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.
By: Jeremy Hobson
U.S. industrial production rose 0.7 percent last month. The growth, the greatest in three months, was led by strong manufacturing output.
Chris Low, chief economist with FTN Financial, joins Marketplace Morning Report host Jeremy Hobson to explain how increasing industrial production will affect the economy and inflation.
by Karen Beard and Tom Stellman
The presumed mismatch between the skills of the workforce and the needs of employers, commonly referred to as the “skills gap,” has garnered the attention of politicians, employers, economic developers, and professionals in workforce and education. A number of authoritative sources—Manpower, Deloitte, McKinsey—point to statistics which show that, despite relatively high levels of unemployment, a number of jobs are going unfilled because employers can’t find candidates with the skills they want. This issue will be the subject of discussion led by TIP’s president and CEO, Tom Stellman, at the Texas Economic Development Council’s 2013 Legislative Conference this week.
Several factors are contributing to this gap, including an aging workforce, an education system focused on 4-year degrees, the growing use of automation, and distortions caused by the labor demands of the energy sector. Yet some argue the current situation is less of a “skills” gap than a “wage” gap. Manufacturing wages have stagnated as the value of goods produced per worker has soared. This lackluster performance can make it even harder to attract young workers to manufacturing careers, particularly in a culture that often perceives the industry as a less–than-desirable option for its children.
Even if we could agree on its existence, the question of how best to fill it remains. Focusing on education is at the heart of many initiatives. Yet even if education is the answer, the challenges of timing the flow of workers with the needs of industry remains. Trying to predict which skills will be in demand can result in well-meaning training programs that produce a number of workers in a particular industry only to find that the economy has moved on and left these newly minted skills in the dust.
So, reality or myth? Maybe, like many of life’s questions, the answer is a little of both.
by Caroline Alexander
TIP, in partnership with Bob Wernersbach, recently completed a market study for the San Marcos Regional Airport (HYI). Communities often face the challenge of how to leverage an airport as an economic development asset. San Marcos provides a useful example of how to approach this challenge for general aviation airports, in particular.
The San Marcos Regional Airport is owned by the city of San Marcos and managed by Texas Aviation Partners. It is situated between Austin and San Antonio between IH-35 and the new SH-130 with access to rail and a workforce of over 1.9 million people within a 50-mile radius of the airport. It is also a short drive away from one of Texas’ most popular tourist destinations – the San Marcos Outlet Malls.
The San Marcos Regional Airport competes not only with the general aviation facilities of Austin-Bergstrom and San Antonio International Airports but also with the airports located in New Braunfels and Georgetown. To understand how the San Marcos airport fits into the regional competitive landscape, we conducted a detailed analysis to score the competing facilities based on 27 criteria across 4 topic areas. The 4 topic areas were value, location, growth potential, and airport facilities.
With the understanding of how San Marcos fits into the competitive landscape, we identified market opportunities and niches for the San Marcos Regional Airport. We proposed a vision for the airport and the surrounding land that will guide investments and development at the airport. Finally, we made specific recommendations on site preparation and infrastructure development that should made and devised a marketing strategy. These recommendations outline the steps the City of San Marcos, Texas Aviation Partners, and the Greater San Marcos Partnership must take to realize the ambitious vision for the airport.
The result of the study is a more coordinated effort to promote the airport as a growth center in the region. Through the planning process, San Marcos was able to engage its stakeholders and build support for the airport vision. Texas Aviation Partners has embraced the study and is building its business plan around it. The Greater San Marcos Partnership, too, will incorporate this study into its over-all economic development strategy. Through this coordinated effort, the community is likely to see strongly positive results.
By: Sarah Gardner
More than a million industrial robots work in manufacturing plants all over the world already. And they’re getting smaller, cheaper and smarter all the time.
Christopher Mims has written an article for Quartz titled “How Robots are Eating the Last of America’s—and the World’s—Manufacturing Jobs.” He begins by remembering the party at which he met Baxter, a robot made by Rethink Robotics.
Baxter, he says, can be programmed “drunk and one handed” (he tried). Mims says you can “literally grab its wrist and show it what to do.” The robot also has humanoid features including expressive eyes on a touch-screen face.
Mims notes Baxter’s low cost. One Baxter robot is expected to cost about $20,000 — a far cry from the $100,000 and up that most manufacturing robots cost now. The average American worker making minimum wage makes around $15,000. And while Baxter is “experimental,” Mims calls it “a taste of things to come, although it’s an awful lot closer than previous robots have been.”
In the future, a factory filled with Baxters might only have a handful of humans to run the machines, especially those that require high precision work. And of course, people will need to build the robots. But Mims says, “not surprisingly, companies that make robots are sometimes the first to adopt automation as well.”
The rise of automation means — without a doubt — manufacturing jobs for humans continue to fade away. But economists aren’t quite sure what this will mean for the jobs market. Education seems key, but Mims says “you definitely have a problem of where do no or low-skilled workers go and that has a lot of economists worried.”
In his article for Quartz, Mims also says automation, not off-shoring, is the biggest threat to American jobs in the future.
By: Mark Garrison
The award-winning Pure Michigan branding campaign covers all the bases of tourism marketing: beautiful outdoor imagery, stirring music, even a celebrity voice, Michigander Tim Allen’s fatherly tones. It’s hard to imagine it stirring up controversy, but when the state’s economic development authority used it in an ad touting Michigan’s controversial new right-to-work law, fans of the slogan exploded online.
Part of the reason why some took offense is that many residents have a feeling of pride and ownership about the slogan. From the beginning, it focused on what was great about Michigan, even while auto plant layoffs made headlines.
“The Pure Michigan campaign really strikes a chord with people,” says Michigan State University tourism professor Dan McCole, who has seen people tear up watching the ads.
That emotional connection is why some residents got angry when the slogan appeared in a full-page ad in The Wall Street Journal urging business to come to Michigan because of its new law limiting union power. Passage of the right-to-work law in December sparked spirited protests, with pro-union demonstrators crowding Michigan’s Capitol. Tourism marketing experts are surprised the state would risk the goodwill Pure Michigan has earned by linking it with such a divisive political issue.
“From a pure marketing perspective, I was shaking my head,” says University of Michigan marketing professor Christie Nordhielm. “What the economic and business development folks should be doing is developing their own positioning and their own slogan.”
The Michigan Economic Development Corporation is responsible for attracting tourists and businesses. It used to have a separate business slogan as part of its annual $35 million marketing budget. But the agency dumped it two years ago in favor of a proven winner.
“We wanted to take advantage of a very favorable part of our state, which was the brand Pure Michigan that we had created,” says Mike Finney, who head’s the state’s economic development agency.
The move was uncontroversial until the right-to-work ad appeared earlier this week. Tourism industry professionals worry the controversy will devalue their well-established slogan and deter visits to Michigan. Vocal criticism of the right-to-work ad now has the state’s marketers rethinking the move.
“We will make decisions on whether it makes sense for us to modify this campaign in any way,” Finney told Marketplace.
By: Louise Story
Via: The New York Times
In the end, the money that towns across America gave General Motors did not matter.
When the automaker released a list of factories it was closing during bankruptcy three years ago, communities that had considered themselves G.M.’s business partners were among the targets.
For years, mayors and governors anxious about local jobs had agreed to G.M.’s demands for cash rewards, free buildings, worker training and lucrative tax breaks. As late as 2007, the company was telling local officials that these sorts of incentives would “further G.M.’s strong relationship” with them and be a “win/win situation,” according to town council notes from one Michigan community.
Yet at least 50 properties on the 2009 liquidation list were in towns and states that had awarded incentives, adding up to billions in taxpayer dollars, according to data compiled by The New York Times.
Some officials, desperate to keep G.M., offered more. Ohio was proposing a $56 million deal to save its Moraine plant, and Wisconsin, fighting for its Janesville factory, offered $153 million.
But their overtures were to no avail. G.M. walked away and, thanks to a federal bailout, is once again profitable. The towns have not been so fortunate, having spent scarce funds in exchange for thousands of jobs that no longer exist.
One township, Ypsilanti, Mich., is suing over the automaker’s departure. “You can’t just make these promises and throw them around like they’re spare change in the drawer,” said Doug Winters, the township’s attorney.
Yet across the country, companies have been doing just that. And the giveaways are adding up to a gigantic bill for taxpayers.
A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains. Read more . . .