Regions Charting
New Directions:
Metropolitan Business Planning
Mayor’s Innovation Project
January 16th, 2013
Robert Weissbourd
Agenda
Drivers of the Next Economy
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Understanding Your Economy
Key Lessons and Discussion
The Global Economy is Undergoing a Fundamental
Transformation, Driven by Knowledge Assets
GDP Growth, 1950-2000
• Human Capital
• Information technologies
• Product innovation; flexible
customization
• Firm, consumer and knowledge
networks
• Increasing returns; divergence
600%
% Change
500%
400%
300%
200%
100%
0%
$s
Source: “Greenspan Weighs Evidence and Finds a
Lighter Economy,” Wall Street Journal
lbs
3
As a Result, the Economy is More Dynamic
-- and Global
Global GDP (2010)
Years Spent on the S&P Index
21.4%
80
60
40
20
0
BIC Countries
20.2%
US
1920s
1990s
GRP Growth
Churn and GRP Growth by MSA
Global GDP (2015)
100%
80%
25.8%
60%
BIC Countries
40%
20%
18.3%
0%
US
15%
20%
25%
30%
35%
Firm Starts and Closures (Churn) as % of All Firms
Sources: Newsweek, Manyika, Lund and Auguste, “From the
Ashes,” 8.16.2010; Brookings Institution
…and Centered in Metropolitan Areas
Metros Share of U.S. Total
Personal Income
Employment
Gross Product
Knowledge Industries (GDP)
Population
Source: Bureau of Economic Analysis, U.S. Patent and Trademark Office
96.3%
Patents
89.8%
90%
83.7%
87%
95.5%
Agenda
Drivers of the Next Economy
“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
Metros
Can Enable
Metropolitan
People and
Regions
Firms
more
to
Concentrateinand
Productive
the Achieve
Next Economy?
Efficiencies
New
Growth
Theory
New
Growth
Theory
Economic
Geography
Institutional
Economics
Act Comprehensively – The Whole is
Greater than the
Sum of the Parts.
Economic
Geography
Customize and Build on
Distinctive Assets.
Institutional
Economics
Develop Institutional Capacity and
Intentionality.
8
Five Market Levers
Drive Regional
Economic
Performance
Create Effective
Public & Civic
Culture &
Institutions
Enhance
Regional
Concentrations/
Clusters
Leverage
Points
Deploy
Human Capital
Aligned with
Job Pools
for Sustainable
and Inclusive
Prosperity
Increase
Spatial
Efficiency
Develop
InnovationEnabling
Infrastructure
9
.6
Wage Growth (1990-2000)
Equity and Growth Go Hand in Hand
Wages Move in Tandem
60,000
Correlation = 0.77, significant
.2
Suburbs
.4
50,000
40,000
30,000
20,000
0
10,000
-.2
0
0
.1
.2
.3
Poverty Rate (1990)
.4
Neighborhoods and Regions Move in Tandem
10,000
20,000
Leverage Points
for Sustainable
and Inclusive
Prosperity
30,000
40,000
50,000
60,000
City
The sub-systems and geographies succeed or fail in context.
New Approaches for the Next Economy
11
Agenda
Drivers of the Next Economy
“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
Metropolitan Business Planning Regions
Seattle
Twin Cities
Milwaukee
Chicago
Louisville-Lexington
Phoenix
Memphis
Buffalo
Northeast
Ohio
Central Upstate
New York
Agenda
Drivers of the Next Economy
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Understanding Your Economy
Key Lessons and Discussion
Analyzing Clusters
Current Concentrations:
Assets, Legacies and Bets
Cluster Dynamics and Drivers
Cluster Organization
 Growth industries that
build on region’s assets?
Opportunities to redeploy legacy
assets?
Concentration
 “Centers of Gravity”: mutually
reinforcing concentrations of
industries, functions, technologies,
occupations?
 Shared inputs, activities,
infrastructure and other factors
contributing to cluster
efficiency/productivity?
Growth
 Challenges, opportunities and
trends in specific clusters?
Understanding Human Capital Dynamics
Status, Attraction and Retention  Educational and skills
attainment of residents?
Segmentation, Skills Match and
Labor Market Efficiency
 Change in population by
Opportunity and Mobility
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 Innovation
University research
specializations?
Commercialization of
R&D
(universities/institutes)
Clusters
Entrepreneurship
(firms)
(individuals)
Extent & nature of universityindustry 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 Efficiency
Urban Growth Form
Connectedness & 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 Governance
Fragmentation
Tax/Value Proposition
Governance
 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?
Agenda
Drivers of the Next Economy
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Understanding Your Economy
Key Lessons and Discussion
Economic
Development
in the Next
Economy
Global, Knowledge
Economy
Specialization and
Dynamism
Intentionality
Build on Your Assets
Coordinated, CrossSectoral, Flexible,
Adaptive, Open,
Information-Rich,
Inclusive,
Entrepreneurial
Compete on
Value-Added
(not low-cost)
Regions Charting
New Directions:
Metropolitan Business Planning
Mayor’s Innovation Project
January 16th, 2013
Robert Weissbourd