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 Response Page - Ketels  Interview -      
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These comments are responses to the statements listed below,
which were generated in regard to the
Christian Ketels  Interview of
09-27-2013.
 

Economic development should spur region-wide productivity, not special deals for some

OVERVIEW

According to Harvard Business School Professor Christian Ketels, the old view of economic development was that government's role was simply to attract new businesses. But, he says, the new view is that economic development is the process of improving the business environment to enable companies to compete in increasingly sophisticated ways. New trends, which are changing the reality of state economic development, call for strengthening the role of regions in fostering economic development; emphasizing job creation from within; supporting advanced manufacturing; helping meet industry demands for talent; raising expectations for universities to foster commercialization from research; and increasing business export initiatives.

He reports that Minnesota is one of 15 states with high and rising prosperity compared with the U.S. But Minnesota should work on its labor force productivity, which is below the national average. In recent years, Minnesota has retained its high rankings among the states on four of eight economic measures, but the state's rankings on seven of the eight measures are trending downward. He notes that, despite ranking low in overall cluster strength, Minnesota had five business clusters that ranked high nationally in 2009: medical devices, publishing and printing, analytical instruments, processed food and information technology.

Ketels emphasizes that regional economic development must ensure more competition and rivalry within and between business sectors. He says less rivalry, which may make an individual company more profitable, is not a good thing for a region, because it reduces the pressure for higher productivity and more innovation. He argues that government's role must be to create an environment where businesses can be more productive and compete more efficiently. Giving special deals or free access to government money to certain businesses does not increase productivity. 

For the complete interview summary see: Ketels interview

Response Summary: Average response ratings shown below are simply the mean of all readersí zero-to-ten responses to the ideas proposed and should not be considered an accurate reflection of a scientifically structured poll.

Readers were asked to rate these statements about today's topic on a scale of 0 (strongly disagree) to 5 (neutral) to 10 (strongly agree): 

1. Value of topic. (7.9 average response) The interview summarized today provides valuable information or insight.

2. Value of further study. (7.0 average response) It would be helpful to schedule additional interviews on this topic.

Readers were asked to rate, on a scale of (0) most disagreement, to (5) neutral, to (10) most agreement, the following points made during the discussion.

3. Clusters have positive impact. (8.0 average response) Higher employment in strong industry clusters (geographically concentrated groups of companies and institutions in related industries) results in higher prosperity, more entrepreneurship and easier emergence of new clusters.

4. Collaboration more effective. (9.3 average response) Economic development should be a collaborative process involving government at multiple levels, companies, teaching and research institutions and private sector organizations.

5. Cluster data can improve decisions. (7.4 average response) Regional government can use cluster data to decide more effectively which dimensions of the business environment to strengthen and which skills, firms and investors to attract.

6. Focus on healthy business environment. (9.1 average response) Economic development should be aimed at creating an environment where the regionís businesses can be more productive and compete more effectively, not at assuring greater short-term profitability for particular companies.

7. Cross political boundaries for results. (8.6 average response) Political units may not be the same as real economic units, and therefore creation of economic authorities across political units may be necessary for optimal economic development.

Response Distribution:

Strongly disagree

Moderately disagree

Neutral

Moderately agree

Strongly agree

Total Responses

1. Value of topic.

0%

13%

0%

44%

44%

16

2. Value of further study.

6%

0%

19%

50%

25%

16

3. Clusters have positive impact.

0%

0%

13%

50%

38%

16

4. Collaboration more effective.

0%

0%

0%

38%

63%

16

5. Cluster data can improve decisions.

0%

0%

13%

81%

6%

16

6. Focus on healthy business environment.

0%

0%

0%

44%

56%

16

7. Cross political boundaries for results.

0%

0%

13%

40%

47%

15

Individual Responses:

Ray Ayotte (2.5) (0) (7.5) (10) (7.5) (7.5) (5)

R. C. Angevine (7.5) (7.5) (7.5) (7.5) (7.5) (7.5) (7.5)

3. Clusters have positive impact. Sounds right.

4. Collaboration more effective. Absolutely!

Dave Broden (10) (10) (10) (10) (10) (10) (10)

1. Value of topic. Understanding the evolution of competitiveness and how companies interact and complement each other as well as [knowing how] technologies and manpower skills and resources interact is core to understanding economic strength and growth

2. Value of further study. Direct similarity and related topics.

3. Clusters have positive impact. The concept of clusters must consider industries and technologies as well as the technology manpower skills and related resources.

4. Collaboration more effective. Collaboration definitely must link the industrial segment with academia but also must promote collaboration among the industries. Collaboration among industry segments is a key thrust throughout business today and this has worked even with the concern that competition and antitrust laws prevent collaboration. Collaboration is King--for innovation and results.

5. Cluster data can improve decisions. This must be done, howeve,r without the government sectors selecting in any way the preferred sectors.

6. Focus on healthy business environment. Long-term focus must be the priority and vision of any government business incentive.

7. Cross political boundaries for results. Definitely true and key factor. Political units are constraining while economic units and regions look to how the required capabilities, resources etc. can be integrated to benefit the product and technology.

Don Anderson (10) (7.5) (5) (10) (7.5) (10) (10)

R. M. Martens (2.5) (5) (5) (7.5) (7.5) (7.5) (10)

Kevin Edberg (10) (10) (10) (10) (5) (10) (5)

1. Value of topic. Wonderful session. Great content.

2. Value of further study. The strand over the past several months about competitiveness (of sectors, of regions, etc.), and policy applications have been very interesting and useful. We need to grow our understandings of these various distinctions.

5. Cluster data can improve decisions. I need a deeper understanding of this.

6. Focus on healthy business environment. Absolutely.

7. Cross political boundaries for results. The question is too narrow. The interview talked about "institutions", not necessarily "economic authorities". The thrust of institutions is broader, and might imply initiatives among educational or research capacities for example. And then you have the real world issues of policy and relationship. I can picture how institutions or "authorities" might function in Grand Forks/EGF, Fargo Moorhead, and perhaps Duluth-Superior; all are matched and have a long history of crossing the border to get to/work with groups on the other side. I don't see La Crescent being a corollary to La Crosse, and Sioux Falls is a world unto itself with a very distinctive business culture. And frankly, if MN and WI can't agree on a basis for synchronizing our approach to personal taxation, and given the very different approaches to a private sector business development organization in WI vs. a state agency in MN, I have trouble seeing how this proposed conversation will bear any nearby fruit.

David Dillon (10) (10) (10) (10) (5) (10) (10)

Stephen Bosacker (10) (7.5) (10) (10) (7.5) (10) (10)

2. Value of further study. A second interview would benefit us if it built on what Dr. Ketel's presented (concepts and principles) into some kind of application for Minnesota. What kinds of institutions do we have that are helping now, what kinds of institutions do we need, or can we adjust some of our institutions to fill in important gaps. Bill Barberg of InsightFormation in Golden Valley has been helping communities collaborate around shared goals. He is finding in some situations where the organizations and groups that cooperate in shared goals are creating lower costs of operations because they are sharing information with one another. This might be a model to expand into a regional level, given that stakeholders buy in. A second possible example is the Tupelo, Mississippi story, where one man helped local farmers increase the quality of their breeding stock, cooperation and shared community goals. The result was a multigenerational expansion of prosperity to the whole area. Perhaps there are stories like this from our region to learn from.

5. Cluster data can improve decisions. This would depend on how well this data revealed the cause-effect relationships in the regional systems. I would advocate for a system dynamics analysis of critical sections of our regional economy. This would require good data, but would go further to generate a model of how our system works. Such a model (computer based) could be used to explore policy changes and impacts of important events on the system. If government officials and representatives have faulty mental models of how things work in our regional economy, they will initiate things that sometimes help and sometimes hurt and they won't know why things are not working as intended.

7. Cross political boundaries for results. What we need is to cultivate an attitude and belief in our region that companies and political units need each other. Collaborative efforts (win-win) are helpful and competitive efforts (win-lose) are harmful. I believe that a large portion of our population believes that you have to win for yourself (or group or company) and if that harms someone else, that is the cost of winning. This belief is what resulted in our State Government shutdown and a lot of harm to the state. With a collaborative view for our region we can then begin to create economic authorities and new institutions that will help. The Metropolitan Council is one good example of this for our 7-county metro region. A corollary example is the old story of the "tragedy of the commons". If an area of life or community or geography is not being managed well and there are not principles of practice or authorities to protect those resources, they will be abused by people.

Jan Hively (10) (5) (10) (10) (7.5) (10) (10)

1. Value of topic. I'll use this information here on Cape Cod to illustrate the importance of a number of changes to strengthen the regional economy. I hope that we can get Professor Ketels here as a presenter for the Harvard Club of Cape Cod.

3. Clusters have positive impact. This point was central to Twin Cities planning in the 70s and 80s.

6. Focus on healthy business environment. One of the most important attributes of the Civic Caucus is its attention to long-term rather than short-term planning

Robert J. Brown (8) (6) (7) (10) (7) (10) (10)

Lyall Schwarzkopf (8) (7) (8) (9) (8) (9) (9)

Mina Harrigan (10) (10) (7) (7) (7) (10) (7)

Chuck Lutz (6) (5) (7) (9) (8) (9) (9)

Bright Dornblaser (8) (7) (10) (10) (8) (10) (8)

Tom Spitznagle (7) (6) (6) (8) (8) (7) (8)

Wayne Jennings (7) (8) (8) (10) (8) (8) (na)

It was very general. His points were valid. We need more specifics and examples. Iím concerned with a population of youth with weak academic and work skills. Greater and different efforts are necessary to deal with this factor. More of the same education wonít work for this population. They can be educated to a productive level, a big factor in our competitiveness and community health and safety. One small example: five of eight substance abuse centers closed in the past two years because revenues did not cover costs. This neglected group will be expensive for society.

    

The Civic Caucus   is a non-partisan, tax-exempt educational organization.   The Core participants include persons of varying political persuasions,
reflecting years of leadership in politics and business. Click here  to see a short personal background of each.

   David Broden,  Janis Clay,  Bill Frenzel,  Paul Gilje,   Jan Hively,  Dan Loritz (Chair),  Marina Lyon,  Joe Mansky, 
Tim McDonald,  John Mooty,  Jim Olson,  Wayne Popham  and Bob White


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The Civic Caucus, 01-01-2008
2104 Girard Avenue South, Minneapolis, MN 55405.  civiccaucus@comcast.net
Dan Loritz, chair, 612-791-1919   ~   Paul A. Gilje, coordinator, 952-890-5220.

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