THE KNOWLEDGE ECONOMY

1. THE KNOWLEDGE ECONOMY Kenneth E. Corey and Mark I. Wilson Michigan State University March 19, 2004

2. Overview • Awareness • Layers • E-Business • Responsiveness • Talk • ALERT

3. Awareness

4. Knowledge Economy • An economy that relies increasingly on technology and knowledge as factors of production & wealth creation – in addition to labor & capital • Technology & knowledge are transforming wealth-creation work from physically-based functions to knowledge-based functions

5. Knowledge Economy • Pre-eminence of knowledge and information as drivers of economic growth and development • Part of the structural change process, and the changing significance of occupations and industries • Challenge for planners is to understand the many dimensions and possible applications of the knowledge economy

6. Economic Change • There are jobs, and there are jobs • Job loss due to technology, outsourcing and economic change • Loss of manufacturing jobs and low wage/low skill technology jobs • High-paying IT occupations generally have expanded since 1999 • More than 70,000 computer programmers lost jobs since 1999; More than 115,000 higher paid computer software engineers gained since 1999

7. Economic Change • Each qtr, US economy generates more jobs than are projected to be lost to offshore outsourcing over the next decades • Outsourced and offshore jobs also benefit US based firms • Underscores the need to understand how firms are changing the way they function

8. Michigan Planning and Development Regions

9. Development Defined • A widely participatory process of social change in a society intended to bring about both social and material advancement (including greater equality, freedom, and other valued qualities) for the majority of people through their gaining greater control over their environment. (Rogers, Communication Research, 1976, P. 225)

10. EDA Investment Guidelines • Market based • Proactive in nature & scope • Plan beyond immediate horizon, anticipate economic changes & diversify local & regional economy • Maximize attraction of private sector investment & would not otherwise come to fruition absent EDA’s investment • Have a high probability of success • Higher-skill, higher-wage jobs are created • Maximize return on taxpayer investment

11. Internet Use • Recent survey of Internet use in Michigan (Jan/Feb 2004)

14. Layers

15. Hierarchy of Multiple Layers World Knowledge Regions Biotech/Pharma Specialization Tech Clusters: Brennan & Smart Zones Biosciences Firms Specialization Tertiary Education Empty Areas/New Areas/New Spaces Mediated by E-Responsive Regions Mediated by Spatial Distribution of Distressed Areas

26. E-Business

27. Relations & Processes The functions and factors that are characterized by clustering and spatial concentration are identified with a “C.” Those that are characterized by dispersion and spatial deconcentration are identified with a “D.”

28. Biotech and theLife Sciences Corridor

32. Responsiveness

33. Responsiveness • How well prepared are Michigan’s cities and regions? • The importance of recognizing change and preparing for new conditions • ‘Learning Regions’ are areas where residents and firms are upgrading skills and competitiveness • Responsiveness is built into institutions and public and private organizations

34. Regional E-Readiness • Survey of directors of Michigan’s 14 planning regions by James Brueckman • Many recognized the importance of technology, but many not well versed in its characteristics. • Need for increased awareness and ICT oriented strategic planning.

35. Economic Development • Review of web sites of Michigan’s 83 counties and 14 planning regions for economic development content by Karan Singh • 25% of counties and 14% of planning regions did not have a web presence • Based on their web sites, counties classified as leaders (8%), contenders (13%), followers (24%) and laggards (46%)

36. E-Responsiveness • Combine e-Readiness and Web-based economic development effectiveness to produce the e-responsiveness measure • Most e-responsive areas in Michigan are in the southern and most populous regions of the state • Least e-responsive areas bracket north and south and nearby the most populous and developed southern corridor of the state

38. Talk!

39. Intelligent Development • Draws on contemporary research and theory • Aware of best planning practice • Investments in places and regions for wealth creation, higher wage employment and improved quality of life • Development planning, therefore, is “intelligent” when these best practices are influenced by appropriate theory and the latest science and technologies are utilized fully to develop a community and region holistically and multifunctionally, including amenity factors

40. Implications • Scenarios for intelligent development • State/regions as passive or proactive? • Focus not only on success at advanced end of spectrum, but there is the need for benefits also to serve distressed areas of the state • Regional planners can engage in intelligent development to plan for more competitive sub-state planning regions in the global knowledge economy

41. Scenario 1 Distressed Communities Geography of Economic Distress + Geography of E-Responsiveness

44. Scenario 1 • Action options: • Most e-responsive and economically distressed. • Somewhat e-responsive and Economically distressed. • Least e-responsive and Economically distressed. • Most e-responsive and Not economically distressed.

45. Scenario 2 Spreading the Benefits Pre-Existing Potential Institutions + Planned Relationships

47. Scenario 3 Human Resources Linkages Education Institutions + Performance + Enterprise Culture + Smart Zones + Distressed Cities