The Latest in Economic Development – 1.11.12

This week’s blog entry focuses on continuing trends in innovation, new international trade opportunities, a surprising university that churns out startups, and the implications of deficit reduction. Comment below or send to common@nlc.org.

Get last week’s blog here.

The harsh realities of deficit reduction are making themselves felt. Wichita, Kansas is feeling the pain after Boeing announced they would be closing a manufacturing plant due to the tight market for defense spending. Proposed cuts to defense have serious implications not just on industries that have direct ties to the weapons industry, but also on companies and startups that are spawned from the military’s research and development budget. CR Roberts from The News Tribune explains the Boeing closure, Binyamin Appelbaum of the New York Times explores the implications of defense cuts, and Matthew Yglesias of Slate responds to the New York Times article.

Are small or large firms the best catalysts of innovation? Economist extraordinaire Joseph Schumpeter first claimed that small companies were more inventive in 1909… then changed his mind years later. Currently, the collective needle has swung in the direction of smaller, nimbler firms that can navigate the murky waters of the global economy. Michael Mandel of the Progressive Policy Institute disputes the prevailing notion that small firms are more effective and claims that economic growth is driven by big ecosystems with large companies at the center. (The Economist)

No one can doubt the important role that universities play in incubating talented young companies. But would it surprise you that the school that produced the most startup companies for the second year in a row wasn’t MIT or Stanford or Harvard? In fact, the University of Utah was the undisputed leader. Perhaps more impressive, U of U gets more bang for their buck – it operates with a much smaller budget than traditional tech powerhouses. (Business News Daily) via (Innovation Daily)

Have the Republican candidates in the recent primary debates given any attention to the evolving 21st Century job market? Thomas Friedman thinks they are missing the mark entirely. Absent the tiresome campaign speak, the world is continuing to rapidly globalize with help from the latest “information technology revolution.” Techno-savvy citizens are becoming more integrated into innovative city ecosystems and according to Friedman, it seems as though our potential leaders are failing to take notice. (New York Times)

At the end of 2011, Congress passed three free-trade agreements with South Korea, Columbia, and Panama. Now that the deals have been enacted, greater Atlanta, with help from state agencies, non-profits, universities, and chambers of commerce, is taking advantage of new opportunities to export products and services overseas. While increased exporting can potentially be a windfall for the region, there is still work to be done. (Global Atlanta)

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