Project Update: Greater Houston Partnership’s Regional Workforce Development Task Force

February 6, 2014

By: Caroline Alexander, Senior Consultant, TIP Strategies

Port of HoustonPhoto courtesy: Port of Houston Authority

Over the past 6 months, TIP Strategies has helped the Greater Houston Partnership (GHP) facilitate their Regional Workforce Development Task Force and develop a strategic action plan.
The Greater Houston region is on the brink of unprecedented growth. With almost $20 billion in investment in new plants and facilities announced, the next 5 years are slated for rapid expansion. Employers, however, are concerned that the region does not have the talent it needs to fuel this expansion. Further complicating the labor market is the aging of the workforce and the pending wave of retirements.
In response to these concerns, the Greater Houston Partnership convened the Regional Workforce Development Task Force (RWDTF). The task force is composed of 104 members representing 79 organizations, including large employers, workforce and economic development, education, and social services. The task force met six times over the course of last half of 2013 with the intention of formulating an action plan to address the challenges over the next five years. The initiative focused in on the middle skills segment of the job market.
The RWDTF identified 4 gaps in the workforce development system that must be addressed in order to create the pipeline of talent required to meet the needs of the region’s employers. The gaps are:

AWARENESS
Potential workers are not aware of the opportunities in the middle skills segment or hold inaccurate perceptions of the jobs.
BASIC SKILLS & EMPLOYABILITY
Many potential workers lack some of the most basic hard and soft skills needed for any middle skills job.
COORDINATION
The landscape of programs and organizations with a focus on workforce is broad and varied, but also fragmented.
DATA
The lack of accurate, reliable data creates a disconnect between demand and supply.

The strategic action plan takes a sector-based approach to create a more demand-driven workforce system. The strategies are structured around addressing the identified gaps. The plan will be finalized at the end of February and GHP is already on the road to implementation. Stay tuned for more news as GHP hires a director of workforce development and launches its first sector council.

Regional Report: Beyond Automotive, The South Revs Up Growth Across Diverse Industries

January 27, 2014

In the below article for Area Development, Beth Mattson-Teig cites announcements by Yokohama, IBM, UBS and others as the latest examples of diversified expansion in the South. Congratulations to TIP client Clarksville, Tennessee, for being selected by Hankook for its $800 million manufacturing facility.

Automotive Industry by Department for Business Innovation and Skills via Flickr (CC BY-ND 2.0)Automotive Industry by Department for Business Innovation and Skills via Flickr (CC BY-ND 2.0)

By: Beth Mattson-Teig
Via: Area Development Online

A highly skilled work force and good transportation infrastructure are also drawing aerospace and other high-tech companies.
Automotive Shines Spotlight on Region
Automotive continues to be a powerful engine for growth across much of the South. Yet the region is firing on all cylinders, with expansion occurring across a variety of sectors ranging from aerospace and advanced manufacturing to data centers and technology.
As more of the old line industries that dominated the region, such as textiles, moved off shore, the resurgence in automotive manufacturing is one of the key industries that has fueled economic growth throughout the region. “That has continued, albeit in different volumes and different project types,” says Eric Stavriotis, a senior vice president at CBRE in Chicago.
Eight of the top automakers, ranging from Ford to Hyundai, all have major manufacturing facilities in the South, namely in the states of Alabama, Kentucky, Mississippi, and Tennessee. Those major auto manufacturing hubs continue to fuel growth among major OEMs and suppliers. For example, Korean tire manufacturer Hankook Tire Co. announced in October that it would invest $800 million in a state-of-the-art manufacturing facility in Clarksville, Tenn., that will create 1,800 new jobs. The company is expected to break ground on the new plant by the end of 2014 and begin tire production by 2016.
That announcement comes on the heels of another announcement earlier this spring that Tokyo-based Yokohama Tire Corp. will locate a commercial truck tire plant in West Point, Miss. The company plans to invest $300 million in the initial project that will create 500 new jobs, with potential future expansion that could bring total employment at the plant up to 2,000 jobs. Automotive has helped to shine a spotlight on the region for other industries and emphasized area strengths such as the employment base and transportation infrastructure. In addition, companies also have had the chance to see how the states have put together incentive packages and worked with companies on expansion and relocation projects, says Stavriotis. “Those types of investments do become a catalyst for other industries downstream,” he says.
Targeting Advanced Manufacturing
Automotive — along with a broader focus on advanced manufacturing jobs — continues to be a top focus for the region, including industries such as aerospace, metals, and chemicals. Notably, aerospace is a thriving niche, and Alabama, Mississippi, and Louisiana are all members of the Aerospace Alliance. Those three states join with Florida to promote the region as an aerospace corridor. Those states are home to major manufacturing and testing operations, as well as NASA facilities.
For example, France-based Eurocopter announced in September that it would start work on expanding its plant in Columbus, Miss., to serve as a final assembly and test site for its AS350 helicopters, the top-selling civil helicopter in the U.S. market. The plant is expected to be ready for assembly operations by Q4 2014.
“We are targeting aerospace, and we are working across state borders to promote the region, and we are finding success in winning some of those projects,” says Adam Murray, a target market specialist for the Tennessee Valley Authority Economic Development.
The entire site selection process is getting more nuanced and more case-by-case depending on a particular business and its unique requirements. “If you were to draw a gross generalization around manufacturing, the Southeast continues to win more than its fair share of projects because of the pro-business environment and lower overall operating costs and high incentives structure that [these states] have set up,” says Stavriotis.
In addition to the myriad of tax credits and financial assistance packages available to today’s businesses throughout the South, there is a distinct emphasis on providing resources to support worker training and development. Louisiana is certainly recognized for its efforts in this area with its FastStart program, which is a customized employee recruiting, screening, and training service that is available to eligible companies at no cost.
Another notable initiative to further expand advanced manufacturing in the region is an effort being led by the University of Alabama-Huntsville to land one of 15 regional Institutes for Manufacturing Innovation (IMIs) that are proposed by the Obama administration. President Obama has proposed the National Network for Manufacturing Innovation (NNMI) to promote advances and growth in the industry, and he is proposing funding the network with a one-time $1 billion investment.

The University of Alabama-Huntsville is specifically focusing on creating an institute that would promote digital manufacturing and design innovation. If that effort is successful, it could help to establish the area as not only a manufacturing hub, but also an R&D hub for digital manufacturing and design, notes Murray. “That is one example of how we are working across state borders to promote advanced manufacturing,” says Murray.
Pursuing High-Tech Jobs
States throughout the South are continuing to court advanced manufacturing businesses, but there also is a concentrated effort to diversify that business base and attract more higher-paying jobs in industries such as technology.
Louisiana has been very aggressive in pursuing technology, software development, e-commerce, and media companies. Those efforts have paid off with the major coup of landing IBM. The firm selected Baton Rouge as the home of its new IBM Services Center. The $55 million project, which includes an office building and residential tower, broke ground in September, with completion set for mid-2015. The new facility is expected to create 800 new direct jobs by the end of 2016.
Most people don’t consider Baton Rouge to be a hotbed for technology but, clearly, the state put some significant resources behind the project, says Stavriotis. Those resources extend beyond assistance related to constructing the facility to focus on developing the educated work force that IBM will need: the state of Louisiana will provide $14 million over 10 years to expand higher-education programs designed primarily to increase the number of annual computer science graduates. At least 65 percent of those funds will be provided for expansion of the Computer Science Division of the School of Electrical Engineering and Computer Science at Louisiana State University.

Basically, the state has said that if we can get IBM to show up, it will build that technology cluster around them, notes Stavriotis. “That takes a lot of time and resources, and it is pretty impressive that the state could package something like that, and that IBM would be willing to take them up on that offer,” he adds.
Data Centers & E-Commerce
Another target industry for the Southern States is data centers. The South is emerging as a strong player in this market because the fiber and IT infrastructure is getting built to give companies the connectivity and speed that is very important to the data center industry. In addition, companies are becoming more comfortable with the existing work force.
“We have had quite a few success stories, both in the Valley and the South in general, of companies that have come and tested the market and been successful,” says Spencer Sessions, a target market specialist for TVA Economic Development. For example, UBS announced in August that the company would establish a new shared services center in Nashville that will represent a $36.5 million investment and create 1,000 new jobs over the next five years. The new UBS Nashville business solutions center will offer expanded business services in support of UBS’ wealth management and investment banking divisions. UBS currently provides operations support in Nashville through over 200 employees, in addition to its full service Wealth Management office.
To further entice large data center projects to locate in Alabama, the state passed new legislation last year that enhances its existing sales, use, and property tax abatements available to qualifying projects. Both Louisiana and Mississippi also offer incentives specific to data center projects.

The South also continues to garner attention for distribution and e-commerce. For companies that are looking to fulfill a major distribution or warehouse component, Louisville and Memphis automatically jump to the top of the short list because of their ability to get product to their end destinations very quickly. Louisville is a major distribution hub for UPS, while Memphis is a key hub for FedEx. The UPS Worldport Louisville is the largest automated package handling facility in the world. It can handle up to 3.6 million packages per day, and more than 140 companies have located in Kentucky just to be close to the UPS hub.

Practitioners’ Forum: What Does the Future of Jobs Mean for Your Community?

January 30, 2012

Over the past two months, we have been engaged in a conversation about the future of jobs with economic development practitioners at the TEDC and IEDC conferences.
Now, we’d like to create an open forum to continue this dialogue beyond the conference setting. In the comments section of this post, you’re invited to respond to the following questions, or pose additional questions for your peers.
How will the “future of jobs” change how you approach economic development?
What mechanisms have you created to support corporations and freelance workers in your community?

Below you’ll find a video of Jon’s recent IGNITE presentation from IEDC’s Leadership Summit in San Antonio. The IGNITE structure allows speakers 5 minutes total to present in the form of 20 slides, with 15 seconds per slide. A brief overview of the presentation follows the slide show.
The Future of Jobs from GIS Planning on Vimeo.

The Future of Jobs from GIS Planning on Vimeo.

This is a discussion about the future of jobs. The idea of what a job is has changed throughout history (and continues to change). Farmers and craftsmen have always had trades, or livelihoods. Since the industrial revolution, a fundamental shift in the nature of jobs has occurred; individuals are employed by entities (corporations) and in return for their labor (9-5), they are compensated (wages) and receive benefits (healthcare, etc.). When unemployment is high, as it has been in the aftermath of the recent recession, we must ask ourselves who should create jobs: the public sector? the private sector? Can the economy continue to grow, even if jobs are not being created? (answer: yes).
The economy grows when value is created. Corporations can create value by increasing productivity (but not necessarily increasing employment), and independent contractors can create value outside of a traditional employee-employer relationship. If we take this thought experiment to its logical extreme, could there be corporations without people on the horizon? Will trade guilds become an organizing structure for independent contractors in a variety of professions?
If jobs are no longer the most useful or accurate measure of economic development success, how can practitioners best promote economic vitality in their communities? Are there mechanisms by which cities, regions, and states can offer resources to corporations and freelancers that will support their ability to create value, regardless of hiring trends or employment status?
We invite you to participate in this conversation in the comments section below.

Healthcare: Rx for Economic Growth

May 19, 2011

By: Jon Roberts and Caroline Alexander, TIP Strategies
Via: IEDC, ED Now (member login required)

The impressive expansion of the nation’s healthcare sector has proven resistant to economic downturns. Over the last two business cycles, healthcare employment has grown by more than 30 percent nationally. Total nonfarm employment, on the other hand, has increased by just 3 percent. This resilience is almost certain to continue. Optimistic growth prospects are well supported by demographic trends. As a result, the sector has caught the eye of many communities seeking to strengthen their economies. The challenge for economic development organizations is how to maximize the economic benefit of this sector.


While healthcare may not be seen as a traditional target for economic development, the sector offers many of the benefits of a “primary industry:” it often draws in outside dollars, it has linkages across a wide supply chain, and it offers a number of opportunities for high-wage, skilled jobs. In addition, access to healthcare has become an essential element of a region’s infrastructure. For these reasons, targeting healthcare can be an effective way to strengthen and expand a regional economy. The following framework provides a starting point for communities that want to consider this strategy.

1. Assess the sector. Economic development organizations typically have an incomplete picture of who is involved in providing medical services. They may have the CEO of the regional hospital on their board, but they may not know what services are (and are not) provided or how a hospital relates to clinics and physicians outside the system. More importantly, they may not have a full understanding of the supply chain on which the hospital relies. Assessing the sector and creating a complete cluster and network map is the starting point for crafting a healthcare strategy.

2. Engage relevant stakeholders. The next step involves understanding your local sector’s growth prospects. This requires direct communication with relevant stakeholders – regional healthcare providers, higher education institutions, and the local development community. Regional healthcare providers can provide information about their expansion plans and workforce needs. Higher education partners can provide insight into corresponding training programs, key research initiatives, and expansion plans. Beyond that, engaging the development community on the benefits of anchoring developments with healthcare and medical assets can lay a strategic foundation.

3. Identify the opportunity. With a complete picture of the healthcare sector and a deep understanding of its growth prospects, the community is ready to identify possible “catalyst” projects. These projects should include more than one strategic anchor that will help the project reach critical mass. Projects should be evaluated based on their potential job creation, tax revenue generation, capital costs to the community, and other tangible and intangible benefits. The project with the highest potential should be prioritized for investment.

4. Establish a framework. The tools needed to promote the opportunity must be put in place, starting with a clear vision and attainable goals for the project. Then, a framework must be established through the community’s regulatory environment and resource allocation to advance the opportunity. This will involve planning tools such as zoning and overlay districts. Adequate funding sources, including grants, bonds, and tax increment reinvestment zones, also need to be identified to finance needed infrastructure. Innovative incentives programs that support the recruitment of key tenants should also be part of the mix.

5. Implement. Ultimately, success depends on a shared vision. Keeping stakeholders fully engaged from inception to implementation will require an integrated approach – one that also involves business recruitment, marketing, entrepreneurship, and workforce development. A concerted effort can yield tangible and widespread benefits.

How it’s working in Round Rock, Texas

Round Rock is one of a growing number of examples of how the healthcare sector can be harnessed for economic development. Using a large tract donated by a local landowner, the City of Round Rock, in collaboration with the Round Rock Chamber of Commerce, higher education institutions, and regional healthcare providers, has formed a nascent, yet robust, healthcare cluster.
The basis of Round Rock’s approach was the creation of a medical education campus. The campus links medical education programs (offered by Texas A&M Health Science Center, Texas State University School of Nursing, and Austin Community College) with regional healthcare providers (Seton Medical Center Williamson, St. David’s Round Rock Medical Center, Scott & White University Medical Center, and Lonestar Circle of Care). The campus functions as an anchor for Avery Centre, a commercial node of the Avery Farms master-planned development. Employees, patients, visitors, and students connected with the medical education campus enhance the commercial and retail value of the development.

The project is textbook economic development – it generates high-paying professional jobs, enhances Round Rock’s workforce training, creates a magnet for talent, boosts commercial tax rolls, supports retail development, serves as an asset to attract bioscience companies (a target industry) and provides a valuable community service. What more could a single project strive for?