Driving Washington’s Prosperity A Strategy for Job Creation and Competitiveness

TACTC Legislative Contact Conference January 30, 2013

Olympia, Washington

Presented to:

Senate Trade & Economic Development Committee January 29, 2013

Olympia, Washington

Presented by:

Steve VanAusdle, Vice-Chair, WEDC Egils Milbergs, Executive Director, WEDC

Washington Economic Development Commission (www.wedc.wa.gov)

Investment Infrastructure Talent

Jobs, Wages, and Standard of Living

Productivity*

Innovation and Entrepreneurship

Regulations Trade

*Improving Productivity will require more innovative uses of existing resources.

Our mandate: Foster Innovation Economy

“Legislature finds that in order to achieve long-term global competitiveness, prosperity and economic opportunity for all the state’s citizens, Washington state must become the most attractive, creative and fertile investment environment for innovation in the world…”

An act relating to

WA Economic Development Commission ‒ Intent RCW 43.162.005

WA Economic Development Commission 3

Our Mandate: Foster Innovation Economy

“Provide leadership, direction and guidance for…”

– Shared economic development vision

– Long-term, strategic policy model

– Public-private partnership

– Collaboration across boundaries

– Data standards and evaluation of state economic development system

– Recommendations to Governor and Legislature

An act relating to

WA Economic Development Commission RCW 43.162

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Commission Membership

The problem we need to solve!

6 WA Economic Development Commission

Data source: U.S. Bureau of Labor Statistics

-197.73

-85.1

-250

-200

-150

-100

-50

0

50

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55

Dif

fere

nce

wit

h I

nit

ial

Per

iod

Em

plo

ym

ent

(Th

ou

san

ds

of

Wo

rker

s)

Months of Recovery

Jobs Recovery Since Start of Recession Seasonally adjusted non-farm employment, based on 3mma

2001 Recession (3 quarters)

Current Recession

April 2008

56 months

WEDC 2.0 7 Data source: Washington State Employment Security Department.

Largest Absolute Changes in Employment October 2012 year-over-year, based on 3 month moving average

Largest Manufacturing Sectors, 2011 By employment, four digit NAICS

WA Economic Development Commission 8

Aerospace Product and

Parts Manufacturing

Ship and Boat Building

Fruit and Vegetable

Preserving and Specialty

Food Manufacturing

Navigational, Measuring,

Electromedical, and Control

Instruments Manufacturing

Plastics Product

Manufacturing

Seafood Product

Preparation and

Packaging

Architectural and

Structural Metals

Manufacturing

Other Miscellaneous

Manufacturing

Sawmills and Wood

Preservation

Semiconductor and Other

Electronic Component

Manufacturing

-35.0%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0

Em

plo

ym

ent

Ch

an

ge,

20

07

-2011

Location Quotient, 2011 Data source: U.S. Bureau of Labor Statistics,

Census of Employment and Wages; author’s calculations.

Change in Non-Farm Employment by Metro Area November 2012 year-over-year, based on 3 mma, seasonally adj.

WA Economic Development Commission 9 Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics.

-1.5%

-1.0%

-0.1%

0.2%

0.8%

0.8%

1.8%

2.0%

2.0%

2.7%

3.0%

4.5%

-2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

Rest of State

Kennewick-Pasco-Richland

Bremerton-Silverdale

Longview

Olympia

Wenatchee-East Wenatchee

Yakima

Spokane

Mount Vernon-Anacortes

Tacoma

Seattle-Bellevue-Everett

Bellingham

Unemployment rates by county, Nov. 2012

WA Economic Development Commission 10

Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics.

Resetting the Economic Development Model

Recruitment-driven Innovation-driven

Investing in company relocation

Investing in talent, ideas and infrastructure

Preserve jobs, safety nets Create jobs, grow incomes

Top down development, short-term fixes

Bottom-up organic growth, long-term view

Competing regions, closed systems

Collaborating regions, open innovation

11 WA Economic Development Commission

Tuning the productivity engine in response Innovation in five drivers for jobs and competitiveness

12 WA Economic Development Commission

Intellect

Investment

Infrastructure

Improvement (regulatory)

International

Driver One: Fueling the Future

Future—Making Talent a Top Priority Making talent a top priority

1. Create jobs for Washingtonians and industry needs by achieving 60% post-secondary degrees & credentials.

2. Increase pool of qualified workers by emphasis on STEM proficiencies and career and technical education at the HS level.

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Prof.

Technical

Unskilled

Prof.

Unskilled

Technical

Driver Two: Adding Horsepower

Future—Making Talent a Top Priority

Investing in entrepreneurship

1. Improve tax and regulatory policy to foster growth of start-ups and job creating business clusters

2. Invest in world class research talent, assist new enterprise formation and help connect the state's research base to industry, entrepreneurs and investors.

WA Economic Development Commission 15

Driver Three: Paving the Way

Future—Making Talent a Top Priority

Connecting through reliable infrastructure

1. Implement alternative financing mechanisms for transportation infrastructure for asset preservation, freight mobility and investment in economic corridors.

2. Require economic development and long term job creation criteria in the capital budgeting process.

WA Economic Development Commission 16

Driver Four: Running Lean

Future—Making Talent a Top Priority Regulating Smarter

1. Systematically review on sector-by-sector basis all state regulations for their cost-effectiveness and determine overlaps, excessive costs, obsolescence, redundancy and solutions.

2. Expand agency use of lean process improvement to lower cost of regulatory compliance and reduce time delays.

WA Economic Development Commission 17

Manufacturing Testimony to Senate Christina Lomasney, Modumetal

November 29, 2012

WA Economic Development Commission 18

Driver Five: Firing on all Cylinders

Future—Making Talent a Top Priority Expanding international business

1. Intensify innovation and collaboration in the Pacific Northwest economic region and support cross-border projects for economic diversification, expanded trade and jobs.

2. Drive job creation through a coordinated system of trade services between the programs of Washington State and regional and federal programs.

WA Economic Development Commission 19

Birgitte Ahring WSU

Biofuels

Chen-Ching Liu WSU

Smart Grid

WA Economic Development Commission

Scientific teams in: • Energy systems • Smart Grid • Bio-fuels • Energy Storage

Washington State University – STARS

Strategy Framework in Action Strategically Targeted Researchers - STARS

University of Washington – STARS

Jonathan Posner UW

Next Generation Batteries

& Fuel Cells

Jihui Yang, UW Next Generation

Batteries & Energy Recovery

Brandon Pierquet, UW Design of electronic

systems power electronics, electric

vehicles

University of Washington – STARS

Daniel Kirchen, UW

Smart Grid

Strategy Framework in Action 20 Entrepreneurs in Residence

WA Economic Development Commission 21

Since inception: 24 EIRs, 59 start-ups, 68 opportunities in the pipeline

11 EIRs, 8 start-ups, 107 direct jobs

2 Regional EIRs, pilot program to foster partnerships, 9 opportunities in the pipeline

Strategy Framework in Action 15 Innovation Partnership Zones

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Strategy Framework in Action Next50 – Innovation Contest

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WEDC co-hosted the Commerce & Innovation Economy Month • Create inspiration short video on Innovation for the next 50 years. • Judged on Content; creativity, quality, imagination, entertainment, quality

and popularity

Vision Foster a Healthy Economy

and a Healthy Environment

Mission

Collaborators

Initiatives

Values

K-12

University Center

WWCC

County

City

Port

Chambers of Commerce

Tourism Walla Walla Wine

Alliance Art

Alliance

Sustainable Living Center

Wallowa Resources

Utilities

Dept. of Ecology

Salmon Recovery

Board

Confederated Tribes

Water Center

Walla Walla Watershed Partnership

Enology & Viticulture

Center

Downtown Foundation

Career Pathways

Infrastructure

Business Development

Wine & Hospitality Cluster

Renewable Energy

Energy Efficiency

Water Efficiency

Water Quality

Watershed Restoration

Skills Center

Workforce Development

Rural Center for Entrepreneurship

Collaboration

Excellence

Integrity

Entrepreneurship

Partnerships

Sustainability

Innovation Diversity

Learning

Strategy Framework in Action: The Innovation Ecosystem (IPZ) in Walla Walla

Economic, Environmental, and Cultural Sustainability

As Goes Manufacturing, So Goes the Washington (and Nation)

Strong association between manufacturing GDP and real GDP of a state or nation.

Integrating new knowledge and producing more complex products and utilizing more advanced manufacturing processes leads to greater economic prosperity.

The linkage between the knowledge networks and drivers of advanced manufacturing is a very strong predictor of the variation in incomes across states and nations.

Teamwork wins this Race! www.wedc.wa.gov

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