Michigan ED Corp Funds Downtown Housing Projects

Michigan Governor Jennifer M. Granholm recently announced more than $2.7 million in Community Development Block Grant funding to help create 77 housing units in nine Michigan downtowns and central business districts. The grants are being made available through a partnership between the Michigan Economic Development Corporation (MEDC) and the Michigan State Housing Development Authority (MSHDA).

"Housing is a vital component of successful downtown economic revitalization," Granholm said. "Providing attractive housing choices will bring more residents to the heart of these communities, driving economic development and helping small businesses thrive."

A total of ten grants were awarded to the following nine communities and counties: Alma, Buchanan, Cheboygan County, Jonesville, Lapeer, Manistee, Norway, St. Johns and Shiawassee County. The grant applications were reviewed jointly by MEDC and MSHDA staff.
 
More here.

Michigan Downtown and Financing Association

Throughout the state of Michigan, cities and towns are planning for the future by rekindling the past. Our downtown areas are vital to the growth of the economy and worthy of revitalization.
 
The Michigan Downtown and Financing Association was formed to encourage good development, redevelopment and improvement of cities and towns with special emphasis on downtown areas.
Who belongs to the MDFA?
 
Members include Downtown Development Authorities, city, township and village officials, Tax Increment Financing Authorities, engineering and consulting firms or any other person, organization or government body within the state of Michigan that supports downtown development.
 
Click here to learn more.

Battle Creek Works to Bring Farmers Market Back Downtown

Battle Creek economic developers are working to bring their Farmers Market back downtown. Great idea. Read about it here.
 
Also, read about Battle Creek's new downtown revitalization plan. Download it here. (3 MB)
 
 

Michigan Cultural Economic Development Guide

The Michigan folks have done a nice job a Cultural Economic Development Guide. Download it here.  It is available on the Michigan Economic Developers Association website.
 
Nice job!

Michigan Economic Update

Michigan continued to shed high-paying manufacturing jobs in June at an alarming rate even as the state's unemployment rate eased a bit.

Balancing off the unemployment picture in June was an correspondingly sizable increase in service sector jobs, many in the tourism and hospitality area as the one of the state's leading sector's geared up for the summer season.

Michigan's unemployment rate dropped slightly in June to 6.5 percent, one-tenth of a percentage point lower than the previous month, but the state continued to lose manufacturing jobs, officials say.

The state's unemployment rate remains nearly a full percentage point higher than the national average of 5.6 percent.
 
More here.

New SF Bay Economic Study

The shift of work to lower-wage countries is just one of a number of global forces affecting job creation and loss in the region, and efforts to prevent offshoring will not succeed, according to the report. The study was sponsored by community groups Joint Venture: Silicon Valley Network and the Bay Area Economic Forum, as well as the Stanford Project on Regions of Innovation and Entrepreneurship.
 
Conducted by management consulting firm A.T. Kearney, 120 interviews, analysis of 9,000 job listings and other research went into the report.

"The research makes clear that global trends will force continued creation and destruction of jobs in the Bay Area," said a statement by Sean Randolph, CEO of the Bay Area Economic Forum. "These trends can't be reversed. Policies and investment should be directed toward helping the region strengthen its core capabilities to compete effectively on a national and global basis."

Offshore outsourcing, which refers to farming out tasks to lower-wage nations such as India or the Philippines, has become a hot-button issue over the past year or so. Defenders of the practice say it ultimately assists the U.S. economy and its workers. But critics say it costs U.S. workers jobs and threatens the country's long-term tech leadership. The exact scale of the trend remains unclear.

The Bay Area is in many ways the home to the U.S. high-tech industry. And a number of prominent companies with operations here--such as Hewlett-Packard, IBM and Intel--conduct some of their work overseas.

According the new study, the Bay Area already has more experience with globalization and offshoring than other parts of the United States. Bay Area manufacturers earn almost 60 percent of their revenue in overseas markets. In addition, 94 percent of companies that make semiconductors, semiconductor equipment and software are using offshore workers, the study found.

On the other hand, one in four job postings by large companies in those sectors in April was for positions in the Bay Area.

According to the study, trends that enable offshoring include technology-driven improvements in productivity and so-called business disintermediation. Disintermediation refers to removing of intermediaries--middlemen--in a supply chain.

The study called for policy-makers to maintain strong support for basic research, invest in education and fix vulnerabilities in the regional business environment, including housing, transportation and "business regulations that hinder local job creation." Business leaders must also "support transition programs and consider investment in local employee development to meet their future job needs," the report said.

The study indicated that the Bay Area will continue to incubate new businesses. But, it said, the region's weaknesses lead to job growth elsewhere in the later stages of the "business lifecycle."

"Companies founded in the Bay Area will typically maintain the majority of their workforce in the region until their first products or services gain market traction and key business processes stabilize," John Ciacchella, A.T. Kearney vice president, said in a statement. "However, as these companies expand and mature, many of the new jobs that stay local will focus on management of expanding business operations that are outsourced, offshored and distributed to other regions."
According to the study, the Bay Area is "well positioned" in the industries likely to spawn new technology start-ups. The region has the highest concentration of biotechnology firms in the country and more nanotechnology firms than all countries except Germany, the study said.
 
More here.

German Engineering Jobs Head Eastward

The flow of sophisticated engineering jobs into low-wage markets is reshaping economics around the world and countries like China and India are not merely taking away existing work from industrial nations but are also creating thousands of new jobs, media reports say."For years Germany, like many other countries, lost manufacturing jobs to China and other low-wage countries in Asia and Eastern Europe. But its engineering sector remained a safe haven, one of the few areas where the country could hold its own globally.
 
Now engineering jobs are beginning to move abroad as well," The Wall Street Journal reported yesterday."Highly paid German engineers proved their worth with a steady stream of innovations, including the world's fastest train, designed by Siemens and ThyssenKrupp AG," it said.The Journal says in a front page dispatch that the development of a flashy new Siemens mobile phone, nicknamed Leopard, not in Germany but by Chinese engineers in a white six-storey building in China by a 33-yer-old Chinese engineer, Li Tao, and a crew of other young Chinese engineers is ominous."Siemens' decision to turn East for engineering know-how represented a big gamble for a company that has relied on the ingenuity of its German engineers for more than 150 years. It also reflected one of Germany's biggest economic challenges ever: the erosion of its dominance in engineering, long the life-blood of the world's third largest industrialised economy and a source of national pride."
 
More here.

BOA Top Minority Lender

Bank of America today announced that it has been named the #1 Small Business Administration lender to minorities for the second consecutive year. By continuing to focus on the needs of minority-owned small businesses, the bank nearly tripled its overall SBA lending to minorities in 2003.

Bank of America's #1 status was confirmed by numbers compiled by San
Francisco-based consumer advocacy group The Greenlining Institute.

Bank of America, which is also the nation's #1 overall SBA lender (9,406
loans granted in fiscal year 2003), provided 40% of its SBA loans to minority-
owned businesses and 40% of its SBA loan dollars to minority-owned businesses.

"We are committed to the creation of strong communities across America by
helping fuel the economic engine of small business," said Lynn Pike, Small
Business Banking president. "By providing access to capital to a broad
spectrum of entrepreneurs, we are able to help build the neighborhoods in
which we do business."

Key Facts about 2003 SBA minority lending at Bank of America

- #1 SBA lender to all minorities

- 40% of all Bank of America SBA loans supported minorities (3,717 out of
9,406 total loans)

- 40% of all Bank of America SBA loan dollars went to minorities
($128,684,000 out of $320,800,000)

- Ranked number one in loans to Hispanics, Asian Americans and Native
Americans

- More than tripled the number of SBA loans to Hispanics

- More than tripled the number of SBA loans to African Americans

More here.

West Virginia ED Authority Rated

Fitch Ratings assigns an 'A' rating to the West Virginia Economic Development Authority's (EDA) $51.075 million lease revenue bonds (Correctional, Juvenile and Public Safety Facilities), comprised of $50.02 million 2004 series A and $1.055 million taxable 2004 series B. Both series of bonds are expected for negotiation the week of July 19 through a syndicate managed by Citigroup, Crews & Associates, Inc. and Ferris, Baker Watts, Incorporated. The 2004 series A bonds are due as $7.95 million serials on June 1, 2005-24 with $42.1 million terms with mandatory sinking fund requirements on June 1, 2029, while the taxable 2004 series B are due on June 1, 2006. Both series of bonds will be optionally callable beginning June 1, 2014 at par.

More here.

State CIO Role in Economic Development

Here is an interesting one.

A recent paper issued by the National Association of State CIOs encourages state CIOs to be active in leveraging state governments' IT and communications investments for economic development.

The National Association of State CIOs on Tuesday released a paper aimed at encouraging state CIOs to become active in leveraging state governments' IT and communications investments for economic development. In addition, the paper sees CIOs serving as liaisons to the state's technology community, economic development corporations, chambers of commerce, and other IT-intensive businesses because of their role leading one of their states' largest IT shops. CIOs are ideally situated to help evangelize the importance of the Internet and high-tech technology to the state's economic future, says George Boersman, director of the Office of Technology Partnerships for Michigan's IT department and chair of the NASCIO panel that wrote the paper. "CIOs need to grab hold of that," he says.

Only two states, Virginia and Colorado, have formally defined wide-ranging economic development roles for their top government technology officials. In both states, the CIOs who handle day-to-day policies and operations of government IT report to these cabinet-level secretaries. Still, the NASCIO paper says, there's much other CIOs can do to champion economic development.

One example: becoming well versed in alternate ways to make broadband access universal as a means to spur economic growth. The state CIO will want to be involved in the discussion to assure the chosen approach will further the goal of pervasive access in underserved or economically stressed areas, the paper says.

Download the brief here.

More here.

Dream Homes Worldwide

Luxury homes is big business. Don't believe me? Click here to see what Knight Frank in the UK has to say about dream homes.

Economy Walking With a Limp in Korea

As the economic recession in Korea gets worse, there is a widespread gloomy economic outlook for the second half of the year. The state-run think-tank of the Korea Development Institute (KDI) on Wednesday cut the country’s GDP growth rate forecast from the initial 5.5 percent to 5.2 percent, citing the reduction in domestic consumption in the second quarter as the main cause. The domestic consumption had showed a sign of a sharp rally since the end of the previous year.

It is forecasted that despite flourishing exports, the economic growth rate for the second half of the year would remain at the 4 percent level due to stagnant domestic demand and slowdown in construction investment. The consumer price index was also raised from 3.1 percent to 3.5 percent due to high oil prices. The KDI is concerned that the current bleak economic signs could lead to a weakening growth potential and a prolonged economic slump.

U.S. investment bank Morgan Stanley also dropped Korea’s economic growth rate forecast for this year from 4.9 percent to 4.6 percent and for next year from 4.3 percent to 3.8 percent. Other financial institutions such as Lehman Brothers, UBS Warburg, Citigroup, HSBC and JP Morgan revised down its economic growth rate forecast for the country. As for domestic financial institutions, LG Economic Institute slashed this year’s growth rate forecast from 5.6 percent to 5.0 percent, and Samsung Economic Institute is expected to announce its revision sooner or later.

Song Tae-jeong, a researcher at LG Economic Institute, said, “Stagnation in domestic demand is one of structural problems of the country’s economy. Thus, this is the time to come up with measures for raising growth potential based on some principles.”

More here.

The Skills You Don't Have CAN Hurt You

NEW YORK--(BUSINESS WIRE)--July 14, 2004--
Failure to Build Critical Workforce Skills May Hinder Ability to Address Marketplace Challenges

The war for talent will escalate as confidence in the economic and business climate continues to improve, but many companies will not be well-positioned to compete in the new environment, according to a new research report released today by Accenture (NYSE: ACN).

The research, the fourth annual High Performance Workforce Study, is based on interviews with 244 senior executives in the United States, Europe and Australia. Its goal was to identify trends and other factors that are currently affecting the performance of workforces and businesses.

More than one-third (41 percent) of respondents said the war for talent will have an impact on their companies in the next 12 months, compared with less than one-quarter (23 percent) who said the war for talent is currently affecting their organizations. Despite this, most respondents said their organizations do not have the skills and capabilities that they view as critical to addressing marketplace challenges.

For instance, while nearly two-thirds (65 percent) cited "developing an effective leadership capability" and half (49 percent) cited "creating an organization and culture that adapt effectively to change" as very important organizational capabilities, only 8 percent in each case said their organizations are performing very well in these areas. Furthermore, just 17 percent of respondents described the overall skill level of their entire workforce as industry-leading.

Survey findings also indicate that executives are shifting their focus from cost control to growth. For instance, one-third (32 percent) of respondents said their primary focus today is on cost control, compared with about one-quarter (27 percent) whose primary focus today is on growth. However, while more than one-third (42 percent) of respondents said their companies will focus primarily on growth in the coming year, less than one-fifth (18 percent) said they plan to focus primarily on cost control during that time.

"The recent focus on cost-cutting has led many companies to lose marketplace momentum. Now, as they ramp up investment in growth-oriented activities to achieve higher levels of performance, they need to regain their competitive edge in terms of recruiting, retaining and developing high-caliber employees," said Peter Cheese, managing partner of Accenture's Human Performance service line. "The way forward involves a more strategic approach in human resources. Organizations should understand how to effectively engage employees, focusing on learning and performance management and aligning both to business strategy."

The research found that shortcomings in the respondent organizations' human resources (HR) and training practices account for the lack of solid workforce performance. For instance, while the three most important HR initiatives that respondents identified were improving worker productivity (69 percent), improving the adaptability of the business to new opportunities (68 percent) and facilitating organizational change (66 percent), no more than 12 percent said they were very satisfied with their progress on any of these initiatives, and just 18 percent said they were very satisfied with the overall performance of their HR function.

Similarly, when asked to identify their most important training initiatives, respondents cited "aligning learning strategy with business goals," "ensuring learning content meets workforce requirements" and "boosting workforce productivity and agility" (selected by 77 percent, 75 percent and 72 percent, respectively). Yet only 11 percent, 16 percent and 9 percent, respectively, said they were very satisfied with their progress in these three areas, and just 16 percent said they were very satisfied with the overall performance of their training function.

The survey also found that, in virtually every case, the mean satisfaction rating with the HR and training functions is higher among respondents who outsource all of a particular training or HR activity, such as recruiting, payroll, training content development or training delivery, than among those who outsource none of that activity.

Additionally, the research identified 38 companies that fared better than the other companies in the survey in terms of various measures of workforce and business performance. For example, as a group, these 38 companies have stronger overall financial performance; are more likely to be planning to grow their businesses in the coming year; see human capital-related capabilities as more important to addressing critical marketplace challenges; use IT effectively to support HR and training; and regularly measure the link between HR and training investments and business results.

"These companies prove that there is light at the end of the tunnel," said Hap Brakeley, president of Accenture Learning, an Accenture business that provides learning solutions to companies on an outsourced basis. "They understand just how critical people are to their overall success and, consequently, devote the attention and resources to help their workforces perform at the highest level. Ultimately, they provide a model for other companies to emulate."

Methodology

To identify trends and factors that are affecting the performance of workforces and businesses, NOP World, on behalf of Accenture, conducted e-mail and telephone interviews with 244 senior executives in the United States, United Kingdom, France, Spain, Germany and Australia between December 2003 and April 2004. Respondents' companies represented 17 industry segments, including financial services, resources, services, manufacturing and government.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With approximately 95,000 people in 48 countries, the company generated net revenues of US$11.8 billion for the fiscal year ended Aug. 31, 2003. Its home page is www.accenture.com.

Kentucky Looks to Life Sciences

Kentucky intends to recruit or help launch companies that can turn plants and other farm products into such things as pharmaceuticals, Gov. Ernie Fletcher said.

But first, Kentucky must retool a business recruitment system that was historically geared toward manufacturers and which put a premium on volume of jobs created, Fletcher and other officials said.

For "life science" or "bioscience" companies, tax breaks may be less meaningful than laboratory space or university research assistance, they said.

Such companies can generate and invest huge amounts of money with comparatively few employees. But they also may take years to hit their stride.

More here.

Michigan Gets Furniture Deal

Office furniture maker Haworth Inc. said Tuesday it will consolidate its manufacturing and distribution operations in four states to facilities in three western Michigan cities.

The Holland-based company received a Single Business Tax credit worth about $10.5 million to consolidate its operations from Jonesboro, Arkansas; Henderson, Texas; Hazelton, Pennsylvania; and Lincolnton, N.C., and relocate to Michigan, according to the Michigan Economic Development Corp.

The move is expected to mean an additional 1,000 Haworth jobs at the company's newly consolidated facilities in Holland, Allegan and Big Rapids, said Paul Krepps, spokesman for the MEDC.

The $42.7 million project includes a major reconstruction of its 25-year-old headquarters in Holland, the MEDC said. Haworth also will continue operating at its existing facilities in Douglas, Ludington, Kentwood and Troy, Krepps said.

Krepps said Haworth has closed facilities in Alabama, North Carolina, Tennessee, Georgia and Washington to reduce excess capacity in recent years.

More here.

Life Sciences in Michigan

Michigan's state government began a concerted effort to boost the life sciences industry in 1999.

•Funding: State funding for grants has dropped from $50 million in 2000 to about $25 million this year, including Michigan Economic Development Corp. money. Some of that money now goes to homeland security and automotive research.

•Michigan's original goal was to invest $50 million a year for 20 years.

•Michigan has about 32,000 workers in its life sciences industry.

•Overall investment in life sciences research and development, including private money, is about $2 billion a year.

Source: State of Michigan: Michigan Economic Development Corp

Indiana Tribe Seeks Federal Designation

A delegation of Miami Indians from Indiana will attend part of the U.N. Geneva Convention in Switzerland to seek international support of its attempt to gain federal recognition as an Indian nation.

The designation for the Miami Nation of Indians, headquartered in Peru, Ind., could mean educational assistance, economic development and qualification for other government services for tribal members.

The Miami Indians of Oklahoma are a recognized tribe and receive the benefits, but Indiana's tribe is not. About 5,500 Miami live in the U.S., with half in Indiana, Chief Brian Buchanan said in a press release.

More here.

Wayne County, Michigan Gets Former Pittsburgh ED Director

Wayne County's new economic development chief cut his teeth in Pittsburgh, where he helped turn slag heaps into clusters of upscale housing. Officials wait to see if Mulugetta Birru can work the same magic in Detroit.

Mulugetta Birru has a record of other successes in Pittsburgh. He converted an abandoned steel mill into 123 acres of lofts, stores and offices. And he took a blighted industrial island in the Allegheny River and helped develop it into market-rate housing.

Birru, 57, says he loves abandoned buildings. That will be helpful in Wayne County, which is bigger than and easily as troubled as the Steel City, which has lost tens of thousands of steel jobs in recent decades and is facing severe financial problems.

More here.

Biotech in Taiwan

The outlook for Taiwan's biotechnology sector in the second half of this year is encouraging, and investment for the whole of 2004 is expected to exceed the average level in recent years, according to forecasts by a government unit.

The Industrial Technology Information Service (ITIS) under the Ministry of Economic Affairs (MOEA) estimated that investment to be channeled into the domestic industry will top NT$20 billion (US$593.5 million) -- the average level for the last three years -- for the whole of 2004. The ITIS made the estimate on the grounds that investor willingness in the industry is strong, pointing to surveys as proof.

More here.

The Genentech and South San Francisco Story

The biotech poster-child, Genentech, started the revolution that has roared on for 28 years. It all started in South San Francisco.

It's an interesting "early days and now" story. Click here to read it.

China Growth Slowing

China is finally having the economic impact its backers have long predicted. The country’s boom accounted for almost one-sixth of worldwide economic growth last year. Now that its economy is slowing, the world’s most populous country may curb global expansion.

Premier Wen Jiabao’s effort to cool China’s growth rate to about 7 percent from last year’s 9.1 percent may trim global growth by half a percentage point in 2005 and Asia’s expansion by a full percentage point, said Stephen S. Roach, chief economist at Morgan Stanley & Co. in New York.

China’s boom accounted for about a fifth of the growth in global trade in 2003, about five times its impact a decade ago, said Nicholas Lardy, China scholar at the Institute for International Economics, a nonpartisan research group in Washington. Its imports rose by 40 percent in 2003.

More here.