▸ JON ROBERTS

▸ TRACYE MCDANIEL

CITIES AT A CROSSROAD

JULY 16, 2020

CHARTING A NEW ECONOMIC COURSE

TIP STRATEGIES

ABOUT TIP▸ A brief introduction

TRENDS▸ The world before and after COVID-19

A STRATEGIC RESPONSE▸ Forces of change▸ Why communities must take action

POST COVID-19 FOCUS▸ What comes next?

CONTENTS

TIP STRATEGIES

1ABOUT TIP

TIP STRATEGIES

Committed to holistic thinking and sustainable development.

We design strategies that will support your community’s vision for the future.

THEORY INTO PRACTICE

TIP STRATEGIES

Year founded1995

Engagements400+

Clients300+

States44

Countries5TIP STRATEGIES

R&D PRODUCTION OPERATIONSIN

THE

FIE

LDENGAGEMENT MANAGEMENTLEADERSHIP

Tom StellmanCEO & Founder

Tracye McDanielPresident

Jon RobertsManaging Partner

Jeff MarcellSenior Partner

BEHI

ND T

HE S

CENE

S

Alex CookeSVP, Consulting

Elizabeth ScottConsultant

Jaclyn LeConsultant

John KarrasVP, Business Dev.

Jenn-Todd GoynesConsultant

Brent McElreathSVP, R&D

Evan JohnstonAnalyst

Phoebe PolakovicAnalyst

Sarah KelleyAdjunct Analyst

Karen BeardSVP, Production

Meredith EberleDesigner

Misty BlazeAssoc. Designer

Tristin CaramihoVP, Accounting

4 principals with a total staff of 17

Austin, Seattle, and Boston offices with global reach

Rachel WiseProposal Writer

TIP STRATEGIES

New JerseyCoordination of statewide business stabilization and reopening after Hurricane Sandy

TIP’S PORTFOLIO OF ECONOMIC RESILIENCY AND RECOVERY WORK

Harris County, TXCreation of an Economic Equity and Opportunity Department

MS Gulf Coast & NW FL ForwardOpportunities analysis & strategy to guide economic recovery funds from the BP Oil Spill

Delaware Prosperity PartnershipDesign of an inclusive tech talent pipeline for the state

Detroit Workforce Funders CollaborativeAlignment of funding for equitable & inclusive COVID-19 recovery

MassDevelopmentStrategies to mitigate the impact of federal budget cuts on the state’s defense contractors

IEDCRe-launch & assistance with economic recovery tools for RestoreYourEconomy.org

Greater New OrleansAnalysis of opportunities for reuse of Jazzland amusement park ruined by Hurricane Katrina

TIP STRATEGIES

▸ Summit provides data analysis and economic development insights to help cities identify and leverage their economic strengths and opportunities.

▸ TIP Strategies provides economic data analysis and expertise and helps facilitate a day-long summit of community leaders to discuss economic development challenges and opportunities.

▸ The outcome is a community analysis that highlights regional connections and dependencies, identifies next steps to tackle the issues discovered, and helps the community move forward on the solutions conceived during the event.

NATIONAL LEAGUE OF CITIES AND TIP STRATEGIES ONGOING PARTNERSHIPFirst Tier Suburbs Economic Development Summit Program

TIP STRATEGIES

2TRENDS

TIP STRATEGIES

THE GEOGRAPHY OF JOBSthe big picture

https://tipstrategies.com/geography-of-jobs/

TIP STRATEGIES

Sources: US Bureau of Labor Statistics, Current Employment Statistics (total nonfarm employment, not seasonally adjusted).Note: Industry classifications have changed over the decades. The grouping of broad sectors in this chart is the closest possible match to consistent definitions.

STRUCTURAL ECONOMIC CHANGE

Manufacturing 25%

9%

0%

5%

10%

15%

20%

25%

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

SHARE OF NONFARM EMPLOYMENTAnnual average employment for selected sectors, 1970-2018

TIP STRATEGIES

Source: US Bureau of Labor Statistics, Household Survey (Current Population Survey); National Bureau of Economic Research.Note: Employment is seasonally adjusted and includes all workers age 25 and older. The National Bureau of Economic Research (NBER) officially dates the Great Recession as December 2007 through June 2009 (19 months total).

A DIVIDED RECOVERY

CUMULATIVE CHANGE IN EMPLOYMENT

Millions of jobs from December 2007

High school or less-4.0 million

Some college or associate degree1.4 million

Bachelor's degree or higher15.2 million

-6

-4

-2

0

2

4

6

8

10

12

14

16

2007 2009 2011 2013 2015 2017 2019

THE

GRE

AT

RECE

SSIO

N

TIP STRATEGIES

AND THEN ALONG COMES A PANDEMIC

TIP STRATEGIES

▸ Simultaneous shocks to supply and demand (e.g., oil and gas)

▸ Inevitability of further turmoil related to global recessionary trends

▸ Disruption of established patterns of work, consumer spending, and social norms: The “new abnormal”

▸ The importance of social justice in recovery and growth

THE CASCADING EFFECTS OF UNEVEN PROLONGED SHUTDOWNS…

TIP STRATEGIES

ACCELERATION OF EXISTING TRENDS▸Supply chain restructuring▸On-line retail sales▸Flexible workspace▸Health and medicine ▸Composition of the workforce▸Social inequityTIP STRATEGIES

Driven by:

▸ Trade policy (tariffs and protection of national industries)

▸ Immigration restrictions

▸ Vulnerabilities (climate, health, geopolitics)

▸ Time to market

▸ Rising labor costs in developing nations

SUPPLY CHAIN RESTRUCTURINGResiliency – not just “cost and efficiency”

TIP STRATEGIES

Source: PwC US Remote Work Survey, June 25, 2020.Note: PwC surveyed 120 US company executives and 1,200 US office workers between May 29 and June 4, 2020, to see how effective remote work has been.

EXECUTIVES AND WORKERS EMBRACE REMOTE WORK MODELS

72% of office workers would like to work remotely at

least two days a week.

11%

36%

34%

21%

25%

55%

77%

39%

After COVID-19

During COVID-19

Before COVID-19

Few (0-29%) Many (30-59%) Most (60-100%)

PERCENT OF OFFICE EMPLOYEES EXECUTIVES ANTICIPATED WILL WORK REMOTELY AT LEAST ONE DAY PER WEEK

TIP STRATEGIES

▸ Less than one in five black workers and roughly one in six Latinx workers work from home.

▸ Higher-wage workers are six times as likely to be able to work from home as lower-wage workers.

▸ Workers in leisure and hospitality are least able to work from home.

▸ Workers with children navigate continuing to work while also providing adequate care for their children as schools’ doors are shut.

NOT EVERYONE CAN WORK FROM HOMEBlack and Latinx workers are much less likely to work remotely

Source: U.S. Bureau of Labor Statistics, Job Flexibilities and Work Schedules — 2017–2018 Data from the American Time Use Survey

TIP STRATEGIES

Source: Chmura Economics & Analytics, JobsEQ

THE DISPARITY CRISIS

-0.6%

-8.3%

-5.3%

7.2%

77.1%

17.3%

12.7%

6.5%

76.5%

9.0%

7.4%

13.7%

White

Hispanic

Black

Asian

RACE & ETHNICITY MIX IN REMOTE JOB OCCUPATIONS IN THE US

All Jobs Remote Jobs Remote work differential

TIP STRATEGIES

11.8%

0.6%

2020

-Q1

2019

-Q3

2019

-Q1

2018

-Q3

2018

-Q1

2017

-Q3

2017

-Q1

2016

-Q3

2016

-Q1

2015

-Q3

2015

-Q1

2014

-Q3

2014

-Q1

2013

-Q3

2013

-Q1

2012

-Q3

2012

-Q1

2011

-Q3

2011

-Q1

2010

-Q3

2010

-Q1

2009

-Q3

2009

-Q1

2008

-Q3

2008

-Q1

2007

-Q3

2007

-Q1

2006

-Q3

2006

-Q1

2005

-Q3

2005

-Q1

2004

-Q3

2004

-Q1

2003

-Q3

2003

-Q1

2002

-Q3

2002

-Q1

2001

-Q3

2001

-Q1

2000

-Q3

2000

-Q1

Source: US Census Bureau.

US ONLINE SALES AS A PERCENT OF TOTAL RETAIL SALES

Will 2020 be an inflection

point?

A near-linear trajectory over 20 years

TIP STRATEGIES

▸ Existing trend of “going cashless” is being accelerated.

▸ Efficiencies and safety gained through touchless transactions.

▸ Disruptions to the banking system (ATMs).

▸ Unbanked individuals and businesses will be affected.

▸ New apps will challenge elderly.

MOVING TOWARD A CASHLESS FUTUREFar reaching disruptions

TIP STRATEGIES

Source: FH Healthcare Indicators and FH Medical Price Index 2019: An Annual View of Place of Service Trends and Medical Pricing via the American Medical Association. https://www.ama-assn.org/practice-management/digital/telehealth-53-growing-faster-any-other-place-care

HEALTHCARE WILL CHANGETelehealth was already building momentum

% change 2016 to 2017

Telehealth 53%

Urgent care centers 14%

Retail clinics 7%

Ambulatory surgical centers (ASCs) 6%

Emergency departments -2%

CLAIMS FILED FOR ALTERNATIVE SETTINGS OF CARE FROM 2016 TO 2017

TIP STRATEGIES

Notes: Includes labor force participants 16 and older. Persons with no previous work experience and persons whose last job was in the US Armed Forces are included in the unemployed total.Source: US Bureau of Labor Statistics - Current Population Survey (CPS); TIP Strategies, Inc.

NEW JOB VULNERABILITIES JUNE 2020 US UNEMPLOYMENT RATE BY OCCUPATION GROUP

TIP STRATEGIES

Notes: Only detailed occupations with at least 10 resident workers included. Demographic estimates are for the US. Selected occupations' "essential" and "salary" indicators have been modified from their initial designations by the St. Louis Fed.Sources: US Department of Labor (O*NET); ACS 2017 5-year sample via IPUMS; EMSI 2020.2 – QCEW Employees, Non-QCEW Employees, and Self-Employed; Gascon & Werner (April 3, 2020), "COVID-19 and Unemployment Risk: State and MSA Differences," Federal Reserve Bank of St. Louis; TIP Strategies, Inc.

THE TIP STRATEGIES RISK TOOLOCCUPATIONAL RISK PLOT: UNITED STATES

TIP STRATEGIES

3A STRATEGIC RESPONSE

TIP STRATEGIES

The future is uncertain... but this uncertainty is at the very heart of human creativity.

- Ilya Prigogine, Nobel laureate and author of “The End of Certainty”TIP STRATEGIES

Where are we now?

How do we restart our economy equitably?

When this is over, where

will we be?

ASSESS YOURVULNERABILITIES

1 2 3

ACCELERATE YOUR RECOVERY

POSITIONYOUR COMMUNITY

KEY QUESTIONS TO ASK OF YOUR COMMUNITY

TIP STRATEGIES

▸ How should we modify our activities and programs?

▸What do we add to our activities (what new things)?

▸ How do we enable remote work (the tools and space questions)?

▸ Can we guide local governments to “become the customer?”

▸ Can we build social equity into all of our programs and activities?

ASK THE RIGHT QUESTIONS…

TIP STRATEGIES

What is your goal?

TIP STRATEGIES

Is your goal to get back to where you were?

TIP STRATEGIES

▸ Provides a more complete picture of challenges and barriers faced by under-resourced populations.

▸ Grounds solutions, decisions, and efforts to bridge resource gaps in factual information.

▸ Useful in tracking progress towards achieving economic inclusion goals.

Greater MSP Regional Indicators Dashboard

Inclusive growth indicators that track jobs, capital investment, and business ownership by race and ethnicity.

DISAGGREGATE DATA

WHAT IS IT?

WHY IS IT IMPORTANT?

BEST PRACTICE

TIP STRATEGIES

▸ Declining traditional retail outlets, changing consumer preferences, and outdated design demanded a new vision.

▸ Creative approach to solve housing shortages▸ Unique redevelopment opportunity revitalizes a

large struggling property.▸ Provides new revenue streams.

Wausau Center Mall Redevelopment, WI

Re-envisioning a struggling downtown mall.Similar approaches (e.g., Lynwood, WA) are transforming malls nationally.

RETHINK URBAN DESIGN

WHAT IS IT?

BEST PRACTICE

WHY IS IT IMPORTANT?

TIP STRATEGIES

▸ Broadband access is increasingly central to economic success and participation in the workforce.

▸ COVID-19 has highlighted the consequences of the digital divide for education and employment outcomes.

▸ Disadvantaged populations are often excluded from occupations that require high speed Internet access.

Richmond Broadband Access Strategy

New approach to providing high-speed Internet access to every residential unit within the city. Drawing upon San Antonio Digital Inclusion.

EXPAND BROADBAND ACCESS

WHAT IS IT?

WHY IS IT IMPORTANT?

BEST PRACTICE

TIP STRATEGIES

▸ Targeted assistance to grow small businesses and encourage entrepreneurship.

▸ Support race and gender-based contracting and procurement process.

▸ Partner with workforce development organizations to support employers.

▸Monitor and evaluate progress by access, impact, and participation by geography, race, gender, income, and language access.

Economic Opportunity Department, Harris County, TX

Creation of a Department of Economic Equity and Opportunity

OPERATIONALIZE EQUITY AND INCLUSION

WHAT IS IT?

WHY IS IT IMPORTANT?

BEST PRACTICE

TIP STRATEGIES

4THE POST-COVID-19 FOCUS: WHAT COMES NEXT?

TIP STRATEGIES

Various strategies will come into play, but these are the most predictableWHAT ARE THE APPROACHES?

EFFICIENCYThe reduction of human transactional interaction, elimination of redundancies, and streamlining of systems will all be in play.

INNOVATIONTechnology will play an increasing role in addressing all of the targets, from workforce training (people) to supply chain restructuring (businesses) to fiscal health.

CONSOLIDATIONExpect aggressive elimination of silos in government, greater integration of business systems, and mergers and acquisitions (including regional consolidation efforts between cities and counties).

TIP STRATEGIES

QUESTIONS?

TIP STRATEGIES

2905 San Gabriel StreetSuite 309

Austin, TX 78705

512.343.9113

www.tipstrategies.com

AUSTIN BOSTON SEATTLETIP STRATEGIES