Mark Lautman presenting on Technology-Led Economic Development content from the International Economic Development Council

1. TECHNOLOGY-LED
ECONOMIC DEVELOPMENT
Mark Lautman
Connect Your Economy Summit
December 15, 2016

2. New
• Paradigm
• Process
• Data
• Business
models
• Approaches

3. Why
Are
We
Here?
Why
Are
We
Here?

7. E > P
P
Economic Development

8. Hierarchy of Job Creation Programs
9

9. Economic Development
Jobs Money

10. Things
You
Have
Going
for
You
1. You
have
a
real
crisis.
2. You
have
leaders
that
get
it.
3. You
have
a
plan
and
are
execuGng
on
it.
4. You
are
innovaGng.
5. Your
people
have
a
strong
work
ethic.
6. They
have
extended
families
with
roots.
7. You
have
bandwidth
coming.
8. You
have
nimble
higher
educaGon
insGtuGons
9. Growing
job
opportuniGes
from
network
dynamics.
10. You
have
a
strong
congressional
delegaGon
and
the
sympathy
of
the
federal
government.

11. Reasons You Will
Misscalculate

13. Labor Starvation Scenario
Dependents
Qualified
Workforce
Dependents
Qualified
Workforce
Unqualified
Workforce
Re$rement
old
young
Failing
Schools
Unqualified
Workforce

15. The Phantom Workforce
Cliff Effects
Skills Mismatch

16. The Reversal of Chi
Economic
Development
Talent
Attraction
Community
Development

17. REPLACEMENT
How many
economic base
jobs are you
losing?
Higher Attrition Rates
LIFE CYCLE
Companies don’t last as long;
globalization and new business
models.
ARTIFICIAL
INTELLIGENCE
Computers that
talk, think and
create.
AUTOMATION
Machines doing the work of
humans.

18. The Shift to
Solowork

19. Increasing Speed and
Uncertianty

20. Rising Costs
Lower Returns

21. Less Government Largess
More Accountability

22. Leadership
Crisis

23. Failure
to
Plan

24. We
need
a
more
comprehensive
and
rigorous
system
for
planning,
accounGng
and
reporGng
of
our
economic
development
program
efforts.

25. The Planning Continuum
Discourse
Assessment
Strategy
Plan
Organization
Ramp
Report
Results
Execute
Think Plan Do

26. A New Planning and Accounting System
1. Clarity
2. Consensus
3. UnderwriGng
4. InnovaGon
5. Decision
making
6. Leadership
development
7. Stakeholder
confidence
8. Pubic
image
New
Framework
New
Process

27. Coherence:
Agree on the
theoretical
construct,
nomenclature and
process
Economic
Predicament:
Agree on the
number of new,
economic-base
jobs that must be
created
Economic
Sector
Selection:
Agree on a ranked
list of the sectors
with the highest
potential for
generating the
economic-base
jobs
Geographic
Distribution &
Resource
Gaps:
Agree on areas of
the state in which
the new,
economic-base
jobs are most
likely to be
created
Policy and
Program
Implications:
Agree on job
creation program
and policy
initiatives needed
to deliver the job
numbers
CELab Clinical Consensus Process

28. Write
plans
for
Major
Program
Theaters
Prescribe
AcGonable
SoluGons
for
each
Factor
of
ProducGon
Gaps
AucGon
local
responsibility
for
each
major
program
component.
Revise
plan
for
any
shor^all.
Form
organizaGons,
raise
funds
and
seat
governance
board(s)
Staff
Up,
execute
and
Report
Planning
to
Doing
Lautman
Economic
Architecture
LLC
Clinical
Consensus
Method

29. A New Taxonomy - Program Theaters
Theater Activities
Employer
Recruiting, expansion and retention of employers
Federal Government
BRAC efforts, Health, Education, transfer payments
Film and Digital Media
Film, TV, games
Start Up
Starting new enterprises that will have employees
Solos
Enterprises with no employees, remote work
Visitor Driven
Tourism, hospitality, transit services
Retirement
Affluent retirement strategies
Agriculture
New crop development
Extractives and Energy
Mining, oil & gas, power plants, wind, solar, bio
Import Substitution
Produce locally instead of importing

30.
New Mexico Elevated Effort
Over by
44,592 Jobs
E-Base Jobs Potential:
191,769

31. New Mexico Business As Usual
Short 10,826 Jobs
for break even
Short 26,779 Jobs for
full employment
Short 69,981 Jobs
for 244,779 new
population

32. A New Taxonomy
Theater
Job Estimates
Activities
Employer
43,944
Major employer Recruiting, retention & expansion
Federal
38,035
Federal agencies, healthcare, higher education
Visitor Driven
38,035
Tourism, hospitality, transit services
Retirement
21,000
Affluent retirement strategies
Extractives & Energy
11,689
Mining, oil & gas, power plants, wind, solar, bio
Solos
11,920
Freelancers, 1099 contractors, independents
Film & Digital Media
11,281
Film, TV, games
Start Up
8,771
Innovation to Enterprise, start ups, tech transfer
Agriculture
4,739
New crop development, food processing, forestry
Import Substitution
???
Produce locally instead of importing
Total Jobs Estimated 151,461
Total Jobs Needed 139,690
Difference +11,771

33. Community
Exemplars

34. Economic Base Job Creation Potential
Program Theaters Potential Biz as Usual Implied Action
Employer
52,789
32,260
Overhaul & Elevate
Federal Government
29,327
21,995
Strategy and Plan
Solowork
21,000*
7,140
Pilot - Fund
Extractives and Energy
21,862
21,862
Strategy
Retirement
21,000*
10,500
Plan Development
Visitor
16,671
0
Overhaul & Elevate
Start up
9,515
2,855
Strategy & Plan
Agriculture
4,720
2,360
Strategy & Plan
Film and Digital Media
3,500
0
Expansion Plan
*Estimates refined based on Jobs Council initiatives

35. Factor of Production Gaps
Marketing &
Sales
Real Estate Workforce
Business
Climate
Research
Building Inventory
Qualified Workforce
Leadership
Lead Generation
Land Inventory
Workforce Housing
Planning
Sales
Utilities
Education & Training
Organization
Deal Structuring
Bandwidth
Community Quality
Tax & Regulation
Completion
Transportation
Capital

36. Strategic Implications
Annual growth capacity by level of effort

37. Factors of Production – NM 2014
166,661
100,000
80,000
60,000
40,000
20,000
JobsAtRisk
Capital
PublicSafety
Bandwidth
Transmission
Roads&Drainage
Power&Gas
Water&Sewer
Transportation
QualifiedWorkforce
Tax&Regulatory
LandInventory
Housing
Mktg.&LeadGeneration
Sales&DealStructuring
Leadership
BuildingInventory

38. A Real Plan
1. Comprehensive
2. Prescriptive
3. Time-Scale Descriptive
4. Organization - Governance
5. Funding – Staffing - Management
6. Causal Accounting - Reporting
7. Iterative

39. New
• Paradigm
• Process
• Data
• Business
models
• Approaches

40.
New Mexico Job Creation Plan
Program
Theater
Definition 10 yr E-Base Job
potential
Status Priority/Rank The Plan Major Factor of production Gaps Proposed Solutions
Employer Focused on procuring economic base jobs by attracting new companies and helping
existing companies survive and grow. Jobs in this theater take place in commercial office
and industrial facilities, and the employees are hired as W2 employees.
• Sectors Included: Back Office, Exported Services, Integrated IT/Cyber,
Manufacturing
• Key Players: EDOs, NM Partnership, NMEDD, DWS, HED, Chambers
Total
52,789
Program reliant
44,871
Underfunded and
Understaffed
Potential Impact: High-1
Rural Impact: High - 4
Influence: High - 4
Marketing and Sales
1.1 Overhaul and 2x the employer program apparatus
(restructure partnership and NMEDD)
-Establish a comprehensive planning and accountability
system
- Raise the state marketing spend from 300K-3M
- Triple state and local sales caseload
- Dramatically increase number of seasoned pros.
- Scale state‘s incentives and closing resources to —but for“
demand
Hard Assets
-3,700 acres of land, 2.65M sqft of industrial space
Workforce
-Establish an integrated workforce placement education and
training system focused on gaps
-Focus state higher education scholarships on gap career
fields
-Elevate technical cognitive skills programs in grade school
curricula.
- Staff Shortage
- Qualified lead shortage
- Insufficient Workforce
- Building shortage
- Housing Shortage
- Broadband shortage
- Lack of planning/accountability
- Accountability Act
- Limit incentives with —but for“ test
- Formula for LEDA replenishment
- EDO Staff Augmentation
- Econ Dev Training Program
- EDO Marketing Funds
- Property tax abatement
- Deregulate local LEDA for Broadband
- Restructure Partnership
- Reorganize NMEDD for other theaters
- Workforce gap analysis
- HED scholarship rule change
Federal
Gov't
Increasing the number of jobs paid for by the federal government. This includes general
schedule (GS jobs), private sector federal contractor jobs, jobs generated by federal grants
and loans, and jobs in healthcare and higher education created as a result of expansion of
federal funds and programs.
• Sectors Included: Federal Government, Health and Social Services, Higher
Education
• Key Players: Congressional Delegations, EDOs, STC, Nat‘l Labs
Total
31,867
Program Reliant
23,900
Limited Activity,
Unorganized
Potential Impact: High-2
Rural Impact:
Moderate/high-6
Influence: High-5
- Establish a senior manager within NMEDD to plan,
organize and execute statewide program to recruit,
expand, and initiate new missions/jobs across all federal
agencies and their primary contractors.
- No Program/planning
- No mapping
- Transportation
- Housing Shortage
- Gross receipts tax
- Map Job Levels
- Stand Alone Fund
- Healthcare Construction
- Student Debt Forgiveness
- Office of Federal Entrepreneurship
- Fed Gov focused EDO Consortia
Solo A solo economic base worker performs work full time from a home office, workshop, studio
or mobile platform. While they may work for a corporation, they do not work in a
centralized workplace. They must also be a resident of the state and a taxpayer. The
qualifier for economic base is that a job brings in 51% or more revenue from out of state.
The level of income generated by a solo economic base worker should exceed 200% of
the federal poverty rate.
• Sectors Included: All industry and service sectors, commuters to out of state jobs
• Key Players: SBDCs, Incubators, Accelerators, Coworking spaces
Total
21,000*
Program Reliant
7,140
No Program Potential Impact: High - 3
Rural Impact: High - 1
Influence: High-3
- Establish a statewide SoloWork Center program scaled to
create 20,000 jobs over ten yrs funded at $3,500-5,000
per job post-performance by EDD and DWS programs.
(JTIP, Rapid Response, WIOA)
- Build out local bandwidth capacity.
- No Program/plan
- No state brand
- Broadband shortage
- Business Services
- GRT
- Solo Pilot Program
- Broadband P3
- JTIP Rule Change
- Adapt SBDC to solowork strategy
- Change LEDA rules to cover broadband
infrastructure
Energy &
Extractives
Creating jobs in two primary areas of the export economy; the extraction and processing of
raw materials from the land for export and the production and transmission of energy for
export out of the state.
• Sectors Included: Energy and Extractives
• Key Players: EDOs, NMOGA
Total
21,862
Program Reliant
18,583
Active but
unorganized
Potential Impact: High-4
Rural Impact: Moderate-5
Influence: Low-8
- Attain regulatory parity with neighboring states.
- Build new transmission infrastructure to out of state
markets.
- Recruit value added production and refinement facilities.
- Convert transportation fleets to natural gas.
- Assistance from NMEDD
- Rail access
- Affordable housing
- Qualified Labor
- Conflicting political environment
- Regulatory environment
- Rail Subsidy
- Local Funding for Housing
- Lift Export Restrictions
- Worker Relocation
- Interdepartmental Cooperation
Retirement Recruiting economic-base retirees who have a combination of net worth and retirement
income in excess of 200% of the federal poverty guidelines. Because their investment and
retirement income are from outside the state, they will have the same impact on the local
and state economy as the creation of a new economic base job.
• Key Players: Real Estate Brokers, Home Builders, Tourism Dept
Total
21,000
Prog Reliant
10,500
Unorganized but
programmable
Potential Impact: Moderate-5
Rural Impact: High-3
Influence: Moderate-7
- Build an affluent retiree recruiting program onto the state‘s
tourism efforts.
- Provide state match to local public/private recruiting and
fulfillment efforts. (Avg $3M/yr for yrs 1-5, $5M/yr for yrs 6-
10)
- No Program/planning
- Broadband
- Lack of suitable housing
- Lack of rural Healthcare
- No community rating
- Retiree Income Tax Break
- Healthcare Worker Rural Incentive
- Retirement Community Rating
- Web/App based marketing
Visitor Jobs with salaries paid from the local sale of goods and services to visitors from out-of-
state.
Although most job creation activities in this theater fall can be defined as tourism --
any journey for business or pleasure more than 50 miles outside your community in which
you spend more than one night away from home -- the IJC process would exclude
journeys for business or pleasure by New Mexico residents.
• Sectors Included: Hotel, Hospitality, Food and Beverage, Transportation, Events
• Key Players: Tourism Dept, Tourism Assoc. CVB, Hotel Assoc., State Parks,
Chambers, Lodgers Tax Boards, Realtors Assoc.
Total
16,674
Program Reliant
8,337
Well Organized Potential Impact: Moderate-6
Rural Impact: High-2
Influence: High=2
- Increase tourism promotion budget by $2M per year
($23M/yr in yr 10).
- Expand tourism program to include matching call to
action-fulfillment functions. ($2M)
- Expand tourism department focus to include long term
leisure, long-term and short-term business travel and
transit.
- Limited Data
- Low repeat visits
- Low promotion of attractions
- Poor local representation
- Nonstop flights
- Highway access
- Broadband/Cell service
- Hospitality training
- Insufficient product improvement
- No local planning
- Tourism Incubator
- Tourism call to action marketing
- P3 for Tourism Marketing
- Trucker Advertising
- Cell Service Improvement
- Hospitality Training
- Tourism and DoL Collaboration
- Liquor License Stock Split
- B&B Taxation
Startup The focus of this theater is entrepreneurs. The mission is helping community members
turn their business ideas into enterprises with economic-base employees. Program
activities: increasing rate and quality of ideas, innovation and IP that can be converted,
conversion of ideas into viable enterprises, helping them grow.
• Sectors Included: All industry and economic sectors
• Key Players: Incubators, Accelerators, SBDCs, Venture Capitalist, SIC, STC, Nat‘l
Labs
Total
9,515
Program Reliant
6,661
Active, Growing
but unorganized
Potential Impact: Moderate-7
Rural Impact: Low-8
Influence: Moderate-6
- Establish a coherent planning, accountability and reporting
system.
- Establish a position in NMEDD to plan, organize and
execute startup job creation efforts statewide.
- Improve tax and regulatory parity with surrounding states
- Lack of Venture Capital
- Broadband
- Qualified Labor
- Too much focus on tech transfer
- Low awareness of existing services
- Lack of leadership/planning
- Planning and accountability system
- Incubator Demand Gauge
- Out of state investment Tax Credit
- Opportunity fund
- SIC Aid
- Capital Gains Reduction
- Tax and Revenue Data Sharing
- Return to Sender Tax Credit
- Tax Break on Rollover Investment
Agriculture Procuring economic base jobs by attracting, expanding and creating enterprises that grow,
process and distribute food and fiber.
• Sectors Included: Agriculture
• Key Players: Dept of Ag, Major Producers, Ag Extension service, NMEDD, Local
Gov
Total 4,720
Program Reliant
2,360
Active but
unorganized
Potential Impact: Low - 8
Rural Impact: Moderate-7
Influence: Moderate-9
- Task secretary of agriculture with establishing a statewide
job creation strategy by region and industry sector.
- Reaching international markets
- Natural Resources
- Low value crops
- Encroaching urbanization
- Lack of planning
- Right to Farm
- Water Rights
- Incentivize High Value Crop
Film/ Digital
Media
Recruiting and developing the production of feature films, independent films, television,
regional and national commercials, documentaries, animation, video games, webisodes,
mobile applications and post production work intended for commercial exploitation and
exhibitions out of state.
• Sectors Included: TV Series, Video Games, Feature Film Production
• Key Players: NM Film Office, NMEDD, Local Studios
Total 3,500
Program Reliant
3,500
Well organized Potential Impact: Low - 9
Rural Impact: Low-9
Influence: High-1
- Establish a private sector investment fund to supplement
the state incentives cap. (combined total of $100M
investment in yr 10)
- Marketing Capacity
- Incentive Capacity
- Broadband
- Qualified Labor
- Lack of Planning
- NMFO Staff Increase
- Game Incubator/Accelerator
- Stand-Alone Finance Program
- Raise Incentive Cap
- Site Selection Guidelines
Totals 180,284

41. Organizational Chart
- Business
Retention,
Expansion
- Recruiting
- Federal Gov’t
- Agriculture
- Energy
- Short Term
leisure visits
- Snowbirds
- Drive by visits
- Retirement
- Solowork
- Solopreneurs
- Startups
Consortium
Cognoscenti
Group
Metrics/
Accountability
EDOs
Tourism
Entrepreneurs
Factors of production gaps Team
Marketing/Sales
Real Estate, Infr.
Capital
Workforce, Housing,
Community
Leadership, Org,
Bus Climate
Land-Based
- Agriculture
- Oil and Gas
- Mining
- Forestry

42. Solowork Center
A community supported program
platform to create, advance and retain
new economic base jobs.
Solo W2 Workers
Recruit, Screen
Train, Place
Support
Solopreneurs who own
their business have no
centralized workplace
or onsite employees.
Solopreneurs
Recruit, Plan
Incubate or Convert
Support
W2 Solo workers employed
by an economic base
employer and allowed to
work from home or the
Solowork Center.
Solowork 3.0
Economic Base
Job Creation
New Solo Workers
Recruit, Screen
Train, Place
Support
New entrants to the
solowork workforce, i.e.
students, hard to
employ, & chronically
poor candidates.

43. Mining
Talent
From
Your
Hard
to
Employ
Sector

45. @marklautman
Mark Lautman Page
Mark Lautman,
Lautman Economic Architecture