Cyclone Power Technologies, Inc. (fka CYPW)

[tchalla]

Some IT business perspective from Dr. B:

Monday, June 20, 2005
Economic development: What?

Think being cool is what brings people to town? Dr. Steve Belovich, one of Don's Capitalist Cleveland industry titans (find podcast here), writes to us and to the Plain Dealer:

To The Editor -

Akron and Cleveland have been doing a lot of economic introspection lately. Unfortunately, the analyses of both cities were very supply-side oriented. They only looked at the sources of degreed graduates and the regional amenities required to retain them. This is a nice feel-good activity, but expecting that approach to rejuvenate a region is unrealistic.

The real issue is high-wage careers with significant growth potential. That's it. Enough of those and the bright, energetic people will stay and drive all kinds of civic improvement. Without them, the best and brightest will leave the area and put down roots elsewhere.

A classic example is Silicon Valley. My work occasionally takes me there and I can attest to the fact that it is neither "hip", nor "cool". Silicon Valley also lacks many amenities that we take for granted in Northeast Ohio, among them being a great orchestra, good restaurants, a waterfront, decent highways, a great park system and greater libraries (yes, our CCPL is that good). Yet the best and brightest go there. Why? Because they start at $120,000+ a year, earn growth-oriented stock options and have an exciting career. Also, Silicon Valley does not focus on retaining its native population because they know that such a strategy is ridiculously self-limiting. They attract the best and the brightest regardless of origin, which contributes immensely to that region's success.

The economic analyses done on Akron and Cleveland yielded incomplete and/or wrong results because they asked the wrong questions of the wrong people. Asking a garage mechanic about a heart problem or a heart surgeon about an alternator malfunction is idiotic. Rather, start asking people who have actually created businesses how they did it. Ask them what was their approach and what can be done to help other entrepreneurs. Asking the right questions of the right people will yield the right answers.

The "Third Frontier" project was supposed to stop the brain drain and achieve economic success, but it is fundamentally flawed. Instead of investing in what smart entrepreneurs do on their own, The Third Frontier project implicitly tries to create entrepreneurs by investing in specific technologies - not in real businesses. This is the fatal flaw: a technology does not equal a business! Technology, rather, is a starting point and a tool for business. Smart investors know this. Smart investors also know that regional amenities derive from business creation and growth - not the other way around. So, let's focus on creating growth-oriented businesses. Do that, and a lot of great things will happen.
____
Dr. Steve G. Belovich
CEO
IQware, Inc.

http://barbarapayne-capitalistcleveland.blogspot.com/2005/06/economic-development-what.html