Economic development

Lack of broadband hurts business recruitment

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.

USDA's Dorr says quality of life a key factor for rural communities

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?

Georgia creates "Entrepreneur Friendly" communities

Submitted by acohill on Mon, 02/13/2006 - 14:15

Georgia has created Entrepreneur Friendly communities (hat tip to the excellent EDPro blog).

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.

Businesses hate red tape

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?

The iPod generation

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.

Communities with broadband prosper

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.

Economic development of the future

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.

Thirty percent of households shop online

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.

Economic Development blogging

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.

Denmark nurtures microbusinesses

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?

iPod for real estate

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.

Outsourcing comes home

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:

Counting the microenterprise

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:

  • What percentage of jobs do these businesses account for?
  • What programs are in the current economic development plan to help existing microbusinesses grow?
  • What programs are in the current economic development plan to help local entrepreneurs start microbusinesses?
  • What programs are in the current economic development plan to attract entrepreneurs from other areas that want to relocate and start a microbusiness?
  • What amenities, services, and community attributes do relocating microbusiness entrepreneurs look for, and do we have a plan in place to get them and market them?

    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.

  • Redundant cable paths

    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.

    A question for your economic developers

    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.

    Designing an ecommerce Web site that works

    Submitted by acohill on Mon, 07/25/2005 - 09:45

    Jakob Nielsen is an expert on Web usability, and he has a short, very readable article about how to design a business Web site.

    Nielsen looks at Amazon and provides an interesting critique of how that ecommerce giant clutters their pages with stuff--on one page he counted 259 links to other information and sites. Although Nielsen says that works for Amazon, almost no other business should be doing things the way Amazon does.

    Friedman's The World is Flat

    Submitted by acohill on Sun, 07/24/2005 - 11:30

    I was initially skeptical of the heavy hype that this book received in the maintstream media. Friedman writes a column for the New York Times, and it seemed that the praise for the book was a bit over the top. But I finally picked up a copy, and while I still believe Friedman has over-simplifed some ideas and concepts, the book is worth reading.

    Friedman is an excellent writer who is able to identify key trends and write about them clearly. His previous book, The Lexus and the Olive Tree also stretched a good idea a bit too far, but nonetheless had valuable insights. The World is Flat is particularly valuable for Friedman's list of "ten forces that flattened the world." It is this list, and Friedman's cogent explanations, that make the book particularly valuable for economic and community developers. Communities across America, and especially in rural areas, are struggling to adapt their local economies to the shifting power of the global economy. Friedman talks about, and explains lucidly, global marketplace concepts like outsourcing and offshoring. Friedman's analysis of offshoring and how to deal with it should be a must read for community leaders struggling with the loss of local manufacturing jobs.

    Perhaps the most important, read between the lines message in the book for communities is that all the change and upheaval brought about by the end of the Manufacturing Economy and the rise of the Knowledge Economy offers incredible opportunities for small and medium-sized businesses that want to grow. A half day workshop for local businesses based on this book should be an essential activity for economic developers to offer to area businesses.

    For more recommended books on community and economic development, visit the Design Nine Book of the Month page.

    South Korea builds a Digital Media City

    Submitted by acohill on Mon, 06/20/2005 - 09:59

    I write a lot about what is happening in other countries, but some of my citations are just statistics--useful to a point, but sometimes you want more detail. Here is some great information about a single project in South Korea that probably dwarfs many other technology park efforts in the United States, and an indicator of how serious some other countries are about passing the U.S. in technology.

    This Digital Media City project appears to be well-focused and well-financed, and is not just a local effort--read down the page to see the "Rental Housing for Foreigners." The project is planning from the ground up to attract overseas investment, and to make sure the right kind of housing is available. How about business parks in your area? Does your plan address the needs of international firms to this degree?

    This is the competition.

    America still has an edge in the Global Economy

    Submitted by acohill on Thu, 06/16/2005 - 10:15

    Although I think U.S. communities have to work much harder on their economic development because of overseas competition that simply did not exist even fifteen years ago, we still have a valuable edge. This blog reprints an op-ed piece on some of the problems businesspeople in India face. Red tape, bureaucratic foot-dragging, costly permits, intrusive rent control, and antiquated labor laws make it very difficult to start a business in India.

    By contrast, it is dead simple in the United States, and usually just involves paying a small fee to register your business with the local government. I don't think it is coincidental that the low barriers to starting a business track nicely with the fact that as many as 90% of new jobs in the U.S. are created by small businesses.

    Ohio economic development strategy

    Submitted by acohill on Wed, 05/25/2005 - 14:38

    Pat Valente, the Deputy Director for the Department of Development of Ohio, spoke at the Ohio CDC Technology conference about the state's strategy for economic development. Here are the key points:

    What is most interesting about Valente's remarks is what went unsaid. There was nothing about industrial recruitment or giving lavish tax breaks to big companies. Ohio is probably still doing some of those things, but the emphasis on entrepreneurs and support for innovation is refreshing. The state is also headed in the right direction by identifying assets and competencies already in the state and trying to leverage those, rather than just imitating what has worked elsewhere or just trying a lot of stuff and hoping something sticks.

    As examples of this strategy, Valente mentioned a focus on fuel cells as an alternate power source. The state is funding research to use biomass as a feedstock for fuel cells, leveraging the state's agricultural industry. It is also funding the development of new polymers (plastics) from soybeans rather than fossil fuels, because the state is a big soybean producer.

    If Ohio sticks to this plan, it will have an advantage over many other states that don't have the same level of focus. I thought only one thing was missing--a statement of intent to ensure that every business in the state has affordable broadband. If Ohio is serious about competing in the global economy, you can't leave this to chance.

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