Milbergs and Van Ausdle on Job Creation and Competitiveness
Driving Washington’s ProsperityA Strategy for Job Creation and CompetitivenessPresented to: Senate Trade & Economic Development Committee January 29, 2013 Olympia, Washington TACTC Legislative Contact Conference January 30, 2013 Olympia, Washington Presented by: Steve VanAusdle, Vice-Chair, WEDC Egils Milbergs, Executive Director, WEDC Washington Economic Development Commission (www.wedc.wa.gov)
Jobs, Wages, and Standard of Living Productivity* Innovation and Entrepreneurship Talent Investment Infrastructure Regulations Trade*Improving Productivity will require more innovative uses of existing resources.
Our mandate: Foster Innovation Economy“Legislature finds that in order to achieve long-term global competitiveness, prosperity and economic opportunity for all the state’s citizens, Washington state must become the most attractive, creative and fertile investment environment for innovation in the world…” An act relating to WA Economic Development Commission ‒ Intent RCW 43.162.005 WA Economic Development Commission 3
Our Mandate: Foster Innovation Economy“Provide leadership, direction and guidance for…” – Shared economic development vision – Long-term, strategic policy model – Public-private partnership – Collaboration across boundaries – Data standards and evaluation of state economic development system – Recommendations to Governor and Legislature An act relating to WA Economic Development Commission RCW 43.162 WA Economic Development Commission 4
The problem we need to solve! 50 Jobs Recovery Since Start of Recession Seasonally adjusted non-farm employment, based on 3mma April 2008Difference with Initial Period Employment 0 (Thousands of Workers) -50 -85.1 -100 2001 Recession (3 quarters) Current Recession -150 -197.73 -200 56 months -250 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 Data source: U.S. Bureau of Labor Statistics Months of Recovery WA Economic Development Commission 6
Largest Absolute Changes in Employment October 2012 year-over-year, based on 3 month moving average WEDC 2.0 7Data source: Washington State Employment Security Department.
Largest Manufacturing Sectors, 2011 By employment, four digit NAICS 15.0% Aerospace Product and Parts Manufacturing Seafood Product 10.0% Preparation and Fruit and Vegetable Preserving and Specialty Packaging 5.0% Food Manufacturing 0.0% Navigational, Measuring, Employment Change, 2007-2011 Electromedical, and Control -5.0% Instruments Manufacturing Ship and Boat Building Other Miscellaneous -10.0% Manufacturing Semiconductor and Other -15.0% Electronic Component Manufacturing Architectural and -20.0% Structural Metals Manufacturing -25.0% Plastics Product Sawmills and Wood Manufacturing Preservation -30.0% -35.0% 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0Data source: U.S. Bureau of Labor Statistics, Location Quotient, 2011Census of Employment and Wages; author’s calculations. WA Economic Development Commission 8
Change in Non-Farm Employment by Metro Area November 2012 year-over-year, based on 3 mma, seasonally adj. Bellingham 4.5% Seattle-Bellevue-Everett 3.0% Tacoma 2.7% Mount Vernon-Anacortes 2.0% Spokane 2.0% Yakima 1.8% Wenatchee-East Wenatchee 0.8% Olympia 0.8% Longview 0.2% Bremerton-Silverdale -0.1% Kennewick-Pasco-Richland -1.0% Rest of State -1.5% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0%Data source: U.S. Bureau of Labor Statistics,WA Economic Development Commission Current Employment Statistics. 9
Unemployment rates by county, Nov. 2012Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics. WA Economic Development Commission 10
Resetting the Economic Development Model Recruitment-driven Innovation-drivenInvesting in company Investing in talent, ideas andrelocation infrastructurePreserve jobs, safety nets Create jobs, grow incomesTop down development, Bottom-up organic growth,short-term fixes long-term viewCompeting regions, closed Collaborating regions, opensystems innovation WA Economic Development Commission 11
Tuning the productivity engine in responseInnovation in five drivers for jobs and competitiveness Investment Improvement (regulatory) Intellect International Infrastructure WA Economic Development Commission 12
Driver One: Fueling the FutureFuture—Making Talent a TopMakingPriority 1. Create jobs for Washingtonians and industry needs by achieving 60% post-talent a secondary degrees & credentials.top priority 2. Increase pool of qualified workers by emphasis on STEM proficiencies and career and Prof. technical education at the HS Prof. level. Technical TechnicalUnskilled Unskilled WA Economic Development Commission 14
Driver Two: Adding HorsepowerFuture—Making Talent a TopPriorityInvesting in 1. Improve tax and regulatory policy to fosterentrepreneurship growth of start-ups and job creating business clusters 2. Invest in world class research talent, assist new enterprise formation and help connect the states research base to industry, entrepreneurs and investors. WA Economic Development Commission 15
Driver Three: Paving the WayFuture—Making Talent a TopPriority 1. Implement alternativeConnecting financing mechanisms for transportation infrastructure forthrough reliable asset preservation, freight mobility and investment ininfrastructure economic corridors. 2. Require economic development and long term job creation criteria in the capital budgeting process. WA Economic Development Commission 16
Driver Four: Running LeanFuture—Making Talent a TopRegulatingPriority 1. Systematically review onSmarter sector-by-sector basis all state regulations for their cost- effectiveness and determine overlaps, excessive costs, obsolescence, redundancy and solutions. 2. Expand agency use of lean process improvement to lower cost of regulatory compliance and reduce time delays. WA Economic Development Commission 17
Manufacturing Testimony to Senate Christina Lomasney, Modumetal November 29, 2012 WA Economic Development Commission 18
Driver Five: Firing on all CylindersFuture—Making Talent a TopExpandingPriority 1. Intensify innovation andinternational collaboration in the Pacific Northwest economic region andbusiness support cross-border projects for economic diversification, expanded trade and jobs. 2. Drive job creation through a coordinated system of trade services between the programs of Washington State and regional and federal programs. WA Economic Development Commission 19
Strategy Framework in Action Strategically Targeted Researchers - STARS Scientific teams in: • Energy systems • Smart Grid • Bio-fuels • Energy Storage University of Washington – STARS Washington State University – STARSDaniel Kirchen, Jonathan Posner Jihui Yang, UW Brandon Pierquet, UW Birgitte Ahring Chen-Ching Liu UW UW Next Generation Design of electronic WSU WSU Smart Grid Next Generation Batteries systems power Biofuels Smart Grid Batteries & Energy Recovery electronics, electric & Fuel Cells vehicles WA Economic Development Commission
Strategy Framework in Action 20 Entrepreneurs in Residence Since inception: 24 EIRs, 59 start-ups, 68 opportunities in the pipeline 11 EIRs, 8 start-ups, 107 direct jobs 2 Regional EIRs, pilot program to foster partnerships, 9 opportunities in the pipeline WA Economic Development Commission 21
Strategy Framework in Action 15 Innovation Partnership Zones WA Economic Development Commission 22
Strategy Framework in Action Next50 – Innovation ContestWEDC co-hosted the Commerce & Innovation Economy Month• Create inspiration short video on Innovation for the next 50 years.• Judged on Content; creativity, quality, imagination, entertainment, quality and popularity WA Economic Development Commission 23
Strategy Framework in Action: The Innovation Ecosystem (IPZ) in Walla Walla Collaborators K-12 Initiatives Dept. of Ecology University Skills Water Center Center Quality Water Center Values Career Watershed Pathways Restoration WWCC Collaboration Sustainability Confederated Mission Tribes Workforce WaterCounty Development Efficiency Excellence Vision Partnerships Walla Walla Watershed City Foster a Healthy Economy Partnership Business and a Healthy Environment Salmon Development Recovery Renewable Board Port Integrity Learning Energy Infrastructure Economic, Environmental, and Cultural Sustainability Energy Wallowa Innovation Diversity Resources Chambers of Efficiency Commerce Rural Center for Utilities Entrepreneurship Entrepreneurship Downtown Sustainable Foundation Wine & Hospitality Living Center Cluster Tourism Enology & Walla Walla Viticulture Art Wine Center Alliance Alliance
As Goes Manufacturing, So Goes the Washington (and Nation) Strong association between manufacturing GDP and real GDP of a state or nation. Integrating new knowledge and producing more complex products and utilizing more advanced manufacturing processes leads to greater economic prosperity. The linkage between the knowledge networks and drivers of advanced manufacturing is a very strong predictor of the variation in incomes across states and nations.
Teamwork wins this Race! www.wedc.wa.gov WA Economic Development Commission 26
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