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"Metro-Economics": Towards a "Unified Field Theory"
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Transcript of "Metro-Economics": Towards a "Unified Field Theory"
“METRO-ECONOMICS”Towards a “Unified Field Theory”
ROBERT WEISSBOURD, RW VENTURES, LLC
Portland PlanInspiring Community Series
January 17, 2011
The Legacy of Dr. King “The time has come for us to civilize
ourselves by the total, direct and immediate abolition of poverty.”
“ At no time has a total, coordinated and fully adequate program [for eradicating poverty] been conceived. As a consequence, fragmentary and spasmodic reforms have failed to reach down to the profoundest needs of the poor.”
Photo from the Associated Press
Economic Development: Markets
Empowerment
Origins: From “Equity” to … “Equity”
Economic Development: Assets
Civil Rights
Putting the Economics in Economic Development
Poverty and Economic Development“… poverty has no causes. Only prosperity has causes. Analogically, heat is a result of active processes; it has causes. But cold is not the result of any processes; it is only the absence of heat. Just so, the great cold of poverty and economic stagnation is merely the absence of economic development. It can be overcome only if the relevant economic processes are in motion.”
-- Jane Jacobs
Photo from Shelf-Basin Interactions
Market Failure in Lower Income Communities
• Employment networks• Entrepreneurial opportunities• Business, real estate investment• Expanded products and services• Competitive, healthy communities
• Undervalued, underutilized assets
Poverty Productivity
Connectedness
Isolation
Equity and Opportunity are Good for Business
Inequality has a negative effect on income growth.
-.20
.2.4
.6
Wag
e Gr
owth
(199
0-20
00)
0 .1 .2 .3 .4Poverty Rate (1990)
7
Productivity Inclusiveness Sustainability
“I N C L U S I V E G R O W T H”Constructive GovernmentInnovationAsset
DevelopmentEconomics & Markets
Amartya Sen:“… human beings are not merely the means of production, but also the ends of the exercise.”
Social
Political Economic
Source: Brookings Institution
Service Exports
75%U
.S. Air Cargo Weight
79%
Airline Boardings
92%
Population
66%
Graduate D
egrees
75%
Venture Capital Funding
94%
Patents
78%
Wind +
Solar Energy Em
ployment
76%
Top 100 Metros Share of U.S. Total
Sources: Brookings analysis of US Census Bureau, FAA, BLS, NIH, NSF, and BEA data; Brookings, ExportNation, 2010 (2008 data); Forthcoming research from Brookings and Battelle
Gross Product
73%
Source: Brookings Institution
The Goal is Economic Growth
Economic Growth Flows from Market Activity
Major Market Systems Operate at the Metro Level
Improving Metro Economic Performance Entails Customized Analysis and Deliberate Activity
Why Metros?Economic Geography and Place-Based Development
Cities Are the Critical Core of Metros
-
10,000
20,000
30,000
40,000
50,000
60,000
0 10,000 20,000 30,000 40,000 50,000 60,000
Wages Move in TandemCorrelation = 0.77, significant
City
Subu
rbs
0% 20% 40% 60% 80% 100%
Museums, botanical, …Educational services
Legal ServicesHealth Services
Depository institutionsInsurance Carriers
CommunicationAir Transportation
Hub Functions of Cities
Suburban % of total MSA employmentCity % of total MSA employment
Neighborhoods are Nested in Larger Systems Which Drive the Flows of People and Capital
ECONOMICSYSTEMS
POLITICALSYSTEMSSOCIAL
SYSTEMS
Labor Markets
Business Markets
Housing Markets
Capital Markets
Consumer Markets
GovernmentServicesInfrastructure
Neighborhoods arise from the interaction of regional economic,social and political systems with characteristics of place.
PublicGoodsGovernance
Social CapitalCivic Networks
Local (Regional) Enabling Environment(Government regulation, taxation and public goods, including
particularly infrastructure and education; civic institutions; qualities of place, including the natural environment; etc.)
Transformative Systems
(Market processes – housing, labor, business; production dynamics – clusters, value chains, etc.; innovation dynamics - knowledge creation, networks, commercialization, entrepreneurship, etc.)
Inputs to Production
(Human capital; real estate; capital; natural and knowledge resources; etc.)
Economic Outputs(Businesses – gross regional product, profits; households – wages, other income, etc.)
Macro/Global Context & Trends
What Drives Inclusive and Sustainable Economic Growth?
Local (Regional) Enabling Environment(Government regulation, taxation and public goods, including
particularly infrastructure and education; civic institutions; qualities of place, including the natural environment; etc.)
Inputs to Production
(Human capital; real estate; capital; natural and knowledge resources; etc.)
Economic Outputs(Businesses – gross regional product, profits; households – wages, other income, etc.)
Transformative Systems
(Market processes – housing, labor, business; production dynamics – clusters, value chains, etc.; innovation dynamics - knowledge creation, networks, commercialization, entrepreneurship, etc.)
Lead to New Drivers of Productivity which Favor Cities
•Dense knowledge networks•Functional specialization• Innovative capacity
% C
hang
e
Gross Domestic Product% Growth over last 50 years
Increased Value of Knowledge Factors…
•High skilled labor force• Intellectual property•Product innovation; flexible
customization•Customer networks
The Knowledge Economy
Source: Brookings Institution
18.3%US
Global GDP 2015
25.8%BIC Countries
Source: Brookings Institution
Exports make up 25% of
Portland’s GMP20.2%US
21.4%BIC Countries
Global GDP 2010
18.3%US
Global GDP 2015
25.8%BIC Countries
Source: Brookings Institution
20.2%US
21.4%BIC Countries
Global GDP 2010Portland ranks 3rd in exports (as % of GMP)
18.3%US
Global GDP 2015
25.8%BIC Countries
Source: Brookings Institution
20.2%US
21.4%BIC Countries
Global GDP 20102002-2008 GMP Growth =
144.5%
Demand for clean energy generation
Demand for products that reduce energy consumption
Demand for products that reduce pollution
Source: Brookings Institution
Portland is the 24th least
segregated metro
Source: Brookings Institution
11.3% of Portlanders live
in povertySource: Brookings Institution
EnhanceRegional
Concentrations Deploy
Human CapitalAligned with
Job Pools
Increase Spatial
Efficiency
Create EffectivePublic & Civic
Culture & Institutions
DevelopInnovation-
EnablingInfrastructure
Leverage Points
These Five Key Leverage Points Take Us from Theory to Practice
Enhance Regional
Concentrations:
Industries, Occupations
and Functions
Portland Plan ClustersAthletic and
Outdoor IndustryCleantechSoftware
Advanced Manufacturing
Cluster Map Source: Bo Heiden, Strategic Uses of the Global Patent System
Portland has the 19th most educated
population,1/3 have at least a bachelor’s degree
Deploy High Human Capital Alignedwith Job Pools
24.1% establishment
births and deaths as % of
total
Develop Innovation-
Enabling Infrastructure
Innovation Ecosystem
MarketResearch
Marketing
Manufac-turing
Finance
R&D
Suppliers
External
Consultants
Research Partners
Academics
Customers
Consumers
Image based on material from Land O’ Lakes Inc.
16.7 patents per 10,000 employees
Develop Innovation-
Enabling Infrastructure
Innovation Ecosystem
MarketResearch
Marketing
Manufac-turing
Finance
R&D
Suppliers
External
Consultants
Research Partners
Academics
Customers
Consumers
Image based on material from Land O’ Lakes Inc.
19th most high impact firms –
7.5 mid-size firm births per
10,000 employees
Develop Innovation-
Enabling Infrastructure
Innovation Ecosystem
MarketResearch
Marketing
Manufac-turing
Finance
R&D
Suppliers
External
Consultants
Research Partners
Academics
Customers
Consumers
Image based on material from Land O’ Lakes Inc.
56th in business
churn; 22.3% firm births and deaths as % of
total
Develop Innovation-
Enabling Infrastructure
Innovation Ecosystem
MarketResearch
Marketing
Manufac-turing
Finance
R&D
Suppliers
External
Consultants
Research Partners
Academics
Customers
Consumers
Image based on material from Land O’ Lakes Inc.
Housing Costs as Percent of Income
Housing + Transportation Costs as Percent of Income
6.4% of Portlanders travel to work using public transit, putting Portland in 11th place.
Increase Spatial Efficiency
Source: Center for Neighborhood Technology
Housing Costs as Percent of Income
Housing + Transportation Costs as Percent of Income
Portland ranks 24th in traffic congestion
Increase Spatial Efficiency
Source: Center for Neighborhood Technology
Housing Costs as Percent of Income
Housing + Transportation Costs as Percent of Income
Portland ranks 63rd in average travel time to work at 25.3 minutes
Increase Spatial Efficiency
Source: Center for Neighborhood Technology
Housing Costs as Percent of Income
Housing + Transportation Costs as Percent of Income
Increase Spatial Efficiency
82% of Portlanders live within urbanized areas
Source: Center for Neighborhood Technology
Housing Costs as Percent of Income
Housing + Transportation Costs as Percent of Income
Increase Spatial Efficiency
24% of jobs are within 3 miles; 29% of jobs are more than 10 miles away from city center
Source: Center for Neighborhood Technology
Portland has .77 special
district governments
per 10,000 people, putting it in 63rd place
Create Effective Public & Civic Culture & Institutions
Portland has .77 special
district governments
per 10,000 people, putting it in 63rd place
Create Effective Public & Civic Culture & Institutions
Portland ranks 37th in most
governments, with 0.3
governments per 10,000
people
Create Effective Public & Civic Culture & Institutions
A Dynamic Economy
The economy is changing rapidly.
Source: Newsweek, Manyika, Lund and Auguste, “From the Ashes,” 8.16.2010
A Dynamic Economy
Success depends on open, adaptive, networked governance.
Summary: Implications for Practice
Cities are the Solution High Road Development Intentionality New Governance Metropolitan Business Plans
Metropolitan Business Plans: A New Way of Doing Business
Grounded in Economics and Business: comprehensive, integrated growth strategies based on unique regional strengths
Gets the Job Done: not just a plan; cross-sector institutional capacity critical to regional performance
Continuous implementation, monitoring, adaptation and further strategy development
Demonstrate better ways to invest in metros to strengthen national economy; develop new federal policies and programs.
Source: Brookings Institution
Why “Metropolitan Business Planning”?
The steps to analyzing and improving a regional economy lend themselves to the proven discipline of business planning.
ECONOMIC DEVELOPMENT PLANNING TRADITIONAL BUSINESS PLANNING
Vision for the Regional Economy Business Mission & Vision
Status of Economy: Assets,Opportunities, Challenges Market Analysis
Goal-Setting & Strategy Identification Analysis of Strategic Alternatives & Risks
Identification of Policies, Programs, Products & Interventions Development of Products & Services
Operational Planning for Implementation Operational & Management Planning
Identification of Funding Needsand Sources Forecasting & Financial Planning
Definition of Outcome Measures & Targets Target-Setting & Performance Tracking
Source: Brookings Institution
Northeast Ohio
Minneapolis-St. PaulPuget Sound
Source: Brookings Institution
A New Economic Federalism
Affordable Housing
HUD Section 8
Workforce Training
Small Business
Assistance
Upgrading Roads and
Rail
Export Strategy
Dept. of Labor
Workforce Inv. Act
Small Business Admin. Loans
Dept of Commerce Int’l. Trade
Admin.
Dept. of Transpo.
SAFETEA-LU Programs
Developand DeployInformationResources
DevelopInnovation-
EnablingInfrastructure
Create EffectivePublic & Civic
Culture & Institutions
DeployHuman CapitalAligned with
Job Pools
EnhanceRegional
Concentrations
Increase Spatial
Efficiency
A New Economic Federalism
HUD Section 8
Dept. of Labor
Workforce Inv. Act
Small Business Admin. Loans
Dept of Commerce Int’l. Trade
Admin.
Dept. of Transpo.
SAFETEA-LU Programs
Comprehensive Metropolitan Strategy
Developand DeployInformationResources Develop
Innovation-Enabling
Infrastructure
Create EffectivePublic & Civic
Culture & Institutions
DeployHuman CapitalAligned with
Job Pools
EnhanceRegional
Concentrations
Increase Spatial
Efficiency
Comprehensive Metropolitan Strategy
A New Economic FederalismIntegrated Federal Investment
White House Office of Urban
Affairs
HUD Section 8
Dept. of Labor Workforce Inv. Act
Small Business Administration Loans
Department of Transportation
SAFETEA-LU Programs
Department of Commerce
International Trade Administration
Cross-Agency Regional Teams Pooled and Flexible Funding Support for Regional Capacity Building “New Federalism” Partnership
Developand DeployInformationResources Develop
Innovation-Enabling
Infrastructure
Create EffectivePublic & Civic
Culture & Institutions
DeployHuman CapitalAligned with
Job Pools
EnhanceRegional
Concentrations
Increase Spatial
Efficiency
Comprehensive Metropolitan Strategy
A New Economic FederalismIntegrated Federal Investment
White House Office of Urban Affairs
HUD Section 8
Dept. of Labor Workforce Inv. Act
Small Business Administration Loans
Department of Transportation SAFETEA-LU
Programs
Department of Commerce International Trade
Administration
WE’RE ALL IN THIS TOGETHER
“We are tied together in the single garment of destiny, caught in an inescapable network of mutuality.“
Photo from the Seattle Times
DISCUSSION
“METRO-ECONOMICS”Towards a “Unified Field Theory”
ROBERT WEISSBOURD, RW VENTURES, LLC
Portland PlanInspiring Community Series
January 17, 2011