On October 14, Amy Liu presented at the Annual Economic Summit hosted by Greater Portland Inc. As Portland launches a new Blueprint for Regional Economic Growth, Amy Liu unveiled how metros can adopt a new model of economic development that helps build globally competitive and inclusive regional economies.
India Economic Survey Complete for the year of 2022 to 2023
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
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@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
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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
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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
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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
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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
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7. 1 2 3
The U.S. needs a new 1 model of economic growth
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8. Pre-Recession Economy
DEBTSPECULATION
CONSUMPTION
DEBT
DEBT
CONSUMPTION
CONSUMPTIONSPECULATION DEBT
DEBT
DEBT
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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
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10. Global Competition Is Fierce, with Growth Shifting Away from the United States
Share of Global Economic Growth
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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
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/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%
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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
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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.
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14
15. Trade Supports Jobs in Non-Traded Sectors
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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
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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.
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17. Global Trade Creates Jobs, Generates Income, and Supports High Wages
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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.
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18. Global Trade Creates Jobs, Generates Income, and Supports High Wages
Metropolitan Policy Program
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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.
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19. Innovative Industries Drive Value Creation and Productivity Growth
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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.
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20. Innovative Industries Drive Value Creation and Productivity Growth
Metropolitan Policy Program
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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
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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
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22. Jobs in STEM Fields Are Growing and Accessible
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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
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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
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24. Infrastructure and Governance Enable Economic Growth and Prosperity
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Infrastructure Governance
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26. Together These Key Drivers Create Opportunity, Productivity, and Prosperity
Infrastructure
Governance
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Trade
Prosperity
Innovation Talent
Enablers
Source: Brookings Institution, RW Ventures, and McKinsey and Company.
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27. 1 2
2
3
Regions will be key to delivering inclusive growth and opportunity
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28. The U.S. Economy Is Made Up of a Network of Diverse Metro Economies
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29. Post-Recession Jobs Recovery by Metro Area
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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
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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
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31. The Largest 100 Metro Areas Concentrate Our National Assets
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31
32. Metropolitan Policy Program
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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%
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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
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“Something has gone
terribly wrong when the
biggest threat to our
American economy is the
American Congress.”
Senator Joe Manchin III
34
36. 1 2 3
3 Regional leaders must embrace new “habits” of economic
development to improve prosperity
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36
37. “Without economic development, economic growth is limited.”
— Dr. Maryann Feldman
Heninger Professor of Public Policy at UNC Chapel Hill
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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
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Stealing
Businesses
38
39. Local Economic Developers Need to Focus on the Real Sources of Job Growth
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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
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Houston
Neighborhood
Centers
New York City
Applied Sciences
Northeast Ohio
Manufacturing
Network
Denver
FasTracks
Chicago
Business Plan
Detroit
Innovation District
40
42. Region Value People Trade Networks Outcomes
Portland:
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Assets
Habit 1: Embrace Regional Markets
20th largest metropolitan economy
in the United States
2 states
2 satellite cities
7 counties
110 communities
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43. Region Value
People Trade Networks Outcomes
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Assets
Habit 2: Compete on Value, Not Cost
43
44. Habit 3: Prioritize People, Not Just Profits
Region Value People
Trade Networks Outcomes
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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
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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
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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
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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
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Assets
Government Economy
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48. Habit 7: Track Long-Term Outcomes, Not Just Short-Term Tactics
Region Value People Trade Networks Outcomes
Metropolitan Policy Program
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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
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49. Metropolitan Policy Program
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“Begin with the end in mind.”
— Dr. Stephen R. Covey
Author, “Seven Habits of Highly Effective People”
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50. ECONOMIC DEVELOPMENT IN THE NEXT ECONOMY
Charting a New Path to Growth and Prosperity
Metropolitan Policy Program
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@BrookingsMetro
@Amy_Liuw
Portland, OR • October 14, 2014 50