Economic Development Futures Journal

Saturday, November 20, 2004

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Look for the Auto Shakeout

From: Area Development Magazine, Oct. 2004
Article by Steve Stackhouse

Here is one to think about.

"Conventional wisdom might suggest that there's no need for new investment in automotive manufacturing. But in the super-competitive world of cars and trucks, conventional wisdom does not necessarily apply.

The world's auto plants have the combined capacity of producing 70 million to 80 million vehicles a year, according to David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan. Global demand for vehicles is roughly 20 million units less than that, he says. Yet while logic might suggest that automakers can cruise on the capacity they have, it's just not that simple.

"One of the realities is that the industry is in a very competitive state," he says. "It hasn't been able to raise real prices since the '90s. The buying power of consumers is better than it's been in years, and that will continue as long as there is overcapacity."

But despite that general overcapacity, individual automakers continue to have the need to adjust their own manufacturing capacity. "If you're Toyota, you're probably going to add to your capacity," Cole says. Meanwhile, "Ford is taking out roughly a million units of capacity." The paradox is that the competitive situation brought on by overcapacity is forcing automakers to make facility investments — not to add capacity but to achieve new efficiencies.

The bottom line: "There's really a business-model transition. The shakeout is under way," Cole says. He notes that a recent industry seminar referred to the situation as "the perfect storm," a confluence of dramatic economic influences. There's the hyper-competitive situation, increases in raw material and energy prices, the rapid emergence of such developing markets as India and China, plus new R&D and manufacturing technologies. "There are whole new ways of developing products," he says."

More here.

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Daily Quote

Consistency is the last refuge of the unimaginative.

--Oscar Wilde

Friday, November 19, 2004

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Internet's Role in Site Selection

Information is king in economic development and site locators know it.

In the world of business site location, capturing information is a key project objective, and those who achieve that objective must do it effectively or their site selection results suffer.

For decades, communities controlled the information flow. If expanding or relocating companies were interested in making inquiries into a particular community they had to go directly to that community. The Internet is changing that.

The Internet has put the search for accurate information unquestionably into the hands of companies and their site location consultants.

The Internet helps companies gather the right information to both eliminate and include areas until they get down to the final choices. Companies can use a combination of sources to identify potential qualifed communities. Those sources include community and state economic development websites, which describe the local community, and private and government sites that give companies the ability to compare community characteristics in a number of ways. Comparative data are vital to successful analysis.

The increased use of the Internet to access information could make it more likely that companies will not contact potential communities until they are ready for the site visits. On the flipside, communities can now use the Internet to research companies looking for new locations. To me, a new two-way street has been created.

More here. (Note: The article seems to indicate that companies have gained the most leverage in this shift to the Net. My question is: how can communities use the power of the Net to counteract this advantage and improve their own position?)

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Daily Quote

Everything you can imagine is real.

--Pablo Picasso

Thursday, November 18, 2004

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State Business Climate Ratings Out

Site Selection Magazine's annual ranking of state business climates has just come out, and the winner in 2004 is Texas.

Texas has performed well in the past, finishing in 6th place in 2003 and third in 2002 -- corporate executives surveyed identified Texas as their first choice in 2002.

Important pro-business measures and actual capital investment as tracked by Conway Data's New Plant database combined to put Texas into first place in this year's rankings. These are important factors.

The ranking uses a combination of factors. Fifty percent of a state's rank performance is based on a survey of corporate real estate executives in which they were asked to rank their top 10 states according to ease of doing business, business costs and other factors. The other 50 percent of the ranking is based on the states' performance in four criteria associated with recent business-expansion activity recorded in the New Plant database. Read the Site Selection Magazine by clicking n the link below.

More here.

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NY City Bids on 2012 Summer Olympics

This is a post from Fast Company Magazine. Think about it.

New York City submitted its bid yesterday for the 2012 Summer Olympics, competing in the finals with Paris, Moscow, London, and Madrid. My question to you today, dear readers, is a two-parter: For those of you from Los Angeles, Atlanta, or any other city that has recently hosted the games, was your Olympic experience as a resident of that town a positive or negative one? Did the games usher in increased development afterwards, or were you saddled with a huge bill after the torch went out?For those of you living in New York, do you want the Olympics here? Will it push the city to even greater heights, or are you dreading the thought of even more tourists in Times Square?

More here.

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Daily Quote

"You can only lead others where you yourself are prepared to go."

--Lachlan McLean

Wednesday, November 17, 2004

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Daily Quote

"People rise to the challenge when it is their challenge."

--Belasco & Stayer

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Sears and K-Mart Tie the Knot

Kmart Holding Corp. and Sears, Roebuck and Co. announced a merger agreement Wednesday that will create the nation’s third-largest retail company, called Sears Holdings Corporation.

The companies said Sears Holdings will have approximately $55 billion in annual revenues, 2,350 full-line and off-mall stores, and 1,100 specialty retail stores. It will be headquartered in the northwestern Chicago suburb of Hoffman Estates, but will maintain a “significant presence” in Troy, Mich., where Kmart is based.

Under the agreement, which was unanimously approved by both companies’ boards of directors, Kmart shareholders will receive one share of new Sears Holdings stock for each Kmart share. Sears, Roebuck shareholders can choose $50 in cash or half a share of Sears Holdings stock in a deal valued at $11 billion.

Read the story here.

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Arizona State University Hopes to Learn From the Irish

Arizona State President Michael Crow is exploring Ireland this week in the hopes of bringing some European concepts to a new ASU research facility.

Crow is touring The Digital Hub outside of Dublin, Ireland. Restaurants and retail businesses exist within the park, as well as living facilities.

Crow's trip, which will last three or four days, would most likely be privately funded by the ASU Foundation. The goal of the trip is to observe the Ireland research facility and apply its concepts to a planned ASU facility. ASU officials hope to build a state-of-the-art research facility at the former Los Arcos mall site in Scottsdale, at Scottsdale and McDowell roads, Renzulli said.The project is estimated to cost $85 million.

More here.

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City of Indianapolis Launches Excellent Site Finder Website

Click here to learn more about it. The Mid-America ED Council will be giving an award to the City for its effort.

Tuesday, November 16, 2004

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Daily Quote

"The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency."

--Bill Gates

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Green Bay: We Need to Be "Cool"

I always thought Green Bay was "cool." At least watching the Packers on Thanksgiving Day, it looks that way.

Oh, you mean "Richard Florida Type Cool!" Got it.

On a serious note, it is a factor in keeping and attracting young talent. I say "Be cool!"

More here.

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14,000 Aviation Jobs Can Be Noisy

That is what Northern Kentucky and Greater Cincinnati residents have to say about their airport. This will be an interesting one to follow. Houses and airport runways have never mixed.

More here.

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Cleveland, Mississippi: A Look at ED

Cotton fields and generations of Mississippians living in poverty are not many miles from the bustling downtown shops and manufacturing plants of Cleveland.

Bolivar County's hub is a cultural oasis and steady economic cog in the Mississippi Delta, which long has been one of America's poorest regions. It's an area where the casino-saturated town of Tunica with its per capita income of $20,114 skews the region's average, making it $18,256 when it falls as low as $6,972 in north Tunica County and $11,104 in Marks. Cleveland's per capita income is $14,585.

"Cleveland is our Wal-Mart,'' said Sunflower County Supervisor Barry Bryant, who finds many constituents driving across county lines to Bolivar County's biggest city to shop and work.

More here.

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Regional Cooperation is Key

Here is a story about some Wisconsin counties that see the light. Click here to read the story.

Monday, November 15, 2004

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Daily Quote

"Any fool can criticize, condemn, and complain, and most fools do."

--Benjamin Franklin

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Personal Perspective

"The quality of an organization is directly linked to the quality of conversations of the people in that organization."

Want to learn more, click here.

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Arizona-Sonora Economic Study

Relative to the entire U.S.-Mexico border region, Arizona-Sonora accounts for:

-9.6% of total population (2003)
-5.7% of cross-border commodity flow (2003)
-48.8% of cross-border fresh produce import flows from Mexico (2003)
-6.5% of cross-border electric/electronic equipment shipments (2003)
-3.5% of cross-border machinery shipments (2003)
-5.4% of cross-border plastics shipments (2003)
-7.4% of cross-border commercial truck traffic (2003)
-7.1% of total gross state product (2001)
-8.9% of agricultural production (2001)
-7.8% of manufacturing production (2001)
-6.1% of transportation services (2001)
-2.1% of mining production (2001)

Learn more here.

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Arizona's Water Situation

The situation with respect to groundwater shortage and depletion is critical and growing worse in most sections of Arizona; . . .. As a general rule the present supply is inadequate to meet existing demand, resulting in severe overdrafts against the underground reservoirs. (Fourth Arizona Town Hall, 1964)

The goals set for the next 50 to 100 years should address the needs of sustainable development and preservation of water supplies for future generations of Arizonans. They should include achieving safe-yield in certain areas and looking beyond domestic, industrial and agricultural uses to the effect water use and allocation have on riparian areas, the nvironment and our overall quality of life. (Seventy- first Arizona Town Hall, 1997)

Arizona water managers, thus far protected from water shortage by legal rights that have guaranteed full delivery of the state’s share of the Colorado River despite dire drought conditions, are correct to raise the specter of water shortages in the future. (Robert Glennon and Jennifer Pitt, 2004)

Read the latest Arizona Town Hall report on the Water Situation in Arizona.

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Sonoran Wage Rates

It's important to know the facts. What are wage rates like in Sonora, Mexico?

Click here to find out.

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China's Growth

According to a recent survey conducted by the US Dow Jones Indexes on the future development of the global top 50 transnational corporations, one-third of these corporations believe that China's economic growth is the most positive factor for their development in the coming five years.

More here.

Sunday, November 14, 2004

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Personal Perspective

Spirituality in the Workplace
By Martin Rutte
(Reprinted from CEO Refresher)

The nature and meaning of work are undergoing a profound evolution. Two forces are helping to catalyze the momentum of this process — fear and the emergence of both a more personal and widespread spirituality.

The fear is about losing our job and having to do more with less. And the emergence of spirituality in the workplace points to the desire that there be more to work than just survival. We yearn for work to be a place in which we both experience and express our deep soul and spirit.

Fear in the Workplace

There are several factors causing an increase of fear in the workplace. The first is massive corporate downsizing. The benefit of downsizing is that it does increase profits. Moreover, it cuts the fat and the excess while streamlining the organization. But downsizing also has a downside. It causes pain and suffering. In addition to the pain felt by those people who have been let go, those who are still left are asked to increase production with less resources, in the same amount of time, and for the same pay.

They feel stressed out and bone-tired. They are anxious about the security of their job and often are resentful. And most painful of all, they don't see any light at the end of the tunnel.
Downsizing works in the short-term; in the long-term, what's lost is loyalty, engagement, experience, creativity and the full expression of spirit.

A second factor is that more work is moving offshore. Years ago, it was just manufacturing work. Now it's also service jobs. India and Israel, for example, are becoming key sites for the development of computer software. We thought that there were certain types of work that would always remain in the developed world — that these were "our jobs," like service and new technology development — it's just no longer so.

And what about successful companies laying people off? That's never happened before. The understanding used to be that when a company was in fiscal trouble it would lay off people and when the company was successful, it would keep and even hire people. But with re-engineering and new advanced technology, there is a need for less people, so successful companies are downsizing.

When you put all these factors together, you're taking the work contract — the implicit agreement that I would come to work for you for life, the belief in security of employment — and smashing it. The message is crystal clear, "You don't have a secure job anymore." And that causes insecurity, it causes anxiety, and it causes fear.

There is a growing sense of "dis-spiritedness" in individuals and in the overall workplace. The spirit has been shut down. It can't fully express itself. There is a sense of dis-engagement. It may not be completely quantifiable, but people can and do feel the lack of spirit in their workplace.

All of this doesn't need to paint a completely bleak picture. We can look at these very same factors from another, more useful perspective — the spiritual. The security we thought we got from the corporation is a myth. Real security comes from a connection to that which is truly secure — the spirit. We are in the process of moving from "dependent children" at work, with the parental company looking after us, to really coming into our full, adult Selfhood. From this new reality we can begin exploring and expressing more of our true spiritual selves.

The Emergence of Spirituality

In addition to fear, there is a compelling inner longing for spiritual fulfillment. There are several factors present in society reflecting the emerging desire for personal and collective spirituality.

The baby boomer generation is now entering its 50's. People are reaching mid-life and looking at those issues that are characteristic for this age – issues such as: "What is my legacy?"; "What are the long-term values that I want to leave behind?"; "In what other arenas of life do I want to invest my energies now that I've reached the peak of my career?"; "What is really important to me as I begin to see my parents, aunts and uncles start to die?" These kinds of thoughts are usual for people in mid-life. What is unusual, however, is that the baby boomer generation is so large. When it begins to think about these issues, then society follows. As spirituality emerges for baby boomers, the whole of society is affected.

Concern and involvement with the bio-environment also reflect an emerging sense of the spiritual. The environment is both life supporting and gives us an awareness and consciousness of the whole. It reveals to us how we are interconnected and interdependent. And when you think about that, that's a very spiritual metaphor.

"When the concept of human spirit is understood as the mode of consciousness in which the individual feels connected to the Cosmos as a whole, it becomes clear that ecological awareness is spiritual in its deepest sense." — Fritjof Capra

Yet another factor is the maturing of the scientific paradigm. We thought we could solve all the world's problems with science. We thought we could eventually understand everything through science. But the more we know, the more we find out we don't know. Science has been divorcing itself from the spiritual for several hundred years. However, science without spirituality is like a wave without the ocean. A growing number of scientists realize this and are moving more into spiritual exploration.

These three factors are indicative of the overall emergence of spirituality in our time. Popular culture also reflects this in the growing number of books, movies, and TV programs about spirituality. And spirituality in the workplace is part of this phenomenon.

What Is Spirituality?

I've found that when people ask me the question, "What is spirituality?", what they're really concerned about is, “Will I have 'the Answer'”? or some other dogmatic response. They're afraid that I've already got spirituality defined and that they will disagree with my definition, which will then cause separation. People are afraid that I (or anyone else speaking about spirituality) will shove a particular point of view down their throats. This approach offers the listener no opportunity to search for his/her own truth.

The journey is not about spirituality as "the answer," but about spirituality as "the question." A question allows you to look more deeply. It allows you to search for what's true for you, and in so doing, deepen your own experience. But ultimately, what moving from answer to question does is make it safe and permissible to explore this territory in a way that is useful.

What is spirituality for you? Where is spirit or spirituality not showing up in your workplace? Where is it flourishing? Explore these kinds of questions, at work, for yourself, your relationships, your division and your company. And in this questioning, in this exploration, notice the deepening of your own experience of spirituality at work.

Spirituality in the Workplace

What would a more spiritual workplace mean for people? It would mean that work would move from merely being a place to get enough money to survive — from just earning our daily bread — to being a place of livelihood. By livelihood I mean a place where we both survive and are fully alive. We are alive in that our spirit fully expresses itself. And through our contribution, we allow other people's spirits to be nourished and to flourish. Livelihood has, at its core, three meanings for work: survival (you're alive), enlivening of the individual Self (you're aliveness), and enlivening of the collective Self (their aliveness).

What are the benefits of a more spiritual workplace? One of the primary benefits is that people are more in touch with the Source of creativity. As business people, we realize the value of creativity and innovation. Creativity is a cornerstone of business. It allows us to come out with new products and services that really are of service. It allows us to do more with less. In essence, creativity leads to more efficient contribution.

As we move more into a service and technological economy, we want to continually expand innovation and creativity. But you can't demand that of people. "Human capital" has to be treated differently than "financial capital." You have to create an atmosphere in which creativity and innovation flourish; and that is accomplished through the bountiful expression of spirit. When we are more in touch with the Source of creativity, there is also revitalization, renewal and resilience.

Another benefit is increased authenticity in communication. A lot of the work I do as a consultant is to create a "safe space" in which people feel permission to talk about their truth without fear of reprisal. Businesses aren't accustomed to doing this as a matter of normal everyday practice. However, when the truth is allowed to be safely and respectfully spoken, old problems clear up, new possibilities emerge, and people feel more aligned. They work together in a trusting team.

Increased ethical and moral behavior is yet another benefit. But who cares if a company is ethical? Isn't business just a place where you see how much you can get ahead? In a word, no. An important value of ethical behavior for a business is the development of trust. We trust people who operate in an ethical framework. Employees trust employers. Employers trust employees. And customers who trust a company stay customers longer.

Spirituality in the workplace also promotes the expression of talent, brilliance and genius — talent in the sense of our Divine gifts; brilliance in terms of our intellect and the intensity of the light we have to shine; and genius not as a scarce commodity, but as something that everyone has. Our true job is to connect with that genius. And moreover, spirituality in the workplace also leads to increased self-fulfillment, contentment and a deep sense of belonging.

In most businesses today, spirit and spirituality aren't talked about. The first thing that needs to happen is to make it safe and permissible to talk about it, as normally and as naturally as the many other conversations we have at work, such as: profitability, innovations and personnel issues.

We start this simply by beginning. Talk to those you trust, talk to others in business, talk to your colleagues, but begin to talk about it. There may be an initial fear, but after a while, the momentum will be unstoppable.

Managing in the New Spiritual Workplace

Today, we live in the transition period between the old definition of work as survival and the new definition of work as livelihood. New management techniques and new organizational structures are needed to handle this emerging context.

Management in the survival mode has been based on command and control. The way you get people to produce is by telling them what to do and making sure it gets done. But in a spiritual workplace, productivity is achieved through nurturing the expression of the self and the spirit. Our job, as leaders, is to facilitate the discovery of spirit, to esteem it, to celebrate it, and to hold others accountable for their expression of it. Support your employees and colleagues in being clear that part of their job responsibility is to fully express their spirit, their life purpose, and their gifts.

A senior vice-president of a large utility company told me that one of the roles of companies in the future will be to help employees discover their life purpose and to make sure that their work is consistent with and demanding of that purpose. “Imagine what would happen," he said, "if you had a company in which all the people were doing their life's work. You would have more loyalty, more resilience, more creativity, more innovation, and a deeper sense of self-reliance, self-renewal and self-generation."

Another new management function will be helping people unleash and express their full, creative spirit. One of the ways to do this is to reconnect people with their artistry, whether that's music, painting, dancing, poetry or cooking. Poet, David Whyte, author of The Heart Aroused, goes into companies and reads poetry. Boeing Aircraft is one of his ongoing clients. The managers he works with begin to realize other aspects of themselves. Poetry helps them delve more deeply into their creative self, and it helps contribute to new insights, both personal and corporate. (Another great way for you and your employees to reconnect with your creativity is to read and do the exercises in The Artists Way, by Julia Cameron.)

An Invitation

The next phase of the evolution of work has begun. Spirituality is becoming more openly recognized as an integral part of work. If this is something that speaks to you, that you want more of in your workplace, I invite you to jump in!

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Martin Rutte is a speaker and consultant on spirituality in the workplace. He is committed to reconnecting business with its natural source of creativity, innovation and genius. As President of Livelihood®, a management consulting firm in Santa Fe, New Mexico, he explores the deeper meaning of work and its contribution to society. Visit http://www.martinrutte.com for additional information.

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Iowa Frets Over Loss of Talent

Here are the numbers that have Iowa economic development officials concerned about their loss of young talented people:

• Iowa lost 18,362 residents with four years or more of college between 1995 and 2000 - the fourth-greatest numerical loss in the nation - a report by Iowa State University's Office of Social and Economic Trend Analysis showed.

• Iowa had a net export of 12,926 young people ages 22 to 29 with at least a college degree between 1995 and 2000. This was the seventh-highest loss rate in the nation, a 2000 report by the National Information Center for Higher Education Policymaking and Analysis found.

• Percentage-wise, only one state, North Dakota, lost more single college graduates ages 25 to 39 than Iowa, a Census 2000 special report on young adult migration indicates.

More here.

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Census Definition of NC's Triad Area Changes

The Triad no longer exists, according to the federal government - at least not in the geographic form in which it has been identified for years.

In the place of what was classified as an eight-county metropolitan statistical area, the U.S. Office of Management and Budget has established five statistical areas that enable federal agencies to gather more in-depth data.

The change, 15 years in the making, separates Winston-Salem's economic data from Greensboro and High Point's. It also splits up the Triad's population base, which was ranked the 36th largest in the nation.

More here.

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Puerto Rico's ED Agenda

After politics, there is economic development. Click here for some insights into Puerto Rico's future economic development agenda.