Tuesday, November 25, 2008

The Rise of the Megaregion

Megaregions -- rather than nations -- have become the natural units of the global economy. How is a megaregion defined? Tim Gulden at the University of Maryland's Center for International and Security Studies has used nighttime satellite images of the earth to identify "contiguous lighted areas" that include at least one major metropolitan area. Examples? The Boston-New York-Washington corridor and the Shanghai-Nanjing-Hangzhou triangle. Megaregions are the lit-up regions that produce more than $100 billion in goods and services. 1.2 billion people -- 18% of the global population -- live in the world's 40 megaregions. Combined, they produce 66% of the world's economic activity and 86% of new patents.

Monday, November 24, 2008

Ohio's job outlook: Ready work force helps, but rust-belt image hurts

Posted by Tom Breckenridge/Plain Dealer Reporter November 23, 2008 07:58AM

Gov. Ted Strickland's favorite four-letter word is "jobs."

To bring more of them to Ohio, Strickland wants to brighten a business climate that corporate leaders say is too costly, over-regulated and short on skilled workers in key occupations.

The governor is sympathetic. Last month, he issued an executive order creating the Ohio Economic Growth Cabinet. Ohio's largest departments must collaborate and streamline to promote business prospects.

The order came less than a month after Strickland and Lt. Gov. Lee Fisher, who doubles as Ohio's economic development chief, unveiled a strategy they say is designed to boost jobs, incomes and productivity.

And how would they do that? By "purposefully redesigning" Ohio's business climate, according to the strategy they've dubbed OHIO, for "Ohio, Home of Innovation and Opportunity."

What follows are factors that influence whether business invests in a state. The Plain Dealer evaluated Ohio in each area based on published research and interviews with economists, business-development experts and state officials.

The bottom line: A ready work force and heartland location lure business, but a high-cost, rust-belt image hurts. More here.

Sunday, November 23, 2008


The International Economic Development Council (IEDC) recently announced the top economic development websites at its Annual Conference in Atlanta. The award-winning websites are impressive and their results are noteworthy. These best-practice websites are models for economic development organizations to follow.

Top Special Purpose Website by Population

• Population 200,000 or more:
NV Energy
• Population 200,000 or more: Greater Oklahoma City Chamber
• Population 50,000 to 200,000: Upstate Colorado
• Population 50,000 to 200,000: Ascension Economic Development
• Population 50,000 or less: City of Winter Garden, FL

Top General Purpose Website by Population

• Population 200,000 or more:
Enterprise Florida Inc.
• Population 50,000 to 200,000:
Blount County ED Board, TN
• Population 50,000 to 200,000: Denton Economic Development Partnership, TX
• Pop. 50K to 200K Hon Mention: Ames ED Commission, IA
• Pop. 50K to 200K Hon Mention: Development Authority Cherokee County, GA
• Population 50,000 or less: Siskiyou County ED Council, CA

How to Get Started With LinkedIn

More and more business professionals are using social networks to build relationships, meet new contacts, and market themselves. For the uninitiated, however, diving into the virtual meet-and-greet can be daunting. Where to begin? For first-time users, the answer is LinkedIn. Developed specifically for business, the site doesn’t run the risk of blurring your professional life with your private one; and with more than 25 million users, it serves virtually every industry and profession.

Joining a network like LinkedIn is simple, but turning it into a powerful networking tool takes a bit of savvy. Here's how to set up a profile, build a network, and put it all to work — without social-networking anxiety.

More here.

Also view, Four Ways Social Networking Can Build Business

Economic poaching: Bagging Bay State biz

Finally, the state of New Hampshire has gotten aggressive in recruiting Massachusetts businesses.

The state Division of Economic Development has long wooed out-of-state businesses. But the approach was too subtle, too traditional. Now the division has launched a clever initiative to directly target Massachusetts-based businesses for poaching.

Called "Open Invitation," the initiative involves contacting hundreds of Bay State companies and offering their owners limo rides from the state border to a Common Man restaurant, lunch with state business recruiters, tours of possible relocation sites and tickets to a Manchester Monarchs game or Cannon Mountain.

And, as they say in sales, "that's not all." The state has created a wonderfully informative Web site, www.nhopeninvitation.com, that makes the case for relocating businesses from Massachusetts to New Hampshire. On the site are lots of data, including a lengthy comparison of business costs and quality of life factors.

This is not your typical marketing pitch. The division is careful to include all sorts of measures by which business owners would want to compare the two states, even ones in which Massachusetts beats New Hampshire.

That lets business owners know they aren't being snowed by a fancy sales pitch; they are being informed of the facts. And the facts are that New Hampshire has a higher quality of life and is a less costly place to do business.

The icing on the cake is that the initiative is almost entirely financed by New Hampshire businesses, such as Public Service of New Hampshire, that have an interest in seeing more companies recruited here, which is an approach we have advocated for years.

Kudos to the folks at the Division of Economic Development for putting together this creative new pitch and doing it in partnership with interested businesses. That is the kind of innovative thinking too seldom seen in government.

Economic poaching: Bagging Bay State biz

Finally, the state of New Hampshire has gotten aggressive in recruiting Massachusetts businesses.

The state Division of Economic Development has long wooed out-of-state businesses. But the approach was too subtle, too traditional. Now the division has launched a clever initiative to directly target Massachusetts-based businesses for poaching.

Called "Open Invitation," the initiative involves contacting hundreds of Bay State companies and offering their owners limo rides from the state border to a Common Man restaurant, lunch with state business recruiters, tours of possible relocation sites and tickets to a Manchester Monarchs game or Cannon Mountain.

And, as they say in sales, "that's not all." The state has created a wonderfully informative Web site, www.nhopeninvitation.com, that makes the case for relocating businesses from Massachusetts to New Hampshire. On the site are lots of data, including a lengthy comparison of business costs and quality of life factors.

This is not your typical marketing pitch. The division is careful to include all sorts of measures by which business owners would want to compare the two states, even ones in which Massachusetts beats New Hampshire.

That lets business owners know they aren't being snowed by a fancy sales pitch; they are being informed of the facts. And the facts are that New Hampshire has a higher quality of life and is a less costly place to do business.

The icing on the cake is that the initiative is almost entirely financed by New Hampshire businesses, such as Public Service of New Hampshire, that have an interest in seeing more companies recruited here, which is an approach we have advocated for years.

Kudos to the folks at the Division of Economic Development for putting together this creative new pitch and doing it in partnership with interested businesses. That is the kind of innovative thinking too seldom seen in government.

Changes to Marketing Spending and Strategy Coming in 2009

by Ginger Conlon
The 1to1 Blog

How the current economy is affecting marketing budgets and the customer experience are hot topics right now. So last week I asked readers and LinkedIn members to respond to a brief survey on potential changes to their 2009 marketing budget and strategy. Some results surprised me (I thought that "decreasing our marketing budget" would get the lion's share of votes, but it didn't); while others were expected (a continued shift toward social media marketing).

Nearly 60 people responded to the survey; a few sent comments, as well. I found the comments to be telling.

For example, Tiffany Bentley, national marketing coordinator at Triad Manufacturing, said "I think it would be crazy to cut back marketing dollars in a time like this. This is the time when you need to be top-of-mind more than ever before to keep ahead of competitors who are feeling the crunch [and] cutting back their advertising and becoming less and less visible to their market. These are the times where marketers can really do their jobs. If you get creative and focus on frugality in other areas, spread your marketing dollars out wisely but continue spending (relatively) what you have been spending, and negotiate, negotiate, negotiate with ad rates, your customers will remember you, new customers will find out who you are, and you will come out smelling like a rose and looking like the strongest lion in the pack (even if you are struggling just as much as the next guys)."

While Andy Lorin, senior marketing analyst for Bonasource, said, "Whatever we may think about marketing and its grandiose goals, it's still part of a company's P&L. When the economy is in trouble, it hits the total budget, including the marketing one.... The major issue here is the level of future spending. Mainly, marketing's job is to make an intelligent bridge to any potential spends in waiting. While they're on hold, it's hard to expect any significant marketing surge. Simply, because it'd be an empty shot to nowhere. Once the economy fundamentals have come back to normal along with spending amounts, we may see marketing budgets bouncing back and up."

The survey responses also spoke volumes. About one third of respondents said their 2009 marketing budget would increase, another nearly one third said it would decrease, and close to 40 percent said it would remain unchanged.

Company size played an unexpected role. Nearly 40 percent of small business plan to increase their marketing budget in 2009, but only a quarter of midsize company and 15 percent of large enterprises plan to do so. About a third each of small and midsize companies expects to decrease their 2009 marketing budget, while nearly 40 percent of large enterprises will be tightening their purse strings. Additionally, a quarter of respondents said their marketing budget would increase as a percentage of their organization's revenue, while 34 percent said it would decrease, and 36 percent said it would stay the same. Five percent said this didn't apply to them.

When asked whether they're planning to reallocate marketing resources in 2009, responses were in line with what one might expect. The top three areas flagged for increased spending are social media (69 percent of respondents), email (68 percent), and search (50 percent). The top three in line for cutbacks are print (44 percent), direct mail (33 percent), and trade shows/conferences (28 percent).

Customer engagement is the number one marketing goal for 2009, with nearly two thirds of respondents citing it as their primary objective. Also cited as a high priority for 2009 are lead generation (41 percent of respondents), awareness (39 percent), and branding (35 percent). Based on these goals, I'm not surprised that most marketing budgets are holding steady or increasing.

"Should we really change?" asked Rene Lisi, a CRM and customer experience consultant, in reference to whether marketers will change their budgets or strategy for 2009. "We must avoid focusing on short-term earnings (increased fees in financial services, etc.). We should focus on building trust and service quality."

Click here to view the full survey results.

Regional economic effort key, officials told

EVANSVILLE, Nov 22, 2008 - In the past five years, the counties surrounding the Memphis, Tenn., area at the junction of Tennessee, Arkansas and Mississippi have begun working together to market the region's work force and amenities.

The cooperative approach of the Memphis Regional Economic Development Council has allowed 52 counties across three states to attract automobile plants and other economic development boosts when in the past the areas had worked alone.

Sharon Younger, an economic development consultant who worked with the region, told a group at the Regional Economic Summit on Friday that she sees similarities between the broader Memphis region and the three-state area of Kentucky, Indiana and Illinois, and some of the same potential.

Before establishing the council, economic development officials "couldn't see past state lines," Younger said.

Younger, who is president of the firm Younger Associates, and other speakers focused on a more regional approach to economic development on Friday at The Centre here, where economic development departments, municipal staff and elected officials gathered for the two-day summit.

Jody Wassmer, president of the Greater Owensboro Chamber of Commerce, said he saw a lot that this region could borrow from the Memphis model.

"Here, we have various examples of chambers and economic development organizations working together in Kentucky, Indiana and Illinois but very little cooperation across state lines," Wassmer said. "They've crossed that bridge, and I believe we can learn from what they've accomplished."

Mark James, founder and CEO of consulting firm ED Solutions, said regional economic partnerships crossing state lines are becoming more common.

During one of the summit's breakout sessions Friday, James pointed to the Texoma Regional Consortium -- a group formed of counties that border each other in Texas and Oklahoma that realize the shared work force between the areas in the two states.

Younger said work on the Memphis council began with an in-depth study of the workforce in the entire region that allowed the larger area to present a more in-depth picture to businesses looking to locate there.

Nick Brake, president and CEO of the Greater Owensboro Economic Development Corp., said he wasn't sure he saw one large economic development agency emerging from this week's summit.

But Brake said he did see increased collaboration when it comes to understanding the regional work force and cooperation between educational institutions.

"The reality is that our market, our labor market, includes (Vanderburgh, Ind.) County, it includes Henderson County, it includes the 30-mile radius," Brake said. "Site selectors ... look at our labor market as being 450,000 people."

Owensboro Finance Director J.T. Fulkerson said he was encouraged throughout the summit to find that Owensboro and Daviess County were already moving forward with some of the initiatives touted by consultants and those in the economic arena.

But there will need to be a willingness to be aggressive with those initiatives, Fulkerson said.

"It's about innovative thinking and not being scared of changes," Fulkerson said. "You can't be sitting back and just say, 'I'm happy to change.' You've got to be aggressive."

The city and local business groups have already begun the process of developing a brand for Owensboro and Daviess County, and the work on that branding is expected should be shared with the community in the next several weeks.

Eric Stavriotis with Jones Lang LaSalle, a strategic consulting firm, said that in his work as a site selection consultant, branding is important, but shouldn't be so broad as to lose its meaning.

"Branding yourself has to take a look at the assets you have in your community," Stavriotis said during another breakout session.

Younger also mentioned branding, and particularly how Marion, Ark., began tying itself in to the Memphis community as part of the regional council's work. Northwest Mississippi also established its Mississippi Memphis Metro council to help tie in to the Memphis area, Younger explained.

Stavriotis said a brand can help tell businesses just what a community has to offer.

"Brand the heck out of it," Stavriotis said.

Southern states add to their Boeing sales pitch

In Alabama, Mississippi, Georgia and the Carolinas, business and government leaders recently watched the Machinists’ strike at Boeing with rapt attention, wondering if Boeing’s frustration might prompt it to someday bring an airplane plant to the South.

Right-to-work laws in Southern states, they say, would prevent such costly walkouts.

But the South has another compelling selling point: its industrial muscle. Increasingly, the nation’s aerospace center of gravity is shifting south, creating an extensive and growing base of hundreds of aerospace companies producing helicopters, aircraft assemblies — even Boeing rockets.

“If I was a Boeing executive, I’d look at the state of Alabama and see there’s a qualified work force ... I’d take a look at the assets we have,” said Stephen Nodine, president of the Mobile County Commission, whose offices are in Mobile, Ala.

This is not to say Boeing Commercial Airplanes has any immediate plans to do anything other than getting its Everett and Renton assembly plants fully running again, and sending delayed aircraft of nearly every model into the air.

But sometime in the next decade Boeing may launch a high-tech successor to the 737, its most popular plane; the company also may upgrade its 777 model or develop a second 787 production line.

In a recent interview, Boeing Commercial Airplanes CEO Scott Carson said Boeing isn’t actively looking at any other sites for plants. But he doesn’t rule out the possibility it could.

“Clearly there’s frustration over the labor situation in Washington, and frustration about being able to be held hostage by a single bargaining unit,” he said. “Will it increase pressure to find another place to do manufacturing in the future? Perhaps.”

While eager for Boeing, economic development leaders in Southern states admit they’re keeping their tactics hidden, not wanting to tip each other off about their strategies for attracting more work from the nation’s largest aerospace company.

“Boeing is a valuable company, and one we will try to attract more and more in the state of Georgia,” said Ken Stewart, commissioner for the Georgia Department of Economic Development, talking slightly more generally. “We will be talking to Boeing on a regular basis to try to attract them to the state of Georgia, no doubt about it.”

Certainly, labor laws are important to the effort to lure Boeing. Even though Carson said the question of whether Boeing is in a right-to-work state isn’t in his mind a critical issue, Southern leaders see it differently.

Right-to-work states don’t require workers to pay union dues if they’re in a unionized company, a provision that tends to undermine union power. All the Southern states are right-to-work states, while West Coast and East Coast states are not.

“It’s been a big factor for other companies and other industries in the state,” said Gray Swoope, executive director of the Mississippi Development Authority. “Companies today that want to maintain a nonunion work force, that’s important to them.”

At the same time, Southerners are not shy in pointing out how rapidly the South has become an aerospace region, landing a series of new aerospace manufacturing plants. In the last few years, for instance, Mississippi has added a General Electric factory producing composite fan blades for jet engines and a helicopter plant is going up for the European Airbus consortium.

Swoope said Mississippi’s strategy, in addition to a right-to-work environment and financial incentives, is to refine the training and knowledge base of the area, partly through strengthening relationships between the state’s universities and private industry, in order to develop a skills base in advanced technologies including composite construction.

“We’re not just interested in manufacturing, we’re interested beyond that, and how do you build capacity,” he said. “We’re even more thrilled GE is going to be working with (Mississippi State University) to partner with them in building the next generation of aircraft.”

Right next door, Alabama has more than doubled its number of aerospace suppliers to 200 in less than 20 years, with current private sector aerospace employment of more than 36,000.

And in a related industry, Mississippi and Alabama have added five auto plants since 1993; none of them is from the big three domestic automakers now teetering on the precipice of bankruptcy.

Aware that they’re working against Boeing’s incumbency in Washington — the sense that Washington is home to a mature aerospace industry with many skilled workers and companies — economic boosters in the South tend to emphasize their region’s capabilities. This is defined by the history of the Civil War South, by the French heritage, and by the states’ proximity to each other along the defining Gulf Coast. The French heritage also has something to do with Southerners’ sense of comfort with Airbus.

For instance, Nodine was instrumental in creating an organization called the Gulf Coast Aerospace Corridor, complete with a website, which touts the strength of the aerospace industry in Louisiana, Mississippi, Alabama and Florida, and the presence of large prime contractors including Lockheed Martin, Northrop Grumman and Boeing.

Boeing already has large operations in the South, and economic development experts want to build on that presence.

Friday, November 14, 2008

Cleveland-to-Pittsburgh Mega-Region Join to Create Tech Belt Initiative

CLEVELAND -- The Tech Belt Initiative is an economic development strategy designed to reinvigorate the Cleveland-to-Pittsburghregion (Cleveland, Youngstown and Pittsburgh) by building on its unique civic, educational, healthcare, and industrial institutions.

The transition to aknowledge-based economy has caused opinion leaders from these metropolitan areas to recognize that the future of these once great manufacturingcommunities are tied together, and that our continued success depends on ourability to collaborate in the creation of new products, technologies, and wealth.

To spearhead this effort, a steering committee, comprised of leadership organizations from Southwest Pennsylvania and Northeast Ohio, is working todevelop a strategic vision for this initiative and to build the partnerships necessary to leverage the region's collective resources.

The committee hasidentified the following goals for potential partnership opportunities:
  • Encourage the federal government to identify the region as a PremierInnovation Zone and invest in/augment existing state technology-based economic development programs
  • Continue support for SBIR/STTR programs
  • Reinstate funding for the National Institute of Standards and Technology's Manufacturing Extension Partnerships (MEP)
  • Continue the Alternative Energy Tax Credits for wind power, solar energy, and other renewable fuels
  • Augment funding for translational research at both the university and commercial levels
A comprehensive list of the Tech Belt Initiative's goals and actions to be pursued can be found in the white paper titled, "The Tech Belt Initiative;Realizing the Full Economic Potential of the Cleveland-Pittsburgh TechnologyCorridor," which can be downloaded at www.techbelt.org.

Mesa sees light rail as a turning point

Many hope route will help deteriorating area
by Chad Graham - Nov. 3, 2008 12:00 AMThe Arizona Republic

With nearly 453,000 residents, Mesa counts a population larger than Miami, Minneapolis or St. Louis.

But the city has struggled to become more than a Phoenix bedroom community.

Mesa has attempted economic-development project after project to diversify its economy, which has good-paying aircraft-manufacturing jobs but also many low-paying telemarketing and retail jobs.

Metro light rail is seen as the latest way to change Mesa's fortune.

The city's initial stretch of the line is only a little more than a mile, but the impact could be among the most dramatic along the entire 20-mile route.

Neighborhoods, mom-and-pop shops and west Mesa, in particular, could be changed.

City officials, business leaders and development experts hope the train will bring a new identity to the city when it starts running down this stretch of Main Street.

Already, light rail has put new polish on Main Street: new paving, sidewalks and landscaping. Apartments, strip malls and businesses that were able to survive the construction are sprucing up before the trains start carrying passengers into the area. More here.

A bit of green for the rust belt

By PETER S. GOODMAN The New York Times - Published: November 2, 2008

NEWTON, Iowa — Like his uncle, his grandfather and many of their neighbors, Arie Versendaal spent decades working at the Maytag factory here, turning coils of steel into washing machines.

When the plant closed last year, taking 1,800 jobs out of this town of 16,000 people, it seemed a familiar story of American industrial decline: another company town brought to its knees by the vagaries of global trade.

Except that Versendaal has a new factory job, at a plant here that makes blades for turbines that turn wind into electricity. Across the road, in the old Maytag factory, another company is building concrete towers to support the massive turbines. Together, the two plants are expected to employ nearly 700 people by early next year.

"Life's not over," Versendaal says. "For 35 years, I pounded my body to the ground. Now, I feel like I'm doing something beneficial for mankind and the United States. We've got to get used to depending on ourselves instead of something else, and wind is free. The wind is blowing out there for anybody to use."

From the faded steel enclaves of Pennsylvania to the reeling auto towns of Michigan and Ohio, state and local governments are aggressively courting manufacturing companies that supply wind energy farms, solar electricity plants and factories that turn crops into diesel fuel.

This courtship has less to do with the loftiest aims of renewable energy proponents — curbing greenhouse gas emissions and lessening American dependence on foreign oil — and more to do with paychecks. In the face of rising unemployment, renewable energy has become a crucial source of good jobs, particularly for laid-off Rust Belt workers. More here.

Take a Deep Breath and Get Ready for the New Year

By Bob Ady, Ady International

The economic development profession is not immune to the uncertainties that the New Year will bring, and neither is the site selection business. Together we will wade into a host of unknowns that cannot be charted based on past experience.

Most projections indicate that business activity will decrease. This will likely be coupled with lower corporate earnings, increased unemployment and slumping consumer confidence. Not exactly a scenario that suggests an overall robust business expansion pattern for next year.

However, all will not be lost. The mantra for the New Year will be "focus". We will need to pick our targets carefully and pinpoint our marketing activities accordingly.

Business retention will be key. Pay closer attention than ever to what you already have. Don't assume your local businesses are immune to the economic environment. Many companies with excess production capacity will be looking to consolidate operations and will be willing to downsize or walk away from redundant facilities. Once that decision is made it is irreversible.

Corporate offices will continue to expand outward from central cities. Excess space, coupled with high salaries, suggests that major cost efficiencies are achievable through the strategic placement of regional offices.

The first footfalls of outsourced operations returning to the U.S. are being heard, and will increase significantly during the next year. This has been prompted by a recognition of the effect that high fuel prices have on supply chain costs, incidences of poor overseas service center quality, and the increasing uncertainty of the financial systems in emerging countries.

Renewable energy is all the buzz, and there is nothing on the horizon that suggests that this will change next year. New products and concepts will continue to be introduced, and the growth of existing renewable energy companies and new startups will be steady.

And then, of course, there are the old reliables that continue to prosper almost regardless of the economic environment. Top among these are all manner of food processing operations, government activities, and companies with a long term planning horizon.

In addition to the external environment discussed in this newsletter, there are many changes projected for next year in the internal environment of the site selection process. I plan to share these with you in my upcoming webinar on November 18, Site Selection Trends for 2009.

2009 will not be a wash. There is an old saying, "When the going gets tough, the tough get going". Let's make it happen next year.

Tuesday, November 11, 2008

Valley counties try unified approach to economic development

Jared Janes
November 8, 2008 - 8:10PM

EDINBURG — Global companies looking at the Rio Grande Valley as a potential spot to invest in new operations ignore city and county borders, the region's economic development officials say.
Those officials are asking the Valley's city and county governments to look past them, too.

Eight local governments in Hidalgo and Cameron counties have paid membership dues to join the Rio South Texas Economic Council, a newly formed agency charged with promoting the Valley as a whole to outside investors, said Sofia Hernandez, Hidalgo County's economic development coordinator.

And at least a dozen more entities - from other governments to educational institutions to private enterprises - have indicated they may join the effort as the council's objectives are more clearly defined.

Because the council is still in its organizational phase, Hernandez said, plans for how it will operate and what its final makeup will be have yet to be determined.

But Hidalgo County Judge J.D. Salinas said its ultimate goal will be to foster collaboration among Valley cities and counties to improve the region's ability to compete for jobs and outside investment against other markets in Texas, the nation and around the world.

"We're trying to get a team effort for economic development," Salinas said, noting the "Friday-night mentality" of Valley cities constantly struggling to come out on top.

"The bottom line is, we need to start promoting the Valley as a region if we're going to attract those Fortune 500-type companies."


The council, which states in its bylaws that it will "promote the economic expansion and diversification of communities," has been quietly pieced together over the past year in discussions by some of Hidalgo County's leading economic development officials.

Commission members selected a board of directors, finished drafting bylaws and setting membership dues and received recognition from the Texas secretary of state - and that was all just last month.

But a major step came last week when the Hidalgo County Commissioners Court agreed to pay $30,000 in membership dues to join the council, which Salinas was elected to chair.

The council is the result of a natural growth in how government officials see the Valley and the avenues to improve its economic standing, said Keith Patridge, the president and chief executive officer of the McAllen Economic Development Corp.

For years, the Greater McAllen Alliance - a conglomeration of six economic development councils in Hidalgo County - worked to market the area, Patridge said. After Salinas took office in January 2007, he told them he wanted to bring a countywide approach to economic development.

But when officials started to work on a council centered on Hidalgo County, Patridge said, they quickly found that entities in Cameron, Starr and Willacy counties also had interest in joining.

A Valley-wide approach made more sense because each area has its own assets to bring to the table, he said. And by bringing more counties to the table, it consolidates the Valley's strengths and marketability as a major metropolitan area.

"When we bring in a company, they don't pay attention to where the city limits are," Patridge said. "They want to look at the buildings, the rail, the workforce. Those are the things that matter most."


Marketing will be a key part of the council's job, Patridge said. Even its name was chosen to distinguish the Valley as different from other parts of the state.

He said the word "Rio" identifies the council as part of the Valley, but it also functions as a quasi homophone for "real," poking fun at other cities like San Antonio that claim to be in South Texas.

However, a clever name won't be enough to pull in the biggest companies.

Salinas said the Valley needs to improve the skills and education of its labor force, develop its trade and transportation corridors and foster a hospitable business climate if it wants to compete for outside investment against other areas in Texas.

The best way to make those improvements is by collaborating on projects like the extension of Interstate 69 to this region and by showing a unified front on legislative trips to Austin and Washington, D.C., said Cameron County Judge Carlos Cascos, who was selected as vice chairman of the council.

He said the cities and counties in the Valley need to change the mentality that economic development is a zero-sum game.

If a business chooses to locate in Hidalgo County, Cameron County isn't automatically a loser, Cascos said. Some Cameron County residents could commute to the business for work, or Hidalgo County residents employed at the business could travel to Cameron County for play.

"Cameron County is not competing with Hidalgo County," Cascos said. "We're competing against other metro areas, other states and other countries."

Jared Janes covers Hidalgo County government and general assignments for The Monitor. He can be reached at (956) 683-4424.

Abu Dhabi: A City Rich in Branding

by Mya Frazier November 10, 2008 issue

So how do the branding efforts of Abu Dhabi, recently christened by Fortune Magazine as “the richest city in the world,” influence the city's prosperity?

Established in 2007, the oddly named Office of the Brand Abu Dhabi, referred to as OBAD, was given two mandates: Create a brand that “captures the essence of the Emirate of Abu Dhabi in an identity that is visual, literal and behavioral” and “act as the guardian and patron of this brand identity,” according to its website.

The apparent simplicity of these mandates can be deceiving. As with any branding challenge—whether of a product or a booming metropolis—paradoxes and complications abound, and the case of Abu Dhabi is no exception.

There are few cities in the history of the world that have undergone the kind of dramatic transformation Abu Dhabi has inside such a short period of time.

From a product-branding perspective, Abu Dhabi's success is comparable to the rise of Crest—a toothpaste brand developed in 1955 that eventually morphed into the multi-sku line of products that it is today, but in the timeframe of just two decades.

It wasn’t until 1958, when oil was discovered, that the dramatic remaking of the economic, social and cultural life of this island city went into hyper-drive. Up until the middle of the 20th century, the richest families in Abu Dhabi lived in mud huts, nice mud huts, admittedly, but mud huts nonetheless.

In 1958, the population topped just 15,000 residents. Fast-forward to today and the city’s estimated population of 1.6 million is expected to balloon to three million by 2030, according to the Abu Dhabi Urban Planning Council. The humble roots of this exploding city are not ignored by the OBAD. “Prior to the mid 1960s, Abu Dhabi was a poor (yet proud) society of people who lived off pearls and fishing,” notes the OBAD’s website.

Today, the prosperous ruling elite—enriched by petrodollars—live in palaces and sprawling villas amid expansive shopping malls and the world’s most expensive hotels. It’s a shimmering coastline city that rises from the desert like an image of Oz. So, how has the city of Abu Dhabi decided to brand itself on the international scene? And is it working?

The OBAD approached the branding initiative by defining the competitive market. It noted the challenge of destination marketing and of creating a brand that isn’t “wallpaper.” “In the UK market alone there are more than 120 destinations busily marketing themselves,” the site notes.

The OBAD carefully refined its audience to “Cultural Seekers,” or people who “see travel as a way to enrich themselves, always seeking new experiences in new countries and they have enough money to go wherever they choose…This group of luxury travelers are worldly and early adopters—the avant-garde of any trend.” After defining this segment, OBAD conducted face-to-face workshops in the UK, Germany and France.

Using an inverted pyramid, the branding process involved funneling down the various product features (desert, Bedouin, dates and coffee, mosques) functional benefits (year round summer, sun and sand), emotional rewards (authenticity, relaxation, pride) consumer values (confidence, adventure) brand personality (wealth, legacy, understated) and, finally, the summing up of all this information into a single word that defined the brand of Abu Dhabi: Respect.

To engage residents of Abu Dhabi in the branding process, the OBAD held a photography competition, which asked for submissions that “capture the sprit of the Emirate of Abu Dhabi,” and received more than 2,000 photos.

But promoting Abu Dhabi as a brand has been externally focused as well. The effort to gain attention on the international scene is already paying big dividends. Amid a looming recession, American media companies recently announced plans to open operations in the island city, a move that will undoubtedly drive more attention to the booming region. CNN, HarperCollins, Random House, the British Broadcasting Corporation, The Financial Times and Thomson Reuters Foundation, will open up offices in a new 200,000-square-meter campus dubbed the Abu Dhabi Media Zone.

The development of the media zone follows another significant media investment—a US$ 1 billion deal with Time Warner’s Hollywood studio Warner Brothers. This isn't the only major investment in media by Abu Dhabi recently. Another arm of the government signed an unprecedented US$ 1 billion deal with Warner Brothers to make video games and movies with that company. Yet another US$ 1 billion was spent to finance a film company. And to increase its cultural cachet to tourists, Abu Dhabi even convinced the Louvre and Guggenheim museums to open up branches in the city—it is,of course, supporting the Western cultural outposts with billions in investment.

In “Brand Dubai: The Instant City; or the Instantly Recognizable City,” a paper published in the academic journal International Planning Studies in 2007, author Samer Bagaeen notes that US$ 100 billion worth of real estate under construction or in the pipeline has helped put the Dubai property market on the world stage, but he does question the “sustainability of this growth.”

Indeed, despite the pending worldwide economic downturn, the oil boom and the petrodollars driving this prosperous city’s transformation is far from over, especially considering Abu Dhabi’s seemingly limitless energy sources: 7.7% of the world’s oil reserves and the fifth largest natural gas reserve in the world. Not bad for an area of just 67,340 square kilometers on a T-shaped island that is the capital of the United Arab Emirates in the Persian Gulf.

Yet, even the threat of an unsustainable growth trajectory—or a shift away from fossil fuels—doesn’t seem to be lost on Abu Dhabi. In February 2008, Abu Dhabi broke ground on a new development district referred to as Masdar City, “the world’s first zero-carbon, zero-waste, car-free city,” and is spending US$ 22 billion to build it. The city is expected to house 50,000 people and will run on solar energy and be linked to a light-rail network.

“We are creating a city where residents and commuters will live the highest quality of life with the lowest environmental footprint,” said Masdar CEO, Dr. Sultan Al Jaber, in a press release announcing the groundbreaking. “Masdar City will become the world’s hub for future energy. By taking sustainable development and living to a new level, it will lead the world in understanding how all future cities should be built.”

The development is part of a broader initiative, the Masdar Initiative, which includes the scheduled opening in 2009 of the Masdar Institute of Science and Technology (MIST), which Abu Dhabi calls “the world’s first graduate university dedicated to renewable energy.” MIST, like other initiatives, involves a Western partner, in this case the Massachusetts Institute of Technology.

Ironically, despite using petrodollars to pay for the Masdar Initiative, the mission of the new institute will be to develop “the next generation of solutions to the world’s growing dependence on fossil fuels.”

The seemingly endless and exhaustive list of audacious plans by Abu Dhabi ensures that this vibrant city is only just beginning to define itself. But surely, there’s little chance Abu Dhabi will get dismissed as “wallpaper” and undoubtedly will be an attraction for the world’s “cultural
seekers,” for decades to come.

Perhaps, if the time comes for the OBAD to choose another word to sum up the brand, a possible replacement might be ambitious.

Mya Frazier is an independent business journalist based out of Columbus, Ohio. She is a frequent contributor to Advertising Age and a former advertising columnist and reporter at The Cleveland Plain Dealer and Cincinnati Business Courier.

OP-ED: Existing business and industry vital to economic development

Traditionally, economic development organizations have focused on creating a community’s wealth by directing a majority of their business recruitment efforts outside the community.

These efforts include external marketing campaigns, company visits, trade show attendance and the extension of invitations to corporate decision-makers, journalists and site selection consultants.

The behavior of recruiting companies from away is reinforced by media outlets that report with great prominence on the new capital investment and job creation.

Generally, the financial cost, vis-a-vis tax incentives associated with recruiting companies from outside a community, is higher than any other form of business recruitment.

Further, it sends a message to the existing business community that they are less important.Statistical data tell us that approximately 80% of all job creation occurs from within the community.

With this in mind, it is important for economic development organizations to provide a high level of business support to their existing business community.

Although communities typically hire outside consultants to provide them with their wisdom about business recruitment strategy, a better quality of actionable intelligence can be gained by speaking with the community’s existing businesses; not in group discussions or public forums but in private, one-on-one meetings.

If the gathered arsenal of information is acted upon, it will not only strengthen the community’s economic base and bolster the existing businesses, it will create a more attractive setting for businesses seeking to relocate.

Although the current economic climate has caused a dramatic decrease in new company relocation announcements and accompanying headlines, many businesses are being created in the city of Charleston.

Existing businesses, especially the knowledge-based companies, continue to grow and thrive, reinforcing the aforementioned statistics on job creation.

Now more than ever, economic development organizations need to utilize their resources to provide value-added services to support their business constituents and spend less time and resources chasing companies that are unlikely to relocate their business operations.

However, one exception does exist: Foreign companies are increasingly seeking to take advantage of the weaker, but currently strengthening, U.S. dollar to expand into new markets.

Although state economic development organizations are often better-equipped to capture some of the capital investment by large foreign companies, local and regional development initiatives can create opportunity by facilitating expansions by the smaller foreign companies.

Local economic development organizations are positioned to best identify technologies that have applicability within their communities and leverage the respective stakeholders and network to build companies with local resources — a win-win for the community.

Tomorrow’s successful economic development organizations will be defined as those that acknowledge the changing face of economic development and optimize their financial and staff resources between business recruitment and retention strategy.

These efforts should be augmented by the development of technologies into successful businesses using local and regional networks to create value for the community in times of prosperity and in a challenging economic environment.

Ernest Andrade is the director of the Charleston Digital Corridor, www.charlestondigitalcorridor.com, and principal of Andrade Economics, an economic development consulting firm.

Friday, November 07, 2008

Michigan struggles to change perception that it's reliant on traditional industries

The regressive slide of Michigan's national economic image has created an encyclopedia of branding pitfalls that businesses big and small are hoping to avoid.

It's prompted many Michigan companies to ask marketing firms to help reshape their images to highlight their economic diversity and flexibility, according to several interviews with marketing professionals.

"Everyone has recognized and realized especially in this state that diversity is paramount," said Jim Hume, president of Ann Arbor marketing firm Phire Branding. "They want to appear like they have a balance. They want to appear as specialists in every market they're in."

Michigan's struggles to escape the shackles of its image as an economy reliant only on traditional manufacturing has led firms in many different industries to forcefully present their own image as diverse.

Injecting an aura of diversity into a company's image requires a thorough assessment of companies' strategic plans and skills.

"You have to envision what the company's going to be and you have to project that image before the company is even there," Hume said.

For The Quell Group, a Troy-based marketing firm, rebranding Michigan companies comes down to highlighting strengths that clients haven't historically focused on.

"We're trying to help our clients do that," said Mike Niederquell, owner of The Quell Group. "The main thing when people talk about branding and positioning is you have to have something that's unique enough to distinguish yourself in that area."

Many automotive engineering clients have skills that can be transitioned into other sectors, including aerospace and renewable energy. A Quell Group client, automotive engineering firm Ricardo Inc., has had tremendous success reshaping its image and highlighting its rapidly expanding renewable energy engineering services capability.

The firm - whose renewable energy related revenue has increased three-fold in the past year to 10 percent of its revenue - this year received a $991,000 tax credit from the Michigan Economic Development Corp. to establish a $2 million battery systems development center. Its engineering services for plug-in electric vehicles and hybrids are helping reshape the company's reputation.

"Ricardo is fuel economy," said Dean Harlow, president of the Van Buren Township-based North American headquarters of Ricardo, which has annual revenues of $344 million.

Projecting an image of flexibility and diversity is an imminent challenge for automotive companies in particular, said Debra Power, owner of Ann Arbor marketing firm Power Marketing.

"We get people calling us and asking, 'How can I kind of retool what it is I already do in a different way?' The question becomes for the company should they rebrand themselves to appeal to a different demographic, a different audience? Does that make sense, should they do it now, should they wait? I think it depends on your industry," Power said.

"If your company is obviously directly working with the auto industry, you're going to bleed so much that you've got to change. And you've got to do it now."

But the message applies to more than just the auto industry. The shocking crisis in the financial industry in the last month has illustrated that even the most seemingly stable of industries can face crises overnight.

Power said Michigan's small businesses face the same challenge as traditional manufacturing and auto companies. Recognizing the need to diversify their business and their image is crucial, she said.

Downtown retailers, for example, face high hurdles, Power said.

"They all have to get a wake up call right now. If you're not doing it right now, next year could be so detrimental to your bottom line that you may not survive," Power said. "That's a segment that's really going to suffer, and they've got to figure out how to get people to their downtown location."

Marketing firms offer a variety of suggestions for pursuing a new image. They include:

•Assessing the company's fundamental strengths and identifying areas that aren't being highlighted.
•Surveying customers and clients to get a sense of how they view the company.
•Leveraging digital marketing technology to target specific segments of potential new clientele.
•Redesigning Web sites and marketing materials to appear fresh.
"Updating that image can go so far," said Mike Rouech, vice president of brand strategy for Phire Branding.

Appearing more diverse and flexible isn't limited to large companies. Among the most diverse companies are the smallest IT firms, whose clientele can range across dozens of industries.

"By the nature of what they do they're able to work with whatever sector of the economy that's strongest," said Charlie Penner, a regional director of the Grand Rapids-based Michigan Small Business & Technology Development Center. "Particularly the smaller companies may recognize the need to be diverse. They may be less diverse than they like to be. But I think they're certainly aware of the dangers of not maintaining a diverse client base, geographically as well as by industry."

Contact Nathan Bomey at (734) 302-1725 or nathanb@mbusinessreview.com.

Attracting businesses depends on five ‘building blocks’

Bob Challinor, Desert Valley Times

Recruiting businesses to a community is a trial-and-error process without a holistic community-based approach, said a speaker from the Nevada Commission on Economic Development.

Joe Locurto, director of Rural Economic Development with NCED, told an audience of 25 Wednesday that communities need to use five economic development building blocks to achieve successful business recruiting.

Locurto was part of the entire NDEC staff that acquainted Mesquite business owners, city officials and council members with programs offered by the commission. The three-hour seminar was held at the CasaBlanca.

NCED assists communities, local governments and businesses with a wide scope of services – marketing, corporate site selection, grants, business development, product development and employee/entrepreneur training are some of the programs – throughout the state.

NCED followed up its morning session with afternoon individual business-to-business assistance. The staff concluded its Mesquite visit with a tour of the community Thursday.

“We take our division directors into the community and have realistic discussions about your needs,” said Michael E. Skaggs, NCED executive director. “Our agency has gone through two rounds of budget cuts and probably will go through one more. It’s time to get more efficient and get back to the basics.”

Locurto said communities need to use leadership development; workforce development; community capacity building; existing business development and entrepreneur development to gain successful business recruiting.

“Mesquite is young enough to take a look at where others have made mistakes,” Locurto said. “And it can see what worked in other places.”Leadership development involves a shared community vision, some sort of leadership institute, a youth leadership program, active civic organizations and volunteer programs plus community leadership recognition, Locurto said.

“Leadership development could come from talking to high school students about business development,” he said. “The leadership institute could be within the school system or the community.”

School-to-careers and summer intern programs; on-the-job training, an adult literacy curriculum; a local training institution with technology; a human resources managers network and local workforce development program drive workforce development in the community.

“You want trained employees,” Locurto said. “It’s extremely important to have something in the schools for training. Have career days. Expose students to what it takes to get into specific businesses. Offer technical training.”

Community capacity building is infrastructure and services available in a community for recruiting and growing new businesses, Locurto said.

“It’s high-speed Internet, cultural and recreational opportunities; adequate affordable and workforce housing; adequate public safety protection and health services,” he said. “It’s extremely important to have these.”

Many times a community will recruit a business but neglect to help develop it, Locurto said.

“The business owner will say, ‘they did a great job helping me get here, but we haven’t seen them since,’” Locurto said. “It’s important keeping in touch with the businesses when they’re here. Set up meetings with local businesses and see what their needs might be.”

NCED has business assistance resources available to businesses, from energy inventories to a manufacturing assistance program.

Equally important to recruiting businesses is entrepreneur development. Locurto said entrepreneurs who start businesses in their own community and who receive support through local assistance programs are much more likely to keep their businesses in town.

NCED has business assistance programs, educational programs and a mentoring program. Locurto recommended having a community capital group, an entrepreneurs network group, business challenge competitions and business incubators.

“Mesquite does a great job marketing the community,” Locurto said, adding that a successful recruiting business recruitment program requires a favorable government atmosphere and local and state incentives.

“The more you can add to that (incentives) pie, the more you can get and keep businesses,” he said.

“I don’t do anything without a strategic plan,” Skaggs said. “The building blocks Joe talked about are just a strategic plan. If you share that strategic plan with us, we can help you so much more. We know exactly what you’re trying to do.”