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Montana Competitiveness:                     State and Cluster Economic Performance                                       ...
Montana Performance Snapshot                                               Position                       Trend           ...
State Comparative PerformanceNGA 2011 – Montana                3                  Copyright © 2011 Professor Michael E. Po...
Montana Competitiveness                                              Overall Economic Performance Indicators              ...
Long Term State Prosperity Performance                                                                                    ...
Near Term State Prosperity Performance                                                                                    ...
State Private Sector Wage Performance                                                                                   19...
Long Term State Labor Productivity Performance                                                                            ...
Near Term State Labor Productivity Performance                                                                            ...
Long Term State Job Growth                                                                        2000 to 2010            ...
Near Term State Job Growth                                                                                  2007 to 2010  ...
Long Term State Unemployment Rate                                                                                       20...
Near Term State Unemployment Rate                                                                                 2007 to ...
Long Term State Patenting Performance                                                                                     ...
Montana Patents by Organization                                                                   Patents                 ...
The Impact of Cluster Mix and Cluster Strength on Wages                                                                   ...
Effect of Urban and Rural Areas on Average State Wages                                                                    ...
Composition of the Montana Economy                          and Cluster PerformanceNGA 2011 – Montana                  18 ...
Composition of Regional Economies, United States                                                                          ...
Overall Composition of the Montana Economy, 2008                     90%                     80%                          ...
Composition of the Montana Economy                                             Employment by Traded Cluster, 2008         ...
Composition of the Montana Economy                                                                    Specialization by Tr...
Composition of the Montana Economy                                                     Specialization by Traded Cluster, 1...
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
Montana Competitiveness: State and Cluster Economic Performance
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Montana Competitiveness: State and Cluster Economic Performance

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Harvard Business School
Professor Michael E. Porter
National Governors Association Winter Meeting
February 26, 2011

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Transcript of "Montana Competitiveness: State and Cluster Economic Performance"

  1. 1. Montana Competitiveness: State and Cluster Economic Performance Prepared for Governor Brian Schweitzer Professor Michael E. Porter National Governors Association Winter Meeting February 26, 2011NGA 2011 – Montana 1 Copyright © 2011 Professor Michael E. Porter
  2. 2. Montana Performance Snapshot Position Trend Prosperity Productivity Labor Mobilization Top quintile Innovation 2nd quintile 3rd quintile 4th quintile Cluster Strength Lowest quintile • Entertainment • Oil and Gas Products and Services Leading Clusters • Jewelry and Precious Metals • Sporting, Recreational and Childrens Goods • Fishing and Fishing ProductsNGA 2011 – Montana 2 Copyright © 2011 Professor Michael E. Porter
  3. 3. State Comparative PerformanceNGA 2011 – Montana 3 Copyright © 2011 Professor Michael E. Porter
  4. 4. Montana Competitiveness Overall Economic Performance Indicators Prosperity Cluster Gross State Product per capita, 2009 Share of State Traded Employment in Strong Clusters, 2008 • In Montana: $36,877 Rank: 44 • In Montana: 15.5% Rank: 49 • In the US: $46,093 • In the US: 41.8% • State difference to US: -20.0% Change in Share of National Employment in Strong Clusters, 1998-2008 Growth in Gross State Product per capita, real annual rate, 1999-2009 • In Montana: 0.08% Rank: 22 • In Montana: 1.55% Rank: 14 • In the US: -0.06% • In the US: 0.86% Share of Employment in Traded Clusters, 1998-2008 • In Montana: 20.2% Rank: 50 • In the US: 27.4% Productivity Gross State Product per labor force participant, 2009 Change in Share of Employment in Traded Clusters, 1998-2008 • In Montana: $72,511 Rank: 49 • In Montana: -0.4% Rank: 11 • In the US: $92,382 • In the US: -2.2% • State difference to US: -21.5% Labor Mobilization Growth in Gross State Product per labor force participant*, 1999-2009 • In Montana: 1.78% Rank: 12 Population, 2009 • In the US: 1.09% • In Montana: 974,966 Rank: 44 • % of US: 0.32% Average private wage, 2008 • In Montana: $30,788 Rank: 51 Population growth, annual rate, 1999-2009 • In the US: $42,435 • In Montana: 0.83% Rank: 21 • State difference to US: -27.4% • In the US: 0.96% Private wage Growth, annual rate, 1998-2008 Labor Force Participation, 2009 • In Montana: 3.65% Rank: 12 • In Montana: 64.9 Rank: 33 • In the US: 3.32% • In the US: 65.4 Employment, 2010 (December) • In Montana: 458,987 Rank: 45 Innovation Output • % of US: 0.33% Patents Per 10,000 Employees, 2009 • In Montana: 2.03 Rank: 42 Employment growth, annual rate, 2000-2010 (December) • In the US: 6.83 • In Montana: 0.34% Rank: 19 • In the US: 0.11% Growth in total patents, annual rate, 1998-2009 • In Montana: -5.11% Rank: 49 Unemployment, 2010 (December) • In the US: 0.23% • In Montana: 7.2% Rank: 13 • In the US: 9.4% Traded establishment formation, annual growth rate, 1998-2008 • In Montana: 3.08% Rank: 7 Change in Unemployment, 2000-2010 (December) • In the US: 1.79% • In Montana: 2.6% Rank: 5 • In the US: 5.5%NGA 2011 – Montana 4 Copyright © 2011 Professor Michael E. Porter
  5. 5. Long Term State Prosperity Performance 1999 to 2009 $70,000 U.S. GDP per Capita Wyoming Delaware Real Growth Rate: 0.86% High but declining Alaska High and rising $65,000 versus U.S. Connecticut prosperity versus U.S. $60,000 Gross Domestic Product per Capita, 2009 New York New Jersey Massachusetts $55,000 Virginia Washington California Hawaii $50,000 Maryland North Dakota Colorado Nevada Illinois Minnesota U.S. GDP per Nebraska Iowa South Dakota Capita: $46,093 Louisiana Texas New Hampshire Rhode Island $45,000 Kansas Pennsylvania Oregon North Carolina Wisconsin Indiana Oklahoma Ohio Utah Vermont $40,000 Georgia Missouri Florida Tennessee Arizona Maine Michigan Kentucky Montana New Mexico Alabama $35,000 West Virginia Arkansas Idaho South Carolina Low and declining Mississippi Low but rising versus U.S. versus U.S. $30,000 -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% Gross Domestic Product per Capita Real Growth Rate, 1999 to 2009Notes: Real GDP figures in 2005 chained US dollars from the Bureau of Economic Analysis. Growth rate is calculated as compound annual growth rate. D.C. excludedNGA 2011 – Montana 5 Copyright © 2011 Professor Michael E. Porter
  6. 6. Near Term State Prosperity Performance U.S. States, 2007 to 2009 $70,000 High but declining versus U.S. Wyoming Delaware Alaska High and rising $65,000 Connecticut prosperity versus U.S. U.S. GDP per Capita Real Growth Rate: -1.87% $60,000 Gross Domestic Product per Capita, 2009 New York New Jersey Massachusetts $55,000 Washington Virginia California Hawaii $50,000 Colorado Maryland North Dakota Nevada Illinois Minnesota Nebraska Iowa South Dakota Texas Louisiana New Hampshire U.S. GDP per $45,000 Rhode Island Kansas Pennsylvania Capita: $46,093 Oregon North Carolina Wisconsin Indiana Oklahoma Ohio Vermont Georgia Utah Missouri $40,000 Arizona Florida Tennessee Montana Maine Michigan New Mexico Kentucky $35,000 Alabama Arkansas South Carolina Idaho West Virginia Mississippi Low and declining versus U.S. Low but rising versus U.S. $30,000 -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% Gross Domestic Product per Capita Real Growth Rate, 2007 to 2009Notes: Real GDP figures in 2005 chained US dollars from the Bureau of Economic Analysis. Growth rate is calculated as compound annual growth rate.NGA 2011 – Montana 6 Copyright © 2011 Professor Michael E. Porter
  7. 7. State Private Sector Wage Performance 1998-2008 $60,000 High but declining versus U.S. High and rising wages relative to U.S. New York U.S. Average Wage Growth: 3.32% $55,000 Connecticut Massachusetts New Jersey $50,000 AlaskaAverage Wage, 2008 California Illinois Washington $45,000 Delaware Maryland U.S. Average Minnesota Virginia Wage: $ 42,435 Colorado Texas Pennsylvania New Hampshire Michigan Rhode Island $40,000 Oregon Georgia Wyoming Ohio Wisconsin Arizona Missouri Nevada Louisiana North Carolina Kansas Tennessee Florida Indiana Utah Hawaii Oklahoma Maine Nebraska $35,000 Kentucky New Mexico Iowa Vermont South Carolina Idaho Arkansas North Dakota Alabama West Virginia South Dakota Low and declining versus U.S. Mississippi Montana Low but rising versus U.S. $30,000 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% Wage Growth (CAGR), 1998-2008Source: Census CBP report; private, non-agricultural employment. Growth is calculated on nominal wage levels.NGA 2011 – Montana 7 Copyright © 2011 Professor Michael E. Porter
  8. 8. Long Term State Labor Productivity Performance 1999-2009 $150,000 High but declining versus U.S. U.S. GDP per Labor Force Participant Real Growth: 1.09% Highly productive and Delaware productivity rising versus U.S.Gross Domestic Product per Labor Force Participant, 2009 $140,000 $130,000 Alaska Wyoming Connecticut $120,000 New York $110,000 New Jersey Massachusetts Hawaii Louisiana California $100,000 Virginia Washington Illinois Maryland Colorado U.S. GDP per Labor Force Nevada Texas Participant: $92,382 $90,000 North Carolina Minnesota Nebraska North Pennsylvania Oklahoma Utah Dakota Georgia Indiana Rhode Island Iowa South Oregon Arizona Alabama Ohio Tennessee Wisconsin Kansas Dakota $80,000 Missouri Florida West Virginia New Mexico Michigan New Hampshire Mississippi Kentucky Arkansas South Carolina Maine Idaho $70,000 Vermont Montana Low and declining versus U.S. Low but rising versus U.S. $60,000 -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% Gross Domestic Product per Labor Force Participant Real Growth Rate, 1999-2009Source: Bureau of Economic Analysis. Notes Growth rate calculated as compound annual growth rate (CAGR).NGA 2011 – Montana 8 Copyright © 2011 Professor Michael E. Porter
  9. 9. Near Term State Labor Productivity Performance 2007-2009 $150,000 High but declining versus U.S. Highly productive and $140,000 Delaware productivity rising versus U.S. U.S. GDP per Labor ForceGross State Product per Labor Force Participant, 2009 Participant Real Growth: -0.97% $130,000 Wyoming Alaska $120,000 Connecticut New York $110,000 New Jersey Massachusetts California Hawaii $100,000 Virginia Louisiana Washington Maryland Illinois Colorado U.S. GDP per Labor Force Texas Nevada Participant: $92,382 $90,000 Minnesota South North Carolina Pennsylvania Nebraska Dakota Oklahoma North Dakota Oregon Georgia Indiana Utah Iowa Rhode Island Alabama Arizona Wisconsin West Virginia $80,000 Florida Ohio Missouri New Mexico Michigan Arkansas South Carolina Kentucky Mississippi Maine Idaho Montana $70,000 Vermont Kansas Tennessee Low and declining versus U.S. New Hampshire Low but rising versus U.S. $60,000 -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% Gross State Product per Labor Force Participant Real Growth Rate, 2007-2009Source: Bureau of Economic Analysis. Notes: Growth rate calculated as compound annual growth rate (CAGR).NGA 2011 – Montana 9 Copyright © 2011 Professor Michael E. Porter
  10. 10. Long Term State Job Growth 2000 to 2010 9,000,000 California (15,945,558) New York Texas (11,202,388) Florida 8,000,000 U.S. Average Growth Rate: 0.11% 7,000,000 6,000,000 IllinoisNumber of Jobs 2010 Pennsylvania Ohio 5,000,000 Michigan Georgia New Jersey North Carolina 4,000,000 Virginia Massachusetts Washington 3,000,000 Indiana Wisconsin Maryland Arizona Tennessee Minnesota Missouri Colorado Louisiana 2,000,000 Alabama Kentucky South Carolina Oregon Connecticut Iowa Kansas Mississippi Oklahoma Arkansas Nevada Utah 1,000,000 Nebraska New Hampshire New Mexico West Virginia Rhode Island Maine Hawaii Idaho Delaware Montana North South Dakota Alaska Vermont Dakota Wyoming 0 -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% Losing Jobs Job Growth Rate (CAGR), 2000-2010 Gaining JobsSource: Bureau of Labor StatisticsNGA 2011 – Montana 10 Copyright © 2011 Professor Michael E. Porter
  11. 11. Near Term State Job Growth 2007 to 2010 9,000,000 California (15,945,558) Texas (11,202,388) New York Florida 8,000,000 U.S. Average Growth Rate: -1.52% 7,000,000 6,000,000 IllinoisNumber of Jobs 2010 Pennsylvania Ohio 5,000,000 Michigan Georgia North Carolina New Jersey Virginia 4,000,000 Massachusetts Washington 3,000,000 Wisconsin Arizona Indiana Minnesota Missouri Tennessee Maryland Colorado 2,000,000 Alabama Kentucky South Carolina Oregon Louisiana Oklahoma Connecticut Utah Arkansas Iowa Nevada Kansas Mississippi 1,000,000 West Virginia New Mexico Idaho Hawaii Nebraska New Delaware Maine Hampshire North Dakota Montana Rhode Island South Dakota Vermont Alaska Wyoming 0 -4.0% -3.5% -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% Losing Jobs Job Growth Rate (CAGR), 2007-2010 Gaining JobsSource: Bureau of Labor StatisticsNGA 2011 – Montana 11 Copyright © 2011 Professor Michael E. Porter
  12. 12. Long Term State Unemployment Rate 2000 to 2010 % 3.0 Below average unemployment North Dakota Nebraska South Dakota % 5.0 New Hampshire Vermont Iowa Wyoming Oklahoma Hawaii Virginia Kansas Unemployment Rate, 2010 % 7.0 Minnesota Maine Maryland Montana Wisconsin Utah Louisiana Massachusetts New York Arkansas Alaska Delaware Texas Colorado New New Mexico Pennsylvania % Jersey Alabama U.S. Average 9.0 Connecticut Illinois Washington Missouri Unemployment Rate: 9.4% Indiana Ohio Idaho West Virginia North Carolina Georgia Mississippi Kentucky Oregon Tennessee South Carolina % 11.0 Arizona Rhode Island Florida Michigan California % 13.0 Change in US Average Employment Rate: 5.5% Above average Nevada Unemployment rising unemployment % 15.0 % 10.0 % 9.0 % 8.0 % 7.0 % 6.0 % 5.0 % 4.0 % 3.0 % 2.0 % 1.0 % 0.0Source: Bureau of Labor Statistics Change in Employment Rate, 2000 to 2010NGA 2011 – Montana 12 Copyright © 2011 Professor Michael E. Porter
  13. 13. Near Term State Unemployment Rate 2007 to 2010 3.0 % Below average Change in US Average North unemployment Employment Rate: 4.4% Dakota Nebraska South Dakota 5.0 % New Hampshire Vermont Wyoming Hawaii Iowa VirginiaUnemployment Rate, 2010 Kansas 7.0 % Oklahoma Minnesota Montana Maine Utah Maryland Wisconsin Louisiana Arkansas New York Alaska Delaware Texas New Mexico New Jersey Pennsylvania Massachusetts Colorado U.S. Average 9.0 % Alabama Connecticut Unemployment Rate: 9.4% Idaho Arizona Missouri Illinois Indiana Tennessee West Virginia Ohio North Carolina Georgia Mississippi Oregon Kentucky 11.0 South Washington % Carolina Rhode Island Florida Michigan California 13.0 % Nevada Above average Unemployment rising unemployment 15.0 % % 10.0 % 9.0 % 8.0 % 7.0 % 6.0 % 5.0 % 4.0 % 3.0 % 2.0 % 1.0 % 0.0 Change in Employment Rate, 2007 to 2010Source: Bureau of Labor StatisticsNGA 2011 – Montana 13 Copyright © 2011 Professor Michael E. Porter
  14. 14. Long Term State Patenting Performance U.S. States, 1999 to 2009 14 High and declining U.S. average Growth Rate Idaho innovation of Patenting: -0.30% California 12 Vermont Massachusetts Washington (+8.0%, 13.53) Oregon (+4.9%, 10.31)Patents per 10,000 Employees, 2009 10 Minnesota Connecticut High and improving 8 Delaware innovation rate versus U.S. New Hampshire Michigan New Jersey Colorado New York 6 Texas Utah Arizona U.S. average Patents per Wisconsin 10,000 Employees: 5.96 Illinois North Carolina Pennsylvania Rhode Island Ohio Maryland Iowa 4 Indiana New Mexico Kansas Georgia Florida Missouri Virginia Montana (-5.7%, 1.58) Nevada South Carolina North Dakota Louisiana (-6.0%, 1.34) Tennessee Nebraska Wyoming 2 Kentucky Arkansas (-6.9%, 0.76) Oklahoma Maine Alabama West Virginia Mississippi Hawaii South Dakota Alaska Low and declining innovation Low and improving innovation 0 -5% -4% -3% -2% -1% 0% 1% 2% 3% Growth Rate of Patenting, 1999 to 2009 3,000 patents issued in 2009 =Source: USPTO, Bureau of Labor Statistics. Note: Growth rate calculated as compound annual growth rate (CAGR).NGA 2011 – Montana 14 Copyright © 2011 Professor Michael E. Porter
  15. 15. Montana Patents by Organization Patents Patents Rank Organization Rank Organization 2005-2009 2005-2009 1 Semitool, Inc. 98 21 Design Rite, Llc. 2 The International Heart Institute Of 2 International Game Technology (Igt) 14 21 Montana Foundation 2 3 Jore Corporation 13 21 Digeo, Inc. 2 4 Montana State University 12 21 Cardiac Dimensions, Inc. 2 5 Locan Properties, Llc 9 21 Montana Black Gold 2 6 University Of Montana 7 21 Hammen Corporation 2 7 Trophy Ridge, Llc 6 21 Advr Inc. 2 8 Bear Archery Inc. 5 21 Cluffy Biomedical Llc 2 United States Of America, Department Of 8 Agriculture 5 21 Ketch-It Company 2 10 Corixa Corporation 4 21 Goodway Industrial (H.K.) Ltd. 2 10 Spectrum Products, Llc 4 21 Techlusion Corporation 2 12 Finisar Corporation 3 21 A& E Manufacturing, Inc. 2 12 Fountainhead Corporation 3 21 Mine Rite Technologies, Llc 2 12 Sun Mountain Sports, Inc. 3 21 Trophy Taker, Inc. 2 Montana Tech Of The University Of 12 Avaya Technology Corp. 3 21 Montana 2 12 Rightnow Technologies, Inc. 3 21 Avistar Communications Corporation 2 12 G & H Technologies Llc 3 21 Kenetrek, Llc 2 Blackhawk Industries Product Group 12 Unlimited Llc 3 12 Crazy Creek Products, Inc. 3 12 Simms Fishing Products Llc 3 21 Advanced Cardiovascular Systems, Inc. 2 21 General Electric Company 2 21 Micron Technology, Inc. 2 21 Sun Microsystems, Inc. 2 21 Luzenac America, Inc. 2 Universities and Research Institutions Government OrganizationsSource: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.NGA 2011 – Montana 15 Copyright © 2011 Professor Michael E. Porter
  16. 16. The Impact of Cluster Mix and Cluster Strength on Wages U.S. States, 2008 State Traded State Traded Wage versus Relative Wage versus Relative National Cluster Mix Cluster National Cluster Mix Cluster State Average Effect Wage Effect State Average Effect Wage Effect New York + 34,578 5,188 29,390 North Carolina -10,673 -5,131 -5,543 Connecticut + 20,008 6,898 13,109 Missouri -10,953 -1,634 -9,319 Massachusetts + 17,308 5,191 12,117 Rhode Island -11,089 -1,370 -9,719 New Jersey + 12,157 4,638 7,519 Florida -11,780 -1,473 -10,307 California + 9,597 121 9,476 Oklahoma -12,225 1,533 -13,758 Maryland + 6,435 2,778 3,657 Alabama -12,301 -4,713 -7,588 Washington + 4,827 3,058 1,769 Tennessee -13,063 -3,987 -9,076 Virginia + 2,550 945 1,605 Vermont -13,095 -2,936 -10,159 Illinois + 2,501 -61 2,562 Indiana -13,309 -5,495 -7,814 Alaska + 2,386 -3,044 5,431 Nebraska -14,659 41 -14,699 Texas +1,400 2,796 -1,396 Utah -14,947 327 -15,274 Colorado + 753 2,292 -1,539 South Carolina -15,256 -5,694 -9,562 Delaware + 612 13,346 -12,733 Nevada -15,429 -2,829 -12,600 Louisiana -4,172 573 -4,745 Maine -15,826 -726 -15,100 Minnesota -4,404 43 -4,448 North Dakota -16,437 2,940 -19,378 Wyoming -4,423 1,408 -5,831 Iowa -16,963 -2,602 -14,361 Michigan -4,981 -2,534 -2,447 New Mexico -16,991 -125 -16,866 Pennsylvania -5,182 -1,064 -4,118 Kentucky -17,303 -5,013 -12,291 New Hampshire -6,359 1,224 -7,584 West Virginia -17,357 -4,290 -13,067 Georgia -7,262 -1,923 -5,338 Arkansas -17,616 -5,171 -12,445 Arizona -8,662 1,557 -10,219 Hawaii -18,103 -14,124 -3,980 Kansas -8,828 1,820 -10,648 Idaho -18,636 -1,567 -17,069 Ohio -9,766 -1,436 -8,330 Mississippi -20,859 -6,165 -14,694 Oregon -9,774 -2,355 -7,420 South Dakota -21,211 955 -22,166 Wisconsin -10,479 -3,341 -7,138 Montana -22,488 -3,494 -18,994 Cluster mix: a region’s particular mix of lower and higher average wage clusters Relative cluster wage: a region’s cluster wage relative to the average national wage in that cluster The cluster mix and the cluster wage level effects add up to the total difference between a region’s average wage and the national average wage. On average, the wage level effect is responsible for 76.3% of the total difference in state wages to the national average.NGA 2011 – Montana 16 Copyright © 2011 Professor Michael E. Porter
  17. 17. Effect of Urban and Rural Areas on Average State Wages U.S. States, 2008 Average Average Overall Overall Wage Relative Relative Wage Relative Relative Difference Metro- Metro Rural Difference Metro- Metro Rural State to U.S. Rural Mix Wage Wage State to U.S. Rural Mix Wage Wage New York +15,412 982 14,078 353 Nevada -4,560 815 -5,752 377 Connecticut +10,919 1,013 9,592 315 Louisiana -4,739 -630 -4,764 655 Massachusetts +10,197 1,674 8,333 190 Kansas -5,371 -2,175 -2,535 -661 New Jersey +8,488 1,631 6,765 92 North Carolina -5,505 -1,262 -3,796 -446 Alaska +6,538 -1,438 5,158 2,818 Tennessee -5,992 -538 -4,973 -481 California +5,584 1,476 3,844 265 Florida -6,132 -128 -6,074 70 Illinois +3,427 411 3,277 -261 Indiana -6,225 -630 -5,665 70 Washington +3,013 832 2,122 58 Oklahoma -6,501 -2,030 -4,496 25 Delaware +2,664 -191 2,895 -40 Hawaii -6,583 -1,892 -4,871 179 Maryland +2,201 1,159 775 267 Utah -7,054 169 -7,273 50 Virginia +1,182 509 709 -36 Vermont -7,280 -6,080 -968 -232 Minnesota +1,024 -903 2,130 -202 Nebraska -7,419 -2,652 -3,621 -1,146 Colorado +539 -110 -66 714 Alabama -7,544 -1,206 -5,701 -636 Texas +325 350 -234 209 Maine -7,697 -2,479 -5,243 24 New Hampshire -504 -2,856 924 1,428 Kentucky -7,978 -2,179 -5,285 -515 Pennsylvania -1,184 262 -1,480 34 Iowa -8,096 -3,123 -4,509 -464 Michigan -1,785 -165 -1,576 -44 New Mexico -8,531 -1,843 -6,548 -140 Rhode Island -2,143 1,720 -3,846 -17 South Carolina -9,137 -609 -8,203 -325 Wyoming -2,478 -6,929 -2,304 6,755 Arkansas -9,482 -2,207 -6,283 -992 Georgia -3,136 -120 -2,542 -475 Idaho -9,766 -1,928 -6,872 -966 Ohio -3,925 -224 -3,799 98 North Dakota -9,973 -2,963 -6,607 -403 Arizona -3,962 937 -4,897 -2 West Virginia -10,074 -3,104 -7,013 43 Oregon -4,116 -359 -3,505 -251 South Dakota -10,976 -3,811 -5,475 -1,690 Wisconsin -4,336 -910 -3,419 -7 Mississippi -11,446 -4,569 -5,493 -1,383 Missouri -4,540 -573 -3,103 -865 Montana -11,792 -5,468 -5,495 -829 Metro-rural mix: average wage impact from a state’s relative proportion of metro and rural regions Relative metro wage: average wage impact from state relative performance in metro regions Relative rural wage: average wage impact from state relative performance in rural regions On average 66.3% of the average wage gap in a state is due to the metro wage effect.Note: Data are based on private, non-agricultural employment.Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.NGA 2011 – Montana 17 Copyright © 2011 Professor Michael E. Porter
  18. 18. Composition of the Montana Economy and Cluster PerformanceNGA 2011 – Montana 18 Copyright © 2011 Professor Michael E. Porter
  19. 19. Composition of Regional Economies, United States Traded Clusters • Serve markets in other regions and countries • Free to choose location • Exposed to competition Local Clusters 27.4% of from other regions employment • Serve almost 37.3% of income exclusively the local market 71.7% of 96.4% of patents employment • Not exposed to 61.8% of income cross-regional competition for 3.5% of patents employment Resource-based Clusters • Location determined by resource availability • <1% of income,Source: Michael E. Porter, Economic Performance of Regions, Regional Studies (2003); Updated via employment, and patents inCluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School (2008) the U.S.NGA 2011 – Montana 19 Copyright © 2011 Professor Michael E. Porter
  20. 20. Overall Composition of the Montana Economy, 2008 90% 80% MT 70% 78.1% USPrivate Employment 60% 71.7% 50%Percent of Total 40% 30% US 20% 27.4% MT 10% 19.5% MT US 2.4% 0.9% 0% Traded Clusters Local Clusters Natural Endowment DependentNote: Data throughout this section of the report are based on private, non-agricultural employment.Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.NGA 2011 – Montana 20 Copyright © 2011 Professor Michael E. Porter
  21. 21. Composition of the Montana Economy Employment by Traded Cluster, 2008 Rank in US Hospitality and Tourism 44 11,121 Business Services 48 10,810 Heavy Construction Services 41 7,595 Entertainment 34 6,478 Education and Know ledge Creation 48 4,220 Oil and Gas Products and Services 20 4,036 Transportation and Logistics 43 3,966 Financial Services 47 3,648 Processed Food 45 3,323 Distribution Services 49 2,533 Forest Products 39 1,347 Heavy Machinery 38 1,326 Analytical Instruments 42 1,303 Information Technology 47 1,244 Publishing and Printing 49 1,212 Building Fixtures, Equipment and Services 47 1,063 Metal Manufacturing 47 749 Agricultural Products 44 685 Furniture 40 642 Production Technology 47 610 Chemical Products 46 553 Medical Devices 42 532 Automotive 47 483 Construction Materials 46 355 Plastics 49 340 Jew elry and Precious Metals 37 315 Biopharmaceuticals 43 271Sporting, Recreational and Childrens Goods 37 265 Prefabricated Enclosures 43 265 Leather and Related Products 41 234 Pow er Generation and Transmission 49 195 Fishing and Fishing Products 27 185 Textiles 47 144 Aerospace Engines 38 134 Communications Equipment 46 130 Motor Driven Products 47 80 Footw ear 26 70 Lighting and Electrical Equipment 48 60 Montana overall employment rank = 46 Aerospace Vehicles and Defense 47 60 Apparel 49 50 0 2,000 4,000 6,000 8,000 10,000 12,000 Employment, 2008Note: Ranks are among the 50 US states plus the District of Columbia.Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.NGA 2011 – Montana 21 Copyright © 2011 Professor Michael E. Porter
  22. 22. Composition of the Montana Economy Specialization by Traded Cluster, 1998 to 2008 0.7% Oil and Gas Employment Products and Overall change in the 1998-2008 Services Montana’s Share of US Added Jobs Traded Employment: +0.04% Entertainment 0.6%Montana’s national employment share, 2008 Lost Jobs Hospitality and Tourism Heavy Construction Services Footwear 0.5% (+0.37%, 0.55%) Sporting, Recreational Fishing and Fishing and Childrens Goods Products (-0.14%, +0.37%) Forest 0.4% Products Jewelry and Precious Metals Heavy Machinery Montana’s Overall 0.3% Share of US Processed Food Furniture Leather and Business Agricultural Traded Analytical Related Services Products Employment: Products 0.22% Instruments Building Fixtures, Construction 0.2% Financial Services Equipment and Materials Transportation Service Aerospace Engines Distribution and Logistics Information Power Services Technology 0.1% Generation Education and and Knowledge Creation Production Biopharmaceuticals Transmission Technology 0.0% -0.07% -0.02% 0.03% 0.08% 0.13% Change in Montana’s share of National Employment, 1998 to 2008 Employees 2,500 =Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.NGA 2011 – Montana 22 Copyright © 2011 Professor Michael E. Porter
  23. 23. Composition of the Montana Economy Specialization by Traded Cluster, 1998 to 2008 (continued) 0.20% Business Services Building Fixtures, Financial Equipment and Service ServicesMontana’s national employment share, 2008 Chemical Products 0.15% Distribution Medical Devices Services Prefabricated Enclosures Publishing and Printing 0.10% Biopharmaceuticals Production Technology Metal Manufacturing Communications Equipment Textiles Plastics 0.05% Automotive Analytical Instruments Overall change in the Employment Apparel Montana’s Share of US 1998-2008 Lighting and Electrical Equipment Traded Employment: Motor Driven Products +.040% Added Jobs Aerospace Vehicles and Defense Lost Jobs 0.00% 0.00% 0.01% 0.02% 0.03% 0.04% 0.05% 0.06% 0.07% 0.08% Change in Montana’s share of National Employment, 1998 to 2008 Employees 2,500 =Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.NGA 2011 – Montana 23 Copyright © 2011 Professor Michael E. Porter
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