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Earlier this month, the U.S. Chamber foundation released a useful report that reviews the economic development activities across the fifty states. The report offers some interesting insights. For example,

the State of North Dakota, perhaps an afterthought to some, was a national leader in job growth over the last decade. Montana, meanwhile, leads in many measures of entrepreneurship, Tennessee in several measures of taxes and regulation, and Minnesota on workforce development and training. Some states, like Texas and Utah, are strong across the board in both economic policies—and economic results. And despite a Midwestern manufacturing meltdown, a State like Indiana remained afloat because of sensible tax, budget, and regulatory policies, proving it can be done.

I’ve attached a copy of the report to this post.

Last September, Singapore's prime minister gave an important talk at the Second Annual Human Capital Summit. He announced plans for Singapore to become a hub for the development of human capital: a global talent hub. You can read his remarks here.

Gradually, the details of the plan are becoming more clear. In February, Singapore launched the Human Capital Leadership Institute. This month, the Institute moves into a new facility which will house a cluster of business schools, human-resource consultancies and corporate universities.

The cluster is forming under the Economic Development Board's (EDB) Leadership Initiative for Building Networks and Knowledge. Read more.

Singapore is providing us a window on the future of economic development. Smart regional leaders in the U.S. will watch closely and be quick to follow.

Earlier this week, Wisconsin's governor signed into law the CORE Jobs Act (Connecting Opportunity, Research and Entrepreneurship). The legislation is a practical state-level alternative that emphasizes the importance of building new companies to make the transition out of the Great Recession. Among the provisions:

• $2 million to facilitate research commercialization partnerships between businesses and state academic research institutions.
• $400,000 to develop an emerging technology center at University  of Wisconsin-La Crosse.
• Creation of business plan competition programs at university and college campuses, as well as funds to support entrepreneurs among students.
•  $500,000 for a micro-loan program to provide loans ranging from $1,000 to $25,000 to small business startups in areas with high unemployment.

Read more. You can also visit the website that legislative sponsors built for the bill. You can download a copy of the bill here.

Brookings has released the latest version of its State of Metropolitan America. You can download it from this page.

Here are some good summaries:

• Race and Region Often Determine Degree Attainment in Big Cities
• Falling Education Attainment
  
• White flight? Suburbs lose young whites to cities
• White flight? In a reversal, nation's suburbs are now increasingly minority, poor and aging
  

• Population Study Finds Change in the Suburbs

According to Brookings:

The State of Metropolitan America is a signature effort of the Brookings Metropolitan Policy Program that portrays the demographic and social trends shaping the nation’s essential economic and societal units—its large metropolitan areas—and discusses what they imply for public policies to secure prosperity for these places and their populations.

Here's more evidence that state budget shortfalls are putting the squeeze on business incentives.

Some state governments seeking to plug yawning budget holes are shutting down tax credit and incentive programs that are supposed to lure businesses and create jobs.

The main driver behind the cutbacks and those in the works is the budget crunch, but such programs have also come under fire from critics who say special tax policies have little bearing on businesses' hiring or investment decisions.

Read more.

These budget problems will force the economic development community to make some tough political decisions. The fact is that the economic case for incentives to business -- especially to spur relocations -- is relatively weak.

At the same time, these incentive policies are very rarely examined for the effectiveness.  (And when they are -- as in the case of New York's Empire Zones -- the results are not pretty.)

It's not surprising. Incentives do not alter the economics of a business. They are too small to shift a cost structure.

Yet, last week in Colorado, the economic development community flexed its political muscle to kill an examination of that state's incentives policies. Read more.

Instead of fighting these efforts to examine questionable policies, the economic development community should be on the front line of developing new co-investment strategies among government, higher education, business and philanthropy to drive the two factors that clearly work to improve regional prosperity: educational attainment and innovation.

Following Oklahoma's Quality Jobs Act, Missouri also passed legislation to award tax credits to companies creating high-quality jobs. Now the state faces a serious budget crisis, and the governor is urging the curtailment of incentives to businesses in order to maintain funding for education.

Read more.

In theory, investments in education -- especially in early child education -- pay remarkably high and predictable dividends through increased earnings.

The case for business incentives is far less clear.

The research on the economic development impacts of early childhood education and business incentives is extensive. For some background, read Timothy Bartik's paper, "The Economic Development Effects of Early Childhood Programs ".

It will be interesting to see how this balance thing act all plays out.

We are entering an era of very tight local and state finances. Others will face the same tradeoffs. Here are two examples from last week. In Madison County, Mississippi, business leaders were focused on the importance of investing in education.Buisness leaders in Connecticut also echoed the message: for a strong economy, invest in education.

Meanwhile in Iowa, a consultant was telling political leaders to invest more aggressively in incentives.

In an effort to spur new ideas for commercializing technology and promoting economic development, the Economic Development Administration (EDA) is launching the i6 Challenge.

Read more.

The new challenge represents a $12 million innovation competition that will award up prize money to six teams from across the country.  Winners will demonstrate the most-cutting edge ideas to accelerate technology commercialization and new venture formation in their regions.

EDA will kick in $6 million. The National Science Foundation and the National Institutes of Health will kick in another $6 million.The NSF/NIH funding will go to their Small Business Innovation Research grantees that partner with i6 Challenge winners.

The good news is that this new competition shows imagination among federal policymakers and a promising collaboration across agencies. One of the biggest challenges the federal government faces comes in the inability of agencies to coordinate. We've seen this problem emerge among auto communities that are struggling to adjust to major contractions in the auto industry.

If successful, this is the type of initiative that can stimulate regional collaboration on a broader scale. (It's still quite small, though. In contrast, for example, the WIRED initiative in the prior administration awarded between $5 million and $15 million to each of 39 regions.)

The State Science and Technology Institute (SSTI) publishes an excellent newsletter. The most recent issue includes an article on the Ford Foundation's Wealth Creation in Rural Communities project.

The latest report in that project concludes that venture capital funds invested in rural communities can generate the same level of returns as funds investing in metro regions. This rather surprising finding may give a boost to the formation of informal capital networks in rural regions. You can read the SSTI article here.

You can download reports on the Ford Foundation's rural wealth project from this page.

You can subscribe to the SSTI weekly digest on this page.

Collier County, Florida is considering a local ordinance to establish innovation zones. Units coming meeting this week, the County commission will vote on a recommendation to approve a new ordinance to establish the zones.

Read more.

Three years ago, we launched a local innovation zone pilot program in Cuyahoga County, Ohio. You can learn more about the Cuyahoga County innovation zone initiative from this page.

Most innovation zone initiatives are taking place at the state level. Right now, Michigan, Pennsylvania, Washington and New Jersey all have state-level legislation on innovation zones.

Local innovation zones are relatively rare. Most innovation zones start by designating geographic boundaries. The important difference for the innovation zone pilot program that we designed in Cuyahoga County: we focused on creating incentives for partnerships and networks to form. We leave the network to designate "hotspots" where development will take place.

Here's a graphic we use to explain the pilot program:

Here is another indication of the shifting focus of economic development. In 2004, Galesburg Illinois was the latest in a long string of Midwest communities hit by manufacturing companies moving their production offshore. Maytag, employing 1,600 people, closed its Galesburg facility and moved most of its production to Reynosa, Mexico.

The phenomenon is not a new one. Large manufacturing companies in the appliance business begin globalizing their production in the early 1980s. Galesburg was one of last communities producing appliances to feel the sting of lower skilled manufacturing moving offshore. (Newton, IA was another.)

Fast forward six years, and now we see an article that puts entrepreneurship in the middle of the economic development strategy for Galesburg. The article explains how the Entrepreneurial Support Network of West Central Illinois is strengthening the entrepreneurial climate within the region through collaboration.

The network represents an impressive range of partners. 

Read more.

We do not often think of rural communities as potential hotspots of innovation. Perhaps we should.

Regions are moving toward new regionally-based energy and food systems. As they do, business opportunities are emerging to diversify away from commodity agriculture and low wage manufacturing, the traditional economic base in rural regions.

This diversification creates a new need for support networks in rural communities. Here's an example. In Wisconsin a new workshop series is launching to support value-added agriculture. Read more.

Southern Ohio provides one of the best examples of a rural region strengthening its economy with value-added agriculture. Led by the Appalachian Center for Economic Networks (ACENet), the region has built a network of innovative regional food businesses.