A June 28 Supreme Court ruling gives manufacturers some clout they’ve been missing for the past 96 years: the ability to agree on minimum prices with retailers and distributors so long as they promote competition. Since 1911, such price floors have been per se ruled in violation of the Sherman Antitrust Act. But as of now, the "rule of reason" will replace the per se assumption of illegality. Justice Anthony Kennedy wrote the ruling, which cited a number of economists in its reasoning, including the ABA Section of Antitrust Law, Antitrust Law and Economics of Product Distribution, which stated in 2006 that [T]he bulk of the economic literature on [resale price maintenance] suggests that [it] is more likely to be used to enhance efficiency than for anticompetitive purposes."

Readiness is crucial to competitiveness too. So says the Council on Competitiveness which in late June published a report on "enterprise resilience" that corroborates many of the discussion points on pandemic and business continuity planning addressed at the IAMC Spring 2007 Professional Forum. Five years of research revealed that companies are too focused on planning for catastrophic events, and not focused enough on more everyday hazards. "Researchers evaluated risk management practices in five business sectors: Chemical, Electrical Power, Financial Services, Oil, and Pharmaceutical, and identified several emerging economic vulnerabilities," said a release from the Council. "First, U.S. companies are exposed to a wider range of business disruptions because of their expansion across the globe. Second, data breaches and cyber attacks associated with new technology incur major capital and productivity costs. Third, litigation costs and regulatory risks depress investment in the research and development of high-value products and services, which are the foundation of U.S economic strength. Fourth, emerging global risks, particularly energy volatility and pandemics, present the potential for far-reaching economic calamity, yet too little is being done to address either. Finally, despite general acceptance of the growing list of risks, most private sector leaders are doing too little to manage risk dynamically across their institutions."

Property and facilities managers may find useful these further reports from the Council on resilience planning within the chemical, pharmaceutical, energy, power and financial services sectors. "Anticipating risk, limiting impact and rebounding rapidly is a shared objective of economic security and private sector competitiveness," said Deborah L. Wince-Smith, president of the Council on Competitiveness. (Look for further coverage of continuity planning in the "IAMC Insider" section of the July issue of Site Selection.)

Could one less visit to your premises by an off-site vendor enhance both security and efficiency? WaterPure International hopes so. The company sent out a late June release touting the fact that one of its Atmospheric Water Generators (AWG) had now been placed inside a nuclear power plant as part of a pilot program to enhance security. By condensing water from the air and then treating it in a series of stages, the AWG can produce five or more gallons of water a day. The Doylestown, Pa., company, part of Worldwide Water Group, just began being publicly traded in January. It recently opened a regional operations center in Ft. Lauderdale, Fla., and plans to open a fulfillment center there soon.

"The current U.S. cap on the number of skilled-worker visas (H-1B) severely handicaps the ability of U.S. universities, science and technology-related companies and research facilities in their ongoing missions to develop new technologies, medicines and other innovative products that put the country on the leading edge of the global economy." So reads a May release from the Association of University Research Parks (AURP). "By definition, research parks are global entities that rely on non-U.S. citizens who have intellectual property that is absolutely essential to the United States' ability to innovate and compete in the world economy," said AURP First Vice President Michael Bowman, who is also the chairman and president of Delaware Technology Park, Inc. "But if these non-U.S. citizens aren't able to stay in this country, we lose the people and the technology to other countries."

H-1B visas are temporary visas for foreign workers with high-tech skills or who work in specialized occupations. Congress has limited the number of H-1B visas to 65,000, with additional allowances for current H-1B visa holders. Another 20,000 H-1B visas can be granted to applicants with advanced degrees from U.S. academic institutions. The limit for 2008 was reached in one day, with more than 150,000 applications. "The number of available visas is underwhelming," Bowman said. "Research parks and our constituents are losing out on people, corporate interests and international competitiveness."

More than one-third of immigrant scientists and engineers report that the most important reason they came to the United States was for family-related reasons.
Credit: Art Explosion

A related late June InfoBrief from the National Science Foundation shines light on another facet of the H-1B dilemma. According to the report, Why Did They Come to the United States? A Profile of Immigrant Scientists and Engineers, more than one-third of immigrant scientists and engineers report that the most important reason they came to the United States was for family-related reasons (37 percent). Other reasons cited include educational opportunities (30 percent), and job or economic opportunities (21 percent). Immigrants make up more than 3.3 million of the 21.6 million scientists and engineers in the U.S. "The majority of immigrant science and engineers in the United States are naturalized citizens (64 percent)," says the NSF. "In addition, a greater percentage of immigrant science and engineers than U.S. citizens have advanced degrees (49 percent vs. 40 percent), were more likely to have earned their highest degree in a science and engineering field (63 percent vs. 54 percent), and report working in a science and engineering occupation (31 percent vs. 21 percent)."

There are more than 18.3 million native-born U.S. citizens who are scientists and engineers, while immigrants total more than 3.3 million. Migrants from India, China, Hong Kong, Macau, Philippines, Canada, United Kingdom, Korea and Taiwan make up the majority of those 3.3 million. Those who emigrated from China, Hong Kong or Macau had the highest percentage (75 percent) of individuals with one or more degrees in science and engineering fields.

Data are from the 2003 Scientists and Engineers Statistical Data System, which integrates three large demographic and workforce surveys of individuals conducted by NSF: the National Survey of College Graduates, the National Survey of Recent College Graduates and the Survey of Doctorate Recipients. These surveys collected data from 102,350 individuals representing a population of about 21.6 million scientists and engineers.

The Financial Services Forum in late June published "Succeeding in the Global Economy: A New Policy Agenda for the American Worker," a study that illustrates the benefits of free trade while also admitting its shortcomings. "Efforts to address pressures on American workers by closing America to trade are likely to be both infeasible and ineffective," says the report. As for what would be effective, it has plenty to say, including recommendations that the U.S. Congress:

• Fully integrate FICA taxes into the income tax or add greater progressivity into the FICA tax itself
• Combine Unemployment Insurance and the current Trade Adjustment Assistance Program into a single program.
• Allow individuals to deduct from their gross income for tax purposes the full cost of education and training expenses, even when directed at preparation for an entirely new career.
• Create a federal insurance facility that permits communities to insure their tax base against sudden economic dislocation.
• Enact legislation that would identify certain communities as "Global Economic Development Platforms" ("GEDPs").
• Allow firms a credit against income taxes for the marginal increase in expenses they might incur in extending their internal education and training facilities to workers outside the firm.
• Renew Trade Promotion Authority on a permanent basis, conditioned on strict consultation requirements with the opportunity to withdraw TPA if those requirements are not met.
• Significantly expand the resources available for enforcement of U.S. trade agreements.
• Limit the scope of inward investment reviews by the Committee on Foreign Investment in the United States, and remove outdated restrictions on inward foreign investment in airlines, shipping, telecommunications, and other areas.

Ernst & Young's European Attractiveness Survey "Wanted: A Renewable Europe" was released June 28 at at the World Investment Conference in La Baule, France. "Investors' priorities focus on greater flexibility (47%), simpler administrative procedures (44%) and more support for innovation (35%)," said E&Y of CEOs’ comments on Europe’s need for reforms. The report surveyed 809 international corporate decision-makers. Among the report’s highlights in comparing Europe to 13 world economic zones:

• Inward investment activity in Europe reached a record in 2006 with 3,531 project announcements, representing an annual increase of 15.2 percent (3,065 projects in 2005). 2006's increase was significantly above that of the previous year (5.3 percent). Among these investments, 71 percent were "greenfield" projects.
• The UK and France remained the top two destinations for FDI, with the UK's lead becoming more pronounced. Almost a fifth (19.4%) of the total number of FDI projects in Europe in 2006 was directed towards the UK, while France attracted 16% of projects.
• Romania experienced the highest growth in number of projects announced, from 86 in 2005 to 140 in 2006.
• BRIC countries (Brazil, Russia, India, China) increased their investments significantly, from 112 in 2005 to 163 in 2006, whereas U.S. investors' interest declined from 35% in 2002 to 30% at the end of 2006.
• Poland was number one in terms of FDI job creation (15% of the total). While Central and Eastern Europe attracted only 26% of investment projects, they benefited from 51% of the new jobs created by foreign investors. This represented an average of 217 jobs per project, compared with 64 jobs per project in Western Europe.
• Central and Eastern Europe's favorable labor environmental image is more and more challenged (the number of respondents ranking it top for this strategic location factor in 2007 fell to 18%, from 27% in 2006) and the region appears to be having difficulty in convincing investors of its merits as an "all-round" business location.
• Over two-thirds (67%) of respondents take the environmental performance record of their target area into account in their choice of location, with 30% considering environmental issues play a strong part in their decision making process.

CLSA Asia-Pacific Markets, a brokerage, investment banking and private equity group that’s part of France’s Credit Agricole, in June issued a report on China’s Purchasing Manager’s Index and its meaning for manufacturing in that country. In May, the index was at 54.1, up from 53.3 in April for the highest month-to-month rise in two years. "The pick up in the CLSA China purchasing managers’ index comes as no surprise on the back of increased bank lending activity in the first quarter of the year," said Dr. Jim Walker, Chief Economist at CLSA. "Despite all Beijing’s monetary tightening efforts, China’s commercial banks continue to ignore pleas to restrain lending just as its local governments ignore pleas to restrain spending. Accelerated monetary tightening measures should be expected over the next six months as Beijing fights to regain control of its overheating economy.

"Overheating is also appearing in Chinese export activity," said Walker. "There has been a gradual pick up in export price rises over the last six months with over 12 percent of manufacturers reporting export price rises in May. The implications for global monetary policy are none too positive: The age of disinflation being exported from China looks to be well and truly over."

Find further insights into the reasons behind these trends in the China Spotlight published in the July 2007 issue of Site Selection.

Sometimes reports intended to influence policy can be useful in influencing corporate strategy too. With that in mind, make what you will of a late May report from the WWF (the organization with the ubiquitous panda that was formerly known as the World Wildlife Federation) entitled Making Energy Efficiency Happen: From Potential to Reality. The 95-page report makes recommendations and includes country-by-country analysis of energy efficiency policies now in place in the G8 industrialized countries (Canada, France, Germany, Italy, Japan, Russia, United Kingdom and United States) plus the developing economies of Brazil, China, India, Mexico and South Africa. Interested corporate site seekers may also find of interest the comments of E. Neville Isdell, chairman and CEO of The Coca-Cola Co., in a June speech at WWF’s annual meeting in Beijing.

Think boilerplate is good enough for lease language? According to an April article in The Legal Intelligencer, a lawyer has been put on the hook for $6.6 million because of "the poor drafting of a lease agreement," which caused a tenant to sue Crown Cork & Seal. Crown settled that suit for approximately $4 million, then sued the law firm for legal malpractice.

A new white paper from i/o Data Centers, "Building vs. Outsourcing Your Data Center: A Business Proclamation", finds, not surprisingly, that "Soon it will not be justifiable for businesses to manage their own data center because the price of outsourced services will be too attractive to ignore."So says its author, Fred Mapp, a veteran CIO who is the author of the book Mapping Information Technology to Your Business. The white paper includes surveys of leading companies on data center issues; information about how to manage growth, business continuity and costs; tactics for determining core competencies; and strategies for leveraging outsourcing to maximize return on investment.