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Over a year ago, I remember reading an article in the Atlantic magazine on the demographic shifts that were taking place across the country. The article explored how the outer reaches of suburban development were likely to become the next slum, while older urban areas could be experiencing a renaissance. These outer reaches of suburban development are characterized by large lot homes and often shoddy construction.

The article came to mind as I read how developers are converting old warehouses into the incubator space in Greenville, South Carolina. Read more. 

If you're it just did in the Atlantic article, I dug it out here.  The forecast for the outer reaches of suburbia are not promising:

Arthur C. Nelson, director of the Metropolitan Institute at Virginia Tech, has looked carefully at trends in American demographics, construction, house prices, and consumer preferences. In 2006, using recent consumer research, housing supply data, and population growth rates, he modeled future demand for various types of housing. The results were bracing: Nelson forecasts a likely surplus of 22 million large-lot homes (houses built on a sixth of an acre or more) by 2025—that’s roughly 40 percent of the large-lot homes in existence today.

For 60 years, Americans have pushed steadily into the suburbs, transforming the landscape and (until recently) leaving cities behind. But today the pendulum is swinging back toward urban living, and there are many reasons to believe this swing will continue. As it does, many low-density suburbs and McMansion subdivisions, including some that are lovely and affluent today, may become what inner cities became in the 1960s and ’70s—slums characterized by poverty, crime, and decay.

At the same time, real estate prices in some urban centers are commanding a premium:

Pent-up demand for urban living is evident in housing prices. Twenty years ago, urban housing was a bargain in most central cities. Today, it carries an enormous price premium. Per square foot, urban residential neighborhood space goes for 40 percent to 200 percent more than traditional suburban space in areas as diverse as New York City; Portland, Oregon; Seattle; and Washington, D.C.

 Now take a look at the newly developed Innovation Center in Greenville:

Most of the companies that have leased space in the building, or plan to, are members of the Greenville Chamber of Commerce's Next group for technology entrepreneurs. They have long wanted to share office space under the theory it would foster collaboration and creativity.

Developer Bob Hughes of Greenville designed the Next Innovation Center with the techie crowd in mind. Amenities include skylights over stained concrete floors, a center atrium with grand staircase, Wii rooms for relaxation, a 50-megabit Internet pipe and digital signage in the lobby that tenants can program.

The  real estate demands of knowledge-based businesses and the entrepreneurs who run them are fundamentally different. EDPros will need to think about how to create innovation "hotspots" within their communities and regions. Close proximity to a college or university will help.

So, for example, the revival of Youngstown, Ohio is taking place around the Youngstown Business Incubator.  In Kokomo, Inventrek, located in a converted office building, is the epicenter for new development being planned by the newly launched Kokomo Development Alliance. 

Some interesting networks are forming in southern Wisconsin around Inventors and Entrepreneurs Clubs.  They represent an important strategy in building networks. Regular programs on interesting topics draw out people within a region who share common interests.

Through these regular civic forums, EDPros can begin developing the networks needed to support entrepreneurs and innovation.  From this article, you can see that the organizers of these forums pay careful attention to the content of their sessions. They make sure that the speakers invited focus on the needs of their local entrepreneurs. Meetings are held throughout the region to make them convenient.

In addition, you'll notice that  the organizers focus on a interstate perspective. They are not interested only in southwestern Wisconsin. They extend their reach to Northern Illinois and eastern Iowa. Read more. You can visit their website here.

In an interesting experiment, the US Economic Development Administration is investing in upstate New York on a strategy to build what I would call a "civic" infrastructure to attract  and retain brainpower. Usually, we don't associate the EDA with these types of strategies. Normally, EDA invests in physical infrastructure.

However, with the leadership of Cornell University and its extension program, the EDA is investing in the connectivity needed to build regional leadership.  The pilot project connects to Southern tier cities, Elmira and Olean, which are about 110 miles apart.

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The project is an outgrowth of an interesting regional initiative called Pipeline 4 Progress.  According to press reports,

The project will offer the communities several training opportunities, including entrepreneurship and enterprise development, green industry, leadership development, grant writing, as well as understanding and using demographics. The project will also seek to link communities together through a rural learning network and an enterprise/entrepreneurial support network.

Here's some  additional background on the project. Read more.

In mid-July, a federal court judge through a huge monkey wrench into the economic developer strategies of Atlanta and Georgia. The judge ruled that Georgia had no legal right to withdraw drinking water from Lake Lanier.

Atlanta's continuous growth as soon as that available drinking water could be easily drawn from Lake Lanier. Now that assumption has been called into question.

The lake currently provides drinking water for 3.5 million citizens in Atlanta. The judge held that Congress never authorized water supply has a purpose for damning the Chattahoochee River to create a reservoir.

The judge made clear that Congress must give its approval to the use of Lake Lanier for anything other than power generation, flood control or navigation. The judge gave Georgia, Florida and Alabama three years to work out a water sharing agreement. Without a deal, the judge could order the Corps of Engineers to reduce water withdrawals from the lake to levels existing in the 1970s.

During the August congressional recess, the Georgia congressional delegation met with the governor to plot a strategy. Read more. Based on some early press reports, the controversy could get uglier.

(Global water shortages are going to become an increasing fact of life over the next couple of decades.  Last spring, the United Nations  released the World Water Development Report which projected  that two thirds of the world could be facing water shortages by 2025.)

For the past nine months or so, I've been keeping my eye on an interesting initiative coming out of Collier County, Florida. That's where Naples is located.  Economic development in Florida faces many of the same deep transformations confronting older industrial states like Michigan. In Florida, real estate development drove strategies.

Now, it has become increasingly clear that regional economies in Florida must diversify.  In 2007, housing prices in Florida began slipping after years of strong growth. Last year, it was cleared almost everyone that Florida's boom had turned to bust.

Late last year, the Economic Development Council of Collier County launched Project Innovation to diversify the economy. You can get a sense of the depth and breadth of this initiative by downloading an overview of their strategy.   In a commentary this month, the chairman of Project Innovation assesses their progress.

The first order of summer work divided the organizations into six working groups, one dedicated to each of the drivers to begin to identify measurable goals. These goals will advance innovation, economic and environmental diversification and sense of place. The means of evaluating each goal’s ability to create the positive change are being incorporated into the plan.

To qualify, the goal must serve a quantifiable role in driving prosperity and supporting innovation at levels catalytic to achieve sustainability and allow current and future generations of our community to thrive.

The process of refining the goals and the means of measuring them has been completed, and the endorsers are now progressing to the second order of business: charting existing and identifying new community projects that will help achieve these goals. Through consensus-building, creativity and collaboration of all the endorser organizations and the community, a specific, actionable blueprint for building a healthy economic foundation is beginning to emerge. As it is implemented, it will create a culture that will attract high-wage businesses and an environment that will support world-class employees.

Underserved neighborhoods in larger cities, as well as some smaller cities, are facing difficulties applying for stimulus funds to build out their broadband networks. The problem comes in the way in which the National Telecommunications and Information Administration (NTIA) defines an "underserved area", eligible for funding.

Over the weekend, I worked on a proposal for a multicounty region in Minnesota. Clearly a rural region, this applicant easily fit the definition of an "underserved area". Not so, though, for other areas of the country in which broadband coverage is spotty. This article from Business Week explains the situation. Read more.

Increasingly, we're seeing ecnomic development efforts focus on a prmising new frontier: students. Here are a couple of examples. 

• In Michigan, a student-led incubator is part of a broader regional strategy to stimulate "growth from within". They are developing not just one program, but a student-centered ecosystem to support new businesses. Read more. 
• At the University of Missouri, a team of students recently entered a iPhone app competition sponsored by Apple. The college newspaper promoted their success. Read more . 

As these types of initiatives proliferate, the resistance within the university to connecting with the business community will inevitably weaken. Now, across college campuses, you see younger faculty embracing the rapidly emerging university role in innovation. 

Milwaukee 7 has launched an impressive water cluster, based on its strength in providing water to process industries like paper and beer. The region's leaders are looking at their industrial strengths in a new light. They are repositioning their assets by using collaboration. 

And that's the important point. Regional economic development strategies should start with a mapping of assets. For an introduction, see the Council on Competitiveness report on mapping regional assets. 

But asset mapping is not simply compiling a list. The real value of asset mapping comes when you start to explore connections among assets and what new opportunities these connections create. 

Other strengths are emerging in the M7 region. Here's a good review of the regional strengths in battery technology. Read more. In Indiana, we have followed a similar strategy of linking together our industrial assets in new ways. That led us to form the Indiana Energy Systems Network. 

For the past couple of years, I have been watching the progress of the Thrive region of 8 counties around Madison, Wisconsin. I like what I see. They started out by building a good foundation. Like the West Michigan Strategic Alliance, the Thrive region applied one of the most important lessons of collaboration: go slow to go fast.

That is, spend time building trust within a core group of partners. Only then can you scale a network. In our region in North Central Indiana, we took nearly a year to slowly build trust within our core group.

This week, a couple of the leaders from the Thrive region outlined the importance of collaboration. Read more.

You can also visit the website here.

The Thrive region started with a set of principles. That makes a lot of sense when trust levels are relatively high. When they're not, you're better off focusing on small collaborative steps. People learn to trust each other as they work together on projects. In a region with low trust -- like North Central Indiana -- you're probably better off starting on small collaborative projects. As momentum builds, you can turn toward outlining a set of principles that make sense.  After three years of work, we are heading in this direction with a new Regional Leadership Alliance based in Kokomo.

The West Michigan Alliance took another tact. They focused its early efforts on building regional awareness. Take a look at their book, The Common Framework, that they produced.

About a week or so ago, the New Economy Task Force of the Metro Atlanta Chamber of Commerce released a new strategy that made it to the pages of the New York Times. Read more.

One of the main themes of the article highlights how cities are moving away from traditional and expensive recruitment programs to nurture growth from within.  

The Atlanta report also highlights how EDPros  our becoming more sophisticated in their understanding of rapidly evolving markets. As we move from a focus on commodity-based manufacturing and cost-driven competition and toward innovation, EDPros need a more detailed (the chamber executives use the term, "granular") understanding of their economy.

You can download a copy of the presentation released by the chamber's consultants here.

In the mid-1980s, the visionary chairman of Control Data Corporation based in Minneapolis, William Norris, founded the Midwest Technology Development Institute. Through expanded collaboration, he felt, the region could accelerate innovation and technology development.

He also promoted the idea that the Midwest region should develop its own global ties. In effect, he encouraged regions to develop their own foreign economic policies. I remember distinctly as a legislative assistant on Capitol Hill reading one of Norris' papers in which he recommended that the midwest states form their own economic alliance with Japan. Constitutional issues notwithstanding, Norris was a big thinker and years ahead of his time.

What's left of his Institute sits in boxes at the University of Minnesota. Nevertheless, we are starting to see regions follow the pathway Norris recommended. Here's an example.

Later this month, the second annual Southeastern United States–Canadian Provinces Alliance Conference will be held in Nova Scotia.  Representatives from six Southeastern states and seven Canadian provinces will meet and discuss stronger trade and technology ties. You can read more from the press release. Or you can visit the website.

I think Norris was right the regions will begin heading down this path or aggressively in the years ahead. As regions become a key unit of global competition, regional  governance will become more stable. As that happens, we will see more region to region collaboration.

It's not surprising that the southeastern states are moving in this direction. Ever since the mid-1960s, Southern states have held quadrant of discussions around economic development issues. The Southern Growth Policies Board has served as a catalyst for many of these discussions.

The Midwest states are farther behind. Despite a number of different efforts to build collaborations across state lines, none of these efforts have been particularly successful (except, perhaps, initiatives focused on the Great Lakes). Now however were starting to see more collaboration taking place in the Midwest.

In the Northwest, we see regional collaboration crossing into Canada. Again, as governance becomes more stable within these regions, we can expect more ambitious alliances to form.

In 1853, George Crum in Schenectady, New York invented the potato chip.

Senator Schumer from New York made reference to the fact in last week's groundbreaking for a new computer chip factory in upstate New York.

The state is invested heavily in public subsidies try to attract chip manufacturers. You can read more about the announcement and the groundbreaking here and here.