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Good Enough is No Longer Good Enough

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Ted Abernathy presentation to Dan River Region from April 28, 2015

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Good Enough is No Longer Good Enough

  1. 1. Good Enough Is No Longer Good Enough: The New Reality of Economic Development and Its Impact on the Dan River Region
  2. 2. Understanding and Using Change to Chart a Different Future for the Dan River Region
  3. 3. Economic Leadership’s task “to review existing economic development plans and to develop a global trends analysis for the region.”
  4. 4. “Everyone has a plan ‘till they get hit in the mouth” Mike Tyson
  5. 5. Economic Leadership LLC Competitiveness Process6 Establishing a Common Current Reality Envisioning a Common Future Desire Direction, or Compass is driven by the Vision, Mission and Core Values of the organization, place, or business Context examines relative assets and converts comparative and longitudinal information to determine realistic options Change is the group of factors, outside your control, that influences your future, global trends, demographic shifts, changing technology Goals Objectives Actions Action Plan Matrix • What actions will we undertake? • Who will be responsible for those actions? • What resources do we need to be successful? • Where will those resources come from? • When will each action start and be completed? • What results do we expect? Strategic Execution Reality Filters Compass Context Change Control Impact Resources Time Action Choice Filters History and Inertia Assessment Adjustment Metrics and Measurements (Balanced Scorecard) Communications Constant Learning Expectation (Learning Community or Company) Action Choices Research Assessments Surveys External Input Leadership Information Stage Choice Stage Action Stage
  6. 6. Trends • Economic and Business Trends • Workforce Trends • Technological Trends • Demographic and Societal Trends
  7. 7. Economic and Business Trends
  8. 8. Economic and Business Trends Competition
  9. 9. Top Factors for Companies Considering New Investment 1) Highway accessibility 2) Occupancy or construction costs 3) Available land 4) Availability buildings 5) Availability of skilled labor 6) Labor costs 7) Right-to-work state 8) Proximity to major markets 9) Energy availability and costs 10)Corporate tax rate 11)Tax exemptions 12)State & Local Incentives Source: Area Development 29th Annual Survey of Corporate Executives, March 2015
  10. 10. Top Quality of Life Factors for Companies Considering New Investment 1) Low crime rate 2) Ratings of public schools 3) Health care facilities 4) Housing availability 5) Housing costs 6) Colleges & universities in the area 7) Recreational opportunities 8) Cultural 0pportunities 9) Climate Source: Area Development 29th Annual Survey of Corporate Executives, March 2015
  11. 11. United States
  12. 12. Southern States 1-Year Employment Changes January 2014 to January 2015 1.8% 2.3% 3.6% 3.2% 2.2% 1.3% 1.5% 1.6% 0.8% 2.6% 1.5% 2.7% 2.6% 3.5% 0.7% 0.4% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV Source: U.S. BLS, March, 2015 Measured Jan 2014- Jan 2015
  13. 13. Southern States 1-Year Manufacturing Employment Changes Jan 2014 to Jan 2015 0.7% 1.8% 0.8% 3.6% 3.9% 2.5% -1.3% 5.0% 0.1% 3.1% 2.1% 1.9% 3.1% 1.9% 0.8% 0.2% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV Source: U.S. BLS, March, 2015 Measured Jan 2014- Jan 2015
  14. 14. Urbanization
  15. 15. Source: Atlantic Cities, March 28, 2014
  16. 16. Half of the US Population Lives in these 146 Counties SOURCE: BUSINESS INSIDER 2013 WALTER HICKEY AND JOE WEISENTHAL
  17. 17. Source: National Employment Law Project, 2014
  18. 18. Growth in Business & Professional Services, Health, Education and low wage service jobs
  19. 19. Other Economy & Business Trends • Globalization • The rise of e-commerce • 24/7/365 operations • Home-grown, locally sourced • Consumer influence of branding • Sharing economy • Re-invention of healthcare • Real estate shifts
  20. 20. Workforce Trends
  21. 21. The Rising Talent Bar
  22. 22. Source: U.S. Bureau of Labor Statistics.
  23. 23. Source: The Motley Fool, Morgan House, March 2014
  24. 24. Southern States- % Proficient 8th Grade Math 34% 20% 29% 28% 28% 31% 22% 40% 32% 19% 37% 27% 32% 24% 40% 40% 21% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% USA AL AR FL GA KY LA MD MO MS NC OK SC TN TX VA WV http://www.nsf.gov/statistics/seind14/
  25. 25. Top Skills Employers Say They Want (2014) 1. Ability to work in a team 2. Ability to make decisions and solve problems 3. Ability to plan, organize and prioritize work 4. Ability to communicate verbally 5. Ability to obtain and process information 6. Ability to analyze quantitative data 7. Technical knowledge related to the job 8. Proficiency with computer software programs 9. Ability to create and/or edit written reports 10. Ability to sell and influence people Source: National Association of Colleges and Employers
  26. 26. Rankings of Employee Skills from Most Important to Least Important Under $12 per hour $12-20 per Hour Over $20 per hour Honesty/Integrity Honesty/Integrity Honesty/Integrity Dependability/Responsibility Dependability/Responsibility Dependability/Responsibility Positive Attitude/Energy Positive Attitude/Energy Positive Attitude/Energy Work Ethic Work Ethic Work Ethic Customer Service Teamwork Teamwork Teamwork Customer Service Problem Solving Professionalism Professionalism Verbal Communication Verbal Communication Verbal Communication Professionalism Source: Economic Leadership Survey of 122 business for Durham NC, 2014 Durham Demand-Driven Workforce Development
  27. 27. Job Specific Skills (Such as construction trades, coding, or customer service) Life Skills (Such as honesty, dependability, teamwork and, positive attitude) Work Skills (Such as communication problem solving, and critical thinking)
  28. 28. • MOOCs • Virtual High School • Digital gaming content (competency based) • Ubiquitous learning content
  29. 29. Corporate Domestic Outsourcing "1 in 3 Americans, or roughly 42 million people, are now freelancers. That's one-third of the U.S. workforce. The group counts individuals who work in nontraditional, impermanent jobs, including part-time employees and independent contractors, as part of the independent workforce. " Source: Elaine Pofeldt, CNBC.com
  30. 30. Other Workforce Trends • Multigenerational workplaces • Slow “prime” labor force growth • Lifelong self- learning
  31. 31. Technology Trends
  32. 32. McKinsey & Company Disruptive Technologies: May 2013 Energy Mobile Internet Advanced Materials Next Generation Genomics Robotics, Cloud, Digital-intel, 3D Printing
  33. 33. Source: Business Insider, The Economist, 2014
  34. 34. Technology Trends • Remote entertainment • Electronic medicine • Crowd-capitalization • Application globalization • Education gamification Source: Business Insider
  35. 35. Demographic and Societal Trends
  36. 36. The Changing Face of America 1960-2060 Source: The Next America, Paul Taylor
  37. 37. Source: The Motley Fool, Morgan House, March 2014
  38. 38. ted@econleadership.com
  39. 39. Demographic and Societal Trends
  40. 40. Millennials- 75% of the workforce in 10 years Foreign born- 82% of population growth between now & 2050 Demographic and Societal Trends
  41. 41. Education separation- college degree- 3/4 of top income quartile-, 1/10 of bottom income quartileDemographic and Societal Trends
  42. 42. Fewer children- in 1960, 3.7 children, today 1.9 Demographic and Societal Trends
  43. 43. Current Economic Reality
  44. 44. Change of Ages 25 to 44 for DRF and Counties 2000 2010 Percent Change Danville 12,335 9,375 -24% Pittsylvania 17,765 14,517 -18% Caswell 7,082 5,692 -20% DRF 37,182 29,584 -20% Virginia 2,237,655 2,199,347 -2% North Carolina 2,500,535 2,573,744 3% Population Change of Ages 25 to 44 for DRF and Counties Source: US Census Bureau
  45. 45. Population Change of Ages 25 to 44 for DRF and Peer Regions 2000-2010 -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% DRF Hickory, NC Wilson, NC Harrisonburg, VA Florence, SC
  46. 46. Annual Wages for DRF and Counties, 2013 Danville Pittsylvania Caswell DRF Virginia North Carolina All Industries $33,163 $30,019 $29,179 $30,841 $51,923 $43,789 Private Sector $32,837 $29,872 $27,381 $30,351 $51,665 $43,758 Goods producing $49,998 $38,244 $36,251 $41,519 $51,608 $50,607 Service Providing $28,130 $24,888 $23,810 $25,699 $51,675 $42,080 Average Annual Wages for DRF and Counties, 2013 Source: Bureau of Labor & Statistics
  47. 47. Dan River Region Leadership Input and Current Local Thinking Focus Groups with Selected Local Leaders • Future of the Piedmont • Middle Border Forward • Young Professionals Group Common Themes Attitude, Vision, Leadership, Race, Communication, The Economy, Education & Training
  48. 48. Dan River Region Leadership Input and Current Local Thinking • Need to articulate an alternative vision for the future • Lack of leadership- as a barrier to improvement • Lack of inclusion of young professionals or minorities into decisions • Still a lot of work to do to bridge race divides exacerbated by economic divides
  49. 49. Dan River Region Leadership Input and Current Local Thinking The Economy More positive comments and seemed to energize the conversations. – The River District investments are growing and successful – Entrepreneurship is growing and seems to have found some niche success – Strong broadband infrastructure – Low cost of living and a low cost of doing business – Agriculture is still important – Great natural beauty, attractive to tourists and retirees – Pride in their public art – The river
  50. 50. Dan River Region Leadership Input and Current Local Thinking The Economy On the negative side people mentioned: • There are very few mid-level jobs, especially white collar, non-government jobs • The loss of young people, especially educated young professionals is a major problem • The city and the university are geographically separated • There is still 4 million square feet of vacant space along the river (an opportunity and a constant reminder of so much more to do)
  51. 51. Dan River Region Leadership Input and Current Local Thinking • Wide agreement that no matter what else is done, that everyone needed to focus on raising the skill level of young people and the workforce
  52. 52. Recent Reports • CFED , A Community and Economic Development Assessment of the Danville Region (2007) • UNC Chapel Hill's Urban Investment Strategies Center, Kenan Institute, and Kenan-Flagler Business School authored Assessing the Economic Competitiveness of the Danville, Virginia Region (2008) • SRI, working for the Virginia Economic Development Partnership, completed a Target Market Assessment for Western Southern Virginia (SOVA) ,(2010) • Southern Virginia, Building a Competitive Advantage, prepared by Civic Change Incorporated, (2010) • The Virginia Economic Development Partnership Western SOVA - Brief Assessment of Regional Assets and Targeted Industries (2010) • Vanessa Garber and Jamie Gutter of UNC examined Attracting Young Entrepreneurs to Danville (2010) • Entrepreneurial Places LLC looked at Retiree Attraction in the Danville Region (2013). • MDC’s The Only Way Out Is Up, How MDC helped Danville, VA., chart a new vision for its future (2013)
  53. 53. Recent Reports- Common Themes • The Dan River Region needs to shed its old manufacturing image, focus on a new future and intentionally create a new image internally and externally • To attract the people and companies that are needed for a brighter future, investments in creating a better place to live and work are mandatory • Downtown reinvention is necessary to attract and retain younger and more educated people • For current regional citizens to prosper in the changing economy their skills and educational attainment must be improved • Entrepreneurial attraction and development is a priority for future job growth • A regional approach to economic development could yield better results • A collaborative approach among public and private entities would yield better results • Leadership diversification, support and engagement are imperative
  54. 54. Our Additional Recommendations 1) Build the infrastructure to excite, inform, engage and diversify regional leadership • a more consistent and formal effort to understand, anticipate and react to the future is needed • begin a formalized multi-year effort to incorporate future thinking into leadership development. • position the region through an annual event as the home of future thinking for micropolitan regions that must reinvent themselves • Increased efforts to identify, educate, mentor, support and empower young leaders. • A specific program to engage older and younger, white and minority, and urban and city leaders together • DRF should take the lead in identifying, digesting and presenting relevant information
  55. 55. • We want someone, or some group, we trust, to make sense of all the information we are receiving. • We want leaders to take actions that improves our situations or solves our problems Why Do We Want and Need Leadership?
  56. 56. “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.” Jack Welch
  57. 57. Collaboration “The act of working with one or more people to produce or create something.” Collaboration is an unnatural act between un-consenting adults
  58. 58. What is a Commitment to Collaborate?
  59. 59. What is a Commitment to Collaborate?
  60. 60. Recommendations 2) Define a new vision and declare intentional strategic actions for economic & workforce development • the DRF take the lead to initiate and fund the development of a regional vision and a comprehensive, collaborative strategic action agenda (a new 5-year comprehensive, multi-organization, regional, public-private economic and workforce development strategic action plan with delineated responsibilities and outcome expectations.)
  61. 61. Recommendations 3) Maximize the opportunities that change is creating • Buy local • Demise of distance • Retiree entrepreneurship • Freelance economy
  62. 62. Summary • Doing what you used to do, no matter how well you do it, will not work. • Many trends are working against you, but some may be beginning to work for you • The key to a better future is strong, informed, diverse, leadership, collaboration, a new clear vision, and the will and capacity to implement. • Building a place that can attract talent and money, improving the education and skills of local residents, and multiple economic development strategies
  63. 63. So What!
  64. 64. Follow on twitter @tedabernathy or LinkedIn Ted Abernathy

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