Commenting Software Added to ED Futures

I've added back the commenting software to ED Futures so you can leave comments regarding articles I've posted to the site. Hopefully you will take advantage of this capability to communicate and share your ideas with others.

Simply click on the "comment" hyperlink after each article and a dialog box will open, allowing you to post comments to the site. Type in your name and email address and your comments and then click send. That's all there is to it. I look forward to hearing from you. Thanks.

Retail Prices Going Up

Stronger retail spending this summer appears to have given retailers greater confidence in recent months to boost prices, or at least slow price declines. Before September’s pause, retailers enjoyed three straight months of 1.2% monthly gains in retail and food service sales, excluding autos.

Economy.com expects that overall retail and food service prices will only start to broadly accelerate late next year. A weaker dollar will certainly play a role, particularly if the greenback’s recent depreciation continues. One reason that the soft dollar has not affected prices of consumer goods yet is that many Asian countries are still closely managing their exchange rates to provide favorable terms of trade. Consequently, prices for imported goods from Asia, a key supplier for domestic retailers, have been flat in recent months. If pressure by the G7 and President Bush to loosen currency controls is successful, import prices for retail goods could lift dramatically. This will not make Wal-Mart happy given the fact the company accounts for nearly 12% of all U.S. imports from China alone.

Firming consumer demand will also eventually support retail prices. At first, consumers will be reluctant to pay higher prices after having become accustomed to discounts. In fact, sales are expected to slow in the final months of this year due to a lack of pent-up demand, high consumer debt burdens and concerns about weak job growth. However, a stronger economy will ultimately override those impediments.

Particularly when the job market improves, shoppers will start opening their wallets a little wider again, giving retailers greater leeway to boost prices. It won’t happen overnight, or even noticeably over the next year, but eventually, those loud discounting advertisements will fade away.

If you subscribe to Economy.com, go here to read more.

Boulder, Colorado Says It's Time to Grow Again

After years of reining in growth and approaching development with suspicion, Boulder's government is focusing on encouraging an economic revival in the city. This week Boulder's city government adopted an "economic vitality" plan to try to help the local economy and grow sales tax revenue, which the city depends on for 80 percent of its income.

The plan puts the city in the game of encouraging economic vitality — it avoids the more common term "economic development" — for the first time in at least two decades.

City leaders spoke of the need to pursue economic growth, especially in retail business, without compromising Boulder's environmental values or allowing development that diminishes the city's quality of life.

Sales and use tax revenue has dropped steadily for more than two years, forcing deep cuts in city budgets. The city council passed a $184 million 2004 budget that cuts $9.1 million from its annual general-fund spending and eliminates 98 city jobs.

Go here to read more.

Saks Fifth Avenue Call Center

When a customer of Saks Fifth Avenue in New York calls to inquire about the balance on her credit cards, the call is answered by someone in:

a) New York.
b) Dallas.
c) Jackson.

If you guessed New York or Dallas, you're wrong.

The call is routed to the Saks Inc. Operations Center in Jackson, Mississippi where 1,500 employees handle support operations for McRae's, Parisian, Proffitt's, Younkers, Herberger's, Carson Pirie Scott and Saks Fifth Avenue, the seven brands of department stores that make up Saks Inc.

Saks Inc., a $6 billion company, operates 360 stores in 39 states and employs 52,000 people. For all of them, the back office functions of information technology, telecommunications, credit, accounting, operations, purchasing, logistics, store planning and construction, facilities maintenance and human resources are handled in Jackson. Including the printing of more than 1 million payroll checks a year.

All 18,000 sales terminals in Saks' 360 stores are tied into the IT system there. So are 50,000 telephones and 12,000 desktop computers.

The center's location in Jackson has also been a selling point in attracting calls centers for businesses such as AT&T, BellSouth and Blue Cross-Blue Shield to the area.

Go here to read more.

Google ED Futures

With literally thousands of articles archived here at ED Futures, we decided it was high time we made it easier for you to search the entire ED Futures website and locate articles on the specific topics you are interested in.

Under "Links," located on the top left part of the ED Futures website is a "Google" search feature that allows you to either conduct a search of ED Futures or the entire Internet for articles that fit your interests. Simply enter the keyword(s) that describe your topical interest, click the search "ED Futures" button and then click the "Google" button and off you go.

Please let me know if you have any trouble using the new feature.

Top States for Worker Training

According to Expansion Management Magazine, here are the top states from the standpoint of support for worker training:

1. South Carolina
2. Georgia
3. North Carolina
4. Oklahoma
5. Virginia
6. Alabama
7. Tennessee
8. Kentucky
9. Michigan
10. Texas
11. California
12. Kansas
13. Delaware
14. Wisconsin
15. Mississippi

Go here to read more.

New Jersey Brings Back Key Incentive Program

New Jersey Gov. James McGreevey has signed into law an ambitious, subsidy-rich job-generation program. With the nearly departed Business Employment Incentive Program (BEIP) as its centerpiece, New Jersey's new blueprint aims to add 200,000 jobs over the next five years, with 500 expanding or relocating firms generating US$6 billion in new public and private investment. Back in March, the program was headed out the door. With the economy improving and competition from surrounding states intensifying, the program has been resurrected.

Go here to read more.

Netherlands Foreign Direct Investment Agency

Looking for effective EDO's to learn from. Take a look at the Netherlands Foreign Investment Agency (NFIA)

What does the organization do? NFIA facilitates American companies' direct investments in the Netherlands. Whether developing a first European presence or reconfiguring existing European operations, companies can obtain information, strategic perspective and practical help from the business consultants of the NFIA.

How does it operate in the U.S? The NFIA, which has offices in New York City, Boston, Chicago, Austin, San Mateo and Atlanta, has helped hundreds of North American companies initiate or expand operations in the Netherlands. They have contributed to over $37 billion in cumulative American direct investment in the Netherlands, representing the direct creation of some 140,000 jobs. In all, over 1,850 of the more than 6,700 foreign companies in the Netherlands are from America.

As a government agency, the NFIA provides information and practical assistance free of charge. Services, all provided on a confidential basis, include providing insight and data on site selection and logistics strategies and intensive, personal guidance on such matters as available incentives, permit procedures and tax structures. The NFIA introduces corporate investors to a variety of Dutch networks and service suppliers in business, to government authorities at the national and regional levels, to academic and private sector consultants, and to others integral to the investment process and continued successful operations.

The NFIA is a division of the Dutch Ministry of Economic Affairs and an expression of its full commitment to expediting foreign direct investment in the Netherlands.

Go here to read more.

Phoenix: Mediocre Creativity Ratings

According to Richard Florida, Phoenix's creativity rank should be higher. It is 19th among U.S. metro areas, as ranked in his book. Phoenix is the 5th largest city in population size. Civic leaders heard a presentation by Florida earlier this week. Many Phoenix area leaders are eager to strengthen the arts as a local economic development catalyst.

Go here to read more.

Do Not Call List Impacts on Call Centers

Most of the media reports of the employment effects of enforcing the do-not-call list overstate the true implications. Call center employment actually peaked in 1998, well before the recession started, as call centers began to move overseas in larger numbers. The recession hastened the decline in domestic call centers, but the decline is likely to continue even if the do-not-call list were to disappear.

Bureau of Labor Statistics (BLS) numbers indicate that U.S.employment at telephone call centers peaked in late 1998 at about 425,000 jobs (see chart). Following six years of strong growth, the industry’s payroll shrank by a modest 3.5% during the 1999 to 2000 period, even as the overall economy continued to grow at a rapid pace. The recession in 2001 and the subsequent weak economic recovery have caused a further decline of nearly 12% since January 2001.

The timing of the call center employment contractions is important, because it shows that the industry ceased to be a growth industry two years before the onset of recession. Thus, it is likely that a significant portion of the industry’s contraction is structural. Indeed, it could continue to shrink as the economy expands, much like it did in 1999 and 2000, with or without the do-not-call list.

Also, it is important to note that the discussion about call center jobs and the implications of the do-not-call list relates solely to outgoing telemarketing calls. The do-not-call list has nothing to do with customer-initiated service calls, and so again, the argument that the list would cause significant job losses at call centers loses some of its punch.

Regardless, many call center jobs are moving overseas, where labor is less expensive than the small U.S.metropolitan areas or rural areas where call centers were apt to locate in the past. Judging from the peak of call center employment in the U.S.relative to overall employment growth, overseas call centers have been growing faster than the overall economy for several years now.

Although there are few hard numbers, India, Philippines and, to a lesser degree, South Africa have seen increases in the number of call center employees supporting U.S. business operations. In India, call centers are believed to be the fastest growing segment among all of the business support activities moving to that country. Considering this, it is possible that the do-not-call list will have a greater job impact overseas than it will here in the U.S.

Read more here.

How Companies Evaluate Location Factors

The way in which companies and their site consultants evaluate site selection factors continues to change. One major change is that these decisions are being made in a more systematic and knowledge-based way. I suggest you read a recent Business Facility Magazine article on how these factors are assessed. Click here.

What does this mean for the community trying to put its best foot forward in competing for a deal? Bottom line, it means that your area will need to become equally systematic and knowledge-based in your marketing and business development efforts. Here are the key questions you should have answers to.

1. How much do you know about what the company is looking for and needs? How do you find out what you need to know in this regard? Do you have the ability to zero in on key concerns and issues and address them in a knowledgable and persuasive manner?

2. Do you have the right information that the prospect needs? Is your information "decision-quality" in nature and "business-critical' in terms of content?

3. Do you use this information strategically to increase your leverage and influence with the company and its consultant?

4. Have you established the right local team to work effectively and efficiently with the business prospect and its consultant?

Site Selection Game is Changing

The site selection business is changing. Anybody involved in the business already knows this. The question is what do all these changes mean to companies and communities as key participants in the economic development process? I have been thinking about these issues for sometime, but my thoughts were urged along after reading a recent Business Facilities Magazine article about how site selection consulting is changing.

In short, the article says that over the past few years there has been a trend among accounting, business consulting, computing, engineering, financial services, and even real estate firms to acquire site selection capabilities. This has occurred through mergers, acquisitions, and restructuring initiatives, firms such as CB Richard Ellis, Deloitte & Touche Fantus, IBM, KPMG, and Price Waterhouse Coopers have expanded their areas of expertise to include site selection services.

Firms are developing site selection/location capabilities to position themselves "upstream" of their core products and competitors. Site selection can be a very effective selling tool, because it enables firms to develop client relationships early in the project development stages. Over time, these full-service location companies can offer customers a comprehensive suite of downstream products and services.

In other words, if you want to make the "big bucks" designing and building the facility, do the site study first to gain an edge on the other business. While I can understand how some service providers use site selection to get follow-on business, it is my opinion that site selection decisions should be clearly driven by overarching business goals and strategies. The failure to do so not only leads to bad facility decisions, but also a decision that injures the long-term proftability and competitiveness of the business.

Is this move toward a bundled approach to site selection and facility design and build good or bad for companies and communities? The author of the Business Facility article says there are pros and cons to both the "bundled" and "unbundled" approaches. He suggests the company buying these services conduct an internal evaluation of costs and other impacts for each approach. This is true.

In my way of thinking, the proof is in the pudding in terms of what the company is looking for and the results it receives. There may be projects where a bundled approach makes the most sense, especially where facility design and build considerations need to be considered throughly during the site selection evaluation process. In other cases, the site search function can be easily separated from the follow-on steps.

One thing that I clearly see in companies is that the "real estate function" is no longer a separate corporate function. Real estate affects various aspects of the company, including finance, tax, legal, operations, human resources, and many others. As these functions become more tightly linked, it suggests that site selection decisions will be made more by 'teams of internal and external experts." The choice for the company is whether and how much to "outsource" of the process leading to the final objective of locating and building a new facility. Outsourcing of business functions has its pluses and minuses. Outsourcing critical knowledge and decision-making expertise is often a mistake for companies if it weakens their ability to achieve overall business bottom line goals.

Here is a point that both companies and communities should bear in mind as they think about how site selection is changing--as the complexity of the site selection process grows, more expertise is needed from both internal and external experts to make the right location and facility decisions from start to finish. In my way of thinking, this argues that the company locating a new facility should consider carefully its final business performance objectives and the strategies it chooses to achieve results. Strategic goals should clearly drive facility location decisions of all types. The failure to do so undermines the company's ability to get where it wants and needs to go in the future.

What's best for the community? That too depends upon the company project. There may be instances where communities can increase their ability to compete on a project by providing a "turn-key" package of incentives and services to an integrated service provider. Leverage and influence are the most important issues for any community competing for a deal. How much of each can the community have in working with an integrated service provider or separate entities providing the various services. Companies as a rule do not want to give any of their suppliers more leverage than they have to, including communities as "location suppliers."

The community should identify ways to best compete for projects under both the bundled and unbundled site selection service provider options. Successful communities will know how to adapt to the business prospect's needs. The community's role in an overall sense is to serve as an "ongoing service provider" to the company, if it locates in the community. That is the important perspective to bear in mind.

One final issue I will put on the table is the growing trend toward the outsourcing of both production and office functions to offshore locations, such as China, India, Mexico, and Singapore. In my estimation, much of the bundling of site selection, engineering, architectural and construction functions is designed to address the complexity surrounding international facility location decisions, where political, economic and other risks are much greater than those experienced in U.S. locations.

Read the Business Facilities Magazine article by clicking here.

Florida ED Mega-Fund In Doubt Now

Florida Gov. Jeb Bush has made some aggressive ED proposals to the state legislature in recent months. His proposal to spend millions to lure a Scripps biotech institute to Florida appears headed for passage, while another plan to give him control of $190 million to close other big economic development deals was in doubt Wednesday.

Bush envisions the creation of a "megafund" to lure major corporations to Florida. He would tap the account quickly, without having to call lawmakers back for a special session to change the state budget. The governor says he needs control of such an account because there's often a short window when competing for major corporate moves. But the Senate budget committee has other plans for much of the federal economic stimulus money Bush would put in the account. It voted Wednesday to spend some of it on a variety of other projects.

Go here to read more.

New Urbanism and Mixed Use Development Trends

More than 500 developers and consultants attended a two-day Urban Land In-stitute “Placemaking” conference at Reston Town Center in Virginia in mid-September. The strong turnout was indicative of the industry interest in building mixed-use projects centered on main streets or designed as downtown districts.

Mixed-use, new urban projects are “hot” in the development industry, yet they require far more skill to pull off successfully than the typical suburban shopping center, office park, or apartment complex.

Another trend is the growing willingness to have residential units permeate the core of mixed-use developments.

Apparently a significant segment of the population will pay a premium to live on top of urban amenities. This principle may also apply to lodging. Easton Town Center, a highly successful 1.5 million-square-foot project in Columbus, Ohio, has three hotels at 83 percent occupancy, although the project is not near any tourist attractions. “These environments are good for hospitality,” said Yaromir Steiner, one of the project developers.

Easton, however, doesn’t have any residential, which brings up a category of projects called “lifestyle centers.” These borrow from New Urbanism in design, but focus almost exclusively on retail.

Go here to read more.

Human-Scale Shopping

Retailing is becoming more closely linked to community. That is the national trend creating demand for new open-air centers and propelling local communities to redevelop existing malls and centers.

For an excellent discussion of what is happening in this area, click here to read a useful New Urban article.

UT at Austin Plans Sustainable Business Conference

The University of Texas at Austin McCombs School of Business will host a national conference Nov. 6-9 that draws over 1,000 MBAs, business leaders and alumni from around the world to discuss corporate social responsibility, business ethics and environment-friendly business practices.

The Net Impact 2003 Conference, "From Corporation to Community, Building a Network for Change," will offer panel discussions, professional development workshops and a career expo where present and future business leaders can discuss the challenge of building socially and environmentally sensitive companies.

A glance over the conference agenda and the crowd of attendees will re-educate anyone who still thinks that soy-lovers and tree-huggers are the only face of green business.

The conference includes a keynote address by Reginald Van Lee, senior vice president at Booz Allen Hamilton and leader of the Harlem Small Business Initiative, as well as panels moderated by representatives from major multinationals such as Hewlett Packard, Intel, Reliant Energy and Procter and & Gamble.

"The business world has changed a lot over the past few years," says Richard Amato, director of UT's Clean Energy Incubator and moderator for one of the conference panels. "Knowing about green business, alternative energy, sustainable resources and global economies is so much more important than it was before, and training in that is becoming a necessity rather than a luxury. Consumers and the general public are savvy and are demanding more of business, expecting corporations to be more socially responsible."

Panel topics at this year's conference include:

- Green Building and the Corporate Bottom Line
- Trends in Socially Responsible Investing
- Making a Life, Making a Living
- Proctor & Gamble Case Study: Developing Sustainable Products

Click here for more information.

Iowa Investments Expected to Produce Big Impact

The $79 million that Iowa taxpayers will invest in three economic development deals - Wells Fargo & Co., Trans Ova Genetics and GCommerce - will help drive $1.5 billion into the state economy over the next 10 years, a new economic study being released today shows.

The $1.5 billion represents income from new jobs; spending on cars, homes and other goods; and taxes generated for state and local projects.

Six Iowa economists developed the economic-impact model to gauge the return to taxpayers on investments made through the newly created $503 million Grow Iowa Values Fund.

Since organizing this summer, the Grow Iowa Values Board has invested $20 million in the three projects. Those projects have garnered a total of $64 million in public investment when local incentives are added.

The three companies have promised to create 2,472 new jobs in exchange for the state assistance. The new study calculates the direct effect of those new jobs, plus the investment in construction, equipment and furnishings connected with the projects, which carry a total estimated price tag of $295 million.

Go here to read more.

Shopping Mall Openings

For those of you tracking shopping mall openings, here is a good working list of those expected to open over the next couple years. Click here.

Boeing Deal Update: The Nonsense Continues

The Boeing deal continues its trek up "Crazy Mountain," as communities coast to coast dig deeper in their pockets to lure the companys' proposed new 7E7 plant.

As Boeing hones the list of cities contending for its 7E7 assembly line, its search for the most generous incentives has renewed a debate over how far a bidding war should go.

Boeing already has been offered tax breaks, low-interest loans, employee training and bargain-priced land. But sources close to the bidding process say the company has upped the ante, asking some sites to arrange for a small fleet of modified 747s to bring in oversized parts.

Even experts in corporate incentives found that novel. Greg LeRoy, head of the D.C.-based nonprofit Good Jobs First, said the average state has more than 30 types of incentives at its disposal to lure companies.

Yet economic developers say even generous corporate incentives tend to pay off in the long run with jobs, expanded tax base and an improved regional image, in turn attracting more business.

"When requests are made, each entity or each company making a proposal has got to evaluate their situation — how badly they need the investment made there, how badly they need the jobs," said Billy Joe Camp, an economic-development consultant in Birmingham, Ala. "I don't know if there are many large projects that, historically speaking, have not paid off."

One thing everyone agrees on, according to a recent Seattle Times article is that: "Companies willing to be nomadic — which now includes Boeing — stand to score big when they offer communities prizes like the $900 million 7E7 assembly line, which will employ roughly 1,200 workers."

Economic developers do sophisticated analysis of financial costs and benefits, claims Ray Gilley, head of the Metro Orlando Economic Development Commission, who says some communities useeconomic impact analysis models, like "REMI," or Regional Economic Models Inc., to assess potential impacts and costs and benefits of major projects.

What do I think? In my work with these models, I find that they show pretty much what you want them to show since they are heavily based upon the assumptions you make about the future.

But Stephen Roulac, author of the upcoming book "280 Corporate Real Estate and Place Mistakes and How to Avoid Them," thinks cities shouldn't engage in what he calls "place prostitution," or selling themselves and their futures. Place prostitution, eh? Maybe the name for a future International Economic Development Council (IEDC) conference?

Go here to read more.

State Fiscal Problems Pegged to Personal Income Tax Erosion

While states' financial problems are clearly multi-facted, a new research piece by Economy-com says these problems are significantly tied to states' reliance on personal income taxes, which have gone to hell in a handbasket in the past couple years.

With standardized state tax data for the April-June quarter having been released, revenue information is now available through the end of the fiscal year in most states. The most recent figures further cement a clear pattern that has emerged in state fiscal conditions over the past few quarters. Namely, the performance of tax collections across states has been highly correlated with a given state’s exposure to personal income taxes.

Excluding North Carolina and Maine, no state with a large dependence on personal income taxes has been spared from large revenue losses. Conversely, states such as Wyoming, Washington, South Dakota and Nevada that do not collect personal income taxes, and those such as Tennessee, New Hampshire, Mississippi, and North Dakota that collect very little, have avoided the worst of the revenue drought.

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The poor recent performance of personal income taxes represents a sharp departure from what has been seen over much of the past decade. After a seemingly endless flow of tax collections associated with income from stock options and capital gains, personal income tax revenues became more than 15% larger than general sales tax collections by the end of fiscal 2001. Since then, job losses and the equity market correction have knocked personal income tax revenues back below sales tax receipts. Sales taxes are currently a much more popular tool for policymakers, due in part to the increasing likelihood that Internet sales will become broadly subject to taxation in the near term.

While state tax collections remain below trend, there has been widespread improvement in recent months due in part to enacted tax increases. This improvement, combined with federal aid payments and belt-tightening by state policymakers, has sharply reduced the size of state budget shortfalls. According to the Bureau of Economic Analysis, state budget deficits fell by more than $50 billion on annual basis during the second quarter. If this improvement holds, states only have $30 to $40 billion more in fiscal drag left to go before budget gaps are filled and reserve requirements are built back up.

Go here to read more if you subscribe to Economy.com.

U.S./China High-Skilled Wage Gap Will Narrow

Here is a summary of an interesting report by the Manufacturers Alliance/MAPI on U.S./China wages.

According to the report, U.S. manufacturing industries with a high concentration of skilled labor should find the labor cost gap with China narrowing over the next decade, but China’s advantage in semi-skilled and low-skilled labor costs will continue as a fact of life in the global economy. I would add that ten years is a long time, and a lot can happen in a decade.

A Manufacturers Alliance/MAPI paper, The Labor Market Dynamic in Post-Reform China: History, Evidence, and Implications (ER-561e) offers historical perspective and a look into the future of the wage and labor force issues in the rapidly evolving Chinese economy.

Cliff Waldman, Manufacturers Alliance/MAPI Economist and report author, writes that the increasing importance of education in the Chinese labor market, in conjunction with the buildup of the technological infrastructure, as well as evidence of strong productivity growth, suggest that wages of skilled workers will increase at an accelerating rate throughout the next decade. Nationally, manufacturing wages in China more than doubled between 1993 and 2001 in nominal terms.

“A narrowing of the U.S.-China labor cost gap in industries that employ a relatively high degree of skilled labor will lessen the degree of import competition in those industries,” Waldman says, “and, in a development that will be favorable to the domestic manufacturing job base, it also will diminish the degree of production outsourcing to China from these industries.”

China, however, will maintain its huge advantage in semi-skilled and low-skilled labor costs as inefficient state-owned enterprises continue to shed workers and as the problems with urban absorption of migrant rural labor persists. Waldman predicts that this surplus supply of readily available and easily accessible lower-skilled workers will last for at least a generation.

The paper finds that overall wage growth in China should be strong enough to support moderate increases in consumer spending. The development of large consumer markets in China is a major boon for a struggling world economy, currently relying too heavily on the American consumer.

Waldman drew his conclusions from a number of sources, including scholarly articles, a wide variety of Chinese economic and demographic data series, and discussions with various experts.

Buy the report here.

New Manufacturing Book

Manufacturers Alliance/MAPI's new book, U.S. Manufacturing: The Engine for Growth in a Global Economy is now available for purchase through Praeger Publishers.

Despite the appearance of difficult economic times for U.S. manufacturing, it is actually the most innovative and competitive economic sector in the world. Far from being confined to the tired stereotype of Industrial Age commodities, such as steel and mass-produced consumer products, U.S. manufacturing has long been an engine for growth. In the 1990s, this central role was strengthened as new technology development and application spurred higher levels of growth throughout the economy. In its present configuration, manufacturing includes such high-tech industries as fiberoptics and microchips. Globalization has accelerated the growth of the manufacturing sector by increasing competitive pressures to cut costs and develop new products faster, spreading out the fixed costs of R&D and investment.

Truly an insider's guide to the future of this critical sector, this book provides policy recommendations based on a wealth of information. Evolving rapidly from a mass-produced product orientation to a flexible, solutions-oriented model, the changing manufacturing sector is poised to lead a global economic recovery. But it can do so only if the right policies are in place in the United States. To that end, the editors of this volume recommend fiscal and tort reform, higher educational achievement, and continued deregulation. At the international level, further trade liberalization and steps to reduce the trade deficit are recommended to ensure the staying power of U.S. competitiveness, particularly for technology-intensive industries.

And I would add that we need to pump up job development within manufacturing here in American communities.

Read more about the book here.

Manufacturing Index Highest Since 1997

A quarterly index of manufacturing economic indicators hit its highest level in nearly six years in September. The Manufacturers Alliance/MAPI index reached 68, up from 60 in June and the highest number since December 1997's score of 71.

The index reflects the views of 54 senior financial executives in a broad range of manufacturing industries. The index includes information on orders, prospective shipments, backlogs, exports, inventories, investments, research and development, capacity utilization and profit margins.

Every index except profit margins increased, which "appears to signal that the manufacturing sector is finally beginning to cover," says Donald Norman, chief economist of Manufacturers Alliance/MAPI.

Go here to read more.

This is good news and hopefully a sign that a more robust recovery is on its way for the manufacturing sector. And hopefully greater employment gains in local manufacturing operations.

Jacob's Field in Cleveland

Go here to see a great digital photo series of the Jake. Click the "next" button is see the slideshow. Now, if we could just get the team winning again!

Baseball Stadiums Don't Pay for Themselves, Says the Cato Institute

For those of you tracking the ongoing debate about whether the public sector should help finance (subsidize) private baseball franchaises through the construction of new ballparks, you may find this recent Washington Post article to be of interest.

In short, Doug Bandow from the conservative Cato Institute says that ballparks do not pay for themselves, based upon his review of the research on the issue.

Go here to read more.

Adding Arts to International Children's Game

For months, local elected officials, artists and economic-development strategists have been discussing Cleveland's need to support and market local arts, boost tourism and make the city more attractive to new residents and businesses. These discussions have included a earlier visit by Carnegie Mellon professor Richard Florida, who has been encouraging communities to tap their creative advantage as a part of their economic development strategy.

A handful of arts leaders has been meeting to discuss creating such a festival as part of the International Children's Games to be held in Cleveland July 30 to Aug. 2, 2004. The hope is that a festival connected to the games, while small at first, may eventually become a major event in its own right.

The idea for the festival grew from the fact that the 35-year-old games are as much a cultural exchange as a sports event. With more than 50 countries to be represented by about 3,000 athletes ages 12-15, much of the games-related activity in Cleveland will have to do with celebrating international ties and national and ethnic cultures - not just the visitors', but also those of Cleveland's diverse population.

The Greater Cleveland Sports Commission plans an extensive international village in downtown Cleveland that will feature the performing and visual arts, food and wares of those cultures.

Looking for synergy by coupling economic development, tourism and the arts is a very logical idea, and one that requires careful planning to be successful. This move in Cleveland is consistent with what many other cities are doing to tap their "creative advantage." While it's a great idea, it must be done right by local planners. Proper funding for the arts festival is needed to make it happen.

Go here to read more.

Lakewood, Ohio: Struggles to Get Land for Development

Lakewood, an older westside suburb of Cleveland, is concerned about its dwindling economic base. Businesses, jobs and tax base are skipping past this inner ring suburb and landing in newer, faster growing suburbs to the West of the City.

In response to this need, City officials have developed Campaign for Lakewood's Future, which is a sizable redevelopment initiative that would give the City the land area it needs to expand and grow.

Greater Cleveland's business community is throwing support and resources behind Lakewood's proposed West End redevelopment. The Greater Cleveland Growth Association is campaigning for approval of a West End-project referendum. It will appear as Issue 47 on the Nov. 4 ballot.

The $151 million project would bring offices, condominiums and shops to the suburb's western end, south of Detroit Avenue. The project has sparked opposition and lawsuits - more than 50 homes and 500 apartment units would be razed, with Lakewood ready to use eminent domain to take the property from unwilling sellers.

These are never easy issues to contend with, especially when residents must give up their homes and relocate to make the land area available. This is a typical first-tier suburban development story in this regard.

Lakewood is an attractive "new urbanist" style city that is liveable and walkable. It has a creative base that can be grown to enrich the quality of life for residents and offer an attractive location for "cultural creatives" who want to start their own businesses. This sounds like the perfect development project to help the City reach its future development potential.

In the final analysis, Lakewood voters will be asked to decide. One for sure, if the City does not experience new commercial and residential development, it will lose out to its more land-rich and ready community neighbors.

Go here to read more.

Outsourcing's Downside

Outsourcing is the rage in manufacturing and service industries alike. Many companies have gone this direction with the hope of saving money and time in accomplishing their strategic business objectives.

There can be a downside to outsourcing, causing many companies to revisit the "make versus buy" decision. Click here to read how one software manufacturer has experienced the downside of depending upon an outside supplier for what it used to do internally.

Colorado Leaders Say NAFTA is Opportunity

Many have railed against NAFTA and its economic impact on US local and state economies. Colorado is saying just the opposite--that NAFTA is an opportunity for Colorado businesses and communities.

In June, Mexico became the Colorado's No. 2 trading partner behind Canada.

"By every measure, NAFTA has been good to Colorado and will continue to be good for Colorado," said Dan Griswold at the Center for Trade Policy Studies, Cato Institute, in Washington, D.C.

"NAFTA broke down some terribly high trade barriers in Mexico, which was really beneficial to states like Colorado with big agricultural sectors," he said.

Colorado companies from the well-known to the little-known are making inroads south of the border.

By the end of August, Colorado had exported $339 million worth of products to Mexico in 2003, up nearly 46 percent from $233 million in exports during the same period last year, according to the Colorado Office of Economic Development and International Trade.

For consumers, the increasing business relationships are evident: Travelers now can fly to several Mexican destinations on Denver-based Frontier Airlines; Corona, Pacifico and Dos Equis beer bottles fill local liquor store shelves; and Bimbo bread, a Mexican favorite, is now available at area grocery stores.

"Metro Denver has evolved into a community of friendships between Hispanic business people and Anglos that is somewhat unusual in the West," said Tom Clark, president and CEO of the Metro Denver Network, a Chamber of Commerce economic-development group.

The state's business ties to Mexico go back more than a century, to the days of Pancho Villa, the rebel general of the Mexican Revolution in the early 20th century, Clark said.

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Scripps Biotech Institute Headed to Florida

Florida has landed a big one in the world of biotech research. This deal will be a real boost to the state's biotech development effort.

Scripps Research Institute wants to embark on one of its biggest cloning experiments: converting the Sunshine State into biotech beach by using $510 million from taxpayers.

With the money, the institute promises to graft its operations to Palm Beach County and replicate the successes it has had in La Jolla, Calif. The institute has spawned 40 ''spinoff'' companies there and helped foster one of the nation's most dynamic biotech clusters.

Florida Gov. Jeb Bush, who quietly engineered the deal, has called a special legislative session for this week to approve an award of $310 million to add to Palm Beach County's $200 million share. Bush says the money for Scripps will create 6,500 high-paying jobs within 15 years, contributing $1.6 billion to the economy.

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Wal-Mart Explosion: Is This What We Want?

Americans want the best value for their money when it comes to their retail shopping. For this reason, Wal-Mart has rapidly grown to become one of the world's largest retailers. At the same time, an increasing number of Americans are concerned that Wal-Mart is becoming too big and it is destroying competition in retailing. Many do not like what the "big box" has done to their community, including downtown shopping.

Wal-Mart will open its first grocery supercenter in California, offering everything from tires to prime meats, and that could be a blessing for middle-class consumers. The reason is simple: Wal-Mart's prices are 14 percent lower than its competitors', according to a study by the investment bank UBS Warburg.

But not everyone is rejoicing about Wal-Mart's five-year plan to open 40 supercenters in California, stores combining general merchandise and groceries that are expected to gobble up $3.2 billion in sales. California's three largest supermarket chains, Ralphs, Vons and Albertsons, are scared, and so are tens of thousands of supermarket workers whose union contracts have put them solidly in the middle class. The three grocers' fears of fierce competition from Wal-Mart and their related drive to cut costs are widely seen as the main reason behind the week-old strike by 70,000 workers at 859 supermarkets in Southern California.

Wal-Mart has already helped push more than two dozen national supermarket chains into bankruptcy over the past decade. That list includes names like Grand Union; Bruno's, once Alabama's largest supermarket chain; and Homeland Stores, formerly Oklahoma's largest.

With Wal-Mart in mind, supermarkets have engaged in tough bargaining across the country. That has led to a 12-day-old strike by 10,000 supermarket workers in Missouri and a six-day-old strike by 3,000 workers at 44 Krogers in West Virginia, Kentucky and Ohio.

It is hard to underestimate the power of Wal-Mart. It has 1.4 million employees and had $245 billion in revenues last year, equaling 2.5 percent of the gross domestic product. Each week 138 million shoppers visit Wal-Mart's 4,750 stores. Last year, 82 percent of American households bought at least one item there.

Wal-Mart sells 32 percent of the nation's disposable diapers, and it is the largest customer for Walt Disney and Procter & Gamble. It has singlehandedly persuaded music companies to issue sanitized versions of CD's. Its 1,397 supercenters account for 19 percent of the nation's grocery sales, making it the largest grocery retailer. With Wal-Mart planning 1,000 more supercenters in the next five years, Retail Forward, a consulting firm, estimates that Wal-Mart's grocery and drug sales will double to $162 billion, giving it 35 percent of the domestic food market and 25 percent of the drug market.

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