The Latest in Economic Development – 1.25.12

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This week’s blog entry uncovers the data behind “Made in China,” explores America’s ongoing competitiveness struggles, looks at a couple examples of entrepreneurial-minded cities, and expounds upon the SBA’s new program to support startups. Comment below or send to

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These days, most household items you use or clothes you wear or office supplies on your desk usually have a sticker that says “Made in China.” This visible evidence of the rise of China’s exporting prowess has made many citizens uneasy about the continual decline of America’s manufacturing base. Although it seems like everything we use comes from China, how much is it really? The Federal Reserve Bank of San Francisco released a letter back in 2011 with the answers to this question and they are more interesting than you may think. It turns out that in 2010, goods and services from China “accounted for only 2.7% of U.S. personal consumption expenditures.” (FRBSF Economic Letter) via (Southern Compass News)

So we don’t consume as many goods and services from China as we think, but it doesn’t mean that we don’t have a competitiveness problem. Harvard Business School’s Michael Porter and Jan Rivkin released their Survey on U.S. Competitiveness this month, and like many recent windows into the U.S. economy, there is good news and bad news. The bad news is that urban employment continues to be weak and companies are losing the desire to be located in the U.S. The good news is that the conditions that are hampering investment can be improved upon; these conditions mostly focus on taxes, regulatory policy, labor costs, and immigration. (Initiative for a Competitive Inner City)

To improve upon the declining competitiveness of the U.S, cities are turning to entrepreneurs and startups to foster growth in their communities. Bill Fulton, fresh off his visit to the National League of Cities’ Congress of Cities Conference, explores two such examples of cities embracing the startup – Boston, Massachusetts and Scottsdale, Arizona. In Boston, Mayor Thomas Menino took a proactive role in creating an “innovation district” to redevelop a section of South Boston for entrepreneurial incubation. In Scottsdale, the city partnered with nearby Arizona State University to establish the SkySong business complex, which accelerates high-growth potential startups using university resources. ( For information on the Boston and Scottsdale programs, check out their presentations from the NLC Congress of Cities Conference.

Now that cities are embracing entrepreneurship, federal agencies are not far behind. The Small Business Administration, in cahoots with the Obama administration’s Startup America campaign, is getting ready to set in motion the $1 billion program introduced last December to “invest in young companies by loaning money to venture capital funds.” The new program, called the Early Stage Innovation Fund, is not without detractors, mostly due to the previous missteps of the SBA during the bursting of the tech bubble. Nevertheless, the SBA is planning to accept applications from investment firms in April and issue licenses by the end of September. (New York Times) via (Innovation Daily)

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