Evaluating Tallahassee’s Future in the New Economy Tim Lynch, Ph.D., Director Julie Harrington,...

Evaluating Tallahassee’s Future in the New Economy

Tim Lynch, Ph.D., DirectorJulie Harrington, Ph.D., Asst. Dir.

Center for Economic Forecasting and Analysis

Florida State Universitywww.cefa.fsu.edu

May 2, 2002

What are the attributes of the New Economy?

An increased trend towards globalization.

Increased levels of business growth, flexibility and competition driven by information technologies (IT).

Higher levels of entrepreneurial activity and creativity.

Higher levels of productivity and income dispersion and quality of life.

What is the New Economy Index?

The New Economy Index evaluates and compares the “high tech economic” strength of US Metropolitan Areas (MSA).

The 50 largest US MSAs have been evaluated and ranked.

Tallahassee and 268 medium and smaller cities have not been evaluated.

This study will evaluate Tallahassee and 19 other Florida metro areas with the New Economy Index.

Goods

ServicesCapital

Productivity

Profits

Low cost productionStrong economy

Entrepreneurs

Old Economy

People

Goods

ServicesCapital

Higher productivityHigher wages

Higher quality of life

Higher profits

Entrepreneurs

More resilient economyHigher efficiency

Higher wealth

New Economy

People

WHAT ARE THE ATTRIBUTES OF THE

“OLD ECONOMY”?

1.People

Measures

Per capita incomeAverage earningUnemployment levelTraining levelLabor productivity

Old Economy

2.Capital

Measures

Infrastructure valueInvestment levelCapital ProductivityLand value

Old Economy

3.Entrepreneurs

Measures

Number of new companies Investment rateProfit levelR&D level

Old Economy

WHAT ARE THE ATTRIBUTES OF THE

“NEW ECONOMY”?

1.People

Measures% Of managerial, professional and technical jobsLevel of workforce education% Of high-tech jobs# Of degrees granted in science and engineering % Of online adult population

New Economy

2.Capital

Measures

Broadband telecom capacityComputer use in schoolsCommercial internet domain namesInternet backbone

New Economy

3.Entrepreneurs

Measures

% of gazelle jobs % of job churning # of patents$ amount of academic research$ amount of venture capital# of new publicly traded companies

New Economy

22%29%

42%

54%

13%7%

$0

$100

$200

$300

IT % of All U

S Private Investments

Old economy New economy

1950 1960 1970 1980 1990 2000

0%

20%

40%

60%

Source: Chase Econometrics, 4-15-2002

US

Wo

rker

Ho

url

y M

anu

f P

rod

uct

ion

% IT

Investm

ent R

ate

US Manufacturing Worker Hourly Production ValueVs The It Investment Rate

(Constant 2002$)

Knowledge Jobs

1. Office Jobs % of Total 2. Managerial/Professional Jobs % of Total 3. Workforce Education Levels

Globalization

4. Export Sales Per Manufacturing Worker

5. Gazelles- Number of Jobs in High Growth Companies 6. Job-Churning - % of New Jobs Created & Old Destroyed 7. New Publicly Traded Companies - Number of New Initial Public Offerings

Economic Dynamism and Competition

New Economy Index Measures

8. Online Population - % of Adult Population On Line 9. Commercial Internet Domains Registered 10. Computer Use in Schools - Percent of Students Accessing Internet 11. Internet backbone capacity - Fiber Network Capacity Connecting the MSA 12. Broadband Telecommunications Capacity - Number High Speed Access Providers

13. High-Tech jobs - % of all Jobs in High Tec Areas 14. Science & Engineering Graduates - Number of S&E Graduates 15. Patents - Number of Patents Issued

Transformation to the Digital Economy

Technological Innovation Capacity

New Economy Index Measures

KNOWLEDGE JOBS

Knowledge Jobs Managerial Professional Technical Jobs

Percentage of jobs held by managers Rank The top five: professionals and technicians:

1 Washington, D.C. 48%2 Austin 46%3 Gainesville 46%4 Hartford 46%5 Denver 45%

Tallahassee Ranking

14 Tallahassee 39%The bottom five:

62 Panama City 22%63 Ocala 21%64 Naples 19%65 LakeLand 19%66 Punta Gorda 18%

U.S. MSA Average 37%U.S. and 16 Fl MSA Average 35%Source: Bureau of Labor Statistics, 2000.Occupational Employment Statistics.

Knowledge Jobs Workforce Education

A weighted measure of theworkforce educational

Rank The top five: attainment composite score1 Gainesville 0.83

2 Tallahassee 0.753 Washington, D.C. 0.744 San Francisco 0.695 Denver 0.68

The bottom five: 62 Las Vegas 0.4463 San Antonio 0.4464 Punta Gorda 0.4165 Lake Land 0.3766 Ocala 0.36

U.S. MSA Average 0.58U.S. and 16 Fl MSA Average 0.57

Source: Bureau of Labor Statistics, 2000. Occupatinoal Employment Statistics

GLOBALIZATION

Globalization Export Focus Manufacturing

Export Sales PerRank The top five: Manufacturing Employee

1 Miami $169,836 2 Seattle $129,000 3 Richmond $86,000 4 San Francisco $80,000 5 Houston $75,000

Tallahassee Ranking

61 Tallahassee $9,851

The bottom five:62 Sarasota $8,812 63 Ocala $7,625 64 Naples $6,446 65 Pensacola $4,151 66 Las Vegas*

U.S. MSA Average $38,200U.S. and 16 Fl MSA Average $36,491

* Nondisclosure restraint on data, 1998

Source: International Trade Administration, 1998 Export Sales.

ECONOMIC DYNAMISM

Economic Dynamism Gazelles % Fast Growing Companies

Jobs in fast-growingcompanies as a percentage

Rank The top five: of total employment:1 Orlando 16.2%2 Las Vegas 14.5%3 Charlotte 12.6%4 San Francisco 11.9%5 Phoenix 11.2%

Tallahassee Ranking

11 Tallahassee 10.7%

The bottom five:62 Oklahoma City 8.0%63 Dayton 7.8%64 Raleigh-Durham 7.2%65 Seattle 7.0%66 Norfolk 5.9%

U.S. MSA Average 9.7%U.S. and 16 Fl MSA Average 9.9%

Source: Cognetics, 1998 Data and CEFA (see appendix)*

Economic Dynamism Job Churning

Job Gain & Loss Rate Employment gain and loss

Rank The top five: rate within enterprises (score)1 Denver 11.32 Atlanta 11.23 Phoenix 11.14 Las Vegas 11.1

5 Dallas 11.0

Tallahassee Ranking45 Tallahassee 9.7

The bottom five:62 Cincinnati 9.263 Pittsburgh 9.164 Hartford 9.065 Rochester 8.466 Gainesville 8.1


Source: Cognetics 1994-1998 Data and CEFA (appendix)* Florida Department of Labor, 2001 - CEFA

Economic DynamismNew Publicly Traded

Initial Public OfferingsNumber of IPOs per 10 billion dollars

Rank The top five: of GMP1 San Francisco 32.3 2 Seattle 28.1 3 West Palm Beach 11.8 4 Boston 10.0 5 Austin 9.4

56 Tallahassee 0.0

The bottom five:

U.S. Average 3.83 Source: http://www.edgar-online.com

Sixteen Metropolitan areas, including Tallahassee, had no initial public stock offerings (Tallahassee, Orlando, Panama City, Richmond, Pensacola, Buffalo, New Orleans, Ft. Pierce, Dayton, Ft. Walton Beach, Daytona Beach, Norfolk, Jacksonville, Grand Rapid

THE DIGITALECONOMY

Percent of adultsRank The top five: online 1999

1 San Francisco 56.1%2 Austin 55.5%3 Seattle 53.3%4 Washington DC 52.8%5 Gainesville 52.5%

Tallahassee Ranking7 Tallahassee 49.6%

The bottom five:62 Lakeland 33.1%63 Ocala 32.9%64 Pittsburgh 30.8%65 Richmond 24.6%66 Rochester 24.5%

U.S. MSA Average 44.6%U.S. and 16 Fl MSA Average 41.7%Source: Scarborough Research, 1999 Data. US Bureau of the Census, 2001, CEFA.

The Digital Economy Online Adult Population

The Digital Economy Broadband Telecommunications

CapacityAverage number of broadband

Rank The top five: providers per zip code area:1 San Francisco 4.62 Denver 4.53 San Diego 4.44 Phoenix 4.35 Los Angeles 4.2

The bottom five:62 Ft. Pierce 1.663 Ocala 1.564 Gainesville 1.465 Pensacola 1.4

66 Tallahassee 0.8

U.S. MSA Average 2.9 U.S. and 16 Fl MSA Average 2.7

Source: FCC Web Site: http://www.fcc.gov/Bureaus/Common_Carrier/Reports/FCC-State_Link/IAD/hzip1299.pdf

The Digital Economy Computers Used In K-12 Schools

Percentage of children using Rank The top five: computers in the classroom:

1 Louisville 81%2 St. Louis 80%3 Milwaukee 79%4 Rochester 79%5 Pittsburgh 79%

Tallahassee Ranking46 Tallahassee 63%

The bottom five:62 Los Angeles 58%63 Grand Rapids 58%64 Las Vegas 57%65 Tampa 56%66 West Palm Beach 49%

U.S. MSA Average 68%U.S. and 16 FL MSA Average 67%Source: Department of Education Survey, 1998.

The Digital Economy Commercial Internet Domain Names

Rank The top five: ".com” domains names per firm (plus 10)

1 San Francisco 13.82 Los Angles 12.43 San Diego 12.34 Austin 11.85 Washington, D.C. 11.5


The bottom five: 62 Ft. Myers 8.963 Pensacola 8.964 Ft. Pierce 8.965 Panama City 8.866 Lakeland 8.7

U.S. MSA Average 11.0U.S. and 16 FL MSA Average 10.0

Source: Mattew Zook, 2000. http://www.zooknic.com

Rank The top five: Internet backbone capacity (Mbps) per 1,000 employees:

1 Salt Lake City 103

2 Tallahassee 923 Kansas City 784 Atlanta 595 Dallas 57

The bottom five: 62 Lakeland 063 Panama City 064 Ft. Myers 065 Punta Gorda 066 Sarasota 0

U.S. MAS Average 32U.S. and 16 Fl MSA Average 29

Source: Ed Malecki, and CEFA 2000. Total internet capacity in Mbps.

The Digital Economy Internet Backbone Capacity

INNOVATIONCAPACITY

Innovation Capacity Level Of High Tech Jobs

Rank The top five: High-tech jobs as a percentage of all jobs:

1 Austin 9.0%2 San Francisco 8.6%3 Melbourne 8.1%4 Raleigh-Durham 8.0%5 Boston 7.1%

Tallahassee Ranking48 Tallahassee 2.5%

The bottom five: 62 Ft. Lauderdale 1.5%63 Gainesville 1.4%64 Punta Gorda 1.4%65 New Orleans 1.2%66 Las Vegas 1.1%

U.S. MAS Average 3.5%U.S. and 16 Fl MSA Average 3.5%

Source: BLS-ES-202 data,1997.

Rank The top five: Weighted score: 1 Gainesville 14.8

2 Tallahassee 12.1 3 Pensacola 11.4 4 Melbourne 11.4 5 Raleigh-Durham 10.7

The bottom five:62 Sarasota 9.5 63 Las Vegas 9.5 64 Ft. Walton Beach 9.4 65 Punta Gorda 9.2 66 Naples 9.2

U.S. MSA Average 10.0 U.S. and 16 Fl MSA Average 10.0

Source: NSF CASPAR Database, 1998.

Innovation Capacity Degrees Granted In Science & Engineering

Rank The top five: Patents per 1,000 workers (weighted score)

1 Rochester 2.332 San Francisco 1.453 Austin 1.384 Minneapolis 0.855 San Diego 0.84


The bottom five:62 Lakeland 0.1563 Ft. Walton Beach 0.1564 Las Vegas 0.1465 Nashville 0.1466 Norfolk 0.13


Source: U.S. Patent and Trademark Office, average of 1996,1997,and 1998 data, PPI,2000

Innovation Capacity Patents Issued

Innovation Capacity Academic Research & Development Funding

Rank The top five: (weighted score)

1 Gainesville 14.62 Raleigh-Durham 13.0

3 Tallahassee 11.34 Boston 10.75 Washington DC 10.5

The bottom five:62 Panama City 9.663 Grad Rapids 9.664 Ft. Pierce 9.665 Ft. Walton Beach 9.666 Sarasota 9.6

U.S. MSA Average 10.0U.S. and 16 Fl MSA Average 10

Source: NSF CASPAR Database, 1997.

Rank The top five: Venture Capital as a Share of GMP

1 San Francisco 5.50%2 Seattle 2.71%3 Austin 1.83%4 Boston 1.53%5 Raleigh-Durham 1.35%

The bottom five:62 Ft. Pierce 0.00%

63 Tallahassee 0.00%64 Greensboro 0.00%65 Ft. Walton Beach 0.00%66 Ft. Myers 0.00%

U.S. MSA Average 0.46%U.S. and 16 Fl MSA Average 0.36%

Source: Florida Venture Forum.

Innovation Capacity Venture Capital Funding Levels

FINAL TALLAHASSEE

RANKING

Tallahassee’s Final Ranking Among The US MSAs Evaluated

0

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40

50

60

70

80

90

100

TALLAHASSEE RANKS 11th OUT OF 66 US MSAs EVALUATED

GLOBALIZATION NATIONAL RANK

• EXPORT SALES 61

THE DIGITAL ECONOMY• BROADBAND TELECOM CAPACITY 66

ECONOMIC DYNAMISM• # OF NEW PUBLICLY TRADED IPOs 60 • JOB CHURNING 45

INNOVATION CAPACITY • VENTURE CAPITAL 63

• PATENTS 58

Tallahassee has an opportunity to build

strength in:

RECOMMENDATIONSBusiness and government must partner

together to expand :

• Broad band high speed Internet access to all business, educational and residential need.

• Business community access to venture capital.

• Regional creative innovation, business formation and trade efforts and job creation.

KNOWLEDGE JOBS NATIONAL RANK

• HIGHLY EDUCATED WORK FORCE 2

• MANAGERIAL, PROFESSIONAL, TECH 19

THE DIGITAL ECONOMY• INTERNET SUPERHIGHWAY LINKAGE 2

• ONLINE POPULATION 7

ECONOMIC DYNAMISM• GAZELLES 11

INNOVATION CAPACITY • DEGREES GRANTED IN SCIENCE & ENGINEERING 2

• ACADEMIC RESEARCH & DEVELOPMENT FUNDING 3

Tallahassee has a strength in:

RECOMMENDATIONSBusiness and government must partner to:

Build on our strengths - high levels of professional/technical jobs and a highly educated, online-savvy workforce, student base and general population.

Communicate to prospective and existing businesses Tallahassee’s strong “high tech” ranking, Internet access and dynamic economy.

Convert our excellent science, engineering and research capabilities into commercially viable local ventures.

Evaluating Tallahassee’s Future in the New Economy Tim Lynch, Ph.D., Director Julie Harrington,...

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