Best Practices Impacting Economic Vitality: The 2007-2009 Recession as a Catalyst for New Directions

Mohammed Khayum

College of Business University of Southern Indiana

Economic Impact WorkshopCarter Hall, University of Southern

IndianaJuly 19, 2011

Outline

Best Practices Evolution and Current Focus

Information gapsToolkits for analysis and strategic thinkingPlatforms and networks

Aftermath of 2007-2009 Recession

Disruption and Reconfiguration of Frameworks

SHIFT FROM LOCAL TO REGIONAL FOCUSActing regionally to compete globally

SUCCESS LINKED TO TAKING ADVANTAGE OF UNIQUE QUALITIESStrategic Directions, Collaboration, Innovative Practice

MORE TOOLS AVAILABLE (www.statsamerica.org/innovation)

Industry ClustersOccupation ClustersInnovation IndexRegional Innovation Strategy

For the frameworks we use what gets more attention? Rear View

Mirror or Windshield Perspectives?

• Industrial recruiting• financial incentives to attract factories, focused on investments in

physical infrastructure to move inputs to factories and finished goods to markets.

1950s

• Cost competition• focus on creating a business and regulatory climate that encouraged

private investment by reducing costs.1980s

• Regional competition• Identifying each region’s competitive advantages, blurring

of lines between economic and workforce development, innovation emerges as a key element around which economic development strategies are organizing.

1990s

Aftermath of the 2007-2009 Recession: Change in U.S. Employment

Aftermath of the 2007-2009 Recession: Change in Indiana Employment

Metropolitan Areas Return-to-Peak Employment

U.S. Metro Economies: Employment and GMP Forecast, IHS Global Insight, 2010

The Changing Shape of Unemployment

The 2007-09 recession had a severe impact on the U.S. labor marketDuring the recession, more than 89 million employees lost their

jobs, while fewer than 82 million were hired

The slow labor market recovery has prompted a growing list of suggested structural explanations in addition to the standard cyclical explanations

Structural factors considered:

Mismatch between job openings and job seekers Extended hiring time

Sectoral shifts Uncertainty

NON-MARKET/NETWORKED

Braille

Periodic Table

RNA Slicing Aspirin EKG

Chloroform

Cosmic Microwave Background Radiation Cell Division

MRI

Enzymes

Cell Differentiation DNA ForensicsRadioactivity Atomic Reactor Cosmic Rays Modern Computer

Penicillin Radar

GPS Anesthesia Internet Quantum Mechanics Infant Incubator Vitamins Artificial Pacemaker

Endorphins

Radiocarbon Dating Neurotransmitters

Radiography

Graphic Interface

Innovation 1800 to present

Source: Where Good Ideas Come From- The Natural History of Innovation by Steven Johnson (2010), p. 229.

Integrating CapitalsPortfolio of Investments

New Directions

Greater understanding of the service sectorHow input-output analysis can help

Fostering the shift from protecting ideas to connecting ideasInnovation processes

Don’t blame your culture ……start building on it

1960s

1970s

1980s

1990s

2000-2007

2000-2010

12.2

16.1

17.7

18.7

8.2

4.9

Service Producing Employment(million)

LIVING IN A CONNECTED WORLD

Information flows more quickly than ever before

Information is being recycled put to new usestransformed in a diverse network e.g. you write a tweet about what you had for lunch and layers of stacked

platforms are activated – the Twitter API and underlying database- SMS communications protocol, cell towers and satellites- Open RSS platform- GPS- HTTP and TCP/IP protocols

When you don’t have to ask permission innovation thrives

Networksdensely populatedplastic – capable of adopting new configurations

Culture – set of deeply embedded, self-reinforcing behavior, beliefs, and mindsets that determine ‘how we do things.’

Deeply embedded cultural influences change far more slowly than marketplace factors

Initiate, accelerate, sustain change by learning to work with and within our culture