TIP Strategies is a privately held Austin-based economic development consulting firm committed to providing quality solutions for public and private‑sector clients.
This blog is dedicated to exploring new data and trends in economic development.
Map below has been updated to reflect data through May 2012.
This animated map provides a striking visual of employment trends over the last business cycle using net change in jobs from the U.S. Bureau of Labor Statistics on a rolling 12-month basis. We used this approach to provide the smoothest possible visual depiction of ongoing employment dynamics at the MSA level. By animating the data, the map highlights a number of concurrent trends leading up to the nation’s present economic crisis. The graphic highlights the 100 largest metropolitan areas so that regional trends can be more easily identified.
The timeline begins in 2004 as the country starts its recovery from the 2001 recession, following the bursting of the dot-com bubble. At first, broad economic growth was apparent across most of the country. Two notable exceptions are the Bay Area — the hub of the tech boom that drove job growth during the prior decade — and several metropolitan areas within the Midwest. The map reveals that much of the industrial Midwest never fully recovered from the previous recession, as manufacturers continue to shed jobs while other parts of the country were adding them in large number.
Equally telling is the short-lived expansion of construction- and real estate-related job growth in Sun Belt states, such as California, Florida, Georgia, and Arizona, during the middle of the decade as the nation’s appetite for new homes increases. During this period, the map also captures the dramatic job losses in New Orleans in 2005 as a result of Hurricane Katrina, as well as the city’s slow recovery driven largely by construction-related employment.
By 2007, regional evidence of the coming economic downturn starts to appear. Employment growth in California and Florida starts to wane, with the first signs of actual losses beginning in the middle of the year in Los Angeles and Tampa. At the same time, layoffs accelerate in the nation’s manufacturing heartland. By the first quarter of 2008, job losses in the Southeast and Midwest begin to spread, setting off a chain of losses in neighboring areas until the two regions unite in recession. The same pattern appears on the West Coast, with the epicenter in Los Angeles marching eastward to the Front Range of the Rockies.
Even as much of the nation was showing clear signs of entering into recession, New York City continued to boom as the flow of easy credit (much of it related to the speculation in the housing sector) stimulated employment growth in the nation’s financial center. In late spring 2007, the bursting of the financial bubble appears with the rapid deterioration of New York’s job market. A stark contrast is offered by solid employment growth in Texas as a result of the run-up in oil prices through the middle of 2008. However, by January 2009, as the energy and construction sectors continue to weaken, job growth in Texas also recedes.
The animated map makes clear that this recession has not treated all regions equally. But no matter where you are in the country, these trying times require a response. And, communities that have set their priorities — based on a realistic vision and action plan for recovery — will fare better. Not only will this make it easier to access federal assistance in the short term, it will help maintain a perspective on future economic vitality.
For many, the federal stimulus may provide the economic shot in the arm that is critical to stemming catastrophic job and population losses. But these short-term stimulus projects must be conceived, developed, and managed in the context of a longer-term plan for economic health. If the economy is indeed resetting itself, as the data suggest, then communities and regions must commit to a longer-term vision, strategies, and implementation plan.
Our belief is that any successful planning effort should involve three primary tasks:
Task one is to assess and educate. This involves an objective and nonpolitical identification and evaluation of local assets and liabilities. It also involves educating yourself and your local leadership team about the global, national, regional, and local economic environment. How is it affecting your local economy? Which of your local sectors, individual businesses, and organizations are most vulnerable to economic pressure? Which are best positioned to weather the crisis or even do well? Focusing on existing business should be the heart of any economic development strategy. This is especially true in light of current economic conditions.
Task two is to appraise and prioritize infrastructure. This extends to both physical infrastructure and human capital, including the social networks increasingly driven by technology. What is successful? What is sustainable? What must be maintained versus what should be abandoned? What new infrastructure must be developed to position your community for recovery?
Task three is to identify and pursue business development opportunities. Once a community understands the competitive environment and the assets required to compete, it can then look at business development in a fresh light. Current opportunities may be found in the federal stimulus package, national or regional business consolidations, counter-cyclical sectors (e.g., discounters, repair, refurbishing, energy efficiency), and non-primary sectors (e.g., healthcare, education, security, tourism). Specific strategies and actions for pursuing these opportunities must be devised and priorities must be set. In order to implement the plan, local resources and leadership will have to be committed and the public engaged.
Whether it is updating an existing plan to current conditions or starting a plan from scratch, now is the time to bring your local leadership team together to rethink how to support existing businesses and to attract new investment, people, and jobs. TIP Strategies has assisted communities and regions throughout the country, both in good times and in bad, to establish a clear vision for economic growth. We offer a fresh approach that integrates community development principles with an understanding of more traditional economic development practices to help communities maximize their potential.