Digital Media Arts Cluster in San Antonio

The San Antonio Technology Accelerator Initiative (SATAI) Network announced recently that it has created a new digital media arts technology cluster in the Alamo City.

SATAI President Randy Goldsmith says this new cluster represents a significant number of small companies doing big things in San Antonio. "The talent in this sector is truly gaining international recognition," he says.

Digital media industry officials estimate that there are more than 4,000 people working in the industry.

Read more here.

Canadian and Chilean Clusters Collaborate

The governments of Ontario and Chile's northern Antofagasta Region have signed a memorandum of understanding aimed at strengthening bilateral mining industry cooperation, Ontario Northern Development and Mines Minister Rick Bartolucci announced recently.

"By sharing knowledge and experience and promoting trade exchange our two jurisdictions have an opportunity to take the inside track in the race to find more efficient and effective approaches to modern mining challenges," said Bartolucci.

Bartolucci is in Chile this week to meet with regional government leaders and senior mining company executives, and promote Ontario mining. One of the areas of cooperation to be explored will be the strengthening of mining clusters.

Like Northern Ontario, the Antofagasta Region has rich mineral resources that contribute significantly to the region's economy.

A cluster is a geographic concentration of inter-related industries and institutions that compete but also cooperate. Clusters drive wealth creation in a region, primarily through the export of goods and services.

In 2003, the McGuinty government created the Ontario Mining Industry Cluster Council to bring together industry and organizations to foster a sustainable and rising standard of living for Ontario's mining regions.

Read more here.

Cluster Development in Germany

Four innovation reports presenting German Networks of Competence have recently been published by the management office of kompetenznetze.de. By pooling the resources and expertise of a wide range of players in industry and science, Networks of Competence facilitate the development of advanced technologies ripe for international commercialisation.

The innovation reports “Biotechnology/Genomics/Bionics”, “Nanotechnology”, “Optical technologies” and “Traffic/ Aerospace/ Information&Communication” feature German Competence Networks with exceptional outreach in fields of innovation with a high potential for growth. The portraits of the networks focus on research projects, international activities, and innovation highlights. Introductory articles provide an overview of innovations in the special fields. Each of the reports ends with a list of useful Internet addresses of e.g. funding programs, research initiatives, and information platforms.

Additionally, the innovation reports “Biotechnology/Genomics/Bionics” and “Optical Technologies” include the article “Conducting research in Germany” by the German Academic Exchange Service (DAAD) presenting Germany`s higher education and research institutes, which are centers of top-flight scientific research. They offer attractive conditions for higher education and research particularly to foreign scientists and students. Future innovation reports will strengthen the focus on the networks’ internationally relevant training offers.

The four innovation reports were published by the management office of kompetenznetze.de in cooperation with the DAAD and Invest in Germany, supporting the distribution of the reports at relevant international trade fairs.

Download them off this page.

Company Profile: Biomet

Biomet, Inc., designs, manufactures and markets products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy, including reconstructive and fixation devices, electrical bone growth stimulators, orthopedic support devices, operating room supplies, general surgical instruments, arthroscopy products, spinal products, bone cements and accessories, bone substitute materials, craniomaxillofacial implants and instruments, and dental reconstructive implants and associated instrumentation.

Biomet, Inc. operates in one business segment, musculoskeletal products, which includes the design, manufacture and marketing of four major product groups: reconstructive devices, fixation products, spinal products and other products.

The company has three reportable geographic markets: United States, Europe and Other.

Reconstructive devices include knee, hip and extremity joint replacement systems, as well as dental reconstructive implants, bone cements and accessories and the procedure-specific instrumentation required to implant the company's reconstructive systems.

Fixation products include internal and external fixation devices, craniomaxillofacial fixation systems and electrical stimulation devices that do not address the spine.

Spinal products include electrical stimulation devices addressing the spine and spinal fixation systems.

The other product sales category includes soft goods and bracing products, arthroscopy products, casting materials, general surgical instruments, operating room supplies, wound care products and other surgical products.

Website: http://www.biomet.com
Location: Warsaw, Indiana

Nation Online Report: A Look at Broadband Service

Those of you working on expanding broadband access in your area will find this information useful.

As the Internet increasingly affects the daily lives of Americans and the U.S. economy, one of the greatest changes in recent years has been the rapid uptake of broadband technologies.

Between the Census Bureau’s Current Population Surveys conducted in September 2001 and October 2003, the number of households with Internet connections grew by 12.6 percent. The data reveal that a transition is underway from dial-up to high-speed Internet connections. The use of high-speed Internet connections grew significantly between 2001 and 2003 and more than offset the decline in dial-up users. For this reason, this report focuses on what Americans are doing with their high-speed connections.

The dramatic uptake of broadband technologies has fueled the Nation’s rising use of the Internet.

• The proportion of U.S. households with broadband Internet connections more than doubled from 9.1 percent in September 2001 to 19.9 percent in October 2003.

• In 2001, two-thirds of broadband households used cable modem service (66.4 percent). By October 2003, cable modem households dropped to 56.4 percent and 43.6 percent of broadband households were using other types of connections.

• Meanwhile, the proportion of dial-up households declined from 40.7 percent to 34.3 percent.
The report finds that broadband users are more likely to use the Internet more frequently and in a wider variety of ways.

• Among Internet users, those with broadband connections at home are more likely to be daily Internet users (66.1 percent) than those with dial-up service (51.1 percent).

• Persons with broadband at home also engage in more types of activities online, particularly in the areas of entertainment, banking, purchasing products or services, and obtaining information.
In addition, broadband usage is lower in rural than urban areas.

• A lower percentage of Internet households have broadband connections in rural areas (24.7 percent) than in urban areas (40.4 percent).

• Rural households with dial-up connections are significantly more likely than their urban counterparts to list "Not Available" as the reason they do not have a higher speed Internet connection (22.1 percent to 4.7 percent, respectively).

Read more here.

Report on Income Variability

Here is an interesting one for those of you working on income and prosperity issues.

Between 2001 and 2002, a large portion of the U.S. population experienced changes in income ratios; however, the extent of upward and downward mobility in income varied substantially among people with different income levels.

Between 2001 and 2002, two-thirds of the U.S. population experienced a change of at least 10 percent in their income ratio --- 37 percent experienced an increase of at least 10 percent and 30 percent saw a decline of at least 10 percent.

Download the working paper here.

Hurricane Hotspots

Yes, we should have considered the possibility!

1. Southeast Florida (Miami-Fort Lauderdale-West Palm Beach)
2. Key West and the Florida keys
3. Southwest Florida (Fort Myers-Naples)
4. West Florida (Tampa-St. Petersburg-Sarasota-Clearwater)
5. Outer Banks islands, NC (Cape Hatteras)
6. Central Texas Gulf coast (Galveston)
7. Central Florida Atlantic coast (Melbourne-Cocoa Beach)
8. Florida Panhandle (Pensacola-Panama City)
9. Central Gulf coast (New Orleans, LA-Biloxi, MS-Mobile, AL)
10. South Texas Gulf coast (Corpus Christi-Brownsville)

Source: Sperlings Best Places

PS: And could a disastrous earthquake hit the West Coast at some point in time?

Real Estate Market Outlook

Industrial: The ongoing economic expansion is creating tenant demand across other property categories besides office space. The industrial vacancy rate fell by a robust 50 basis points, the largest quarterly decline in nearly 7 years, to end the first quarter at 8.9 percent. At the same time, the construction pipeline swelled to 88 million square feet, a 4 million-square-foot gain from the prior quarter. Look for the vacancy rate to continue falling, but at a slower pace in the second half of 2005, ending the year between 8 and 8.5 percent. Average rental rates may begin a gradual ascent toward year-end.

Retail: Shopping center leasing activity and rental rates have been very firm. Asking rental rates for prime inline shop space and premier urban retail space blew past expectations, averaging gains of 5 percent and 3.8 percent, respectively, over the past 12 months, while the average sales price for a 1-acre pad site in a top location increased by a robust 7.3 percent. Rising home prices have been a source of consumer spending as homeowners refinance their mortgages with cash-back or take out home equity loans. Stubbornly high oil prices have had a chilling effect, but it has been confined mostly to lower-income households and the recent performance of discount retailers. Despite slowly rising interest rates, consumer spending should remain strong as long as the economy continues to create jobs.

Hotels, Medical Offices, Other: Other property categories seeing high levels of demand include hotels, medical office buildings, and office condos. The hospitality market is in the midst of a robust expansion cycle fueled by increasing business travel and tourism, including foreign tourists visiting the United States at fire-sale prices - thanks to the depreciated dollar. Medical office buildings are benefiting from increasing demand for healthcare services created by the aging baby boom generation and biotech-fueled advancements in the medical industry. Office condos are enjoying a mini-boom spurred by the same low interest rates that encourage renters to become homeowners.

Read more here at Buildings.com

Office Market Turns More Profitable

The U.S. office market ended 2004 on a high note, reporting a 5-percent increase in net operating income (NOI) and a decrease of 6.1 percent in total expenses, according to the data collected and reported in BOMA Intl.’s 2005 Experience Exchange Report (EER). The U.S. private-sector survey results for calendar year 2004 are the weighted average responses of 3,210 buildings representing approximately 700 million square feet of space.

The dollar amount spent on different expense line items provides a mixed picture, but the overall expense data in the 2005 EER indicate that, though total income remained constant at $23.89 per rentable square foot in 2004, the NOI increased by 5 percent ($14.15/rsf vs. $13.51 in 2003). Building management achieved this increase by working to decrease its total operating expenses by 3 percent ($6.32/rsf vs. $6.52), and by decreasing administrative costs, which declined again by 1 percent in comparison with the previous year ($1.22/rsf vs. $1.23 in 2003).

Read more here. (You must purchase the report to get the data.)

If You Don't Have a Downtown

Maybe you have noticed this trend: mixed development projects are becoming much more common in suburban communities. One driver is the fact that suburban residents want the experience of a downtown, even if they don't have one. That is the story of Crocker Park in Westlake, Ohio, a western suburb of Cleveland.

Read the story here.

Katrina: An Opportunity for Economic Development to Re-Invent Itself?

ED Futures Editorial
By Don Iannone, Publisher

"Most of those in need of help after Hurricane Katrina have now been reached, the evacuation of New Orleans is largely complete, and engineers have started to pump water out of the flooded city. Who is to blame for the botched relief effort: George Bush, local officials, or no one in particular?" Source: Economist.

There is no escaping the finger-pointing that will grow as Katrina and its handling (mis-handling) becomes the biggest political football that America has seen in a long time. And if we are not careful, some could eventually point fingers of blame at economic development organizations for not doing more to help New Orleans and other Gulf Coast communities rebuild their economic bases.

Why is Katrina so special; perhaps in some ways, more important than 911? I would like to say it is because of the thousands of lives lost, the destruction of one of our nation's biggest cities and its surrounding Gulf region, and the economic costs that must be paid over several generations to rebuild what used to be there. Instead, racial politics and the widening gulf between the haves and have-nots in society are the major reasons why Katrina is such a big issue that people will hold onto for a very long time.

The issues of race and social and economic disparity are always there. They weren't resolved by the Civil Rights Movement, or other turning and tipping points in our nation's history. The disenfranchised in society cannot be bought off with a re-vamped minority business set aside program, or a new inner city home-building program. Their pain is too great and our ability to understand and respond is too small.

American society is out of whack, and the political extremes our nation has seen the past two decades have not helped restore our much needed sense of balance. More and more people are falling through the cracks. The cracks have widened, allowing not only Blacks and other racial minorities, but an entire middle class in American society, to fall further behind. Economic development has done virtually nothing about these issues. Why? Because we fear the political football created by racial politics and the worldwide war between the haves and have-nots.

How is the economic development community responding to our "Gulf Disaster?" I'm not talking about just the economic development organizations in New Orleans and the surrounding region. How can the national economic development community help the area get back on its feet? What lessons must we learn from this disaster? For one, every economic developer in America should be disturbed by what Katrina showed us in New Orleans and other impacted Gulf Coast communities about human pain and suffering. It should motivate us to do more to bring about a new generation of broad-based economic prosperity that touches all people.

We must do more!

Katrina could be an opportunity for New Orleans and the Gulf Coast to re-invent themselves and adopt a more sustainable development path in the future. The communities along the Gulf have long defied Mother Nature and her fury. Maybe this is a good time to design communities that live in harmony with nature's rules. Katrina can also be an opportunity for economic development to re-invent itself within a more sustainable development model, and also truly help those who need our help the most, and that is not Wal-Mart and the Bank of America!

Let's not let this opportunity slip away, and simply wait until the water recedes, so everyone can return to "business as usual." Instead, let's use this situation as an opportunity to re-make economic development with the really big issues in mind.

Katrina's "Unique" Economic Impact

This analysis was reported in a recent Business Week article. The report is truly sobbering. This parallels what I am hearing from other informed sources in the economic and business research community.

"This hurricane has at least three unusual features that will likely take additional bites out of third- and fourth-quarter GDP. The damage from Hurricane Katrina is still being tallied, but we at Action Economics have decided to take a first pass at gauging how wide a swath the storm will cut through U.S. economic output. In total, we're assuming it will subtract 0.7 percentage points from growth in gross domestic product in the third quarter, lowering the expected U.S. growth rate to 3.7%. We expect an additional 0.4 percentage point hit to the fourth quarter, with growth in that quarter now set at 3.9%. However, we forecast positive effects of 0.2 to 0.5 percentage points in each of the four quarters of 2006.

While most hurricanes have economic effects, Katrina has at least three unique factors: its impact on U.S. energy production; the related devastation of a major urban center, New Orleans; and the disruption of a vital transportation artery, the Mississippi River. Absent those factors, we might have expected a GDP subtraction of 0.3 percentage points from the third quarter, but a 0.1 percentage point positive impact in the fourth, as well as the four quarters of 2006 on average. But Katrina wasn't your ordinary hurricane. It struck a critical region for the national oil industry in terms of production, importing, and refining of petroleum products. Such strategic dependence on a specific region hit by a storm was absent in prior hurricanes in Florida, the East Coast, and Hawaii. Damage assessments are ongoing, and it will be some time before the overall impact becomes clear."

National Federation of Independent Businesses August Survey Results

Small Business Optimism Index

The Index for July rose slightly to 101.1 (1986=100). Second quarter GDP growth was estimated at 3.4 percent, with contributions from all major components. The NFIB Index
anticipated a stronger reading, so revisions to GDP growth will likely be positive. Labor markets tightened a bit and more firms reported raising compensation than raised prices. Nonetheless, profit trends improved as the number of firms reporting rising profits gained relative to those
reporting declines.

Labor Markets

Nineteen (19) percent of the owners reported increasing employment in July, and eight percent reported workforce reductions, adding a net 0.5 employees per firm. Seasonally adjusted, 17 percent reported increased employment and ten reported reductions averaging a net 0.2 employees added per firm. Fifty-two (52) percent hired or tried to hire one or more workers. Seventy-nine (79) percent of these owners reported few or no qualified applicants for the positions that they were trying to fill. Overall, hiring plans were solid in all industry groups. Construction was strongest with 23 percent planning to increase employment and nine percent
planning job reductions. Firms in finance, insurance and real estate followed.

Capital Spending

The frequency of reported capital outlays over the past 6 months was unchanged at 61 percent of all firms, a solid figure. Forty-six (46) percent reported spending on new equipment; 24 percent acquired vehicles; and, 13 percent improved or expanded their facilities. Eight (8) percent acquired new buildings or land for expansion and 16 percent spent money for new fixtures, furniture etc. The frequency of reported outlays was higher in all categories, and overall, the capital spending picture remains solid. The median outlay was about $27,000, substantial when aggregated over millions of firms and well ahead of June numbers.

Ohio's 19th Century Economic Roots

"Ohio's industrial structure was built between 1850 and 1880, when the value of its manufacturing grew to more than twice that of agriculture. A major stimulus was provided by the American Civil War (1861–65), in which Ohio supported the North, though there was strong antiwar sentiment in the state. After the war the growth continued, notably in the northeast and around Lake Erie."

More here at Encyclopedia Britannica. (Registration required.)

Ohio's Economy is Losing Ground

Economists blame Ohio's economic situation on the loss of manufacturing jobs, higher education's low priority, and bad political moves.

I would add the absence of a real economic development strategy and that Ohioans have a self-defeating image of themselves.

Read more here at the Akron Beacon Journal. (Free registration is required)

Meaningful Work

Work is a part of our search for meaning in life. No matter how much we love our jobs or careers, they are not ends in themselves.

As economic developers, our job is to help others find jobs. Nowadays, our attention is focused on the creation of "quality" jobs, or those jobs that offer good pay and benefits, career growth opportunities, favorable work conditions, and stability. This is no easy assignment given the competition for good jobs worldwide.

Labor Day offers us an opportunity to appreciate people who work. Historically, Labor Day was designed to honor "working Americans" who worked hard in a physical sense. Many economic developers have come to see Labor Day as an unwelcomed day to honor labor unions, which they see as a threat to American business competitiveness. As a result, Labor Day has come to mean less to the economic development community.

Maybe our profession should re-define its commitment to Labor Day by seeing it as a day to commemorate "meaningful" work in society; that is work that helps to bring meaning to people's lives. Maybe we should help to return pride and dignity to the workplace. I don't know about you, but I see too many people in this world who see work strictly as a means to an end. That's unfortunate because we spend 40 plus years of our lives working.

What is meaningful work? It's more than a job hierarchy that concludes that doctors, lawyers, business owners, artists, spiritual leaders, Air Force pilots, and the like are more meaningful jobs than the work performed by machinists, industrial laborers, flight attendants, food servers, and customer service representatives.

Meaningful work is work that helps fulfill our personal calling in life. It is work that makes us feel proud and accomplished in what we do. It is work that teaches us the lessons in life we must learn. It is work that we approach with a sense of personal meaning and worth. It is work that we care for and work that teaches us to care about ourselves, others, and the world in a larger sense.

I would urge all economic developers to consider this challenge and identify how they can help bring about more meaningful work in society in the future. Let's celebrate the expansion of meaningful work in America next Labor Day.

Your comments are most welcome. Email Don Iannone at: dtia@don-iannone.com.

Labor Day 2005

Source: SuperSky Products

Nation Branding and Lessons for Economic Development

Nations have brands. Just ask the French about their reputation for wine. Ask the Germans about their reputation for cars.

How does your national brand shape how your geographic area is perceived for economic development? Are you capitalizing on your national brand to create an advanatage in branding your community, region, or state for economic development?

Who has experience dealing with nation-branding? The Anholt-GMI Nation Brands Index is the first analytical ranking of the world's nation brands. Each quarter, the company polls its worldwide panel of consumers on their perceptions of the cultural, political, commercial and human assets, investment potential and tourist appeal of several developed and developing countries.

To learn more, download a short report about the Anholt-GMI Nation Brands Index here.

Happy branding!

Branding as Memory

Many economic developers are interested in creating a brand for their geographic areas. Some have tried and succeeded. Others have tried and failed. I think the difference lies in what you think a brand is. It's like everthing in life: what you think in your head (or your customer's head) can either help or hurt you.

What exactly is a brand? There are countless definitions of the term; a promise, a rumor, a relationship, an image, a unique position and so forth. But these descriptions are all results of branding, not the brand itself. A better description is "a person's collected experiences of a company, product or service with a certain name." But not even this description is spot on.

A brand is actually a memory. That is what Swedish brand planner Jonas Bergvall says. "Everything you remember about a company, through interaction, what other people say about them, advertising, using their products or every other interaction is their brand for you." Maybe the same can be said for place branding.

In light of that, create enduring happy memories for existing businesses in your area and new companies evaluating your area as a business location.