Innovation Philadelphia Receives National Award

Innovation Philadelphia's Innovation and Entrepreneurial Index project received the highest award for Outstanding Achievement from ACCRA, a national membership organization of 500 economic development researchers. ACCRA represents professionals working for chambers of commerce, economic development organizations, local government, utilities, academic institutions, and regional planning councils.

The Innovation Philadelphia Innovation and Entrepreneurial Index represents a truly innovative approach to sharing information about the community with the general public, businesses, and visitors. The Index focuses on the inputs that support the creation, retention, and recruitment of innovative business in their early states of development.

The Index compares the Greater Philadelphia Region to seven other regions in the U.S. through a series of key metrics in three categories - knowledge, capital and location - that nurture innovation businesses through their life cycles.

Check out the Index here.

Excessive Employment Regulation Hinders Economic Development

"Doing Business in 2004: Understanding Regulation," a World Bank-commissioned study by economists Simeon Djankov and Caralee McLiesh on the determinants of private-sector development, reveals that although employment regulation may have been necessary to correct past failures in the labor market, it should be adapted according to the changes in circumstances, technology, and business organization.

Djankov and McLiesh studied the three main components of employment regulation in various jurisdictions around the world: flexibility of hiring (part-time and fixed-term contracts), conditions of employment (flexibility in work time requirements, mandatory payments, minimum wage), and flexibility of firing (grounds and procedures for dismissal, notice periods, and severance payments).

According to the report, although employment regulation tends to increase the tenure and wages of incumbent workers, too-strict regulatory intervention yields four negative results.

World Bank.

Denver Metro Chamber Chair Says Organization on Track

Honig is chairman-elect for the Denver Metro Chamber of Commerce, which means he'll lead the chamber's volunteer board for the 2005-06 year. In the meantime, he's co-chairman of the recently created Metro Denver Economic Development Corp. The Rocky Mountain News sat down with Honig this week to talk about a new era in economic development in Denver and the latest trends in the banking industry.

The interview is an interesting read on what leadership thinks. Go here.

Rural Hispanic Trends

This is a very interesting and useful analysis of how Hispanics living and working in rural areas are faring. In short, not particularly well.

Hispanics are the largest and fastest growing minority group in the U.S. Until now, their presence has been mostly an urban phenomenon, as roughly 90 percent of all Hispanics reside in metropolitan (metro) areas. For the first time, however, the nonmetro Hispanic population is increasing in number throughout many rural regions of the Nation. This new demographic pattern is the result of changes in immigration laws and stricter border crossing enforcement during the 1990s, which induced many Hispanic immigrants to extend their stays in the U.S.

Hispanic population growth and settlement have visible economic and social effects on rural areas and small towns and have garnered considerable media and public policy attention. Many rural communities have sought ways to integrate their newest residents. What does the presence of a growing population of low-income minority residents mean for the social, economic, and political future of rural America?

During the 1990s, nonmetro Hispanic population growth more than doubled from the previous decade and far outpaced that of all other nonmetro residents. Hispanics made up less than 5 percent of nonmetro residents in 1990, but they accounted for over 25 percent of all nonmetro population growth from 1990 to 2000. Despite their concentration in the Southwest, half of all nonmetro Hispanics now live outside the Southwest. Moreover, rural Hispanics in the Midwest, Southeast, and Northwest, though small in number, are growing far more rapidly than all other racial and ethnic groups.

Although Hispanic employment in high-growth nonmetro counties is still concentrated in agricultural work, recent data show occupational diversity and mobility. Hispanics in many nonmetro counties are often employed in large numbers in specific rural industries, such as textile manufacturing jobs in Georgia and poultry processing jobs throughout the Southeast. Nonmetro Hispanics make up the majority of farmworkers, but the share of nonmetro Hispanics employed in agricultural industries fell from 17 percent in 1990 to about 11 percent in 2000. In contrast, the share of nonmetro Hispanics in sales, services, and manufacturing occupations increased over the decade. By 2000, 17 percent of nonmetro Hispanics were employed in general service jobs, 14 percent in precision production jobs, 11 percent as machine operators, 11 percent as farmworkers, and 10 percent as handlers, equipment cleaners, helpers, and laborers.

More here.

Downtown Phoenix Developments

Phoenix, the nation's 5th-largest city, will deliver a 1,000-room hotel to accompany its innovative, high-tech, expanded convention center. The Phoenix City Council today approved the new Sheraton hotel that will be owned by the city and constructed in downtown Phoenix's Copper Square. The hotel is scheduled to open upon completion of the expanded Phoenix Civic Plaza Convention Center and other downtown revitalization projects, as early as late 2008.

"In the next five years, downtown Phoenix will transform itself into a 24/7 city, with a new 1,000-room hotel, a Civic Plaza that's triple the size, the Phoenix Bioscience Center and 15,000 ASU students and faculty," said Mayor Phil Gordon.

The hotel will substantially increase room inventory for the downtown convention market, and will provide delegates with convenient walking access to the convention center, located just one block away.

More here.

Georgia's Biotech Corridor

Regional officials got another dose of confidence recently from experts who say the Georgia Highway 316 corridor can become the heart of Georgia’s biobusiness industry.
In only their second meeting, officials on the Georgia Bioscience Joint Development Authority also heard they should create their economic vision for the corridor as quickly as possible, or risk losing upstart biotech firms to other states.

Their prime example is Inhibitex Inc., an Alpharetta biopharmaceutical company that has shown some interest in the corridor, but that also appears to be drawing attention from other states eager to lure the firm to their own biotech parks. The Research Triangle between Durham and Chapel Hill, N.C., considered the granddaddy of all biotechnology centers, would likely be a top competitor.

Michael Cassidy, executive director of the Georgia Research Alliance, said Inhibitex is just one of many biotech companies sprouting on the northern fringe of Atlanta. As these firms continue to grow, they may one day look to the corridor to build headquarters or research facilities — adding investment and jobs to the economy.

More here.

Website Checklist

This website evaluation worksheet will help you evaluate e-commerce sites. The results will help you plan your own e-commerce site or offer strategies for revamping your existing one. (There are some ideas that can be adapted to your ED or workforce development website. Take a look.

Download the list here. (Free registration required)

Best Companies for Minorities

McDonald's leads FORTUNE's seventh annual list of the best companies for minorities. Which other firms make an effort not only to hire minorities but also to retain them and promote them through the ranks?

Download the list here. (Subscription required)

Industrial Output Up Again

Here is some continued good news.

Big industry production surged by 1.1 percent in May, the strongest performance in nearly six years, and a nationwide survey of business activity showed widespread strength, fresh signs the economy possesses good momentum.

The sizable increase in industrial production reported Wednesday by the Federal Reserve came after a strong 0.8 percent rise in April. The 1.1 percent advance - better than the 0.6 percent rise that some economists were expecting - represented the biggest gain since August 1998.

Factory production - the biggest slice of industrial activity tracked by the Fed - rose by 0.9 percent in May, up from a 0.7 percent increase the month before.

More here.

Career Taxidermy

Here is an interesting one for educators and workforce developers to mull over.

Lately, the media has been fascinated with women who have "opted out" of careers to care for their children. These stories read like close-ups of someone dripping wet without revealing that she's standing in a hurricane--all symptoms, no cause. Let's talk hurricane : Highly trained women leaving work aren't opting out. Torn up by conflicts between motherly love, inflexible career structures, and substandard child care, they're being "squeezed out" of organizations that have quietly but determinedly resisted their presence by not adapting to their needs.

How has this happened? Career taxidermy. Taxidermy is the art of taking something dead and making it appear alive, forever. A century ago, managerial capitalism was invented along with the template for the modern career. It reflected the biology and sociology of employees then. Biologically, they were men. Sociologically, they had wives caring for home and family. Careers followed the inverted "U" curve, starting out in early adulthood and progressing to retirement, and career advancement was an exercise in moral development. The men who suppressed their individuality to conform to the organization got promoted.

This template has been stuffed and mounted. The inverted "U" is the universal gold standard. Conformity remains essential. Individuals have little say over the structure, pacing, or content of their careers. The big difference, of course, is that the way of life expressed in the old template has vanished.

More here.

VC Firm Pushes Startups to Offshore Work

Trying to develop more tech startups in your community? Did you know this trend was affot?

Accel Venture Capital is leading a growing trend among venture capitalists to urgently --and mostly quietly -- push their companies to tap into larger markets and cheaper labor abroad.

Lately, droves of venture capitalists have boarded planes for flash visits to China and India to test the waters for alliances, investment opportunities and potential employees. Silicon Valley Bank, for example -- which underwrites loans to local start-ups -- arranges such visits.

John Doerr, a leading venture capitalist at Kleiner Perkins Caufield & Byers, is also courting the Indian community. At a recent appearance before an Indian business group in Santa Clara, he said a good number of his firm's start-ups now have operations in India.

"Rarely does a board meeting go by when we do not have some focus on being more aggressive about either offshore development in China or India," said Jim Breyer, a venture capitalist at Accel.

Most venture capitalists shy away from the "offshore" word, with local unemployment numbers still high. Not Accel. The firm takes the stance that venture capitalists are responsible for preparing their companies for global competition, and that includes offshoring. It's all part of a strategy to keep Accel's investments bringing in maximum returns.

A recent internal survey of 45 of Accel's portfolio companies showed that 38 percent had undertaken moves to hire abroad. By 2005, the plan is to knock that up to 75 percent.

More here.

Some Reactions to BLS Offshoring Report

"Pretty lame!" That's how Thea M. Lee, chief international economist at the AFL-CIO, described a new survey that suggests offshoring of American jobs is less of an economic threat than is popularly believed.

Conducted by the Bureau of Labor Statistics, the survey found that of the 239,361 people who lost their jobs during the first quarter of the year, only about 2 percent, or 4,633, were sacked for reasons "associated with the movement of work outside the country." That's a reassuring metric. Certainly, if it were accurate, it would go a long way toward quelling the concern that erupted last year over widely publicized cases of Americans losing their jobs to cheaper workers abroad. But, sadly, it may not show the complete picture.

The BLS survey covers only layoffs at companies with at least 50 workers, where at least 50 filed for unemployment insurance and the layoffs lasted more than 30 days. And it does not count jobs created by American companies overseas with no direct layoffs in the United States. Finally, the Labor Department compiled its data simply by asking companies who had reported layoffs whether they had offshored the positions eliminated. In the current political environment, company executives are likely a little reluctant to admit to such actions. "This is a company checking a box on a survey, and having little incentive to be completely forthcoming" about why it laid off a large number of employees, Lee told the Washington Post. "There's no kind of follow-up or investigation on the part of the BLS. So I don't think this is a particularly good way of doing an exhaustive measure of job loss. It's good they've gone in that direction, but it's not useful for the purpose of knowing what percentage of jobs lost have actually been outsourced."

Source.

The World's 7.7 Million Millionaires

Remember the 1950s TV Show, the Millionaire? Looks like the man with the briefcase has been pretty busy in the past year! Read on.

Some 500,000 people joined the ranks of the world's millionaires in 2003 thanks to a roaring stock market and strong economic conditions, a survey showed Tuesday.

The survey showed the number of high net worth individuals rose by 7.5 per cent to 7.7 million individuals, while their assets grew by 7.7 per cent to $28.8 trillion. The survey counts those with $1 million in assets, excluding home real estate.

There are 61,000 millionaires in India, in case you were wondering.

The report by Capgemini and Merrill Lynch showed a return to levels of wealth prior to recessions in North America and elsewhere as a result of improving conditions in 2003.

The rebound came after a mixed year for wealthy investors in 2002, during which the number of US millionaires and their net worth declined modestly while the group's overall assets rose just 3.6 per cent.

"If 2002 was a 'lost year' for HNWI investors, then global financial markets recovered most of these losses by the end of 2003, which had a restorative effect on investor confidence and HNWI wealth," said the 2004 World Wealth Report.

"As in previous years, high net worth individuals were quick to respond to global trends affecting their ability to preserve and grow wealth," said James Gorman, president of Merrill Lynch's Global Private Client group.

"They benefited from a strong stock market rally and solid, global economic growth. In particular, wealthy investors in the US, China and India were able to capitalize on these trends despite a great deal of geopolitical uncertainty."

The trend is likely to stay intact, the report said, predicting 7 per cent annual growth in the assets of this group to over $40 trillion by 2008.

North America and Asia led the rise in wealth creation, with more modest growth in Europe, Latin America and the Middle East.

The number of millionaires in the United States stood at 2.27 million at the end of 2003, up 13.5 per cent or a net 272,000 compared with the previous year.

The assets of these people were up 13.6 per cent. There was also strong growth amid a smaller number of millionaires in China, which saw a 12 per cent increase in the number of millionaires, and India, which saw a 22 per cent increase, the report said.

The report said Europe continued to show lower growth in millionaires and their assets than North America, "primarily due to restrictive income-tax policies which impede the ability to accumulate personal wealth."

Overall, in Asia the number of millionaires grew by 8.4 per cent and their assets rose by 10 per cent.

The number of millionaires in Europe grew 2.4 per cent to 2.6 million, the report said. But, it said, Spain, Russia and the Czech Republic were exceptions where the wealthy investor count increased more rapidly.

In Latin America, the number of millionaires rose by just 1.3 per cent, but it continued to have the highest average wealth of any major region among the group.

The number of millionaires in the Middle East rose 2.4 per cent last year, with their assets up 3.3 per cent.

Globally, a very small but fast-growing group of 70,000 belonged to the 'ultra-rich' category with more than $30 million in financial assets, up from 58,000 a year ago.

The survey is aimed at drawing attention to the value of investment advice for those with high net worth.

"A growing number of HNWIs are successfully mirroring the behavior of institutional investors," said Alvi Abuaf, vice president at Capgemini.

"This can be seen in their following a structured process, looking for integrated solutions rather than buying isolated products, and taking the emotion out of investing."

Source.

Hiring Plans Up

Here is a little good news on the job growth side.

U.S. employers will maintain a brisk hiring pace for the third quarter, according to the quarterly Manpower Employment Outlook Survey. Twenty percent of companies surveyed intend to hire workers in the third quarter, on a seasonally-adjusted net basis, matching second-quarter hiring plans that were the most optimistic since early 2001.

That's up from a net hiring outlook of 7 percent a year ago, said Barbara Beck, executive vice president of North America operations at Manpower, the staffing firm.

The seasonally-adjusted net employment figure is derived from the percentage of firms planning to hire minus those intending layoffs. It does not measure the number of jobs. Manpower surveys almost 16,000 U.S. companies on their hiring plans each quarter.

"Employers are feeling confident that the recovery has legs," Beck said. "Most employers have a higher level of confidence at this point, far exceeding what they had a year ago. "The fact that employers are feeling as optimistic going into the third quarter as they did going into second quarter is an indication that this is a true recovery," she said.

This is a survey of hiring intentions, not set-in-stone edicts. "There are always factors ... that may alter their behavior. There is a whole lot of scrutiny right now on interest rates and economic uncertainty," Beck said. Still, historically "the correlation is very tight between what employers say they're going to do (in the survey) and what they actually do," Beck said.

The Labor Department reported a gain of almost 250,000 jobs in May. Thus far in 2004, about 1.2 million jobs have been created, versus the 2.7 million jobs lost between March 2001 and August 2003.

Still, many Americans continue to struggle with long-term unemployment. Last month, 1.8 million unemployed Americans had been without a job for 6 months or more, according to the Labor Department.

Those long-term unemployed were 21.9 percent of the total 8.2 million unemployed, almost the highest percentage since the early 1980s.

More here.

Latin American Economic Development

Does your economic development program have ties to Latin America? This article may interest you.

Latin America is headed toward an unhappy anniversary: 25 years of failed attempts at economic growth. The world has no comparable period of failure anywhere else in at least the last century, including the Great Depression. From 1960 to 1979, these economies grew at a decent rate, chalking up an 80% gain in income per person. In spite of Latin America having the world's worst inequality in income distribution, this was enough to substantially improve living standards for the vast majority of the population, including most of the poor.

But then something went wrong, and it has as much to do with policies advocated by the "Washington consensus." From 1980 to 1999, per-capita income grew by only 11%. The 1980s were known as Latin America's "lost decade," when the region's income per person actually fell. The 1990s produced only modest growth, and the first decade of the 21st century is now looking like it might also count itself among the missing. Using the International Monetary Fund's (IMF) projections for 2004, the first half of the new decade (2000-04) shows a gain of about 1% for the whole five years.

More here.

Tribal Gaming Update

Many companies in gambling's Establishment are finding that managing tribal operations is a lucrative source of new revenue

While MGM Mirage (MGG ) has raised its offer for Mandalay Resorts Group (MBG ), in a merger that would give MGM Mirage control of half the hotel rooms on the Las Vegas strip, other casino companies are looking outside Nevada for growth, frequently to Indian reservations. But it wasn't that long ago that the nation's gambling Establishment was on the warpath with the Indians. Threatened by tribal casinos that were stealing customers from strongholds in Las Vegas and Atlantic City, casino executives such as Donald Trump and Steve Wynn unleashed high-price lawyers and big-bucks lobbying campaigns aimed at heading the Indians off at the pass.

Now, companies that manage tribal casinos have become one of the hottest plays on Wall Street. The reason: Traditional gaming markets are mature, and the cost of building a new resort now tops $2 billion. The number of Indian casinos, meanwhile, continues to soar. Last year, the nation's 377 tribal casinos generated $15.9 billion in revenues -- more than Las Vegas and Atlantic City combined. That number should climb as states such as California, New York, Connecticut, and Rhode Island continue to find gaming on tribal land more palatable than traditional casinos.

This is a big economic development issue for many states. More here.

New Global Poll Shows Bush in Growing Disfavor

For those of you trying to gauge how the rest of the world sees the U.S., especially the Bush administration, here are some interesting insights.

Global Market Insite (GMI), a leading provider of integrated, global on-line market research solutions, has released its new poll on world political opinion about the U.S. and the Bush administration.

The main finding of this poll is that respondents from the participating G8 economic countries (excluding the United States) strongly view -- by a large margin -- that President George W. Bush is not an effective global leader; are opposed to the U.S. sending military troops to Iraq; do not view the maltreatment of prisoners at Al Ghraib prison by U.S. military as an isolated event; and do not believe in the efficacy of the United States' approach to fighting global terrorism. International survey respondents (excluding the United States) also support by extremely high margins John Kerry over George W. Bush in the upcoming November U.S. presidential election.

More here.

New World City Cost of Living Study

London overtook five other locations, including Moscow, to become the world's second-most expensive city behind Tokyo as the pound rose against the dollar, according to the consulting firm Mercer Human Resources.

London jumped from seventh to second spot in March compared with a year earlier and Tokyo retained the No. 1 position it took from Hong Kong in 2003, according to a survey by Mercer, a unit of Marsh & McLennan Cos.

"There have been some dramatic movements in the rankings this year which are a largely due to currency fluctuations," said Marie-Laurence Sepede, a researcher at Mercer.

The pound rose 11 percent against the dollar in the year through March, boosting the cost of goods and services, from compact discs to bus journeys, in London relative to New York, on which the index is based.

The cheapest city of 144 monitored by Mercer was Asuncion, Paraguay, followed by the Uruguayan capital, Montevideo, according to Mercer's survey which also includes the monthly rental of a two- bedroom apartment and the cost of a cup of coffee and newspaper.

New York, the most expensive U.S. city, slipped to No. 12 from 10th position. The most expensive city using euros was Milan which jumped four places to 13th position.

The following is a table showing the top 10 cities by cost of living according to Mercer. Figures in parentheses are last year's placings:

1 (1) Tokyo 2 (7) London 3 (2) Moscow 4 (3) Osaka, Japan 5 (4) Hong Kong 6 (6) Geneva 7 (8) Seoul 8 (5) Copenhagen 9 (9) Zurich 10 (12) St. Petersburg, Russia 11 (5) Beijing 12 (10) New York 13 (17) Milan 14 (21) Dublin 15 (13) Oslo.

More here.

Foreign Investment in China Continues Growth

China reported an acceleration in foreign direct investment, suggesting government measures to slow the economy aren't prompting overseas companies to scale back their expansion plans.

Investment from abroad increased 11 percent from a year earlier to $25.9 billion in the five months through May after rising 10 percent in the first four months of this year and 7.5 percent in the first quarter, the Beijing-based Ministry of Commerce said on its Web site. Contracted investment, a sign of future investment, jumped 50 percent to $57 billion.

China's growing demand for cars, computers and cell phones is attracting investment even as the government aims to slow economic growth to 7 percent this year from a seven-year high of 9.1 percent in 2003. Volkswagen AG and General Motors Co. plan to at least double their China production capacities in the next four years, they said last week at a Beijing auto show.

More here.

Winning Workplaces

Here is a source or useful information on how companies can improve their workplaces.

Winning Workplaces is a not-for-profit providing information, training, ideas, consulting, and easy-to-use, affordable tools to help small and midsize organizations create great workplaces. The business experience of our founders and evidence from other companies prove that people-friendly workplaces produce better business results.

Learn more here.

Business Births, Deaths, Expansions, and Contractions Data

All of us struggle to find useful data on business demographics. Here is an SBA source that may be of some use to you. Downlaod state and metro area data in Excel spreadsheet here.

Self-Employment Trend Data

Nonemployer business establishments provide important insights to self-employment trends in an area. You may want to explore recent Census Bureau reports on this subject.

U.S. business establishments with no paid employees increased by 2.2 million between 1997 and 2002 to 17.6 million, according to 2002 Economic Census data released today by the U.S. Census Bureau. These nonemployer businesses recorded sales or receipts of $770 billion in 2002, a 31 percent rise over 1997.

Nonemployers consist mostly of individual proprietorships (15.4 million), but also include 1.1 million partnerships and 1.2 million corporations that do not file payroll taxes.

Repair and personal services, as well as other industries that comprise the "other services," experienced the greatest increase in number of businesses, with 523,000 new firms for a total of 2.5 million. Real estate and rental and leasing added 483,000 businesses to reach 1.9 million. Administrative and support and waste management and remediation establishments grew by 370,000 to nearly 1.3 million.

The sector with the most nonemployer businesses was professional, scientific and technical services at 2.6 million. Close behind were other services at 2.5 million and construction at 2.1 million.

The tabulations, titled 2002 Economic Census: Advance Nonemployer Statistics, show that four economic sectors accounted for more than half of the $770 billion in nonemployer receipts. They were: real estate and rental and leasing ($162 billion); construction ($115 billion); professional, scientific and technical services ($96 billion); and retail trade ($78 billion).

More here.

Standards For What: The Economic Roots of K-16

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Review

Looking for an excellent set of agruments on why the new economy should guide the setting of future educational curricula? Check out this important ETS report.

Standards For What: The Economic Roots of K-16 By Anthony P. Carnevale and Donna M. Desrochers. Educational Testing Service. (2003, 104 Pages)

This report concludes that higher standards in K-12 education are driven by the educational needs of a twenty-first century economy, rather than by the educational failures or deficiencies of the past or present. It argues that without efforts to better prepare today's students for postsecondary education and increase their access to college, America's premier economic position and global competitiveness could be in jeopardy. The report tracks the relationship between educational attainment and job requirements since 1959 and examine future work and education requirements out to 2020.

Download free here.