Reinvigorating Neighborhood Economic Development

Ted Howard Ted Howard is the Steven A. Minter Fellow for Social Justice at the Cleveland Foundation in Cleveland Ohio. Click here to see a PDF of Mr. Howard’s presentation. To see a video of the forum go here and to see a video shown at the end of the presentation which describes the foundation’s work click here.

Red Fields to Green Fields National Research Program

Kevin Caravati is a senior research scientist with the Georgia Tech Research Institute. Click here to see a PDF of Mr. Caravati’s presentation. To see a video of the forum go here.

Outsourcing: White Knight or Evil Dragon

Monty Hamilton, CEO of Rural Sourcing, Inc. April 6, 2011. Click here to see a PDF of Mr. Hamilton’s presentation. To see a video of the forum go here.

April 6, 2011 Forum

Generating Jobs and Triggering Growth

Communities that rely on manufacturing must find alternatives for economic sustenance and growth when those industries disappear.  At this semester’s third and final innovation forum on April 6th, Monty Hamilton, CEO of Rural Sourcing Inc. (RSI), discussed how his firm helps locales do just that.

It’s called domestic sourcing and it aims to replace offshore outsourcing—in his company’s case, information technology (IT) support—with competitive services in non-urban areas.  It can work, he said, due to several factors, among them: continuing high unemployment, a desire to grow and retain jobs locally, a devalued dollar, high inflation rates in countries such as India and less discrepancy in salaries between that nation and the United States.  RSI, he said, offers lower cost and closer proximity to clients, time zone and language advantages, superior domain knowledge, and a high quality of work

Also significant is customer satisfaction.  According to Hamilton, some 50 percent of firms are not satisfied with outsourcing despite spending millions of dollars on it.  He pointed to a 2009 study that reflected more customer satisfaction with domestic providers than international ones.

RSI started in Jonesboro, Ark., and experienced considerable growth over the past two years.  It recently launched a new operations center in Augusta, Ga., which plans to hire 100 employees—mostly programmers and software developers—over the next couple of years.  The firm, he said, plans to eventually establish 30 such centers across the country, each employing 100 workers and continuing to serve Fortune 500 companies as well as smaller firms.

For locations, he looks at smaller cities at least a couple of hours from major urban centers, places with a stable populace, excellent quality of life, and good educational resources.  RSI doesn’t “pull people off tractors” and turn them into IT workers; rather, it seeks the well-educated who want to reside/remain in non-urban communities.  These are skilled workers who only need confidence to compete regionally and internationally, he said. 

He said his company may pay nearly twice the basic labor cost but Indian IT firms often run greater tabs by adding off-site expertise to a project at higher rates.  He added that RSI provides a high level of critical thinking and staff who ask questions and collaborate closely with a client’s team in what’s called agile development.

What does this mean for economic developers?  “A great entrepreneurial opportunity exists,” said Hamilton, estimating that 1 million jobs could be created by domestic sourcing over the next decade.  Economic developers need to think of how they can reposition their communities for it, he said, adding that practitioners and educators must better prepare their residents for the Internet economy, for example, by addressing STEM (science, technology, engineering, math) issues.  Also, they might consider molding educational offerings to what firms want.  A well-educated workforce is vital to attracting firms, he said. 

This session concluded a year-long focus on job creation during economic recovery.  Previous themes included innovation, entrepreneurship, sustainable growth, and surviving the recession. 

For the past seven years, the Innovations in Economic Development Forum has brought together faculty, other researchers, students, economic developers, and policymakers to discuss leading-edge ideas and practices in economic development and innovation policy.  Free and open to the public, it is presented each academic term by the program in Science, Technology and Innovation Policy (STIP)–a joint initiative of Georgia Tech’s Enterprise Innovation Institute and School of Public Policy–and co-sponsored by the Georgia Economic Developers Association and the Federal Reserve Bank of Atlanta.  Watch for the fall series beginning in September 2011.  For more information on the forums or STIP, contact Lynn Willingham (404/894-0730, lynn.willingham@innovate.gatech.edu).

STIP Interns, Summer 2011

The program in Science, Technology and Innovative Policy (STIP) has selected four graduate students, all from Georgia Tech, to be interns this summer during which time they will conduct research projects relating to Georgia’s economic development.  In early September, they will publicly present their findings.  Now in its seventh year, the summer intern program has numbered some two dozen graduate students who have worked on topics ranging from biofuels, Georgia IPOs, and Hispanic business growth to waste management, nanotechnology, and the Brunswick port.

For 2011, the four students and their topics are:

Mary Richardson, a master’s degree student in City and Regional Planning, proposes to examine vacant public and private land in Atlanta to determine, through remediation and reuse, a suitable urban agriculture program and policy for the city.  Such an effort could reduce the supply of vacant, blighted land while creating new opportunities for entrepreneurial small farmers.  An increase in farm sales can translate into jobs and revenues, and successful urban agriculture can improve environments and public health, and foster neighborhood stability and eco-tourism.  Among other things, her research will involve GIS mapping, zoning policies, land bank programs, and funding strategies.

In addition to her academic work Richardson has interned at HNTB’s transportation department where she has conducted research and analysis on the downtown multi-modal transit station, the Northwest Georgia Corridor transit feeder system, and the Georgia Department of Transportation’s high-speed rail project.  She earned her undergraduate degree from the University of New Orleans.

A second-year doctoral student in the Sam Nunn School of International Affairs, Science and Technology, Ayodeji Fajebe intends to study using intellectual property to close the innovation gap between the information technology and life sciences industries in Georgia.  He will utilize bibliometric analysis of patent filings and patents awarded in the two industries over the past 10 years to better understand how innovative they are.  The state has identified life sciences as an important sector to grow its economy, but IT dominates the economic landscape.  The research could illustrate potential in the life sciences and help identify new opportunities, strategic collaborations and spillover markets that may exist between the two sectors.

Fajebe holds a B.S. degree in electrical engineering from the University of Lagos in Nigeria, an M.S. in electrical and computer engineering from the University of Oklahoma, and a master’s degree in engineering from the University of Waterloo in Canada.  He has been an instructor and a research assistant in various IT studies.

Nettrice Gaskins is a first-year Ph.D. student in the digital media program of the School of Literature, Communication and Culture.  Her project will investigate the feasibility of augmented reality and game-based STEM (science, technology, engineering, mathematics) learning toolkit development in K-12 and higher education in Georgia; it also will identify Georgia’s companies, foundations, and institutions that can respond to trends in this area of education innovation.  Primary data will come from a survey of members of the Game Developers Association, secondary data from such sources as STEM-related academic and workforce performance reports.

A frequent blogger and writer about digital media, Gaskins holds a B.F.A. in computer graphics from the Pratt Institute and an M.F.A. in art and technology studies from the School of the Art Institute of Chicago.  She has worked as a college instructor and a director of multimedia/broadband programs in the Boston, Mass., area.

Benjamin Deitchman, a doctoral student in the School of Public Policy, will explore the policy and program characteristics of effective and sustainable federal Energy Efficiency and Conservation Block Grants in Georgia made under the 2009 American Recovery and Reinvestment Act.  These grants have funded activities to reduce energy use and greenhouse-gas emissions and foster economic development. The project’s goal is to understand the policy landscape in such local energy and conservation initiatives and provide guidance to policymakers to continue “green” development efforts.  The research, among other things, will evaluate endeavors to date and identify best practices.

Deitchman earned his B.A. from Johns Hopkins University and his master’s degree in public administration from George Washington University.  He is a former regional program coordinator for the Alexandria, Va.-based National Association of State Energy Officials.

The four interns were picked from 19 applications.  The selection committee comprised Pat Sims of Georgia Power Company, Greg Torre with the Georgia Department of Economic Development, and Dennis Chastain from Georgia EMC.

STIP is a collaboration between Georgia Tech’s Enterprise Innovation Institute and School of Public Policy.  For more information on the intern program or STIP in general, contact Lynn Willingham (404/894-0730, lynn.willingham@innovate.gatech.edu).

February 2, 2011 Forum

Small Business by the Numbers

What’s the big deal with small businesses?  Small is, well, small, is it not?  But large numbers are associated with these companies.  According to estimates by the U.S. Small Business Administration (SBA), small businesses (under 500 employees) represent 99.7 percent of all U.S. employer firms, employ about half of all private-sector employees, and, over the past 17 years, have generated more than 65 percent of net new jobs.  In other words, small business is a big engine.

That’s not to say they were spared by the recent recession.  Numbers good and gloomy have resulted from the lingering downturn.  Appropriately, the spring semester innovation forum series began Feb. 2 with a presentation by Brian Headd, an economist with U.S. Small Business Administration’s Office of Advocacy.  As with last fall’s series, this term’s theme involves job creation during economic recovery, and Headd discussed facts and figures behind the growth and demise of these enterprises.

Regarding jobs, companies with 500 or more employees account for 34.8 percent of jobs, those with 20 to 499 workers account for 42.8 percent, and firms under 20 employees represent 22.4 percent; also, the number of single-person businesses is rising.  Twenty percent of small businesses are seasonal.

Regarding survival, he said that five years after establishment, half of small firms remain in business, and real growth occurs after the first 10 years.

But, noted Headd, the share of employment by small firms is decreasing, with the “Wal-Marts” taking a larger share.  Stagnation, that is businesses not expanding, he said, has a bigger effect on employment than do layoffs.  There’s a need to push the handful of businesses that have a good chance to grow, the “gazelles” or big employment expanders.  “And we need bigger startups, not necessarily more,” he said.

The word for economic developers is that the economy is coming back, and “now is the time to make an impact,” he said, adding that SBA has a new public-private microlending program for startups.  Also, he noted that reducing regulations can help, and federal procurement is very important to improving the fortunes of small businesses.  “Momentum for small businesses is going in the right direction,” he said.

The event was part of the biannual (each spring and fall semester) series of innovation forums in economic development co-sponsored by Georgia Tech’s Enterprise Innovation Institute, FRBA, and the Georgia Economic Developers Association and presented by the program in Science, Technology and Innovation Policy.  The forums, open and free to the public, bring together faculty, researchers, students, economic developers, and policymakers to discuss leading-edge ideas and practices in economic development and innovation policy.  The videotaped sessions can be accessed via the forum section of the STIP Web site.

March 2, 2011 Forum

The Impact of Undocumented Workers

That undocumented workers have an economic impact in the United States is not in question, but recent research from the Federal Reserve Bank of Atlanta (FRBA) indicates that at least some of the effects run counter to conventional wisdom and political posturing.

Speaking at the second of three Georgia Tech-hosted spring forums on post-recession job creation, Myriam Quispe-Agnoli, Ph.D., an FRBA community and economic development economist, said that a 1 percent increase in immigrants raises income per worker by 0.6 to 0.9 percent.  The positive impact on wages varies across sector and worker characteristics, she added.  Also, her research found no evidence of displacement of legal employees in companies hiring undocumented workers.  But, firms exploit the limited employment and grievance opportunities of undocumented workers to pay them lower wages.  Further, firms are more likely to hire undocumented workers if their competitors do so, and employing these illegal hires enhances company survival.

In her March 2nd presentation in Midtown Atlanta, Dr. Quispe-Agnoli described several characteristics of undocumented workers.  They constitute a 3.7 percent share of the total U.S. labor force, and in Georgia 4.4 percent, or some 425,000 workers.  According to the Pew Hispanic Center, the growth rate of unauthorized immigrants in Georgia since 2000 has been 70 percent, one of the highest in the country; in the same span, California saw an 11 percent growth rate.

In addition, they are young—in 2009, 74 percent were 18 to 24.  Also, nearly half the undocumented households were couples with children, and some 73 percent of those children are U.S. citizens.  Countries of origin vary, but most (62 percent) come from Mexico, with another 5 percent from El Salvador and 4 percent from Guatemala.  Asia contributes, too—3 percent or less, respectively, arriving from the Philippines, South Korea, and China.

The political reaction has grown apace, she noted, at least measured by state legislation.  In 2005, there were 300 immigration-related bills introduced and 39 laws passed; last year those numbers were 1,400 and 208, respectively.  In Georgia as in many other states, the issue comes down to getting the crops in and the poultry processed versus identifying and weeding out illegal workers.

The event was part of the biannual (each spring and fall semester) series of innovation forums in economic development co-sponsored by Georgia Tech’s Enterprise Innovation Institute, FRBA, and the Georgia Economic Developers Association and presented by the program in Science, Technology and Innovation Policy.  The forums, open and free to the public, bring together faculty, researchers, students, economic developers, and policymakers to discuss leading-edge ideas and practices in economic development and innovation policy.  The videotaped sessions can be accessed via the forum section of the STIP Web site.  The final spring 2011 forum, scheduled for April 6, will feature Monty Hamilton speaking on rural sourcing of IT jobs.  For more information, contact Lynn Willingham at 404-894-0730.

Immigration and Jobs in Your Community: What is the real impact of undocumented workers?

Myriam Quispe-Agnoli, Community and Economic Development Economist, Federal Reserve Bank of Atlanta. March 2, 2011. Discussant: Dr. Rosa Hayes, Assistant Commissioner, Information and Analysis, Georgia Department of Labor. Click here for Dr. Quispe-Agnoli’s presentation in PDF format. To see the video of the forum click here.

Small-Business Dynamics and Job Creation: Facts, Obstacles and Best Practices

Brian Head, Economist, U.S. Small Business Administration’s Office of Advocacy. February 2, 2011. Discussant: Donna Ennis, Project Director, Georgia Minority Business Enterprise Center, Enterprise Innovation Institute. Click here for Briann Headd’s presentation in PDF format. To see the video of the forum click on this.

October 6, 2010 Forum

Think Tank Pursues Green Jobs

The “next economy,” according to a senior policy analyst at the Washington, D.C.-based Brookings Institution, will be led by metropolitan areas and be characterized by exports, low-carbon industry, and innovation.  This indicates high potential for green economic development and green jobs, he said.

Speaking at the fall term’s second innovation forum, Jonathan Rothwell, Ph.D., said demand currently exists, citing Pew Charitable Trusts research in 2007 that found 0.8 million green jobs nationwide and U.S. Commerce Department figures of the same year ranging from 1.8 million to 2.4 million.  Regarding potential, he pointed to a Brookings analysis for 1996-2009 indicating the annual growth of environmental export products stood at 8.7 percent while the yearly growth of all manufacturing exports was 2.7 percent.  He added that there’s already a considerable amount of capital investment and government involvement in the green economy.

Rothwell said Brookings has launched a detailed analysis of green employment and plans to issue a report titled “Metro Green” in spring 2011.   It will analyze trends at metro levels, which form local labor markets, and help leaders think about how to create jobs and prepare for a low-carbon future.  It will: (1) focus on economic development, occupations/wages, and exports; (2) cover more than 45 industry segments in the 100 largest U.S. cities for 2003-2009; and (3) perform a “bottom-up” count of green companies and jobs.  All data, said Rothwell, will be available on the Web. 

The green economy will be measured by jobs involved in adding value to green products, and the value added must have a green component, he said, an activity that “prevents, limits, minimizes, or corrects environmental damage to water, air, and soil, as well as problems related to waste, noise, and ecosystems.”

Nearly 25,000 Georgians now work in the state’s two largest green economy segments—green building products (14,189) and conservation and management (10,727), according to Rothwell.  Georgia also is seeing rapid growth in energy-efficient products, biofuels, solar energy, energy-efficient lighting, and green architecture.  Jobs in many of these industries more than doubled from 2003 to 2010, he said.  Metro Atlanta, he noted, claims clusters in smart grid systems and diverse energy-efficiency segments, such as water-efficient products and battery and energy storage technologies.

Rothwell described a “policy playbook” in which the federal government takes the lead on carbon pricing, investing in innovation, and regulating electricity markets, and state governments deal with renewable energy standards, regional electricity transmission, tax credits, and green-tech investments.  The metro role, he said, entails accelerating and supporting green-cluster growth, which means “understanding local clusters, supply chains, and associated advantages; developing green-cluster initiatives in the strongest emerging export sectors; and advocating for a supportive policy environment.”

The session’s discussant was Tom Croteau, director of the Georgia Department of Economic Development’s Agribusiness, Food Processing, Energy and Logistics Team.  He pointed out that Georgia, with its 22 million acres of forestland, ranks number one nationally in commercial forest resources and number three in biomass resources.  In addition, several green-related organizations and initiatives already exist in the state, among them: the Georgia Center for Innovation for Energy, Georgia Smart Grid Initiative, Commercial Aviation Alternative Fuels Initiative, Electrification Coalition, and Marietta-based Green Tech Corridor whose goal is to build an “energy ecosystem.”

Held each fall and spring semester, the Innovations in Economic Development forum is presented by the program in Science, Technology and Innovation Policy (STIP), a joint initiative of Georgia Tech’s Enterprise Innovation Institute and School of Public Policy.  For more information on STIP, contact Robert Lann (404-894-3475, robert.lann@innovate.gatech.edu).