exploring opportunities for a stronger regional economy
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Exploring Opportunities for a Stronger Regional Economy. Module Six. Reflecting on the Previous Session. What did you find most useful or valuable? What progress have you made since then? Any questions or clarification needed?. COMMUTING PATTERNS. COMMUTING PATTERNS. - PowerPoint PPT PresentationTRANSCRIPT
Exploring Opportunities for a Stronger Regional Economy
Module Six
Reflecting on the Previous Session
• What did you find most useful or valuable?• What progress have you made since then?• Any questions or clarification needed?
COMMUTING PATTERNSTable 1. Where Workers in a County Reside
Carson City Churchill Douglas Humboldt Lyon Mineral Pershing Storey WashoeCarson City 43.42% 2.22% 10.68% 1.03% 8.40% 2.81% 1.86% 5.99% 2.80%
Churchill 1.64% 71.72% 0.67% 1.34% 5.74% 3.89% 3.79% 1.65% 0.84%Douglas 12.83% 1.66% 49.78% 0.75% 3.28% 3.83% 1.80% 0.90% 1.70%Humboldt 0.52% 0.80% 0.23% 67.03% 0.28% 1.08% 8.26% 0.07% 0.33%
Lyon 12.76% 5.82% 3.95% 0.59% 60.00% 5.68% 4.79% 16.67% 3.17%Mineral 0.21% 0.57% 0.19% 0.11% 0.44% 67.58% 0.13% 0.14% 0.10%
Pershing 0.41% 0.43% 0.08% 4.20% 0.22% 0.36% 61.05% 0.07% 0.13%Storey 0.82% 0.19% 0.29% 0.05% 0.73% 0.18% 0.27% 19.63% 0.54%
Washoe 18.79% 9.26% 9.62% 5.39% 15.63% 5.80% 8.46% 50.41% 80.98%Rest of Nevada 4.33% 4.44% 3.77% 15.16% 1.71% 2.81% 6.19% 0.07% 4.99%RUS or ROW 4.25% 2.89% 20.73% 4.34% 3.56% 5.98% 3.40% 4.41% 4.42%
TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
COMMUTING PATTERNS
Table 2. Where Workers from a Given County Work.Carson City Churchill Douglas Humboldt Lyon Mineral Pershing Storey Washoe
Carson City 54.17% 4.73% 18.84% 1.96% 19.34% 3.21% 5.89% 12.75% 2.90%Churchill 0.78% 58.11% 0.69% 0.84% 2.48% 2.43% 1.70% 0.84% 0.40%Douglas 8.96% 1.30% 49.15% 0.59% 4.03% 1.99% 0.72% 3.03% 1.00%Humboldt 0.34% 1.02% 0.29% 66.67% 0.24% 0.44% 15.86% 0.22% 0.22%Lyon 3.89% 6.14% 1.79% 0.39% 33.78% 2.49% 1.19% 4.21% 0.90%Mineral 0.21% 0.68% 0.34% 0.25% 0.52% 62.47% 0.31% 0.17% 0.05%Pershing 0.13% 0.60% 0.14% 1.69% 0.40% 0.11% 47.37% 0.22% 0.07%Storey 0.39% 0.25% 0.07% 0.01% 1.33% 0.11% 0.05% 16.01% 0.41%Washoe 24.03% 16.59% 17.13% 8.52% 33.03% 9.95% 12.76% 57.36% 85.91%Rest of Nevada 3.11% 5.94% 2.77% 16.22% 2.46% 4.42% 9.50% 2.64% 4.53%RUS or ROW 3.98% 4.65% 8.78% 2.86% 2.39% 12.38% 4.65% 2.53% 3.61%
TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Overview of Module Six
• Explore basic concepts of competitive advantage
• Provide an overview of tools and data available to detect regional competitive advantage
• Examine strategies for building stronger regional economies
BASIC CONCEPTS OF COMPETITIVE ADVANTAGE
Competitive Advantage: Four Factors
What determines competitive advantage?• Firm Strategy, Structure and Rivalry • Factor Conditions• Related and Supporting Industries • Demand Conditions
Business shapes the economic value of a region, but places can help shape, nourish and
sustain local enterprises and industry.
Health Care Industry
Firm Strategy:3 hospitals
7 full-time doctors
Industry determined by university-owned hospital, located 100 miles away
Demand Conditions: Unemployed and underemployed
seeking low-cost health care
Higher income leaving the region for large urban hospital
Factor Conditions: Low rent
Inexpensive unskilled labor
Difficult to retain medical professionals
Related and Supporting Industry:25% of durable supplies can be
purchased locally
0% of non-durable supplies can be purchased locally
What value chains or
clusters exist in our region?
How many competitors?
What is the threat of new entry? Local customer
base? What do people want?
How does place influence the
quantity, quality and cost of input
factors?
DETECTING REGIONAL COMPETITIVE ADVANTAGE
What Are the Keys toEconomic Growth?
• People• Place• Businesses• Innovation• Clusters or branding
First Key to EconomicGrowth: People
• Who are our workers? Skill level, education, occupation Work ethic
• Who are our residents? History and culture Long time residents, newcomers
People: The Residents• Who are the people that live in this region?
How long have they lived here? How many generations have lived here? Where did they originate? Why did they come?
• Why do they like living here? Social conditions Cultural factors Economic prospects
• Who are our workers? Basic demographics Experience Work ethic
• Is our workforce adapting to change? Technology Recognizing needs
People: The Workforce
Second Key to Economic Growth: Place
• What amenities does our region offer?
• Why would people want to live here?
• Why would businesses relocate here?
Place: Industrial Indicators
• Current leading employers • New and expanding companies and industries • Research facilities, R & D• Available land and buildings• Existing infrastructure• Access to transportation networks• Tax structure
Place: People & Quality of Life Indicators
• Population and labor force• Education• Health care• Recreational opportunities• Shopping• Crime, weather, etc.
• What is the portfolio of businesses (small, medium, large)?
• What does entrepreneurship look like?• What’s the mix of industrial sectors?
Third Key to Economic Growth: Business
Industries & Occupations: Looking at Your Region’s Data
• What types of industries/ businesses currently exist?
• What are key occupations?• How have these businesses
fared, particularly during the recent economic downturn?
Business Assistance in the Region
What type of programs, assistance or incentives are offered to:• Support expanding businesses?• Recruit new businesses?• Foster the growth of
entrepreneurs or small, locally-owned businesses?
Identifying Entrepreneurs
Small businesses
Self- Employed
People with underutilized talent
Social Entrepreneurs
Unemployed
Innovators
High growth businesses
Entrepreneurship
Youth
Who Is an Innovator/Entrepreneur?
Identifying Innovators & Entrepreneurs
Problem/Opportunity
New Old
Solution
New YES YES
Old YES NO
Entrepreneur: one whose goal is to create or capitalize on new economic
opportunities through innovation.
Assessing Entrepreneurship Capacity
• Community surveys Existing programs Community readiness Leadership Networks
• One-on-one interviews with local entrepreneurs
Assess ambitions and needs Identify local/regional constraints
Assessing Entrepreneurship CapacityInventory of Entrepreneurship:• BEA-REIS data• Census (non-employer statistics)• County Business Patterns• Panel Study on Entrepreneurial
Dynamics• Business owners survey
Capacity for New Entrepreneurs:• Educational attainment• Immigration and diversity• Financial resources• Business resources
Fourth Key to Economic Growth: Innovation
"Innovation . . . the successful
introduction of a new thing or
method . . . Innovation is the
embodiment, combination or
synthesis of knowledge in original, relevant,
valued new products, processes or services.”Luecke and Katz, 2003
How Nurturing is Your Region?
Conception Implementation Marketing
• Idea Generation• Project Planning
• Development• Prototype Dev• Testing
• Production• Launch
BusinessProcess
RegionalCapacity
• R&D centers• Universities• Industrial Parks
• Capital Availability• Community Support
• Education• Technical Assistance
Three Phases of Innovation
Source: Tawari, Buse and Herstatt, 2007
Your Region’s Capacity for Innovation
• Research & Development (R&D) assets
• Regional universities or community colleges
• Other resources that foster innovation
Fifth Key to Economic Growth:Clusters or Branding
• Cluster – making the whole greater than the sum of the parts
• Branding – consolidating the essential characteristics of the individual identity into a brand core
Industry Cluster Analysis
• Views firms and industries, as interdependent, not isolated
• Identifies value chains• Discovers collections of businesses
producing similar outputs
What Can Regional Cluster Analysis Tell Us?
Where we have . . . • Gaps • Growing industries/clusters• Declining industries/clusters
Data Needs
• Industry sector data: number of establishments (over time), number of employees, payroll, earnings
• Potential linkages to determine value chains
You Think There Is a Regional Cluster, So Now What?
• Map the cluster• Determine if growing or declining• Evaluate regional capacity• Identify potential leakages
& opportunities • Determine potential strengthening
strategies
MAPPING THE CLUSTER
Value Chain Cluster Example
Grape stock
Fertilizers, Pesticides, Herbicides
Grape harvesting equipment
Irrigation technology
Specialized publications
Public Relations & Advertising
Labels
Caps & Corks
Bottles
Barrels
Winemaking equipment
Educational, Research & Trade organizations
Growers/Vineyards
Wineries/Processing
facilities
State government agencies
California Agricultural Cluster
Tourism Cluster
Food Cluster
Wine
Source: California Department of Food and Agriculture
Cluster Illustration: Bubble Chart
Source: EMSI.com
Identify Potential Leakages and Business Opportunities
For the cluster, determine the:• Current regional capacity• Industry potential• Future growth of industry • Types of skills needed
Identify Potential Leakages and Opportunities for New Businesses
Wine
Zero inputs available regionally
Small % of inputs available regionally
Large % of inputs available regionally
100% of inputs available regionally
Labels
Grapes
Research
IIrrig
ation
System
Fertilizer
Advertising
Let’s look at the data for the Region
• Yesterday we looked at data that describes the people and the place.
• Today we are going to look at the data that describe the workers and the businesses– Workforce Data– Industry Data
The Workforce• Who are the workers in this region? • Are they blue collar or white collar? • What types of occupations have done
well lately?• Do you attract the creative class? • What are the skills or education needs
for targeted occupations?• What industries hire particular
occupations?
Occupation 2011 Jobs Growth (2002-2011)
Real Estate Brokers and Sales Agents
6,751 82%
Securities, Commodities, and Financial Services
4,437 73%
Financial Analysts and Advisors
6,788 67%
Fast Food and Counter Workers
6,305 27%
Miscellaneous Managers
4,055 45%
Nursing, Psychiatric and Home Health Aides
3,420 36%
Accountants and Auditors
3,286 32%
The Creative Class
• Should be attracted and retained
• Develop, design or create new applications, ideas, relationships, systems or products
• Considered “footloose” • Attracted to amenities
Florida, 2002
Where is the Creative Class in the US?How "creatively-driven" is your economy compared to the national average?
Dark-blue is the least creative and dark-red the most creative areas.
INDUSTRY OVERVIEW
Examining Clusters in Your Region
Cluster Choices• Advanced Materials• Agribusiness, Food Processing &
Technology• Apparel & Textiles• Arts, Entertainment, Recreation & Visitor
Industries• Biomedical/Biotechnical (Life Sciences)• Business & Financial Services• Chemicals & Chemical Based Products• Communications• Computer & Electronic Product
Manufacturing• Computers & Software• Construction Materials• Defense & Security• Education & Knowledge Creation• Electrical Equipment, Appliance &
Component Manufacturing
• Energy• Energy (Fossil & Renewable)• Fabricated Metal Product Manufacturing• Food Products & Services• Forest & Wood Products• Glass & Ceramics• Health• Information• Information Technology & Telecommunications• Machinery Manufacturing• Manufacturing Super Cluster (6 sub-clusters)• Metals & Machining• Mining• Primary Metal Manufacturing• Printing & Publishing• Transportation & Logistics• Transportation Equipment Manufacturing
GOVERNOR’S CLUSTERS• Tourism, Gaming, and Entertainment• Clean Energy• Health and Medical Services• Aerospace and Defense• Mining, Materials, and Manufacturing• Business IT Ecosystems• Logistics• Agriculture• Intangibles and Financial Enterprises• Water Technology
Example: NV Manufacturing Cluster
NV Manufacturing ClusterNAICS Code
Description 2002 Jobs 2011 Jobs2011
Average Earnings
2011 Establishments
311 Food Manufacturing 1,328 1,739 $57,382 62312 Beverage and Tobacco Product Manufacturing 154 126 $65,605 3313 Textile Mills 212 22 $30,691 3314 Textile Product Mills 349 179 $47,027 18315 Apparel Manufacturing 94 91 $15,349 2316 Leather and Allied Product Manufacturing 50 22 $32,253 4321 Wood Product Manufacturing 675 524 $56,857 28322 Paper Manufacturing 204 345 $63,081 13323 Printing and Related Support Activities 1,762 1,149 $63,866 65
324 Petroleum and Coal Products Manufacturing 106 157 $157,491 7
325 Chemical Manufacturing 404 613 $97,538 30326 Plastics and Rubber Products Manufacturing 2,070 1,192 $66,129 45327 Nonmetallic Mineral Product Manufacturing 1,203 822 $82,232 43
331 Primary Metal Manufacturing 548 653 $102,122 13
332 Fabricated Metal Product Manufacturing 3,366 2,802 $66,184 157333 Machinery Manufacturing 1,072 943 $86,365 54334 Computer and Electronic Product Manufacturing 2,930 2,328 $86,993 68
335Electrical Equipment, Appliance, and Component Manufacturing
374 201 $77,622 13
336 Transportation Equipment Manufacturing 1,399 1,176 $74,086 42337 Furniture and Related Product Manufacturing 856 490 $60,973 54
339 Miscellaneous Manufacturing 3,833 3,444 $104,242 95
Total 22,991 19,017 $79,021 817
NV Manufacturing Cluster
NAICS Code Description 2002 Jobs 2002 LQ 2011 LQ
339 Miscellaneous Manufacturing 3,833 2.34 2.34
326 Plastics and Rubber Products Manufacturing 2,070 1.10 0.88
323 Printing and Related Support Activities 1,762 1.08 1.03
327 Nonmetallic Mineral Product Manufacturing 1,203 1.04 1.01
332 Fabricated Metal Product Manufacturing 3,366 0.99 0.95
334 Computer and Electronic Product Manufacturing 2,930 0.90 0.96
314 Textile Product Mills 349 0.75 0.68
337 Furniture and Related Product Manufacturing 856 0.62 0.60
321 Wood Product Manufacturing 675 0.52 0.65
331 Primary Metal Manufacturing 548 0.50 0.78
333 Machinery Manufacturing 1,072 0.40 0.41
311 Food Manufacturing 1,328 0.39 0.55
336 Transportation Equipment Manufacturing 1,399 0.35 0.40
335 Electrical Equipment, Appliance, and Component Manufacturing 374 0.34 0.25
325 Chemical Manufacturing 404 0.20 0.35
Total 22,170 0.68 0.73
Looking Deeper into Misc Manufacturing Cluster
Distribution of Jobs Across Region
Strengthening the Miscellaneous Manufacturing Sector
Regional Occupations Related to Production
EXPLORING POSSIBLE ECONOMIC
DEVELOPMENT STRATEGIES
Strategies to Strengthen a Cluster or Brand
• Targeted attraction of industry• Business retention and expansion• New firm creation/entrepreneurship• Attraction of the creative class• Network development and
meta-business creation
Targeted Attraction of Industry• Past: Blindly attracting industry
• Now: Targeting businesses likely to be successful in the region
• Strategies: Cluster mapping Location models Community Business Matching
model
Location Models
Employs place specific data to:• Analyze the probability of an
industry moving to the region• Evaluate the region’s ability to
respond to industry needs• Select industries with the
highest likelihood of success
Community Business Matching Model
Compatibility Desirability
Community
Business
Assets
Needs Profile
Goals
The Ideal
Source: Cox et al., 2009
Business Retention & Expansion• Lets businesses know they are valued• Helps solve local business issues• Improves community awareness• Connects businesses to community
resources• Creates connections between community
organizations• Fosters job retention & growth
How BR&E Works
• Planning Phase• Action Phase
Recruit volunteer visitors Visit local businesses
• Follow-up Respond to concerns Plan for future
Regional Strategies to Increase Entrepreneurism
• Community-based training options Weekend boot camps FASTRAC or other 13-week programs Short-term targeted business training
• Access to business coaching• Youth entrepreneurship: 4H,
Scouts, in-school programs
Entrepreneurial Communities or Regions
Community Support
Conception
Birth
Openness to new ideas
and intellectual stimulation
Capital: Equity and Debt
Education: K-22
Information
Connections + Networking
Infrastructure
Services and Amenities
Source: Based on Reynolds, et. al., Small Business Economics 23: 263–284, 2004.
Attracting the Creative Class
The creative class is ‘footloose’ and tends to congregate in places with a high quality of life.
• Networking • Retain/attract youth • Recreational activities• Cultural diversity, tolerance and
inclusiveness• Infrastructure• Population density • Proximity to metropolitan areas• Natural amenities (esp. mountains, forest)
Po
ten
tial
to
Aff
ect
Business Network Development
A formal or informal collaboration or cooperation among either competing firms or
firms that are part of a value chain
for the purpose of
creating a net benefit for all involved
Network Examples
Workforce Development Example• Milwaukee Seven Water Council:
Transform the workforce system and create high performance talent pipelines within the region
Entrepreneurship Network Example• The Entrepreneurs Network:
Promote job growth and business creation
Meta-Business Formation
Strategies for generating revenue that support all local business
Examples:• Local coupons• Local credit/debit cards• Local currency • Business directories• Local stock exchange• Businesses that support other businesses
What’s Next?• Consider other potential strategies that
could be successful in the region
• Further examine the regional data
Final Reflections
What topics did you find most helpful?
What did you find confusing?
What other data do you need?
Other items you want to mention?
Looking Ahead: Module Seven
We will: Examine regional assets Explore the region’s seven
capitals Take an honest look at potential
barriers Take steps to link assets to
your potential regional goals