Regions Charting New Directions -...
Transcript of Regions Charting New Directions -...
Robert Weissbourd
Regions Charting New Directions:
Metropolitan Business Planning
South Bend Economic SummitJune 21, 2012
Drivers of the Next Economy
Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Understanding Your Economy
Key Lessons and Discussion
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500%
600%
$s lbs
% C
han
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GDP Growth, 1950-2000
• Human Capital
• Information technologies
• Product innovation; flexible customization
• Firm, consumer and knowledge networks
• Increasing returns; divergence
The Global Economy is Undergoing a Fundamental Transformation, Driven by Knowledge Assets
Source: “Greenspan Weighs Evidence and Finds a Lighter Economy,” Wall Street Journal 3
0
20
40
60
80
1920s 1990s
Years Spent on the S&P Index
As a Result, the Economy is More Dynamic
Sources: Newsweek, Manyika, Lund and Auguste, “From the Ashes,” 8.16.2010; Brookings Institution
18.3%US
Global GDP (2015)
25.8%BIC Countries
20.2%US
21.4%BIC Countries
Global GDP (2010)
0%
20%
40%
60%
80%
100%
15% 20% 25% 30% 35%
GR
P G
row
th
Firm Starts and Closures (Churn) as % of All Firms
Churn and GRP Growth by MSA
-- and Global
Serv
ice E
xp
orts
75%
U.S
. Air C
arg
o W
eig
ht
79%
Airlin
e B
oard
ing
s
92%
Po
pu
latio
n
66%
Gra
du
ate
Deg
rees
75%
Ven
ture
Cap
ital F
un
din
g
94%
Pate
nts
78%
Win
d +
So
lar E
nerg
y E
mp
loym
en
t
76%
Top 100 Metros Share of U.S. Total
Sources: Brookings analysis of US Census Bureau, FAA, BLS, NIH, NSF, and BEA data; Brookings, ExportNation, 2010 (2008 data); Forthcoming research from Brookings and Battelle
Gro
ss P
rod
uct
73%
…and Centered in Metropolitan Areas
Gross Metropolitan Product, 2005
Driver’s of the Next Economy
Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Understanding Your Economy
Key Lessons and Discussion
How Metro Economies Grow
Metro economy = total value of goods and services produced in the region
Growth is inherently business sector growth (number, size and profitability of firms)
Business sector grows through firm creation, growth and location decisions (retention and attraction)
Firm creation, growth and location depend upon increases in efficiency and productivity (of firm and system, including product innovation)
Core Question: What attributes of the region increase efficiency and productivity, leading to business sector growth?
What Makes Metropolitan Regions more Productive in the Next Economy?
Economic Geography
Institutional Economics
New Growth Theory
8
Metros Can Enable People and Firms to Concentrate and Achieve Efficiencies
Act Comprehensively – The Whole is Greater than the Sum of the Parts.
Develop Institutional Capacity and Intentionality.
Customize and Build on Distinctive Assets.
Economic Geography
Institutional EconomicsNew
Growth Theory
9
Leverage Points
for Sustainable and Inclusive
Prosperity
DeployHuman CapitalAligned with
Job Pools
Create EffectivePublic & Civic
Culture & Institutions
EnhanceRegional
Concentrations/Clusters
Increase Spatial
Efficiency
DevelopInnovation-
EnablingInfrastructure
Five Market Levers Drive RegionalEconomic Performance
10
“… poverty has no causes. Only prosperity has causes. Analogically, heat is a result of active processes; it has causes. But cold is not the result of any processes; it is only the absence of heat. Just so, the great cold of poverty and economic stagnation is merely the absence of economic development. It can be overcome only if the relevant economic processes are in motion.”
-- Jane Jacobs
Photo from Shelf-Basin Interactions
Leverage Points for Sustainable and Inclusive
Prosperity
-.2
0.2
.4.6
Wag
e G
row
th (
19
90
-20
00
)
0 .1 .2 .3 .4
Poverty Rate (1990)
Equity and Opportunity are Good for Business
Neighborhoods and Regions Move in Tandem
Variation of appreciation trends across neighborhoods,King County 1990-2004
The Pieces of Economic Development …
Succeed or Fail “In Context” of Each Other
EntrepreneurshipBusiness Development
SustainabilityHousing
Workforce Training
Infrastructure
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New Approaches for the Next Economy
Driver’s of the Next Economy
Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Understanding Your Economy
Key Lessons and Discussion
Metropolitan Business Planning: A New Way of Doing Business
Grounded in Economics and Business
Comprehensive, Actionable Strategies
NOT Plans — Enterprises
Continuous Process and Improvement
Business Planning: A Proven Discipline for Comprehensive, Effective Action
Identify regional assets/opportunities
Develop customized strategies
Turn strategies into concrete actions
Build institutional capacity
Execute
Metropolitan Business Planning
Regional Economy Mission and Vision
Market Analysis
Identify Strategies and Goals
Specify Products, Services and Policies
Operational Planning
Financial Planning
Performance Monitoring
Pilot Metro Business Planning Regions
Northeast OhioPartnership for Regional Innovation Services in Manufacturing ( PRISM )
Metropolitan Business Plans in Action
Metropolitan Business Plans in Action
Puget Sound (Seattle)Building Energy-Efficiency Testing and Integration Center (BETI)
Developing Institutional Capacity
Steering Committee
Strategy 1 Team
Initiative 1AInitiative 1B
Strategy 2 Team
Initiative 2A
Strategy 3 Team
Initiative 3A
Strategy 4 Team
Initiative 4A Initiative 4B
Engage stakeholders across public, private and civic sectors
Iterate analysis/strategy and institutional development
High-level (e.g., C-suite) leadership group/steering committeeDay-to-day (staff-level) working teamsExpert/business/practitioner teams for specific strategies and
initiative developmentStrategy is coordinated; Implementation is distributed
Driver’s of the Next Economy
Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Understanding Your Economy
Key Lessons and Discussion
Understanding the South Bend Region’s Economy
South Bend MSA
Rest of “Michiana”
The Big Picture: Restructuring?
Source: Bureau of Economic Analysis; Bureau of Labor Statistics
South Bend MSA USA All Metros
80.0
90.0
100.0
110.0
120.0
2000 2002 2004 2006 2008 2010
Employment(Indexed to 2000)
$55,000
$65,000
$75,000
$85,000
2001 2003 2005 2007 2009
Productivity (Output per Worker)
$25,000
$35,000
$45,000
$55,000
2000 2002 2004 2006 2008 2010
Average Annual Wage
100
105
110
115
120
2001 2003 2005 2007 2009
Real GRP/GDP(Indexed to 2001)
Analyzing Clusters
Current Concentrations: Assets, Legacies and BetsCluster Dynamics and DriversCluster Organization
Cluster Map Source: Bo Heiden, Strategic Uses of the Global Patent System
Growth
Co
nce
ntr
atio
n
Opportunities to Target, Redeploy
Legacies? (3-digit NAICS, employment)
Bets
Assets
Manufacturing• Concentrations in primary and
fabricated metals, machinery, electrical, chemical, transportation equipment, plastics
• Connections to nearby orthopedic devices and RV/manufactured housing clusters?
• Specific sub-segments growing?
Industry Growth
Co
nce
ntr
atio
n in
Re
gio
n
Education• Leverage university strengths to
support private sector?
Communications Technology• High employment growth; High LQ;
high wage; high productivity; low absolute employment
Biotech/Life Sciences• Tie in with hospitals or Notre Dame
research?
Growth industries that build on South Bend assets?
Understanding Human Capital Dynamics
Status, Attraction and RetentionSegmentation, Skills Match and
Labor Market EfficiencyOpportunity and Mobility
High-end Production, Weak Retention
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
High SchoolDiploma
Bachelor's +
Educational Attainment
St. Joseph County
Indiana
USA
-0.1%
-0.6%
-1.1%
USA
Indiana
South Bend MSA
Growth in 25-44 Population, 1997-2009
16 Colleges and Universities High Production of Human Capital
0%
10%
20%
30%
40%
Management +Professional
Service Sales + Office NaturalResources,
Construction +Maintenance
Production,Transportation
+ MaterialMoving
Occupation Share, 2010
South Bend MSA USA Skills mismatch?Which jobs/ industries will help retain recent grads?
Cultivating Innovation
Innovation Ecosystem
MarketResearch
Marketing
Manufac-turing
Finance
R&D
Innovation PipelineCluster-based innovationInnovation ecosystem
Weak Indicators Across Pipeline
Increase university commercialization?Explore cluster-based innovation opportunities?
Enhancing Spatial Efficiency
Urban Growth FormConnectedness and Mobility
South Shore Line South Bend Airport TRANSPO St. Joe Valley Metronet
Strong Transportation Assets and Relatively Dense
Source: Center for Neighborhood Technology, Housing + Transportation Index; Innovation Index , Stats America
Residential Density Employment Density
463
500
700
South Bend MSA
Indiana
USA
Broadband Density, 2009
Connections across broader region? Jobs-housing mismatch?
Achieving Good Governance
FragmentationTax/Value PropositionGovernance
20,000
30,000
40,000
50,000
60,000
70,000
4.00% 6.00% 8.00% 10.00%
GDP Per Capita vs. Sales Tax Rate(Illustrative)
Compete on High Value instead of Low Costs
Most important public goods and services to industry, residents? Quality of these?
Regulatory processes (permitting, licensing, inspections, etc.) onerous for businesses?
Alignment of ED programs, organizations?
Govt 2.0: engaging firms and citizens, transparency, flexibility, use of public data for economic growth, …?
Services/initiatives that might be efficiently coordinated, streamlined?
Challenges &
Opportunities
Assets
Illustrative Strategy Development
Strong research assets at Notre Dame, esp. in
MicrosensingBiomedical Diagnostics
and Nanotechnology
Proximity to Warsaw’s Medical Devices cluster
Legacy manufacturing assets and human capital in need of
redeployment
Predevelopment barriers (assembly, product and market development, etc.)
Targeted, employer-driven workforce
training
Industry Innovation Center of Excellence (advanced medical
manufacturing)
Potential Strategy
Driver’s of the Next Economy
Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Understanding Your Economy
Key Lessons and Discussion
Global, Knowledge Economy
Specialization and Dynamism
Build on Your Assets
Coordinated, Cross-Sectoral, Flexible, Adaptive, Open,
Information-Rich, Inclusive,
Entrepreneurial
Compete on Value-Added
(not low-cost)
Intentionality
Economic Development
in the Next Economy
DISCUSSION
Robert Weissbourd
Regions Charting New Directions:
Metropolitan Business Planning
South Bend Economic SummitJune 21, 2012