Month: February 2015

Advice Ashtabula County Should Heed

According to a new Brookings Institute article, metropolitan leaders across the country (Insert: and many nonmetropolitan leaders as well) share a desire to create high quality jobs, get more young adults and other workers into those jobs, expand incomes, reduce inequality, and keep their core industries competitive in the face of rising global competition and opportunity. Yet traditional tools of economic development are ill suited to achieve these aspirations and create inclusive, prosperous communities.

Economic development calls to mind longstanding practices of building housing, retail centers, and far-flung industrial parks—or attracting business relocations—to boost municipal tax revenue. These approaches are often costly, zero-sum, and do little to address yawning social gaps in metro areas. Furthermore, they don’t satisfy the demands of the modern economy, which requires concerted efforts to help firms, workers, and communities adapt effectively to new technologies and global competition.

Now however, cities and metro areas are moving away from these traditional economic development strategies to a new model of economic growth that can lead to long-term prosperity. This model focuses on enhancing existing market assets and capabilities to boost trade, increase the value of advanced industries, and create incomes and opportunities for workers, no matter where they live in the region. While landing a big brand name firm (invariably with sizable public incentives) still grabs headlines, we are seeing more attention paid to business formation, talent creation, and the role of place-making and infrastructure in both.

This is precisely what I was saying in yesterday’s article about economic development incentives. Ashtabula County needs to move to the new model of economic development! he Growth Partnership’s new Forward Ashtabula County action plan identifies how we can mount this path. Watch for more on Forward Ashtabula County.

New Prescriptions on Business Incentives by Pew Trust

What I have to say in this article will rub some people the wrong way. That’s ok. Incentives are part of an antiquated, unfair, costly, and ineffective model of economic development that has been around since the Industrial Revolution in the late 19th century. Some places have successfully shifted away from this haphazard approach to economic development, but most have not. Ashtabula County remains mired in the old way of doing business.

Let’s see what the Pew Trust report has to say. Although every state gives tax incentives for economic development, there are numerous inconsistencies in how these incentives are evaluated. Based on best practices developed by 10 states and the District of Columbia that passed legislation requiring regular evaluation of economic development tax credits from 2012 to 2014, researchers at The Pew Charitable Trust developed a framework for states hoping to improve the accountability and performance of tax incentives in a new policy brief. Ultimately, the brief recommends three steps:

  • Making a plan that determines who will evaluate the incentives, how they will evaluate, and when they will evaluate. By identifying clear, measurable goals for each incentive, it is easier for policymakers to assess success;
  • Measure the impacts by selecting appropriate metrics and a reasonable timeframe for analysis. Although many evaluations study how incentives impact businesses, the authors suggest more emphasis should be on how incentives affect state residents (jobs, wages, economic security); and,
  • Inform decisions by identifying opportunities for improvement and encouraging lawmakers to regularly review incentives. According to the authors, this approach would allow for effective incentives to potentially become more effective, while ineffective incentives could be changed rather than completely eliminated.

Read the report here.

In my view, businesses take incentives for granted. They expect them as a given. Many using them don’t need them. For years my position has been to eliminate all incentives everywhere. Unilateral disarmament will not work; that is if one place stops using incentives and others do not. Incentive disarmament is very unlikely to happen because the policy of using incentives is deeply entrenched in business practices globally. Research shows that in the vast majority of cases the bidding wars for businesses and jobs do nothing more than drive of the price for what would have happened anyway. That is bad public policy! Perhaps it is even criminal.

There are better ways to encourage and assist business competitiveness. For one, provide the trained and educated workforce that employers need. Second, provide competitive sites and infrastructure. Third, streamline development permits — not to break the rules, but speed up the review and approval process. Finally, create quality communities and schools that attract managers, knowledge workers, and their families.

Ashtabula County needs to mount a new growth curve–that is the curve of creating knowledge and innovation-driven businesses and industries, which create higher skilled and better paying jobs. And before that can happen, our population base and workforce need to become better educated and skilled.

Highly skilled and knowledge based jobs follow the people who have the skills. Frankly the county is not prepared to mount this curve because many don’t believe it is possible and many think what we have is just fine. It’s not. Ashtabula County lacks opportunity, especially for young people. We will continue to lose our young people if we do not fix this problem. The solution will require a very long term commitment by leadership, employers, educators, and citizens. As I think of this economic shift proposition, we may be able to justify using government incentives because this shift to the new economy would not happen otherwise. Until we make this long term commitment to the shift, we will continue to have the social and economic realities we see across the county.

More on this important set of issues in the future.

How is branding a geographic area different from branding a product?

Reprint of Place Branding, by Derrick Daye

In some respects, branding places is no different than branding anything else. Finding the most powerful and unique image for the place (“unique value proposition” or “brand position”) is the most important activity. After that, building awareness is next most important. Both of these activities assume that the requisite research has been done with the most advantageous and receptive target audiences.

Beyond the basics, branding places becomes a more interesting and complex activity than branding a typical product or organization. The target audiences are myriad and disparate, including at least the following:

• Residents and potential residents
• Businesses and potential businesses
• Tourists/visitors
• Meeting and an event planners (including convention planners and major sporting event organizers)

Each of these audiences has its own distinct issues and needs.

What does a city – or place need to discover in the branding process? Ultimately, a place must find those one or two things that will get the target audiences excited about living, visiting and conducting business in its geography. Those one or two things must be unique and compelling enough to cause those people to choose it over all of the other increasingly compelling options that residents, tourists, businesses and meeting planners have. And, most importantly, those one or two things need to be authentic and believable. Finding these one or two things is much easier said than done and requires rigorous research among the target audiences.

The Millennial Lag

Despite having a higher rate of educational attainment than any previous generation, U.S. millennials (between 16-34 years of age) ranked lower than most of their international peers in literacy, mathematics and technology problem solving in a recent study by the Organization for Economic Cooperation and Development (OECD) and the Educational Testing Service (ETS). Those born in the U.S. after 1980 tied for last among the 22 participating countries in numeracy and technology skills, and 16th in literacy. Top scoring Americans in this cohort ranked lower than their peers in most other countries, and bottom-scoring Americans ranked among the lowest in the whole study. Read more here.

Ashtabula County needs accelerated performance from the spectrum of generations in play; not just the younger ones.

Self-awareness is essential to being a good leader

Economic development requires good leadership. And as many of us know: we cannot become good leaders unless we know ourselves as human beings.

You can’t be a good leader without self-awareness. It lies at the root of strong character, giving us the ability to lead with a sense of purpose, authenticity, openness, and trust. It explains our successes and our failures. And by giving us a better understanding of who we are, self-awareness lets us better understand what we need most from other people, to complement our own deficiencies in leadership.

The question, then, is how can we cultivate and develop it further. There are many ways to do so. A recent article on the Harvard Business Review Blog identifies five self-awareness strategies. Read it here.

 

Many Entrepreneurs Are Not Taking the Plunge

Leaders seeking to promote entrepreneurship, take note: Gallup finds that one-quarter of Americans say they’ve considered becoming business owners but decided not to. For an economy with a negative net number of startups each year since 2008, this represents a missed opportunity to engage would-be entrepreneurs in action that could result in business startups or growth.

Many entrepreneurs lack the expertise or the right set of talents to succeed, which might explain in part why half of the new ventures in the U.S. fail in the first five years. However, startups are essential to economic growth, so supporting prospective entrepreneurs — the 25% of Americans who’ve thought about but decided against building a business — could help them convert their interest into action. To do so, it’s crucial to understand these Americans’ perceived barriers to entrepreneurship.

We need to do a better job supporting startups in Ashtabula County, and helping young professionals create their own businesses. Does an incubator make sense? Perhaps, but more importantly we need a richly linked network of investors, advisors and support entities to support entrepreneurial growth locally. And yes, we should draw on external expertise such as the Youngstown Incubator, Jumpstart, and others. NEO Fund, KSU Ashtabula, the chambers, and others have a role to play.

Read more here.

Learning How to Thrive: Redefining Success

“We have been living under a collective delusion for a long while now that burnout is necessary for success, that if you really are serious about succeeding, building a company, climbing the career ladder, then you just have to accept that’s going to require burning the candle at both ends.” That’s all rubbish, says Huffington. A delusion. There is no such thing as success without a state of sustainable well-being. This is the theme of Huffington’s best-selling book Thrive: The Third Metric to Redefining Success and Creating a Life of Well-Being, Wisdom, and Wonder, which she wrote upon discovering her own personal need to redefine success.

Huffington is right! We don’t have to kill ourselves create a successful life for ourselves and our families. She argues for life-work balance, sustainability, caring for ourselves and others, and doing what’s important in terms of our values and life aspirations.

The same principles apply in thinking about economic and community development in Ashtabula County. Ashtabula County needs to be about thriving and not growing! Many years ago when I started my economic development career at the Greater Cleveland Growth Association our marketing theme for Greater Cleveland was “Where Enterprise Thrives.” The messaging aimed to offset the earlier notion that economic development was just about growing bigger. The objective of economic development is about growing better and becoming more sustainable.

Read more about Learning to Thrive here.

Looking at Retirement in 2015

Retirement is an economic development issue. How so? For one, workers (often very experienced ones) exit the workforce. In some cases, these workers are hard to replace. Retirement also creates work opportunities for younger workers, which can be a good thing. Retirement impacts communities because wealthy residents may move away. The demand for goods and services can change in communities as significant numbers of workers retire. The aging of communities impacts the demand for healthcare for one.

We will be looking at the retirement issue in Ashtabula County in the near future. For now, let’s look at a tiny piece of the retirement issue: Is this a good time to retire? The answer is this is a better time then a few years back, but basically it depends upon the individual and his or her ability to retire.

So what is it like to retire in 2015? A recent Careerbuilders article speaks to this issue. Here are a few highlights from the article. Back in the recession’s heyday, CareerBuilder’s annual retirement survey found that the number of workers age 60 or older delaying retirement was 66 percent. In 2015, that figure dropped to 53 percent: one of the most recent indicators of strong economic recovery.

What does retirement look like in 2015? What career strategies are mature workers utilizing in their own retirement plans? Let’s take a look at this year’s survey findings to find out.

When most people think of retirement, they think of never working again and instead having time for family, adventure and relaxing. But when the reality of retirement approaches, you may find it’s smarter to find a different job as a way to earn extra income or pass your time. For the 54 percent of senior workers (age 60+) that say they’ll work after retiring from their career, about four-fifths (81 percent) say they’ll most likely work part-time, while 19 percent plan to continue working full-time.

Read the complete article here: http://advice.careerbuilder.com/posts/what-it-looks-like-to-retire-in-2015

Where the Digital Economy is Headed

A recent Harvard Business Review (HBR) article characterizes where the digital economy is headed in the future. Countries studied were grouped into 4 performance categories:

  • Stand Out countries have shown high levels of digital development in the past and continue to remain on an upward trajectory.
  • Stall Out countries have achieved a high level of evolution in the past but are losing momentum and risk falling behind.
  • Break Out countries have the potential to develop strong digital economies. Though their overall score is still low, they are moving upward and are poised to become Stand Out countries in the future.
  • Watch Out countries face significant opportunities and challenges, with low scores on both current level and upward motion of their DEI. Some may be able to overcome limitations with clever innovations and stopgap measures, while others seem to be stuck.

While this subject may seem to be a distant one for Ashtabula County, it isn’t! Everything and every place is impacted by the digital economy. For example, it has given us 3D and 4D printing in manufacturing. It gave us computer aided design (CAD). It gave us geographic information system (GIS) mapping. Our fine dining restaurants in the Harbor District allow us to make reservations online. More and more people are reading the e-version of the Star Beacon newspaper. We need to be thinking of new ways to capitalize on the digital economy in our county!

Ashtabula County Download the article here.

Where Workers Residing in Ashtabula County are Employed

Yesterday’s article showed where people live who work in Ashtabula County. Today’s article shows the counties where workers residing in Ashtabula County are employed.

A total of 38,159 workers reside n Ashtabula County. 52.2% of workers (19,909) living in Ashtabula County also work in the county. The remaining 47.7% of Ashtabula County workers (18,250) commute outside the county each day for jobs. The top out-commuting counties are: Lake County (4,656), Cuyahoga County (3,985), and Geauga County (1,835).

ash workers

Click on table to enlarge it.