Economic and Community Development
FDI: A Two-Way Street
You’d probably guess that the United States is the leading origin of Foreign Direct Investment in the world. You may be surprised to learn that the United States is also the top destination for Foreign Direct Investment.
An article by our friend Jay Garner, CCE, CEcD, President and Founder of Garner Economics, in the March/April issue of Expansion Solutions magazine illustrates this two way flow of investment and jobs. Garner also outlines the key reasons foreign companies decide to invest in the United States. While cost isn’t typically the driver, these factors are:
- Market Access – The US is the world’s number one market
- Intellectual Property Rights – The US values IP and enforces its laws
- Quality of Place
- Business Climate
Building a United Front in St. Louis
A Post-Dispatch article from last week chronicles the long journey St. Louis has made over the past fifteen yearstoward regional cooperation. It is a familiar story – fragmented local jurisdictions slowly learning to present a united front, rather than compete, to attract investments and jobs to the region - with a familiar hero – the local chamber of commerce. Here’s an excerpt:
“When Dick Fleming arrived in 1994 to run St. Louis' economic development effort, he found a landscape that looked more tribal than regional.
Various city and suburban agencies made their own pitches to employers wanting to move or expand — in competition rather than cooperation. Some counties defined success by how many businesses they could lure from the city of St. Louis. ….
As part of the RCGA's first regional plan, which launched in 1995, Fleming made the various cities and counties agree to a no-raiding pledge.
They had to stop recruiting companies on one another's turf. They can't publicly disparage any part of the St. Louis area. If approached by a company from within the metro area, they must notify the company's current city or county to see if its needs can be met there.”
This is great earned media on an issue that doesn’t get enough public attention. It also highlights the important work done by the local chamber of commerce.
Check out the full article - RCGA works to unify a divided region
Portland's Athletics and Outdoor Cluster
When someone says cluster I automatically think high-tech, biomed or alternative energy. But a recent report mapping Portland’s Athletics and Outdoor cluster shows that clusters can blossom in all kinds of industries.
Anchored by Nike, Adidas and Columbia Sportswear, Portland’s Athletics and Outdoor cluster includes 700 firms employing 14,000 with an annual payroll of $1.2 billion. Wages in the sector average more than $80K annually. Those aren’t numbers to sneeze at.
This particular cluster is also interesting because it show that successful clusters are built on existing assets and unique local characteristics.
Learn more about Portland’s Athletics and Outdoor Cluster.
World Cities and Economic Recovery
Looking for a region that has bounced back from the recession quickly? Better look in Asia and Latin America.
Global MetroMonitor, a report released this week by Brooking Institution and the London School of Economics, ranks 150 metro regions from across the world based on gross value added– the value of goods and services produced, – employment and population. Topping the list was Istanbul, Turkey followed by Shenzen, Lima, Singapore, Santiago, Shanghai, Guangzhou, Beijing, Manila, and Rio de Janeiro rounding out the top ten.
Austin, TX is the top American metro region on the list coming in at 26th. Other highly ranked North American regions include Montreal (27), Virginia Beach (36), Dallas (39), Detroit (46) and Nashville (48).
Read more from this interesting report at: Global MetroMonitor: The Path to Economic Recovery
Networks Drive Innovation
Practically every region in the world wants to build a research park attached to a university and capture a slice of the high tech, innovation economy. Vivek Wadhwa of Duke University’s Center for Entrepreneurship and Research Commercialization would argue that innovation doesn’t happen that way. It is networks and risk-takers that drive innovation and entrepreneurship, not real estate development.
In a recent article in The Chronicle of Higher Education, Wadhwa argues that, “To boost entrepreneurship, they (regions) need to focus their energy not on infrastructure, but on people.” Here is his shortlist of suggestions to spawn innovation:
- Remove the stigma of failure
- Teach entrepreneurship to students and skilled workers
- Promote immigration
- Deepen networks, locally and globally
- Invest in education
Chambers can play a big part in all of these areas, whether or not they are paid to do economic development.
Emotional Attraction = Economic Growth
According to findings from a 3 year study by Gallup, cities that elicit the strongest emotional attachment for residents also had the highest rates of GDP growth. Three relatively subjective qualities – social offerings, openness and beauty – were determined to be the leading drivers of emotional attachment. Here’s how Jon Clifton, deputy director of the Gallup World Poll analyzed the results:
“Our theory is that when a community’s residents are highly attached, they will spend more time there, spend more money, they’re more productive and tend to be more entrepreneurial.”
26 communities with Knight owned newspapers, including Charlotte, Detroit, Lexington, Miami and Wichita, were surveyed for this study.
Find out more at: www.soulofthecommunity.org
Business Growth Challenge in South Dakota
The Rapid City (SD) Area Chamber of Commerce posed a challenge to its members – grow!
The challenge is part of new board chair Lia Green’s “Power of One” campaign that encourages each chamber member to create at least one new job during the coming year. If successful, the effort will yield at least 1,150 new jobs for the region.
The chamber has joined forces with the local economic development partnership and small business development center to provide information and access to business and employment growth services. They will also track progress and highlight growing businesses in their monthly print newsletter.
They’re off to a great start with 56 new jobs already. Read more about the program on page 4 of the Rapid City (SD) Area Chamber’s November Investment Report.
This program is a great example of the role all chambers can play in economic development.
Metro Regions Jobs Report
A report released today by our friends at Garner Economics notes a slow down in the number of US metro regions that added jobs in September. Only one more region added jobs in September compared with August. In September, 168 metro regions were experiencing year over year job growth while 193 were losing jobs compared with the same period last year.
The report also ranks regions based on how current employment compares to their pre-recession employment peek. Texas has the most metro regions in the top quartile of that list while California and Florida have the most metros that in the bottom quartile.
Check out the full study - Progress Report: Job Growth in U.S. Metros
Friends Blogging about Friends
Today our friends over at Market Street Services wrote a blog post about our friend Kelly Miller at the Asheville (NC) Convention and Visitors Bureau. Kelly, a graduate of the ACCE Ford Foundation Regional Sustainable Development Fellowship, was a featured speaker at a recent C2ER regional conference that was held in Asheville. He presented on a successful state legislative effort to raise the bed tax in Asheville by 1% to create a funding source for key tourist development projects.
Ranada from Market Street provides a great recap about a strong program. It's worth a read.
Experts on Manufacturing
Our friends at the Southern Growth Policies Board recently asked a panel of experts to explain why is manufacturing suddenly so popular among policy makers. Their responses about the importance of manufacturing to overall economic health should be news to anyone in the chamber profession, but their perspectives may help you make the case.
Click to read: Ask the Experts - Manufacturing
Here are a few select quotes:
- "Manufacturing can be a driver to speed recovery and build economic stability."
- "...data show that manufacturing jobs pay 20 percent more than service-sector jobs"
- "...if manufacturing experiences an upturn, we will certainly see the economy improve."