SET Overview and Exploration of Regional Data Middle Rio Grande Economic Development Association Region Session 1

Today, We Will Lay the foundation for SET work together Review the Regional SET Forum Explore the regional economic data: Regional industry clusters Employment and occupation Chart the next steps

Middle Rio Grande Economic Development Region – SET Session 12/02/2015 AGENDA 9:00 – 9:30SET Program and Civic Forum Review 9:30 – 10:30Businesses in the Region 10:30 – 10:45Break 10:45 – 11:30Industry Cluster Analysis 11:30 – 12:15Labor Force and Occupations in the Region 12:15 – 12:30Now What?

SET Participating States Insert new map

SET Purpose: Doing Better Together The regional team develops and implements a High Quality Regional Economic Development Plan that builds on the region’s current and emerging economic strengths.

High Quality Plan: Essential Components Evidence-Based Focused on Regional Economic Development Aligned with Goals Broadly Supported Practical Team’s Regional Plan

Building Shared Expectations Collaborating Cooperating Coordinating Networking Trust Effectiveness

Guiding Principles for Our Discussions Sample ideas: Enter into the discussion enthusiastically. Give freely of your experience. Allow and encourage others to contribute. Listen attentively and take accurate notes. Ask questions when you don’t understand. Appreciate the other person’s point of view. Provide constructive feedback and receive it willingly. Keep confidences and assume others will. Confine your discussion to the topic.

Round I: Forum Review

Civic Engagement Forum Review Regional Strengths, Challenges & Opportunities

Middle Rio Grande Economic Development Association Region Regional Strengths 1. Technology - Spaceport, Universities (28) 2. Year-round outdoor opportunities (27) 3. Tourism (22) 4. History & Culture (17) 5. Location (16) 6. Agriculture (15)

Middle Rio Grande Economic Development Association Region Regional Challenges 1. Lack of trained Workforce (37) 2. Lack of infrastructure (broadband, etc.) (31) 3. Poor K-12 Education (21) 4. Currently insufficient Regional Mindset (19) 5. Socio-economic issues (16)

Middle Rio Grande Economic Development Association Region Regional Opportunities 1. Package regional tourism (17) 2. Prioritize broadband (15) 3. Better collaboration across government, community & individuals (11) 4. Create team incentive program to attract, retain teachers, doctors and other services (10) 5. Mentoring/training programs to create stronger teachers, administrators (9) 6. Agriculture (8) 7. Spin-off companies from NMT and incentivize them to stay (8)

Round II: Businesses in the Region

Data Scavenger Hunt: Thriving Businesses Number of employees Workforce skills needed Type of business (i.e. manufacturing, retail, health services) Average earnings County Size Large=over 100 employees Small= under 100 Other businesses/industries for which it is providing support

Round III: Exploring Business and Employment Data for the Regio n

17 Industry and occupation section 05 Establishments ​ Source: National Establishment Time Series (NETS) – 2011 Database An establishment is a physical business location. Branches, standalones and headquarters are all considered types of establishments. Definition of Company Stages Self- employed 2-9 employees employees employees 500+ employees Components of Change for Establishments Establishments Launched 6,039 Establishments Closed 4,121 Net Change 1,918 Net Migration (Establishments moving into minus Establishments moving out of the region) 127 Total Change 2,045 Percent Change 49.7%

18 Industry and occupation section 05 Establishments ​ Source: National Establishment Time Series (NETS) – 2011 Database Number of Establishments by Company Stages StageEstablishmentsProportionEstablishmentsProportion Stage 0 1, % 2, % Stage 1 2, % 3, % Stage % % Stage % 380.6% Stage % 30.05% Total 4, % 6, % Questions: What stage businesses have shaped the region’s economic growth in the last 10 years? Which ones are growing or declining the most? Which stage of establishments are likely to shape the region’s future economic growth?

19 Industry and occupation section 05 Establishments ​ Source: National Establishment Time Series (NETS) – 2011 Database Number of Jobs by Company Stages Year % Change Stage 0 1,285 2, % Stage 1 8,078 9, % Stage 2 12,124 13, % Stage 3 3,592 6, % Stage 4 4,000 2, % Total 29,079 34, % Questions: What establishments are the most numerous based on company stages? What stages have experienced the largest growth? The greatest decline? What company stage employs the largest number of people? What stage captures the most sales? Which ones have experienced the greatest percentage loss over the period? Sales ($ 2013) by Company Stages Year % Change Stage 0 $161,096,666$153,976, % Stage 1 $983,994,891$753,404, % Stage 2 $1,205,496,485$946,548, % Stage 3 $259,640,783$599,338, % Stage 4 $292,459,417$146,538, % Total $2,902,688,242$2,599,806, %

20 Industry and occupation section 05 NAICSDescription2009 Jobs2014 JobsChangeChange (%) State Change (%) 55Management of Companies and Enterprises %-2.3% 11Crop and Animal Production2,5953, %13.3% 52Finance and Insurance9161, %8.8% 71Arts, Entertainment, and Recreation %4.7% 72Accommodation and Food Services2,5812, %6.7% 53Real Estate and Rental and Leasing1,4031, %7.3% 44Retail Trade4,2684, %2.8% 81Other Services (except Public Administration)1,7091,782734%0.7% 21Mining, Quarrying, and Oil and Gas Extraction %43.2% Top nine industry sector employment growth ​ Source: EMSI Class of Worker (QCEW, non-QCEW, self-employed and extended proprietors) Questions: What regional industry sectors have seen the greatest growth? Did they grow at the same rate as the state? What factors are causing the growth?

21 Industry and occupation section 05 Top ten industry sector employment decline ​ Source: EMSI Class of Worker (QCEW, non-QCEW, self-employed and extended proprietors) Questions : How does the industry sector make-up of the region compare to the rest of the state? Which industry sectors are growing and declining the most in employment? NAICSDescription2009 Jobs2014 JobsChangeChange (%) State Change (%) 23Construction2,2921, %-12.4% 48Transportation and Warehousing1,8881, %7.4% 54Professional, Scientific, and Technical Services1,6571, %-5.7% 31Manufacturing1,1591, %-8.2% 62Health Care and Social Assistance4,8784, %10.7% 90Government9,2118, %-1.3% 22Utilities %-1.3% 51Information %-2.4% 61Educational Services %51.8% 56 Administrative and Support and Waste Management and Remediation Services %-1.6%

Round IV: Exploring Industry Clusters

Industrial Clusters Clusters are groups of inter-related industries that drive wealth creation in a region, primarily through export of goods and services. Vertical Clusters Represents the entire value chain of a broadly defined industry from suppliers to end products. Examples: Auto manufacturing (glass, paint, engine, plastic, etc. that goes into making a car) Healthcare (service providers, equipment, medical supplies, pharmaceuticals) Horizontal Clusters Groups of similar industries that use the same resources including raw materials and/or labor Examples: Silicon Valley Wall Street Financial District Napa Valley Wine Region

Example of a Vertical Cluster

Example of a Horizontal Cluster

LIST OF CLUSTERS Advanced Materials Agribusiness, Food Processing & Technology Apparel & Textiles Arts, Entertainment, Recreation & Visitor Industries Biomedical/Biotechnical (Life Sciences) Business & Financial Services Chemicals Computer & Electronic Product Manufacturing Defense & Security Education & Knowledge Creation Electrical Equip, Appliance & Component Manufacturing Fabricated Metal Product Manufacturing Energy (Fossil & Renewable) Forest & Wood Products Glass & Ceramics Information Technology & Telecommunications Machinery Manufacturing Manufacturing Super-cluster Mining Primary Metal Manufacturing Printing & Publishing Transportation & Logistics Transportation Equipment Manufacturing

Industry Cluster Definitions Handout

Distribution of clusters in the Region by quadrants Industry and occupation section 05

29 How to interpret cluster data results The graph’s four quadrants tell a different story for each cluster. ​ Modified from: / / Emerging Bottom right (weak but advancing) Stars Top right (strong and advancing) Mature Top left (strong but declining) Transforming Bottom left (weak and declining) Contains clusters that are more concentrated in the region and are growing. These clusters are strengths that help a community stand out from the competition. Small, high-growth clusters can be expected to become more dominant over time. Contains clusters that are more concentrated in the region but are declining (negative growth). These clusters typically fall into the lower quadrant as job losses cause a decline in concentration. Contains clusters that are under-represented in the region but are growing, often quickly. If growth trends continue, these clusters will eventually move into the top right quadrant. Clusters in this quadrant are considered emerging strengths for the region. Contains clusters that are under-represented in the region (low concentration) and are also losing jobs. Clusters in this region may indicate a gap in the workforce pipeline if local industries anticipate a future need. In general, clusters in this quadrant show a lack of competitiveness.

30 Industry cluster analysis section 02 Percent Growth in Specialization Level of Specialization Mature Clusters Transportation & Logistics (1.43; 1,625) Energy (Fossil & Renewable) (1.00; 1,941) Star Clusters Mining (5.38; 572) Glass & Ceramics (3.62; 222) Agribusiness, Food Processing & Tech. (2.82; 3,001) Chemicals (1.24; 537) Emerging Clusters Arts, Ent. Recreation & Visitor Industries (0.85; 1,244) Advanced Materials (0.73; 778) Primary Metal Mfg. (0.70; 57) Business & Financial Services (0.52; 2,493) Fabricated Metal Product Mfg. (0.41; 119) Apparel & Textiles (0.38; 101) Education & Knowledge Creation (0.35; 294) Transforming Clusters Biomedical/Biotechnical (Life Sciences) (0.95; 2,651) Defense & Security (0.58; 882) Forest & Wood Products (0.49; 249) Information Technology & Telecommunications (0.48; 674) Machinery Mfg. (0.20; 46) Manufacturing Supercluster(0.20; 239) NOTE: The first number after each cluster represents its location quotient while the second number represents the number of total jobs (full and part time jobs by place of work) in that cluster in the region in The clusters are sorted in decreasing order by location quotient. Note: Transportation Equipment Mfg., Machinery Mfg., Computer & Electronic Product Mfg., Primary Metal Mfg. subclusters have too few jobs. Electrical Equip, Appliance & Component Mfg. cluster does not exist in the region.

Round V: Labor Force in the Region Data Handouts

Labor Force Data What are the region’s unemployment trends? Are more people commuting into the region or commuting out? How do regional earnings compare to the state or nation?

33 Labor force section 04 Unemployment rates Questions: How does the region’s unemployment rate compare to the rest of the state and nation? How does the region’s unemployment peak and post-2009 recovery compare to the state and nation? What might this suggest for the region’s economic future? ​ Source: LAUS, BLS Middle Rio Grande Region Rest of State US Total

34 Labor force section 04 Earnings per worker in 2014 Questions: How does the region’s average earnings compare to that of the rest of the state? What might be some driving factors for the differences? Do these represent potential strengths or challenges for the region? NOTE: Earnings include wages, salaries, supplements and earnings from partnerships and proprietorships ​ Source: EMSI Class of Worker (QCEW, non-QCEW, self-employed and extended proprietors) Middle Rio Grande Region Rest of State Average earnings

35 Labor force section 04 ​ Source: LEHD, OTM, U.S. Census Bureau Questions: How many people employed in the region actually reside outside the region? How many who live in the region commute to jobs outside the region? What are the implications for the region’s economic development efforts? Population 2013 Jobs Proportion Employed in Region 21, % Employed in Region but Living Outside 8, % Employed and Living in Region 12, % In-Commuters Same Work/Home 8,803 12,629 Journey to Work Out-Commuters 24,838 Population 2013 Jobs Proportion Region Residents 37, % Employed Outside Region but Living in Region 24, % Employed and Living in Region 12, %

Round VI: Occupations in the Region

37 Industry and occupation section 05 Top five occupations in 2014 Questions: What are the education and skill requirements for these occupations? Do the emerging and star clusters align with the top occupations? What type salaries do these occupations typically provide? ​ Source: EMSI Class of Worker (QCEW, non-QCEW, self-employed and extended proprietors)

38 Industry and occupation section 05 Science, Technology, Engineering & Math Questions: How do STEM jobs compare to the state? What has been the trend of STEM jobs over time? How important are STEM jobs to the region’s Star and Emerging clusters? ​ *Note: STEM and STEM-related occupation definitions from BLS (2010) ​ Source: EMSI Class of Worker (QCEW, non-QCEW, self-employed and extended proprietors) % Change Job change in STEM occupations Middle Rio Grande Region Rest of State 40, % 42,209

Now What? Based on the assets of the region and current industrial trends… What clusters should this region explore further?

Reality Check and Next Steps Did the data reveal: Any new opportunities that should be considered? The need to eliminate previously considered opportunities? New partners that need to be included in the planning process.

Actions: Begin Writing the Plan Describe and summarize the Civic Engagement Forum process and results. Summarize key strengths and challenges based on the data Describe the selected clusters: Why were these clusters selected for further exploration? What are the strengths and challenges associated with the selected clusters? Which suggested opportunities are associated with each selected cluster?

Deb Caldwell Middle Rio Grande Economic Development Association (575) Michael Patrick New Mexico Cooperative Extension Service (575) Terry McDermott USDA Rural Development-New Mexico (505)