GLOBAL CITIES INITIATIVEA J O I N T P R OJ ECT O F B R O O K I N GS A N D J P M O R GA N C H AS E

Munich, Germany / November 18, 2014@bruce_katz! #globalcities

Payroll Count Jobs Gap Growth-Based Jobs Gap

-10,000,000

-5,000,000

0

5,000,000

2007 2009 2014

Source: The Hamilton Project analysis of Congressional Budget Office and Current Employment Statistics data.

Post-Recession U.S. Jobs Gap !Since start of recession

Payroll Count Jobs Gap Growth-Based Jobs Gap

-10,000,000

-5,000,000

0

5,000,000

2007 2009 2014

Source: The Hamilton Project analysis of Congressional Budget Office and Current Employment Statistics data.

5.2 million!missing jobs

Post-Recession U.S. Jobs Gap !Since start of recession

1 2 3

The U.S. Manufacturing Moment1

2 3

Blurring distinction between

manufacturing and services

Relentless pace of technological

change

Shale gas and domestic energy

revolution

R&D-intensive industries that concentrate the nation’s science, technology, engineering, and mathematics (STEM) workforce

Advanced Industries

Pharmaceuticals

Medical EquipmentMotor Vehicles & Parts

Aerospace

Manufacturing35

Advanced Industries

Pharmaceuticals

Medical EquipmentMotor Vehicles & Parts

Aerospace

Manufacturing35

Oil & Gas !Extraction

Electricity !Generation

Energy3

Advanced Industries

Pharmaceuticals

Medical EquipmentMotor Vehicles & Parts

Aerospace

Manufacturing35

Software Computer Systems Design

Telecommunications R&D Consulting Services

Services12

Oil & Gas !Extraction

Electricity !Generation

Energy3

Advanced Industries

advanced industry jobs require less than a 4-year degree

1 out of 2

Wages

average advanced industry wage

$90,000average wage

$47,000>

Skills

Source: Brookings Analysis of Moody’s Analytics and BLS OES Data

Advanced Industries

PatentsGDP

Advanced Industries!Share of U.S. Totals

Share of GDP Growth

’09 – ’13

Share Job Growth

’09 – ’13

R&DJobs Exports

*Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations. Source: Brookings Institution forthcoming.

Advanced Industries

Drive Productivity in Other Industries

Stimulate Local Economies

Support Long!Supply Chains

Develop Technology that Transforms Lives

Advanced Industries

Innovation Skills Ecosystems

Advanced Industries

Japan

3.5% 4.4%

France United States

United Kingdom

3.1%

European Union

5.0%3.8%

Germany South Korea

China

5.5%

10.9%

20.7%Growth of Domestic R&D Expenditures!

Average Annual Growth, 2001-2011

Source: National Science Foundation, SEI 2014

Innovation

Innovation

Triadic patents per million workers 2010-2012 average

400

300

200

100

0

Switz

erlan

d

Swed

en

Japa

n

Finlan

d

Ger

man

y

Nethe

rland

s

United

Sta

tes

Denm

ark

Israe

l

Korea

Fran

ce

Belgium

Austri

a

United

King

dom

Luxe

mbo

urg

Irelan

d

Norway

Canad

a

Singap

ore

Advanced Industries

Innovation Skills Ecosystems

Percentage of graduates majoring in STEM fields

1

…

31

32

33

34

35

26.7%

…

21.9%

21.8%

19.3%

19.2%

18.7%

Germany…

AustraliaPoland

United StatesChileJapan

RANK VALUE

Source: OECD Global Skills Survey

Skills

Source: US Census Bureau, 2010 American Community Survey

Hispanics

19%

African Americans

Non-Hispanic Whites

Asians

25%39%

56%

Educational Attainment!Associate’s Degree or Higher

United States

36%

Skills

Source: US Census Bureau, 2010 American Community Survey

Hispanics

19%

African Americans

25%

Educational Attainment!Associate’s Degree or Higher

Skills

Advanced Industries

Innovation Skills Ecosystems

1980 2013

Major metropolitan areas with at least 10 percent of total employment in advanced industries

Ecosystems

Ecosystems

Decrease in large, integrated R&D

operationsOutsourcing of manufacturing

Diminishing job tenure and

internal training

1 2 31

2

3

Lessons from Germany

Manufacturing and the Export Economy!United States versus Germany

100

50

0Share of GDP

in mfg

Share of mfg GDP in high-tech

Exports as share of

GDP

Mfg share of mech. exports

2212

58

4254

7

82

62+$425 b

-$668 b

German trade balance in manufacturing

U.S. trade balance in manufacturing

Germany

United States

Advanced Industries

Innovation Skills Ecosystems

Innovation!Platform

Workforce & Skills Pipeline

Regional !Ecosystems

Public Funding Private Funding

Basi

c Re

sear

chAp

plie

d Re

sear

ch Innovation!Platform

Lander!Institutions

Universities Helmholtz!Association

Federal!Institutions

Max Planck!Society

Academies

Research Infrastructures

Leibniz!Association

Fraunhofer-!Gesellschaft

Networks and !Clusters

Companies/Industrial Research

Public Funding Private Funding

Basi

c Re

sear

chAp

plie

d Re

sear

ch Innovation!Platform

Industrial Research !Associations (AIF)

Lander!Institutions

Universities Helmholtz!Association

Federal!Institutions

Max Planck!Society

Academies

Research Infrastructures

Leibniz!Association

Fraunhofer-!Gesellschaft

Networks and !Clusters

Companies/Industrial Research

Public Funding Private Funding

Basi

c Re

sear

chAp

plie

d Re

sear

ch Innovation!Platform

Industrial Research !Associations (AIF)

Lander!Institutions

Universities Helmholtz!Association

Federal!Institutions

Max Planck!Society

Academies

Research Infrastructures

Leibniz!Association

Fraunhofer-!Gesellschaft

Networks and !Clusters

Companies/Industrial Research

Public Funding Private Funding

Basi

c Re

sear

chAp

plie

d Re

sear

ch Innovation!Platform

Industrial Research !Associations (AIF)

Lander!Institutions

Universities Helmholtz!Association

Federal!Institutions

Max Planck!Society

Academies

Research Infrastructures

Leibniz!Association

Fraunhofer-!Gesellschaft

Networks and !Clusters

Companies/Industrial Research

Public Funding Private Funding

Basi

c Re

sear

chAp

plie

d Re

sear

ch Innovation!Platform

Industrial Research !Associations (AIF)

Lander!Institutions

Universities Helmholtz!Association

Federal!Institutions

Max Planck!Society

Academies

Research Infrastructures

Leibniz!Association

Fraunhofer-!Gesellschaft

Networks and !Clusters

Companies/Industrial Research

Public Funding Private Funding

Basi

c Re

sear

chAp

plie

d Re

sear

ch Innovation!Platform

Industrial Research !Associations (AIF)

centers6723,0006-8,000

employees

projects per year

!

$2 billion annual research

SMEs

centers6723,0006-8,000

employees

projects per year

!

$2 billion annual research

Lander!Institutions

Universities Helmholtz!Association

Federal!Institutions

Max Planck!Society

Academies

Research Infrastructures

Leibniz!Association

Fraunhofer-!Gesellschaft

Networks and !Clusters

Industrial Research !Associations (AIF)

Companies/Industrial Research

Public Funding Private Funding

Basi

c Re

sear

chAp

plie

d Re

sear

ch Innovation!Platform

Workforce & Skills Pipeline

Innovation!Platform

Regional !Ecosystems

Wor

kfor

ce &

Ski

lls

Pipe

line

Completion of Lower Secondary School

Wor

kfor

ce &

Ski

lls

Pipe

line

15% Fachoberschulen & Berufsfachschulen!Full-time technical education and training.

Wor

kfor

ce &

Ski

lls

Pipe

line

Com

plet

ion

of L

ower

Sec

onda

ry S

choo

l

15% Fachoberschulen & Berufsfachschulen!Full-time technical education and training.

30% Gymnasium!Continued classroom studies and the!pathway to university.

Wor

kfor

ce &

Ski

lls

Pipe

line

Com

plet

ion

of L

ower

Sec

onda

ry S

choo

l

Dual Berfusauddildung!The dual system of training in which students train 3-4 days per week, complemented by teaching in vocational school 1-2 days per week !

45%

15% Fachoberschulen & Berufsfachschulen!Full-time technical education and training.

30% Gymnasium!Continued classroom studies and the!pathway to university.

Wor

kfor

ce &

Ski

lls

Pipe

line

Com

plet

ion

of L

ower

Sec

onda

ry S

choo

l

Dual Berfusauddildung!The dual system of training in which students train 3-4 days per week, complemented by teaching in vocational school 1-2 days per week !

45%

15%

30%

Fachoberschulen & Berufsfachschulen!Full-time technical education and training.

Gymnasium!Continued classroom studies and the!pathway to university.

Wor

kfor

ce &

Ski

lls

Pipe

line

Com

plet

ion

of L

ower

Sec

onda

ry S

choo

l

Dual Berfusauddildung!The dual system of training in which students train 3-4 days per week, complemented by teaching in vocational school 1-2 days per week !

45%

15%

30%

Fachoberschulen & Berufsfachschulen!Full-time technical education and training.

Gymnasium!Continued classroom studies and the!pathway to university.

Dual Berfusauddildung!The dual system of training in which students train 3-4 days per week, complemented by teaching in vocational school 1-2 days per week !

45%

15%

30%

Fachoberschulen & Berufsfachschulen!Full-time technical education and training.

Gymnasium!Continued classroom studies and the!pathway to university.

Innovation!Platform

Workforce & Skills Pipeline

Regional !Ecosystems

Munich

Aschheim

Neufarn

Ismaning

Am Hart

Oberschleissheim Regional !Ecosystems

Regional !Ecosystems

Regional !Ecosystems

Regional !Ecosystems

Regional !Ecosystems

1 2 31 2

3 Delivering the German !Model in the United States

Advanced Industries

Innovation Skills Ecosystems

Innovation Skills Ecosystems

Innovation Skills Ecosystems

Innovation Skills Ecosystems

GLOBAL CITIES INITIATIVEA J O I N T P R OJ ECT O F B R O O K I N GS A N D J P M O R GA N C H AS E

Munich, Germany / November 18, 2014@bruce_katz! #globalcities

Metropolitan Policy Programat BROOKINGS