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CHARTING A NEW PATH TO GROWTH AND PROSPERITY 
Implications for a Blueprint for the Regional Economy 
Metropolitan Policy Program 
at BROOKINGS 
@BrookingsMetro 
@Amy_Liuw 
Portland, OR • October 14, 2014 1
On the Surface, the Economy Has Recovered from the Great Recession 
5,000,000 
0 
-5,000,000 
-10,000,000 
+865,000 jobs 
2007 2009 2014 
Metropolitan Policy Program 
at BROOKINGS 
Post-Recession U.S. Jobs Gap 
Since start of recession 
Source: Current Employment Statistics. 
2
However, We Still Face a Growth Problem 
5,000,000 
0 
-5,000,000 
-10,000,000 
Post-Recession U.S. Jobs Gap 
Since start of recession 
2007 2009 2014 
Metropolitan Policy Program 
at BROOKINGS 
5.6 million 
missing jobs 
Payroll Count Jobs Gap Growth-Based Jobs Gap 
Source: The Hamilton Project analysis of Congressional Budget Office and Current Employment Statistics data. 
3
40% 
30% 
20% 
10% 
0% 
-5% 
1990 2000 2012 
Metropolitan Policy Program 
at BROOKINGS 
36% 
0% 
-4% 
We Also Face a Wealth Problem 
Change in Output Per Capita and Median Household Income 
Since 1990 
Output Per Capita Median Household Income 
Output per capita: 
+$14,589 
Median income: 
-$2,120 
Source: Current Population Statistics, BLS Consumer Price Index, Census Population Estimates, Moody’s Analytics. 
4
Finally, We Face an Inclusion Problem 
Income Growth During Recovery 
2009-2012 
Metropolitan Policy Program 
at BROOKINGS 
Unemployment Rate by Age 
Recession through 2013 
2007 2012 
Source: Current Population Statistics. 
23% 
16% 
2007 2012 
16 to 19 
years old 
6% 
4% 
0.4% 
31.4% 
Top 1 Percent Bottom 99 Percent 
Source: Saez and Piketty, “ The Evolution of Top Incomes in the United States,” 2013. 
13% 
8% 
2007 2012 
20 to 24 
years old 
25 and Older 
5
1 2 
1 
2 
3 
The U.S. needs a new model of economic growth 
Regions will be key to delivering inclusive growth and opportunity 
Regional leaders must embrace new “habits” of economic 
development to improve prosperity 
3 
Metropolitan Policy Program 
at BROOKINGS 
6
1 2 3 
The U.S. needs a new 1 model of economic growth 
Metropolitan Policy Program 
at BROOKINGS 
7
Pre-Recession Economy 
DEBTSPECULATION 
CONSUMPTION 
DEBT 
DEBT 
CONSUMPTION 
CONSUMPTIONSPECULATION DEBT 
DEBT 
DEBT 
Metropolitan Policy Program 
at BROOKINGS 
Next Economy 
INFRASTRUCTURE 
HUMAN CAPITAL 
MANUFACTURING 
INNOVATIONSTEM 
ADVANCED 
ENERGY 
EXPORTS 
R&D 
OPPORTUNITY 
We Need New Growth Strategies 
8
At the Same Time, We Need to Adapt to Macro Forces 
Globalization Technology Demography 
Metropolitan Policy Program 
at BROOKINGS 
9
Global Competition Is Fierce, with Growth Shifting Away from the United States 
Share of Global Economic Growth 
Metropolitan Policy Program 
at BROOKINGS 
Middle Class Consumption 
5.9% 
North America 
53.2% 
China & India 
2050 
US Canada Mexico 
Source: Homi Kharas, “The Emerging Middle Class in Developing Countries,” OECD, 2010. 
20.2% 
US 
2013 – 2019 
30.1% 
BIC Countries 
Source: International Monetary Fund, World Economic Outlook Database, October 2014. 
10
Technological Advances Are Rapidly Disrupting Labor Markets 
$33 trillion 
Metropolitan Policy Program 
at BROOKINGS 
/YEAR 
McKinsey & Company: 
maximum estimated global economic impact 
of 12 technology platforms through 2025 
Source: James Manyika and others, “Disruptive Technologies,” McKinsey & Co., 2013 
Share of U.S. Jobs at Risk of Automation 
47% 
2013 – 2033 
Source: Carl Benedikt Frey and Michael A. Osborne, “The Future of Employment,” 2013. 
11
The United States Is in the Midst of a Huge Demographic Shift 
24.5% 
Metropolitan Policy Program 
at BROOKINGS 
53.7% 
minority population share of 
U.S. workforce by 2038 
Source: Brookings/William Frey analysis of U.S. Census 2010 data. 
today’s U.S. workforce that will 
reach retirement age by 2030 
12
Rapid Diversification Currently Comes with Wide Educational Achievement Gaps 
Metropolitan Policy Program 
at BROOKINGS 
Bachelor’s Degree Attainment 
2012 
50.5% 
Source: Brookings analysis of American Community Survey data. 
29.1% 
Total Asian 
32.5% 
18.7% 
13.8% 
White Black Hispanic 
13
Trade Innovation Talent 
Leaders will invest in the drivers of growth and prosperity. 
Metropolitan Policy Program 
at BROOKINGS 
14
Trade Supports Jobs in Non-Traded Sectors 
Metropolitan Policy Program 
at BROOKINGS 
Traded-Sector 
Job 
= 
Local-Serving 
Jobs 
Source: Ezell, Stephen and Robert Atkinson, 2012, “Fifty Ways to Leave Your Competitiveness Woes Behind,” ITIF. 
15
Global Trade Creates Jobs, Generates Income, and Supports High Wages 
Metropolitan Policy Program 
at BROOKINGS 
International Exports’ Economic Impact 
29.9% 
8.1% 
Share of 
GDP Growth 
‘09-‘13 
Share of 
Job Growth 
‘09-‘13 
17.0% 
Manuf. 
Trade Wage 
Premium 
20.0% 
Services 
Trade Wage 
Premium 
Sources: Moody’s Analytics; Brookings “Export Nation”; J. Bradford Jensen, “Global Trade in Services,” Petersen 
Institute for International Economics, 2011; David Riker, “Do Jobs in Export Industries Still Pay More?” ITA, 2010. 
16
Global Trade Creates Jobs, Generates Income, and Supports High Wages 
Metropolitan Policy Program 
at BROOKINGS 
International Exports’ Economic Impact 
Portland 
32.0% 
Export 
Growth 
‘09 – ’12 
14.9% 
Export Job 
Growth 
‘09 – ’12 
14.1% 
25.9% 
Export 
Growth 
‘09 – ’12 
Exports Job 
Growth 
‘09 – ’12 
Sources: Moody’s Analytics; Brookings “Export Nation”; J. Bradford Jensen, “Global Trade in Services,” Petersen 
Institute for International Economics, 2011; David Riker, “Do Jobs in Export Industries Still Pay More?” ITA, 2010. 
17
Global Trade Creates Jobs, Generates Income, and Supports High Wages 
Metropolitan Policy Program 
at BROOKINGS 
International Exports’ Economic Impact 
4.4% 
13.2% 
Portland 
24.4% 
8.6% 
Share of 
Output 
Share of 
Jobs 
Share of 
Output 
Share of 
Jobs 
Sources: Moody’s Analytics; Brookings “Export Nation”; J. Bradford Jensen, “Global Trade in Services,” Petersen 
Institute for International Economics, 2011; David Riker, “Do Jobs in Export Industries Still Pay More?” ITA, 2010. 
18
Innovative Industries Drive Value Creation and Productivity Growth 
Metropolitan Policy Program 
at BROOKINGS 
60.0% 
Advanced Industries 
Share of U.S. Totals 
37.9% 
30.3% 
GDP Patents 
Share of 
GDP Growth 
’09 – ’13 
14.5% 
Share 
Job Growth 
’09 – ’13 
81.3% 
R&D 
8.8% 
Jobs 
17.8% 
Engineers 
*Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations. 
Source: Brookings Institution forthcoming. 
19
Innovative Industries Drive Value Creation and Productivity Growth 
Metropolitan Policy Program 
at BROOKINGS 
Advanced Industries 
Share of U.S. Totals 
Engineers Patents R&D 
*Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations. 
Source: Brookings Institution forthcoming. 
10.9% 
39.5% 
74.9% 
19.3% 
81.3% 
60.0% 
30.3% 
Jobs Share GDP 
Job Growth 
’09 – ’13 
Share of 
GDP Growth 
’09 – ’13 
Portland 
20
Talent Drives Prosperity and Fuels Innovation and Productivity Growth 
Metropolitan Policy Program 
at BROOKINGS 
Median Annual Wages by Education and Occupation 
In 1,000s 
$57 
$50 
$70 
$29 
$74 
$53 
$93 
$45 
High school 
or equivalent 
Associates 
or some college 
Bachelors Graduate 
Non-STEM STEM 
Source: Jonathan Rothwell, “The Hidden STEM Economy,” Brookings, 2012 
21
Jobs in STEM Fields Are Growing and Accessible 
Metropolitan Policy Program 
at BROOKINGS 
26 million 
STEM Jobs 
20% 
50% 
STEM Jobs as a 
Share of All Jobs 
Share of STEM Jobs 
Requiring 4-Year Degree 
Source: Jonathan Rothwell, “The Hidden STEM Economy,” Brookings, 2012 
22
Jobs in STEM Fields Are Growing and Accessible 
Metropolitan Policy Program 
at BROOKINGS 
Portland 
201,820 
STEM Jobs 
21% 
54% 
STEM Jobs as a 
Share of All Jobs 
Share of STEM Jobs 
Requiring 4-Year Degree 
Source: Jonathan Rothwell, “The Hidden STEM Economy,” Brookings, 2012 
23
Infrastructure and Governance Enable Economic Growth and Prosperity 
Metropolitan Policy Program 
at BROOKINGS 
Infrastructure Governance 
24
Infrastructure Should Enable Economic and Social Outcomes 
Trade Accessibility Connectivity 
25
Together These Key Drivers Create Opportunity, Productivity, and Prosperity 
Infrastructure 
Governance 
Metropolitan Policy Program 
at BROOKINGS 
Trade 
Prosperity 
Innovation Talent 
Enablers 
Source: Brookings Institution, RW Ventures, and McKinsey and Company. 
26
1 2 
2 
3 
Regions will be key to delivering inclusive growth and opportunity 
Metropolitan Policy Program 
at BROOKINGS 
27
The U.S. Economy Is Made Up of a Network of Diverse Metro Economies 
Metropolitan Policy Program 
at BROOKINGS 
28
Post-Recession Jobs Recovery by Metro Area 
Metropolitan Policy Program 
at BROOKINGS 
Pre-Recession Peak to 2014Q2 
Recovered 
Not recovered 
Denver 
+5.5% 
Grand Junction 
-8.8% 
Portland 
+1.6% 
Detroit 
-9.0% 
Cleveland 
-3.8% 
The Economic Challenges Vary 
29
Change in Employment Ratio of Working-Age Population 
Metropolitan Policy Program 
at BROOKINGS 
2007 to 2013 
Increased 
Decreased 0 - 3 points 
Decreased 3 or more points 
Denver 
-1.21 
Portland 
-2.31 
Detroit 
+0.4 
Cleveland 
-1.65 
The Economic Challenges Vary 
30
The Largest 100 Metro Areas Concentrate Our National Assets 
Metropolitan Policy Program 
at BROOKINGS 
31
Metropolitan Policy Program 
at BROOKINGS 
75% 
GDP 
66% 
population 
12% 
land area 
The Largest 100 Metro Areas Concentrate Our National Assets 
32
The Nation’s Key Economic Drivers Are Concentrated in Metro Areas 
66% 
72% 
Metropolitan Policy Program 
at BROOKINGS 
Largest Metros’ Share of U.S. Market Assets* 
74% 
Bachelor’s 
Degrees 
92% 
82% 
Population Patents 
75% 
Graduate 
Degrees 
90% 
Advanced 
Industries 
*The 100 largest U.S. metropolitan areas. 
Source: Brookings analysis of US Census Bureau, FAA, BLS, and BEA data. 
Air Freight 
Services 
Exports 
33
Metropolitan Policy Program 
at BROOKINGS 
“Something has gone 
terribly wrong when the 
biggest threat to our 
American economy is the 
American Congress.” 
Senator Joe Manchin III 
34
Metropolitan Policy Program 
at BROOKINGS 
Cities and Metros 
States 
Feds 
35
1 2 3 
3 Regional leaders must embrace new “habits” of economic 
development to improve prosperity 
Metropolitan Policy Program 
at BROOKINGS 
36
“Without economic development, economic growth is limited.” 
— Dr. Maryann Feldman 
Heninger Professor of Public Policy at UNC Chapel Hill 
Metropolitan Policy Program 
at BROOKINGS 
Source: Maryann Feldman and others, “Economic Development: A Definition and Model for Investment,” Working paper, 2014. 
37
Traditional Approaches to Local and Regional Development Are Insufficient 
Starbucks Stadia 
Metropolitan Policy Program 
at BROOKINGS 
Stealing 
Businesses 
38
Local Economic Developers Need to Focus on the Real Sources of Job Growth 
Metropolitan Policy Program 
at BROOKINGS 
Source: Jed Kolko, “Business Relocation and Homegrown Jobs, 1992-2006,” Public Policy Institute of California, 2010. 
56.3% job creation from startups 
1.9% job creation from attraction 
41.8% job creation from firm expansion 
39
Dozens of Metro Areas Are Pursuing Transformative Approaches 
Portland 
Export Plan 
Los Angeles 
LA 30/10 
Metropolitan Policy Program 
at BROOKINGS 
Houston 
Neighborhood 
Centers 
New York City 
Applied Sciences 
Northeast Ohio 
Manufacturing 
Network 
Denver 
FasTracks 
Chicago 
Business Plan 
Detroit 
Innovation District 
40
Metropolitan Policy Program 
at BROOKINGS 
7 Habits 
of Highly Effective Regional Leaders 
41
Region Value People Trade Networks Outcomes 
Portland: 
Metropolitan Policy Program 
at BROOKINGS 
Assets 
Habit 1: Embrace Regional Markets 
20th largest metropolitan economy 
in the United States 
2 states 
2 satellite cities 
7 counties 
110 communities 
42
Region Value 
People Trade Networks Outcomes 
Metropolitan Policy Program 
at BROOKINGS 
Assets 
Habit 2: Compete on Value, Not Cost 
43
Habit 3: Prioritize People, Not Just Profits 
Region Value People 
Trade Networks Outcomes 
Metropolitan Policy Program 
at BROOKINGS 
Assets 
“Leaders with longer perspectives 
understand that companies can’t thrive 
for long while their workers and their 
communities struggle.” 
— Michael Porter 
“Unless you have the right skilled 
people, you’re just wasting your money 
on technology and equipment.” 
— GE Executive 
44
Habit 4: Invest in Market Assets, Do Not Just Recruit Them 
Region Value People Trade Networks Outcomes 
Albany Nano-Tech 
Metropolitan Policy Program 
at BROOKINGS 
Assets 
Impact of Relocating Firms* 
15,536 
23,158 
2004 – 2009 
$146,488 
$127,654 
IN OUT IN OUT 
Move-related Jobs Sales Per Job 
Source: Brookings and research partners’ analysis of NETS data on inter-metropolitan firm relocations 
in a large name-withheld midwest metropolitan area. 
800,000 sq ft 
integrated research, 
development, 
prototyping and 
educational facilities 
$1 billion 
from State of New York 
$13 billion 
invested by 300+ 
affiliated firms 
2,600 R&D jobs on site 
Focus on nanotechnology “cluster” is building a 
base of manufacturers, suppliers and engineering 
facilities - including a $4.6 billion investment from 
Global Foundaries in Saratoga County 
45
Habit 5: Invest in Trade, Not Consumption 
2% tradable sectors’ share of net job 
growth in the U.S. between 
1990-2008 
Region Value People Trade 
Networks Outcomes 
Metropolitan Policy Program 
at BROOKINGS 
Assets 
Michael Spence, “The Evolving Structure of the American Economy,” CFR, 2011 
46
Habit 6: Build Networks Instead of “Going Alone” 
Region Value People Trade Networks 
Outcomes 
Metropolitan Policy Program 
at BROOKINGS 
Assets 
Government Economy 
47
Habit 7: Track Long-Term Outcomes, Not Just Short-Term Tactics 
Region Value People Trade Networks Outcomes 
Metropolitan Policy Program 
at BROOKINGS 
Assets 
Track What Matters 
Objective: Improve economic and governance 
capacities to move regional economies onto a faster, 
more sustainable long-term growth trajectory. 
Performance Metrics: 
• Economic Growth 
• Jobs, Output, Startups 
• Wealth and Income 
• Productivity, Output per capita, Wages, Income 
• Equity and Inclusion 
• Labor Force Participation, Unemployment, 
Socio-Economic Disparities 
vs. Traditional Metrics 
“High performance economic development is the 
dedicated pursuit of any objective, no matter what the 
current objective may be, coupled with measured 
progress along the way.” 
Performance Metrics: 
• website unique visits 
• conversations with companies that are relocating 
Source: withheld. 
or expanding 
• jobs announcements 
• investment announcements 
• jobs created per week 
48
Metropolitan Policy Program 
at BROOKINGS 
“Begin with the end in mind.” 
— Dr. Stephen R. Covey 
Author, “Seven Habits of Highly Effective People” 
49
ECONOMIC DEVELOPMENT IN THE NEXT ECONOMY 
Charting a New Path to Growth and Prosperity 
Metropolitan Policy Program 
at BROOKINGS 
@BrookingsMetro 
@Amy_Liuw 
Portland, OR • October 14, 2014 50

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2014 10-14 portland conference - portland, or

  • 1. CHARTING A NEW PATH TO GROWTH AND PROSPERITY Implications for a Blueprint for the Regional Economy Metropolitan Policy Program at BROOKINGS @BrookingsMetro @Amy_Liuw Portland, OR • October 14, 2014 1
  • 2. On the Surface, the Economy Has Recovered from the Great Recession 5,000,000 0 -5,000,000 -10,000,000 +865,000 jobs 2007 2009 2014 Metropolitan Policy Program at BROOKINGS Post-Recession U.S. Jobs Gap Since start of recession Source: Current Employment Statistics. 2
  • 3. However, We Still Face a Growth Problem 5,000,000 0 -5,000,000 -10,000,000 Post-Recession U.S. Jobs Gap Since start of recession 2007 2009 2014 Metropolitan Policy Program at BROOKINGS 5.6 million missing jobs Payroll Count Jobs Gap Growth-Based Jobs Gap Source: The Hamilton Project analysis of Congressional Budget Office and Current Employment Statistics data. 3
  • 4. 40% 30% 20% 10% 0% -5% 1990 2000 2012 Metropolitan Policy Program at BROOKINGS 36% 0% -4% We Also Face a Wealth Problem Change in Output Per Capita and Median Household Income Since 1990 Output Per Capita Median Household Income Output per capita: +$14,589 Median income: -$2,120 Source: Current Population Statistics, BLS Consumer Price Index, Census Population Estimates, Moody’s Analytics. 4
  • 5. Finally, We Face an Inclusion Problem Income Growth During Recovery 2009-2012 Metropolitan Policy Program at BROOKINGS Unemployment Rate by Age Recession through 2013 2007 2012 Source: Current Population Statistics. 23% 16% 2007 2012 16 to 19 years old 6% 4% 0.4% 31.4% Top 1 Percent Bottom 99 Percent Source: Saez and Piketty, “ The Evolution of Top Incomes in the United States,” 2013. 13% 8% 2007 2012 20 to 24 years old 25 and Older 5
  • 6. 1 2 1 2 3 The U.S. needs a new model of economic growth Regions will be key to delivering inclusive growth and opportunity Regional leaders must embrace new “habits” of economic development to improve prosperity 3 Metropolitan Policy Program at BROOKINGS 6
  • 7. 1 2 3 The U.S. needs a new 1 model of economic growth Metropolitan Policy Program at BROOKINGS 7
  • 8. Pre-Recession Economy DEBTSPECULATION CONSUMPTION DEBT DEBT CONSUMPTION CONSUMPTIONSPECULATION DEBT DEBT DEBT Metropolitan Policy Program at BROOKINGS Next Economy INFRASTRUCTURE HUMAN CAPITAL MANUFACTURING INNOVATIONSTEM ADVANCED ENERGY EXPORTS R&D OPPORTUNITY We Need New Growth Strategies 8
  • 9. At the Same Time, We Need to Adapt to Macro Forces Globalization Technology Demography Metropolitan Policy Program at BROOKINGS 9
  • 10. Global Competition Is Fierce, with Growth Shifting Away from the United States Share of Global Economic Growth Metropolitan Policy Program at BROOKINGS Middle Class Consumption 5.9% North America 53.2% China & India 2050 US Canada Mexico Source: Homi Kharas, “The Emerging Middle Class in Developing Countries,” OECD, 2010. 20.2% US 2013 – 2019 30.1% BIC Countries Source: International Monetary Fund, World Economic Outlook Database, October 2014. 10
  • 11. Technological Advances Are Rapidly Disrupting Labor Markets $33 trillion Metropolitan Policy Program at BROOKINGS /YEAR McKinsey & Company: maximum estimated global economic impact of 12 technology platforms through 2025 Source: James Manyika and others, “Disruptive Technologies,” McKinsey & Co., 2013 Share of U.S. Jobs at Risk of Automation 47% 2013 – 2033 Source: Carl Benedikt Frey and Michael A. Osborne, “The Future of Employment,” 2013. 11
  • 12. The United States Is in the Midst of a Huge Demographic Shift 24.5% Metropolitan Policy Program at BROOKINGS 53.7% minority population share of U.S. workforce by 2038 Source: Brookings/William Frey analysis of U.S. Census 2010 data. today’s U.S. workforce that will reach retirement age by 2030 12
  • 13. Rapid Diversification Currently Comes with Wide Educational Achievement Gaps Metropolitan Policy Program at BROOKINGS Bachelor’s Degree Attainment 2012 50.5% Source: Brookings analysis of American Community Survey data. 29.1% Total Asian 32.5% 18.7% 13.8% White Black Hispanic 13
  • 14. Trade Innovation Talent Leaders will invest in the drivers of growth and prosperity. Metropolitan Policy Program at BROOKINGS 14
  • 15. Trade Supports Jobs in Non-Traded Sectors Metropolitan Policy Program at BROOKINGS Traded-Sector Job = Local-Serving Jobs Source: Ezell, Stephen and Robert Atkinson, 2012, “Fifty Ways to Leave Your Competitiveness Woes Behind,” ITIF. 15
  • 16. Global Trade Creates Jobs, Generates Income, and Supports High Wages Metropolitan Policy Program at BROOKINGS International Exports’ Economic Impact 29.9% 8.1% Share of GDP Growth ‘09-‘13 Share of Job Growth ‘09-‘13 17.0% Manuf. Trade Wage Premium 20.0% Services Trade Wage Premium Sources: Moody’s Analytics; Brookings “Export Nation”; J. Bradford Jensen, “Global Trade in Services,” Petersen Institute for International Economics, 2011; David Riker, “Do Jobs in Export Industries Still Pay More?” ITA, 2010. 16
  • 17. Global Trade Creates Jobs, Generates Income, and Supports High Wages Metropolitan Policy Program at BROOKINGS International Exports’ Economic Impact Portland 32.0% Export Growth ‘09 – ’12 14.9% Export Job Growth ‘09 – ’12 14.1% 25.9% Export Growth ‘09 – ’12 Exports Job Growth ‘09 – ’12 Sources: Moody’s Analytics; Brookings “Export Nation”; J. Bradford Jensen, “Global Trade in Services,” Petersen Institute for International Economics, 2011; David Riker, “Do Jobs in Export Industries Still Pay More?” ITA, 2010. 17
  • 18. Global Trade Creates Jobs, Generates Income, and Supports High Wages Metropolitan Policy Program at BROOKINGS International Exports’ Economic Impact 4.4% 13.2% Portland 24.4% 8.6% Share of Output Share of Jobs Share of Output Share of Jobs Sources: Moody’s Analytics; Brookings “Export Nation”; J. Bradford Jensen, “Global Trade in Services,” Petersen Institute for International Economics, 2011; David Riker, “Do Jobs in Export Industries Still Pay More?” ITA, 2010. 18
  • 19. Innovative Industries Drive Value Creation and Productivity Growth Metropolitan Policy Program at BROOKINGS 60.0% Advanced Industries Share of U.S. Totals 37.9% 30.3% GDP Patents Share of GDP Growth ’09 – ’13 14.5% Share Job Growth ’09 – ’13 81.3% R&D 8.8% Jobs 17.8% Engineers *Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations. Source: Brookings Institution forthcoming. 19
  • 20. Innovative Industries Drive Value Creation and Productivity Growth Metropolitan Policy Program at BROOKINGS Advanced Industries Share of U.S. Totals Engineers Patents R&D *Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations. Source: Brookings Institution forthcoming. 10.9% 39.5% 74.9% 19.3% 81.3% 60.0% 30.3% Jobs Share GDP Job Growth ’09 – ’13 Share of GDP Growth ’09 – ’13 Portland 20
  • 21. Talent Drives Prosperity and Fuels Innovation and Productivity Growth Metropolitan Policy Program at BROOKINGS Median Annual Wages by Education and Occupation In 1,000s $57 $50 $70 $29 $74 $53 $93 $45 High school or equivalent Associates or some college Bachelors Graduate Non-STEM STEM Source: Jonathan Rothwell, “The Hidden STEM Economy,” Brookings, 2012 21
  • 22. Jobs in STEM Fields Are Growing and Accessible Metropolitan Policy Program at BROOKINGS 26 million STEM Jobs 20% 50% STEM Jobs as a Share of All Jobs Share of STEM Jobs Requiring 4-Year Degree Source: Jonathan Rothwell, “The Hidden STEM Economy,” Brookings, 2012 22
  • 23. Jobs in STEM Fields Are Growing and Accessible Metropolitan Policy Program at BROOKINGS Portland 201,820 STEM Jobs 21% 54% STEM Jobs as a Share of All Jobs Share of STEM Jobs Requiring 4-Year Degree Source: Jonathan Rothwell, “The Hidden STEM Economy,” Brookings, 2012 23
  • 24. Infrastructure and Governance Enable Economic Growth and Prosperity Metropolitan Policy Program at BROOKINGS Infrastructure Governance 24
  • 25. Infrastructure Should Enable Economic and Social Outcomes Trade Accessibility Connectivity 25
  • 26. Together These Key Drivers Create Opportunity, Productivity, and Prosperity Infrastructure Governance Metropolitan Policy Program at BROOKINGS Trade Prosperity Innovation Talent Enablers Source: Brookings Institution, RW Ventures, and McKinsey and Company. 26
  • 27. 1 2 2 3 Regions will be key to delivering inclusive growth and opportunity Metropolitan Policy Program at BROOKINGS 27
  • 28. The U.S. Economy Is Made Up of a Network of Diverse Metro Economies Metropolitan Policy Program at BROOKINGS 28
  • 29. Post-Recession Jobs Recovery by Metro Area Metropolitan Policy Program at BROOKINGS Pre-Recession Peak to 2014Q2 Recovered Not recovered Denver +5.5% Grand Junction -8.8% Portland +1.6% Detroit -9.0% Cleveland -3.8% The Economic Challenges Vary 29
  • 30. Change in Employment Ratio of Working-Age Population Metropolitan Policy Program at BROOKINGS 2007 to 2013 Increased Decreased 0 - 3 points Decreased 3 or more points Denver -1.21 Portland -2.31 Detroit +0.4 Cleveland -1.65 The Economic Challenges Vary 30
  • 31. The Largest 100 Metro Areas Concentrate Our National Assets Metropolitan Policy Program at BROOKINGS 31
  • 32. Metropolitan Policy Program at BROOKINGS 75% GDP 66% population 12% land area The Largest 100 Metro Areas Concentrate Our National Assets 32
  • 33. The Nation’s Key Economic Drivers Are Concentrated in Metro Areas 66% 72% Metropolitan Policy Program at BROOKINGS Largest Metros’ Share of U.S. Market Assets* 74% Bachelor’s Degrees 92% 82% Population Patents 75% Graduate Degrees 90% Advanced Industries *The 100 largest U.S. metropolitan areas. Source: Brookings analysis of US Census Bureau, FAA, BLS, and BEA data. Air Freight Services Exports 33
  • 34. Metropolitan Policy Program at BROOKINGS “Something has gone terribly wrong when the biggest threat to our American economy is the American Congress.” Senator Joe Manchin III 34
  • 35. Metropolitan Policy Program at BROOKINGS Cities and Metros States Feds 35
  • 36. 1 2 3 3 Regional leaders must embrace new “habits” of economic development to improve prosperity Metropolitan Policy Program at BROOKINGS 36
  • 37. “Without economic development, economic growth is limited.” — Dr. Maryann Feldman Heninger Professor of Public Policy at UNC Chapel Hill Metropolitan Policy Program at BROOKINGS Source: Maryann Feldman and others, “Economic Development: A Definition and Model for Investment,” Working paper, 2014. 37
  • 38. Traditional Approaches to Local and Regional Development Are Insufficient Starbucks Stadia Metropolitan Policy Program at BROOKINGS Stealing Businesses 38
  • 39. Local Economic Developers Need to Focus on the Real Sources of Job Growth Metropolitan Policy Program at BROOKINGS Source: Jed Kolko, “Business Relocation and Homegrown Jobs, 1992-2006,” Public Policy Institute of California, 2010. 56.3% job creation from startups 1.9% job creation from attraction 41.8% job creation from firm expansion 39
  • 40. Dozens of Metro Areas Are Pursuing Transformative Approaches Portland Export Plan Los Angeles LA 30/10 Metropolitan Policy Program at BROOKINGS Houston Neighborhood Centers New York City Applied Sciences Northeast Ohio Manufacturing Network Denver FasTracks Chicago Business Plan Detroit Innovation District 40
  • 41. Metropolitan Policy Program at BROOKINGS 7 Habits of Highly Effective Regional Leaders 41
  • 42. Region Value People Trade Networks Outcomes Portland: Metropolitan Policy Program at BROOKINGS Assets Habit 1: Embrace Regional Markets 20th largest metropolitan economy in the United States 2 states 2 satellite cities 7 counties 110 communities 42
  • 43. Region Value People Trade Networks Outcomes Metropolitan Policy Program at BROOKINGS Assets Habit 2: Compete on Value, Not Cost 43
  • 44. Habit 3: Prioritize People, Not Just Profits Region Value People Trade Networks Outcomes Metropolitan Policy Program at BROOKINGS Assets “Leaders with longer perspectives understand that companies can’t thrive for long while their workers and their communities struggle.” — Michael Porter “Unless you have the right skilled people, you’re just wasting your money on technology and equipment.” — GE Executive 44
  • 45. Habit 4: Invest in Market Assets, Do Not Just Recruit Them Region Value People Trade Networks Outcomes Albany Nano-Tech Metropolitan Policy Program at BROOKINGS Assets Impact of Relocating Firms* 15,536 23,158 2004 – 2009 $146,488 $127,654 IN OUT IN OUT Move-related Jobs Sales Per Job Source: Brookings and research partners’ analysis of NETS data on inter-metropolitan firm relocations in a large name-withheld midwest metropolitan area. 800,000 sq ft integrated research, development, prototyping and educational facilities $1 billion from State of New York $13 billion invested by 300+ affiliated firms 2,600 R&D jobs on site Focus on nanotechnology “cluster” is building a base of manufacturers, suppliers and engineering facilities - including a $4.6 billion investment from Global Foundaries in Saratoga County 45
  • 46. Habit 5: Invest in Trade, Not Consumption 2% tradable sectors’ share of net job growth in the U.S. between 1990-2008 Region Value People Trade Networks Outcomes Metropolitan Policy Program at BROOKINGS Assets Michael Spence, “The Evolving Structure of the American Economy,” CFR, 2011 46
  • 47. Habit 6: Build Networks Instead of “Going Alone” Region Value People Trade Networks Outcomes Metropolitan Policy Program at BROOKINGS Assets Government Economy 47
  • 48. Habit 7: Track Long-Term Outcomes, Not Just Short-Term Tactics Region Value People Trade Networks Outcomes Metropolitan Policy Program at BROOKINGS Assets Track What Matters Objective: Improve economic and governance capacities to move regional economies onto a faster, more sustainable long-term growth trajectory. Performance Metrics: • Economic Growth • Jobs, Output, Startups • Wealth and Income • Productivity, Output per capita, Wages, Income • Equity and Inclusion • Labor Force Participation, Unemployment, Socio-Economic Disparities vs. Traditional Metrics “High performance economic development is the dedicated pursuit of any objective, no matter what the current objective may be, coupled with measured progress along the way.” Performance Metrics: • website unique visits • conversations with companies that are relocating Source: withheld. or expanding • jobs announcements • investment announcements • jobs created per week 48
  • 49. Metropolitan Policy Program at BROOKINGS “Begin with the end in mind.” — Dr. Stephen R. Covey Author, “Seven Habits of Highly Effective People” 49
  • 50. ECONOMIC DEVELOPMENT IN THE NEXT ECONOMY Charting a New Path to Growth and Prosperity Metropolitan Policy Program at BROOKINGS @BrookingsMetro @Amy_Liuw Portland, OR • October 14, 2014 50