Ontario's New Manufacturing Initiative

Ontario Economic Development and Trade Minister Joseph Cordiano announced a new $500 million repayable loan program today. Ontario's Advanced Manufacturing Investment Strategy will work with industry partners to develop and put in place leading technologies and innovations to keep them globally competitive.

"We value our manufacturing sector in Ontario, and know that it is our province's largest job creator. With this strategy we are investing in our highly skilled workforce by helping manufacturers stay at the cutting edge of technology," Cordiano said. "That's how our industries will stay globally competitive and jobs for our Ontario workers will be secure in the future."

The Advanced Manufacturing Investment Strategy is designed to attract investment by helping companies across the province take immediate steps to develop and use leading technologies and innovations that will keep them globally competitive. Government support will focus on manufacturing processes and technologies, materials innovations, innovative waste management technologies and energy efficiencies.

Read more about the Ontario initiative here. Similar programs aimed at manufacturing, in particular the automotive sector have been launched in the past month in Michigan and Ohio. The question is: Will any of them work, or are they just postponing the inevitable?

Canada's Community Futures Program

The federal government supports local economic development by promoting community enhancement and diversification through the national Community Futures Program (CFP), which is intended to encourage communities to take charge of their future.

In Quebec, Canada Economic Development manages the CFP through its main partners: 57 Community Futures Development Corporations (CFDCs) in designated rural areas; the CFDC Network, whose mission is to encourage the CFDCs and BDCs to work together; 9 Business Development Centres (BDCs) in near-urban areas; and 15 Community Economic Development Corporations (CEDCs) in disadvantaged urban areas.

Through this network of partners, Canada Economic Development also provides most of Quebec’s communities with official access to government services.
Community Futures Development Corporations (57 CFDCs)

Ethics in Practice: A Look at Honesty

Mark Twain said "if you tell the truth you don't have to remember anything." I chuckle when I think about Twain's notion, but he is absolutely right.

Have you ever wondered how economic development would change if it practiced honesty on a higher level?

For an interesting discussion of "honesty," read what the ancient Chinese philosopher Conficius had to say about the three levels of honesty.

Michigan State University's College of Human Medicine

Whenever I try to understand the future, I look for where the "lines cross," and where new intersections appear. That is exactly what Michigan State University has been doing through its College of Human Medicine.

MSU's College of Human Medicine (CHM) has a national reputation for its history of innovation and excellence in medical student education. Founded in 1964, CHM was the first community-integrated medical school, with a curriculum that emphasized a patient-centered philosophy and a biopsychosocial approach to caring for patients.

More than 3,100 M.D. graduates of the College have experienced a unique combination of basic science education on the campus of a large, land-grant University, and clinical education in one of six campuses located across the state of Michigan. More than 200 paid and 3200 volunteer faculty are committed to teaching core institutional values that mark CHM graduates as unique and exemplary: respect of and care for patients, commitment to community, and the incorporation of psychological, social, and spiritual elements into care delivery.

Learn more about MSU's College of Human Medicine here.

Google Pittsburgh

Google Inc., the leading online search engine company, will open a new engineering and research office in Pittsburgh next year to be headed by a Carnegie Mellon University professor, the company announced recently.

The facility will be charged with creating software search tools for Google. It is expected to create as many as 100 new high-tech jobs in the Pittsburgh area over the next few years.

Read more here.

Cumo Vs. DaimlerChrysler: End of Big Incentives?

That is the question raised in a recent Nashville news article: "Millions of dollars in incentives states use to lure companies, such as Tennessee did for Nissan, may be outlawed depending on a U.S. Supreme Court decision expected next year.The high court has agreed to hear arguments March 1 on a case that could impact whether states are able to grant tax credits in their attempt to lure companies into their areas."

Read more here.

What do you think will be the Court's decision?

Change the World, Change the Heart

"To put the world right in order, we must first put the nation in order; to put the nation in order, we must first put the family in order; to put the family in order, we must first cultivate our personal life; to put our personal life in order, we must first set our hearts right."

Source: Confucius

Michigan: Stop Blaming Yourself for the Auto Sector's Demise

The Michigan Legislature just passed a $600 million tax relief bill package for large manufacturers, which Michigan Gov. Jennifer Granholm will soon sign into law. The legislation is designed to aid the state's struggling automotive industry, and it will provide the relief to these companies over four years.

The legislation will create a 15 percent personal property tax credit beginning in 2006 and a new 100 percent new investment credit on property directly related to jobs transferred to Michigan in 2007 and 2008. (This is a way for Michigan to gain favor with consolidating manufactuirng companies to bring more jobs back to Michigan. The strategy is to capture a larger share of a rapidly shrinking national manufacturing employment pie. In the short term, it might appear to work, but in the long term this is "zero-sum" economic development strategy.)

Michigan-based companies that export goods would also get a tax advantage with a change in the state's sales tax apportionment factor. (My guess is that these companies are already exporting their goods. Shame on them if they're not.)

The new Michigan legislation will also maintain the current tax status for auto suppliers Delphi Corp., and Visteon Corp., allowing them to avoid a massive tax hike at the end of this year. (What else is new?)

If you are so inclined, you can read more here.

Commentary: Let me start off by saying that I am not picking on Michigan, but this situation is my "tipping point" when it comes to the sad state of economic development policy and strategy across the United States.

I am deeply concerned by the "acts of desperation" that I see masquerading as "economic competitiveness strategies." There must be a better way. I will do my best to find it. Stay tuned.
I have very serious doubts that the tax relief being proposed in Michigan, or any local or state reduction in corporate taxation anywhere, is going to improve the competitiveness of the manufacturing sector here in the United States.

You can cut taxes until you are blue in the face and it will not prevent the inevitable evolution of the manufacturing sector. This is especially true for the automotive sector, which has created its own "nightmare on Elm Street."

My advice to Michigan economic development officials: Stop blaming yourself. You have a wonderful state, which is rich in people, variety of place, environment, knowledge, creativity, compassion, and so much more. Your state tax policies are not responsible for what is happening to the automotive industry or the larger manufacturing sector. Therefore, changing these policies will not prevent the inevitable.

Accept there is little that you can do to make life easier for these companies. They created their own success and now they are creating their own misery. Don't allow these companies to bully you into concessions like those they pound out of their suppliers worldwide. This is a time for "tough love."

Focus your attention on the people directly and indirectly impacted by the massive self-destruction of the auto industry. Better educate them. Create jobs in new industries for them. Give them hope and encouragement that they can succeed in the global economy. Above all, tell them the truth about what they need to do to survive and prosper in the future. Use your great universities to rethink the state's model for economic development and how to move to the global entrepreneurship model.

SBA Study: Broadband Use by Rural Small Businesses

This SBA study explores two popular beliefs pertaining to the deployment and use of broadband services. First, that these services provide tangible benefit to the overall economy. Second, that rural deployment lags urban deployment. It has often been suggested that the universal provision of broadband services in rural areas was cost prohibitive; thus creating the urban-rural digital divide.

This study investigates and verifies these assertions, specifically, as they apply to rural small businesses. It relies primarily on data from the Federal Communications Commission (FCC) and an Office of Advocacy survey.

The study finds that an urban-rural digital divide does exist in the provision and adoption of broadband services. This difference in broadband use is statistically significant. A major concern is that many benefits have been associated with the availability and adoption of broadband services, and rural small businesses are not obtaining them.

• Broadband investment (and more generally investment in information technology) • appears to provide substantial benefits to both consumers and the overall economy. Broadband investment and services appear to stimulate economic productivity and • output, as well as create jobs.

• This study finds that rural small businesses do not subscribe to broadband services as frequently as urban small businesses do, and finds the difference in broadband use between rural and urban areas to be statistically significant.

• One of the drawbacks of the apparent urban-rural digital divide is that rural small businesses are less likely to benefit from new technologies facilitated by access to broadband services. For instance, this study finds a statistically significant difference in voice-over-Internet protocol (VoIP) use between metropolitan and non-metropolitan areas, apparently due to the lack of broadband use in rural areas.

Download the complete study here.

Small Business Research Sources

Looking for a nice concise guide to where to find small business information and data. Click here and download a two-pager by the SBA that provides some useful guidance on this subject.

Target Industry: The Geographic Arbitrageur

Forbes ran an interesting article about a month back that has some good advice for communities aiming at the self-employed knowledge workers and the telecommuting workforce. Here are a few clips:

If you're a telecommuting knowledge worker, you have a new name now: Geographic Arbitrageur! Thanks to computers, Fed-Ex, cell phones, but mostly the broadband Web, you can do your work just about anywhere. The hitch is finding an affordable place, which is Forbes main point.

Not everyone is cut out to be a Geographic Arbitrageur. It takes buckets of moxie and self-motivation to work hours (or even time zones). It takes a certain knowledge and sophistication about how the big-dollar centers operate.

In this century of high metro real estate prices and flattening paychecks, GeoArb could become a way of life for millions of knowledge workers. Suppose you lost your high-paying white-collar job in a big city. What would you do? File for unemployment? Probably not. Show up a bogus "jobs retraining" program and be taught by a social worker who knows little about the way business really works? No. In all likelihood you'd set up a home office and try your hand as a consultant. That's what some 300,000 Americans have done since 2000.

Here's the catch. Surviving as a freelance knowledge worker--where you sell your time--is extremely tough in high-priced joints like New York, California or Washington, especially if you are the sole family breadwinner. It is cruelly difficult to generate enough income to make your $4,000 per month mortgage payments, keep the cars and professional wardrobes up, take clients to dinner, maybe send the kids to private schools and try to save money.

Most competent freelancers past the age of 30 with big-city connections in fields such as product design, public relations, software and sales and marketing can make $100,000 per year if they put their minds to it. Trust me, it's not that hard to do if you're a pro and you're pulling those bucks from California or New York. What's hard for any freelancer to do anywhere on the planet is earn the second $100,000. Yet that second $100,000 is what your household needs to swing a comfortable middle-class family lifestyle in the metro coastal areas.

Read more here.

Self Employment is Growing

The number of businesses with no paid employees grew from 17.6 million in 2002 to more than 18.6 million in 2003, a growth rate of 5.7 percent, according to a report issued today by the U.S. Census Bureau. This represents the biggest rate of increase in self-employment since the Census Bureau began releasing such statistics in 1997; the rate during the 2001 to 2002 period, 3.9 percent, was the previous high.

According to the report, Nonemployer Statistics: 2003, Nevada led the nation in the growth of these small businesses, with a 11.4 percent increase between 2002 and 2003. Arizona climbed from ninth place in 2002 to second place in 2003, with a 9.4 percent increase. Georgia’s rate of business growth, the third largest, was 8.9 percent. Texas and Florida had business growth of 8.1 percent and 7.0 percent, respectively, to round out the top-five states in nonemployer business growth. (See the report here: [Excel])

U.S. Hispanic Population Update

An update on the demographic and socioeconomic characteristics of the nation's Hispanics, with national summary data from the U.S. Census Bureau's Current Population Survey.

Characteristics include, for example, sex, age, citizenship, nativity, educational attainment, occupation, and income and poverty status.

Internet address: <http://www.census.gov/population/www/socdemo/hispanic.html>.

This is a very revealing update. Take a look for yourself.

Small Area Healthcare Insurance Coverage Data

Here is some useful data you can use.

The US Census Bureau's Small Area Health Insurance Estimates (SAHIE) program provides model-based estimates of health insurance coverage for counties and states.

Download the data in an Excel spreadsheet here.

ED Futures Newsletter

Dear ED Futures Subscriber:

Welcome to the latest newsletter.

Many new articles have been added to the ED Futures website.

Here are some that may interest you:

Nissan/Tennessee: On Working Both Sides of the Fence

AirBus to China

Verizon Plans Pension Cuts to Managers

Industry Update: Aerospace and Defense

Tennessee Gets More Good Auto News

Ford: Maybe Another 30,000 Jobs Gone

Branson's Building Boom

Chrysler Looking at New Investment in St. Louis Area

Industry Snapshot: Major Drugs

Tennessee Officials Sorting Out Nissan Deal Fallout

Ford Follows in GM's Footsteps

Tata, Add This Word to Your Vocabulary

As always, we invite your comments and questions.

My advice is to pay close attention to what is happening nationally and globally. It is not enough to just know what is going on in your own backyard. There are some major business and economic decisions being made worldwide that have major implications for people and communities in many places.

Sincerely,

Don Iannone
ED Futures Publisher
Email: dtia@don-iannone.com
Telephone: 440.449.0753

Smaller Caribbean Islands Need to Work on Competitiveness

Caribbean Ministry of Finance Laurie Lawrence said there is a need for nation states particularly the smaller islands of the Caribbean to become more competitive in an increasingly external environment brought about by globalisation if they are to survive.

He said smaller islands have been placed at a disadvantage due to their lack of critical mass, which is necessary for them to benefit from economies of scale in the production of goods and services.

Lawrence’s comment came while he delivered brief remarks at a seminar last Friday, the final day of a week of activities promoting statistics literacy, hosted by the Department of Statistics and Economic Planning in the Ministry of Finance. The theme for the week was “Promoting Statistics Literacy: Poverty, the CSME and Sustainable Development”.

Read more here.

High-End Retail Not as Easy to Attract

When developers proposed bringing a Wal-Mart Supercenter to Avondale, Arizona last fall, residents pleaded for something more upscale. Opponents of the Wal-Mart asked for stores like AJ's Fine Foods, Crate and Barrel or the Cheesecake Factory - something fancier, something more like Scottsdale.

Gateway Crossing, the latest retail development approved by the City Council, will bring in a Best Buy and Old Navy to the 29-acre shopping center. But those aren't the dream stores that shoppers that local shoppers were hoping for.

Avondale is learning what many other communities are also learning. High-end retailing requires strong proof the market they seek to serve is really there. During these economic times, even in high-growth Arizona, the big high-end chains are getting pickier.

Read more here.

Tempe, Arizona: WiFi for All

Tempe, the Phoenix suburb that is home to Arizona State University, is due to have wireless Internet available for all of its 160,000 residents in February, becoming the first city of its size in the United States to have Wi-Fi throughout.

Tempe officials hope that by making high-speed Internet as accessible as water or electricity across its 40 square miles, it will attract more technology and biotech companies -- and the young, upwardly mobile employees they bring.

Read more here.

India's "Growing" Floriculture Industry

Be it reose, gladiolus or orchids, or flowers for the Durga Puja, - flowers from West Bengal, India are in great demand in markets abroad.

In fact, floriculture, is fast emerging to be a thrust-area in the over all agro-economic development of the state, with more than 7000 hectares of land being used for the purpose.

And yes, India has been working on the science behind its new "flowering" business.

Read more here.

Tata, Add This Word to Your Vocabulary

Tata Motors Limited engages in the design, manufacture, assembly, and sale of commercial automotive vehicles primarily in India. It operates through two segments, Automotive and Other.

The Automotive segment designs, manufactures, assembles, and sells trucks and buses, passenger cars, utility vehicles, and related parts and accessories. The company also provides financing for its vehicles.

The Other segment operations include information technology related business, construction equipment manufacturing, automotive vehicle components and supply chain activities, machine tools and factory automation solutions, high-precision tooling and plastic and electronic components for automotive and computer applications, automotive retailing and service operations, and real estate and investment.

The company sells its products through its regional and sub-regional offices, as well as dealer outlets. As of March 31, 2005, it operated 29 regional and 36 sub-regional offices, as well as 500 dealer outlets. The company was incorporated in 1945 as Tata Locomotive and Engineering Company Limited and changed its name to Tata Engineering and Locomotive Company Limited in 1960. Subsequently, it changed its name to Tata Motors Limited in 2003. Tata Motors is based in Mumbai, India. Tata Motors Limited is a part of Tata Group.

Learn more here: http://www.tata.com at the company website.

I think it is interesting what the company is doing automotive-wise, but what the company is up to in its "Other" business segment may be even more interesting.

Ford Follows in GM's Footsteps

The United Auto Workers said yesterday it reached a tentative agreement on health care costs with Ford Motor Co. that will require "sacrifices" from workers and retirees.

Details of the agreement were being withheld ahead of a meeting of the UAW-Ford Council next week in Detroit, the union said. The agreement is subject to ratification by active members and court approval.

I hope that Ford executives plan to take exactly the same cuts.

Read more here and stay tuned.