Collaborative Economics Presented by John Melville Collaborative Economics

THERE IS A CHALLENGE FACING AMERICA’S COMMUNITIES America’s communities are experiencing growing economic pressure from a new wave of globalization Communities across America have seen large employers move some or all of their operations oversees Meanwhile, other regions, from Beijing to Bangalore are rapidly increasing their capabilities to perform value-added activities and compete in the global market place. “The United States now has to compete for every job going forward. That has not been on the table before. It has been assumed we had a lock on white-collar jobs and high-tech jobs. This is no longer the case.” Craig Barrett, CEO Intel

MEETING THE CHALLENGE OF GLOBAL COMPETITION

AN INNOVATIVE ECONOMY IS A CATALYST FOR COMPETITIVENESS An innovative economy is the engine that produces economic opportunity and community revenues that make possible: Career mobility Investment in educational systems Development of community infrastructure and amenities And other critical assets for regional competitiveness. It is not possible to sustain regional competitiveness over the long term without an innovative economy (i.e., residents lack economic opportunity, communities lack revenues). This is the essence of the “Vital Cycle”

THE CORNERSTONES OF INNOVATIVE REGIONS

CLUSTERS OF OPPORTUNITY

BRIDGING ECONOMIC DEVELOPMENT AND WORKFORCE GOALS

Targets of Opportunity: Connecting Regional Workforce and Economic Development

Why Clusters of Opportunity? We noticed disconnects, a mythology, a barrier to workforce and economic goals. “There are no jobs here.” But employers desperate for talent… “The timber and fishing industry are dead (There’s nothing else).” But we have fast growing entrepreneurial companies … “Our children are leaving.” But data contrary, leaving home can be good, come back for Quality of Life… Common notions used politically to influence decision making with long term implications. Copy and paste data to table

Six Targets of Opportunity Diversified Health Care Building and Systems Construction and Maintenance Specialty Food, Flowers & Beverages Investment Support Services Management and Innovation Services Niche Manufacturing

Surprised at What We Found 6 fast growing industries 53% of private sector payroll and almost 40% of jobs Grew jobs 37%, new firms 23% and wages up to 26% (compared to 4%, 1.5% and 6% in the overall regional economy) All pay above the median, and fast rising All with appealing, robust career spans Some familiar, but grouped in a more powerful way Some new export opportunities that we hadn’t seen before Some totally new industries that we hadn’t been paying attention to

Steps to Building & Analyzing the Data for the Report and Moving to Action Build the local team, use guidebook for building clusters Create the mother of all spreadsheets. Apply the criteria and group industries. Refine definitions, look at occupational patterns. Convene employers for focus groups…ask the about past and future drivers of growth, workforce needs. Deliver report and launch campaign.

Create the Mother of All Spreadsheets EX: Management & Innovation Services

Expanding Opportunity Improving Competitiveness Apply Criteria and Group Industries How Targets of Opportunity were Identified CRITERIA INTERPRETATION Expanding Opportunity JOB GROWTH Shows how various industries have weathered market forces and their subsequent employment generation FIRM GROWTH Growth in firms can indicate a change in organization of an industry, a surge in local entrepreneurship, or attraction of outside investment to the region Growing Quality JOB QUALITY High average payroll per employee relative to the regional average indicates a sector with relatively high productivity per employee. Additionally, pay is a reflection of job quality and indicates the amount of training and skill required to perform the job Improving Competitiveness STRONG AND/OR GROWING REGIONAL SPECIALIZATION A concentration of greater than 1 indicates that employment in the region is more specialized in the industry compared with U.S. or California. Specialization generally reflects competitiveness and outward orientation. Career Potential OCCUPATIONAL DISTRIBUTION AND DYNAMICS Occupational opportunities spread across higher, mid, and lower-levels, suggesting possible pathways for upward mobility. Occupations that are highly-concentrated and/or fast-growing are of particular interest. Key Linkages IMPORTANT RELATIONSHIPS AND COMMON NEEDS Related to other sectors in important buyer-supplier or complementary partnering relationships. Share a common workforce, markets, or others.

4. Refine Definition Look at Occupational Patterns EX: Niche Manufacturing 20% 50% 30%

5. Convene Employers 6. Deliver Report and Launch Campaign Employer Focus Groups 6-12 business owners, CEO’s. Enroll them in the data and what you want from them—what’s driving their growth, their needs and opportunities. Opportunity for them to identify immediate actions Deliver Report and Launch Campaign Present report Immediately followed by panel of business owners…put faces and stories on the data. Make the media interview business owners, don’t represent the data all yourself.

Significance of What We Found The data and input… Debunked myths Far more compelling than we expected Foundation for BIG thinking Sustained structural shift in our economy Tremendous opportunity Inspirational…reason to look forward

Immediate Impacts of What We Found Got into action right away on a few projects that came up in focus groups, as the report evolved. 5 new private sector CEO-types stepped forward to be on the WIB the week after report was released. Moved the WIB beyond WIA-compliance to Engagement. Compelling platform for ongoing Opportunity Campaign… Regional collaboration Stimulating training institutions to change Engaging and connecting businesses Developing useful tools Evolving economic and workforce development thinking

SAN DIEGO’S CHALLENGE San Diego is participating in a new global innovation economy San Diego’s global reach has grown substantially over the last decade. Share of global talent pool has increased Share of global investment capital has increased

SAN DIEGO’S GLOBAL COLLABORATION

SAN DIEGO’S CHALLENGE San Diego’s economic drivers are changing with the convergence of key industries and technologies. Traditional cluster definitions are not adequate; new clusters of opportunity better capture what is happening in the region’s economy. San Diego’s growing participation in the new global innovation economy is expanding economic opportunity for a wide range of San Diegans. While the region’s leading industries have created many high wage jobs, an average of about 40% of jobs in these sectors are at the mid-wage level

CLUSTERS OF OPPORTUNITY AND INNOVATION

CLUSTERS OF OPPORTUNITY

SAN DIEGO’S CHALLENGE San Diego’s challenge is to ensure that its economic drivers have the regional and global resources necessary to compete. Public and private leaders in other regions are working together to make strategic investments, grow their talent pools and extend their global reach Benefiting from globalization requires hands-on regional leadership. Global competitiveness requires a proactive regional agenda The Partnership for the Global Economy is bringing together business leaders to identify priorities and organize for strategic action

SAN DIEGO’S PATH FORWARD

BOTTOM LINE: WHAT IS REQUIRED? Shift to an innovation mindset It is not about high tech or low tech industries It is about how we do things, not what we make Everyone can be included if you learn how to play by new rules Focus on clusters of opportunity to connect economic and workforce development

BOTTOM LINE: WHAT IS REQUIRED? Understand how global connections, regional convergence, and economic opportunity are related and set the stage for a new approach Align roles and rewards of professional staff to these new realities Engage employers and build public-private partnerships to pursue action with the urgency and flexibility of a “campaign”

For More Information, Contact: John Melville Director Collaborative Economics 785 Castro Street #A Mountain View, CA 94041 650-623-3086 Melville@coecon.com www.coecon.com