Dean Barber

Idiots Abroad: My Entirely Too Long European Vacation with A Few Business Meetings Thrown In

In Corporate Site Selection and Economic Development on June 18, 2017 at 3:16 pm

A lot can happen in three weeks. And a lot did happen in the three weeks that my wife and I were rumbling, bumbling and stumbling through Europe.

President Donald Trump announced the U.S. would withdraw from the Paris Climate Accord when we were in Paris. In more Trump news, the president announced travel and business restrictions toward Cuba, while fired FBI Director James Comey accused the Trump administration of telling “lies” in testimony before the Senate Intelligence Committee.

A gunman fired at Republican members of Congress as they held a baseball practice, wounding House Majority Whip Steve Scalise and four others. General Electric announced that CEO Jeff Immelt would step down after nearly 16 years on the job, and Amazon said that it would be buying Whole Foods.

Meanwhile, I was getting telephone calls and emails relating to my business/economic development consultancy back home. While I had others working on my behalf while I was gone, I still felt untethered and isolated.

Lucky For Me

Amplifying this feeling was the fact that doing relatively simple things, like driving, buying gas, parking, really making any sort of purchase, could be challenging if not completely perplexing in the countries that we were visiting. Indeed, there were times when I felt like a complete idiot, which lucky for me is “idiot” in French, “idiota” in Spanish, Portuguese and Italian.

Mind you, I have been to Europe many times on business trips. However, those trips were mostly in places where English is more widely spoken, and where there was a buttoned-down itinerary that never left me truly out of my element.

This trip was different. Most of it, not all, was in southern Europe where outside of the confines of our hotel, “bonjour” or “buenos dias” or “bom dia’ or “buongiorno,” followed by “do you understand the words coming out of my mouth?” were met mostly with quizzical looks. (I think one fellow thought I was asking him where I could buy a giraffe.)

We in turn responded with our own dog-like quizzical looks when people would speak to us in French, Spanish, Portuguese and Italian.

Playing the Part

But the language barrier, while real, is really not so bad and could be viewed as a plus. Being an idiot abroad should, if you have any smarts about you, cut down your ego, which in turn should make you more humble and polite. Being a polite if not somewhat clueless tourist can have its perks if you play your cards right.

We played the part of touristes to the hilt in Versailles and Paris and Geneva; turistas in Barcelona and Lisbon (Lisboa); and turisti in Milan (Milano), Florence (Firenze), Venice (Venezia) and Rome (Roma), and were treated quite nicely in all these great cities.

Most if not all date back to the days of the Roman Empire, and all exemplify incredibly beautiful art and architecture, good food, and the wealth and power of the Catholic Church.

I Shall Dream of It

I cannot tell you with certainty how many grand cathedrals I entered (probably a dozen), or how many grandiose paintings and sculptures that I saw of figures from the Bible, saints, popes and martys, sometimes naked or nearly naked, sometimes not.

The one that left the biggest impression on me was St. Bartholomew Flayed (1562) in the Milan Cathedral. It is a gruesomely realistic, sculptured figure of a stoic, skinless young man.

During a tour of the Milan Cathedral in 1867, Mark Twain found the statue by Marco d’Agrate repulsive. “I am very sorry I saw it, because I shall always see it now. I shall dream of it sometimes.”

My Consternation

Also in Milan, I got to see one of the world’s most famous paintings, The Last Supper by Leonardo da Vinci. It sits inside the Convent of Santa Maria delle Grazie. The painting depicts the consternation that occurred among the Twelve Disciples when Jesus announced that one of them would betray him.

After viewing the painting, I experienced a bit of my own consternation when I entered the restroom at the convent. Rather than a toilet, there was a hole in the tiled floor with designated places to put your feet before essentially squatting. I chose not to.

Among the Herd

In Vatican City, which is a separate country within the confines of Rome, we were able to see the Sistine Chapel ceiling, painted by Michelangelo, a cornerstone work of High Renaissance art.

Central to the ceiling painting are nine scenes from the Book of Genesis, which I did not get to fully fathom, because I was stuck in the midst of a tightly bunched, moving herd of tourists that was being shunted in and out of the chapel.

Indeed, in many of the places that we visited, there were entirely too many tourists present. American journalist Russell Baker said, “The worst thing about being a tourist is having other tourists recognize you as a tourist.”

As I did not wear a ball cap, or shorts, or athletic shoes in my travels, I tried not to look the part of a tourist, although I am sure that I mostly failed in that regard.

At times we were able to successfully bust out of the herd, only to be caught up in it again. It was frustrating.

Looking the Part

Businessmen truly look the part in northern Italy, particularly in Milan. They invariably wore wonderfully tailored suits and almost all carried fine leather briefcases.

I had several productive business meetings, and while I was always treated with great reverence and respect, I left the meetings feeling that I was under dressed. I won’t make that mistake again, even if I am on vacation.

One meeting in particular reminded me of the importance of establishing trust and relationships in business and this holds particularly true for European, family-owned companies.

Phase Zero

When I was an economic developer some years back, I noticed that few of my colleagues would help foreign companies set up meetings in the United States. I did just the opposite. I actively set up meetings for them, knowing full well that I could win their favor by doing so and thereby win their business.

Phase Zero is how a knowledgeable businessman in Milan explained it to me. The idea is to be willing to work on behalf of these mostly family-owned companies at no cost before a project even becomes a project.

In short, they are cautious and want to put a toe in the water to see if the U.S. makes sense for them. If you can assist in that process by setting up meetings for them, you will be remembered and stand a better chance of being hired or rewarded in some capacity.

I assured my contact in Milan that I was perfectly comfortable doing Phase Zero work with Italian companies. Indeed, that I had a history of doing such work (within reason) to prove myself to be loyal, competent and trustworthy.

Down Went Barber

I’m convinced that Europe has it all over the U.S. when it comes to healthcare. I speak from experience, as I took a face dive in the lobby of the Hilton Hotel in Paris. I busted a big gash over my right eyebrow, and found myself bleeding like a stuck pig.

The hotel manager was Johnny on the Spot and paramedics were called. They put me in an ambulance and hauled me to a hospital where they sewed me up. I got three stitches and a bill. Total cost, including the ambulance: 90 Euros, about $100.

Had that have happened to me in the U.S., the ambulance ride alone would have been $500. Total cost would likely have been more than a $1,000, maybe $2,000.

I believe healthcare in America remains one of our biggest problems and will remain so as long as the insurance and pharmaceutical industries essentially dictate terms. We could use another Teddy Roosevelt about now.

From Lion to Lamb

With stitches over my eye and a bruised cheek, I arrived in Barcelona looking like I had been in a bar fight, which was fine by me. Better to look like a lion than a lamb.

My brave exterior would soon fall away when my wife rented a scooter for us to travel about the city. Please understand that I have driven thousands upon thousands of miles on motorcycle in the United States, from coast to coast.

But put me on a scooter in five lanes of traffic in a roundabout in Barcelona (actually there were no discernible lanes or rules to go by), which is exactly what happened more times than I would like to remember, and you might have heard me cry out like a little lamb.

But somehow, someway, we survived our three weeks in Europe relatively unscathed. Well, I have one scar. We got home to Dallas late, about midnight. I was out the moment my head hit the pillow and I slept about 10 hours.

The next morning, I couldn’t help but notice that the coffee I was drinking tasted really bad. But it was good to be home.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. BBA helps companies and communities. Mr. Barber is available as a keynotes speaker and can be reached at dbarber@barberadvisors.com

Manufacturing is Common Sense

In Corporate Site Selection and Economic Development on May 21, 2017 at 7:42 pm

Our ability to perceive, understand, and judge things that are common to most of us, well, that is common sense. It is central to civilization and probably why we’re still around as a species.

Remember that Common Sense, a pamphlet written by Thomas Paine in 1775–76 advocating independence from Great Britain to people in the Thirteen Colonies, forged a nation and that which became a world superpower.

As Americans, we hold common sense to be a great attribute, that is until we elect a person to public office. Then something very strange happens. That person, who previously exhibited a great abundance of common sense, becomes a politician.

As a result, common sense becomes a casualty, and our trust in our institutions erode. Notwithstanding this erosion of faith, I truly believe in the common sense of the common man. He may not understand immediately, but he eventually discerns the truth. He will get it.

Critical to Our Nation’s Future

Which is why I am heartened by a recent survey that show that an overwhelming majority of Americans see manufacturing as critical to our nation’s future prosperity.

It is only common sense to believe this. But now it is up to our elected officials to shirk off the D or the R from their shirtsleeves, and come together to enact common sense policies to grow manufacturing in this country.

I will offer up some ideas on that front, but first let’s take a look at that recent U.S. public opinion survey by Deloitte and The Manufacturing Institute. Among the findings:

  • 83 percent believe U.S. manufacturing is critical to economic prosperity
  • 81 percent feel it is important to maintaining their standard of living.
  • 81 percent believe trade and export of U.S. manufactured goods benefits the economy
  • 76 percent believe the U.S. needs a more strategic approach to developing its manufacturing base
  • 76 percent believe the U.S. should further invest in the manufacturing industry.
  • 71 percent believe the U.S. should ensure long-term, stable funding for programs that spur innovation and advanced manufacturing.
  •  88 percent expect future manufacturing jobs will require a higher level of technical skill

They Get It

In a nutshell, this survey confirms that most Americans correctly view manufacturing as vital to America’s livelihood and that we as a country should invest more in manufacturing.

They understand that manufacturing jobs will be more high-skill and less manual labor, and they know that manufacturing fuels job creation in this country. (Something that economic developers on the state and local level have long appreciated.)

Having grown up in a manufacturing family (my father was the president of a foundry) and having worked on factory floors, I have special affinity for manufacturing. Most of the companies that I have helped as a corporate site selection consultant have been manufacturers.

They like the fact that I am true believer in manufacturing and that the location of a future plant, to which I will help in finding, is critical to its long-term operational success. Factoring costs, which includes the good, the bad and the ugly, is the essence of corporate site selection process.

The Smart Factory Needs Smart People

One critical factor in finding that optimal location for a future plant, which should not be shock to anyone, especially economic developers, is the technical talent within an existing local (commuting distance) labor pool.

As I have written many times, we are in but the early stages of a digital industrial revolution. The “smart factory” of the future, employing digital technologies such as the internet-of-things, big data analytics, artificial intelligence and advanced robotics, will require smart people.

By the end of 2022, manufacturers expect that 21 percent of their plants will be smart factories, according to a new report by Capgemini’s Digital Transformation Institute. Sectors, such as aerospace and defense, industrial manufacturing and automotive, where people are working alongside intelligent machines, are expected to be the leaders of this transition.

To suggest that the shift to smart factories will transform the labor market in this country is an understatement. Companies see automation as a means to remove inefficiencies and low-skill jobs. In short, those manning the smart factory of the future must have digital skills.

Conversely, it also means that there will be more employment opportunities for highly skilled workers in automation, analytics and cybersecurity.

Some Companies Step Up

U.S. manufacturing job openings are quickly outpacing qualified candidates, resulting in a widening skills gap across the industry. Between 2015 and 2016 an average of two unemployed manufacturing workers existed for each open position, according to the U.S. Labor Department.

Some companies, seeing a way to lower costs and accelerate innovation, are stepping up to the plate by training their existing employees to use cutting-edge digital technologies. Capgemini found in its study that more than half (54 percent) of respondents are providing digital skills training to their employees and 44 percent are investing in digital talent acquisition to bridge the skill gap.

GE, which invests more than $1 billion in employee development each year, announced in March a “Brilliant Learning” curriculum that will include immersion boot camps on advanced manufacturing, additive and other digital technologies.

“Today, manufacturing is driven by productivity – and when combined with the merging of hardware and software, the need for a highly skilled labor force is becoming integral to the success and modernization of our industry,” said Philippe Cochet, GE’s Chief Productivity Officer in a prepared statement.

“At a time when the creation and retention of U.S. jobs in America’s manufacturing cities is more important than ever, GE is helping to secure these jobs through the execution of ‘Brilliant Learning,’ and we hope it becomes a model for the industry.”

Meeting the Needs of People and Companies

A 2016 Pew Research Center survey, “The State of American Jobs,” found that 87 percent of workers believe it will be essential for them to get training and develop new job skills throughout their work life in order to keep up with changes in the workplace. Again, the common man showing a lot of common sense.

A central question about the future is whether formal and informal learning structures will evolve to meet the needs of people who want to work and “stay current” and companies who want skilled workers.

Pew Research Center and Elon’s Imagining the Internet Center surveyed technologists, scholars, practitioners, strategic thinkers and education leaders in the summer of 2016 on the future of workplace training.

Seventy percent of the 1,408 respondents said successful programs would emerge to teach new skills at the scale that is necessary to help workers keep abreast of tech changes. But 30 percent said “no,” that they do not believe adaptation in teaching environments will be sufficient to teach new skills at the scale needed to keep up with changes in technology.

Some Communities Will, Others Won’t

As one who does economic development consulting for communities in addition to corporate site selection, I see a spotty record. Some communities will make a valiant effort to offer and keep up with what is essentially vocational training that begins in elementary schools and lasts a lifetime.

It is these communities that are preparing for a smart factory future by preparing their people with needed digital skills.

Sadly, I come across some communities that are not even thinking about this, much less doing anything about it. Now guess which communities are going to do well in the future with manufacturing and which ones aren’t.

It’s only common sense. I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. BBA helps companies and communities. Mr. Barber is available as a keynotes speaker and can be reached at dbarber@barberadvisors.com

A Ho-Hum Opinion of Cars May Be Part of the Problem

In Corporate Site Selection and Economic Development on May 14, 2017 at 9:59 am

If you were to believe much of what you hear and read about this seemingly monolithic group called millennials, you might wonder if they are not an alien bunch from outer space.

Indeed, marketers and consultants have determined there is much money to be made if they can convince us that millennials have special wants and needs and cracking the code is critical if we are going to reach them

While I acknowledge there are some generational differences in how we all see the world, I suspect that much of what we are being told about millennials, which is shorthand for young Americans, is a crock.

Never mind there is no consensus on what a millennial is. Some say millennials are anyone born between 1980 and 1995 while others say it is between 1982 and 2000.

Don’t Put Them in Box

More to the point, we seem obsessed with generational labels and stereotypes.

“There’s about 80 million millennials right now and some of those millennials are CEOs in Silicon Valley, and some of them are illegal immigrants in the Midwest who are waitressing somewhere,” said Jessica Kriegel, author of Unfairly Labeled: How Your Workplace Can Benefit from Ditching Generational Stereotypes in an interview with USA Today.

“You really can’t put them all in a box. And what we do is, we put them all in a box, and that box is really based on a middle-income, white, American person and then we just say that’s the only kind of millennial that exists right now.”

We have been told ad nauseam that millennials would prefer not to own and will thereby drastically shape our future consumer society. And while there may be a kernel of truth to that, the bigger aspect is that digital technologies are changing how and what we buy via online transactions, and tech savviness has much more to do with socio-economic status than age.

They Actually Do Own

Fifty-three percent of millennials actually do own homes and overall, 88 percent of millennials who don’t hope to one day, according to a survey conducted by Qualtrics, a Provo, Utah-based survey software firm, and venture capital firm Accel Partners (a Qualtrics investor).

Nearly 80 percent of millennials own cars and 75 percent of millennials who don’t own a car aspire to own one, the Accel + Qualtrics Millennial Study 2017 found.

In last week’s blog, A Rocky Road Ahead for the Auto Industry, I wrote about how some industry analysts believe auto sales have peaked and are set to trend downward. Without trying to put them into a box, young people’s attitudes toward cars might be partly responsible.

A Softening of Drivers Licenses

One major truth facing the industry is the fact that a lower proportion of young people have drivers licenses today compared to their counterparts in the 1980s.

In a 2016 report examining changes in driver licensure in the U.S. from 1983 to 2014, researchers at the University of Michigan found a continuous decrease in the percentage of those under age 45 with a license.

About 87 percent of 19-year-olds in 1983 had their licenses, but more than 30 years later, that percentage had dropped to 69 percent. Even the proportion of Americans ages 45-69 with driver’s licenses have declined overall since 2008, following a 25-year rise.

Delayed Buyers

One could surmise from this study that millennials could bring about a historic collapse in auto sales because they will reject vehicle ownership entirely in favor of car-sharing, on-demand services and, in a few years, shared autonomous vehicles.

In fact, the share of the new-car market jumped to 28 percent for those between 21 and 38 percent in 2015, according to the J.D. Power Information Network, which defines millennials as those between 21 and 38.

That’s a big improvement from 2010, when millennials — who make up around 30 percent of the population — bought just 17 percent of new cars. That had auto executives wondering aloud if the trend would be permanent.

Still, it is probably true that many millennials simply cannot afford to buy a new car, because they are under employed and/or saddled with tons of college debt. They will either resort to buying a used car or hold off on car ownership entirely.

This is particularly true in large cities where housing prices are high, public transportation and Uber or Lyft are available and where just parking a car can be a major expense.

Even if and when these young, carless urbanites become middle-aged and move to the suburbs, thereby requiring their need for a car, the fact that they have postponed buying a car poses a problem for the auto industry. It likely means they will buy fewer cars during their lifetime.

The Utilitarian Aspect

I grew up in the generation of the “muscle car,” exclusively Detroit-powered V-8s known for creating a little havoc on the streets. The closest I got to one was a 1968 Pontiac Firebird 328. It was red with a white convertible top.

My next vehicle would be a 1969 Volkswagen bus. Even though they were vastly different vehicles, both the Firebird and the VW bus represented freedom of sorts for a dumb kid venturing out into the world.

Many of today’s young people view cars less as a status symbol and more like a utilitarian thing, like a pipe wrench. A survey last year by NerdWallet reported that while 75 percent of millennials who own a car plan to buy another within the next five years, 43 percent said owning a car is a hassle.

In short, car ownership appears not have the appeal or fascination with many young people today as it did with my generation. In a recent trip to Austin, I was struck by how many bicycles were parked outside of neighborhood bars and restaurants.  Made total sense to me now.

But again, it is lazy thinking to lump all young people into the millennial box with the belief that they think one way. A young man growing up in rural Oklahoma will likely see the world somewhat differently from a kid growing up in Boston.

For the kid in Oklahoma, that first set of wheels may indeed represent freedom, whereas the kid in Boston or Austin may be thinking, “I’ll get one if and when I have to.”

Carless in Seattle

Census data show that from 2010 to 2015, the percentage of Seattle households that own a vehicle declined, according to a report last week by The Seattle Times.

During that five-year span, car ownership among the city’s young , those younger than 35, had declined by about 3 percentage points. The data suggests that young newcomers to the city are, more often than not, choosing to forgo owning a car.

It’s a combination of economics and priorities.  As Seattle housing costs rise, cars are one expense that many young city dwellers are willing to sacrifice, Mark Hallenbeck, director of the Washington State Transportation Center at the University of Washington, told the newspaper.

“If you get away from the high set of fixed expenses that go with owning a car — monthly payments, parking, insurance — you can pay for the apartment … ,” he said. “You can go out to bars to meet your friends, and you can get around everywhere you need to go.”

Aside from the fact that many young people, particularly those living in large cities, have a rather ho-hum opinion of cars, there are likely other factors contributing to a cooling of car sales.

Too Many Cars on the Road

Deutsche Bank said in a recent report that the combination of rising interest rates and a slide in used-vehicle prices, make for a potentially not-so-good scenario for the auto industry.

Today’s cars are much more durable than in the past and fewer are being taken off the road. Scrappage has declined to about 11 million a year from about 13 million to 14 million a decade ago. Total vehicles in the U.S. have increased to 270 million, from 249 million at the end of 2012.

“This has led us to question whether the U.S. is broadly oversupplied, and whether trend demand in the 17 million range is fundamentally supported,” the Deutsche Bank analysts wrote. “If it is not, the oversupply should be self-correcting — the U.S. market will experience declining used-vehicle prices, pressuring new vehicle sales.”

Faced with the shifting consumer tastes of some (not all) millennials, an oversupply of cars on the road, and declining used-car prices, it would appear the auto industry faces some major headwinds that could result in softening sales and industry layoffs.

But this has long been a cyclical industry, with ups and downs. It should weather the storm much better than it did during the Great Recession.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. BBA helps companies and communities. Mr. Barber is available as a keynotes speaker and can be reached at dbarber@barberadvisors.com