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Business community must be on the same page, says Harvard prof

Study supports telecommunications cluster in Mississippi

Perhaps the most surprising news was not announced at the unveiling of the cluster study and subsequent agenda for Mississippi Technology Inc. in the afternoon session of the Mississippi Economic Council’s annual meeting at the Crowne Plaza in Jackson, but was mentioned off the cuff afterwards.

With a common sense plan announced for the state’s economic development growth in technology, the timeline was, well, overlooked.

“I think this project will move fairly quickly, within two months,” said MTI chairman Dwight Evans, after the session. MTI’s initial funding came in the 1999 legislative session. Governor Ronnie Musgrove has said he would call a special session on economic development this summer.

During the session, in which nearly 200 business leaders from around the state attended, Dr. Michael Porter from Harvard’s business school, discussed the analysis of the communications and information technology (CIT) cluster study led by MTI.

“From what I can see, the current spirit of cooperation in the state is not perfect, but it’s getting there,” said Porter, a leading authority on competitive strategy and international competitiveness.

“The business community in Mississippi must be on the same page,” he said. “It can energize everything that’s done. A lot of what’s hampered the state in the past is not the lack of ideas, but the lack of follow through. Companies and associations here tend to be competitive, not collaborative.”

Porter explained the groundwork for a model that has been successful in other cluster industries, such as California’s Napa Valley and Silicon Valley and Minnesota’s Medical Alley.

For example, even though technological advances allow wine to be produced in most climates, California’s Napa Valley wine cluster produces 90% of U.S. wine. Processors, with the remaining crops contracted long term, creating a much more efficient business environment, Porter said, grow only 15% to 20% of grapes.

“In Minnesota, instead of waiting for the government to step in with workforce training, Medical Alley, the cluster group there, stepped in, created a degree program of exactly what they needed, and aligned local institutions,” he said. “The state government created a role for a health care professional who became the quarterback. Is this a top down role of government? No, it’s a bottom up role. But to get into the game in the first place, you have to make sure all the cross-cutting things are right first: schools, roads. Second, the new economy must adopt a different mindset. The old economic development plan worked fine but ran its course.”

Mississippi has traditionally sold itself on the lowest cost of production, a self-defeating goal that guarantees a poor state.

“The only way to win is to change the whole strategy,” he said. “Look at Sweden. People used to think of it as a cold, dark place. Now it’s the wireless capital of the world.”

Vitality and competition are the drivers of innovation, Porter said. For example, Italian consumers spend more per capita on them, but buy fewer shoes than most consumers, providing the shoe industry in Italy with “a wonderful laboratory to create better products worldwide,” he said.

Troy Stovall, CEO of GulfSouth Capital, Inc., said models of the diamond framework that MTI plans to use could be accessed by the end of the week at www.msmec.com, www.ihl.state.ms.us or www.mississippi.org.

“When people are asked to name telecommunications companies in central Mississippi, they usually stop after MCI WorldCom and SkyTel,” Stovall said. “But when we researched it, we found there were over 300 in central Mississippi. Yet we have students who can’t find jobs and companies that can’t find employees. Our question became, how do we stitch these together?”

Special programs, such as forgiveness of student loans or special scholarships, similar to teacher incentive programs, may be considered to retain “the best and brightest” in the CIT fields in Mississippi, Stovall said.

“Action must be driven by the private sector,” he said. “The feedback we got from this morning’s workshop was the telecommunications industry is indeed fragmented and people wanted to know if we were going to do something similar for other industries and other parts of the state.”

With research, an industry base and private/public institutions as building blocks, the next step in developing a CIT cluster includes defining key elements of cluster successes, performing an initial assessment and understanding road blocks and opportunities.

“We need to build a consensus here, then move forward and study other parts of the state so that no region is left behind,” Evans said.

Mark Leggett, director of government affairs for the Mississippi Manufacturers Association, said he agreed with Porter’s assessment of clusters, which Porter described as “a curious blend of cooperation and competition.”

“We already have numerous clusters in Mississippi that have arisen in the last 50 years, such as the furniture industry and its suppliers in Tupelo, the catfish industry around Belzoni and the forest products and chemical clusters statewide,” Leggett said. “We have a burgeoning electric generation cluster that would benefit from competition which he said is a necessary ingredient.”

Natural resources will continue to be an important ingredient in cluster development in Mississippi, Leggett said.

“For example, the network of natural gas pipelines creates an excellent opportunity for growth in the electric industry,” he said.

Musgrove stepped in the conference room long enough to endorse MTI’s agenda, saying, “If we don’t make technology front and center of our economic development strategy, we’re missing the boat.”

The technology business holds tremendous promise for Mississippi, said Mississippi Department of Economic and Community Development chief J.C. Burns.

“Mississippi Technology Inc. is working to coordinate the development of high-tech commercial applications, a brand new business segment for Mississippi,” he said.

Contact MBJ contributing writer Lynne Wilbanks Jeter at mbj@msbusiness.com or (601) 364-1018.

About Lynne W. Jeter

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