TIP Strategies Featured at the Buenos Aires Global Summit: Economic Development Districts

October 2, 2015

By: Jeff Marcell, Senior Partner, TIP Strategies, Inc.

Innovation Districts, Prosperity Zones, Creative Districts or Tech Towns—no matter what the terminology, the concept of concentrating industries, technologists, companies, entrepreneurs, and R&D within a definable geography is top of mind for many in the economic development community. Prime locations are usually dense urban environments offering mixed-use real estate, allowing residents to work, learn, and have fun all in the same neighborhood. Examples and elements of these districts are being studied by economists, think tanks, and economic developers alike. Best practice models are scattered around the US, often led by public-private collaborations. Examples include Seattle’s South Lake Union, Detroit’s Downtown and Midtown developments, and recent developments in downtown Las Vegas. Sometimes these districts are executed by formal, organized efforts with specific boundaries, and sometimes they grow from an organic process with informal boundaries. However they take root, successful districts have generated a lot of attention and inspired many communities to pursue similar approaches in hopes of stimulating job creation.

The Summit

In September, I was honored to join some of the most knowledgeable and successful thought leaders in economic development from across the US to participate in the City of Buenos Aires’s Global Districts Summit in Argentina. The Summit was driven by the city’s motivation to share best practices in the creation and sustainability of economic development districts with a focus on public policy, entrepreneurship, and international business development. My fellow US delegates included leaders from the Research Triangle Park, Ann Arbor SPARK, Creative Oklahoma, the University South Carolina, IAE Business School, and the Center for Strategic International Studies out of DC.

The conference began with a full day tour of the city’s five creative districts dedicated to technology, audiovisual, arts, design, and sports/entertainment. The districts were established in 2008 to address blight, unemployment, and poverty in economically disadvantaged areas. The goal of the districts program is to attract new investment, jobs, and redevelopment. A daylong workshop followed, discussing the districts’ accomplishments and ways in which the city could improve and expand on what has been completed. The summit culminated in a half-day public forum attended by over 200 dignitaries, business leaders, and city officials. This forum is where I and other delegation representatives shared our thoughts on lessons learned from other districts around the world and suggested opportunities the Buenos Aires districts could pursue in the future. An enthusiastic keynote address, about the possibilities that innovation holds for Argentina, was given by Guibert Englebienne. Guibert, who is regarded as the Steve Jobs or Bill Gates of Argentina, is co-founder of Globant, the country’s largest technology company with more than 4,300 employees serving clients like LinkedIn, Zynga, and Google.

The Takeaway

At TIP Strategies, we think about successful economic development efforts in terms of Talent, Innovation, and Place. These three components are critical to a successful economic development district as well as to the region in which that district is located. What follows is an outline of some of what is happening in the City of Buenos Aires and its creative districts, as well as ideas that were shared by the delegation, as they relate to Talent, Innovation, and Place:

Talent: Buenos Aires exudes excitement and energy. Its architectural beauty, vibrant art, culture, and nightlife act as a magnet for the creative class. The city also has over 30 universities and colleges within its boundaries. Buenos Aires has made meaningful commitments to strengthen its talent base. One effort is a partnership with three universities, including the prestigious Technology Institute Buenos Aires, to collectively build a new campus in the heart of the technology district. The production of more trained engineers is imperative; roughly 40% of engineering graduates from local schools leave the country to work elsewhere. This is an unacceptable loss of a precious asset. The delegation agreed that all efforts must be made to keep and grow this engineering talent if the districts, city, and country are to be successful.

Innovation:The rapid success of Globant is proof that innovation and entrepreneurship is alive and well in the Buenos Aires region. The city has received international recognition for its growing software industry, drawing attention from companies and technology leaders in places like Silicon Valley. But recognition and international contracts for only the largest firms is not enough. Technology businesses within the district primarily serve back-office functions for business and government clients within Argentina. If businesses within the district are going to succeed, their customer base must be larger than the opportunities within the country’s borders. The city can help attract international business for its emerging tech cluster. Additionally, the city’s university system has focused its energy on the production of skilled students, which is vital, but not enough to achieve success. The conference’s US delegation encouraged an emphasis on research and development and technology commercialization out of these institutions as well.

The city also has a fledgling entrepreneurship program. The program has limited staff and resources with a broad directive to help the people of Buenos Aires create their own business. The US conference attendees recommended that the program narrow its focus to just serving entrepreneurs in the sectors that align with the districts, rather than a more general approach.

Place: Buenos Aires benefits from attributes that create fertile ground for innovation districts: a dense population and mix of residential and commercial activity, served by mass transit. In this respect, the city is fortunate; it didn’t have to create this environment, like many other cities with similar ambitions have to do. In 2008, the city took bold steps to establish the creative districts, identifying areas of focus, setting boundaries, establishing tax incentives to encourage investment and relocation, and making the catalyst investment of building a new state-of-the-art city hall in the technology district. The new city hall not only serves as an architectural gem, it is a statement that the city is committed to the districts’ success. Many businesses have responded—with over 200 firms locating in the technology district alone. They are all benefiting from incentives and infrastructure investments made by the public sector. The US delegation unanimously agreed: if the districts are to meet their potential, the business community must now take a larger leadership role. We encouraged a new formal partnership between the city and the business community with dedicated staff and programming to address the districts’ opportunities and ongoing needs. This kind of initiative would require that the city give up some control; this is necessary to achieve the city’s goals for the districts and ensure their sustained, long-term success.

The concept of innovation/creative districts translates around the world. Concentrating industries, entrepreneurs, and technologists creates an abundance of opportunities that may produce new businesses, investments, and jobs. The Buenos Aires creative district program was established just seven years ago, and they have already generated palpable success. These districts serve as an inspiration to communities everywhere. If it keeps on this path, the city will reach its ambition of being the unquestionable technology capital of South America and will provide jobs and opportunity to its people. Buenos Aires is a place economic development practitioners need to watch.

To learn more about the City of Buenos Aires creative districts visit:
I welcome the opportunity to discuss innovation districts with you and learn about the economic development efforts in your community. Please feel free to contact me at jeff@tipstrategies.com.

Geography of Recovery: Cumulative Job Gains/Losses since December 2007 by Metropolitan Statistical Area

October 1, 2015

By: TIP Staff

When we released the Geography of Jobs in spring 2008, our goal was to visualize the answer to a seemingly simple question: How did the impact of the recession play out across the country? The resulting animated map—which shows the 12-month rolling job change for all US metros from 1999 to the present—was a resounding success. It provides a vivid illustration of the magnitude of pre-recession job growth and the subsequent dramatic job losses. What our approach failed to capture, however, is the recession’s cumulative impact.

In the second quarter of 2014, it was widely reported that the US had “recovered” all the jobs lost since the start of the recession more than six years earlier. But as we traveled across the country, it didn’t take much to see that many areas were still suffering. With our latest map, the Geography of Recovery, we use the same data to explore this issue. As the name suggests, our new data visualization picks up on the question of recovery: How have individual metro areas fared since the start of the recession? Which metros felt the greatest job losses as a percentage of pre-recession employment? Which have yet to recover the jobs they lost? Which areas recovered faster? Were there any that saw minimal negative impact or even emerged unscathed?

How to Read the Map

Unlike the prior map, which illustrates the change in jobs relative to the same period 12 months earlier, the Geography of Recovery compares employment levels in each metro area to the number of jobs reported at the beginning of the economic downturn. To simplify the comparison, the map uses an index to illustrate this relationship. Each metro starts at 100 percent, which represents total employment in December 2007 (the recession’s official start). From that point forward, the size of each metro’s corresponding bubble grows or shrinks based on the percentage of jobs gained or lost relative to the baseline. A red bubble indicates a cumulative job loss; a blue bubble represents cumulative job gains.

Like the original Geography of Jobs, you can hover over each metro bubble and watch the actual percentage change over time. You’ll also notice two animated “dashboard” features on the left of the map that track with the animation’s timeline. The first is a simple percentage, titled “US share of 2007 employment,” which shows the nation’s job change relative to the baseline. The second indicator is a set of bars representing the number of metros above (in blue) or below (in red) December 2007 employment levels.

Revelations on Recovery

The most striking revelation from this visualization is the unevenness of the recovery. By the time the US returned to its December 2007 employment level in May 2014, the majority of metro areas had not recovered. As of July 2015—more than one year later—fully one-third (120) of the more than 300 metro areas analyzed had not yet recovered the number of jobs lost during the recession.

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.

Footnote: We recognize the limitations to this approach:

  • It does not account for population change in each metro over time. Because jobs can grow faster or slower than population, the impact of employment change on a metro’s population may not be reflected.

  • We picked Dec 2007 as the starting point, since this was the date that the national recession officially began. But, some metros, such as Detroit, had already experienced significant job losses in the previous 2 years. Detroit was in a recession long before the official national recession began, therefore their bubble does not reflect losses from the time prior to December 2007.

  • Following the 2010 Census, the federal Office of Management and Budget revised the official definitions of a number of metropolitan statistical areas (MSAs). This once-a-decade overhaul (released in February 2013) resulted in the addition of a number of new metro areas, the change of metro boundaries, as well as the loss of the MSA designation for a number of existing areas. Some added counties, lost counties, or were combined with neighboring metros to form larger MSAs; others lost their designation due to population declines. In implementing these new standards, the US Bureau of Labor Statistics could not produce seasonally adjusted data for all the affected metro areas beginning with its March 2015 release of data from the Current Employment Statistics (CES) program, the data series used to create the Geography of Recovery. While 69 metro areas without seasonally adjusted data are not included in the animation, we have provided a table [PDF] showing the annual percent change in employment since December 2007 using unadjusted data.

TIP Clients Creating Paths to Prosperity

September 25, 2015

By: Caroline Alexander, Senior Consultant, TIP Strategies

The recent Politico article, “A Real Path to Shared Prosperity in America,” addresses a topic that has been a central concern for many of our clients. The article highlights findings from a conference of thought leaders held this summer at Harvard Business School to explore the critical question: How can our nation continue to grow while also providing a path to prosperity for more Americans?

We, too, have seen our clients bring together coalitions of partners to address this question and to strengthen what Fuller et al. refer to as “the Commons.” Some of our recent clients are actively tackling this problem:

  • The Greater Houston Partnership convened a regional workforce development task force to develop a strategy to address the gap between the region’s middle-skills jobs and the available workers. The resulting initiative—UpSkill Houston—aims to strengthen the regional talent pipeline to bridge this gap.
  • In Fargo, North Dakota, the Greater Fargo Moorhead Economic Development Corporation, the Fargo-Moorhead Chamber of Commerce, the Fargo Moorhead Convention and Visitors Bureau, the Fargo-Moorhead Area Foundation, and United Way partnered with the business community to develop a strategy to address their talent shortage. The resulting Regional Workforce Study recognizes the need to build a stronger framework for upward mobility to support workers in low-wage and basic-skill jobs.

  • And in the Minneapolis–Saint Paul region, GREATER MSP, the Cities of Minneapolis and Saint Paul, Hennepin and Ramsey Counties, the Minneapolis and Saint Paul Chambers of Commerce, the Saint Paul Port Authority, Minnesota Philanthropy Partners, and the McKnight Foundation have formed a coalition to develop and implement an action strategy to accelerate investment and job creation in the center cities. The Center Cities Action Strategy is currently in the process of being finalized.

In Highly Educated Larimer County, Skills Gap Persists

November 5, 2014

By: Madeline Novey
Via: The Coloradoan

Photo credit: "techshop_members_welding_project" by TechShop via Flickr (CC BY 2.0)

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.

Coolest Job Data Visualization You’ll Ever See

October 23, 2014

By: Chris Tomlinson
Via: The Houston Chronicle

Graphic shows how jobs surge and contract across the country

Job data is important to understanding the nation’s economy, but the spreadsheets can be painful to analyze. The economic development consulting firm TIP Strategies, though, has developed a very cool visualization tool to understand how employment surges and contracts over time and geography.

The Greater Houston Partnership recently crowed about adding 600,000 in the first nine months of this year, and that is truly remarkable. But how does this recent boom compare to the last 15 years? When Houston is adding jobs, what is the rest of the country doing?

Hitting the play button, it’s fascinating to watch the pulsing blue circles of added jobs from 1999 to 2002. Dallas and New York added jobs at a much higher rate than Houston. Then a recession hits in 2002 and the whole country begins losing jobs as the dot-com bubble burst. Other parts of the country suffered much more than Houston.

Then in early 2004, Houston lags behind the rest of the nation as the economy takes off elsewhere. This is where you can see how a growing economy demands more energy, and in response, Houston begins adding jobs to meet those needs.

Perhaps most stunning, Hurricane Katrina hits in 2005 and like a bomb, the orange circles of lost jobs explode over New Orleans as thousands of jobs are lost. The number of new jobs in Houston surges as workers flee Louisiana.

Then in 2007, Houston’s job growth begins to lead the rest of the country. The recession hits, and while most U.S. cites, particularly Los Angeles, lays off tens of thoussands of workers each month, Houston continues to add until 2009 when it begins registering losses. The fracking boom takes hold in 2010, and we know the story from there.

The lesson from the data is that Houston has done remarkably well compared to the rest of the country. The reasons are many and debateable. There’s also an intense debate over the quality of those jobs, and the state’s 15.9 percent poverty rate which just dropped to become the same as the national average.

Fundamentally, though, the map is simply very cool, and a reminder of how good Houston has it.

The New And Improved Geography Of Jobs

October 20, 2014

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.

Map highlights:

  • 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.