It's a Regional Challenge

Competitiveness

February / March 2007 By: Deborah Wince-Smith Volume 5 Number 1

Print this Article

E-mail this Article

Today, our enormous trade deficit, the loss of millions of manufacturing jobs and the off-shoring of skilled service jobs all indicate that we are dealing with an unprecedented set of new challenges. The skills required to compete in an increasingly technological and global environment are accelerating rapidly, even as our education and training systems struggle to keep pace. As a result, competitiveness has become a first-tier economic priority again in Washington, D. C. for the first time in almost two decades.

But competitiveness has also become a critical challenge at the regional level as well. Federal legislation by itself is not enough to stimulate innovation in specific regions. National policies set the context for innovation, but regions are where innovation really happens. Perhaps the greatest lesson of the Council's work on regional innovation is that people innovate, and they do it in their local communities and regions. That's why the Department of Labor's new WIRED (Workforce Innovation in Regional Economic Development) initiative is such an important program and why the Council is so excited to be a partner in this groundbreaking initiative—€”it enables regions to take concrete actions to address the major challenges facing the U.S. in an increasingly competitive global economy.

The Council's Innovate America report laid out a bold national policy agenda based on the platforms of talent, infrastructure and investment. And we are very excited that many of our recommendations have already been proposed in federal legislation and supported by the president.

But one of the most important lessons that we have learned over the past decade is that innovation happens in regions. National governments have a crucial role to play but they are no substitute for the actions of regional governments, individual firms, research institutions and entrepreneurs acting within their region.

Based on the Council's extensive work in a dozen U.S. regions over the past six years, we have identified a series of issues that regions face in trying to support innovation-based growth. While every region is unique, we identified five challenges that cut across many regions:

—€¢ Promoting regionalism
—€¢ Building and retaining talent
—€¢ Transitioning to advanced manufacturing
—€¢ Networking knowledge assets
—€¢ Energizing the entrepreneurial economy

Many communities have developed programs to address each of these challenges and some are being implemented with success. However, even the most successful program efforts are limited by two fundamental structural issues that presently inhibit development of true innovation hotspots. Across the U.S., we consistently find that:

—€¢ Regions don't act regionally, and
—€¢ Regional strategies do not integrate all the elements necessary to support innovation.

Regional leaders may understand the innovation imperative and develop strategies to take advantage of it, but are still ineffective because they work independently or even at cross-purposes to each other. Rather than create strategies that reflect the regional nature of their economies, individual geographic entities craft plans independently. Often key players—€”notably business leaders—€”do not participate actively in the efforts. This sort of piecemeal planning typically leads to a fragmentation of development efforts—€”and a suboptimal impact.

Remember, it's not just a matter of competing against other American cities and states—€”it's a matter of competing against Ireland, Singapore, China, India and hundreds of other regions around the world. How can you possibly compete successfully if you are not leveraging all of your region's assets to the fullest?

A related challenge, even for communities that do act regionally, is that their economic development, workforce, educational and entrepreneurship strategies are disparate. While the individual strategies may be excellent, they fail to succeed fully because leaders pursue them as separate efforts, instead of as an integrated growth strategy. That's why WIRED is such a critical and groundbreaking program. It leverages federal funding and national expertise to help regions develop and implement truly regional strategies.

At one of our recent meetings, Roger Enrico, former CEO of PepsiCo and now CEO of Dreamworks Animation, talked about the importance of making big changes to big things. Change and progress, he explained, will never come if you don't free yourself from the tyranny of incrementalism. Dramatic results do not come from undramatic action, but from "tinkering on the edges."

The nation faces big challenges on the competitiveness front and those challenges require big and innovative strategies. Getting our cities, states and various institutions to compete regionally represents the big thinking we need to meet our challenges successfully.

Deborah Wince-Smith is president of the Council on Competitiveness.