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Count Your Assets

The vibrant past history and current woes of Lockport, New York, are a wake-up call for struggling post-industrial regions.

Lockport is an old canal town some 20 miles east of Niagara Falls. It's an historic city that's been the Niagara County seat since the Erie Canal was built. It boomed in the 19th century when industries powered up new factories by tapping the canal's waters.

Today, Lockport is home to a big plant owned by Michigan-based Delphi Corp., where 6,000 mostly unionized workers labor for a company that has been a big supplier to General Motors. Delphi is the biggest manufacturing employer in Niagara County and one of the biggest in New York State. Last October, however, the company filed for Chapter 11 bankruptcy protection. Since then, it has been engaged in an acrimonious battle with the United Auto Workers over dramatic wage and benefit reductions. That leaves Lockport sitting on edge and fearing the loss of thousands of jobs.

If all of this sounds so 20th century, it's also the kind of story that has served as a wake-up call for the struggling Western New York region--Buffalo, Niagara Falls and the outlying counties between Buffalo and Rochester. Still struggling to emerge from close to 40 years of stagnation, the Buffalo-Niagara Falls area is finally getting its act together with a regional economic strategy, courtesy of the Erie- Niagara Regional Partnership. There are some good ideas floating around--and also some good lessons on how a struggling region should approach the good ideas. As usual, it begins with the region's assets.

The most obvious and eternal asset is Niagara Falls--one of the most compelling place names in the world, right up there with Hollywood and Wall Street. This makes tourism an obvious play, but Western New Yorkers are still debating exactly how to take advantage of the tourism idea.

Next come new developments. In early December, the Seneca Indians broke ground on a new casino near downtown Buffalo, stimulating a debate about whether this would simply empty the pockets of residents in the region or serve as an economic engine. This could go either way--a casino and nothing else would simply empty pockets. But the Buffalo waterfront has a spectacular view of Lake Erie, so if the casino can be surrounded by other compelling attractions, it might serve, like Niagara Falls, as part of the foundation.

Then there are the biosciences. New York State, like so many other states, has decided to play hardball in the biosciences game and has made Western New York the focus, largely because of the "meds and eds" assets in Buffalo, such as Roswell Park, a cancer research center. But competition against richer regions, such as Arizona, California, Texas and Georgia, is ferocious; in December, a leading researcher--the State University of New York's single highest-paid employee--defected to Georgia Tech.

And finally, there's still manufacturing. Not the labor-intensive 20th-century manufacturing that made the region rich decades ago but advanced, technology-driven 21st-century manufacturing.

When you put these assets down on paper, they may not seem very impressive. Not everybody has Niagara Falls, but everybody has a tourism strategy. Not everybody has world-class biosciences research institutions, but everybody has a "meds and eds" strategy. Not everybody has Lockport, but everybody has an idea about how to make manufacturing work in the 21st century. Pile that on top of an aging and stagnating population in a region with a lot of out-migration, and it can be hard to see the competitive advantage.

But the key in Western New York--as everywhere else--is not just to identify your assets but also to act strategically to take advantage of them. Buffalo's not going to win the worldwide biosciences "arms race" outright--not with California throwing $3 billion at stem-cell research or Arizona spending hundreds of millions of dollars to create a biotech research base in downtown Phoenix.

What Western New York can do is figure out how to use and combine these assets in ways no one else can. Where else, for example, is there a strong biosciences research base--focused on drugs and treatments to help people stay healthier longer--located in a region with such a rapidly aging population that will need and want these new products? Where else can the biosciences be combined with sophisticated manufacturing capacity? And with cheap hydroelectric power from--you guessed it--Niagara Falls.

Economic development in the late 20th century was about identifying your assets. But in the early 21st century it will be about taking the next step: figuring out what you can do with those assets that no one else can do. Buffalo, Niagara Falls and Lockport may be accustomed to thinking that they can't compete in the worldwide race for prosperity, but Western New York may be the best laboratory in the country for the new rules of economic development.

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