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Quote of the day April 27, 2006

Posted by Tom in Economic Development, Workforce.
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From Smart City Memphis, buried in a discussion on the merits of what looks like tax incentive financing:

…as Professor John Eger puts it: “The effort to create a 21st century city is not so much about technology as it is about jobs, dollars and quality of life. In short, it is about organizing one’s community to reinvent itself for the new, knowledge-based economy and society; preparing its citizens to take ownership of their community; and educating the next generation of leaders and workers to meet these global challenges…At the heart of this effort is ultimately defining a ‘creative community.'”

What a great perspective.


Fighting brain drain April 26, 2006

Posted by Tom in Opinion, Workforce.
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Many communities, especially in the "Rust Belt," find that they are experiencing a brain drain – a loss of young, talented people to other cities. Conventional wisdom states that this talent, if the community was able to retain them, would be the bedrock of a bright future for the community.

The rationales behind the brain drain are a classic matter of perspective. Forging Innovation offers the oft-overlooked 20-something perspective on brain drain:

  1. We want to have ample opportunity to establish relationships with other young people
  2. We want a chance to make it big–high-powered jobs, rapid advancement, $$$
  3. We want to have fun–it has to be easy to get around to a variety of places that provide (See #1)

Sounds simple, but this has been very hard to implement. Hence the brain drain continues…

IT or bust (for now) April 26, 2006

Posted by Tom in Economic Development, Workforce.
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Indiana's Department of Workforce Development released its list of the "hot jobs" in the state, and the top 10 goes like this:

  1. Registered Nurses
  2. Teachers, Elementary and Kindergarten, including Special Education
  3. Teachers, Secondary, including Special Education
  4. Computer Systems Analysts
  5. Dental Hygienists
  6. Medical and Health Services Managers
  7. Computer and Information Systems Managers
  8. Police and Sheriff’s Patrol Officers
  9. Pharmacists
  10. Lawyers

Note that 8 of the 10 top jobs are service sector jobs – jobs that rely upon the existence of wealth-creating entities for their livelihoods. The two outliers? Computer Systems Analysts and Computer and Information Systems Managers. (Kids, get those CISCO and MCSE certifications!)

This report highlights the challenge that I've noticed over the past months, that our economic development entities have spent so much time on triage – trying to find quick fixes to remedy job losses from plant closings, downsizings, etc. – that they have not invested effort in proactive, strategic growth planning.

That's why the Indiana Economic Development Corporation's new strategic plan is so important. While not trailblazing by any means – setting an overarching target of having the average Indiana wage meet the average national wage isn't visionary like, say, nanotechnology – this plan lays out a workmanlike approach to creating an environment in which economic development can flourish in Indiana.

One of the three pillars on which this plan is based? That's right – workforce. It's all about the convergence.

Stifling growth by constricting the high-skilled workforce April 26, 2006

Posted by Tom in Economic Development, Media, Opinion, Workforce.
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The CEO of TechNet placed an op-ed in today's USA Today about one of the more curious aspects of the convergence of ED and workforce – immigration.

Under the current system, the federal government provides 65,000 H-1B visas [explanatory link added] each year, beginning Oct. 1. Yet the visas made available last October were spoken for almost two months before that, which means our open door for innovation is temporarily closed for 14 months.

For foreign-born students graduating from a U.S. college in June, the H-1B limitations make it difficult for them to find jobs here. We're even closing the door on those with H-1Bs visas who seek permanent U.S. residency because of extended delays in a system designed largely in 1990, when our workforce and economic needs were different.

For the U.S. high-tech community, these laws present a difficult choice: Innovate or perish. If we can't find professionals to do the job here in the USA, many will simply move the job to the qualified workers overseas.

America has capitalized on its global reputation as an immigrant-friendly "melting pot" to lure many of the world's brightest young minds to its higher education institutions. These students then find that they enjoy life in America and set down their roots here – building businesses and providing expert skill at a rate that outstrips our native-born capacity. Simply put, we have skimmed the cream off the top of the world's talent supply for years and grown the world's greatest economy.

Now, with post-9/11 immigration restrictions, America's knowledge-driven companies are starving for new talent. One answer to the problem is to develop home-grown talent, but our culture and educational systems do not align our youth toward engineering and the "hard" sciences. That's why we have relied on immigrant talent. To change our internal course as a country may take a generation, and the rapid rise of mainland Asia (China and India, specifically) on the world stage means that we don't have the luxury of time. And we've been chafing under the H1-B visa restrictions for many years now.

Immigration reform is stumbling through the Congress as I type, and the issues raised by TechNet and those by border protectionists are unfortunately being intertwined. There is a real chance that the high-skilled immigration demand will lose out as the passions related to illegal immigration overwhelm the debate.

If more education equals a better chance at the American Dream… April 25, 2006

Posted by Tom in Research, Workforce.
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…what does this tell us? As a resident of Northeast Indiana, I'm a little concerned…

Click on the map to see it slightly larger… 

Broadband is critical to the convergence April 25, 2006

Posted by Tom in Economic Development, Innovation, Opinion, Workforce.
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Last week, I participated in a town meeting/listening session on the Indiana Lieutenant Governor's Rural Indiana Strategy for Excellence (RISE 2020) tour.  This process was fascinating to observe; the culture clash between progressive/modern thinking and traditional/"values" thinking was never more evident.  I placed my cards with the former.  The RISE 2020 initiative really demands its own entry, so I will focus on the larger project later.  

One of the questions in the meeting struck me: What does rural Indiana need in order to succeed?  I offered my solution: Broadband.  Whether you're in manufacturing (and rural Indiana has a lot of manufacturing – at least in Northern Indiana), agriculture or the service economy, you need broadband to work in the modern era.  Not only does it allow you to conduct business as expected by your commercial peers, broadband removes the issue of place.  It allows a farmer in rural Indiana to communicate with a customer in New York or Beijing on even terms.  

Problem is, broadband is not being rolled out in a universal manner.  

Connecting the Dots lays out the need for universal broadband – and the implications of having a nation of haves and have-nots – in a well-written blog entry.  He also discusses Minnesota's boradband initiative, which has the potential to place the entire state at a competitive advantage if carried through as stated. 

The infrastructure is only one part of the puzzle, though. We have to orient our population – everyone – to the potential presented by this technology.  From research and science to commerce and entertainment, true broadband communication can revolutionize our ways of thinking and working. 

Which means that we need workforce programming to meet these new challenges.  

Higher education as an engine of development April 25, 2006

Posted by Tom in Economic Development.
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Professor Maurice Eisenstein, writing about the state of higher education in Northwest Indiana, makes a bold claim about the importance of expert level training capacity (read: world-class higher education) in the larger scheme of development:

One of the central facts about Twenty-First Century economic development is that it cannot occur and will not occur and has not occurred anywhere were there is not a first rate university structure. A university whose goal is to not only to educate the residents of the particular area but also to be of such superior quality in its research and graduate programs so as to attract the best and the brightest from other parts of the Country.

This university structure will also enable the students who graduate to want to stay in the area of the university. Studies have shown that students tend to remain within 75 miles of where they graduated from irrespective of where there "hometown" is.

He then goes on to discuss the higher education system in "Da Region," leading to a fascinating anticipated development:

NWI cannot develop economically without its own national university. In addition its tax dollars are being used to develop other parts of the State and to support none-Hoosier students. It is time to return economic development to NWI and the tax funds that go along with it.

To this end, the State legislators from NWI will introduce a bill in the next session of the legislature to change the status on NWI Universities to "metropolitan" designation. This will automatically change their funding and contribution, i.e. goals, in the region. If the Lafayette and Bloomington will not support these changes than NWI has to do what Indianapolis and Southern Indiana has done and that is to authorize its own board of Trustees.

Writing this blog from Northeast Indiana, and knowing that the local Indiana-Purdue hybrid campus (IPFW) has had the topic of a unique higher education identity (unique from IU and PU) on the table for some time, this development comes as surprising news. Forcing a divorce from Bloomington or West Lafayette through legislation is a drastic and profound move.

I'm not entirely sold on the notion that a split is the right thing to do for Indiana's regional campuses. IU and PU have a terrific stranglehold on public higher education resources in the Statehouse and does not actively foster unique capacities (like research) at its satellite campuses. But, if Eisenstein is to be believed on his assertion that a community needs a world-class research university to compete economically, then perhaps legislation is the only way to go.

My mind leads me back to the "culture of cheap" discussion, though. Does Indiana want to afford a handful of top-flight facilities? Plenty of evidence says it should – but I'm skeptical that it wants to foot that bill.

I'll be watching the Northwest Indiana higher education dialogue carefully through the next session of the Indiana General Assembly.

Fighting the “culture of cheap” April 25, 2006

Posted by Tom in Opinion.
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Here's the beginning of the best blog entry I've read in a long time:

There are times when it just seems that Memphis can’t get its economic development strategies into the 21st century. It’s as if we just don't want to compete in a knowledge economy in a global marketplace.

Our economic development strategies are caught in the commodity trap, stemming from our background as an agricultural center and continuing with our pride in being a distribution center. Our experience is in selling products that tend to be seen as commodities, to a consumer making a decision based on the lowest price.

Commodity economic development is premised on the same thing – appealing to companies who make their decisions based on the lowest prices. This kind of economic development is forever in a race to the bottom to offer the cheapest land, and the cheapest workers.

It isn't just Memphis.

I cannot overemphasize how much I agree with this post. In our drive to be cheap, we have overlooked quality. And it's not just in the products we buy, it's in the way we train our people (or expect our trainers to perform with insufficient resources), in the way we fund our infrastructure…and on and on.

Companies want to go where the people are skilled (read: quality), where the roads are kept up and the broadband flows freely (again: quality). Sure, they don't want to pay unreasonable amounts of taxes and other investment costs – but they're willing to pay if they know that they're getting a superior product in return.

Look at growth areas like the Bay Area and Silicon Valley, Boston and its 128 corridor and Chicago. These communities – and others like them – redefine competitiveness based upon the quality of the people, services and place that they offer. The same could be said for Austin or the Research Triangle.

We've moved into an age of development have's and have-not's. If your community can't offer quality – and don't have the fortitude to demand quality and pay for it – you are left offering cheap.

But what happens when there is no more tax abatement money to give away? What happens when every school fails No Child Left Behind?

Waht a great commentary.  Take a couple minutes and check it out. 

2 new blogs added April 25, 2006

Posted by Tom in Housekeeping, Links, Updates.
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If you look in the right-hand column,you'll see that I added two blogs, Houston Strategies and Smart City Memphis to the list of links. Both are related to issues of economic development (and, to a degree, workforce). The focus of these, however, is tightly linked to their respective metropolitan areas.

Blogs by themselves are terrific in that they represent ongoing conversations – of (hopefully) experts on a given topic of interest. The dialogues in these blogs are replicated throughout the country as individual communities try to find their way in the 21st century social and economic landscape. Discussions like these invariably involve workforce and economic development as keys to building top-flight metro areas. We can all stand to learn from each other, finding best practices and avoiding unfortunate pitfalls.

I found both to be very interesting, and more community-specific blog links will follow as they are identified.

[UPDATE 4/27/06 – A couple great Pittsburgh blogs are now listed.  Communities have so much to learn from each others' experiences!]

HELP WANTED: Older Workers April 24, 2006

Posted by Tom in Workforce.
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The crunch of retiring baby boomers and an insufficient population in succeeding generations is starting to result in new public policies.

The "Mature Worker Initiative" is an effort to stem a shrinking workforce caused by retirement of many Baby Boomers.

In a news conference at the state Capitol, Gov. Mike Huckabee said the program recognizes the value of older, experienced workers who otherwise may soon be retiring.

Huckabee cited U.S. Bureau of Labor Statistics data that shows 43 percent of the existing workforce will reach retirement eligibility by 2012. The report said younger generations are 15 percent smaller than their Baby Boom predecessors.

Many younger people also are not qualified as replacements, Huckabee said.

"More frightening is the fact that the people that we're losing are the most seasoned, experienced, knowledgeable people of how their particular jobs are done," he said.

As a member of the younger generation, I'm especially alarmed at the 15% size differential in generational populations. Combine that with the fact that the post-boomer generation is the most heavily incarcerated, and you have some real demographic problems to deal with.

A past remedy to population differentials and skill shortages resulting from those differentials was to boost immigration levels for skilled workers. In Richard Florida's The Flight of the Creative Class, however, it's revealed that the exact opposite is taking place; in the wake of 9/11, the United States has increasingly closed its borders to immigrants of all types…including key knowledge workers. Gulp. (A full book review will follow when I finish!)

What's the answer to this problem? In Arkansas' case, it means that baby boomers will be asked to forestall their retirements.