Tri‐State Alliance Economy: Past Trends and Implications for Future

Tri‐State Alliance EconomyTri State Alliance Economy
Past Trends and Implications for Future
Iowa
Grant
Lafayette Green Rock
N W l B i H
BooneWinnebagoStephensonJoDaviess
OgleCarroll
Jackson
Jones
DubuqueDelaware
Presented to
Norman Walzer and Brian Harger
Senior Research Scholar Research Associate
Clinton
Cedar
Tri‐State Alliance Meeting
Rockford, IL
May 9 2011May 9, 2011
6/15/2011 1

Overview of Presentation
• How has the Recession impacted the Tri‐State Region?
– Occupational and Industry Changes
– Fastest Growing Industries
– Trends in Business Establishments/Employment
• What are the future prospects for the Region?
– Population Shifts
– Industry ForecastsIndustry Forecasts
– Possibility of Clusters in Our Future
• How could we promote vitality and prosperity?
EDA I ti R h– EDA Innovation Research
– Regional Action Plan (Regional Investment Strategy)
• What are the next steps?
6/15/2011 2

Where Are We Now?
Impact of the Recession on Tri‐State Alliance RegionImpact of the Recession on Tri‐State Alliance Region
• 17 Counties in Illinois, Iowa, and Wisconsin., ,
• Population (2009) was 999,909 (4.8% increase from 2000‐
2009).
– Population is larger than 7 states—Alaska, Delaware, Montana, N.
Dakota, S. Dakota, Vermont, & Wyoming.
I h T i S R i• In the Tri‐State Region…
– Regional GDP grew 0.8 % from 2008‐2009 (U.S. declined 3.6%).
31 800 jobs lost in the region (over 5 5 million jobs lost nationwide)– 31,800 jobs lost in the region (over 5.5 million jobs lost nationwide).
– Per capita income grew 0.5% from 2008‐2009.
– U.S. Consumer Price Index increased 2.67% in 2008 and 2009.
Data Sources: The National Bureau of Economic Research, http://www.nber.org/cycles/cyclesmain.html;
Woods & Poole Economics, Inc., 2011.
6/15/2011 3

Post‐Recession Changes
Tri‐State Alliance RegionTri‐State Alliance Region
• Regional GDP grew 1.2 % from 2009‐2010.g g
– U.S. had 2.2% growth.
• Net loss of 3,500 jobs in region from 7/2009 to 3/2011., j g / /
• Regional unemployment rate at or above the U.S. average.
• Per capita income grew 0.8% from 2009 to 2010.p g
• Demographic trends may limit economic growth in next 20‐30
years as “Baby Boomers” retire and working‐age population
declines.
Data Sources: U.S. Bureau of Labor Statistics; Woods & Poole Economics, Inc., 2011.
6/15/2011 4

U.S. Industry Employment & Output
Percent Change (1998‐2008)
Other services
Religious, grantmaking, civic, professional organizatons
Output
Employment
Education services
Health care and social assistance
Arts, entertainment, and recreation
Accomodation and food services
Other services Employment
Finance and insurance
Real estate, rental, and leasing
Professional, scientific, and technical services
Management of companies and enterprises
Administrative, support, waste management and remediation
Wholesale trade
Retail trade
Transportation and warehousing
Information
Mining
Utilities
Construction
Manufacturing
-50.0 0.0 50.0 100.0 150.0
Data Source: Employment Projections Program, U.S. Bureau of Labor Statistics, 2011.
6/15/2011 5

Employment Trends
Tri‐State Alliance Region (1969 – 2009)Tri‐State Alliance Region (1969 – 2009)
35%
40%
25%
30%
35%
ment
20%
25%
of Total Employm
10%
15%
Manufacturing Employment
Percent
0%
5%
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Services Employment
Government EmploymentData Sources: U.S. Bureau of Economic Analysis, 2011.
6/15/2011 6

Unemployment Rate
Tri‐State Alliance Region (1990 – 2011)Tri‐State Alliance Region (1990 – 2011)
16.0
Tri‐State Region
12.0
14.0
g
U.S. Average
ssion
on
sion
8 0
10.0
Reces
Recessio
Recess
6.0
8.0
2.0
4.0
990
991
992
993
994
995
996
997
998
999
000
001
002
003
004
005
006
007
008
009
010
011
Note: Data is not seasonally adjusted.
Data Source: U.S. Bureau of Labor Statistics, 2011.
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
6/15/2011 7

Employment Trends by Zip Code
Data Sources: EASI Analytics, Inc., 2011.
6/15/2011 8

Employment by Industry
Tri‐State Alliance Region 2000‐2010Tri‐State Alliance Region, 2000‐2010
Industry Sector
2000 2010 Percent
Change
N b
Percent of
N b
Percent of
2000-2010Number
Total Emp.
Number
Total Emp.
Manufacturing 115,908 24.5 106,268 21.4 -8.3
Educational, Health and Social Services 89,625 19.0 109,387 22.0 22.0
Retail Trade 57 353 12 1 52 643 10 6 8 2Retail Trade 57,353 12.1 52,643 10.6 -8.2
Arts, Entertainment, Accommodation and Food Services 31,217 6.6 36,067 7.3 15.5
Construction 28,839 6.1 32,050 6.4 11.1
Professional, Scientific, Management, Administrative 26,001 5.5 31,084 6.3 19.5
Transportation and Warehousing, and Utilities 23,118 4.9 26,843 5.4 16.1
Finance, Insurance, Real Estate and Rental and Leasing 23,298 4.9 25,215 5.1 8.2
Other Services 21,050 4.5 24,138 4.9 14.7
A i lt F t Fi hi d H ti d Mi i 18 151 3 8 15 473 3 1 14 8Agriculture, Forestry, Fishing and Hunting, and Mining 18,151 3.8 15,473 3.1 -14.8
Wholesale Trade 15,998 3.4 14,650 2.9 -8.4
Public Administration 12,529 2.7 13,807 2.8 10.2
Information 9,223 2.0 9,302 1.9 0.9
Data Source: EASI Analytics, Inc., 2010.
,
6/15/2011 9

Employment by Occupation
Tri State Alliance Region 2000 2010Tri‐State Alliance Region, 2000‐2010
Occupational Category
2000 2010 Percent
ChangeN b P t f N b P t fOccupational Category Change
2000-2010
Number
Employed
Percent of
Total Emp.
Number
Employed
Percent of
Total Emp.
Sales and Office 116,404 24.7 122,856 24.7 5.5
P d ti T t ti d M t i lProduction, Transportation, and Material
Moving
107,683 22.8 100,736 20.3 -6.5
Professional and Related Occupations 76,091 16.1 89,396 18.0 17.5
Services 65,519 13.9 62,936 12.7 -3.9
Management, Business, and Financial
Operations
57,072 12.1 73,264 14.7 28.4
Construction, Extraction, and Maintenance 44,715 9.5 44,380 8.9 -0.7
Farming, Fishing, and Forestry 4,826 1.0 3,359 0.7 -30.4
Data Source: EASI Analytics, Inc., 2010.
6/15/2011 10

Fastest Growing Industry Sectors
Tri‐State Alliance Region 2002 ‐2007Tri‐State Alliance Region, 2002 ‐2007
3-Digit NAICS Level
I d t D i ti
Employment Change 2002-2007
Industry Description 2002 2007 Number Percent
Administrative and Support Services 16,394 22,755 6,361 38.8
Construction 16,565 20,595 4,030 24.3
Warehousing and Storage 554 3,120 2,566 463.2
Couriers and Messengers 333 2,454 2,121 636.9
Nursing and Residential Care Facilities 10,468 12,309 1,841 17.6
Food Services and Drinking Places 26,095 27,752 1,657 6.3
Social Assistance 6,870 8,299 1,429 20.8
General Merchandise Stores 9,735 11,116 1,381 14.2
Ambulatory Health Care Services 14,709 15,712 1,003 6.8
Real Estate 2,000 2,776 776 38.8
Truck Transportation 6,147 6,590 443 7.2
Data Sources: U.S. Census Bureau, County Business Patterns, 2002;
U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages, 2007.
6/15/2011 11

Trends in Business Establishments
Type of Business 2000 2008 Pct. Chg.
2000 2008
Ave. Annual
Pct Chg2000-2008 Pct. Chg.
Total 53,977 76,245 41.3 4.6
Noncommercial 4,163 4,799 15.3 1.7
Nonresident* 2,836 2,603 -8.2 -0.9
Resident* 46,978 68,843 46.5 5.2
Self employed (owner-operator) 15 806 27 744 75 5 8 4Self employed (owner operator) 15,806 27,744 75.5 8.4
Stage 1 (1 to 9 employees) 25,538 35,513 39.1 4.3
Stage 3 (100 to 499 employees) 328 282 -14.0 -1.6
Stage 4 (500+ employees) 43 30 -30.2 -3.4
* Resident businesses are either stand-alone in area or headquartered in same state; non-resident businesses are headquartered in a different stateResident businesses are either stand-alone in area or headquartered in same state; non-resident businesses are headquartered in a different state.
Data Source: National Establishment Time-Series (NETS) database, 2011.
6/15/2011 12

Trends in Business Employment
Tri‐State Alliance Region 2000 ‐2008Tri‐State Alliance Region, 2000 ‐2008
Type of Business 2000 2008 Pct. Chg.
2000 2008
Ave. Annual
Pct Chg2000-2008 Pct. Chg.
Total 536,630 510,942 -4.8 -0.5
Noncommercial 70,224 74,495 6.1 0.7
Non-resident* 137,302 101,529 -26.1 -2.9
Resident* 329,104 334,918 1.8 0.2
Self employed (1 emp.) 15,806 27,744 75.5 8.4Self employed (1 emp.) 15,806 27,744 75.5 8.4
Stage 3 (100 to 499 employees) 57,809 48,596 -15.9 -1.8
Stage 4 (500+ employees) 46,826 30,366 -35.2 -3.9
* Resident businesses are either stand-alone in area or headquartered in same state; non-resident businesses are headquartered in a different stateResident businesses are either stand-alone in area or headquartered in same state; non-resident businesses are headquartered in a different state.
Data Source: National Establishment Time-Series (NETS) database, 2011.
6/15/2011 13

Projected Trends in the RegionProjected Trends in the Region
6/15/2011 14

Population Changes by Age Cohort
42.3% 42.2%
50.0%
27.1%
21.9%
30.0%
40.0%
to 2020
Millennials
Generation Z
Silent
Generation
4.0%
8.1%
4.3% 5.8%
14.6%
2.0%
10.0%
3.0%
0 2%
10.0%
20.0%
ent Change 2010
Baby Bust
Generation Z
‐7.6% ‐7.4%
‐4.2%
14 0%
0.2%
‐10.0%
0.0%
Perce
D S W d & P l E i I 2011
Baby Boomers
‐16.4%
‐14.0%
‐20.0%
Data Sources: Woods & Poole Economics, Inc., 2011.
6/15/2011 15

Population Changes by Age Cohort
47.1% 48.6%50.0%
to 2030
30.4%
30.0%
40.0%
MillennialsGeneration
Alpha?
ent Change 2020
1.2%
5.2%
10.2%
5.3%
7.4%
15.8%
3.1%
12.4%
15.7%
10.0%
20.0%
Baby Bust
Generation Z
Alpha?
Perce
‐0.9%
1.2%
‐6.4% ‐5.6%
‐2.6%
‐12.3%
‐10.0%
0.0%
Baby Boomers
‐15.1%
12.3%
‐20.0%
Data Sources: Woods & Poole Economics, Inc., 2011.
6/15/2011 16

U.S. Industry Trends
Forecasted Annual Rate of Change, 2008‐2018
Industry Description
Pct. Of Total
Emp. (2008)
Employment Wages Output
Mining 0.6% -1.6 0.4 -0.2Mining 0.6% 1.6 0.4 0.2
Utilities 0.4 -1.1 0.9 0.9
Construction 7.7 1.7 1.4 2.9
Manufacturing 9.5 -0.9 -0.2 2.1
Wholesale trade 4.3 0.4 0.8 5.3Wholesale trade 4.3 0.4 0.8 5.3
Retail trade 12.7 0.4 1.0 4.2
Transportation and warehousing 3.8 0.9 1.1 2.9
Information 2.4 0.4 1.0 5.4
Finance and insurance 5.6 0.5 1.1 9.3
Real estate, rental, and leasing 5.2 1.1 2.0 2.5
Professional, scientific, and technical services 7.9 3.0 2.1 3.2
Management of companies and enterprises 1.3 0.5 1.3 4.3
Administrative, support, waste management & remediation 7.2 1.6 1.7 3.5
Education services 2.5 2.4 2.7 1.7
Health care and social assistance 11.8 2.3 2.0 3.6
Arts, entertainment, and recreation 2.4 1.4 1.7 1.9
Accommodation and food services 8.0 0.7 1.6 1.6
Other services 6.8 1.2 1.8 1.5
Data Sources: U.S. Bureau of Labor Statistics; Woods & Poole Economics, Inc., 2011.
6/15/2011 17

U.S. Industry Employment & Output
Forecasted Percent Change, 2008‐2018
Religious, grantmaking, civic, professional organizatons Output
Education services
Health care and social assistance
Arts, entertainment, and recreation
Accomodation and food services
Other services Employment
Fi d i
Real estate, rental, and leasing
Professional, scientific, and technical services
Management of companies and enterprises
Administrative, support, waste management and remediation
Wholesale trade
Retail trade
Transportation and warehousing
Information
Mining
Utilities
Construction
Manufacturing
-50.0 0.0 50.0 100.0 150.0
Data Source: Employment Projections Program, U.S. Bureau of Labor Statistics, 2011.
6/15/2011 18

Industry Clusters
Tri‐State Alliance Region 2009
Glass & Ceramics
0 40
0.50
Tri‐State Alliance Region, 2009
Employment
Change (2001-2009)
Agribusiness, Food
Processing & Technology
Chemicals & Chemical
Based Products
Transportation & Logistics
0.20
0.30
0.40
rtance
2009)
Increase
Decrease
Advanced Materials
Apparel & Textiles
Ed ti & K l d
Energy
Forest & Wood Products
Mining
Printing & Publishing
0.00
0.10
0.20
RelativeImpor
Quotient,2001-2
Arts, Entertainment,
Recreation & Tourism
Biomedical/
Biotechnical
Business & Financial
Services
Defense & Security
Education & Knowledge
Creation
Information Technology &
Telecommunications
Manufacturing
Supercluster
-0.20
-0.10
Changein
(Location
Telecommunications
-0.30
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 2.20
Relative Importance (Location Quotient, 2009)
Note: The size of circles indicate the size of employment in the industry sector.
Data Source: Innovation Cluster database StatsAmerica.org, 2011.
6/15/2011 19

Preparing for Knowledge Economy
• Innovation and Product Developmentp
• Need a Work Force Prepared for Future
– Importance of Transportation and Linkagesp p g
• EDA Sponsored Innovation Index
– Human Capitalp
– Productivity and Employment
– Economic Dynamics
– Economic Well‐Being
• How Does the Tri‐State Region Fare?
6/15/2011 20

Innovation Index
Major ComponentsMajor Components
Human Capital: 30% Economic
Dynamics: 30%
Economic Well-
Being: 10%
Productivity and
Employment: 30%
Data Source: Mapping Innovation Tool, StatsAmerica.org, 2011.
6/15/2011 21

Innovation Index vs. Employment
Tri State Alliance RegionTri‐State Alliance Region
GRANT
74.3
GREEN
83.9
IOWA
75.1
ROCK
78.4
LAFAYETTE
74.3
Top figure: Employment Chg.
December, 2007 - June, 2009
Bottom figure: Employment Chg.
July 2009 March 2011
DELAWARE
78.6
DUBUQUE
85.7
WINNEBAGO
84.7
JACKSON
73.0JONES
75 8
JO DAVIESS
79.2
CARROLL
71 8
OGLE
STEPHENSON
92.0
BOONE
80.3
-1.8
GRANT
-2.7
IOWA
-2.7
9 0
July, 2009 – March, 2011
NOTE D k l i di t hi h i d l
75.8
CEDAR
78.5
CLINTON
83.5
71.8 78.4
GRANT
+4.4 -4.7
GREEN
-5.5
-9.0
ROCK
-1.8
+0.6
LAFAYETTE
+0.1
+0.2
DELAWARE
+3.8
-2.0
DUBUQUE
+1.8
-11.4
WINNEBAGO
+0.3
-3.6
JODAVIESS
-6.4
-2.8
STEPHENSON
-5.7
-10.8
BOONE
+0 3NOTE: Darker colors indicate higher index values.
5 0% t 9 9%
Unemployment Rate (March, 2011)
-0.9
JACKSON
-3.8
+0.1
JONES
-1.7
+3.3
CEDAR
-1.8
CLINTON
-2.7
-5.8
CARROLL
-1.6
-6.0
OGLE
-1.4
+0.3
Less than 5.0%
5.0% to 9.9%
10.0% to 14.9%
15.0% or more
Data Source: U.S. Bureau of Labor Statistics, 2011.
+1.1
6/15/2011 22

Human Capital Index
Human Capital
GRANT
73.8
IOWA
69.2
“High Tech” Employment -
20%
Population Age 25-64 with
Some College or AA Degree
GREEN
89.2
ROCK
74.5
LAFAYETTE
75.0
DELAWARE
85.6
DUBUQUE
89.8
WINNEBAGOJODAVIESS STEPHENSON
g g
- 20%
Population Age 25-64 with
Baccalaureate Degree -20%
Y Ad lt P l ti78.7
JACKSON
73.7JONES
76.0
CLINTON
88.8
CARROLL
66.4
OGLE
82.2
STEPHENSON
73.5 BOONE
72.7
Young Adult Population -
20%
Population Growth - 20%
Tech-Based Occupations -CLINTON
82.6
CEDAR
82.3
NOTE: Darker colors indicate higher index values.
Tech-Based Occupations -
20%
6/15/2011 23

Economic Dynamics Index
Economic Dynamics
GRANT
67 1
IOWA
68.8
Venture Capital Investment -
25% (per $10,000 GDP)
Average Establishment
Churn - 25%
67.1
GREEN
78.9 ROCK
75.6
LAFAYETTE
64.7
DELAWARE
65.9
DUBUQUE
85.8
Broadband Connection -
12.5% (per 1,000
households)
Change in BroadbandWINNEBAGO
79.0
JACKSON
67.2JONES
68.7
CLINTON
71.7
CARROLL
67.0
OGLE
86.9
STEPHENSON
79.1 BOONE
79.1
Change in Broadband
Density - 12.5%
Ave. Employment. in Large
Establishments - 12.5% (per
10,000 workers)CLINTON
76.7
CEDAR
68.8
10,000 workers)
Ave. Employment. in Small
Establishments - 12.5% (per
10,000 workers)NOTE: Darker colors indicate higher index values.
6/15/2011 24

Productivity & Employment Index
Tri State Alliance RegionTri‐State Alliance Region
Productivity and
Employment
GRANT
73 4
IOWA
76.4
Employment
Ratio of Job Growth to
Population Growth -25%
Change in “High Tech”73.4
GREEN
81.4 ROCK
81.3
LAFAYETTE
73.2
DELAWARE
78.3
DUBUQUE
77.2
WINNEBAGO
94 7
JODAVIESS STEPHENSON
Change in High Tech
Employment Share - 25%
Average Patents - 25% (per
1,000 workers)
94.7
JACKSON
69.2
JONES
71.5
CLINTON
71.0
CARROLL
75.4
OGLE
69.9
123.5 BOONE
86.0
GDP per Worker - 12.5%
Average Annual Rate of
GDP Change (per worker) -
12.5%
CLINTON
79.3
CEDAR
73.6
6/15/2011 25

Economic Well‐Being Index
Economic Well-Being
GRANT
99 8
IOWA
107.8
Average Poverty Rate - 20%
Average Unemployment
Rate - 20%
99.8
GREEN
100.1 ROCK
89.8
LAFAYETTE
103.8
DELAWARE
96.8
DUBUQUE
98.4
Average Net Internal
Migration - 20%
Change Per Capita Personal
Income - 20%
90.0
JACKSON
99.6JONES
98.6
CLINTON
97.7
CARROLL
91.3
OGLE
95.5
91.9 BOONE
89.8
Change in Wage/Salary
Comp. -10% (per worker)
Change in Proprietor Income
- 10% (per proprietor)CLINTON
98.8
CEDAR
100.8
- 10% (per proprietor)
6/15/2011 26

What Do We Currently Know?
• Area is a Significant Midwestern “Region”
– Is There a Niche to Develop?
• Tourism, Local Specialty Foods, Biomass?
– Industries Could be Basis for Mini‐clusters
– Chicago Area Provides Unique Global Access
• Population Shifts Will Be Important in Future• Population Shifts Will Be Important in Future
– Need Growth in Younger Workers for Workforce
– Changes in Housing Demands With Age Shifts
– Quality of Life and Accessibility Are Essential to Prosperity
• Importance of Access to Large Centers
• Rail Access Will Be Important Issue
6/15/2011 27

What Do We Currently Know?
(continued)(continued)
• Need High‐Paying Replacement Jobs
– Excellent access to Midwestern markets
– Rail access is a critical location determinant for manufacturing
– Dubuque and Rockford areas help drive region q p g
• Exports are key to growth in region
– Have access to major airports
• Business Starts Slower than U.S. So Need Entrepreneurship
– Young adults, Especially females 25 to 34 years
– Farm families; Pre‐retirement age groups
– Entrepreneurs seek high quality of life & access to larger cities
– Locally‐managed companies stay longerLocally managed companies stay longer
6/15/2011 28

What Could We Do Together?
• Explore Potential For Region in More Detailp g
– Identify major industry drivers in region
– Understand barriers to innovation in companies
Determine adequacy of financing system– Determine adequacy of financing system
– Assess impact of highway & rail investments
• Strengthen Regional Entrepreneurship
– Identify potential unfilled business opportunities
– Expand training programs into rural areasExpand training programs into rural areas
– Help small businesses expand
– Provide technical assistance to business starts
6/15/2011 29

(continued)(continued)
• Identify Emerging Industry Sectorsy g g y
– Biomass products
– Local foods assembly and processing
Renewable energy– Renewable energy
– Other industries
• Organize Marketing Effort for Region
– Brand the Region and emphasize quality of life
– Collaborate to promote the Region as a Region– Collaborate to promote the Region as a Region
– Work with tourism groups to bring In business leaders
6/15/2011 30

(continued)
• Work With Higher Education Institutionsg
– Product development
– Business technical assistance
Training on specialized skills for clusters– Training on specialized skills for clusters
– Create programs that appeal to young adults
• Design Regional Economic Action Plan
– Build consensus of local agencies in Region
– Enlist financial support to implement planEnlist financial support to implement plan
6/15/2011 31

What Will We Do Together?
• In the Next 12 Months?
– a.
– b.
– c.
• In the Next 36 Months?
– a.
b– b.
– c.
• Beyond?
– a.
– b.
How can NIU Center for Governmental Studies Help?How can NIU Center for Governmental Studies Help?
6/15/2011 32

For Further InformationFor Further Information
Contact:
Norman Walzer Brian Harger
Senior Research Scholar Research Associate
nwalzer@niu.edu bharger@niu.edu
Center for Governmental Studies
Northern Illinois University
De Kalb, IL 60115
815‐753‐1907

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