ncta presentation june 17 2011
TRANSCRIPT
Presentation to the NC TECHNOLOGY ASSOCIATION
REGIONAL TECHNOLOGY STRATEGIESCARRBORO, NC
June 17, 2011
Dare to CompareHow does NC Stack Up?
Topics
The North Carolina Economy yesterday & today
The Rankings SystemsNorth Carolina by CategoryCase Studies in State Technology
Development PolicyA Policy Comment Tangent
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The North Carolina Economy in 1970
The Big 3 Textiles Tobacco Furniture
The Big Three accounted for: 2/3rds of Manufacturing Employment 1/4qtr of Total Employment
And they lost by 2007 Textiles 2/3rds of Manufacturing Employment Furniture 2/3rds of Manufacturing Employment Tobacco 60% of Manufacturing Employment
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The North Carolina Economy in 2007
The New Big 5 represent 17% of NC GSP Technology Pharmaceuticals Financial Services Food Processing Automotive Vehicle Parts
NC in the Connected Age (Walden, 2008) Fastest growing occupation 1970-2005 –
Professional & Scientific Workers Per capita income in NC grew faster than US as a
whole Percent of population with college degrees
approached national average
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But People Keep Showing Up!5
North Carolina Economy: Where next?
Walden suggests Tourism, retiree migration Port development Air travel and Jack Kasarda’s Aerotroplis
Others Aerospace with Spirit, Boeing and others Military related industry Green industries (the biotech of the 2010s)
What will our panelists say?
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Comparing States: Information Technology & Innovation Foundation (ITIF)
The 2010 State New Economy IndexKnowledge JobsGlobalizationEconomic DynamismThe Digital EconomyInnovation Capacity
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North Carolina 2010 = 24
Comparing States: Milken Institute
State Technology & Science Index 2010Human Capital InvestmentR&D InputsRisk Capital and Entrepreneurial
InfrastructureTechnology and Science Work ForceTechnology Concentration and
Dynamism
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North Carolina 2010 = 13
Comparing States: National Science Board
Science & Engineering Indicators 2010Elementary/Secondary & Higher
EducationWorkforceFinancial R&D InputsR&D OutputsScience & Technology in the
Economy
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Comparing States: Conexus Indiana
2011 Manufacturing & Logistics Report Manufacturing Health Logistics Health Diversification Global Reach Venture Capital PC Productivity & Innovation Tax Climate Benefit Costs Human Capital
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North Carolina 2010 = B
Milken Institute Rankings11
Human Capital InvestmentInputs ($s) and outputs (grads, computers, internet) 26
R&D Inputs Inputs ($s) and outputs (SBIR, NSF) 16Risk Capital & Entrepreneurial Infrastructure VC, incubators, patents 8Technology & Science Work Force Engineers, scientists, IT 15Technology Concentration & Dynamism High tech concentration, growth 11
North Carolina by Category
ITIF Rankings12
Knowledge Jobs IT, Educ, Migration 28Globalization Export, FDI 10Economic Dynamism Churn, IPOs, patents 30Digital Economy Online, digital gov 33Innovation Capacity
High tech jobs, scientists, patents, R&D, VC 22
North Carolina by Category
Positive Rankings (NC State Rank)13
Percent Change in State Appropriations for Higher Education (2009-10) 3
Science, Engineering, and Health Postdoctorates Awarded per 100,000 People Ages 25 - 34 (2006) 7State Appropriations for Higher Education, Per Capita (2010) 6R&D Expenditures on Biomedical Sciences, US$ per Capita (2007) 4R&D Expenditures on Life Sciences, US$ per Capita (2007) 4VC Investment in Nanotechnology per $1,000 of GSP (2004-07) 5Intensity of Medical Scientists per 100,000 Civilian Workers (2008) 7Number of High-Tech Industries Growing Faster than U.S. Average (2004-2008) 1Foreign Direct Investment 7Health IT 15Alternative Energy Use 15
Negative Rankings (NC State Rank)14
Percentage of Households with Internet Access (2007) 39
IPO Proceeds as Percent of GSP (2007-09) 30
Percent of Establishments in High-Tech NAICS Codes (2006) 31
Workforce Education 37
Entreprenuerial Activity 41
Inventor Patents (Private) 44
What Does This Tell Us?
As the John Prine songs says “Pretty good, not bad, can’t complain”
Can you compare the rankings? What do they think is important? Do they place the actual measures into the same
categories? Are they measuring inputs or outputs? What are the politics involved?
What do we do with it What do you have control over? Are differences significant?
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Case Studies
Colorado – ranks highly (3rd Milken, 9th ITIF, “A” Conexus Indiana)
Kansas – ranks middle (23rd Milken, 26th ITIF, “C” Conexus Indiana)
Kentucky – ranks low (47th Milken, 39th ITIF, “D” Conexus Indiana)
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Let’s Take a Little Tangent17
Innovation and Business Size
In the 1960s John Kenneth Galbraith declared that the large industrial firm had won the economic battle and proposed the new industrial state economic policy.
In the late 1980s David Birch’s much cited but methodologically flawed analysis claimed that nearly all net new job growth was due to small businesses. Now big business was dead and the entrepreneurial state was proposed.
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The Numbers Battle
Politicians proclaim that “90% (or 80% or 92%) of net new jobs are created by small entrepreneurial firms.” Birch originally said 80-85%.
The Bureau of Labor Statistics completed the first rigorous analysis of size and net new job growth and they found…
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Net Job Growth 1993-2003
Small firms (1-99 employees) created 47%
Mid-size firms (100-499) created 17%Large firms (500+) created 36%
Recent research tends to say that the age of the firm is the most important characteristic in explaining net job growth
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But What is Really Important?
“The different roles taken on by small and large firms together create more technological progress, innovation and growth than either category could have achieved by itself.” William Baumol, Princeton University
Small and large firms have a symbiotic relationship
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