Wednesday, July 29, 2009

Speaker: Midwest must reinvent to survive

WOOSTER -- If the Midwest states are to survive in this age of globalization, they must reinvent the region and seek ways to collaborate and merge, a senior fellow with a foreign affairs organization said.

The Midwest's economy revolves around two "big things," intensive agriculture and heavy industry, said Richard Longworth, author of "Caught in the Middle: America's Heartland in the Age of Globalization" and a fellow with the Chicago Council on Global Affairs. However, globalization has tossed both of these up in the air.

Longworth was the keynote speaker of the three-day NorthCentral Region Mini Land Grant Conference at Ohio State University's Ohio Agricultural Research and Development Center's Shisler Center. It wraps up today.

While the region manufactures as much as it ever has, it is doing so with fewer people, Longworth said, using a steel plant that produces the same output today with one-tenth the number of employees.

A century ago, the Midwest acted as the Silicon Valley of today, where the ideas of backyard tinkerers and basement entrepreneurs like the Timkens, Ketterings and Goodriches in Northeast Ohio, Longworth said. The ideas were so good, the corporations were so powerful, this region lived off of them ever since.

Those corporations provided good-paying jobs, consequently no other good ideas were needed, which led to the loss of the knack to innovate and invent, traits that enabled this area to dominate the national and world economy.

Longworth concludes the Midwest must reinvent itself or die. Part of the solution is for land grant schools, cities and other organizations to look beyond state lines and political boundaries to cooperate with one another rather than compete. He spoke of the need to develop global cities in the region because the true competition was not coming from nearby states, but from across the globe.

In Northeast Ohio, the Fund for Our Economic Future has been promoting regionalism. Longworth's recommendations takes the mission of the Fund and expands it. Rod Crider, president of Wayne Economic Development Council, said regional groups like the Fund need to connect with others to think and act differently to help the Midwest come back.

Collaboration will need to work on all levels, whether it's Wooster, Wayne County, Northeast Ohio or the Great Lakes region, Crider added.

Bobby Moser, dean of OSU's College of Food, Agricultural and Environmental Sciences, asked Longworth what his priorities would be.

The priorities should include education at all levels, and there should be an awareness about how education fits with economic development, Longworth said. He added there needs to be a high-speed rail system to connect the Midwest's cities so travel time would be about two to three hours.

Tuesday's morning session included discussions about the bioeconomy. Adam Liska of the University of Nebraska-Lincoln spoke about the "Life Cycle Energy Efficiency and Greenhouse Gas Emissions of Corn Ethanol," Randy Fortenbery of the University of Wisconsin-Madison talked about issues faced by bio-refinerie, Stephen Myers of Ohio State University talked about bioproducts being created through the Ohio BioProducts Innovation Center, and Theresa Selfa, a sociologist at Kansas State University, addressed how ethanol plants were impacting rural communities.

Is right-sizing the right fix?

On Detroit's near east side, just a stone's throw away from the hulking and abandoned Packard Plant, sits a neighborhood with overgrown fields, dumped trash, toppled trees and collapsed structures.

Three women perch on a porch having Bible study, while another woman chats on the phone from her porch farther down the street. Their homes are two of the few inhabited ones in a five-block radius, and both offer a wretched view. Their neighborhood represents a growing number
of Detroit enclaves that are ripe to be stripped, scrubbed and made over.

Urban planners insist -- and Detroit's political leaders are beginning to acknowledge -- that the city cannot continue to function as if nearly 2 million people still live there. That tax base is long gone, taking with it the money required to maintain city services and a crumbling infrastructure.

"Detroit once had 1.8 million people, and it's not likely that that number is going to come back in the next two to three decades -- if ever," said Dan Kildee, Genesee County treasurer and a national advocate for downsizing initiatives.

Experts say a downsized Detroit is doable, if these steps are taken:
  • Create a new city master plan, a blueprint for future development and the regreening of the landscape.
  • Identify which parts of the city are most suitable for habitation and development.
  • Develop an execution plan that acknowledges any right-sizing will take 25 to 50 years and should be done in 5-year increments to accommodate budget constraints.
  • Take a full inventory of all city-owned parcels and develop a plan to clear, clean and assemble them into usable shape.
  • Establish state and federal alliances with the Department of Housing and Urban Development, the Environmental Protection Agency and the Federal Reserve Board to pursue block grants that could be used to relocate residents.
  • Build a partnership with private investors willing to support Detroit's future.
Former Mayor Dennis Archer and other city stakeholders began talking about right-sizing Detroit 15 years ago, when they touted tripling the city's green space and reshaping neighborhoods through demolition and relocation.

That was when the city still had about 1 million people.

Now, three mayors later, in a city with at least 100,000 fewer inhabitants and a budget deficit of $200 million to $300 million, Detroit Mayor Dave Bing is scrambling to find creative ways to save money on city services. It's a daunting task.

Bing said he first plans to strengthen some of Detroit's neighborhoods by using part of the $47 million the city received from the Neighborhood Stabilization Program -- funded by HUD -- to demolish vacant structures, especially near schools.

But right-sizing will take time. More here.

Thursday, July 23, 2009

Michigan CEOs believe state’s economy will worsen, survey shows

By Amy Lane

Michigan CEOs are pessimistic about Michigan’s economy in the coming months but believe the national economy will hit bottom and begin to improve, according to a survey released Wednesday by Detroit Renaissance Inc. and the Michigan Business Leadership Council.

The survey of 60 Michigan chief executives found approximately 90 percent forecasting the same or lower employment and Michigan capital investment over the next six months.

Sixty-eight percent said they expect the Michigan economy will worsen over the next six months, while 80 percent believe the U.S. economy will be the same or improve.

Looking ahead 18 months, 80 percent of those surveyed believe Michigan’s economy will stay the same or worsen, with 49 percent saying the economy will be the same and 31 percent expecting further decline.

However, 78 percent of CEOs believe the U.S. economy will be in recovery.

In a news release, Doug Rothwell, president of Detroit Renaissance and the leadership council, said the survey results should be informative to state policymakers.

The leadership council is a statewide group of corporate executives that meets throughout the year to discuss ways to improve the economy and make Michigan a more competitive place to do business.

“The results show two things: First, Michigan cannot expect to grow out of its fiscal crisis anytime soon so it must make structural budget reforms, and second, major changes are needed to stimulate economic growth in this state,” Rothwell said.

Saturday, July 18, 2009

Voices grow in opposition to potential regional water pipeline

By Roberto Acosta
Staff Writer

GENESEE COUNTY -- A Canadian MP from Sarnia has joined a Michigan drain commissioner and the City of Detroit in concern over a possible Genesee County water pipeline.

"The lack of information about the project has caused great concern across my community," said Patricia Davidson in a letter to Gov. Jennifer Granholm and Steve Chester, the state's Department of Environmental Quality director.

Davidson, a member of Canada's Conservative Party, is asking for 60 additional days of public comment to review the proposal.

"This is something we don't want to be making uninformed decisions about," she said. "We need to have the time to determine what's happening. Public comment is currently set to close on July 15.

Jeff Wright, Genesee County Drain Commissioner, has said the pipeline would stretch 65 miles into Sanilac, Lapeer and Genesee counties and carry a projected cost of $603 million.

Construction would be done in cooperation among the Genesee County Drain Commission-Division of Water and Waste Services, the City of Flint, Greater Lapeer County Utilities Authority and Sanilac County.

Wright in the past HAS explained that the plan is for intrastate use and is not considered a diversion under the Great Lakes Compact.

Dennis Lennox, Cheboygan County Drain Commissioner, filed an objection to the proposal on June 5 and has talked of seeking legal action if the Department of Environmental Quality approves the plan.

"Genesee County's proposal opens the door to identical pipelines across the Great Lakes, which would result in mass diversions and the commercial exploitation of water resources," he said.

Lennox also sent a letter to Granholm and Chester asking for more time to review the plan because he was "concerned that the views of Canadian officials, as well as authorities across the Great Lakes region, may not be taken into consideration by the Department of Environmental Quality because they did not have adequate time to study Genesee County's proposal before the close of public comment."

Pamela Fisher, interim director for the Detroit Water and Sewerage Department, listed several objections to the pipeline in a letter from the department and City of Detroit to Brant Fisher, an environmental engineer specialist for the DEQ's Water Bureau.

The letter says there are factual inaccuracies in the GCDC permit application, and that it fails to comply with the water compact's section concerning the "balance between economic development, social development and environmental protection of the proposed withdrawal and use and other or planned withdrawals in water uses sharing the water source."

The letter states a new pipeline would place an "immediate 6 percent rate increase for all the rest of the DWSD's 85 wholesale customers, as well as the residents of the City of Detroit" because of a smaller customer base. It also questions the project cost, saying the figure "does not, to our knowledge, include the cost of maintaining a connection to DWSD's system, which will be necessary if GCDC is to have the redundancy it needs."

Wright said local customers would see an increase of $7 per month during the pay-off period for a 25-year bond, but could see an overall $200 million savings in rate fees.

Thursday, July 16, 2009

Ohio's job growth in advanced energy industry grew 31%

A new report released by The Pew Charitable Trusts ranks Ohio best in the Midwest and among the top five states in the nation for job growth in a clean energy economy. According to the Ohio Business Development Coalition, the non-profit organization that markets the state for capital investment, the report is further evidence that Ohio is uniquely positioned to succeed in the advanced energy industry thanks to its existing strengths in manufacturing and engineering, along with its vast, skilled labor pool capable of an easy transition to fulfill the jobs of the future.

"This report further proves Ohio's dedication to technology innovation coupled with its access to a world-class supply chain and a talented, educated workforce is vital in building a strong foundation for the widespread application of advanced energy systems," said Lieutenant Governor Lee Fisher. "There are many business incentive programs the state offers to companies that create new jobs, thereby creating a supportive and encouraging environment for new investment."

Based on significant research and input from experts in the field, including the advisory panel that helped guide the study, Pew developed the following definition: A clean energy economy generates jobs, businesses and investments while expanding clean energy production, increasing energy efficiency, reducing greenhouse gas emissions, waste and pollution and conserving water and other natural resources.

The Pew study shows in 2007 Ohio ranked among the top five states with the most jobs in clean energy (3,653), energy efficiency (5,367) and environmentally friendly production (2,800). Overall, Ohio boasted a total of 35,267 clean jobs in 2007, which represents an overall job growth of 31 percent since 1998 and an average annual job growth of .85 percent each year. For more information about The Pew Charitable Trusts and the report, visit

Ohio's leaders are leveraging the state's key assets such as Ohio's manufacturing infrastructure, skilled workforce and advantageous location to support a growing advanced energy industry. Ohio's historic strengths in advanced design, advanced materials and advanced manufacturing combined with the state's ability to seamlessly transform these existing skill sets into those needed to compete for the jobs of the future creates the perfect environment to make the state a global leader in this rapidly growing industry. Ohio-based companies are now producing an increasing array of solar panels, wind turbines and component parts, biomass products, fuel cells, hydroelectric components, geothermal parts and storage facilities that promote better utilization of advanced energy resources and competitiveness in a global marketplace.

"Ohio has surplus automotive skilled labor and manufacturing capability that is rapidly being converted to accelerated growth of the clean energy industry and is available for clean energy companies that want a rapid start," said Ed Burghard, executive director of the Ohio Business Development Coalition. "Ohio is successfully reinventing itself as the location of choice among leading suppliers to the technologies of the future, and our state serves as a model for struggling states and cities with economies that rely on traditional manufacturing processes."

One of the most significant initiatives supporting Ohio's advanced energy industry is the Ohio Third Frontier, an unprecedented and bipartisan commitment to expand Ohio's technological strengths and promote commercialization that leads to economic prosperity throughout Ohio. Since its inception, the program has retained or created 7,700 high-paying technology jobs and has attracted more than $3.5 billion in private investment to Ohio, a 9:1 return on investment. Ohio's Third Frontier has already invested more than $100 million in advanced energy technology research and development since 2002, and is projected to provide $24 million in additional grants related to advanced energy in the coming year.

"Business leaders in the advanced energy industry are realizing how, in Ohio, they're able to successfully build a business without sacrificing their personal life," Burghard said. "Business owners profit from the bottom-line benefits of better work:life balance for their employees. Ohio offers low-cost, low-stress communities in a combination of micropolitan and metropolitan cities. This diversity provides executives and employees the resources and time to make any ambition achievable. Ohio truly is the state of perfect balance."

Wednesday, July 15, 2009

Minnesota Lawmakers Establish Green Jobs Plan; Gov Takes Final Action on Budget

As one of several states working to recruit and retain companies that create green jobs, Minnesota lawmakers passed a measure to create a multiagency authority to promote, market and coordinate state agency collaboration on green enterprise and green economy projects. At the same time, legislators rejected Gov. Tim Pawlenty's Green JOBZ proposal, creating a tax-free program for renewable and clean energy businesses modeled after the original JOBZ program and part of the governor's Jobs and Recovery Act (see the Feb. 4, 2009 issue of the Digest).

The Ominbus Environment, Natural Resources, Energy and Commerce bill signed by the governor establishes the Green Enterprise Authority, a cooperative effort between the Department of Employment and Economic Development (DEED) and the Department of Commerce to design programs to attract green jobs to the state. The Green Enterprise Authority will receive the remaining balance of the FY09 special revenue fund appropriation for the Green Jobs Task Force. Establishment of the authority was a major priority of the task force, a bipartisan coalition of legislators, business leaders, policy experts and state agencies created by the legislature in 2008.

Lawmakers also rejected a measure providing $50 million in investment tax credits for certified capital companies (CAPCOs) introduced by the governor earlier in the session. Gov. Pawlenty proposed the investment tax credits, which would be deferred until 2012, available to insurance companies for early-stage investments in CAPCOs.

The governor vetoed a bill that included a $10 million-a-year, 25 percent tax credit for angel investors, citing opposition to tax increases in other parts of the bill, reports the Star Tribune.

Gov. Pawlenty took final action on the state's two-year budget last month following approval of a spending plan by the legislature in May that left a $2.7 billion shortfall between spending and revenues, according to the governor's office. Executive actions taken to balance the budget include a $100 million reduction in higher education appropriations and a 2.25 percent reduction to most state agency operating budgets. This is in addition to the 5 percent reduction imposed on many agencies as part of the recently enacted budget.

The Omnibus Economic Development bill includes $200,000 each year of the 2009-11 biennium for the Office of Science and Technology (OST). The OST was created in 2008 to develop a collaborative partnership between industry, academia and government to coordinate federal funding procurement efforts in S&T in Minnesota. DEED received $400,000 in FY09 to expand current SBIR and STTR efforts and develop a process for technology partnering and commercialization to enhance the S&T funding and technology pipeline.

Lawmakers also approved $500,000 each fiscal year for the BioBusiness Alliance of Minnesota to recruit, retain and expand bio business activity, implement the Destination 2025 statewide plan, and update a statewide assessment of the bioscience industry.

The K-12 Education Omnibus bill approved by lawmakers includes $750,000 in FY10 for Math and Science Teacher Academies. The legislature approved $3 million for the creation of regional academies in 2007, which provide professional development and training opportunities to math and science teachers.

Reduced Funding Scales Back Indiana Life Sciences, Technology Development Initiatives

While maintaining a $1 billion reserve over the next biennium, the 2009-11 budget signed into law by Gov. Mitch Daniels reduces by half funding for the state's 21st Century Research and Technology Fund and appropriates only a fraction of the requested $70 million for the Indiana Innovation Alliance, an initiative to grow the state's life science industries.

Indiana's 21st Century Research and Technology Fund administered by the Indiana Economic Development Corporation (IEDC) will receive $35 million over the next two years - half the amount appropriated last biennium.

Supporting numerous entrepreneurial ventures over the last 10 years, IEDC uses the fund to offer loans and grants to companies bringing new technologies to market, to match SBIR grants, and to create University Centers of Excellence.

Additionally, no funding was included for IEDC's High Growth Business Incentive Fund, which received $3 million last biennium.

The Technology Development Grant Program, which supports the creation and expansion of technology parks, will receive $3.8 million over the biennium, $400,000 less than last biennium.

Lawmakers allocated $20 million over the next two years to establish the Indiana Innovation Alliance, a partnership between Indiana University (IU) and Purdue University. Hoping to bring more external funding into the state by providing matching funds for large-scale research grants and initiatives, the presidents of the two universities asked lawmakers for $70 million over the biennium to be divided among two priority areas. This included $25 million each year to enhance state-of-the-art core research capabilities for university and corporate research, specifically in bioeconmic areas, and $10 million each year to expand education and healthcare innovations by growing statewide medical and bioscience programs.

In the end, lawmakers approved just $10 million each year, allocating $5 million for core research for the two universities, $3 million for expansion of the IU School of Medicine, and $2 million for Purdue's health care technology assistance program, reports the Lafayette (IN) Journal and Courier.

Legislators also concurred with the governor's proposal to eliminate the $20 million Life Sciences Fund approved as a one-time appropriation last biennium to support recruitment and retention of world-class scientists specializing in life sciences at the Indiana School of Medicine.

Federal stimulus funds were allocated during the session to support several economic development projects in the higher education system. Specifically, the enacted budget includes $20 million in bond authority for a drug discovery center at Purdue University West Lafayette and $10 million for the Midwest Institute for Nanoelectronics Discovery, a partnership between industry, Purdue University, and the University of Notre Dame. Launched in March 2008, the collaboration is one of four across the nation designed to create new research opportunities that will lead to development of atomic-scale technologies and drive future computing breakthroughs, according to the Semiconductor Research Corporation (SRC). Additional funding comes from Notre Dame, IBM Corporation, SRC's Nanoelectronics Research Initiative, and the city of South Bend.

Another $5 million in federal stimulus funds was allocated to support the Woodrow Wilson Teaching Fellowship program to add new math and science teachers in underserved areas of the state and for startup costs to establish new Tech High Schools.

The 2009-11 enacted budget is available at:

High-Tech Industry Wins Big in Wisconsin

Gov. Jim Doyle signed the 2009-11 biennial budget last month, providing funding for university-based research and enhancing tax credits for angel and venture investors supporting high-tech R&D.

Several of the governor's priorities outlined earlier this year in the Digest as part of the state's stimulus plan were funded this session, including the following provisions to enhance the Angel Investment and Venture Capital Tax Credit programs, known as Act 255:

Tripling the Acceleration Wisconsin tax credit from $1 million to $4 million for angel and venture investors in support of startup technology companies, beginning retroactively for the 2008 tax year;

Tripling the annual pool of credits available from $5.5 million to $18.25 million per year for angel credits and from $6 million a year to $18.75 million a year for venture credits, beginning Jan. 1, 2011;

Raising the aggregate creditable investment from $8 million per year from any combination of angel or venture sources, beginning Jan. 1, 2011;

Allowing angel investors to claim the entire 25 percent credit on their investment in the first taxable year; and,

Permitting insurance companies to claim the venture capital investment tax credit against gross premium tax liability.

The enacted budget also funds several TBED initiatives from the governor's budget proposal (see the Feb. 25, 2009 issue of the Digest). They include:

Providing an R&D tax credit for businesses that increase R&D by more than 125 percent of the company's three-year R&D average in the form of an income and franchise tax credit worth $1 for every $1 investment above 125 percent beginning Jan. 1, 2011;

Creating a capital gains tax exemption for investments of up to $10 million in new businesses. The pool of available credits will be tripled beginning in 2011; and,

Exempting the sales and use tax for machinery and other tangible personal property used for qualified manufacturing or biotechnology research, effective Jan. 1, 2012;

In support of new job creation, the enacted budget consolidates five existing tax credit programs, including development zones, enterprise development zones, agricultural development zones, technology zones and airport development zones. The goal is to further target those credits to businesses that create jobs, invest capital, and provide training and retraining to new and incumbent workers, according to the governor's office.

University-based R&D investments include $8.2 million for the Wisconsin Institute for Discovery for research in biotechnology, nanotechnology, and information technology. The institute is part of the Grow Wisconsin Plan first announced by the governor in 2003 (see the Sept. 19, 2003 issue of Digest).

The enacted budget also includes the governor's recommendation to provide $8 million over the biennium to establish University of Wisconsin Bioenergy Initiatives at the Madison, Stevens Point and River Falls campuses for projects to develop the next generation of bio-based fuels and energy. To establish the Wisconsin Genomics Initiative for research into personalized health care for disease identification and prevention, the budget appropriates $2 million in FY10.

Lawmakers allocated $25 million in FY11 for the Wisconsin Covenant Scholars grants. This appropriation will establish a funding base for the grants, which are available to students who maintain a B grade average who are entering into the higher education system in the fall of 2011.
The 2009-11 enacted budget is available at:

Saturday, July 11, 2009

Battery innovation thrives in area

Firms work with wind, cars, grids

By Thomas Content of the Journal Sentinel
Posted: July 10, 2009

As an energy producer, wind is fickle: Maybe it'll blow when you need it. Maybe not.

So the race is on to find more efficient ways to store the electricity wind produces when it's blowing, so the lights can stay on when it isn't. A Milwaukee company is smack in the middle of that race - a player in a high-tech sector that local economic strategists hope will become a growth engine for the region.

"Wind has incredible potential to be a significant portion of the nation's energy supply," said Kevin Dennis, vice president of sales and marketing for ZBB Energy Corp. "But to be a reliable resource, it ideally needs to be coupled with energy storage and to be flexible in how the power is managed and controlled out to the grid."

A joint venture between ZBB Energy and Eaton Corp. earlier this month shipped its first rechargeable energy storage system for the renewable power sector to Ireland, where it is being installed alongside a wind turbine that is already providing half the power needed by the Dundalk Institute of Technology.

While Milwaukee's highest-profile economic development strategy has centered on freshwater technology during the past year, a secondary effort seeks to make the seven-county Milwaukee area a center for advanced battery research, development and manufacturing - exactly the type of work already going on at ZBB and several other area companies.

Wisconsin touts new economic development programs

By SCOTT BAUER Associated Press Writer
3:32 PM CDT, July 10, 2009

MADISON, Wis. - Wisconsin came up empty in the competition to land a new General Motors Corp. car plant, but tax breaks that were a part of the state's pitch may end up helping other businesses stay or expand.

"Coming in second or third on this GM plant may turn out to be a long-run blessing," said Tom Still, president of the Wisconsin Technology Council, which advises the governor and Legislature on economic development and other issues.

GM closed its production plant in Janesville in April, cutting about 1,200 jobs. The state lobbied the auto giant to reopen the plant to make a new line of small cars, but GM chose a Michigan plant instead.

Janesville residents who hoped the plant would reopen might find it hard to believe that losing might really be a win. But the incentives designed for the automaker may end up luring other, more attractive businesses to Wisconsin, Still said.

New tax breaks, some of which were included in the state's $195 million pitch to GM, were passed by the Legislature this year despite a $6.6 billion budget shortfall.

Republicans have criticized the Democratic-controlled Legislature as bad for business because it balanced the state budget in part with $3 billion in higher taxes and fees. But Democratic Gov. Jim Doyle's administration says it has overhauled the state's economic development incentives to make Wisconsin a leader in keeping and retaining jobs.

The new tax breaks, which emphasize investment and research and development, give Wisconsin "one of the most powerful economic development tools in the country," said Zach Brandon, executive secretary of the state Commerce Department. More here.