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Agility, Part II May 31, 2006

Posted by Tom in Economic Development, Innovation, Workforce.
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I’ve been struggling to understand the behavior of communities during this wrenching economic shift away from the manufacturing-dependent world that the Midwest has known. One of the most insightful community planners I know suggested that I read Jon C. Teaford’s “Cities of the Heartland: The Rise and Fall of the Industrial Midwest,” a history of the (more or less) Great Lakes states from the times of the earliest settlers in the original American Northwest Territory.

The book has been a somewhat slow read (more a reflection on my life than the book, which is pretty good), and I just reached the early 1900’s and the rise of the then-new auto industry. This particular paragraph struck me, especially in light of the many discussions about transforming the northeast Indiana’s regional manufacturing competency/dependency in the world of auto parts suppliers:

Automobile production took root in the Midwest largely because the region’s industrial heritage was particularly conducive to the manufacture of motor vehicles. During the late nineteenth century thousands of machine shops and foundries operated in midwestern cities, many of them fashioning steam engines. Traditionally less reliant on waterpower than the Northeast, from the steamboat days the Midwest had specialized in fuel-dependent mechanisms. Thus it had an abundance of experienced mechanics and metal workers who could readily adapt to the demands of the new industry and fashion the parts necessary for automobiles. Moreover, Detroit specifically had taken a lead in producing gasoline engines for motor launches on the Great Lakes, and consequently that city enjoyed a headstart in mastering the technology of the internal combustion engine. (p. 104)

Fascinating – I’m a Michigan native and never learned why the auto industry “chose” Michigan until now. This paragraph makes the alignment that took pace at the turn of the 19th century so simple to understand – there was a ready workforce ready to ply their trades in this new direction, one where rampant economic development was taking place because entrepreneurial, agile communities were making it happen. With a small innovation – putting a gasoline engine on a wagon – the region had developed a killer application (note Wikipedia’s reference to autos as the killer app of gasoline engine technology).

Stepping forward in time to today, one has to wonder what the next killer app will be in the industrial Midwest. Logic dictates that it will be tied somehow to manufacturing – our workforce is so heavily aligned in this sector that to overlook it is illogical. In northeast Indiana, I know that the more visionary thinkers are looking to expand the region’s capacity in orthopedics industry and even develop a new niche in aviation parts (SATS, specifically). At face value, both seem like logical extensions of the current industry base.

But there’s more to the equation than just finding an industry to latch onto. As my post on making a Silicon Valley explained, a ready workforce is only one component. Just as important is ready access to capital. I’ll expand further, adding the spark of innovation to the mix. Bright, energetic, visionary entrepreneurs can harness the local capacity and transform a community. And communities need to demonstrate their agility and focus attention on entrepreneur development in the mode of Huntington County, Indiana’s VentureWorks program, an innovative application of economic development resources to home-grow the people needed to take the killer app to market. (Another great source of entrepreneur development knowledge is the Edward Lowe Foundation of Cassopolis, Michigan.)

When all of these elements are aligned, you’re onto something special. And, in many cases, the industrial Midwest can’t realign itself fast enough.

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