Robert Weissbourd Regions Charting New Directions: Metropolitan Business Planning Mayor’s Innovation Project January 16 th, 2013 Mayor’s Innovation Project January 16 th, 2013

Drivers of the Next Economy Agenda “Metro-Economics” Metropolitan Business Planning (from theory to practice) Understanding Your Economy Key Lessons and Discussion

% Change GDP Growth, Human Capital Information technologies Product innovation; flexible customization Firm, consumer and knowledge networks Increasing returns; divergence The Global Economy is Undergoing a Fundamental Transformation, Driven by Knowledge Assets Source: “Greenspan Weighs Evidence and Finds a Lighter Economy,” Wall Street Journal 3

As a Result, the Economy is More Dynamic Sources: Newsweek, Manyika, Lund and Auguste, “From the Ashes,” ; Brookings Institution 18.3% US Global GDP (2015) 25.8% BIC Countries 20.2% US 21.4% BIC Countries Global GDP (2010) -- and Global

…and Centered in Metropolitan Areas Population 83.7% Employment 89.8% Personal Income 96.3% Knowledge Industries (GDP) 87% Metros Share of U.S. Total Source: Bureau of Economic Analysis, U.S. Patent and Trademark Office Gross Product 90% Patents 95.5%

Drivers of the Next Economy Agenda “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)  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?

Metros Can Enable People and Firms to Concentrate and Achieve Efficiencies What Makes Metropolitan Regions more Productive in the Next Economy? Economic Geography Institutional Economics New Growth Theory Act Comprehensively – The Whole is Greater than the Sum of the Parts. Develop Institutional Capacity and Intentionality. Customize and Build on Distinctive Assets. Customize and Build on Distinctive Assets. Economic Geography Institutional Economics New Growth Theory 8

Leverage Points for Sustainable and Inclusive Prosperity Leverage Points for Sustainable and Inclusive Prosperity Deploy Human Capital Aligned with Job Pools Create Effective Public & Civic Culture & Institutions Create Effective Public & Civic Culture & Institutions Enhance Regional Concentrations/ Clusters Enhance Regional Concentrations/ Clusters Increase Spatial Efficiency Develop Innovation- Enabling Infrastructure Five Market Levers Drive Regional Economic Performance 9

City Suburbs Equity and Growth Go Hand in Hand Leverage Points for Sustainable and Inclusive Prosperity Leverage Points for Sustainable and Inclusive Prosperity The sub-systems and geographies succeed or fail in context. Neighborhoods and Regions Move in Tandem

11 New Approaches for the Next Economy

Drivers of the Next Economy Agenda “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

Seattle Phoenix Buffalo Louisville-Lexington Central Upstate New York Northeast Ohio Milwaukee Chicago Memphis Twin Cities Metropolitan Business Planning Regions

Drivers of the Next Economy Agenda “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 Concentration  Growth industries that build on region’s assets? Opportunities to redeploy legacy assets?  “Centers of Gravity”: mutually reinforcing concentrations of industries, functions, technologies, occupations?  Shared inputs, activities, infrastructure and other factors contributing to cluster efficiency/productivity?  Challenges, opportunities and trends in specific clusters?

Understanding Human Capital Dynamics  Status, Attraction and Retention  Segmentation, Skills Match and Labor Market Efficiency  Opportunity and Mobility  Educational and skills attainment of residents?  Change in population by 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 Commercialization of R&D (universities/institutes) Entrepreneurship (individuals) Clusters (firms)  University research specializations?  Extent & nature of university- industry 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?

Drivers of the Next Economy Agenda “Metro-Economics” Metropolitan Business Planning (from theory to practice) Understanding Your Economy Key Lessons and Discussion

Global, Knowledge Economy Specialization and Dynamism Build on Your Assets Coordinated, Cross- Sectoral, Flexible, Adaptive, Open, Information-Rich, Inclusive, Entrepreneurial Compete on Value-Added (not low-cost) Compete on Value-Added (not low-cost) Intentionality Economic Development in the Next Economy

Robert Weissbourd Regions Charting New Directions: Metropolitan Business Planning Mayor’s Innovation Project January 16 th, 2013 Mayor’s Innovation Project January 16 th, 2013