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

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A presentation made to the Tri-State Alliance stakeholders meeting by Dr. Norman Walzer and Brian Harger on May 9, 2011 in Rockford, Illinois.

A presentation made to the Tri-State Alliance stakeholders meeting by Dr. Norman Walzer and Brian Harger on May 9, 2011 in Rockford, Illinois.

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  • 1. Tri‐State Alliance EconomyTri State Alliance EconomyPast Trends and Implications for FutureIowaGrantLafayette Green RockN W l B i HBooneWinnebagoStephensonJoDaviessOgleCarrollJacksonJonesDubuqueDelawarePresented toNorman Walzer and Brian HargerSenior Research Scholar Research AssociateClintonCedarTri‐State Alliance MeetingRockford, ILMay 9 2011May 9, 20116/15/2011 1
  • 2. 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
  • 3. 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
  • 4. Post‐Recession ChangesTri‐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
  • 5. U.S. Industry Employment & OutputPercent Change (1998‐2008)Other servicesReligious, grantmaking, civic, professional organizatonsOutputEmploymentEducation servicesHealth care and social assistanceArts, entertainment, and recreationAccomodation and food servicesOther services EmploymentFinance and insuranceReal estate, rental, and leasingProfessional, scientific, and technical servicesManagement of companies and enterprisesAdministrative, support, waste management and remediationWholesale tradeRetail tradeTransportation and warehousingInformationFinance and insuranceMiningUtilitiesConstructionManufacturing-50.0 0.0 50.0 100.0 150.0Data Source: Employment Projections Program, U.S. Bureau of Labor Statistics, 2011.6/15/2011 5
  • 6. Employment TrendsTri‐State Alliance Region (1969 – 2009)Tri‐State Alliance Region (1969 – 2009)35%40%25%30%35%ment20%25%of Total Employm10%15%Manufacturing EmploymentPercent 0%5%19691970197119721973197419751976197719781979198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009Services EmploymentGovernment EmploymentData Sources: U.S. Bureau of Economic Analysis, 2011.6/15/2011 6
  • 7. Unemployment RateTri‐State Alliance Region (1990 – 2011)Tri‐State Alliance Region (1990 – 2011)16.0Tri‐State Region12.014.0gU.S. Averagessiononsion8 010.0RecesRecessioRecess6.08.02.04.0990991992993994995996997998999000001002003004005006007008009010011Note: Data is not seasonally adjusted.Data Source: U.S. Bureau of Labor Statistics, 2011.191919191919191919192020202020202020202020206/15/2011 7
  • 8. Employment Trends by Zip CodeData Sources: EASI Analytics, Inc., 2011.6/15/2011 8
  • 9. Employment by IndustryTri‐State Alliance Region 2000‐2010Tri‐State Alliance Region, 2000‐2010Industry Sector2000 2010 PercentChangeN bPercent ofN bPercent of2000-2010NumberTotal Emp.NumberTotal Emp.Manufacturing 115,908 24.5 106,268 21.4 -8.3Educational, Health and Social Services 89,625 19.0 109,387 22.0 22.0Retail Trade 57 353 12 1 52 643 10 6 8 2Retail Trade 57,353 12.1 52,643 10.6 -8.2Arts, Entertainment, Accommodation and Food Services 31,217 6.6 36,067 7.3 15.5Construction 28,839 6.1 32,050 6.4 11.1Professional, Scientific, Management, Administrative 26,001 5.5 31,084 6.3 19.5Transportation and Warehousing, and Utilities 23,118 4.9 26,843 5.4 16.1Finance, Insurance, Real Estate and Rental and Leasing 23,298 4.9 25,215 5.1 8.2Other Services 21,050 4.5 24,138 4.9 14.7A 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 -14.8Wholesale Trade 15,998 3.4 14,650 2.9 -8.4Public Administration 12,529 2.7 13,807 2.8 10.2Information 9,223 2.0 9,302 1.9 0.9Data Source: EASI Analytics, Inc., 2010.,6/15/2011 9
  • 10. Employment by OccupationTri State Alliance Region 2000 2010Tri‐State Alliance Region, 2000‐2010Occupational Category2000 2010 PercentChangeN b P t f N b P t fOccupational Category Change2000-2010NumberEmployedPercent ofTotal Emp.NumberEmployedPercent ofTotal Emp.Sales and Office 116,404 24.7 122,856 24.7 5.5P d ti T t ti d M t i lProduction, Transportation, and MaterialMoving107,683 22.8 100,736 20.3 -6.5Professional and Related Occupations 76,091 16.1 89,396 18.0 17.5Services 65,519 13.9 62,936 12.7 -3.9Management, Business, and FinancialOperations57,072 12.1 73,264 14.7 28.4Construction, Extraction, and Maintenance 44,715 9.5 44,380 8.9 -0.7Farming, Fishing, and Forestry 4,826 1.0 3,359 0.7 -30.4Data Source: EASI Analytics, Inc., 2010.6/15/2011 10
  • 11. Fastest Growing Industry SectorsTri‐State Alliance Region 2002 ‐2007Tri‐State Alliance Region, 2002 ‐20073-Digit NAICS LevelI d t D i tiEmployment Change 2002-2007Industry Description 2002 2007 Number PercentAdministrative and Support Services 16,394 22,755 6,361 38.8Construction 16,565 20,595 4,030 24.3Warehousing and Storage 554 3,120 2,566 463.2Couriers and Messengers 333 2,454 2,121 636.9Nursing and Residential Care Facilities 10,468 12,309 1,841 17.6Food Services and Drinking Places 26,095 27,752 1,657 6.3Social Assistance 6,870 8,299 1,429 20.8General Merchandise Stores 9,735 11,116 1,381 14.2Ambulatory Health Care Services 14,709 15,712 1,003 6.8Real Estate 2,000 2,776 776 38.8Truck Transportation 6,147 6,590 443 7.2Data 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
  • 12. Trends in Business EstablishmentsTri‐State Alliance Region 2000‐2008Tri‐State Alliance Region, 2000‐2008Type of Business 2000 2008 Pct. Chg.2000 2008Ave. AnnualPct Chg2000-2008 Pct. Chg.Total 53,977 76,245 41.3 4.6Noncommercial 4,163 4,799 15.3 1.7Nonresident* 2,836 2,603 -8.2 -0.9Resident* 46,978 68,843 46.5 5.2Self employed (owner-operator) 15 806 27 744 75 5 8 4Self employed (owner operator) 15,806 27,744 75.5 8.4Stage 1 (1 to 9 employees) 25,538 35,513 39.1 4.3Stage 2 (10 to 99 employees) 5,263 5,274 0.2 0.0Stage 3 (100 to 499 employees) 328 282 -14.0 -1.6Stage 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
  • 13. Trends in Business EmploymentTri‐State Alliance Region 2000 ‐2008Tri‐State Alliance Region, 2000 ‐2008Type of Business 2000 2008 Pct. Chg.2000 2008Ave. AnnualPct Chg2000-2008 Pct. Chg.Total 536,630 510,942 -4.8 -0.5Noncommercial 70,224 74,495 6.1 0.7Non-resident* 137,302 101,529 -26.1 -2.9Resident* 329,104 334,918 1.8 0.2Self employed (1 emp.) 15,806 27,744 75.5 8.4Self employed (1 emp.) 15,806 27,744 75.5 8.4Stage 1 (2 to 9 employees) 87,959 106,535 21.1 2.3Stage 2 (10 to 99 employees) 120,704 121,677 0.8 0.1Stage 3 (100 to 499 employees) 57,809 48,596 -15.9 -1.8Stage 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
  • 14. Projected Trends in the RegionProjected Trends in the Region6/15/2011 14
  • 15. Population Changes by Age CohortTri‐State Alliance Region 2010‐2020Tri‐State Alliance Region, 2010‐202042.3% 42.2%50.0%27.1%21.9%30.0%40.0%to 2020MillennialsGeneration ZSilent Generation4.0%8.1%4.3% 5.8%14.6%2.0%10.0%3.0%0 2%10.0%20.0%ent Change 2010Baby BustGeneration Z‐7.6% ‐7.4%‐4.2%14 0%0.2%‐10.0%0.0%PerceD S W d & P l E i I 2011Baby Boomers‐16.4%‐14.0%‐20.0%Data Sources: Woods & Poole Economics, Inc., 2011.6/15/2011 15
  • 16. Population Changes by Age CohortTri‐State Alliance Region 2020‐2030Tri‐State Alliance Region, 2020‐203047.1% 48.6%50.0%to 203030.4%30.0%40.0%MillennialsGeneration Alpha?ent Change 20201.2%5.2%10.2%5.3%7.4%15.8%3.1%12.4%15.7%10.0%20.0%Baby BustGeneration ZAlpha?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
  • 17. U.S. Industry TrendsForecasted Annual Rate of Change, 2008‐2018Industry DescriptionPct. Of TotalEmp. (2008)Employment Wages OutputMining 0.6% -1.6 0.4 -0.2Mining 0.6% 1.6 0.4 0.2Utilities 0.4 -1.1 0.9 0.9Construction 7.7 1.7 1.4 2.9Manufacturing 9.5 -0.9 -0.2 2.1Wholesale trade 4.3 0.4 0.8 5.3Wholesale trade 4.3 0.4 0.8 5.3Retail trade 12.7 0.4 1.0 4.2Transportation and warehousing 3.8 0.9 1.1 2.9Information 2.4 0.4 1.0 5.4Finance and insurance 5.6 0.5 1.1 9.3Real estate, rental, and leasing 5.2 1.1 2.0 2.5Professional, scientific, and technical services 7.9 3.0 2.1 3.2Management of companies and enterprises 1.3 0.5 1.3 4.3Administrative, support, waste management & remediation 7.2 1.6 1.7 3.5Education services 2.5 2.4 2.7 1.7Health care and social assistance 11.8 2.3 2.0 3.6Arts, entertainment, and recreation 2.4 1.4 1.7 1.9Accommodation and food services 8.0 0.7 1.6 1.6Other services 6.8 1.2 1.8 1.5Data Sources: U.S. Bureau of Labor Statistics; Woods & Poole Economics, Inc., 2011.6/15/2011 17
  • 18. U.S. Industry Employment & OutputForecasted Percent Change, 2008‐2018Religious, grantmaking, civic, professional organizatons OutputEducation servicesHealth care and social assistanceArts, entertainment, and recreationAccomodation and food servicesOther services EmploymentFi d iReal estate, rental, and leasingProfessional, scientific, and technical servicesManagement of companies and enterprisesAdministrative, support, waste management and remediationWholesale tradeRetail tradeTransportation and warehousingInformationFinance and insuranceMiningUtilitiesConstructionManufacturing-50.0 0.0 50.0 100.0 150.0Data Source: Employment Projections Program, U.S. Bureau of Labor Statistics, 2011.6/15/2011 18
  • 19. Industry ClustersTri‐State Alliance Region 2009Glass & Ceramics0 400.50Tri‐State Alliance Region, 2009EmploymentChange (2001-2009)Agribusiness, FoodProcessing & TechnologyChemicals & ChemicalBased ProductsTransportation & Logistics0.200.300.40rtance2009)IncreaseDecreaseAdvanced MaterialsApparel & TextilesEd ti & K l dEnergyForest & Wood ProductsMiningPrinting & Publishing0.000.100.20RelativeImporQuotient,2001-2Arts, Entertainment,Recreation & TourismBiomedical/BiotechnicalBusiness & FinancialServicesDefense & SecurityEducation & KnowledgeCreationInformation Technology &TelecommunicationsManufacturingSupercluster-0.20-0.10Changein(LocationTelecommunications-0.300.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 2.20Relative 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
  • 20. 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
  • 21. Innovation IndexMajor ComponentsMajor ComponentsHuman Capital: 30% EconomicDynamics: 30%Economic Well-Being: 10%Productivity andEmployment: 30%Data Source: Mapping Innovation Tool, StatsAmerica.org, 2011.6/15/2011 21
  • 22. Innovation Index vs. EmploymentTri State Alliance RegionTri‐State Alliance RegionGRANT74.3GREEN83.9IOWA75.1ROCK78.4LAFAYETTE74.3Top figure: Employment Chg.December, 2007 - June, 2009Bottom figure: Employment Chg.July 2009 March 2011DELAWARE78.6DUBUQUE85.7WINNEBAGO84.7JACKSON73.0JONES75 8JO DAVIESS79.2CARROLL71 8OGLESTEPHENSON92.0BOONE80.3-1.8GRANT-2.7IOWA-2.79 0July, 2009 – March, 2011NOTE D k l i di t hi h i d l75.8CEDAR78.5CLINTON83.571.8 78.4GRANT+4.4 -4.7GREEN-5.5-9.0ROCK-1.8+0.6LAFAYETTE+0.1+0.2DELAWARE+3.8-2.0DUBUQUE+1.8-11.4WINNEBAGO+0.3-3.6JODAVIESS-6.4-2.8STEPHENSON-5.7-10.8BOONE+0 3NOTE: Darker colors indicate higher index values.Data Source: Mapping Innovation Tool, StatsAmerica.org, 2011.5 0% t 9 9%Unemployment Rate (March, 2011)-0.9JACKSON-3.8+0.1JONES-1.7+3.3CEDAR-1.8CLINTON-2.7-5.8CARROLL-1.6-6.0OGLE-1.4+0.3Less than 5.0%5.0% to 9.9%10.0% to 14.9%15.0% or moreData Source: U.S. Bureau of Labor Statistics, 2011.+1.16/15/2011 22
  • 23. Human Capital IndexTri‐State Alliance RegionTri‐State Alliance RegionHuman CapitalGRANT73.8IOWA69.2“High Tech” Employment -20%Population Age 25-64 withSome College or AA DegreeGREEN89.2ROCK74.5LAFAYETTE75.0DELAWARE85.6DUBUQUE89.8WINNEBAGOJODAVIESS STEPHENSONg g- 20%Population Age 25-64 withBaccalaureate Degree -20%Y Ad lt P l ti78.7JACKSON73.7JONES76.0CLINTON88.8CARROLL66.4OGLE82.2STEPHENSON73.5 BOONE72.7Young Adult Population -20%Population Growth - 20%Tech-Based Occupations -CLINTON82.6CEDAR82.3NOTE: Darker colors indicate higher index values.Data Source: Mapping Innovation Tool, StatsAmerica.org, 2011.Tech-Based Occupations -20%6/15/2011 23
  • 24. Economic Dynamics IndexTri‐State Alliance RegionTri‐State Alliance RegionEconomic DynamicsGRANT67 1IOWA68.8Venture Capital Investment -25% (per $10,000 GDP)Average EstablishmentChurn - 25%67.1GREEN78.9 ROCK75.6LAFAYETTE64.7DELAWARE65.9DUBUQUE85.8WINNEBAGOJODAVIESS STEPHENSONBroadband Connection -12.5% (per 1,000households)Change in BroadbandWINNEBAGO79.0JACKSON67.2JONES68.7CLINTON71.7CARROLL67.0OGLE86.9STEPHENSON79.1 BOONE79.1Change in BroadbandDensity - 12.5%Ave. Employment. in LargeEstablishments - 12.5% (per10,000 workers)CLINTON76.7CEDAR68.810,000 workers)Ave. Employment. in SmallEstablishments - 12.5% (per10,000 workers)NOTE: Darker colors indicate higher index values.Data Source: Mapping Innovation Tool, StatsAmerica.org, 2011.6/15/2011 24
  • 25. Productivity & Employment IndexTri State Alliance RegionTri‐State Alliance RegionProductivity andEmploymentGRANT73 4IOWA76.4EmploymentRatio of Job Growth toPopulation Growth -25%Change in “High Tech”73.4GREEN81.4 ROCK81.3LAFAYETTE73.2DELAWARE78.3DUBUQUE77.2WINNEBAGO94 7JODAVIESS STEPHENSONChange in High TechEmployment Share - 25%Average Patents - 25% (per1,000 workers)94.7JACKSON69.2JONES71.5CLINTON71.0CARROLL75.4OGLE69.9123.5 BOONE86.0GDP per Worker - 12.5%Average Annual Rate ofGDP Change (per worker) -12.5%CLINTON79.3CEDAR73.6NOTE: Darker colors indicate higher index values.Data Source: Mapping Innovation Tool, StatsAmerica.org, 2011.6/15/2011 25
  • 26. Economic Well‐Being IndexTri‐State Alliance RegionTri‐State Alliance RegionEconomic Well-BeingGRANT99 8IOWA107.8Average Poverty Rate - 20%Average UnemploymentRate - 20%99.8GREEN100.1 ROCK89.8LAFAYETTE103.8DELAWARE96.8DUBUQUE98.4WINNEBAGOJODAVIESS STEPHENSONAverage Net InternalMigration - 20%Change Per Capita PersonalIncome - 20%90.0JACKSON99.6JONES98.6CLINTON97.7CARROLL91.3OGLE95.591.9 BOONE89.8Change in Wage/SalaryComp. -10% (per worker)Change in Proprietor Income- 10% (per proprietor)CLINTON98.8CEDAR100.8- 10% (per proprietor)NOTE: Darker colors indicate higher index values.Data Source: Mapping Innovation Tool, StatsAmerica.org, 2011.6/15/2011 26
  • 27. 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 Issue6/15/2011 27
  • 28. 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 longer6/15/2011 28
  • 29. What Could We Do Together?• Explore Potential For Region in More Detailp g– Identify major industry drivers in region– Understand barriers to innovation in companiesDetermine 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 starts6/15/2011 29
  • 30. What Could We Do Together?(continued)(continued)• Identify Emerging Industry Sectorsy g g y– Biomass products– Local foods assembly and processingRenewable 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 leaders6/15/2011 30
  • 31. What Could We Do Together?(continued)• Work With Higher Education Institutionsg– Product development– Business technical assistanceTraining 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 plan6/15/2011 31
  • 32. 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
  • 33. For Further InformationFor Further InformationContact:Norman Walzer Brian HargerSenior Research Scholar Research Associatenwalzer@niu.edu bharger@niu.eduCenter for Governmental StudiesNorthern Illinois UniversityDe Kalb, IL 60115815‐753‐1907