ED Pro Ed Morrison's Economic Development predictions for 2005

Submitted by Norm Roulet on Mon, 01/03/2005 - 13:09.

From Ed Morrison's always insightful and expert ED Pro website are his predictions for 2005 - feel free to add yours as comments to this posting.

Predictions for 2005 Predictions are always a tricky business, but they're fun to think about. Here's what I expect to see in economic development in the coming year.

Awareness of the skills gap will start to sink in:
We face a basic imbalance in our workforce system. Baby boomers are retiring, and we are not producing enough skilled workers with post secondary education. (Too many kids are dropping out of high school, and too many kids are graduating from high school with weak skills and no career plans.) So, the skills gap is growing. Here's an example from Akron. Here's another from Michigan.

More regional partnerships:
An increasing number of EDPros will recognize that the future lies in regional alliances. The reason is simple: In a global world, no one can afford to go it alone. It is only within a region that businesses can find the brainpower and innovation networks they need to be globally competitive. We'll continue to see our share of regional initiatives undercut by silly considerations like old high school football rivalries, but overall, more EDPros will figure this out.

Growing backlash against incentives:
The $250 million deal for Dell will raise questions in North Carolina, just as the $3.2 billion Boeing deal has done in Seattle. (That deal may have to be reworked if the World Trade Organization intervenes.) The Ohio federal appellate decision will embolden incentive critics, and you can expect bi-partisan efforts, like this one, to reduce subsidies to companies.

More focus on incentive accountability and "clawback provisions":
Increasingly, state and local governments will be negotiating tougher incentive agreements. In part, the move will be defensive. In an era of tight government budgets, no political leader will want to appear "soft" on an incentive deal. At the same time, state legislators will be pressing for more accountability, like this legislation recently passed in Ohio.

More emphasis on entrepreneurship:
Rural areas, especially, are gradually learning that entrepreneurship offers the best pathway to higher prosperity. Business recruitment -- long the single strategy in many places -- has begun to play itself out. Here's an article from Georgia that makes the point.

A new focus on innovation:
Manufacturing is not dead in this country, nor will it be in our lifetimes. But successful manufacturers will be those who innovate with new product and process improvements. Prompted by the new report InnovateAmerica from The Council on Competitiveness, we should begin to understand that innovation represents our best answer to globalization.

More international partnerships:
The weak dollar will help us wake up to the opportunities in the global market. More communities will be following the lead of places like Hampton Roads, Fairfax County, and Tucson in developing innovative global partnerships. The regions that will be ahead of the curve on this trend will see their efforts as building global innovation networks.

Growing visibility for sustainability:
The high costs of sprawl will start to bite local and state budgets even harder. In some regions, water shortages will push sustainability issues to the front. Finally, a backlash against Big Box retailers -- particularly Wal Mart -- will raise questions about what economic development really means. At the same time, sustained high oil prices will lead to new markets in alternative fuels -- biodiesel, ethanol, wind -- and the growing realization that elements of a hydrogen based economy are likely to emerge in ten years or so.

More aggressively entrepreneurial colleges and universities:
Across the landscape of economic development, an increasingly assertive leadership among our colleges and universities is leading to new roles in economic development. Soon, we can hope, state legislators and Congress will wake from their slumber to discover the critical role our colleges and universities play in our international competitiveness. Learn more.

The emergence of creativity as an economic development driver:
Regular readers of EDPro News know that I'm no fan of Richard Florida. And this trend has little to do with his theories of "the creative class". Rather, this trend emerged in Europe several years before Florida wrote his book. This ttrend is rooted in the deep connection of creativity to innovation. This trend also focuses on the emergence of digital media and the convergence of entertainment and education.

Blurring lines between economic development, workforce development and tourism development:
Profvessionally, we all grew up at a time when the boundaries separating these fields were clear. Increasingly, though, we will see professional bridging the gaps. Communities that foster these conversations will move ahead with a shared understanding: In this era of global competition, we're all in the same boat.

New focus on our backyard:
More EDPros will do the math and start pushing ahead with retention and expansion initiatives. Here's an example from Enterprise Florida. The big leap -- and we might not be ready for it yet -- will come in realizing that solid "retention and expansion" initiatives are really innovation initiatives. As Michael Porter points out there's no such thing as high tech or low tech industries...only high tech or low tech companies. (In fact, if we're lucky, we'll ditch the term "retention and expansion" altogether.)

Tighter scrutiny on marketing budgets:
Economic development money is no longer free, and the recruitment game will come under tighter scrutiny. Business, media and political leaders will continue to look for more accountability and metrics. As the economic development zeitgeist shifts to workforce, innovation and entrepreneurship, more people will wonder whether marketing budgets should be so large.

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