Thoughts on the GCP strategy

Submitted by Ed Morrison on Sat, 03/01/2008 - 20:14.
About  week ago, Jay Miller from Crain's Cleveland Business sent me an e-mail. He asked three questions about the Greater Cleveland Partnership. In the interests of promoting an open discussion about the activities of Cleveland's chamber of commerce, I reprint my responses to Jay's questions. He started by pointing out the the GCP points to NorTech and BioEnterprise and Team NEO as its economic development strategy.

JM: So I have a three-part question: Do you think those organizations (NorTech and BioEnterprise and Team NEO) are having a reasonable level of success in the areas they focus on?

EM: These organizations are having some success, but their regional impacts are relatively small. These organizations are slowly changing the dynamic of the relatively small footprint around Cleveland and Cuyahoga County.   


Here is the rub. In some sense, you cannot have it both ways. 

The GCP looks at these organizations and says, "Here are Greater Cleveland's economic development organizations". 

The FFEF looks at the same organizations and says "Here are our regional (read 16 county) Northeast Ohio economic development organizations". 

This confusion leads to misunderstanding. By "outsourcing" its economic development responsibilities to these organizations, GCP undercuts the utility of these organizations as neutral regional networks and reinforces the impression (and reality) that these organizations are "Cleveland-centric". 

At the same time, there's good evidence to suggest  that these organizations do not really invest much beyond a relatively narrow footprint around Cleveland. Finally, these organizations are relatively expensive to run, and not very transparent in their operations. No one is quite sure how all this fits together or what success looks like. 
JM: Part two: Can GCP fairly share the credit for the successes of those organizations (or should it share the blame for their lack of success)?

EM: GCP can and should claim some success for these organizations, but that does not substitute for leadership in economic development and workforce development. The major challenge facing this region -- or any region -- is workforce development. The GCP is largely disengaged from education and workforce development. It's initiatives are small scale and hardly transformative. 


At the same time, by claiming too much of the ownership of these regional organizations, GCP undercuts their regional utility. They are seen as captive to the interests of the Cleveland business community. (Out in the Mahoning Valley, they call this "Cleve-centrism".)
JM: And part 3: Is this stategy --of a central organization farming out tasks, an effective way (or the best way) for a chamber of commerce to operate (I realize as I write that that I'm not exactly sure if there is a particular role a chamber of commerce-like organization should play)?

EM: No. It's not a very effective strategy. 

1. The strategy creates confusion. As I have suggested, this outsourcing approach engenders a lot of confusion in the region about these organizations. Greater Cleveland (Cleveland+) is not the region. The footprint of Greater Cleveland (Cleveland+) is Cuyahoga, Lake, Medina and (maybe) Lorain counties.  (A recent Innovation Alliance between Lorain and Akron suggests that Lorain is looking more toward Akron than Cleveland.) Holding these organizations out as both Cleveland+ and Northeast Ohio (16-22 counties, depending how you count) initiatives creates a major disconnect. 

Effective chambers (example: Oklahoma City, Atlanta) focus on setting a privately-led agenda for economic development and workforce development. Sadly, the GCP is not very good at doing that.  

(Background: I developed the Oklahoma City Chamber strategy for economic development starting in 1994. I worked there for seven years as we implemented the strategy. OKC is now model of how a chamber should do economic development.  In fact, a delegation from Milwaukee is visiting Oklahoma City this week. Learn more: http://www.okcchamber.com.)

2. The strategy is slow. The process of economic development in this region is slow. The convention center process has dragged on for ten years. The process is cock-eyed and the County has made major commitments to build a convention center Med Mart complex without a business plan in a very soft market. The GCP launched an expensive and ill-conceived effort to get casinos for a handful of Cleveland developers. That took about two years. 

The idea of a design district is... well, I'm not sure where.  

3. The strategy misses a major challenge in talent development. Meanwhile, major voids exist in education and workforce development strategies. The Cleveland-Cuyahoga County WIB operates with two staffs, despite a "merger" announced a couple of years ago. The GCP has no clear STEM education strategy, and no drop-out prevention strategy. 

(About a year ago, I was teaching an advanced strategy lab at the Economic Development Institute. When I mentioned the problem of high school drop-outs, I noted that Cleveland's drop out rate was about 60%. 

The head of economic development for the Austin Chamber was in my class. He raised his hand and asked: "If 60% does not startle the Cleveland business community, what will?")

By failing to demonstrate strong collaboration in workforce development, Cleveland lost out on the most innovative and flexible federal economic development program to come along in a generation: WIRED (Workforce Innovation in Regional Economic Development).  

4. The strategy is not accountable or transparent. The fact that we are still spending time trying to figure out the GCP's strategy should tell you something. Leading regions publish clear metrics or scorecards telling everyone where they are heading. Transparency is important because without it, trust deteriorates. 

Regions with strong networks of collaboration will be more competitive. They will learn faster. Spot opportunities faster. Align resources faster. Act faster. Transparency is critical to developing this trust. 

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WSJ says "become more like Texas and less like Ohio"

I think a good place to begin assessing the performance of all things GCP would be in yesterday's Wall Street Journal - an industry rag - which tells the world "The challenge for our national economy in a world of competition is to become more like Texas and less like Ohio."

Now, I don't know of any GCP leadership (and family) who haven't been "leading" NEO for decades and so can escape responsibility for being the laughing stock of the world, in the paper they hold more sacred than the bible...

So, the answers to all Jay's questions are, Nortech, Bioenterprises and TEAMNEO don't even exist, as far as economic policy is concerned, as the conservative business leadership of the world thinks the GCP sucks... Nortech is as important as a trade organization... Bioenterprises is a lab, and teamNEO is a PR firm, and every big city region has lots of all of them... but few are as fucked up as the GCP's NEO.

"Texas has been prospering while Ohio lags, and the reasons are instructive about what works and what doesn't in economic policy"... "Ohio's economy has been struggling for years, and most of its wounds are self-inflicted. Ohio now ranks 47th out of 50 in economic competitiveness, according to the American Legislative Exchange Council"... "A common joke is that Ohio lays out the red carpet for companies -- when they leave the state". And, "Ohioans may not like to hear this, but for any company considering where to locate a new plant or move an existing one, the choice between Ohio and Texas isn't even a close call."

Now, I think the Wall Street Journal is a root of all evil in the world, and their benchmarks are self-serving, but, regardless of that, if you are to judge a "Chamber of Commerce" by any measures it is how its performance is viewed by corporate interests... especially the WSJ...

Here is the WSJ editorial, in case it disappears from their site...

Texas v. Ohio
March 3, 2008; Page A16

As Barack Obama and Hillary Clinton race around Ohio and Texas for tomorrow's primaries, they are telling a tale of economic woe. Yet the real story isn't how similar the two states are economically but how different. Texas has been prospering while Ohio lags, and the reasons are instructive about what works and what doesn't in economic policy.

There's no doubt times are tough in Ohio. The state has lost 200,000 manufacturing jobs since 2000, home foreclosures are soaring, and real family income is lower now than in 2000. Meanwhile, the Texas economy has boomed since 2004, with nearly twice the rate of new job creation as the rest of the nation. The nearby table compares the states over a decade or so.

Let's start with the fact that Texas's growth puts the lie to the myth that free trade costs American jobs. Anti-Nafta rhetoric doesn't play well in El Paso, San Antonio and Houston, which have become gateway cities for commerce with Latin America and have flourished since the North American Free Trade Agreement passed Congress in 1993. Mr. Obama's claim of one million lost jobs due to trade deals is laughable in Texas, the state most affected by Nafta. Texas has gained 36,000 manufacturing jobs since 2004 and has ranked as the nation's top exporting state for six years in a row. Its $168 billion of exports in 2007 translate into tens of thousands of jobs.

Ohio, Indiana and Michigan are losing auto jobs, but many of these "runaway plants" are not fleeing to China, Mexico or India. They've moved to more business-friendly U.S. states, including Texas. GM recently announced plans for a new plant to build hybrid cars. Guess where? Near Dallas. In 2006 the Lone Star State exported $5.5 billion of cars and trucks to Mexico and $2.4 billion worth to Canada.

Ohio Governor Ted Strickland, a Democrat who supports Mrs. Clinton, blames his state's problems on President Bush. But Ohio's economy has been struggling for years, and most of its wounds are self-inflicted. Ohio now ranks 47th out of 50 in economic competitiveness, according to the American Legislative Exchange Council. Ohio politicians deplore plant closings even as they impose the third highest corporate income tax in the country (10.5%) and the sixth highest personal income tax (8.87%). A common joke is that Ohio lays out the red carpet for companies -- when they leave the state. By contrast, Texas has no income tax, a huge competitive advantage.

Ohio's most crippling handicap may be that its politicians -- and thus its employers -- are still in the grip of such industrial unions as the United Auto Workers. Ohio is a "closed shop" state, which means workers can be forced to join a union whether they wish to or not. Many companies -- especially foreign-owned -- say they will not even consider such locations for new sites. States with "right to work" laws that make union organizing more difficult had twice the job growth of Ohio and other forced union states from 1995-2005, according to the National Institute for Labor Relations.

On the other hand, Texas is a right to work state and has been adding jobs by the tens of thousands. Nearly 1,000 new plants have been built in Texas since 2005, from the likes of Microsoft, Samsung and Fujitsu. Foreign-owned companies supplied the state with 345,000 jobs. No wonder Texans don't fear global competition the way some Presidential candidates do.

So tomorrow the eyes of America will be on these two states moving in different directions. Ohio has an economy burdened by high taxes and work rules that impose heavy costs on employers. Texas embraces free trade, keeps taxes low, doesn't impose unions on business and has tooled itself for 21st century global competition. Ohioans may not like to hear this, but for any company considering where to locate a new plant or move an existing one, the choice between Ohio and Texas isn't even a close call.

The challenge for our national economy in a world of competition is to become more like Texas and less like Ohio.

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Greater Cleveland Partnership to lobby candidates for 3 projects

Presidential candidates who want to curry favor with the region's business leaders should start talking up an Erie County runway, a new Cleveland port and a new East Side boulevard.

That was one of the messages Wednesday at the annual meeting of the Greater Cleveland Partnership, the region's largest chamber of commerce.

Of course, the "boulevard" is the "Opportunity Corridor". So reports the 03/06/08 PD, making clear the purpose of the GCP. Pretty uninspiring, eh?!?!

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