State ED Performance Measures

Go here to read a recent economic development performance measure study done for the State of Georgia. Interesting approach.

ED Performance Measures

I have been working a great deal on performance measures for my ED strategy clients. I ran across a very useful general resource on performance measures that I would call your attention to. Go here to the National Center for Public Productivity.

By the way, it's not enough to have and ise metrics, you must design and implement management strategies that embody these measures.

SAP-Microsoft Merger Talks

The same week software giants SAP and Microsoft own up to merger discussions, a new study shows how consolidation forces within the enterprise-level applications and services space are working to shrink the number of vendors.

The study, released earlier this week by consulting firm Bain & Company, delineates the ways in which "gorilla companies" -- large vendors, such as Oracle, SAP, Microsoft and IBM -- continue to seek still greater size and scale through mergers and acquisitions.

Simon Heap, partner and technology strategist at Bain, and Vince Tobkin, co-head of Bain's global technology and telecommunications practice, co-authored the study. Heap said that the current capital market environment is driving mergers and acquisitions.
"The two questions are, 'Does this deal make strategic sense, and can it be made at the right value?'" he told CRM Buyer.

More here.

Michigan Cool Cities Initiative Takes Some Heat

Budget budgets have Governor Granholm and Michigan state legislators in a debate about whether the Governor's new Cool Cities Initiative is worthwhile. Here for more.

New BLS Offshoring Study Captures Only Half the Issue

The Labor Department released a new survey Thursday suggesting that jobs are trickling, not gushing, overseas due to outsourcing. In my estimation, the study captures only about one-half the issue that needs to be assessed. You may find this summary from the Chicago Tribune to be of interest. Here to download BLS study.

Coming atop the spate of good news about U.S. job creation over the last few months, the report may help reduce some of the anxiety over the nation's labor situation.

But experts quickly said the government's first attempt to get its arms around the outsourcing trend almost certainly understates the true number of jobs being lost to such countries as China and India.

Noting that the report doesn't count jobs created in other countries at the expense of job creation in the U.S., Stephanie Moore, a vice president at Forrester Research said, "There's still a big difference between folks laying off people here and folks hiring overseas."

The Bureau of Labor Statistics said that 4,633 workers' jobs were shipped to other countries in the first quarter. That number represents a tiny 2 percent of the 239,361 workers who lost jobs due to mass layoffs during the first three months of the year.

The survey said that far more people--almost 10,000--lost their jobs when work was moved elsewhere in the U.S. All told, these dislocations were only 6 percent of the total number of lost jobs.

Outsourcing is concentrated in the manufacturing sector, the numbers showed. Almost 70 percent of the jobs shifted to new locations involved production workers. Not coincidentally, the Midwest, where a disproportionate number of manufacturers are located, took the largest hit in terms of job losses.

There were a total of 1,204 layoff "events" during the quarter across the nation, the report said. Of those, only 119 involved moving jobs overseas or elsewhere in the U.S.

While economists generally agree that the number of jobs lost due to outsourcing is small compared to the total job market, they are unlikely to find convincing proof of their argument in the report.

Even Lewis Siegel, a senior economist at the Bureau of Labor Statistics, acknowledged that the survey provided only a "little piece" of the total outsourcing picture.

The survey, which will be conducted each quarter as part of the Labor Department's regular tally of mass layoffs, does not measure job losses at companies with fewer than 50 employees. And it doesn't count layoffs of 50 people or fewer.

Moreover, the survey doesn't take into account instances when companies fail to draw a direct correlation between layoffs here and hiring abroad. Often, outsourcing efforts involve changing the way a company does business, making it hard to draw a cause-and-effect relationship between firing and hiring, experts said.

FRED Can Help

Doing business and economic research on an area within the St. Louis Federal Reserve Bank District? Click here to access FRED 2, a new online data resource created by the Bank. Very nice!

Reconciling Divergent Economic Estimates

Click here to read an interesting article that explains why recent employment estimates have varied so significantly. In short, it depends upon what and how your survey and how the survery results are generalized to the larger population. This is useful.

National Council on Economic Education

Here is a very practical and useful place to find information about economic issues and how they come into play in our lives. Click here to visit Economic Education Link, which covers everything from baseball economics to the impact of international trade on various economic sectors.

Economist Says Biotech Not Attractable

Governors and mayors from across the country were in full force at the biotech industry's annual convention this week, offering tax breaks, government grants - even help with parking - to lure biotech companies.

Yet biotech remains a money-losing, niche industry firmly rooted in three small regions of the country. "This notion that you lure biotech to your community to save its economy is laughable," said Joseph Cortright, a Portland, Ore., economist who co-wrote a report on the subject. "This is a bad-idea virus that has swept through governors, mayors and economic-development officials."

Cortright is partially right on this assessment, but the situation is far from deterministic. There are plenty of biomedical device companies and other practical types of bioscience-related businesses that are on the move. It all depends upon what you include in your definition of the bio industry. My assumption for the future is that businesses, like everything else in the world will see great change in the years ahead, and that includes where they locate and whether they concentrate in old or new places. Some pieces of the industry are unlikely to budge, but others are very mobile.

Here for more.

New State Biotech Study Released

Employment and other economic activity in the biosciences has grown dramatically in the past three years, and states working to attract bioscience companies are learning that success means specializing in specific sub-sectors, according to a new study by the Battelle Memorial Institute and the State Science and Technology Institute (SSTI) for the Biotechnology Industry Organization (BIO).

The study is the most comprehensive analysis ever done to quantify the scope and impact of bioscience employment in all 50 states. It also examines programs in each state to promote the development of bioscience companies. This state-by-state analysis expands on a 2001 study that looked at activities in 42 states.

Key findings include:

* In 2004, 40 states specifically target the biosciences for
development and all 50 states have economic development initiatives
available to assist bioscience companies. Investments have grown --
as much as $500 million in Florida, and experimental approaches,
such as tax credits to encourage investment in private venture
capital funds, have also increased significantly.

* More than 885,000 people in the United States are employed in the
biosciences. The largest segment of this group is working in the
areas of medical devices and equipment, which accounts for 37
percent of bioscience employment.

* In 2003, bioscience workers on average were paid at least $18,600
more than the overall national average private sector annual wage.

More here.

NC Triad Region Pitches for Resources

The Triad’s 22 chambers of commerce presented to the region’s 33-member state legislative delegation in Raleigh today an agenda focused on transportation and life science initiatives. The chambers, which represent a 12-county region, want funding from the General Assembly for seven items:

• Supporting the N.C. Biotechnology Center office in the Triad.

• Accelerating the construction pace for Interstate 73-74.

• Maintaining funding from the Highway Trust Fund for Triad projects.

• Accelerating rail transportation funding and construction.

• Maintaining funding for the International Home Furnishings Market.

• Maintaining support for the proposed FedEx Corp. hub at Piedmont Triad International Airport.

• Providing funding of up to $250,000 toward regional economic-development strategies and continuing funding for the Piedmont Triad Partnership.

The seven initiatives were chosen because they have the unanimous support of all 22 chambers and have a specific benefit for the Triad as a whole.

More here.

Economic Developers Out Full Force at BIO 2004

Here is what a recent news article had to say about the economic development picthes being made at the BIO 2004 conference in San Fransisco:

"Many booths had an almost-obligatory cheesy slogan with some science pun. Others had christened themselves with bio-names: There were India's "Genome Valley" and "Bangalore Helix," "North Carolina: The State of Minds," "Iowa Life Changing," "Wisconsin: Room to Breathe," "UKBio" and HollandBioDelta.

Mike Bruening, manager of economic development for the Omaha, Neb., Chamber of Commerce (slogan: "Bio's Hot in Omaha," accentuated by faux flames dancing above the booth), explained why regions had flocked to the show."


More here.

Role of Design

Design is an engine for economic development. Product design is of great importance in most industries. Look at manufacturing and all the changes design has made in recent years. So what role does it play in businesses?

Click here for some survey insights (preliminary ones at that) from a recent Fast Company poll.

Miami and Global Positioning

Long accustomed to being just a hub for Latin America and the Caribbean, Miami recently awarded itself an upgrade. It now advertises itself as the “Gateway of the Americas”. But why should an ambitious Florida city stop there, when “Capital of the Americas” beckons? Or even “Centre of the New World”, as one of its glossy brochures has it? For that is what Miami is now pitching for: already it has launched a big campaign to host the headquarters of the proposed Free Trade Area of the Americas (FTAA).

But it faces competition to host the FTAA. Other cities in the region are determined to outdo Miami as the link between the north and south of the Latin markets. Latinos are now the largest minority in America. Many firms view the American-Hispanic market as their most dynamic growth opportunity.

But Miami has a head-start. For one thing, says Tony Villamil, head of the Miami-based Washington Economics Group, “we are basically a Latin American city in the United States.” There is probably no more ethnically diverse city in Latin America either. Of Miami-Dade county's 2.3m population, over half were born outside America. Most are Hispanic, with around 700,000 Cubans, 100,000 Haitians and 40,000 Jamaicans. Bilingualism is passé. At the airport, announcements are made in English, Spanish and Creole.

Can anyone stop it? Atlanta, Georgia, is mounting a serious bid for the FTAA, as is the Mexican city of Puebla and Panama City in Panama. But perhaps the strongest rival will be Puerto Rico, which is aiming to give Miami a run for its money—both for the FTAA headquarters and as pan-regional centre. Héctor Mayol, president of the Chamber of Commerce there, argues that Puerto Rico's capital, San Juan, “offers a natural bridge between the United States and Latin America”.

Interesting one to watch.

More here.

Economic Development Argentina Style

I try to cover economic development events worldwide, as most of you know. Here is an interesting update on Argentina, which was suffering not so long ago.

Argentina has a big opportunity to reverse its history of decline. But it will need to draw the right lessons from the past. Almost across the board, Argentina's economy is booming. The recovery gathered pace throughout last year: since September, GDP has expanded at an annual rate of 11%. And as the economy picked up, the government's authority seemed to revive in parallel.

What makes this remarkable is that only two years ago Argentina was in chaos. In 2001 it suffered its worst economic collapse in more than a century. In December of that year, after $20 billion had fled the country and bank deposits were frozen, an incongruous combination of unemployed rioters and pot-banging middle-class protesters caused Fernando de la Rúa, the Radical president, to resign.

Argentina is thus not a “developing country”. Uniquely, it achieved development and then lost it again. That's what makes the story so interesting. Could this be a pattern for many countries worldwide in the years ahead? Could this also be the case for local economies there, elsewhere, and even here in the US.

More here.

Poetry and Strategic Thinking

This article is from the Boston Consulting Group I write poetry because it gives me joy, but I agree that poetry is useful as a stimulus for creative thinking. My poetry website is Conscious Living Poetry.

Our language capability has a significant effect on how we express ourselves and on the way we think. Much richness in ideas can be lost if the person expressing the ideas does not have a superior command of language, and as much more can be lost when the recipient is ill prepared. Not sensing the proper tone, not recognizing an allusion, misunderstanding a metaphor, or taking understatement literally can all lead to a communications breakdown. Reading poetry can help you think strategically because: (1) like other literature, poetry can teach by analogy, and (2) poetry can teach language skills because it is the most condensed form of language and the richest in means of expression.

Sensitivity to language, however, is not the most important leadership skill that can be enhanced by studying poetry. Leaders too often develop their abilities in quantitative, linear thinking at the expense of emotional, contextual, and cultural response. (3) Effective reading of poetry requires a blending of intellectual, emotional, and sensory reactions. It blends visual image and language. It understands the literal while allowing full play to the ambiguous. Admittedly, most poetry students never become proficient in this integration, and we don't claim that if you read poetry you will automatically develop the skill. It requires that one enjoy the experience of poetry and want to become an astute reader. But the skill can be learned and, once acquired, should be transferable, for example, to responding to complex, strategic situations.

To itemize one strategic benefit, poetry develops nonlinear thinking by improving our ability to:

-recognize layered perception
-detect different modes of meaning
-expand the breadth and depth of associations we perceive
-improve a wholeness of response
-deal with ambiguity, uncertainty, unresolved conflict
-defamiliarize ourselves from the immediate situation
-defer judgment
-detect weak signals

New Milken Institute Biotech Study Released

The Milken Institute recently released a new study examining the top biotech clusters in the United States. “America’s Biotech and Life Science Clusters,” the most comprehensive economic examination of this sector ever undertaken, ranks the country’s 12 leading biotech metros and outlines in detail what it takes to become a biotech cluster. It also offers a case study of the number one metro.

Click here to see the top ten chart.

Here to download the study. (Free registration required.)

The Word on Bio From Arizona

In the past two years, Arizona has agreed to put up at least $470 million to build biotech research facilities. But other states are pulling out their wallets to recruit and expand research, as well.

In 2001, 14 states had identified bioscience as an area for economic development. Now the tally is up to 40 states, according to a national report released Monday by the Battelle Memorial Institute, which is acting as a consultant to Arizona's efforts. Efforts include:

• Florida's commitment of more than $500 million to the Scripps Florida Biotechnology Research Institute.

• Connecticut's creation of a $5 million BioSeed Fund, which invests up to $500,000 in early-stage companies.

According to a study done by the Milken Institute, a national think tank, only a handful of metropolitan areas are able to sustain biotech industries.

Among the biotech winners: San Diego, followed closely by Boston and the Raleigh-Durham-Chapel Hill metro area in North Carolina. Neither Phoenix nor Tucson was mentioned.

Here for more.

Pennsylvania Bio Gets Boost

Pennsylvania, hardly a hotbed of venture investment in recent years, appears to be off to a fast start this year when it comes to attracting private backing for biotechnology start-ups and other budding businesses.

For the first quarter of this year, 19 businesses in the state -- 12 of which were fledgling life science companies -- attracted $200 million in venture capital, according to Pennsylvania Bio, a statewide association for biotechnology companies. That represents a gain of 65 percent from the previous quarter and a whopping 167 percent gain for biotech investment.

The increase in venture activity was part of a report Pennsylvania Bio unveiled yesterday at the Biotechnology Industry Organization's annual conference, BIO 2004, in San Francisco.

More here.

BIO Brings Out Protestors

Protesters promise that today (June 8) they will shut down the annual Biotechnology Industry Organization convention in San Francisco, though a heavy police presence has kept the proceedings incident free so far.

As an estimated 18,000 biotechnology scientists, executives and government officials are in town for the convention. Florida Gov. Jeb Bush planned to show up Tuesday, joining U.S. Health and Human Services Secretary Tommy Thompson, as well as governors Mitt Romney of Massachusetts and Tom Vilsack of Iowa.

Many of the demonstrators are protesting the genetic engineering of food. In anticipation of their protest, authorities set up a network of metal barriers and policemen milled about the area with plastic tie handcuffs clipped to the back of their belts.

Earlier this week, about 150 protesters taunted conference attendees at an opening night reception a few miles from the convention center. No arrests were reported as demonstrators dumped rotten fruit and vegetables in the street before the police confiscated cases of remaining food without incident.

Here for more.

UK's Full Court Press at BIO 2004

Listen to this.

Beginning today, Lord David Sainsbury of Turville, Great Britain's Minister for Science and Innovation, will lead the largest international delegation -- more than 600 delegates, representing more than 150 U.K. companies, universities and R&D institutions -- at BIO 2004 in San Francisco. While the conference will draw together the world's leading biotechnology companies and luminaries, it is by no means the Bay Area biotechnology community's first introduction to the United Kingdom.

More here.

Wisconsin and Biotech

Wisconsin’s technology industry is often compared unfavorably to the tech-based economy in Minnesota, a state with more venture capital investments, more college graduates and a long history of spinning out entrepreneurial companies. For the most part, our Minnesota envy is justified – but not when it comes to biotechnology.

Twice in recent months, Minnesota biotech leaders have been quoted in Twin Cities’ publications as saying, in essence, “Forget California and Massachusetts – we need to be more like Wisconsin.” They pointed to Wisconsin’s research institutions, its process for patenting and licensing biotech innovations, and its ability to place start-up companies in settings such as University Research Park in Madison.

It’s not just the folks in Minnesota who are noticing. Last week, a delegation from Florida toured Madison to find out why biotechnology is flourishing in Wisconsin’s capital city but has yet to establish roots in Tallahassee, another state capital and university town. The Florida delegation left impressed by what they saw – and maybe a bit daunted by what it would take to compete.

Whether it’s the latest Forbes magazine “best places for business” ratings or articles such as the recent review in Genetic Engineering, Wisconsin is getting some well-deserved press as a place for life science businesses to start and grow.

More here.

Is Guidant on Your Radar Screen?

According to the Indy Star and other newspapers, landing a 2,000-employee Guidant Corp. plant would require Indiana to assemble its largest economic development package since the ill-fated United Airlines deal more than a decade ago.

At least a dozen states trying to land high-paying biomedical jobs likely will launch a bidding war for the proposed $100 million factory to make drug-coated heart stents, economic development specialists say.

More here.

Banks Step Up Competition

Chicago area banks are bringing in new bells and whistles to woo you back, everything from more automation to (bankers say) getting rid of or shrinking those teller lines.

In Chicago, as banks open up new branches at the fastest pace local bankers can recall, financial institutions are trying harder to be your bank for the future -- and move away from some of the more traditional and unpleasant banking experiences customers have all faced, like long lines and tellers who glare if you want them to count your large jar of pennies.

Sound familiar? I see the same thing happening in Greater Cleveland, especially in suburbs with fat wallets.

My question is: when does the shakeout take place? It will. Trust me.

More here.

Downtown Development: Comparing Austin and San Antonio

Austin and San Antonio have taught each other some downtown development tricks over the years. Both cities are involved in public-private partnerships to redevelop their downtowns, and each has followed the other's path in some way — San Antonio adopted a developers' incentive scorecard and Austin is looking at building its own River Walk.

According to a recent San Antonio news story, in the long run, however, a crucial difference between the cities may be that San Antonio's leadership today doesn't have a vision to build on what set the city apart in the first place.

Lack of long-term planning, observers say, has hurt San Antonio's economic growth and helped it lag behind other Texas cities in investment status. And officials have not encouraged the incentive scorecard designed to reward developers who do good design.

More here(Free registration required)

How Much Risk Should You Take?

That appears to be one of the questions being asked about the Pittsburgh area's tech investment group. Read on.

Innovation Works, the state-funded nonprofit charged with growing the Pittsburgh region's tech start-ups, may re-evaluate its mission, investment strategy and management practices after an extensive review over the summer.

The 5-year old organization said the review had been planned but coincides with questions that have resurfaced about the Hazelwood-based organization's function.

An anonymous memo, sent last month by a "Concerned and Discouraged Angel Investment Group," to Innovation Works Chairman Sanford Ferguson, state Department of Community and Economic Development Secretary Dennis Yablonsky, the heads of Carnegie Mellon and the University of Pittsburgh and others, contended that the organization was "misguided" and "out of control."

The memo's authors charge that the nonprofit funds only those companies that demonstrate the greatest potential to generate profits for investors instead of putting dollars toward what authors say are critically needed funds for new technologies and young companies.

The southwestern Pennsylvania region, the memo said, needs "significantly more early stage capital" than is provided by Innovation Works and other state-supported tech incubators, including the Pittsburgh Digital Greenhouse, the Pittsburgh Life Sciences Greenhouse and the Idea Foundry.

More here.

The Young and the Restless

"The Young and the Restless: How Tampa Bay Competes for Talent," is a new study commissioned by several Tampa Bay economic development groups. The study tracked and analyzed the demographic trends of young, high-skill professionals who are viewed by an increasing number of local economic development officials as the gatekeepers to the future viability of America's cities. The study also sought to identify ways Tampa Bay could better compete for this age demographic.

Unfortunately, the results for Tampa Bay region weren't anything to get in a hootenanny over. The study found Tampa Bay's share of the 25- to 34-yearold population is much smaller than most other large Metropolitan Statistical Areas, or MSAs, ranking 47th out of the 50 biggest.

Competing metro areas such as Atlanta and North Carolina's Triangle (Raleigh-Durham-Chapel Hill) increased their 25- to 34-year-old population by 20 percent, and the Charlotte, N.C., region improved by 17 percent.

The top three destinations that Tampa Bay's young and restless were fleeing to were Orlando, Atlanta and Miami.

The Lakeland-Winter Haven MSA fared better than Tampa, losing only 3.3 percent of its 25to 34-year-old population between 1990 and 2000.

More here.