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: John Karras, Consultant, TIP Strategies
Last month (Sept. 14-16, 2015), I attended the Inner City Economic Summit in Detroit with Jeff Marcell, Senior Partner from our firm’s Seattle office. We spent the first part of the week in Detroit, engaging with leaders from other urban markets and national experts on the subject of inner city economies. Following the conference, we joined our clients at the East Michigan Council of Governments in Saginaw to share what we learned and to continue our work helping evaluate options for establishing a center of excellence. The work is part of the implementation phase of our prior engagement which resulted in a plan to boost economic development in the 8-county region centered on Saginaw.
The Inner City Economic Summit was created by the Initiative for a Competitive Inner City (ICIC), the Harvard-based think tank established by Michael Porter, and was sponsored by three other organizations: the W.E. Upjohn Institute for Employment Research, the Federal Reserve Bank of Chicago, and the Economic Development Quarterly from Sage Publications. For those of you not familiar with the ICIC, it’s worth getting to know their organization and their work. My favorite aspect of the ICIC is their incredibly useful “library of best practices in urban economic development.” The summit was hosted at the Detroit Marriott Renaissance Center (the same complex where GM is headquartered) on Day 1 and at the Detroit branch of the Chicago Federal Reserve on Day 2. During both days, we heard presentations and panel discussions from national experts on urban economic development, including a keynote from Michael Porter. We learned first-hand about the unprecedented private sector investments centered on downtown and Midtown Detroit, led primarily by Rock Ventures. We also participated in a three-hour bus tour through several revitalized and distressed areas in Detroit. And at the end of the conference, we took our own “self-guided” tour of the most challenged neighborhoods before heading up to Saginaw for the second part of our Michigan visit.
The Summit was filled with high-quality presentations, panel discussions, and conversations with leaders from urban markets across the US. But three presentations rose to the top as the most insightful and relevant to the challenges and opportunities facing urban economic development:
1. Michael Porter, the famed Harvard economist and corporate strategy expert. Porter revisited 20 years of groundbreaking research and experience on inner city economies and their competitive advantages, reflecting on lessons learned and providing perspective on what’s next for the field. [Read more]
2. Matthew Cullen, President and CEO of Rock Ventures. Cullen provided an in-depth perspective on how private sector investment has shaped Detroit’s infrastructure, economy, and culture in recent years. [Read more]
3. Martin Lavelle, Business Economist with the Detroit branch of the Chicago Federal Reserve Bank. Lavelle shared an overview of Detroit’s current economic situation and offered perspectives on where it is headed, including some of the remaining barriers and potential pitfalls facing the city’s economy. [Read more]
Throughout the summit, an underlying theme emerged during the discussions about Detroit’s economic future:
Does urban economic development need to be big or small?
I would argue that, in order for cities to have the greatest shot at success, their economic development programs must include a combination of big and small initiatives. Detroit is focusing on both ends of the spectrum, which is a good thing, given the serious challenges facing the city’s economic development. I’ll share with you the highlights from the summit, including what Detroit is doing to catalyze economic growth. But first, let me share a brief summary of how the city arrived at its current state of affairs. There are an infinite number of things that can be said about Detroit’s economic history (people have written lengthy essays and books about it), but I’ll be as short and to-the-point as possible. Here goes…
Detroit, Michigan played a leading role in the development of the US economy during the 20th century. It was the birthplace of modern manufacturing and large-scale industrial production. Henry Ford’s Model T and the innovative assembly line that made it possible transformed the global economy in ways that no one could have anticipated. Detroit was arguably the most important city in the world from 1900 to 1950, from an economic development perspective. The city was, and still is, the global epicenter of the automotive industry. Only a handful of US cities dominate a single industry in the same way (New York with finance, Houston with energy, and Los Angeles with film/entertainment). Detroit also occupies an important place in our nation’s cultural identity, thanks in large part to Motown.
But despite its many accolades, Detroit is better known today for its epic decline. Even though its business leaders and companies were responsible for revolutionizing the world’s economy, the city has become a universal symbol of economic failure. Detroit is the only city in US history to have reached the 1,000,000 mark in population and subsequently drop down below that mark. Even worse, Detroit came close to the 2,000,000 mark around 1950 (estimated at 1.85 million in 1950) before its population decline. Detroit is by no means the only US city where such a dramatic economic decline took place…but it is the by far the largest and most well-known. In 2010, the city’s population stood at 713,777. In 2013, the city entered the largest municipal bankruptcy in US history. The latest 2014 estimates for Detroit show a population of 680,250, less than 37 percent of its 1950 peak. And the city’s decline has taken place against a backdrop of racial inequities. With a city population that is 83 percent black and 11 percent white, compared with a metro area population that is roughly 70 percent white and 23 percent black, the city offers a glaring example of racial segregation. Interestingly, the city’s decline over the last several decades has played out within the context of a relatively stable metro area population. The Detroit metro area was home to 4,490,902 residents in 1970, compared with 4,296,611 in 2014, a decline of only four percent (compared with a 45 percent decline in the city’s population during the same period).
Although there are stark challenges facing Detroit’s economic future, there are some major signs of life in the city. Private sector investment, business expansions, and job growth are beginning to take place in portions of the city, especially in downtown and Midtown. Positive things are happening in Detroit on a level not seen in more than half a century. It’s too early to gauge whether these recent changes will turn the tide, but there is finally a reason to be optimistic about Detroit’s future. At the very least, it is an unprecedented experiment in urban economic development that will provide the rest of us with case studies and lessons learned for years to come. Hopefully those future lessons will be referred to as “best practices” instead of cautionary tales. Time will tell…
So, back to our question of whether urban economic development needs to be big or small: What does a struggling urban economy need to get back on track? What does Detroit need to change the course of its economy- many small things or a few big things?
Detroit has an aversion to big things. For nearly a century, their economy has been defined by big auto companies, big unions, and big government. All three of these big things have dramatically (and permanently) decreased. So it is understandable that many residents are placing their hopes of recovery in small things (e.g., block-by-block revitalization of Midtown, expansion of the Eastern Market as a local food hub, a new protected bike lane on Jefferson Avenue). On top of that, the city’s business and community leaders are equally concerned with pursuing larger, more transformative, strategies (e.g., the massive private sector investments from Dan Gilbert, a new streetcar line, the innovation/acceleration efforts lead by TechTown Detroit).
Below are three additional ideas for Detroit to consider as part of its “all of the above” approach to transform the local economy, each of which could potentially include a combination of big and small things:
1. R&D and higher education.
2. International development.
3. Aggressive business recruitment and expansion.
R&D and higher education. When we completed the Regional Prosperity Strategy last year for the 8-county region in East Central Michigan, one of the most surprising findings from our data analysis was how concentrated the academic R&D investments in Michigan are in the state’s top two schools. The University of Michigan in Ann Arbor is the nation’s number two institution ranked by academic R&D spending (nearly $1.4 billion in FY 2013). The state’s other top school and research powerhouse, Michigan State University in East Lansing, spent $516 million on R&D in FY 2013.Together, those two institutions account for more than 83 percent of Michigan’s total academic R&D expenditures. While this is greatly beneficial for those institutions, it’s a huge missed opportunity for the rest of the state. In fact, Michigan has a higher percentage of academic R&D investments in its top two universities than the investments in the top two universities in the other top 10 states in the US ranked by total academic R&D expenditures. This is especially frustrating for the Detroit metro area which accounts for nearly half of the state’s population but less than 10 percent of the state’s academic R&D spending. Wayne State University in Midtown Detroit is the city’s only significant research institution, with $224 million in academic R&D investments in FY 2013. Wayne State is certainly playing a critical role in the revitalization of Midtown, thanks in large part to its 27,000 students and its nearly 6,000 employees, but it is still a far cry from being one of the world’s preeminent research universities. The link between higher education and economic development is well-established. Besides the most prevalent examples (Stanford University in Silicon Valley, Harvard and MIT in Boston, and the University of Texas in Austin), dozens of communities across the US can trace their economic development success to the role of higher education. Which is why it’s no coincidence that Ann Arbor, just 40 miles from Detroit, is the best performing metro area in the state (along with Grand Rapids), having surpassed its pre-recession employment levels by 5 percent as of July 2015.
International development. With Windsor, Ontario right across the river from downtown, Detroit is part of the largest integrated, bi-national metropolitan economy in North America. Many people do not realize that the automotive manufacturing cluster centered on metro Detroit is actually a highly connected economic region that extends well into Canada. Given the city’s strong existing international ties, the multitude of nonstop international flights at Detroit-Wayne County International Airport, and the city’s global business connections, international business development represents a significant opportunity for Detroit.
Aggressive business recruitment and expansion. There is an untapped potential to bring in large private investment and business expansions from outside of Michigan into Detroit. An aggressive business recruitment program could play a large role in Detroit’s resurgence, while the city has a global brand and a reputation as an up-and-coming place for Millenials. The relocation of firms from Detroit’s suburbs into the urban core (e.g., Quicken Loans, Little Caesars) is wonderful for downtown, but the real opportunity lies in attracting new businesses from outside of the state. This won’t be easy, but business recruitment will be critical to the long-term growth of Detroit’s economy.
The beginning of something new? Or the beginning of the end?
This post could leave off on a positive note, citing once again the incredible transformation of downtown/Midtown Detroit. Or it could end on a less optimistic note, acknowledging the realities of a still-declining city that has yet to turn the tide. I’m going to do both.
Google Maps has a really cool new feature. You’ve probably used the Street View tool before, but you may not be aware that you can now use Street View to see the same photo perspective from multiple points in time. This is especially useful for cities that are experiencing rapid change, whether the change is positive or negative.
In Detroit’s case, I will leave you with two sequences of photos from Google’s StreetView. The first shows a house in the city’s near-East side neighborhood of McDougall-Hunt in 2009, 2011, and 2013. The second sequence shows Campus Martius Park in downtown Detroit in 2008, 2011, and 2015.
I’ll let the images speak for themselves.
Highlighted Inner City Economic Summit Presenter Summaries in Detail:
Michael Porter’s presentation was a comprehensive overview of the challenges and opportunities for inner cities, based on multiple decades of research and observation. It was fascinating, not only because Porter is a dynamic and incredibly knowledgeable speaker, but because he did a great job of tying the challenges facing inner city economic development to the realities in the larger national economy. You can download Porter’s presentation here [PDF]. You can also see a re-cap of his talk on YouTube. Porter began his talk by describing the structural challenges facing the US economy, concluding that “strengthening America’s inner cities has become more challenging due to the overall state of the US economy.” He contrasted this with the relatively strong national economy in 1990, back when ICIC was first getting off the ground. ICIC defines an inner city as “contiguous census tracts within central cities that are economically distressed”. Their definition of distressed is based on the following two criteria: 1) “a poverty rate of 20 percent or higher, excluding students” or; 2) “a poverty rate, excluding students, of 1.5x or more than the MSA” and at least one of two other criteria: “median household income 50 percent or less than the MSA” or “unemployment rate 1.5x or more than the MSA”. One of the more interesting points in Porter’s presentation was that inner city economic success is not closely correlated with overall metropolitan economic success. At first glance, this seems to go against commonly held beliefs that a strong inner city is needed for a strong metro economy. But Porter was also keen on pointing out that the central cities (not including the portions classified as inner city according to ICIC’s definition) accounted for all of the net job growth in the US from 2003 to 2013. He also shared several key findings about how to stimulate economic development in inner city economies, including: the importance of clusters as drivers of growth, connecting inner cities to regional clusters, and capitalizing on anchor institutions present in inner cities. While Porter’s talk touched on many of the challenges and opportunities facing inner city economic development, he did not cover one key area, real estate. Urban areas have many barriers impacting real estate development that don’t exist in suburban and exurban areas. Fortunately, the other keynote presentation from Matthew Cullen did cover real estate.
Matthew Cullen, head of Rock Ventures, also gave a dynamic keynote presentation. Rock Ventures is the umbrella entity created to manage Quicken Loans founder Dan Gilbert’s portfolio of 110 companies, investments, and real estate development projects in Detroit primarily, and to a lesser extent, in Cleveland. Cullen’s talk showcased the major transformations in downtown and Midtown Detroit, largely spearheaded by Rock Ventures and other private sector leaders (e.g., the Illitch family, which is bringing its Little Caesars corporate HQ from the suburbs into Midtown and is also building a new arena for the Red Wings hockey team as part of a new mixed-use district). It’s funny…at TIP we sometimes joke about the ”fairy godfather/godmother” strategy for downtown revitalization. As the story often goes, “all you have to do is find a rich/famous person with an affinity for your community, and then convince them to funnel millions of dollars into the renovation of historic buildings to create a bunch of cool new offices, restaurants, and loft apartments.” Well, downtown Detroit may be the best example ever of this strategy, with Dan Gilbert serving as Chief Executive Fairy Godfather and Matthew Cullen serving as Chief Operating Fairy Godfather. You can see Cullen’s presentation for yourself (parts 1 through 5 on YouTube), but I’ll give you the highlights. Since 2010, Rock Ventures has been responsible for the creation of 13,000 jobs, nearly $2 billion in investment, and the renovation/redevelopment of 13 million square feet of building space (office, residential, retail). They are also leading an effort to create a new $140 million streetcar line (with a remarkable $100 million coming from private and philanthropic investors, and only $40 million in public funds) that will connect downtown to Midtown after construction is completed in 2017. Rock Ventures has also invested in a downtown broadband internet infrastructure known as RocketFiber, which is purported to be 100x faster than Comcast. It’s pretty obvious that Gilbert’s efforts are starting to pay off in a major way. All it takes is a 10-minute walk through downtown Detroit, and you feel like you’re in an emerging hipster haven. Take another 20 minute walk north to Midtown, and you’ll find growing clusters of creative businesses like Shinola among the large anchor institutions of Wayne State University, the Detroit Medical Center, and the Detroit Institute of Arts. Lastly, Rock Ventures is keenly aware that bringing jobs and investment into the urban core will not create a vibrant district without a thoughtful approach toward improving the urban design, or the “connective tissue” as Cullen described it. Of course, it’s worth keeping in mind that, no matter how inspiring the work of Rock Ventures and other private sector leaders, the downtown/Midtown area only represents a small portion of Detroit, roughly 6 to 8 percent of the city’s land area, depending on how you define it. And when you consider the fact that the city’s urban core has seen a large amount growth (investment, job growth, and residential growth) while the city as a whole is still losing more than 8,000 residents a year (from 2010 to 2014), it is clear that the rest of the city is still declining rapidly. It will be interesting to watch the evolution of Detroit’s downtown/Midtown urban renaissance over the coming years. Hopefully, the success of the city’s urban core can translate into broader economic development for the rest of the city.
Martin Lavelle, an economist with the Detroit branch of the Chicago Federal Reserve Bank, gave a brief talk as part of the introductory set of presentations. (You can find his presentation at the tail end of this document.) I really appreciated Lavelle’s comments because he cut through the hype and gave a realistic assessment of where Detroit is and where it might be headed from an economic development perspective. Lavelle started by acknowledging the major progress in the city: improving city services, ongoing investment (largely in the downtown/Midtown area), a growing neighborhood focus, and a greater willingness among civic leaders to discuss the tough issues. Lavelle then went on to discuss some of the significant structural impediments that act as barriers to economic development in the city, most notably the lack of a premier research university and an inadequate public transportation system. He also highlighted several potential pitfalls that could send the city back into bankruptcy including: tax revenue declines, fiscal challenges facing other regional entities (e.g., Detroit Public Schools, Wayne County), and a potential return of corrupt elected leadership—a long-time hallmark of Detroit’s government. Finally, Lavelle touched on some of the key issues the city must tackle in order to become a prosperous community: reform of Detroit Public Schools, addressing the city’s many unique land use challenges, and regional cooperation.
By: Madeline Novey
Via: The Coloradoan
Employers want people like Lexynton Seeley.
The 17-year-old Berthoud High School senior is one of about 60 students in Front Range Community College’s welding certificate program for high school students. Raised by a dad who’s skilled in the craft, she later dated someone enrolled in the program and thought: “It looks really interesting to me, this trade that’s in such high demand.”
After graduation, she’s considering going to New Mexico State University or the University of Colorado at Colorado Springs to study biomedical engineering or mechanical engineering, with the hope of one day building prosthetics or bodily implants.
She plans to weld during the summers to pay tuition: “I didn’t want to be eternally paying debt.”
Seeley is part of a new generation of workers who could change the face of employment in Larimer County and the nation, bridging the gap between skills employers need and the workforce.
Blue-collar work is changing. Workplace environments are safer and cleaner. The wages are in many cases higher than jobs filled by a plethora of college graduates.
National labor statistics indicate there’s a need for roughly 300,000 machinists, welders and other skilled tradespeople to fill vacancies left by a wave of people in their 50s and 60s nearing or in retirement. Media have widely reported that industry-specific phenomenon, but the skills gap touches other facets of Larimer County’s job market.
September’s unemployment rate dropped to 3.2 percent — the lowest level since 2007 — but people are still looking for work.
Jobs in retail, restaurants, hospitality and personal services are among the county’s fastest-growing industries that support the population, according to TIP’s labor market profile, but are relatively low-paying and highly competitive; the region has an “overqualified” workforce to meet the needs of these industries. At the same time, Larimer County employers are having trouble hiring welders, machinists, electricians, sales representatives, drivers, engineers and more.
About half of Larimer County workers have a bachelor’s degree or higher. But only 23 percent of the region’s jobs require college degrees, as reported in a September labor market profile compiled by Austin-based TIP Strategies.
Closing the gap is imperative to building a healthy economy.
Josh Birks, the city’s economic development director, thinks it’s the responsibility of the entire community — the city, educational institutions, employers, the Larimer County Workforce Center and others — to close the skills gap. He said his office will work with partners to further dissect TIP Strategies’ labor market profile and use the data to inform a current revisit of the 2012 Economic Health Strategic Plan, presented to the City Council on Tuesday.
Closing the skills gap will require a number of steps. Programs such the machining shop at Front Range Community College’s Longmont campus — one of nine community colleges to receive a portion of dollars from a $25 million U.S. Department of Labor Grant to build a pipeline of advanced manufacturing workers — can’t do it alone.
Birks said such steps could include increasing alignment between employers and educational institutions, as PSD, Front Range and other institutions have been doing. It could also mean helping connect the labor force with training programs and create greater awareness of employer needs, as the Economic Health Strategic Plan rework addresses, he said.
The city’s Economic Health Office is also aiming to create less of a mismatch between the highly educated workforce and the relatively low percentage of jobs that require a college degree, said Caroline Alexander, a consultant at TIP Strategies. She said the office is cultivating key industry clusters, supporting an innovative ecosystem that fosters new business development and growth; and is ensuring the city has space for these businesses to grow.
“Of course, these strategies will take time to narrow the gap,” she wrote, “but the city has gained traction over the last three years since it adopted its Economic Health Strategic Plan.”
How we got here
Some say it’s too difficult to pin down one culprit for the skills gap.
Some point to impending waves of baby boomer retirements and a lack of trained people to fill tens of thousands of vacant positions, as is the case in skilled trades such as welding and machining. Some think there’s a lack of awareness about the aforementioned jobs and how good they can be. Others say we as a society pushed too hard to get everyone to go to college and, thus, siphoned off pipelines feeding blue-collar industries.
“It’s pretty well known that if you go to college, you will make higher wages than if you don’t. That’s certainly the push that we put out there,” said Martin Shields, CSU’s regional economist.
Shields was referring to the oft-advertised statistic that college graduates will, on average, make $1 million more in their lifetime than someone without a degree.
But “wages for college-educated workers are stagnant and others are declining. A college education is not this path to riches, necessarily; it’s the path to treading water,” he said.
George Newman, director of Front Range Community College’s machining program, said “there’s been an overemphasis on four years of college for everyone.”
He’s noticed a philosophical shift that puts college and trade work education on more equal footing. It’s driven by increased awareness about the skills gap, a greater consideration of whether students want to take on significant student loan debt to pay for college and shifting perceptions about machining.
Contrasted with their oil-splattered, 20th-century machining shop counterparts, today’s facilities are cleaner and safer, Newman said. Instructor Brian Glover joked on a recent day in October that one could “eat off the floors” in the new machining shop at Front Range Community College’s Longmont campus.
“I mean, look at this facility,” he said, motioning to rows of computer-controlled equipment programmed by humans to do precise work. “It’s not your grandfather’s machine shop anymore.”
Impact on employers
Mandy Dicker is a recruiter for A World of Tile, which has 15 stores in Colorado, Arizona and New Mexico. The company intends to grow annual revenues from $15 million to $100 million by 2020, and it “absolutely” faces a challenge to fill sales representatives positions.
College graduates are great, Dicker said, but employees don’t necessarily need the degree to make the cut; eagerness to serve people and sales skills (taught in company-specific trainings) are key to getting a position she said pays an average of $50,000 a year.
In the Fort Collins market, Dicker said she’s yet to figure out where and how to reach job seekers. The secret to closing their skills gap is yet unsolved. She thinks people may not consider sales as a career because the job is overshadowed by a negative reputation. People don’t want to be used car salesmen, she said.
Steve Anderson is CEO of Forney Industries, one of the oldest manufacturing companies in Fort Collins. He’s working with others in the Northern Colorado Manufacturers Group, as well as partners PSD, Front Range and CSU, trying to bring more manufacturing to the region. He is struggling to find people to do the work.
“We are seeing a real void in kids that have the ability to get into manufacturing. They are not aware of the jobs, for sure, but they don’t have the training,” he said.
The college path isn’t for everyone, something Poudre School District recently stressed in its long-term vision for what graduates should look like.
Jason Walsh, director of Front Range Community College’s welding technology program at the school’s south Fort Collins campus, said his shops are running at full steam. He’s enrolled all the students he can and is excited for the campus’ new integrated technology building to open later in 2014 with a larger footprint and extra welding bays.
Roughly 50 students graduate from FRCC’s welding programs each semester; a bigger building could increase the number of graduates 10 percent to 20 percent, he estimates. However, another challenge is finding and hiring trained instructors who are willing to earn less in academia than in the field.
“We’re in a weird spot where we’re not really having a major shortage in people who want to learn. We’re seeing a bottleneck in being able to train them quickly for it,” he said.
When Walsh started at FRCC’s Larimer campus 10 years ago, he got calls from parents asking him whether it was safe for their children to work as welders and if they’d make enough money to make ends meet. Things have changed.
“We’re constantly getting calls from parents that want us to talk with their kids about welding instead of going to a four-year college,” he said. A significant factor is money.
A young person could spend four years and accrue tens of thousands of dollars in debt for a liberal arts degree and make $30,000 to $40,000 a year, Walsh said. Or they could pay about $6,000 for an associate degree in welding technology at Front Range “and they’ll have a job waiting for them” at graduation day making $16 to $20 per hour.
Even with “low skills and low experience,” companies across Northern Colorado are “giving people a chance.”
“It’s really a no-brainer if you want to pay the bills,” Walsh said.
“Blue collar, we make more than people with history degrees,” said Jen Steen, prevision machining instructor at FRCC’s Longmont campus. And for the self-described entrepreneur with an MBA working in manufacturing means being part of something bigger, something necessary to keep America’s economy vibrant.
“I think there’s a lot of pride to being part of what keeps the world turning,” she said.
By: Renee Hansen
Via: Community Impact Newspaper
Weakness identified as mismatch between city’s jobs, workforce
The release of a new Frisco labor market study shows the city as having a strong talent base of employees that is attracting businesses and impressing employers. The comprehensive analysis was conducted by Austin-based TIP Strategies, an economic development consulting firm.
The report, released May 22, shows there is a highly educated workforce of nearly 500,000 people within a 10-mile radius of Frisco. The workers’ strengths focus around information technology and line up with the industries found in the city’s borders such as telecommunications, software development, and financial and medical services.
Area residents soar above the national average of educational attainment levels with 58.3 percent holding a bachelor’s degree or higher, compared with the national average of 28.5 percent, according to American Community Survey data.
Employers also give the area’s workforce high marks, with 80 percent surveyed saying the workforce is either “good” or “excellent” in computer skills, trainability and employee attitudes.
Given its size, quality of the workforce and ability to draw in workers from throughout the Metroplex, Frisco is the place to be for economic growth, according to TIP.
The Frisco Economic Development Corp. requested the study to gain insight on the labor market of the city, FEDC President James Gandy said.
“It was great for us to have an opportunity to work with [the FEDC],” said TIP Strategies President Tom Stellman. “They are one of the most respected economic development groups in the Metroplex.”
The FEDC has helped facilitate projects to create or retain nearly 12,500 jobs since 2009. With a population of more than 133,000, the report said Frisco is projected to gain 65,000 new working-age adults over the next 15 to 25 years.
Although Frisco houses a large and talented workforce, the study identified that the majority of Frisco workers commute out of the city for their jobs. The market overview reported Frisco residents fill only one in five positions within the city, which means there is a mismatch between employment options and the skills of the area workforce.
“The study has identified a number of things that we intend to work on,” Gandy said. “There’s a tremendous opportunity for new companies to move here and utilize the readily available workforce within our city that may currently be commuting outside our city.”
FEDC Director of Marketing Darcy Schroer explained the benefits to keeping Frisco residents within the city borders for employment.
“We have a great quality of life, and we want the people who live here to enjoy that quality of life,” she said. “It opens up a whole different lifestyle when you can work in the city you live in.”
Project Update: Woodward, Inc. HQ and Manufacturing Facility to Relocate to Downtown River District in Fort Collins, CO
by Caroline Alexander, Senior Consultant, TIP Strategies
After completing a strategic plan for the City of Fort Collins in 2012, TIP has continued to support the City’s Economic Health Office, providing research and analyses to help them refine their program and investment strategy. As such, we have been able support them in their continued efforts to put theory into practice.
Recently, the Fort Collins City Council voted to approve a $23.5 million business assistance package for Woodward, Inc. to develop a 101-acre property to house its corporate headquarters and a manufacturing facility. The company plans to invest $220 million in new buildings, relocate 600 jobs to the new facility, and create 400 new jobs. The economic impact analysis that TIP and Impact DataSource prepared estimated that the project will likely generate a net benefit for the local taxing districts of over $36 million in the first 10 years.
The significance of the project, however, moves far beyond its economic and fiscal impact: it has the potential to transform the city’s under-developed River District and spur additional investment in the area. The headquarters will anchor the southeastern edge of the River District with a major employer and will provide 29 acres of improved open space along the Poudre River. Demand for services such as hospitality and retail will grow to support the headquarters of a $2 billion global company and will generate a great deal of activity in the District. Recreational users will also be drawn to the expanded access to the river, generating even more social, retail, and dining activity. As a result of this catalytic project, the streets between the Woodward Campus and historic downtown will likely see a surge of interest and investment.
Kudos to the City of Fort Collins, the Economic Health Office, and the Downtown Development Authority for their work in making this project happen.
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.
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.
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?