A note to readers of Technopolis Times

As I send this Spring issue of Technopolis Times' Issues & Events, a pile of unsummarized clippings still awaits my attention.  I want to get an issue out to you today, though, despite that I've been side-tracked by my search for a new day job.  So despite my getting a bit behind, here is a hefty compilation of digested articles, opinions and current events on technology based regional economic development.

            This week I was to attend a banquet in Washington, DC, to receive a research award from IAMOT, the International Association for Management of Technology.  However, I took my daughter to California to look at colleges, and missed the IAMOT conference.  The IAMOT directors agreed that nothing's more important than the next generation's education.  They graciously excused me, and promised to mail the award to me.

            When you, faithful readers, start to buy enough stuff from the http://www.generalinformatics.com/technopolistimes.html site, I won't have to worry about day jobs any longer.  Until that time – and after, as well – the TT staff and I will keep sending you information you can't find elsewhere about tech-based regional development, one of the most important concerns for our future.

            Opt in or out:  We will keep sending you free quarterly newsletters unless you tell us not to.  We would prefer that you actively opt in.  See the insert below.  We will not share your email address with any third parties.

United States dominates in world knowledge rankings, reports bizsites.com. 

"Forty-three regions in the United States are listed among the top 50 performers in the World Knowledge Competitiveness Index for 2003-2004." The report measures 125 regional economies for knowledge capacity, capability and utilization of resources.

San Francisco was number one this year, replacing Minneapolis-St. Paul. Report authors say San Francisco is increasing its R&D investments. Tokyo, in 15th place, scored well in technology services and computer manufacturing.

Stockholm, Sweden, was the top European performer in 18th place. Scandinavian regions are continuing to evolve high-technology service sectors and are not far behind the United States, says Robert Huggins, chief author of the report.

The full report can be purchased through Robert Huggins Associates' website http://www.hugginsassociates.com.

VC funds flock to digital-molecular biology: expected to revive Silicon Valley

The big science of the next decade will "engage a diverse group of specialists – mechanical and electronic engineers, computer scientists, chemists, molecular biologists – in the effort to decode the cellular growth process."  National foci for the effort include Stanford's BIO-X Biosciences Initiative, Angela Belcher's lab at MIT, Leroy Hood's Institute for Systems Biology in Seattle, and Battelle-Pacific Northwest National Laboratories' Biomolecular Systems Initiative.  See Chappell Brown's article in EE Times, February 9, 2004.

Europe's 4^th largest biotech community is in Sweden

After the UK, Germany and France.  The Stockholm-Uppsala region hosts "235 pure biotech companies and several hundred biotech-related companiesÉ. Between 1995 and 2000, Sweden experienced the fastest-growing venture capital market in the world" (Candida Savage in Genetic Engineering News, Volume 24, Number 3, February 1, 2004, 8-14). Uppsala will begin construction of its new science city, Uppsala-Rosendal, in 2004. The science park will have expertise in drug discovery, but will promote cross-disciplinary research. The region leverages the intellectual horsepower of the Karolinska Institute, Karolinska Hospital, The Royal Institute of Technology, and Stockholm University. Useful sites: Stockholm Bioscience http://www.stockholmbioscience.com, Sweden BIO http://www.biosweden.org, and Uppsala Bio http://www.uppsalabio.com.

Portland is a world center of Linux talent; Seattle ditto for Windowsª talent. 

Open-source vs. corporate reflects the relative characters of the two cities, claims Willamette Week (1/28/04) http://www.willametteweek.com/story.php?story=4764. Linux creator Linus Torvalds has joined the Open Source Development Lab in Beaverton, Oregon, just blocks from your Technopolis Times editorial offices, boosting the status of the Lab and the existing collection of open-source software companies and talent in Portland and environs. "The Lab is the self-proclaimed center of gravity for the global phenomenon" symbolized by Tux the penguin, and a prime mover in Linux evangelism.

Coastal Chinese villages become centers for electronics recycling

This is not a good-news story.  Villages like Guiyu on the Guangdong coast (reports Ching-Ching Ni on the front page of the April 6, 2004 Los Angeles Times) attract migrant workers who disassemble computers and circuit boards, recovering gold and other usable materials but without protection from the mercury, cadmium, lead, and acids that are part of the products or part of the recovery process.  Unsightly equipment dumps pollute the environment of these villages.  Why near ports?  Because most of the discarded equipment comes from overseas, notably from the United States.

San Francisco neighborhoods try to bar chain stores

If you have more than eleven retail outlets with a uniform look, forget about locating in SF's Hayes Valley or Cole Valley neighborhoods, says a new SF board of supervisors ordinance.  In southern California, the city of Inglewood voted on April 6 on a similar ordinance (really an initiative to grant a variance on ordinary permitting procedures) that seemed specifically aimed against a Wal-Mart super-center. Inglewood citizens defeated the initiative – and Wal-Mart – by a 2-1 margin.  I just returned from the Netherlands, where many cities restrict store opening hours to eleven per day.  This seemingly non-discriminatory policy has the effect of allowing one-person retail businesses to survive under conditions that are not profitable for big-box stores.

            Why a discussion of retail strategy in Technopolis Times? Banning chain and big-boxes maintains the distinctive culture and flavor of a locality.  This distinction may attract educated knowledge workers, and thus may, in an indirect way, tip a technology firm's expansion decision.  However, in the context of economic development, retail strategy is interesting in its own right.

            In broad terms (I'll note exceptions below), increasing retail square footage and sales only increases local jobs and wealth if it attracts the shopping dollars of tourists and residents of the near hinterlands.  Only in this way does local retail become an export ("traded-sector") activity.  Tourists are also attracted by distinctive local flavor, and some cities that have it (London, Paris, Tokyo, Milan, New York) are tourist shopping meccas.  So-called "destination shopping" also attracts residents on the fringes of a metro area if the development is downtown (with safe, convenient access and parking) or in major regional malls (which may be in suburbs near major highway interchanges). 

Neighborhood strip malls merely circulate the same dollars among local residents, allowing the IRS to skim off a healthy percentage each time.  Strip malls may reduce the miles customers must drive to find a certain kind of store.  However, unless a neighborhood retail outlet produces a very serious reduction in stop-and-go secondary-street automobile traffic (thus reducing the opportunity cost of time and also the money spent for gasoline, car maintenance, and pollution-related health and clean-up costs), it is not a net contributor to local wealth.  When a good strip mall restaurant becomes known throughout the city, it can increase traffic.

Now what about chain and big-box stores?  Yes, they can employ more local youth at or near minimum wage.  Is that needed, or just nice?  If the alternative for these youth is gang crime, then it's needed.  However, neighborhoods where that's the case are not the neighborhoods most chains are looking to locate in.  It is family-wage jobs that create community wealth by generating multiplier-effect jobs, and create stable communities by allowing parents to support families.  Generally speaking, more minimum-wage jobs without additional family-wage jobs does not constitute economic development.

Chains may increase local wealth in a way, by selling goods cheaper to local residents. Yet the University of Southern California's Stefan Schumacher notes that "by squeezing suppliers to cut wholesale costs, [Wal-Mart] has hastened the flight of U.S. manufacturing jobs overseas." (Can you say, "Race to the bottom"? Sorry – this news story has somehow turned into an editorial.) 

Yes, the chains have shown us ways to cut costs.  We need to know these methods.  However, often, large businesses are not reducing costs, but rather externalizing them – making society pay for things that used to be business expense items.  Goods may be cheaper in the short run, but a deteriorating social fabric and community economy will cost more in the long run – and fixing them will be a public expense.  It has usually been local merchants who temper short term cost considerations with concessions to local social realities.  But even Henry Ford knew he would not have a sustainable business if his own employees could not afford his products.

Conferences

From Ethan Seltzer Re: Alliance for Regional Stewardship

"Thanks Fred!  I suspect you mean that clusters won't mechanically produce prosperity without the necessary-but-hard-to-quantify social capital needed to create the right environment.  If so, I agree completely.  You would probably enjoy the work on regional stewardship done by Doug Henton and colleagues at Collaborative Economics in Palo Alto.  They were the staff behind the creation of Joint Venture.  They have also been instrumental in the creation of the Alliance for Regional Stewardship, on the web at http://www.regionalstewardship.org. The next National Stewardship Forum will be held in Austin Texas, May 19-21 2004. http://www.regionalstewardship.org/leaderforum.html
Alliance for Regional Stewardship fosters 'collaborative multi-sector regional stewardship as a means for advancing economic, social and environmental progress, while maintaining a sense of place, in America's metropolitan regions.'"

PICMET'04, June 2004, Seoul, Korea. http://www.picmet.org

The 8^th International Conference on Technology Policy & Innovation, previously scheduled for Munich in June, is now slated for Moscow in September 2004: http://in3.dem.ist.utl.pt/moscow2004/background.asp

Incentive update

West Virginia incentive package largest in state history

West Virginia offered incentives, believed to be the largest in state history, to lure Cabela's to a site near Wheeling. The offer was more than twice that made by Pennsylvania, South Dakota, Minnesota, Wisconsin, Kansas or Michigan. West Virginia's $127.5 million incentive package includes $78 million in tax-increment financing. Cabela's distribution center is scheduled to open in June and employ up to 800 workers by 2007. "The retail store is set to open later this year and will eventually employ up to 390 workers." Source: Gazette-Mail, Feb. 8, 2004 via bizsites.com

Kia to produce small & compact vehicles for European market

Kia Motors will build an $872 million production plant in Zilina, about 125 miles northeast of the Slovak capital Bratislava. Production will begin in late 2006, creating 2,400 jobs. Several of Korean auto parts suppliers may set up factories in the Zilina region as well.

According to Kia, incentives, logistical costs and wages were top considerations in their site selection decision (Poland was also a contender). Slovak government subsidies comprise about 15 percent of the total investment cost, in addition to use of a 367-acre plot of land and new transportation infrastructure. Slovakia is also establishing a Korean-language school for the children of Kia employees.  Plants Sits &Parks compiled this story from news sources.

Short Takes

Rita Colwell resigns as director of NSF.  Arden Bemont (NIST) named interim director. http://sciencenow.sciencemag.org/cgi/content/full/2004/211/1

 
Designed in Dubai?
"United Arab Emirates begins construction on world's most integrated micro-optoelectronic technology park with eye toward winning electronics companies."
http://email.electronicnews.com/cgi-bin2/DM/y/efmA0Eigbz0DbD0B7D20AD

MIT Technology Review: 10 Technologies to Change Your World http://info.101com.com/default.asp?id=4660

 
Temple-Inland withdraws Austin office expansion request
Statesman.com, Friday, January 23, 2004: "Company would have needed a waiver of the city's Save Our Springs ordinance to expand campus over the Barton Springs watershed." http://letters.statesman.com/W0RH05D8BC8283607BC5B3EAFC752
 

Former trade rep joins Intel's board
Ambassador Charlene Barshefsky, formerly U.S. Trade Representative, joins Intel's board of directors. http://c.bizjournals.com/ct/c/706737
 

SCO To Congress: Linux Hurts The U.S.
A Jan. 8 letter says that the commoditizing influence of open-source software is bad for the U.S. economy and argues that open-source skirts export controls that govern commercial products.  (Technopolis Times editorial:  Yeah, right.)
http://www.computerworld.com/newsletter/0,4902,89335,00.html?nlid=AM
 

What's new in off-shoring of jobs

Bill Introduced To Force Companies To Disclose Offshoring Plans

Senate Minority Leader Tom Daschle's bill would require any company that plans to lay off 15 or more workers and send those jobs overseas to disclose how many jobs are affected, where the jobs are going and why they're being offshored. http://www.computerworld.com/newsletter/0,4902,90158,00.html?nlid=PM

Amex On The Defensive About Offshore Plans

American Express is gearing up to dramatically expand offshore development, raising the specter of U.S. IT layoffs, according to sources familiar with the company's plans. But Amex denies it.

http://www.computerworld.com/newsletter/0,4902,89944,00.html?nlid=PM

Offshore Outsourcing Vendor Cognizant Sees 61.9% Revenue Boost

"Cognizant saidÉ it posted revenue of $368.2 million for 2003, up 62.2% from the $229.1 million it reported for 2002." http://www.computerworld.com/newsletter/0,4902,90084,00.html?nlid=AM

HP Sets Up India Call Center

"HP currently supports English-speaking buyers of its consumer products in the U.S. through about 4,000 staff members provided by partners based in the U.S., Canada, Mexico and India."

http://www.computerworld.com/newsletter/0,4902,90085,00.html?nlid=AM

THIS ISSUE'S FEATURED PRODUCTS

New Product Development Simulation is fun and instructional.  Learn the risks of new product development.  Play in on the web for FREE at http://www.cenquest.com/demos/510sim.html for a limited time, or buy CD+license for $69.00 at http://www.generalinformatics.com/academics.htm#NPD.

 
Bibliography of technology based economic development.  Endnote™ file with more than 90 full bibliographic entries - books, articles, reports.  This file will remain FREE until it gets big enough to charge for. Request a copy at bibliog@generalinformatics.com.

Other relocations & expansions

Infineon Expands Dresden Plant

"Investing $152 million, Infineon will add a new building with a clean room and 120 jobs to its main memory plant."

http://email.electronicnews.com/cgi-bin2/DM/y/efo50Eigbz0DbD0B7QO0Aj

AMD Wins EC Approval for European Fab

"The European Commission has approved investment aid of $693 million for AMD's new fab in Dresden, Germany."

http://email.electronicnews.com/cgi-bin2/DM/y/efo50Eigbz0DbD0B7QP0Ak

Xilinx to open Asia/Pacific HQ in Singapore

"The programmable logic company's new Asia/Pacific headquarters will include facilities for R&D, product test engineering, logistics and warehousing, in addition to sales, finance, HR, customer service and IT operations."

http://email.electronicnews.com/cgi-bin2/DM/y/efmA0Eigbz0DbD0B7EE0AX

Newsletters and reports

Finland's high technology in a single package

New PICMET newsletter

In response to a large number of requests from the worldwide technology management community to provide continuous support for the research, education  and implementation aspects of the field on a continuous basis, PICMET (Portland  International Conference on Management of Engineering and Technology) is pleased  to announce the launching of TMN (Technology Management News) as PICMET's electronic newsletter. TMN has been designed, developed and extensively tested for more than a year.  The Winter '04 issue of this quarterly newsletter is now ready for your use. You can see it by clicking "Newsletter" on the PICMET web page at www.picmet.org.

 Free downloads from Korea's Science & Technology Policy Institute (STEPI)

Characteristics and Types of Chinese Innovation Clusters in Comparison with Korean Cases http://210.219.34.12:8080/publications/board/downadd.asp?No=181                 
National Innovation Systems of Small Advanced European Countries http://210.219.34.12:8080/publications/board/downadd.asp?No=179

Survey of the Use of Biotechnology in US Industry

ATIP has published the following report:

ATIP04.005: CODEC 2004

ABSTRACT: This report summarizes CODEC 2004, an international conference on computers and devices for communication, held on January 1-3, 2004 in Kolkata, India, and organized by the Institute of Radio Physics and Electronics at the University of Kolkata. The most encouraging trend observed at this event was the intent to look for alternate and cost-effective solutions to problems. The scientists' process to link R&D to industry and then to the general public was very much evident in the presentations made at this conference. The present report analyses some of the noteworthy papers, which are having or are expected to have an impact on both industry and society at large.

KEYWORDS: Advanced Materials, Computer Software, Conferences, Consumer Electronics, Defense Applications, Electronic Commerce, High-Performance Computing, Information Systems, MEMS, Photonics/Optoelectronics, Robotics, Semiconductors, Space Satellite, Telecommunications/Internet COUNTRY(S): India

A summary of the remainder of this report (including a table of contents) is available on ATIP's website: http://www.atip.org/public/atip.reports.04/atip04.005.pdf

Up-and-Comers: Site Consultants Reveal Their Long-Term Picks

Site Selection for the Technology Industry

Site selection is becoming more complicated as tech industry becomes even more global. Technology companies of all sizes and kinds are now critically evaluating how their location decisions affect their bottom line and strategic position. While each industry and each company has unique requirements and concerns, technology companies all search for the best talent, research, and business climate in the world. In this article, Angelos Angelou looks at site selection trends and requirements in the technology industry.

Abridgment of an editorial from the Winter 2004 edition of Trade & Industry Development magazine, by Angelos Angelou. http://r.vresp.com/?AngelouEconomics/b924fed6f0/168105/754d5d4698

EDITORIAL: Do new business incubators work?

Well I think they do, but instead of arguing the point, I'd like to discuss some "data collection problems" that impede our ability to answer the question.

            First, a great many plain vanilla office suites have decided to call themselves incubators, maybe thinking that it sounds better than "office suite."  Real estate services and a shared receptionist do not an incubator make!  Any study that includes these "real estate operations" in the sample and draws conclusions about tenant company successes will be severely biased.  Real incubators provide expert business services aimed specifically to targeted types of entrepreneurs.

            Second, before the crash, many VC investors were running their own in-house incubators.  None of these efforts now survive, while university incubators and some other public-private partnership incubators are still going strong.  It is tempting for investors to indulge in revisionist history under the circumstances, and just say that no incubators worked.  (They are wrong, however.)

            Third, investigators may survey incubator successes/failures by interviewing "graduated" companies, and another bias comes into play. Incubator graduates have hit their growth phase, and often have hired new CEOs who have no recollection of their own firm's early incubator experience.  These executives want to paint the firm's success as due to their own brilliant management – not due to some university that they're not familiar with (and that might, seeing the survey published, turn around and ask the execs for money)!  They will naturally reply that the impact of the incubator on the firm's success was small.

            VCs still complain about the "crapshoot" that characterizes each of their investments.  Mae West, entering a room where W.C. Fields was playing poker, righteously demanded to know if she was witnessing a game of chance.  "Not the way I play it," Fields replied.  New business incubation is not a horse race where you put your money down and pray; it is a process that can be managed, to minimize ongoing risks and steadily increase probabilities of success.

Computer viruses: Messages that look like they're from Technopolis Times or General Informatics but are not

Recent viruses sweep into a PC, grab email addresses from resident address books, and send bogus messages that look like they're from a familiar correspondent.  You may have received some that appear to be from Technopolis Times.  We are working with our ISP to minimize these occurrences, but they will probably persist at some low level. 

You are never required to send information to Technopolis Times or General Informatics, nor do you have an "account" with us that will be "terminated" unless you open an attached file.  We will never send you file attachments without your specific permission. 

Of course, we encourage you to send us inquiries and any other information discussed in our newsletter or web site, via the email addresses provided there.