Amy Liu's presentation at Global Cities Indianapolis

1. A Joint Project of Brookings and JPMorgan Chase

2. GLOBAL CITIES INITIATIVE
A JOINT PROJECT OF BROOKINGS AND JPMORGAN CHASE
Indianapolis, IN- February 19, 2015
@amy_liuw
#globalcities

3. Post-Recession Jobs Recovery by Metro Area
Pre-Recession Peak to 2014Q2
Recovered
Not recovered
Portland
+1.6%
Indianapolis
+2.9%
Cleveland
-3.8%
Economic Challenges Vary
Kansas City
-1.2%

4. Metropolitan Policy Program
at BROOKINGS
Change in Employment Ratio of Working-Age Population
2007 to 2013
Increased
Decreased 0 - 3 points
Decreased 3 or more points
Economic Challenges Vary
Portland
-2.3
Indianapolis
-2.6
Cleveland
-1.7%
Kansas City
-0.6%

5. Source: Ezell, Stephen and Robert Atkinson, 2012, “Fifty Ways to Leave Your
Competitiveness Woes Behind,” ITIF.
Traded
Manufacturing Job
=
Local Jobs
Traded Sectors Are Key to High Quality Economic Growth

6. State and Local Leaders Need to Focus on the Real Sources of Job Growth
1.9%
job creation from firm
attraction
98.1%job creation from
firm expansion & startups
Source: Conway Data Inc., Brookings analysis of NETS data at youreconomy.org.

7. 1 2 31 2 3
The Imperative for Global
Engagement
Metros Are Centers of Global
Trade and Investment
Metros Are Engaging Globally

8. 79%
share of global economic growth
occurring outside the U.S., 2013-2018
The Bulk of Potential Demand for U.S. Products Comes from Outside of the U.S.
Source: World Economic Outlook, International Monetary Fund, 2014.
Middle Class Consumption
5.9%
North America
23.0%
North America
11.8%
China & India
53.2%
China & India
2050
Source: Homi Kharas, “The Emerging Middle Class in Developing Countries,” OECD, 2010.
2013

9. Metropolitan Policy Program
at BROOKINGS
Share of
GDP Growth
‘09-‘13
Share of
Job Growth
‘09-‘13
Exports Create Jobs, Generates Income, and Supports High Wages
Metropolitan Policy Program
at BROOKINGS
International Exports’ Economic Impact
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.
Manuf. Trade
Wage
Premium
Services
Trade Wage
Premium
Metropolitan Policy Program
at BROOKINGS

10. Firms Benefit From Exports
Exporting
U.S. Manufacturing Firms Revenue Growth
2005-2009
Non-Exporting
Source: U.S. International Trade Commission, 2010, “Small and Medium-Sized
Enterprises: Characteristics and Performance,” Washington,
2012 Both Years2011
Number of Firms Exporting
302,000
199,000
293,000

11. Though Volatile, Global Investment Flows Are Growing
1984 1999 2012
FDI Flows (Capital)
$2 trillion
$1 trillion
Source: UNCTAD
Global
U.S.
$1.3 trillion
$168 billion

12. The U.S. Is Capturing a Smaller Share of Global Investment
12 percent
26 percent
45 percent
1984 1999 2012
U.S. Share of Global FDI (Capital)
Source: UNCTAD

13. FDI Bolsters Exports and Innovation
U.S.
Manufacturing
Exports
U.S.
Manufacturing
Employment
2%
20%
Foreign-Owned Firms
Goods-Producing Industries, 2011
Source: Brookings, Metro FDI, 2014; Bureau of Economic Analysis
U.S.
Corporate R&D
U.S.
Employment
5%
19%
Foreign-Owned Firms
2011

14. Advanced Industries
Innovation Human Capital Infrastructure

15. Pharmaceuticals
Medical EquipmentMotor Vehicles &
Parts
Aerospace
Manufacturing
35
Software Computer Systems
Design
Telecommunications R&D Consulting
Services
Services
12
Oil & Gas
Extraction
Electricity
Generation
Energy
3
Advanced Industries

16. Metropolitan Policy Program
at BROOKINGS
Advanced Industries Support High Wages
Wages
*Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations.
Source:Brookings “Advanced Industries”, Mark Muro
Metropolitan Policy Program
at BROOKINGS
$90,000 > $47,000
average advanced
industry wage
average wage
Skills
1 out of 2
advanced industry jobs require
less than a 4-year degree

17. Advanced Industries Drive Value Creation and Productivity Growth
PatentsGDP
Advanced Industries
Share of U.S. Totals
R&DJobs Exports
*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.
Metropolitan Policy Program
at BROOKINGS

18. Advanced Industries Drive Value Creation and Productivity Growth
Advanced Industries
Share of U.S. Totals
*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.
Metropolitan Policy Program
at BROOKINGS
GDPJobs R&DPatentsExports
Indianapolis
Region

19. Metropolitan Policy Program
at BROOKINGS
Non-STEM STEM
Talent Matters to Innovation and Opportunity
High school
or equivalent
Associates
or some college
Bachelors Graduate
Source: Jonathan Rothwell, “The Hidden STEM Economy,” Brookings, 2012
Median Annual Wages by Education and Occupation
In 1,000s
Metropolitan Policy Program
at BROOKINGS

20. Metropolitan Policy Program
at BROOKINGS
Jobs in STEM Fields Are Accessible
Metropolitan Policy Program
at BROOKINGS
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
178,910STEM Jobs
Indianapolis Region

21. $149 b
Top 100
Metros
Indianapolis
Region
International Trade Share
15.8% 13.3%
Total Goods Trade
24th out of top 100 metros
Top Global Country/Region Trading Partners
1 Chicago $9.2 b
2 Indiana (Rem.) $8.4 b
3 Cincinnati $4.6 b
4 New York City $3.5 b
5 St. Louis $3.3 b
6 China $3.2 b
7 Canada $2.9 b
8 Louisville $2.8 b
Indianapolis Region Freight Profile
Source: Brookings, Metro Freight (2013) & Global Gateways (2012)

22. Metros are centers of
global trade and
investment
1 2 31 2 3

23. Bachelor’s
Degrees
74%
92%
PatentsPopulation
66%
75%
Graduate
Degrees
90%
Advanced
Industries
Source: Brookings analysis of US Census Bureau, FAA, BLS, and BEA data
Largest Metros’ Share of U.S. Market Assets
Air Freight
82%
Services
Exports
72%
GDP
75%
Metro Areas Hold the Bulk of the Assets That Will Drive Exports

24. Source: Brookings Export Nation 2013, Census
Metropolitan Areas
Indiana
81% 75%78%
Population GDP Exports

25. Metros Have a Critical Role to Play in Exports
Increase export pipeline through proactive outreach in existing networks
Coordinate federal, state, and local programs on the ground
Catalyze cultural shift by mainstreaming exports and trade
Metro
State
Federal
Bring credibility of the Governor’s office to global trade
Establish a state brand platform
Organize trade missions
Dedicate resources to global engagement
Open new markets through free trade agreements
Finance exports through Ex-Im and SBA
Provide on-the-ground expertise in U.S. and foreign markets
Produce export data to inform state and regional efforts

26. 1 2 31 2 3
Metros are engaging
globally in new ways
METRO
INNOVATION

27. 27
Organize for Trade

28. GLOBAL CITIES INITIATIVE
AJoint Project of Brookings and JP Morgan Chase
Research ExchangeConvenings
Goal
Catalyze a shift in economic growth policy and practice that results in more globally
competitive metropolitan areas, positioning them for high-quality growth and better jobs
for more workers in the 21st century economy.

29. The Exchange Is 28 U.S. Metro Areas at the Vanguard of Global Engagement
Exports:
New Cohort
Baltimore
Fresno
Houston
Kansas City
Philadelphia
Salt Lake
Seattle
St. Louis
Exports:
Current
Atlanta
Charleston
Chicago
Columbus
Des Moines
Indianapolis
Jacksonville
Louisville-Lexington
Los Angeles
Milwaukee
Mpls-St. Paul
Phoenix
Portland
Sacramento
San Antonio
San Diego
Syracuse
Tampa Bay
Upstate SC
Wichita
Columbus
Mpls-St. Paul
Portland
San Antonio
San Diego
Seattle
FDI Pilot

30. Each Metro Area Is Leveraging its Unique Specializations and Global Brand
We Build
Green Cities
Portland
Health and
Wellness
Minneapolis - St. Paul
Life Sciences
San Diego
Services and
Canada
Syracuse

31. 31
Organize for Trade
Invest in
What Matters

32. Innovation Human Capital Infrastructure
SUNY Albany
Nanotech
Campus
Columbus
Clemson University
International Center for
Automotive Research

33. Innovation Human Capital Infrastructure

34. Innovation Human Capital Infrastructure

35. Organize for Trade
Invest in
What Matters
Network Globally

36. Chicago
Mexico City2nd largest
Mexican immigrant population
resides in Chicago metro area
130
Chicago-based firms with
operations in Mexico City
$1.7 billion
total bilateral trade of locally
produced products
290,000
tourists and business travelers
between Chicago and Mexico City
per year

37. GLOBAL CITIES ECONOMIC PARTNERSHIP

38. Exports Should be Part of a Comprehensive Approach to Economic Development
Global Research &
Advanced Industries
Human Capital &
Immigrants
Exports & FDI
Freight &
Infrastructure

39. GLOBAL CITIES INITIATIVE
A JOINT PROJECT OF BROOKINGS AND JPMORGAN CHASE
Indianapolis, IN- February 19, 2015
@amy_liuw
#globalcities