Monday, August 4, 2008

Globalization: Insights and Suggestions

By: Gary R. Baker
Senior Lecturer
Department of English
The University of Akron

Longworth, Richard C. Caught in the Middle: America’s Heartland in the Age of Globalism. New York: Bloomsbury, 2008.

Florida, Richard. Who’s Your City? How the Creative Economy Is Making Where to
Live the Most Important Decision of Your Life. New York: Basic Books, 2008.
The key to Richard C. Longworth’s new book, Caught in the Middle, is to step back from a map of the United States and to look at the Midwest as the large region that it is –about the size of Germany. Considering the Midwest’s history, geography and economy, Longworth sees the Midwest as Minnesota, Wisconsin, Michigan, Iowa, far eastern Nebraska, northeastern Kansas, the northern half of Missouri, and three states – Illinois, Indiana and Ohio – without their far southern counties. When he thinks about the effect of globalization on the Midwest, he does not let state boundaries get in the way. In Longworth’s mind, the smart way to figure out how to deal with globalization and how to live in a global economy is to consider the region – not the individual state. He thinks as a resident of the region, not a resident of a state. Then he can ask: What does the region need? What should we do as a region? How can we work together to help our fellow Midwesterners and ourselves in this global economy?

Longworth, an experienced and professional journalist, drove 11,000 miles around the Midwest to talk with people face-to-face and to look at the towns, cities and farms himself. Born in Boone, Iowa, and later a long time resident of Chicago, Longworth is a fellow at the Chicago Council on Global Affairs. For many years he was a foreign correspondent and senior writer at the Chicago Tribune. His book is a serious and challenging “… report from the front line of America’s new economy.” He is not easy on the Midwest. He does not make excuses. He does not make a case for propping up failing or failed industries. In the global economy, he knows some Midwestern communities, towns and cities are being left behind.

With Richard Florida’s book, Who’s Your City?, the reader needs to stand back from a satellite map of the world at night and note where the light clusters and over what areas it shines out in “spikes”. It’s easier to see the cities, metro areas and metro corridors which are morphing into mega-regions at particular places on the map. The reader can then see the new global economy in action and discover that the Midwest hosts the third largest mega-region in the world in economic output. It runs from Pittsburgh west to Cleveland through Detroit to Chicago and, finally, to Minneapolis. State and national boundaries are not relevant in this economic picture.

“We owe it to ourselves,” Florida writes, “to think about the relationship between place and our economic future, as well as our personal happiness, in a more systematic – if different – way.” In the global economy – where you live does make a difference - even if you have a laptop, iPod, blackberry and cell phone because opportunity is not spread out equally across the map. Having the technology does not make up for the face-to-face conversations, the personal contact that leads to inspiration, insight and innovation. The technology does not make up for where you are and the people you talk with each day in the hallway outside the office, on campus, at a restaurant, in a local pub, on the street downtown.

Florida, an economist and author of The Rise of the Creative Class, is Professor of Business and Creativity at the University of Toronto’s Rotman School of Management. He grew up in Newark, New Jersey, graduated from Rutgers and Columbia and taught at Carnegie Mellon University. His wife, Rana, grew up in Troy, Michigan, near Detroit. They have lived together in a number of cities, including Washington, DC.

After many years of social science, statistical and survey research, Florida has decided to organize and lay out his findings so that the individual living in the global economy can make use of the results. Florida makes this argument: Where a person lives is directly connected to the individual’s happiness and creativity. The subtitle of the book is How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life.

* * * * * * * *

In Caught in the Middle, Richard Longworth writes, “A city is an organic thing. It is born usually for economic reasons.” But what if the economic base disappears? “Great cities reinvent themselves, over and over, finding new ways to support themselves and their citizens.” Scanning the Midwest, Longworth observes, “The Midwest has a handful of global cities and creative cities, and it desperately needs more.” He sees Chicago as the Midwest’s brightest example of the reinvented city, the global city and the creative city in the new economy.

In Longworth’s review of the global economy and the Midwest, he is especially worried about education and job training. He wonders: Do Midwesterners understand what education means to the region’s future in the global era? Longworth contends that most Midwestern states are “shortchanging education at the moment in history when it’s most important…More than any other part of America, the Midwest has lost the knack to compete in the new economy, and the schools have lost their ability to teach it.”

He feels that one reason the Midwest is being held back in the global economy is that the colleges and universities are duplicating each other. He praises the example of California’s system of big time research universities, four-year state schools that teach undergraduates, vocational and technical colleges and two-year community colleges that prepare students for the four-year colleges.

In the Midwest Longworth praises the community colleges because they are offering a wonderful flexibility in their programs. “Everywhere I went in the Midwest,” Longworth remembers, “I found community colleges emerging as the engine of local economies.”

Longworth endorses the Midwest Research Universities Network (MRUN), “a potential base of cooperation”, composed of twenty Midwestern universities and medical centers. The mission of MRUN, now based at the University of Wisconsin, is to bring joint proposals to venture capitalists and to leverage the institutions’ brainpower to create start-up companies.

To reinvent itself in the global economy, the Midwest must think as a region – not as individual states. The Midwest “must find its voice.” Longworth would like to see a Global Midwest Forum (GMF). The job of the Forum would be “to focus the Midwestern mind, to grab the attention of the people with the power to ignite real action.” In the Forum let Midwesterners talk to other Midwesterners in similar situations. Ignore state boundaries. Discuss mutual problems. Call on thinkers and creative people from all walks of life to participate. But do not let the GMF become a forum of states led by governors.

Longworth argues that the Midwest needs a think tank devoted to Midwestern issues, a think tank to create tools for action. To support such an effort, Longworth suggests turning to foundations based in the Midwest. He would encourage the foundations to think and work together.

In trade offices overseas, the Midwest should sell itself as a single region. Each regional trade office would be backed by the research and resources of the GMF. Back home, the Midwest needs a good newspaper or Web Site to set the agenda for the Midwest, to see the news from a Midwestern angle, to speak to the Midwest and to speak in the voice of the Midwest – “a regional journal, with global coverage and thoughtful analysis…”

For transportation in the new economy, Longworth calls for high-speed rail to bring cities to cities and universities to universities. “It’s not that Amtrak can’t work. It’s just that we have to start taking it seriously.”

Rather than competing among themselves in the global economy, the cities and communities and states of the Midwest must compete as one region.

But how does the region educate and attract talented, innovative, imaginative, creative people? Besides the initiatives mentioned so far, Longworth also calls for in-state tuition rates for any Midwestern student at any Midwestern university. Talent, innovation, imagination and creativity are personal attributes, yes; but they are also economic factors, as Richard Florida will tell you.

Richard Florida has written Who’s Your City? to help people choose the best place to live. “The key,” explains Florida, “is to find a place that fits you – one that makes you happy and enables you to achieve your life goals.” He is more convinced than ever that happiness leads to creativity – not vice versa.

Look around you. Consider the place where you are now. Does it give you energy? Does it inspire you? Can you be yourself there?

In partnership with the Gallup Organization, Florida undertook a major study, the Place and Happiness Survey of 27,000 respondents “… to identify the key factors that underpin our happiness with place.” These are the factors that matter most in order of importance (most important listed first): Aesthetics, Basic Services, Openness, Economic and Physical Security, Leadership. In Chapter 16, “Place Yourself”, Florida guides the reader through consideration of places to live. In Appendix E he lays out the Place Finder, a survey in two pages – a tool to help the reader collect information and ultimately to rank places.

In organizing the data for his book, Florida makes careful note of the “life stage” of the respondents (Singles -20 to 29, Professionals -29 to 44, Families with Children, Empty- Nesters 45 to 64 and Retirees – over 65). “Appendix C: Regional Rankings by Life Stage for All Households” presents extremely valuable information for the individual, the family and cities and regions. Although Florida has written this book for individuals – at any stage of life – who are thinking about moving to another location in our global economy, leaders in our cities and regions would be wise to study the research results, too. In these charts – based on his survey and statistical research – Florida ranks cities and metro areas.

Florida makes it clear in his books and columns that creativity and talent are not restricted to one age group or to a short list of particular groups. Every human being is creative. The potential range of creative talent is wide not narrow. A place can promote and encourage talented and creative people if it is tolerant, open and accepting.

Florida reminds individuals who are thinking of moving as well as political and business leaders in the various cities and regions, “Places really do have different personalities.” Few considerations are more important than this one: Where would I be happiest? Yes, a region has a business climate and economic structure, but it also has a psychological make-up or “psycho-social environment”.

“Regional leaders,” Florida explains, “must become more aware of how their region’s collective personality shapes the kinds of economic activities that it can do and the kinds of people it can attract, satisfy and retain.” For the individual – “the point is to find the place that’s best for you, regardless of what others think.”
For regional leaders, the question in the global economy is not, “How can we get a factory to move here?” – but – “Who are the people we need?” and “How can we get them to stay here or move here?”

The three big questions in a person’s life are these: What will I do for a living? Who will be my life partner? Where will I live? Florida believes that these questions are of equal significance in our lives. It turns out that place is important both in the individual’s own life and in the global economy.

Gary R. Baker
Senior Lecturer
Department of English
The University of Akron

Richard C. Longworth is a Fellow at
The Chicago Council on Global Affairs

Web Sites about Richard Florida’s Writings and Work:

Wednesday, May 7, 2008

Global Corporations Demand Equally Global Citizens

With world-wide food shortage upon us (see “Multinationals make billions in profit out of growing global food crisis,” below) we cannot afford the gross stupidity of turning corn and other foods into fuel to power our vehicles. There are many other ways to solve the problem, as Dr. Stover shows below.

We, the emerging “global citizens” must become outraged at this misuse of “our” resources and, I believe, criminal activity on the part of our global corporations. In my opinion, the starvation of millions in favor of powering our BMWs rates as much a crime against humanity as the most heinous acts of history, including those perpetrated during the 30s and 40s by Nazi Germany and expansionist Japan.

In my view it is abundantly clear that the rise of “global” corporations, which are accountable to no authority and driven more by profit than service to humankind, must be balanced by an equally powerful “global” oversight representing the interests of people throughout the world. If we allow the global corporations to go unsupervised, then we have sealed our doom and given away our childrens' future to the newest generation of robber barons. Most assuredly they will grow rich while the rest of us starve.

The world’s highest honor (yet to be created) should be given to Geoffrey Lean for writing his story and to The Independent for publishing it, as well.

On a much more positive note, while I believe hydrogen will ultimately serve as the major inexpensive and renewable energy source to power our vehicles, homes and businesses in the near future, other resources such as solar and wind are finally taking on more of the power-generating burden and will continue to do so in the years ahead.

Dr. Lloyd V. Stover an environmental scientist who assisted in the development of President Carter’s energy proposals during the 1970s, has assembled an excellent, and optimistic, article regarding the current status of solar and wind power, which appeared May 6, 2008 on the Ashville Citizen-Times website. I’ve placed the entire article below. Three cheers for Dr. Stover and for the Ashville Citizen-Times for publishing his work! ... RB

Multinationals make billions in profit out of growing global food crisis
Speculators blamed for driving up price of basic foods as 100 million face severe hunger
By Geoffrey Lean, Environment Editor, The Independent (UK) Sunday, 4 May 2008

Giant agribusinesses are enjoying soaring earnings and profits out of the world food crisis which is driving millions of people towards starvation, The Independent on Sunday can reveal. And speculation is helping to drive the prices of basic foodstuffs out of the reach of the hungry.

The prices of wheat, corn and rice have soared over the past year driving the world's poor – who already spend about 80 per cent of their income on food – into hunger and destitution.

The World Bank says that 100 million more people are facing severe hunger. Yet some of the world's richest food companies are making record profits. Monsanto last month reported that its net income for the three months up to the end of February this year had more than doubled over the same period in 2007, from $543m (£275m) to $1.12bn. Its profits increased from $1.44bn to $2.22bn.

Cargill's net earnings soared by 86 per cent from $553m to $1.030bn over the same three months. And Archer Daniels Midland, one of the world's largest agricultural processors of soy, corn and wheat, increased its net earnings by 42 per cent in the first three months of this year from $363m to $517m. The operating profit of its grains merchandising and handling operations jumped 16-fold from $21m to $341m.

Similarly, the Mosaic Company, one of the world's largest fertiliser companies, saw its income for the three months ending 29 February rise more than 12-fold, from $42.2m to $520.8m, on the back of a shortage of fertiliser. The prices of some kinds of fertiliser have more than tripled over the past year as demand has outstripped supply. As a result, plans to increase harvests in developing countries have been hit hard.

The Food and Agriculture Organisation reports that 37 developing countries are in urgent need of food. And food riots are breaking out across the globe from Bangladesh to Burkina Faso, from China to Cameroon, and from Uzbekistan to the United Arab Emirates.

Benedict Southworth, director of the World Development Movement, called the escalating earnings and profits "immoral" late last week. He said that the benefits of the food price increases were being kept by the big companies, and were not finding their way down to farmers in the developing world.

The soaring prices of food and fertilisers mainly come from increased demand. This has partly been caused by the boom in biofuels, which require vast amounts of grain, but even more by increasing appetites for meat, especially in India and China; producing 1lb of beef in a feedlot, for example, takes 7lbs of grain.

World food stocks at record lows, export bans and a drought in Australia have contributed to the crisis, but experts are also fingering food speculation. Professor Bob Watson – chief scientist at the Department for Environment, Food and Rural Affairs, who led the giant International Assessment of Agricultural Science and Technology for Development – last week identified it as a factor.

Index-fund investment in grain and meat has increased almost fivefold to over $47bn in the past year, concludes AgResource Co, a Chicago-based research firm. And the official US Commodity Futures Trading Commission held special hearings in Washington two weeks ago to examine how much speculators were helping to push up food prices.

Cargill says that its results "reflect the cumulative effect of having invested more than $18bn in fixed and working capital over the past seven years to expand our physical facilities, service capabilities, and knowledge around the world".

The revelations are bound to increase outrage over multinational companies following last week's disclosure that Shell and BP between them recorded profits of £14bn in the first three months of the year – or £3m an hour – on the back of rising oil prices. Shell promptly attracted even greater condemnation by announcing that it was pulling out of plans to build the world's biggest wind farm off the Kent coast.

World leaders are to meet next month at a special summit on the food crisis, and it will be high on the agenda of the G8 summit of the world's richest countries in Hokkaido, Japan, in July.

Additional research by Vandna Synghal

The end of the world as we knew it is upon us
by Dr. Lloyd V. Stover, Guest Commentary, Ashville Citizen-Times, May 6, 2008

The oil age began in 1860. By 2006 the world’s oil rigs pumped oil at a rate of 85 million barrels a day. They haven’t come close since, even as prices have risen to more than $100 per barrel.

Breaking our fossil fuel dependency will require plugging into the grid instead of pulling up to the pump. And there are some interesting energy options — and others are doing a lot more about developing them than Americans.

Germany leads the world in its installed capacity of renewable energy sources (25 percent), and is the third largest producer of solar panels after China and Japan.

The share of electricity generated from renewable sources exceeded 14 percent in 2007, an increase from 11 percent in 2006. This means that Germany has already met the European Union’s target that 12.5 percent of electricity should come from renewable sources by 2010.

Enercon, a major wind equipment maker, claims that the renewable-energy business will become a major part of the country’s manufacturing business, alongside cars and machine tools. Employment in the renewables industry is now 250,000 ands expected to double by 2020. Throughout Germany, around 160 technical institutions are doing research on alternative energy.

Ireland has a created a unique research and development center at the Dundalk Institute of Technology. The project is part of a European Union program to encourage clean energy projects. The others are in Austria and Switzerland. By 2010 solar and wind energy will account for 20 percent of the heat and electricity for the city, industrial park and college. They also plan to install self-powered streetlights, as is being planned in China.

Denmark is already generating 20 percent of its electricity by renewable resources. Even though our standard of living is relatively the same, the average American consumes nearly three times as much energy as the average Dane. And the per capita greenhouse gas emission is more than double in America.

American efforts
What are we doing about it? This year wind farms will generate more than 1 percent of our electricity. The industry grew 45 percent last year. If present trends continue wind could provide 20 percent of our power by 2020.

American solar industry grew nearly 60 percent last year. Wal-Mart and Google made headlines by their plans for solar installations on their facilities. California accounts for a third of the demand for solar and has a stated goal of solar cells on over a million roofs by 2020. Cities provide subsidies from $3,000 for homes and $10,000 for businesses.

Within five years nano-engineered materials should make solar panels lighter, more efficient and cheaper. This should make them able to power homes and make hydrogen fuel cells available for our cars.

Two solar thermal power plants, one in Spain and the other in Nevada, have been operating for a year. They use large mirrors to concentrate solar power and generate steam to run turbines that generate electricity. The advantage is that the solar plant can provide power round the clock, by storing energy in the form of molten salt or compressed air.

Eight additional solar thermal plants are under construction in Spain, Algeria and Morocco and nine others are in various stages of design in Israel, Mexico, China and South Africa.

Wind power
Installed wind capacity in the United States grew 45 percent last year, and a comparable increase is expected this year. It already supplies 1 percent of America’s electricity. More than $9 billion was invested last year.

In 2006 Texas surpassed California by generating 3 percent of its electricity from wind power, enough to supply power to a million homes. Texas has approved upgraded transmission lines and anticipates five times the wind power generated in the state today. One of the anticipated wind farms will become the biggest in the world, and will cost more than $10 billion.

Colorado, Iowa, Minnesota and Oregon already get more than 5 percent of their power from wind farms.

The beginning of the end of the oil crisis is upon us, and with foresight we will be able to cope with it to our — and the planet’s — benefit.

In time we will be able to look back at high oil prices that motivated us to take advantage of conservation and alternative energy. We are fortunate that the energy issues of the future are no longer essentially geological, as they are technical, financial and political. Now innovation, creativity, and the desire to improve the well-being of our planet and its inhabitants, human and otherwise.

Sunday, March 2, 2008

Lemon Aid Yourself, Michigan!

Three proactive steps which Michigan can implement to improve our economic climate.

Health CareMichigan must provide leadership in health care if we are to attract more businesses and keep those we have. Long ago, our corporations gave up providing adequate health care benefits. And, the federal government has repeatedly failed to meet the health needs of our people. We have literally allowed ourselves to be lulled into child-like dependence by our health care industry and a “not-my-job-man” federal government. As a result, more and more “middle Americans” can no longer afford even the most rudimentary preventative health care. We are now in a crisis which will become increasingly acute in the days ahead as more “boomers” discover that they, too, need medical help... just like their parents did.

I’m not sure why, but for some reason, we thought the health care industry would serve the needs of the people instead of their collective, ever-growing bank accounts. Through our willful negligence, what have we created? We have managed to turn a healthcare industry into a gluttonous monster which deposits our “uninsured,” disoriented, ill and helpless people onto the streets in their pajamas and slippers in the dead of the night. Who is dumping these poor people onto skid row? Why, they are the bonus-rewarded and well-paid administrators of some of our most prestigious nonprofit hospitals.

By default, but more importantly, to make our state clearly different from other more attractive locations, Michigan must turn the health care burden into a compelling reason to locate here. What can we do? We must become proactive and pickup leadership responsibility. We can review what the other states and foreign nations have done to help their people survive in today's “global economy” and enact what is working elsewhere.

The balance of the Western world has far surpassed our “system” with programs that at least attempt to meet the needs of their people. If we are going to change Michigan, then we must make our home a place where others will want to live. Let’s change the health care system for us, for our families and others, too.

More than Politics, We Need Statesmanship
Here’s a glum, but I believe, honest snapshot of where we are today: the United States is a nation run by global corporations which have no local, state or federal-level accountability; provide executive-level compensation that is shameful when compared to the balance of employees who are now forced to accept McDonald’s wages; and, perhaps worst of all, by default, encourages and rewards robber-baron, “me first” corporate (read, “global”) leadership.

Old fashioned, Cincinnatus-like statesmanship is called for now. Will we meet the challenge? Will we find the leadership to meet the challenge? Will we elect statesmen and women who will work to alter this disgusting decline and regression into the dark ages of the worst of American capitalism? Who will come to the defense of the interests of the everyday American… Joe and Janet Lunch Bucket… or, perhaps more accurately described, Mr. and Ms. McDonald’s employee?

Capital for Small BusinessEver tried to launch a new business? Not only is it a physically exhausting; it’s downright frightening to risk your life savings, the welfare of your family and your health. The worst of it is not the risk or the hard, never-ending work. It’s the disdain one faces in the financial market, from chamber of commerce employees and government workers that hurts most deeply. The leaders of those institutions are not “small business” oriented, to say the least. My experience has been that these people have never risked a dime in their lives and have never concerned themselves about making a payroll or even scrambling to make a payment on an outrageous 30%-plus-interest-rate credit card debt. Their paychecks are regularly deposited into their accounts. When it comes to comprehending what it takes to transform an idea into the marketable concept, service or product, these people have a long path to walk toward understanding.

To many of the bankers, investors and chamber managers I’ve had the pleasure of meeting, business has only one definition: “big.” “Small” is not in the vocabulary. My guess is that working with small business is just too hard and the risk of failure is too great. Big business is easier. For example, we all know that Ford sells cars and trucks, so loaning a car dealer money for inventory is not that big of a risk. Or, since Google is now a mega-billion corporation and the fastest and best thing on the Internet, let’s give it the tax breaks and all the publicity in the world because they may employ a few people in downtown Ann Arbor.

However, historically, it’s small business people who come up with the innovative ideas and employ the greatest number of people throughout the U.S. Big business is simply not very good at doing either of those things.

Well, if Michigan is to recover from the past several years of depression, it must become the state to offer entrepreneurs and small businesses unfettered and easy access to investment funds, grants and low-interest loans. It will be the small business owners and entrepreneurs who will generate the unstoppable drive to make their dreams come true. As a result, they will employ more people by creating new services and products. Find them, Michigan. They are here, right now, struggling to stay in business while you give the massive tax breaks to the global corporations. Seek them out and support them. They are Michigan’s future.

Come on, Michigan! Health care will soon be out of reach for the average person; our leadership needs some lessons in statesmanship; and we've forgotten that the little companies made us great. So, we have a bunch of lemons... let's meet those challenges with solutions...  let's make lemon aid! ... RB