Economic Development Leader

Healthcare Costs and Economic Development: A Look at Indiana

2007-10-05T10:00:00.000-04:00

Employers and employees are struggling with the issue of how to pay for growing healthcare costs. It's an issue everywhere, BUT at the same time, the value placed on health in society is a top one for most Americans.

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.

ED Spending Raises Some Brows in Indiana

2007-10-04T09:56:00.000-04:00

Apparently baseball has replaced golf as the activity of choice for brokering business deals. At least that is the case for the Indiana Economic Development Foundation – the non-profit arm of the Indiana Economic Development Corporation – that spent more than $50,000 on suites and tickets to ballgames in Chicago, New York and Atlanta since its inception in early 2005.

Lesson: Be careful how you use your money!

Read more here.

Healthy Mind and Body: Your Biological Age

2007-10-03T10:10:00.000-04:00

What is your biological age?

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.

Religiosity and Economic Development

2007-10-03T09:50:00.000-04:00

Here is an "out-there," but very interesting observation...

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.

Book Review: Beat the System: 11 Secrets to Building an Entrepreneurial Culture in a Bureaucratic World

2007-10-02T10:24:00.000-04:00

Here is one every economic development organization can take to heart...

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.

Source: PowerHomeBusiness

Leadership Quote: Be Who You Are!

2007-10-02T10:19:00.000-04:00

“To wish you were someone else is to waste the person you are." -Source unknown

Arizona Makes Changes in Economic Development Effort

2007-10-02T09:44:00.000-04:00

My firm has done a fair amount of work in Arizona. Coordination of ED effforts is important to the state's future economic development success. Alignment with a set of shared ED priorities is very important, especially priorities that encourage quality growth and help manage development to avoid outstripping the state's natural resources. Here is what AZ Gov. Janet Napolitano hopes to do.

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.

Source article.

Innovation Economic Development Vs. Industrial Recruitment

2007-10-01T09:31:00.000-04:00

People at times try to make the world to operate in an either/or sense. It doesn't work. Should North Carolina pursue innovation-based economic development or industrial recruitment? The answer comes down to the kind of an economy you want to create. In most cases, the answer is both are needed. Read on what a recent NC news article has to say.

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.

Singapore Leads on Doing Business

2007-09-30T09:21:00.000-04:00

Singapore retained its ranking as the easiest place to do business in the World Bank's "Doing Business 2008" report, the fifth in an annual series.

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).

Industry Perspective: Personalized Medicine

2007-09-29T08:57:00.000-04:00

Is your area thinking about the impacts of personalized medicine on its economic base?

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)

The GM-UAW Situation

2007-09-28T06:38:00.000-04:00

This is an important issue not just for General Motors and Detroit, but communities and states across America. Local economies everywhere will be watching on GM and the UAW handle the issues before them.

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.

Leadership Quotes

2007-09-27T07:15:00.000-04:00

Leadership is essential to getting things done in economic development. There is a right and wrong way to approach things.

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

Healthy Mind and Body: Chronic Fatigue Syndrome

2007-09-27T06:53:00.000-04:00

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.
Depression.
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.
Tinnitus.
Vertigo.
Headaches.
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.

More information.

Business and Industry Intelligence: Auto and Truck Manufacturing

2007-09-27T06:48:00.000-04:00

Overview

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.

Key Issues

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.

Significant Trends

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.

Ohio Looks at How to Get More from Higher Education for Economic Development

2007-09-26T06:44:00.000-04:00

Ohio's new system of colleges can turn around the state's lagging economy if the universities develop focused, world-class programs, lure international students and help graduates find jobs in state, Ohio Board of Regents Chancellor Eric D. Fingerhut said this week.

“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.

Source article

Are We Headed into a Recession?

2007-09-25T06:29:00.000-04:00

This is an issue that every economic developer is concerned about: the economy and whether we are headed into a recession. Here are some thoughts.

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?

Writing Tip: Effective Press Releases

2007-09-24T07:06:00.000-04:00

Press releases can be just as powerful for your economic development organization as advertising, and they cost a lot less. A good press release can promote any important development at your company, but if it's written poorly the media may ignore it no matter how newsworthy the topic.

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.

-Be available.

-Make your point quickly.

-Don't be pushy.

-Include the basics.

-Less is more.

-Consider the timing.

-Don't make mistakes.

Jim Devine: Lee's Summit, MO's ED Scout

2007-09-24T06:11:00.000-04:00

Scouts are football’s unsung heroes. While players and coaches focus on winning games now, scouts search for the talent that will help the team thrive in the future. Jim Devine is Lee’s Summit’s equivalent of a scout. He has been searching for new business for the city since 1999, and Lee’s Summit has been on a winning streak throughout his tenure.

“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.

Minnesota Honors Its Economic Development Leaders

2007-09-23T06:00:00.000-04:00

Minnesota knows it takes leadership to bring about economic development. Recently, these leaders were recognized for their contributions to economic development:

-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.

Source article

Ports-to-Plains Coalition

2007-09-22T05:52:00.000-04:00

The Ports-to-Plains project is a multi-modal transportation and trade corridor designed to facilitate the efficient transportation of goods and services from Mexico through West Texas and ultimately on into Canada and the Pacific Northwest.

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

Arizona Counties Lead Nation's Home-Building

2007-09-21T17:43:00.000-04:00

With the national housing market in the dumper, here is what the latest Census report says about housing construction markets across the U.S.

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.

Business and Industry Intelligence: Capital Goods

2007-09-20T17:39:00.000-04:00

Overview

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.

Key Issues

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.

Significant Trends

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.

Phoenix Working to Compete Based Upon Skilled and Educated Workers

2007-09-19T17:36:00.000-04:00

The United States, including metropolitan Phoenix, must develop a better-educated, more innovative workforce in order to compete in an ever increasingly global economy, experts told attendees at the International Economic Development Council conference on Monday.

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."

Source article.

Rochester Area ED Groups Look to Unite

2007-09-18T17:28:00.000-04:00

Monroe County, NY Executive Maggie Brooks announced today a new collaborative initiative to create more jobs, better align resources and make it easier for businesses to locate and grow in Monroe County and the Greater Rochester area.

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.

Source article.

Kansas City Area ED Initiative Honored

2007-09-17T17:33:00.000-04:00

The Institute for Entrepreneurship and Innovation (IEI) at the University of Missouri-Kansas City (UMKC) and its program, KCSourceLink, were honored by the International Economic Development Council (IEDC) with its Multi-Year Economic Development Programs Award.

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.

Kentucky & Six Other States Set to Collaborate on ED Strategy Study

2007-09-16T17:30:00.000-04:00

The National Governors Association's Center for Best Practices has chosen Kentucky and six other states to participate in a year-long policy academy to learn how to improve economic development strategies.

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.

Source article.

"New" Tennessee Rural Opportunity Fund

2007-09-15T17:25:00.000-04:00

A new public-private partnership has launched the Tennessee Rural Opportunity Fund to benefit rural economic development.

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.

Business and Industry Intelligence: Auto and Truck Parts

2007-09-14T08:30:00.000-04:00

Overview

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.

Key Issues

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.

Significant Trends

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.

Corporation for Enterprise Development's New Report on the States

2007-09-13T08:12:00.000-04:00

The 2007-2008 Assets and Opportunity Scorecard contains evidence that even profound and enduring ownership patterns can change and change fast.

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.

Writing Tip: Improving Your Business Writing

2007-09-12T08:51:00.000-04:00

1. Keep It Short and Simple

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

From Sacramento: A New Way of Looking at Prosperity

2007-09-12T08:06:00.000-04:00

The Prosperity Index is compiled by the Sacramento Regional Research Institute, a joint venture of California State University Sacramento and the Sacramento Area Commerce and Trade Organization. The institute compiles a business climate report each quarter and a larger report annually that also includes comparisons of "people" and "place" measurements.

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.

Healthy Mind and Body: Personal Creativity

2007-09-11T08:36:00.000-04:00

Would you like to be more creative in your life? You can! Here is a list of action steps you can take today to increase your personal creativity. I have been down this path, which explains why I write poetry on a daily basis.

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

Missouri Fortifies Its Incentives

2007-09-11T08:03:00.000-04:00

My firm has been doing some work in Missouri. I just returned from a trip there. Missouri is moving on some new incentives.

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.

Source article

Business and Industry Intelligence: Scientific and Technical Instruments

2007-09-10T01:44:00.000-04:00

Overview

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.

Key Issues

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.

Significant Trends

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.

Ease of Doing Business in Taiwan

2007-09-09T01:36:00.000-04:00

Taiwan ranked 47th in the world in terms of ease of doing business for 2006, down four notches from the previous year, according to an annual report released recently by The World Bank Group.

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.

More here.

Philippines Looks to Medical Tourism

2007-09-08T01:29:00.000-04:00

Dubbed as “The Economics of Compassion,” Lyf Center Ultimate Solutions chief executive officer Julio Cabanero cited the highly expensive medical treatment among industrialized countries which should stimulate investments in medical tourism here in the country.

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.

Source article

Business and Industry Intelligence: Forestry and Wood Products

2007-09-07T06:50:00.000-04:00

Overview

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.

Key Issues

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.

Significant Trends

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.

West Virginia "Open for Business"

2007-09-06T06:08:00.000-04:00

News reports say that West Virginina Gov. Joe Manchin’s highly unpopular slogan for the state — “Open for Business” — might be about to go belly up.

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.

Reda more.

U.N. Says U.S. Growth Will Slip

2007-09-05T06:16:00.000-04:00

The U.S. economy will slow sharply this year and fall behind growth rates in most of the world, according to forecasts in a U.N. report released this week.

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

U.S. Workers Most Productive

2007-09-04T06:25:00.000-04:00

American workers stay longer in the office, at the factory or on the farm than their counterparts in Europe and most other rich nations, and they produce more per person over the year.

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.

Read more.

Max Planck for $190 Million

2007-09-03T06:31:00.000-04:00

The Max Planck Society, an international research giant based in Germany, is poised to open its first U.S. institute in Palm Beach County — if the county and the state can meet its requirements, the county Business Development Board announced Wednesday.

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?

Read more.

Forbes Article: Ohio Lags in Good Paying Jobs

2007-09-02T06:36:00.000-04:00

Though no longer America's poorest big city, Cleveland remains dead last in median income, a distinction shared by Youngstown among midsize cities.

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."

Read more.

Business and Industry Intelligence: Money Center Banks

2007-09-01T06:47:00.000-04:00

Overview

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.

Key Issues

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.

Significant Trends

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.

Resource Review: Great Lakes Manufacturing Council

2007-08-31T07:05:00.000-04:00

Manufacturing needs a lot of help to stay competitive. Businesses and jobs are on the line everyday in this vital sector of our economy. This article is about an important resource trying to help midwestern states cope with the effects of global manufacturing competition. A client of mine, Magnet (Cleveland, Ohio) is an active member of the Council.

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.

Goals

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]

Healthy Mind and Body: Fitness and Staying Motivated

2007-08-31T06:15:00.000-04:00

Fitness: Staying Motivated

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.

Set goals

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.

Start slowly

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.

Think variety

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.

Have fun

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.

Seek support

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.

Reward yourself

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.

Be flexible

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

Ideal Weight

Calories Burned

New Book: The Entrepreneurial Society by David Audretsch

2007-08-30T07:41:00.000-04:00

How can people and places thrive in a world where jobs can be shipped oversees overnight? Award winning economist David Audretsch offers answers in The Entrepreneurial Society (Oxford University Press).

Audretsch’s first book written for the general audience has been featured in leading newspapers, television, and radio. It is the leading guidebook to understanding how society is transitioning from a managed economy to the new Entrepreneurial Society.

The book identifies the positive, proactive response to globalization – the Entrepreneurial Society, where change is the cutting edge and routine work is inevitably outsourced. Under the managed economy of the Cold War era, governments around the world supported big business, while small business was deemed irrelevant and largely ignored.

A fundamental policy revolution is underway. The focus is shifting to technology and knowledge-based entrepreneurship, where start-ups and small business have emerged as the driving force of innovation, job creation, competitiveness and growth. By understanding the shift from the managed economy to the Entrepreneurial Society, individuals, businesses, and communities can learn how to harness the opportunities afforded by globalization in the new Entrepreneurial Society.

For further information please find attached the flyer for the book; or link to www.davidaudretsch.com. Please direct any questions, or comments to Petra Mader, responsible of Public Affairs at the Max Planck Institute of Economics, mader@econ.mpg.de

ED Leader Makes Top 100 Economic Blogs Roll

2007-08-29T16:53:00.000-04:00

ED Leader was selected because of its content and traffic as one of the top economic-related blogs. Check out here which websites and blogs made the list.

Business and Industry Intelligence: Gaming and Casinos

2007-08-29T07:36:00.000-04:00

Overview

The US casinos and gaming industry generated total revenues of $86.6 billion in 2006, representing an increase of 5.4% on the previous years value. The development of non-gaming business, and the launch of casinos throughout the US beyond their traditional locations, will drive revenue growth moving forward.

Casinos form the largest contributor to net gaming revenues in the US, generating 38% of the total. Lotteries and Indian casinos each contribute an additional 27%.

The 2006 ban on online gaming has dramatically curtailed earnings potential for the major companies, but high consumer demand for gambling services, particularly low denomination slot machines, will ensure strong revenue growth moving forward. At the other end of the market, gaming companies are incorporating luxury retail outlets and restaurants within casino resorts in order to leverage the international reputation of these brands and attract wealthy gamblers.

The leading companies in the US casinos and gaming industry are MGM Mirage, Harrahs Entertainment, Las Vegas Sands, Station Casinos, International Game Technology, and Wynn Resorts. Companies are expanding into the Asia-Pacific market in order to maximize earnings and mitigate against any future fluctuations at home.

Key Issues

Indian Gaming - The number of casinos operated by Native American communities is likely to increase dramatically over the next two years, stiffening the competition in this already highly concentrated industry. In California alone, seven communities have been granted a license to operate a casino but have not as yet opened a facility.

Changing Gambling Habits - Less heavily regulated Class II gaming is increasing in popularity, boosting revenues for the major players. Penny- and other low-denomination slot machines have stimulated earnings growth despite the short-term costs incurred installing the new machines.

Geographical Distribution - The casinos and gaming industry is geographically highly concentrated, with very little brand loyalty. Players must continually invest in innovative marketing programs and new games in order to generate repeat customers, pressurizing margins.

Significant Trends

Added Value - Players are targeting higher-budget customers who drive incremental revenues through the provision of luxury service and exclusive events.

Asia-Pacific - Players are investing in operations in the Asia-Pacific market, where gambling is growing in popularity and the number of premium gaming customers is on the rise.

Property Developments - Casino and gaming companies are diversifying into real estate and retail operations to boost profitability and defend revenue growth from the effects of downturn in any one segment.

Innovation - Video gaming is showing strong growth in the smaller state markets outside Las Vegas. Companies are also installing video slot machines with the capacity to download new games as they are developed, reducing the need for replacement machines. This trend offers significant cost savings in the longer term, as continually replacing machines is more expensive than changing the software.

The casinos and gaming industry consists of all forms of online (if permitted) and traditional betting on sports, lotteries and slot machines, as well as gambling in casinos or bingo halls. The online segments of the sector comprise revenues generated from betting on all formats via the Internet. Market values represent net winnings (amount wagered minus payouts to players) for all operators. Depending on the type of game and its location, net winnings are typically 15-20% of total bets wagered.

Des Moines Sees Success from Business Accelerator

2007-08-28T07:31:00.000-04:00

Mike Colwell, executive director of Des Moines' BIZ business accelerator, says the nonprofit group plans to improve the probability of success for Iowa entrepreneurs.

BIZ was founded by the Greater Des Moines Partnership, Des Moines Area Community College, the Iowa State University Research Park and the Ames Economic Development Commission. These organizations and the Iowa Department of Economic Development provide the majority of its funding.

"Every entrepreneur is very different," said Curt Nelson, president and chief executive officer of the Entrepreneurial Development Center, a business accelerator in Cedar Rapids. "They have similar sets of needs wrapped around very different capabilities and personalities. "That center assisted 103 entrepreneurs last year. It has helped 21 businesses grow from the idea stage in 2002 to companies with between $100,000 and $8 million in annual revenue by the end of 2006.

The economic development department estimated that 161 businesses were assisted by the expertise of those running the Iowa business accelerators in 2005. Almost 80 of those were directly involved in targeted industries: biosciences, advanced manufacturing and information solutions, and financial services.

Read more here.

Massachusetts Studies Merits of Gaming

2007-08-27T07:28:00.000-04:00

Casino gambling isn't legal in Massachusetts, but about 130 people attended a forum last night on the topic to listen to an expert's report on how legalized gaming would positively impact the state and local economy.

There were plenty of questions at the end of the presentation by Clyde W. Barrow, director of the Center for Policy Analysis at the University of Massachusetts Dartmouth and the author of a recent report titled "Maximum Bet: A Preliminary Blueprint for Casino Gaming and Economic Development in Massachusetts." The meeting took place at Chicopee Public Library at the invitation of Mayor Michael D. Bissonnette, who is pushing the aldermen to place a nonbinding referendum question regarding the casino issue on the Nov. 6 ballot.

Barrow's report, based on the assumption that the state will impose a 27 percent tax on gross gaming revenues, highlights the economic impact that three casinos would have on Massachusetts if casino gambling is approved by the state Legislature. He said the casinos would generate approximately $400 million in new revenue for the state and cities and towns in the first year, along with creating about 10,000 construction jobs and more than 10,000 resort casino jobs. Money, approximately 0.25 percent from gross gaming revenues, would be used to address the issue of gambling addiction.

Read more here.

Arkansas Considers Changes to Gain a Competitive Edge

2007-08-26T07:17:00.000-04:00

To better recruit industry to the state, the Arkansas Economic Development Commission will consider, among other things, pursuing a constitutional amendment to remove the restriction on the state investing in private companies.

Details of the agency's economic development efforts in 2006, as well as possible strategies in coming years, were revealed last week in an annual report to legislators that has been required by law since 2002.

The consideration - one of many that also include offering income tax credits to Arkansas companies that recruit their suppliers to the state; providing incentives to companies that hire people with certain doctorate degrees; and exempting native Arkansans from income tax or capital gains tax if they return to the state - is only an idea, not a commitment, said Morris Jenkins, director of AEDC's strategic planning division.

Read more here.

Business and Industry Intelligence: Recreational Products

2007-08-25T12:14:00.000-04:00

Industry Overview

The US recreational products market, consisting of games consoles and software, traditional toys and games, and sports equipment, generated revenues in 2006 of approximately $57 billion.

The markets most lucrative segment in 2006 was sports equipment, generating total sales of $23.8 billion. This sectors performance has been boosted by the increasing awareness of obesity in the US, as consumers have looked to lead healthier lifestyles and incorporate sports into their daily routine.

The rising price of raw materials and the need to cater to an evolving demographic are placing financial pressures on companies. However, consumers with increasing amounts of disposable income and growing demand for 'gadgets' has seen revenues grow strongly, mitigating these rising costs, providing that companies have managed to diversify in order to meet consumer demand.

Leading companies in this highly competitive industry include Brunswick Corporation, Mattel, EMI Group, and Hasbro. Companies are continuing to outsource manufacture to areas of low cost labor, such as China. Recent news articles have reported the use of unsafe materials in toys made in China and sold in the U.S. This will pose a challenge for Chinese toy makers as they work to overcome this damage to their credibility.

Key Issues

High Input Costs

Companies throughout the US manufacturing sector are experiencing increased costs due to high prices for energy and many raw materials, including base metals and plastic resins. Many markets are highly price competitive, and therefore additional costs cannot be passed onto the customer, detracting from profit margins.

Decline in Sale of Traditional Toys

Manufacturers of traditional toys and games have experienced significant difficulties in recent years, as children are tending to lose interest in traditional toys at an earlier age. Indirect competition from the video and PC gaming sector is thought to be a major reason for the change in market dynamics.

Changing Demographics

The aging population and falling birth rate are reducing consumer bases in key demographics, particularly within the toys and games sector. Companies have been forced to shift the focus of their marketing strategies and product portfolios in order to keep pace with this change in demand.

Significant Trends

South-East Asia

To defend margins, manufacturing companies are outsourcing or relocating manufacturing operations to regions with lower labor costs, most notably South-east Asia, including China and Taiwan. The United States is currently experiencing an influx of Chinese-made goods, especially toys and games, as domestic supply has failed to meet demand.

Merchandising

A major source of revenue within the toy and video game market is gained through the production of products linked to recent film releases or TV shows. For example, in June 2006 Mattel gained a licensing deal with Time Warner to produce toys based on characters and shows from the TV channel Cartoon Network. Such deals are highly lucrative, as the popularity of TV show should assure the sale of the associated product.

Next-Generation Games Consoles

The US games console and software sector is currently undergoing a period of intense competition with the 2006 release of Sonys Playstation 3 and Nintendos Wii third generation consoles. Microsoft has had a significant head start with the release of its third-generation console, the Xbox 360, in Autumn 2005. Although technological features of consoles are important competitive factors within the console gaming sector, of paramount importance is the quality and diversity of games available. An important emerging feature of video gaming is the ability to play online, and therefore software titles with online compatibility will have a significant sales advantage moving forward.

The US recreational products market is valued as the revenues from retail sale of games consoles and games software, traditional toys and games, and sports equipment.

2007-08-24T06:24:00.000-04:00

ED LEADER NEWSLETTER #25

Business & Industry Intelligence: Food Processing

2007-08-24T06:19:00.000-04:00

Food processing is one of the largest manufacturing sectors in the US; the domestic market for processed and packaged foods reached $429 billion (retail prices) in 2006. It is set to continue growing steadily as demand for processed food remains high. The maturity of the market is encouraging manufacturers to sell directly to restaurants, as well as conventional retail outlets.

The largest sector of the industry is dairy foods, which accounts for 22.8% of revenues, representing $98 billion. A further 12.9% is generated by bakery and cereals, and 11.5% is from chilled foods. Other major sectors include meat, fish and poultry, frozen foods and confectionery.

Cash-rich, time-poor consumers are driving demand for processed convenience foods in the US, where a vast amount of the expenditure on food goes on meals prepared away from home. The progress towards healthier eating, such as reduced consumption of trans-fat, as it is now specified separately in ingredient lists, has encouraged the use of genetically modified supplements. GM crops also increase productivity per hectare and so reduce the cost of raw materials for processed foods.

Leading companies include Unilever, Archer Daniels Midland Company, Kraft Foods, Tyson Foods, and Bunge. Companies have introduced healthier products in response to consumer demand and obesity concerns. Health concern groups and companies have formed alliances to give grants to childrens groups for programs to improve health and nutrition, a move that should enhance public perceptions of the companies. Cost efficiencies have been generated through consolidation, while some larger companies have divested operations to ensure focus on core products.

Key Issues

Consumer Lifestyle - Increasingly time-poor, cash-rich consumers are demanding convenient processed foods with extended shelf lives. In return, consumers are willing to pay a premium, which is driving growth in the market.

Government Legislation - Government regulations have been introduced requiring clear labeling of trans-fats content in packaged foods. The Food and Drug Administration claim this additional label will reduce the risk of cardiovascular disease, and it is estimated that over a billion dollars a year will be saved in medical costs and lost productivity. Companies will incur additional costs in order to achieve compliance; however, it is

Biotechnology - The US is the largest grower of genetically modified (GM) crops. They enable high yields, reducing the price of the agricultural products. Consumers generally accept these foods, however, a slowdown in GM food sales may be attributed to long-term health and environmental concerns.

Increasing Costs - High oil prices have inflated costs for raw materials, packaging and transportation, whilst detracting from consumer spending. Due to the high levels of competition in food retailing, it is difficult for processors to pass these costs on, which has resulted in severe pressure on profit margins.

Significant Trends

Healthy Products - Companies are developing new products and brands to attract custom from more health-conscious consumers. Consumers are increasingly realizing that fad diets such as low-carbohydrate are not realistic long-term solutions to their health problems, and are concentrating on their overall well-being. Many players have also sought to exploit the growing niche market for organic food, in order to drive revenue growth.

Reduction of Brand Portfolio - The divestment of non-core operations allows for focus on the core products of a brands portfolio. Several major players have sold off production lines to concentrate on the products and brands that offer long-term growth opportunities.

Consolidation - Food processors are using the acquisition of well-known brands to create inorganic revenue growth. These consolidation moves are also driven by the need to create cost efficiencies, including enhanced purchasing power, capitalize on emerging markets, and defend top lines against fluctuating demand with a diverse range of products.

The processed food market consists of the total revenues generated through the sales of bakery and cereals, canned foods, chilled foods, confectionery, dairy food, dried food, frozen food, ice cream, meat, fish and poultry, oils and fats, pasta and noodles, ready meals, sauces, dressings and condiments, savory snacks, soup and spreads. The market is valued at retail selling price (RSP).

Service Competition: Assessing Your Competitive Advantages

2007-08-23T05:44:00.000-04:00

It's all about service! Every EDO provides them, but are your economic development services to businesses competitive with those offered by your competition? Existing and new companies looking at your area for investment opportunities will want to know what services you can provide them.

I find that economic development organizations (EDOs) give varying levels of consideration to their competitiveness from a service standpoint. Some give little or no thought at all to this issue. Your success depends upon knowing your competition and its service strengths. How do you do that?

Here are ten key questions you might consider exploring to develop a better understanding of your competition's services and how they compare with yours.

- First, what other areas do you compete with in a general way and in specific target industry markets?

- What economic development services does your area and your ED rivals offer, and what are their comparative benefits?

- What areas might launch new service offerings that are similar to those in your area? (Incentives are an important tool to assess here.)

- How significant are the resources (marketing budget, target industries, incubator services, etc.) your competition plans to launch in the future?

- How much does it cost your area and your competitors to provide the services you /they provide? Does your area have a cost advantage? (Getting good cost information on competitors is tricky.)

- Where do you and your rivals market services to businesses, and to which target market audiences? Is small business your service niche? Do you give more attention to technology companies?

- How successful is your service marketing performance in your major target market segments?

- What new ED services does your rival have in the pipeline, and how will they be marketed?

- How are your rivals organized? How well are their operations performing? (Are they organized in a vertically integrated way? How do they use networks? Are they adequately staffed? Is their staff well-trained?)

- What are your rivals' marketing channels (state development agency, regional EDO, industry groups associated with target industries, existing companies, leadership channels, etc.)?

- Are your rivals considering new strategic partnerships that could affect their competitive strength? For example, are new ties with a local college or university in the works? Is a new service relationship being considered with the local workforce development agency?

If you ask these ten questions, you will surprised at what you will learn that can help you become more competitive from a service standpoint.

Toyota Ups Its Canadian Investment

2007-08-22T05:30:00.000-04:00

The Ontario Government is investing $8.7 million in new jobs and leading-edge ideas at Toyota Boshoku Canada’s auto parts plant, announced Minister of Economic Development and Trade Sandra Pupatello. The project will create 365 new jobs in Woodstock.

Toyota Boshoku’s $87.3 million investment includes building a 25,000 square metre plant that will manufacture front and rear seats, interior door trim and other interior products for the RAV4 vehicle model produced at Toyota Motor Manufacturing Canada’s Woodstock plant.

The Toyota Boshoku Canada investment is provided under the Ontario government’s Advanced Manufacturing Investment Strategy (AMIS). The $500-million strategy provides repayable loans, interest free for up to five years, to support investments in technology and innovation. The innovative projects supported by this strategy will generate more than $600 million in new investment and support the creation or retention of about 4,000 jobs.

“We are proud to call Woodstock home to Toyota Boshoku Canada’s first Canadian facility,” said Haruo Murase, President of Toyota Boshoku Canada. “The skilled workers of Woodstock and the surrounding region will help us reach the next level of competitiveness and success. We couldn’t have found a better place to do business.”

The government is now accepting proposals for AMIS round four, with a submission deadline of August 30, 2007. For eligibility requirements and an application package visit

www.ontariocanada.com (click on the “Programs and Services” link). In this year's budget the Ontario government lowered the project threshold for loan applications under the program to either 100 jobs created or kept or $25 million invested, to allow more small- and medium-sized companies to participate.

AMIS is part of the government’s overall strategy for jobs and prosperity that includes investments in infrastructure, postsecondary education, stable energy supply, research and innovation and key economic sectors.

Two Great New Economic Development Books

2007-08-21T07:37:00.000-04:00

Two new books just came across my desk, and I want to tell you about them, but I also want to tell you about the books' author, Maury Forman, a friend of mine from Washington State.

First, let's talk about Maury. If you have met Maury, you know he is not the typical community economic developer. His career is not only dedicated to doing, which is a well-known hallmark of all successful economic developers, but he is also a talented thinker, writer and teacher. In addition to these gifts, Maury has a tremendous sense of humor. Every economic developer knows it takes a sense of humor to survive in economic development. His books and speeches include lots of humor; always used tastefully.

To me, Maury Forman is an alchemist, and I doubt that he has ever used that term to describe his career calling, but that is exactly what he does when he boils down the vast world of information and knowledge to its essential underlying wisdom. If Maury were a poet, his style would be haiku. In Maury's books, using fewer words and the right words is preferable to filling hundreds of pages. And did I fail to mention that all of Maury's writings include wonderfully entertaining cartoons?

Maury, who holds a Ph.D. from the Political Science Department at New York University with an emphasis in Healthcare, is the Director of Education and Training for Washington State's Department of Community, Trade and Economic Development. In recent months, he has been on temporary assignment as the Manager of Education and Outreach for Economic Development for the State of Washington.

So, that is Maury Forman. Now, a little bit about his two recent books.

The first is Your Town, A Destination: The 25 Immutable Rules of Successful Tourism, which Maury co-authored with Roger Brooks, a tourism development specialist and President of Destination Development, Inc. I won't list all 25 success rules described in the book, but will mention three that I especially like.

The first is Rule #4, Toilets Attract More Than Flies (The Rule of Necessity). What can I say but when it comes to community tourism, you must create what's necessary to respond to the tourist's overwhelming sense of "I gotta go."

Rule #13 is Insanity Has Its Own Rewards, which speaks to the need for communities to find and market what is unique to them. Knowing Maury, he would probably say that this rule even applies to the tourist's "going experience."

Finally, I love Rule #20, Make It Easy to Tell Your Cows from My Cows, which speaks to the branding issue with which many communities struggle. In this regard, I suppose Maury would remind us to "sell the beef" as well as the "sizzle" when it comes to our cows. Or maybe he would say, communities need to do a better job of "milking" their tourism resources to create a greater economic impact. Makes me wonder if there are any "sacred cows" when it comes to tourism development. Hmmm...

So, that's the first book.

Maury's second book, The Ten Commandments of Community Leadership, was co-authored with Michele Harvey, the Communications Coordinator for the Association of Washington Cities.

Three of the ten commandments jump out at me:

1. Thou shalt develop a strategic plan. To that, I say amen! The authors provide good solid advice on planning, including connecting community vision to the plan, building a collaborative plan, defining success, and linking the plan to budgets and other resources.

2. Thou shalt invest in education and training. Another amen brother! The authors encourage a broad-based approach to strengthening education and workforce development, covering the spectrum from short-term job training to strengthening K-12 systems and higher education.

3. Thou shalt promote respect. Yet another amen from me. Human relation is a vital aspect of economic development. I like the authors' suggestions under this commandment: acknowledge all ideas; critique ideas and not people; listen attentively; give credit where due; compromise; understand cultural differences; and distinguish facts from beliefs and opinions.

You can order the Ten Commandments from Moses at this link, and the tourism book can be ordered by sending an email here. Maury Forman can be reached by email.

NY State's New Office for Small Cities

2007-08-20T07:29:00.000-04:00

New York Governor Eliot Spitzer announced today that the Office for Small Cities and Empire State Development (ESD) are providing more than $1.1 million in economic development aid to help businesses in Schenectady, St. Lawrence and Wayne Counties create and retain nearly 160 jobs. The funding will help local businesses provide health care and other benefits, upgrade facilities and equipment, and invest in workforce training.

The state grants have been awarded to Newton Falls Fine Paper, LLC in Clifton, CEL Packing, LLC in Wolcott, and Duanesburg Area Community Center, Inc. in Duanesburg.

The Office for Small Cities, a subsidiary of the New York Housing Trust Fund Corporation, will also leverage $26 million in additional funding from a variety of public and private sources to help fund these projects.

“When working to revitalize the upstate economy, reviving struggling small cities across New York must be one of our top priorities,” said Governor Spitzer. “Today’s announcement shows that we are making progress toward this goal. These grants hold the promise of new, good-paying jobs, which means more New Yorkers will have a secure economic future.”

Read more here.

Best Advice Ever on Leadership

2007-08-19T07:32:00.000-04:00

I don't recall who said this, but it is the best advice I have ever seen on leadership. I'm making a plaque and adding these words so it can hang in my office.

- The six most important words: "I admit I made a mistake."

- The five most important words: "You did a good job."

- The four most important words: "What is your opinion?"

- The three most important words: "If you please."

- The two most important words: "Thank you,"

- The one most important word: "We"

- The least most important word: "I"

The Samurai and the Swami Unite: How Japan and India are Working Together to Take on China

2007-08-18T07:25:00.000-04:00

As Beijing’s influence in Asia and around the world has grown, their common interests have forced Tokyo and New Delhi to begin warming their historically chilly relationship and to start forging closer economic ties.

“The key issue facing the whole region is how to accommodate the rise of China,” said Suman Bery, the director general of the National Council of Applied Economic Research, a New Delhi research group. Indian economists estimate that Japanese investment in India will reach $5.5 billion by 2011, compared with just $515 million in the 2006 fiscal year.

Consultants are trying, so far in vain, to coin the catchphrase, like “the Samurai and the Swami,” that will sum up the nascent strategic economic relationship between the countries.

Courting India has come slowly for the Japanese, who were highly critical of India’s surprise nuclear weapons test in 1998. While Japan is a large lender to India, until now it has not been a major investor or business partner. Instead, Japan has virtually sat on the sidelines while countries from Switzerland to Brazil cemented business alliances in India, where economic growth is about 9 percent a year.

Read more here.

2007-08-17T08:29:00.000-04:00

ED LEADER NEWSLETTER #24

Medical Equipment and Supplies Industry Profile

2007-08-17T08:24:00.000-04:00

Introduction

Many areas have targeted medical equipment and supplies for for business and job development. This summary profile discusses some of the major trends in the industry that economic developers should be aware of. Contact Don Iannone for more information.

In 2006, the total value of the medical equipment and supplies market was approximately $89 billion, a 4.2% increase over 2005. Reflecting the growing medical requirements of an aging population, and the incidence of chronic diseases such as diabetes, the US medical equipment and supplies market is forecast to continue strong growth moving forward.

The most lucrative segment of the market consists of disposables such as syringes, catheters and dressings, which account for 40% of the total revenues. Opthalmic and IV diagnostic equipment and supplies each generate a further 11% of the market value.

The high cost of crude oil has driven up the price of oil-derived plastic resins used in the manufacture of many items of disposable medical equipment. In a bid to maintain profit margins, many companies have increased the retail price of such items or relocated manufacturing operations to low cost regions such as Southeast Asia or Latin America.

Leading companies include Johnson & Johnson, Medtronic, Baxter International, and GE Medical Systems. The market favors large companies with high levels of supplier power, who can provide broad product portfolios, competitive pricing, and extensive technological expertise.

A high degree of M&A activity is evident within the industry, especially with respect to larger players enhancing their IP ownership through the acquisition of niche, innovation-driven SMEs. High levels of R&D expenditure are characteristic of the industry, with companies recognizing a healthy innovation pipeline as a key strategy for organic growth.

Key Issues

Aging Population - As the baby boomer generation advances to old age, the US elderly population is growing rapidly, which in turn is increasing levels of medical treatment and hospital admissions. The medical equipment and supplies industry is therefore benefiting greatly from increased sales volumes and enjoys positive long-term sales forecasts.

Diabetes Epidemic - The increasing prevalence of diabetes mellitus is considered to have reached epidemic proportions according to the US Centers for Disease Control. It has been estimated that diabetes accounts for more than $130 billion of healthcare spending in the US annually. The market for diabetes diagnostic, monitoring, and treatment devices is set to increase considerably moving forward.

High Plastic Prices - The high price of crude oil and natural gas is driving up the price of petrochemical-based plastic resins required for the manufacture of many disposable medical supplies, such as syringes and catheters. Although much of the increased cost can be passed onto customers, many manufacturers have relocated their manufacturing plants to low-cost environments in Southeast Asia and Latin America in an attempt to preserve profit margins.

Significant Trends

Consolidation - The US medical equipment and supplies market favors the growth of large players. Larger firms are in a better position to negotiate favorable deals with group purchasing organizations (GPOs) and can afford the often prohibitive expense of product development including gaining FDA approval for new technologies. Smaller companies within the industry mostly represent niche technologies and are often targeted by larger players looking to increase their technological expertise.

E-Procurement - The growth in e-procurement and Internet sites featuring medical product and purchasing information has introduced significant price transparency within the market. This has increased the purchasing power of many healthcare institutions and GPOs, especially for high-volume disposable medical supplies.

R&D Expenditure - Maintaining a healthy innovation pipeline is key to protecting market share and maintaining revenues, with many companies continually increasing R&D expenditure in a bid to stay at the forefront of the industry. An increasing amount of research spending is currently being channeled into biotechnology, whose medical applications are becoming increasingly valuable.

The medical equipment and supplies market consists of the total revenues generated through the sale of laboratory apparatus; surgical and medical instruments; dental equipment; catheters, syringes, needles; diagnostic and laboratory disposables; wound management supplies; non-woven medical disposables; and all other related disposable medical supplies, valued at manufacturers selling price. Pharmaceuticals are not included.

Missouri Tax Change Called "Dumb" by Kansans

2007-08-16T08:09:00.000-04:00

Here is a section from a recent editorial on proposed tax amendments proposed by a Missouri state senator:

"From the incredible world of dumb as dirt comes Missouri state Sen. Joan Bray's wacko tax amendment to this year's Senior Tax Justice Act.

Bray's shortsighted amendment to House bill 444 threatens to light the fuse on a political, tax-fueled border war between Kansas and Missouri lawmakers.

Bray, D-University City, opened hostilities with a raid on Kansas taxpayers' funds. The St. Louis area lawmaker's amendment, which the Republican majority in Jefferson City allowed to pass, eliminates an important tax deduction for Kansans.

The deduction, logically, lets Kansans who work in Missouri take Kansas property taxes off Missouri income taxes. Doing so is only fair.

Kansas, in turn, has acted neighborly by allowing the same deduction for Missourians who work in Kansas. Some would go further to say that cities in Kansas have been more than neighborly because they did not retaliate after Kansas City, Mo., placed an earnings tax on Kansas workers.

In contrast to such neighborliness, Bray's bushwhacking amendment has proven about as welcome to Kansas as William Clarke Quantrill's raid on Lawrence."

Read more here.

#####

I do not have the details of this situation and feel no need to take a position on the debate. The only thing I will say is that it would be a shame to see any disintegration of the fine cooperation between Kansas and Missouri for economic development. I also believe as the "war for tax revenues" escalates among governmental jurisdictions, we are likely to see more changes to tax codes in terms of who receives beneficial treatment.

Oakland County, Michigan Looks to Swedish Investment

2007-08-15T08:06:00.000-04:00

Oakland County would like to expand on the 17 Swedish companies already doing business in Oakland County, said Maureen Krauss of Oakland County Planning and Economic Development.
"Oakland County has been very active in the Swedish market," said Krauss, who also is on the board of directors of the Swedish-American Chamber of Commerce. County representatives have traveled to Sweden several times.

"We have some good relationships and some good companies in Oakland County," Krauss said.

"We think it's a great market because they're very advanced in biotech and alternative energy. They like looking to the U.S. for opportunities for expansion."

There are now 840 foreign companies doing business in Oakland County, according to the county's economic development office.

Read more here.

New West Virginia Economic Development Report

2007-08-14T07:56:00.000-04:00

A recently published report, "Culture, Creativity and Innovation: West Virginia in the New Economy," says WV policymakers should take the initiative by following these 10 suggestions:

1. Set priorities for spending based on what's critical for success for the state's long-term success (e.g., investing in universal preschool, paid family leave, university research and development and technology transfer programs, incumbent worker training and K-12 education reform). Other examples include: smaller class sizes, charter schools, "schools within schools," outreach to parents to become more involved, higher pay for gifted teachers and financial incentives for principals and teachers to work in worst schools.

2. Consider investments in education, public health and child development as part of an overall development strategy -- to be sustained in both good and bad times. The new imperative is lifelong learning.

3. Use business incentives judiciously and only in concert with improved transparency and performance checks, such as First Source hiring agreements.

4. Focus more attention on the homegrown economy, especially technical and financial assistance to new, young or small firms rather than on business attraction.

5. Make entrepreneurial education and financial literacy classes a requirement in all middle and high schools.

6. Improve and expand outreach to existing firms to marshal more proactive services to prevent closings, such as those caused by lack of business succession planning.

7. Invest in social capital -- community leadership skills and nonprofit management talent and administrative systems and improved community and economic development planning.

8. Use limited government services to direct and leverage private and nonprofit providers of existing business services.

9. Give frontline government staff more power to make decisions and to respond flexibly when delivering services rather than cutting staff myopically, paying them less and working them harder and harder.

10. Create realistic and measurable goals that reflect your development vision and values and rely upon objective economic analyses.

In sum, good government is good economic development. The revolution that has transformed private industry by establishing high-performance workplaces as the way to win in the global marketplace calls for competing on quality, not lowered wages. (The cheapest site for doing business, after all, is not necessarily the most profitable.)

Solid advice, from my standpoint!

Download the full report here.

University of Southern Indiana Economic Impact

2007-08-13T07:52:00.000-04:00

The University of Southern Indiana says a new report shows that the school makes an economic impact of $150 million annually and an employment impact of 2,600 on the southwest Indiana economy.

The university says since its last report in 2000, it has implemented 12 of the 13 academic programs outlined as needed in the area. Overall, the report shows a need for the university to push science, technology, engineering and mathematics education and develop an entrepreneurial culture in the region.

Has the university been responsive to employers? Yes. Employers asked for a string of academic programs that closely parallel USI’s planned new programs through 2011, including specialties within the baccalaureate engineering program; a four-year major in criminal justice/law enforcement; and more graduate-level studies in sales management, communications, maintenance management, clinical nursing, and other health-related programs.

Healthcare professionals expressed a need for development of a health informatics program and continued graduation of registered nurses. Employers also expressed an interest in undergraduate programs in business economics, a blended business/engineering degree, manufacturing technology, environmental sciences, and degrees in logistics/transportation.

Overall, there is a desire for USI to push STEM (science, technology, engineering, and mathematics) education; develop an entrepreneurial culture in the region; and continue the strong emphasis on the core curriculum, which emphasizes communication skills, critical thinking, leadership, and collaboration.

Source: Inside Indiana Business

Orange County Funds ED Initiatives

2007-08-12T07:36:00.000-04:00

The Orange County Commission provided $500,000 for economic development programs at the University of Central Florida.

Commissioners also approved $100,000 each for the UCF Institute for Economic Competitiveness, UCF Small Business Development Center, UCF Small Business Advisory Board Council, UCF Technology Incubator and UCF Orange County Venture Lab. Money had previously been budgeted for the programs.

The UCF Institute for Economic Competitiveness provides research that supports business and community leaders in making informed decisions.

The UCF Small Business Development Center provides business seminars and one-on-one counseling for small business owners.

The UCF Small Business Advisory Board Council provides no-cost advisory boards to small businesses in order to help them increase revenue, retain jobs and create new jobs.

The UCF Technology Incubator provides early-stage technology companies with office space and support programs to grow into financially stable high-growth companies.

The UCF Orange County Venture Lab nurtures new technology companies that spin-off of research done by UCF faculty and students.

Source: BizJournals

Hawaii's Economic Growth Outlook

2007-08-11T07:33:00.000-04:00

State economists made few changes in their outlook for Hawaii's economy in their latest forecast but now say visitor arrivals will decline slightly.

Personal income, total wage and salary jobs, and state gross domestic product are forecast to increase through 2007 and into 2008, but below the high growth rates of previous years.

The quarterly report released recently comes from the state's Department of Business, Economic Development and Tourism. Highlights of the report include:

The forecasts for real personal income growth remained unchanged at 1.8 percent for 2007 and 1.9 percent for 2008.

The inflation forecast is unchanged at 4.5 percent for this year and 3.8 percent for next year.
Hawaii's real G.D.P. growth is now projected to be 2.9 percent in both 2007 and 2008, up slightly from the government's May forecast.

Total visitor arrivals to Hawaii are expected to decline 0.3 percent in 2007, which is attributed to sluggishness in international tourism.

If the present trend continues, a total of 7.54 million visitors will visit the Islands by the end of this year, spending $12.6 billion, $300 million more than in 2006.

Forecasted arrivals in 2008 have now been lowered a half percentage point to 1.5 percent growth.

The 2007 forecast of wage and salary growth this year has been raised to 2 percent, up slightly from the 1.8 percent forecast in May. The increase is based on better-than-expected job growth in the first half of the year.

Job growth has been particularly strong in professional and business services, the health sector, construction and government activities. The forecast for job growth in 2008 remains 1.5 percent.

Source: BizJournals

2007-08-10T17:54:00.000-04:00

ED LEADER NEWSLETTER #23

Aerospace and Defense Industry Profile

2007-08-10T17:36:00.000-04:00

Revenues within the US aerospace and defense industry have improved considerably after a 1.4% slump in spending on commercial aircraft caused by a weakened tourism market in the aftermath of 9/11. Increased spending during the recent Gulf War did buffer industry growth rate and reached a value of $464.3 billion in 2005.

Defense expenditure is still the leading source of revenue for the US industry, essentially due to the substantial and ever increasing defense budget of the US Government. Projects such as the missile interception network and the revamp of the US armed forces account for a large proportion of this spending whilst providing welcome revenue boosts for companies such as Boeing during the decline in aerospace spending.

Increasing cost pressures within the aerospace industry have resulted in massive reform as aircraft manufacturers attempt to cut costs whilst producing cost-efficient, highly marketable aircraft to promote sales and stimulate growth within the industry. Growth in defense expenditure has served to compound the problems for the aerospace industry as leading players reduce their aircraft production in order to concentrate their resources on their defense outputs.
Major players within the US aerospace and defense markets include Boeing, Northrop Grumman, Lockheed Martin, General Dynamics and Raytheon. The initial reaction towards Boeings prototype 7E7, expected to enter service in 2008, has confirmed the huge market potential for midsize, fuel-efficient aircraft in the US whilst proving that cost-effective air travel does not necessarily rely on high capacity aircraft. However, the launch of the new Airbus A380, the worlds largest passenger jet, is expected to impact on the sales volumes of Boeings 747 in the international market.

Key Issues

Threat of Terrorism - Efforts to prevent terrorism in the US have swelled defense expenditure whilst increasing costs within the aerospace industry. New regulations, in terms of in-flight security and anti weapon systems, are increasing airlines liabilities, spreading the costs throughout the supply chain and affecting the potential purchasing behavior of airlines, reducing their expenditure on new planes.

Cost Pressure - Rising oil prices, augmented by the demand for low cost air travel, have caused deficits for airlines, which have cascaded along the supply chain. In reaction to this, aircraft manufacturers are increasing outsourcing efforts and developing longer-term contracts with more select groups of suppliers in order to cut costs. In addition, the use of alternative materials to aluminum and steel, such as composites and titanium, and the fly-by-wire concept are a growing part of the strategy to offer airlines cost-efficient operation over the lifetime of the aircraft.

Increasing Military Expenditure - The formation of the Homeland Security Department (HSD) and the creation of a missile interception network have come in a period of increased defense spending in reaction to the growing terrorist threat and the Second Gulf War. With a budget of around $40 billion, the HSD has already introduced legislation to improve the safety of air travel, with cost consequences for airlines, which will pass throughout the supply chain.

Significant Trends

Technological Innovation - As NASA continues its development towards a next generation space vehicle, the demand for a publicly accessible space platform has prompted several initiatives within the aerospace sector to produce a viable option. Amongst other projects, the development of high-speed rocket replacement technologies such as anti-matter production chambers and ramjet engines could usher in a new era of space and air transport and possibly provide an answer to the airline industrys dependence on crude oil.

Shift from Aerospace into Defense - In response to escalating cost pressures from airlines and the reduced capacity of the aerospace industry, aircraft manufacturing companies have begun to concentrate their production efforts into the defense industry to exploit the growth in military spending and maintain revenue streams. The development of the F/A 22 and Joint Strike Fighter configurations and the production of the US missile defense network include contributions from most of the aerospace industrys leading players.

Consolidation - Reduced demand and yields within the airline industry have produced cost pressures, which have resulted in consolidation amongst the airlines. This consolidation has increased the airlines buying power, causing a downward pressure on costs, reducing margins for the aircraft manufacturers and promoting consolidation in a cascading effect along the supply chain.

Toyota Slower Growth in U.S. in Future

2007-08-09T17:50:00.000-04:00

Toyota Motor Corp will continue to grow in the U.S. market, but at a slower rate than it has in the past, and is considering targeting young consumers with a premium small car, the automaker's North American sales chief said on Thursday.

"I don't think the double-digit growth of the past few years will continue because we are such a large part of the U.S. market now," Jim Lentz told new sources.

Lentz said Toyota is on track to post a U.S. sales increase of 5 to 6 percent in 2007. The automaker is now neck and neck with General Motors Corp in global sales, and is expected to become the world's largest automaker this year.

"For next year, we will definitely grow, but we have to reevaluate the market in the fourth quarter to see how much we could grow," he said. Toyota sold 2.5 million vehicles in the U.S. market in 2006 and had more than 17 percent of the market in July.

Read more here.

Harold Gutzwiller Moving On

2007-08-09T17:21:00.000-04:00

Harold Gutzwiller has resigned as executive director of the Hendricks County Economic Development Partnership, the county-wide agency that helps spear-head business growth in Avon, Brownsburg, Danville, Plainfield and other smaller towns.

Gutzwiller has accepted a new position as senior economic development coordinator for Hoosier Energy, the Bloomington-based electric power company with 17 REMCs serving all or parts of 48 southern Indiana counties.

Good luck Harold!

Read more here.

Specialty Retail Industry Profile

2007-08-08T17:46:00.000-04:00

Worth approximately $155 billion in 2006, the US specialty retail sector grew steadily during the 2002-2006 period, with a compound annual growth rate around 5%.

The most important segments of the market are electronics and appliances, jewelry, sporting goods, music, and books. The prospects for the sector are good, as consumer confidence remains strong, despite the dampening effect of rising interest rates. However, it is the rapid growth of online music and video downloads that is expected to be the key driver of growth going forward. This should also sustain demand for associated electronics, such as MP3 players.

While the majority of revenue is generated by store sales, online ordering systems are gaining significance as Internet penetration rates grow. The relatively weak status of the dollar has also attracted many international consumers to purchase via US websites. Many US sectors are currently suffering cost pressures due to high fuel and energy prices, and specialty retail, with its need for transport and distribution services, is no exception.

The leading specialist players in the sector include Best Buy, Barnes & Noble, and Tiffanys. Many companies in the sector are consolidating assets and knowledge, benefiting from economies of scale, and outsourcing services. This consolidation has been necessary in order to compete with traditional and online multi-retailers, such as Wal-Mart and Amazon, which have gained considerable market share in many of the product segments included in the specialty retail sector.

Key Issues

High-End Merchandise - Reflecting rising disposable incomes, consumer tastes are increasingly for high-end goods, which are best catered for by specialty stores. Designer apparel stores are especially benefiting from this shift, prompting mainstream apparel retailers to commission ranges of clothing from fashion designers.

Store Environment - Specialty retailers are focusing on improving shopping experiences by providing more comfortable, ergonomic store environments. Specialty retailers can use improved store environments to differentiate themselves within the marketplace, especially against larger discount retailers, within which such qualities are generally lacking.

Fuel Costs - High fuel prices are reflected by the increased transport and distribution costs of products. Although many costs are passed on to customers, the high degree of price competition within retail markets restricts the extent to which retailers can hike prices. Companies need to balance reductions in profit margins against the maintenance of customer loyalty and market share.

Significant Trends

Online Retailing - In response to growth in online shopping, retailers are prudent to keep up to date with advances within the sector. Investment in innovative technologies to simplify the customer interface and maximize the coordination of inventories will enable retailers to maximize revenue and sustain growth moving forward.

Supply Chain Management - Retailers can benefit considerably from more efficient supply chains, prompting the introduction of automated merchandise planning systems to assist with inventory and forecasting demand. Inventory management systems are helping to optimize product replenishment and shorten lead times. In addition, Radio Frequency Identification Tags (RFITs) are being employed by the retailers to develop faster stocking and tracking procedures.

Consumer Intelligence - The analysis of consumer trends and purchasing patterns has become a key tool in the management of retail operations. Companies gain a distinct advantage in using such intelligence to drive marketing strategies, design store layout, and build product inventories.

What's in a Leader? (A View from Corporate America)

2007-08-07T17:30:00.000-04:00

Recent focus on board activism and chief executive turnover would have you believe that these are particularly difficult times for CEOs and that the job of a CEO is more challenging than it has ever been. The fact is, the job of a CEO has always been a highly complex task.

In our over 30 years of experience in dealing with leadership issues and education, we have always emphasized the importance of innovative and flexible leadership that is adept at adjusting to changing times and circumstances. As such, over the years, we've selected and awarded leaders based on their ability to take calculated risks and alter an industry, all the while delivering continued shareholder value, built on a strong ethical foundation. Good CEO leaders have operated like this for years.

We are of the belief that great leaders are those that are able to exercise the right leadership traits at the right time to realize the best results.

As leaders, we all know that there are times when we need to take risks, and there are times that we ought to avoid risks. Then, there are times we have to be firm and lead with conviction, and there are times when we need to be a team player. Great leaders know when to balance these traits based on company circumstances.

These days, stakeholder relations, business ethics and corporate social responsibility are top of mind. However, those of us who have been in the business long enough know that personal accountability and brand reputation have always been vital leadership concerns. As such, there's never been a time where ethical leadership was not a part of our evaluation criteria.

Read more here.

Piedmont Triad on Incentives and Their Impact

2007-08-06T17:26:00.000-04:00

The Piedmont Triad landed Honda Aircraft Co.'s manufacturing operations this year, proving that economic development doesn't always have to come at a high price.

For $1.4 million in local incentives and $6.7 million in state incentives, Piedmont Triad International Airport gets 300 well-paying jobs, the right to call this the home of the HondaJet and close ties with one of the most prestigious corporate names in the world.

Some say any incentive payment is too much. But in a year when Caldwell County and Lenoir in western North Carolina showered Google with up to $165 million to locate a major operation there, the Honda deal could be considered a bargain.

Read more here.

Clean Ohio Council's Impact

2007-08-05T17:24:00.000-04:00

The Clean Ohio Council has awarded 64 Clean Ohio Revitalization Fund awards since 2002 totaling more than $158 million in brownfield remediation dollars, while leveraging a planned $2 billion in private and public investment upon project completions.

Ohio economic development officials recently announced that $41,188,065 has been awarded for 15 brownfield revitalization projects across the state, pending Controlling Board approval. The Clean Ohio Council, which Lt. Governor Fisher chairs, approved the projects for the Clean Ohio Revitalization Fund Round 4 funding cycle.

Read more here.

Indiana University's Impact

2007-08-04T17:17:00.000-04:00

With more than $2 billion in physical assets and a world-class reputation for academics and innovation, Indiana University (IU) will soon formally leverage its considerable intellectual muscle to grow the state of Indiana.

New IU president Michael McRobbie (himself an overt proponent of all things technology) has announced the appointment of longtime community advocate William B. Stephan to the new post of vice president of engagement.

Mirroring the unqualified success of Purdue University’s model of statewide engagement, IU is expected to extend its already formidable reputation in life sciences development on behalf of the state.

“IU is a tremendous asset to economic development in the state of Indiana,” said McRobbie in announcing Stephan’s new role. “We have a robust capacity for scientific research. We know how to transfer technology from the laboratory to the marketplace. We have a deep pool of talented experts in every aspect of starting and growing business ventures.”

Read more here.

2007-08-03T13:28:00.000-04:00

ED LEADER NEWSLETTER #22

Arizona's Fort Huachuca's Environmental Impact

2007-08-03T12:28:00.000-04:00

A new study from the Center for Sustainable Economy finds past government reports have likely underestimated Fort Huachuca’s impacts on the local economy and environment. The study, titled “Fort Huachuca and the San Pedro River: Improving Water Deficit Liability Calculations Through Economic Modeling,” is authored by Janie Chermak, Ph.D., John Talberth, Ph.D., and Jason Hansen of the University of New Mexico and the Center for Sustainable Economy. Read more here.

Warnings on NY State's Empire Zone Program

2007-08-02T12:54:00.000-04:00

Companies that have received millions of dollars in tax breaks as part of the state's Empire Zone program have been put on notice by the state for failure to meet commitments to invest in economic expansion and promises to increase jobs. State officials announced they had notified 3,000 companies - nearly a third of participants, including three operating on Long Island - that they could lose tax breaks and other benefits under the program, launched more than two decades ago to stimulate economic growth and create jobs. This is the first time the state has officially notified participating companies of failure to meet their obligations under the program.

Read more here.

Food for Thought on Regional ED Strategy

2007-08-01T12:56:00.000-04:00

There is some food for thought in this one!

This is from a recent editorial in the Toledo Free Press written by Professor Dan Johnson at the University of Toledo:

"For the past two decades, Harvard economist Michael Porter has traveled the world advising nations, provinces, states, cities and regions, how to become even more competitive. Porter and others have advanced the notion of economic “clusters” as a concept for understanding an area's economic strengths. Clusters are also advanced as the cornerstone of a strategy for making an area more competitive. Toledo and Northwest Ohio are well into “cluster” thinking.

But the immediate question is, “What now?” What is our approach to economic development as a city? As a region? What is our economic development strategy? Our priority? Our program? Our plan? And, our policy? Do we have any of the above? And, does anyone know?

My sense is that, in Toledo and Northwest Ohio, we are pursuing several approaches. We have many economic development strategies at work, emanating from multiple economic development organizations. We also have any number of programs — both public and private — operating to advance these strategies, and numerous plans in place to help organize and further our efforts.

My worry is that there are very few people in our community and region — even community and civic leaders — who know about or understand these strategies, plans, and programs. As a citizen or business person, could you call someone to find out what our economic development goals and strategies are for Toledo and Northwest Ohio?"

From Indiana...Education, Key to Economic Development

2007-07-31T13:00:00.000-04:00

Everyone knows this, BUT we are still not doing enough to align education, workforce development, and economic development. Here is a view from Indiana.

David Lips, director of policy for the Indiana Economic Development Corporation, gave the keynote presentation, focusing on bringing business to Indiana and helping companies grow though regional collaboration.

"Indiana doesn't have a single economy," Lips said. "It has a bunch of regional economies. We encourage regions to act in concert."

A question and answer session followed Lips' presentation. The main topic of discussion was education, with one audience member asking if there would be enough jobs in the state for an expected surge in high school graduates.

"One of the main drives of economic development is the status of the workforce," Lips said, noting that there is a demand for educated workers. "Indiana is well known for its work ethic and needs a knowledgeable workforce to stay competitive."

Read more here.

WIRED Grant in Piedmont Triad, NC

2007-07-30T13:04:00.000-04:00

The Piedmont Triad Partnership (PTP) has awarded two Focus Talent Development Grants during the fourth round of the WIRED Focus Grants program. The grants program is one of several strategies being employed by the PTP to enhance workforce development initiatives as part of a larger effort to improve the global competitiveness of the Piedmont Triad Region. The Focus Talent Development Grants fund demonstration projects in curriculum development, identification and dissemination of career information, and supply chain education.

Read more here.

Older America Trends

2007-07-29T13:06:00.000-04:00

Aging baby boomers constitute this decade's fastest growing age group, expanding nearly 50 percent in size from 2000 to 2010. This group-more highly educated, with more professional women, and more diverse than its predecessors-will add new stresses to suburban and Sun Belt locations where they are predominantly "retiring in place" with demands for health, transportation, and other services. Get the report here.

Brookings on Poverty in Kentucky

2007-07-28T13:12:00.000-04:00

Kentucky's working families frequently pay a premium for everyday necessities. Lower-income workers in Kentucky are more likely to pay double-digit interest rates for auto loans; more likely to pay hundreds of dollars more for car insurance; and more likely to pay a higher sticker price for their car compared to their higher income counterparts.

Additionally, lower-income workers are twice as likely to have purchased a high-cost mortgage compared to their higher income neighbors and are more likely to use alternative financial service providers, costing untold extra dollars for basic financial transactions and the purchase of home goods.

However, new innovative and practical initiatives are being implemented and improving the prices of key necessities for lower-income families around the country. Public and private leaders in Kentucky can follow suit and also reduce these higher costs of living, and do so in ways that defy the substantial budgetary, economic, and partisan pressures that limit so many efforts to grow the middle class. Through a combination of initiatives that bring down business costs, curb unscrupulous behavior, and boost consumer knowledge, public and private leaders can bring down these prices, creating up to thousands of dollars in extra family spending power.

Get the study here.

Early Childhood Education Pays Off

2007-07-27T13:14:00.000-04:00

“Although education and the acquisition of skills is a lifelong process, starting early in life is crucial. Recent research—some sponsored by the Federal Reserve Bank of Minneapolis in collaboration with the University of Minnesota—has documented the high returns that early childhood programs can pay in terms of subsequent educational attainment and in lower rates of social problems, such as teenage pregnancy and welfare dependency.”

Read more here.

Latest on the Texas Economy

2007-07-26T13:20:00.000-04:00

The Texas economy expanded moderately in June. The Dallas Fed's Texas Business-Cycle Index, an aggregate measure of the region's current economic activity, rose at an annualized rate of 3.4 percent. Year-to-date, the index has increased an annualized 3.5 percent, suggesting a deceleration in growth from last year's 4.2 percent pace.

State payroll employment rose by 15,100 workers in June—for annualized growth of 1.8 percent, according to data released by the Texas Workforce Commission and seasonally adjusted by the Dallas Fed (see table). The labor market remained tight during the month—the Texas unemployment rate stayed at a record low of 4.1 percent.

Read more here.

International Trade's Role in the Economy

2007-07-25T13:21:00.000-04:00

During the past four decades, international trade has grown from a relatively insignificant slice to nearly a third of U.S. domestic economic activity. To cater to the global economy's palate, U.S. manufacturers and service industries have specialized and become more efficient in producing goods and services that suit the international menu.

The U.S. external sector—the sum of all imported and exported goods and services—is currently equivalent to 30 percent of overall domestic economic activity, or gross domestic product (GDP). Just four decades ago, however, the share of foreign trade represented a mere 10 percent of GDP. To grow as a share of GDP during the past 40 years of significant U.S. economic prosperity, the external sector had to expand more than the overall economy did. Imports, increasing at an average rate of nearly 11 percent each year, led the external-sector expansion, while exports grew at an average rate of more than 9 percent per year.

In addition, U.S. goods-producing industries have become increasingly more dependent on international markets. Almost two-fifth of the revenues earned by U.S. manufacturers now come from sales abroad compared with less than 15 percent 40 years ago.

Read more here.

Sports and the Economy

2007-07-24T13:24:00.000-04:00

Looking for a good resource on sports and its impact on economic activity. Check out the Boston Federal Reserve Bank's resource on this subject.

For example: Why Do We Spend So Much Time and Money on Sports?

We spend a lot of time and money watching games. We pay premium prices for team jerseys and caps. Some of us camp out for the chance to fork over a fistful of cash for playoff tickets; or we spend an entire Sunday munching snack food and watching the NFL on TV. Why do we do it?
Economists approach the question through the concept of utility: We choose to spend our money on a product or service because we get a certain amount of use, pleasure, or satisfaction from consuming it.

Utility can be very practical. For example, we might decide to buy a generic baseball cap to corral our wild hair or keep the sun out of our eyes.

But then there are purchases that deliver a greater sense of psychic satisfaction. Sometimes we choose to pay twice as much for a different cap simply because it carries the logo of our favorite team.
The motivation for each purchase is different, but each involves personal choice, and we derive a certain amount of utility—use, pleasure, or fulfillment—from it.

2007-07-23T22:28:00.000-04:00

ED LEADER NEWSLETTER #21

Most of Us Drive to Work Alone

2007-07-23T22:24:00.000-04:00

Despite rising fuel costs, commuters continued to drive their cars in 2005, according to a new U.S. Census Bureau analysis of data from the American Community Survey. The survey, gathered over the course of the year, found that driving to work was the favored means of commute of nearly nine out of 10 workers (87.7 percent), with most people (77 percent) driving alone.

In contrast, 4.7 percent of commuters used public transportation to travel to work in 2005, an increase of about 0.1 percent over 2000 levels.

About half of the nation’s public transportation commuters can be found in 10 of the nation’s 50 cities with the most workers age 16 or over: Baltimore, Boston, Chicago, Houston, Los Angeles, New York, Philadelphia, San Francisco, Seattle and Washington, D.C. These cities account for 2.9 million of the nation’s 6.2 million users of public transportation (see detailed tables).

Beyond the total number of public transportation users, these cities also had relatively high rates of public transportation use. However, Los Angeles and Houston, with rates of 10.3 percent and 5.1 percent, respectively, had lower rates than many other smaller cities, including Minneapolis (12.5 percent); Oakland, Calif. (16.5 percent); Portland, Ore. (13.3 percent) and Seattle (17 percent).

Read more here.

Russian Steel Company Looks at Ohio Investment

2007-07-22T22:13:00.000-04:00

The Russian steel company that has been negotiating with the state to build a steel mill is considering a location in Scioto County near the Sun Coke plant, The Ironton Tribune has learned.

A source close to the situation, who spoke on the condition of anonymity, said the company — Magnitogorsk Iron and Steel Works — is considering a roughly $2 billion investment in Haverhill that would include a mill that would produce automobile body sheets and employ between 1,000 and 1,400 workers.

Not a done deal yet. Other locations are also being considered.

Read more here.

AZ`Gov. Napolitano on Innovation America

2007-07-21T22:13:00.000-04:00

AZ Gov. Janet Napolitano kicked off the 99th annual meeting of the National Governors Association, a three-day conference that will focus on economic development, education reform and global warming, among other issues.

Much of the focus will be on Napolitano's chosen initiative: Innovation America. The centerpiece of her one-year reign as head of the NGA, Innovation America is an effort to reshape the nation's education system to create a skilled workforce that can feed a future economy built on innovation and ingenuity.

It's a complex undertaking aimed at a simple question that Napolitano posed today: "How does the United States maintain and grow its place in the world?"

Read more here.

Back to School Facts: 2007-2008

2007-07-20T22:17:00.000-04:00

Summertime is winding down, and summer vacations are coming to an end. It’s back-to-school time! It’s a time that many children eagerly anticipate — catching up with old friends, making new ones and settling into a new daily routine. Parents and children alike are scanning the newspapers and Web sites looking for upcoming sales to shop for a multitude of school supplies and the latest clothing fads and essentials. This edition of Facts for Features highlights the many statistics associated with the return to classrooms by our nation’s students and teachers.

Source: US Census

Back-to-School Shopping

$7.1 billion
The amount of money spent at family clothing stores in August 2006. Only in November and December — the holiday shopping season — were sales significantly higher. Similarly, sales at bookstores in August 2006 totaled $2.1 billion, an amount approached in 2006 only by sales in January and December.

For back-to-school shopping, choices of retail establishments abound: In 2005, there were 24,659 family clothing stores, 6,305 children and infants clothing stores, 26,416 shoe stores, 9,501 office supplies and stationery stores, 23,195 sporting goods stores, 11,077 bookstores and 9,589 department stores.

Students

75.8 million
The number of children and adults enrolled in school throughout the country in October 2005 — from nursery school to college. That amounts to about one-fourth of the U.S. population 3 and older.

Pre-K through 12 Enrollment

54%
Percentage of 3- and 4-year-olds enrolled in school in October 2005.

70%
Percentage of children enrolled in kindergarten who attended all day, as of October 2005.

55.8 million
The projected number of students to be enrolled in the nation’s elementary and high schools (grades K-12) this fall. (Source: Upcoming Statistical Abstract of the United States: 2008)

11%
Projected percentage of elementary and high school students enrolled in private schools this fall. (Source: Upcoming Statistical Abstract of the United States: 2008)

41%
Percentage of elementary and high school students who were minorities, as of October 2005.

22%
Percentage of elementary and high school students with at least one foreign-born parent in October 2005.

42%
Percentage of children 12 to 17 who participated in sports as of 2003, which was the most popular extracurricular activity. About one-third of children this age participated in club activities and 29 percent in lessons. Lessons include those taken after school or on the weekend in subjects like music, dance, language, computers or religion.

75%
Percentage of children 12 to 17 who were enrolled in school and academically “on-track ” (i.e., enrolled in school at or above the grade level for peers their age) as of 2003.

24%
Percentage of children 12 to 17 who were in a special class for gifted students or did advanced work in any subject, such as honors and advanced placement classes, as of 2003.

41%
Percentage of children 12 to 17 who had ever attended or been enrolled in first grade or higher and had changed schools at some point as of 2003.

Languages

10.5 million
Number of school-age children (5 to 17) who speak a language other than English at home, about one in five in this age group. Most of them (7.5 million) speak Spanish at home. (Source: 2005 American Community Survey)

Lunchtime

30.1 million
Average number of children participating each month in the national school lunch program in 2006. (Source: Upcoming Statistical Abstract of the United States: 2008)

10 billion
The nation’s total apple production, in pounds, in 2006. The chances are good that the apples your children present to their teachers or enjoy for lunch were grown in Washington state, which accounted for more than half of the nation’s total production.

College

18 million
The projected number of students enrolled in the nation’s colleges and universities this fall. This is up from 12.8 million 20 years ago. (Source: Upcoming Statistical Abstract of the United States: 2008)

37%
Percentage of all college students 25 and older in October 2005; 56 percent of these older students attended school part time.

69%
Percentage of undergraduates enrolled in four-year colleges in October 2005. Of those enrolled in such schools, 81 percent attended full time.

49%
Percentage of 18- and 19-year-olds enrolled in college in 2005.

56%
Percentage of undergraduates who were women in October 2005. Among graduate students, the corresponding percentage was even higher: 59 percent.

Learning and Earning

21%
Percentage of high school students who were employed as of October 2005.

50%
Percentage of full-time college students who were employed as of October 2005.

How Many Schools?

95,726
Number of public elementary and secondary schools in 2003-04. The corresponding number of private elementary and secondary schools was 28,384. , Tables 228 and 252.

4,276
Number of institutions of higher learning that granted college degrees in 2005. (Source: Upcoming Statistical Abstract of the United States: 2008)

1.1 million
Number of students who were home-schooled in 2003. That was 2 percent of all students 5 to 17.

3,294
The number of public charter schools nationwide in 2004-05. These schools, granted a charter exempting them from selected state and local rules and regulations, enrolled 887,000 students. (Source: Upcoming Statistical Abstract of the United States: 2008)

Teachers and Other School Personnel

6.8 million
Number of teachers in the United States in 2006. Some 2.7 million teach at the elementary and middle school level. The remainder include those teaching at the postsecondary, secondary and preschool and kindergarten levels. (Source: Upcoming Statistical Abstract of the United States: 2008)

$57,300
Average annual salary of public elementary and secondary school teachers in Connecticut as of the 2003-2004 school year — the highest of any state. Teachers in South Dakota received the lowest pay — $33,200. The national average was $46,800. High school principals earned $86,938 annually in 2004-05. , Tables 240 and 241

$14.18
Average hourly wage for the nation’s school bus drivers in 2004-05. Custodians earned $12.61, while cafeteria workers made $10.33. , Table 241

Technology

14.2 million
Number of computers available for classroom use in the nation’s elementary and secondary schools as of the 2005-2006 school year. That works out to one computer for every four students. , Table 248

100%
Percentage of public schools with Internet access as of fall 2003. , Table 246

83% and 43%
Percentage of children 3 to 17 using a computer and the Internet, respectively, at school as of fall 2003.

75%
Among children 3 to 17 accessing the Internet in fall 2003, whether at home, school or elsewhere, the percentage who used it to complete school assignments. This was the most common reason for children to use the Internet.

66%
Among children 3 to 17 using a computer at home in fall 2003, the percentage who used it to complete school assignments. This was the second most common home computer use for children, behind playing games.

The Rising Cost of College

$13,425
Average tuition, room and board (for in-state students) at the nation’s four-year public colleges and universities for an entire academic year (2005-06). That is more than double the corresponding figure in 1990. (Source: Upcoming Statistical Abstract of the United States: 2008)

$36,510
Average tuition, room and board at the nation’s four-year private colleges and universities for one academic year (2005-06). That also is more than double the corresponding 1990 figure. (Source: Upcoming Statistical Abstract of the United States: 2008)

$6,291
Average amount of aid received by full-time college students in 2001-02. More than half of college students receive some form of financial aid from outside their families to help pay for their education.

The Rewards of Staying in School

$79,946
Average annual 2005 earnings of workers 18 and older with an advanced degree. This compares with $54,689 a year for those with bachelor’s degrees, $29,448 for those with a high school diploma only and $19,915 for those without a high school diploma.

$67,069
Average starting salary offered to bachelor’s degree candidates in petroleum engineering in 2006, among the highest of any field of study. At the other end of the spectrum were those majoring in the humanities; they were offered an average of $31,183. (Source: Upcoming Statistical Abstract of the United States: 2008)

Graduation

3.3 million
Projected number of high school diplomas that will be awarded in the 2007-08 school year. (Source: Upcoming Statistical Abstract of the United States: 2008)

3 million
Number of college degrees expected to be conferred in the 2007-08 school year. (Source: Upcoming Statistical Abstract of the United States: 2008)

Government Spending on Public Education

$8,701
The per-pupil expenditure on public elementary and secondary education nationally in 2005. New York ($14,119) spent the most among states or state equivalents, followed by New Jersey ($13,800), the District of Columbia ($12,979), Vermont ($11,835) and Connecticut ($11,572). Utah ($5,257) spent the least per student, followed by Arizona ($6,261), Idaho ($6,283), Mississippi ($6,575) and Oklahoma ($6,613).

Satisfaction

7%
Among households with a child in the local public school, the percentage who expressed dissatisfaction with the schools in 2003. Fifteen percent of these households said they would prefer a different school for their child

Massachusetts Steps Up Life Science Efforts

2007-07-19T21:55:00.000-04:00

Joined by legislative leaders at a special Joint Session of the Legislature, Governor Deval Patrick today filed legislation providing for a major investment in and expansion of the Life Sciences industry in Massachusetts. The legislation is a comprehensive plan to make Massachusetts the global leader in the life sciences industry.

The plan is a significant milestone in moving forward on the administration’s 10-year, $1 billion investment package that will both enhance the Commonwealth’s already nationally recognized assets in the fields of medicine and science, and fill gaps in federal funding to strengthen the state’s capacity to support life science progress from the idea stage through the production and commercialization stages.

Read more here.

Dubai Building the Tallest

2007-07-18T22:04:00.000-04:00

Developers of a 1,680-foot skyscraper still under construction in oil-rich Dubai claimed Saturday that it has become the world's tallest building, surpassing Taiwan's Taipei 101 which has dominated the global skyline at 1,667 feet since 2004.

The Burj Dubai is expected to be finished by the end of 2008 and its planned final height has been kept secret. The state-owned development company Emaar Properties, one of the main builders in rapidly developing Dubai, said only that the tower would stop somewhere above 2,275 feet.

When completed, the skyscraper will feature more than 160 floors, 56 elevators, luxury apartments, boutiques, swimming pools, spas, exclusive corporate suites, Italian fashion designer Giorgio Armani's first hotel, and a 124th floor observation platform.

After North American and Asian cities marked their 20th century economic booms with skyscrapers, the Gulf grew eager to show off its success with ever taller buildings. In Dubai, long an oil-rich Gulf symbol of rapid economic growth, the building reflects the city's hunger for global prestige.

"It's a symbol of Dubai as a city of the world," said Greg Sang, the project director for Emaar Properties.

Read more here.

Happiness and Economic Development

2007-07-17T21:59:00.000-04:00

Discussion and research on "development" emerged in the middle of the 20th century. Since World War II the focus of international attention has been development in developing countries. And since the implementation of the "First UN Development Decade" by the UN General Assembly in the 1960s, development has become a prominent research topic. However, the concept has shifted from concentrating on GDP growth to more comprehensive social, environmental and economic conditions.

Beginning in the 1970s, with the expansion of the meaning of development, the focus shifted from developing countries to developed Western countries. Concepts such as quality of life and indexes of happiness or well-being began to be proposed. Researchers in psychology, economics, sociology and public policy studied the topic.

With this perspective, people realized that economic growth should not be the goal of life. It is merely a means of promoting human happiness. After distinguishing the ends from the means, academic circles began to conduct studies on the relationship between the sense of happiness in people and economic growth.

Many studies have been conducted on the impact of economic growth on happiness. For example, a study by the University of Leicester ranked Bhutan as the planet's eighth-happiest place. Nevertheless, statistics generally show that the more developed a nation's economy is, the happier its people feel. This shows that a sense of happiness relies to a degree on economic development. But beyond that point, the marginal utility of material wealth will diminish.
Well-being index studies show that the meaning of happiness is not limited to the subjective sense of happiness. It also includes objective appraisals of living and development conditions. In other words, the concept of happiness has a material level of social welfare and economic conditions as its foundation, as well as the non-material level of things like culture, education, social networks and the living environment.

Read more here.

2007-07-16T07:05:00.000-04:00

ED LEADER NEWSLETTER #20

Greensboro's Downtown: More Residents, Fewer Jobs

2007-07-16T07:01:00.000-04:00

In recent years, the revitalization of Greensboro's downtown has produced some impressive numbers: $265 million in new construction and renovations, about 50 new restaurants and entertainment venues and 275 new residential units, with another 285 planned. But those developments haven't translated into more jobs. Just more residents. Between 2000 and 2006, employment downtown lost more than 700 jobs, a decline of 3.6 percent.

Read more here.

Whatcom County, Washington: Gearing Up for Tech

2007-07-15T06:57:00.000-04:00

With the heavy-hitters of high tech nearby in Seattle, it has been a struggle at times for Whatcom County to stand on its own in the industry.

When the Seattle area was enjoying the dot-com boom in the late 1990s and early 2000, the thinking by the local economic development leaders was to try and lure companies to this area, touting the quality of life factors. Although one company, Logos Bible Software, did make the move to Whatcom County and has grown since then, it became apparent that another strategy was needed: Try to expand what was already here and encourage people with great ideas to get started.

Read more here.