What is the single most important rate-limiting factor when it comes to economic development?

If you live in Northeast Ohio and have been following the Avon exchange controversy, you might think it was highways and roads.  Proponents argued the new highway exchange will be a much needed stimulus to the economy; opponents argued that it contributes to sprawl and negatively affects efforts to revitalize downtown.

Both arguments contain some truth–and yet both also miss the single most important factor that enables economic development to occur in the first place:  access to cheap, potable water.  There could be no economic development in the area surrounding the Avon exchange if there weren’t also easy access to abundant fresh water.

Why was it that places like Cleveland, Pittsburgh, and even Chattanooga became major industrial centers?  Water.  And lots of it. 

Most attention these days is placed on developing alternative energy resources, yet even here water plays a critical role.  Water plays a major role in removing carbon from the atmosphere.  The quality of our water has been adversely affected by the choices we’ve made with respect to the fuels and other energy sources we use.

(Historical note with no small amount of irony: When Rockefeller first set up shop in Cleveland he developed a process for extracting kerosene, the fuel of the day, from oil.  A by-product of the cracking process was gasoline.  Since there was no use for gasoline at the time, Rockefeller and team simply dumped the gasoline into the Cuyahoga River…)

Everything eventually comes back to water.  Our manufacturing processes depend heavily on water, and in the process have damaged the quality of our water, air, and land.  Precipitation draws pollutants out of the air and puts them into our water table.  It also pulls them out of the ground and deposits them in our rivers and streams.

We certainly can and need to develop alternative fuels–indeed, we have to if we want to survive–but what we can’t develop is an alternative to water.

As a result Northeast Ohio has two critically important assets that, despite continued industrial use, are woefully underutilized: Lake Erie, part of the chain of lakes that make up the largest remaining source of surface fresh water in the world (the five lakes combined account for nearly 20% of the world’s surface fresh water), and the Cuyahoga River Valley watershed–once the source of late night TV jokes but today one of the most important watershed testbeds in the world.

In our 2005 report on the possible futures Northeast Ohio might face, green/sustainable systems and new energy sources were identified as key global drivers of importance to the region.  Increasingly, access to fresh water is becoming a key driver for other regions around the world.  While we currently explore the feasibility of offshore wind as one possible energy solution, have demonstration solar setups at the Great Lakes Science Center and Progressive Field, have projects in the Valley focused on fuel cells, green bulkheads, alternative storm water treatments, and even a nanotechnology-based filtration company in the region, we don’t have a highly visible, focused effort around fresh water issues and solutions.

With the Port of Cleveland contemplating a move–the kind of thing that happens in a region once every hundred years or so at best–with a LEED certified development going up in the Flats District, the potential to develop offshore fresh water wind in Lake Erie, with the 50th anniversary of the river catching fire coming up in just over a decade, and with the region as a whole sitting right on the edge of the shallowest of the Great Lakes with one of the three most critical dead zones in the country, the opportunities for Northeast Ohio to be the testbed for critical fresh water research and solutions development is enormous.  

And this is the most important economic development lesson I learned from my visit to Chattanooga.  Water–access to it, its quality, and how it is used–is the single most critical factor to the amount of productive economic development that can take place in a region.  Does that mean I think we should run out and build an aquarium? No, but we should learn from the Tennessee Aquarium’s efforts to focus on the freshwater econsystem and the watersheds that run from Chattanooga down to the Gulf. 

While fresh water fish will always be fascinating to flyfishers like me, they don’t make for the most exciting aquarium exhibits, and so Chattanooga had to build on a salt water addition so people could see “all the pretty colors.” Given Chattanooga’s emphasis on developing downtown as a tourism destination, this made sense.  The same for their River Walk, which is far more people-friendly than our Towpath Trail, with well-designed convenience centers that incorporate recycled materials from the region’s major industries every two miles, and exceptionally good signage that ties the city’s industrial past to its present and future direction. 

We should certainly do more with design than we do (another of the key global drivers identified in the 2005 report), plagued as we are with a plethora of Soviet-era style architecture that is almost as much of a turn off in our wonderful summers as it is in our more Soviet-like winters. But the main things I took away from Chattanooga that are important to Cleveland are the following:

We know we need to boost the amount of R&D that takes place in our region.  We also need to pay greater attention to design as well.  The two can be done together.

We know water is the ultimate rate-limiting factor on economic development and that, while we have it in abundance today, tomorrow may well be a different story.

We know that water touches or is touched nearly every major sustainable technology in some way or another: nutrient loading from and diversions for agricultural use and neighborhood development; pollution from industrial processes; dredging to keep shipping channels open; green bulkheads to help repopulate depleted fish stocks; permeable concrete to minimize stormwater runnoff; filtration to remove contaminants; alternative energy that uses offshore wind and water movement to generate clean power; diminishing sources of fresh, clean drinking water sufficient to support growing populations…the list goes on and on.

And so it isn’t an aquarium we need, but rather a Fresh Water Institute–not a building, but a way of organizing and increasing the amount of academic research that takes place here focused on near shore and watershed loading issues in Lake Erie and the Cuyahoga, things that have universal applicability and growing importance over time.  An organization that is able to focus attention on that research and raise its visibility the way Woods Hole and Scripps do for oceanic research.  But even more the organizational capacity to convert what we learn from this increased academic research into commercial solutions that serve the global marketplace but are based here in Northeast Ohio. 

We also need to make sure that as part of the marketing and educational pieces of this Institute that the public outreach and K-12 educational components are thoroughly integrated, so that people in the community understand the importance of these resources and our children grow up with an enthusiasm for both water and the science of making sure there will be enough fresh water for all of us in the future.

Lastly, because so much depends on how we use this essential resource, having a policy group within the Institute–a mix of legal, research, commercial, and governmental expertise–is essential.  It not only can help change how we use water here, but how water is used around the world, and it also helps to elevate the visibility of both the research and the commercial development occuring in the region.  Not to mention reinforcing the image of Cleveland as a “Green City on a Blue Lake,” an attractive, clean place to live and raise a family.

There were lots of other lessons I learned in Chattanooga, but for purposes of the economic development in Northeast Ohio, this is it: make better use of water as the key factor necessary for robust, successful economic development.

It was a great day yesterday in Cleveland.  The new Mixon Hall opened to great reviews at the Cleveland Institute of Music, and local chef Michael Symon was crowned the next Iron Chef by the Food Network.

What do either of these things have to do with technology?  A lot more than you might think.

Anyone at all familiar with great music, architecture that incorporates both form and function, and cutting-edge cuisine will recognize that each incorporates a great deal of technology and innovation.  What’s more, no society worth living in could possible exist without great art in all its forms.  The two are far more interdependent than most assume, and it is the ability of true artists to “hide” their technology within their art that makes it all the more sublime.

And makes any place wanting to be a tech “hub” just that much more attractive to the more traditional “technologists” as well.

Northeast Ohio has long been known aound the world as home to one of the top orchestra’s in the world, the Cleveland Orchestra, but the town’s reputation as a “gritty manufacturing center” often has overshadowed its rich history of art and architecture.  But truth be told, it is was that very same “gritty manufacturing” that enabled the city and the region to have such magnificent treasures.  And it is advances in manufacturing technologies that are removing that world “gritty” from our lexicon and enabling people to see the region for what it truly is: a place rich in history and art, ringed by an emerald necklace of parks, a place full of good food, good music, and good people, too.

Some may find the Cleveland + campaign corny, but there’s no denying it’s true: we really do have it all–together.

Via the Kauffman Foundation come two new excellent reports on innovation (full disclosure–I have in the past been an advisor on another NESTA study):

A new study from Britain’s National Endowment for Science, Technology and the Arts argues that new technologies are changing how we “do innovation.” These transforming technologies include rapid prototyping, virtual reality, eScience, and various new modeling and simulation techniques. The authors refer to these technologies as “Innovation Technology” or IvT. Thanks in part to IvT, innovation will no longer move along a linear pattern from basic R&D to a final product. Instead, the innovation process will be quicker, messier and less predictable. Innovation leadership will become the only real source of value for companies. Firms will no longer have an innovation strategy – innovation will be the strategy. What does this mean for governments and other institutions? At a minimum, it means they must become more entrepreneurial and nimble. Governments will also need to make new kinds of investments in IvT. For example, instead of simply backing IvT-related R&D, it may need to invest in new centers of excellence that help demonstrate the power and utility of these new technologies. It may also need to assume a broker role that helps build connections and networks between users and providers of innovation support.

Download the September 2007 National Endowment for Science, Technology and the Arts report, Innovation Technology: How New Technologies are Changing the Way We Innovate, by David Gann and Mark Dodgson.

Innovation in a Networked World

Innovation is not just changing due to the emergence of new technologies. It’s also changing due to the emergence of new organizational models—the networked form of innovation. An article in the latest edition of Innovations examines these changes. The authors. Diego Rodriguez and Doug Solomon, are both based at the leading design shop, IDEO, so they practice what they preach. They discuss the importance of new technologies, such as the IvT cited in the NESTA study above, and they also offer a helpful series of key questions that all organizations should ask when involved in the innovation process. Individuals and organizations must embrace massive change to operate in this new structure. Old leadership styles and approaches are no longer relevant; they must be replaced by a new culture of collaboration.

Learn more about the journal, Innovations, and access the Summer 2007 Innovations article, “Leadership and Innovation in a Networked World”, by Diego Rodriguez and Doug Solomon.

Coming up October 22-25:

The Nano-Network and NanoBusiness Alliance have assembled top nanotechnology experts and experienced executives at the forefront of nanotechnology development and commercialization. Speakers will explore a broad range of issues relating to nanotechnology and its many applications in automotive, clean tech, and defense sectors. Major manufacturers, leading nanotechnology product developers, and industry experts will share product enhancements, insight on current market demands, commercialization and investment opportunities, and much more. Attendees will leave the Nano App Summit with a better understanding of nanotechnology commercialization opportunities that exist within the automotive, clean tech and defense sectors and the business contacts to move their company to the next level. It’s all about nanotechnology applications today — not years into the future.

For more details, go to http://www.nanoappsummit.com/

Following up on our earlier post about an educated workforce and the need for more innovation in our educational system comes this article from the Financial Times proposing that instead of (essentially meaninigless) internal training certificates, companies might actually provide recognized degrees for training provided to their employees:

“To educational protectionists an employer’s degree would doubtless be as worthless as a mail-order diploma from a mid-west correspondence college. But to most Britons, a masters in jet propulsion from Rolls-Royce would carry more clout than honours in media studies from Humber University (née Scunthorpe Poly). The currency of degrees is already debased. The inclusion of suitably vetted employers among awarding bodies could raise, rather than lower, their value.”

It’s an intriguing idea, and one our larger companies should give serious consideration.  Sure, they might want to partner with an existing institution first, they way Timken and Rolls Royce partner with Stark State.  In fact, that seems to be the right approach, at least the way this model is unfolding in the UK:

“Unipart, the engineering logistics company, would be well placed to exploit this opportunity, since it already has its own ‘university’. I visited one of its colleges earlier this week. It was not the kind of ivy-clad establishment where Sebastian Flyte, the gilded undergraduate of Evelyn Waugh’s Brideshead Revisited, would loiter with his teddy Aloysius. It was located within a components factory in Coventry. Forklift trucks performed a noisy ballet outside the training rooms, dubbed the “Faculty on the Floor”.

“But proximity to the workplace is the whole point, according to Unipart. Too often, staff instantly forget what they have learnt in the bubble of offsite training. Unipart U is geared to adult learners, teaching them skills they will use quickly and therefore remember. Students work together in mixed-ability groups to crack problems. Touchy-feely skills were the focus of the course I observed. “Drinking at work is frowned on in the UK,” one would-be logistics consultant pondered, ‘but in some eastern European countries factory managers start the day with vodka.’ Should the visiting contractor accept or decline a shot, he wondered?

“Unipart requires all of its 9,000 staff to complete some training. About three-fifths are taking vocational courses from a curriculum whose upper level equates to a university degree. The company hopes to award a logistics NVQ2 – equivalent to a GCSE – under the oversight of a local college.”

Now that Rolls Royce has a fuel cell facility in Canton, imagine what the pedigree of a Rolls Royce degree in solid oxide fuel cell development could mean, both as an attractor of talent to the region and as a way to position the region as the place to be to get the skills you need to succeed in today’s economy.  The could hold for companies like Sherwin-Williams, whose CEO already jokingly claims he lowers the IQ in his Cleveland R&D center 100 points just by entering the building.  Why not use that talent, paired up with one of our local universities, to offer a Sherwin-Williams degree in solar collecting or other advanced coatings technologies?  Fears about brain drain (people taking that degree and using it to get a good job somewhere else) would be more than offset by the brain gain potential such degrees would create–after all, if a Rolls Royce degree in fuel cell development has so much value outside the region, doesn’t it also say Northeast Ohio is where you have to be if you are serious about being in the fuel cell industry?

A lot was made last night at TeamNEO’s second annual State of the Region meeting about the progress we’ve seen in the region.  Tom Waltermire and team are to be commended for being forthright and direct about both the positive and the negative changes that have taken place in our region over the past few decades.  You can get a copy of their most recent quarterly update on the state of our region by clicking here.

The two key speakers at last night’s event were Cleveland Federal Reserve Bank President Sandy Pianalto, and Cleveland State University’s Vice President of Economic Development Ned Hill.  While both spoke of the importance of STEM education (Science Technology Engineering and Mathematics) and educational attainment as keys to economic growth and prosperity, both were also very vocal in their insistence that STEM is not a panacea, and that the arts and other non-STEM education is also critical to the development of creative, innovative minds. 

Ms. Pianalto emphasized education and innovation as intimately linked and essential to regional success.  STEM is certainly a part of that, but innovation requires creativity and critical thinking as well as knowledge of advanced science, technology, engineering and mathematical skills.  And Ned Hill, in addition to stating that knowledge of calculus was a huge hurdle that was keeping many students from pursuing college degrees, also showed some intriguing data about 2-year vs. 4-year degrees in which there was not a clear correlation between a more advanced degree and regional employment, which seemed to indicate to him that the two year program need not be seen as simply a feeder system for a four year degree, but that it was also the place where many of the skills most needed in the region could be acquired.

There is another possibile explanation, though.  While calculus is and always will be important for certain degrees and professions, boolean logic is actually more important in the information age than calculus.  

It is entirely possible that where we need innovation most is in our educational system, which is still rooted in our industrial past–in order to succeed in an information-based economy, every student needs to have a fundamental understanding of how this deceptively simple mathematical system is the source of so much of the creativity and complexity that make up our world today.  It is, after all, only logical.

Crain’s notes that Business Week this week names the Cleveland Institute of Art one of world’s top design schools, while the Financial Times runs an article on how MBA programs are increasingly using design classes to help their students be more innovative. 

Out of modesty we won’t make too much of the fact that all this was pointed to in the TechFutures scenarios and in the resulting report (well, that wasn’t too much, was it?), what really intrigues us is what’s going on at Case Western Reserve’s Weatherhead School of Management, where rumor has it (actually, much more than rumor) that staff is reviewing the curriculum with an eye towards introducing the notion of management as design as a core concept. 

With the Cleveland Institute of Art right next door, the possibilities are extremely exciting–CIA students have long turned to Case for their “non-design” courses.  If Weatherhead is serious about make design a central tenent of how they teach management, then the school may well be able to carve out an exciting and necessary niche for itself in a degree program that has been showing signs of weakness and age at all schools that offer the traditional MBA degree.  As noted in the FT article, “it is a great thing for a design school to live in a time when the business world is realizing the importance of design, creativity, and innovation.”  Even more exciting is a business school that embraces design as a core aspect of good management.

With investors increasingly calling on the SEC to require companies to disclose their carbon emissions and regulators in California calling for carbon-neutral building codes, corporate attention turns to the supply chain: How can we ensure that not only our product, but all the processes and third-party components that go into our product, have as little impact as possible on the environment?

Incresingly attention within corporations is focused on how IT can help in reducing the impact–not simply by making sure obsolete computers are recycled or that videoconferencing technologies are used wherever feasible to reduce travel requirements, but also in monitoring and control supply chain relationships.  According to the Financial Times, “some companies are beginning to monitor supply chain processes from an environmental point of view.”

“The process of transitioning to an information-based environmental management system has thrown up opportunities for direct cost reductions,” the FT reports Mike Packer, environmental director for Timbmet, a timber importer, as saying.  “It has improved efficiencies on operations and given better understanding of energy demands leadng to opportunities for increasing renewable energy.

“IT systems in companies traditionally manage financial data and basic business.  Newer environmental parameters look at slightly different aspects of the same enterprise that’s being managed.  If the environmental factors are to be measured and managed with the same rigor as traditional financial ones, the underlying data capture must be equally rigorous.”

As the FT continues, “So perhaps jobs in green IT are not just about power management but more aligned with where business meets IT in every day use–process efficiency, which incorporates resources, use, and waste throughout the lifecycle of a product.”

In the Information Age the importance of IT as a tool for achieving sustainabililty and cleantech goals should come as no surprise, but as always the question remains, which companies will move quickly enough to capture this trend and use it to their (and our) advantage, and which will be left behind?  Perhaps even more importantly, will our higher educational system respond quickly enough to this emerging trend to develop and train the IT specialist that will be needed to fill this growing role within the corporate world?

A message from Michael Wolf at E CITY 

As you know, E CITY is growing rapidly to teach more students in

 These positions are:-        

Volunteer Coordinator-        

Executive Assistant-        

Assistant Program Director

If you or someone you know would like to join us in the effort to solve the education and poverty issues in Cleveland, the next step is to visit the E CITY website’s home page at www.ecitycleveland.com.  The application process for each position begins there.Thank you for taking the time to consider this – we’re immensely grateful to the friends of E CITY and E Prep like you, who are so supportive of our missions.

From Kauffman’s  Public Forum Institute comes this news about broadband penetration in the US:

A new study of broadband use in California offers some useful insights for other regions around the country and overseas. The study, Broadband for All?, examines patterns of broadband adoption and availability across the state. It notes the presence of three broadband “digital divides” in the state. First, broadband availability varies widely. Not surprisingly, broadband is more readily available in wealthier and denser parts of the state. In terms of adoption, 47% of California households have broadband (compared to 39% nationwide). Finally, the study finds large racial and income disparities in terms of use – wealthier families are much more likely to adopt broadband. Hispanic and African-American families have much lower broadband adoption rates when compared to other Californians – even though the availability of such services does not differ by race. The report concludes by recommending that policymakers focus on two key goals: boosting broadband availability in rural areas, and boosting broadband adoption and use by Hispanic and African-American families.Access the July 2007 Public Policy Institute of California report, Broadband for All? Gaps in California’s Broadband Adoption and Availability, by Jed Kolko.