REMARKS AS PREPARED FOR DELIVERY - SANDY K. BARUAH, ASSISTANT SECRETARY OF COMMERCE FOR ECONOMIC DEVELOPMENT - ETA WIRED KICKOFF MEETING - KANSAS CITY, MISSOURI

THURSDAY, MAY 25, 2006

AS PREPARED FOR DELIVERY

Introduction by: Paul Scianna, Executive Director, Alliance for Innovation in Manufacturing-Kansas City

Thank you, Paul, for that kind introduction.

I would like to thank Assistant Secretary Emily DeRocco for the kind invitation to join her today to celebrate the kickoff of the OneKC WIRED project.

Throughout George W. Bush’s presidency, he has encouraged the collaboration between federal agencies to achieve common objectives, and I am proud to say that one of the great success stories in this effort is being highlighted here today.

The Department of Commerce has enjoyed a long standing partnership with the Department of Labor. Our two Departments have worked to leverage their resources and align their roles to help communities and regions address the challenges and opportunities presented by a changing world-wide economy.

This partnership has included helping communities respond to sudden and severe economic dislocation as well as those communities affected by the military Base Realignment and Closure (BRAC) process.

President Bush’s strong desire to better integrate the complementary functions of economic development and workforce development has provided me with the opportunity to work closely with Assistant Secretary DeRocco over the last few years.

Emily is a tremendous colleague and a key player in President Bush’s plan to ensure that all Americans have the knowledge and skills they need to succeed in the 21st Century.

The Department of Labor has made great strides, not the least of which is the WIRED Initiative.

I’m very pleased with the partnership that has been built between ETA and the Department of Commerce’s Economic Development Administration. I would like to thank Emily. I’d like to thank Emily for her leadership, and let folks in the audience know that, believe it or not, Federal agencies do cooperate and work effectively together.

The Department of Commerce is also pleased to be a partner with the Council on Competitiveness, which is the leading voice of American industry to help focus the Federal agenda on competitiveness and innovation.

The Council will continue to be a critical partner in the implementation of the President’s American Competitiveness Initiative, which is the President’s bold plan to:

• Double funding for basic Research & Development, and make permanent the private sector R&D tax credit;

• Improve math and science skills in our schools;

• Triple the number of workers getting job training; and

• Attract and retain the world's best and brightest people.

The Administration is grateful for the Council on Competitiveness’ help in moving the American Competitiveness Initiative forward, and I am delighted that my friend, Council President Deborah Wince-Smith, is here with us today.

The 21st Century economy is ushering in many “New Realities” that present our nation with both new challenges and new opportunities, and I am reminded of a few of these “New Realities” here today:

• New Reality 1: The components of competitiveness can no longer be pursued separately;

• New Reality 2: The role of the private sector in building competitiveness strategies is more critical than ever; and

• New Reality 3: The competitiveness of our nation depends on the competitiveness of America’s regions.

I would like to take a moment to expand a bit on each of these “New Realities,” and then say a few words about the Kansas City region.

New Reality 1: When it comes to strengthening America’s competitiveness in the 21st Century, it is no longer good enough for the drivers of economic growth – innovation, entrepreneurship, human capital, and others – to be pursued in separate silos, which has traditionally been the case. Competitiveness in the world-wide economy requires collaboration across the spectrum of competitiveness components, including economic development and workforce development.

Assistant Secretary DeRocco has said, and I agree, that “the most important component of a sustainable economic development strategy is the development of human talent.” While it is critical that we invest in our physical infrastructure and smart strategies, it is the talented people that use this infrastructure to create the new ideas and innovative technologies that make the American economy the envy of the world – far outpacing our competitors in the industrialized world.

The education and training that sparks this creativity gives our workers cutting-edge skills that are key to economic development, and it is encouraging to see the growing interest across the nation in aligning the work of economic development organizations and workforce organizations.

New Reality 2: In the 21st Century is more critical than ever that the private sector plays a collaborative role in economic development and competitiveness strategies.

While government – at all levels – does play a role in creating an environment for economic development, it is the private sector that must be ready, willing and able to invest in order for economic growth to occur.

Development professionals and community leaders like those of you here today can help this process greatly by serving as a critical link between the public sector, the private sector, the key institutions in a region, and even the public.

It is clear to me that the Kansas City region has given this concept some serious thought, and is beginning to reap rewards.

New Reality 3: In our changing economy, the competitiveness of our nation depends on the competitiveness of America’s regions, and the competitiveness of America’s companies is directly related to the competitiveness of the economic regions in which they do business.

In eras past, communities competed for their share of existing markets through industrial recruiting – otherwise known as “smokestack chasing,” and later on cost cutting. But the globalization of markets for goods, services, capital and labor requires the development of new market opportunities, which is best pursued through the identification of regional assets for innovation, and by capitalizing on those regional assets.

In our global economy, our competition is not next-door. The areas around us are our strength, not our competitors. As Tom Friedman says, in the 21st Century, the world is “flat,” meaning that our competition can come from any part of the globe populated by someone with a good education, a good idea, a computer and a broadband connection. This idea of “regional competitiveness” is simply the Tom Friedman, The World is Flat, 21st Century version of what we all learned on the school playgrounds of our youth: There is no “I” in T – E – A – M and we are stronger working together than when we stand alone.

By thinking of ourselves as part of a broader economic region, we can build on our strengths to better align a critical mass of local resources to spur innovation.

So those are some of the new realities that all communities in America are dealing with. How does Kansas City fit in to this new reality? Well, in many respects, the Kansas City region has asked and answered its own question.

The Greater Kansas City region, with Kansas on one side of the border and Missouri on the other, is uniquely situated for regional competitiveness, and has made a great start of it. The requirement for local officials and development organizations to literally bridge the divide of two states – let alone two cities – is excellent training for building a unified and collaborative development approach.

Entrepreneur magazine ranks Kansas City among the top U.S. cities for its support of small businesses. And Fortune magazine rates it as one of America’s 20 best cities for international business.

The Kansas City region already houses some of the world’s leading corporations, such as Sprint, Hallmark Cards, H&R Block, AMC Theaters, and Russell Stover Candies.

And, Kansas City is home to two of EDA’s favorite organizations, with which we work very closely. The Kauffman Foundation is one of the nation’s leaders in encouraging entrepreneurship and improving education. And the Federal Reserve Bank of Kansas City’s Center for the Study of Rural America, led by Dr. Mark Drabenstott, has been a valued partner on rural economic development issues. Mark is one of our nation’s greatest minds on the rural economy, and the Department of Commerce is grateful for his counsel.

While successful economic development must be locally-driven, there is an important Federal role in creating the environment to foster economic growth. As you work to grow the Kansas City regional economy, one of the important roles that the Federal government can play is to ensure a strong and growing national economy – and we are doing that.

As President Bush said last week when he signed the Tax Increase Prevention Act, we have achieved some significant economic wins:

• 2 million new jobs in the last year and over 5 million since August 2003;

• An unemployment level down to 4.7%, a level that many economists consider full employment;

• Homeownership at record highs;

• $880 billion returned through tax cuts to citizens and small businesses across the nation for investment, savings and additional purchasing power; and

• 18 straight quarters of solid economic growth, with 1st Quarter growth in 2006 of 5.3%.

This is good news not just on a national level, but good news for local efforts because you can tap in to this national momentum to boost your local economy.

The WIRED Initiative is a cutting-edge program that addresses the “New Realities” of the 21st Century economy. WIRED is the most visible Federal effort to-date that acknowledges the power of economic regions – that communities are stronger when they stand together than when they stand alone, and the reality that economic development and workforce development are two sides of the same coin and must be tackled in a comprehensive and holistic manner.

The Commerce Department stands ready to continue to work closely with our colleagues at Labor to implement this initiative. I have instructed EDA’s Regional Directors to place an emphasis on the WIRED Initiative, and that their offices should do everything they can to help with the effort.

In fact, here with us today are Bob Olson, Director of EDA’s Denver Regional Office, and Paul Hildebrandt, the Economic Development Representative for both Missouri and Kansas. Bob and Paul are your local resources for tapping in to EDA, and I’d like to thank them for being here today and for all of their efforts in support of the WIRED initiative.

On behalf of President Bush, I would like to congratulate the Greater Kansas City region on the kickoff of the OneKC WIRED initiative, and I thank you and my colleague Emily DeRocco for the invitation to be here today.

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