London, Ontario: Well-Organized Program

I see a lot of economic development programs. I like the way the London ED Corporation in Ontario, Canada presents itself on the Web. They are well-organized and send the right messages to business investors. Very importantly, the LEDC website also provides very good information to support site location decisions.

To view London's website, click here.

Southern States Work on Political Clout

Political clout is essential to getting economic development results. The southern states have been effective in working together to leverage resources out of Washington. Take note of what the Southern Economic Development Council (SEDC) does with its Congressional Honor Roll and other strategies to increase public sector support for economic development.

Link.

Fairfax County, Virginia Encourages International Partnerships

Fairfax County ED Authority in Virginia is doing some innovative things. For those interested in how to spark international ED parternerships, take a look at what these officials are doing with Germany, the UK and other European nations.

This is a smart and futuristic approach to economic development.

Link.

U.N. Gives More Attention to Small Business

The United Nations launched a commission that will seek to harness small business as an engine for economic growth in poor countries. This is no substitute for other economic development strategies, such as foreign business recruitment, but it will ensure that a base of small entrepreneurs develops in poorer nations.

Former Mexican President Ernesto Zedillo and former Canadian Finance Minister Paul Martin will be co-chairmen of the Commission on the Private Sector and Development, which was convened by Mark Malloch Brown, head of the U.N. Development Program.

Link.

West Michigan Sustainable Business Forum: A Good Idea

Looking for a real live example of how to encourage and support sustainable business development at the local and regional level. Take a look at what businesses in West Michigan are doing. Go here.

The Forum has two excellent publications you should read:

Self Assessment Guide to Sustainable Global Commerce.

Designing Products and Services with Sustainable Attrubutes.

Nice job!

Good Corporate Governance

"Good corporate governance – the rules and practices that govern the relationship between the managers and shareholders of corporations, as well as stakeholders like employees, pensioners and local communities, - ensures transparency, fairness, and accountability… When this trust is undermined, lenders and investors lose their appetite for risk... We need to develop governance tools and incentive structures that are more robust in the face of financial innovation."

Source: Bill Witherell, Head, OECD Directorate for Financial, Fiscal and Enterprise Affairs

What significance does this message have for economic development? In short, it has great significance as communities worldwide struggle to cope with the often dire consequences and disruptions caused by corporate decision-makers everyday. True, nothing is forever, and businesses must be decisive and adapt to their changing environment. Economic developers need to consider these issues and confront their own role in the process of bringing about better corporate citizenship.

Many companies have been working at establishing standards, benchmarks and guideposts to help them decide "how good is good enough enough?" This is no easy matter, as you can imagine. The thought process is what is most significant in my mind, as opposed to rigid standards that everyone must live by--especially in light of the pace of change in our world today.

I'd like to see more discussion about these issues in the economic development community. How about you?

You may find the work of the Foundation for Business and Society to be of interest. Visit its website here.

Download the Foundation's initial report here.

Build Sustainable Businesses

Is your community working on incubating new companies? Is it trying to retain older companies that need new products and technology to survive? Does your area want to attract new companies that have "commitment?" If the answer to any of these questions is "yes," then you should be working harder at building sustainanble businesses in your area. Why? Read on.

Here is what the Progressive Investor has to say: "Put simply, companies that outperform on the environment, outperform financially. Empirical research demonstrates this. By investing in companies with top environmental records, you can produce superior financial returns and support companies that enhance life on earth. Strong environmental performance equates to better management overall, which translates into stronger earnings and greater shareholder value."

Want to know more? Go here.

Targeting Socially-Responsible Companies?

Is your community interested in targeting socially-responsible companies for future investment? If so, then SocialFunds.com is a resource you will find useful in identify which companies are actively working at "doing well by doing some good."

Go here to learn more.

U.S. Business Council for Sustainable Development

Here is a resource you should know about if you are promoting sustainable economic development projects and practices in your community.

The United States Business Council for Sustainable Development (US BCSD) is a non-profit association of businesses whose purpose is to create and deliver value driven sustainable development projects in the United States.

Mission:

The US BCSD creates value through:

- Initiatives that foster sustainable development
- Networks and partnerships
- Forums that provide a voice for business

Approach:

The Council approaches sustainable development through:

- Tangible sustainable development projects
- Networks and partnerships across industry, non-government organizations, academia, and government
- Domestic voice for business on sustainable development issues

Who are some of the Council's members:

- Alcan
- American Forest and Paper Association
- Armstrong Wood Products
- Baker Botts LLP
- ConocoPhillips
- The Dow Chemical Company
- RETEC Group
- Shell Chemicals
- Temple-Inland Forest Products
- Thompson Knight LLP
- TXU
- URS

Go here to learn more.

Corporate Sustainability Practices

For those of you interested in how companies manage and report on their sustainability practices, check out what Shell's annual sustainable development report has to say. There are some great lessons to learn from this one.

Download the report here.

Higher Ed Seen as Key to Future Economic Growth

That was one of the major conclusions drawn from recent meetings in Montana about how it's new Economic Roadmap for the Future will be put into place.

Look for some interesting new developments in Montana in how higher education will support economic development in the future. That is the word from the state's Higher Education Board.

I agree that our colleges and universities are a major force for economic development--no matter which economic path your area chooses to take.

Read more here.

Spokane Likes What It Sees In San Diego

Here is an idea worthy of note. It's ok to build your own model for growth, or learn from others who have had considerable success. The Inland Northwest Technology Education Center (Intec) believes that Spokane has something to learn from the San Diego "Innovative Economy" model.

The University of California at San Diego, with its Connect program, is doing things right, says Lewis Rumpler, Intec's new CEO. He says that means more than just recruiting companies. It means also recruiting talented people—or bringing them through schools here—then capitalizing on their innovations.

Launched in 1985, UCSD Connect guides people with marketable ideas through the commercialization process and connects them with possible funding sources. It has assisted in the formation of hundreds of companies, Rumpler says. He credits UCSD Connect with helping to drastically lower San Diego’s unemployment rate, and says that metro area now has one of the nation’s highest concentrations of biotech and wireless-communications companies.

Article link.

Mississippi Wants More Tools to Compete for Students

The race for talent in the form of college students in on in Mississippi. Listen to this.

Mississippi university presidents do not believe they have any weapons in the years-long border war with institutions in neighboring states that lure their students with the promise of waived out-of-state tuition. They say "But it's time to fight fire with fire — to eliminate out-of-state fees for Tennessee, Arkansas, Alabama and Louisiana students in counties and parishes just across the Magnolia State's lines."

Get this. Schools like the University of South Alabama have waived out-of-state charges for residents in six south Mississippi counties since the mid-1960s. The waiver helps lure nearly 1,000 Mississippi residents every fall to 12,500-student USA in Mobile, officials say.

Article link.

Toledo Leaders Huddle About Future

Struggles for power and self-interest seem to be the meat of life when it comes to economic development. Yet, these struggles rip us apart. Toledo is making an effort to heal itself, discover a common ground, and increase its ability to work together to improve its economy. It sounds like a recent visioning session might have helped.

Like most urban centers, Toledo faces significant economic and social challenges. As my hometown Cleveland knows, there are no silver bullets when it comes to solutions to these problems. I bought a wonderfully concise and well-written book that kind of says it all, Stuff Happens (and then you fix it), by John Alston and Lloyd Thaxton.

A couple of months ago, I had the pleasure of facilitating a wonderful strategic thinking session for the leadership of the Toledo Regional Growth Partnership. My job was to help these officials put their economy and their economic development efforts into a larger national and global context. It worked.

So many economic development leaders across the country have been doing their share of "suffering about their suffering." Perhaps now that the economy is improving, they will be able to put their minds to ease and get back to work in making their local economies stronger.

There is one further bit of advice that I would offer Toledo area officials at this point, and that is to appreciate what already is working in the community. At times, it is tempting to feel that your community is a total failure. That is simply a feeling. I can assure you that I know of no community that is a complete failure. In fact, I continuously find that there is more good than bad and more success than failure in every community I work in.

There is no perfect world when it comes to economic development. While it definitely helps to have a plan to help guide your way to a better future, making the most of the "now" is even more important. I subscribe to an inter-generational philosophy of life, but my pragmatic side says that each of us needs to capitalize on the here and now. That is the only place in life that has any traction and momentum. It simply doesn't pay to live in the past or the future. Today is when you can make a difference in your area's economic base. Do the best job you can now.

Services Hindering Economic Recovery

U.S. businesses generally undertake new capital spending for one of two reasons; either to replace their existing capital stock or to facilitate new expansions. The recent recession and weak recovery witnessed a significant drop in investment as businesses severely curtailed spending to facilitate expansion and some industries even allowed their capital stock to decline outright. Despite significant incentives to spur investment, a proper recovery has yet to develop. Surprisingly, service-producing industries, not manufacturers, are accounting for much of the current weakness.

Inferences on the state of capital spending can be derived from both the capacity data produced by the Federal Reserve and in the financial data published by publicly traded companies. In aggregate, both measures show that investment spending has remained sufficient to offset the depreciation of the capital stock. However, they tell different stories over the past nine months. The government data show a stabilization in capacity in the closing months of 2002 and a small improvement this year. Meanwhile, the data from publicly traded companies indicate that the pace of growth in the capital stock has continued to weaken.

Source: Economy.com (If you subscribe.)

Convergys: Lessons on Global Networks

Much has been written in recent weeks about the competition between Cincinnati and Northern Kentucky over Convergys, a leading billing, customer and employee care service company currently based in downtown Cincinnati, which is planning to relocate its corporate headquarter operations.

Convergys has been searching for a new corporate headquarters for two years, exploring sites and potential tax breaks on both sides of the Ohio River. In the past month, however, it appears to have settled on a Northern Kentucky site. Convergys plans to invest $100 million to buy and renovate the building, displacing at least five tenants but consolidating much of its Ohio work force, about 1,450 jobs, at the site and adding up to 1,450 new jobs within 15 years.

While Ohio and Kentucky officials will continue to duke it out over who gets the headquarters prize, there is another important lesson to learn from this situation. It is the lesson of global connectivity. Convergys employs over 44,000 people globally and its future growth will be international. Now with over 4,000 employees in India and growing and expanding operations in the Philippines and other world locations, these numbers dwarf the company's Cincinnati area job numbers.

Many communities are focused on developing new businesses and jobs in the FIRE sector (finance, insurance and real estate) and the Business Services sector. It is important to consider the global realities that go with these sectors right now. The major back-office operations in these industries are moving with great speed to developing countries that were given little thought as prime service business locations just five years ago.

While communities here are battling to hold or land the headquarters, the real jobs in terms of numbers will be abroad. The Convergys deal is a reminder to all of us that "global workforce management" is a new reality for economic development. It speaks to the need for new strategic relationships between and among locations worldwide to function as a global network in supporting a company like Convergys. This is the new model of economic development coming our way.

Article link.

Corporate Headquarters Moves

They happen. Companies move their front offices much like they move other parts of the business.

Headquarter operations remain a favored business development target in many communities. Usually, they offer a number of good-paying jobs, many of which are "knowledge jobs." Landing a major corporate headquarters operation is often an "image boost" for the community landing the deal, and an "image spill" for the one on the losing end of the stick. There are many other benefits associated with having corporate headquarters in your community, such as being the command and control center of the company, and in many cases having the company's R&D operation.

Corporate restructuring is a major driver in corporate headquarters relocation. It has been for some time. Cleveland is fretting the loss of Office Max, a local success story in the retail office supply industry, which was recently acquired by Boise-Cascade. While the exact impact on Office Max's Cleveland operations is not known, the turned over cards on the table point to more losses than gains for the Cleveland area.

My friend Mark Sweeney of McCallum Sweeny Consulting said in a recent Business Facility's article that "major headquarters relocation projects are still relatively rare, but are high profile decisions. They capture the attention of the business world and the economic development community, as well as the company's stockholders and employees. Behind the headlines, though, headquarters relocation projects are difficult decisions for companies. They have immense consequences for a company's long-term identity as well as short-term continuity. Many firms will consider the possibility of a headquarters relocation, but few will get beyond preliminary consideration, and only a very few of these companies will actually make the decision to relocate."

Sweeney cites three major reasons why companies move their headquarters operation: 1) image and branding; 2) mergers and acquisitions; and 3) cost-reduction. Some times the decision embodies all three driving factors.

My experience points to the need to understand the mindset of the CEO and the Board of Directors on decisions like this. As economic developers, we need to do a better job in this department. In some cases, you can see it coming. In other cases, you have to be skilled at reading the tea leaves. There are key vital signs to watch for with corporate headquarters: 1) corporate stock value and overall financial health; 2) major management changes; 3) strategic redirection of the company's business; 4) struggles finding the talent needed to run the business in the current headquarters location; 5) rising costs of doing business in the current headquarters location; and 6) a surge in M&A activity in a particular industry to achieve consolidation and improve industry profitability. These are some I advise watching for.

Stay tuned. I will be returning to this topic again shortly in the future.

Marketing to Life Scientists

Every place under the sun is trying to shine as a biotech or life science center. It makes sense for economic developers to look carefully at how they market their areas to the decision-makers in this sector. A recent report by Bioinformatics provides some useful insight into about businesses are marketing themselves to life scientists. Maybe there is something that economic developers can learn from this report.

Here are some tid bits from the report:

- "Catalogs", "information from co-workers and colleagues" and "scientific meetings" are the three most common ways that scientists learn about vendors and their products and services.

- The respondents claim that the most influential factors in their decision to purchase a new product or service that they've never used before are the availability of a "free product sample for evaluation" (61%), the "recommendation from a co-worker or colleague" (55%) and the "brand name/company reputation" of the vendor (44%).

- 38% of the study respondents spend between one and two hours visiting vendor Websites per week.

- The study respondents state that the two most useful features on vendor Websites are "detailed product descriptions" (69%) and "protocols and application notes" (62%).

- Sigma-Aldrich, Invitrogen and Molecular Probes are considered to have the most useful vendor Websites.

- Over 35% of the life scientists surveyed open and read over 80% of the direct mail they receive each week.

Ford LIkely to Axe 2,000 White Collar Jobs

The news from Ford is not so good. The second largest vehicle maker announced recently it could cut as many as 2,000 white collar jobs from its 45,000-white collar payroll.

The move is part of a worldwide move to cut salary-related costs by 10 percent. Less than half of the cost savings are expected to come from job cuts.

Ford, struggling with diminishing market share and record incentives to sell cars and trucks, earlier reported a 27 percent drop in quarterly earnings. It also forecast a third-quarter loss that would be larger than Wall Street expected and vowed to press harder on cost cuts.

Source: Detroit Free Press, July 18, 2003