Click to edit Master title style The Future of Economic ......Click to edit Master title style • Founded 2005 • Has served 40+ Clients • 4 full-time staff + strategic partners

Click to edit Master title style The Future of Economic Development

& Best Practices

24th Pinal County Town Hall

Presentation October 12, 2011

Chris Engle, Vice President & Chief Analyst

Avalanche Consulting

[email protected]

512-695-0100

Click to edit Master title style

• Founded 2005 • Has served 40+ Clients • 4 full-time staff + strategic

partners • Previously 10 years at other

consulting firms • Two Focus Areas:

• Economic Development • Workforce Development

About Avalanche Consulting


The Economy Today

Facing a Crisis of Confidence?

Future Drivers

ED Best Practices

Actions for Central Arizona

AGENDA

Click to edit Master title style PERSPECTIVE IS EVEN MORE IMPORTANT NOW

GLOBAL ECONOMY AND FORCES OF CHANGE

What is happening to …

MY TARGET CUSTOMERS & THEIR

NEEDS

PRIORITIES OF MY ORGANIZATION

(Incl. politics)

“Permanent Repeat”

(and myself)

Click to edit Master title style US STOCK MARKET FLAT DECADE

11,500

2000 2005 2010

Dow Jones

An “Opportunity” Barometer?…but Unclear future…

Click to edit Master title style What Does Zero Return Mean to YPs and Retirees?

162%

36% 15%

173%

310%

-5% -50%

0%

50%

100%

150%

200%

250%

300%

350%

1950's 1960's 1970's 1980's 1990's 2000's

TOTAL STOCK MARKET RETURNS BY DECADE

Dow Jones Return

Click to edit Master title style Venture Capital Returns Have Been Negative

Click to edit Master title style No More 10%+ Annual Returns to Net Worth

Source: Federal Reserve

Click to edit Master title style Unlikely Rebound for Manufacturing Employment

Source: BLS


Federal Reserve Bank Dallas

4313

811

108

1011

166

1688

24+

0 5 10 15 20 25 30 35 40 45 50

Aug'29…May'37…Feb'45…Nov'48…

Jul'53…Aug'57…Apr'60…Dec'69…Nov'73…Jan'80…Jul'81…Jul'90…

Mar'01…Dec'07…

LONGEST RECESSION SINCE THE 30’s

Months In Recession

30


What are the Drivers of

Future Growth?

AGENDA

Click to edit Master title style What New Factors/Investment Will Propel Us?

POST WAR

MIDDLE CLASS SUBURBS

GLOBALIZATION

COMPUTERS

INTERNET

?????

1950’s 1960’s 1990’s 2000’s 2010’s 1970’s 1980’s

FINANCE

What’s the next BOOST ? What will be the STORY of 2010’s ? 2020s ?

HOUSING

CHINA

Click to edit Master title style Prospect Activity by Industry 1H vs. Previous

Source: Avalanche Consulting survey of 150 EDCs in US (August, 2011)

0%

10%

20%

30%

40%

50%

60%

70%

Oct '09 Jan '10 July '10 Jan '11 Aug '11

Leads

Relocation Prospects

Prospect Visits

Expansion Prospects

Announcements

% of respondents

indicating an

INCREASE in

activity...

Prospect Activity: Percent Saying Increased Over Previous Half

Click to edit Master title style Prospect Activity by Industry 1H vs. Previous


20%

30%

40%

50%

60%

70%


Leads

Relocation Prospects

Prospect Visits

Expansion Prospects

Announcements

% of respondents

indicating activity

WILL INCREASE in

the next half...

Prospect Activity: Percent Saying Will Increase Next 6 Months


0% say Federal Policies are Good

Prospect Activity by Industry 1H vs. Previous


0%

20%

40%

60%

80%

100%


National Economy

Your State Economy

Your Community's Economy

Perception of Current Economy: Percent Saying Economy is Good or Very Good is Poor or Very Poor

0%

20%

40%

60%

80%

100%


0%

10%

20%

30%

40%

50%

60%

70%

Oct '09 July '10 Jan '11 Aug '11

Federal government

Your State government

Your Local government

Current Economic Policies are... Good Poor

0%

20%

40%

60%

80%

Oct '09 July '10 Jan '11 Aug '11

Click to edit Master title style Best Prospects Identified Last Year by EDers


Clean Energy 76% 81%

Manufacturing 70 51

Energy 67 64

Health Care Services 63 45

Food Processing 49 32

Distribution / Warehousing 46 27

Back Office / Call Centers 45 52

Metals / Machining 43 23

Technology Services / Software 43 34

R&D 38 36

Medical Products 35 25

Biotechnology / Pharmaceuticals 32 33

Engineering / Professional Services 32 25

Financial Services 31 25

Transportation Equipment 24 20

Plastics 23 10

Industrial Machinery 18 14

July-2010 Q4-2009

Economic Developers Say much has Improved (Prospect Activity For Relocations & Expansions)


What Is Working in ED ?

Best Practices

AGENDA

Click to edit Master title style Be Honest in your SWOT

Summarize Community Assessment Findings in a SWOT Analysis

Click to edit Master title style Be Honest in your SWOT

Summarize Community Assessment Findings in a SWOT Analysis

Get input from: citizens, businesses (large and small), political leadership (their vision), and outside site selectors

Click to edit Master title style Use a simple SWOT MATRIX

STRENGTHS • Leading industries • Key, unique assets • Lifestyle draws

WEAKNESSES • Infrastructure gaps • Education gaps

OPPORTUNITIES • Emerging sectors • Investment plans • Changing regional/global

dynamics in your favor •New partnerships •New goals for your organization

THREATS •What your competitors are doing

better • Changing site selection requirements • Local industries in decline (offshoring

threats)

INTE

RN

AL

EXTE

RN

AL

Filling this out in a board retreat gets everyone on the same page.

Click to edit Master title style Inventory Your Soft and Hard Assets

• How assets connect and reinforce each other are is important than quantity of X, Y, Z

• Think in terms of Community Competencies: the intersection of skills, infrastructure, corporate expertise, etc.

Click to edit Master title style Target Specificity to the Extreme


What are Your Top Targets?

AGENDA

Click to edit Master title style Employment Growth, Pinal County

• Low job creation relative to your population growth


What are Your Top Targets?

AGENDA

Click to edit Master title style Unemployment Rate, CAAG Region

Historically above the US average, but much more so during this recession.

Click to edit Master title style Industry Growth

Gila County

2000-2010

Click to edit Master title style Industry Growth

Gila County

2000-2010

Source: BLS

Click to edit Master title style CHINA EFFECT ON GLOBAL DEMAND

Impact on: • US Technology Exports

• Materials / Energy Prices

• Foreign Students

• Chinese Acquisitions of US firms

Click to edit Master title style ENTREPRENEUR JOB GROWTH IS STRONG

Jobs created by unincorporated entrepreneurs grew 3x faster than “corporate” economy in 2000s – and consistently.

Texas

Self-Employment Job Growth

Corporate Economy


More Best Practices

for Central Arizona to Consider

AGENDA

Click to edit Master title style Emphasize Outcomes over Output

• Membership Fees

• Fundraising

• Professional Team

• Engaged Stakeholders

• Community Support

Develop Resources

• Improve Community Assets

• Align Workforce Skills

• Enhance Quality of Life

• Rally Internal Support

• Market

Take Action • Job Creation

• Capital Investment

• Increased Wages

• Talent Recruitment, Retention

• Entrepreneurship, Innovation

Accomplish Goals

Output

Outcome

Click to edit Master title style Don’t Underestimate the Value of a Plan

Click to edit Master title style METRICS TO MONITOR

Economic Development

Performance is measured for the Organization and Regional Economy:

• New jobs created in the region’s target clusters

• New $$ capital investment

• New High-Paying Jobs

• Startup Growth

• Income levels / Wealth

Workforce Development

Participants Served

Placed in Jobs

Job Retention

Wage Gain

Replacement wages

Resources Leveraged

Other impacts

Economic Impacts

Click to edit Master title style Marketing Should State Your Case

Jobs created by unincorporated entrepreneurs grew 3x faster than “corporate” economy in 2000s – and consistently.

Click to edit Master title style Regionalism Delivers Best ROI on Public Dollars

Marketing requires a regional brand. The needs of your customer should come first, not your funders.

Click to edit Master title style A Strategy in a Day

A plan can be developed over several months, or internally with your board. Gathering public input and research, then facilitating an informed board retreat with clear target audiences in mind is a simple format for strategic planning. A sample board retreat agenda is provided here.

Click to edit Master title style Create a Detailed Implementation Plan

Recommendation Cost Assignment Year 1 Year 2 Year 3

1. Internal MarketingP Develop regional brand identity, logo $25,000 EDO, Chamber n

P Reception to launch new marketing campaign $1,000 EDO n

P Press conference to launch new marketing campagin $500 EDO, Executives n

P Radio and television PSAs about eco dev $7,500 EDO, Agency n n

P State of the Region business summit $10,000 EDO, Chambers, Newspaper n n n

Economic development related op-ed pieces - EDO Board n

Quarterly Coffee and Conversations $500 Chamber n n

Weekly business profile in local paper(s) - Newspaper, Executives n n

Hire full time BRE manager $55,000 Chamber n n

2. External Marketing

Tool Development

P Target company database - EDO Staff, Agency n

P Redesign sales materials with new logo $15,000 Agency, EDO n

P Social media $2,000 EDO Staff, Agency n n n

P Website updates $5,000 EDO Staff n n n

Direct Sales

Commercial real estate tour $3,500 n n n

In-bound site selection / investment forum $10,000 n n

Marketing missions $30,000 n n

Sample format for an implementation timeline, with tactical steps corresponding to the Plan, budget, assignments, and schedule all indicated in one spreadsheet:

Click to edit Master title style Get ED & WD to Collaborate in Meaningful Ways

• Reciprocal Board and Committee Engagement

• Networking and Connections

• Partner on Prospecting

• Partner on Program Development

• Partner on Fundraising

• Best Practices from National Communities

• Reciprocal Advocacy

Click to edit Master title style Example: www.RuralCapitalHeadlight.com

Click to edit Master title style FINAL 3 THOUGHTS 1. Your job

description continues to grow– don’t fear this !

THIS WAY TO OPPORTUNITY

Click to edit Master title style FINAL 3 THOUGHTS 2. Differentiate between your Vision and your

Implementation Plan

• Don’t try to do too much

• Or Promise too Much !

Click to edit Master title style FINAL 3 THOUGHTS

3. Get your workforce aligned with your economy

• Encourage youth to pursue high demand careers

• Continue to encourage better and higher education

Click to edit Master title style Education Pays Off More in Later Years

Source: US data from the US BLS

Click to edit Master title style The Future of Economic Development

& Best Practices

24th Pinal County Town Hall

Presentation October 12, 2011

Chris Engle, Vice President & Chief Analyst

Avalanche Consulting

[email protected]

512-695-0100

Documents

Click to edit Master title style The Future of Economic ......Click to edit Master title style • Founded 2005 • Has served 40+ Clients • 4 full-time staff + strategic partners