Business Strategy and Economic Development

Mergers, spinoffs, bankruptcies, acquisitions are the top business stories for 2003 for the Minneapolis-St. Paul region. Sound familar? It should be since these are the main ways the "business economy" behaved last year. It wasn't especially pretty in the Twin Cities, and not great elsewhere as we study the battlefield and who remains standing. Go here to read more.

Where are we headed this year? My biggest worry remains the velocity with which companies are dragging business and jobs offshore to save money. That will remain our biggest impediment to economic development in 2004. Yes, the economy will grow this year at a much improved rate. Once again, the important issue is not speed but the composition of growth; that is which industries grow and where. It matters which industries grow in your area. We decided a long time ago that "not just any growth will do." Right?

Things weren't pretty in my hometown, Greater Cleveland, last year. By comparison, we are in much worse shape than the Twin Cities. The "base" is still in tact for the most part in the Minneapolis area. That is less the case in Greater Cleveland, which has sustained a more severe loss of ground from a core business and industry perspective. What do we do? We work on building a "new core." That takes time and it won't be easy given the competitive environment and where we stand at this point in time.

If I had one bit of advice to economic developers everywhere it would be this: Work on creating a much better understanding of the role of business strategy in shaping your area's economic development prospects. Dig in this year and create a clear understanding of what business strategies are driving business decisions in your area. If you know that, you are in a better position to predict how well 2004 will treat you.

Your thoughts? Talk to me.