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Robert Weissbourd
Regions Charting New Directions:
Metropolitan Business Planning
Regions Charting New Directions:
Metropolitan Business Planning
Mayor’s Innovation ProjectJanuary 16th, 2013
Mayor’s Innovation ProjectJanuary 16th, 2013
Drivers of the Next Economy
Agenda Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Understanding Your Economy
Key Lessons and Discussion
0%
100%
200%
300%
400%
500%
600%
$s lbs
% C
hang
e
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 AssetsThe Global Economy is Undergoing a Fundamental Transformation, Driven by Knowledge Assets
Source: “Greenspan Weighs Evidence and Finds a Lighter Economy,” Wall Street Journal 3
1920s 1990s0
20
40
60
80
Years Spent on the S&P Index
As a Result, the Economy is More Dynamic 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)
15% 17% 19% 21% 23% 25% 27% 29% 31% 33%0%
20%
40%
60%
80%
100%
Churn and GRP Growth by MSA
Firm Starts and Closures (Churn) as % of All Firms
GRP
Grow
th-- and Global
…and Centered in Metropolitan Areas
Population
83.7%
Employm
ent
89.8%
Personal Income
96.3%
Knowledge Industries (G
DP)
87%
Metros Share of U.S. Total
Source: Bureau of Economic Analysis, U.S. Patent and Trademark Office
Gross Product
90%
Patents
95.5%
Drivers of the Next Economy
Agenda Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Understanding Your Economy
Key Lessons and Discussion
How Metro Economies GrowHow 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)
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?
Metros Can Enable People and Firms to Concentrate and Achieve EfficienciesWhat Makes Metropolitan Regions more Productive in the Next Economy?
Economic Geography
Institutional EconomicsNew
Growth Theory
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 Economics
New Growth Theory
8
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
Five Market Levers Drive RegionalEconomic Performance
9
-.20
.2.4
.6W
age
Gro
wth
(199
0-20
00)
0 .1 .2 .3 .4Poverty Rate (1990)
-
10,000
20,000
30,000
40,000
50,000
60,000
0 10,000 20,000 30,000 40,000 50,000 60,000
Wages Move in Tandem
Correlation = 0.77, significant
City
Subu
rbs
Equity and Growth Go Hand in HandEquity and Growth Go Hand in Hand
Leverage Points for Sustainable
and Inclusive Prosperity
The sub-systems and geographies succeed or fail in context.
Neighborhoods and Regions Move in Tandem
11
New Approaches for the Next EconomyNew Approaches for the Next Economy
Success = Dynamic Economic Growth
Success = Short Term
Jobs
Subsidize companies
Reduce taxes
Train the unemployed
Municipal competition
Government-led
Traditional economic development
New economic growth planning
Leverage regional strengths
Add value
Connect training to jobs
Regional collaboration
Public-private partnerships
Drivers of the Next Economy
Agenda 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 BusinessMetropolitan Business Planning: A New Way of Doing Business
Grounded in Economics and Business
Comprehensive, Actionable Strategies
NOT Plans — Enterprises
Continuous Process and Improvement
Grounded in Economics and Business
Comprehensive, Actionable Strategies
NOT Plans — Enterprises
Continuous Process and Improvement
Seattle
Phoenix
Buffalo
Louisville-Lexington
Central Upstate New York
NortheastOhio
MilwaukeeChicago
Memphis
Twin Cities
Metropolitan Business Planning RegionsMetropolitan Business Planning Regions
Drivers of the Next Economy
Agenda Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Understanding Your Economy
Key Lessons and Discussion
Analyzing ClustersAnalyzing ClustersCurrent Concentrations:
Assets, Legacies and BetsCluster Dynamics and DriversCluster Organization
Growth
Conc
entr
ation
Growth industries that build on region’s assets? Opportunities to redeploy legacy assets?
“Centers of Gravity”: mutually reinforcing concentrations of industries, functions, technologies, occupations?
Shared inputs, activities, infrastructure and other factors contributing to cluster efficiency/productivity?
Challenges, opportunities and trends in specific clusters?
Understanding Human Capital DynamicsUnderstanding Human Capital DynamicsStatus, Attraction and RetentionSegmentation, Skills Match and
Labor Market EfficiencyOpportunity and Mobility
Educational and skills attainment of residents?
Change in population by educational attainment, age – brain drain?
Projected job growth/loss, retirements by occupation and industry?
Match of existing & projected labor force skills (detailed segmentation)?
Labor market finding, measurement challenges?
Opportunities for targeted retraining, credentialing?
Cultivating InnovationCultivating Innovation
Commercialization of R&D
(universities/institutes)
Entrepreneurship(individuals)
Clusters(firms)
University research specializations?
Extent & nature of university-industry connections?
Cluster innovation and firm R&D dynamics?
Sources, successes of start-up activities? Entrepreneurship access, support, connections?
Characteristics of VCs? Availability of earlier-stage funding?
Legacy industries that need to redeploy assets and innovate?
Emerging industries with high potential?
Enhancing Spatial EfficiencyEnhancing Spatial Efficiency
Urban Growth FormConnectedness & Mobility
Jobs housing mismatch -- by industry, occupation, skill level?
Segregation and isolation?
Change in residential density & job dispersion? Specific fast-growing areas/nodes?
Opportunities for in-fill, mixed use development?
Opportunities for transformative infrastructure (next gen. energy, IT, public transit, PUDs)?
Transit use and access? Barriers?
Congestion?
Achieving Good GovernanceAchieving Good Governance
FragmentationTax/Value PropositionGovernance
Services and regulatory processes that might be efficiently coordinated, streamlined?
Most important public goods and services to targeted industries, residents?
Govt 2.0: engaging firms and citizens, transparency, flexibility, use of public data for economic growth?
Strategic and practical alignment of ED programs, organizations?
Drivers of the Next Economy
Agenda 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
Robert Weissbourd
Regions Charting New Directions:
Metropolitan Business Planning
Regions Charting New Directions:
Metropolitan Business Planning
Mayor’s Innovation ProjectJanuary 16th, 2013
Mayor’s Innovation ProjectJanuary 16th, 2013