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: USC Annenberg School of Journalism
Via: APM Marketplace
The September unemployment rate fell for the right reason, for a change: More people are seeking work and finding it. Students from the Annenberg School of Journalism profile four California companies that are hiring highly skilled workers. Here are their stories:
Profile: Ramping up but hard finding the right skills
Cornerstone OnDemand, a publicly traded company, provides talent-management, learning, and performance-management software that helps companies manage their workforce. Its clients include Starwood Hotels and Resorts, The Neiman Marcus Group and Turner Broadcasting.
Company: Cornerstone OnDemand Inc.
Location: Santa Monica, California
Industry: Information technology
Annual revenue: $ 75.5 million (2011)
2008 workforce: 152
Current workforce: more than 650
The company’s workforce has more than quadrupled in the past four years, and it’s currently trying to fill 65 positions in fields such as marketing, information technology, finance and administrative services. It hasn’t been easy.
Tina Figueroa, Cornerstone’s vice president for talent and administration, says the company is often looking for people with skills that are already in high demand.
“What we’re finding, and what recent research supports, is that, despite the unemployment rate there are skills shortages,” Figueroa says. That has sparked what she calls “a war for talent.”
Figueroa adds that traditional recruiting methods just don’t bring in enough of the right candidates. She has begun leveraging social networks and online communities to look for talent. Cornerstone has also begun asking its own employees to scour their own social networks for qualified candidates.
- By Corrina Shuang Liu
Profile: Business and spending improving
In the past year, Joe Phelps has grown the workforce of his marketing and communications agency by nine positions, or 14%, thanks largely to clients increasing marketing budgets as the economy recovers. The salaries he offers average around $90,000. But he has been hiring people whose skills are in demand: software programmers, digital producers and search-engine-optimization specialists.
Company: Phelps (formerly The Phelps Group)
Location: Santa Monica, California
Industry: Marketing and Communications
Annual revenue: $65 million
2006 workforce: 53 (2006)
Current workforce: 75
Yet Phelps says he doesn’t expect profits to grow this year. Instead, he’s beefing up his staff in anticipation of new accounts and greater demand from longtime clients.
“For many of our hires, the revenue for which they were hired really hasn’t even come to fruition yet,” Phelps says. “Clients say, ‘We’re going to be spending this.’ And we need to be ready.”
Phelps’ clients include Panasonic, Whole Foods Market and Public Storage. In 2012, Phelps added Valvoline Instant Oil Change and real estate listings giant Realtor.com, among others.
Most of Phelps’ new employees are specialists hired from other companies or straight out of prestigious universities. Finding and evaluating new talent can be a challenge, he says.
He says he has been able to grow his company because his clients include industry leaders such as Public Storage, which continued to invest during the downturn while weaker competitors retrenched.
- By Aaron Schrank
Profile: Turning adversity into opportunity
MySocialCloud sees a business model in managing what many Internet users consider a major headache: keeping track of usernames and passwords.
Location: Los Angeles, California
Industry: Internet startup
Current size of workforce: 10
The Los Angeles startup, the brainchild of siblings Scott and Stacey Ferreira, employs 10 people and expects to create 10 to 15 jobs in the new year, thanks in part to a big investment from Virgin Group founder Sir Richard Branson. The company is currently receiving 50 to 75 applications a week.
Scott Ferreira, 21, started developing web applications as a teenager seven years ago. After dropping out of the University of Southern California, he founded MySocial with his sister, now 20, in May 2011. The idea was sparked by a fatal computer breakdown that wiped out the all of the Ferreiras’ online usernames and passwords, which were usually kept on an Excel spreadsheet.
The Ferreiras pitched the idea to Branson after meeting him at a charity event. He later later introduced them to venture investor Jerry Murdock. MySocialCloud also attracted the attention of Photobucket co-founder Alex Welch. The three now are the site’s primary investors and business mentors.
MySocialCloud says its users are college students, professors and small businesses. The website can automatically help users log in to any site that they’ve stored. As passwords get longer and more complicated, and more social media emerge, the company is betting that more people will see value in having one site safely taking care of all of their passwords.
- By Shako Liu
Profile: Healthcare and electronic records prove to be a boon
The government’s push to convert doctors’ paper medical files to electronic records is fueling a hiring boom at Practice Fusion.
Proponents of electronic medical records (EMR) say the digital systems do much more than just clear out closets in doctors’ offices. They help doctors communicate more effectively with patients and colleagues, which leads to more precise medication management, fewer unnecessary tests, more accurate diagnoses, and better outcomes.
Company: Practice Fusion
Location: San Francisco, California
Industry: Electronic Medical Records
Annual revenue: not disclosed
Workforce at the start of 2012: 130
Current workforce: 220
“We’re trying to make technology to help save lives,” says Sheila Ryan, Practice Fusion’s vice president of People and Culture, who may have the world’s best job title.
It’s Ryan’s responsibility to make sure the privately held company is growing fast enough to satisfy the demand for that technology. Practice Fusion had 130 employees in January. That number is on pace to double by the end of the year, Ryan says.
Practice Fusion is hiring engineers, web designers and product managers. The firm also says it’s focusing more on customer service, and has grown its tech support team from one person to 20 over the past nine months. And, the company is trying to stock itself with a broad range of talent, such as a team of six data scientists who scour health records — with patient names removed — to dig for trends that could be useful in evaluating the quality of care.
Ryan says the company feels confident about its expansion plans, in part because of the federal government’s commitment to EMR: Doctors who treat patients on Medicare and Medicaid are eligible for federal grants to help offset the cost of converting paper records to digital.
“Our biggest concern would be if economic conditions pushed these doctors out of business,” says Ryan. “But that’s what our product helps prevent. We want to keep the small doctors alive and well, by helping them switch to electronic records, by making them more efficient and more effective.”
- By Jake de Grazia
By: Shaila Dewan
Via: The New York Times
Even some of the cities that suffered the most in the housing bust are showing signs of improvement, with prices beginning to recover in places like Miami, Atlanta and Detroit, according to the latest housing data.
In fact, there is improvement across the board, with home prices nationally inching up over their levels a year ago for the first time since 2010, when sales were helped by a temporary tax credit for home buyers.
The data is contained in the S.&P./Case-Shiller Home Price Index, which tracks prices nationally and in 20 major cities. Both showed gains over the past year, from June to June — 1.2 percent nationally, and 0.5 percent in the 20 cities. Though prices were still depressed in a few of the cities compared with a year ago, every one of them showed price gains from May to June. The report is highly regarded because it tracks actual price differences as a home is sold and resold over time.
[click image for an interactive version]
Home prices are still down almost a third from their peak in 2006, but most recent reports are pointing to a slow recovery and increased optimism that could encourage potential buyers to take the plunge.
In Atlanta, the city with the biggest one-year decline in home prices, the market perked up by about 4 percent in May and again in June, according to nonseasonally adjusted numbers.
Detroit prices increased 6 percent from May to June, while in Miami, prices rose by 1.4 percent in May and 1.6 percent in June. A surge in prices is to be expected in June, a time when the market ordinarily heats up, but analysts called these increases particularly strong.
Housing went from being a huge engine of growth to a drag on the economy as inventories swelled, foreclosures mounted and prices crashed. More recently, economists have pointed to a slow turnaround, saying it is once again contributing to the nation’s economic output.
Several factors have helped: investors have bought cheap properties, reduced inventory has led to competitive bids, and lower interest rates have buoyed buyers — at least those who can qualify for a mortgage.
The number of foreclosures has declined as banks responded to tightened oversight in some jurisdictions. After the national settlement over foreclosure abuse, housing counselors report that banks are taking more aggressive measures to keep homeowners in their homes.
But economists warned of potential dangers that could still hold home buyers back. Consumer confidence unexpectedly dropped in August, the Conference Board reported Tuesday, largely because of diminished expectations for the future. The November election and the “fiscal cliff” of expiring tax breaks and looming spending cuts at the end of the year may also be muting home sales.
“All those kinds of things will weigh on housing because it’s still a big decision and a big purchase for people,” said David M. Blitzer, the chairman of the index committee for S.& P. Dow Jones Indices, which produces the home price index. “But all the underpinnings look better.”
Ed Stansfield, the chief property economist for Capital Economics, warned that the euro zone crisis could set off another financial disaster that would keep people from buying homes. “Even so,” he wrote, “with prices rising at an annualized rate of close to 10 percent in the second quarter, without another major shock, house prices are more likely to surprise on the upside than the downside this year.”
Some of the strongest showings could be seen in many cities in the South and West that were among those hit hardest. When home prices were rising, places like Phoenix and Las Vegas were growing rapidly and real estate was a major part the local economy. Homes there lost more than half their value, according to Case-Shiller data. But while Las Vegas has shown little movement, recovering 4.5 percent from its trough, Phoenix has rebounded by 14 percent, San Francisco by 18 percent and Atlanta by 11 percent.
Mark Zandi, chief economist for Moody’s Analytics, said the Phoenix economy is more diverse than Las Vegas’s, so the job market started to recover sooner and investors have been more eager to buy. “That said,” he added, “I don’t think the Vegas economy and housing market are too far behind.”
Places that showed relatively small declines, like Denver and Dallas, have shown correspondingly small upticks in prices. In Washington, which is somewhat shielded from recessions by the presence of the federal government, homes lost a third of their value but have recovered by more than 14 percent.
By: Blake Farmer
The riverfront streetcar passes the Downtown Memphis cityscape. Memphis — a city that has struggled with population decline and high unemployment — wants its native sons and daughters to help fuel a comeback.
Stacey Vanek Smith: You might hear “Memphis” and think Beale Street, the blues and Elvis Presley. But outside the spotlights, Memphis is dealing with major urban challenges. So the city is launching a PR campaign, aimed in part at bringing former residents back to the city.
From WPLN, Blake Farmer reports.
Blake Farmer: A minute-long web ad has an uncanny resemblance to a popular Chrysler commercial about the Motor City. This spot describes Memphis as “real and raw.”
Advertisement: The stage is set. This is Memphis. This is the comeback.
The comeback campaign includes strategically placed billboards in nearby metropolitan areas like Little Rock, St. Louis and Nashville. Memphis has been shrinking.
Mary Cashiola works in the mayor’s office and says the campaign is meant to tap a deep-rooted Memphis loyalty.
Mary Cashiola: The feeling is always like, ‘”Well, I’m going to be back one day.” So this campaign asks, “Well, why not today?”
Cashiola points to the green shoots of a turnaround. Unemployment dropped below double digits. A billion dollars in economic development was announced for the city last year, and on Broadway, “Memphis” the musical won a Tony.
The comeback campaign targets prospective tourists as well as people like youth minister David Rubio. He moved his family to Nashville seven years ago, and unlike some Memphis expats, he feels an unexplained draw to move back.
David Rubio: I will frequently have a conversation that goes something like this, “Oh you’re from Memphis? Aren’t you glad you got out of there? Isn’t it great to be free?”
Rubio bristles at the negative stereotypes, even if some are deserved. He cringes when Memphis ends up at the top of some horrible list, like infant mortality rates. Will a PR campaign make the hometown pull irresistible?
Rubio: I hope the come back happens, even if it happens without me.
For now, Rubio says he’ll be rooting for Memphis — but from three hours east.
In Nashville, I’m Blake Farmer for Marketplace.
By: Lam Thuy Vo and Jacob Goldstein
Via: NPR, Planet Money
When you compare government jobs and private-sector jobs over the past several years, you see two different universes.
As the U.S. went into the recession, government jobs held steady as huge numbers of private-sector jobs disappeared. Since the recovery started, the reverse has held true: the private sector keeps adding jobs, and the government keeps cutting.
There are a few reasons for this. For one thing, governments don’t fire (or hire) as quickly as private companies. For another, the federal stimulus program gave hundreds of billions of dollars to the states in 2009, which helped them avoid layoffs for a while.
Eventually, though, the recession finally caught up to state and local governments, in the form of lower tax revenues. Local governments, which rely heavily on property taxes, were particularly hard hit.
Cuts in government jobs have been slowing lately. A report out yesterday said state tax revenues are now above where they were at the start of the recession.
Friday’s big July jobs report may not be an especially helpful indicator for the state of government jobs; Jim O’Shea of High Frequency Economics told me that the July data are notoriously noisy, because lots of people leave education jobs at the end of the school year.
Whatever happens with government jobs, when you look at the big picture, it’s clear that the story of jobs in America is mainly a private-sector story.
The private sector is so much bigger than the public sector, and the job cuts during the recession were so massive, and the recovery has been so slow. The jobs picture won’t get much better, and the economy won’t really get back to normal, until the private sector adds millions more jobs. That may take years.
Note: The numbers for government jobs in all graphs exclude temporary federal workers hired for the 2010 Census.
TIP developed an economic strategy for the City of Clearwater, Florida, designed to refocus the city’s economic development efforts and build upon new regional initiatives. Completed in August 2011, the plan provides a template for Clearwater to adopt a more assertive approach to attract new investment, diversify its tax base, and attract high-wage employment in growth industries.
By adopting the plan, the City of Clearwater has embraced a more proactive approach to economic vitality. In November, the City Council approved an implementation plan that allowed for staff restructuring as well as funding for additional positions devoted to economic development, including an economic development specialist and an assistant director of economic development and housing.
In addition to these personnel changes, the City is making quick progress translating the plan into action. Below is summary of three of the plan’s core recommendations and the progress made toward the implementation of each.
Create a technology district to encourage building improvements in Downtown, the Cleveland Street District, and the East Gateway.
Discussions with local software and IT professionals revealed that Clearwater is home to a growing concentration of software and IT industry firms and professionals. These firms, however, reported a shortage of industry-standard IT infrastructure in existing commercial office buildings in the downtown area. These space and infrastructure deficiencies made the City vulnerable to losing several of its valuable software employers. In order to retain IT and software companies and to remain competitive as a location for firms to re-locate, the plan recommended the City establish a technology district.
Since the adoption of the plan, a Technology District has been established and twelve companies have been identified as part of the Downtown tech cluster. Six of these firms will comprise a new Technology/Software Council, which will work with the City of Clearwater’s Downtown Manager to develop the Technology District work program. The City is also currently assisting in the relocation of a new technology company to the area, representing a potential gain of approximately 30 jobs.
In addition, an IT infrastructure assessment of the Downtown, Cleveland Street District, and East Gateway (Community Redevelopment Areas) is currently being conducted to better understand the physical needs in existing buildings so that an incentive program can be created for business expansions and relocations in that district. The program could function as an opportunity to (1) improve existing commercial structures, (2) encourage employment density downtown, and (3) create a destination that can be marketed to attract software and IT firms in the future. To support entrepreneurship, the City is also investigating a virtual incubator program with the Tampa Bay Innovation Center.
Formal Incentives Policy
Develop the policies and tools to compete for new private investment and jobs.
Clearwater is in a highly competitive market within the region, state, and nation for new investment and jobs. Many Florida communities seek to attract new businesses by utilizing various types of financial incentives. To better compete, the plan called for the City of Clearwater to adopt, formalize, and prioritize the use of incentives and other financial and non-financial tools to promote and accommodate new investment.
Toward this end, the Florida Institute of Government at Florida State University is currently researching state-allowed incentives and benchmarking incentives from neighboring communities to inform a formal incentives policy for Clearwater. To help determine a project’s rate of return and payback period for potential incentives, the City purchased the Economic and Fiscal Impact Computer Model from Impact Data Source. An economic development ad valorem property tax exemption program has also been proposed and will appear as a referendum on the November 6, 2012, ballot.
Business Retention and Expansion
Build and maintain a database of existing businesses in Clearwater and refine the business visitation program.
A vibrant business retention and expansion (BRE) program should be the cornerstone of any economic development program. Previously, the City had only allocated limited staff and financial resources to BRE. After consulting with many local businesses and regional economic development partners, it was determined the City should expand its commitment to supporting the retention and expansion of existing businesses.
The City has created a leads-tracking-spreadsheet and has established a new BRE protocol which standardizes questions to ask during business visits. The City is also reviewing state data to compile a target list of businesses for visitation, with an emphasis on on firms with over 100 employees in their target clusters: technology/software; health and human performance; professional/business services; and finance and insurance.
In addition to the initiatives highlighted above, the City is also marketing the plan widely and engaging other regional stakeholders in its success. For example, they have presented the strategic plan to key organizations, including the Clearwater Regional Chamber of Commerce, Commercial Realtors Association, and Professional Medical Association. They are also working with the Tampa Bay Partnership, the region’s economic development organization, to market Tampa Bay at the Republican National Convention in August 2012 and are participating in the implementation of the Partnership’s Regional Business Plan.
To learn more about this project, see the full project description and read about the U.S. 19 Corridor plan.
By: Paul Scheuren
December 2011 marked an important milestone for the Texas economy in its recovery from the Great Recession. Total employment in December finally surpassed peak employment achieved in August 2008 prior to the recession. Approximately 427,600 jobs were lost between peak employment in August of 2008 and when the state began adding jobs in December 2009. As of March of this year, Texas employment is 101% of the prior peak.
Although state employment is now 1% higher than before the recession, some industries are still lagging far behind employment levels attained in 2008. Employment in the Construction industry is just 84% of the peak level employment. The Information industry and both Durable and Non-Durable Goods Manufacturing industries employment are still well below pre-recession employment levels. On the other side of the spectrum, Education and Health Services industry employment as well as Mining and Logging industry employment now exceed pre-recession employment by nearly 13%.
The final graph shows the path to job recovery for each industry. Each line tells an interesting story but here are some highlights as we see them:
|•||The Educational and Health Services industry saw no drop in overall employment, partially sustained by sufficient government funding for K-12 education during the recession and supported by the continuing demand for higher education and health services.|
|•||Mining and Logging employment fell precipitously at the beginning of the recession but roared back as the Texas natural gas and oil industry was revitalized by new drilling techniques.|
|•||Government employment shows a delayed response to the troubles in the greater economy and a small spike in employment related to the temporary employment of Census workers.|
|•||Construction, Information and Non-Durable Manufacturing industry employment have fallen significantly from 2008 and these industries have failed to see any significant employment gain to this point. Although Durable Goods Manufacturing employment dropped significantly during the recession, this industry appears to be trending in the right direction.|