Submitted by acohill on Mon, 05/01/2006 - 08:43
Jerry Fuhrman, who writes from rural southwest Virginia, has an interesting observation today that I think is applicable to many rural areas of the country.
He notes that one of Virginia's main exports is wood (mostly to China), and one of Virginia's main imports is furniture (mainly from China). Fuhrman's question is how will high energy prices affect the cost of goods, since it takes a lot of energy to haul wood to China, turn it into furniture, and then haul it back to the U.S?
Higher energy prices are going to change things in ways we are not thinking about right now. The current focus on automobile efficiency is, I think, extremely short-sighted. Fuhrman is more on track, looking at indirect effects and trying to ferret out business opportunities. There is a business boom at the end of every downturn. Thinking in a futures context means less handwringing about the present and more consideration of where things might end up.
Virginia used to be a furniture manufacturing powerhouse. And Fuhrman may be right that it could be again.
Submitted by acohill on Mon, 04/17/2006 - 08:07
Chicago area small businesses are hurt by the lack of broadband. But that is a story that applies to small businesses everywhere in the U.S., but rural businesses suffer the most.
In rural areas, the longer distances make it more difficult for incumbent phone companies to justify the investment, but the need is still there. I was at a county council meeting last week in a community working to develop a broadband master plan for the county, and the incumbent phone company used the same tired arguments against the community effort.
The phone company representative said that it was too expensive to do. This is patent nonsense. It may be more expensive, but it is not "too expensive." We need only look at the existing telephone and electric lines to virtually every rural home and business in the country--mostly provided by well-run and profitable coop ventures. Common sense alone suggests that if we have already run two cables to rural homes and businesses, we can certainly do so again.
What we need are honest phone and cable companies that are willing to say, "Okay, we understand the market has changed. We'll work with any local community that builds an open access infrastructure. This will lower our costs and expand our potential market. And we understand we will have to compete."
That would be honest and forthright, and companies that would embrace an open access communitywide network would, I am convinced, make more money than they are now. Why? Because they would have access to more customers at lower cost, and could offer a wider variety of advanced services.
But it requires corporate honesty first to prosper in that kind of environment. In the meantime, communities and community leaders can't just sit by and watch their local businesses wither away because basic infrastructure is missing. If it were 1960, we have the equivalent, in many communities, of leaders who are saying good water and sewer is not important because the outhouse still works just fine.
Local businesses need affordable high speed broadband to compete in the global Knowledge Economy. And they can't wait forever. What are your leaders and economic developers doing to remedy the situation?
Submitted by acohill on Fri, 04/14/2006 - 09:42
A new study confirms what most people already know intuitively, but it is always nice to have data to back it up: Most people stop looking at search results at page three, and many expect to find what they want on page one.
It is an issue for businesses, but also for communities and economic developers. With most relocation research starting on the Web, if your community is not getting relevant community site links on the first page of most search engines, it is telling relocation consultants you are not "connected." And your community is probably not even getting on the short list for consideration. Worse, you won't even know, because no one is calling the economic development office at this stage of relocation search.
It also underscores the importance of a broad, communitywide cooperative effort among local Web sites. Without a comprehensive and collaborative effort, few of your community sites--government, economic development, tourism, civic--will show up on page one of search results.
Unfortunately, I still see many communities managing (or not managing) community Web sites as private fiefdoms that get little time, attention, or resources. And at the same time, the community is wondering why so few businesses are taking a serious look at their town or region.
Design Nine has been helping communities design Web strategies longer than any other company on the planet (we started designing community portals in 1993). Call us if you want to get your community on page one.
Submitted by acohill on Mon, 04/10/2006 - 12:50
The state of Kentucky is beginning to get the hang of a 21st century Knowledge Economy economic development strategy. From this article[link no longer available] (hat tip to EDPro), here is Kris Kimel, president of the Kentucky Science & Technology Corp:
"We are not going to recruit ourselves to prosperity in this state," Kimel said. "That's a piece of it ... but by and large, because of the shift in this knowledge economy, our economy's going to be driven in the future ... by how good a job we do at creating the kinds of knowledge and entrepreneurs that can grow those companies."
Notice Kimel's emphasis on knowledge creation and entrepreneurs as part of an overall economic development effort. That is where many of the new jobs are coming from, not from traditional industrial recruitment. The article goes on to note that the state can no longer recruit primarily based on lower cost (e.g. lower wages, lower cost of utilities, lower cost of land). Why not? Well, if you want low cost for your factory, you will take it to Asia, not to Kentucky, or any other state in the U.S., for that matter.
It is a whole new ballgame in economic development, and an effective regional ED strategy should be developed using a clean sheet of paper and expert advice. One of the biggest problems I see? It's the boards that guide ED groups; too often, the board is comfortable with a Manufacturing Economy approach that produces lackluster results. Who is on your local ED board? Are entrepreneurs and Knowledge Economy businesspeople well represented, or does the board make up look pretty much like it did in 1983--the last year that industrial recruitment was effective as a primary strategy?
Submitted by acohill on Tue, 03/28/2006 - 11:53
I generally get a cool reception when I tell communities that they need to promote community portals and local blogging. It just does not sound like something that is going to bring jobs and businesses into a region.
This short article is just one data point, but illustrates perfectly how the Web and what is available on the Web from a community or region drives relocation decisions. Here is the key quote:
"...One of the things that encouraged me to make that move with my family was the realization that the vitality, innovative spirit, and collegial atmosphere of the region around B-burg was a good bit higher than I realized. Your weblog was a key part of that, along with the discovery of a growing community of writers, musicians, and creative businesses."
Community portals and a rich, interconnected web of local community sites and blogs tell the world that your community is online, understands technology, is not afraid of it, and is using it to connect people. It's the cheapest and easiest way to promote what your community has to offer people looking for a great place to live and to work.
Submitted by acohill on Mon, 03/20/2006 - 12:27
A recent story in the Washington Post (registration required, unfortunately) discusses how the lack of broadband is hurting business and employee recruitment in rural areas. Here is a key statement from the Telework Consortium, a group that helps businesses set up work from home programs.
"I think Loudoun County needs to look at broadband as being another utility as important as electricity and the telephone."
Businesses today are making relocation decisions based on the availability of affordable broadband, and that is not just broadband availability in business parks. Companies want employees to have access to business systems from home, and that means broadband.
Think of it another way. If the CEO of business prospect can't find affordable broadband in the town or area where he or she will live if the business moves, the business probably is going to go somewhere else.
Submitted by acohill on Mon, 02/13/2006 - 14:22
Tom Dorr is one of the most knowledgeable people in the Federal government when it comes to rural issues. At a seminar in Iowa, Dorr discussed a key advantage that he thinks rural communities have when attracting entrepreneurs--quality of life (hat tip to EDPro).
Dorr is under secretary of rural development at the USDA, and he cited several factors that are becoming a major influence for relocating entrepreneurs, including peace and quiet, short commutes to work, good schools, and lower taxes. The "good schools" is an issue rural communities need to study carefully. As family needs drive business relocation, local schools need to have high graduation rates, low drop out rates, and good college prep and advanced placement classes.
Yes, that's right. Schools are an economic development issue. So does your ED strategy include goals and objectives for local schools? If not, why not?
Submitted by acohill on Mon, 02/13/2006 - 14:15
It takes about a year for a rural community to qualify for the award, which is managed by the Georgia Dept. of Economic Development. In order to qualify, local leaders have to take leadership training, receive training on entrepreneurship needs, and work with local businesses (often a new concept for economic developers). Some communities are already reporting that they are seeing results.
Submitted by acohill on Mon, 01/23/2006 - 07:57
Take a tip from what Europe is doing wrong, and use it to give your own region a little boost. This report says businesses are moving their plants and investments into the U.S. and Asia, where the regulatory climate is less onerous.
Do your economic developers regularly talk to local businesspeople to find out about red tape problems? Can you do more to make it easier to start and to run a business in your community or region?
And do you have a modest program to attract European businesses to your area? How about some welcome pages on your site in several different languages? Do you have the phone number of one or more interpreters who could help with questions and negotiations in a different language?
Submitted by acohill on Fri, 01/20/2006 - 11:17
If your job involves working with youth, or if it should (economic developers take note), you may want to read this article about the kind of people that visit Apple's iTunes Music Store. You might call people that fit the profile the "iPod Generation."
Not only do these folks comprise nearly 14% of everyone on the Internet, they have very specific interests and preferences, and I'm not talking about their musical preferences. If you are wondering why young people keep leaving your community or region, or why you can't attract young workers to your area, you should probably print this article out and circulate it widely in your community while asking, "What do we have that is of interest to these young people?" Some of the interesting data includes:
If you want to solve the disappearing youth problem in your community, you have to start by understanding their interests. Here's an easy way to get started.
Submitted by acohill on Thu, 01/12/2006 - 11:07
One of the problems with community investments in broadband is the lack of data showing the value of such investments. Community leaders are somewhat wary of spending public money on unproven infrastructure. A new study from Carnegia Mellon and MIT shows that communities that have invested in broadband infrastructure are doing better from an economic development perspective than communities that have not.
The research team used extensive government data to analyze these investments and to develop the conclusions--this is not some casual vendor report.
Among the findings are these:
In the summary section of the report, here is welcome news for community leaders that have been promoting the benefits of broadband:
"Policy makers who have been spending their time or money promoting broadband should take comfort that their efforts and investments are not in vain.....Broadband is clearly related to economic well-being and is thus a critical componenent of our national communications infrastructure."
In other words, broadband infrastructure investments by the community pay off, by creating jobs and attracting businesses. This is welcome verification, indeed.
Here is the whole article, as a PDF file.
Submitted by acohill on Tue, 01/03/2006 - 10:18
With a hat tip the excellent Connecting People blog, here is a link to what looks like a great new source of economic development ideas and concepts for the Knowledge Economy.
One of the great things about blogs is that the good ones are typically written by people with a passion for a particular topic, like future-oriented economic development. The short article style of blogs, coupled with the fast scanning offered by RSS feeds, gives you access to a lot of information that has already been vetted and reviewed by someone that knows more than you do about a topic outside your own area of expertise.
One of the problems I see over and over again, especially in rural communities, is a lack of information. Rumor, innuendo, and misunderstandings often get in the way of bringing focus and commitment to a problem. If more community leaders were blogging about local affairs, it would be more difficult for roadblocks to develop. Open discussion of problems is a good thing, not something to fear.
Submitted by acohill on Fri, 12/30/2005 - 12:13
The New York Times (registration required) has an article on the growth of online shopping during this holiday season.
Two numbers stand out: There was a 25% increase in Internet sales over last year, and about a third of all U.S. households bought something online. And L.L. Bean took more orders over the Web than over the phone, which is a watershed.
I have thought, since the early days of the BEV, and still think that local and small businesses are missing out on this boom. Many have never tried to sell anything online, and others were burned in the go-go dot-com days by the then high expense of online catalogs and the low sales rates.
Anecdotally, I see lots of small businesses doing very well on the Web when they have identified a unique product or service *and* develop a marketing strategy around it.
Economic developers ought to be doing a lot more to help local businesses grow in this area, but still see very little effort being made here.
Submitted by acohill on Wed, 12/28/2005 - 11:31
This new blog is a great example of the potential of local blogging to enhance economic development and to educate/inform local leaders and citizens. This new Blacksburg area blog has a nice mix of job opportunities, economic development news, and leadership issues. It is just what is needed in many local areas.
To make it successful, though, most communities will also need some training sessions to teach people about blogs, RSS feeds, and how to make good use of this new communications styles. Blogs are still poorly understood, and few people, even among the young, can tell you exactly what a blog or an RSS feed is.
Every economic development authority should be running a blog and a series of RSS feeds on a variety of topics, including enterpreneurial news, local quality of life issues, retail/commercial real estate opportunities, business management, and local governance.
How about your region? Are your economic developers using this new medium to communicate more effectively? If not, why not?
Bottom line: an economic development group that is blogging and using RSS feeds sends a strong message to businesses and entrepreneurs who might be looking at the region that the community is technologically savvy and connected. It's a powerful marketing tool. If your economic developers won't do this, maybe you need some new leadership at the helm.
Submitted by acohill on Fri, 12/02/2005 - 11:29
Here is a report from Denmark about how one group is trying to nurture and promote the growth of microbusinesses. Stick with the article to the end, and you will find a useful list of activities and projects that would apply in any community or region. Does your economic development game plan include these kinds of activities?
Submitted by acohill on Fri, 12/02/2005 - 10:27
This very short article discusses a new use for the video iPod. Real estate agents are making short video clips of homes for sale and making them available for download into a video iPod. Other agents can download the videos and to learn more about a property and/or show the videos to prospective home buyers.
I've been writing a lot about the iPod recently. I don't own any stock in Apple, and have no financial interest in the iPod. But I see the iPod as the first of a whole series of transformative devices that are going to emerge over the next five to ten years that will, like the iPod, transform the way we do things.
Bottom line: If you don't understand the iPod phenomenon, you will have a very difficult time correctly assessing economic development activities and what direction to take your community or region. My articles are not really about the iPod itself, they are about what the iPod represents--entirely new ways of doing business, new kinds of businesses, and new kinds of jobs. Ignore the iPod at your peril.
Submitted by acohill on Mon, 11/28/2005 - 11:17
This article suggests the tide may be starting to turn on the loss of manufacturing jobs to overseas factories. A Wisconsin cookware company is starting to bring jobs back to the Midwest because of rising labor costs overseas and drastic increases in the cost of shipping.
The change also highlights the need for economic developers to roll up their sleeves and talk to every company already in their region, because most of the new jobs will be coming from those existing companies, rather than from relocating businesses. Some of the questions that economic developers should be asking:
Submitted by acohill on Wed, 10/19/2005 - 10:43
In New Hampshire, economic developers did a study of business ownership and found that 18.5% of all private, non-farm employment in the state was tied to microenterprises. A microenterprise is defined as a business that employs between one and five people, including the owner, and requires no more than $35,000 in start up capital (Business NH Magazine, March 2005).
So in New Hampshire, a fifth of the economy is based on companies with less than five people!
So here is a homework assignment. Go back to your local economic developers and elected leaders (who usually appoint the economic developers), and ask them these questions:
If you do not get satisfactory answers to these questions, your region may be ignoring the fastest growing source of jobs in the United States, with a 600% increase over the last decade in the microbusiness category.
Submitted by acohill on Fri, 09/02/2005 - 12:18
I have been talking to communities about the importance of redundant cable paths for years. If you don't have at least two entirely separate cable paths into your community for telecommunications, your community, and especially your businesses, are at risk.
The most mundane risk is having a cable cut by a contractor digging somewhere. But as a painful example of what can go wrong, one of the primary fiber cable routes into New Orleans was across the Pontchartrain bridge, which suffered enormous damage.
Telecom companies are trying to patch other routes together to get Internet and phone service back into the city, but it is a sober reminder that we have to plan for disasters--the routine ones, like a wayward backhoe, or something much worse.
Submitted by acohill on Wed, 08/03/2005 - 10:11
Lately, I've found a very simple way to find out if the economic developers in a community or region are staying current with job and employment trends. I ask them just two very simple questions.
Question one: How many people in the United States make a full time living from eBay?
Question two: How many people in your region make a full time living from eBay.
The answer to the first question is easy. Currently, about 724,000 people make a full time living from eBay, up from a half million last year.
If your economic developers don't know the answer to the first question, your region is in trouble, because it says your economic developers are not keeping their eye on microenterprise trends and the ability of microenterprises to contribute significantly to the local economy.
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