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EdPro on Ford and the real drivers of economic growth September 20, 2006

Posted by Tom in Community, Economic Development, Education, Innovation, Workforce.
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EdPro has a couple great blog entries – the first, reflecting on his past experience with Ford Motor Company, left him recollecting about a consulting experience he had with Ford over twenty years ago.  Even then, he could see the writing on the wall (with a nifty workforce twist for the modern day thrown in…):

Ford managers continued to see issues in terms of costs not learning. Japanese automakers saw management challenges as opportunities to learn — to innovate — with the result that costs would naturally decline as everyone learned more. Each challenge stood out as a new learning opportunity. The Japanese taught me that innovation is a team sport.

I’m convinced we have a bright future for manufacturing in the U.S. But only if we understand that older forms of industrial organization — old mental models of both management and labor — get in the way of our innovation. Job security for our hourly or salaried workforces no longer comes from contracts.

Today, job security only comes from up-to-date skills that are in demand. That requires a willingness and ability to learn quickly and continuously: to innovate.

The other is a one-line note linking to a Toledo Blade article on how traditional economic development really doesn’t incorporate innovation…but should:

What mattered most [to Ohio’s economic growth], Mr. [Paul] Bauer and Mr. [Mark] Schweitzer [of the Federal Reserve Bank of Cleveland] discovered, were states’ patents per-capita. A wealth of patents drove Ohio’s economy in the 20th century. But in the past two decades, other states sprinted past.

The Birthplace of Aviation, the cradle of the cash register and Play-Doh, Ohio ranked sixth in the nation in per-capita patent generation in 1954. It fell to 11th in 1988. By 2001, Ohio slipped to 20th, passed by such nontraditional tech hubs as Wisconsin, Utah, and Idaho.

Ohio also struggles in what Mr. Bauer and Mr. Schweitzer identified as the second-strongest predictor of income: the percent of high school and college graduates in a state.

When 100 people walk down a street in Ohio, 23 have college degrees. In Toledo, it’s 17. The concentration is higher in 37 other states, including Minnesota, where 30 percent of the population have at least a bachelor’s degree. The average family income in Minnesota is $63,998 — $10,000 more than in Ohio.

Powerful stuff, and a great article that I’ve forwarded to my friends and fellow researchers.

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