Delivered at a meeting of the Milwaukee 7 Regional Economic Development Advisory Council.

1. Robert Weissbourd
Regions Charting
New Directions:
Metropolitan Business Planning
Milwaukee 7 Regional Economic
Development Collaboration
June 7, 2012

2. Drivers of the Next Economy
Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Getting to Ground in Milwaukee
Institutional Capacity and Next Steps

3. 0%
100%
200%
300%
400%
500%
600%
$s lbs
%Change
GDP Growth, 1950-2000
• Human Capital
• Information technologies
• Product innovation; flexible
customization
• Firm, consumer and knowledge
networks
• Increasing returns; divergence
The Global Economy is Undergoing a Fundamental
Transformation, Driven by Knowledge Assets
Source: “Greenspan Weighs Evidence and Finds a
Lighter Economy,” Wall Street Journal 3

4. 0
20
40
60
80
1920s 1990s
Years Spent on the S&P Index
As a Result, the Economy is More Dynamic
Sources: Newsweek,Manyika, Lund and Auguste, “From the
Ashes,” 8.16.2010;Brookings Institution
18.3%
US
Global GDP (2015)
25.8%
BIC Countries
20.2%
US
21.4%
BIC Countries
Global GDP (2010)
0%
20%
40%
60%
80%
100%
15% 20% 25% 30% 35%
GRPGrowth
Firm Starts and Closures (Churn) as % of All Firms
Churn and GRP Growth by MSA
-- and Global

5. ServiceExports
75%
U.S.AirCargoWeight
79%
AirlineBoardings
92%
Population
66%
GraduateDegrees
75%
VentureCapitalFunding
94%
Patents
78%
Wind+SolarEnergyEmployment
76%
Top 100 Metros Share of U.S. Total
Sources: Brookings analysis of US Census Bureau, FAA, BLS, NIH, NSF, and BEA data; Brookings, ExportNation, 2010 (2008 data); Forthcoming research from Brookings and Battelle
GrossProduct
73%
…and Centered in Metropolitan Areas
Gross
Metropolitan
Product, 2005

6. Driver’s of the Next Economy
Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Getting to Ground in Milwaukee
Institutional Capacity and Next Steps

7. How Metro Economies Grow
Metro economy = total value of goods and services
produced in the region
Growth is inherently business sector growth (number, size
and profitability of firms)
Business sector grows through firm creation, growth and
location decisions (retention and attraction)
Firm creation, growth and location depend upon increases
in efficiency and productivity (of firm and system, including
product innovation)
Core Question: What attributes of the region increase
efficiency and productivity, leading to business sector growth?

8. What Makes Metropolitan Regions more
Productive in the Next Economy?
Economic
Geography
Institutional
Economics
New
Growth
Theory
8

9. Metros Can Enable People and Firms to
Concentrate and Achieve Efficiencies
Act Comprehensively – The Whole is
Greater than the Sum of the Parts.
Develop Institutional Capacity and
Intentionality.
Customize and Build on
Distinctive Assets.
Economic
Geography
Institutional
EconomicsNew
Growth
Theory
9

10. Leverage
Points
for Sustainable
and Inclusive
Prosperity
Deploy
Human Capital
Aligned with
Job Pools
Create Effective
Public & Civic
Culture &
Institutions
Enhance
Regional
Concentrations/
Clusters
Increase
Spatial
Efficiency
Develop
Innovation-
Enabling
Infrastructure
Five Market Levers
Drive Regional
Economic
Performance
10

11. -.20.2.4.6
WageGrowth(1990-2000)
0 .1 .2 .3 .4
Poverty Rate (1990)
-
10,000
20,000
30,000
40,000
50,000
60,000
0 10,000 20,000 30,000 40,000 50,000 60,000
WagesMoveinTandem
Correlation= 0.77, significant
City
Suburbs
Equity and Growth Go Hand in Hand Leverage Points
for Sustainable
and Inclusive
Prosperity
The sub-systems and geographies succeed or fail in context.

12. 12
New Approaches for the Next Economy

13. Driver’s of the Next Economy
Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Getting to Ground in Milwaukee
Institutional Capacity and Next Steps

14. Metropolitan Business Planning:
A New Way of Doing Business
Grounded in Economics and Business
Comprehensive, Actionable
Strategies
An Ongoing Enterprise
Enables “New Federalism”

15. Business Planning: A Proven Discipline for
Comprehensive, Effective Action
 Identify regional
assets/opportunities
 Develop customized
strategies
 Turn strategies into
concrete actions
 Build institutional
capacity
 Execute
Metropolitan Business Planning
Regional Economy Mission and Vision
Market Analysis
Identify Strategies and Goals
Specify Products, Services and Policies
Operational Planning
Financial Planning
Performance Monitoring

16. Pilot Metro Business Planning Regions

17. Northeast Ohio
Partnership for Regional Innovation Services in Manufacturing ( PRISM )
Metropolitan Business Plans in Action

18. Metropolitan Business Plans in Action
Puget Sound (Seattle)
Building Energy-Efficiency Testing and Integration Center (BETI)

19. Driver’s of the Next Economy
Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Getting to Ground in Milwaukee Region
Institutional Capacity and Next Steps

20. Understanding the Milwaukee Region’s
Economy
The 7 County Region
Source: BizStarts Milwaukee

21. The Big Picture: Shaking Out; Redeploying?
Source: Bureau of Economic
Analysis; Bureau of Labor Statistics
$65,000
$70,000
$75,000
$80,000
$85,000
2001 2003 2005 2007 2009
Productivity (Output per Worker)
$30,000
$35,000
$40,000
$45,000
$50,000
2000 2002 2004 2006 2008 2010
Average Wage
Milwaukee MSA USA All Metros
90
95
100
105
110
115
2000 2002 2004 2006 2008 2010
Employment
(Indexed to 2000)
100
104
108
112
116
120
2001 2003 2005 2007 2009
Real GRP/GDP
(Indexed to 2001)

23. Current Concentrations
Source: Bret Mayborne, MMAC, based on data from EMSI and BLS
Electrical equip. mfg
Machinery mfg.
Fabricated metal
prod.
Printing
Data processing
Management of
companies
Computer &
electronics mfg.
Primary metal mfg.
Plastics mfg.
Educational services
Food mfg.
Insurance
services
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0
Locationquotient2010
Projected national output growth 2010-2020 (GAGR)
Projected all sector output growth (CAGR) = 2.9%
Diverse economy,
undergoing
restructuring
Active in water;
food and beverage;
power, automation,
controls and energy;
design and
technology
What are
Milwaukee region’s
“legacy” and “bet”
clusters?
Regional Status: Already Building on
Strong Clusters

24. Cluster Dynamics and Drivers
Regional Status: Still Much to Learn About
Dynamics/Drivers & Emerging Opportunities
 Further defining clusters
 What industries and occupations make up the clusters?
 What parts of the clusters do you have (e.g., headquarters, final assembly,
component manufacturing, R&D, etc.)?
 What shared inputs, activities, infrastructure and other factors contribute
to efficiency/productivity of each cluster?
12.3%
10.1%
11.4%
Milwaukee MSA
All Metros
USA
Export Intensity
 Understanding cluster dynamics/drivers:
human capital, technology, infrastructure,
etc.
 Getting beyond the data: what are
challenges, opportunities and trends in
specific clusters? Export opportunities?
 What do specific clusters need in order to
increase productivity and grow jobs and firms?
Sources: Brookings Top 100 Metros Metrics

26. Status, Attraction and Retention
Sources: U.S. Census Bureau, American Community Survey, 2010 Estimates.
0%
20%
40%
60%
80%
100%
High School
Degree
Some College
or Associate's
Degree
Bachelor's
Degree
Advanced
Degree
Percent of Population with at Least Each
Level of Education
0.0%
20.0%
40.0%
60.0%
80.0%
Foreign Born
Population as
% of Total,
2010
Growth in
Foreign Born
Population
% of Foreign
Born
Population w/
Bachelor's +
% of Foreign
Born
Population
Speaking
Fluent English
Immigrant Attraction
-10.0%
0.0%
10.0%
20.0%
30.0%
25-34 year
olds with
bachelors+ as
% of total
% change in
25-34 year
olds, 2000-
2010
35-44 year
olds with
bachelors+ as
% of total
% change in
35-44 year
olds, 2000-
2010
Highly Educated and Mobile
Milwaukee 7 City of Milwaukee USA
Regional Status: Average Human Capital
Levels; Lagging Growth in Key Demographics
 Slow growth in young/educated:
Brain drain? Declining production?
Some of both?
 35-44yo moving to non-MSA
counties?

27. 26%
54%
20%
31%
46%
23%
Skills Match and Labor Market Efficiency
Sources: Wisconsin’sForgottenMiddle-Skills Jobs, The Workforce Alliance, 2008
Low-Skill Workers
Low-Skill Jobs
Middle-Skill Workers
Middle-Skill Jobs
High-Skill Workers
High-Skill Jobs
Wisconsin’s Skills Match: Jobs and Workers
Regional Status: Large Middle-Skill Job Pool
Promising; Potential Skills Mismatches?
 Projected job growth/loss,
retirements by occupation and
industry?
 Match of existing & projected
labor force skills (detailed
segmentation)?
 Finding,
measurement
challenges?
 Opportunities
for targeted
retraining,
credentialing?
 What dynamics might explain
potential high-level mismatch?

28. Opportunity and Mobility
Regional Status: TBD
 Identification of entry-level and middle-skill
occupations, career ladders/pathways
 Presence & success of targeted, employer-
driven training opportunities; retraining for
displaced workers; staged and “stacked”
credentials?
 Preconditions: K-12 public education
system;…

30. Innovation Pipeline
Regional Status: Some R&D and HC Strengths;
Limited Commercialization, New Business Growth
University/
Industry
driven
innovation
Research
▪ Universities
▪ Centers of
excellence
▪ Industry
Commercialization Start-up
Growth
company
Patent applications per 1000
workers, 2001-2010
VC Investment Per $10,000
GDP, 2003-2008
Midsize Establishment Births per 10,000
Employees
University Research Expenditures Per
1000 Population, 2008 ($’000s)
 University research
specializations?
 Dynamics of firms’
investment in R&D?
 University “push” vs.
industry “pull” model?
 Role of capital? Systemic
barriers to business start-
up (regulatory, cultural,
capital, etc.)?
 Origin of start-ups (e.g.,
spin-offs from existing firm,
university start-up, etc.)?
 Trends and high-impact
opportunities by types of
new businesses?
 Characteristics of VCs that
invest in Milwaukee?
Availability of earlier-stage
funding?
$40.42
$170.52
$147.65
Milwaukee
MSA
All Metros
USA
18.1
23.5
Milwaukee
MSA
All Metros
$0.29
$2.04
$52.56
Milwaukee 7
Wisconsin
USA
7.7
10.4
Milwaukee MSA
All Metros
Sources: Innovation Index , Stats America; Brookings Top 100 Metros Metrics.

31. Cluster-Based Innovation
 Well-organized clusters
(e.g., water, food and
beverage, WERC)
 Leveraging design and
technology (functional)
cluster (e.g. MiKE)?
 Legacy industries lagging in productivity that need to
redeploy assets and innovate? What are new opportunities,
and what’s needed to capture them?
 Emerging industries with high potential? What’s needed to
support emergence/growth?
Regional Status: TBD

32. Innovation Ecosystem
 Extent & nature
of university-
industry
connections?
 Presence of
specialized
finance?
 Networks for
cross-sector
and inter-disciplinary
connections?
Regional Status: Many Pieces but Lacking
Integration; Climate?
Innovation
Ecosystem
Market
Research
Marketing
Manufac-
turing
Finance
R&D
Research
Partners

34. Urban Growth Form: Density & Mixed Use
Regional Status: Concentrated Population – and
Poverty; Decentralized Jobs
63
Source: Center for Neighborhood Technology, Housing + Transportation Index
 Relative locations of job and residential centers by cluster, occupation, skill level, wage level?
 Rate of change in residential density & job dispersion? Specific fast-growing areas/nodes?
 Opportunities for in-fill development?
Residential Density Employment Density Median Household Income

35. Connectedness and Mobility
Regional Status: Globally Connected; Transit Coverage
Uneven; Relatively Good Access to Jobs (MSA only)
 National and Global Connections
 Port of Milwaukee
 General Mitchell International Airport
 Union Pacific, Canadian Pacific, Canadian
National and Wisconsin & Southern Railroads
 Interstates 94 and 43
 Enhance connections beyond MSA?
 Address targeted jobs-housing
mismatch?
 Opportunities for transformative
infrastructure (next gen. energy, IT,
public transit, PUDs)?
 Level of coordination across
jurisdictions?
Average travel time to work = 22.3 minutes (US = 25.3)
2010 Congestion Rank = 33rd
604
600
700
Milwaukee 7
Wisconsin
USA
Broadband Density, 2009
0%
10%
20%
30%
40%
50%
60%
70%
Transit coverage
rate
Job access rate -
all jobs
Job access rate -
low-skill Jobs
41
810
# = rank among top 100 metros
Sources: Innovation Index , Stats America; Brookings Top 100 Metros Metrics

37.  147 municipalities
 93 school districts
 More local governments
per capita than 2/3rds of
major metros; more
special-district
governments than 1/3
 Some service sharing;
history of failed
cooperation on transit
and other infrastructure
Government Fragmentation and
Coordination
Regional Status: Fragmented
What services/initiatives might be
efficiently coordinated, streamlined?

38. Tax & Regulation/Value Proposition
 Heavy reliance on property tax (base & rate vary widely
across region); highly dependent on State for revenue
(unable to levy significant local sales tax)
 What is the total tax burden in the region and how does
it compare to competing metros?
 What public goods and services are most important to
regional businesses, residents? What’s their quality?
 How onerous are regulatory processes (permitting,
licensing, inspections, etc.) for businesses?
Regional Status: TBD

39. Governance
 Milwaukee 7, MMAC,
GMC, cluster and other
organizations reflect
positive trends
 Degree of alignment of
ED programs,
organizations?
 Govt 2.0: engaging firms
and citizens,
transparency, flexibility,
use of public data for
economic growth, …?
Regional Status: TBD

40. Assets
Challenges &
Opportunities
Illustrative Strategy Development:
Cluster-Based
Concentration
in Power, Automation,
Controls and Energy
(PACE)
Growing export market
for energy & power
products
Existing cluster
leadership/organization
Need for new
technology deployment
to improve productivity
Shortage of CNC
machine operators &
other skilled
occupations
Create PACE
Center of Excellence
(advanced technology
& training)
Potential Strategy

41. Assets
Challenges &
Opportunities
Illustrative Strategy Development:
Innovation
Concentration of
workers with IT &
design skills
Highly ranked
engineering school
(MSOE)
Relevant university
research activity
(MSOE & UWM)
Strengthen
entrepreneurial
support and ecosystem
Strengthen university-
industry connections
commercialization
and firm innovation
Innovation Accelerator
(catalyze technology
commercialization, support
new & existing firm growth)
Potential Strategy

42. Challenges &
Opportunities
Assets
Illustrative Strategy Development:
Place-based
Regional
concentrations in
“opportunity-rich”
clusters
Vacant land in urban
core with transit &
highway access
Underutilized local
workforce (needing
short term up-skilling)
Predevelopment
barriers (assembly,
infrastructure, etc.)
Develop targeted,
employer-driven
workforce training
Creation of mixed-use
district with cluster
firms, training center,
housing &
retail/services
Potential Strategy

43. Driver’s of the Next Economy
Agenda
“Metro-Economics”
Metropolitan Business Planning (from theory to practice)
Getting to Ground in Milwaukee
Key Lessons, Institutional Capacity and Next Steps

44. Global, Knowledge
Economy
Specialization and
Dynamism
Build on Your Assets
Coordinated, Cross-
Sectoral, Flexible,
Adaptive, Open,
Information-Rich,
Inclusive,
Entrepreneurial
Compete on
Value-Added
(not low-cost)
Intentionality
Economic
Development
in the Next
Economy

45. Developing Institutional Capacity
Steering
Committee
Strategy 1
Team
Initiative 1AInitiative 1B
Strategy 2
Team
Initiative 2A
Strategy 3
Team
Initiative 3A
Strategy 4
Team
Initiative 4A Initiative 4B
Engage stakeholders across public, private and civic sectors
Iterate analysis/strategy and institutional development
High-level (e.g., C-suite) leadership group/steering committee
Day-to-day (staff-level) working teams
Expert/business/practitioner teams for specific strategies and
initiative development
Strategy is coordinated; Implementation is distributed

46. Next Steps
Continue deepening fact-gathering and market analysis
Begin answering open questions
Engage partner organizations in market-lever working groups
Identify high-priority strategies
Begin surfacing potential cross-lever initiatives
Focused further market analysis, product and services
specification, etc. to create initiative business plans
Organize, capitalize, launch, implement!
Monitor performance and periodically update analysis and
strategies

47. DISCUSSION

48. Robert Weissbourd
Regions Charting
New Directions:
Metropolitan Business Planning
Milwaukee 7 Regional Economic
Development Collaboration
June 7, 2012