The Latest in Economic Development

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This week’s Latest in Economic Development highlights unnecessary business licenses, looks at U.S. manufacturing, and skilled worker shortages.  Have things to add, contact me at

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While there is lots of excitement about the “re-shoring” of jobs by companies like Starbucks, the state and future of U.S. manufacturing is far from simple. Chinese labor is growing more expensive and U.S. based operations offer product and logistical advantages. However, according to Harvard Business School Professor Gary P. Pisano, the U.S. has not seen wide spread resurgence of the type of  innovative manufacturing process that produces  long term benefits : “What we need to see is manufacturing that creates new capabilities here that we didn’t have and can build on, and I don’t think we’re seeing that yet.”  (New York Times). However, there are more positive signs. There has been an uptick in small manufacturers purchasing expensive, high tech machinery – a sign that small manufacturers are more confident about their future.  These investments help U.S. manufacturer produce sophisticated and specialized projects which may help them have a leg-up on foreign competition.(U.S. News)

The mismatch between worker skills and employer needs are driving collaboration between private sector and universities. According to Craig Torres and Steve Mathews in Bloomberg, “[Companies] are reaching into colleges to make contact with students far earlier than they ever have. Their involvement extends to advising and shaping curricula so graduates can plug into jobs faster with less training time and costs.”  While some have concerns that students get less of the theoretical underpinnings of traditional academia, students have the advantage of likely job offers upon graduation.

Entrepreneurs and small businesses are suffering under the yoke of too many licenses writes NPR’s Jacob Goldstein in the New York Times. There are more than 1,000 licensed professions in the United States a result of a system initially designed to protect the social welfare of the public which, over time, has turned into a self-perpetuating legal framework promoted by professional groups. And while those already licensed support and defend the system, licensing requirements create timely and expensive barriers (for example two years and 16,000 dollars to become a hair braider in Utah) to individuals trying to enter new fields –  including laid off workers or military spouses who change states frequently (a cause championed by Michelle Obama). This is consistent with last month’s Kauffman Foundation and survey of small businesses who  reported license requirements as twice as important as tax-related regulations in determining their state or city government’s overall business-friendliness.