Egils Milbergs Executive Director
Washington Economic Development Commission www.wedc.wa.gov
Four Pillars for Economic Growth and Job Creation
Making it in Washington February 1, 2012
Commission Members
Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics
Recovery: Non-farm Employment Monthly difference with start of recession (Q4 2007)
-208.1
-250
-200
-150
-100
-50
0
50
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
Dif
fere
nce
wit
h In
itia
l Pe
rio
d E
mp
loym
en
t
(Th
ou
san
ds
of
Wo
rke
rs)
Months of Recovery
2001 Recession (3 quarters) Since Q4 2007
Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics
Non-farm Employment Seattle-Bellevue-Tacoma Metropolitan Area
-118.9
-71.2
1,340
1,360
1,380
1,400
1,420
1,440
1,460
1,480
1,500
Au
g-0
7
Oct
-07
Dec
-07
Feb
-08
Ap
r-0
8
Jun
-08
Au
g-0
8
Oct
-08
Dec
-08
Feb
-09
Ap
r-0
9
Jun
-09
Au
g-0
9
Oct
-09
Dec
-09
Feb
-10
Ap
r-1
0
Jun
-10
Au
g-1
0
Oct
-10
Dec
-10
Feb
-11
Ap
r-1
1
Jun
-11
Au
g-1
1
Oct
-11
Dec
-11
Line indicates employment level in April 2008 (recent max)
Key Performance Comparisons (by range, state rank and trend)
5 WEDC 1.4
$45,464
1.8%
$43,564
0.442
4.0%
86
Real per capita GDP, 2010
Non-farm employment growth, Nov ‘11 3mma
Per capita personal income, 2010 (current USD)
Gini Coefficient, 2005-2009
Computer and mathematical occupations, as % total workforce, 2010
Patents (all types) per 100k residents
AK, DE, CT
ND, OK, UT
CT, MA, NJ
UT, AK, NH
VA, MD, WA
VT, WA, CA
Washington’s Rank
#14
#11
#14
#19
#3
#2
$29,318
0.8%
0.499
$31,046
4.6
-0.8%
$63,090
$54,877
4.9%
0.411
106.8
5.1%
(Scale in reverse)
(More than double 2005)
Data source: Washington State Employment Security Department.
Non-farm Absolute Gains and Losses, Year-over-Year Seattle-Bellevue-Tacoma Metropolitan Area, November 2011 (1000s workers)
-0.63
-0.33
-0.33
-0.33
-0.03
1.30
1.77
1.83
3.73
8.63
Credit Intermediation and Related Activities
Insurance Carriers and Related Activities
Accounting, Tax Preparation, Bookkeeping and Payroll
Truck Transportation
Air Transportation
Administrative and Support Services
Architectural, Engineering and Related Services
Software Publishers
Computer Systems Design and Related Services
Transportation Equipment Mfg
Larg
est
Lo
sse
s La
rge
st G
ain
s
The Good and the Bad
Reasons for Optimism
• Young, connected, smart people • Strong anchor companies:
aerospace, food, information technology, medical, non-profit
• Intellectual property hotspot • Attractive place to live • No income tax • Pacific Rim location • Potential defense opportunities • Growing entrepreneurial sector • Abundant energy sources
Reasons for Pessimism
• Global uncertainty • Long term unemployed • Skills mismatch • Short on engineering talent • Underperforming schools • Poor transport infrastructure • Lagging regions • Income disparity • Cost/complexity to start a new
business.
7 WEDC 1.4
To accelerate job creation, WA must make progress on four dimensions
Intellect
Investment
Infrastructure
International
Emphasize career transition, access to learning resources and the skills that employers need.
Create innovation ecosystem to foster new products, start-ups and manufacturing.
Design a 21st century infrastructure, an efficient regulatory system and align to regional objectives.
Grow the global presence of Washington’s business.
8 WEDC 1.4
Policy Specifics Around the Four Pillars
TALENT and WORKFORCE
1. Channel talent
pipeline to industry needs
2. Shift focus of UI to support new career prep.
3. Retain foreign student graduates
4. Navigate career choices with personalized information
INVESTMENT and
ENTREPRENEURSHIP
1. Recruit STARs
research teams
2. Provide operational funds for IPZs
3. Turn on FDI
4. Enhance tax policy to close gaps in commercialization
INFRASTRUCTURE and REGULATIONS
1. Assess economic
development outcomes.
2. Create Lean Institute for regulatory efficiency
3. Align infrastructure investments to local priorities
4. Pilot self financing of collaborative innovation.
INTERNATIONAL BUSINES (Exports)
1. Optimize export
services to SMEs
2. Modernize transportation infrastructure for freight mobility
3. Intensify innovation collaboration in the Pacific Northwest.
SOURCE: Statement of Priorities for Kick-starting Job Creation, Washington Economic Development Commission, Nov 22 , 2011 9 WEDC 1.4
Workforce Challenge
WA Economic Development Commission 10
Technical
Prof
Technical
Unskilled
Prof
Unskilled
Washington STAR Researchers
Michael Hochberg Birgitte Ahring
Chen-Ching Liu
Daniel Kirschen
UW
WSU – BSEL Center for Bioproducts and Bioenergy
Smart Grid
WSU
Hugh Hillhouse
Faces of Emerging Industries
Entrepreneurs-in-Residence
Lars Johansson
Ronald Berenson
Terri Butler
Henry Berg
Stephanie Amoss
Ken Myer
David Kaplan
David Croniser
Thomas Schulte
Bryan Zetlan
Lewis Rumpler
Peter Quinn
Karen Fleckner
Kevin Petersen
Jeff Canin
Chris Leyerle
Startup Weekend
WA Economic Development Commission 13
Whidbey Island Naval Air
Puget Sound Naval Shipyard
Joint Base Lewis McChord
Madigan Medical Center
Naval Submarine Base Bangor
Spokane Fairchild AFB
US Coast Guard
WA Nat’l Guard
US Army, Yakima US Marine Corps
Opportunities in Defense Technology
191,000 jobs $12.2 billion in output
$10.5 billion in labor income $5.2 billion in defense contracts
Intelligence, Surveillance, and Recon
Special forces and special operations
Network-centric operations
Cyber security
Composite materials
Unmanned systems – both air and sea
Energy efficiency
Environmental stewardship
Health care for veterans
Naval Station Everett
14
Transforming Infrastructure
Post “ICE” Age? Internal Combustion Engine
15
Leave oil before it leaves us!
15 WA Economic Development Commission
Innovation Partnership Zones
Bellingham Innovation Zone
Aerospace Convergence Zone
North Olympic IPZ
Tri-Cities Research District
South Lake Union Life Science IPZ
Spokane University District IPZ
Bothell Biomedical Manufacturing Corridor Central Washington Resource Energy Collaborative Grays Harbor Sustainable Industries
Pullman –Clean Tech Industries
Walla Walla IPZ
Interactive Media and Digital Arts King County Financial Services Collaborative Urban Clean Water Technology Zone
WA Economic Development Commission 17
Washington’s Global Health Ecosystem
T
S
R&D Assets
•University based research centers
•National Labs (gov’t)
•Corporate Labs
•Inventors (patent owners)
Transformers
•Entrepreneurs
•Start-ups
•Incubators
•Technology Development Initiatives
•Industry University Collaborations
T
Funders
•Government Policies/Programs/Incentives
•Venture Capital
•Angel/Seed Networks
•Corporate R&D
•IPOs
S
Support
•Regional Innovation Clusters
•Talent pool
•Professional (Legal, Accounting, HR , Mentors)
•Marketing and Branding
Innovation Ecosystem
Not just ingredients but the relationships
Adapted from Navi Radjou, Forrester Research 18 WA Economic Development Commission
Innovation Ecosystems Evolve
Growth
Transformational
Nascent
Emerging
None or few firms Growth potential
Few to many firms Fast growth
Some linkages
Accelerated collaboration Many linkages
Attraction of firms
Many nodes Dense linkages
Region to Region Next generation
STARS IPZs
R&D
EIRs Patents
Incubators
Innovation Triggers
Tax Incentives
Talent
Gap Funding SBIR
19 WA Economic Development Commission
21
Fiscal constraints require new priorities Some difficult choices for economic development
Reduce Create
Eliminate Invest
Tough Trade-offs
Economic Development
Programs Outcomes
Jobs
Income Distribution
Per capita GDP growth
Quality of life
Tax revenues
WEDC 1.4
22
Current Economic Development System Many pieces, but how do they work together?
Dept of Commerce 18 Programs
Governor’s Office Strategic Reserve Account
Employment Security
Department 15 Programs
Dept. of Agriculture 5 Programs
Dept. of Social & Health Service
3 Programs
WSDOT 2 Programs
OSPI /Early Learning
3Programs
WA SBCTC 10 Programs
Workforce Training Board
2 Programs
Washington State University
5 Programs
University of WA 6 Programs
36 other state economic programs
Recreation & Conservation Office
14 Programs
Innovate WA 8 Programs
Trade Associations Economic
Development Councils
Innovation Partnership
Zones
City & County Government
Federal Labs
SBA
Dept. of Agriculture
SBIR/STTR
Dept. of Defense
Business and Local Economic Development Organizations
Fed
eral P
rogram
s
Dept of Commerce
Associate Development Organizations
WEDC 1.4
PNWER Region (GDP/Pop.) State/Prov. GDP* Population
Wash. 322,778 6,549,224 Alberta 291,300 3,735,086 B.C. 191,006 4,551,853 Oregon 161,573 3,782,991 Idaho 52,747 1,545,801 Alaska 47,912 686,293 Sask. 41,296 1,049,701 Montana 29,885 974,989 NW Terr. 4,124 41,464 Yukon 2,026 34,157 Total 1,144,647 22,901,559
*2009 population & GDP in $US Million Data provided by PNWER – Pacific Northwest Economic Region
Pacific Northwest is an innovation powerhouse
If PNWER were a separate country,
it would rank 14th in total GDP
23 WA Economic Development Commission
If PNWER were a separate country,
it would rank 14th in total GDP
24 WA Economic Development Commission