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Learning from Cleveland and Mumbai
Sunday, March 04, 2007 Consider the slow pace of economic development in Cleveland:
Meanwhile, globally competitive cities are accelerating their pace of transformation. In Mumbai, India they are implementing plans to be a world class city. My brother Hunter and I just returned from a week of briefings and consultation. In one presentation, leaders demonstrated to us their practice of rapid piloting of infrastructure projects — their idea: “building infrastructure at the speed of thought”. In May, the primary coordinator on Mumbai workforce initiatives will be coming to Purdue to learn what we are doing to accelerate workforce innovation. In today’s globally competitive economy, velocity is your friend. Mumbai’s leadership is figuring this out. Cleveland’s business leadership is simply not set up to compete on these terms. Sad, but true.(Another important metric: per capita income growth. Cleveland began falling behind Pittsburgh in the early 1990’s.) Slow decisions are the consequences of following a model of economic development management that does not work particularly well. Last week, I saw the new network dynamic working in Mumbai. An outside economist developed a thoughtful critique of how the government was handling design standards for the redevelopment of Dharavi, Asia’s largest slum. Within a day, he was making his presentation in front of senior officials suggesting that there might be a better way. This agility — built on networks and trust relationships — is very healthy. The complexity of regional economic development requires us to adopt a flexible approaches that emphasize fast learning. In Valdis Krebs’ terms, the network quickly absorbed new learning from its periphery. In Cleveland, we have alternatives to managing economic devleopment that are more transparent, agile, and fast. Mumbai can provide us insights. It is an older industrial city facing a major transition due to the loss of its textile industry. (Until recently, Mumbai was significantly underperforming. India's booming outsourcing is concentrated in other market areas. Mumbai’s IT sector is small and struggling against competitive cities, notably Bangalore.) The issues that connect Mumbai to Cleveland are many. Indeed, the connection was first made by McKinsey in their report for Mumbai, where they cited Cleveland as a city that Mumbai should follow. Now, Mumbai, like Cleveland, needs to re-imagine itself. Another salient connection is this issue: How do you conduct complex transformation in a democratic context? Mumbai does not have the advantages of Shanghai, where transformations can take place virtually overnight. Economic development in China (where I have worked more extensively) is completely different than in India, where democratic norms and institutions prevail. In China, whole neighborhoods can be moved quickly. In India, government must negotiate with all the stakeholders. The folks in Mumbai have learned that in the democratic context transparency is strategic. Transparency is not a web site, or a forum, or even (excuse me, Chris) a professional position. These steps are all helpful, but they are tools or tactics. Transparency is a strategic decision by civic leadership that must be baked into the DNA of the process. The folks in Mumbai have figured this out (as have people in Research Triangle, Austin, and places as obscure as Evansville, IN.) There are no text books for regional economic development. As the McKinsey Mumbai report makes clear, cities should establish a few simple benchmarks, drawn from leading cities, to guide their strategies. So, it is very important to learn from others, set high expectations, ask compelling questions. For example, what would Northeast Ohio look like as a global leader in creative industries? To answer that question, we would need to look at what others are doing in London, Toronto, Copenhagen, Vienna. All these cities are deeply involved in developing their creative industries. (In the home of The Cleveland Orchestra is it not odd that we are not comparing ourselves to these cities routinely?) Los Angeles is also exploring this opportunity in creative industries. You can download their report, issued last week, here. The potential of creative industries is not lost on others. Here’s a quote from a report on the Mumbai economy released last month: “The gaming and animation market has huge growth potential.” It is projected to grow world-wide from $25 billion in 2005 to $35 billion in 2009. CIA is poised to lead the development of this cluster in our region. But, thusfar, I detect little support from Cleveland’s business community for Future, CIA’s Center for Design and Technology Transfer. Or, for defrag, the highly successful statewide creative industries forum launched at CIA. (In the light of this opportunity, can you understand my amazement that the GCP decided to commit any resources at all to pursuing gambling, a twenty year old low wage jobs strategy that is more appropriate for Tunica, Mississippi; Shreveport, Lousiana; or Rising Sun, Indiana?) Planning regular site visits to leading cities — a common practice elsewhere — would help Cleveland’s business and foundation leadership keep focused on what matters, learn from others, and set high expectations. Some months ago, I encouraged the FFEF leadership to start this practice of learning from other cities and regions through regular site visits by a regional leadership delegation. These delegations typically range from 30 to 40 on the low end to 150 on the high end. Nothing much happened beyond a few e-mail exchanges. Why are we so slow in Cleveland? The word "plan" is both a noun and a verb. If you focus your efforts on the noun, you will be disappointed. Practical plans are never perfect and perfect plans are never practical. In a sense, in Northeast Ohio, our foundation and business leaders have been stuck on plan as noun. Plan as verb gives you another perspective. There is never a finished action plan or strategy in regional economic development. Good strategies are always a “work in process”. The activity is the end product. The civic habits of “strategic doing”, derived from David Cooperrider’s work in appreciative inquiry, work well to focus civic activity and translate ideas into action quickly. Strategic doing provides simple rules to guide a complex process. This point is made well in a recent book, The Starfish and The Spider: The Unstoppable Power of Leaderless Organizations, which cites David’s work. In old industrial models, civic engagement appears as one step in a long process. (Think of an administrative process with a “public comment” period.) In this rapidly disappearing world of rigid command and control hierarchies, leaders think in terms of “top-down” or “bottom-up”. Leaders fear that opening the process up too fast from the bottom will lead to chaos and confusion. In new network based models of economic development, civic engagement is not a step in a process. It is the process. Top down or bottom up is a false choice, because there is no top or bottom to a network. Ambiguity is inherent in these network models. Clarity comes in following a dictum of open source software development: Release early and often. What we need are simple rules to manage the civic process and accelerate learning. We also need fast design/build cycles for new ideas. We need simple, low cost and replicable civic processes that balance open participation and leadership direction. (For example, Midtown Brews, BFD, Meet the Bloggers, Tuesdays@Future or defrag.) That’s what strategic doing provides. At Purdue, we are adapting David Cooperrider’s concepts of appreciative inquiry and building the tools we need to guide strategic doing. We are applying these tools to workforce and economic development innovations. In the old industrial world, conversations were a distraction, an idle activity that detracted from productivity. In the networked world, guided conversations are an accelerant, a way to build relationships and align resources. Major innovations are taking place in civic transformation and regional economic development. Whether Cleveland's business and foundation leadership choose to learn about them is another matter. posted by Ed Morrison | Two leadership challenges for Cleveland Saturday, February 17, 2007 The substance of this post appeared as a comment on Brewed Fresh Daily.) In economic development, Cleveland faces two leadership challenges. The first involves understanding its role in the region. The second involves understanding its role in economic development. When we talk about regional issues -- sprawl, for example -- we are slowed by the Cleve-centrism of our Cleveland leadership. There is a common perception outside Cleveland that the Cleveland leadership is insular and out of touch with the region. (I've pointed out before that people outside Cleveland joke that GCP -- Greater Cleveland Partnership -- refers to God's Chosen People.) An example: The GCP is preparing a marketing strategy in which the Greater Cleveland Marketing Alliance is developing a regional brand. Read more. Developing a brand for Greater Cleveland and developing a brand for the region are two are very different tasks. Confusing the two illustrates "Cleve-centrism". Now to the second leadership challenge: Cleveland's economic development efforts stalled in the early 1990's, as the city's leadership failed to make the transition from a strategy of public investments to a strategy of private investments. In my view, for nearly a decade, the private sector has droped the ball. The prime evidence: The failure of Tower City. (Compare Indianapolis, where the private sector worked hard to build the residential base of downtown.) A second piece of evidence, the per capita income growth between Cleveland and Pittsburgh openned in the early 1990's and has been widening ever since. Although there are some promising indication lately that the private sector understands its role in the development process, the private sector leadership is still looking largely to public investments -- a casino, a convention center -- to bail out Cleveland. This strategy will not work. As the Cleveland economic base continues to erode, services are tougher to maintain. Upward pressure on tax rates continues. With the deterioration of services, the hollowing out process continues. It's a dangerous cycle that feeds on itself. We can reverse the decline by leveraging the assets of CSU, setting aggressive residential development goals, and creating an ambitious economic development strategy for the Euclid Corridor. The proposed design district is an impressive start. posted by Ed Morrison | Dealing with sprawl Friday, February 16, 2007 The substance of this post appears as a comment on Brewed Fresh Daily. Northeast Ohio is not dealing well with sprawl. A large part of the challenge comes in reconciling different perspectives on a complex issue. For seven years I struggled with drafting and implementing the development code for one of the fastest-growing county's (parishes) in Louisiana. This experience taught me that solutions lie at the intersection of perceptions. FInding these intersections is tricky. First you need a stable, reliable civic process that can safely house the exploration. You also need a flexible, clear and fair legal framework to outline options and encourage -- through incentives and penalties -- agreeements. A good development code provides a framework within which these discussions and agreements can take place. One of the biggest challenges we face is this: the legal structure underlying land use of this country is antiquated. As Hunter points out in his Meet the Bloggers interview , original zoning codes focused on public health issues. The idea was to spread things out and to create single use districts in order to protect the public health. Long ago, the original rationale for single use zoning faded. In general, our zoning ordinances have not adjusted well to our changing economy. As outlying communities have developed, the habit is to replicate older zoning ordinances originally developed for early 21st century industrial cities. As development uses became more varied and complex, the solution was simply to add more single use districts. When that approach could not work well, communities began adding overly districts (to, for example, protect historic districts) and planned unit development districts (to accommodate more flexible uses). These adjustments are minor and at the margin. It is not uncommon now to go into a largely rural county and find a zoning ordinance with over twenty single use districts. The county has simply borrowed a zoning ordinance from somewhere else and made minor modifications. (They rarely consider that they do not have the staff, in many cases, to administer complex ordinances. This is a game developers always win.) In my view, a lot of the problem lays at the doorstep of the legal profession, which is devoted to a few resources to providing model statutes for states and model ordinances for local governments. Obviously, there is not much money in writing planning statutes and zoning ordinances. Some years ago, the American Planning Association stepped in to fill the void at the state level. There's no question that sprawl imposes costs that are not borne by either the developer or the homeowner. Some of the earliest work on the hidden costs of sprawl came out from Robert Burchell of Rutgers University. While sprawl arises from the relentless pressure of people looking for qualities of suburban and rural life they cannot find in the city, sprawl creates a classic market failure: People are not paying the true costs of what they are getting. Because of the way in which the zoning has evolved in this country, we have no easy way to internalize these external costs. The most common local response in high growth counties is impact fees. This strategy recognizes of fundamental fact of life: residential development does not pay for itself. In rare cases -- Oregon and Maryland come the mind -- state planning statutes are updated to provide for much stronger local control of development patterns. Advocates of smart growth like that point to these two states as examples of what we should be doing. Politically, however, few states have the option of passing such sweeping land use reform. In his Meet the Bloggers interview , Hunter proposes a middle course. He suggests that we begin using computer simulations to raise the question about while we want Northeast Ohio to look like as we develop. As a region we're not having this conversation. The metropolitan planning organizations the drive many transportation and land use decisions are not set up to discuss broader regional development patterns. We could, however, anchor this regional conversation in our colleges and universities. In Pennsylvania, a group of foundations got together and hired Brookings examine the impact of no growth sprawl. This report touched off an important and on-going debate about how Pennsylvania should develop. Like Pennsylvania, Ohio faces the same challenge of fragmented local government. The underlying structure of local government places heavy burden on state and local taxpayers. It becomes easy for the business community to complain about higher taxes, but these protestations have little impact. After almost a generation of Republican statehouse rule, Ohio has more local government employees per capita. The solutions to this challenge are deeper and more profound. We need to find new ways of collaborating across political boundaries. We are beginning to make some progress in this direction, but our progress is altogether too slow. The no growth, sprawl development pattern continues. As Myron Orfield has pointed out, these development patterns that lead to a hollowing out of our cities also lead to political polarization and gridlock at the state level. The irony, of course, is that the dream people chase by moving to the suburbs eventually fades. Open spaces are lost to yet another subdivision. Rural infrastructures are taxed beyond their limits. Schools become crowded. And emergency services are slower and in some cases less reliable. People with new $300,000 houses find raw sewage flowing in their backyard culvert after a rain. In sum, the zoning ordinances are not adequate to protect what we value. It will be interesting to see whether the Voices and Choices process will offer practical solutions to these regional challenges. In the end, Northeast Ohio needs a new development framework that raises these important questions and structures a stable exploration of alternative development scenarios. It will not take much to start. For one-tenth the money the foundations invested in Voices and Choices, they could underwrite a promising exploration of new regional directions. posted by Ed Morrison | The need for civic transformation in Northeast Ohio Thursday, February 15, 2007 In confronting the challenges of sprawl, by brother Hunter raises some interesting points in his Meet the Blogger interview. We have metropolitan planning organizations designed from the 1960's, and they haven't changed. (Listen especially to segment 9.) These organizations have difficulty defining or sustaining a meaningful exploration of alternative futures for Northeast Ohio. That's not what they were designed to do. Yet, we now have the capability to use computer modeling to define some alternative land use patterns and their consequences. See, for example, CommunityViz that helps people explore alternative land use scenarios. Alternatively, look at how Dayton used Myron Orfield's approach here. Orfield is now working in the Bluegrass region of Kentucky, where we are exploring alternative development scenarios for the region under the sponsirship of Bluegrass Tomorrow. Supporting these civic dialogues takes adjustments by a wide range of players. So, for example, we have redesigned CommerceLexington, the chamber of commerce in Lexington, to manage these dialogues, following the principles of "strategic doing". It's perhaps a little to much to expect the GCP to assume this role in Northeast Ohio, for a lot of reasons that we can group under "Cleve-centrism". But there are alternatives. As Hunter points out, a regional dialogue, anchored in our colleges and universities, could begin to raise these issues and explore alternative futures. We know what the pattern of current decisions yields: more sprawl. Designing a better future requires us to design stronger, more purposeful civic dialogues. In my view, to sustain these dialogues, we will need to tie them to our colleges and universities. We are now exploring in Indiana how to design such a statewide "civic transformation network" (our working title). We have serial entrepreneurs, civic entrepreneurs, venture capitalists, chambers, leadership programs, representatives from Indiana University, Ball State and Purdue participating in this exploration. Not the usual suspects. It's early, and all this might fall apart. But I don't think so. In traveling the across Indiana for the past two years, more and more people recognize the importance of regional civic networks to compete globally. Another person who can help lead the region in this direction: David Beach. In my travels across the country, there is no one who has a better grasp of these regional issues. His Green Cities, Blue Lake web site is extraordinary in its breadth and focus. posted by Ed Morrison | The Plain Dealer's coverage of economic development Tuesday, February 13, 2007 This Sunday's PD carried a story about an exciting new polymer center at Case. The story profiled Anne Hiltner, the Center's impressive director. Read more. In the world of economic development, this news is a big deal. There's only one problem: the event took place over even months ago (last July). See the original press release from Case here. The original PD story was short (324 words) and largely missed the importance of the event for our region. Profiling Dr. Hiltner is a good move by the PD. But the fact remains that the profile is separated from the event by seven months. I just question the editorial decisions made by the PD on this story. In other words, why did they place this story far below casino gambling in their economic development priorities in the past six months? Why did they take such a long time to recognize Dr. Hiltner’s extraordinary achievement? Why do the editors seem to have so little understanding that Dr. Hiltner’s work — and the work of other research scientists at Case — is critical to the economic future of our region? (See the recent working paper from the Cleveland Federal Reserve here. This paper underscores the importance of educational attainment and patents as key economic drivers.) As I look into the story, there are other important angles to explore. For example, the grant includes a partnership between Case and the Cleveland Metro School District. How will this partnership work? Could this partnership lead to a kind of Boston City Lab for polymers? (The grant also includes a partnership with Fisk University to expand engineering opportunities for African-Americans. How will that work?) What business development opportunities exist with microlayering and nanolayering processes? For people to start to see a positive future for the region, the PD needs to be telling a lot more practical stories about what could be. As we uncovered first at REI and later at I-Open, there are literally dozens of positive stories that capture exciting opportunities for our region: stories about new business models of open innovation; explosive growth among companies in preventive health care; the application of digital media to product development, medical research (robotic surgery) and education (in, for example, treating autism); new models of K-12 education; new models of high school engineering education (Fenn Academy); strong opportunities in MEMS; dynamic research in early childhood education; a good possibility for manufacturing wind power components (although Pennsylvania may have beaten us to the punch). The list goes on. Yet, the editors of the PD are very slow (or unwilling) to figure any of this out. We have no coverage of what is taking place in Milwaukee (a new initiative announced by the governor last week), Pittsburgh (continued technology-led development that is accelerating per capita income growth far past Cleveland), Detroit (a new strategy underway in January) or Cincinnati (expanded collaborations with Northern KY and a recent trip of civic leaders to Boston). Indeed, the best recent Ohio coverage on economic development comes from the Toledo Blade. See, for example, Ohio economy sputters as innovation declines. For a model outside Ohio, look to the Milwaukee Journal Sentinel. The editors are committed to shapng the regional dialogue in a positive way. See, for example, last week’s editorial Fostering innovation. In my view, the casino story last fall damaged the reputation of the PD statewide. The casino story revealed that the PD editors have become little more than a shill for self-absorbed downtown real estate interests. If we are going to have a strong regional economy (the jury is still out on that one), a vibrant, engaged newspaper will help significantly. The PD can do its part by putting some editorial focus on positive alternatives (not just “Cleveland: Dead or Dying” stories). Our move to a more prosperous region will accelerate with stronger, more professional economic development coverage by the PD. posted by Ed Morrison | Super Bowl ads, civic engagement, and the risks of too much money Saturday, February 03, 2007 At times, too little money is better than too much. Anyone who is worked with start-up companies understands this point. With too little money, entrepreneurs are forced to be resourceful. They focus on challenges really matter. They learn to learn from their mistakes. When times are tight, entrepreneurs take small steps to test ideas then expand the successful ones. They gain powerful insight from their mistakes. In the manufacturing world, having too little money corresponds with lean thinking. Lean management thinking eliminates non-essential material and processes in order to understand the dynamics of the core system. Lean processes force focus and "deep dives" to understand what is relly going on. This discipline tends to disappear when entrepreneurs have too much money. We got glimpse of these excesses during the "dot com" boom in the late 1990's. With too much money, grand gestures replace sensible experiments. (Remember the millions wasted on forgettable Super Bowl commercials? As Forbes noted, "More than a dozen Internet companies spent an average of $2.2 million for 30-second spots, amounting to more than $40 million of stockholder cash and not-so-hard-won venture capital.") Too much money tempts entrepreneurs to outsource their thinking to consultants. Awash in cash, they hire "the best". This mistake leads to a hard landing when entrepreneurs learn that their interests are not aligned with their hired guns. They overlook the fact that their outside consultants are also running a business...a different business. So, while business interests may be aligned for a time, the consultant all too quickly powers on to the next Big Project to keep the cash flowing. Fat wallets create another problem. Too much money weakens the impulse to learn. With too much money, mistakes are quickly shoved aside, excuses made. Start-ups with too much money have a tough time confronting the learning power of their mistakes. In a delightful book, Whoever Makes the Most Mistakes Wins: The Paradox of Innovation, Richard Farson and Ralph Keyes point out the importance of what they call "post-failure management". "The essence of post failure management," they write, "is identifying excusable failure and approaching it as an important part of the innovation process to be examined, understood and built upon". When you have too much money, though, appearances matter. Thinking tends to revert to simplistic patterns. Instead of learning, we rely on outmoded ideas that stand in the way of our ability to innovate. Mistakes become occasions to assign blame, not understand better underlying complexities. ("Who could have been so stupid?") As a civic start-up, has the Fund for Our Economic Future fallen into the trap of having too much money? Will Voices and Choices amount to little more than a grand gesture? Do the civic entreprenurs at the Fund truly understand the underlying complexities of civic engagement in Northeast Ohio, or have they bet too heavily on outside consultants? Have we just seen a hugely expensive Super Bowl commercial for "civic engagement"? The answers will come in time. posted by Ed Morrison | Cleveland, business leadership and economic development Sunday, January 28, 2007 The substance of this post appeared frist as a comment on Brewed Freah Daily here. In economic development, there are two broad strategies: 1) publicly-led, privately supported and 2) privately-led, publicly suported. In the first category the public sector takes the financing lead, supported by the private sector. In the second category, private business takes the financing lead, supported by the public sector. The first category builds stadiums, convention centers, infrastructure. (In broadband, you see communities using both categories of strategies, interestingly, depending on the circumstance.) In the second category, you see strategies that accelerate innovation: cluster-based strategies, business development strategies, and entrepreneurship support networks. (The Council for Entrepreneurial Development in North Carolina, probably the most successful entrepreneur support organization in the country, takes no public money.) In Cleveland, we have been very good at the first category of strategies, but not so good at the second. We have been very aggressive at investing public money in economic development. We built Gateway, R&R Hall, Science Center and so on. But we have largely failed with residential development (only about 8,000 units when we need closer to 20,000 or 25,000) and retail development (Tower City, Galleria). Residential and retail are privately-led strategies. Here's an example of how the two strategies should work together. Oklahoma City developed a publicly-led strategy (the MAPS initiative) that rebuilt a lot of the public investments downtown. We coupled that with a privately-led development strategy (Forward Oklahoma City, now in its third five year cycle) to attract businesses (Sonic's relocated HQ, Dell, Southwest Airlines, etc.). The result has been a transformation in about 8 years. (Disclosure: I designed the privately-led strategy.) In Cleveland, the key public sector investments in downtown happened fifteen years ago, but it was only last year that the business community established a business improvement district downtown. That's too late, and much of the momentum downtown has been lost. (In OKC, we established the district along side the MAPS initiatives.) For Cleveland to progress, we need to get better at privately-led strategies. These are the strategies that transformed the South (where aversion to the federal government and higher taxes limited reliance on public money.) The role of the private sector goes beyond competing for public dollars. No matter how much public sector investment we attract to Northeast Ohio, it will not be enough to transform the economy. (Translation: To be transformative, NorTech needs to be more than a funds broker. Government funds are only a partial metric. Refine NorTech's role in building open networks.) JumpStart is showing some very promising signs of understanding this new privately-led dynamic. They are introducing, for example, a new web site that could result in significant new private sector investment. Read more. In Cleveland, we have an interesting variant: foundation funding. Most regions do not have the luxury of the deep foundation funding we have here in Cleveland. Foundation funding is both a blessing and a curse. It's a blessing when it finances early stage ideas (Civic Innovation Lab, although too small and too slow for many entrepreneurs, is a very good idea.) It's a curse when it substitutes for private sector leadership. Foundations are removed from the market. Program officers are generally no more sensitive to market signals than government employees. When government takes the lead in making decisions that are more appropriate for the private sector, we get industrial policy. In Cleveland, we are straying close to the line of an industrial policy led by foundations, not by government. That may make sense for the foundations (it's their money, after all), but it is not an approach that encourages much open innovation. Sadly, this approach also slows things down, when we need to be speeding up. The three year Voices and Choices exercise is an example. Most regions go through a "listening exercise" in months, not years. Part of the problem, I think, is that our business community in Cleveland really does not understand its role in regional economic development. Here's a thought exercise: If you polled the Board of the Greater Cleveland Partnership, what percentage could -- with no help from staff -- outline our region's top three transformational initiatives? Not just the name, but what these initiatives are actually doing and how they are measured. (Here's another set of questions: What is the mission of the Greater Cleveland Partnership? What are the strategic outcomes we are working to achieve as a region? What is our vision of the future for Northeast Ohio? What are the principles that are guiding our regional development initiatives? How do we hold ourselves accountable? The recent PD series asked a lot of these questions and came up with muddy answers.) The GCP does not routinely organize field trips to other cities so its Board members can learn what works and what doesn't. The last big delegation of business leaders to travel anywhere was probably -- my guess -- in the 1980's when a group went to St. Louis. In the past year alone, board-level delegations of business leaders have been traveling all over the U.S. -- Milwaukee and Louisville went to Denver. Charlotte went to Philadeliphia. Cincinnati and Northern KY went to Boston. Lexington, KY went to Oklahoma City. Oklahoma City went to Indianapolis. Baton Rouge went to Research Triangle. Phoenix went to Austin. You get the idea. That's a good place to start. The Boards of NorTech, JumpStart, GCP need to become more active in what works in economic development. Relying too much on staff is not a smart strategy. If you are not careful, staff can end up -- as I have seen in many places -- focusing on protecting their position, not bettering the cause. They filter information to the chamber board, and the board becomes passive. Board meetings become polite lunches, not places where key strategies are openly discussed, debated and aligned. In sum, in organizations that are staff-led, in my experience, the transformation slows and often ends up off course. (Staff cannot read market signals very well either.) That is, my guess, what has happened here in Cleveland. posted by Ed Morrison | Civility and regional economic development Saturday, January 20, 2007 This post originally appeared in Brewed Fresh Daily in a commentary with John Ettorre here. The work of regional economic development takes place in a civic space, outside the four walls of any one organization. There are no rules in this civic space, unless we impose them on ourselves. No one can tell anyone else what to do. (Which is one reason why corporate, command and control mindsets don't do well. There is a lot of inherent ambiguity.) We need simple rules to guide our behavior: civility. Without civility, our civic space -- and our ability to tackle difficult issues and seize our opportunities -- withers. That's in part, what has happened in Cleveland, in my view. Where in this city do we have on-going discussions on the difficult issues facing us? The answer, I think, is in isolated venues, largely disconnected from one another. If we are to address these issues more than isolated events will be required. The City Club, CSU forums, Voices and Choices are all useful, but they are isolated events. They are not focused on the civic discipline of translating ideas into action, of holding each other accountable, of learning continuously about what works. They are not focused on "strategic doing". These conversations are also easy to disrupt. It doesn't take much for a loud mouth to disturb a library. People get angry at the disruption, and after a while they stop showing up. (This helps explain why strategies in this region are so difficult to implement, why after ten years we are still talking about convention centers.) So, many of us are engaged in the business of rebuilding our civic spaces. In this new economy -- and economy in which wealth is built on networks -- trust provides the fuel. Regions that embrace the civic behaviors that lead to stronger civic networks will be more competitive in the long run. They will spot opportunities faster. They will learn faster. They will move faster. We model new civic behavior by, in part, pointing out bad behavior and its consequences. We point out how old patterns of behavior lead nowhere. That's constructive criticism. Criticism with a purpose. (Much of my writing on Issue 3, casinos for Cleveland, was geared to pointing out the weak behavior of our business leadership in pursuing a narrowly self-interested policy that would damage our region.) Part of the reason we should focus some of our on bad behavior is simply to say, "That's not us." Or, more clearly, "Don't repeat THAT." It helps to understand good behavior by knowing what bad behavior looks like. (From George Washington: "In the Presence of Others Sing not to yourself with a humming Noise, nor Drum with your Fingers or Feet.") In our terms, rather than speak behind closed doors with our criticisms, publish them on Brewed Fresh Daily for all to see. Transparency matters in the civic space. People learn to trust each other when they are confident they can get access all the facts. (Which explains, in part, why the Internet changes everything.) In the past we relied on newspapers and professional journalists to balance this stuff out. While we have some very good young reporters, the Plain Dealer itself is a damaged brand with a diminished credibility. (Again, look at the swamp they got themselves into with Issue 3.) So people look now to bloggers for help. No one wants to listen all day to whining. At the same time, people want to know the facts on the ground. They want to learn from mistakes, and they want to move on. Constructive criticism is just that, constructive. The same simple rules that guide a productive private life, guide civility. Civility requires simple rules and discipline. (Check out George Washington's Rules on Civility. Or, read H.W. Brand's wonderful book on Benjamin Franklin, The First American. Brand describes how a young Franklin working to establish himself in Philadelphia, set out a discipline to convert specific virtues into habits.) So facing facts constructively -- with a mind for improvement -- is a good step, a necessary step. Ignoring facts leads us to misunderstanding where we stand. When we don't know where we stand, we get easily confused about the right direction. When we don't know our direction, we waste time. When we waste time, someone else eats our lunch. So, in the end, this issue of balance has no set answer. But each of us need to strike that balance, not 50/50, but more like 20/80: 20% of our time on pointing out mistakes to each other so that we can correct them, and 80% of our time focused on new habits and new possibilities. That's a rough rule of thumb, but good enough. The irony, of course, is that we sit in a region in which one of the most powerful innovations in civic engagement -- appreciative inquiry -- was invented. David Cooperrider at Case Western Reserve -- designed this discipline and it is now reshaping the civic spaces all over the world (but not here.) posted by Ed Morrison | The role of Case Western Reserve Do we understand the vital importance of Case Western Reserve to our region? Here are some observations from a business leader in Michigan:
Read more. 
posted by Ed Morrison |
Traveling to Detroit It might be time for the Greater Cleveland Partnership to get a delegation to visit Detroit... Detroit and Southeastern Michigan are getting their act together:
Read more: Economic Development Coalition Formed in Southeast Michigan Aside from working regionally, Detroit is also focused on a practical strategy. This month action teams have started forming. Learn more about what is happening with Detroit's new strategy on the Detroit Renaissance website That's not all. Over in Lansing, a new alliance is forming. Partnership aims to spur mid-Mich.'s economy What can the Greater Cleveland Partnership, NorTech, TeamNEO, MAGNET and Fund for our Economic Future learn from what's taking place in Michigan? Might be worth a trip to find out. posted by Ed Morrison | Evaluating a regional strategy Voices and Choices has recently released their strategy doucment, and the question naturally comes up, "Will this approach work?" Here are some guidelines to use in evaluating the effectiveness of a regional strategy: 1. Does the strategy set forth clear strategic outcomes? A strategic outcome outlines what we hope to accomplish. More specific strategic outcomes are better than more vague outcomes. Specific outcomes point us to practical implementation plans and metrics. Vague outcomes are difficult to translate into action, and they tend to move us in circles. "Having a well-educated workforce" is not a good strategic outcome. "Creating a learning region in which all fourth graders can read and comprehend well" is a far better strategic outcome. One of the best ways to clarify an outcome is to define the characteristics of the outcome. So, for example, Columbus, IN wants to build a "learning region" with a set of characteristics, such as 1) every 4th grader reading well; 2) no child allowed to drop out of school; 3) every child encouraged to take at least one year of post-secondary education... Defining these characteristics helps align various interests. 2. Are there a handful of specific, practical initiatives (strategic initiatives) to achieve these outcomes? A strategic initiative aligns the interests of different groups toward a common purpose. Effective initiatives are defined with a (formal or informal) simple charter that outlines who is involved, how the initiative team will operate, and how success will be measured. The initiatives should align the interests of different groups and the strategy should clearly outline these groups: Who will take responsibility for these initiatives? In my experience, it is best to start out with about five strategic initiatives. These should be balanced across the spectrum of needed investments. (Balancing investments is tricky. The balance has different dimensions, including risk and timing. Open Source Economic Development provides a framework for balancing these investments to gain broad-based support.) 3. Are the strategic initiatives described with SMART goals (milestones) to measure progress? A strategic initiative can be practical only if it is translated into Simple, Measurable, Relevant and Time-sensitive (SMART) goals. These SMART goals -- which evolve and the initiative moves forward -- keep people focused on the next steps. 4. For each initiative, is there an action plan and budget that aligns resources and outlines who is supposed to do what by when? Ultimately, a strategy needs an action plan and budget to manage accountability. More important, the action plan and budget, widely shared, help insure transparency and fairness. 5. Is there a process outlined to measure progress and continuously update the strategy? In regional economic development, strategy isa process of continuous learning. A good strategy outlines how this learning will take place and how the knowledge generated by the process will be shared. Collaboration platforms help with collecting and sharing information. Through a lean, flexible civic process, a community or region also manages the challenges of leadership transition and of integrating new people into the process. Here are some examples: Sacramento, CA Web site Regional Business Plan Puget Sound in Washington State: Web site Strategy Summary 2007 Action Items posted by Ed Morrison | Remembering the plight of the rich Sunday, December 24, 2006 Spare a thought, this Christmas season, for the plight of the rich. They are caught in the season of high fever, a luxury fever. Many of our neighbors have been spending time trying to figure out their gifts this holiday season. This three- quarter- pint Fire Hydrant Cocktail Shaker? A Bulgari watch? The Assioma Collection, perhaps? Certainly, we are in the grips of a luxury buying spree that rivals the Gilded Age a century ago. Cornell economist Robert Frank has argued that the spending patterns of the super-rich affect us all. While the Gilded Age touched only a relative handful of families, Frank believes that our current consumption binge touches people all along the income spectrum. We see the cascading impacts in larger houses, more expensive cars, even, Frank points out, $5,000 luxury gas grills. The profligate spending of the super-rich ups the ante for everyone else. The problem is that, except for the super-rich, family incomes have not kept pace. While those at the top of the economic heap have done spectacularly well, the median American family has gained virtually no ground at all during the past two decades, and the earnings of those in the bottom fifth have actually declined more than 10 percent in purchasing power. Middle- and low-income families are financing their higher spending by a lower rate of savings and sharply rising debt. As yesterday's New York Times points out, they are turning to pay day lenders, with damaging results. There are other dimensions to consider. Surely, we should see that luxury spending, at the very least, makes the super-rich feel better. Not so, apparently. These may be the best of times materially, "a time of elephantine vanity and greed" observes Garrison Keillor, but they are not the best times for the human spirit. As the latest issue of the Economist points out, material wealth does not translate easily into well-being. Our becoming much better off over the last four decades has not led even the most wealthy among us to an increased sense of well-being. Why has well-being appeared so elusive, especially for the super-rich? Not to be unfair, but let's focus in more personal terms on the Ratner family in Cleveland. Why have stories of Albert Ratner's ranting and Sam Miller's manipulations become so much a part of Cleveland's "back story"? Why, recently, did Albert Ratner summon Cleveland's planning and economic development leadership to a multi-hour meeting simply to pontificate about Cleveland's inability to get much of anything right? (Could the explanation be, just possibly, inept business leadership?) Surely, Ratner and Miller are among the wealthiest in Cleveland. Why do they appear so unhappy? My guess: We are seeing too much of suffocating arrogance, civic leadership that has burned through ethical boundaries, and, ironically, money without a meaningful mission. Rumor has it that the Ratners and their partners invested between $20 and $24 million this past year in an inept campaign to legalize casinos for Cleveland. They boldly promoted false hope, despite strong evidence to the contrary, that the benefits of casinos in Cleveland would outweigh the costs. They lined up politicians, lawyers, pollsters, ad agencies, the Plain Dealer, and the Levin College at CSU to support their claims. They even made an unseemly public buy-off of opponents in Cincinnati. Few people were fooled. As one of the most thoughtful analyses offered by the editors of the Courier in Findlay, Ohio noted: "Issue 3 is just not worth it." The editors of the Toledo Blade put the matter more bluntly: "The prime concern of the issue's supporters is not to ensure that kids go to college but to make money - lots and lots of money." In the end, the Forest City campaign came across as deceptive, self-absorbed and cynical: "elephantine vanity and greed". (Reading what editors across Ohio said about Issue 3, we can hear the echoes of George Bailey in It's a Wonderful Life: "You sit around here and you spin your little webs and you think the whole world revolves around you and your money. Well, it doesn't, Mr. Potter! In the... in the whole vast configuration of things, I'd say you were nothing but a scurvy little spider.") Let's step back a moment and explore some alternatives with a simple thought experiment. What could have happened if the Ratners had chosen to invest their money differently? How do you suppose that Clevelanders would view the Ratner family now if they had instead devoted their riches to another course to help their hometown? How could they have used $24 million in other ways to strengthen our economy? Well, hungry children are not busy learning. They could have provided an endowment to the Cleveland Food Bank that would cover about half of the Food Bank's operating costs. Learn more. Or, they could have supported the emerging Cleveland Literacy Cooperative. A recent report by Center on Urban Poverty and Social Change at Case Western Reserve has concluded: "Approximately half of the adults aged 16 and over in Cuyahoga County do not have the minimum literacy skills necessary to function effectively in society." (Read more about our serious literacy challenges in Cleveland here. Learn about what the Cleveland Foundation is doing here.) Or, the Ratners could have leveraged the fine work already taking place in early childhood initiative of Cuyahoga County: Invest in Children. Data from the Federal Reserve Bank in Minneapolis shows that investments in early childhood education are one of the best economic development investments we can make. Read more. And the prestigious Committee for Economic Development promotes this strategy aggressively. Read more. Or, an endowment for OneCommunity would have enabled us to accelerate the deployment of wireless throughout Cleveland's inner ring suburbs. Learn more. Or, they could have provided matching funds to the recently awarded Third Frontier grants at CSU and the Clinic. Or, they could have explored how Mayor Bloomberg in New York is aggressively accelerating innovations to assist low income residents in his city. Read more. Or, they could have followed the example of the wealthy citizens of Kalamazoo and created a Cleveland version of Kalamazoo's Promise to provide a college education to every child who graduates from the Kalamazoo public school system. This bold initiative will change the way economic development is practiced. Read more. Already, civic leaders in Pittsburgh are exploring how they might follow this model. Read more. If the Ratners and their partners had chosen to invest their money in another way...how would Clevelanders now feel about them? More important, how would they now feel about themselves? Would we all be better off if they had chosen to invest $20+ million more responsibly? Almost certainly. Moving to a higher realm of civic responsibility calls for a new discipline of wealth, the type of discipline that Warren Buffet exemplifies by giving away the bulk of his fortune. It requires thinking in new terms about business investment, venture philanthropy, our community and the connections among the three. But more important, on a personal level, authentic civic leadership for our city requires seeing Cleveland in a new way. Garrison Keillor's insights help us understand our opportunities: "Even in a time of elephantine vanity and greed, one never has to look far to see the campfires of gentle people." It is around those campfires that we find the good life in Cleveland. The future of our city is forming there. posted by Ed Morrison | Improving Cleveland's schools Sunday, December 10, 2006 Last week, Ohio Grantmakers announced an important initiative on education. Read more. You can download the report from this page. Now comes the hard part: Translating ideas into action. For inspiration, Ohio might look to Indiana. This Tuesday, the Governor Daniels will be announcing the launch of five New Tech High Schools in the state. This effort is part of a broader strategy to upgrade science, technology, engineering and math (STEM) education. You can learn more about what is going on just across the border at the Center for Excellence in Leadership of Learning. The Cleveland business comunity might look to Rochester. First Niagara, a banking, investment and insurance company, will provide up to $500,000 to mentor public school students in western New York. Referring to a recent study by Big Brothers, Big Sisters, First Niagara said students who meet regularly with a mentor are: -- 52 percent less likely than their peers to skip a day of school; -- 37 percent less likely to skip a class; -- 46 percent less likely than their peers to start using illegal drugs; and -- 27 percent less likely to start drinking. Read more. posted by Ed Morrison | What will startle us? Friday, December 08, 2006 The business community in Connecticut is focused on the sad condition of high schools. Read more. Can Cleveland learn from Connecticut? South Carolina is moving with an ambitious new initiative. There are good ideas in these approaches. Read more. Can Cleveland learn from South Carolina? Earlier this week, I was teaching 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?" What would it take for our community to work toward the goal of a 90% graduation rate for all Cuyahoga County high schools? Earlier this fall, the Plain Dealer carried a report about school performance. That morning I spent a few minutes with the data that you can download from the state Department of Education web site. The decision to drop out of high school is the most important economic decision in a person's life. The cost: about $300,000 in lost lifetime earnings, according to the Bureau of the Census. Learn more. A good place to start: Learn about drop-out prevention from the National Dropout Prevention Center at Clemson University. Learn more. In western New York, First Niagara, a banking, investment and insurance company, has announced it will provide up to $500,000 to mentor public school students. Read more. 
posted by Ed Morrison |
Open innovation in rich media  New approaches to regional economic development focus on developing open networks. These involve "link and leverage" strategies, similar to the approach that Proctor and Gamble is taking to accelerate innovation. Learn more from this article in Fast Company: A Problem Shared Is a Problem Solved Join the network that is connecting Northeast Ohio's rich media resources. You can learn more about tomorrow's activites here. posted by Ed Morrison | What Issue 3 tells us about our region Sunday, December 03, 2006 Here's what Forest City's Issue 3 -- the gambling initiative -- tells us about Northeast Ohio. NEO as a whole voted against Issue 3 by 49%-51%. Close but no cigars. Downstate, including Hamilton County (the only county that voted for) voted against the issue with landslide proportions (60%-40% aganst). In NEO, Cuyahoga, Medina, and Lake counties (in Greater Cleveland) and Trumbull and Mahoning counties voted for the issue by a respectable 54%-46%. BUT, the rest of NEO voted like downstate, 58%-42% against. Interesting enough, three urbanized counties (with large working class populations) that one would expect to be in favor (Summit, Stark, and Lorain) voted against the issue by 55%-45% (Lorain), 56%-44% (Summit) and 60%-40% (Stark). Clearly, Cleveland's leadership in this issue extends out the working class/middle class commuting patterns into Medina and Lake counties but not west into Lorain, or south into Summit and Sark. These communities have their own identity and community structure and do not consider themselves to be extensions of Cleveland. Geauga County, which is on the wealth vector from Cuyahoga, acted more like a downstate community, voting 56%-44% against and not like an exension of Cuyahoga County. Mahoning and Trumbull counties, bordering Pennsylvania, and with large working class populations, bought the argument that gambling dollars are slipping across the border into Pennsylvania. Columbiana and Astabula, both more rural communities, on the other hand, did not, voting 58%-42% (Columbiana) and 53%-47% (Astabula) against the issue. The conclusion: NEO is a fragmented region that $20 million of intensive and slick advertising in the two dominent media markets (Cleveland/Akron and Youngstown/Warren) could not bring together. By pushing Issue 3, Forest City and the Greater Cleveland Partnership managed only to split our region even further apart. Nice work. posted by Ed Morrison | Finding a president for Case Within thirty years, no region of the U.S. will be prosperous without ties to a strong research university. That's where Northeast Ohio faces real challenges. Our strongest research university (some would argue our only research university) is Case Western Reserve, and Case Western is in trouble. As Clemson's president Jim Barker has noted: "The healthiest state and regional economies have been - and will continue to be - those where business has spun off from - and clustered around - strong research universities to create concentrated, self-sustaining economic activity in a specific industry sector." The University of Delaware recently announded a new president, and this article frames the emerging role of research universities in economic development rather clearly. Read more. Without strong preesidential leadership, Case Western is likely to continue on a downward trajectory. NorTech's core focus should be helping the new president rebuild the strengths and connections of Case Western within the region. posted by Ed Morrison | Taking a Walk with Jerome Saturday, December 02, 2006 It's started again. In the White Administration, if you crossed the Mayor, you "took a walk with Jerome", the City cop. Jerome was assigned to escort directors and commissioners out of City Hall with the contents of their professional life in a banker's box. Anthony Houston, Director of Cleveland's Enterprise Zone and a member of the Ohio Board of Regents, was escorted out of his office recently. The message to the Jackson cabinet: the old days are back. Don't do anything to cross the Mayor. "You can and will be out on the street in a heartbeat." That's the lesson of The Walk with Jerome. My guess: Anthony refused to bow to pressure involving federal funds tied to the Empowerment Zone. He probably said "No" to some cockamamie scam. When you take a person with Anthony's credentials and treat him in this way you can be sure of one thing: The White Administration is back. Learn more about Anthony with his CoolCleveland interview here. (When Campbell took over from White, the office files were gone, the computer memories were erased, and the drawers were cleaned out to the last paper clip. What were they hiding?) In corrupt governments, public humiliation is a comon tactic to consolidate power and discipline employees. It's too early in the Jackson administration to conclude that the city administration is hobbled by corruption. But the sacking of Anthony Houston is a real danger signal. The Plain Dealer, not surprisingly, has not covered Anthony's dismissal. Fear is back. Integrity is seeping out of this City. It's all about the money...again. The biggest risk: Keep an eye on the airport. These are where the big contracts are: parking, advertising, concessions. If the contracts start moving with fast track competitive reviews and if the City Council lets these contracts slide without adequate oversight, we are on the downward path. One of Northeast Ohio's most important regional assets will become uncompetitive. Sadly emough, the Cleveland cancer is back. posted by Ed Morrison | In Praise of Radical Transparency Friday, December 01, 2006 From Chris Anderson of Long Tail fame.
In Praise of Radical Transparency Open Source Economic Development, which we are developing at I-Open, leverages these trends. We saw an excellent example of how this appoach to economic development works with Roy Church in Lorain earlier this week. Open connections -- hyperpowered by the Internet -- mean that regions with strong networks will be most competitive. They will learn faster, align faster and move faster. (In this spirit, Indiana's statewide economic development plan -- and its emphasis on regional networks -- is called "Accelerating Growth". Download a copy here. Disclosure: We had a hand in working on this plan.) From page 32:
The collaborative tools of Web 2.0 is only accelerating these trends. In another important book, The Spider and The Starfish, Brafman and Beckstrom point to appreciative inquiry (developed by David Cooperrider at Case) as an important tool to deal with this new environment of "leaderless organizations".
I-Open's model of "Strategic Doing" is based on David's approach. Add to all this the work of Valdis Krebs, June Holley and Jack Ricchiuto on the tools and leadership skills of "weaving networks", the civic journalism innovations of Meet the Bloggers and Roy Church's work in Lorain. NEO is becoming quite an incubator for these new approaches. posted by Ed Morrison | Next steps for the Northeast Ohio region Sunday, November 12, 2006 An interesting discussion is taking place on Brewed Fresh Daily about regional strategies. Here's my response to one of Brad Whitehead's comments. Brad: Thank you for your comments. Please read my comments more carefully. Far from being "sweeping, blanket statements" I have raised questions about the cost, effectiveness and sustainability of your approach. We all wish the foundations well with your Fund. I did not say, nor did I imply that the Funders were "paralyzed by inaction" or "sitting around". Those are your words, not mine. Let's go over again some of the points I made and add some new ones. 1. Issue 3.-- The GCP's strong support for Issue 3 -- saying, in effect, we are supporting this initiative because there are no other economic development ideas on the table -- simply added to the regional confusion. If Issue 3 is our only regional economic development strategy, then what are NorTech, JumpStart, Team NEO, and so on? Further, I made the point that Issue 3 divided our region, and the vote totals demonstrate that. Overall, the NEO region, like the rest of the state, voted against Issue 3. In my view, a handful of real estate developers pushed this agenda, and not enough people in our business and foundation leadership in Cleveland pushed back. We wasted a lot of time on this indulgence, and Cleveland appears isolated in both the region and the state in the aftermath. In the interim, Brookings released an important report on the future of th Great Lakes. This report went unnoticed in the Plain Dealer, and it's profound implications have not been explored in our region. Learn more. 2. Voices and Choices.-- At the same time, candidly, few people with whom I have talked have understand how Voices and Choices will yield a pragmatic regional agenda. While at Case, I shared with you my concerns. I indicated that Voices and Choices would not succeed without an authentic partnership with our colleges and universities. I still believe this is one of the major weaknesses of your effort. Beyond that, as I pointed out in my comments, your process is very expensive by any measure. How can this approach be replicated? In my experience, regional collaborations work if there is a continuous alignment of activities and investments. So, a regional process must be continuous and sustainable. The Fund may wish to continue V&C, but I suggest that you might want to explore other simpler, more adaptive and less expensive approaches. As I pointed out, the V&C preliminary report does not outline much direct action. I cited the recommendation “Improve workforce training programs and ensure they match the needs of both workers and employers" as an example. perhaps your team of policy experts will be able to put a finer point on this one. But that's only part of the challenge. How will you execute? What action steps will align these complex systems to achieve measurable results? Education and workforce development are complex systems -- each designed in the last century -- that need disruptive innovations. Making these adjustments is tough work among fortified political constituencies. I will be interested to see how you will integrate some of the most promising practices of skill assessments, high school reform models (like career academies, New Tech high, and early college), STEM education, cluster-based career pathways, and so on. 3. BioEnterprise.-- I did not say, nor do I believe, that "the efforts of BioEnterprise are likely to be irrelevant on a larger scale." Again, these are your words, not mine. I am simply pointing out that in an economy of 4.3 million people, the efforts of BioEnterprise will have localized effects. Biotechnology is a very risky investment arena, and the payoffs are far from clear. (I can refer you to a Brookings report, if you like.) I am not criticizing BioEnterprise's efforts. From afar, they look focused and professional. If our goal is to raise per capita incomes broadly across the region, the impact of BioEnterprise will be important, but limited. 4. JumpStart.-- As I indicated, JumpStart is a "bright light". I am, however, concerned about its cost structure. I doubt that, as currently structured, JumpStart is sustainable without continuous infusions of cash from foundations and government. This is not the ideal toward which we should be aiming. The most successful entrepreneurial support organizations in places like Massachusetts, San Diego and North Carolina are self-sustaining. They both create and capture value from the private sector. 5. NorTech.-- I have suggested that NorTech's role should extend beyond brokering Third Frontier dollars. Although this is important, economic transformation does not take place with government money alone. You might want to look at what Chicago, Milwaukee or St. Louis for some additional models. Last week, Dorothy Baunach and Chris Varley asked me to lunch. I suggested to them that the most important short term issue facing the region is getting Case Western Reserve University back on track. The university, and particularly the Weatherhead School, needs strong support from the regional business and foundation community. I also suggested that NorTech work closely with the County to develop innovation zones. For the past year or so, I have participated with a team of consultants to design these strategies. You can download the overall strategy document here. The innovation zone strategy builds off work being done in Michigan and Pennsylvania. The basic idea involves strengthening our college and university campuses with very targeted incentives based on an SBIR model. Our ideas are clear, specific and actionable. We have developed an Innovation Zone Handbook that is available from the County. 6. Final thoughts.-- At Purdue, I have found an excellent group of colleagues aggressively working to realign our assets in the Great Lakes to fit our opportunities. I am happy to share what I am learning and doing. This practice of sharing information is important. "Borrow and adapt" represents the fastest way to learn. I bring examples of other regions forward with that spirit in mind. In my view, Cleveland's business leadership has become quite insular. In contrast, large delegations of business and civic leaders routinely travel to other cities to learn what might work. These delegations typically average about 60, but they can go upward of 200. The visits usually last three days. In the past six months or so, Milwaukee and Louisville leaders have traveled to Denver. Lexington went to Oklahoma City. Oklahoma City went to Indianapolis. Charlotte went to Philadelphia. Phoenix went to Austin. Cincinnati and Northern Kentucky went to Boston. Chicago has been learning from San Diego. Everyone is trying to figure out these complexities. Organizing a leadership visit -- or a series -- would be a good investment for your Fund. Organize a delegation of NEO civic leaders to visit someplace nearby: Chicago, St. Louis, Toronto, Milwaukee, Pittsburgh, Raleigh-Durham. These are all places where new, promising practices are evolving. We have a lot to learn from other places. An income gap between Pittsburgh and Cleveland opened in the early 1990's and has been widening ever since. Why? We will only be able to answer this question satisfactorily if enough civic leaders in Northeast Ohio understand the rapidly evolving role of colleges and universities in regional economic development. (On the importance of learning from other regions: Voices and Choices has never been tried on such a scale before. That alone should raise questions as to whether this model makes sense for NEO. The smart regions are learning and adapting from each other. They are not assuming the risks of entirely new, untested approaches. They build prototypes. Find out what works. And then they invest to scale.) In the years ahead, regions that learn faster will be more competitive. They will learn faster if they have thick networks of collaboration. These networks enable regions to make decisions quickly and align resources to opportunities. They enable regions to develop and implement the dramatic improvements we need in education and innovation. You can keep up with innovations in other regions on my EDPro weblog. Cleveland and Northeast Ohio have some wonderful opportunities ahead. Brewed Fresh Daily is an important network we have to share new and positive stories of regional transformation. It's also turning out to be a vital place where serious issues of regional strategy are addressed openly. posted by Ed Morrison | Recovering from Issue 3 Friday, November 10, 2006 I first posted this comment on Brewed Fresh Daily. The tragedy of Issue 3 is this: We live in a state in which the three major business communities: Cleveland, Columbus, and Cincinnati have a weak history of working together. (One business school dean with experience in the state told me a couple of weeks ago, "These people hate each other". That may be extreme, but you get the point.) Issue 3 further isolated Cleveland. Even within the 15 counties of the Fund for Our Economic Future, the issue failed 51% to 49%. It failed in Akron and Lorain, and barely passed in the Mahoning Valley. Issue 3 also barely passed in Hamilton County (Cincinnati) by less that 1%, even after the $100 million no-strings commitment to ship money from Northeast Ohio to Southwest Ohio. (Who was thinking? Shrewd politics, maybe. But really dumb economic development strategy.) And in Columbus, it failed overwhelmingly by over 25%: 37%-63%. Issue 3 was a debacle. It further divided the state's business community, and, most important, diverted Cleveland's leadership from the core issues of education and innovation that will drive our region forward. Now we have a new U.S. Senator from Lorain, a new governor form the Mahoning Valley, a new Lieutenant Governor from Cleveland. And no regional agenda. We have no set of priorities, no list of initiatives, no regional projects in which we need investment partners. The $3 million Voices and Choices effort (which started in planning about 3 years ago) has yet to produce anything meaningful, (beyond platitudes about being the largest civic engagement on the planet). The cost of the effort is exorbitant. Even with 20,000 participants, the cost ranges to $150 per participant. (By comparison, In Indiana we ran 10 regional forums in four months this spring with a budget of $60,000. We engaged about 2,000 people for a cost of $3 per participant. This was a little thin. I'd like to have had a budget of about $10 per participant.) The Voices and Choices preliminary report offers precious little guidance. Instead, it includes recommendations like "Improve workforce training programs and ensure they match the needs of both workers and employers." That's a bumper sticker, not a strategy. Let's look around to other agendas: NorTech's strategy document is more a general framework than a strategic action plan. There's no action plan, no metrics. no roadmap. Team NEO is busy reorganizing and refocusing, so there's not much there. After years of repositioning, MAGNET is just starting to find a new way. The jury is still out on that one. BioEnterprise has its act together, perhaps, but the overall impact of its work -- standing alone -- will be relatively small across the region. JumpStart is another bright light we have in the region. But there are real questions about the sustainability of this initiative. There are a lot of staff to run an organization of this type. The sorry state of regional collaboration in Northeast Ohio is not just my opinion. A year ago, the U.S. Department of Labor held an innovative competition. It asked each governor to submit three regional proposals to integrate workforce development and economic development. The prize: 13 winning regions would get $15 million to implement their strategy. Another 13 would get $100,000 planning grants to get in line for the next round. Of the 26 regions selected. Michigan got 3. Indiana got 2. Ohio got 0. In other words, Northeast Ohio (which submitted a proposal) did not even rank in the top 26 regions in the country. This is after all of the money that has been poured into regional collaboration. At the end of the day, with new political leadership in Columbus and Washington, we have a new regional opportunity, but no clear regional agenda. The reason Issue 3 was the only economic development option is because the Board of the GCP made it the only option. For the past year, they have spent time on precious little else. The GCP CEO spent his time trying to convince editorial boards in Lorain and Youngstown to vote for a thirty year old economic development strategy that does not work. And this is business leadership? Meanwhile in Indiana, we are launching a new science and math network to accelerate teaching of science and math in high schools. We have new initiatives to promote 21st century skills in high schools through major reforms. We have new university collaborations in innovation and entrepreneurship, and we are working on a new "compact" among local governments to accelerate entrepreneurship. We are working on a pilot program in advanced manufacturing with Purdue and NIST. We are extending rural broadband and accelerating rural entrepreneurship. In the Bluegrass region of Kentucky, I-Open is redesigning the regional chamber of commerce around new "open source" principles of economic development. The new mayor in Lexington has been deeply involved in these efforts, and we are presenting the new mayor with a strategic action plan by the end of November. The list goes on. You get the point. To say that Issue 3 is the only option for Northeast Ohio speaks volumes about the misguided leadership of the GCP and the ineffectiveness of Voices and Choices. Who is driving this bus? posted by Ed Morrison | Issue 3 and Coercive Monopolies Sunday, November 05, 2006 "[T]his is how our economic system works. The reward is going to the people who risk the capital." Fred Nance, Greater Cleveland Partnership as quoted in the Plain Dealer Memorandum TO: Fred Nance FROM: Ed Morrison SUBJECT: Issue 3 and Coercive Monopolies Issue 3 grants casino monopolies to both Forest City and Jacobs Entertainment. (Click here for a detailed policy analysis.) "In economics, a government-granted monopoly (also called a "de jure monopoly") is a form of coercive monopoly in (which) a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by law, regulation, or other mechanisms of government enforcement." Source Wikipedia The coercive monopoly created by Issue 3 translates into a windfall for the nine owners designated in the amendment. According to the Columbus Dispatch: "Charles J. Ruma, whose Beulah Park racetrack in Grove City made $778,000 last year, would reap most of an average $30 million annual windfall from slot machines if state Issue 3 passes." Source: Coumbus Dispatch, Sunday October 15. Granting coercive monopolies is how non-market economies -- e.g., the former Soviet Union, China before its 1979 reforms started -- operate. History has proven this approach to be inefficient. Further, the extensive intrusion of politics into markets tends to promote a climate of corruption. (Former Louisiana governor Edwin Edwards is now serving time for his role in allocating casino licenses in Louisiana. Source: Tyler Bridges, Bad Bet on the Bayou: The Rise of Gambling in Louisiana and the Fall of Governor Edwin Edwards .) Why is the GCP sanctioning this approach when it comes to casinos for Ohio? I had thought the GCP was supposed to be promoting free markets and a climate of innovation in Northeast Ohio. posted by Ed Morrison | Crime and gambling Monday, October 30, 2006 Proponents of Issue 3 continue to deny any connection between gambling and crime. The evidence, however, goes the other way. On crime and casinos, check out the work by Grinols and Mustard. Read the Washington Post article Casinos and Crime: The Luck Runs Out Here's a graph that focuses on aggravated assaults. (I have posted the Grinols and Mustard report and other studies here.) posted by Ed Morrison | No laughing matter Sunday, October 29, 2006 Originally posted on Brewed Fresh Daily. Jill waas making the point that Issue 3 is no laughing matter. Jill: I spent nearly ten years in the casino economy of Louisiana. I worked for casino developers, I worked for communities with casinos. I have seen up close the devastation of these businesses. I understand -- in ways that few people in Cleveland understand -- how these developments will cripple Cleveland's inner city. I have been to the clinics where pathological gamblers convene. I have heard and seen the stories. The casino developers are completely dishonest when it comes to these costs. Their willingness to move ahead with this campaign, in my view, raises serious ethical and moral questions. They will also further corrupt our politics. (Haven't they already?) The culture of corruption that these developments engender further depress economic development. My point is simple: Our leadership is so misguided that it has become a farce. We need new leadership, and that leadership is already starting to emerge. Henry Mitzberg, the noted strategy theorist, points to "community-ship" as the evolving model for organizations. In a networked world -- especially in the "civic space" where real economic development happens -- the old conventions simply do not apply. Read more about Mintzberg's point here. Unfortunately for us, the highly paid staffs at the GCP, NorTech, and TeamNEO are ten to fifteen years behind the leading regions. (Of the three, NorTech is the most up-to-date, but it is still largely a funds broker and little else. Leading regions evolved from this model years ago.) The foundations are not much better. Voices and Choices is such an ill-defined, extravagent process that it will not yield much beyond vague policy prescriptions. (Even though, I am told, the foundations are busy trying to come up with some practical outcomes. Read the preliminary report here. They'd better do something. Coming up with a recommendation like "Improve workforce training programs and ensure they match the needs of both workers and employers" is, frankly, laughable.) The cost of this process is also exorbitant. $3 million to engage 20,000 people represents a cost of $150 per participant. The town hall meetings cost, I would estimate, about $250,000 to $300,000 each or about $300 per participant. In Indiana, I ran 10 regional forums this past spring with a budget of $60,000. We engaged 2,000 people at a cost of $30 per participant. (At REI, our Tuesday forums that led to a number of important collaborations cost us less than a dollar per participant, unless we threw in a fruit plate.) Indiana leaders are not trying to figure out what to do with these forums. They are busy trying to figure out how to hold more of these forums on their own. Civic leaders in each region are busy implementing. (You can read more by downloading the Indiana Leadership report and reading about the regions in the back of the report here.) This coming week, I will be at a conference designing how we can use regional forums to integrate high school and economic development. Learn more. At some point, enough people will come to an understanding: The "leaders" running this show in Cleveland do not really know what they are doing. With the possible exception of BioEnterprise and JumpStart, most of these big investments have, in my judgement, very little probability of payoff. The design flaws are serious and difficult to overcome. (Team NEO is the most vulnerable to collapse.) Even worse, Issue 3 heads us in completely the wrong direction with a campaign that is deceitful, at best, corrupt at worst. (I can only imagine the bag money being passed out this week.) We are in a soup, and our current cast of characters at the GCP and the Fund for the Future are still fumbling around, unable to admit that they are lost. As Governor Daniels in Indiana has told audiences many times: "Progress begins when denial ends." posted by Ed Morrison | Top Ten Reasons to Vote for Issue 3 Saturday, October 28, 2006 10. Beat out Detroit in the race to the bottom. 9. Teach the Columbus business leadership a lesson in collaboration. 8. Concentrate our cocaine traffic, strip clubs and prostitution in one place. 7. Reverse the welfare juggernaut: Have poor inner city families pay the the college tuition bills for rich suburban families. 6. Contribute 8 cents on the dollar to education (or maybe it's 6). 5. Prove to the wimps once and for all that, in politics, money trumps the truth. 4. Finally build our Forest City Convention Center. 3. Demonstrate the power of free enterprise by getting our Cleveland casinos written into the Ohio Constitution. 2. Show editorial writers in Dayton, Columbus, Toledo, Lorain, Warren, Akron, Cincinnati and Youngstown that they're completely out to lunch. 1. Prove to Northeast Ohio what regionalism is all about, whether they like it or not. posted by Ed Morrison | Time for a New Business Leadership? Tuesday, October 24, 2006 The following commentary appeared in Crain's this week. Since Crain's is a subscription site, I'm posting the commentary here, as well. Here's a question to ponder over your coffee this morning. Does Cleveland need new business leadership? To answer that, let's start with a few more questions. Can you explain Cleveland's economic development strategy? Can you clearly define Cleveland's role in building an innovation economy in Northeast Ohio? Can you quickly communicate a positive future for our city to a high school student? Chances are you, like me, cannot answer these questions. So, in truth, we don't have a very clear picture of Cleveland's future. Let's look in another direction. In about 1990, an income growth gap began to appear between Cleveland and Pittsburgh. It's been getting wider ever since. Why? We both suffered when our steel industries collapsed. We both have well endowed foundations. We both have public and private universities. We both have difficult political climates. Yet, Pittsburgh seems to have a clear focus on building a regional innovation economy, while in Cleveland -- as we have seen -- our future is harder to define. The answer to this riddle lies in the nature of regional economic development strategies. Successful regional economic development takes two parallel strategies. The public sector leads one strategy with heavy, publicly-financed investments in infrastructure. These investments set the stage for private enterprise. But standing alone, publicly-led strategies are never enough. Big as they are, they are simply too small to move the regional economy forward. That's why most economists will tell you that convention centers and stadiums by themselves are inadequate regional strategies. Enter the private sector, stage right. Privately led strategies align the major driver of a regional economic transformation: productive private investment. Clusters of economic activity, propelled by private investment, drive the dynamic regional economies of Austin, Silicon Valley, and Research Triangle. Government and foundations play a supportive role to these privately-led strategies. They are careful not to get in the way. Astute government and foundation leaders understand that when it comes to reading market signals, they're not too smart. They leave this job to entrepreneurs, business executives and venture-capital investors who have "skin in the game". (When government and foundation leaders try to lead too much, we end up with wrong-headed industrial policies.) With privately-led strategies, smart government and foundation leaders are happy to play a supportive role. Starting in the 1980s, Cleveland did a good job with strategies based on large-scale public investment. Public officials, representing our taxpayers of course, committed vast sums of public money to remake our downtown. By the early 1990s, these investments were essentially complete. Yet, for 15 years we have been waiting for the private sector's strategy to enter from the wings. Now, apparently with the Issue 3, we have it. Gambling is supposed to remake our city. Playing an appropriate role, public officials have lined up to support this privately led strategy. There's only one problem. Casino gambling is a thirty year old economic development strategy that does not work. Listen to a voice of experience. Last month, the editors of the Baton Rouge newspaper wrote about Louisiana's experiment with casinos: "Alas, gambling has not delivered the promised pot of gold at the end of the rainbow... Louisiana would be much better off today if we had spent the past decade paying attention to more fundamental reforms to grow business, such as investing in education..." After fifteen years of waiting, a tired, failed strategy is disappointing enough. What's worse, the Greater Cleveland Partnership has closely associated itself with a mind-boggling political campaign that has managed to split the Ohio business community, generate allegations of fraud in the inducement of petition signatures, used children as an advertising shield for casino owners, treated the Ohio Constitution like a small town zoning ordinance, inflated revenue estimates, misrepresented clear facts (developed by their own consultants) on the significant social costs of gambling, and promoted a very public "buy off" of support in Cincinnati with a $100 million side deal. (We're not sure how to summarize these blunders, but "sordid" pops to mind. The last clumsy move is the most enduring: Shipping $100 million in income from citizens in Northeast Ohio -- where most of the slots will locate -- to Southeast Ohio may be shrewd politics, but it will further disable Cleveland, Cuyahoga County and our regional economy.) Meanwhile, a group of civic entrepreneurs has come up with a truly imaginative proposal for Cleveland and Cuyahoga County: Support our cultural institutions with an increase in the cigarette tax. Issue 18 recognizes that the future of Cleveland rests in our cultural and educational institutions. These entrepreneurs are taking and applying the lessons of other successful cities, like London, Toronto and Vienna. In the digital age, creative industries provide one very promising path to higher income and prosperity. Creative industries are not our only way forward. In Indiana, civic and business leaders are embracing manufacturing as the core of high-performance production systems. They are redesigning high schools, community colleges, university technology transfer and other systems to support the integration of research, product design, manufacturing and logistics. Meanwhile, back in Cleveland, our business leadership is fighting hard for its casinos. Luckily, though, we have a choice. If you are looking to move toward a new generation of business leadership in Cleveland join us in voting "No" on Issue 3 and "Yes" on issue 18. Our future lies with creativity and innovation, not casinos and gambling. Ed Morrison is Economic Policy Advisor to the Purdue Center for Regional Development and partner in I-Open, the Institute for Open Economic Networks. ------ In the wake of Issue 3 -- regardless of how the vote turns out -- our task is ahead is clear: encourage a new Cleveland business leadership dedicated to integrity and transparency. We need to foster the civic disciplines that build trust, collaboration, and open innovation. In Cleveland, the "soft stuff" has always been the hard stuff. The irony is that in the knowledge economy, the "soft stuff" drives innovation: the ability to learn quickly, align resources quickly, and act quickly. Civic trust fuels speed, flexibility and agility. posted by Ed Morrison | Forest City, The Partnership, the PD: The politics of isolation Saturday, October 21, 2006 Reading Ohio's newspapers about the gambling issue leads to some interesting conclusions about the growing isolation of the editors at Cleveland's Plain Dealer and the leadership of the Greater Cleveland Partnership. To my way of thinking, the leaderships of the PD and the Partnership have entered a cynical alliance to push Issue 3. The likely architect: Forest City Enterprises. (What other company has a PD sponsored blog?) Increasingly, editorial writers and others around the state are not buying the Forest City/Issue 3 line that gambling will be good for Ohio. For the past year or so, the Greater Cleveland Partnership has almost entirely focused its efforts on Issue 3. Recently, the Plain Dealer lined up behind the issue. (Now they are even promoting the campaign with front page articles about where gamblers choose to spend their money. Today's lead article -- which reads more like cheap public relations for Issue 3 -- throws into question the editorial integrity of the newspaper. If worth publishing at all -- is there news here? -- this article hardly deserves promotion to the lead article in today's paper.) One fact is increasingly clear: The FCE-GCP-PD alliance has managed to isolate Cleveland within the state. A brief tour around Ohio will illustrate the depth of anger at Cleveland's arrogance. Let's start our trip around the state in Youngstown. Not too long ago, Joe Roman traveled to Youngstown to make a personal appeal to the Youngstown Warren Chamber of Commerce in the Mahoning Valley to support Issue 3. After carefully considering what Roman had to say on the issue, Youngstown and Warren's business leadership concluded that the Mahoning Valley would be in net loser financially. The Valley would bear the cost of problem and pathological gambling and see little revenue in return. They also concluded that the promises of scholarship funds were clearly inflated, and that the State's Constitution was being misused by a bold faced attempt to grant monopolies to a few private interests. Last week Youngstown's new mayor, Jay Williams, announced his opposition to Issue 3 stating that "gambling is not a proven sustainable way to improve the state's economy." The editors of the Yongstown Vindicator are a little more direct: "That the backers of this get-rich-quick scheme would try to sell it under the misnomer "Learn and Earn" is an insult to the intelligence of Ohio voters. Teach them a lesson. Vote no on Issue 3." The editors use an interesting analogy to explain their disgust.
Right next door in Warren, the editors of the Tribune Chronicle even more upset about the deceptions of Issue 3 supporters. "The college education claim is a farce...Only a fool believes this will add to education funding." Read more. Now let's drive down the road to Akron. In a scathing editorial, the editors of the Akron Beacon Journal argue that viewpoint underlying Issue 3 is "cynical and wrong headed". Let's quote this diatribe at length:
Now let's head northwest to Lorain. The editors of the Morning Journal call Issue 3 "devious" in their headline. The conclude: "We urge voters in the strongest terms to vote no on state Issue 3." Read more. So, Youngstown, Warren, Akron and Lorain are opposed to Issue 3. Recall, more than 80 foundations have come together as Fund for Our Economic Future and invested the past three years and at least $30 million trying to build regional collaboration across Northeast Ohio. Now, the FCE-GCP-PD alliance drives a wedge between Cleveland on the one hand and Akron and the Mahoning Valley on the other. Smart move. Who is driving this bus? Let's head west to Toledo. The editorial writers Toledo Blade are even more angry in their colleagues in Akron. They start out their commentary this way:
They continue:
Read more. (A news article outlines the magnitude of the benefits flowing to just one track owner: "Charles J. Ruma, whose Beulah Park racetrack in Grove City made $778,000 last year, would reap most of an average $30 million annual windfall from slot machines if state Issue 3 passes.") Now let's head southeast to Columbus. The mayor of our state's most prosperous city has this to say: "I don't call it Learn and Earn. I call it to Greed and Burn". Read more. In a biting editorial criticizing the Ohio Regents for their silence on Issue 3, the editors at the Columbus Dispatch write,
In a separate editorial opposing Issue 3, the editors call Issue 3 "preposterous". Think they are angry? Let's read more:
They go on to write about the economic impacts of casinos in Ohio:
Let's move on. Time to head to Dayton. The editors there are clear about their views. They title their editorial: "Our Recommendation on Issue 3: 'Learn & Earn' campaign is a crock". Do you think they are upset? Let's read on:
They end their editorial with these words: "Can you really trust people who would use scholarships for kids as a cover to fatten their own wallets?" Now, let's wipe the steam off the windshield and head on to Cincinnati. Here, of course, Cleveland business leaders negotiated a very public side deal to buy off the opponents to Issue 3. To the small price tag of $100 million dollars, Cleveland's business leadership managed to silence opponents in both the business and political community. Read more. Keeping the editors of the Cincinnati paper quiet is another matter. The editors point out the true impact of the amendment is to steer huge sums of money into the ha |
