NEO ED Strategy Executive Summary Presentation 120205
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The document outlines the agenda and goals of a meeting to discuss the Northeast Ohio Regional Economic Competitiveness Strategy. The summary is: 1) The meeting will include presentations and group discussion on developing a regional economic strategy for Northeast Ohio. 2) The strategy aims to craft a shared vision and action plan to measurably improve the region's economic competitiveness and growth. 3) A phased approach is outlined to initially develop a point of view from key stakeholders and later engage broader audiences to refine and validate the plan.
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NEO ED Strategy Executive Summary Presentation 120205
- 2. TODAY’S MEETING WILL INCLUDE PRESENTATIONS & GROUP DISCUSSION Agenda 1:00‐1:30 TeamNEO Board Business 1:30‐2:00 NEO Regional Economic Competitiveness Strategy Introduction 2:00‐3:00 NEO Economy Overview 3:00‐3:15 Break 3:15‐3:45 NEO Regional Competitiveness 3:45‐4:30 NEO Initiatives & Interventions Impact 4:45‐5:00 Next Steps & Wrap Up 1
- 6. THE STRATEGY DEVELOPS REGIONAL INITIATIVES TO ENHANCE LOCAL EFFORTS & DRIVE ECONOMIC GROWTH… Objective of the Northeast Ohio Regional Economic Competitiveness Strategy Craft a market‐based, regionally shared vision and actionable plan for Northeast Ohio’s economy that aligns and advances key local and regional efforts to measurably impact economic competitiveness and growth Guiding Principles of the Regional Strategy 1. Improves Northeast Ohio’s potential to out‐perform the national economy 2. Connects and strengthens local growth and competitiveness initiatives – it is not a replacement for nor should it override local strategies and initiatives 3. Developing and executing an effective strategy requires engagement with and commitment from diverse sectors and stakeholders 4. Interventions supported by the strategy must be economically inclusive 5. The diversity of Northeast Ohio’s multiple urban centers , communities and rich rural assets are a regional competitive strength and should be enhanced by the strategy 5
- 7. …WE'RE PURSUING A PHASED APPROACH TO DEVELOP AN INITIAL POINT OF VIEW AND DRIVE BROADER ENGAGEMENT Version 1.0 Version 2.0 November 2011 June 2012 July 2012 Develop a strategic framework and initial point of view from the business and philanthropic community to improve the overall competitiveness of the region Refine the initial plan with the engagement of appropriate audiences, validating major Phase 1 assumptions and at a depth of detail that is actionable. Develop a framework for regional collaboration in execution and for sustaining and refining the strategy over time Objective of the Northeast Ohio Regional Economic Competitiveness Strategy Craft a market‐based, regionally shared vision and actionable plan for Northeast Ohio’s economy that aligns and advances key local and regional efforts to measurably impact economic competitiveness and growth 6
- 8. THE APPROACH TO DEVELOP VERSION 1.0 IS A COLLABORATIVE EFFORT OF KEY STAKEHOLDERS Strategy Task Force Bill Christopher, Task Force Chair, Team NEO & GCP Boards Tom Waltermire, Team NEO Brad Whitehead, The Fund For Our Economic Future (FFEF) Shilpa Kedar, The Cleveland Foundation & FFEF Member Bob Smith, Team NEO & GCP Boards Tom Strauss, Team NEO & GAC Boards & FFEF Member Virginia Albanese, Team NEO & GAC Boards Bob Joyce, Team NEO Board & FFEF Member Mark Williams, JumpStart Board Bill Seelbach, FFEF Board Christine Mayer, FFEF Board Joe Roman, Greater Cleveland Partnership (GCP) Dan Colantone, Greater Akron Chamber (GAC) Tom Humphries, Youngstown‐Warren Regional Chamber Rebecca Bagley, NorTech Ned Hill, CSU Funders Economic Research Support 7
- 9. FOR VERSION 1.0, THE TASK FORCE WORKED TO ANSWER FIVE KEY QUESTIONS 1. What is success and how will it be measured? 2. What is the historical and current state of the regional economy? 3. How competitive is the region – what are our assets and gaps? 4. What are the current economic development interventions and what is the potential impact? 5. What are our initial conclusions and recommendations? 8
- 10. OUR FRAMEWORK FOR ECONOMIC DEVELOPMENT PROVIDES USEFUL CONTEXT ABOUT THE STRATEGY SHORT TERM 1 – 2 Years INTERMEDIATE TERM 2 – 10 Years LONG TERM 10 – 20 Years Focus Transactions Marketing Current Assets Interventions Strengthening Regional Competitiveness & Industry Dynamics Investments Changing the Quality of the Assets Economic Growth Drivers Retention, expansion and attraction of companies based on the region’s current assets The success of a regional portfolio of companies and products, people and places Improved quality of assets including people, place and knowledge Objective of the Strategy TRANSACTIONAL EXCELLENCE: Leverage existing assets and incentives to maximize the success of each retention, expansion and attraction transaction STRATEGIC INVESTMENT: Invest in interventions that improve and sustain the diversity or quality of the region’s companies, products, people and places Coordinate, augment and/or collaborate to enhance public sector efforts STRATEGIC ADVANTAGE: Invest in interventions that improve the quality of the region's assets Advocate to influence and innovate public policy Source: Edward Hill, Dean, Levin College of Urban Affairs, Cleveland State University 9
- 11. ‐10.0% ‐5.0% 0.0% 5.0% 10.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Annual Change In GRP v. GDP THE NORTHEAST OHIO ECONOMY HISTORICALLY UNDERPERFORMED GDP… Source: CSU Center for Economic Development; Moody’s economy.com U.S. NEO 10
- 12. ‐10.0% ‐5.0% 0.0% 5.0% 10.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Annual Change In GRP v. GDP THE NORTHEAST OHIO ECONOMY HISTORICALLY UNDERPERFORMED GDP… Source: CSU Center for Economic Development; Moody’s economy.com U.S. NEO 1. Sustained decline driven by product life cycle and manufacturing competitiveness 2. NEO economy drivers shift 11
- 13. ‐10.0% ‐5.0% 0.0% 5.0% 10.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Annual Change In GRP v. GDP …BUT HAS RECENTLY IMPROVED AND IS POSITIONED TO RECOVER… Source: CSU Center for Economic Development; Moody’s economy.com U.S. NEO 1. Core industries perform well in downturn and recovery 2. Manufacturing base drives recovery 3. Assumes no constraints 4. No impact from shale gas or other local initiatives 1. Sustained decline driven by product life cycle and manufacturing competitiveness 2. NEO economy drivers shift 12
- 14. ‐10.0% ‐5.0% 0.0% 5.0% 10.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Annual Change In GRP v. GDP …AND STRATEGIC INITIATIVES ENHANCE THE POTENTIAL FOR SUSTAINED GROWTH Source: CSU Center for Economic Development; Moody’s economy.com U.S. NEO Strategic Initiatives Change Projections 1.Strategic initiatives improve competitiveness 2.EDOs deliver job impact 3.Shale gas materializes 1. Core industries perform well in downturn and recovery 2. Manufacturing base drives recovery 3. Assumes no constraints 4. No impact from shale gas or other local initiatives 1. Sustained decline driven by product life cycle and manufacturing competitiveness 2. NEO economy drivers shift 13
- 15. 2006‐2010 Change Per Capita Income (Quartile) GMP (Quartile) Employment (Quartile) GMP/Job (Quartile) Per Capita Income v. National Average Akron, OH 2 3 3 2 ‐10% Canton‐Massillon, OH 2 4 4 4 ‐21% Cleveland‐Elyria‐Mentor, OH 2 4 4 4 ‐3% Youngstown‐Warren‐Boardman, OH‐PA 2 4 4 4 ‐22% Cincinnati‐Middletown, OH‐KY‐IN 4 3 3 3 ‐6% Columbus, OH 3 3 2 4 ‐9% Dayton, OH 2 4 4 4 ‐15% Toledo, OH 3 4 4 4 ‐17% Baltimore‐Towson, MD 1 1 2 1 17% Harrisburg‐Carlisle, PA 1 2 2 2 ‐6% Madison, WI 3 2 1 3 5% Pittsburgh, PA 3 1 1 2 4% Wichita, KS 4 2 2 2 ‐8% OUR MSAs CAN BE COMPARED TO OTHERS – WHILE IMPROVING, STILL LAG IN OVERALL PERFORMANCE Akron is the best performing NEO MSA Ohio MSAs have underperformed There are a number of MSAs that have performed well through the recovery Source: FFEF Dashboard; CSU Center for Economic Development 14
- 16. Strategic Drivers 1. Help companies take advantage of immediate growth opportunities through transactional excellence and effective marketing 2. Drive private sector job growth by strengthening the region’s driver industries – with a specific focus on manufacturing 3. Strengthen and connect the region’s innovation, research and commercialization capacity to increase product development in driver and emerging industries 4. Build coalitions that accelerate growth of more emerging industries – leveraging our current and targeted regional advantages 5. Continue to foster and grow the region’s entrepreneurial environment FOR NEO TO OUTPERFORM THE NATIONAL AVERAGE, WHAT ARE THE STRATEGIC DRIVERS? 15
- 17. Strategic Drivers 6. Develop workforce to meet short‐term employer needs; elevate educational attainment and attract high‐skilled people to maximize long‐term competitiveness 7. Align local and regional initiatives that will improve our Quality of Place competitiveness to appeal to growing companies and talented people 8. Strengthen and connect the region’s transportation assets (hub air service, highways, rail and ports) to improve access for people and products to markets near and far 9. Advocate for public policies that lower the cost of living and of doing business in the region, including more efficient government, effective land use and legislation that fosters business growth 10.Develop the coalition(s) of business, philanthropic, education and government leaders to monitor, refine and deliver on the Strategy FOR NEO TO OUTPERFORM THE NATIONAL AVERAGE, WHAT ARE THE STRATEGIC DRIVERS? 16
- 19. THERE IS POTENTIAL TO REPOSITION THE ECONOMY WITH THE RECOVERY & STRATEGIC INITIATIVES Region outperforms the national average in key metrics Change in Per Capita Income Change in GRP MSAs consistently achieve 1st/2nd quartile performance* in key metrics: Change in Per Capita Income Change in Employment Long Term Aspiration: Note: As measured by The Fund For Our Economic Future’s Regional Dashboard of Economic Indicators. There are 136 MSAs that are compared along the metrics above (and additional metrics). The four MSAs in Northeast are among the 136 MSAs in the model. Change in Employment Change in GRP per Job Change in GMP Change in GMP per Job Per capita income v. National Average Per Capita Income v. National Average 18
- 20. SHORT TERM 1 – 2 Years INTERMEDIATE TERM 2 – 10 Years LONG TERM 10 – 20 Years REVERSE THE TREND Take advantage of economic recovery driving “demand” while improving transaction efficiency BUILD CAPABILITIES Strategic initiatives enhance “supply” side, focus on core & emerging industries, and driving quality of place initiatives at the local and regional level SUSTAINED GROWTH Regional “supply” of workforce, high quality of place, transactional efficiency & strong industry clusters drive sustained growth. NEO Targets Change in NEO GRP = the National Average Change in NEO GRP > the National Average Change in NEO GRP > the National Average MSA Targets 2nd ‐3rd Quartile 2nd Quartile 1st ‐2nd Quartile SUCCESS REQUIRES REVERSING TRENDS & DEVELOPING ABILITY FOR TOP QUARTILE PERFORMANCE 19
- 22. The Northeast Ohio economy performed worse that the US economy for decades, but current data suggests this is changing While there have been changes in major elements of the economy over time, our legacy industries remain important; for example since 1995, we have increased industry breadth, yet manufacturing remains the biggest sector at 17% of GRP The Northeast Ohio economy declined by $9.7B 2006‐2010; the biggest contribution to decline is the “local competitiveness factor” of the region – population serving industries comprised the majority of the decline NEO’s driver industries, which comprise 35% of the regional economy, performed relatively well during the recession – GRP declined by less than $400M between 2006 and 2010, but their employment declined by 50% − There are “bright ” spots emerging in energy, chemicals and manufacturing segments that are benefiting from innovation Moody’s economy.com forecasts NEO’s economy to growth with the national economy through 2015, but those projections do not include the shale gas boom or potential labor constraints The region’s employment challenge for the next decade will ensuring sufficient workers are prepared to compete for the jobs that will be created There are key risk factors that need to be better understood, including the impact of healthcare reform, natural gas prices and the other aspects of the potential shale oil boom NEO ECONOMY IS WELL‐POSITIONED TO OUTPERFORM HISTORY & THE US ECONOMY 21
- 24. NEO’S PER CAPITAL INCOME HAS RISEN, BUT NOT AT THE PACE OF THE US $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Per Capita Personal Income NEO > US NEO = US NEO < US Source: Team NEO; Moody’s economy.com; Data adjusted for inflation NEO US
- 25. THE NEO ECONOMY EVOLVED 1995‐2006; INDUSTRY BREADTH WILL BETTER WEATHER DOWNTURNS 0 50 100 150 200 1995 2006 2010 NEO GRP By Industry $B Manufacturing 15% Real Estate & Leasing 11% Health Care & Social Asst 9% All Other 34% Retail Trade 7% Finance & Ins 8% Source: Moody’s economy.com; Team NEO Wholesale Trade 7% 24 Local Government 7% Construction 3% Manufacturing 17% Real Estate & Leasing 12% Health Care & Social Asst 10% All Other 29% Retail Trade 7% Finance & Ins 9% Wholesale Trade 8% Local Government 7% Construction 3% Manufacturing 23% Real Estate & Leasing 11% Health Care & Social Asst 8% All Other 28% Retail Trade 6% Finance & Ins 7% Wholesale Trade 4% Local Government 7% Construction 5% $159B $186B $178B Wholesale Trade and Other Non‐Manufacturing Industries Have Gradually Increased Their Share Of GRP, Offsetting Declines In Manufacturing & Construction
- 27. ‐4 ‐3 ‐2 ‐1 0 1 2 THE LOCAL EFFECT DECLINED BY $9.8B, DRIVEN BY DECLINES IN SPECIFIC INDUSTRIES Other Decliners (n=47) Machinery Manufacturing Specialty Trade Contractors Real Estate Computer and Electronic Product Manufacturing Federal Government Hospitals Fabricated Metal Product Manufacturing Professional, Scientific, and Technical Services Ambulatory Health Care Services Transportation Equipment Manufacturing Local Government Primary Metal Manufacturing Credit Intermediation and Related Activities Chemical Manufacturing Management of Companies and Enterprises Petroleum and Coal Products Manufacturing Utilities Electrical Equipment, Appliance, and Component Other Gainers (n=23) 2006‐2010 Changes in Local Effect $B Source: CSU Center for Economic Development; Moody’s economy.com; 3 digit NAICS level Population Serving Industry Performance Export Industry Performance (Driver & Other Export Industries) Large Declines In Population Serving Industries Impacted The Economy 26
- 28. NEO’S ECONOMY DRIVERS COMPRISE NEARLY $60B, 33% OF 2010 GRP $0 $2 $4 $6 $8 $10$0 $2 $4 $6 $8 $10 Agents and Managers for Public Figures Water, Sewage and Other Systems Coal Mining Other Investment Pools and Funds Other Agricultural Chemical Manufacturing Other Information Services Oil and Gas Extraction Commercial and Industrial Machinery and Equipment Leasing Natural Gas Distribution Petroleum and Coal Products Manufacturing Electric Power Generation, Transmission and Distribution Offices of Real Estate Agents and Brokers Management of Companies and Enterprises* General Medical and Surgical Hospitals* Lessors of Real Estate Activities Related to Real Estate Securities and Commodity Exchanges Monetary Authorities‐Central Bank Cutlery and Handtool Manufacturing Vending Machine Operators Clay Product and Refractory Manufacturing Household Appliance Manufacturing Nonferrous Metal (except Aluminum) Production and Processing Coating, Engraving, Heat Treating, and Allied Activities Foundries Iron and Steel Mills and Ferroalloy Manufacturing Boiler, Tank, and Shipping Container Manufacturing Steel Product Manufacturing from Purchased Steel Metalworking Machinery Manufacturing Forging and Stamping Metal and Mineral (except Petroleum) Merchant Wholesalers Resin and Artificial Synthetic Fibers and Filaments Manufacturing Paint, Coating, and Adhesive Manufacturing Motor Vehicle Manufacturing Other General Purpose Machinery Manufacturing Electrical Equipment Manufacturing Basic Chemical Manufacturing Machine Shops; Turned Product Manufacturing Plastics Product Manufacturing Motor Vehicle Parts Manufacturing Other Fabricated Metal Product Manufacturing 2010 Growth Drivers: $36.9B 2010 Traditional Base $20.2B Source: CSU Center for Economic Development; Moody’s economy.com; *Industries are both Growth Drivers and Economic Base industries 27
- 29. $0 $2 $4 $6 $8 $10$0 $2 $4 $6 $8 $10 Agents and Managers for Public Figures Water, Sewage and Other Systems Coal Mining Other Investment Pools and Funds Other Agricultural Chemical Manufacturing Other Information Services Oil and Gas Extraction Commercial and Industrial Machinery and Equipment Leasing Natural Gas Distribution Petroleum and Coal Products Manufacturing Electric Power Generation, Transmission and Distribution Offices of Real Estate Agents and Brokers Management of Companies and Enterprises* General Medical and Surgical Hospitals* Lessors of Real Estate Activities Related to Real Estate Securities and Commodity Exchanges Monetary Authorities‐Central Bank Cutlery and Handtool Manufacturing Vending Machine Operators Clay Product and Refractory Manufacturing Household Appliance Manufacturing Nonferrous Metal (except Aluminum) Production and Processing Coating, Engraving, Heat Treating, and Allied Activities Foundries Iron and Steel Mills and Ferroalloy Manufacturing Boiler, Tank, and Shipping Container Manufacturing Steel Product Manufacturing from Purchased Steel Metalworking Machinery Manufacturing Forging and Stamping Metal and Mineral (except Petroleum) Merchant Wholesalers Resin and Artificial Synthetic Fibers and Filaments Manufacturing Paint, Coating, and Adhesive Manufacturing Motor Vehicle Manufacturing Other General Purpose Machinery Manufacturing Electrical Equipment Manufacturing Basic Chemical Manufacturing Machine Shops; Turned Product Manufacturing Plastics Product Manufacturing Motor Vehicle Parts Manufacturing Other Fabricated Metal Product Manufacturing 2010 Growth Drivers: $36.9B 2010 Traditional Base $20.2B Source: CSU Center for Economic Development; Moody’s economy.com; *Industries are both Growth Drivers and Economic Base industries Real Estate Activities Benefiting from Recession Large, National Real Estate Companies Hospitals Corporate Management Energy Generation & Distribution & Manufacturing of Related Products … Manufacturing Manufacturing Manufacturing Chemicals NEO’S ECONOMY DRIVERS COMPRISE NEARLY $60B, 33% OF 2010 GRP 28
- 31. ‐20,000 ‐15,000 ‐10,000 ‐5,000 0 5,000 10,000 EMPLOYMENT DECLINED BY 50% IN DRIVER INDUSTRIES BETWEEN 2006 AND 2010 2006‐2010 Changes in Employment For Economy Driving Industries Source: CSU Center for Economic Development; Moody’s economy.com General Medical and Surgical Hospitals Boiler, Tank, and Shipping Container Manufacturing Activities Related to Real Estate Natural Gas Distribution Oil and Gas Extraction Other Decliners (n=18) Clay Product and Refractory Manufacturing Other Metal and Mineral Merchant Wholesalers Management of Companies and Enterprises Iron and Steel Mills and Ferroalloy Manufacturing Other General Purpose Machinery Manufacturing Coating, Engraving, Heat Treating, and Allied Activities Other Fabricated Metal Product Manufacturing Forging and Stamping Metalworking Machinery Manufacturing Foundries Machine Shops; etc Other Nonferrous Metal Production and Processing Motor Vehicle Manufacturing Plastics Product Manufacturing Motor Vehicle Parts Manufacturing Auto Industry Drove The Employment Decline 30
- 32. NEO’S GRP IS PROJECTED TO IMPROVE WITH THE NATIONAL ECONOMY UNTIL 2015… Source: CSU Center for Economic Development; Moody’s economy.com; dashed lines indicate projections ‐10.0% ‐5.0% 0.0% 5.0% 10.0% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Annual Change In GRP v. GDP U.S. NEO ‐10.0% ‐5.0% 0.0% 5.0% 10.0% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Annual Change In Employment U.S. NEO 2009‐2015: Projected to recover with the National Economy 31
- 33. …THEN REPEAT HISTORY AND UNDERPERFORM THE NATIONAL ECONOMY Source: CSU Center for Economic Development; Moody’s economy.com ‐10.0% ‐5.0% 0.0% 5.0% 10.0% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Annual Change In GRP v. GDP U.S. NEO ‐10.0% ‐5.0% 0.0% 5.0% 10.0% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Annual Change In Employment U.S. NEO 2016‐2019: Projected to lose our strong position – outperformance required improving the quality of our assets 32
- 34. EMPLOYMENT IN THE REGION IS PROJECTED TO INCREASE TO 2.1M BY 2019… 33 1,750 1,850 1,950 2,050 2,150 2,250 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 NEO is projected to add nearly 200K jobs and achieve pre‐recession levels by 2015… Northeast Ohio Employment 000 Source: CSU Center for Economic Development; Moody’s economy.com
- 35. EMPLOYMENT IN THE REGION IS PROJECTED TO INCREASE TO 2.1M BY 2019… 34 1,750 1,850 1,950 2,050 2,150 2,250 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 NEO is projected to add nearly 200K jobs and achieve pre‐recession levels by 2015… Northeast Ohio Employment 000 …and that does not include the shale boom and the impact of other interventions… Source: CSU Center for Economic Development; Moody’s economy.com
- 36. EMPLOYMENT IN THE REGION IS PROJECTED TO INCREASE TO 2.1M BY 2019… 35 1,750 1,850 1,950 2,050 2,150 2,250 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 NEO is projected to add nearly 200K jobs and achieve pre‐recession levels by 2015… Northeast Ohio Employment 000 …and that does not include the shale boom and the impact of other interventions… …currently, there are only ~170K unemployed people in the NEO workforce Source: CSU Center for Economic Development; Moody’s economy.com
- 37. …REVEALING NEW WORKFORCE CHALLENGES FOR THE COMING DECADE 36 1,750 1,850 1,950 2,050 2,150 2,250 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Northeast Ohio Employment 000 NEO’s NEW WORKFORCE CHALLENGE Through 2019, Northeast Ohio will be challenged to supply sufficient workers who are prepared to compete for the jobs that will be required to fuel the projected GRP growth Source: CSU Center for Economic Development; Moody’s economy.com
- 51. EFFORTS TO ASSESS COMPETITIVENESS VARY, COMMON THEMES EMERGE FFEF Dashboard of Economic Indicators Federal Reserve Bank of Cleveland Brookings Institution Economic Development Administration Products Technology, Innovation, Entrepreneurship, Exports Technology Commercialization Patents Issued Innovation Innovation Entrepreneurship Networks People Prepared workforce & educated talent Skilled Workforce & R&D Educational Attainment (BA’s) Human Capital Brain Power Places Quality, Connected Communities Racial Inclusion Income Equality Legacy of Place Infrastructure Quality of Place Quality, Connected Places Civic Collaboration Other 5 other factors Branding Experiences 1 2 3 50
- 52. VERSION 1.0’S ASSESSMENT OF REGIONAL COMPETITIVENESS FOCUSED IN 3 AREAS Products People Places Innovation, technology, entrepreneurship, and efficient access to markets, particularly in key industry clusters, determine a region’s ability to produce and sell more products in a global economy A well‐prepared workforce is needed to meet current and projected demands, and a competitive region needs well‐ educated talent capable of out‐ innovating the competition over the long term Well‐governed, connected, quality places that offer easy access to education, jobs and cultural and natural amenities appeal to growing companies and talented people 51
- 53. Quartile performance of MSAs vs. comparison set, 2009 data; NA= Not Available 1 Source: FFEF Dashboard, Ranked 136 metropolitan statistical areas (excludes largest and smallest metros) 2 Source: Moody’s Economy.com, Ranked vs. top 100 metros (2008 data) 3 Source: Moody’s North American Business Cost Review, Ranked vs. 384 metros (2008 data) 4 Source: Brookings, combines Canton/Cle/Ytown and removes duplicate flights, Ranked vs. top 100 metros 5 Source: U.S. Department of Transportation, Ranked vs. Top 40 freight transportation gateways. Northeast Ohio Akron Canton ‐ Massillon Cleveland – Elyria ‐ Mentor Youngstown – Warren ‐ Boardman Products VC Raised1 NA 3 3 1 4 Industry R&D1 NA 2 4 2 4 University R&D1 NA 2 4 2 4 Patents1 NA 1 1 2 3 Exports as % of GMP2 NA 2 NA 1 1 People % of population in professional occupation1 NA 3 4 2 4 % of population with a graduate or professional degree1 NA 3 4 2 4 % of population with bachelors’ degree1 NA 2 4 3 4 % foreign born population1 NA 4 4 3 4 Places Cost of Doing Business3 NA 2 4 2 4 Broadband Penetration2 NA 2 NA 2 3 State & Local Tax Index3 NA 4 4 4 4 Housing Affordability2 2 2 NA 2 2 Direct Flight Connections4 1 NA NA NA NA Value of freight handled by air land and sea ports5 NA NA NA 2 NA COMPETITIVE PERFORMANCE OF NEO MSAs VS. OTHER MSAs 52
- 54. Goals Assets Gaps Improve product development, particularly within core and emerging industry clusters World‐class research capacity Manufacturing capacity that has embraced innovation Support infrastructure for emerging clusters Third Frontier investments Business retention, growth and attraction network Below national average in research spending Research capacity to support key industry sectors (chemistry) Connections among industry and research assets Availability of capital PRODUCTS – INNOVATION, TECHNOLOGY, CLUSTERS ENTREPRENEURSHIP & EXPORTS 53
- 55. Goals Assets Gaps Build portfolio of high‐growth companies Robust entrepreneurial ecosystem Third Frontier investments Executive talent with high‐ growth experience Availability of capital Supply of serial entrepreneurs Number of second‐stage companies Large proportion of company mix is mature, low growth 54 PRODUCTS – INNOVATION, TECHNOLOGY, CLUSTERS ENTREPRENEURSHIP & EXPORTS
- 56. Goals Assets Gaps Expand exports Domestic International Air and water ports Product mix is export friendly Healthy base of global companies Diverse transportation assets Small‐, mid‐sized companies lack export capacity Connected logistics and transit systems 55 PRODUCTS – INNOVATION, TECHNOLOGY, CLUSTERS ENTREPRENEURSHIP & EXPORTS
- 57. PEOPLE – WORKFORCE, EDUCATIONAL ATTAINMENT, TALENT ATTRACTION Goals Assets Gaps Better prepare workforce to compete for available jobs that will help employers grow Pockets of excellence with WIBs, Career Centers, Community Colleges Emerging industry‐driven efforts (RITE Board, NEOHealthForce etc.) Gov. Kasich focused on reform Clarity, transparency of present and near‐term gap between supply and demand Coordination, accountability, alignment of institutions Employers’ ability aggregate demand for workers to influence talent development system Employers’ success elevating entry level workers to fill demand for middle‐skill workers 56
- 58. Goals Assets Gaps Elevate educational attainment 27 accredited colleges and universities 209,000 enrolled students 30,000 post‐secondary degrees and certificates issued per year Pockets of primary and secondary school excellence Effective local efforts to elevate educational attainment (Stark Education Partnership) Understanding of longer‐ term talent demand and supply, demographics of talent base and understanding of higher education system performance Multiplicity of K‐12 school districts with varying degrees of resources and challenges Coordination, accountability and alignment of higher education system 57 PEOPLE – WORKFORCE, EDUCATIONAL ATTAINMENT, TALENT ATTRACTION
- 59. Goals Assets Gaps Attract and retain higher‐educated, higher‐skilled talent Pockets of internship excellence Emerging local talent attraction initiatives Diverse downtowns and other assets that appeal to younger, talented workers Coordinated talent attraction efforts Level of immigration Coordinated, connected internship programs 58 PEOPLE – WORKFORCE, EDUCATIONAL ATTAINMENT, TALENT ATTRACTION
- 60. PLACES – GOVERNANCE, CONNECTEDNESS & QUALITY OF PLACE Goal Assets Gaps Vibrant, connected urban cores Robust internet infrastructure Diverse downtowns World‐class cultural assets, natural assets and amenities Land banks 24‐7 downtowns Downtown and near‐ downtown residential Infrastructure Connections of people to educational and economic opportunities Aligned land use and infrastructure that strengthen competitiveness Vibrant, connected rural communities OARDC Local‐food networks Land conservancies Land banks Aligned land use and infrastructure that strengthen competitiveness Incentives to protect and preserve working lands 59
- 61. Goal Assets Gaps Efficient, effective governance State policy Strengthening collaboration efforts Federal support of nascent coordinated planning efforts Aligned land use and infrastructure that strengthen competitiveness Capacity to improve governmental efficiency, effectiveness State policies that promote more efficient, effective local government Efficient access to regional, national and global markets Multiple airports Multiple ports Inter‐states Rail assets Robust internet infrastructure Regional air service strategy Connected logistics and transit systems Relatively high labor costs 60 PLACES – GOVERNANCE, CONNECTEDNESS & QUALITY OF PLACE
- 64. NEO’S ECONOMIC DEVELOPMENT INTERVENTIONS HAVE BORNE FRUIT, YET OPPORTUNITIES EXIST Historical investments in economic development organizations are paying dividends and create an opportunity for accelerated growth Current regional initiatives have the potential to create ~60K new jobs and $15B in capital investment – collective retention and expansion efforts should significantly increase those outcomes Initiatives have been enabled by strong leadership and committed funding, but the system is “expensive” (leadership and funding) and core funding for operations is declining Comprehensive strategies are needed to: − Achieve broad‐based excellence in commercialization support − Infuse product innovation and commercialization in driver industries with low growth − Enhance the local assets supporting high growth driver industries − Improve the ability of the region’s workforce to compete for the jobs that will be in demand − Effectively connect regional economic development strategies to urban cores There are countless mega‐regional, sub‐regional, local and hyper‐local initiatives that may significantly increase the regional outcomes, but inconsistencies in metrics and timelines prevent aggregation 63
- 66. CURRENT & FUTURE IMPACT CAN ONLY BE AGGREGATED FOR INTERVENTIONS TRACKED BY FFEF Amount Invested 2011 2011 Year End 2012‐2018 Projected Responsible Organization Manufacturing $4.3M 369 New Jobs 730 Retained Jobs $50.3M Capital 12.7K New Jobs 5.5K Retained Jobs $538.7M Capital MAGNET Biomedical $30 M 2.3 K Jobs $152M Capital 7.5 K Jobs $200M V Capital BioE ‐ Partners Advanced Energy $1.6 M 226 jobs $17 M 9.9K Jobs $662M Capital NorTech Flexible Electronics $870 K 67 jobs $17 M 1.5K Jobs $100M Capital NorTech Entrepreneurship $15.5 M 2.3K Jobs $221M Capital 7.7K Jobs $350M Capital JS ‐ JEN Company recruitment $3.9M 1.4K Jobs $52M new payroll 8 K Jobs $300M new payroll Team NEO Retention and expansion $4.9M 4 K New Jobs 8 K Retained Jobs $1.5B Capital 40K New Jobs, 83K Retained Jobs $13B Capital JobsOhio Network 65Source: NorTech, BioEnterprise, TeamNEO, MAGNET, FFEF
- 67. ESTIMATING THE COLLECTIVE IMPACT OF INITIATIVES REQUIRES CONSISTENCY OF METRICS We have compiled a database of nearly 100 mega‐regional, regional, local and hyper‐local initiatives including… Key Insights Strong, vibrant cities and communities are critical for the long‐term vibrancy of the region The NEO Regional Competitiveness Strategy is interested in understanding the potential collective impact of local initiatives We recommend that funders encourage consistency of key metrics (job creation, capital attracted or invested, etc) and timelines to enable regional data aggregation Mahoning River Consortium Evergreen Cooperatives The Oberlin Project University Park Alliance Food Security Cluster Stark Education Partnership 66
- 69. SECTORS TO BE ASSESSED Manufacturing – related to value added manufacturing that MAGNET is leading Biomedical – led by BioEnterprise and its partner organizations Advanced Energy – NorTech is leading in 11 sectors of energy with different emphasis depending on the sector Flexible Electronics – NorTech is leading Ag‐Bio – Early stages with OARDC and Wayne County Economic Development leading Water Technologies – NorTech is leading a industry driven roadmapping process specific to waste and storm water clean up Tourism – dispersed in many organizations across the region 68 ASSESSING INITIATIVES BY IMPACT & PROBABILITY OF SUCCESS PROVIDES INSTRUCTIVE INSIGHT
- 70. ENABLERS TO BE ASSESSED Entrepreneurship – Jumpstart Entrepreneurial Network Company recruitment – Team NEO traditional role Retention & expansion – JobsOhio regional network Workforce/talent – dispersed throughout the region Technology Commercialization – focused within the cluster areas more than cohesive regional strategy Inclusion in identified industry sectors – NorTech is leading a regional effort with the regional partners and the Fund External Marketing and Communications – Cleveland Plus Advocacy ‐ Chambers 69 ASSESSING INITIATIVES BY IMPACT & PROBABILITY OF SUCCESS PROVIDES INSTRUCTIVE INSIGHT
- 74. Strategic Drivers 1. Help companies take advantage of immediate growth opportunities through transactional excellence and effective marketing 2. Drive private sector job growth by strengthening the region’s driver industries – with a specific focus on manufacturing 3. Strengthen and connect the region’s innovation, research and commercialization capacity to increase product development in driver and emerging industries 4. Build coalitions that accelerate growth of more emerging industries – leveraging our current and targeted regional advantages 5. Continue to foster and grow the region’s entrepreneurial environment FOR NEO TO OUTPERFORM THE NATIONAL AVERAGE, WHAT ARE THE STRATEGIC DRIVERS? 73
- 75. Strategic Drivers 6. Develop workforce to meet short‐term employer needs; elevate educational attainment and attract high‐skilled people to maximize long‐term competitiveness 7. Align local and regional initiatives that will improve our Quality of Place competitiveness to appeal to growing companies and talented people 8. Strengthen and connect the region’s transportation assets (hub air service, highways, rail and ports) to improve access for people and products to markets near and far 9. Advocate for public policies that lower the cost of living and of doing business in the region, including more efficient government, effective land use and legislation that fosters business growth 10.Develop the coalition(s) of business, philanthropic, education and government leaders to monitor, refine and deliver on the Strategy FOR NEO TO OUTPERFORM THE NATIONAL AVERAGE, WHAT ARE THE STRATEGIC DRIVERS? 74
- 76. 75 Activities/EDOs • Retention & Expansion • Attraction • Advocacy • Workforce Development • Nortech • Bio Enterprise • Jump Start • Magnet • Chambers • City/County Strategies • Others… Green: Current strength but may require some refinement/clarifications Orange: Significant opportunity to align with regional strategy Red: Significant gap to be addressed IMPACT OF STRATEGIC DRIVERS ARE SPREAD OVER TIME – ALIGNING INITIATIVES IS KEY TO VERSION 2.0 SHORT TERM 1 – 2 Years INTERMEDIATE TERM 2 – 10 Years LONG TERM 10 – 20 Years Strategic Drivers Enable short‐term Demand growth and expand regional marketing Transportation strategy maintaining/growing air service and grow ground transport competitiveness Workforce for short term demand Drive private sector job growth‐ focus on core industries/manufacturing Improve education attainment across the region Workforce to develop a long‐term supply for to support growth Leverage and Build on Innovation strengths Align local and regional initiatives to improve Quality of Place Attract and Develop emerging industry clusters Foster and grow Entrepreneurial environment Advocate to improve cost of living and of doing business in the region Coalition to monitor progress, refine and deliver strategic initiatives 75