Exploring Opportunities for a Stronger Regional Economy. Module Six

Transcription

1 Exploring Opportunities for a Stronger Regional Economy Module Six

2 Reflecting on the Previous Session What did you find most useful or valuable? What progress have you made since then? Any questions or clarification needed?

3 COMMUTING PATTERNS

4 COMMUTING PATTERNS

5 Overview of Module Six Explore basic concepts of competitive advantage Provide an overview of tools and data available to detect regional competitive advantage Examine strategies for building stronger regional economies

6 BASIC CONCEPTS OF COMPETITIVE ADVANTAGE

7 Competitive Advantage: Four Factors Business shapes the economic value of a region, but places can help shape, nourish and sustain local enterprises and industry. What determines competitive advantage? Firm Strategy, Structure and Rivalry Factor Conditions Related and Supporting Industries Demand Conditions

8 How many competitors? What is the threat of new entry? Firm Strategy: 3 hospitals 7 full-time doctors Industry determined by university-owned hospital, located 100 miles away Local customer base? What do people want? Related and Supporting Industry: 25% of durable supplies can be purchased locally 0% of non-durable supplies can be purchased locally Health Care Industry Demand Conditions: Unemployed and underemployed seeking low-cost health care Higher income leaving the region for large urban hospital What value chains or clusters exist in our region? Factor Conditions: Low rent Inexpensive unskilled labor Difficult to retain medical professionals How does place influence the quantity, quality and cost of input factors?

9 DETECTING REGIONAL COMPETITIVE ADVANTAGE

10 What Are the Keys to Economic Growth? People Place Businesses Innovation Clusters or branding

11 First Key to Economic Growth: People Who are our workers? Skill level, education, occupation Work ethic Who are our residents? History and culture Long time residents, newcomers

12 People: The Residents Who are the people that live in this region? How long have they lived here? How many generations have lived here? Where did they originate? Why did they come? Why do they like living here? Social conditions Cultural factors Economic prospects

13 People: The Workforce Who are our workers? Basic demographics Experience Work ethic Is our workforce adapting to change? Technology Recognizing needs

14 Second Key to Economic Growth: Place What amenities does our region offer? Why would people want to live here? Why would businesses relocate here?

15 Place: Industrial Indicators Current leading employers New and expanding companies and industries Research facilities, R & D Available land and buildings Existing infrastructure Access to transportation networks Tax structure

16 Place: People & Quality of Life Indicators Population and labor force Education Health care Recreational opportunities Shopping Crime, weather, etc.

17 Third Key to Economic Growth: Business What is the portfolio of businesses (small, medium, large)? What does entrepreneurship look like? What s the mix of industrial sectors?

18 Industries & Occupations: Looking at Your Region s Data What types of industries/ businesses currently exist? What are key occupations? How have these businesses fared, particularly during the recent economic downturn?

19 Business Assistance in the Region What type of programs, assistance or incentives are offered to: Support expanding businesses? Recruit new businesses? Foster the growth of entrepreneurs or small, locallyowned businesses?

20 Identifying Entrepreneurs Social Entrepreneurs People with underutilized talent Small businesses Unemployed Entrepreneurship High growth businesses Youth Self- Employed Innovators

21 Who Is an Innovator/Entrepreneur? Identifying Innovators & Entrepreneurs Solution Problem/Opportunity New Old New YES YES Old YES NO Entrepreneur: one whose goal is to create or capitalize on new economic opportunities through innovation.

22 Assessing Entrepreneurship Capacity Community surveys Existing programs Community readiness Leadership Networks One-on-one interviews with local entrepreneurs Assess ambitions and needs Identify local/regional constraints

23 Assessing Entrepreneurship Capacity Inventory of Entrepreneurship: BEA-REIS data Census (non-employer statistics) County Business Patterns Panel Study on Entrepreneurial Dynamics Business owners survey Capacity for New Entrepreneurs: Educational attainment Immigration and diversity Financial resources Business resources

24 Fourth Key to Economic Growth: Innovation "Innovation... the successful introduction of a new thing or method... Innovation is the embodiment, combination or synthesis of knowledge in original, relevant, valued new products, processes or services. Luecke and Katz, 2003

25 How Nurturing is Your Region? Three Phases of Innovation Conception Implementation Marketing Business Process Idea Generation Project Planning Development Prototype Dev Testing Production Launch Regional Capacity Education Technical Assistance R&D centers Universities Industrial Parks Capital Availability Community Support Source: Tawari, Buse and Herstatt, 2007

26 Your Region s Capacity for Innovation Research & Development (R&D) assets Regional universities or community colleges Other resources that foster innovation

27 Fifth Key to Economic Growth: Clusters or Branding Cluster making the whole greater than the sum of the parts Branding consolidating the essential characteristics of the individual identity into a brand core

28 Industry Cluster Analysis Views firms and industries, as interdependent, not isolated Identifies value chains Discovers collections of businesses producing similar outputs

29 What Can Regional Cluster Analysis Tell Us? Where we have... Gaps Growing industries/clusters Declining industries/clusters

30 Data Needs Industry sector data: number of establishments (over time), number of employees, payroll, earnings Potential linkages to determine value chains

31 You Think There Is a Regional Cluster, Map the cluster So Now What? Determine if growing or declining Evaluate regional capacity Identify potential leakages & opportunities Determine potential strengthening strategies

32 MAPPING THE CLUSTER

33 Value Chain Cluster Example Grape stock Fertilizers, Pesticides, Herbicides Grape harvesting equipment Irrigation technology Growers/ Vineyards Wine State government agencies Wineries/ Processing facilities Educational, Research & Trade organizations Winemaking equipment Barrels Bottles Caps & Corks Labels Public Relations & Advertising Specialized publications California Agricultural Cluster Food Cluster Tourism Cluster Source: California Department of Food and Agriculture

34 Cluster Illustration: Bubble Chart Source: EMSI.com

35 Identify Potential Leakages and Business Opportunities For the cluster, determine the: Current regional capacity Industry potential Future growth of industry Types of skills needed

36 Identify Potential Leakages and Opportunities for New Businesses Grapes Fertilizer Advertising Wine Research Zero inputs available regionally Small % of inputs available regionally Large % of inputs available regionally 100% of inputs available regionally

37 Let s look at the data for the Region Yesterday we looked at data that describes the people and the place. Today we are going to look at the data that describe the workers and the businesses Workforce Data Industry Data

38 The Workforce Who are the workers in this region? Are they blue collar or white collar? What types of occupations have done well lately? Do you attract the creative class? What are the skills or education needs for targeted occupations? What industries hire particular occupations?

39 Occupation 2011 Jobs Growth ( ) Real Estate Brokers and Sales Agents Securities, Commodities, and Financial Services Financial Analysts and Advisors Fast Food and Counter Workers Miscellaneous Managers Nursing, Psychiatric and Home Health Aides Accountants and Auditors 6,751 82% 4,437 73% 6,788 67% 6,305 27% 4,055 45% 3,420 36% 3,286 32%

40 The Creative Class Should be attracted and retained Develop, design or create new applications, ideas, relationships, systems or products Considered footloose Attracted to amenities Florida, 2002

41 Where is the Creative Class in the US? How "creatively-driven" is your economy compared to the national average? Dark-blue is the least creative and dark-red the most creative areas.

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43 INDUSTRY OVERVIEW

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45 Examining Clusters in Your Region

46 Cluster Choices Advanced Materials Agribusiness, Food Processing & Technology Apparel & Textiles Arts, Entertainment, Recreation & Visitor Industries Biomedical/Biotechnical (Life Sciences) Business & Financial Services Chemicals & Chemical Based Products Communications Computer & Electronic Product Manufacturing Computers & Software Construction Materials Defense & Security Education & Knowledge Creation Electrical Equipment, Appliance & Component Manufacturing Energy Energy (Fossil & Renewable) Fabricated Metal Product Manufacturing Food Products & Services Forest & Wood Products Glass & Ceramics Health Information Information Technology & Telecommunications Machinery Manufacturing Manufacturing Super Cluster (6 sub-clusters) Metals & Machining Mining Primary Metal Manufacturing Printing & Publishing Transportation & Logistics Transportation Equipment Manufacturing

47 GOVERNOR S CLUSTERS Tourism, Gaming, and Entertainment Clean Energy Health and Medical Services Aerospace and Defense Mining, Materials, and Manufacturing Business IT Ecosystems Logistics Agriculture Intangibles and Financial Enterprises Water Technology

48 Example: NV Manufacturing Cluster

49 Total 22,991 19,017 $79, NV Manufacturing Cluster NAICS Code Description 2002 Jobs 2011 Jobs 2011 Average Earnings 2011 Establishments 311 Food Manufacturing 1,328 1,739 $57, Beverage and Tobacco Product Manufacturing $65, Textile Mills $30, Textile Product Mills $47, Apparel Manufacturing $15, Leather and Allied Product Manufacturing $32, Wood Product Manufacturing $56, Paper Manufacturing $63, Printing and Related Support Activities 1,762 1,149 $63, Petroleum and Coal Products Manufacturing $157, Chemical Manufacturing $97, Plastics and Rubber Products Manufacturing 2,070 1,192 $66, Nonmetallic Mineral Product Manufacturing 1, $82, Primary Metal Manufacturing $102, Fabricated Metal Product Manufacturing 3,366 2,802 $66, Machinery Manufacturing 1, $86, Computer and Electronic Product Manufacturing 2,930 2,328 $86, Electrical Equipment, Appliance, and Component Manufacturing $77, Transportation Equipment Manufacturing 1,399 1,176 $74, Furniture and Related Product Manufacturing $60, Miscellaneous Manufacturing 3,833 3,444 $104,242 95

50 NV Manufacturing Cluster NAICS Code Description 2002 Jobs 2002 LQ 2011 LQ 339 Miscellaneous Manufacturing 3, Plastics and Rubber Products Manufacturing 2, Printing and Related Support Activities 1, Nonmetallic Mineral Product Manufacturing 1, Fabricated Metal Product Manufacturing 3, Computer and Electronic Product Manufacturing 2, Textile Product Mills Furniture and Related Product Manufacturing Wood Product Manufacturing Primary Metal Manufacturing Machinery Manufacturing 1, Food Manufacturing 1, Transportation Equipment Manufacturing 1, Electrical Equipment, Appliance, and Component Manufacturing Chemical Manufacturing Total 22,

51 Looking Deeper into Misc Manufacturing Cluster

52 Distribution of Jobs Across Region

53 Strengthening the Miscellaneous Manufacturing Sector

54 Regional Occupations Related to Production

55 EXPLORING POSSIBLE ECONOMIC DEVELOPMENT STRATEGIES

56 Strategies to Strengthen a Cluster or Brand Targeted attraction of industry Business retention and expansion New firm creation/entrepreneurship Attraction of the creative class Network development and meta-business creation

57 Targeted Attraction of Industry Past: Blindly attracting industry Now: Targeting businesses likely to be successful in the region Strategies: Cluster mapping Location models Community Business Matching model

58 Location Models Employs place specific data to: Analyze the probability of an industry moving to the region Evaluate the region s ability to respond to industry needs Select industries with the highest likelihood of success

59 Community Business Matching Model Community Assets Goals The Ideal Compatibility Desirability Needs Profile Business Source: Cox et al., 2009

60 Business Retention & Expansion Lets businesses know they are valued Helps solve local business issues Improves community awareness Connects businesses to community resources Creates connections between community organizations Fosters job retention & growth

61 How BR&E Works Planning Phase Action Phase Recruit volunteer visitors Visit local businesses Follow-up Respond to concerns Plan for future

62 Regional Strategies to Increase Entrepreneurism Community-based training options Weekend boot camps FASTRAC or other 13-week programs Short-term targeted business training Access to business coaching Youth entrepreneurship: 4H, Scouts, in-school programs

63 Entrepreneurial Communities or Regions Openness to new ideas and intellectual stimulation Capital: Equity and Debt Education: K-22 Community Support Conception Birth Information Connections + Networking Services and Amenities Infrastructure Source: Based on Reynolds, et. al., Small Business Economics 23: , 2004.

64 Attracting the Creative Class The creative class is footloose and tends to congregate in places with a high quality of life. Potential to Affect Networking Retain/attract youth Recreational activities Cultural diversity, tolerance and inclusiveness Infrastructure Population density Proximity to metropolitan areas Natural amenities (esp. mountains, forest)

65 Business Network Development A formal or informal collaboration or cooperation among either competing firms or firms that are part of a value chain for the purpose of creating a net benefit for all involved

66 Network Examples Workforce Development Example Milwaukee Seven Water Council: Transform the workforce system and create high performance talent pipelines within the region Entrepreneurship Network Example The Entrepreneurs Network: Promote job growth and business creation

67 Meta-Business Formation Strategies for generating revenue that support all local business Examples: Local coupons Local credit/debit cards Local currency Business directories Local stock exchange Businesses that support other businesses

68 What s Next? Consider other potential strategies that could be successful in the region Further examine the regional data

69 Final Reflections What topics did you find most helpful? What did you find confusing? What other data do you need? Other items you want to mention?

70 Looking Ahead: Module Seven We will: Examine regional assets Explore the region s seven capitals Take an honest look at potential barriers Take steps to link assets to your potential regional goals