Community Wisdom, by Maury Forman & Robin Roberts

I met up with Maury Forman, the master economic development humorist from Washington State, at the California Association of Local Economic Development (CALED) annual conference last month. Maury shared a copy of his new book, Community Wisdom, which is chock full of pithy statements, delightful humor, and yes wisdom as the book's title suggests.

Community Wisdom combines keen observations about economic development with intoxicating humor. It's a fun book that isn't afraid to poke a little fun at economic developers and what they do. Maury is right that we tend to take ourselves too seriously at times. During these tough economic times, it helps to laugh. I thank Maury for helping us do that.

Here is taste of what you will find in Community Wisdom: Tips, Ideas and Thoughts for Community Success. "Economic development has three primary strategies: the lottery, which consists of playing the high-stakes game of recruiting a company from the outside; the bread and butter, which refers to retaining and expandsing existing businesses; and the gardening strategy. The gardening strategy refers to seeding businesses within your community. Gardening and bread and butter are where 90 percent of the jobs come from."

Community Wisdom is published by Kendall/Hunt Publishing Company in Dubuque, Iowa.

You can contact Maury Forman at his email address. Click here.

Research Triangle Park's Big Employers

Who are the largest employers in Research Triangle Park (RTP)? Here's the list:

* IBM, 14,000
* Nortel Networks, 5,000
* GlaxoSmithKline, 5,000
* Cisco Systems, 2,800
* US EPA, 1,800
* Research Triangle Institute, 2,000
* National Institute of Environmental Health Sciences, 1,000
* Sony Ericsson Mobile Communications, 750
* Akzo Nobel/Diosynth, 615
* Bayer CropScience, 600
* Underwriters Laboratories, 575
* BASF, 435
* Reichhold, 450
* DuPont iTechnologies, 270
* Bayer Corp., Biological Products, 200
* EMC2 Corporation, 200
* Eli Lilly-Sphinx Pharmaceuticals, 200
* Verizon, 200

RTP website.

Which Cities are the New Tech Hotbeds?

According to Entrepreneur Magazine, forget Silicon Valley. When it comes to technology companies, Atlanta; Austin, Texas; and Boise, Idaho, are where it's at these days. The magazine checked to see what kinds of companies are booming in these cities, what attracts entrepreneurs to the cities and what areas will be growing over the next decade. While very different, each ranked high as a technology business location.

All three cities have very good to excellent potential as tech hotbeds, but I am not quite ready to write-off the Silicon Valley as a major force in the tech competition in the years ahead. Look for the Valley to reinvent itself, coupling its IT strengths with other important technology areas, such as the life sciences.

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What Does 1,000 Boeing Jobs Mean to Witchita?

Every 1,000 jobs at Boeing Wichita create another 1,939 jobs in Wichita's economy, according to Wichita State University's Center for Economic Development and Business Research. Those 1,000 jobs add roughly $60 million to Boeing Wichita's payroll and generate another $67 million to Wichita's economy

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New ED Task Force Created for Northern Colorado

Northern Colorado officials plan to strengthen their ability to compete for new economic opportunities. How? By strengthening their regional effort to ensure that everyone is pulling in the same direction to make things happen. The new group is called the Northern Colorado Economic Technology Task Force. Its focus will be to increase investment by technology-oriented businesses in the future.

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Everybody Wants the New Boeing Plant

A large number of states and communities say they want a shot at the Boeing plant deal. Fort Wayne, Indiana is the latest to express interest. The city is planning to submit its 450-acre Air Trade site to the Indiana Department of Commerce as a possible Indiana location, if Boeing should desire to look at Indiana for the project.

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Maquiladora Growth Slows in Mexico

Mexico's assembly-for-export industry, which created thousands of jobs and boosted the standard of living along the U.S. border for decades, has stalled and Mexico has no one to blame but itself, says the head of the country's maquiladora association.

Some say it's the paperwork that is slowing the industry. Starting up a plant in Mexico requires filling out 3,000 government forms, compared with just 22 in China. Once in business, a company must also quickly adjust to last-minute provisions, such as a salary tax passed in the wee hours of January 1, 2002 that took effect the same month. Gee, and you thought your state was bad in terms of business paperwork.

The maquiladora sector, which accounts for about 45 percent of Mexican exports, has lost hundreds of plants and more than 250,000 jobs in the past two years. At this point, industry leaders would be content to maintain the roughly 1.1 million jobs that remain in the sector.

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Preparations Underway for TGen in Phoenix

Phoenix is preparing to start construction on the cornerstone building of its downtown biosciences campus. The 170,000-square-foot facility will house the Translational Genomics Research Institute and other tenants with biotech links. It "will look like a science building, very tech-oriented," Phoenix's Assistant City Manager Sheryl Sculley said. The city hopes that TGen, and the biotech industries expected to migrate to the area to take advantage of its research, will help revitalize downtown.

Preliminary designs for the TGen building were unveiled to Phoenix City Council members earlier this week. Groundbreaking is set for June 13. The project is scheduled to be completed by late fall 2004.

The $39 million building will be owned by the City of Phoenix, although $8 million of the cost will be picked up by the building's leased tenants: Alexandria Real Estate and the National Institute of Diabetes and Digestive and Kidney Diseases. Part of the National Institutes of Health, the NIDDK's Phoenix Epidemiology and Clinical Research Branch is at the Phoenix Indian Medical Center. The race for tenants will be on as the opening date draws closer.

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Japanese Auto Industry Invests in Thailand

Japan's automobile industry is set to invest at least 18 billion baht in Thailand this year, according to Thailand's Deputy Prime Minister Somkid Jatusripitak. Somkid, speaking at the end of a three-day economic and tourism roadshow to Japan, said executives of all of the Japanese auto-related companies he had met had confirmed they would increase investment in Thailand to a value of about 18 billion baht this year. That's about $430 million in U.S. currency by the way.

The projects include a research and development (R&D) center for pickup trucks worth five billion baht, a motorcycle R&D center for Honda worth 800 million baht, an assembly and parts production project of Mitsubishi Motors worth 10 billion baht and a project from tire maker Bridgestone, worth at least one billion baht.

This tells us a couple things. Business investment is beginning to loosen up in many places across the world. Secondly, it tells you that Thailand, like its SE Asian neighbors, is doing an effective jobs of recruiting foreign investment.

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Vertical Living Catches on in Cleveland

Cleveland is making headway with its vertical living plans; that is its plan to expand downtown and suburban condominium living. Ok, so Cleveland is not the first to move in this direction, but finally it is.

Area planning and economic development offices, builders and real estate brokers estimate that almost 750 townhouse units are either ready for occupancy, under construction, or designed, approved and ready to build in Cleveland and five suburbs. Town planners also say proposals for another 700 to 800 townhouses are in the works, including a controversial plan for multi-story for-sale units atop parking garages on the west end of Lakewood.

The secret to a 24/7 downtown is people living downtown. This is a good thing for the city and the region.

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Arizona State University Strengthens Its ED Commitment

Arizona State University hopes to broaden its impact on the state's economy and business community with the establishment of a new Office of Economic Affairs. The office will serve as an umbrella under which ASU's economic development and research activities will be coordinated. "We are looking for new ways of being players in the economic well-being of the community," said Rob Melnick, associate vice president and head of the new office. "We are going to be more aggressive about becoming even more involved. Not that we haven't been involved before, but this will be in a more coordinated, coherent way." Melnick also will continue his duties as director of ASU's Morrison Institute for Public Policy.

Kudos! Hopefully more universities will follow this lead. The University of Arizona has had an Office of Economic Development in place for several years. I am very impressed with the UA's effort and I am certain that ASU will also do great things.

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ASU Office of Economic Affairs.

UA Office of Economic Development.

Dayton May Be in Line for Proposed International Aviation Trade Show

Legislative language directing the U.S. Defense Department to spend up to $1 million to help study and start up an international aviation trade show is in the House version of the 2004 defense authorization bill. While the bill does not specifically mention Dayton, an accompanying report by the House Armed Services Committee says the Pentagon should select a community for the study that already has an air show, "such as Dayton, Ohio." The trade show is seen as a biennial event. A host community will be selected by March 1, 2004, and the results of the study are due by Sept. 30, 2004.

As you might expect, local development officials are quite enthused about the idea. Two questions come to mind on this proposal. Is the trade show sustainable in Dayton or other locations? Can the Dayton area build and maintain attendance at the show? Second, how much of an ongoing public subsidy will be required to keep the show viable? How much will local governments and the State of Ohio be asked to invest? Clearly, the Dayton area has some considerable aerospace and aviation-related development strengths. One of them, however, is not its own airport, which is a key resource in attracting trade show exhibitors and attendees. And yes, I know the drive time to the Greater Cincinnati airport. These are important questions for Dayton area leaders to consider as they formulate a strategy to pursue this opportunity.

Strategic development projects (SDPs), like major trade shows, ballparks, convention centers, museums and other developments, are not easy to do successfully. They are especially hard during the current economic climate. I don't fault any community for wanting to call attention to itself and advance its economic base through innovative developments. At the same time, we have to consider the economic realities of these activities. More than a few communities have succeeded in building new major public facilities, only to discover that after building it, not enough people come.

My advice: plan carefully and scrutinize the scale/scope of the trade show project. Look long and hard at the financial and economic numbers under different scenarios.

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India Closing the Gap on Becoming a Developed Nation

India has made huge economic strides in the past couple decades. According to Indian officials, once they deepen their talent pool, they will achieve developed nation status.

India is not far from achieving the status of a developed economy, said Wipro chairman Azim Premji at a World Bank-sponsored conference on Development Economics in Bangalore. India needs to build talent keeping in mind the economic scenario 50 years from now, Premji told the scholars and practitioners from across the world attending the Annual Bank Conference on Development Economics (ABCDE).

Earlier ED Futures have called attention to the major progress India, China and Singapore have made in developing knowledge-based economies. These are important issues for local economic developers to pay closer attention to.

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Beanstalk Site: Cool ED Website

If you are looking for innovative approaches to connect your local college students/graduates with area employers, take a look at the Beanstalk website created by the Center for Economic Growth (CEG), which serves New York State's Capital Region.

The starting point in entering the "race for talent" is on the homefront. In this case, it is important that your "brain-drain" mitigation efforts start with students attending and graduating from your local colleges.

Here is the link.

Factors Associated with Local Economic Growth

In a literature search for another project, I recently ran across a thought-provoking article by Stats Canada on factors influencing the growth prospects of communities, especially those located in rural areas. Here are the highlights of what they learned from their 1999 analysis, along with my commentary on the study's findings:

* A higher education level in a community provided only a weak boost to employment growth during the 1980s. (This finding runs counter to what we have been preaching in the recent years.)

* Communities that were relatively specialized in primary sector employment and traditional manufacturing employment were relatively disadvantaged in the 1980s. (This is consistent with the findings of many other studies. I would argue that low-tech manufacturing better fits this finding than high-tech manufacturing, which actually boosts local economic growth through its multiplier effects.)

* The type of region in which a community was located had a substantial impact on the rate of local economic growth. Communities in regions influenced by metropolitan centers benefited relative to other communities. (I think this is a major argument on why regional approaches to economic development should be followed in both urban and rural areas.)

* A higher unemployment rate in a community in 1981 did not indicate an excess supply of labor that would attract employers. In fact, wage rates grew less in these communities and thus these communities fell further behind during the 1980s. (I think both labor market dynamics and industry site selection parameters have changed since the 1980s. Now, more companies are locating where they can find workers--not just any type of worker but trained and skilled workers.)

* Communities with a higher share of population with low incomes experienced higher economic growth in the 1980s, relative to the average community. These communities were catching up to the average community during the 1980s. (This finding may be peculiar to rural economies where industry location has increased in the past two decades. Companies see low incomes as lower wage potential, which is seen as an advantage to locating in rural areas that badly need jobs.)

* There was a wide variability in community growth patterns in the 1980s. Many communities achieved economic growth in spite of the factors identified here that constrained growth for the average community. (This reinforces the findings of a recent London School of Economics' study that finds that industry location patterns are more random in nature than linked to any overall driving force, such as industry clustering.)

We need more of this type of research to inform economic development policy and practice.

Website link.

Push the Math and Science Skills

“A skilled workforce is crucial to a growing economy,” argues the Committee for Economic Development in its’ newest report, Learning for the Future: Changing the Culture of Math and Science Education to Ensure a Competitive Workforce. The report proposes a strategic plan for improving math and science education in U.S. schools with the goal of creating a larger American workforce of creative scientists and engineers. Learning for the Future summarizes statistics showing the steady decline in proficiency in math and science skills the longer that students stay in U.S. schools. One result of this decline is the fact that less than 1% of all bachelor’s degrees from American colleges in 2000 were in mathematics.

The report specifically urges action in three areas that will increase student “demand” for and achievement in mathematics and science:

* Increasing student interest in math and science to sustain the pipeline focuses on ways to change the way students view math and science disciplines. CED calls on the business community to collaborate with school districts to develop enhancements to the district-adopted math and science curricula that integrate the state-of-the-art applications of mathematical and scientific principles into the classroom setting and provide an insight into the work scientists and engineers perform every day. Business should also provide financial and logistical support to extracurricular math and science activities, as well as the time and talents of their employees, to enrich the learning experiences of students.

* Demonstrating the wonder of discovery while helping students to master rigorous content offers programs to help teachers reinforce student interest and success in math and science. CED calls for reform in teacher preparation, opportunities for teachers to work with those in the technical work force, and significant improvements in the quality of professional development. Businesses should partner with local school districts to provide scientists and engineers as resources for schools. Businesses, colleges and universities, and school districts should jointly develop effective programs to provide valuable summer experiences for teachers.

* Acknowledging the professionalism of teachers considers the “supply side” problems facing the teacher labor market. CED recommends that teacher salary scales be viewed as a capital investment similar to other capital improvements. The report also urges reforms in teacher certification, licensing, and pension incentives.

I second this motion.

Website link.

New Mexico's Entrepreneurial Leadership Excelerator Gets High Marks

Next Generation Economy Inc. (NextGen) operates an interesting and innovative program to build its business leadership called the "Entrepreneurial Leadership Excelerator ."

The Entrepreneurial Leadership Excelerator™ helps business leaders achieve balanced success that includes establishing the enterprise’s competitive and commercial viability, fostering personal and professional growth and contributing to the vitality of the community. Here are its objectives.

Attendees of the Excelerator will:

* Have a clear picture of their ability to lead, as it differs from managing or providing expertise.
* Have a clear understanding of their own leading, values and purpose.
* Be able to communicate their expectations and better understand their followers’ needs.
* Have a better understanding of and access to their sources of creativity.
* Learn from a mentor and learn to mentor others – a key role in leading.
* Appreciate the importance of their role as a leader in the community.
* Build quality relationships with other leaders.

Fifteen business leaders are accepted into each class.

Website link.

San Diego Gets Top Regional ED Award

U.S. Secretary of Commerce Donald Evans has announced that the San Diego Regional Economic Development Corporation (EDC) is the recipient of the 2003 Excellence in Economic Development Award in the category of “Enhancing Regional Competitiveness.” This is a well-deserved award in light of the San Diego's leadership, persistence and results in regional economic development.

The award recognizes extraordinary achievement in seven categories. EDC’s award, Enhancing Regional Competitiveness, is based on success in supporting long-term development of the regional economy. EDC was chosen by a Selection Panel that included members of the economic development community, academia, and EDA, appointed by Assistant Secretary of Commerce for Economic Development David A. Sampson.

This is an organization to look at if you're looking for programs to benchmark.

Website link.

Cool University ED Center

Many universities play an important role in economic development. As a former university ED center director, I have been impressed with the work of the Economic Development Institute (EDI) at Georgia Tech University over the years. So what does EDI do?

EDI offers many services with the overall goal of promoting the growth of business and economic development in Georgia. Whether the goal is attracting new companies to Georgia, expanding existing enterprises, providing technical expertise for industrial projects or helping communities plan for growth, EDI helps keep the state's economy moving forward. EDI assists company managers and business owners, city and county government officials and economic development professionals.

For Georgia business and industry, EDI provides technical assistance, management training and other assistance designed to improve productivity and help companies become more competitive in world markets. With a staff of more than 125 professionals on campus and in regional offices around Georgia, EDI offers services to business and industry in:

* Quality and international standards;
* Energy and environmental management;
* Lean enterprise solutions;
* Manufacturing information technology;
* Process productivity, and
* Marketing and strategic planning.

Georgia Tech's Economic Development Institute supports Georgia's economic development efforts by conducting specialized professional development courses, performing economic development research, helping Georgia communities prepare for growth and connecting relocating or expanding companies with resources at Georgia Tech. EDI economic development specialists help Georgia's economic and community development professionals expand their skills and keep current with new trends and technologies. EDI provides its services through a statewide network of 17 regional offices, backed up by campus-based skill centers and the resources of Georgia Tech's nationally-ranked academic and research faculty.

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Vermont's Captive Insurance Industry

This is an interesting story. Did you know that Vermont is the home to more captive insurance companies that any other state?

What is a captive insurance company? It is a closely-held insurance company whose insurance business is primarily supplied by and controlled by owners, and in which the original insureds are the principal beneficiaries. The insureds have a direct involvement and influence over the company's major operations, including underwriting, claims, management policy, and investments. There are currently 4,000 captives licensed worldwide, that service their parents' risk financing needs. In Vermont, that figure is more than 500.

Vermont's captive owners represent a wide range of industries including multinational corporations, associations, banks, municipalities, transportation and airline companies, power producers, public housing authorities, higher education institutions, telecommunications suppliers, shipping companies, insurance companies and manufacturers, among others.

Why go with a captive insurance company? A captive insurance company represents an option for many corporations and groups that want to take financial control and manage risks by underwriting their own insurance rather than paying premiums to third-party insurers. Vermont officials cite the following advantages of going captive are:

* Coverage tailored to meet your needs
* Reduced operating costs
* Improved cash flow
* Increased coverage and capacity
* Investment income to fund losses
* Direct access to wholesale reinsurance markets
* Funding and underwriting flexibility
* Greater control over claims
* Smaller deductibles for operating units
* Additional negotiating leverage for underwriters
* Incentives for loss control
* Alternatives to costly practice of trading dollars with underwriters in the working layers of risk

What is the economic impact of these companies on Vermont's economy?

* Over 1,100 jobs.
* $52,000 average annual salary for workers.
* $14.5 million in tax payments to the state.
* $850 million on deposit in Vermont banks/financial institutions.

Website link.