Stretch Article: New Signs of Life

I believe we need to stretch our thinking from time to time. Here is a story that will do just that.

Reprinted from Wired Magazine

Living Machines

By Christopher Meyer

Technology and biology are converging fast. The result will transform everything from engineering to art - and redefine life as we know it. Scientific advances point to a startling conclusion: The nonliving world is very much alive.

Copernicus demoted humanity by removing Earth from the center of the universe. Darwin showed that, rather than being made in God's image, people were merely products of nature's experimentation. Now, advances in fields as disparate as computer science and genetics are dealing our status another blow. Researchers are learning that markets and power grids have much in common with plants and animals. Their findings lead to a startling conclusion: Life isn't the exception, but the rule.

The notion that the inorganic world is alive is as old as mythology; think of Poseidon, the Greek personification of the sea. However, the tools available to examine life at its most essential - DNA sequencing, bioinformatics, gene chips - are new. We're beginning to discern life processes at their fundamental level, and as we re-create these processes in silico, we're starting to see how they work in inorganic settings. It turns out that many of life's properties - emergence, self-organization, reproduction, coevolution - show up in systems generally regarded as nonliving.

EMERGENCE describes the way unpredictable patterns arise from innumerable interactions between independent parts. An organism's behavior, for instance, is driven by the interplay of its cells. Similarly, weather develops from the mixing of oxygen, carbon dioxide, water, and other molecules.

SELF-ORGANIZATION is a basic emergent behavior. Plants and animals assemble and regulate themselves independent of any hierarchy for planning or management. Digital simulations made up of numerous software agents have demonstrated self-organization in systems ranging from computer networks to tornadoes.

REPRODUCTION was considered strictly the purview of organisms until recently. Now computer programs procreate, too. Genetic algorithms mimic biology's capacity for innovation through genetic recombination and replication, shuffling 1s and 0s the way nature does DNA's Gs, Ts, As, and Cs, then reproducing the best code for further recombination. This technique has been used to evolve everything from factory schedules to jet engines.

COEVOLUTION inevitably accompanies evolution. When an organism evolves in response to environmental change, it puts new pressures on that environment, which likewise evolves, prompting further evolution in the organism. This cycle occurs in many social systems - for instance, the interaction between behavioral norms and legal codes.

These life properties are already being built into real-world devices, like Sony's robotic dog Aibo; put two of them together and their personalities will coevolve. The line between organisms and machines is beginning to blur.

Consider a hypothetical pod of Predator drones. Each unmanned aerial vehicle monitors terrain, weather, and potential threats, and continuously receives target updates and transmits its findings via satellite. The drones are motivated by two rules: hunger for valuable intelligence and repulsion from other drones to minimize redundant observation. These rules enable the UAVs to direct themselves better than any dispatcher could. Other rules help the fleet survive. When a drone observes a hostile signature - missile, rocket-propelled grenade, rifle fire - it executes an evasive maneuver from a stored repertoire. As Predators live and die by these rules, they generate new information about fitness under various conditions. Genetic algorithms use this data to breed more effective rules. Predators are connected, so if one is shot down over Afghanistan, all drones everywhere gain improved responses to that form of attack. This is precisely how bacteria develop resistance to antibiotics, only faster.

This sounds far-out until you realize that something similar is already happening on your desktop, when Norton AntiVirus updates virus definitions automatically over the Internet. In fact, networks could play a critical role as machines come to resemble living creatures. In life, as on the Net, connections matter more than processors. The Internet could allow sensors to interact in emergent ways, forming an autonomic nervous system for the physical world. An early version is taking root in Los Angeles, where sensors at intersections identify approaching buses and ask a central computer whether they're on time. Late buses get the green light; the system gives crossing traffic extra time in subsequent cycles. The result: 25 percent improvement in transit times without creating congestion.

Oddly enough, our growing knowledge of life processes could have its biggest impact in the social sciences. Social systems, after all, are made up of interacting agents, i.e., people. When we become adept at applying these insights to the social sphere, we'll be able to run simulations that reveal, say, the conditions under which Iraq would reconstruct itself. At that point, the new science of life will help us not only live better, but live better together.

Go here to read more.

Just How Much of a Biotech Research Edge Do We Have?

It's official: The United States has fallen significantly behind in mining the promising field of stem cell research to treat disease.

A momentous milestone - a team of South Korean researchers has announced its successful harvesting of stem cells from a cloned human embryo - is a feat U.S. researchers have been striving to achieve since at least 2001.

Singapore in November unveiled "Biopolis," a $287 million government biotech center focused on stem cell research.

Chinese researchers last year reported fusing human skin cells with rabbit eggs to produce early stage embryos, which in turn yielded stem cells. The government is also building a stem cell research center.

England, Israel and several other countries also have more advanced stem cell programs. Those countries aren't as politically riven by the issue as the United States.

Here to read more.

Biotech Boom? Not in Real Estate

Buildings designed for biotech are emptying. In the last year, vacancy has risen from 14.4 percent to more than 20 percent in San Mateo County, according to BT Commercial Real Estate. In the same time, it's gone from less than 4 percent to 10.5 percent in South San Francisco. Much the same is happening in San Diego, another biotech hotbed. That area's 6 million square feet of biotech space spread over three major markets has seen its vacancy swing in the last two years from 6 percent to more than 22 percent, according to Andy Head of the biotech advisory group for San Diego's BRE Commercial.

Blanket explanations for the industry's struggles are difficult to find. Matt Gardner, president of BayBio, the Northern California bioscience association, notes that the industry is not immune to the economy's larger forces. Mergers and acquisitions, and resulting consolidation, also have played a role, others say.

Here to read more.

What is the Comcast Takeover of Disney Really About?

Hostile takeovers always tell us something important about the direction of a market or industry. They often seem to unfold as dramas of one aggressive company with a vision of the future going after a passive target chugging along in the present. Witness the era of hostile takeovers in the '80s, defined by private-equity buccaneers intent on creating a leaner, meaner corporate world. Costs were wrung from businesses like water from a wet sponge.

Now comes Comcast's (CMCSA ) $66 billion bid on Feb. 11 for media powerhouse Disney (DIS ), and a similar tug between the present and the future is playing out again. Only this time, the vision of the future is a bit more subtle than it was in the '80s. It's less about synergy and cost-cutting than it is about how companies produce growth in a low-cost, high-output environment.

This battle isn't about barbarians crashing the gates of Corporate America. It's about how Comcast, having taken the TV-distribution business about as far as it can go, builds a new model for both communications and media.

This is one that economic developers should be paing attention to!

Go here to read more.

Wisconsin Told to Get With Innovation Program

Wisconsin has sacrificed a source of economic strength by neglecting so many of the innovations and graduates produced by its academic research programs, a top expert on technology and the economy said. "You have an excellent research university," said Ross C. DeVol, director of regional economics at the Milken Institute. "It has not yet been as successful in commercializing that research."

DeVol urged state officials to move to the new innovation-based model of economic development, where higher dividends are to be paid in the future. While the state has taken steps to strengthen entrepreneurship and tech-business development, DeVol says more is needed.

Here to read more.

Oakland County, Michigan to Give Recruitment Push

That is the word in a recent Detroit Free Press article. The new recruitment spree will focus on both out of state and in state companies. The effort is aimed at a list of 144 target companies that local officials say have some reason to be in Oakland County.

Indiana Takes Investment Worthiness Pulse

The Indiana Dept. of Commerce surveyed several site consultants and business executives about the state's investment climate. The survey contained mixed news in comparing Indiana with other states in their appeal to 240 consultants and executives who help decide where businesses locate. The state ranked third overall in percentage of responses totaling very good or excellent. But only 5 percent of the respondents classified Indiana as excellent, last among the field.

The consultants' recommendations make sense. They urge the Department of Commerce to focus marketing on the state's enduring strengths - low labor costs, energy and housing. At the same time, the consultants call for a new emphasis on qualities that are likely to appeal to businesses that promote creativity and progressive ideas.

The consultants view the state's many respected colleges and universities as underused assets that could be especially attractive to businesses focused on cutting-edge ideas.

State and local governments cannot afford to fall into a rut in competing for businesses in a changing economy. Cherished assumptions about what has worked in the past may not appeal to new kinds of businesses with different needs from those founded 50 years ago.

Learning what businesses want requires constant attention to shifting priorities. The agency should plan to make information-gathering projects like the survey a regular part of its work.

Here to learn more.

NE Ohio Foundations Bolster ED Support

NE Ohio foundations will announce on Feb. 17, the creation of a $30 million fund to stimulate regional economic development. The Fund for Our Economic Future is being created by 25 civic, corporate and community foundations throughout Northeast Ohio. The fund is an outgrowth of a two-year-long effort to increase the foundations? investment in economic development. Organizers of the fund have received commitments of $22 million, including a $10.3 million commitment from the Cleveland Foundation. The first recipients of the fund?s money won?t be announced until April.

Speakers will focus on alternative economic practices from around the nation. Practitioners from Pittsburgh, Philadelphia, Louisville, St. Louis and Minneapolis-St. Paul will discuss their experiences. Keynote speakers on Tuesday are: Phillip Thompson, a leading expert in the areas of urban politics and community development, and Claire Gaudiani, a senior research scholar at Yale Law School and the author of "The Greater Good: How Philanthropy Drives the American Economy and Can Save Capitalism."

Go here to read more.

Tennessee Lands Toyota Supplier

Aisin Automotive Casting Tennessee Inc. will build a 280,000-square-foot plant in Clinton and create 400 new jobs, the Department of Economic and Community Development announced Wednesday.

Aisin Automotive Casting is a subsidiary of auto parts manufacturer Aisin Seiko Co., part of Toyota. The new plant will produce engine components, including water pumps, oil pumps and pistons to be used in the Toyota Tacoma, Toyota Tundra and Toyota Camry.

Aisin will invest about $67 million in Clinton. The new plant will include a full process die-casting facility, including machining and assembly.

Source.

Cities Chase Citicorp Call Centers

City and county officials in Greensboro, N.C., are putting together an incentive package to lure 1,000 Citicorp Credit Services call center jobs. The project is similar to one Louisville is pursuing with the financial services company, though it's not clear if the two cities are competing for the same jobs.

Citicorp's parent, Citigroup, is consolidating a number of its call centers around the country, including several it recently acquired from Sears, Roebuck and Co., into about a dozen centers. But Citigroup has not said whether Louisville and Greensboro are competing for the same facility or if both could get call centers.

Both cities already employ a substantial number of Citicorp call-center workers. There are about 500 in Louisville and 700 in the Greensboro area, both at former Sears facilities. Louisville economic-development officials have been told to expect an additional 1,600 jobs, paying an average of $32,000 a year, if the city is selected. Greensboro stands to gain around 1,000.

Go here to read more.

Mississippi to Merge Workforce Efforts

Gov. Haley Barbour has announced a plan to centralize workforce training programs in hopes of maximizing hundreds of millions of federal dollars and raising the skill level of Mississippi's workers.

The move, Barbour hopes, will lure businesses to the state that have wanted to locate here but feared the state's workers were not skilled enough.

Under his plan, the state Workforce Development Council, which oversees state workforce money, and the state Workforce Investment Board, which handles federal money, would be merged.

Workforce training boards would have incentives to contract the operation of the WIN Job Centers, or "One-Stop Centers," with schools. The reorganization would give the community and junior colleges a stronger role in job training.

The Mississippi Employment Security Commission would be placed under the governor. The creation of a Department of Employment Security would yield $2.1 million in savings a year, and allow the governor greater coordination of federal work-force training programs.

Here to read more.

North Carolina's New Biotech Plan

The North Carolina Biotech Center presented Gov. Mike Easley with a 54-recommendation strategic plan for biotech growth that would cost more than $390 million if fully funded. Easley said he had asked the Center for "the most aggressive plan," and that is what he got.

The first two years of the plan focus on the biomanufacturing training program funded at $64.5 million by the Golden Leaf Foundation and industry commitments. From 2005 to 2009 the plan also recommends spending:

-$33 million to develop a statewide network of research centers focused on key regional resources.
-$25 million for the state commerce department to promote NC biotech.
-$19 million to replenish the Biotech Center's economic development fund.
-$15 million annually in the One North Carolina Fund used to recruit industry to the state.
-$15 million to fund continuing education programs at community colleges.
-$11 million to support early-stage applied research through Biotech Center grants.
-$10 million a year to endow university faculty and create a general fund for faculty startup packages.
-$6 million beginning in 2006 and $12 million more for the next three years to continue funds for the Biomanufacturing and Pharmaceutical Training Consortium.
-$500,000 to $1 million a year to survey the needs of biomanufacturing and life science companies in the state.
-$250,000 annually to market NC to national and international venture capitalists.
-$200,000 a year to establish an entrepreneur in residence program at universities.

Here to read more.

The full plan is available online at: www.ncbiotech.org/strategicplan

Buffalo Area Looks at Regional Government Alternatives

The top executive of the county encompassing Buffalo, N.Y., has called for abolishing both the city and county governments and merging services and resources under a new regional government. A streamlined metropolitan government would reduce the region's tax burdens, said Erie County Executive Joel Giambra. And that, he says, would attract business investments to an area suffering from economic stagnation. Well, maybe.

Buffalo's story is not unlike those of Cleveland and other onetime industrial towns falling on economic hard times. Regionalism has become a hot topic in Cleveland, as well. A poll re leased last week shows that Northeast Ohio residents like the idea of shifting responsibility from local government to a regional government for tourism, planning economic growth and luring new businesses, but want to keep land-use issues with local governments.

The proposed Buffalo merger would make the new local government the 11th largest in the nation. By itself, Buffalo is the 59th largest city. If Cleveland, which ranks 33rd, merged with Cuyahoga County, it would rank sixth.

Here for more.

North Carolina Conference Looks to New Responses to Economic Challenges

This theme echoed throughout the 2004 Emerging Issues Conference at North Carolina State University: Change is inevitable, so prepare for it. Here to read more. Another way to say the same thing is this: "Create your own future."

New York Looks at Legislation to Combat Offshoring

A bill that would bar companies that move jobs out of New York state from getting taxpayer-funded development incentives is drawing support. The bill grapples with the hot issue of disappearing jobs, one that has long been a concern in the state and is now part of a national debate reaching into the presidential race.

Two Westchester County legislators -- one a Democrat, the other a Republican -- introduced identical bills in both houses. They define ''outsourcing" as moving jobs out of the state and ban most forms of incentives from going to any company that sends jobs overseas or even out of state. The topic hits home in the mid-Hudson, where top employer IBM Corp. has confirmed at least one phasing out of local jobs in which the work is going to India.

''This bill does not bar outsourcing,'' Assemblyman Richard Brodsky, D-Greenburgh, said Tuesday. ''This bill is an attempt to say, if the free market requires taking $80,000 jobs in New York and turning them into $10,000 jobs in (New) Delhi, please don't ask the New York state taxpayer to pay for it.''

Interesting. I hear more of these types of proposals as I make my way across the country. Most states and communities are very uneasy with the productivity argument--that is offshoring will result in more knowledge and highly skilled jobs in the U.S. Many are saying: "I'm from Missouri, show me!"

Here for more.

Europeans Say Airport Vital to Economic Development

European airports play a key role in boosting regional accessibility and economic expansion according to data released today.

They also drive tourism development and serve as national and regional economic motors, according to a report entitled 'the social and economic impact of airports in Europe.'

Key findings from the study include that total on-site employment at European airports was around 1.2m in 2001 creating some 950 on-site jobs per million passengers per annum. For every on-site job, another 2.1 jobs are created indirectly or through induced effects in national economies.

Access to markets and external and international transport links are regarded as absolutely essential to enterprises making location decisions.

Regional airports are equally important to their local and national economies while failure to provide increases in airport capacity could cost between 2.5% and 3% of national or regional Gross Domestic Product respectively.

For the European Union as a whole, tourism accounts for 5% of total employment and Gross Domestic Product. The advent of low-cost carrier services is also accelerating the development of tourism in many places.

Here for more.

Another Regional Example

A group of regional economic development organizations has received funding from the U.S. Department of Commerce to complete development of a comprehensive strategy for the Portland-Vancouver, Wash., area. The group is currently developing work plans around four industry clusters: silicon (semiconductors & photovoltaic); micro- and nanotechnologies; cyber-security; and metals and transportation equipment. Here to read more.

Tacoma and Puyallup Tribe Sign ED Agreement

Here is a good example of collaborative economic development.

The Port of Tacoma Commission and the Puyallup Tribe Council signed a major economic development agreement on Monday, February 9, setting the stage for additional Port maritime expansion, cooperative marketing of Port and Tribal lands in the Tacoma Tideflats, and increased economic diversity for the Tribe.

The agreement comes at a pivotal time for both the Port and the Tribe, each of which are currently working on two separate major economic development initiatives:

-- The Port is building a new container terminal for Evergreen Line, and

-- The Tribe is developing the Cascades Casino, a major new casino facility.

Here to read more.

The Business of Basketball

Sports economics your thing? If so, read this story. The National Basketball Association is off to a rather unusual fast break this season. Player controversies and coaching changes off the court have stolen the headlines from on-court play.

Midway through the season, only one of 15 teams in the Eastern Conference has the same head coach as last year. In January, the New York Knicks fired their general manager and hired Hall of Famer Isiah Thomas who subsequently fired the coach and hired Hall of Famer Lenny Wilkens. If that's not enough tumult, the New Jersey Nets, after being sold to a real estate developer (pending league approval) who wants to move the team to Brooklyn, fired their head coach. As for players, Kobe Bryant, once the heir apparent to Michael Jordan, is being charged with sexual assault. And the always-controversial Portland Trail Blazers are, well, the Portland Trail Blazers.

Thank goodness for King James. LeBron James, that is. The teenager, drafted last summer by the Cleveland Cavaliers straight from high school, has been scoring big-time both on and off the court. That's great news for the league, which last season began a six-year $4.6 billion broadcasting deal with ESPN, ABC and TNT. The excitement over James has bolstered television ratings and attendance, not to mention team values, at a time when basketball really needed a big play.
Go here to read more.

Recruiting Chinese Business Investment?

Start with the country’s most wealthy list. If the government doesn’t own the companies, then these rich folks do. Where can I get a list of China’s most wealthy people. Why just click here. My how things have changed! Thirty-five new names made this year's list of China's 100 Richest. Eight of them are technology entrepreneurs. Personal wealth of at least $100 million was required to make our list, compared with $84 million last year and $6 million in 1999.

Internet-Working: Trend to Watch

Here is a new development in the business world to watch.

The Executive's November 2003 issue concentrates on networks-between firms and within firms, technological and cultural. The article on "Internetworking," from a professor at Kenan-Flagler Business School at the University of North Carolina and a professor at the Swiss Federal Institute of Technology, discusses how companies can develop online networks to transfer knowledge between far-flung employees. After highlighting some of the most successful "internetworkers", such as Cemex and Caterpillar, the authors discuss the results of a survey of executives about their firms' level of IT-enhanced networking, and admit that progress towards more networked firms has been slow. Their recommendations? Make sure leadership at the very top is committed to developing a better network; concentrate more on the goals of knowledge-sharing and efficiency than on the potential technical difficulties; and start with small experiments to make both employees and customers more comfortable, building to more complex operations later. Source: The Academy of Management Executive, November 2003 (Volume 17, No. 4)

Tribes Seek Financial Expertise

Looking for a new banking niche for your local financial institutions? Try the Indian tribes that are operating major gaming facilities and resorts. The casinos certainly have plenty of money to spread around. A total of 330 tribal gaming operators generated $14.5 billion in revenue for fiscal years ending in 2002, according to the most recent data provided by the National Indian Gaming Commission, an independent federal regulatory agency of the United States. That's a significant increase from the $8.5 billion in revenue generated by 297 operators in 1998. Today, 48 of the 50 states have Indian gaming in some form.

Go here to read more.

Just Having the Technology Isn't Enough, the Word from South Carolina

Various entities within South Carolina are looking at improving the transfer of technology into startups and new products. Technology transfer involves the spread of university or government research discovery to the commercial sector and promotes the knowledge-based economy. It also includes the way research-generated intellectual property is commercialized through technology licenses or spin-offs of new venture startups.

Since the institution of the Bayh-Dole Act in 1980, universities can own, negotiate and transfer publicly funded intellectual property to private companies for exploitation and business profitability. As a result, universities have created a wellspring of marketable technology to stimulate an emerging knowledge-based economy

Nationally, 80% of startup companies that start from university funding grow around the area of their university, including San Diego, Boston and Austin, Texas. But, say South Carolina officials, “that isn’t true here.

“Technology is not enough to start a company. First, startups need access to capital that is not risk averse—that’s why the creation of the Angel Partnership and the Venture Capital Act is so important. Secondly, we need an environment that supports entrepreneurs, where people have general understanding of technical fields, accountants and lawyers who understand the maintenance and management of big companies versus a high-risk startup company. And we need facilities with lab space.”

Technology transfer agreements help assure that university professors realize value from their invention, discovery or research. “We need to help our professors at our state universities with the monetary aspect of taking that technology development on their university campus and marketing that to the public or a business,” says Thomas Persons, acting chairman of the South Carolina Technology Alliance in Columbia.

Go here to read more.

Business Week Annual Jobs Outlook

This is a good one to read. Each year Business Week prepares a rather thorough job outlook with lots of valuable commentary by experts. Read on.

January's disappointing figures on job growth in the U.S. pretty much tell the story. This year is shaping up to be more promising than 2003 for execs looking for work. But it's not going to be a hiring cakewalk by any stretch. Last month, companies created some 112,000 jobs -- the strongest month for job creation in more than four years. But the feat looks less impressive when you consider that economists had been hoping for at least 150,000 new jobs, which is the minimum monthly rate needed to absorb all the people who actually want to work.

The bottom line is, competition for these scarcer-than-expected openings will remain fierce, and as a result, the job hunt will continue to be a long and miserable odyssey of four to six months on average, according to DBM, a large outplacement company. "There's a ton more scrutiny of candidates because businesses want the perfect employee who will have an immediate return on investment on salary," says Penny McBain, a managing consultant for DBM in Falls Church, Va. "I've had one candidate who's had 11 interviews at the same company, and still no offer."

If that's not enough to worry about, job seekers will also have to contend with a growing trend of companies shipping jobs overseas to places like India and the Philippines, where highly educated professionals are willing to work for a fraction of what their U.S. counterparts make. Although the "offshoring" threat to jobs, especially for U.S. professionals with specialized skills, may be overblown, many experts say the phenomenon is a factor in keeping any U.S. jobs expansion in check.

Read more here.

Atlanta Economic Outlook

Atlanta's economy grew by 5.2 percent during the fourth quarter of 2003, beating the national growth rate for the second time in the past year, and the city led the nation in the creation of jobs.

The local economy continued to recover throughout the year, doubling its rate of growth from the first quarter to the fourth quarter and ending the year at an annual growth rate of 4.2 percent, matching the national rate for the first time since 1999. "We have the wind to our back for the first time in four years," said Gregory Miller, chief economist for SunTrust Banks Inc. "We have restored the natural order of things."

Spending by businesses will drive economic growth in 2004, replacing the consumer spending that had propped up the economy.

Some of Atlanta's largest publicly traded companies benefited from the improved economy. The stock price of Georgia-Pacific Corp. (NYSE: GP) increased 87.4 percent during 2003, closing at $30.67 a share Dec. 31, up from $16.37 at the beginning of the year. The Home Depot Inc. (NYSE: HD) was up 67.4 percent to $35.49 on Dec. 31. The Coca-Cola Co. (NYSE: KO) had a 15.8 percent increase in its stock price while United Parcel Service Inc.'s (NYSE: UPS) stock rose by 18.5 percent during the year. But the stock price of Delta Air Lines Inc. (NYSE: DAL) dropped by 6.6 percent.

Go here to read more.

Southern California Economic Outlook

“The economy of Southern California is on a growth track in 2004, but the state's poor business environment will limit job growth in the area,” said Chief Economist and Senior Vice President Jack Kyser, Los Angeles County Economic Development Corporation (LAEDC). Moreover, many of the new jobs created will tend to be in lower wage occupations.”

The LAEDC’s 2004-2005 Economic Forecast and Industry Outlook,” was released today (Monday, Feb. 9, 2004) at a workshop on state budget impacts on tourism, energy, transportation, population and housing. It can be downloaded here.

“The industries with the best growth prospects include: classic aerospace, international trade, and tourism, while the technology sector will be turning around. The health services sector will continue to struggle during the year, but ironically there will still be a decent rate of job creation,” said Kyser.

“In terms of job growth in 2004, Los Angeles County will set the pace with 31,300 nonfarm jobs, followed by the Riverside-San Bernardino area with 25,600, Orange County with 22,200, and San Diego County with14,600,” said Kyser. The LAEDC Forecast pointed out the on-going discrepancy between the nonfarm employment survey and the household survey, which indicated a much stronger growth in 2003 and for 2004. “This reflects a high level of new business formation as well as people working in new ways due to the high costs to business of adding workers. Unfortunately this is probably resulting in a ’leakage’ of tax revenue for government,” he said.

Go here to read more.

UK Unions Fight Offshoring

UK unions representing business-process and call-centre employees are planning to establish an independent public investigation into the outsourcing of UK jobs abroad, according to Amicus, which is the largest union for private sector and manufacturing workers.

The investigation, which will address e-commerce, call centres, internet services, IT, and software development, in addition to other, non-IT related, back-office functions, is likely to run in parallel with a study commissioned by the UK Department of Trade and Industry into offshoring.

The investigation is part of a campaign by Amicus, along with other service-sector unions, including CWU, UNIFI and Connect, to highlight what they say are the dangers associated with outsourcing work from the UK to the developing world. The cost savings, say the unions, are so big "that it will be impossible for UK companies, particularly in insurance, banking and IT, to refuse".

Deloitte Consultancy has predicted that two million jobs currently based in western economies will migrate to India by 2008, and Amicus is predicting that we can expect 200,000 call-centre and back-office processing jobs to leave British soil by the end of the decade.

Go here to read more.

Cincinnati, Tolerance, and Economic Development

Cincinnati is a city with lots on the ball. It also has taken a serious hit in the national press for its struggles to become a more "tolerant" city.

A recent Cincinnati newspaper article talks about how Ohio Governor Taft's position on gay marriages is raising some additional red flags in the city. Taft, by the way, is a Cincinnati native.

The presidents of Miami University and Ohio State University had said a ban on state-funded domestic-partner benefits would put them at a disadvantage when competing against other universities and companies to hire faculty, and they urged the governor to veto the bill. Taft said in a statement issued when he signed the bill that it doesn't prohibit colleges and universities from offering same-sex partner benefits.

Still, NCR Corp. of Dayton and Limited Brands of Columbus told the Legislature the bill would hurt their efforts to promote a diverse work force.

One high-tech company looking to expand took Ohio off its list when the state Senate passed the Defense of Marriage Act last month. "We're not going to go to any place that discriminates," said Mary Mason of Missing Lynx Systems of San Ramon, Calif.

I have spent some time looking at this issue and how it play out in the economic development arena. Click here to read an article I posted to CrainTech in Cleveland just last week. (Scroll down to my post on January 31.)

Rochester Takes Aim at Israeli Startups

Like the droves of other communities across America, Rochester is chasing Israeli tech startup companies. Read on.

Representatives from 13 Israeli businesses are in Rochester exploring opportunities to form partnerships with local companies through the "Rochester-Israel Business Attraction Visit," initiated by the Greater Rochester Enterprise (GRE).

During the event, Rochester and Israeli participants hope to establish mutually beneficial relationships and bring new business to the area. "We are thrilled that these companies are coming to Rochester and are considering our region as a business opportunity," said Michael Finney, president and CEO of GRE. "Our region has so much to offer, including our knowledge-based workforce, technological strengths, entrepreneurial spirit, commitment to innovation and outstanding quality of life."

GRE started the search of Israeli companies by identifying 94 candidates, then narrowing its list to businesses that planned to open a U.S. operation in the next two years. Israeli companies attending the event specialize in such areas as radiology, ophthalmology, dental, voice technology, and nanotechnology--industries important to the Rochester economy.

Throughout the visit, the Israeli companies will have the opportunity to meet with local companies, tour technology centers, identify potential partnerships and joint-ventures, and learn more about doing business in Rochester and New York State. The visit will also be comprised of networking events and opportunities for the Israeli guests to get a sense of the culture and quality of Jewish life in the area.

Go here to read more.

India Feels Backlash on Jobs

India's large, highly skilled labor force is attracting a growing amount of white-collar work from the U.S., along with an intensifying political reaction, especially during this national election year.

By next month, according to the National Association of Software and Services Companies in India, the nation's software and services sector will post total revenue of $15.57 billion, up from $5.54 billion in March 2000. Over the same period, the industry's employment has grown to 813,500 from 284,000.

The group estimates that exports of software and services--mostly to the U.S.--will rise to $12.20 billion in March from $3.96 billion in 2000, despite the sharp downturn in the U.S. economy. If growth trends hold, the association predicts that exports could reach $40 billion or more by 2009.

Indian executives point to a widely distributed piece of research by McKinsey Global Institute that shows that $1 spent on outsourcing may generate $1.14 in benefit for the U.S. economy. This comes from savings to the company plus goods and services, such as computers, bought by the Indian operations in order to provide the service.

The study also relies on an assumption that U.S. workers who lose their jobs eventually find productive new ones. The key word is eventually, said Steven Clemons, a conference speaker and executive vice president of the New America Foundation think tank. But there can be a long period of pain, as evidenced by the large number of people whose unemployment benefits are running out before they find a new job.

Go here to read more. (Registration required.)

Is Utah's Tech Dream Beginning to Fade?

Some think that might be the case with the recent changes that have taken place.

Novell and WordPerfect merged in an effort to fend off challenges to their technology by Microsoft Corp. The attempt failed. WordPerfect became part of Canada's Corel Corp. and nowadays barely exists.

Iomega has moved its headquarters from Roy to San Diego; neither Intel nor Micron has yet realized more than a fraction of their original expansion plans for Utah.

And Novell several times has shifted its strategy, most recently through acquisitions on Linux, a move that adjusts its focus farther away. The company's move of its headquarters to Massachusetts is a major blow to Utah's tech dream.

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