Manufacturing may be taking slow, tentative steps back into the U.S. market, but those baby steps are starting to yield big returns for places like Athens, Ga., which recently landed 1,400 jobs from a major Caterpillar plant coming back from Japan. What’s the best strategy for states, regions and cities looking to build upon that momentum?

Developing regional clusters of highly specialized companies, especially those focused on machinery, composite materials, auto production and aerospace, is key to building back manufacturing in many parts of the U.S., according to a new report from the Brookings Institution.

The report noted that nationwide manufacturing is “displays greater variety than may be recognized and falls into six broad patterns of industry clustering,” which include computers and electronics, transportation equipment, chemicals, machinery, food productions and low-wage manufacturing industries.

This cluster-based approach to manufacturing has been a guiding force for some economic development leaders in Ohio. Boasting 620,000 manufacturing jobs by the end of 2010, the Rust Belt state is slowly starting to regain some of the 39 percent of manufacturing jobs it lost over the past decade.

In the Dayton area, leaders are working to restore the region’s historic manufacturing base by building on existing clusters in aerospace and advanced materials.

“We are in the middle of the nation and in an area that is growing more quickly,” Scott Koorndyk, executive vice president of the Dayton Development Coalition, told Aerospace Manufacturing and Design magazine. “We are investing in early stage technologies to build clusters in those things that we are good at.”

Potential for the Midwest, Southeast
The Midwest is best positioned to take advantage of this, in part because it is still the most manufacturing-dependent region. But a few Southeastern states are also discovering viable clusters to replace others that have become obsolete.

Once dependent on apparel and textile manufacturing, Alabama landed a Mercedes-Benz plant in 1997 that jump-started its auto industry. Since then, the state has grown the sector from 3,4000 jobs to 10,4000 jobs in just 10 years. Specializing in auto parts production has also been a boon for Kentucky, which operates major auto assembly plants for Toyota, Ford and General Motors. The state’s 65,000 auto manufacturing jobs now exceed those in its staple aluminum production and processing sector.

What do you think of this cluster-based approach to manufacturing? Would it work for your region?

Besides highlighting the surge in technology, manufacturing and energy, the annual Best Cities for Job Growth rankings has demographer Joel Kotkin channeling his inner John Mellencamp.

The small towns of which Mellencamp famously sang are becoming magnets for new jobs and investment. The 2012 ranking notes the phenomenal job growth in smaller cities such as Midland, Odessa and San Angelo TX, Lafayette LA, Columbus IN and Casper WY.

Now it isn’t difficult to figure out what’s creating jobs  in many of these communities. Midland and Odessa are in the heart of the Texas oil patch, where red hot energy demand is fueling growth. Casper is part of Wyoming’s booming energy economy, which turns out 40 percent of the nation’s coal supply.

What has Kotkin’s sights on small towns beyond the boom-bust-boom cycle of industry segments are the convergence of a couple of developments that, at their heart, signify the importance that quality of place plays in economic development.

High-speed connectivity and continuing telecommunications innovation let business be conducted from anywhere, and beyond just letting it be conducted from lower-cost locales, it also brings in a range of lifestyle preferences – from culture and recreation opportunities to ease of commuting to wide open spaces.

Do quality of place factors alone make or break investment and job creation? No, but if you think they are not significant factors in a number of situations, think again. The appeal of place can and does drive job decisions, both from those seeking them and those creating them.

Kotkin also notes that two key demographic cohorts – millenials and Baby Boomers – are in greater numbers shying away from high-density urban areas to smaller communities with more elbow room. Why?

As Kotkin notes, in part the reasons “may lie in many mundane factors that are often too prosaic for urban theorists. They include things such as strong community institutions like churches and shorter commutes than can be had in New York, L.A., Boston or the Bay Area (except for those willing to pay sky-high prices to live in a box near downtown). Young families might be attracted to better schools in some areas .. .and the access to natural amenities common in many of these smaller communities.”

Kansas has made those type of distinctions one of its key selling points in attracting businesses and people. Wyoming has coupled its stout technology infrastructure with outdoor appeal and open spaces to offer a clear quality of place message (and recognition for one of the nation’s better business climates.)

We probably shouldn’t expect the sidewalks to be rolled up and the skyscrapers to be put back in their boxes in New York, L.A. or Boston anytime soon. Big cities will always find people and companies seeking the vibrancy and intellectual energy they offer. But small communities that can tap their diffentiators, exploit the technological capabilities and effectively integrate quality of place into their economic development strategy give site decision makers, entrepreneurs and job seekers a clear choice.

Whether you’re in a big town or a small town, what is your view on the influence quality of place plays in economic development decisions? What does quality of place mean to you in terms of economic development and how is it part of your strategy?

A customer service  center for Amazon.com, more engines for Toyota and more energy jobs for Houston leads this week’s job creation and site selection announcements:

In Kentucky, Amazon.com Inc. plans to open a 70,000-square-foot customer service facility in Winchester, investing more than $20.7 million and creating more than 550 full-time and 600 seasonal jobs by 2017. The Winchester facility will be Amazon’s first customer service center in Kentucky. The company operates three fulfillment centers in the state.

Also in Kentucky, the state’s automotive manufacturing industry is getting another boost. Toyota Motor Manufacturing Kentucky (TMMK) will increase 4-cylinder engine production by 100,000 engines per year at its Georgetown plant, creating 86 new jobs and investing $31.9 million.

Texas’ vibrant energy industry gained more momentum with the announcement that GE Energy will bring 100 technical jobs to Houston and invest $10 million in a 50,000-square-foot training center near Bush Intercontinental Airport. The investment is tied to the company’s growing interest in deep-water oil drilling. The new center will be next to GE Energy’s drilling systems technology center in Houston.

In Florida, BlueWare Inc., a Michigan-based information technology company, will relocate its operations to Melbourne on the state’s “Space Coast.” The company, which develops products that deliver a comprehensive electronic health record, expects to hire 190 employees with an average wage of $69,000 over the next four years

In South Carolina, US Fibers, a recycler of PET Post Industrial and Post Consumer material,  plans to expand its current operations in Edgefield County. The $5.5 million investment is expected to generate 48 new jobs.

A Canadian company is investing $8 million in a new wine label plant in California’s wine country. CCL Industries Inc., a manufacturer of specialty packaging for the consumer products and health-care industries, said the plant in Sonoma should be operating by the fourth quarter of this year.

Manufacturing may be making a comeback in the U.S., but many manufacturers feel ill prepared to take advantage of it, according to an article in yesterday’s USA Today. Why? Despite an upswing in sales, many businesses lack the workforce to handle the spike in orders. Hiring new workers might seem like the easiest solution to this dilemma, but as Tami Minond, owner of North Brunswick, NJ-based XPAK USA, acknowledges “a machinist is a rare bird in New Jersey.”

Spike in Production, Orders
In April, manufacturing grew at its fastest pace in 10 months, hitting 54.8 on the Institute for Supply Management’s manufacturing activity index— the highest level since June. ISM’s gauge of new orders also jumped to its highest level over the past year. Though much of the growth in production is coming from large manufacturers, they are pushing their suppliers to boost output, which is increasing work for everyone.

Boeing, for example, reported a 58 percent jump in profit in the January-March quarter, as orders for its more fuel-efficient 737 jetliner soared. Charlotte, NC-based Goodrich Corp., which makes aircraft components, also benefited, with a 27 percent jump in sales.

Normally, this trickle-down effect would be welcome news, but it’s leaving many manufacturers scrambling to find and train workers who have the technical skills needed to fill the sudden backlog of orders. This skills gap within the current workforce stems from several factors, including increased automation in plants, retiring baby boomers, a decline in students pursuing technical and vocational careers, and a lack of time and money for training among small- and mid-sized manufacturers.

Finding Qualified Workers
As the orders –and work – piles up, how can manufacturers find the help they need to keep up? For time- and cash-strapped employers, the best solution is to team up with community colleges that can provide workforce training for little to no cost. Partnering with South Carolina’s ReadySC program, which provides customized job training through the South Carolina Technical College System, helped Boeing find and train the highly skilled employees it needed after locating its second 737 jetliner assembly production facility in the state.

Apprenticeships are another way companies can cultivate talent. Many employers are also recognizing the need to work closely with schools early on to encourage the study of science, technology, engineering and math – also known by the acronym STEM  – and to entice youth to consider advanced manufacturing and other technical careers. Recognizing a lack of skill and enthusiasm among local workers for jobs growing more technical by the day, a group of floor covering manufacturers in Dalton, Ga., recently sponsored a summer career camp to get middle students excited about opportunities available in their industry.

Local universities and colleges also play an influential role in building a trained, adaptable workforce and preparing students for careers. Check out this post on OnlineUniversities.com for 15 creative ways that colleges can close the skills gap. What do you think? How can local industries, colleges and businesses work together to find and train workers to keep up with the production demands of the future?

The new Fortune 500 list is out, the annual ranking of the top publicly traded companies in the United States.

So, who’s No. 1? It depends on which way you parse the list. California is No. 1 in terms of companies on the list headquartered in the state, with 53, edging out Texas  (52) and New York (50)

Overall, ExxonMobil is No. 1, reflecting its nearly $453 billion in revenue. Energy is also a clear No. 1, occupying four of the top 12 slots on the list, and with it the energy industry in Texas and California, where all of those companies are based.

The banking and financial services sector is heavily represented, too, with mortgage giant Fannie Mae and Freddie Mac and global banking powerhouses Bank of America, J.P. Morgan Chase and Citigroup occupying spots in the top 25. (It should also be noted that top 25 conglomerates General Electric and Berkshire Hathaway have financial services holdings, too)

The U.S. auto industry is making a solid showing on the 2012 list, with General Motors and Ford taking top 10 spots and recording enormous gains in profitability. Hewlett Packard can lay claim to the title of top communications and information technology company, followed by AT&T, Verizon,  Apple and IBM.

And the impact of the health care, life sciences and pharmaceutical industry on the economy can be seen by the presence of major players in different aspects of health care in the top 25. Two enormous delivery and distribution companies – McKesson and Cardinal Health – are 14 and 21 on the ranking, respectively. Pharmacy benefits operator CVS Caremark is No. 18 and insurer UnitedHealth Group is  No. 22.

So what’s the value of having a Fortune 500 company headquartered in your region? Beyond the prestige, there’s the matter of jobs, and good-paying ones, too. Overall, the companies on the 2012 Fortune 500 employ more than 17 million people in the United States alone.

In the Charlotte NC region, for example, the eight Fortune 500 headquarters do more than just provide jobs – they also support a full range of endeavors that make the community a better place to live. Bank of America, No. 13 on the list, has done everything from supporting cultural institutions to underwriting academic programs at colleges to securing naming rights on the stadium where the Carolina Panthers play. And Fortune 500 headquarters are a magnet for other investment and job creation by companies that want to do business with them and a breeding ground for entrepreneurial talent that often starts innovative new companies.

Some communities have been fortune to have legacy industries that spawned Fortune 500-caliber companies, others have gone out and recruited them. What’s your community’s strategy? Share your thoughts and your successes on landing a major corporate player and the risks and rewards in doing it.

A new corporate headquarters for Kentucky, a major mining investment in Alabama and a significant aircraft expansion in Kansas lead the week’s investment and job creation announcements:

In Kentucky, specialty print-on-demand company CafePress Inc. will move its global headquarters to Louisville, where it already has a 140,000-square-foot fulfillment center. The company, which had been based in San Mateo CA,  plans to expand the existing operation by another 185,000 square feet and create 592 new full-time jobs as well as an investment of more than $16.5 million.

In Kansas, global aircraft manufacturer Bombardier Learjet has broken ground on the expansion of its Learjet site in Wichita. The expansion, the largest in the company’s history, includes the Bombardier Flight Test Center, the establishment of Bombardier Centers of Excellence for Engineering and Information Technology, new facilities for paint and production flight testing as well as a new delivery center and employee parking lots.

In Alabama, Walter Energy Inc., plans an investment of more than $1.2 billion that will create 530 jobs in four Alabama counties.As part of its Blue Creek Energy Project, Walter Energy will develop a new underground metallurgical coal mine in Tuscaloosa County, and a coal terminal will be located at the Port of Mobile. The project will also include a barge load-out facility in Walker County and a rail spur in Fayette County.

In Louisiana, SE Tylose will invest $120 million to build a hydroxyethyl cellulose plant at Shintech Louisiana’s Plaquemine site.SE Tylose, a sister company of Shintech, will produce HEC chiefly for latex paints to create water-soluble coatings, to adjust viscosity, to improve adhesiveness and to prevent sedimentation of the colorants. The Iberville Parish project will create 30 new direct jobs with an average annual salary of $58,000, plus benefits, while helping to retain 270 Shintech jobs. LED estimates the project also will result in 292 new indirect jobs for the Capital Region and surrounding areas of Louisiana.

In Ohio, care coordination company Quantum Health Inc. said it will maintain its headquarters in Columbus and expand local operations to create at least 525 full-time jobs, more than doubling its health-care workforce  over the next three years. Quantum Health expects to generate an additional $24.6 million in annual payroll (beyond its $11 million existing payroll) by hiring additional experienced nurses and patient service representatives as well as information technology, marketing and other positions.

Energy, technology and manufacturing are the biggest drivers of new job growth in the U.S. — that’s the consensus of a new study conducted by economist Joel Kotkin. Using employment data from the Bureau of Labor Statistics, Kotkin tracked job growth in 398 metros over the past 12 years, discovering some revealing trends. Among them:

•The return of the private sector. The government used to be the nation’s biggest source of jobs, but that is changing. For the first time since the recession, jobs in the private sector outpaced the public sector in 2011. More than half of the metros surveyed showed a decline in government jobs and an average 1.4 percent increase in private sector employment. Not only is this trend becoming apparent in government-dependent locales like Bethesda-Rockville-Frederick, Md. and state capitals, it is even extending to once recession-proof military and college towns, where federal and state budget constraints are taking their toll.

•The surge in tech. With the rise in social media and a recent influx in private-equity investment, times are good for tech companies. The center of the tech bubble, Silicon Valley, ranked fifth among the 65 biggest metro areas for job growth. But the upturn in this sector isn’t confined to California. The biggest gains are happening in cities less dependent on venture capital such as Austin, where Apple is expanding to the tune of an $308 million investment and 3,600 jobs, Raleigh-Cary, N.C., Nashville, where consumer technology protection provider Asurion recently added 500 jobs.

•The revival of manufacturing. While the manufacturing sector is still a long way from recouping the jobs it shed over the past decade, a small but significant resurgence is under way. In 2011, manufacturing expanded at three times the rate of the overall GDP, adding 425,000 jobs — above the national average. Rust Belt cities like Columbus, Ind. and Grand Rapids, Mich. are rising to the top of job growth lists once again.

All of these trends are present in the regions topping Kotkin’s lists for the best large, medium and small cities for jobs in 2012. What region had the best showing across all lists? Why, Texas, of course. Its energy-rich cities like Odessa, Midland and Corpus Christi have fueled some 200,000 jobs in the high-paying gas and oil sector, but Texas cities like Houston and Fort Worth also continue to lead in manufacturing and tech-related services.

What do you think of these rankings? Please share your thoughts below or check out our industry spotlight page for news on developments in the energy, manufacturing, biotechnology and information technology sectors.

Petula Clark knew it and so do economic development organizations.

YFactor offers some insightful thoughts on economic development and downtown place branding that notes the high-wire act that economic development organizations sometimes have to perform in  promoting their central business districts without ignoring – or worse, harming – other business districts in the community.

It can be a very delicate balancing act. No doubt that downtown relevancy is a key component of community economic development strategy, one that is enjoying a renaissance of sorts. Downtowns aren’t just centers of commerce anymore – they often are also centers of culture, entertainment and residential living, and their vibrancy can be a key part in making them centers of talent that draw and develop knowledge companies.

As author Mike Dachuk notes,  ”A vibrant downtown can create a unique destination that serves as an economic advantage for the entire community, even as a unifying symbol. Its role as a place for making connections can be an important strategic element of regional economic development. Connectivity has become vital in this mobile information age, especially for attracting young people in the creative class.”

Nashville knows it. As part of its economic development strategy, Partnership 2020 – the economic development arm of the Nashville Area Chamber of Commerce – has made he partnership has made talent recruitment one of  the cornerstones of its overall economic development strategy. Promoting Nashville’s livability is a key part of that strategy. Though Nashville has a number of vibrant business district throughout the city, Partnership 2020 leaders recognize that a strong downtown core with abundant entertainment, cultural and residential living options benefits the entire community.

It is that downtown vibrancy that attracted ServiceSource,  a service revenue management company that works to increase recurring revenue for hardware, software, health care and life sciences companies, to Nashville’s central business district, where it has since expanded. The type of workers the company tends to recruit favor working in a vibrant urban core.

Charlotte is another city where young people are driving the downtown experience – or in Charlotte parlance, the Uptown experience. Charlotte, too, has endeavored to create a lively central business district experience.

Like, Nashville, it has a number of thriving business districts throughout the city, but Uptown, once a bit sleepy after 5 p.m., is a hub of  restaurants, unique retail and cultural and entertainment gems like the Mint Museum and the NASCAR Hall of Fame. Significantly, Uptown has built a strong residential core that numbers more than 13,000 people. An Uptown youth movement is aided by major expansion and investment by the region’s colleges and universities to increase their Uptown presence.

Wichita also enjoys a number of thriving business and commercial areas. And it also is experiencing new growth and investment in its downtown, an outcome that did not occur by happenstance. A planning process that began in 2009 provided a blueprint for growth that built on successes already in place including the bustling Old Town district adjacent to downtown.

Smaller communities have a less complicated issue when it comes to downtown branding. Generally, there’s just one central business district to rally around and devote resources to, and often those efforts are aided by initiatives such as Main Street programs or other efforts.

Larger communities, though, have more complex issues, and promoting their central business districts must be weighed against the needs of other commercial district. Still, as in the cases of Nashville, Charlotte and Wichita, lively central business districts can be a major drawing card in attracting new investment and jobs that will lift an entire community.

How does your community promote its central business district and what’s your strategy for encouraging downtown growth but also nurturing your other business districts? Share your thoughts.

Plastics, furniture and automotive top the week’s expansion news, with investment and job creation announcements from Dow Chemical, Ashley Home Furniture and JTEKT.

In Texas,  Dow Chemical will create 150 new jobs and invest $1.7 billion with the location of a hydrocarbon cracker in Freeport in Brazoria County. The facility will processes natural gas and natural gas liquids to create ethylene, to produce plastic resins and other chemical intermediates used to manufacture a variety of materials including transportation, building and construction, infrastructure, wire and cable, medical devices, personal care and food packaging.

South Carolina’s booming automotive industry is seeing more investment. JTEKT Automotive South Carolina Inc., a manufacturer of automotive components, plans to expand its operations in Greenville County. The $102 million investment is expected to generate at least 80 new jobs over the next two years.

In North Carolina, Ashley Furniture, will locate a new manufacturing and distribution facility in Davie County. The home furnishings manufacturer expects to create 550 new jobs over the next five years and invest $80 million in land, buildings, machinery and equipment.

In Indiana, Steel Dynamics Inc. will invest $76 million to expand and upgrade its Pittsboro mill operation, creating approximately 50 new jobs. The company is, the nation’s fifth-largest producer of carbon steel products.

Another shot of good news for Kentucky’s bourbon business:  Heaven Hill Distilleries will create 14 full-time jobs and invest $9.5 million in Louisville’s historic district, opening a multi-million dollar artisanal distillery, tourism and retail attraction called The Evan Williams Bourbon Experience along what historically is known as “Whiskey Row” on West Main Street. More on that announcement here.

Anyone who lived through the national financial meltdown that culminated in what economists now call the “Great Recession” knew it was bad, but the numbers just confirm it.

In the four years since the economy hit rock bottom in September 2008 to the latest private sector employment count in February, only seven of the nation’s 100 biggest metros added more jobs than they lost, according to comparative data from the U.S. Bureau of Labor Statistics.

Not surprisingly, five of those cities were from Texas– a state which not only weathered the recession with amazing resilience, but also boasts the healthiest post-recession economy of any state.

Cities that created a surplus of jobs during the past four years include:

1. Houston
2. Austin
3. Pittsburg
4. McAllen-Edinburg, TX
5. El Paso
6. San Antonio
7. New Orleans

Houston and Austin set the national pace for employment growth, adding 49,500 and 29,600 jobs respectively, while Pittsburg came in third with 10,500 private sector jobs.

The Texas Job Streak
Since the recession officially ended in June 2009, the Lone Star State has earned national acclaim for creating one out of every two new jobs in the U.S. in top growth sectors such as business and processional services, education and health care, and leisure and hospitality. Texas now has more Fortune 500 companies – 58 – than any other state, including longtime corporate powerhouse New York.

Much of Austin’s private sector growth has come from a growing list of homegrown and outside companies, from local start-ups like video game developer EA Sports to multinational corporations such as Samsung, Nokia, Siemens and Fujitsu. Apple and eBay are the two latest high-profile companies to announce multimillion-dollar investments in the city – both for expansions in business, back office and customer support operations.

Not only is Houston a major center of the energy business, it also operates one of the nation’s busiest ports and, with its recent $14.7 billion surge in exports, is the second largest exporting metro in dollar values.

San Antonio is building a reputation as a growing hub for biotech research and development, and El Paso continues to thrive as North America’s largest global manufacturing center, thanks to border advantages and production sharing with maquilas in nearby Juarez, Mexico.

Bouncing Back from the Recession
Despite an upswing in hiring over the past year, most U.S. metros are still in the red when it comes to recovering their pre-recession employment levels. Look beyond the gains in the seven cities mentioned above, and the numbers start to dip dramatically. Most cities are still in the hole by thousands of jobs, but some are starting to catch up.

Charleston, S.C., for example, has kept its losses to a minimum, shedding just 5,900 jobs since the recession. With private sector employment at 236,600 as of February, the city is on pace to recover its pre-recession levels of 242,500. Along with a thriving transportation and logistics industry that includes a major East Coast port, Charleston has grown its aerospace sector, attracting investments from companies like Boeing, whose $870 million 787 Dreamliner assembly project has created more than 4,000 direct jobs in the region.

With just 7,400 jobs to recoup to reach its pre-recession levels, Nashville is also making strides, thanks to its diverse industry base and growth in its manufacturing, health care and financial services sectors.

Where does your city rank? What is being done to recoup the jobs lost and create new ones in your region? Please share your thoughts below.