are moving from an industrial economy to an innovation economy. In the industrial economy, companies created wealth by dominating markets and controlling costs. (Indeed, one of the precepts of industrial business strategies is aggressively build market share to drive down costs: the experience curve). The innovation economy focuses on brainpower and networks. So, we are seeing a subtle shift in economic development from a focus on companies (which come and go) to a focus on people (who tend to stick around or, if they leave, may return). Here's another example, in Upstate New York, a group of young people have launched Pipeline 4 Progress. Read more. The trick will be whether this group can build a process -- a new set of conversations that convert ideas into action -- not just hold an event. Visit their web site. Upstate New York is not alone. In another article last week, the local paper in Lexington, KY outlined the difficulty of keeping brains in the Bluegrass. Read more. posted by Ed | The next wave of Internet start-ups The dot.com bust a few years ago has led some to underestimate the long term impacts of the Internet. This technology platform changes the economic development world completely. It is our first interactive mass medium, and we are just beginning to understand its implications. As one venture capitalist notes: "We have not yet begun to recognize the magnitude of change we will undergo as a result of this frictionless, Internet-connected universe. The pace of development, the pace of innovation, is ever increasing, because of the Internet." So, it is not surprising to see a second generation of Internet-based start-ups emerging in the Bay area. Read more. posted by Ed | A broad blueprint to push renewable fuels Pennsylvania's governor has outlined a plan to focus energy development on renewable resources. Read more. The broad plan calls for: - Using regulations to require greater consumption of alternative fuels by utilities; - Using government purchasing to stimulate private investment in alternative fuel production and fuel-saving technologies; - Focusing existing subsidies to alternative fuel production. While there is little chance that the federal government will act along these lines, we can expect to see more and more states and regions adopting their own energy strategies. Some states are already moving aggressively in alternative fuels. Pennsylvania and Indiana are good examples. posted by Ed | UC San Diego builds connections with Mexico Here is a another example of global networks emerging in economic development. The University of California at San Diego (UCSD) has announced a broad platform for collaboration between the university and Mexico. Read more. posted by Ed | Collaborations among states Concerns about global warming are propelling states to develop regional compacts. These regional compacts fill a void where federal policy does not meet regional needs. Read more. In my view, these types of agreements will become more common to the future of economic development. We will see states collaborating on a far more extensive scale than in the past, as we all cope with the continuing pressures of globalization. posted by Ed | Reducing regional competition for a large project Regional competition can trigger destructive bidding wars. So, it's a healthy sign when regional officials in Texas warn communities to stay within their budgets in trying to attract a major new project. In this case, regional collaboration is emerging from the state level. The state government has mandated that each council of government can submit one site for consideration. Absent a state mandate, the key to long term regional collaboration involves developing regional agreements to share tax revenues from these projects. While still rare, these agreements will emerge more frequently as local officials come to a basic insight: Everyone has more to gain from collaboration. The project itself is noteworthy. FutureGen is a $1 billion federal initiative to design, build and operate a 275-megawatt energy facility that produces electricity and hydrogen with near zero emissions. The federal government is considering several states for the project – Texas, Illinois, Ohio, Kentucky, Wyoming and Indiana. Read more. posted by Ed | Government procurement assistance for small firms One of the first economic development initiatives I started twenty years ago involved assistance to small companies interested in government procurement. The initiative is still going strong today, pumping millions of dollars each year into the ecoomy of Northwest Louisiana. Here's how an assistance program works in Oklahoma City, next to Tinker Air Force Base. Read more. posted by Ed | Utah's Innovation Campus In a recent ceremony marking the 20th anniversary of Utah's Innovation Campus, Chris Roybal, senior adviser for economic development for the state of Utah, pointed to the importance of research universities: "As you look at all the strong economic areas in the country, you will find research universities driving each of them. Economic development really begins at research universities. They are the nerve center." The article also highlights Utah's Smart Site initiative for rural areas. The initiative encourages development of computer, data processing and telecommunications industries in rural areas. Read more. posted by Ed | Economy Watch Saturday, December 03, 2005 Here are the articles on the economy I found last week. U.S. Job Growth: Steady as She Goes Vital Signs for the Week of Dec. 5 Bush, Greenspan split on economy outlook The Networked Creators The Global Spread Of Higher Ed Tech startups show signs of life OECD Sizes Up U.S. Economic Growth Prospects Global CFO Survey: Inflation Expected to Rise; Corporate Optimism Slips to New Low; Most Firms Take No Action to Offset High Fuel Costs US economic growth solid: OECD posted by Ed | Incentives Watch Here are the articles on incentives I came across last week. Communities are preparing for the next round of plant closings by Ford. Georgia has moved quickly and closed a deal to save its assembly plant. Read more. Meanwhile, Minnesota is considering a deal to try to save a plant in St. Paul. Read more. And worries are mounting in Missouri. Read more. Commentators are weighing in on incentives. An editorial board in Iowa notes that incentives need to be carefully managed. Read more. A conservative commentator in Oklahoma argues that incentives interfere with the market. Read more. In Colorado Springs, a public debate has broken out on whether incentives should be used to keep companies in the city. Read more. A 3M warehousing project is attracting incentives in Illinois. Read more. South Carolina's governor is trying to move the state away from a low cost recruitment strategy. He argues that he is having some success. Read more. posted by Ed | Keeping the brains in town Friday, December 02, 2005 A lot of regions around the country -- especially those in the industrial Midwest and in rural areas -- experience "brain drain", the loss of young people. This problem has led some communities to launch "brain gain" initiatives, such as College 360 in Northeast Ohio. Visit the site. College 360 grew out of Philadelphia's efforts to keep its college talent. This initaitive, called OneBigCampus, is an outgrowth of a partnership between higher education and economic development organizations: The Knowledge Industry Partnership. The consulting firm, Collegia has built its business around the Philadelphia model. Other consultants see a growth industry in this business. Of course, Richard Florida has been focusing on The Creative Class. And, following Florida's popularity, Rebecca Ryan has been advising cities on how to keep their young leaders engaged through her firm, Next Generation Consulting. Jack Schultz has made a good career out of advising small towns -- agburbs he calls them -- through his book, Boomtown USA. Read more. Ft. Wayne, IN is working on a smaller, more targeted scale with its Brain Gain initiative that repays college loans from graduates who stick around. Read more. In Upstate, New York, Pipeline 4 Progress is focusing on how to keep young people. Read more. A number of chambers have launched internship web sites. Here's an example from Indianapolis. Here's another internship site from Albany. Another thread of initiatives focuses on building networks among young professionals. Here's an example from Philadelphia and another from Arkansas. In Michigan, the governor wants to help smaller cities become competitive with a Cool Cities initiative. Some reversal is underway. Here's an article from Indiana on how smaller towns are beginning to attract college educated young professionals. Read more. At the same time smaller cities, like Paducah, KY are becoming magnets for the arts. Read more. posted by Ed | Incentives to think regionally Regional economic development efforts ordinarily start with business leaders. The reason is easy to understand. Many business leaders think regionally, because they operate regionally. In recent years, business leaders have been pushing regional solutions for two other reasons. First, they want to operate economic development more efficiently: lower the ED overhead. Second, many regional business leaders are facing global pressures in their own businesses. These pressures are shifting their perspectives. If you are confronting pressure from China, it's a little harder to tolerate local disputes that are grounded in old high school football rivalries. In contrast, it's unusual to see a political leader calling for regional solutions. We should not be surprised. Politicians are sole proprietors. They have a single brand: me. We elected them to represent us, not to think, necessarily, beyond their political boundaries. So, it should not be surprising that, given their incentives, it is hard for politicians to choose regioonal solutions. If we want our political leaders to think and act more regionally, we need to create the incentives for regional action. The simplest place to start is on regional intiatives that save money (and reduce the pressure to increase taxes): sharing fire services, for example. Occasionally, you find a political leader are who is thinking regionally because they are young enough to understand the stakes or secure enough to risk it. Here's an example from the Mayor of Evansville, IN. Read more. posted by Ed | Enterprise Florida focuses on trade The U.S. is a large market, and we often do not see exports as a major growth engine. In contrast, EDPros in European and Asian countries, as well as Canada see exports as a major driver of growth. So, for example, export promotion programs are not a large focal point in the U.S. So, it's unusual to see a U.S. based EDPro put trade at the top of the strategic agenda. That's what the new head of Enterprise Florida is doing. Read more. posted by Ed | When airline hubs restructure With Delta in bankruptcy, Cincinnati is nervous about losing the hub at the airport they share with Northern Kentucky. So, the newspaper is looking at what happened when American Airlines abandoned its hub in Nashville. Read more. posted by Ed | The value of greenways Building quality, connected places retains wealth in your region. The reason is simple. Smart people can live anywhere. They will choose to live in places that respect sound principles of physical development. This argument is the basic point that Richard Florida makes when he talks about the creative class. Here's a good list of talking points on the value of greenways to a city and region. Read more. Atlanta is using this strategy along abandoned rail tracks. Read more. Visit the site of the BeltLine Partnership. posted by Ed | US EDA invests in Vermont wood products The Economic Development Administration is investing in a plan to promote Vermont wood products. Read more. posted by Ed | "Hollywood is rebooting" Some years ago, I read a quote that sticks in my mind: "Hollywood is rebooting". The point was that the entertainment industry was moving to a digital frontier and that the historical reasons that the film industry located in California no longer applied. So, it is not surprising that Los Angeles is now concerned that it is losing its film industry. Read more. Download a copy of the report. posted by Ed | New report on inner city business development A new report from the Institute for a Competitive Inner City underscores the importance of developing new strategies for inner city business development. The report concludes that federal aid has done little to accelerate job development in the inner city. Read more. posted by Ed | Building biotech brainpower Developing an innovation strategy involves spinning a lot of plates. In Maryland's case, they need to focus their efforts now on strengthening the training needed for biotech companies. Read more. Contrast how policy makers in Utah are trying to get ahead of the curve. They are proposing a four year biotechnology college degree. Read more. posted by Ed | The Rochester-Israel connection Global innovation networks can help regions transform and grow. In Rochester, business leaders are looking to make connections with Israel. A technologically advanced country, Israel's market is too small for growth-oriented technology companies. They need connections to bring their innovations to global scale. Read more about the Rochester-Israel connection. Go. Virginia is perhaps the state that has developed this strategy most aggressively with its Virginia Israel Technology Alliance. posted by Ed | Creating innovation networks in Lansing If Michigan (and the rest of the Great Lakes) are going to transform, we must design and grow thick networks of entrepreneurship and innovation. Here's a good article from Lansing, MI that explores this theme. Read more. posted by Ed | The Maryland-Estonia link If you did not think that economic development has become global, read this article. The Estonians are interested in learning from Maryland lessons on incubating technology-based start-ups. (For those of you who are curious, Estonia, one of the three small Baltic states, is one of the most wired countries on the planet. Read more. Learn more about Estonia from the CIA Factbook here.) posted by Ed | Georgia Tech's manufacturing study In case you missed it, Georgia Tech's manufacturing study, released some weeks ago, is still generating good press. Read more. You can download the report from this page. The Georgia Tech report underscores the importance of innovation to the future of manufacturing. While you're at it you should download the National Association of Manufacturer's recent report on skill shortages. The NAM report concludes: -- Today's skill shortages in manufacturing are extremely broad and deep. -- Skills shortages are having a widespread impact on manufacturers' abilities to compete Among its recommendations, the study urges: -- Educators to emphasize science, math and technology-related programs in K-12 schools -- Employers to invest at least 3 percent of payroll in training for current employees You can download the report from this page. posted by Ed | San Antonio's venture capital pool To read most economic development strategies that mention venture capital, you would think that venture capital was a necessary pre-requisite to innovation-led growth. In some respects, that's true. But here is an important point: institutional venture capital follows good deals, it does not create them. One of my friends, a distinguished venture capitalist tells me, "The reason that there is not more venture capital deals in Cleveland is that there are not enough globally competitive business plans. The plans I see from Northeast Ohio do not stack up well against the plans we review coming out of California and Boston." True enough. Here's an article from San Antonio that demonstrates the point. Read more. posted by Ed | Georgia looks at electronic gaming Gaming -- as in electronic games -- represents a significant growth opportunity. A state legislative committee will be visiting Savannah this month to learn more about the opportunities. Read more. Savannah has positioned itself as a hot spot for creative industries. View the web site of The Creative Coast. Austin also has focused an initiative on electronic gaming. Read more. posted by Ed | Job hopping and innovation Thursday, December 01, 2005 We may be making some headway with the economists. In my experience, economists generally have a very difficult time understanding Michael Porter's cluster theory. The reason: Clusters are open innovation systems in which social networks disperse knowledge and innovation. Regions with thick open networks are more competitive. Why? Because knowledge and innovation -- translating ideas into valuable products -- are a product of networks. This theory was set forth well in AnnaLee Saxanian's book, Regional Advantage in 1994. Saxenian argued that Silicon Valley responded to the technology shift to personal computers away from minicomputers much faster than Rte 128 in Boston. The reason: Silicon Valley had thicker open business networks. These networks allowed business organizations to move resources far more quickly than in Boston, where companies like DEC and Prime ultimately failed. The basic message: regions with thicker open networks of collaboration are more competitive. They will spot opportunities faster, align their resources faster, and act faster. This message fit well into Porter's emerging cluster theory. (Porter's cluster theory first appeared in his 1990 book, The Competitive Advantage of Nations.) The economists have difficulty understanding the importance of open networks. The main reason comes down to methodology. There is no easy way to run regressions on social networks. (Not surprisingly, Saxenian is not an economist.) Now, it seems, the economists may have a data set that can help them see the light. Read more. If you look at job hopping from a classical economic view, job hopping should discourage investments in innovation. But if you look at innovation from the perspective of an open system, job hopping is just the type of behavior that speeds learning and forms new networks. posted by Ed | Shifting to renewable fuels A coalition in Western Colorado is focusing on clean fuels as an opportunity for the region. The idea is to spur a shift to renewable fuels. Learn more. Former President Clinton advises local officals to focus on these opportunities. In a speech earlier this month in Las Vegas, Clinton remarked, "If I were the economic development czar for America today or if I were in charge of economic planning for Las Vegas and Nevada today, I would start by making a complete and total commitment to a clean energy future because I think you can create more jobs there than anywhere else." Read more. posted by Ed | The problem with earmarks Increasingly, Congressional earmarks are being used to create anchor investments in potentially new clusters. For example, last week, U.S. Rep. G.K. Butterfield of North Carolina announced that he had secured an earmark of $1.5 million for the Advanced Vehicle Research Center through the Energy and Water Development Appropriation for fiscal year 2006. The center will be located in rural Northampton County (pop, 21,000, near Roanoke Rapids). Read more. In another example, a representative from North Carolina got a bunch of funding for a new center on regenerative medicine. Read more. The trick is that politics is not a really good predictor of markets. Anchors like these need to attract private investment if they are to be sustainable. The earmark process does not provide any rational way to evaluate whether a given investment has the potential to leverage private dollars. But Rep. Butterfield's project is chump change compared to Senator Grassley's $50 million for his indoor rain forest. Perhaps embarrassed by the scope of a project that provides $50 million in federal funds to build a rain forest in rural Coralville, Senator Grassley is proposing legislation now that requires project leaders to raise at least $50 million in private funds by December 2007 before federal funding can be used. To give himself a little political cover, he now wants to mandate leverage. Read more. posted by Ed | Conference on rural strategies In Des Moines last week, the Federal Reserve Bank of Chicago held a session on rural strategies for economic development. You can read more about the event here. You can also review the agenda.. posted by Ed | |
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