Obama Administration to auto communities: Figure it out for yourself
In a few weeks, the Obama administration's auto communities 'czar", Ed Montgomery, will be leaving the administration. Sadly, he will also be leaving a wide range of auto communities with little more than fading memories of well-intentioned, but unproductive meetings.
At the end of the day, it may have been too much to expect the federal government to really provide a catalyst to help auto communities –- places like Kokomo and Flint –- in any meaningful way. These communities are facing enormous challenge of transforming their economies in the midst of one the worst recession since the Great Depression.
Part of the problem -–perhaps even the core problem –- stems from the inability of federal agencies to craft anything close to a collaborative strategy among themselves. Each agency operates with an underlying set of statutes and regulations. Meaningful collaboration requires that joint investment projects (that blend multiple federal funding streams) meet multiple administrative standards, a virtually impossible task. As one EDA administrator commented about a month ago, it's virtually impossible for federal agencies to invest jointly in a project.
(His suggestion is for the federal agencies to agree among themselves that only one set of federal regulations will apply to investment projects involving multiple federal streams of money. He recommended that the agencies select the least restrictive set of regulations on these joint investment projects. While a good idea, it's hard to see how federal agencies could adopt such a collaborative stance in the absence of an executive order. Even then, multiple committees in Congress would undoubtedly weigh in and muddy the waters.)
Beyond that, it's clear to even casual observers that federal staff, with few exceptions, really don't have the experience (or, perhaps, the skills?) to collaborate among themselves. Few government officials work routinely across agency boundaries, and they are not really rewarded by anyone for these collaborations.
Another problem becomes painfully apparent as you sit in on some of the meetings convened by federal agencies in the auto communities. The federal representatives, for the most part, lack of practical professional background they need to communicate effectively as a partner with the auto communities.
This point is subtle. The federal administrators have a good handle on their own programs, but sadly that's not enough to meet today's competitive challenges. The federal partners need to be just that -– partners. Instead, they came to these meetings and effectively threw a pile of tools on the table and told the auto communities, “Here, we have all these tools for you to use.”
The problem, of course, is that these federtal tools were invented 30, 40 or 50 years ago. They are hopelessly out of touch with the need for flexible, dynamic investments that stimulate innovation within our regional economies. It's as if the feds handed you a set rusty pliers to repair your car's electronic transmission. (Of course, the feds did not help their case by limiting their visits to a few hours in most cases. These "fly-bys" don't really provide much opportunity for the feds to understand the complexities we are confronting in auto communities.)
The simple conclusion: We cannot deal with the competitive challenges of the 21st century with tools invented in the 20th century.
The Brookings Institution, before Montgomery hit the door, held a "summit" in Washington on auto communities, but that session added little. At the end of the day, we do not need more summits. What we need are innovations in federal policy. That takes some complex thinking and a coherent strategic process to figure our new ways to link and leverage our assets to speed regional transformation. A one day summit isn't it.
Where we go from here?
My sense is that auto communities must take it upon themselves to form their own networks to innovate: in Kokomo, we've been using the concept of “re-engagement networks” as a way to encourage the innovation we need to build new companies. These re-engagement networks promote focused, strategic collaborations across organizational and political boundaries.
Here's an example of one such collaboration. When Delphi Electronics announced in Kokomo that they were laying off 600 technical and engineering staff, we quickly organized a new approach to form companies based around the engineering talent and technology coming out of Delphi. We did not cook this idea upon our own. Instead, we look to Kalamazoo, Michigan that faced a similar dislocation with the shutdown of the Pfizer facility some years ago.
Fourteen months after Delphi electronics made its announcement, we have launched 10 new businesses and had an equal number in the pipeline. Here's a video that explains what we did.
The federal government should be looking at the failure of the auto communities initiative as an important lesson. When it comes to regional collaboration, talk is easy. It is not difficult to bring people together in a spirit of collaboration for one or even two meetings. But sadly, the federal government has abdicated its leadership role in guiding the economic transformation of our auto communities. Now it is up to the auto communities themselves to exercise their leadership, to innovate, and to learn from each other about what works.
We need to develop re-engagement networks fast, and it would be helpful for the feds to lend a hand.
