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EU Book
Towards the Learning Region — Education and Regional Innovation in the European Union and the United States
A US-EU Regional Partnership
— Northeast Ohio and Southwest Saxony, Germany Close linkages between Regions in the United States and Europe There is a long history underlying the linkages between different regions in the United States and Europe going back to the early years of the existence of the United States of America and even predating its foundation. In the framework of to-day's global society and economy it cannot be considered purely accidental that new trading and cultural links are being recreated between regions of the US and the EU which have had close relationships in the past. During the last nine years, civic leaders, entrepreneurs and development agencies in Northeast Ohio and Southwest Saxony have been rebuilding historic links between their areas. Over the past two centuries Northeast Ohio became the home to one and a half million people of German origin - by far the biggest cultural grouping living in the area - many of them from what was known for the past fifty years as Eastern Germany. That these two areas which have been linked
together so closely in the past and have shared This chapter will examine the historical, economic and social background to the links between these regions and will describe how the relationship has been re-enacted in the recent period. It will examine the development of new regional development organizations and consider how US-EU co-operation can benefit the development of the economies in both continents. EU BOOK CHAPTER 3
A
US-EU Regional Partnership — Northeast Ohio and Southwest
Saxony, Germany Close linkages between Regions in the United States and Europe There is a long history underlying the linkages between different regions in the United States and Europe going back to the early years of the existence of the United States of America and even predating its foundation. In the framework of to-day's global society and economy it cannot be considered purely accidental that new trading and cultural links are being recreated between regions of the US and the EU which have had close relationships in the past. During the last nine years, civic leaders, entrepreneurs and development agencies in Northeast Ohio and Southwest Saxony have been rebuilding historic links between their areas. Over the past two centuries Northeast Ohio became the home to one and a half million people of German origin - by far the biggest cultural grouping living in the area - many of them from what was known for the past fifty years as Eastern Germany. That these two areas which have been linked
together so closely in the past and have shared similar types of
economic, industrial, social (and in the case of Saxony), major
political traumas, are now again co-operating and learning from
each other, is a sign of the enduring links between the United
States and Europe, and it is appropriate that the City of Akron in
Northeast Ohio became the location for hosting a major event in
February 1998 - the Akron Forum - to discuss regional co-operation
between the US and the EU. This chapter will examine the historical, economic and social background to the links between these regions and will describe how the relationship has been re-enacted in the recent period. It will examine the development of new regional development organisations and consider how US-EU co-operation can benefit the development of the economies in both continents. Economic and Social Development in Ohio Located in the heart of the nation's industrial region, Ohio is strategically situated on the great inland waterways and criss-crossed by the interstate roadway system. Sixty percent of all U.S. households lie within 600 miles of Ohio, and more than 50 percent of the Canadian market is within the same range. Seventh in the nation in total population, Ohio's population of 11,172,782 people is concentrated in eight large urban centres and 15 micro-metropolitan centres. The largest metropolitan area in Ohio is the Cleveland-Akron consolidated area with 2,913,000 people. Other metropolitan areas with populations in excess of 500,000 include Cincinnati, Columbus, Dayton, Toledo, and Youngstown. Ohio's economy grew rapidly in the first half of the twentieth century based on engineering and manufacturing industries. It became the centre of the American motor car and machine tool industries and the world's leading manufacturer of car tyres. As the economy grew so did the demand for skilled labour. Many of the workers who moved to Ohio came from middle Europe and from Germany, with waves of immigration following the first and second world wars. In the 1970s the area experienced a severe recession. Heightened international competition, lack of investment in infrastructure and changing technologies led to the collapse of its industrial base and it became the site of one of the 'rustbelt industries'. In particular the rubber and tyre industry, of which Akron was the centre, experienced a dramatic collapse. 20,000 people lost their jobs in a period of three years. In Akron 60,000 out of a total workforce of 300,000 were unemployed. Over the past twenty years the economy has been
rebuilt and in the last five years has once more experienced a
boom. Ohio's economy created 128,000 new jobs from October 1996 to
October Ohio's manufacturing sector employs 1.1 million people, making Ohio the second largest manufacturing state in the nation. The state's factories lead the nation in the manufacture of steel, plastics, rubber and fabricated metals. Ohio also is a leading producer of autos and trucks. However the boom has led to severe skill shortages, especially for computer and machine technicians. Young people have increasingly turned their backs on traditional skilled craft trades, preferring instead to follow college education in pursuit of white-collar careers. Apprenticeship programmes have traditionally been weak, with employers preferring to follow a high technology strategy rather than depending on skilled workers. Following changes in the US immigration law in 1962, the wave of immigration of skilled workers from Europe, the traditional response to skill shortages, dried up. It is this background, which has provided the impetus to rekindling the traditional links with Germany. Economic and Social Development in Saxony Southern Saxony is one of the oldest industrial regions in Germany. Together with the Rhine Valley, it was the heartland of the industrial revolution in the last century, and was the centre of the mechanical engineering, tool making and automobile industries up to the second world war. The capital of the region is Chemnitz, formerly Karl Marx Stadt, with a population of 265,000. The region is situated in South East Germany in the Erz mountains, with close access to the growing markets of the Czech Republic and eastern Europe. Following the Second World War the economy of the region continued to grow based on the engineering and car industries. But the re-unification of Germany was to lead to a major economic collapse. An outdated infrastructure, restrictions in trade, lack of investment in modern technology, over-manning compared to western industries and the introduction of the one-to-one exchange rate between the former Eastern and Western German marks, led to the closure of much of the industry. Saxony also suffered in that, as in Ohio, industrial growth had been based on heavy industries, which were undergoing rapid technological change and the region was also prone to competition from the newly emergent economies in the east. Since re-unification the economy has slowly been
rebuilt although unemployment, in common Northeast Ohio Trade and Economic Consortium The inspiration for reviving the links between Saxony and Ohio came from the Northeast Ohio Trade and Economic Consortium (NEOTEC). NEOTEC was formed in 1996 and was inspired by Tim Davis, Executive for Summit County, and the collective leadership of five other Northeast Ohio counties that participated in its creation (Columbiana, Mahoning, Portage, Stark and Trumbull). There are 19 counties in Northeast Ohio which may someday be a part of NEOTEC. Such a union of economic potential (50 per cent of Ohio's industrial production) would further enhance the region's appeal to world traders and business. Even before NEOTEC's inception, its leadership envisioned a partnership with a kindred region in Europe. History and culture led them to Southwest Saxony, the area including and surrounding Chemnitz. Not only was there a strong tradition of German immigration to Ohio but both regions have strong ties to the automobile and machine tool industries. In the 1970's, the NEOTEC region was devastated by the dissipation of the tyre industry which it had spawned some hundred years earlier. What Southwest Saxony experienced in the 1990's as a result of its amalgamation into the Federal Republic of Germany had already been weathered by NEOTEC's region. Years of re-evaluation and redirection, combined with a will to prevail, contributed to making the NEOTEC area one of the most productive and industrially prolific in the USA. From tyres there came polymers and plastics. The know-how to use machinery to make products from the new manufacturing manna was already in place and at that time (late 1970's & 1980's) perhaps adequate. Today, hundreds of companies feed the automobile and other industries with components made by experienced manufacturers on machines evolved from the experience of their forbearers. A similar evolutionary manufacturing
metamorphosis is taking place in Greater Chemnitz area. Developing Exchange Programs NEOTEC and Chemnitz, through the latter's economic development organization CWE, led by Dr. Bernd Lange, perceived a symbiosis for both partners: unemployed Saxonian skilled workers might answer the NEOTEC manufacturers' immediate needs for skilled machining specialists. The workers would be processed through a form of training at a local facility such as the Akron Machining Institute (AMI) or Portage Lakes Career Center. They would be exposed to commercial English and American entrepreneurial methods. The skills and knowledge learnt from the exchange programme would benefit individual employees, American companies interested in doing business in Germany and local businesses in Chemnitz. This possibility was first discussed in late 1996 when NEOTEC leaders visited the Siemens and Volkswagen training facilities in Chemnitz. Further enthusiasm for an exchange followed a meeting in Chemnitz in April 1997, with the local Arbeitsamt (labour office). The sophisticated universal service offered to young (and also not so young people) was noted during that visit and led to the consideration of the future development of a project to exchange young workers. It is worth noting that young people are not encouraged to pursue the machining trades in the United States. Some statistics suggest a bleak prospect for careers in these fields. It appears that the data upon which such as prognosis was made was based upon inputs by large companies and not the small and medium sized ventures which are in great need of skilled workers (at least 500, some say, in NEOTEC's sphere of influence). NEOTEC is set on averting an unnecessary gap in trained capacity by giving a common sense regard to working models flourishing in Saxony. NEOTEC and Chemnitz leaders projected a positive influence on young American people while a dozen or so self-confident and motivated skilled German craftsmen took up the challenge. The experiences of Austin (Texas) and Koblenz (Germany) in training American youth in auto-repair disciplines is supportive. All of the participants found good jobs on return to the US. Americans were taught well in Germany and their employers valued the quality of the work they produced. Although there is still some opposition from American Labour Unions, the active role of German unions like IG Metall in the training process of skilled workers could be used to demonstrate benefits to their American counterparts. Getting people into the US to participate was not perceived as a problem. The United States Information Agency (USIA) would assist with exchange programmes, as would the Carl Duisberg Society in Cologne, Germany in arranging visas. At present, more than 15 NEOTEC companies have asked to participate in the original concept of taking on skilled workers for a period of 'on-the-job' experience and class-room training. Added to the players is the Chemnitz office of the IHK (Industry and Trade Chamber of Commerce) which is identifying new journeymen to be interns (Praktikanten) for at least six months in NEOTEC workshops. Building Regional Partnerships The initial success of NEOTEC has led to plans for its expansion. It is intended to develop a new strategic partnership in the region, encompassing the Ohio Department of Development and Kent State University, along with NEOTEC itself. The School of Technology at Kent State University has a campus in every one of the eight regions of North West Ohio encompassing a geographical area of 160 miles in radius. Besides offering education to degree level, the School of Technology has developed a mission to support the development of applied research and for workplace development in the region. The plan for workplace development has been developed in conjunction with NEOTEC. It includes the provision of training for industry and partnership in research as well as the provision of business and technology incubator units for the development of new enterprises. The School of Technology is also supporting the extension of the exchange programme with Germany through providing distance learning programmes. These programmes are providing support for machinists to work in Germany for up to six months. Whilst some are drawn from existing enterprises, the programme is also providing opportunities for the unemployed. The exchange programme is considered as valuable, in that Germany has advanced expertise in the education and training of machinists, whilst there is a shortage of industrial machinists, especially of tool makers and CNC operators, in Ohio. The longer-term aim is to overcome the 'training gap' which is leading to skills shortages in Ohio. In partnership with NEOTEC, the School of Technology is developing regional centres of excellence at each of its campuses. These include specialist support for logistics and for small machine shops. At the same time the School is looking at the problems of recruitment linked to the relatively low esteem and prestige attached to technical occupations, compared with white-collar professions. They recognise the need for a campaign to promote alternatives to college education. Regional Partnerships: a strategy for the
future The Professor and Dean of the School of Technology at Kent State University, Dr. Raj Chowdhury sees the developments in Northeast Ohio as crucial to future national and regional economic development in the US: "The United Sates is a rich country. However, no one realised the implications of a passive approach to infrastructure and industrial renewal. There was no consideration paid to the need for a policy response to innovation. Northeast Ohio was allowed to become a 'rustbelt'. With the collapse of the tyre industry 20,000 people lost their jobs over a period of three years. 60,000 out of a total workforce of 300,000 were unemployed. At that time, Kent State University was a traditional institution aimed at providing general education for college graduates. Now it is changing. It is impossible to separate government, economic development and higher education. We have to move away from viewing unemployment as a social phenomenon to realising that it is linked to business and economic development." It is this philosophy which underpins the developing strategic approach in Northeast Ohio. There is a recognition of the need for local government to act internationally to promote regional economic development. However, this concept is new to many in the US and there is still a limited understanding of such an approach. The development of the concept of learning regions and the need for networks is limited by the artificial boundaries of local government. Whilst natural economic regions can be defined by the work-force and economies, government boundaries tend to adhere to geographical features or spatial areas. A further barrier to regional economic development is the predisposition of capital investors to view development in terms of 'physical capital' and play down the importance of 'human capital'. However, learning from their European partners in Saxony, many of the leading actors in Northeast Ohio clearly understand the importance of investing in people, and to prove that, the infrastructures involving public education bodies, such as development agencies and universities working with companies, are being put in place.
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