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Convergence in…Streetcar manufacturing? June 30, 2006

Posted by Tom in Community, Economic Development, Innovation, Workforce.
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Richard Layman of Rebuilding Place in the Urban Space and I swapped bookmarks, and we started a dialogue about my topic area – aligning workforce and economic development – and one of his projects:

Well, speaking of convergence. I want DC to do a joint manufacturing thing and build the streetcars locally. If our plans work out, we’ll have more streetcar lines using new trainsets of any area in North America. Especially if Virginia and Maryland go forward with similar but less ambitious programs. You might be interested in this blog entry: DC as a center of Streetcar Manufacturing excellence.

In his linked blog entry, Richard continues:

…we have an opportunity to rebuild streetcar technology in the United States, in the DC region, because the plans for re-introducing streetcars in DC and Arlington County are amongst the most extensive of any “new systems” proposed in North America (remembering that San Francisco, New Orleans, Philadelphia, and Toronto have maintained such use all along).

I guess I need to get out more. I had no idea until just recently that streetcars were making a comeback. I suppose that means that subway programs like DC’s fabulous Metro system won’t be seeing major expansions in the near future. (At a base logic level, streetcars make financial sense if the community is willing to accept the additional street congestion that they cause.)

(Side note: Who knew? Columbus, Ohio also is looking at downtown streetcars as well.)

Back to the dialogue….it appears that the new streetcars are being built in Czechoslovakia (by Dopravní Podnik Ostrava). Without any detailed analysis of the streetcar manufacturing environment, one can presume that American streetcar manufacturers, if there are any, were not competitive with the Czechs. If urban centers are developing a higher demand for this product line, why wouldn’t an American manufacturer start production?

And, to follow Richard’s lead, why not build where the demand presumedly would be highest? It could provide economic stimlulus to the community, employ people with sustainable wages and build a new industry specialization for the Washington, DC area.  Fascinating idea.


Honda comes to Indiana June 29, 2006

Posted by Tom in Community, Economic Development, Workforce.

In a major economic development coup, the State of Indiana secured a new, $500+ million Honda automobile production plant for Greensburg, Indiana. This is a huge boost for a section of the state that has been hit hard by by regional and global economic shifts. Don Iannone at Economic Development Futures Journal offers his insights, as well as a link to the announcement.
Bill Testa at the Chicago Fed offers up his analysis of the Honda relocation here. He attributes the Indiana siting to its proximity to the Honda supply chain:

The choice of the Midwest rather than the south is a company-specific story rather than a reversal of the industry’s southward movement. Honda’s decision to site its next assembly plant in the Midwest is very consistent with the crucial role that supply chains and logistics play in today’s manufacturing environment. In this regard, the Midwest’s continued high concentration in automotive parts and related industries keeps it a contender for future siting of North American automotive production facilities.

The quality of the Indiana workforce apparently played a role in the decision, as Indianapolis’ WTHR conveys:

Former automotive workers in cities like Anderson, which was built largely by GM, say Honda would be smart to employ the cities idle production talent pool as it searches for skilled workers. In fact, automotive analysts say it’s Indiana’s automotive workforce that helped land Honda.

Sadly for Ohio, a main competitor with Indiana in the Honda derby, workforce may have been a deciding factor in the decision to go west:

Lt. Gov. Bruce Johnson, director of the state’s development department, said Honda wanted to build the plant near its suppliers, but not so close that the suppliers’ workers would be tempted to take higher-paying jobs at the new assembly plant. That would put Honda in competition with its own suppliers, he said, and raise the cost of the parts.

David Cole, president of the Center for Automotive Research in Ann Arbor, Mich., agreed that building the plant in Ohio might have lured workers away from some of the automaker’s own suppliers in the state.

Honda appears commited to investing in its nearly 2,000 new workers in Greensburg, according to Inside Indiana Business (with audio link).

UPDATE: The Fort Wayne Journal-Gazette indicates that the price to the State of Indiana was steep:

Indiana offered $141.5 million in incentives to the company, which included tax credits and abatements, training assistance and a promise to expedite a long-sought interchange upgrade at U.S. 421 onto Interstate 74, state officials said.

Now I’m going to let my economic development naivete show…$141.5 million for 2,000 jobs equals State incentives of $70,750 per job. That seems like a lot of money. Can any expert care to comment on this? Are there comparable numbers for other incentive packages? I’ve never looked at the relative value of incentives before, so perhaps it is a reasonable amount.

Regardless, incentives that high make one wonder if having a top tier workforce will ever be enough to entice companies to a region. Is it possible to sell a company on high value as opposed to cheap…or free money?

A “brain gain” education initiative June 28, 2006

Posted by Tom in Community, Education, Innovation, Technology.
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Kudos to Harrisburg, Pennsylvania leaders, who saw a convergence of workforce and economic development challenges and stepped up to create a truly innovative solution. But let me hand the mike over to Dr. Melvyn D. Schiavelli, founding president of the Harrisburg University of Science and Technology, who is reporting to the public after the conclusion of their first year of classes:

Employers in a global economy value college graduates that bring a combination of specialized technical aptitudes, adaptability, and business skills to the workforce. The solution is to motivate U.S. students and adults, using a variety of incentives, to study and enter science, technology, engineering and mathematics careers: the STEM disciplines. This will require new approaches to higher education and new thinking about traditional undergraduate degree programs.

We recognized this challenge in Central Pennsylvania and created a ‘brain gain’ education model that can serve as an example for other states to follow.

The capital region of Harrisburg, Pennsylvania had many economic assets, but there were significant weaknesses in our economic portfolio–one being the lack of a four-year university focused on the production of technology-educated graduates needed to capitalize on our local information-technology opportunities. With too few technology-educated workers available, our region’s economic growth was depending too heavily on sectors with lower-paying jobs and dimmer long-term prospects. We were in danger of becoming what one business leader described as a ‘warehouse economy.’ Other states face the same dilemma.

Our solution was to create Harrisburg University of Science and Technology, a private urban educational institution–co-locating a high school, comprehensive university, and business incubator–that provides the competencies that encourage the successful navigation of the STEM careers by all students. Deputy Secretary of the U.S. Department of Education Ray Simon lauded the idea as a “model for the rest of the nation.”

Members of regional industry are playing a role by developing our course curriculum and participating as corporate faculty and program advisory team members. In addition, we link every student with a business mentor upon enrollment and have a mandatory multi-year internship program. In the near future, Harrisburg University’s SciTech Innovation Center will foster regional entrepreneurial ventures as well as attract new technology companies to the Central Pennsylvania Region.


The people that matter June 28, 2006

Posted by Tom in Opinion, Workforce.
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I’ve noticed a lot of recognition lists getting published recently, from Newsweek’s latest “15 People Who Make America Great” to the Smithsonian’s “35 Who Made a Difference” (Good golly, that was published in November? Where has time gone?!) to the American Film Institute’s “100 Years … 100 Cheers: America’s Most Inspiring Movies.”

Evolving Excellence brings another list to light: CNN’s “50 People Who Matter Now.” Like any good weblog, it dissects the list and proposes its own list of Real Important Folks. Evolving Excellence is a blog dedicated to examining lean management principles, so their heroes are those who are critical to the world of lean, especially those in manufacturing. If you are trying to figure out the fascinating landscape of lean, this blog is a great jumping-off point.

Of note is the last of their top 10, “The Production Workers:”

American manufacturing workers have been been conned. lied to, used, and abused by managers and labor unions for better than a century. Through it all they have shown up for work every morning and done the job of making what America and the world has needed.

They have been led down so many primrose paths of management schemes and false union promises that their skepticism of lean manufacturing initiatives is easily understandable.

The future of American manufacturing rests in very large measure on their willingness to give us another shot – to take us at our word when we promise true involvement and participation in the continuous improvement of our organizations. In the end, American manufacturing depends on lean manufacturing, and lean manufacturing depends on the people in the factories to commit to contributing their knowledge, creativity and experience, then on our willingness as managers to treasure that contribution.

Reflecting on this, it’s clear that we have a special workforce and a special culture that nurtures this workforce. But this should not be taken for granted. One of the “root causes” we uncovered in determining the reasons for occupational and skills shortages during Northeast Indiana’s Strategic Skills Initiative planning was that the bonds of loyalty between employer and employee need to be stronger – a LOT stronger. Reduced turnover, assuming that workforce is operating at peak productivity, means lower end costs. (Less money on recruiting, remedial training, etc.) And an employee who stays for the right reasons is generally a happy employee, adding to the positive culture of the workplace.

As the ties that bind grow weaker – especially in manufacturing, under the pressures forced by global competition – we all must be consciously aware of the need to nurture and support our workforce. That might involve advanced training, professsional development, encouragement to innovate (like Google) or even a public show of encouragement. Management and labor are in this global fight together – and we need to work as a team to succeed. If lean management is the way to make it happen, so be it.

Teaching innovation June 28, 2006

Posted by Tom in Education, Innovation, Workforce.
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In my daily swing through the blogs, a couple like-minded pieces emerged – those dealing with the concept of teaching innovation.  Innovation often is treated like an athletic gift – either you have it or you don’t.

Tell that to Ivy Tech Community College in Indiana.  According to Boomtown USA’s Jack Schultz, they are teaching entrepreneurship skills to kids, clearly fostering innovation in the process:

Logansport has teamed up with Ivy Tech, the state technical school, to begin offering entrepreneurship classes beginning in the fourth grade. The curriculum culminates in a business plan competition at the high school level which awards a $1000 scholarship to the winner. “We have a middle school student who has a patent pending on a stabilizer bar for bow hunting. He is selling it all over the country and is only in the eighth grade.”

Further up into the Ivory Tower, the fine folks at Stanford University believe that a curriculum can be designed to encourage innovation.  Fortune’s Business Innovation Insider found a fascinating interview by an Indian business magazine with Tina Seelig of Stanford’s Technology Ventures Program:

[The notion] that innovation can be de-constructed into a number of component parts and then taught as part of a broader curriculum – obviously has major implications, especially for emerging nations such as India. In fact, during the interview, Tina hints that India needs to de-emphasize its focus on technical knowledge and, instead, focus on teaching the types of skills and approaches required to be innovative and creative.

This concept doesn’t just have implications for India.  It is implications for Indiana – and the rest of the United States.   We will always need plenty of people with technical skills (Has anyone tried to get a plumber or electrician to come out on short notice?  Good luck!), but we can always use more creative minds to drive the creation of industries and the development of new products for the long-term health of our economies.  If we can teach these skills in an organized curriculum, all the better.

An immigration fix? June 28, 2006

Posted by Tom in Media, Workforce.
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This St. Louis Post-Dispatch editorial offers a mixed bag solution to the immigration debate – boosting the number of H1-B visas to satisfy demand for highly skilled workers and allowing a number of temporary visas for low-skilled/non-skilled workers.

The H1-B proposal, in my opinion, makes perfect sense. Here’s how the newspaper described the situation:

The American economy grows by innovation, and innovation requires smart people with technical skills. The more such people we have around, the faster our economy will advance. Historically, we’ve grown most of our own innovators and relied on immigration for the rest. Albert Einstein, after all, was a Swiss immigrant.

Right now, we’re not developing enough scientists and engineers with the right skills to fill the needs of American corporations.

I’m still not convinced that their solution on the low-skilled side makes sense. Rather than pull the wrong quote, I’ll leave it up to you to click on their link. Perhaps we can have some dialogue in the comments.

Defending the high-value approach June 27, 2006

Posted by Tom in Community, Economic Development.
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Kelly Lovell of the Center for Economic Growth in upstate New York offers a defense of her region’s public sector investment in luring a microchip production facility to the Albany area. In the process, she outlines how strategic economic development can positively affect the workforce and the larger community.

Tech Valley, and much of upstate, is at an economic crossroads. By choosing to make the investments necessary to compete and succeed globally, we position ourselves to reverse the exodus of companies and young people from our region. We stabilize and enhance our local tax base. We bring new jobs and new opportunity to a talented, eager workforce. And we begin to return the region to the national and international promise and prominence it once held.

Associating any reported incentive proposal solely with the jobs directly created does not begin to measure the broad and deep ripples and return these incentive investments will have. Fully understanding this impact is critical as we weigh the benefits of these investments on the future of Tech Valley.

It comes back to math and science June 27, 2006

Posted by Tom in Economic Development, Education, Technology, Workforce.

1983’s landmark “A Nation at Risk” paper sounded the alarm for American education. Specifically, it showed how America was slipping in its performance in math and science education – and how that drop-off could affect our economic health.

The new University of Alabama Chancellor, Malcom Portera, raises the same topic – but this time through the lens of the alignment of workforce and economic development:

[Portera] said Americans must focus on math and science in school and communities must encourage their youngsters to take interest in those fields if the U.S. and the South is to compete with foreign countries in the future economy.

“I have always felt that the key for us in Mississippi and Alabama is to try and take the talent that exists on the campuses of the universities, working hand-in-glove with the state and local economic development organizations, and help restructure and build our economies,” Portera said.

The Deep South has been reasonably successful luring manufacturing facilities to their states – especially the newer foreign automotive plants. If Portera has his way, you could see a lot more than assembly-driven manufacturing going south.

Young professionals step up in Tulsa June 27, 2006

Posted by Tom in Community, Stronger Organizations.
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Not every workforce or economic development initiative needs millions of taxpayer dollars to implement.  Often, the effort only needs to bring like-minded people together for a common purpose.

Many communities are doing just that, building formal networks of young professionals as a means to stem brain drain and encourage civic involvement from Robert Strauss and Neil Howe’s “13th Gen.”  Without trying hard, I can think of such programs in Fort Wayne and South Bend, Indiana and Columbus, Ohio.

Tulsa, Oklahoma has a similar organization, YP Tulsa.  UrbanTulsa.com offers a fantastic write-up on this new group and also offers some general background on the young professional trend:

Why do communities develop young professional groups? Why do they spend the time targeting young professional groups? The answer is simple: times are changing and so is the workforce.
For starters, traditional industries such as manufacturing are downsizing, relocating, and even closing, according to YP Commons Web site. While the traditional industries have declined, new industries like the technology and business services are growing.
Younger generations, generally the Generation Xers, those born between 1961 and 1981, are driving the new economy, the site continued.
“Fully 56 percent of all computer programmers are Gen Xers, and four out of five new businesses are started by women, Gen Xers and minorities,” the site said. “To grow an innovation-based regional economy, cities must attract young professionals.”
This is where problems can arise. YP Commons said there are fewer Generation Xers in the workforce compared to the Baby Boomer Generation, those born between 1942 and 1960. There are roughly 51 million Generation Xers where as there are 76 million Baby Boomers. So employers are looking at smaller employee pool.
Even more, the new generation of professionals believes in living first and working second, according to the Web site, explaining that they pick where they want to live then find a job.

The purpose of a young professional group is to connect individual young professionals as well as connecting them to the community.

The website referred to in the quote is www.ypcommons.org – a site listing over 150 young professional groups around the country.  Most of them are just one or two years old.  If you’re under 40 and want to dial in to your community, that site looks like a good place to start.

WIRED – Facilitating “Wall Street West” June 27, 2006

Posted by Tom in Economic Development, Innovation, Technology, WIRED, Workforce.
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The Department of Labor’s WIRED initiative takes a different form in each region it serves. In northeast Pennsylvania, it appears to be all about fiber-optics:

WHAT ARE THE GOALS? Several. They include extending a connected fiber optic line between northeastern Pennsylvania and New York City, and attracting financial houses to establish backup operations in the region — hence the term “Wall Street West.” The WIRED component refers to creating high-paying jobs that could improve the region’s economy.

It used to be that communities looked to rails, then roads, then airport hubs to build their business bases. Now, it’s fiber. Kudos to the leaders of northeast Pennsylvania for thinking beyond their current paradigm to build a completely new future for their workforce – and leveraging their $15 million WIRED grant to transform that workforce.

UPDATE: This complementary article makes the concept appear not so certain. Regardless, the forward thinking is worthy of admiration.