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: Jeff Marcell, Senior Partner and John Karras, Consultant, TIP Strategies
We hope you will take a moment to check out our “new and improved” Geography of Jobs. In our updated version, we’ve included 372 metros* and extended the timeline back to 1999. As in the previous version, each bubble shows the net change in employment in a given metro area compared to the same period one year earlier. The diameter of each bubble reflects the size of the loss or gain. But, unlike the original Geography of Jobs, you can now place your cursor over any of the metros and watch the actual job numbers change over time . If you press the pause button, you can also move your cursor over any metro and compare actual job losses or gains at any point in the timeline. Another “behind the scenes” feature is our ability to map new datasets, such as job change by sector.
At TIP Strategies, we are always looking for ways to translate data into insights about economic development. We hope you will help us with this task by providing feedback and sharing your insights at the end of this blog post.
- The Great Recession officially lasted from December 2007 to June 2009, but the job losses spanned a longer timeframe, beginning early in 2007 and extending well into 2010. Some regions were hit harder than others, some were hit earlier, and some took longer to recover, but no corner of the US was spared.
The Dot-Com Bubble was marked by rapid job growth in some of the country’s leading high-tech regions (Silicon Valley, Boston, Seattle, Austin) in 1999 and 2000. You can then see these same regions losing lots of jobs from 2001 to 2003 during the Dot-Com bust and subsequent recession. Silicon Valley actually continued losing jobs into 2004, even while the rest of the country had come out of the recession and was gaining jobs.
The Housing Bubble, following the relatively mild recession that began in 2001, led to unprecedented job growth across the country. Buoyed by easy money (i.e., subprime mortgages), housing supported strong job growth in places like Las Vegas, Phoenix, Atlanta, and Southern Florida. You will also see that these same places were the first to begin losing jobs as the housing market collapsed, starting in 2007.
Hurricane Katrina slammed into New Orleans in late July 2005, a disaster that had an immediate and lingering impact on jobs in the region. However, you will notice that metros in the periphery, most notably Baton Rouge, actually saw a significant uptick in jobs during that time due to temporary (and perhaps permanent for many) outmigration from New Orleans.
- Watching the Midwestern US, especially the manufacturing-centric states of Michigan, Ohio, and Indiana, reveals that many of the metro areas in these states never enjoyed the economic growth experienced by most of the country from 2003 to 2006. Red bubbles cover much of the area surrounding Detroit from 2002 all the way until the end of the Great Recession in 2010. However, the employment situation in the Midwest has taken a turn for the better in recent years thanks to the recovery of the US automotive industry beginning in 2010.
We are excited about the upgrades to the Geography of Jobs and hope you find it useful. And we would love to hear from you. Please take a moment to share your comments on how the tool did (or did not) provide any insights about your community, any regional or national trends of significance, and other datasets we should consider mapping.
Thanks for viewing.
*NOTE: Map includes the 372 MSAs for which data are available from the US Bureau of Labor Statistics.
Now that TIP Strategies has a permanent presence in both Austin, Texas and Seattle, Washington we’ve been having fun comparing and contrasting the two regions. One feature the two share: momentous growth. According to two recent articles, Austin’s metro area is the “fastest growing large metro area” and the City of Seattle is the “fastest growing large city.” This growth is a direct result of another commonality between Austin and Seattle, a cool factor that generates a gravitational pull of people, investment, and attention.
Speaking of cool, Seattle was recently named America’s Most Hipster City by “Thrillist” …Austin came in at #3. And between the two cities, you have a long list of internationally recognized events and festivals: South by Southwest, the Austin City Limits Music Festival, the Formula 1 U.S. Grand Prix, Bumbershoot, the Seattle International Film Festival, Seafair, and many others. If you want to define cool, you can’t get closer than Austin and Seattle. The evidence is substantial:
- Austin and Seattle were both ranked in the “Top 10 Cities to be a Moviemaker” by Movie Maker Magazine (Austin is #1, Seattle is #3).
- Both cities were included in the “Top 10 Most Vegan-Friendly Cities” by PETA (Austin is #1, Seattle is #6).
- Conde Nast Traveler recently named Austin and Seattle as two of “America’s Best Cities for Foodies” (Austin is #16, Seattle is #13).
- Both cities were included in Trulia’s list of “The 10 Best Cities To Dine With Your Valentine” (Austin is #7, Seattle is #8).
While the competition for cool is a fun conversation, we at TIP Strategies do take successful economies very seriously. There is much more than the entertaining buzz of oddball rankings that drives the success of these regions. Our firm has identified the formula to economic success as Talent, Innovation, and Place. Austin and Seattle have tapped into this formula and are benefiting from job growth and investment because they deliver on these critical components of a successful economy.
The regions are similar in a number of important ways:
- The Austin and Seattle metros are national leaders in population growth as evidenced by the latest Census data.
- Both cities also lead the nation in job growth. In fact, the U.S. News & World Report recently included Austin and Seattle in its list of “The 10 Best Cities to Find Jobs” (Austin is #5, Seattle is #6).
- The Austin and Seattle regions contain the most significant concentrations of high-tech companies in the country outside of Silicon Valley and Boston, thanks to headquarters and major facilities of tech companies like Microsoft, Amazon, Google, Facebook, Dell, Apple, Samsung, and many others.
- Both cities have high levels of educational attainment (44.8% of Austin residents age 25 and older hold a bachelor’s degree and 56.5% of Seattle residents age 25 and older hold a bachelor’s degree, compared to a U.S. average of 28.5%).
But each region meets the Talent, Innovation, and Place formula in its own unique way. Let’s briefly explore how the regional economies of Seattle and Austin are leading the pack:
Austin and Seattle are both magnets for talented professionals and entrepreneurs. The talent pool in each metro area is the basic building block of each region’s economy. Of course, the cool factor in both cities helps to attract talent from across the country. But each city also has a strong pool of locally grown talent thanks in large part to the University of Texas at Austin and the University of Washington, two of the top public universities in the world. As economic development professionals, we understand that access to talent is the number one issue for both companies and communities. Here’s how Austin and Seattle compare in the competition for talent:
- A recent study by the Milken Institute ranked the Austin and Seattle metro areas as two of the “Top 10 Best-Performing Cities” (Austin is #1, Seattle is #6). The study analyzed the 200 largest metro areas based on job, wage, and technology growth.
- Both cities were named as two of the “Best Cities for Twentysomethings” by CreditDonkey (Austin is #1, Seattle is #6).
- Niche.com recently named Austin and Seattle among the “25 Best Cities for Millenials” (Austin is #2, Seattle is #13).
- Austin and Seattle were included in the “35 Best Cities for People 35 and Under,” Vocativ.com’s Livability Index (Austin is #2, Seattle is #4).
- Both cities were included in The Daily Beast’s list of “America’s Thriving Cities” (Austin is #4, Seattle is #6).
There’s a special kind of energy in Austin and Seattle that you just don’t feel in most cities. Both places are hotbeds of creativity and innovation. This is partly due to the influx of people moving to these cities each day, but it’s also due to the level of growth taking place in locally based start-ups and small businesses. Austin and Seattle are among an elite group of cities that are on the cutting edge of innovation and entrepreneurship.
Here are a few examples of how the economies of Austin and Seattle are driving innovation:
- Business Insider recently named Austin and Seattle as two of “The 15 U.S. Cities That Are Driving The Future” (Austin is #1, Seattle is #6).
- Austin and Seattle were both ranked among “The 7 Hottest Startup Scenes in the U.S.” by Entrepreneur Magazine (Austin is #1, Seattle is #2).
- Both cities were included in the “Top 30 Cities for Young Entrepreneurs” (Austin is #1, Seattle is #10).
- Austin and Seattle were recently named among “The Most Tech-Savvy Digital Cities” by Digital Communities (Austin is #6, Seattle is #4).
The level of growth (population, jobs, investment) taking place in the regional economies of Austin and Seattle is strong evidence of each metro area’s quality of place. You can experience this first-hand simply by seeing the amount of construction cranes towering over each city’s urban core. Yet even if you’ve never visited either city, chances are you have a good impression of them. Each city has its own unique brand, but they are both vibrant cities with strong identities.
If a quick look at the population and job growth data (or construction cranes) isn’t enough to convince you that Austin and Seattle are two of the most appealing places in the U.S., here are a few more examples that might do the trick:
- Jones Lang Lasalle recently named Austin and Seattle among the “World’s 20 Most Dynamic Cities” as part of its proprietary City Momentum Index (Austin is #7, Seattle is #18).
- A recent Brookings Institution study includes Austin and Seattle in the top tier of “U.S. metro areas with the highest percentage of international trade” among the 100 largest metro areas (Austin is #9, Seattle is #12).
- Both cities were rated among the “Top 15 Aspirational Cities in the U.S.” by newgeography.com as part of an index that included both jobs and culture (Austin is #1, Seattle is #12).
- Austin and Seattle both rank highly on the “City Energy Efficiency Scorecard” LINK http://aceee.org/local-policy/city-scorecard from the American Council for an Energy-Efficient Economy (Austin is #6, Seattle is #5).
- Both cities ranked highly on the Urban Land Institute’s “U.S. Markets to Watch in 2014” (Austin is #7, Seattle is #6).
TIP Strategies is linked to each of these metropolitan economies like no other economic strategy firm. Our approach is grounded in understanding these economies, taking what we know to be their successful components, and applying and leveraging these lessons for the benefit of the communities we work with across the country. Being connected to and engaged in the two capitals of Talent, Innovation, and Place is our strategic advantage.
While our staff will continue to have fun debating which TIP location is cooler, we will always place serious emphasis on the lessons we can take from each of these metropolitan economies, lessons we can bring to our clients to help them build their own unique brands through Talent, Innovation, and place.
There will be those who say the only thing more boring than soccer is the economics of soccer. I am not one of them. I do, however, have friends and acquaintances who are very much of that opinion. To disabuse them of their benighted view, I’d like to tie Brazil’s current political crisis to more general questions of economic development. What does it mean to spend many billions (yes, billions) of dollars supporting the construction of stadiums? What does it mean to provide subsidies to private corporations or to international governing bodies to host large sporting events? These questions are also ours here in the US. We publicly subsidize everything from the Super Bowl to minor league ball parks to NASCAR tracks. We do this in the belief that there will be a return on investment. Are we justified in this view?
If economic development issues are not complicated enough, I have also indulged my desire to weigh in on the World Cup itself, who will win, and why. Fans of the game can add one more voice to the countless prognosticators and pundits who think they know who will win the World Cup by reading my post on the matter here.
Beyond the spotlight a single World Cup provides lies the larger public policy question of whether massive subsidies for sports are necessary—or even desirable. This post uses the World Cup stage as an opportunity to talk about the economics of sports and the peculiarities of soccer generally.
Brazilians ask: Why did we decide to host this event?
The World Cup begins this week. Thirty-two nations are participating, and a total of sixty-four games will be played in 12 stadiums. Some of these facilities are brand new and purpose-built. All have been constructed or improved through public financing of the Brazilian government. The most remarkable of these is in Manaus, a city at the edge of the Amazon rain forest. There are no viable roads in. Construction materials were sent by barge. Visitors to the four matches will fly in, though there is a river boat option as well. Yes, four matches at a stadium designed for 42,000 fans. And after the matches are played? No one knows. There is no local team that can justify a stadium of this scale. More broadly, the cost is well over $3 billion for all of the stadiums.The entire budget deficit of the country could have been offset by that spending. And there is no discernible ROI for the stadium development. What’s more, soccer’s international governing body (FIFA) will take all of the gate receipts and broadcast rights—one hundred percent.
So with no direct ROI, what justifies that spending? The most common answer, one familiar to cities who have vied for the Olympics (or sports venues or events generally), is that they generate welcome publicity for the host community. Never mind that no credible study supports the perceived benefits. Wh, then, you may ask, do communities continue down that path? There are two answers to that question, neither of which is very encouraging. The first is that officials are corrupt. We have ample evidence of that. FIFA itself is rife with kick-backs and bribery. Sepp Blatter, the head of FIFA, is deeply complicit in “selling” the Cup to the highest bidder. The 2022 Cup is scheduled to be held in Qatar, which would force players into matches where the temperature can reach 140 degrees. Moving the Cup from the summer to the winter would disrupt the professional league matches, so that’s not a good idea. And did I mention that the next World Cup will be held in Russia?
There’s corruption, and then there’s a simple case of being misguided. In 2007, the former Minister of Sport, Orlando Silva, said that no public money would be required for the construction (and improvement) of stadiums for the 2014 World Cup. More recently, Silva’s replacement, Aldo Rebelo, dismissed the notion that the new stadiums would become white elephants. In fact, there is every reason to think that neither the new construction nor the improvements to existing stadiums will ever justify the expenditures. The experience after the World Cup in South Africa strongly suggests that not only is there no ROI, but that the host nation is saddled with additional debt. This was Greece’s experience after the Olympics, and almost certainly played a part in that nation’s debt crisis.
Brazil was the only nation to bid on the 2014 World Cup. Since then, support for the Cup among Brazilians has steadily declined—from over 70% to under 30%. It may sink even further. Brazil’s president, Dilma Rousseff, is a vocal defender of the Cup, but she is struggling with the strikes and protests that have engulfed the nation. Even high profile former soccer stars are questioning the expense. Street protests made the news early this year and can be expected to play to the international news media for the next several weeks. The complaint is that money spent on stadiums should have gone to the country’s “Third World” infrastructure. It’s an argument that deserves more than passing consideration.
It is entirely possible the relationship between major governing bodies (FIFA, the IOC, and even the NFL, with its non-profit status) and host cities and nations will have to change. If countries and cities quit bidding on events, or subsidizing stadiums, sports won’t go away. TV coverage won’t stop, and there will still be breath-taking moments for fans across the country and around the world.
Why the US should care about the Cup
Around the globe, nations are waiting for the first game between Brazil and Croatia with bated breath. But Americans will, as they always do, wonder what all the fuss is about. There are obvious reasons for this: we already have a game called football and it’s, well…different. Beyond that, we have a national team that rarely wins and pretty much struggles against all opponents.
Soccer is a game we don’t understand and we play poorly, but there are other reasons to be skeptical of the hoopla. In addition to the massive capital outlay to host the event, this World Cup carries a load of scandals that rival the Lance Armstrong era in cycling. Are the stadiums actually prepared for the tens of thousands of fans who will occupy them? Are the police ready for the tens of thousands of citizens who will occupy the streets? And that’s not all. Accusations of match-fixing associated with illegal international betting are hitting the presses, just as teams are leaving for Brazil. Then there is the systemic corruption of the sport’s governing body, FIFA.
How, you may wonder, can we be enthusiastic about a quadrennial event the host nation no longer cares to have, is tainted by match fixing, and is overseen by an organization that no fan of the game will defend? And oh yes, an underperforming national team, sub-par officiating, and players that may fall over and writhe in agony when an opponent so much as breathes on them?
Despite all this, soccer’s influence in the US continues to grow. Close to a million Americans may now watch a high-profile English Premiership match. Hundreds of thousands more carefully track the fortune of national teams from Germany, Italy, Nigeria, and, of course, Mexico. Soccer is rapidly becoming our “fourth” sport, ahead of hockey, and it is beginning to rival baseball in popularity. It’s no great stretch to imagine soccer joining basketball and football as one of the big three by the time of the 2022 World Cup in Qatar (or the US, if the scandal that accompanied the selection of Qatar results in a change of venue). In short, soccer is big in this country, and the World Cup will command attention for three glorious weeks. Despite the riots in the streets of Rio and Sao Paulo, despite the bad officiating and the prima donna antics of some players, despite all this, the tournament will captivate a global audience of which the US, for better and worse, will be a part.
What soccer has, and what constitutes a huge part of its appeal, is the flow of the game. In the US, one could argue that sports have lost that beauty. Our major sports are so over-managed that actual playing time is an absurdly small percentage of the coverage. I timed the fourth quarter of the recent Super Bowl from when the ball was snapped to when the play was blown dead. There were less than eight minutes of action in a quarter of play that seemed to go for an eternity. Basketball has begun to follow a similar pattern, with an increasing number of mind-numbing time outs. And baseball, well let’s not even go there. In American sports, players don’t so much play the game as follow the instructions of the coaches. In soccer, there are no time outs. You play for 45 minutes, then you take a break, then you play for another 45 minutes. There are only a total of three substitutions allowed. If you required more than that, due to injury, you would have to play a man down. All this and the players run an average of six miles during the match, often at sprint speeds. Flow is everything—or the ability to disrupt the flow. (Watch Italy.) But in any case, decisions are made and executed by the players rather than managed by the front office’s or television’s demands.
The US can learn to love soccer because it is a beautiful game. People can love it even if their interest in sports isn’t all that great in the first place. Why? Because the passion that drives the 32 nations who participate is unlike that of any other sport, or any other event. While we do watch the Olympics, the intensity has never equaled that of soccer. US sports certainly generate enthusiasm, but soccer more closely resembles collegiate athletics than it does our professional sports. There is also the separate question of how insular our big sports are. Yes, baseball is international, but we continue to host the “World” series even though we won’t allow other countries to participate (excepting Canada). American football is little more than a curiosity outside of North America. Basketball is the notable exception, but it pales in comparison with soccer.
Soccer is wonderful for the non-sports enthusiast, if for no other reason than it provides an alternative to Ambrose Bierce’s chillingly funny adage: “War is God’s way of teaching Americans geography.” Soccer, it turns out, can also teach Americans about geography. We can learn to appreciate that Bosnia and Herzegovina is a single small country in what was the former Yugoslavia (and the former Austro-Hungarian Empire), that many great Belgian players have more than a passing affinity for the Congo, and that England is, well, just England and that Scotland and Wales and Northern Ireland all have their own soccer teams (none of which qualified for this Cup).
What does this all mean for economic development?
There are lessons to be learned from Brazil’s misadventures with the World Cup. Yes, we want the Cup to be a success, but if we fail to understand the consequences of bad decisions, we will certainly repeat them ourselves:
- Do not assume that public subsidies for facilities will yield measurable benefits.
- Question assumptions about the promotional value of sports generally.
- Acknowledge that governing organizations (such as FIFA and the NFL) are profit driven even if they are “non-profit.” Their profits are simply allocated differently
- When working with private developers, ensure that the stadiums are integrated into the fabric of the community (Portland’s Providence Park soccer stadium).
- Promote and support sports that the community can participate in, not just as spectators but as participants and investors (youth organizations, for example).
- Stand firm in the face of pressure from professional teams who will claim to “put you on the map.” You are already on the map. Your economic development success will not be the result of sports franchises. Here in Austin we have no professional sports teams (and did I mention that we lead the nation in job growth)?
The World Cup is a unique event. Its viewership (and the passion it generates) is second to none. Being the host nation, however, is not a reason to cave to the demands of an overreaching governing body, and to ignore the greater needs of the country. If we think our sport is so great, we’ll find a way to support it without bankrupting a country.
In a separate post, I shared some thoughts about the economics of sports and the peculiarities of soccer generally. Fans of the game, and those who know me personally, will quickly see through my ruse in writing on the subject: “You’re don’t really care about public policy, you just want to talk about the World Cup.” Not true! (Ok, well, a little bit true.)
But this post is just that: a post about the World Cup. It is my thoughts on who will win and why. For you sports fans that still don’t get soccer and why a scoreless draw can be exciting, maybe this post can help provide some context. Or not. For those of you who care to learn your geography through other means than sports, or who don’t care about sports at all, well, you may just want to sit this one out.
Who will win the Cup: In which a statistical perspective sheds light on what it takes to be the best in the world
Let’s talk about tennis for a minute. The data are revealing. If you have not already won a Grand Slam event, the odds are stacked against you. In other words, winners keep winning. Expressed differently, there are far fewer winners of a single slam than there are winners of multiple slams. It’s hard to win, but much easier, statistically, to keep winning. This turns out to be just as relevant to football. (We’ll quit calling it soccer now that only the purists are reading this blog.)
The World Cup began in 1930. There have been 19 tournaments since then, with the matches in Brazil this summer marking the 20th anniversary. Only eight nations have won the trophy in over 80 years. Of those eight, five are multiple winners. France and England each won just once, and it was when they were the tournament host. Hosting a tournament confers a clear advantage for the home team. Spain is the only other single winner; they are also the defending champions. In all, 76 nations have been represented in the tournament, which now hosts 32 teams.
So with these facts safely tucked away, let’s ask the question a different way. Who among the teams going to Brazil really believes they can win? Not, can play well. Not, will match up against other teams or can advance out of their group. No, who among the teams has a conviction that they can win? The answer to that question will narrow the field, and will do so in ways that aren’t reflected by the nominal team rankings.
- The host country almost always believes it can win. It believes this with some justification. Nearly a third of winning nations (6 in all) did so when they hosted the tournament. More recently, as FIFA (football’s governing body) sought to make the sport more global, the tournament was hosted in countries without a rich footballing tradition: the US, South Korea/Japan, and South Africa. Those nations may have fantasized about a win, but they never believed they would raise the trophy.
- Previous winners have an edge.
- Defending champions believe they can repeat. Italy and Brazil have won back-to-back championships, and while it is not a common event, the belief is there.
Ignoring everything else for now (injuries, susceptibility to tropical heat, player selection) and based on these statistics alone, listed below is who is likely to advance:
To these we can add Argentina. And Uruguay (as a dark horse). These choices will come as no surprise to fans of the game, but the underlying reasons are what’s important.
Of these six teams, only two teams have an unshakeable belief in victory: Brazil and Germany. Once the rosters are set and we take a fresh look at the groups, we’ll see what progress we can expect from our two frontrunners and the remaining two to four contenders. Comments made to the media last month by England’s team captain, Gerrard, illustrate what it means not to have this belief: “It would be very stupid and naïve of me to stand here and say we’re going to win it.”
Against this background, we can think about who is selected for the national teams. For Klinsmann to leave Donovan off the US team was an odd and potentially devastating choice. Contrast it to Joachim Löw’s decision to include Miroslav Klose. At age 35, he is far from his prime, and while he was good at Lazio (in Italy where he plays professionally), there were other choices for the German national team. Klose’s motivation is to set a World Cup goal scoring record—and that was enough for Löw. He wanted someone who believed both in his own goal-scoring prowess and the team’s success. The same can be said for the inclusion of Pirlo (age 35) on the Italian squad and for Xavier Hernandez (age 34) on the Spanish team. Coaches who believe their team can win will find players who share that conviction. Donovan did (or at least he believed that the US would find a way to win any given game). It is far from clear that Clint Dempsey or Jozy Altidore, for example, believes it.
The Groups: Why the luck of the draw matters so much
The contestants are drawn into eight groups of four teams each. Three points are accorded for a win, one for a draw, and none for a loss. The top two teams of each group advance to the “knock-out round.” For the remaining 16 teams, a loss means they are out of the tournament.
Even the casual observer will quickly see why the group in which the team plays, and the subsequent pairings, are so important. An unlucky draw, one in which two or three of one’s opponents are highly rated, can effectively mean the tournament is over before it begins. This is the case for the United States. The opposite can also be true, where a single strong team is likely to dominate the group. This is the case for Brazil. Further, the subsequent pairings pit the number one team in Group A against the runner-up of Group B, and so on. This can create significant incentive to win the group in order to avoid a particular opponent.
Here are the groups and my prediction for who will emerge from them. Am I confident in these choices? Absolutely! Dart-throwing monkeys and soothsaying octopi notwithstanding, I expect to be 100 percent accurate, because pundits always are.
Group A: Brazil, Croatia, Mexico, Cameroon
Brazil wins the group. And second place goes to…? Croatia. Why Croatia? Luka Modric, who plays for the championship-winning club Real Madrid, is a big part of the answer. The other part is that Mexico has suffered recent injuries and lacks the confidence to win two matches (after the presumed loss to Brazil). Their best hope is to advance on goal differential over Croatia (one win, one draw, and one loss). Cameroon is not to be taken likely. Veterans like Samuel Eto’o (Chelsea) and Alex Song (Barcelona) will give any team problems. The depth, however, is not there. And while I have no African teams advancing out of group play, Cameroon may be the exception.
Group B: Spain, Holland, Chile, Australia
This is a very tough group. You have last year’s finalists (Spain and Holland), and a deeply talented Chilean squad. Australia would be fortunate to garner a single point. There is also the added burden of knowing that the team that finishes second in this group will almost certainly face Brazil in the first pairing of the knock-out round. In other words, this group is a toss-up. Based on the assumptions at the beginning of this blog, I’ll pick Spain to win. Second place to Chile, but this is a guess at best. Having watched both teams only a handful of times, it’s clear that each has real firepower.
There is a separate game fans like to play. It’s called “Who is the best footballing nation never to have won the Cup?” Spain led that competition for decades, finally breaking the curse four years ago. The title is now held by Holland, a great footballing power and runners-up in 1974 (to Germany), 1978 (to Argentina), and 2010 (to Spain). They’ve led the way in the concept of “total football” that ushered in a new attacking philosophy. If they were unable to advance out of their group – a real possibility – it would be a colossal blow. The $800 ticket to watch Holland and Chile play on June 23rd in Sao Paulo may well be worth the money. It will be the final group game. Expect the loser to be out of the tournament, crushing the hopes of a nation.
Group C: Columbia, Ivory Coast, Greece, Japan
If there’s a group of death, why can’t there be a marshmallow group? That’s not fair, though none of these nations has made a deep run in any World Cup. Columbia has played some impressive football in qualifying, and there are top-notch players for the Ivory Coast (Drogba and Gervinho ) and for Japan (Kagawa and Honda). My picks? Columbia to win the group, with Ivory Coast and Japan vying for the coveted second spot. Japan will surprise everyone and finish second.
Group D: England, Costa Rica, Uruguay, Italy
Yikes. Three former Cup champions and the toughest of the Central American teams. But let’s just cut to the chase. Italy wins the group, followed by Uruguay. Why? Because Italy feasts on England and because Uruguay’s brilliant striker – Luis Suarez – will want to show up his Liverpool team mates on the England team (Gerrard, Henderson, Johnson, Sterling, Sturridge and Flanagan). Italy will best Uruguay because their stifling defensive tactics, honed over decades, have served them well. Only Brazil have hoisted the trophy more often.
Before leaving this group, let me confess my allegiance to the Liverpool Football Club (YNWA!). The Uruguay-England match-up will have special significance to all LFC fans, but the real hope is that none of the players suffer injuries.
Group E: Switzerland, Ecuador, France, Honduras
The composition of the groups is always devilish, but especially in this tournament. Group E should present the least obstacle to the advancement of the European teams. France to win, Switzerland to finish second. Honduras and Ecuador are unlikely Cup participants in the first place. Ecuador may have acquitted itself well in tough qualifying rounds, but they did so by winning at their high-altitude home stadium. Take them out of that rarified air and they struggle.
Group F: Argentina, Nigeria, Iran, Bosnia-Herzegovina
An easy group for Argentina to win, with Bosnia-Herzegovina as runners-up. And meta-data aside, Argentina is a formidable team, deeply talented and brimming with optimism. Second place is less certain, though Bosnia-Herzegovina have more depth and more consistency than Nigeria. African teams, even with star players, tend to struggle at the World Cup. Iran, well, they may have a dedicated fan base, but a last place finish is likely. Back to worrying about sanctions and a weak currency.
Group G: Germany, Portugal, Ghana, USA
This is not the group of death. Germany to win, Portugal to finish second. Of course, all eyes (all US eyes, that is) will be on this group. The omission of Landon Donovan will be blamed for the US gaining only a single point in its three matches (drawing against Ghana), but the result would be the same even if the US could bring 44 players and had unlimited substitution. There is simply not enough talent for Klinsmann to draw upon. The inclusion of young German-American players may help for 2018, but will do nothing for this tournament. The faithful will be hoping for a win against Ghana on June 16th, followed by a stunning draw against Portugal in the rain forest of Manaus on the 22nd. Those hypothetical four points – along with a favorable goal differential – would then just be enough to edge Portugal for second (assuming everyone loses to Germany, and Ghana loses to everyone). Pure fantasy. Portugal have world class players (including the best on the planet, according to many fans, and not least to Ronaldo himself) and they show well at the World Cup. When they lose, it is often to eventual Cup winners (though as Andy Coe reminds me, Portugal lost to the US in the 2002 Cup). They are also in contention for the best team not to have won the tournament, along with Holland.
The US will go home and talk about rebuilding. There is a bridge I can sell you if you expected more, but the bridge would also need to be rebuilt. Our failing infrastructure goes beyond football.
Group H: Belgium, Algeria, Russia, Korea
This group mirrors Group A: a single dominant team with a three-way fight for second. Yes, Belgium is that good. They finished top of their qualifying group in Europe and they have strong and experienced players. Two of the best keepers in the world, a great defense (led by Kompany) and Mirallas, Benteke, and Lukaku are part of a formidable squad. Their lack of World Cup accomplishments shouldn’t matter at this stage. It’s interesting to look ahead for Belgium if they won the group: a meeting with, most likely, Portugal. This is a stretch, but then I have high expectations of Belgium. They’re my European dark horse and a run to the quarter-finals would not surprise me. Belgium-Argentina? Definitely a possibility.
Second place is a race between Korea and Russia, and who wouldn’t want to see Korea advance (I mean, other than Putin). Korea do well at the World Cup generally, so they are my prediction.
Beyond the groups (but don’t call it the Sweet Sixteen)
Looking beyond the group stage is like predicting the weather: we’re often right about tomorrow and almost never about the week after next. Still, we can make some general observations. First, the top half of the draw (Groups A-D) is tougher than the bottom half. Five of the eight former Cup holders are in those groups, as well as perennial power Holland. The bottom half has Germany and Argentina, plus France. By the time the first knock-out games are decided, however, the dynamics change. Germany, for example, could face Brazil in the semis.
While Brazil has numerous advantages going in – not least of which are familiarity with the food and the climate and the rabid fan base – they will be looking at formidable competition as soon as group play ends. They may also be less cohesive than other teams. Talent yes. Magic? Not as certain. The second place team in Group B (Brazil’s opponent if they win their group) would probably be Spain, Holland, or Chile. All very tough. Next up might be Uruguay. In short, Brazil’s road to the final is treacherous. I’ll go predict a Germany-Brazil semi-final. To suggest that Germany could win that match may raise an eyebrow, but if all goes well for the Germans, they will emerge fresher than the Brazilians, who face tough matches against fellow South American teams. On the other side, Spain could face Argentina in the semis. So Brazil, Germany, Spain, and Argentina in the semis.
And the winner is? Well, if you give me the prerogative to revisit my predictions after the group stage, I’ll simply quote Gary Lineker, the English footballer and commentator: “Football is a simple game; 22 men chase a ball for 90 minutes and at the end, the Germans always win.”
Jon Roberts is a principal with TIP Strategies in Austin, Texas. He has authored two posts in celebration of the upcoming 2014 World Cup. Jon shares his views on the economics surrounding the World Cup in his post, Economics of the World Cup. He discusses his predictions in The 2014 World Cup: The Lessons of Geography and History.
If you ask what qualifies him to write about the economics of sports or to predict the outcome of the World Cup, here is his answer:
The economics of sports is something I came to appreciate in the mid and late 90s. I led an economic impact study of the Texas Motor Speedway and then became an expert witness in the subsequent lawsuit on behalf of the Northwest ISD (outside of Fort Worth). Since then, the question of public subsidies for sports facilities has arisen with some regularity. Credible studies by economists of all stripes have cast grave doubt on the benefits associated with incentives for sports in general.
Jon Roberts has authored two posts in celebration of the upcoming 2014 World Cup. Jon shares his views on the economics surrounding the World Cup in his post, Economics of the 2014 World Cup. He discusses his predictions in the post, The 2014 World Cup: The Lessons of Geography and History.
March 11, 2014, marked the last day of this year’s SXSW Interactive. Austin’s premier tech event has grown steadily since its inception in 1994. One notable mark of its reach, that may be overlooked by the standard measure of badges sold and tourism dollars generated, is the heightened presence of economic development organizations at the festival.
The industry’s interest in SXSW was apparent from the number of US states and cities, as well as foreign cities, regions, and countries, that set up shop at SXSW, all vying for one of the most desired of economic development targets: tech start-ups and young entrepreneurs. No doubt about it, this tactic represents a sea change in what counts as credible economic development. Where in the past the profession’s holy grail was the relocation of a major manufacturing company, we now see a shift to technology and high growth start-ups (though manufacturing is still seen as the primary objective in many parts of the US). We’ll leave for another time a more thorough discussion of how successful these efforts are. (The short answer: it varies widely.) At one end of the scale is the possibility that bringing companies to SXSW will only speed their exodus from less tech-savvy regions to (you guessed it) Austin. At the other end is the ability to connect with and recruit entrepreneurs to new markets. My panel, “Start-up Grind: What Makes Austin a Startup Hub,” touched on these issues, as well as the question of what made Austin successful in the tech space.
Clearly, industry recruitment and expansion is not the stated objective of SXSW Interactive, nor is it likely to be the primary draw for most participants. As suggested by their mission statement—encapsulated in three values: creativity, innovation and inspiration—SXSW Interactive is about stepping outside your intellectual comfort zone. At a minimum, spending time in the presence of so many creative companies and individuals gives you an opportunity to rethink assumptions behind your business—even, and especially, at a fundamental level. From an economic development perspective, for example, this rethinking of assumptions raises the question of whether measuring success by jobs created is the best way to grow our economy. Abandoning this gold standard is, in some ways, analogous to growing a business without worrying about profitability. It’s a radical notion, and one that, on the face of it, makes no sense. Just don’t tell that to Amazon or to Facebook.
But testing one’s assumptions is not the whole of the SXSW experience. The real power of SXSW lies in what Tony Hsieh, of Zappos fame, calls collisions—connections that occur spontaneously and bring together individuals and companies that might never have connected before. The sheer number and variety of panels, speakers, and registrants makes this goal relatively easy to accomplish. It can be as simple as colliding with the AT&T team during the Ping-Pong tournament (and, in my case, losing to them) then learning what AT&T is doing, what their talent strategy is, and what their new product line will look like. If I’m busy “recruiting companies,” I miss out on these chance encounters; my agenda gets in the way of making real connections. Sometimes an indirect approach is the surer path towards one’s goal.
And even if you weren’t able to experience the randomness of SXSW, you couldn’t fail to miss this year’s driving theme. It was already apparent on the first day and gathered steam throughout the event: Internet privacy. First Julian Assange, via Skype from the Ecuadorian embassy in London, then Edward Snowden from an undisclosed location in Russia (routed through multiple ISPs). Whatever one’s political attitude towards Assange and Snowden, their message is coming through loud and clear and is being fully embraced by the tech crowd: privacy matters.
The question of Internet privacy has numerous dimensions. It is not exclusively governmental. It extends to transactional privacy with corporations and to the question of who owns our personal data (our Internet identity). The default answer should not be that this information is “owned” by corporations or the government (or health care providers). We—it is being argued—have an absolute right to our personal data and we ought not to be giving it up (or having it taken from us) without our informed consent. This, of course, is a discussion that requires a much larger platform. At a minimum, however, SXSW is signaling a shift in how we think about our use of the Internet. I’ll venture to say it signals a sea change, one whose implications may be profound.
Among the immediate insights that arise from taking a privacy perspective on data are the following:
- Bitcoin is interesting far beyond its effects on financial institutions. The way to think about Bitcoin is as a means of ensuring transactional privacy. What could only be done with cash, can now be done electronically with the same advantages – and, as we have discovered, some of the same risks.
- Our health records are ours, and do not belong to a health care system or the government. The realization that our health records tell our personal story and that their ultimate value belongs to us and needs to be managed by us is still a startling fact.
- Every online transaction, from simple browsing to Internet (and credit card) purchases, reveals information about us that we have the right to control. Commercial transactions, by definition, are between at least two parties. E-commerce exponentially increases the parties involved in each transaction. Data collected during the initial transaction becomes a commodity in itself, which can be shared and sold many times over. Whether we explicitly agree to this extension of our transactions or not, we are entitled to know which of our data is kept and how it is being used.
These points—and many more like them—could have enormous business and social implications. It is immediately apparent that they relate to one another and foreshadow a changing relationship to the data and metadata that increasingly define who we are. In fact, we can expect to see a new wave of disruptive technologies related to managing our on-line activity. We are already beginning to note distinctions where before there were none: distinctions, for example, between privacy and security, and what it means to own our digital identity. Add in social media (in its multiplicity of forms), and every on-line activity is subject to a major re-thinking.
SXSW has a way of making small ideas very big. This was true of Twitter, and it may be true of a new wave of privacy-related companies. Stay tuned.