the edge is becoming the core...

From: The Only Sustainable Edge: Why Business Strategy Depends on Productive Friction and Dynamic Specialization by John Hagel III and John Seely Brown

"What do we mean by this? The edge is where the action is - in terms of growth, innovation and value creation. Companies, workgroups and individuals that master the edge will build a more sustainable core. While our primary focus will be on business activity, our perspectives will also be relevant to leaders of other kinds of institutions as well - educational, governmental and social.

The edge is giving rise to a new common sense model. We all perceive and act based on "common sense" assumptions about the world around us and the requirements to achieve our goals. Every major technology shift has produced a fundamentally new common sense model. Our goal is to understand and describe key elements of the new common sense model emerging from technology innovations - especially the invention of the microprocessor and the introduction of packet-switched networks - that were introduced in the early to mid-1970s."

Downtown Revitalization Report

From Brookings Institute: Twelve Steps to Revitalizing Downtowns

Though every downtown is different, there may be some common revitalization lessons that can be applied anywhere. While any approach must be customized based on unique physical conditions, institutional assets, consumer demand, history, and civic intent, this paper lays out the fundamentals of a downtown turnaround plan and the unique "private/public" partnership required to succeed. Beginning with visioning and strategic planning to the reemergence of an office market at the end stages, these 12 steps form a template for returning "walkable urbanity" downtown.

New Book Says Government Renewal is Possible

This may be hard for some of you to believe, but Steven Kellman's new book, Unleashing Change: A Study of Organizational Renewal in Governmenty, says change and innovation is possible in large public bureaucracies. There is a review from the Brookings Institute:

"This is a hopeful account of the potential for organizational change and improvement within government. Despite the mantra that "people resist change," it is possible to effect meaningful reform in a large bureaucracy. In Unleashing Change, public management expert Steven Kelman presents a blueprint for accomplishing such improvements, based on his experience orchestrating procurement reform in the 1990s.

Kelman’s focuses on making change happen on the front lines, not just getting it announced by senior policymakers. He argues that frequently there will be a constituency for change within government organizations. The role for leaders is not to force change on the unwilling but to unleash the willing, and to persist long enough for the change to become institutionalized.

Drawing on the author’s own personal experience and extensive research among frontline civil servants, as well as literature in organization theory and psychology, Unleashing Change presents an approach for improving agency performance from soup to nuts—mixing theory with practice. Its analysis is innovative and empirically rich. Kelman’s conclusions challenge conventional notions about achieving reform in large organizations and mark a major advance in theories of organizational change. His lessons will be of interest not only to scholars interested in improving the performance of the public sector, but for anyone struggling to manage a large organization.

Steven Kelman is the Weatherhead Professor of Public Management at Harvard University’s John F. Kennedy School of Government. From 1993 to 1997 he administered the Office of Federal Procurement Policy at the U.S. Office of Management and Budget, where he was a leading figure in "reinventing government" efforts. His previous books include Procurement and Public Management: The Fear of Discretion and the Quality of Government Performance and Making Public Policy: A Hopeful View of American Government."

New Reports From the Bay Area Economic Forum

This one was passed along to me from Mike Ammann from the Solano, CA EDC. Thanks Mike!

Three new reports published by the Bay Area Economic Forum in 2005 are now available online.

Technology Start-Ups and the Dynamics of Silicon Valley (PDF: 12 pages, 240 Kb) assesses the process through which technology start-ups are created in the Valley. This latest entry in the Forum Reports series considers why the Bay Area has incubated so many entrepreneurs, and the issues that will impact the region's future ability to generate innovative small companies.

Visas for Higher Education and Scientific Exchanges: Balancing Security and Economic Competitiveness (PDF: 18 pages, 369 Kb) is a joint publication with the Bay Area Science and Innovation Consortium (BASIC). It discusses the effects on economic competitiveness of visa and immigration policies implemented since 9/11, particularly as they impact graduate students and scientists coming to this country from overseas.

One Million Jobs at Risk: The Future of Manufacturing in California (PDF: 30 pages, 352 Kb) discusses the importance of manufacturing to California's economy, and recommends strategies that the public and private sectors can jointly pursue to assure that the state retains a viable manufacturing base.

Economic Developer as Business Strategist

I have thought for some time that economic developers should develop a new skill set related to business strategy. Why? Because we continue to intercept "deals" too late to have any impact of how or where they happen. If we work with companies at the strategy level, we may stand a better chance of increasing our impact. It's worth a try.

I have always been impressed with how a school of pirhana can overtake larger prey. With the right business strategy skills, could we help smaller companies in our area work together, or work with smaller companies elsewhere, to compete against larger corporations? As the multinationals pull even farther away from American communities, maybe we should be thinking in this direction.

It can be done. Read this article in Strategy+Business. Think about it. Could this be a new role for economic developers in creating growth opportunities for their areas?

New Louisville, Kentucky Seed Venture Fund

A group of state and local leaders active in the venture-capital, life-sciences and economic-development industries quietly has been soliciting investments for a locally based venture fund to provide seed capital for Kentucky and Louisville-area life-sciences companies. The fund will have about $10 million at the start. Read more here.

Where's Venture Capital Headed

After a very difficult three years in the venture capital industry, signs of improvement are finally emerging. Yet most VC industry-watchers agree there are still too many startups, too many VC firms, and too much capital waiting to be invested. History and common sense suggest the industry is due for a major shake-up. Some argue that the impending crunch will bring new blood and a more democratic process to a clubby, clique industry. A new report by Focus Ventures believe that, for better or worse, just the opposite will happen.

New Community Planning Guidebook

Smart Growth America has released Choosing Our Community's Future, a guidebook developed to assist communities in shaping the growth and development of their neighborhoods, towns and regions.

The guidebook will help readers understand the elements of community design, the planning and site approval process for development projects, and what can make a plan or project deliver on community and environmental benefits such as walkability, durable design and a range of community features like parks, libraries, schools and convenient shopping.

''Choosing Our Community's Future'' focuses on the visioning and planning efforts that set the stage for smarter growth, and how citizens can engage and make suggestions for better growth and development through collaborative stakeholder meetings and workshops.

The guidebook will help you learn how to:

1. Make sure that infill development works in your neighborhood
2. Evaluate mixed use projects
3. Argue for redevelopment that brings benefits to all
4. Reduce the environmental impact of growth and development projects
5. Get the most from community planning.

Learn more here.

Take Note of Tallahassee

Is your ED organization facing a battle with a local government funding source that is threatening to withhold its check this year? Several EDOs I have known over the years have faced these issues. Many local governments are feeling significant revenue pressure. They must be able to speak to the worthiness of any investment they make, even in economic development.

If this situation applies to your organization, you might want to review what has been going on in Tallahassee, Florida, where city officials had put a hold on their check to the local EDC.

There is always more to these situations then what gets reported in the local newspaper, but you might find this to be an interesting read.

My advice is to be prepared to speak to the return on investment (ROI) that your local government receives from its investment in economic development. It all starts with your organization operating in a highly performance-based way. I know some organizations that have not been able to demonstrate their worth, and as a result have lost funding. Be proactive around communicating frequently and effectively with your funding sources about the value of their investment in your organization. The worst time to do it is when you ask for the next check.

Know Your Emotions

Looking to Make a Sale or Get Promoted? Emotions Will Help Determine the Outcome
Article Abstract
Source: Knowledge_at_Wharton

Can your emotional state impact your effectiveness as an economic developer? If economic developers are at all like business managers and executives, then the answer is definitely yes they can.

High emotion contributes to great opera. It does not, however, serve us well when making judgments about others. This is the argument advanced in "Feeling and Believing: The Influence of Emotion on Trust," a new paper by Maurice E. Schweitzer, Wharton professor of operations and information management, and Jennifer Dunn, a PhD student in the department.

The two researchers conducted five experiments to determine the influence of emotional states -- happiness, gratitude, anger, and guilt -- on trust. Each experiment confirmed that incidental emotions (emotions from one situation that influence judgment in a following, unrelated situation) affect how willing we are to trust others. For example, our anger over a speeding ticket is likely to affect how we judge someone later in the day. The researchers conclude that despite feeling we are rational beings who make clear, lucid judgments, in reality we all walk around in a sea of emotions that are likely to influence how we act in both business and social contexts.

A second key finding in the study is that if people are aware of their emotional state, then the emotional state does not generally bleed into their judgments of others. Misattributed emotions are a problem, the authors point out, particularly for people working in high-stress, fast-paced jobs, who have to make quick judgments about people. Because they move from one incident to the next without the luxury of time to sit back and gauge their emotions, they are more likely to misattribute emotional states. Again, awareness and correct attribution of emotional states can help manage this process, they suggest.

A good read in this area is Emotional Intelligence by Daniel Goleman.

Poll on the Top Business Attraction Organizations

Wouldn't you like to know who ED leaders believe are the top-rated ED organizations doing business attraction? Lots of people would like to know this. That's why we sent out a request to 100 top ED leaders and consultants asking them to tell us which organizations do the best job in this arena. We will run a story discussing the poll results sometime in August.

Here is the request. Please feel free to send your suggestions by email to Don Iannone at: dtia@don-iannone.com.

ED Futures is in the process of identifying the industry leaders in business attraction (recruitment) across America. We would like your advice about which regional (multi-county) and county-level organizations and programs are doing the best job of recruiting new businesses to their areas. We are working to identify business attraction programs that meet at least one of the following criteria:

1. Recognized as a business attraction industry leader by a state, regional (multi-state), or national economic development association.
2. Frequently used as a business recruitment and marketing best practice example by other economic development organizations.
3. Viewed by economic development professionals, industry site selection location consultants, and other experts as running a highly effective program that gets significant recruitment results over time.
4. Described in the trade, industry, or professional literature as an effective business recruiter, and worthy of note because of its performance.
5. Seen as using innovative business attraction strategies and techniques.

We would like you to identify three (3) organizations that you are aware of that meet at least one of these five criteria. It would help us greatly if you could provide us with the name and location of the organization, and a person we could contact for additional information.

Please feel free to: 1) ask others who can help with this request; or 2) suggest your own organization as a recruitment leader, if it meets one of the five criteria.

In exchange for your help, we will supply you with a list of the top organizations suggested as business attraction “industry leaders.”

Time is of the essence. We would like to formulate this list by next Friday, July 22, 2005.

In anticipation of your help, I would like to thank you.

Sincerely,

Don Iannone

Publisher, ED Futures
dtia@don-iannone.com
Phone: 440.449.0753

Top-Rated Metro Real Estate Markets

Expansion Management Magazine does an annual ranking of metro real estate markets, according to price and affordability.

The primary sources of data for the analysis are The National Real Estate Index (NREI), which is produced by Global Real Analytics (www.nrei.info); Grubb & Ellis’ Office Market Trends and Industrial Market Trends (www.grubb-ellis.com); and RS Means’ Construction Cost Index (CCI), a product line of Reed Construction Data (www.rsmeans.com).

Here is the 2004 list:

1. Greenville-Spartanburg, S.C.
2. Greensboro/Winston-Salem, N.C.
3. Oklahoma City, Okla.
4. Columbus, Ohio
5. El Paso, Texas
6. Tulsa, Okla.
7. Memphis, Tenn.
8. Jacksonville, Fla.
9. Salt Lake City, Utah
10. Albuquerque, N.M
11. Raleigh-Durham, N.C.
12. Nashville, Tenn.
13. Dallas-Fort Worth, Texas
13. San Antonio, Texas
15. Richmond, Va.
16. Indianapolis, Ind.
17. Cincinnati, Ohio
17. Cleveland, Ohio
19. Hartford, Conn.
19. New Orleans, La.
21. Birmingham, Ala.
22. Phoenix, Ariz.
23. Milwaukee, Wis.
24. Austin, Texas
24. Detroit, Mich.
26. Kansas City, Mo.
27. Norfolk, Va.
28. St. Louis, Mo.
29. Charlotte, N.C.
29. Ft. Lauderdale
31. Houston, Texas
32. Baltimore, Md.
33. Orlando, Fla.
33. Tampa-St. Petersburg, Fla.
35. Chicago, Ill.
36. Atlanta, Ga.
37. Pittsburgh, Pa.
38. Denver, Colo.
39. West Palm Beach, Fla.
40. Portland, Ore.

Reader Points to Leapfrogging Example

"Don, I think one of the clearest examples of leagfrogging is occurring in the developing world with telephone infrastructure. Many are skipping traditional land lines and going straight into mobile phone networks. In a related note, there is an excellent article in the July 9th issue of the Economist on the role mobile phones play in entrepreneurial development in developing countries.

Jared Diamond, author of "Guns, Germs, and Steel", would argue it's all due to a geographical accident. Growing the right crops such as wheat and barley that are easy to store, having animals that can be domesticated (goats & sheep v. lions & elephants), and a surplus of agriculture to allow labor specialization. PBS started an excellent adaptation of his book last night with more episodes to follow."

Dennis Pruitt
Montgomery County Action Council

Southern Arts Federation

The Southern Arts Federation (SAF) is a not-for-profit regional arts organization that has been making a positive difference in the arts throughout the South since 1975.

SAF creates partnerships and collaborations; assists in the professional development of artists, arts organizations and arts professionals; presents, promotes and produces Southern arts and cultural programming; and advocates for the arts and art education.

The organization works in partnership with the state arts agencies of Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee. SAF is funded by the National Endowment for the Arts (NEA), foundations, corporations, individuals and member states.

Learn more here.

Rural Prosperity in the South

Southern Growth Policies Board (SGPB) has just released its new report, The New Architecture of Rural Prosperity, which builds on the premise that the prosperity of the rural South is crucial to the prosperity of the South as a whole.

SGPB puts forth two recommendations for building rural prosperity. The first recommendation is to expand the view of economic development beyond industrial recruitment to include community-building activities as part of the actions that create, expand and recruit business to the rural south. Among other things, this means that economic development should operate within the context of quality of life. The second recommendation urges that economic development activities be managed along regional lines, without regard to traditional or state boundaries.

Good advice. Not exactly new, but sound advice. Most importantly, more people need to take these recommendations to heart and reinvent their ED programs.

The New Architecture of Rural Prosperity also includes action items for states and communities to build rural prosperity, an analysis of the research and recommendations from rural economic development experts and profiles of successful rural initiatives in the Southern region. Download the executive summary.

Utah's Industry Cluster Blog

Cool idea! Utah economic development officials are blogging about their new cluster initiative. I like it.

From the blog:

"What is Utah’s Cluster Initiative? Establishing clusters enables Utah companies to better leverage our regional strengths and global market opportunities to help build and sustain economic growth in key targeted areas. Clusters can cohesively align businesses, research, ideas, capital, workforce, education and government around core competencies and inherent resources."

Go to the blog.

Additional Family Business Resources

Check out these university centers which are providing assistance to family business development:

Austin Family Business Program - Oregon State University
Australian Centre for Family Business
Baylor University Institute for Family Business
Bryant College Institute for Family Enterprise
California State University-Fullerton
Case Western Reserve University Weatherhead School of Management
Cornell University Family Business Research Institute - Bronfenbrenner Life Course Center
Creighton University Center for Family Business
Delaware Valley Family Business Center
DePaul University Family Business Program
Duke University, Fuqua School of Business
Fairleigh Dickinson University - The George Rothman Institute
Family Enterprise Publishers
Florida International University Family Business Institute
Goshen College
Grand Valley State University
The Jim Moran Institute for Global Entrepreneurship
Kennesaw State University
Loyola Center for Closely-Held Firms
McMurry University Family Business Center
Montana State University Family Business Program
Northeastern University's Center for Family Business
NOVA Southeastern University - Institute for Family Business
Saint Louis University's EWEB
Stetson University Family Business Center
Tulane University Family Business Center
UMass Family Business Center
University of Alberta Business Family Institute
University of Cincinnati Goering Center for Family and Private Business
University of Connecticut - Family Business Program
University of Delaware Family Business Center
University of Kentucky Family Business Institute
University of Louisville Family Business Center
University of Memphis - Family Business Forum
University of New Haven
University of San Diego Family Business Institute
University of Tampa
University of Texas at El Paso College of Business Administration
University of Toledo Center for Family Business
University of Wisconsin-Madison Family Business Center
USC Family Business Program

Cornell University's Family Business Research Institute

Family-owned businesses are vitally important to local economic growth. We need to give more attention to the nurturing the growth of these businesses. The Cornell Family Business Research Institute is a useful source of information on this subject.

Helpful Information Links:

Using Life Insurance to Fund a Business Buy--Sell Arrangement
Family Business as a Field of Study: Task Force of the International Family Business Program Association
The Family Firm as Foundation of Our Free Society: Strengths & Opportunities
Management Succession Issues in Family Business
Social Capital & Entreprenuership: Bridging the Family Community
A Life Course Approach to the Entreprenuerial Family
Family Resource Management & Family Business: Coming Together in Theory and Research

Monograph on Energizing Entrepreneurs

I ran across this very useful monograph about how to energize and support entrepreneurship in rural areas on the Center for Rural Entrepreneurship. Click here to download the monograph in PDF format.

Entrepreneurship is getting a lot more attention to many of the rural areas where I am doing ED strategy work. I heard a great deal about it in June during my visit with economic developers in the Pacific-Northwest.

Read my earlier post urging greater attention to entrepreneurial development by ED organizations.

Rural Entrepreneurship Case Studies

For those of you looking for stories about how rural entrepreneurs have made it, check out these links:

Jim Jenkins - Rural Nebraskan Brings Entrepreneurial Spirit Back Home, March 2004
Finding the Entrepreneur Within Herself: Shirley Williams and Vanceboro Apparel, Chapell Hill, North Carolina, January 2004
Larry Comer - Entrepreneur and Volunteer Mentor, Americus, Georgia, December 2003
Life - and Business - Down on the Lavender Farm, Sequim, Washington, September 2003
Nurse Turns Entrepreneur - Caring Business is Born, Sparta, GA, August 2003
Rah Trost - Great Northern Adventures, December 2002
Cedar Works - Wayne Co. Ohio, October 2002
Beth Strube - Sunshine Express, September 2002
Jerry Atkin - Skywest Airlines, June 2002

Source: Center for Rural Entrepreneurship

"Open Source" as a New Approach to Economic Development

That is what Ed Morrison and a group of Greater Cleveland business, IT, and economic development types are buzzing about.

What is OSED? Ed can do a better job than me in explaining Open Source Economic Development (OSED). My overall assessment is that OSED is about a more open and participative process by which communities set and achieve their economic development priorities.

The "open source" concept (metaphor) is drawn from the computer world, where it refers to shared-code software such as Linux. In the software world, developers and users have access to the code underlying the software. Ed argues that everyone concerned about economic development should have access to the "ED code," and not just the established powers-that-be in a community.

After 30 years in the business, I wonder if there really is a "code" in ED. We seem to invent things as we go, from what I can tell. ED is a "semi-profession" by academic standards. It still has a ways to go in establishing and developing widespread agreement on its knowledge and practice foundations. Don't get me wrong...I love the field and believe it plays a vital role in society.

Let me get to the point of this post. I just read an article in Business Week entitled "The Myth of Open-Source , which raises questions about the future of open-source software. Is the article correct? Ask the Linux guys, or the author of the Business Week article.

My question is this: "If the open source concept from the computer world is to applied to economic development, how far can the concept (metaphor) be taken in economic development, especially if open-source software runs into some serious problems in the future?" I'm raising the issue of the sustainability of the transferred idea. I believe it is one that needs to be considered by those pushing the OSED "paradigm."

I give Ed Morrison credit for trying to tackle the "behind-closed doors/closed-system" approach to economic development. I run into it in lots of places where I do ED strategy work, and it inhibits the development and absorption of new ideas. I do the best I can to address the problem. A lot of it has to do with the distribution of power and wealth in communities. That is not an easy situation to change. In most cases, the folks with the money and power do not want to give it up, and they don't want somebody coming along and taking it away from them.

I think economic development needs new ideas. We have to open the window (knowledge and practice window) for that to happen. The old, closed approach is reaching its limits in many places, from what I can tell. Where it's exclusionary of certain stakeholder interests, it (the old closed model) should be let to die. At the same time, I think we need to give serious thought to the ideas (new or old) that we propose to apply in the field. That's not asking too much.

Latest Job Numbers

Employment gains were weaker than expected in June, although other data were more encouraging and the overall hiring trend remains solid.

After an outsize gain in May, the number of new jobs added by the U.S. economy in June was something of a disappointment. The headline nonfarm payroll figure for the month's employment report, released July 8, showed a gain of 146,000 jobs, well below economists' median forecast of an increase of 190,000. More here.

Should we be surprised that job growth is less than expected? Look at the number of jobs we continue to offshore every day. Gee. maybe that has something to do with the slower employment growth problem we're having.

The other question is: "Are we creating enough good jobs in terms of pay level, benefits, and career growth potential? I would guess not.

New President/CEO at Charlotte Regional Partnership

Just last week, the Partnership announced the selection of Ronnie L. Bryant as the new President and CEO. Ronnie, a longtime friend and colleague, comes to Charlotte from Pittsburgh, where he served as president and chief operating officer for the Pittsburgh Regional Alliance, an economic development and regional marketing organization serving a 10-county region of southwestern Pennsylvania. Bryant brings more than 23 years of managerial and economic development experience his new role with the Partnership. Congratulations Ronnie!

The Charlotte Regional Partnership is a nonprofit, public/private economic development organization dedicated to the growth and prosperity of Charlotte USA - a region of 2.3 million people located in North and South Carolina.

The organization's purpose is to allocate and leverage regional economic development resources to sustain and enhance the economic growth, vitality, and global competitiveness of the Charlotte region as a superior business location. The Partnership's services include site location assistance and customized research for business prospects considering the Charlotte region.

To learn more about the Charlotte Regional Partnership, click here.

Koreans Incubate in Fairfax County, Virginia

Here is an example of a real economic development innovation.

A group of Korean entrepreneurs are housed in the Korea Business Development Center, an incubator financed largely by the Korean government that helps Korea-based companies launch and expand in the United States. Many are in the research-and-development phase, flying between laboratories in Seoul and sales operations in the United States.

Here's the hitch--It's based in Fairfax County, VA! That's right...Koreans building new business in the U.S. for the U.S market.

The one-room office allotted to each may be tiny, but these innovators cram them with big dreams. As they make their pitch to anyone who will listen, at trade shows, networking lunches and cocktail receptions, the businesses are battling to compete with multibillion-dollar U.S.-based companies also charged with finding the Next Big Thing.

Read more here.

"Yes We Can" Phase Two in Battle Creek

In 2002, Yes We Can began as a pilot-type program in seven economically depressed Battle Creek, Michigan neighborhoods. The initiative was born from a consensus of Battle Creek residents, a group convened by the W.K. Kellogg Foundation about five years ago to redirect funding where it would be most beneficial. The resulting effort was the foundation's response to what it called "long-standing economic and racial disparities in the educational achievement of youth."

The foundation has allocated a total of $19.5 million for phase two, leaving more than $16 million to carry out Yes We Can objectives. Grant proposals are accepted on an ongoing basis, but are reviewed and awarded three times each year. Application deadlines are in April, August and December.

More here.

Cleveland Developer Suggests Changes in City's ED Approach

Here is what developer Dan Moore suggests:

"Focus the Port Authority on industrial job creation by forming an investment banking arm, which would lure manufacturing companies.

Create a deputy mayor position to function as a city manager.

Reduce City Council from 21 members to 11.

Establish a 3-1-1 citizen service center to direct calls and take complaints from residents.
Create a job advisory board to oversee Cleveland's Economic Development Department. The board would include three venture capitalists, a real estate expert, an investment banker and other experts.

Create a voluntary, 11-person advisory board to counsel the schools chief executive officer and school board."

Reprint from the Cleveland Plain Dealer.

More here.