Friday, October 5, 2007
In some ways, the issue seems unresolvable, but many places, including leaders in Indiana are looking for better solutions. See the summary of what is happening in Indiana.
I find too many one-sided views of the healthcare cost issue. It's very political and as I see it everyone continues to talk past each other on the issue and what to do about it. One personal thought: Maybe we should spend less on a war going nowhere in Iraq and put those resources into helping people self-manage their health.
Here's the story from Indiana...
Spiraling health-care costs can drain financial resources for both companies and their employees, making some companies less competitive, but a pilot program available to north-central Indiana employers is seeking new ways to help save money by changing the way businesses and individuals view health-care choices.
WIRED Healthy Workforce is an initiative developed through Purdue University's Technical Assistance Program (TAP). The project features programs and training modules introduced over an 18-month period that, when implemented, should save money on employee health insurance programs.
"We want to help employees be better consumers of health care and to take better care of themselves," said Cindy Modlin-Adams, an adult nurse practitioner and Purdue University visiting associate professor.
The program consists of an initial assessment that identifies key opportunities for health-care cost control. The pilot program is free to one company in each of the 14 counties in the Indiana WIRED region.
Read more here.
Thursday, October 4, 2007
Lesson: Be careful how you use your money!
Read more here.
Wednesday, October 3, 2007
It is your age determined by physiology rather than chronology; factors of biological aging include changes in the physical structure of the body as well as changes in the performance of motor skills and sensory awareness.
Take the online test now.
A second site to take the test.
Is there a strong connection between the religiosity of a country and its level of development? The latest Pew Global Attitudes study seems to suggest there is one. It reveals there is a connection between how religious a country is and its economic status.
The survey finds a strong relationship between a country's religiosity and its economic status. In poorer nations, religion remains central to the lives of individuals, while secular perspectives are more common in richer nations.
This relationship generally is consistent across regions and countries, although there are some exceptions, including most notably the United States, which is a much more religious country than its level of prosperity would indicate. Other nations deviate from the pattern as well, including the oil-rich, predominantly Muslim -- and very religious -- kingdom of Kuwait.
Read more here.
Tuesday, October 2, 2007
Book Review: Beat the System: 11 Secrets to Building an Entrepreneurial Culture in a Bureaucratic World
Does bureaucratic inertia have your business locked in a losing status quo? Are you being held back by gray suits who won't allow innovation and creativity at work? Do you want to build a business that isn't slowed down by the concrete shoes of bureaucratic indecision or stifled by unimaginative groupthink? If so, maybe it's time to beat the system!
In this insurgent guide to business success, Robert MacDonald shows professionals, business leaders, and entrepreneurs how to smash the bureaucracy that smothers the innovative, entrepreneurial spirit essential to long-term business success. Whether you own a small business, run a large corporation, or work for someone else, Beat the System provides proven, real-world advice for building an entrepreneurial culture in your entire organization, your department, or even in your individual position.
When MacDonald founded LifeUSA, people thought he was a madman for trying to compete against giant, entrenched competition in the stagnant life insurance industry. But with a willingness to challenge the status quo and question the rules of the system, he grew LifeUSA into a hugely successful player in an industry that was actually shrinking at the time. Now, he shares the eleven entrepreneurial secrets he used to defeat bigger and stronger competitors.
We live in a bureaucratic world, but fighting the status quo is a business strategy that works. Beat the System outlines a proven plan for creating a business culture that creates, innovates, and moves fast enough to overtake even the most entrenched competition. Whether you're starting a new business or simply trying to advance your career, you really can succeed wildly if you have the right weapons to storm the battlements of bureaucracy.
Nobody said it would be easy; fighting the forces of darkness never is. But with these smart, entrepreneurial strategies, total unconditional victory will be yours—but only if you play by your own rules. Beat the System is a practical, worldly guide to developing your own entrepreneurial, revolutionary spirit and building that spirit into every brick of your organization.
The State of Arizona is launching a new economic development initiative to coordinate existing ones and revamping another effort in moves that Gov. Janet Napolitano said will help advance and unify current programs.
Napolitano said Thursday the new Arizona Economic Resources Organization will be a nonprofit board that acts an umbrella organization over all other economic development activity. She says AERO will coordinate those activities and set strategies for the state by providing recommendations and guidance.
Also, an existing nonprofit organization, the Arizona Global Network, is being expanded, Napolitano said. (Note: Earlier this year we did a peer review of the effort and gave it favorable marks for its progress.)
The AGN's focus is on promoting the state, recruiting new companies and establishing strategies for foreign investment.
“Our goal is to attract and grow businesses in Arizona to keep us economically strong,” Napolitano said. “We want the next Fortune 500 and high-growth companies in our state, and are committed to collaborating on diversifying and modernizing our economy.”
AERO will work with the three state universities and collaborate with the state Commerce Department, the Greater Arizona Development Authority and other entities, she said.
Napolitano's office said AGN's members includes all economic development organizations, higher education representatives, the Department of Commerce and other entities.
Monday, October 1, 2007
The State of North Carolina recently gave two multinational tire makers located in the state over $60 million in tax incentives to remain in production in North Carolina, albeit at much reduced employment levels at each plant. The ostensible public policy logic of the tax incentives model was explained in a 2005 public policy research study on industrial cluster analysis in Eastern North Carolina, prepared by The Center for Regional Economic Competitiveness.
As they stated, “In order to replace the jobs being lost, (as a result of plant closures) North Carolina Eastern Regional Leaders seek to attract, expand and generate new companies in growing, competitive industries.” Giving private companies financial incentives to induce them to locate in the state is a tool that is used to attract the companies.
In the past, more modest incentives, in the range of $1 million per project, could be used as an inducement to locate a facility in the state. In recent years, the incentives have bloomed into hundreds of millions of dollars per project, both in the current tax year they are given, and in deferred tax savings extending out 30 years. The State of North Carolina gave Dell Computers over $300 million in financial incentives to locate a distribution center near Winston Salem, and gave Google over $250 million to locate an internet server farm in the Piedmont of the State, purportedly in exchange for the creation of 200 jobs.
Read more here.
Sunday, September 30, 2007
The rankings are based on ten quantitative measures of the regulatory environment for private firms. Egypt showed the biggest improvement compared with the last survey, advancing in five of the areas covered. A business can spring to life more quickly there than in Italy.
Many of the countries making the greatest strides are in eastern Europe and the former Soviet Union. Ghana, Colombia, Saudi Arabia, Kenya and China are also among the top ten reformers. Congo, where it takes 155 days to get a business up and running, is the lowest ranked country in the survey.
Source: The Economist, October 6, 2007 (Paid subscription required).
Saturday, September 29, 2007
Personalized medicine is a concept promoted as a new paradigm for health care delivery, with particular emphasis on more tightly linking genomics-based diagnostics and therapeutics. Previous analyses focused on the pharmaceutical market; this analysis also addresses the incentives to develop linked genomics-based diagnostics and the broader public policy implications.
Using a standard economic framework of an insurer-payer negotiating reimbursement with manufacturers of an innovative, targeted diagnostic and a companion patented therapeutic, several illustrative hypothetical scenarios are developed. The relative importance of the key economic factors is examined, including whether the reimbursement system is value or cost based, whether the therapeutic is already marketed, the strength of diagnostic intellectual property, and a current year versus longer time frame.
The results suggest that health systems reforms that promote value-based, flexible reimbursement for innovative, patent-protected diagnostic and therapeutic products are critical to create stronger economic incentives for the development of personalized medicine.
Source: Drug Information Journal. Ambler: 2007. Vol. 41, Iss. 4; pg. 501 (Paid subscription required to access this article)
Friday, September 28, 2007
General Motors Corp. and the United Auto Workers agreed to a new class of jobs that would pay about half the current rate, breaking with the UAW's tradition of equal earnings for union members, people with knowledge of the plan said.
Under a four-year accord reached Sept. 26, all new employees would start in so-called non-core jobs such as janitorial and maintenance work and make about $28 an hour in pay and benefits, compared with $51 for present employees, the people said. They asked not to be identified because contract details haven't been released.
The new hires would retain their non-core status until they obtain an assembly-line or other higher-rated job. The two-tier system, like an historic deal to transfer retiree health benefits to a union-run fund, marks another milestone in negotiations between the biggest U.S. automaker and the UAW.
UAW leaders are to be briefed today (9/28/07) in Detroit on details of the proposed contract, reached after a two-day strike. Union workers must ratify the agreement for it to take effect.
GM shares have risen 19 percent this year, in part on the expectation that the company would win more labor savings. The shares fell $1.18, or 3.1 percent, to $36.46 in New York stock Exchange composite trading yesterday.
Read more here.
Thursday, September 27, 2007
Wrong Way: “A man who carries a cat by the tail learns something he can learn in no other way.” ~Mark Twain
Right Way: “Be the change you want to see in the world.” ~Mahatma Gandhi
Let me say at the onset I am not a doctor, but the health issue discussed in this issue is an important one for many people.
Chronic Fatigue Syndrome (CFS, also known as ME), is a severe, debilitating condition consisting of a number of different physical, physiological, neurological and psychiatric symptoms including:
- Severe fatigue, especially after exercise, and a greatly reduced ability to perform any type of physical exertion.
- Sleeping problems, such as insomnia, feeling sleepy all the time or having a desynchronized body clock.
- Anxiety attacks.
- Reduced immune function and susceptibility to illness, particularly viral infections.
- Constant sore throat.
- Swollen lymph nodes.
- Problems regulating heart rate, blood pressure and blood volume, as well as arrhythmias such as atrial fibrillation.
- Digestive problems, lack of appetite and nausea.
- Memory and cognition problems.
- Hypersensitivity to light and sound.
- Problems regulating body temperature.
- Unexplained weight gain.
- Emotional lability (suddenly changing emotions).
Recovery from CFS, when it does occur, is generally long-term and gradual. One treatment for CFS that have been fairly successful is cognitive behavioral therapy (CBT), which addresses psychological attitudes to the illness, and graded exercise therapy, which aims to gradually increase physical activity. However, even these treatments do not help everyone who has CFS, and they tend to be not much better than simply doing nothing at all.
The treatments that tend to work best for curing CFS can be divided into three categories: psychological, changes in lifestyle and the placebo effect. All three types of treatment ultimately work in the same way, with the psychology of the patient determining the effectiveness of any particular treatment. In many cases it is probably the act of doing the treatment that results in recovery, rather than any actual benefit from the treatment itself.
Purely psychological treatments, such as CBT and counselling, tend not be very effective, as they tend to focus on areas such as emotional problems which are not necessarily a significant factor in many cases. In the lifestyle category, many patients find that getting a new job or changing their career to something that they really enjoy results in curing their CFS symptoms.
In terms of the placebo effect, many dubious alternative therapies that rely on it for their effectiveness have resulted in people completely recovering from CFS. Treatments that have worked include anti-candida diets, kinesiology, food intolerance diets, as well as many others. It should be pointed out that these were not patients who had mild symptoms; many of these people were bed-ridden and had highly debilitating physical and mental symptoms, all of which were completely cured by apparently trivial treatments.
Managing stress in your life is important all the time; even when you don't appear to be overly stressed.
While the GM/UAW negotiations are very much on everyone's minds at this moment, let's step back and look at the big automotive manufacturing picture.
The US new car market had a value of $219 billion in 2005, an increase of 3.2% on 2006, while the trucks market was worth $280 billion, little changed from 2005. Both markets had seen declines in revenue in 2003. Market volumes in this year were 7.8 million cars and 9.3 million trucks.
2006 saw SUVs, hitherto a major segment of the market, waning in popularity with US customers. These vehicles offer significantly lower miles per gallon than more traditional passenger cars, which historically high gasoline prices translate into high running costs. Hybrids, which promise greater fuel efficiency through the combination of internal combustion engine and electric motor, form a small but growing market segment.
The industry continues to face high raw material prices. Global demand for steel and resins (plastics) has been rising, driving up prices for these inputs to automotive manufacturing. Hedging is often difficult for these commodities. Major US players also report that the costs imposed by healthcare and retirement benefits for their employees are significant burdens, which soaring health insurance premiums will do nothing to alleviate. Intense price competition restricts their ability to pass these costs on to customers. However, the development of export growth markets such as China promises revenue boosts going forward.
GM, Ford, DaimlerChrysler, and Toyota are the leading players. The domestic industry is suffering from overcapacity, to which manufacturers are responding with the closure of factories in order to decrease costs. They are also negotiating with labor organizations to scale back spending on employee benefits. In a concentrated market, US manufacturers are seeking to differentiate their products through investment in both innovation and branding, in order to grow market share.
Employee Benefit Costs - US auto manufacturers bear significant costs of healthcare insurance and pensions for their current and retired employees. As insurance premiums rise, these costs will also tend to increase.
Excess Capacity - In 2005, the North American industry was estimated to have excess capacity of 17%, higher than in Europe. Although demand is rising, price competition in the US market remains intense, and the costs associated with this spare capacity are placing unsustainable pressure on margins.
An End to Unlimited Cheap Fuel? - Gasoline prices in the US have been rising for several years, and there is growing awareness among both consumers and manufacturers that oil is a finite resource. In response, US consumers are switching their allegiance from SUVs to smaller, more fuel-efficient vehicles, and the change has been more rapid than some manufacturers predicted. Hybrids, which are potentially more fuel-efficient, remain a niche, with a 1-2% share of the US passenger car market volume, but hybrid sales are also increasing.
Commodity Prices - Car manufacturers are particularly dependent on steel and resin (plastics), and the prices of these commodities have been increasing in recent years, as global demand rises. Even where prices stabilized in 2006, they were often at historically high levels. Moreover, it is difficult to formulate hedging strategies for these inputs. The result is strong pressure on margins, particularly as car manufacturers compete intensely on price, and so have limited scope for passing on the cost increases to end-users.
Globalization - Domestic manufacturers are facing intense competition from foreign players, especially on price. At the same time, US companies can exploit growth markets such as China.
Cost Reduction - Both GM and Ford began decrease domestic manufacturing capacity in 2006. By 2008, these companies between them will have closed 26 North American facilities, with the loss of 60,000 jobs. Negotiation with the car workers' union has allowed these market leaders to restrain their healthcare expenditure going forward. To decrease material costs, some players are entering into longer-term relationships with a smaller number of suppliers.
Branding and Marketing - Manufacturers are focusing their different brands on different consumer segments, in order to differentiate their products in a crowded marketplace. As well as competing on price, players are simplifying their price structures.
Innovation - Industry players are investing in R&D, both to offer incremental improvements to their vehicles (such as hybrid-powered SUVs), and also to investigate more radical ideas, such as hydrogen fuel cells. As well as differentiating products, these investments should protect companies' long-term revenues in the face of volatile fuel prices and environmental legislation.
The car and truck market consists of total spending in the US on new cars, and new light, medium, and heavy trucks (including coaches), at manufacturers' selling price.
Wednesday, September 26, 2007
“We want a higher-education system that offers every kid growing up in Ohio opportunities that will allow him or her to stay here, prosper and raise a family,” Fingerhut told a standing-room crowd of nearly 300 students, professors and staff at Ohio University.
Fingerhut shared his vision of how the new University System of Ohio will develop in the coming decade, and help make the state more competitive in the global economy during a public forum.
Last month, Gov. Ted Strickland ordered the creation of the system to increase cooperation among schools and reduce duplication of programs by having colleges determine their strengths.
The system will consist of the state's 13 public universities, 24 regional branch campuses, 23 two-year colleges and the Northeastern Ohio Universities College of Medicine. The state's adult and technical centers also are expected to join.
Tuesday, September 25, 2007
The economy is feeling some serious pressure from tougher financial conditions and the hatrd-pressed housing market. What isn't certain is just how much these factors are constricting growth and whether the economy is now weak enough to slip into a recession.
That's why the September jobs report is so important. Even as economic growth cooled down last year, the housing recession worsened, gasoline prices flared up, and troubles in the subprime mortgage market emerged this summer, the economy's optimists believed consumers could persevere because the labor market was solid. Wages and salaries, which account for over 60% of after-tax personal income, are growing at an annual rate of close to 5.5% this year.
But the job market has cooled off considerably in the past couple months. The August increase in private payrolls of 24,000 workers was the smallest since early 2004. While the manufacturing and construction sectors are bearing the brunt of the weakness, the pace of hiring in the service sector also faded. The weaker job growth now has consumers feeling more pessimistic about the labor market.
Economists expect a mild rebound in payrolls in September. Lower jobless claims certainly are cause for some optimism, but another poor result would raise a red flag about the resiliency of consumer spending and the economy at large.
If business aren't hiring in response to the recent changes in financial and economic conditions, they probably are holding back on spending in other areas too. August business activity reports from the Institute for Supply Management showed some softening in demand. The September results are important to see if conditions have worsened. The August factory goods data will also provide an update on conditions for manufacturers.
Even with all this not so good news, the U.S. economy expanded at the fastest pace in more than a year in the second quarter, before the sell-off in credit markets that threatens to hobble growth in the second half. Gross domestic product rose at a revised 3.8 percent annual rate from April though June, propelled by a surge in exports, figures from the Commerce Department showed in Washington. The economy advanced at a 0.6 percent rate in the first quarter.
Stay tuned. What are your thoughts?
Monday, September 24, 2007
Press releases are short documents used to call the media?s attention to an event or newsworthy happening at your company. Read local newspapers closely and watch local television carefully to discern what is considered news. Look over the press releases of companies similar to yours to get a better idea of how your release should look.
Here are some effective tips to follow:
-Pick your targets carefully.
-Meet their needs of the media.
-Make your point quickly.
-Don't be pushy.
-Include the basics.
-Less is more.
-Consider the timing.
-Don't make mistakes.
“Economic development is both an art and a science,” Devine said. “You have to manage community issues, building sites and the incentive process, and you have to inform public officials about the proper course of action. It’s a team effort.”
Jim Devine is indeed one of the best economic development scouts I know. He is also one of the business' most esteemed leaders. Jim has been a role model to many economic developers. Personally, I've taken several notes from him throughout my career.
Read the full story here.
Sunday, September 23, 2007
-Catherine Jordan, president and CEO of Minneapolis-based Achieve!Minneapolis, a nonprofit that raises private funds for school reform initiatives.
-John Ostrem, president of the Northwest Minnesota Foundation, which works to improve the lives of people in rural Minnesota. Ostrem has been a leader in planning, community and economic development, and philanthropy.
-Yvonne Cheung Ho, president and CEO of the Metropolitan Economic Development Association (MEDA). Ho joined MEDA in 1993 as director of the Business Development and Programs department and served MEDA and the Minnesota Minority Supplier Development Council.
-Sharon Bredeson, a member of the Governor's Workforce Development Council, She has also served on the Minneapolis Workforce Investment Board for 20 years, on its Dislocated Workers committee.
-Trish Taylor, chair of the Central Minnesota Workforce Investment Board, where she represents private industry. Taylor is the co-owner of Monticello-based Taylor Land Surveyors.
-Mike Valentine, executive director of the Two Harbors Development Commission, Valentine has been active in economic development in northeast Minnesota, advocating regional partnerships.
-Judy Mortrude, assistant supervisor of adult learning with Saint Paul Public Schools. Mortrude has been involved in workforce education efforts for more than a decade, and played an instrumental role in Minnesota's Workforce Initiative for a Learning and Mentoring Alliance (WILMA) project.
Saturday, September 22, 2007
Extending from the most active U.S.-Mexico border port, Laredo, through Lubbock and West Texas, New Mexico, Oklahoma and Colorado, the Ports-to-Plains Corridor links the plains of the United States to the border centers of commerce.
Its primary purpose is to create a modern trade corridor benefiting the public by enhancing freight movement and promoting economic development.
Learn more: www.portstoplains.com
Friday, September 21, 2007
Pinal County, Ariz., part of the Phoenix metro area, had the highest growth rate of housing units of any county in the nation, according to U.S. Census Bureau estimates released today. Meanwhile, neighboring Maricopa County was the biggest numerical gainer.
Pinal’s housing increased by 16.6 percent, or more than 18,000 units, from July 1, 2005, to July 1, 2006. Maricopa gained 43,000 units. A housing unit can be a house, an apartment or even a single room intended as separate living quarters with direct access from outside.
Flagler County, Fla., north of Daytona Beach on the Atlantic coast, had the highest growth rate of housing stock the previous two years but slipped to fifth place in 2006. Two other Florida counties among the top five were second-place Sumter (west of Orlando) and fourth-place Lee (southwestern Florida). Kendall, Ill., near Chicago, was third. (See Table 1 Excel PDF.)
Maricopa was followed in numerical growth by Harris County (Houston), Texas, which added 39,000 units; Clark County (Las Vegas), Nev., with 38,000; Riverside County (east of Los Angeles), Calif., with 33,000; and Lee County (Fort Myers), Fla., with 28,000. (See Table 2 Excel PDF.)
Among all counties and county equivalents, Orleans Parish, La., experienced the largest numerical decline in housing units between July 1, 2005, and July 1, 2006, losing 107,000, or slightly more than half its housing stock. Neighboring St. Bernard Parish, had the highest rate of decline, losing 76.2 percent of its homes. Both parishes suffered major damage from Hurricane Katrina early in the period. (See Tables 3 Excel PDF and 4 Excel PDF.)
At the state level, four of the five states with the most rapid housing growth are in the West: Nevada (with a growth rate of 4.5 percent), Arizona (3.5 percent), Idaho (3.4 percent), Florida (3.3 percent) and Utah (3.1 percent). Nevada’s rate of growth was more than triple the national average. (See Table 5 Excel PDF.)
The South dominated the states adding the highest number of housing units. Florida gained 273,000 homes during the period to lead all states, followed by Texas (198,000), California (181,000), Georgia (101,000) and North Carolina (89,000). Louisiana was the only state to experience a decline, with the number of housing units falling by 110,000, or 5.7 percent.
The United States had an estimated 126.3 million housing units as of July 1, 2006, representing an increase of 1.8 million, or 1.4 percent, since July 1, 2005.
Thursday, September 20, 2007
Demand for industrial machinery in the US has fallen in recent years, reflecting the decline of domestic manufacturing industries, as the country becomes more reliant on cheap imports. Throughout this decade, the miscellaneous capital goods industry has faced stagnation and decline. The outlook for this mature and saturated industry is no less bleak, with no growth predicted in future years.
Electrical equipment, including switches, circuit breakers and tools, continues to account for the majority of the markets revenues, although the demand for pumping equipment is rising following the introduction of federal clean air legislation. This has created a shift towards gas-powered energy generators in the US, driving demand for the necessary pumping technology to extract methane, and boosting revenues for equipment manufacturers.
Many end-markets served by this industry, such as construction, are cyclical, accounting for the markets current stagnation. Further, margins have been compromised by expenditure on meeting environmental legislation and increasing raw material and energy costs; these have led to price increases, causing consumers to become dependent on cheaper imports, further damaging margins. Counterfeits and cheap imports are another threat to the markets revenues moving forward.
Leading companies include Hitachi, which dominates the market, Wolseley, Illinois Tool Works, and Eaton Corporation. Companies are expanding through merger and acquisition activity but are neglecting developing regions, such as China, which pose significant growth potential; nor are companies investing heavily in research and development to provide increasingly sophisticated equipment to satisfy demand.
Increasing Costs - High crude oil prices have forced up the price of raw materials and energy, increasing costs and degrading margins. The reliance of several major players on steel is a problem; the continuing steel shortage has further increased the materials fluctuations in price, threatening margins.
Weak Dollar - The current weak dollar has increased the cost of imported materials, which have become more important in view of the current production deficits in a number of key US sectors such as the steel industry. However, the dollars weakness has increased exports, which will become increasingly important in view of Chinas new position as the worlds leading consumer of machinery.
Legislation - The Clean Skies Act (2005) increased the need for extraction of coal bed methane (CBM), driving consumer demand for pumping and extraction equipment and providing a lucrative growth sector within the market. However, expenditure on strict federal, state, and local laws regarding emissions increases manufacturers costs.
Combating Counterfeits - The US Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE) made more than 14,000 seizures of counterfeit goods of all types, worth in excess of $155 million in 2006, which represents a 67% increase on the previous year. Companies are working with customs officials to reduce the influx of counterfeit goods that reduce sales volumes and lower consumer confidence.
Inorganic Growth - Several industrial equipment manufacturers in the US have attempted to insulate against volatile economic conditions through acquisitions and a focus on higher-margin, higher-growth sectors. This has allowed them to capture benefits of scale, strength, and scope to improve profitability.
Foreign Investment - US manufacturers are making fewer direct investments in low-wage locations such as China. Instead, there has been a tendency in recent years to outsource to local companies in these regions.
Wednesday, September 19, 2007
Without a change, America's "standard of living will decrease, our way of life will be threatened, our opportunities for success for future generations will diminish," ASU President Michael Crow said in a keynote address.
Crow and others envision a future where companies have access to a steady stream of college graduates across all subjects to quickly put new products on the world market, particularly to compete with China, India, Brazil and Russia. advertisement
"These new economies will be heavy-weight competitors," he said, adding the economies "will not be burdened by 200 years of success as we are."
Universities will be more critical in this knowledge-driven, science-driven economy. "A well-performing university in a region that you can actually speak to, actively communicate with and actually work with is a very, very valuable asset," Crow said.
The event, which attracted an estimated 1,300, is being held through Wednesday at the Westin Kierland Resort and Spa in Scottsdale.
Gov. Janet Napolitano told the audience that Arizona's public and private sector has worked to position the economy to try and increase the number of high-quality, high-wage jobs.
It is a critical challenge as the state's current population of 6.4 million is predicted to soar to 12 million by 2030.
Attendees at the conference piled onto buses for the "Phoenix Rises - Again and Again" tour, which promised to show "the city has once again redefined its downtown."
It featured more than $3 billion worth of new construction, including the light rail system, the downtown ASU campus and the Translational Genomic Research Institute.
While those long-held dreams are becoming reality and the population boom continues, the Valley remains heavily addicted to the housing industry and continues to take its lumps in the current mortgage crisis.
Job growth is projected to slow from 6 percent in 2006 to 1.8 percent in 2008, according to the Arizona Department of Economic Security.
Average wage and income levels remain behind peer cities - and in many cases behind the national average, according to federal data.
"Phoenix is driven by social mobility growth. It's not being driven by innovation-based growth," said Crow. "This is a region of the United States that's benefiting from the lack of performance in other regions."
Meanwhile, economic development experts and business leaders said they are having a tougher and tougher time attracting and keeping educated workers.
That could lead to high profile, local companies moving outside of the U.S. to find talent.
"We need to have the ability to keep students here as opposed to educating them here and then they go somewhere else," said Bruce Coomer, executive director of the Arizona Association for Economic Development.
"Our highly educated students are going to California or the East Coast because they can offer more than Arizona can."
Tuesday, September 18, 2007
The plan, the Partnership for Economic Growth, would streamline economic development in the community by centrally locating public and private resources under one roof.
Brooks said this one-stop shopping office would be located in downtown Rochester at street level. A location for the office has not been selected.
Representatives from various city, county and private groups would work in this office providing assistance to companies already here and those considering coming to the area.
The partners in the initiative are Greater Rochester Enterprise, Rochester Business Alliance, RochesterWorks!, Rochester Downtown Development Corp., Infotonics Technology Center, Excell Partners, Trillium Group, High Tech Rochester and Rochester Gas & Electric.
Monday, September 17, 2007
The award will be presented at an awards ceremony during IEDC’s annual conference in Phoenix, Arizona, and will be accepted by Cary Clark, market development director for KCSourceLink and IEI.
IEI and KCSourceLink competed in a category that included organizations serving areas with populations exceeding 200,000. UMKC’s IEI and the KCSourceLink program were a clear standout, according to IEDC chairman Ronnie L. Bryant, who noted that “the award serves as a salute to pacesetting organizations like IEI for leading the charge.”
Founded in June, 2003, KCSourceLink connects small businesses and entrepreneurs in the 18-county, bi-state Kansas City region to more than 140 business-building non-profit resource organizations. Its mission is to help small business grow and prosper by providing business owners easy access to needed services. Entrepreneurs and business owners can access the entire network by making one phone call, e-mailing or using a search tool, The Resource Navigator®, on the Web site at ww.kcsourcelink.com.
“This award goes to KCSourceLink’s network partners,” says Maria Meyers, Network Builder for KCSourceLink. “These organizations work hard to grow business in the Kansas City region every day. It is an example of how communities can merge nonprofit, private and university resources to create an economic development environment that encourages small business success.”
Between June, 2003 and May, 2007 more than 2,600 aspiring and existing business owners have accessed this network via telephone hotline or e-mail, and 5,400 client referrals have been made to network resource organizations. Over 6,700 online searches have been made on The Resource Navigator® since its activation in January, 2004. An average of 7,000 visitors per month access www.kcsourcelink.com.
IEI at the Henry W. Bloch School of Business and Public Administration at UMKC includes innovative programs, innovative faculty, and innovative curriculum. At IEI, entrepreneurship is a mainstream field of study based on solid research and offered to students from all disciplines.
KCSourceLink was founded by the Ewing Marion Kauffman Foundation, the SBA and the Bloch School of Business and Public Administration at UMKC.
Sunday, September 16, 2007
At the academy, a team selected by Kentucky Gov. Ernie Fletcher will work to identify economic policies that can help improve the state's competitiveness in the global economy, particularly policies that will improve work-force education and encourage entrepreneurship.
The research will focus on policy options related to cluster-based economic development, according to a news release. Clusters are groups of businesses and institutions that derive economic advantages from being near one another.
Kentucky's team will include: Keith Bird, chancellor of the Kentucky Community and Technical College System; Deborah Clayton, commissioner of the Kentucky Department of Commercialization and Innovation; Kris Kimel, president of the Kentucky Science and Technology Corp.; Beth Smith, commissioner of work-force development for the Kentucky Education Cabinet; and Libby Milligan, Fletcher's special assistant for administration and legislation.
"The NGA Center's policy academy will facilitate open discussion across state agencies to help better align economic development with state resources and advocate for a unified economic development plan," Kentucky Economic Development Secretary John Hindman said in the release. "NGA's experts will assist in synthesizing a wide array of studies and reports, while helping identify common themes and overarching recommendations to help guide Kentucky in developing economic development policies."
The other participating states are Georgia, Illinois, Iowa, Maryland, Oregon and West Virginia.
Saturday, September 15, 2007
The joint fund was created through a partnership by the state of Tennessee, the Tennessee Bankers Association and Southeast Capital Management, a nonprofit community development financial Institution.
The fund will provide loans and technical assistance to small, disadvantaged and early-state businesses in rural Tennessee.
Gov. Phil Bredesen announced the fund during his keynote address at the Governor's Conference on Economic and Community Development Thursday.
"The Rural Opportunity Fund is truly an innovative partnership," Bredesen says in a release. "I'm excited about the opportunities that will arise from this new source of capital for small and independent business growth here in Tennessee."
Read more here.
Friday, September 14, 2007
In 2006, the US car and truck aftermarket was worth $280 billion, an increase of some 4% on 2005. Since 2000, annual growth has been between 3.4% and 5.5%. This contrasts with the less buoyant performance of the new car and truck markets in the same period.
The automotive aftermarket accounts for 74% of the total value, with the medium and heavy truck segment generating the remainder. The truck aftermarket has grown more strongly since 2004. Although mechanical components are likely to remain more lucrative going forward, electronic parts are becoming an increasingly valuable segment, as manufacturers continue to move to electronic control systems.
Manufacturers in the US industry continue to suffer from the current high prices of important commodities such as steel, aluminum, resins (plastics), and copper, which tend to drive up their costs. There is also a risk to revenue and brand value from counterfeit products, which are generally of inferior quality. However, the number of cars and trucks on the road, and their average mileages, are increasing. Both these factors should maintain demand for aftermarket products.
Johnson Controls, Delphi, Magna International, and Lear are the leading players, with many companies acting as both OEM and aftermarket suppliers. The industry saw intense M&A activity in 2005 and 2006, in both manufacturing and wholesale sectors. Innovation is important, not only to develop improved products, but also to ensure that they are delivered efficiently through the supply chain to end-users. US companies are exploiting export markets such as China, where rates of car ownership are rising strongly, and also benefiting from low-cost manufacturing locations in Eastern Europe and Asia.
New and Used Car Markets - The recovery of the US new car market in 2004, following some years of decline, was sustained in 2005 and 2006, although at a slightly slower pace. The used car market is worth more than double the new car market, and in 2005, unit sales of used cars grew more strongly than new car volume. Overall, the number of cars in use in the US, their average age, and the aggregate mileage, are increasing. These factors are expected to maintain demand for aftermarket parts.
Rising Demand in the Truck Aftermarket - In 2005, aftermarket sales for medium and heavy trucks grew more strongly than car aftermarket sales. Drivers of demand in this segment include rising Class 4 8 truck sales, and total truck registrations since 2000, together with increasing road transport mileage.
Increasing Costs - For aftermarket manufacturers, raw materials are significant costs. In 2006, prices of vital inputs such as carbon steel and stainless steel, aluminum, copper, and many plastics (resins) continued to rise. Although stabilization of some prices, particularly for resins, was detectable towards the end of the year, raw material costs will continue to impact manufacturers: directly by narrowing their margins, and indirectly, by affecting the performance of upstream component suppliers on which they rely.
Counterfeiting - Aftermarket manufacturers are impacted by the presence in the market of counterfeit products, such as brake components and batteries. This decreases revenue for the genuine manufacturers. Additionally, as the counterfeits are generally of inferior quality, and may even be hazardous, there is a risk that they will damage the brand image of the manufacturers.
Consolidation - 2005 saw more intense aftermarket M&A activity than any year since 1999. Almost 60% of the deals were in the manufacturing sector, with the remainder in the wholesale sector. Preliminary information for 2006 indicates that this trend is persisting. The industry remains fragmented, and additional consolidation is likely going forward, as players aim to grow revenue inorganically, diversify product ranges, increase their purchasing power, and compete more effectively against cheaper commodity products from foreign manufacturers. In some cases, businesses spun off by the largest companies have been successfully acquired by smaller ones. Also, domestic and foreign private equity players are continuing to pursue aftermarket companies.
Innovation - Manufacturers are investing in R&D, in order to bring to market innovative, higher quality, and more durable products that can be sold at higher prices. There is increasing adoption of IT solutions such as the Internet Parts Ordering open standard, which can replace fax and phone communication between manufacturers, distributors, and end-users, thus increasing efficiencies throughout the industry.
Globalization - US-based manufacturers are exploiting growing markets, such as China, where vehicle ownership rates are rising strongly, in order to boost their total revenues. At the same time, Asia and Eastern Europe offer attractive low-cost manufacturing locations for US companies, which should alleviate cost pressures.
The auto & truck part market is valued here as total spending by consumers in the US on automotive aftermarket parts, tools, service, and equipment.
Thursday, September 13, 2007
In the two years since the release of the 2005 Scorecard, median net worth jumped 20% nationwide, while it jumped 68% for women and more than doubled for minorities. Most of these gains have come as a result of increasing homeownership and home values, and are therefore at risk that as interest rates rise and grace periods end, foreclosure rates will also rise.
The results underscore the efficacy of housing finance and credit innovation and the need for policing and reigning-in predatory lending. The current housing market crisis will undermine many of these gains.
Yet, the most important message of the 2007-2008 Scorecard, like its two predecessors, is the disparity in asset ownership – and, consequently, economic opportunity—among states, and by race, gender and income.
Net Worth - Median net worth in the US in 2004 was $65,150, but minorities had only 13 cents for each dollar their white fellow citizens did – largely the result of past government policy.
College Attainment - Seventy-two percent of Americans lacked the college attainment necessary today for a living wage income, but African Americans are nearly half as likely to have a college education as their white counterparts.
Asset Poverty - One fifth of the population does not possess enough belongings to survive 3 months without a job at the poverty line; more than half the population lacks sufficient liquid assets to put a downpayment on a home, invest in two-years at a community college or start a business.
Homeownership - 69% of Americans own their own homes – a determinant not only of financial stability, but future outlook and community commitment-- but less than half of minority families do (48.9%).
Health Care - Health insurance coverage from employers dropped another percentage point since the last Scorecard two years ago, to 63.2%, while medical debt remains a chief cause of bankruptcy.
Get the details here.
Wednesday, September 12, 2007
Do your readers a favor: write in short sentences and use simple words. We are wrong to believe that big words and long sentences indicate intelligence. A concise letter or report is more effective; it saves reading and writing time. Your main points won't fade into a background of unnecessary words.
Read sentences out loud to check their length. If you run out of breath, they're too long. Better yet, read your writing to someone else. If your listener forgets the beginning before you finish, you need to break your thoughts into two or more sentences. Eliminate extra words whenever you can.
2. Be Specific and Avoid Generalizations
Use specific, concrete words instead of vague generalizations. Don't make your readers guess about the meaning of your message; it wastes their time as well as yours. For example, which of the following sentences conveys the most information? "Please get back to us as soon as possible regarding your return," or: "To complete your 1040 form before the deadline, we must hear from you before April 1."
3. Use the Active Voice
Avoid dead, dull-sounding writing by sticking to the active voice, in which the subject is the doer of the action. "The client filed the Schedule C" is an active sentence. "The Schedule C was filed by the client" is passive.
The passive voice makes sentences longer and more impersonal. The active voice sounds alive, personal and demanding. For example, "Your prompt attention to this letter will be appreciated" is considerably crisper in the active voice: "Please attend to this matter promptly."
4. Use Parallel Structure
Organize your sentences with parallel structure. Your writing will be much smoother and clearer if you put related ideas in the same tense and form. For example, "I came, I saw, I conquered," sounds a lot snappier than "I arrived, then having seen, I proceeded to conquer."
When you're writing a letter to a prospective client, it's awkward to write: "Our firm offers a range of services: preparing financial statements, help your plan your strategies, train you in computers and provide business consulting."
5. Organize your writing
Always create an outline before starting to write. Even if you only jot down five or six words, it will save you writing time and remind you of where you're headed. More importantly, your readers won't get lost in a poorly organized document that causes them to ignore or misunderstand your message.
Get to the point immediately. Busy readers should be able to get your message in the first two or three sentences of your document. Start with the conclusion or call to action, then list your primary arguments. Provide the back-up or discussion material at the end for anyone who has time to read that far.
6. Watch Your Tone
The way you "talk" in writing gives your readers a mental picture of your personality. Write informally, as a friendly, concerned professional. If you sound too formal or long-winded, that's how your readers will envision you.
Use positive words and expressions instead of negative ones. If you want to motivate your readers, positive languages works best. Avoid writing "you claim," which implies: "you say so, but I don't believe you." Words such as "failed to," "neglected to" or "lack of" can sound accusatory. For example, instead of: "This notice is regarding your failure to remit payment on our invoice," you might use: "Did you receive our invoice of Sept. 12, 1995?"
7. Edit for Grammar, Punctuation, and Spelling
Spelling and grammatical errors not only convey a sloppy image, but also can cost you business. For example, a hyphen in the wrong place can inadvertently offend your readers: "we are always happy to serve small-business owners," is different than: "We are always happy to serve small business-owners."
Always let someone else edit your writing. Although most word processors have a spell check function that can catch some errors, none of them will catch words that are spelled correctly, but used incorrectly in a sentence. There's no substitute for the human eye - especially the fresh eye of a person who hasn't been looking at the document over and over.
A number of excellent handbooks review common grammatical errors and discuss how to fix them. One of the best is William Strunk, Jr. and E.B. White's classic Elements of Style. It's short, focused, and entertaining.
Source: Oregon State University English Language Institute
Learn more about the index here.
The intent of the report is to help business and community leaders see how Sacramento stacks up in economic prosperity and the areas where it needs to improve to remain competitive.
Any index that provides benchmarks for improvement has value, said Jim Williams, one of three chairs of Partnership for Prosperity, a coalition of local groups that is developing an economic development plan for the region.
Tuesday, September 11, 2007
I will pass along one tip: Don't try to do everything on this list all at once. Pick with an action that speaks to you and work on it for a couple weeks, and then move to another action.
1. Believe You Are Creative: Everyone is. Or has the potential to be. It is part of being human.
2. Broaden Your Interests: Consciously seek out what you have not sought out before. Be open to new experiences, new sources of information.
3. Prepare to Create: Gather information, hunches, impressions, colors, textures, sounds. Keep Notes!
4. Look for (or, better still, make) Connections: The more varied your interests, the greater the chance of cross-fertilization; of combining two or more things that have not been combined before. Look for relationships between things that are not related.
5. Break Habits: Our own habits are what often keep us from being more creative. The more you follow the script, the less you can improvise. Breaking even little habits can shake up the system enough to allow new connections to happen, new points of view to form.
6. Provide the Right Environment (for you): Some people like to listen to music, others prefer silence once they are in the creative flow. Experiment until you find what works for you.
7. Provide Time To Create: (1) Time to sleep on it. Time without your conscious manipulation. Time for seemingly random thoughts and bits of input to percolate and bump into each other. (2) Time away from the immediate demands of work and/or home, dedicated to the creative task at hand. In certain environments, time is so precious that this seems like an unrealistic element of developing your creativity. But even five minutes could make a difference.
8. Persevere: Don't give up on yourself or your project. Creativity is not necessarily easy. Make lots of mistakes. Learn from them. It is to be expected. It is a part of the process. Keep going. There is a paradox here because sometimes an important part of being creative is knowing when to abandon an unproductive idea.
9. Maximize All Of Your Senses: The more you utilize all of your senses to gather and process information, the greater the chance of those bits of ideas bumping into each other . . . and sticking together to create a new something.
10. Forget How Much You Know: Adopt the beginner's mind. Conventional wisdom may say this or that cannot be done and then unconventional wisdom goes right ahead and does it. Learn to look at things with a fresh eye. Don't be afraid to ask the "dumb" questions.
Source: Ken Coleman
Governor Matt Blunt (R-MO) has signed into law HB 1, the economic development and job creation bill lawmakers approved during their recently concluded special session of the Legislature.
The economic development legislation that was passed during the regular session of the General Assembly was vetoed by the Governor, who felt it was too costly. He says this slimmed down version of the package will help Missouri's economy and its job creation efforts, thanks the hard work of a lot of state lawmakers who put a lot of time and effort into this bill.
The key component of the bill is an expansion of the Quality Jobs Program, which offers incentives to businesses that provide both competitive wages and healthcare benefits. This bill increases the program's annual capacity from $12-Million to $40-Million.
Other pro-jobs initiatives in this legislation include expansion of the Enhanced Enterprise Zone and creation of the New Markets tax credit programs which are designed to promote expansion and new job creation. The bill increases the Enhanced Enterprise Zone capacity from $7-Million to $14-Million and creates a state match for the federal New Markets tax credit which brings investment to economically distressed areas.
Monday, September 10, 2007
Leading companies in the scientific and technical instruments market have experienced strong revenue growth in recent years. Consolidation within the industry, and sustained corporate and state spending, were key drivers of growth.
This diverse industry obtains revenues from instrumentation designed for both measurement and control, with laboratory and field applications. The large and rapidly-expanding US biotechnology industry is driving particularly strong revenue growth in the analytical and bioscience instrumentation sector.
Within the scientific and technical instrument market, input prices and skilled labor costs are increasing. However, end-users in the semiconductor, networking, and similar industries must compete through non-stop innovation, which increases demand for instrumentation and test gear. Long-term increases in healthcare spending will sustain demand for medical instrumentation, while the expanding defense and homeland security budgets will also be a key determinant of revenues for scientific instrument manufacturers.
Leading companies include Danaher, Thermo Fisher Scientific, Beckman Coulter, and Pall Corporation. Players in this industry are diversifying geographically into developing markets and expanding their portfolio of products in order to drive revenue growth. This entails heavy investment into research and development, and acquisition costs. For example, in 2006, Thermo Electron and Fisher Scientific merged forming Thermo Fisher Scientific.
Rising Costs - Prices of raw materials and inputs, such as steel and semiconductors are increasing, endangering profit margins. Domestic salaries for skilled employees are also high. There is currently a shortfall of suitably qualified engineers, pushing salaries higher and further impacting earnings within the market.
Environmental Regulation - Legislation is imposing stringent environmental standards on many industrial processes. This is boosting demand for instruments to monitor emissions, thus driving revenue growth within the market.
Government Expenditure - Massive spending on aerospace, defense and homeland security, and increasing US healthcare spending, has led to significant extra demand for scientific and technical instruments across the US.
Innovation - Scientific advancement is constantly opening up new opportunities for manufacturers of scientific and technical equipment, in areas such as DNA, life sciences, and nanotechnology; several leading companies have already established strong positions within the life sciences sector through aggressive acquisitions.
Diversification - Players have continued to diversify their product portfolios through research and development and acquisitions. This allows them to heighten market visibility, and offer one-stop solutions for a diverse range of end-users.
Mergers and Acquisitions - Major players within the market are continuing to consolidate their businesses, strengthening their position within the market. Two major players, Thermo Electron and Fisher Scientific, completed their merger in November 2006, forming Thermo Fisher Scientific.
Sunday, September 9, 2007
Among Asian countries, Taiwan had the eighth most conducive environment to operating a business in 2006, according to the Doing Business 2007 Report, which measured business regulations and their enforcement across 175 economies.
Singapore ranked first in the survey, followed by New Zealand and the United States. Rounding out the top 10 list were Canada, Hong Kong, the United Kingdom, Denmark, Australia, Norway and Ireland, in that order.
In the Asian region, Taiwan lagged behind Singapore, Hong Kong, Japan, Thailand, South Korea, Malaysia and Mongolia, but it placed ahead of China, which ranked 93rd.
Among all 10 sub-indices used in the survey, Taiwan performed the worst in terms of ease of employing workers, ranking 154th among the 175 economies surveyed.
Taiwan's difficulty of hiring index stood at 78, compared with the average of 23.7 for the East Asian and Pacific region and 17 for Organization for Economic Cooperation and Development (OECD) member states.
Saturday, September 8, 2007
Cabanero said: “The Philippines has proven to the world that it has the competence and can assure the safety of potential foreign patients availing of our healthcare facilities and medical personnel.”
“While we are talking of a US$40 billion medical tourism global industry in the future, it is forecasted that the figure will grow by US$188 billion in 2013,” Cabanero said.
“With our competence and related tourism development, the Philippines or the Visayas in particular has no reason not to capture a good portion of this multi-billion dollar market,” he added.
Other than competence, Cabanero cited world economic development that is very favorable to the growth of medical tourism in the Philippines.
He also cited ease and affordability of travel as among the plus factors for the country.
Cabanero said “Japan now has 22 million elderly population costing them US$36.5 billion in elderly care. My estimate is that the Philippines can offer at least 50 percent less if we develop fully the medical tourism industry.”
Cabanero also explained linkages if medical tourism is to be developed, among them, wellness centers (both hi-tech and traditional), schools, and medical research institutions (much cheaper to study here), medical insurance companies, tourism enterprises, local government units (LGUs), and other associations.
Friday, September 7, 2007
The global forest products market grew in value by 4% in 2006 to reach a value of $296 billion. The US accounts for 14% of this, or $41 billion. The US is also a major exporter of wood and forest products.
The most lucrative segment is industrial roundwood, which generates 55% of the market volume, with sawnwood accounting for a further 20%. The US construction industry is a major consumer of sawnwood, but after several years of strong growth the number of housing starts began to fall in late 2006. This led to declining lumber prices, and increased downtime for domestic producers who had hitherto operated at almost full capacity.
The growth of China's secondary wood product industry, which includes areas such as furniture, has been dramatic in recent years. This has led to strong demand for wood raw materials, boosting exports from US players. However, the resolution in 2006 of the softwood timber dispute between the US and Canada is likely to see increased imports from Canada to the US, increasing the competitive pressures on domestic forestry and wood companies. Furthermore, the prevalence of illegal logging operations in many countries means that US and Canadian companies, which are generally considered to operate within the law, may be at a disadvantage in the international markets.
Key players in this industry tend to be large, vertically-integrated businesses. Weyerhaeuser, Universal Forest Products, and Louisiana-Pacific are industry leaders. There is a trend for companies to sell off their timberland to institutional investors such as pension funds and REITs: the sellers may be aiming to reduce indebtedness following acquisitions, while the buyers are looking to diversify their portfolio to include forest assets that have historically offered good returns. Innovation is also important for companies in this industry. It may include the development of faster-growing, straighter trees, or diversification into new areas, such as biorefineries that can generate base chemicals and fuels from forest product raw materials.
Home Starts Falling - Late 2006 saw the number of new homes being built declining from the high levels of 2004 and 2005. As residential construction accounts for about half of wood panel product consumption in the US, this led to production falling to 90% of capacity (it had been close to 100%), with consequent increased downtime at sawmills.
China - Growth in the Chinese secondary wood product sector, such as furniture manufacturing, has seen the country rapidly increasing its lumber imports, to the benefit of US exporters. In the longer term, China is developing its primary wood product sector, with the construction of more sawmills and similar processing plants. This should increase demand for imported logs, but may impact on US lumber producers.
Illegal Logging - It has been estimated that 8-10% of all wood product production globally is due to harvesting without permits, under-reporting of production to avoid taxes, logging in national parks and nature reserves, and other illicit activities. The US industry, however, has a clean record. This means that US wood product players are disadvantaged in export markets, because illegal logging tends to increase supply and lower prices, and allows those companies engaging in such practices to reduce their costs.
Softwood Lumber Dispute - Late 2006 saw a settlement of this longstanding trade dispute. The US had imposed high tariffs on Canadian softwood lumber imports, arguing that its northern neighbor subsidized its production to the detriment of the US forestry sector. The agreement finally reached includes a reduction of tariffs, conditional on prices remaining above a certain level. This will benefit US-absed wood producers going forward.
Land Ownership - Traditionally, wood companies have been vertically integrated, involved in owning large tracts of timberland, logging, and producing wood products. There is a trend for timberland to be sold to institutional investors, such as pension funds and REITs. The sellers are often carrying more debt than they would prefer, as a result of previous M&A activities, while the buyers aim to diversify their holdings to include forestry assets which have historically offered good returns.
Innovation - Forest product companies are increasing the energy efficiency of their processes in order to reduce costs and environmental impact. Going forward, they are also looking to innovate in their product lines. For example, integrated forest products biorefineries, which can produce base chemicals and fuels, such as acetic acid, ethanol, and synthetic gas. Such processes would diversify revenue streams and allow value to be created using the waste products of existing mill processes, such as pulp residues.
Divestment of Fine Papers Operations - Early in 2007, the US player Weyerhaeuser received regulatory approval for its proposed $3.3 billion merger with Canadian paper company Domtar. When the deal is completed, Weyerhaeuser will be able to divest its poorly performing fine papers business, which will then operate under the Domtar name. In recent years, several major forest products companies have also disposed of their fine papers divisions.
The forest products market consists of chips and particles, sawnwood, wood fuel, wood residues, industrial roundwood and wood-based panels, but excludes paper and pulp. The markets value has been calculated at manufacturers selling price.
Thursday, September 6, 2007
The governor’s office announced Wednesday an online and telephone poll for people to come up with a new slogan for the 107 welcome signs posted along roads leading into the state.
“With our state heading in the right direction and our citizens taking a renewed sense of pride and ownership in West Virginia and its future, I believe that now is the time for us to engage the people of West Virginia in choosing a permanent welcome slogan — one that they would want all the world to see as they journey into the Mountain State,” Manchin said in a news release.
Manchin unveiled the “Open for Business” slogan during his 2006 State of the State address as an overt statement about his administration’s focus on economic development.
Criticism has been rampant ever since. His office has always maintained that the wording on the larger welcome signs was designed for easy removal.
Wednesday, September 5, 2007
For the first time since 2001, both the European Union, at 2.8 percent, and Japan, 2.3 percent, are predicted to have higher GDP growth than the United States.
Global growth, meanwhile, is pegged at 3.4 percent, down from 4 percent in 2006, largely because of the U.S. slowdown, the report said.
High commodity prices continue to boost growth in developing countries, which accounted for a 37 percent share of global trade last year, the report said. A decade ago their share of trade was 29 percent.
The economic outlook for developing countries is positive for the first time since the early 1970s, driven in large part by the growth in China and India, according to an annual report by the United Nations Conference on Trade and Development (UNCTAD) released today.
Developing countries – including many of the world’s poorest nations – will see ongoing benefits from strong demand for primary commodities, and this positive trend in terms of trade since 2003 has allowed such countries globally to bolster investment in their economies, said the Trade and Development Report 2007.
Per capita gross domestic product has increased nearly 30 per cent between 2003 and 2007, compared to 10 per cent for the Group of Seven (G-7) highly industrialized countries, the Report noted. Overall, the world economy will mark growth for a fifth consecutive year, with a 3.4 per cent expansion this year.
UNCTAD warned that a major recession in the United States could lead to diminished exports for China and India, which are setting the pace for growth of developing countries.
The Report also cautioned that North-South bilateral and regional free trade or preferential trade agreements could prevent poorer nations from developing their industrial sectors and reduce their control over foreign direct investment.
Instead, UNCTAD pointed to the example of today’s industrialized and developing countries which have recorded tremendous economic growth in the past several years through protection of nascent industries, thus allowing them to hone their abilities to meet the challenges of international competition.
Additionally, the Report called for intensified regional cooperation in exchange rate arrangements as a means to reduce the vulnerability of developing countries. The absence of appropriate global exchange rate arrangements could lead to exchange rate instability, especially in developing nations by impeding their overall competitiveness.
Regional collaboration could also benefit developing countries in terms of long-term development, UNCTAD said, as it can help countries build up their economic capabilities to allow them to compete globally. Such cooperation should include joint policy action – focusing on macroeconomic, financial, infrastructure and industrial policies – to boost growth and structural change potential.
U.S. economic developer should be asking what impact this drop-off in growth will have on local and state economies.
Read more here.
Download report here: UNCTAD
Tuesday, September 4, 2007
They also get more done per hour than everyone but the Norwegians, according to a U.N. report released Monday, which said the United States "leads the world in labor productivity."
The average U.S. worker produces $63,885 of wealth per year, more than their counterparts in all other countries, the International Labor Organization said in its report. Ireland comes in second at $55,986, followed by Luxembourg at $55,641, Belgium at $55,235 and France at $54,609.
The productivity figure is found by dividing the country's gross domestic product by the number of people employed. The U.N. report is based on 2006 figures for many countries, or the most recent available.
Only part of the U.S. productivity growth, which has outpaced that of many other developed economies, can be explained by the longer hours Americans are putting in, the ILO said.
The U.S., according to the report, also beats all 27 nations in the European Union, Japan and Switzerland in the amount of wealth created per hour of work — a second key measure of productivity.
Norway, which is not an EU member, generates the most output per working hour, $37.99, a figure inflated by the country's billions of dollars in oil exports and high prices for goods at home. The U.S. is second at $35.63, about a half dollar ahead of third-place France.
Seven years ago, French workers produced over a dollar more on average than their American counterparts. The country led the U.S. in hourly productivity from 1994 to 2003.
The U.S. employee put in an average 1,804 hours of work in 2006, the report said. That compared with 1,407.1 hours for the Norwegian worker and 1,564.4 for the French.
It pales, however, in comparison with the annual hours worked per person in Asia, where seven economies — South Korea, Bangladesh, Sri Lanka, Hong Kong, China, Malaysia and Thailand — surpassed 2,200 average hours per worker. But those countries had lower productivity rates.
America's increased productivity "has to do with the ICT (information and communication technologies) revolution, with the way the U.S. organizes companies, with the high level of competition in the country, with the extension of trade and investment abroad," said Jose Manuel Salazar, the ILO's head of employment.
The ILO report warned that the widening of the gap between leaders such as the U.S. and poorer nations has been even more dramatic.
Laborers from regions such as southeast Asia, Latin America and the Middle East have the potential to create more wealth but are being held back by a lack of investment in training, equipment and technology, the agency said.
In sub-Saharan Africa, workers are only about one-twelfth as productive as those in developed countries, the report said.
"The huge gap in productivity and wealth is cause for great concern," ILO Director-General Juan Somavia said, adding that it was important to raise productivity levels of the lowest-paid workers in the world's poorest countries.
China and other East Asian countries are catching up quickest with Western countries. Productivity in the region has doubled in the past decade and is accelerating faster than anywhere else, the report said.
But they still have a long way to go: Workers in East Asia are still only about one-fifth as productive as laborers in industrialized countries.
The vast differences among China's sectors tell part of the story. Whereas a Chinese industrial worker produces $12,642 worth of output — almost eight times more than in 1980 — a laborer in the farm and fisheries sector contributes a paltry $910 to gross domestic product.
The difference is much less pronounced in the United States, where a manufacturing employee produced an unprecedented $104,606 of value in 2005. An American farm laborer, meanwhile, created $52,585 worth of output, down 10 percent from seven years ago, when U.S. agricultural productivity peaked.
Monday, September 3, 2007
Board President Kelly Smallridge said the renowned research organization, which has 78 institutes worldwide, has agreed in concept to come to the county and set up shop alongside The Scripps Research Institute, the California-based group that opened a branch in Jupiter two years ago.
The deal is contingent on the county and the state chalking up a $190 million incentive package, which would include land for the institute on the Jupiter campus of Florida Atlantic University. The price could prove too rich for some county commissioners, weary after the county's $340 million payout to lure Scripps.
Could this deal have anything with German winters?
Sunday, September 2, 2007
Ohio also isn't faring well in the category, seeing a steep decline since 1999. The remedies for the problem aren't easy ones.
Cleveland actually had an increase in median income last year, up more than $2,400 from 2005 to $26,535, according to data released by the U.S. Census Bureau this week. But it was still worst among cities with a population over 250,000.
Youngstown's median income was $21,850 last year, a more than 17 percent drop from 2005, according to the Census Bureau.
Cities like Youngstown are magnets for people with low incomes because of their low housing costs, said Thomas Finnerty, associate director of Youngstown State University's Center for Urban and Regional Studies.
"We have these central cities that have become the collection sites for the poor," he said. "We have an incredibly old population. When people retire, retirement income is less than working income. That's a big factor, too."
And what does Don Iannone have to say about this article: "I don't dispute Ohio and many of its communities need to work harder at developing more high wage/high skilled jobs. The key is educational attainment. Until Ohio communities, especially the more poor ones, make strides in educational improvement, good jobs will simply not come. We need to accelerate the education curve in Ohio."
Saturday, September 1, 2007
As of early 2007, commercial banks in the US had total assets of $9,700 billion, and total liabilities of $8,900 billion. Almost 90% of each were due to domestically-chartered institutions.
The ten largest banks control assets of $4,900 billion, $3,700 billion being domestic assets. With the exception of HSBC, all of the top ten are entirely US-owned institutions.
2006 saw feverish M&A activity in the US, with a total deal value of $1,500 billion; activity in Europe was also intense. While private equity firms are increasingly involved, money center banks are still generating substantial revenues through these deals.
The regulatory framework for large banks is due to change, with Basel II compliance likely to demand greater capital reserves, and increase costs. As banks grow larger, the requirement that none should hold more than 10% of the nation's deposits is being seen as restrictive. The fate of this federal cap on deposits may affect banks' organic and inorganic growth.
Citigroup, Deutsche Bank, Bank of America, and HBSC Holdings are all leading players in this sector. They are continuing to adjust their financial product portfolio to client demand, with asset-based loans, for example, showing a rapid increase in popularity. M&A is a common strategy for players to expand, especially into lucrative overseas growth markets.
Basel II - The Basel II framework is an internationally agreed set of rules for assessing the adequacy of a financial institution's capital reserves in relation to the risk of assets such as loans.
Basel II compliance could force a bank to maintain higher capital reserves than previously, and may also increase costs by requiring greater investment in areas such as IT services. In most countries, those banks that need to comply with the new rules have an early-2007 deadline, while in the US, this has been put back to 2008.
Deposit Limits - Federal law currently restricts individual banks from holding more than 10% of the total deposits in the US. While most banks are not close to this limit, Bank of America, with more than 9% of total US deposits, is urging the government to remove this limitation. Removal of the limit could affect the degree of consolidation in the industry, allowing larger institutions to merge.
M&A Activity - 2006 saw record levels of M&A activity in many industries in the US, with total deal value of approximately $1,500 billion. Activity in Europe was also strong. It is expected that 2007 will see a continuation of this trend. This should provide continued fee income for money center banks involved in the deals.
Asset-Based Loans - Asset-based loan balances outstanding grew from $117 billion in 1994 to $360 billion in 2006. They involve revolving credit and loans secured on a company's financial and physical assets, such as accounts receivable or land, in contrast to loans based on cash flow, which can impose stricter conditions on a borrower's short-term financial performance. Commercial banks are increasingly offering such loans, in reponse to demand.
Emerging Markets - Commercial banks are increasing their operations in emerging economies such as China and CEE countries. They are seeking to boost their income through interest on substantial loans, the fees associated with IPOs, and the provision of other financial services.
Consolidation - Within the banking sector, consolidation is continuing. For example, late 2006 saw the merger of Bank of New York with Mellon Financial in a $16 billion deal. Larger players are likely to be looking to acquire overseas banks going forward into 2007.
The money center banking industry consists of all banks specializing in international fund transfer as well as those that borrow from and lend to governments, corporations, and other banks. Values quoted refer to commercial banks with substantial involvement in these activities, but may include results of consumer banking and other operations.
Friday, August 31, 2007
The Great Lakes Manufacturing Council is a membership organization representing industry, non-governmental organizations, trade associations, organized labor, educational and financial institutions, economic development groups, chambers of commerce, governments and others united to promote, enhance and preserve manufacturing in the Great Lakes Region.
To develop and pursue a common agenda that will result in a regional competitive advantage for the Great Lakes region and preserve the prosperity of the region.
To establish shared goals to maintain and increase the competitive advantages of manufacturing in the Great Lakes region.
To develop an effective, interactive network among all stakeholders focused on the success of manufacturing in the Great Lakes region.
To develop, implement and advance the use of best practices throughout the region related to common themes of image, innovation, and logistics & borders.
Resources & Publications
GLMC Forum Report
GLMC Strategic Plan
GLMC March 2006 Presentation
GLMC/CME March 06 Presentation
GLMC June 2005 Tech Ed Summit
Brookings May ‘06 Great Lakes Economic Initiative [PDF Download]
Magnet: Creating an Environment for Innovation in Northeasy Ohio [PDF Download]
This week's Healthy Mind and Body tip for economic developers is about staying motivated to stick with your fitness program or routine.
Are you having trouble sticking with your fitness program? Have you ever started a fitness program and then quit? If you answer yes, you're not alone. Many people start programs but stop when they get bored or results come too slowly. Stay motivated with these simple tips from the Mayo Clinic in Rochester, Minnesota.
Start with simple goals and then progress to longer range goals. Remember to make your goals realistic and achievable. It's easy to get frustrated and give up if your goals are too ambitious.
If you haven't exercised in a while, a short-term goal might be to walk five minutes once or twice a day. An intermediate goal might be to work up to 20 minutes of walking three or four times a week. A long-term goal might be to complete a 10K race.
Consider your personality
If you prefer solitude, walking, biking or in-line skating may be good choices. If group activities are more to your liking, try a class at a local fitness or martial arts center or join a volleyball or softball league. Involve your kids. Walk or bike with a group of friends.
If you push yourself too hard at first, you may be forced to abandon your program because of pain or injury. It's better to start slowly and progress gradually.
Vary your activities to keep boredom at bay. Alternate walking or biking with swimming or a low-impact aerobics class. When the weather cooperates, do your flexibility or stretching exercises outside. Play soccer with your kids. Join a health club to broaden your access to different forms of exercise.
You're more likely to stick with an exercise program if you're having fun. If you're not enjoying your workouts, try something different. Exercise doesn't have to be drudgery.
Make exercise part of your daily routine
If it's hard to find time for exercise, schedule workouts as you would any other important activity. You can also slip in physical activity throughout the day. Be creative! Take a walk during your child's music lesson. Take the stairs instead of the elevator at work. Pedal a stationary bike while you watch TV at night.
Put it on paper
Are you hoping to lose weight? Boost your energy? Sleep better? Manage a chronic condition? Write it down! Seeing the benefits of regular exercise on paper may help you stay motivated.
You're not in this alone. Invite a friend or co-worker to join you when you exercise. Work out with your spouse or your kids. Take a class at a local fitness center.
Track your progress
It may help to keep an exercise diary. Record what you did during each exercise session, how long you exercised and how you felt afterward. Recording your efforts can help you work toward your goals — and remind you that you're making progress.
After each exercise session, take a few minutes to sit down and relax. Reflect on what you've just accomplished. Savor the good feelings that exercise gives you. This type of internal reward can help you make a long-term commitment to regular exercise.
External rewards can help, too. When you reach a longer range goal, treat yourself to a new pair of walking shoes or new tunes to enjoy while you exercise.
If you're too busy to work out or simply don't feel up to it, take a day or two off. Be gentle with yourself if you need a break. The important thing is to get back on track when you feel better.
Now that you're enthused again, get moving! Set your goals, make it fun and pat yourself on the back from time to time. Review these tips whenever you feel your motivation sliding.
Resources that can help
These three online calculators can help you in setting the right personal fitness goals.
Body Mass Index