The Center for American Progress recently published a comprehensive report on innovation clusters and how they relate to a region-specific economy.  “Silos of Small Beer: A Case Study of the Efficacy of Federal Innovation Programs in a Key Midwest Regional Economy” offers insight into the obstacles inhibiting  growth of regional innovation, and how federal programs designed to spur innovation could be reformed and realigned to better commercialize  innovation.

Coming from the perspective of a four-city regional economy that includes Pittsburgh, Akron, Cleveland and Youngstown, authors Maryann Feldman and Lauren Lanahan provide a thorough assessment of, and connection between, “small beer” –or low-percentage federal investment– and the inability of businesses, university centers and economic development organizations to commercialize technological and scientific advancements.  According to the report, only 10 percent of the nation’s $150 billion basic research and development funding pot is allocated to commercialization.

Encouraging findings from the report include: the willingness of businesses in the region to consult with a cluster coordinator (87 percent of respondents surveyed); the importance of developing bottom-up, locally organized approaches to innovation programs that are coordinated to regional economic development strategies; and the fact that startup companies and established small- and mid-sized firms are building on the region’s historical strength in industrial activity to create new products and services to emerging industry clusters within the region.

To read the report in its entirety visit: www.americanprogress.org/issues/2010/09/small_beer.html

The Central Mississippi Planning and Development District (CMPDD) has recently added economic impact studies to its list of services offerings.  

Recognizing an opportunity to help regional business owners and local government officials make informed decisions, CMPDD’s economic analyses provide comprehensive data on the corresponding impacts of incoming and outgoing businesses.

Studies are completed with the use of Total Impact, an economic impact modeling software. Using the economic impact analysis software, the District is able to prepare a report that can be used to determine the impact of companies moving in and out of a region. The report will show the direct and indirect economic impact of a business including:

• Number of new direct and indirect jobs created
• Salaries to be paid to these workers
• Number of new residents expected in the area
• Taxable sales expected in the area
• Additional residential and commercial property added to local tax rolls, and
• Other applicable impacts.
• Furthermore, the report will translate the annual revenues over a ten year period for each local taxing district, including:
• Sales taxes
• Property tax on new residential and commercial properties added to tax rolls
• Hotel taxes
• Utilities
• School taxes, and
• Other major taxes, user fees and charges for services

In June, the CMPDD prepared a customized economic impact study for Entergy Mississippi, Inc. The study analyzed the economic impact created by Entergy Corporation on the State of Mississippi. While certain components of the study involved the use of Total Impact, the overall model used for the study was created by CMPDD, as Entergy is already a well established business in Mississippi.  For more information on CMPDD’s economic impact studies, please contact Lesley Callender or Kim Rodgers at 601-981-1511.

Major U.S. Economic Development Administration Grants Advance Innovation and Entrepreneurship to Create Jobs in Auto Impacted Communities

By John Fernandez, EDA Assistant Secretary

EDA Assistant Secretary John Fernandez

President Obama has begun to lay the groundwork for an economic climate where innovation can flourish and over the last year and a half, a new foundation for sustainable growth is emerging. The U.S. Economic Development Administration (EDA) is doing its part by promoting recovery and creating sustainable, economically-robust communities. We strive to create new opportunities and leave adversely impacted communities better off than they were before.

For instance, in June 2008, GM announced plans to close its Moraine, Ohio assembly plant, eliminating 5,000 direct jobs and thousands more indirectly. Within two weeks of GM’s announcement, EDA’s Chicago staff began working with state and local officials to develop a strategic response to the plant closure to provide technical assistance and capital.

Recently, EDA announced three major grants to support innovative entrepreneurship and national and global investment in communities that have been severely impacted by the downturn of the automotive sector.

Our $5.9 million investment in the University of Wisconsin-Whitewater will administer the Auto Adjustment Entrepreneurial Support Initiative to provide comprehensive entrepreneurial support to businesses in six regions in Southeastern Wisconsin and North-Central Illinois.

The initiative is part of a larger regional collaboration that will provide comprehensive entrepreneurial support at every stage of business development through the sharing of resources, facilities, curriculum, training, and collective expertise.  The components of the proposed services include technical assistance, global resource development, market diversification, marketing and technology valuation, business retention programs, facilitation of foreign investments, capital needs assessment, interactive GIS mapping of business resources, rapid prototyping, and clean energy curriculum.

To promote innovation and small business development in the auto-impacted cities of Akron, Ohio; Detroit, Mich.; Fort Wayne, Ind.; Gary, Ind.; St. Paul, Minn.; and Duluth, Minn., EDA has invested $1.5 million in JumpStart, Inc., of Cleveland, Ohio to develop regional entrepreneurship action plans (REAP) and training and assistance programs for entrepreneurs and early-stage businesses.  The project will spur collaboration and help the communities maximize the utilization of local resources to boost job growth through increased innovation and entrepreneurship.

This grant will help JumpStart replicate its proven approach, which has seen success in Cleveland and throughout northeastern Ohio, to significantly bolster innovation and regional collaboration efforts in the six cities. JumpStart will examine entrepreneurial eco-systems and create REAP programs in these communities that have been affected by the restructuring of the American automotive industry.  Michigan, Ohio, and Indiana, respectively, have the first-, second-, and fourth-highest number of automotive manufacturers in the United States.

JumpStart will work to increase access to capital in each region and conduct educational events for entrepreneurs. The events will provide training and information, short- and long-term critical analysis and mentorship, and will connect entrepreneurs and investors.

And to further encourage collaboration in auto-dependent communities in Illinois, Indiana, Michigan, Ohio, Wisconsin, and Minnesota, EDA has provided a $200,000 grant to the Center for Automotive Research (CAR) of Ann Arbor, Michigan to execute a conference that will explore ways to help them attract national and global investment.

This kind of collaboration is critical to helping auto-impacted communities remain competitive.  The conference will advance the public-private partnerships that are critical to helping these communities grow their economies and create jobs.

The conference is a follow-on event to the summit CAR held in April 2009.  Details of the 2010 conference will be made available in the near future on the CAR Web site: (http://www.cargroup.org/carhome.asp).

These EDA investments are part of a concerted and coordinated strategy by the Obama Administration to engage multiple federal agencies in support of auto communities, suppliers and workers in transition.