Presentation on theme: "2013 NEBRASKA POLICY AND ISSUES SUMMIT NEBRASKA CHAMBER OF COMMERCE NOVEMBER 18, 2013 JONATHAN HAUGHTON SENIOR ECONOMIST, BEACON HILL INSTITUTE PROFESSOR,"— Presentation transcript:
2013 NEBRASKA POLICY AND ISSUES SUMMIT NEBRASKA CHAMBER OF COMMERCE NOVEMBER 18, 2013 JONATHAN HAUGHTON SENIOR ECONOMIST, BEACON HILL INSTITUTE PROFESSOR, DEPARTMENT OF ECONOMICS, SUFFOLK UNIVERSITY State Competitiveness, November 2013 NE: Competitive or not?
The Ratings Cacophony State Competitiveness, November
Key ideas State Competitiveness, November NE GDP weathered the recession about as well as the US Because fundamentals of competitiveness are solid? Competitiveness: Our measure is Broad Associated with per capita income Helpful in identifying policy-relevant areas of strength, weakness NE: Knocking at the top 10 Some others are improving Several problems need attention
Personal Income per capita State Competitiveness, November
NE: Muted recession damage State Competitiveness, November
Competitiveness Is … State Competitiveness, November A state is competitive if it has in place the policies and conditions that ensure and sustain a high level of per capita income and its continued growth. Naturally leads to the question of what these policies and conditions are Michael Porter: Competitiveness measures “the microfoundations of prosperity” and “wealth is actually created at the microeconomic level.” The BHI index: Inspired by Porter but developed in-house Long-term: what makes a persistent difference to real income? Policy is important, but only part of the story Natural resources; culture; history.
The Big Picture: Top 5 + Neighbors State Competitiveness, November MASSACHUSETTS1 (7.77) COLORADO 6 (6.36) NORTH DAKOTA2 (6.99)KANSAS10 (5.77) MINNESOTA3 (6.81)NEBRASKA 11 (5.75) SOUTH DAKOTA4 (6.48)IOWA 13 (5.55) UTAH5 (6.42) MISSOURI 32 (4.64) NE: Index was 5.97 in 2011 and 6.36 in 2010.
State Competitiveness, November
NE: The trend Ranks: State Competitiveness, November th over the whole period
NE: The subindexes NE indexNE rank Government and fiscal policy Security Infrastructure Human resources5.947 Technology Business incubation Openness Environment Overall State Competitiveness, November
NE: Government and fiscal policy NE index State & Local taxes/income4.81 Workers Comp. premia5.43 Bond rating5.43 Budget surplus / GSP5.28 Avg. pmt to insured unemployed5.64 FTE St. & Loc. Employees/cap3.82 Overall5.17 State Competitiveness, November
NE: Infrastructure NE index Mobile phones/ Hi-speed Internet lines/ Air passengers per cap4.56 Avg. travel time to work6.58 Electricity prices/kWh5.71 Apartment rental (2 bdrm)5.90 Overall5.64 State Competitiveness, November
NE: Business Incubation NE index Bank deposits/cap4.84 Venture capital ($/worker)4.56 Employer firm births/cap4.89 IPO volume, $/capita4.53 % of labor force in unions5.40 Minimum wage5.19 Tort Reform4.62 Standardized wage rate5.48 Overall4.84 State Competitiveness, November
NE: Openness (weak spot) NE index Exports/capita5.01 Employment in foreign MNEs3.97 % foreign-born4.60 Overall4.26 State Competitiveness, November
Subindex 1: Government & Fiscal Policy State Competitiveness, November NE Strengths Budget surplus % GDP 4 NE Weaknesses Govt. employees/residents 46 Colorado22 Iowa27 Kansas35 Missouri 4 Nebraska23 Massachusetts33 Mississippi13
Subindex 2. Security State Competitiveness, November NE Strength BGA integrity index6 Colorado 4 Iowa15 Kansas23 Missouri37 Nebraska18 Massachusetts 3 Mississippi45
Subindex 3: Infrastructure State Competitiveness, November NE Strengths Travel time to work 3 Apartment rental cost 8 Electricity prices 9 NE Weaknesses Mobile phones/capita41 High-speed lines/capita34 Colorado 4 Iowa29 Kansas 7 Missouri13 Nebraska16 Massachusetts33 Mississippi41
Subindex 4: Human Resources State Competitiveness, November NE Strengths Unemployment rate 2 % adults in labor force 2 NE Weaknesses Physicians/residents35 Colorado15 Iowa 4 Kansas16 Missouri28 Nebraska 7 Massachusetts 1 Mississippi50
Subindex 5: Technology State Competitiveness, November NE Strengths S&E graduates/capita10 NE Weaknesses Patents/capita39 High-tech employment 33 Colorado 7 Iowa19 Kansas26 Missouri27 Nebraska25 Massachusetts 1 Mississippi45
Subindex 6: Finance/Business State Competitiveness, November NE Strengths Minimum wage 5 NE Weaknesses Venture capital/capita39 Tort index33 Colorado18 Iowa30 Kansas20 Missouri39 Nebraska28 Massachusetts12 Mississippi24
Subindex 7: Openness State Competitiveness, November NE Weaknesses Employment in foreign MNCs 42 Colorado39 Iowa38 Kansas27 Missouri43 Nebraska40 Massachusetts 8 Mississippi45
Subindex 8: Environment State Competitiveness, November NE Strength Carbon emissions/square mile 9 Colorado19 Iowa24 Kansas12 Missouri33 Nebraska11 Massachusetts28 Mississippi23
NE: Long-Term Issues (in bottom 15) State Competitiveness, November S1 (Government/Taxes) High number of govt. employees (46) S2 (Security) Jump in crime (36) S3 (Infrastructure) Few mobile phones/cap (41) S5 (Technology) Patents/capita (39) S6 (Business Incubation) Venture capital/capita (39) S7 (Openness) Low employment in foreign MNCs (42)
Index up 1 point, PCI up $1,893 State Competitiveness, November Real personal income per capita = 30, ,893 × Competitiveness Index 2011 p=0.01 R 2 = 0.23 PI per capita deflated using a spatial pNEce index (Aten et al. 2011)
Applied to NE State Competitiveness, November Ranked 11 th with index of 5.75 Business: 28 th (4.84) Openness: 40 th (4.26) Raise these to the mean (5.0): Rank would rise to 9 th with index of 6.02 Real personal income would rise $500 per person per year That’s a total of $900 million annually.
State Competitiveness, November Suffolk University was founded in 1906, and has over 9,000 students in its College of Arts and Sciences, Sawyer Business School, and Law School. The Beacon Hill Institute was founded at Suffolk University in 1991 for the purpose of bringing economic analysis to bear on current public policy issues.