cities charting new directions: metropolitan business planning
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Robert Weissbourd, RW Ventures, LLC
Cities Charting New Directions:
Metropolitan Business PlanningCity Reformers Group Workshop
March 22, 2011
Metropolitan Business Plans: A New Way of Doing Business Grounded in Economics and Business:
comprehensive, integrated growth strategies based on unique regional strengths
Gets the Job Done: not just a plan; cross-sector institutional capacity critical to regional performance
Continuous implementation, monitoring, adaptation and further strategy development
Demonstrate better ways to invest in metros to strengthen national economy; develop new federal policies and programs.
Source: Brookings Institution
Why Metros?
Service Exports
75%U
.S. Air Cargo Weight
79%
Airline Boardings
92%
Population
66%
Graduate D
egrees
75%
Venture Capital Funding
94%
Patents
78%
Wind +
Solar Energy Em
ployment
76%
Top 100 Metros Share of U.S. Total
Sources: Brookings analysis of US Census Bureau, FAA, BLS, NIH, NSF, and BEA data; Brookings, ExportNation, 2010 (2008 data); Forthcoming research from Brookings and Battelle
Gross Product
73%
Why Metros?
Source: Brookings Institution
What is it About Place that Affects Economic Performance?
“Cities exist to eliminate transport costs for people, goods and ideas” – Ed Glaeser
What is it About Place that Affects Economic Performance?
• Urbanization and Localization Economies: general and industry-specific benefits of concentration as workers and firms co-locate; spillovers, synergies, shared labor and job pools, linkages among firms generate increased efficiency and productivity through flow of ideas and technologies, enhancements to human capital, economies of scale, reduced transaction and transport costs. (Marshall, Krugman)
“Cities exist to eliminate transport costs for people, goods and ideas” – Ed Glaeser
What is it About Place that Affects Economic Performance?
• Urbanization and Localization Economies: general and industry-specific benefits of concentration as workers and firms co-locate; spillovers, synergies, shared labor and job pools, linkages among firms generate increased efficiency and productivity through flow of ideas and technologies, enhancements to human capital, economies of scale, reduced transaction and transport costs. (Marshall, Krugman)
• New Growth Theory: location is becoming more important, and with different benefits, in the knowledge economy, as metros increasingly become centers of idea creation and transmission (through technology, human capital externalities, intellectual spillovers). Increasing returns to knowledge and imperfect competition lead to metro specialization and divergence. (Romer, Lucas)
“Cities exist to eliminate transport costs for people, goods and ideas” – Ed Glaeser
What is it About Place that Affects Economic Performance?
• Urbanization and Localization Economies: general and industry-specific benefits of concentration as workers and firms co-locate; spillovers, synergies, shared labor and job pools, linkages among firms generate increased efficiency and productivity through flow of ideas and technologies, enhancements to human capital, economies of scale, reduced transaction and transport costs. (Marshall, Krugman)
• New Growth Theory: location is becoming more important, and with different benefits, in the knowledge economy, as metros increasingly become centers of idea creation and transmission (through technology, human capital externalities, intellectual spillovers). Increasing returns to knowledge and imperfect competition lead to metro specialization and divergence. (Romer, Lucas)
• Institutional Economics: growth, and particularly innovation, take place in the context of an institutional infrastructure – research, professional and learning networks; universities and civic/business organizations; quasi- and governmental organizations and regulation – which can hamper or accelerate all of the other benefits of concentration. (Coase, Atkinson)
“Cities exist to eliminate transport costs for people, goods and ideas” – Ed Glaeser
What is it About Place that Affects Economic Performance?
• Urbanization and Localization Economies: general and industry-specific benefits of concentration as workers and firms co-locate; spillovers, synergies, shared labor and job pools, linkages among firms generate increased efficiency and productivity through flow of ideas and technologies, enhancements to human capital, economies of scale, reduced transaction and transport costs. (Marshall, Krugman)
• New Growth Theory: location is becoming more important, and with different benefits, in the knowledge economy, as metros increasingly become centers of idea creation and transmission (through technology, human capital externalities, intellectual spillovers). Increasing returns to knowledge and imperfect competition lead to metro specialization and divergence. (Romer, Lucas)
• Institutional Economics: growth, and particularly innovation, take place in the context of an institutional infrastructure – research, professional and learning networks; universities and civic/business organizations; quasi- and governmental organizations and regulation – which can hamper or accelerate all of the other benefits of concentration. (Coase, Atkinson)
“Cities exist to eliminate transport costs for people, goods and ideas” – Ed Glaeser
The Major Systems that Drive Efficiency and Productivity Operate at a Metro Level
Influencing Metro Economies
Influencing Metro EconomiesAct Comprehensively -- The Whole is Greater than the Sum of the Parts. Increasing productivity and efficiency requires influencing how the pieces fit together – the interactions and synergies between economic activities
Customize. Regional Economies are differentiated, complex and dynamic
Influencing Metro EconomiesAct Comprehensively -- The Whole is Greater than the Sum of the Parts. Increasing productivity and efficiency requires influencing how the pieces fit together – the interactions and synergies between economic activities
Customize. Regional Economies are differentiated, complex and dynamic
Influencing Metro Economies
Develop Institutional Capacity and Intentionality. Growing metro economies entails continuously integrated, grounded and deliberate activity
Act Comprehensively -- The Whole is Greater than the Sum of the Parts. Increasing productivity and efficiency requires influencing how the pieces fit together – the interactions and synergies between economic activities
Customize. Regional Economies are differentiated, complex and dynamic
Influencing Metro Economies
Develop Institutional Capacity and Intentionality. Growing metro economies entails continuously integrated, grounded and deliberate activity
Act Comprehensively -- The Whole is Greater than the Sum of the Parts. Increasing productivity and efficiency requires influencing how the pieces fit together – the interactions and synergies between economic activities
Key Question:What are the leverage points to improve system performance?
EnhanceRegional
Concentrations Deploy
Human CapitalAligned with
Job Pools
Increase Spatial
Efficiency
Create EffectivePublic & Civic
Culture & Institutions
DevelopInnovation-
EnablingInfrastructure
Leverage Points
Enhance Regional Concentrations:
Industries, Occupations and
FunctionsCluster Map Source: Bo Heiden, Strategic Uses of the Global Patent System
Deploy High Levels of Human Capital
Alignedwith Job Pools
Develop Innovation-
Enabling Infrastructure
Innovation Ecosystem
MarketResearch
Marketing
Manufac-turing
Finance
R&D
Suppliers
External
Consultants
Research Partners
Academics
Customers
Consumers
Image based on material from Land O’ Lakes Inc.
Housing Costs as Percent of Income
Housing + Transportation Costs as Percent of Income
Increase Spatial Efficiency
Source: Center for Neighborhood Technology
Create Effective Public & Civic Culture & Institutions
Create Effective Public & Civic Culture & Institutions
Create Effective Public & Civic Culture & Institutions
Source: Newsweek, Manyika, Lund and Auguste, “From the Ashes,” 8.16.2010
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)
Intentionality
Governance in the Next Economy
Why “Metropolitan Business Planning”?
The steps to analyzing and improving a regional economy lend themselves to the proven discipline of business planning.
ECONOMIC GROWTH PLANNING TRADITIONAL BUSINESS PLANNING
Vision for the Regional Economy Business Mission & Vision
Status of Economy: Assets,Opportunities, Challenges Market Analysis
Goal-Setting & Strategy Identification Analysis of Strategic Alternatives & Risks
Identification of Policies, Programs, Products & Interventions Development of Products & Services
Operational Planning for Implementation Operational & Management Planning
Identification of Funding Needsand Sources Forecasting & Financial Planning
Definition of Outcome Measures & Targets Target-Setting & Performance Tracking
Source: Brookings Institution
Metro Development Baseline/Overview (MDBO)Mission/Vision: MSP as a flexible, adaptable, dynamic region home to a business environment in which Fortune 500
companies and entrepreneurs alike can thrive.↓
Market Analysis: Strong, diverse clusters, but minimal strategic support; highly educated workforce, but flagging talent attraction; robust university & corporate R&D environment, but limited commercialization; culture of civic engagement,
but fragmented & uncoordinated efforts; ample regional data, but dispersed in multiple locations ↓
Goals: Highly networked cluster firms & institutions; workforce skills matched to emerging, in-demand jobs; enhanced levels of innovation & entrepreneurship; reduced congestion & spatial mismatch; dynamic public, civic & non-profit
institutions; more & better information for private-sector decision making↓
Strategies: MSP Regional Cluster Initiative; Regional Economic Development Partnership; Thinc.Green; Corridors of Opportunity; Entrepreneurship Accelerator.
↓
Business Plan Components
Metro Development Baseline/Overview (MDBO)Mission/Vision: MSP as a flexible, adaptable, dynamic region home to a business environment in which Fortune 500
companies and entrepreneurs alike can thrive.↓
Market Analysis: Strong, diverse clusters, but minimal strategic support; highly educated workforce, but flagging talent attraction; robust university & corporate R&D environment, but limited commercialization; culture of civic engagement,
but fragmented & uncoordinated efforts; ample regional data, but dispersed in multiple locations ↓
Goals: Highly networked cluster firms & institutions; workforce skills matched to emerging, in-demand jobs; enhanced levels of innovation & entrepreneurship; reduced congestion & spatial mismatch; dynamic public, civic & non-profit
institutions; more & better information for private-sector decision making↓
Strategies: MSP Regional Cluster Initiative; Regional Economic Development Partnership; Thinc.Green; Corridors of Opportunity; Entrepreneurship Accelerator.
↓
Detailed Development Initiative (DDI): Entrepreneurship AcceleratorIntervention: Accelerate growth of innovative early- stage businesses & ideas into venture-
ready companies by providing continuum of resources to entrepreneurs & community↓
Operational Plan: Mentorship/advice (EIRs); technical support; capital; information-sharing↓
Financial Sources & Uses (3 yrs): $12-14MM public & philanthropic funds; 14 direct investments
↓
Metrics: # companies advised; companies’ achievement of business plan milestones; companies’ ability to attract follow-on investments; EA funds raised, etc.
Business Plan Components
Metro Development Baseline/Overview (MDBO)Mission/Vision: MSP as a flexible, adaptable, dynamic region home to a business environment in which Fortune 500
companies and entrepreneurs alike can thrive.↓
Market Analysis: Strong, diverse clusters, but minimal strategic support; highly educated workforce, but flagging talent attraction; robust university & corporate R&D environment, but limited commercialization; culture of civic engagement,
but fragmented & uncoordinated efforts; ample regional data, but dispersed in multiple locations ↓
Goals: Highly networked cluster firms & institutions; workforce skills matched to emerging, in-demand jobs; enhanced levels of innovation & entrepreneurship; reduced congestion & spatial mismatch; dynamic public, civic & non-profit
institutions; more & better information for private-sector decision making↓
Strategies: MSP Regional Cluster Initiative; Regional Economic Development Partnership; Thinc.Green; Corridors of Opportunity; Entrepreneurship Accelerator.
↓
Detailed Development Initiative (DDI): Entrepreneurship AcceleratorIntervention: Accelerate growth of innovative early- stage businesses & ideas into venture-
ready companies by providing continuum of resources to entrepreneurs & community↓
Operational Plan: Mentorship/advice (EIRs); technical support; capital; information-sharing↓
Financial Sources & Uses (3 yrs): $12-14MM public & philanthropic funds; 14 direct investments
↓
Metrics: # companies advised; companies’ achievement of business plan milestones; companies’ ability to attract follow-on investments; EA funds raised, etc.
Business Plan Components
Metropolitan Investment Prospectus
Northeast Ohio
Minneapolis-St. PaulPuget Sound
Source: Brookings Institution
Pilot Metro
Business Planning Regions
Affordable Housing
HUD Section 8
Workforce Training
Small Business
Assistance
Upgrading Roads and
Rail
Export Strategy
Dept. of Labor
Workforce Inv. Act
Dept of Commerce Int’l. Trade
Admin.
Dept. of Transpo.
SAFETEA-LU Programs
Small Business Admin. Loans
A New Economic Federalism
HUD Section 8
Dept. of Labor
Workforce Inv. Act
Dept of Commerce Int’l. Trade
Admin.
Dept. of Transpo.
SAFETEA-LU Programs
Small Business Admin. Loans
A New Economic Federalism
DevelopInnovation-
EnablingInfrastructure
Create EffectivePublic & Civic
Culture & Institutions
DeployHuman CapitalAligned with
Job Pools
EnhanceRegional
Concentrations
Increase Spatial
Efficiency
Comprehensive Metropolitan Strategy
A New Economic FederalismIntegrated Federal Investment
White House Office of Urban
Affairs
HUD Section 8
Dept. of Labor Workforce Inv. Act
Small Business Administration Loans
Department of Transportation
SAFETEA-LU Programs
Department of Commerce
International Trade Administration
DevelopInnovation-
EnablingInfrastructure
Create EffectivePublic & Civic
Culture & Institutions
DeployHuman CapitalAligned with
Job Pools
EnhanceRegional
Concentrations
Increase Spatial
Efficiency
Comprehensive Metropolitan Strategy
Cross-Agency Regional Teams Pooled and Flexible Funding Support for Regional Capacity Building “New Federalism” Partnership
A New Economic FederalismIntegrated Federal Investment
White House Office of Urban Affairs
HUD Section 8
Dept. of Labor Workforce Inv. Act
Small Business Administration Loans
Department of Transportation SAFETEA-LU
Programs
Department of Commerce International Trade
Administration
DevelopInnovation-
EnablingInfrastructure
Create EffectivePublic & Civic
Culture & Institutions
DeployHuman CapitalAligned with
Job Pools
EnhanceRegional
Concentrations
Increase Spatial
Efficiency
Comprehensive Metropolitan Strategy
Cities Charting New Directions:Metropolitan Business Planning Robert Weissbourd
City Reformers Group Workshop
March 22, 2011
DISCUSSION
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