Archive for August, 2008

Innovation and Economic Development

Sunday, August 31st, 2008

By Dean Whittaker

Innovation is everywhere.  From “Technology Lead Economic Development” to transitioning to the knowledge economy, everyone has a strategy to commercialize the intellectual property of universities and the federally funded R&D taking place in federal labs.  Why is innovation such a key driver for economic development?  Part of the reason is that all products and services become commodities over time.  Yesterday’s innovation is today’s “also ran.” Without continuous innovation, a business will fail in the long run.

Where does innovation come from, and how can it be used in an economic development strategy?  Innovation is “finding a better way.” It begins with asking a good question. One question that I like is, “What impossible thing, if made possible, would revolutionize your business?”  For me, that impossible thing has been identifying which companies were going to relocate or expand in the next 18 months, and where and when that might happen.  I have been working on the answer to these questions for twenty years. So far, I have a good understanding of who, a hint at where and no clue as to when.

So how does one commercialize a good idea?  First of all, ideas are a “dime a dozen.” Having a good idea is not the issue. Success is really about whether the idea meets a need people will pay to have met.  And they have to pay enough that a profitable business can be created around meeting that need.

Innovation matters because without it our local businesses are “out of business.”  Does the idea have to come from a federal laboratory or a university? Of course not–any business that has been around a few years has had to innovate to survive. Continuous innovation is critical to our local economies.

So how do we create a culture that supports innovation? First of all, we accept risk.  Is your area willing to support risk-takers? Are financial systems in place to support risk taking? Is there a free flow of ideas that integrate new ways of doing things into existing business practices? One approach I like is the TED conference (www.ted.com), where big thinkers present their ideas in front of a “make it so” audience.

For those engaged in the pursuit of the commercialization of intellectual property, an organization has formed, complete with annual conferences. SSTI (www.ssti.org) is a comprehensive resource for those involved in technology-based economic development. Since its inception in 1996, SSTI has developed a nationwide network of practitioners and policymakers dedicated to improving the economy through science and technology.

A couple of interesting initiatives to take a look at are the Arizona Technology Council and the eastern Tennessee Innovation Valley Nano Alliance (http://www.nanovalley.us/). These and other initiatives like them are changing our economy.  If you are not already on the bus, you might want to think about getting there.  For those on the bus, more power to you!

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Two Ways to Get There

Sunday, August 31st, 2008

By Todd Smithee

At the end of my family vacation, I decided to attempt to hook into a king salmon in Ludington, Michigan’s harbor.  Ludington is where the Pere Marquette River empties into Lake Michigan.  Every August the salmon make their annual migration from the lake into the river.

I prepared for my morning of fishing by putting stronger line on my reel, which was attached to a grossly undersized fishing pole.  My plan was to fish in the harbor, hook a fish with my undersized pole, and chase the fish with my boat until I tired it out.  As I got ready to launch my small aluminum fishing boat, I offered to help another fisherman launch his boat (he was alone).  He said he could launch it by himself.  Then he took a look at my situation and graciously offered to take me along with him.  This was my first example of fisherman’s luck of the day, and I jumped at the opportunity.

My new friend (I’ll call him Bob) put me to work driving the boat while he set the lines.  Almost immediately we hooked into a nice salmon.  Bob surprised me again when he told me to go ahead and reel it in.  I was lucky enough to catch my first salmon in years, a nice 17-pound king.  In my second round of fisherman’s luck, Bob handed the rod to me a little while later, and again I landed another salmon.

But my final, and by far the most important, strike of fisherman’s luck for the day was the time I got to spend with Bob.  Bob is a fairly recent retiree of one of the Big-Three automakers.
Since I’m self-employed, we could not have had more diverse career backgrounds.  I learned much about the hopes and concerns of Americans employed in careers in the industrial base that is so important to our nation’s economy and defense.  It was an eye-opening experience.  One thing that was especially interesting was that Bob and I worry about exactly the same things–saving for retirement, paying the bills, and preparing our children for the real world.  The only real difference is to how we’ve attempted to get there.

Bob’s a great example of just-in-time logistics.  Bob retired just in time.  He receives his pension and excellent healthcare benefits just-in-time.  But he got me thinking about the other “Bobs” out there.  What happens if one or all of the Big-Three automakers goes bankrupt?  Who will pay for all of the other Bobs’ healthcare, pensions, and jobs?  And what about the retired Bobs?  Will they lose their pensions and healthcare?  Finally, what about our industrial base?  How can the US remain a world power, defend itself, and remain economically strong without the capability to manufacture cars – processes that also allow us to design and build military vehicles, and equipment?

The loss of our auto industry is a sword that cuts both ways (and both are bad).  We are losing not just our manufacturing base, but the ability to support our retirees and our national defense.  I am by no means suggesting the nationalization of the industry.  I am an entrepreneur and believe strongly in the free market.  The private sector is definitely the most efficient vehicle to provide jobs, benefits, and manufacturing capabilities and must continue to do so.  What our government needs to do is to make sure we are not undermining ourselves with unfair trade practices.  Otherwise, we will be exporting the Bobs’ salaries, pensions, and benefits and our ability to equip our military.  Free trade is critical.  So is our ability to feed our families and defend ourselves.

By the way – thanks, Bob.  You will never know how much you made my day!

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The “Un-Conference”

Sunday, August 31st, 2008

By Jami Miedema

BarCamp was a term I was not familiar with until recently. Even after I learned what it was, it took awhile for me to wrap my mind around it. A BarCamp is a user-generated gathering (on-site, not virtual) created by and for individuals who are eager to learn and share in an open setting. They tend to broadly focus on and attract individuals in the field of information technology, but the topics and agenda are not pre-arranged. In fact, the attendees provide the content and decide what they want to discuss at a particular session. They are also encouraged to participate by giving presentations or opening a dialogue.

BarCamps were “founded” in 2005 in Palo Alto, CA, and have since popped up in hundreds of cities all over the world. They are usually organized and advertized via the web, especially through the use of a wiki and blogs. An advantage of these open events is that they are typically free of charge, as sponsors are kind enough to furnish space, food, and money to ensure a great experience for the “campers.” Perhaps the biggest benefit is the talent that is brought to the table and the information that is shared during and after the event. According to The Rules of BarCamp, “When you come, be prepared to share with barcampers. When you leave, be prepared to share it with the world.”

The laid-back structure of BarCamp is a refreshing contrast to the very private, invitation-only meetings held by some IT gurus. Therefore, it has been dubbed the “un-conference.”  So, if you are enthusiastic about learning, but do not want the hassle and cost of attending a formal conference, BarCamps are the perfect way to gain useful knowledge and skills, contribute unique ideas, and find new networking opportunities. Visit www.barcamp.pbwiki.com to see if there is a BarCamp event near your location.

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Generation Y Trends

Sunday, August 31st, 2008

By Jim Bruckbauer

As we can see throughout history, each generation has unique factors and experiences that distinguish it from previous cohorts and sets them apart from those to come. Listed below are five attributes of Generation Y that are slowly changing the dynamics of the workplace.

  1. Compensation is not solely about money. The Millennial generation, those between the ages of 18-30, are characterized by a desire to receive training, take on new challenges, and expand capabilities as a result.  There is less focus on compensation, and more emphasis put on recognition of achievement and meaningful work.
  2. Millennials communicate through humor, passion, and truth. It is also important to show “direct and timely feedback, frequent encouragement and recognition of efforts.”  This keeps employees engaged and motivated.
  3. Employers will invest heavily in management training for the Generation Y cohort. Companies are redesigning their organizational practices and cultures to accommodate changes in generational trends.
  4. Benefits should be consistent with lifestyle. Employers should seek ways to creatively manage the work/life balance.  One example is to hold training sessions that are mixed with entertainment and learning.  Another idea is to offer sabbaticals to allow a Millennial to explore some civic interest.
  5. Working remotely will become standard. Meeting and interacting online is just as comfortable and “real” as face-to-face meetings.  Many Millennials feel that the virtual world is a natural extension of their personal experiences.

Source: Managing Generation Y as They Change the Workforce, Reuters, Jan. 8, 2008

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Companies From Emerging Markets are Making a Mark on the World Stage

Sunday, August 31st, 2008

By Vidhan Rana

The business world has changed significantly over the last few decades as companies from the developing world, especially India, China and Brazil, have ascended to the world stage. One such company is Tata Consultancy Services (TCS), a subsidiary of the Tata Group. The Tata Group owns interests in steel, automobiles, information technology, communication, power, tea and hotels. TCS employs 116,000, of which over 30,000 are based outside India.

The company started out in 1978 as a service group to serve other functions within the Tata Group, and 40 years later, it is India’s largest software company, with revenues of $5.7 billion in 2008. Its first client in the United States was Burroughs, which at that time was the country’s second-largest computer manufacturer. TCS opened its first office in New York City in 1979 to market to other prospective clients in the information-technology industry. Today, TCS has 35 offices in the US and employs over 14,000 in the US and Canada.

Recently, things have not looked as rosy for TCS. Economic slowdown in the United States, especially in the financial services industry, has hit the company hard. All of the top 10 global banks are clients of TCS. Its profits declined by 6.17 percent in 2008 and its share prices have declined 11 percent since the beginning of the year, its highest fall since its debut in 2004. However, even in tough economic times, TCS’s sales in North America, the UK and Europe increased by eight percent in the first quarter in 2008. The company says traction in manufacturing, life sciences and retail verticals helped offset the losses in the financial sector.

Another developing-world company with a global presence is China’s Chery Automobile, the fastest growing automaker in the world. Founded just over 10 years ago, Chery sold about 381,000 vehicles in 2007. This may not sound like a big number, but considering that the company’s first car came off the production lines in December 1999, it is a huge accomplishment. Its plant in Wuhu, in Anhui province, used machines and engine technology purchased from Ford Europe for $25 million. Chery is currently the fourth-largest passenger-vehicle manufacturer in China. The company hopes to manufacture over a million vehicles by 2010, and export about 40 percent of them.

Chart

To accomplish its export targets, Chery is looking to enter markets in Europe and North America. It is working with Bertone and Pininfarina, the famed designers of Ferrari and Lamborghini, to give its vehicles a look that Western consumers desire. It is also working with Fiat and AVL to supply engines for its cars and trucks. In North America, the company has signed a deal with Chrysler to bring Dodge- and Jeep-branded Chery small cars to US shores by 2009 or 2010.

Doubts have been raised about whether Chinese cars will pass US safety and emission standards. However, the Chinese are determined to break these barriers. If the country’s recent success at the Olympics games means anything, the cars should prove as good as any other car made in the US. Quality doesn’t seem to be an issue for TCS, which is planning to buy units from EDS and is already giving tough competition to IBM and Accenture. IBM, EDS and Accenture have all set up large offshore service operations in India to take advantage of low-cost staff. But, these US-based companies have not fully benefited from this move because of their lack of experience in managing their staffs in India. Industry analysts expect that TCS and other Indian IT service providers will become larger than US service providers by 2011.

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A Look into Chinese Etiquette

Sunday, August 31st, 2008

By Karla Helvie

China has been an intense draw for me this summer. Not only is news about China or coverage of the Olympics readily available, but in less than two weeks, I leave Michigan to live and study in Shanghai for four months.

One article I read recently details China’s struggle with a topic that’s also of concern in the U.S. As China has grown economically, moving from communism to capitalism, its migrating population has stretched family bonds, and the question of how to support retirees is looming large. Census figures estimate that China will have 400 million people over the age of 60 by 2020. Many of these retirees have only small social-security incomes and government health insurance that won’t cover large medical expenses. In an attempt to prepare for the aging population, the government has increased the social-security plan and enlarged the health insurance package, along with creating retirement savings accounts. In 2000, only 18.6 percent of the population was eligible for social security benefits, while today, benefits are available for 90 percent of the population. These changes are one reason the government is popular–according to polls, over 87 percent of Chinese people believe that the government should be responsible for retirement social security and health care. The overwhelming public response is that society, in the form of the state, should oversee and supply retirees with their income and benefits.

One of the most frequent reactions I get when I tell people I’m going to China is something along the lines of, “That is going to be so different!” This is undoubtedly true, and another recent article gave the reader several tips on Chinese etiquette and what to expect from daily interactions and events while in China. Below are five of the tips (taken from MSNBC) that seem to me to give the most insight into the Chinese character:

1. Cars
Never, ever assume pedestrians have the right of way. Cars will not necessarily stop for you. Cross with a group if possible at a designated crosswalk. A car won’t stop for a single person necessarily, but will stop for a group because the driver doesn’t want the car to be dented. The Chinese really love their cars.

2. Chopsticks
Don’t point at other people’s faces with them. Don’t stab your food with them like toothpicks. Don’t lick them. And by all means don’t stick them upright in your rice bowl—that’s how the Chinese honor the dead at graves.

3. Face
Never shout, even when someone has done something wrong. Losing your temper will only make the other person feel that he or she has lost face (i.e. dignity), and will often cause that person to refuse to take responsibility for a problem. Best to smile, stay friendly, and persistently ask the person to “help you” solve whatever problem has arisen.

4. Respect for elders
It’s fine to open doors and give up your seat to an older person of either gender. And don’t be offended if younger Chinese—male or female–offer you an arm going up stairs or other assistance if you are older. They don’t think you’re infirm. They’re just trying to be polite.

5. Smiling
Chinese people smile for more reasons than Americans. A smile can mean the person is embarrassed, curious, happy, friendly, or trying to be helpful. In the middle of an argument, smiling means that the speaker doesn’t want this to become personal. When all else fails, smile in China. It shows you have no ill intentions, and it can work wonders in getting better service.

Sources: “Aging May Strain Chinese Economy” Raleigh News & Observer, August 17; “10 Chinese Etiquette Tips,” msnbc.com, Aug. 8

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