Latest on Chrsyler Healthcare Pass Along

The more you earn, the more you'll pay for health care at the Chrysler group beginning in 2007.

The new plan affects 13,800 salaried workers and 17,600 salaried retirees.

"Our health care costs have almost doubled since 2000," CEO Tom LaSorda said in an e-mail to employees announcing the change. "Health care is one of our largest fixed costs at $2.3 billion in 2006."

At the Chrysler group, health care costs add an average $1,400 to the cost of a vehicle, the company says. Chrysler also is negotiating with the UAW, seeking health care contributions from unionized workers and retirees.

Chrysler's move came the same week that Ford Motor Co. added fees for salaried workers' health care. Ford will charge employees for coverage of family members who are covered under another insurance plan, according to a report in The Detroit News.

Chrysler's active salaried workers now pay an average of $3,000 a year in co-pays, deductibles and premium contributions, Chrysler says.

Under the new plan, workers will shoulder more of the premium increases in 2007:

Up to 1,400 top executives could pay $1,500 more, on average.

Up to 9,400 management employees could pay $450 more, on average.

4,100 administrative staffers will not pay more.

Read more here.

Toyota's U.S. Economic Impact

Click here to view the download the full CAR report, "Contribution of Toyota to the Economies of Fourteen States and the United States in 2003"

Click here to view graph packet accompanying "Contribution of Toyota to the Economies of Fourteen States and the United States in 2003"

A new study from the Ann Arbor, Michigan-based Center for Automotive Research (CAR) shows Toyota’s investment of $13.4 billion in its U.S. operations contributed 386,300 jobs and $14.4 billion in wages to the U.S. economy in 2003.

The first-ever single-manufacturer economic impact study by CAR, titled "Contribution of Toyota to the Economies of Fourteen States and the United States in 2003," takes a comprehensive look at how Toyota’s national activities have impacted regional U.S. economies beyond the number of employees directly compensated by Toyota, and forecasts the impact of Toyota’s operation in San Antonio, Texas, scheduled to start production in 2006.

According to the study, Toyota’s U.S. manufacturer-related operations directly employed 29,135 people in 2003. Those workers represent employment in manufacturing operations, sales, marketing, distribution, research, development and design, headquarters, and all other operational activities within the company, including the five manufacturing plants, located in Buffalo, W.Va.; Georgetown, Ky.; Huntsville, Ala.; Princeton, Ind., and Fremont, Calif.

Another 74,060 workers were directly employed in new vehicle dealer-related operations, including sales, service and marketing-related activities. Add in the number of supplier jobs and the number of spin-off jobs (defined as jobs resulting from spending generated by Toyota’s direct employees, dealers and their suppliers) and the total was 386,300 workers.

CAR also estimates that the San Antonio, Texas plant, which will manufacture the Tundra truck line, will generate approximately 9,000 additional total jobs and $460 million in annual compensation in Texas once it is fully operational. During the construction phase, extending from 2004 through 2008, that number is expected to rise to 10,600 as a result of the construction labor required to complete the $850 million facility.

"This study illustrates the importance of foreign direct investment in the United States, which is largely responsible for the U.S. motor vehicle industry first recovering, and then maintaining, its traditional position as the largest national automotive industry in the world," said Kim Hill, director, automotive communities program and assistant director, economics and business group, CAR. "Toyota is one of the major international automakers leading this trend."

"The study also emphasizes the many intangible benefits of Toyota’s U.S. investment, such as innovation, productivity performance, environmental performance and increases in product quality that have had a ripple effect within the industry, in local communities and throughout the entire U.S. economy," said Hill.

"Toyota’s long-time motto is 'to enrich society through building cars,'" said Dennis Cuneo, senior vice president, Toyota Motor North America (TMA). "We are proud to be an integrated part of the American economy and an integral partner to the communities where we do business."

More here.

Ontario Acts to Counteract Rising Dollar, Interest Rates, and High Energy Prices

Ontario doled out some ax break to corporations this week and targeted several industries -- including auto makers, the entertainment sector and the mining industry -- for a dollop of assistance.

The Ontario budget revealed the province will move up a reduction in the capital tax before eliminating it in 2010, double the rebate it gives to purchasers of hybrid vehicles and provide a tax break for Ontario-based video game developers.

Mr. Duncan pointed out, however, that high oil prices, rising interest rates and the strong Canadian dollar are expected to dampen economic growth in the province this year, to 2.3 per cent from an estimated 2.7-per-cent rate last year.

The rise in the value of the dollar alone is expected to dampen corporate profits this year, cutting profit growth to 3.8 per cent from 14.1 per cent in 2004 and an estimate of 6.2 per cent for last year.

Read more here.

Wal-Mart on the March in China

Wal-Mart Stores Inc. and other foreign retailers in China are looking westward for the next round of store expansion as the government sweetens incentives to invest in the underdeveloped central regions.

Multinationals are already well-established in Chinese coastal cities such as Shanghai, where competition is fierce. Analysts say the stage is now set for another battle over second-tier, inland cities as retailers race to build name recognition among brand-loyal consumers.

Retail consultants list some 60 cities that are ripe for development. The first retailer to reach each one gains a major edge because they can build a following among local consumers before competitors can muscle in.

Foreign retailers are eager to expand in China to get their share of a $240 billion retail market with an average growth rate of more than 10 percent in recent years. Most of their focus so far has been on the large, wealthy cities on the eastern coast.

Read more here.

Latest Version of the ED as a Profession White Paper

The dialogue about economic development's status as a profession continues.

Click here to download the latest version of my white paper on the subject. This version reflects the many comments I have received through yesterday.

Feel free to share your ideas.

What are People Saying about the Economic Development as a Profession White Paper?

Here are some of the public comments I have received about my proposal to devise a plan to advance economic development as a profession:

1. I agree we have not reached professional status in the sense you describe in your paper. Let’s learn from other fields. What was the impetus for other fields to become professions and what process did they follow? What role did national associations and universities play in the process?

2. Is there a logical way to decide when a field becomes a profession? How will we know when economic development has advanced enough to claim “full” profession standing?

3. I don’t believe economic development will ever become a profession in the sense that law and medicine are professions, but maybe our field can become a profession in the way that real estate and other business fields have become professions.

4. Don, is it worth the effort? It sounds like a whole lot of work. Before we venture down this path, we should define how this will make economic development better.

5. Your statement about “economic development being accountable to the public” scares the daylights out of me. We are having a tough enough time to being accountable to the boards and elected officials we work for. I hear what you are saying about the need to become more accountable for the public dollars we use in economic development. Maybe that is a separate issue we should tackle directly.

6. As one who has invested heavily in my own professional development over the years, I am very interested in how a new professional development process in the field will impact my creditionals as a CEcD. I sure as heck don’t want to jump through a bunch of new hoops for nothing.

7. I agree we need to become more professional in the sense that we know what really works. I think many economic development types are frustrated by their inability to have a greater impact on their local economies. Will becoming more professional solve this problem? If it does, then count me in.

8. This all sounds fine and good, but the real issue is whether those we work for will support us making the transition to full professionalhood (maybe not an acceptable term). Do you know what I mean? Our bosses already think we ARE professionals. Even worse, they think they actually know something about economic development and at times should do my job for me.

9. Lots of people think anyone can be an economic developer. Will your idea solve this problem To make this work, economic developers will need a major incentive to buy in. What’s the reward? Will my salary increase by 25% if I become a full-blown professional. Personally, I believe I am already a professional. What’s the motivation for me to want to do more?

10. I liked your earlier idea on working on leadership development in the field better than this idea about becoming a profession. Maybe if economic developers to use your term ‘solidify’ their leadership skills they will advance in a professional sense.

11. I am new to the field, as you know. You are one of the people who talked to me early on. I’m glad we talked about these issues while I was a graduate student. I am glad I have a graduate degree. I feel like I have more grounding in the field. You’re right education helps you to think about problems. From what I see, most of the training programs in economic development try to generalize practice and in the process by training people only one way to do the job, they set people up for failure. I find you have to think your way through problems to solutions. Too much monkey see, monkey do behavior in the field. If you don’t know what to do, just throw an incentive at the problem.

12.I read your ED Futures on a regular basis. I don’t work in economic development, but I am very interested in it. How does someone outside the field get into the field?

13. This topic should be a subject discussed at the September IEDC annual conference in New York. Different sides on the issue should be presented and practitioners should be given a chance to debate the issue.

14. I like where you are going with the proposal. I work in economic development in North Carolina and believe practitioners need more in-depth preparation to become professionals.

15. Perhaps the best model to examine for ideas on professionalizing economic development is in the Accounting field, where a combination of degrees and the CPA designation are used. Let's look for advice here on how to strengthen economic development.

16. How this process is approached is very important. Personally, I have concerns about too many of the "old-liners" might dominant the process and therefore stick with the status quo. We need a diverse set of views given consideration to ensure that this is reflective of our future, and not our past.

As comments are received, they will be passed along to ED Futures readers. If you have comments, please share them. Thank you.

Revised White Paper on Economic Development as a Profession

Because of your outpouring of comments, I have revised the White Paper on Economic Development's Status as a Profession. You can download a copy by clicking here.

Don Iannone can be contacted by email at: dtia@don-iannone.com, and by phone at: 440.449.0753.

Comments and questions welcome.

New Kauffman Foundation Study Identifies Key Factors Driving Offshoring of Corporate R&D

-Article Reprint-
Kauffman Foundation

KANSAS CITY, MO, February 16, 2006 - Contrary to popular belief, it is intellectual capital and university collaboration, not just lower costs, that primarily attract companies to locate R&D activities in locations away from their home country, according to a new study sponsored by the Ewing Marion Kauffman Foundation. The study of more than 200 multinational companies across 15 industries, mostly headquartered in the United States and Western Europe, finds that emerging countries such as China and India will continue to be major beneficiaries of R&D expansion over the next three years as companies seek new market opportunities, access to top scientists and engineers, and collaborative research relationships with leading universities.

The study was released at a meeting of the Government-University-Industry Research Roundtable (GUIRR) of the National Academies. It was conducted by Marie Thursby, Ph.D., Professor of Strategic Management, Georgia Tech College of Management, and Jerry Thursby, Chair of the Department of Economics, Emory University, with sponsorship by the Kauffman Foundation.

Designed to identify and rank the importance of different factors feeding into the corporate decision-making process as to where to locate R&D facilities, the study also tracked R&D work coming into the United States from abroad, as well as R&D work going in the reverse direction; addressed favored countries for locating R&D work and why; and outlined trends industry expects for R&D expansion in the future.

Among the top factors going into new R&D siting decisions in both developed and emerging countries are market growth potential, quality of R&D talent, collaboration with universities and IP protection. How these factors influence the decision, however, depend on whether the site is in a developed or emerging country. In neither emerging nor developed countries was cost consideration the most important factor, which runs contrary to what has been reported by the media (according to an analysis of media coverage over the past few years in The Wall Street Journal and New York Times on multinational R&D locations).

Among the study's more surprising findings, according to the researchers, was the role university collaboration plays in the decision-making process for locating R&D facilities. In fact, collaboration with universities was particularly prevalent as a factor for expanding to emerging countries, even though these countries provide lesser degrees of IP protection.

"The study underscores the critical role universities play in a country's national innovation system, not just in the training of new scientists and access to the best talent, but in the ease of developing and licensing technology," said Carl Schramm, president and CEO of the Kauffman Foundation.

More than half of the corporate respondents who identify the United States as their home country report that they have either recently expanded or planned to locate R&D facilities in China and India vs. other developed countries. Of 63 Western European companies responding, 13 plan on expanding or locating new R&D facilities to the United States. The issue of collaborative research between universities and corporations has been a growing concern within the United States, with some observers saying legal wrangling over intellectual property rights is not only slowing the pace of innovation but also prompting companies to seek university research partners in other countries.

The study indicates, however, that while the trend toward R&D offshoring to Asia will continue despite concerns over IP protection, companies are keeping their most cutting-edge research in developed countries where IP protection is the strongest. According to the study, only 22 percent of the R&D effort in emerging countries is for new science.

"The United States would seem to have a comparative advantage in maintaining its innovative leadership through the high caliber of its scientists and its strong protection of IP," said Lesa Mitchell, vice president of Advancing Innovation at the Kauffman Foundation. "Industry and universities must be alert to removing obstacles to joint research, or emerging countries will overtake us in innovation breakthroughs, and the burst of discovery that has been driving our economy for the past half-century will be over."

Another public policy implication of the findings, say the researches, is that the United States must focus on highly skilled worker immigration.

"We are educating the best and the brightest, but make it impossible for them to stay in America and immigrate. We need major immigration reform that welcomes, instead of pushes out, highly skilled workers," said Dr. Marie Thursby.

Learner-Centered Education

"Learner-centered education places the student at the center of education. It begins with understanding the educational contexts from which a student comes. It continues with the instructor evaluating the student's progress towards learning objectives. By helping the student acquire the basic skills to learn, it ultimately provides a basis for learning throughout life. It therefore places the responsibility for learning on the student, while the instructor assumes responsibility for facilitating the student’s education. This approach strives to be individualistic, flexible, competency-based, varied in methodology and not always constrained by time or place."

Source: Arizona Board of Regents

Defining a Profession

"A profession is an occupation that requires extensive training and the study and mastery of specialized knowledge, and usually has a professional association, ethical code and process of certification or licensing. Examples are law, medicine, finance, the military, the clergy and engineering.

Classically, there were only three professions: ministry, medicine, and law. These three professions each hold to a specific code of ethics, and members are almost universally required to swear some form of oath to uphold those ethics, therefore "professing" to a higher standard of accountability. Each of these professions also provides and requires extensive training in the meaning, value, and importance of its particular oath in the practice of that profession.

Sociologists have been known to define professionalism as self-defined power elitism or as organised exclusivity along guild lines, much in the sense that George Bernard Shaw characterised all professions as "conspiracies against the laity". Sociological definitions of professionalism involving checklists of perceived or claimed characteristics (altruism, self-governance, esoteric knowledge, special skills, ethical behavior, etc.) became less fashionable in the late 20th century."

Source: Wikipedia Online Encyclopedia

Defining Professionalism

“The term professionalism refers to a group pursuing a learned art as a common calling in the spirit of public service--no less a public service because it may incidentally be a means of livelihood. Pursuit of the learned art in the spirit of a public service is the primary purpose.”

--Roscoe Pound, Legal Scholar and Educator

ED Futures Newsletter

Dear ED Futures Subscriber:

I am back to thinking about the professional status of the economic development field, which all of us know and love.

I wrote an important article on March 18, 2006 that shares some ideas on how we might advance our profession. You can read the article online here, and you can download a more polished version of the article here. (I suggest reading the downloadable version.)

Your comments and questions are most welcome, as always.

You will find many other interesting and worthwhile articles about economic development in this issue. Please scroll down and see for yourself.

My thanks to those of you updating your subscriber contact information. Many others need to help us with that task. At the very bottom of the newsletter you will find a link "Unsubscribe/Change Profile." Click on the link and respond to the handful of questions asked. We need this information to better serve you. Thank you very much.

Best wishes,

Don Iannone
Publisher, ED Futures Journal
Email: dtia@don-iannone.com
Tel: 440.449.0753