Judging Manufacturing Success in Northeast Ohio

I posted this article on CrainTech today and have re-posted here for my ED Futures readers to catch it. The issues are relevant to any community, region or state struggling to hold onto and strengthen their manufacturing base.

One of the issues that we must confront as a "community" in NE Ohio is how we judge our future success in economic development. Five to ten years from now, how will we know whether we have done the right things relative to manufacturing? We need to set realistic expectations about what we can achieve, and everybody (including the public) has to understand what the betting odds on different courses of remedial action.

Up till now, job development has been the most frequently used yardstick to judge success in economic development in NEO and elsewhere. The 13-county NEO region still has 345,000 manufacturing jobs--much less than we had but still a lot! The job measure is not enough, especially in gaging our progress in assisting the manufacturing sector. We need other measures, including output growth, productivity, innovation, capital investment, exports, diversification of industry mix, new product development, market share growth, increasing synergy between the manufacturing and service sectors in the region, and others.

The starting point in setting future expectations about what we need to achieve is "who and what are we now," or what is our baseline?" Then what is our vision of what we can/will become in the future. There is almost always a gap between the two. The question is how do we close it through intervening action by the private and public sectors.

Every US region is on an economic trendline of one sort or another. The trendline for manufacturing in NE Ohio is not a favorable one because of the past quarter century of disinvestment by our major manufacturing corporations. We have experienced far greater "outward" momentum than "inward" momentum from an investment and development standpoint. We have to change the direction of this momentum, which will not be easy.

Most industrial companies pulling up stakes here would probably explain their decision to shutter or relocate operations as a function of global competition, changing technology, corporate restructuring, etc. Some would point the finger of blame at City Hall, state government, or other entities. They would say "we did what we had to do to survive."

I find that larger external forces (things beyond the community's control) usually have more to do with a realistic explanation of why companies leave an area. This is what I call the 80% factor in economic development; that is 80% of what happens in any highly developed regional economy (like NEO) is driven by national and global trends. Only 20% of what happens can we influence. An econometric technique called "shift-share analysis" provides some insight into the influence of various local and external factors.

I tend to think in terms of possible future scenarios--best case, worst case, and most probable case. Forecasting is exceedingly difficult because of the growing level of risk and uncertainty in shaping future outcomes. Also, our "beliefs" shape we are capable of envisioning. We need to engage in more scenario-type thinking as we fashion future regional economic development strategies. We also need to do a better job of defining the yardsticks we will use to assess results. Finally, we need an improved understanding of which factors drive the economic competitivenes of NE Ohio. This list should include the role of external events (globalization, offshore outsourcing, etc.) as they ripple their way across economic levels and finally touch down in NE Ohio.

I would offer these ideas as a new place to re-start the discussion about manufacturing in the NEO economy.

Learn From Silicon Valley's Business Leaders

Many Silicon Valley business leaders operate outside the spotlight but have substantial influence as innovative technologists, creative thinkers or well-connected dealmakers. Here are the Mercury News profiles some of these people. Go here to read some profiles of these leaders.

I found the profile of Dave Sifry, the man behind Technorati (www.technorati.com), a Weblog search engine and data-cruncher. The site has become an essential service for people who want to understand the fast-growing blog cosmos and their place in it. Technorati now searches about 1.4 million blogs (and adds about one every 10 seconds), and has a business plan to sell services to companies that want to track the community conversation about what they're doing.

This is exactly what you want entrepreneurs in your area to do!

Job Cuts and Offshoring Do Not Always Bring Profitability

Hoover Chairman and CEO Ralph F. Hake has a three-part plan, unveiled last spring, for getting Hoover back on track. He moved more production to low-wage factories in Mexico, China, and South Korea -- a move rivals had done earlier. And he began chopping jobs in the States while installing new managers.

Hoover -- begun in 1907 and a Maytag subsidiary since 1989 -- had more than 1,800 unionized employees at its facilities three years ago in North Canton, Ohio. That number has shrunk to just over 1,500 today. The employees, members of the International Brotherhood of Electrical Workers (IBEW), also approved cuts in health-care and retirement benefits in mid-December, after Maytag threatened to pull out entirely by 2005.

White-collar payrolls have been lowered even more substantially. Maytag won't give out its head count but confirms it has chopped the number of salaried workers at Hoover by 25% in the last year. Hake also installed new managers at Hoover, and he wants it to come up with new vacuum-cleaner features that will persuade people to pay premium prices.

So far, Hake's countermeasures haven't helped. Operating income at Hoover plunged 80% in the third quarter on a 20% sales drop, and Hake has warned that Hoover would pull down Maytag's fourth-quarter results, too, reducing full-year earnings by 30% from 2002. Maytag profits in 2004's first quarter should be essentially flat from a year earlier, Hake has also said.

Go here to read more.

Is Employment Gaining Steam?

As businesses large and small put the downturn behind them, temp hiring seems to be on a steady rise at last -- a good sign for the whole job market.

The fact that temp employment has picked up bodes well for more jobs overall in 2004. The temp-job total rose nearly 8% from April through November, when it hit 2.3 million, and could rise 6% to 7% in 2004, estimates the Harris Nesbitt Gerard brokerage firm. Forecasters at Economy.com say that overall payrolls could grow at a rate of 150,000 to 175,000 a month by summer, vs. an average of roughly 100,000 in recent months. "We're on the right track," says Brian Nottage, a senior economist at the West Chester (Pa.) consulting firm.

Is this picture consistent with what you are seeing in your labor market area?

Go here to read more.

What Happens to Former Military Plants?

One of Long Island's major commercial developers (Blumenfeld Development Group) has purchased two large former military plants with plans to create new office and retail space. Click here to find out how this former plants will be re-used.

What Happens to Old Machine Tool Plant Sites?

Click here to find out what Cincinnati area developers are doing with a former Cincinnati Milacron plant site.

Empty Buildings Along Boston's 128 Corridor

Read this article. It tells the story of how much available office space exists in the I-128 High Tech Corridor in the Boston area.

Yes, in large part these buildings were emptied after the dot com bust in the late 90's, but it's offshore competition that is preventing the current economic recovery from re-filling this space. Go here.

UK Struggles to Hold Onto Call Centers

A £2.5m scheme to stem the flow of call center jobs from Merseyside to India was launched yesterday. The Government's regional economic agency, the Northwest Development Agency, is investing the cash in a three-year initiative to raise the profile of the call center industry and retain jobs in the region.

Merseyside is a major hub for call centers, employing more than 13,000 people in about 60 across the region. However, over recent years thousands of jobs have been lost from Merseyside and the North West through companies switching call centers to India and other developing countries.

This is even more proof why the economic development business model must shift to one embodying a globally-networked approach to developing places.

Go here to read more about the UK situation.

Signs of Rising Costs of Business in China

I've posted some earlier articles saying that business costs are going up in China. Here is more evidence of this trend.

Shanghai's economy growth may slow down a little this year due to shortages of power and raw materials, government officials said Thursday. "Shortages of energy and raw materials may restrain industrial output this year," said Xu Jianguo, director of the Shanghai Economic Commission. "Export growth is likely to slow down. That will also influence local manufacturers' sales this year," he added.

The Shanghai Economic Commission is worried that increased business costs will hold back the city's development. In my assessment, these costs can ONLY go up. The important question for the Chinese is how rapidly their business costs rise compared to competing locations.

Go here to read more.

Just How Big Will Offshore Outsourcing Be in 2004?

Huge!

Click here and read the forecast. How will American economic developers respond? It is vitally important for all of us to get a handle on how much growth in 2004 is going to get pushed and pulled offshore.

What are your expectations about how big of an effect offshore outsourcing will have on your local or state economy? I would enjoy hearing from you.

Offshore Outsourcing Consultants

Want to see what the business and management consultants are doing now to help U.S. companies export jobs and business to China, India and other countries?

Click on these links below:

--Deloitte and Touche

--Everest Company

--Michael Corbett and Company

--Outsourcing Institute

--Accenture

These are just a few. There are many more, including McKinsey, KPMG, and others. Who are these companies? They are smart consultants helping U.S. companies (in manufacturing and service industries) export jobs and business abroad. When you compare the number of jobs they are recommending go abroad versus those that stay in the US, you see that most of their attention is focused on helping to "un-do" the benefits of the cluster-based and other economic development strategies all of you have put into place in US states and regions in the past decade.

Don't get me wrong--I am not against globalization and management consultants, but I am very concerned about the short and long term effects of shifting vast numbers of businesses and jobs offshore without seeing at least an equal return of high quality jobs and businesses to U.S. soil.

My operating assumption is that what can go abroad will go abroad. Right now, a great part of our economic base can go abroad, and it probably will.

Is your industry cluster effort strong enough to counter or make-up for the effects of offshore outsourcing in your area? My impression in looking at many of these efforts across the country is that they are not. Should they be addressing this issue? Yes, they should. Once again, what does this say about the effectiveness of our place-based economic advocacy model of economic development?

Just yesterday alone, I receive 11 emails from folks in the U.S., Canada, and Japan about the most recent issue of ED Futures. Most agreed with me that the ED business model must change. Even the Japanese economic developers are concerned about this trend.

Jump in here with your ideas...please.

If You Think Brain Drain Is Bad in Your Community, Read This

An Alaska Department of Labor study says nearly two of every five Alaskans who were 15 to 19 years old in 1994 have left the state for life and employment outside. Alaska has one of the highest migration rates in the nation, according to Jeff Hadland, an economist with the Department of Labor and Workforce Development, author of the brain-drain article in the January issue of Alaska Economic Trends.

According to the data, nearly 40 percent of Alaskans who were in their mid- to late teens in 1994 are gone today. Since 1998, those Alaskans have been leaving at a faster rate than the rest of the population, the study said.

Go here to read more.

How Not to Communicate About Offshore Outsourcing

Take a note on how not to communicate about offshore outsourcing. "There is no job that is America's God-given right anymore," said Carly Fiorina, chief executive for Hewlett-Packard Co. "We have to compete for jobs."

Worried about possible government reaction to the movement of U.S. technology jobs overseas, leading American computer companies are defending recent shifts in employment to Asia and elsewhere as necessary for future profits and warning policy makers against restrictions. In a report released Wednesday, the companies said government efforts to preserve American jobs through limits on overseas trade would backfire and "could lead to retaliation from our trading partners and even an all-out trade war."

I agree that we must compete for jobs. I also believe corporate executives should use their heads before making remarks like the one made by H-P's CEO. Wake up and smell the roses! If we go overboard and export too many jobs overseas, where is the personal income going to come from for American consumers to buy all those H-P computers on the store shelves? Maybe the H-P Board of Directors should remind Carly Fiorina that her job is not a God-given right either.

Go here to read more.

Maquiladora Plants in McAllen, Texas

What is a maquiladora plant? It is a company that has been granted a Maquila Program under the US-Mexico Maquila Decree, and one that regularly exports its production, notwithstanding any future sales in the Mexican Market, which are limited to the specific percentages allowed by the Maquila Decree. Commonly, the maquiladoras are known as "twin plants," with a facility on both the US and Mexico sides of the border.

Who is taking advantage of the Maquila legislation? Here is a list of the American companies with maquiladora manufacturing plants in the McAllen, Texas/Reynosa, Mexico area, which provides some idea of companies seizing this opportunity.

Advanced Steel Technology
AES Interconnectors
Alco Controls
Alpine Electronics of America, Inc.
Ametek
Am-Mex Products, Inc.
Andrew Corporation I
Andrew Corporation II
Antenna Specialists Co., Inc.
Austin Sculptures & Decoratives, Inc.
Automotive Exchange
B & A International, Inc.
Beachmold Mexico
Bettcher Mfg.
Bigston
Bissell, Inc.
Black & Decker
Bryan
BSN Medical
C & D Technologies
C.R. Bard
Callen Die Casting
Cebal Americas
Celulosa y Papel Solar
Cequent Electrical Products
Chemical Products
Chippenhook Corp.
Chiyoda
Cinch Connectors
Connector Service Corporation (CSC)
Corning Science
Cortes del Bravo, Inc.
Costuras Diseno Arc
Custom Finishing, Inc.
DAM Draexlmaier Automotive of America LLC
Delphi Automotive Systems
Deltron, Inc.
Duro Bag, Inc.
Eaton
Eaton Controls
Emerson Hermetics
Emerson Motors
Ennis Automotive
Ensambladora
Exel Logistics
Famous Candy Ltd.
Fansteel
Fresenius Medical Care North America
Fujitsu Ten
GE Electric Motors
Global Data Solutions
Globe Motors
Great Lakes Chemical Corp.
Grupo WIC (Western Industries Corporation)
GSW
Helios Container Systems
Hoffman Engineering Co.
Home Products International
Hyco International, Inc.
IMI Cornelius
INFASA
In-sink-erator
Invacare Corporation
Invensys Controls
Jabil Global Services
Johnson Controls, Inc.
Johnson Controls, Inc. #2
Kamco Plastics Inc.
Kern Liebers TX, Inc.
Key Tronic
Kimball Electronics Texas, Inc.
Kitz Corporation
Kohler
Kongsberg
LG Electronics
Liebert Corporation
Liga Mayor
Lintel
Maersk Medical
Magnolia International
Maquiladora y Fabricacion
Maser
Maverick Electronics
Maverick Industrial Services 
Maytag
Maytag II
McAllen Economic Development Corporation
MEL
Mercorp Inc.
Meridian Medical Systems
Methode Electronics
Mikuni Texas
Minnesota Rubber
MIRSA
Molding Designs
MSL de Mexico
MSL de Mexico II
Nexus Technology
Nibco, Inc.
Nokia Corp.
Norton
Nova/Link Inc. (QC Onics), (Kolder)
Orval Kent Food Co., Inc.
Overly
Panasonic Communicacion Industrial
Panasonic Electric Components
Pantimedias
Pentair Electronic Packaging, Co.
Precision Cable Manufacturing Corporation
Precision Mold & Tool
R.R. Donnelley & Sons Co.
Risdon AMS
Roller Bearing Company
Samtech Corporation
Sapphire Custom Manufacturing, Inc.
Seagate
Semtech Corpus Christi Corp.
Service Manufacturing
Shin Etsu
Siemens Furnas
Siemens Landis & Gyr
Small Parts
Span Mfg. Ltd.
Springs Window Fashions Mfg. Co. USA, Inc.
Staktek US
Standard Motor Products
Stone Container
Symbol Technologies
Takata Corporation
Tally Genicom
Technimark
Tenneco Automotive
TI Group #6 & #7
TI Group Automotive Systems
Trostel
TRW V.S.S.I.
TRW, Inc.
US Marine
Valeo
Vanity Fair Intimates, Inc.
Velvac Inc.
Victory Packaging
Weldmex Industries
Wells Manufacturing Corp.
West Bend Co.
Western Industries Corp.
Whirlpool Corporation

Source: McAllen, Texas Economic Development Corporation.

Development Gateway Website

This is a valuable information every economic developer should know about. The Development Gateway provides access to literally hundreds of information and data sources that related to economic development and development in general. It contains a country gateway as well that allows you to drill down to more detailed (localized) geographic areas. This is an important bookmark for anyone doing comparative research on economic development. Go here to learn more.

County to County Work Commuting Pattern Data

Data from the 2000 Census can be downloaded here. Go here to access comparable data for earlier Census years (1970, 1980, 1990).

This is very useful data if you are working on any type of labor availability or other type workforce study. The 2000 data is very revealling, especially in how labor markets have regionalized, or expanded geographically.

Up to Minute Biotech News

Here is a great website that provides links to daily news summaries for developments in the biotech industry. This site can save you a lot of time in assessing information about new technology, business and financing developments in the sector on a daily basis. Best of all...it's free via PR Newswire. Go here to access the site.

Implications of Frictionless Commerce for Economic Development

This one is a little out there. Forgive me for making everyone think a little harder about what we are doing in economic development. It is a NEW year, so it makes sense to look for some NEW ideas. Right? If you're brave enough, feel free to read on.

I ran across an interesting article in Fast Company Magazine discussing the implications of globalism and "frictionless commerce" for capitalism. It starts by describing the number of American senior citizens buying their prescription drugs in Canada and proceeds to discuss how the Internet has shattered traditional theories and strategies of market pricing and product distribution. That is if you don't like the price of a lawn mower at the local handy dandy store, search the Internet for the best price and have UPS deliver it to you in 3 days.

We have known these things would be issues for all of us since at least the early 1990s. Have we really come to terms with them in economic development? My response is that we have not.

My follow-on question is this: "What are the implications of "frictionless commerce" for place-based economic development as we know it today?" My assessment is that the vast majority of communities, regions and states are not prepared to cope with the consequences of these issues. My recommendation is that we figure out a way to cope with them--and fast.

If markets are less and less governed by geography--and politics, where does this leave economic development as "place-based economic advocacy?" At one extreme, one could argue that our current place-based model of economic development becomes obsolete and is discarded. This scares lots of people, but think about it anyway. Where does this leave economic development? Maybe it suggests we need to think more in global network terms about our goals of providing jobs, wealth, innovation and other things for people.

Maybe we should take down the non-productive "trade barriers" that separate local and "personal" economies across the world and give people and businesses the tools they really need to succeed in building wealth for themselves on a global basis. (Maybe we should start thinking of households as personal micro-economies. On one level, that is exactly what they are.) In this sense, it could be possible that our attention in economic development will turn from trying to make places more prosperous to making people more prosperous. The easy out is to say that we should try to make people more prosperous in places. But could it be possible that the price of place is simply too high and it needs to be driven down in a global marketplace? Is it possible that the carrying costs of place are no longer bearable and we need to reduce them? Is this another way to argue that we need fewer governmental units and that regional government is more in line with our ability to survive in global society in the future? I admit these are exceedingly difficult questions, but I think we need to ask them.

Most economic developers are wringing their hands about offshore outsourcing. What if I told you that our current model of economic development (place-based economic advocacy) is completely useless in the face of this trend that is sucking business, jobs and wealth out of American communities everyday. I don't believe that more government control (trade barriers) is the answer. I think the answer lies in inventing new strategies and tools that re-network people, businesses and jobs globally. Stop thinking about economic development within the confines of your city or regional economic boundaries, and start thinking about economic development as something that occurs among and between people, places and businesses worldwide. Might we find some new answers to offshore outsourcing if we adopted this brand of thinking? I think we would.

So, what are your thoughts? I'd enjoy hearing them. Thanks for allowing me to stretch your mind a bit.

Retirees Rate Best Employers to Work For

Which employers are the best places to work, according to seniors? The November-December 2003 Issue of the AARP Magazine provides the answer to this question. Here are the employers that made the top 25 list:

1. Baptist Health South Florida
2. Adecco Employment Services
3. Children's Health System
4. The Aerospace Corporation
5. Principal Financial Group
6. Freeport Health Network
7. SSM Health Care-St. Louis
8. Ultratech, Inc.
9. Bon Secours Richmond Health System
10. Deere & Company
11. Roche
12. St. Mary's Medical Center
13. First Tennessee National Corporation
14. The Ohio State University Medical Center
15. Pinnacle West Capital Corporation
16. Massachusetts Institute of Technology
17. Augusta Health Care, Inc.
18. Volkswagen of America, Inc.
19. West
20. Farmers Insurance Group of Companies
21. Lincoln Financial Group
22. Whirlpool Corporation
23. The MITRE Corporation
24. Scottsdale Healthcare
25. Brethren Village

Unfortunately, the location of the employers was not provided in the AARP article. You will note that many health care institutions are listed and even a few universities.

Retirees Plan to Keep Working

That is what recent surveys by the AARP say. This is an important issue for economic development. Traditionally, many communities and states have been working on attracting retirees, especially those with money to spend. Now, some are trying to attract retirees with skills and professional backgrounds to help offset skill shortages in their areas. Retirees are planning to work longer for one simple reason--they must to supplement their retirement income.

Although the age of 65 has customarily been associated with retirement, previous research by AARp and other sources has suggested that many workers who are approaching the customary retirement age plan to continue working well beyond the age of 65. AARP conducted a nationwide telephone survey of 2,001 workers between the ages of 50 and 70 years old last summer to explore their vision of retirement and to better understand the types of jobs that workers who plan to work in retirement imagine holding and the types of jobs currently held by today's working retirees.

Findings reveal that most preretirees still cling to traditional images of retirement, such as spending more time with loved ones and receiving pension and Social Security benefits; however, the majority also report that their personal definition of retirement includes some form of work. Those who expect to work in retirement are considering a variety of occupations, including positions related to teaching, office support, crafts, retail sales, and health care.

Financial concerns represent the primary reason that many preretirees expect to work in retirement. Other common reasons for working in retirement include the desire to remain mentally and physically active and the desire to be productive and useful.

Go here to download the report at AARP.

Wyoming Hopes to Capitalize on Retirement Boom

Some folks in Wyoming are saying that Wyoming may soon be known as the "retirement state." By 2020, Wyoming is expected to have the highest percentage of residents age 65 and older in the nation, according to the American Association of Retired Persons.

As members of the baby boomer generation - now 39 to 57 - begin to retire, they are looking for more than the golf and tennis that their parents may have wanted. According an AARP survey, the boomer generation wants lifelong learning, culture and entertainment, access to outdoor recreation and work.

Taxes are another factor considered by some when retiring. Along with no personal or corporate income tax, Wyoming has been named the most wealth-friendly state in the nation for six straight years by Bloomberg Wealth Management magazine.

Go here to read more.

Connecticut Sprawl Hearings Produce Few Takers

While growth and environmental protection have made some headway in achieving greater coordination in many areas, there are still many conflicts and differences of opinion about how development should proceed. Connecticut officials have been searching for ways to minimize what they describe as urban sprawl. From a recent state meeting on the topic, it appears that the public is not really paying much attention to the "sprawl-fighters," at least not at the moment.

I have observed over the years that concern about environmental issues grows when the economy is chugging along and more growth is taking place and it wanes in interest when economic growth is slow. Environmental issues, including their close cousins farmland preservation and urban sprawl control, have diminished in importance over the past 3-4 years with the economy sputtering and the relatively weak support for environmental protection in Washington during the Bush Presidency.

Go here to read more about the Connecticut situation.

Korea Struggling to Attract Foreign Investors

According to a recent Korea Herald article, "Korea's foreign direct investment last year fell 29.8 percent to $6.46 billion, the fourth consecutive year of decline."

The nation's economic leaders created a new Invest KOREA at the Korea Investment-Trade Promotion Agency, which they hope will help attract more investment. A wide range of incentives will be offered to foreign investors, including cash grants and project managers who will oversee the investment processes to provide better support.

Here is the focus of the new incentives. Grants are to be allotted among firms in industrial service areas investing $10 million or more, and research and development companies investing a minimum $5 million.

Why the slump in DFI in Korea? Persistent internal problems, including the North Korean nuclear crisis, hostile labor relations and sluggish domestic consumption, have prompted some economic experts to forecast continued trouble in attracting foreign investment. Others say the main obstacle is the global economy, including much greater competition from China and India.

Go here to read more.

Sarasota Area Says More Incentives Needed

Like a lot of places across America, Sarasota wants to ensure it gets its share of future business investments. Area economic development leaders have been discussing possible new incentives that could give the area a great edge with companies. Local government officials have concerns, which relate to the growing difficulties in making fiscal ends meet.

Florida in general is working hard to step up economic development efforts. This was evident to me in speaking at the Florida ED Council's summer conference in Tampa and in watching developments from afar.

Go here to read more about the Sarasota discussion.

Japan's Economy Showing Signs of Improvement

Japan's prime minister says that the nation's economy is finally emerging from a prolonged slowdown thanks to rising corporate profits, investment and write-offs of bad bank loans.

"Japan's economy has strong underlying strength. It has potential energy," Prime Minister Junichiro Koizumi said in a nationally televised New Year's press conference. "Finally, we are starting to see some bright signs." Koizumi said Japan's economy has been performing above government expectations as banks have reduced bad loans and rising profits give companies more money to invest. He acknowledged that Japan's employment situation remains tough with unemployment at 5.2 percent - just below a record high - but noted that job offers are increasing.

Japan's economy has been struggling for more than a decade since the country's asset "bubble" - inflated by speculative spending on stocks and real estate - burst in the early 1990s.

Could this mean more Japanese business investment in the US in 2004? That is one possible implication. Another is that Japanese exports to the US will continue to grow this year. Watch the Japanese situation very closely this year. I think some interesting things are likely to happen, based upon my "reading of the tea leaves."

Go here to read more.

Biotech Company Annual Reports

Looking for an easy source to locate and download annual reports for public biotech companies? Look no further. Go here to access 50 or so of the top biotechs. Isn't the Web great?

New Team NEO Chief Says It Starts With an Attitude Change

Team NEO is the new regional business development and marketing organization that aims to strengthen economic development across the 13-county NE Ohio region. According to a recent interview with Crains Cleveland Business, the organization's new chief, Bob Farley, says the job is doable and the region needs to start with a change of attitude about regional economic development assets and what the region is capable of growing and developing. He says we need to do a better job of talking about the region's successes. As I look around the country, that is something that other regions, including Pittsburgh, Phoenix, Austin, Denver and St. Louis, are doing.

Marketing is vitally important to increasing the regions' share of future quality businesses and jobs, Farley says. That job begins at home by strengthen relations with the region's top 200 employers. He's right.

Go here to read more.

Naples, Florida-Based Arthrex: Case Study on How to Grow a Tech Firm

Everyone looks for examples of how to spur the growth of tech firms. The example I would offer is Arthex of Naples, Florida, which is a leading provider of medical instruments for arthroscopic surgery.

The most important ingredient in this case is "blood, sweet and tears" by the founding entrepreneur and an unwillingness to become deterred from his vision. Second, take help from those that can give it when you need it. The EDC in the Naples area has helped Arthex to expand 4 times. An important lesson from this case is that "quality of life really matters" to companies like Arthex and its customers.

Go here to read more.

Chandler, Arizona Locates Three Biotechs

Three biomedical companies are opening operations in Chandler, AZ, a Phoenix suburb, adding a total of 270 jobs to the area.

The companies are:

* Island Kinetics (not sure what they do).
* Isagenix International Inc., a neutraceuticals company focusing on weight loss.
* Amersham Biosciences, a DNA-testing company that purchased Motorola's life sciences operations.

The Flinn Foundation has been a major supporter of biotech development in the Greater Phoenix area, according to Rick Weddle from the Greater Phoenix Economic Council.

ED Futures is 365 Days Old Today!

We made it through the first year. If I am correct, articles were posted to ED Futures every day during the past year. That is no easy matter with other demands on your time.

Running this blog has been a rewarding experience for me. Almost 5,700 people from across the world have asked to subscribe to the ED Futures e-newsletter. Traffic at the ED Futures website continues to grow, which suggests that we are providing a valuable service to our clients and the general public.

Here is what I said in my starting ED Futures post on January 4, 2003: "This is an online journal where you can find interesting ideas and insights about the evolution of economic development practice and policy across the United States and globally."

We have stuck to that mission statement in the past year and believe that ED Futures should continue on this path in 2004.

I would like to take this opportunity to thank all our readers for looking to us for timely information about where economic development is headed. I also want to thank the many content providers and information sources that have been grist for the ED Futures mill over the past year. Also, I would like to thank the NE Ohio blogging community for its support and companionship over the past year. It helps to do something like this with others' encouragement and help. Two people deserve special mention since they have been especially helpful to me:

1. Ed Morrison at the Center for Regional Economic Issues at Case Western Reserve University, who runs EDPro@REI. I had the first ED electronic newsletter which became my blog, and Ed actually had the first ED blog.

2. George Nemeth from Brewedfreshdaily who serves as a portal for all the known public blogs in NE Ohio. George has been a big help on some technical issues related to the blog and I appreciate the portal service that he provides to all NEO bloggers.

We continue to invite your feedback on how we're doing and how we can improve in the future. Also, please use the commenting software found on ED Futures to leave us comments. We really want to hear from you.

Best wishes for 2004!

Northeast Ohio ED Marketing Pitch

The December issue of Expansion Management Magazine contains one of the largest special advertising sections I have ever seen in any industry site selection trade publication. It occupies nearly one-half of the 100-page magazine. Who ran it? The Northeast Ohio Works marketing project, sponsored by Penton Media, the Greater Cleveland Ggrowth Association, and other local/regional EDOs in NE Ohio.

It's a well-done piece with a series of interesting articles written by local economic development leaders. (Maybe next time some NE Ohio business CEOs can author the articles. That may carry greater weight with corporate decision-makers.) Overall, it's a pretty good piece as far as trade publication marketing pieces go. (Note: the series is available only in the mailed paper edition at this point.) I assume it will be on the Expansion Mgt. website at some point.

Three key questions should be considered in any economic development marketing effort. First, is the effort effective in reaching the intended audience(s) with the desired message? Were the messages believable? Second, what is the return on investment (ROI) on the marketing activity? How many business inquiries or leads were generated, and what is the quality of the leads? Finally, is the activity grounded in a well-thought out overall marketing plan or strategy?

NEO needs to do more marketing. We have been out of the game for too long. Let's hope that business prospects (existing NEO companies and out-of-town businesses) are listening to the messages communicated in the section.

What are your thoughts?

(Note: You may want to follow a discussion about this issue that is going on over at BrewedFreshDaily.com. Go here and be sure to read the posted comments at the end of the article.)

Eastern Europe Still Lagging as Business Location

A recent article in Expansion Management Magazine talks about how US companies still prefer Western Europe over Eastern Europe for business operating locations. I think this is true--for now. The question is what happens in the next 5 years as cost pressures push more US companies out of Western Europe? Another important point should be made here. It is Western European companies--not US companies--that are leading the investment drive in Eastern Europe.

A larger question to consider is this: How well will Eastern European fare in competition with even lower cost locations in India and China in the next 5 years? Much of the investment in Eastern Europe that I see has a larger European market orientation to it. It makes sense to manufacture goods in the Czech Republic if you want to sell them across the European continent.

US economic developers should have Eastern Europe on their radar screens for a variety of reasons. Not the least of which is that some of the Western European companies they seek to attract to the US will seek and find homes in Eastern Europe.

Go here to read more.

Workforce Development and Clusters

In case you missed it, Stu Rosenfeld from NC-based Regional Technology Strategies wrote an interesting article in the print edition of the December 2003 issue of Inside ED (Expansion Management Magazine publication) about how to approach workforce development within industry clusters. (Not on the Web)

While I agree with many of Stu's ideas in this regard, I must say that reinventing community colleges in light of clusters gives me a pause. I think community colleges can play a vital role in developing good jobs in clusters, but the real role of community colleges should be that of offering diverse educational opportunities to residents of an area. Maybe it's a matter of degree, or how much attention we give to the concept of "cluster-based education." It should be a part of the future educational portfolio, the question is how much is reasonable.

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.