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Economics at work--the Greater Cleveland Growth Association. (Economics at Work).

Beginning January 2002, Jack left the staff of the Greater Cleveland Growth Association but continues--as an independent strategy advisor through his company JEK Analytics, Inc.--to serve as its chief economist and as the director of the Northeast Ohio Cluster Project. Jack is a NABE Board member.

I am pleased to contribute to "Economics at Work," a revival of a feature that is familiar to long-term readers of Business Economics. From my perspective, the role of economists has been redefined by the nature and extent of modem business, and-importantly-by ourselves. If any profession should know about the concept of value or adding value, we should.

The services I provide as chief economist of the Greater Cleveland Growth Association cover a fairly wide area. Since ours is a rather unique organization, it is probably best for me to describe its purpose, summarize the typical work we perform inside and outside the organization, and finally present further perspective on a unique regional economic development initiative.

The Greater Cleveland Growth Association, founded in 1848 as the Cleveland Board of Trade, is one of the nation's leading regional economic development organizations and is the largest U.S. metropolitan chamber of commerce. Through its Board of Directors, nearly 100 employees, business volunteers, strategic partnerships, and more than 16,700 member companies large and small, the Growth Association works to support and accelerate the competitive position of Northeast Ohio. Its mission is to serve as the catalyst for economic growth and jobs creation in the eight-county Cleveland/Akron Metropolitan area.

Firms large and small access our programs and services on workforce development, retention and expansion, access to capital, minority business development, and government advocacy. World Trade Center Cleveland is housed in the Growth Association and provides "short cuts" for businesses trying to break into new international markets. Through its small business division, the Council of Smaller Enterprises (COSE), members benefit from business counseling, mentoring, resources, training and education programs, and networking opportunities, as well as the power of group purchasing for vital business services.

Integral to the Growth Association's past and future results are its strong working relationships and collaborative initiatives with key public and private organizations throughout Northeast Ohio. Working with government, education, labor, economic development, and business organizations-as well as civic and community groups-the Association seeks to strengthen the region's ability to remain business-friendly and competitive.

A Business Economist in Economic Development

Why should business economists have an interest in economic development? This is a complicated but interesting question--especially since the position of chief economist did not exist prior to 1995, when I first left the Federal Reserve Bank of Cleveland to join the Growth Association. A short answer has two important considerations. First, economic growth is an important part of civic life and an important subject of study within the economics profession. Recently, economists have attempted to understand the effectiveness of economic growth strategies to encourage long-run prosperity of regions and cities. Second, a firm understanding and the ability to communicate on regional and local issues are extremely important for many of us who have become involved as policy advisers, consultants, and spokespersons for our organizations. Practicality and relevancy are critical for our success.

Fortunately, the Greater Cleveland Growth Association has offered me excellent opportunities to add value to the enterprise and to the region where my family and I live. I have realized that the need for economic thinking and creating value in the economic development arena is critical. However, when approaching the task of economic growth and development, one must do so with a huge dose of humility about the ability to guide or control it. It is difficult for me to believe that one can identify in advance the industries, sectors, and the individual firms that will be created. From my perspective the economy in not built like a machine or any other physical structure but it is more like a garden. As I work in the field of analysis and policy formulation, my focus is to make sure I am more like a gardener than an engineer. My task is to make sure that we have a fertile environment for growth to take place. The common denominators between what I do and other business economists do are the same, however. Both r equire an adequate economic infrastructure (including reliable and accurate data) reasoned analysis, and effective communication.

Research and Economic Analysis

Before I arrived at the Growth Association, the research function focused on providing and publishing business information and statistics on Greater Cleveland's economy, demographic changes, real estate, cultural amenities, and business climate for members, other businesses, the media, tourists, and the public. The five-member staff also provided technical and analytical support to other divisions by undertaking special studies on selected issues.

The Growth Association realigned its structure, priorities, and resources--both human and financial--in 1995. As part of this new agenda I joined the organization as chief economist and research director. This newly created position was charged with gearing the research capabilities and scope towards policy analysis, improving analysis of current conditions, supporting our business retention and expansion efforts, and serving as a spokesman on the regional economy. To meet these new goals, a research professional with a PhD in economic development and a database manager joined the core staff.

Over the past several years we have conducted policy analyses on a broad range of topics including: access to capital for local business, the importance of small business in the region, the impact of proposed living wage legislation, the case for incumbent worker job training legislation, workforce assessments and future skill needs of the region's information technology and biotechnical/biomedical industries, the economic impact of selected industries, and downtown transportation. Many of these studies involved working with other local and regional research professionals and engaging research centers at our local universities to undertake the assignments. Beyond conducting these studies, we created a unique database designed for use by our business development group that provides ready comparison of Greater Cleveland's economic and demographic data with other key competitor regions. Last year, we geocoded our members by federal and state legislative districts for use in our government advocacy efforts. In a ddition, we have undertaken a corporate "image and branding study" in conjunction with a national consulting firm, quarterly customer satisfaction surveys, new product development investigations, and the design and coordination of our annual business planning and measurement system.

Industry Cluster Project

Along with my duties as chief economist, I have served as the primary project manager for The Northeast Ohio Regional Economic Development Strategy Initiative. It is more commonly referred to as the Cluster Project. This project stretches over eight counties and is the seminal collaborative effort by the region's four leading economic development organizations: the Greater Akron Chamber of Commerce, the Cleveland-Cuyahoga County Port Authority, Cleveland Tomorrow (composed of CEO'S from the largest area corporations), and the Greater Cleveland Growth Association. The ongoing project's purpose is to accelerate economic growth and development in the Northeast Ohio region.

As the project manager, my responsibilities include coordinating overall and individual cluster activities with the Cluster Project Management Team. This team is comprised of senior staff of our partnering organizations. In addition, I lead efforts to obtain initial and continued project funding.

The Clusters Project was launched in 1996 and funded by The Cleveland and George Gund Foundations. It was initiated on the premise that the region's economic performance, in terms of the quality of jobs, quantity of out-of-region exports, and generation of wealth and income, is based on a portfolio of industries whose competitive strength is reinforced by a network of customers and suppliers. This "clustering" concept has been evident in several regions, including Silicon Valley in California, The Research Triangle in North Carolina, and the Optics Valley in Arizona.

The Cluster Project began by first commissioning research to be completed by Cleveland State University, Case Western University, and Applied Development Economics. The four integrated investigations sought to determine which industries--when strategically identified, supported, and promoted--would contribute the most significant rates of growth to the region. From these reports, and in particular from using a statistical model developed by Cleveland State University that examined all industries, seven key clusters were initially identified. These included: five driving industries that fuel the regional economy; two emerging industries that offer substantial growth opportunities; and local serving industries that meet the demand for products and services of local businesses.

To validate these results and to gain insights regarding the region's industries that could not be inferred from the data, we conducted interviews and group meetings with regional companies. This information was compiled with the quantitative data into profiles or briefing papers and used to convene cluster forums. Taking the "analysis to action" began in 1998 by convening cluster forums where nearly 120 firms articulated a five-year vision for each industry and identified requirements for success. As part of this framework, short-term and long-term strategies and actions have been specified. Such strategies include raising the level of workforce quality to match the common needs of firms throughout the cluster. Some actions proposed are being carried out by businesses, others by business and area colleges and universities, and others reach across the state and are by business and government.

Since 1998, the project has met with notable successes, all of which underscore the importance of community-wide collaboration between firms across several industries and with academia and economic development entities. Though we have "locked in" real projects that should have tangible signs of progress, it will take a long time to measure the success and the return on the investment of time and resources of this economic development initiative.


As you can see the organization that I joined six years ago has relied on the skills that economists bring to the daily workplace. Quantitative abilities, analytics, and knowledge about markets, industries and products have been important ingredients in setting our economic development strategies and our work agenda. The value-added proposition mentioned at the start of this article has certainly stretched me as an individual and a business economist.
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Author:Kleinhenz, Jack E.
Publication:Business Economics
Geographic Code:1U3OH
Date:Apr 1, 2002
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