ED Futures Newsletter

Dear ED Futures Subscriber:

Welcome to the latest newsletter.

Several new articles on various topics were posted this week, ranging from economic development's status as a profession to what's happening in key industry sectors to a look at some of the hard economic questions we must give greater attention to as economic developers.

Here is an index to help you navigate this past week's articles:

Multifactor Productivity: A Source of Competitive Advantage
Saturday, April 01, 2006

China's Race to Innovate
Saturday, April 01, 2006

Mirrior Mirror on the Wall, Who's the Ugliest of Them All
Saturday, April 01, 2006

Immigrant Workforce Training for Manufacturing
Friday, March 31, 2006

New Jobs for the Future Report
Friday, March 31, 2006

Conglomerates: Quick Overview
Thursday, March 30, 2006

Quick Overview: Aerospace and Defense
Thursday, March 30, 2006

Latest on the "Economic Development as a Profession" White Paper
Wednesday, March 29, 2006

Harvard's Edmond J. Safra Foundation Center for Ethics
Wednesday, March 29, 2006

Target Industry: Meat Processing
Tuesday, March 28, 2006

My thanks to all of you offering comments on the ED as a Profession white paper.

Finally, several of you have not updated your subscriber profile. We need your help with this task since it equips us to better serve you. To update your profile, scroll down to the link "Unsubscribe/Update Your Profile" at the very bottom of this newsletter. Click on the link, which will take you to the Mail Center where we would like you to answer a few simple questions about yourself and your economic development interests. Thank you.

Best wishes,

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

Multifactor Productivity: A Source of Competitive Advantage

Multifactor productivity (MP) is one of the main reasons that the U.S. has any chance of holding any semblance of an economic leadership role in the world.

What is it? MP is the growth in output in excess of the contribution from labor and physical capital. The latest multifactor productivity were released by the Bureau of Labor Statistics recently. (PDF report download).

In short, the BLS report says that during the 2000-2004 period, output per worker hour (labor productivity) rose at a 3.6% annual rate. Here are the respective contributions of the associated factors: 1.2 percentage points from capital, 0.5 percentage points from improvements in the quality of labor, and quite importantly 1.9 percentage points from multifactor productivity.

China's Race to Innovate

Are we paying close attention?

Innovation was a major theme at the recently concluded China National People's Congress, with the government unveiling its latest five-year plan calling for big increases in spending to nurture innovation.

China is targeting a broad range of sectors, including some controversial areas such as stem cells, gene therapy, and genetically modified crops; and some areas that the U.S. has long dominated, including software, semiconductors, and space exploration. And China aims to become a leader in emerging technologies such as renewable energy sources ranging from solar, hydro, and wind power to fuel cells. By 2050, China intends to surpass the U.S. and become the biggest player in the world of science.

There are many reasons that Beijing wants to push the innovation agenda. One is national pride: As a great nation that was coming up with innovative breakthroughs when Europe was in the Dark Ages, China believes it should be a leader, not a follower. Another reason is national security. The Communist regime doesn't like being at the mercy of foreigners for key technologies.

Read more here.

Mirrior Mirror on the Wall, Who's the Ugliest of Them All

After months of tough talk, Delphi Corp. on Friday stood by its words, saying it would slash more than 25,000 jobs, close or sell off two-thirds of its U.S. plants and ask a bankruptcy court judge for permission to throw out its union contracts.

The move by the nation's largest auto-parts supplier raised the stakes in a 5-month-old conflict that could have a far-reaching impact on the company, its 33,000 workers, its unions, the U.S. auto industry and Midwest communities.

Accusing Delphi of misusing the bankruptcy court process, the UAW promptly warned that a "long strike" would take place if Delphi sought to impose its latest offer. The union also said there is "no basis for continuing discussions" with the company.

Read more about the ugliness here.

Immigrant Workforce Training for Manufacturing

Educating the Immigrant Workforce: Practice in the Manufacturing Industry

Immigrants are crucial to the maintenance and growth of the U.S. workforce. In the coming decades, there will be jobs for immigrants with all levels of skills, and manufacturers, as well as other employers, will continue to need and hire immigrants. It is sound economic sense to implement strategies and models that improve the skills of immigrants entering the workforce—and that streamline their ability to keep pace with changes in industry and to succeed in higher-wage, more skilled jobs.

JFF and the Manufacturing Institute, National Association of Manufacturers, are partners in Educating the Immigrant Workforce, a research project to identify promising practices by manufacturing employers to train their non-English speaking workforce.

According to a Manufacturing Institute report, Closing the Immigrant Skills Gap, immigrants are the fastest-growing segment of the workforce and will be in high demand as the competition for skilled workers heats up. However, 88 percent of the manufacturers responding to a national survey conducted in partnership with JFF and the Urban Institute cited poor English skills among immigrant workers.

Read about Educating the Immigrant Workforce

Download Closing the Immigrant Skills Gap

New Jobs for the Future Report

A new JFF report addresses a critical question: Are pathways available to help dropouts pursue an education and move toward an economically productive adulthood? This report assesses how far our society is from “making good” on the promise of a second chance for dropouts and offers a starting point for improving the record. It challenges several misconceptions based on a detailed look at who dropped out and how much education they completed by their early adulthood.

JFF's findings, which counter the prevailing views of the dropout population, include:
Dropping out is epidemic in central cities and rural, low-income communities—but it is not just a problem of the poor.

Socioeconomic status—not race—is the key indicator for dropping out.

Black and Hispanic youth are no more likely to drop out than their white peers in the same socioeconomic group, but the problem hurts black and Hispanic communities more than others.

Most dropouts are remarkably persistent in their desire to get more education.
Making Good on a Promise concludes with lessons for policymakers looking for new ways to give dropouts a second chance.Download Making Good on a Promise

Also, The Silent Epidemic: Perspectives on High School Dropouts, a new survey released by the Bill & Melinda Gates Foundation, looks at why a third of high school students leave school without a diploma—and what might help keep them engaged in school.

Download The Silent Epidemic

Conglomerates: Quick Overview

Conglomerates in the US have witnessed slow revenue growth in recent years, with the fall in value of the US dollar and increasing raw material prices combining to detract from margins. An increasingly interdependent global economy characterized by excess manufacturing capacity has resulted in intense competition leading to pricing pressures.

The US is usually the largest, most lucrative market for conglomerates, although several less developed markets, such as China, provide significantly higher growth potential along with cost benefits such as cheap raw materials and labor. Despite the comparatively low level of wealth, a relatively large demand exists for consumer goods in emerging economies.

The worldwide scale of conglomerates gives them a unique insight into the direction of global markets, allowing them to predict and adapt to market developments in a fast, efficient manner. With this in mind, conglomerates continue to invest in high-growth regions and sectors such as water, security and consumer finance, using their business awareness and large scale economies to gain market share and boost revenues from these sectors.

The major conglomerates in the US include GE, Siemens, United Technology, LVMH, 3M and Honeywell. Using their huge economies of scale, conglomerates have begun to create strong direct sales divisions in order to eliminate intermediaries from the distribution chain. This development will allow companies to provide a higher quality service to their clients whilst fueling growth in margins by eliminating trade commissions.

Latest on the Economic Development as a Profession White Paper

I would like to thank all of you providing comments on the Economic Development’s Status as a Profession white paper. They were very helpful. Those who have not commented yet, there is still plenty of time.

Comments thus far reflect eight overall views of economic development’s status as a profession. The number in parentheses indicates the number of people who reflected that particular view in their comments.

1. It is an emerging profession now with an undefined path to advancing its professionalism. (16)

2. It is an emerging profession now, and will continue to advance if we remain on our current professional development path. (8)

3. It is not a profession now, and it will not become one unless we make radical changes to move it in a professional direction. (7)

4. Right now, we don’t really know if economic development is or is not a profession. (6)

5. It is a new profession that will need to continue working on advancing itself. (3)

6. It is not a profession now, and it will never become one. (3)

7. It is a fully mature profession now, and it is making good progress in advancing itself. (1)

8. Our goal should not be to become a profession. Instead we should develop as a business. (1)

Several of you have suggested that economic development can learn from other professions, and I agree with you. In that light, please click on this link to see what one very relevant profession has to offer economic development. If nothing else, this profession points to a new skill set that should be tested for in the CEcD exam.

Harvard's Edmond J. Safra Foundation Center for Ethics

The Edmond J. Safra Foundation Center for Ethics encourages teaching and research about ethical issues in public and professional life; helps meet the growing need for teachers and scholars who address questions of moral choice in business, education, government, law, medicine, and public policy; brings together those with competence in philosophical thought and those with experience in professional education; and promotes a perspective on ethics informed by both theory and practice.

Is there something economic development could learn from this center?

Learn more here.

ED Futures Newsletter

Dear ED Futures Reader:

Welcome to the latest issue of the ED Futures newsletter.

While there were several new articles posted to the ED Futures website in the past week, major attention was given to the topic of where economic development stands as a profession. Several fascinating articles were posted on that subject. The most important part of the series can be downloaded here. (This a white paper by ED Futures on how we can strengthen our professional development process in the field.)

Many economic developers emailed and called me about the white paper. You can read their comments here. (This article provides a summary of the major comments received.)

This is a continuing dialogue, so please feel free to share you ideas.

Once again, if you have not updated your subscriber profile, please do so now. Click on the link at the very bottom of this issue of the newsletter, which is entitled "Unsubscribe/Change Profile." There are a few questions we would like you to answer so we can better serve you in the future. Thank you.

Best wishes,

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

U.S. Travel and Tourism Industry Trends

The Bureau of Economic Analysis (BEA) has provided fourth-quarter 2005 current-dollar measures and first-time price and quantity measures of tourism activity.

In the fourth quarter, real tourism output (price-adjusted “direct tourism sales”) grew 5.1 percent, following an increase of 1.4 percent in the third quarter (seasonally adjusted at annual rates).

Real output of goods and services sold to visitors grew 4.8 percent in 2005, down from 6.2 percent in 2004, according to data released by the BEA.

Average employment of workers directly engaged in the production of goods and services sold to visitors (“direct tourism employment”) increased 1.3 percent through the first three quarters of 2005, following annual growth of 1.3 percent in 2004. In the third quarter of 2005, the most recent period for which data are available, direct tourism employment grew 0.2 percent (seasonally adjusted at annual rates).

Learn more here.

Foreign Direct Investment in the U.S.

Foreign direct investment valued at historical cost—the book value of foreign direct investors’ equity in, and outstanding loans to, their U.S. affiliates—was $1,526.3 billion at the end of 2004.

In 2004, as in 2003, the United Kingdom and Japan had the two largest positions. The position of the United Kingdom was $251.6 billion, or 17 percent of the total position, and the position of Japan was $176.9 billion, or 12 percent of the total.

The Netherlands, Germany, and France had the next largest positions, with each accounting for about a tenth of the total FDIUS position. The FDIUS position increased $115.6 billion, or 8percent, in 2004. This was the largest increase, in both dollar and percentage terms, since 2000.

Read more here. (Link to download recent Bureau of Economic Analysis (BEA) report on FDI in the United States.)