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This week the Southern Economic Development Council is conducting a unique event: a conference co-sponsored by the Economic Development Administration (EDA) and the Employment and Training Administration (ETA). The focus is on the lessons of regional innovation. The event includes a wide range of panelists who are offering valuable perspectives on the steps regions can take to become more competititve. 

Here's more on the conference. 

Mark Drabenstott led off the event with a very effective presentation on the emerging role of regions in today's global economy. You can listen to Mark's remarks in the attached audio file. 

In Northeast Ohio, a group of foundations, The Fund for Our Economic Future has taken important steps toward an "open source" approach to its work, and the early results are inspiring. Over the weekend, the local paper supported the Fund's new initiative to  stimulate collaboration among local governments. Read more.

No doubt, this step is small: the $300,000 proposed for this initiative represents only about 3-4% of the Fund's total investment each year in regional economic development.

Yet, for a region noted for its tight corporate control over economic development agendas, the Fund's new experiment is a hopeful sign. It may open the door to a move away from the Fund's past practices of investing in a handful of top-heavy regional organizations.

If a region's efforts are too tightly controlled by its leaders, the region risks becoming closed to innovation. They give rise to the type of "industrial policies" set by a handful of people who, ultimately, are detached from quickly changing market signals.

The Fund can use its experiment in government collaboration to find and fund other collaborations beyond government.

We have followed a similar path with our Opportunity Fund in Indiana: We've invested about $5 million over the past couple of years in 14 counties surrounding Purdue. Here's what we have learned.

1. Inspire trust with transparent standards for evaluating proposals.

2. Focus on replicability and scalability.

3. Create a "stage-gate" approach to progressively fund ideas and nurture them as they develop.

4. Set clear, flexible accountability rules to minimize administrative costs.

Here are examples of the innovations that have "popped up":

An inspiring guitar summer camp to demonstrate manufacturing skills to high schoolers. Mark French, the Purdue professor who came up with the idea, is now moving the initiative statewide. Watch a video that inspired applause when I showed it to the Governor's Workforce Summit in Idaho.

A "green collar certification" for manufacturing employees. Purdue is working with the Society for Mechanical Engineers to roll this certification out nationally this fall. The idea popped up when Christy Bozic, a Purdue employee, threw it out among 14 people in our Strategic Doing session in the basement of the White County courthouse. Humble beginnings for a major idea, to be sure. Read more.

A healthy workforce initiative that extends the benefits of wellness programs to smaller manufacturers. This program was so good, Purdue decided to adopt it. Allison Bryan, another Purdue employee, came up with this idea. Read more. The idea is now forming a core for the expanding alliance between Purdue and Indiana University. Read more.

A new initiative, announced last week, to engage engineers recently laid off from Delphi Electronics. Kalamazoo's work with scientists displaced by the Pfizer shutdown inspired our work. Jan Hendrix, an economic development professional in Kokomo, came up with this idea. Read more.

We are currently funding over 50 of these initiatives in four strategic focus areas. We are doing it all with 1 administrator. That's the power of Open Source Economic Development. SE Wisconsin -- the Milwaukee 7 region -- is following this open source model of "Strategic Doing". One of their most powerful initiatives to come from their version of an Opportunity Fund: a new fresh water technology cluster. Here's more background from an earlier BFD post. These Open Source approaches are catching on.

Idaho and Colorado are using them to redesign their workforce systems.

The U.S. Department of Labor is using them to help manage the flood of re-employment demands arising from this downturn.

The Center for Education Innovation and Regional Economic Development, a collaborative of 40 school districts in SE WIsconsin, is using this approach to develop transformative collaborations among their members.

Purdue and the Economic Development Institute at the University of Oklahoma are launching a new certificate program in Open Source Economic Development this fall.

Open Source approaches combine open participation with leadership direction. They are fast, practical and transformative. But they work for an entirely different reason: People find meaning and they have fun collaborating.

The economic transformation underway is challenging EDPros to stretch our thinking. In February, Toyota's incoming president, Akio Toyoda, called the current economy "unprecedented, the likes of which haven't been seen in 100 years."

One way this is taking place: Think about the role of the "creative economy" can play in local and regional economic development.

Here's a press release out of Massachusetts to show you how the connections are being made on the North Shore outside Boston. Read more.

The Nation magazine carries an article in its latest issue on the role of creative enterprises in the recovery. Read more.

And here's a perspective, publlished this week, from Nova Scotia. Read more.

Here's an interesting article out of Maine. A private sector leader sees the source of economic growth n the innovation of Maine's companies. Read more.

He's right, of course. Most job growth comes from smaller growth-oriented companies. The Edwartd Lowe Foundation has produced a really useful web site, YourEconomy, which enables you to see how these companies -- Lowe calls them Second Stage entrepreneurs -- generate jobs. Check out the data for your economy here.

Over on a local Cleveland blog, Brewed Fresh Daily, I posted some information on the Cleveland economy, oulled from YourEconomy.org. I was obliquely criticizing TeamNEO for touting its pitches to site selectors. You can read the post here.

John Polk, an astute observer of the Cleveland political scene offered these comments about Economic Gardening, a set of strategies designed to nurture these high growth companies.

“Smokestack chasing” was a post-WWII-era economic development strategy, driven primarily by local utility companies in an era of greenfield suburban/exurban expansion.

It sorta ran out of gas in the late 1960’s in Northeast Ohio, as our tax and regulatory structure and labor costs placed the region at a disadvantage not only to right-to-work states in the South and West, but also to Columbus, where Jim Rhodes used his power as Mayor and Governor to force a regional approach to development, leavened with plenty of incentives.

It was the relative ineffectiveness of the old Greater Cleveland Growth Board at attracting new outside investment to the region which forced a merger between the Growth Board and the Cleveland Chamber of Commerce to create the Growth Association.

In similar fashion, it was the relative ineffectiveness of GCGA (now GCP) and other Northeast Ohio Chambers at business attraction which led to the formation of TeamNEO. Because it is essentially a “collaborative” effort of a number of organizations which were themselves ineffective at their jobs, there was little evidence that one single organization could really do a better job.

The real value of TeamNEO to local Chambers was that it became a convenient place to “outsource” regional attraction and retention efforts, leaving the Chambers free to pursue things it was easier to take credit for.

There’s nothing wrong with a little smokestack chasing in context; somebody’s probably got to “handle it.” But it is a high-cost, low return strategy. And it’s sort of the economic development equivalent of my friend from college who’d go to a bar and ask 50 women to go home with him; 49 failures didn’t phase him as long as one said yes.

TeamNEO is just one of many organizations in the region involved in might be considered display behavior…largely symbolic activity meant more to demonstrate that we have “a process in place” to “handle” various aspects of economic development. The success of these groups have much less to do with the results they achieve than with the fact that they’re doing…something.

To expand a bit on Ed’s metaphor, there are two central paradigms for development: engineering and gardening.

Engineers believe that economies can be developed via top-down centralized efforts to focus on big projects, “big bets,” and picking winners. The activities of these organizations tend to be very expensive relative to the concrete results of their efforts. Their mantra is a variation on trickle-down theory: that a lot of process surrounding big projects will somehow create subsidiary economic activity that will benefit more than the “winners” receive in the form of big incentives.

Gardeners believe that economies develop, but they are not developed from the top down; rather, economic growth results through the efforts of many, many entrepreneurs doing their own thing.

The efforts of gardening organizations tend to focus on enriching the environment for grass-roots entrepreneurship, and on reducing the barriers to entrepreneurial success. Gardening organizations will focus on meaningful efforts to reduce tax and regulatory barriers, reduce non-wage labor costs such as health care, workers compensation and other payroll taxes, to promote educational attainment, and workforce readiness, and to create an open environment in which entrepreneurs can receive the answers and help they need to make smart investment decisions.

As Ed’s numbers imply, Northeast Ohio is top-heavy with engineering organizations, and almost devoid of gardening organizations. The relative value of gardening vs. engineering is quantitatively indisputable. And yet in Northeast Ohio, our leadership caste has boldly embraced the 1950’s-style model.

Why?…Because symbolic behavior is fun. Big bets, big wins, and a concentration of economic activity which produces economic benefits for the engineers and the transaction processors who support them. And lots of process keeps everyone busy. If TeamNEO talks with 100 companies, and one decides to locate here, we don’t talk about the 99 who didn’t, or the companies which leave, we can “focus on the wins.”

Gardening is harder. It requires hard work, patience and persistence. It doesn’t make corporate oligarchs rich; instead effective gardening helps the company with 6 employees add a seventh, then multiplies that sort of grass roots job creation by the thousands.

I may be mistaken, but I believe Cleveland is the highest-tax city in the highest-tax county in one of the top five highest-taxed states in America. Yet a key element of the community’s economic development strategy is to RAISE taxes to finance big projects whose benefits might somehow trickle down through the rest of the economy.

I don’t get it…Then again, maybe I do…

The economic stimulus creates the opportunity for rural communities to connect through broadband. The Knoght Center for Digital Excellence is taking a lead role in pushing out useful information on how to move forward. As the head of the Center notes:

Now, the promise of federal stimulus money presents a historic opportunity for communities to come together in old-fashioned, roundtable discussions to talk about how technology and innovation can change the future of community life.

Our team leaders at the Knight Center of Digital Excellence are seeing it firsthand. There is a spark — an energy — emerging in town discussions in communities across America. Through the federal stimulus plan, we have unprecedented investment capabilities. As people in communities come together to talk about new possibilities, they understand that broadband — and the high-speed communication it enables — is critical to succeeding in the new economy. The stimulus is driving communities to make a plan, and once they do, momentum can build for bold, catalytic projects.

Read more.

You can learn more by visiting the Center's Stimulus Center.

The University of Central Florida sent out  press release this week announcing that it would be pursuing stimulus dollars for entrepreneurship and innovation programs through the U.S Economic Development Administration.

Read more.

A couple of very good reports came out of Michigan this week. The first, by the Michigan Land Policy Institute, explores the important characteristics of a competitive place. The report urges communities to leverage the economic potential of existing universities. It also argues that investment in green infrastructure, such as parks and trail systems, is just as important as investment in traditional infrastructure of roads and bridges.

You can download the Michigan Land Policy report here.

A second report, this one produced by Michigan Future, explores the consequences of moving toward a more knowledge-based economy:

What most distinguishes successful areas from Michigan is their concentrations of talent, where talent is defined as a combination of knowledge, creativity and entrepreneurship. Quite simply, in a flattening world where work can increasingly be done anyplace by anybody, the places with the greatest concentrations of talent win. States and regions without concentrations of talent will have great difficulty retaining or attracting knowledge-based enterprises, nor are they likely to be the place where new knowledge-based enterprises are created.

You can download the Michigan Future report from this page.

Over at the Google Group, Economic Gardening, we had an interesting string develop in the creative econnomy. The conversation started with a question about how to display and categorize the "creative economy". It went on from there. I reprint it below in reverse order (the newest posts come first):

Hello- I am a new follower of this group, and I first wanted to mention what a great creative economy discussion has taken place- very helpful/insightful!

Also, I wanted to give a plug for a creative economy measure that I work with called the Creative Vitality Index (CVI), mainly because I think what we are measuring within the Index speaks to several concerns/issues that have arisen within this thread. The CVI was first developed approximately five years ago by my organization (WESTAF), Hebert Research, the Washington State Arts Commission and the Seattle Office of Arts and Cultural Affairs. An example of a study we developed for the State of Oregon can be found here- http://www.oregonartscommission.org/main.php.

Essentially, the index synthesizes available data streams measuring nonprofit and commercial arts revenues and occupations to measure a locality's relative (per capita) creative health or "vitality" when compared to the nation as a whole. The index uses data streams that can be updated each year so that an organization can track progress in terms of jobs/revenue data as well as the relative strength of this progress when compared to national data.

An index was seen as an appropriate tool to measure the creative economy given the complex nature of the phenomenon as exemplified within this discussion, i.e. the scope of Florida's creative class and the relationship of creativity to STEM related professions. The CVI includes a fairly conservative number of industries/occupations when compared to a number of studies, though a broad section when compared to what are traditionally referred to as "the arts".

We've recently received some excellent input/analysis from economists at Economic Modeling Specialist, Inc. (EMSI) to further refine CVI data. First, to take a cue from Matt, we've made sure that the occupations we are monitoring are closely aligned with O*NET scores for thinking creatively and originality. Here we focus on jobs that have an element of fine arts skills, and include those that have high scores for both thinking creatively and originality. Since these jobs are defined by occupation and not by industry,  the Index focuses on the presence of creative jobs rather than the number of jobs within a creative industry. Additionally, we're looking at a select number of industries to help approximate community participation in the arts by measuring both supply and demand factors through sales, absorption and consumption figures.

In the end, I think we have a practical tool that can help state and local agencies inform creative economy development strategies given this knowledge of their relative strengths. As we continue to monitor this data, I think we will eventually be able to further investigate the causal relationship between creative vitality and strong local economies.

Anyways, feel free to contact me if you'd like to further discuss or have any questions about the CVI.

Ryan Stubbs
Director of Research
Western States Arts Federation
ryan.stubbs@westaf.org
303-629-1166




On Apr 11, 9:48 am, Matt Kures <matthew.ku...@gmail.com> wrote:
One of the many problems with Florida's approach is that his creative
class classifications have a broad focus.  Obviously, the creative
class appears to be larger and have more importance if you include
more industries/occupations (Florida focuses on mostly occupations
rather than industries).  And as some researchers have noted, some of
Florida's creative class categories appear to require relatively
little creativity (see McGranahan and Wojan, Recasting the Creative
Class,http://tinyurl.com/d5ubgj).  McGranahan and Wojan partially
arrive at this conclusion by using the Department of Labor's O-NET
system (http://online.onetcenter.org/) to look how different
occupations require various skill sets.  Using O-NET's measures, they
found that many of Florida's Creative Class occupations actually rank
somewhat low in skills such as "Thinking Creatively" (http://
tinyurl.com/djdzdd).

Others, such as Sir Ken Robinson (another British thought leader on
creativity), would argue that everyone has the capacity to be
creative, regardless of occupation or industry. However, Florida's
focus on certain occupations as a potential panacea for economic/
workforce development has often created artificial silos for
industries and led policy makers to craft short-sighted economic
development policies.   That is, many people feel that we should focus
our energy on developing amenities that attract/retain creative
workers and creative industries and that more traditional service and
production-based industries now deserve much less attention.  Because
all people can be creative, and creativity falls on a continuum from a
skills perspective, I feel that the recent focus on creativity should
lead us to try and inject, promote, or discover creativity in all
industries as a source of competitive advantage.

For those of you interested in trying to measure creative industries,
I would recommend some of Ann Markusen's work at the University of
Minnesota.(http://www.hhh.umn.edu/projects/prie/pub.html).  A number
of states have also tried to measure their own creative economies/
creative industries with varying success. 

See Iowa: (http://tinyurl.com/cssscd), Maine (http://tinyurl.com/ckw2l2)  and Montana
(http://tinyurl.com/d5ztvp) to name a few.

Best,

Matt Kures
GIS State Specialist
University of Wisconsin-Extension
Center for Community and Economic Development

On Apr 10, 7:58 pm, Christine Hamilton-Pennell

<chamiltonpenn...@gmail.com> wrote:
Ed,

Great summary on the creative economy--thanks much for passing this
on. I read the policy briefing papers by the Obama campaign on the
arts (put out in Sept. 2008), which included a good deal of
information about the relationship between the arts, innovation, and
the economy. I can't find the actual document on the Web at this
point, but if anyone is interested, I'd be glad to email the PDF file.

A decade ago there was a flurry of activity around the relationship
of the arts and academic achievement. A research review done by
Project Zero at Harvard (Reviewing Education and the Art
Project--REAP) in
2000,http://www.pz.harvard.edu/Research/Reap/REAPExecSum.htm,
revealed that while there were a few causal links between specific
artistic endeavors (listening to and playing music; drama in the
classroom), the majority of studies showed no causal effects between
arts education and improvement in test scores or academic achievement.
One of the conclusions reached by the authors was that it is
dangerous to justify arts education in terms of instrumentality,
i.e., secondary, non-arts effects: "We must not allow policy makers
to justify (or reject) the arts based on their alleged power to
transfer to academic subject matters."

I agree with Ed that there is tremendous potential in focusing on
the creative industries through economic gardening programs. Perhaps
we need to be careful in our economic development practices not fall
into the same instrumentality trap--while the creative industries
very well may produce economic benefits, the arts should be
supported for their intrinsic value to society. I suppose I am
biased, being married to an artist and art educator!

Great post!

Christine

On Fri, Apr 10, 2009 at 5:23 PM, Ed Morrison <edmorri...@earthlink.net> wrote:
Michael:
A little background on the creative industries might be helpful.
Guided by thought leaders like Charles Landry (The Creative
City: http://snurl.com/fnhq4 [www_amazon_com] ), the Blair
government in the UK introduced the concept of creative industry
clusters as a part of a strategic framework for economic
development. That was about 1996 or 1997, I recall.
The early work might still be available on the UK government web
site, but the current incarnation of the effort can be found
here: http://www.creativeclusters.com/ The UK government's work
spawned a number of local efforts in the UK, like Creative
Edinburgh (http://www.creativedinburgh.co.uk/) in 2003 and
Creative
London: (http://snurl.com/fnib5) in 2004.
Now the creative industries are part of a number of cities across
the globe from Wellington (http://snurl.com/fni1s) to Vienna
(http://snurl.com/fnimj) Frankfurt
(http://snurl.com/fnirk).HongKong recently announced a major push
in  this direction: (http://snurl.com/fnj31) In the US, the move
toward pushing the creative industries started, not with Richard
Florida, but with the New England Foundation for the Arts
(http://snurl.com/fnj6t) In 2000, the NEFA released a report
specifically connecting the creative industries with the region's
competitiveness. (In traditional economic development creative
industries are often relegated to "lifestyle" amenities.) Read
more here: http://snurl.com/fnjc0 Florida published his book, The
Creative Class, in 2002. Sadly, Richard did not give readers much
background on what had been going on in the UK, the work of the
NEFA, or the work of Charles Landry, who has pioneered much of the
practical application of this concept. (I recommend his book.)
Florida's three T's formulation -- talent, tolerance, and (I
forget the third one) -- reduces the sophistication of a creative
industries strategy to a virtually useless bumper sticker.
Nevertheless, people like my colleague George Robertson tried out
some of Florida's ideas. George used the focus on tolerance to
launch a strategy to attract Guyanese immigrants to Schenectady.
(http://snurl.com/fnju6) As you can see, I'm not a big fan of

Florida's work. While he publicized the opportunities of focusing on

creative people, his work does not offer much practical direction.
The deeper flow of helpful critical thinking comes out of the
Europe--NEFA linkages. So, if you are heading in this direction, I
recommend Landry as a starting point.
By now, the focus on creative industries is taking hold in the
U.S. We are still five to seven years behind what's been happening
in the EU. This year, for example, the EU launched the European
Year of Creativity and
Innovation: http://create2009.europa.eu/ It seems that still
outside the US, the connections between creativity and innovation
are more explicitly drawn. See, for example, the Institute for
Creeative Industries and Innovation in Australia:
 (http://www.ici.qut.edu.au/)
A focus on creative clusters has also taken hold in places like
Rhode Island (   ) (Rhode Island School of Design) and Savannah:
The Creative Coast ( http://www.thecreativecoast.org/)  (Savannah
College of Art and Design) and Charleston (http://snurl.com/fnkmu)
(Spoleto) > an interesting experiment is underway at Ball State
University to establish a nationally prominent center for digital
media design in the hopes of sparking new business development.
(As the director of the center has said, "Hollywood is
rebooting.") (http://snurl.com/fnl23) Vermont has pioneered
applying these frameworks to rural communities.
http://snurl.com/fnkb2 This strategy is taking hold in rural
economies like Western Massachusetts (The Berkshire Creative
Economy Project). Other places, like North Central Arkansas are
beginning to explore the option. (http://snurl.com/fnl3t ) Last
year, Fairfax County in Northern Virginia put a stake in the
ground to be a center of creative industries in the US with its
Creative Economy web site and symposium:
http://www.e-country.org/creative.htm
The Triad region of North Carolina, following the recommendations
of consultant Angeles Angelou, has placed a big bet on the creative industries.
Not to be outdone by Northern Virginia, they  recently announced a
National Creativity Symposium: http://snurl.com/fnlgc So there you
have it: a brief road map of the emerging connection between the
creative industries and economic development. As you may be able
to tell, I think its a big opportunity.
In my view, focusing on the creative industries represents a good
setting for applying the tools, insights, and strategies of Economic Gardening.
Ed

On Apr 11, 2009, at 12:47 AM, MStoddard wrote:

Chris asked how we selected the data on creative industries. Below
was our process.

I started with these questions: "How do we quantify the creative
industry in Tacoma?" "How many employers are there?" "How many
employees?" "What categories of businesses fall within the
creative industry?" Finding acceptably accurate data on employment
is challenging. We decided to use reports available through
Americans for the Arts:http://bit.ly/NSkyi.

For the past couple of weeks, I have been traveling in China. In an upcoming post, I'll summarize some of my thinking about the challenges ahead for both China and the U.S.

I have been coming regularly to China since 1990, so I have the advantage of perspective. In addition, for the past ten years or so, I have been involved in a small Chinese joint venture. This experience has given me the advantage of seeing the realities of doing business in China from the ground floor. 

If you are interested in seeing some of my pictures from China, I have been posting some short impressions over on a Cleveland blog, Brewed Fresh Daily.

• Hangzhou’s pipa season 
• Eating in Hangzhou 
• Easter in Hangzhou
  

 Good thoughts from the president of Michigan State University:

We have to recognize what assets we already have available and then try to redeploy them. Too often in difficult economic times, we don't see those big ideas that are already available to us.

Read more.

Here's another article that illustrates how the contours of economic development are shifting.

In years past, the Kansas City Area Development Council focused on large company recruitment.  Now attention is focused  on recruiting entrepreneurs and their companies. Read more.

State and local professionals and economic development of workforce development will be struggling over the coming months to define a new green job strategies. The recovery package emphasizes the importance of investing in emerging sectors of our economy based on renewable fuels and energy efficiency.  Agencies of the federal government have been working to provide some guidance, but it's clear that state, regional and local strategies will evolve over time.

Here's an example. Chicago has a relatively  long history of working in the field of sustainability, but even here, the uncertainty over "what's next?" is clear. Read more.

Here's an example of one new direction. Cisco and Metropolis -- a collaborative of the world's largest cities -- announced a collaboration  for using information technology to drive "greener" cities. Read more.

One thing is certain: the move toward more sustainable forms of economic development will scramble old boundaries.

A cautionary note:  companies are likely to use green tech as a buzzword to lure economic development organizations into  questionable deals. This week, the state of Georgia announced a new green tech manufacturing company was locating in the state with the prospect of 320 jobs.  Warning sign: if you click on the link in the newspaper article, the company's website doesn't exist.