NEO ED Strategy Executive Summary Presentation 120205

NORTHEAST OHIO REGIONAL ECONOMIC COMPETITIVENESS

STRATEGY

FEBRUARY 6, 2012

TODAY’S MEETING WILL INCLUDE PRESENTATIONS & GROUP DISCUSSION

Agenda1:00‐1:30 TeamNEO Board Business1:30‐2:00 NEO Regional Economic Competitiveness Strategy Introduction2:00‐3:00 NEO Economy Overview3:00‐3:15 Break3:15‐3:45 NEO Regional Competitiveness3:45‐4:30 NEO Initiatives & Interventions Impact4:45‐5:00 Next Steps & Wrap Up

1

A NUMBER OF FORCES CAME TOGETHER TO DRIVE THE DEVELOPMENT OF A REGIONAL STRATEGY

Northeast Ohio Economic Competitiveness Strategy

Initiative

Fund For Our Economic Future

& Advance Northeast Ohio

ProgressJobsOhio

ExpectationsNEO77

Momentum

Current NEO Economic

Development Strategies & Momentum

Extended Period of NEO Economy Underperforming the National Averages

2

THE JOBSOHIO NETWORK DEFINES THE REGIONAL SCOPE OF OUR STRATEGY

3

THE STRATEGY DEVELOPS REGIONAL INITIATIVES TO ENHANCE LOCAL EFFORTS & DRIVE ECONOMIC GROWTH…

Objective of the Northeast Ohio Regional Economic Competitiveness StrategyCraft a market‐based, regionally shared vision and actionable plan for Northeast Ohio’s economy that aligns and advances key local and regional efforts to measurably impact

economic competitiveness and growth

4

THE STRATEGY DEVELOPS REGIONAL INITIATIVES TO ENHANCE LOCAL EFFORTS & DRIVE ECONOMIC GROWTH…



Guiding Principles of the Regional Strategy

1. Improves Northeast Ohio’s potential to out‐perform the national economy

2. Connects and strengthens local growth and competitiveness initiatives – it is not a replacement for nor should it override local strategies and initiatives

3. Developing and executing an effective strategy requires engagement with and commitment from diverse sectors and stakeholders

4. Interventions supported by the strategy must be economically inclusive

5. The diversity of Northeast Ohio’s multiple urban centers , communities and rich rural assets are a regional competitive strength and should be enhanced by the strategy

5

…WE'RE PURSUING A PHASED APPROACH TO DEVELOP AN INITIAL POINT OF VIEW AND DRIVE BROADER ENGAGEMENT

Version 1.0 Version 2.0November

2011June2012

July2012

Develop a strategic framework and initial point of view from the

business and philanthropic

community to improve the overall

competitiveness of the region

Refine the initial plan with the engagement of appropriate audiences, validating major Phase 1 assumptions and at a depth of detail that is actionable. Develop a framework for regional collaboration in execution and for sustaining

and refining the strategy over time



6

THE APPROACH TO DEVELOP VERSION 1.0 IS A COLLABORATIVE EFFORT OF KEY STAKEHOLDERS

Strategy Task Force

Bill Christopher, Task Force Chair, Team NEO & GCP Boards

Tom Waltermire, Team NEO

Brad Whitehead, The Fund For Our Economic Future (FFEF)

Shilpa Kedar, The Cleveland Foundation & FFEF Member

Bob Smith, Team NEO & GCP Boards

Tom Strauss, Team NEO & GAC Boards & FFEF Member

Virginia Albanese, Team NEO & GAC Boards

Bob Joyce, Team NEO Board & FFEF Member

Mark Williams, JumpStart Board

Bill Seelbach, FFEF Board

Christine Mayer, FFEF Board

Joe Roman, Greater Cleveland Partnership (GCP)

Dan Colantone, Greater Akron Chamber (GAC)

Tom Humphries, Youngstown‐Warren Regional Chamber

Rebecca Bagley, NorTech

Ned Hill, CSU

Funders

Economic Research Support

7

FOR VERSION 1.0, THE TASK FORCE WORKED TO ANSWER FIVE KEY QUESTIONS

1. What is success and how will it be measured?

2. What is the historical and current state of the regional economy?

3. How competitive is the region – what are our assets and gaps?

4. What are the current economic development interventions and what is the potential impact?

5. What are our initial conclusions and recommendations?

8

OUR FRAMEWORK FOR ECONOMIC DEVELOPMENT PROVIDES USEFUL CONTEXT ABOUT THE STRATEGY

SHORT TERM1 – 2 Years

INTERMEDIATE TERM2 – 10 Years

LONG TERM10 – 20 Years

Focus Transactions

Marketing Current Assets

InterventionsStrengthening Regional Competitiveness & Industry Dynamics

InvestmentsChanging the Quality of the

Assets

Econ

omic

Growth

Driv

ers Retention, expansion and

attraction of companies based on the region’s current assets

The success of a regional portfolio of companies and products, people and places

Improved quality of assets including people, place and

knowledge

Objectiv

e of th

e Strategy

TRANSACTIONAL EXCELLENCE:

Leverage existing assets and incentives to maximize thesuccess of each retention, expansion and attraction

transaction

STRATEGIC INVESTMENT:

Invest in interventions that improve and sustain the diversity or quality of the

region’s companies, products, people and places

Coordinate, augment and/or collaborate to enhance public

sector efforts

STRATEGIC ADVANTAGE:

Invest in interventions that improve the quality of the

region's assets

Advocate to influence and innovate public policy

Source: Edward Hill, Dean, Levin College of Urban Affairs, Cleveland State University 9

‐10.0%

‐5.0%

0.0%

5.0%

10.0%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Annual Change In GRP v. GDP

THE NORTHEAST OHIO ECONOMY HISTORICALLY UNDERPERFORMED GDP…

Source: CSU Center for Economic Development; Moody’s economy.com

U.S.

NEO

10

‐10.0%

‐5.0%

0.0%

5.0%

10.0%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


THE NORTHEAST OHIO ECONOMY HISTORICALLY UNDERPERFORMED GDP…


U.S.

NEO

1. Sustained decline driven by product life cycle and manufacturing competitiveness

2. NEO economy drivers shift

11

‐10.0%

‐5.0%

0.0%

5.0%

10.0%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


…BUT HAS RECENTLY IMPROVED AND IS POSITIONED TO RECOVER…


U.S.

NEO

1. Core industries perform well in downturn and recovery

2. Manufacturing base drives recovery3. Assumes no constraints 4. No impact from shale gas or other

local initiatives



12

‐10.0%

‐5.0%

0.0%

5.0%

10.0%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


…AND STRATEGIC INITIATIVES ENHANCE THEPOTENTIAL FOR SUSTAINED GROWTH


U.S.

NEO

Strategic Initiatives Change Projections

1.Strategic initiatives improve competitiveness

2.EDOs deliver job impact3.Shale gas materializes

1. Core industries perform well in downturn and recovery

2. Manufacturing base drives recovery3. Assumes no constraints 4. No impact from shale gas or other

local initiatives



13

2006‐2010 Change

Per Capita Income(Quartile)

GMP(Quartile)

Employment(Quartile)

GMP/Job(Quartile)

Per Capita Income v. National Average

Akron, OH 2 3 3 2 ‐10%Canton‐Massillon, OH 2 4 4 4 ‐21%Cleveland‐Elyria‐Mentor, OH 2 4 4 4 ‐3%Youngstown‐Warren‐Boardman, OH‐PA 2 4 4 4 ‐22%

Cincinnati‐Middletown, OH‐KY‐IN 4 3 3 3 ‐6%Columbus, OH 3 3 2 4 ‐9%Dayton, OH 2 4 4 4 ‐15%Toledo, OH 3 4 4 4 ‐17%

Baltimore‐Towson, MD 1 1 2 1 17%Harrisburg‐Carlisle, PA 1 2 2 2 ‐6%Madison, WI 3 2 1 3 5%Pittsburgh, PA 3 1 1 2 4%Wichita, KS 4 2 2 2 ‐8%

OUR MSAs CAN BE COMPARED TO OTHERS – WHILE IMPROVING, STILL LAG IN OVERALL PERFORMANCE

Akron is the best performing NEO MSAOhio MSAs have underperformedThere are a number of MSAs that have performed well through the recovery

Source: FFEF Dashboard; CSU Center for Economic Development 14

Strategic Drivers

1. Help companies take advantage of immediate growth opportunities through transactional excellence and effective marketing

2. Drive private sector job growth by strengthening the region’s driver industries –with a specific focus on manufacturing

3. Strengthen and connect the region’s innovation, research and commercialization capacity to increase product development in driver and emerging industries

4. Build coalitions that accelerate growth of more emerging industries –leveraging our current and targeted regional advantages

5. Continue to foster and grow the region’s entrepreneurial environment

FOR NEO TO OUTPERFORM THE NATIONAL AVERAGE,WHAT ARE THE STRATEGIC DRIVERS?

15

Strategic Drivers

6. Develop workforce to meet short‐term employer needs; elevate educational attainment and attract high‐skilled people to maximize long‐term competitiveness

7. Align local and regional initiatives that will improve our Quality of Place competitiveness to appeal to growing companies and talented people

8. Strengthen and connect the region’s transportation assets (hub air service, highways, rail and ports) to improve access for people and products to markets near and far

9. Advocate for public policies that lower the cost of living and of doing business in the region, including more efficient government, effective land use and legislation that fosters business growth

10.Develop the coalition(s) of business, philanthropic, education and government leaders to monitor, refine and deliver on the Strategy


16

What is success & how will it be measured?

17

THERE IS POTENTIAL TO REPOSITION THE ECONOMY WITH THE RECOVERY & STRATEGIC INITIATIVES

Region outperforms the national average in key metricsChange in Per Capita Income Change in GRP

MSAs consistently achieve 1st/2nd quartile performance* in key metrics:Change in Per Capita IncomeChange in Employment

Long TermAspiration:

Note: As measured by The Fund For Our Economic Future’s Regional Dashboard of Economic Indicators. There are 136 MSAs that are compared along the metrics above (and additional metrics). The four MSAs in Northeast are among the 136 MSAs in the model.

Change in EmploymentChange in GRP per Job

Change in GMPChange in GMP per Job

Per capita income v. National Average

Per Capita Income v. National Average

18


INTERMEDIATE TERM2 – 10 Years


REVERSE THE TRENDTake advantage of economic recovery driving “demand” while improving

transaction efficiency

BUILD CAPABILITIESStrategic initiatives

enhance “supply” side, focus on core &

emerging industries, and driving quality of place initiatives at the local and regional level

SUSTAINED GROWTHRegional “supply” of

workforce, high quality of place, transactional efficiency & strong

industry clusters drive sustained growth.

NEO Targets

Change in NEO GRP = the National Average

Change in NEO GRP > the National Average

Change in NEO GRP >the National Average

MSA Targets 2nd ‐3rd Quartile 2nd Quartile 1st ‐2nd Quartile

SUCCESS REQUIRES REVERSING TRENDS & DEVELOPING ABILITY FOR TOP QUARTILE PERFORMANCE

19

What is the historical and current state

of our economy?

20

The Northeast Ohio economy performed worse that the US economy for decades , but current data suggests th is i s changing

Whi le there have been changes in major elements of the economy over t ime, our legacy industr ies remain important ; for example s ince 1995, we have increased indust ry breadth, yet manufactur ing remains the biggest sector at 17% of GRP

The Northeast Ohio economy dec l ined by $9.7B 2006 ‐2010; the biggest contr ibut ion to dec l ine i s the “ loca l compet i t iveness factor ” of the reg ion – populat ion serv ing indust r ies compr ised the major i ty of the dec l ine

NEO’s dr iver industr ies , which compr ise 35% of the reg iona l economy, performed re lat ive ly wel l dur ing the recess ion – GRP dec l ined by less than $400M between 2006 and 2010, but the i r employment dec l ined by 50%− There a re “b r i ght ” spot s emerg ing i n energy, chemica l s and manufac tu r ing segment s that a re benef i t i ng

f rom i nnovat ion

Moody ’s economy.com forecasts NEO’s economy to growth with the nat iona l economy through 2015, but those project ions do not inc lude the sha le gas boom or potent ia l l abor constra ints

The reg ion’s employment cha l lenge for the next decade wi l l ensur ing suff i c ient workers are prepared to compete for the jobs that wi l l be created

There are key r i sk factors that need to be better understood, inc lud ing the impact of heal thcare reform, natura l gas pr ices and the other aspects of the potent ia l sha le oi l boom

NEO ECONOMY IS WELL‐POSITIONED TO OUTPERFORM HISTORY & THE US ECONOMY

21

NEO UNDERPERFORMED THE US ECONOMY FOR DECADES, BUT RECENT PERFORMANCE IS IMPROVED

Source: Moody’s economy.com ; Team NEO

2009‐2010 GRP tracked closely

with GDP22

‐8%

‐6%

‐4%

‐2%

0%

2%

4%

6%

8%

10%

U.S.

NEO

1979‐2010 Annual Change in GRP v. GDP

NEO’S PER CAPITAL INCOME HAS RISEN, BUT NOT AT THE PACE OF THE US

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

Per Capita Personal Income

NEO > US

NEO = US

NEO < US

Source: Team NEO; Moody’s economy.com; Data adjusted for inflation

NEOUS

THE NEO ECONOMY EVOLVED 1995‐2006; INDUSTRY BREADTH WILL BETTER WEATHER DOWNTURNS

0

50

100

150

200

1995 2006 2010

NEO GRP By Industry$B

Manufacturing15%

Real Estate &Leasing 11%

Health Care &Social Asst 9%

All Other34%

Retail Trade 7%

Finance & Ins 8%

Source: Moody’s economy.com; Team NEO

Wholesale Trade 7%

24

Local Government7%

Construction 3%

Manufacturing17%



All Other29%

Retail Trade 7%

Finance & Ins 9%

Wholesale Trade 8%

Local Government7%

Construction 3%

Manufacturing23%



All Other28%

Retail Trade 6%

Finance & Ins 7%

Wholesale Trade 4%

Local Government7%

Construction 5%

$159B

$186B$178B

Wholesale Trade and Other Non‐Manufacturing Industries Have Gradually Increased Their Share Of GRP, Offsetting Declines In Manufacturing & Construction

184.8

175.1

1.5 (1.4)(9.8)


THE 2006‐2010 ECONOMIC DECLINE WAS DRIVEN BY A LOCAL COMPETITIVENESS EFFECT OF ‐$9.8B

2006‐2010 Changes in GRP$B

GRP

Export Industry Performance (Driver & Other Export Industries)

Population Serving Industry Performance

National Effect:The change in GRP that is attributed to the growth of the national economy

Mix Effect:The change in GRP that is attributed to the change in the

national trajectory of individual industries

Local Competitiveness

Effect:The change in GRP that is attributed to the competitiveness

of the region’s companies and

industries

Population Serving Industries Comprised ~60% of the Local Competitiveness

Effect

25

‐4 ‐3 ‐2 ‐1 0 1 2

THE LOCAL EFFECT DECLINED BY $9.8B, DRIVEN BY DECLINES IN SPECIFIC INDUSTRIES

Other Decliners (n=47)Machinery ManufacturingSpecialty Trade ContractorsReal EstateComputer and Electronic Product ManufacturingFederal GovernmentHospitalsFabricated Metal Product ManufacturingProfessional, Scientific, and Technical ServicesAmbulatory Health Care ServicesTransportation Equipment ManufacturingLocal GovernmentPrimary Metal ManufacturingCredit Intermediation and Related Activities

Chemical ManufacturingManagement of Companies and EnterprisesPetroleum and Coal Products Manufacturing

UtilitiesElectrical Equipment, Appliance, and Component

Other Gainers (n=23)

2006‐2010 Changes in Local Effect$B

Source: CSU Center for Economic Development; Moody’s economy.com; 3 digit NAICS level

Population Serving Industry Performance

Export Industry Performance (Driver & Other Export Industries)

Large Declines In Population Serving Industries Impacted

The Economy

26

NEO’S ECONOMY DRIVERS COMPRISE NEARLY $60B, 33% OF 2010 GRP

$0 $2 $4 $6 $8 $10$0 $2 $4 $6 $8 $10

Agents and Managers for Public Figures

Water, Sewage and Other Systems

Coal Mining

Other Investment Pools and Funds

Other Agricultural Chemical Manufacturing

Other Information Services

Oil and Gas Extraction

Commercial and Industrial Machinery and Equipment Leasing

Natural Gas Distribution

Petroleum and Coal Products Manufacturing

Electric Power Generation, Transmission and Distribution

Offices of Real Estate Agents and Brokers

Management of Companies and Enterprises*

General Medical and Surgical Hospitals*

Lessors of Real Estate

Activities Related to Real Estate

Securities and Commodity ExchangesMonetary Authorities‐Central BankCutlery and Handtool ManufacturingVending Machine OperatorsClay Product and Refractory ManufacturingHousehold Appliance ManufacturingNonferrous Metal (except Aluminum) Production and ProcessingCoating, Engraving, Heat Treating, and Allied ActivitiesFoundriesIron and Steel Mills and Ferroalloy ManufacturingBoiler, Tank, and Shipping Container ManufacturingSteel Product Manufacturing from Purchased SteelMetalworking Machinery ManufacturingForging and StampingMetal and Mineral (except Petroleum) Merchant WholesalersResin and Artificial Synthetic Fibers and Filaments ManufacturingPaint, Coating, and Adhesive ManufacturingMotor Vehicle ManufacturingOther General Purpose Machinery ManufacturingElectrical Equipment ManufacturingBasic Chemical ManufacturingMachine Shops; Turned Product ManufacturingPlastics Product ManufacturingMotor Vehicle Parts ManufacturingOther Fabricated Metal Product Manufacturing

2010 Growth Drivers: $36.9B 2010 Traditional Base $20.2B

Source: CSU Center for Economic Development; Moody’s economy.com; *Industries are both Growth Drivers and Economic Base industries 27

$0 $2 $4 $6 $8 $10$0 $2 $4 $6 $8 $10

Agents and Managers for Public Figures

Water, Sewage and Other Systems

Coal Mining

Other Investment Pools and Funds

Other Agricultural Chemical Manufacturing

Other Information Services

Oil and Gas Extraction

Commercial and Industrial Machinery and Equipment Leasing

Natural Gas Distribution

Petroleum and Coal Products Manufacturing

Electric Power Generation, Transmission and Distribution

Offices of Real Estate Agents and Brokers

Management of Companies and Enterprises*

General Medical and Surgical Hospitals*

Lessors of Real Estate

Activities Related to Real Estate

Securities and Commodity ExchangesMonetary Authorities‐Central BankCutlery and Handtool ManufacturingVending Machine OperatorsClay Product and Refractory ManufacturingHousehold Appliance ManufacturingNonferrous Metal (except Aluminum) Production and ProcessingCoating, Engraving, Heat Treating, and Allied ActivitiesFoundriesIron and Steel Mills and Ferroalloy ManufacturingBoiler, Tank, and Shipping Container ManufacturingSteel Product Manufacturing from Purchased SteelMetalworking Machinery ManufacturingForging and StampingMetal and Mineral (except Petroleum) Merchant WholesalersResin and Artificial Synthetic Fibers and Filaments ManufacturingPaint, Coating, and Adhesive ManufacturingMotor Vehicle ManufacturingOther General Purpose Machinery ManufacturingElectrical Equipment ManufacturingBasic Chemical ManufacturingMachine Shops; Turned Product ManufacturingPlastics Product ManufacturingMotor Vehicle Parts ManufacturingOther Fabricated Metal Product Manufacturing

2010 Growth Drivers: $36.9B 2010 Traditional Base $20.2B

Source: CSU Center for Economic Development; Moody’s economy.com; *Industries are both Growth Drivers and Economic Base industries

Real Estate Activities Benefiting from Recession

Large, National Real Estate Companies

Hospitals

Corporate Management

Energy Generation & Distribution & Manufacturing of Related

Products

…

Manufacturing

Manufacturing

Manufacturing

Chemicals

NEO’S ECONOMY DRIVERS COMPRISE NEARLY $60B, 33% OF 2010 GRP

28


LOCAL COMPETITIVENESS OF DRIVER INDUSTRIES PERFORMED RELATIVELY WELL 2006‐2010

2006‐2010 Changes in GRP for Economy Driving Industries$B

57.757.1

0.5


GRP of Economy Driving Industries

(0.4)(0.7)

Driver Industries’ GRP & Local Competitiveness Were Relatively Flat 2006‐2010

Traditional Base

Growth Drivers

National Effect:The change in GRP that is attributed to the growth of the national economy

Mix Effect:The change in GRP that is attributed to the change in the

national trajectory of individual industries

Local Competitiveness

Effect:The change in GRP that is attributed to the competitiveness

of the region’s companies and

industries

29

‐20,000 ‐15,000 ‐10,000 ‐5,000 0 5,000 10,000

EMPLOYMENT DECLINED BY 50% INDRIVER INDUSTRIES BETWEEN 2006 AND 2010

2006‐2010 Changes in Employment For Economy Driving Industries


General Medical and Surgical HospitalsBoiler, Tank, and Shipping Container Manufacturing

Activities Related to Real EstateNatural Gas DistributionOil and Gas Extraction

Other Decliners (n=18)Clay Product and Refractory ManufacturingOther Metal and Mineral Merchant WholesalersManagement of Companies and EnterprisesIron and Steel Mills and Ferroalloy ManufacturingOther General Purpose Machinery ManufacturingCoating, Engraving, Heat Treating, and Allied ActivitiesOther Fabricated Metal Product ManufacturingForging and StampingMetalworking Machinery ManufacturingFoundriesMachine Shops; etcOther Nonferrous Metal Production and ProcessingMotor Vehicle ManufacturingPlastics Product ManufacturingMotor Vehicle Parts Manufacturing

Auto Industry Drove The Employment

Decline

30

NEO’S GRP IS PROJECTED TO IMPROVE WITH THE NATIONAL ECONOMY UNTIL 2015…

Source: CSU Center for Economic Development; Moody’s economy.com; dashed lines indicate projections

‐10.0%

‐5.0%

0.0%

5.0%

10.0%

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019


U.S.

NEO

‐10.0%

‐5.0%

0.0%

5.0%

10.0%

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Annual Change In Employment

U.S.

NEO

2009‐2015: Projected to recover with the National Economy

31

…THEN REPEAT HISTORY AND UNDERPERFORM THE NATIONAL ECONOMY


‐10.0%

‐5.0%

0.0%

5.0%

10.0%

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019


U.S.

NEO

‐10.0%

‐5.0%

0.0%

5.0%

10.0%

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Annual Change In Employment

U.S.

NEO

2016‐2019: Projected to lose our strong position –outperformance required improving the quality of

our assets32

EMPLOYMENT IN THE REGION IS PROJECTED TO INCREASE TO 2.1M BY 2019…

33

1,750

1,850

1,950

2,050

2,150

2,250

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

NEO is projected to add nearly 200K jobs and achieve

pre‐recession levels by 2015…

Northeast Ohio Employment000



34

1,750

1,850

1,950

2,050

2,150

2,250

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018




…and that does not include the shale boom and the impact of

other interventions…



35

1,750

1,850

1,950

2,050

2,150

2,250

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018




…and that does not include the shale boom and the impact of

other interventions…

…currently, there are only ~170K unemployed people

in the NEO workforce


…REVEALING NEW WORKFORCE CHALLENGES FOR THE COMING DECADE

36

1,750

1,850

1,950

2,050

2,150

2,250

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018


NEO’s NEW WORKFORCE CHALLENGE

Through 2019, Northeast Ohio will be challenged to supply sufficient workers who are prepared to compete for the jobs that will be required to fuel the projected GRP

growth


MAKING THE DATA ACTIONABLE & ALIGNING INTERVENTIONS

% Growth GRP

2006‐20

10

2010 Location Quotient

Location Quotient:Measure of the regional share of economic activity in an industry

to the national share of economic activity in that industry.

37

% Growth GRP

2006‐20

10


Growth Opportunity BaseInvest In Efforts To improve The LQ

Other Industry BaseAllow natural evolution

of the industries

Strong Economic BaseSafeguard continued

good health of the industry

Traditionally Competitive BaseInvest In Efforts To

innovate the product portfolio

MAKING THE DATA ACTIONABLE & ALIGNING INTERVENTIONS

38


THE INDUSTRIES THAT ARE GROWTH DRIVERS ARELARGE WITH MODEST LQs AND GROWTH

Growth Drivers – GRP Growth v. LQ


% Cha

nge GRP

2010‐20

19


39

2006‐2010 GRP Growth

>5%

<5%





% Cha

nge GRP

2010‐20

19


High LQ and Low‐Moderate Growth

What can we do to encourage or support product innovation and

increased attraction and expansion of companies?

40


>5%

<5%





% Cha

nge GRP

2010‐20

19


LQ of ~1 and Moderate‐High GrowthHow do we increase NEO’s

competitiveness?

41


>5%

<5%





% Cha

nge GRP

2010‐20

19


High Growth and Low LQCould we improve the

attractiveness of NEO? How?

42


>5%

<5%





% Cha

nge GRP

2010‐20

19


Low LQ and Low GrowthFocus interventions in other industries where either growth or LQ is

promising

43


>5%

<5%


OUR TRADITIONAL BASE INDUSTRIES HAVE VERY HIGH LQs AND ARE PROJECTED TO GROW


% Growth GRP

2010‐20

19


Traditional Base – GRP Growth v. LQ

44


>5%

<5%

Source: CSU Center for Economic Development; Moody’s economy.comSource: CSU Center for Economic Development; Moody’s economy.com

% Growth GRP

2010‐20

19



Very High LQ and GrowthHow do we safeguard our success?


45


>5%

<5%

Source: CSU Center for Economic Development; Moody’s economy.comSource: CSU Center for Economic Development; Moody’s economy.com

% Growth GRP

2010‐20

19



Very High LQ and Low GrowthWhat can we do to encourage or support

product innovation and increased attraction and expansion of companies?


46


>5%

<5%

Work with strategy stakeholders and appropriate partners to ensure broader understanding of the economy and encourage use of the data as a foundation for decision making

Dig into the driver industries to identify potential regional interventions to accelerate growth rates, enhance the LQs and enhance overall competitiveness

Define the objectives of any additional economic research and analysis required for Version 2.0 of the strategy

NEXT STEPS FOR THE ECONOMIC ANALYSIS

47

How competitive is the region –what are our assets and gaps?

48

THE REGION’S OVERALL COMPETITIVENESS IS IMPROVING, YET CONTINUED EFFORTS ARE NEEDED

There are many existing frameworks for assessing competitiveness, but key themes have emerged that we have tentatively labeled as products, people and places

The FFEF’s Dashboard of Economic Indicators provides a useful tool for assessing the competitiveness of the four largest NEO metro areas vs. 132 other MSAs nationally

NEO metros have clear competitive strengths and significant competitive weaknesses

Version 1.0 has identified goals, assets and gaps as they relate to products, people and places

49

EFFORTS TO ASSESS COMPETITIVENESS VARY,COMMON THEMES EMERGE

FFEF Dashboard of Economic Indicators

Federal Reserve Bank of Cleveland

Brookings Institution

Economic Development Administration

ProductsTechnology, Innovation,

Entrepreneurship,Exports

Technology Commercialization Patents Issued Innovation

Innovation

Entrepreneurship Networks

PeoplePrepared

workforce & educated talent

Skilled Workforce& R&D

Educational Attainment (BA’s) Human Capital Brain Power

PlacesQuality,

Connected Communities

Racial Inclusion

Income Equality

Legacy of Place

Infrastructure

Quality of Place

Quality, Connected Places

Civic Collaboration

Other 5 other factors Branding Experiences

1

2

3

50

VERSION 1.0’S ASSESSMENT OF REGIONAL COMPETITIVENESS FOCUSED IN 3 AREAS

Products People PlacesInnovation, technology,

entrepreneurship, and efficient access

to markets, particularly in key industry clusters,

determine a region’s ability to produce and sell more products in a global economy

A well‐preparedworkforce is needed to meet current and projected demands, and a competitive region needs well‐educated talent capable of out‐innovating the

competition over the long term

Well‐governed, connected, quality

places that offer easy access to education, jobs and cultural and natural amenitiesappeal to growing companies and talented people

51

Quartile performance of MSAs vs. comparison set, 2009 data; NA= Not Available1 Source: FFEF Dashboard, Ranked 136 metropolitan statistical areas (excludes largest and smallest metros) 2 Source: Moody’s Economy.com, Ranked vs. top 100 metros (2008 data)3 Source: Moody’s North American Business Cost Review, Ranked vs. 384 metros (2008 data)4 Source: Brookings, combines Canton/Cle/Ytown and removes duplicate flights, Ranked vs. top 100 metros5 Source: U.S. Department of Transportation, Ranked vs. Top 40 freight transportation gateways.

Northeast Ohio Akron Canton ‐

Massillon

Cleveland –Elyria ‐Mentor

Youngstown – Warren ‐Boardman

Prod

ucts

VC Raised1 NA 3 3 1 4Industry R&D1 NA 2 4 2 4University R&D1 NA 2 4 2 4Patents1 NA 1 1 2 3Exports as % of GMP2 NA 2 NA 1 1

Peop

le

% of population in professional occupation1 NA 3 4 2 4% of population with a graduate or professional degree1 NA 3 4 2 4

% of population with bachelors’ degree1 NA 2 4 3 4% foreign born population1 NA 4 4 3 4

Places

Cost of Doing Business3 NA 2 4 2 4Broadband Penetration2 NA 2 NA 2 3State & Local Tax Index3 NA 4 4 4 4Housing Affordability2 2 2 NA 2 2Direct Flight Connections4 1 NA NA NA NAValue of freight handled by air land and sea ports5 NA NA NA 2 NA

COMPETITIVE PERFORMANCE OF NEO MSAs VS. OTHER MSAs

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Goals Assets Gaps

Improve product development,

particularly within core and emerging industry clusters

World‐class research capacity

Manufacturing capacity that has embraced innovation

Support infrastructure for emerging clusters

Third Frontier investments

Business retention, growth and attraction network

Below national average in research spending

Research capacity to support key industry sectors (chemistry)

Connections among industry and research assets

Availability of capital

PRODUCTS – INNOVATION, TECHNOLOGY, CLUSTERS ENTREPRENEURSHIP & EXPORTS

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Goals Assets Gaps

Build portfolio of high‐growth companies

Robust entrepreneurial ecosystem

Third Frontier investments

Executive talent with high‐growth experience

Availability of capital

Supply of serialentrepreneurs

Number of second‐stage companies

Large proportion of company mix is mature, low growth

54


Goals Assets Gaps

Expand exportsDomesticInternational

Air and water ports

Product mix is export friendly

Healthy base of global companies

Diverse transportation assets

Small‐, mid‐sized companies lack export capacity

Connected logistics and transit systems

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PEOPLE – WORKFORCE, EDUCATIONAL ATTAINMENT,TALENT ATTRACTION

Goals Assets Gaps

Better prepare workforce to compete for

available jobs that will help

employers grow

Pockets of excellence with WIBs, Career Centers, Community Colleges

Emerging industry‐driven efforts (RITE Board, NEOHealthForce etc.)

Gov. Kasich focused on reform

Clarity, transparency of present and near‐term gap between supply and demand

Coordination, accountability, alignment of institutions

Employers’ ability aggregate demand for workers to influence talentdevelopment system

Employers’ success elevating entry level workers to fill demand for middle‐skill workers 56

Goals Assets Gaps

Elevate educational attainment

27 accredited colleges and universities

209,000 enrolled students

30,000 post‐secondary degrees and certificates issued per year

Pockets of primary and secondary school excellence

Effective local efforts to elevate educational attainment (Stark Education Partnership)

Understanding of longer‐term talent demand and supply, demographics of talent base and understanding of higher education system performance

Multiplicity of K‐12 school districts with varying degrees of resources and challenges

Coordination, accountability and alignment of higher education system

57


Goals Assets Gaps

Attract and retain higher‐educated, higher‐skilled

talent

Pockets of internship excellence

Emerging local talent attraction initiatives

Diverse downtowns and other assets that appeal to younger, talented workers

Coordinated talent attraction efforts

Level of immigration

Coordinated, connected internship programs

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PLACES – GOVERNANCE, CONNECTEDNESS &QUALITY OF PLACE

Goal Assets Gaps

Vibrant, connected urban cores

Robust internet infrastructure

Diverse downtowns

World‐class cultural assets, natural assets and amenities

Land banks

24‐7 downtowns

Downtown and near‐downtown residential

Infrastructure

Connections of people to educational and economic opportunities

Aligned land use and infrastructure that strengthencompetitiveness

Vibrant, connected rural communities

OARDC

Local‐food networks

Land conservancies

Land banks


Incentives to protect and preserve working lands

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Goal Assets Gaps

Efficient, effective governance

State policy

Strengthening collaboration efforts

Federal support of nascent coordinated planning efforts


Capacity to improve governmental efficiency, effectiveness

State policies that promote more efficient, effective local government

Efficient access to regional, national and global markets

Multiple airports

Multiple ports

Inter‐states

Rail assets

Robust internet infrastructure

Regional air service strategy

Connected logistics and transit systems

Relatively high labor costs

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PLACES – GOVERNANCE, CONNECTEDNESS &QUALITY OF PLACE

NEXT STEPS FORHOW WE COMPETE

Update Dashboard of Economic Indicators to increase understanding of competitiveness factors and the region’s ability to compete within those factors

Conduct gap analysis to align with Gov. Kasich’s effort to better match workforce/talent supply and demand

Prioritize existing and potential interventions

Advocate for state and federal policies that enhance our Strategy

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What are the current economic development interventions and what is the potential impact?

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NEO’S ECONOMIC DEVELOPMENT INTERVENTIONS HAVE BORNE FRUIT, YET OPPORTUNITIES EXISTHistorical investments in economic development organizat ions are paying dividends and create an opportunity for accelerated growth

Current regional in it iat ives have the potential to create ~60K new jobs and $15B in capital investment – col lect ive retention and expansion efforts should signif icantly increase those outcomes

Init iat ives have been enabled by strong leadership and committed funding, but the system is “expensive” ( leadership and funding) and core funding for operations is decl ining

Comprehensive strategies are needed to:− Achieve broad‐based excellence in commercialization support− Infuse product innovation and commercialization in driver industries with low growth− Enhance the local assets supporting high growth driver industries− Improve the ability of the region’s workforce to compete for the jobs that will be in demand

− Effectively connect regional economic development strategies to urban cores

There are countless mega ‐regional , sub ‐regional , local and hyper ‐ local in it iat ives that may signif icantly increase the regional outcomes, but inconsistencies in metrics and t imel ines prevent aggregation

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Manufac‐turing

Water Technologies

Advanced Energy*

Ag‐BioBiomedical

Technology/industry sectors

Cross‐cutting en

ablers

Flexible Electronics

*Advanced Energy includes energy efficiency fuel cell, smart grid, energy storage, biomass/waste to energy , nuclear, clean coal, solar, wind, electric transportation and shale gas

MANY REGIONAL INTERVENTIONS ARE CROSS‐CUTTING ENABLERS THAT CAN BE APPLIED TO MULTIPLE INDUSTRIES

Tourism

Entrepreneurship

Workforce/Talent (not comprehensive)

Company Recruitment

Retention & Expansion

Technology Commercialization (not comprehensive)

Inclusion in identified industry sectors

Advocacy

External Marketing and Communications

EXISTING PLANNED

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CURRENT & FUTURE IMPACT CAN ONLY BE AGGREGATED FOR INTERVENTIONS TRACKED BY FFEF

AmountInvested 2011 2011 Year End 2012‐2018

ProjectedResponsibleOrganization

Manufacturing$4.3M 369 New Jobs

730 Retained Jobs$50.3M Capital

12.7K New Jobs5.5K Retained Jobs$538.7M Capital

MAGNET

Biomedical $30 M 2.3 K Jobs$152M Capital

7.5 K Jobs$200M V Capital BioE ‐ Partners

Advanced Energy $1.6 M 226 jobs$17 M

9.9K Jobs$662M Capital NorTech

Flexible Electronics $870 K 67 jobs$17 M

1.5K Jobs$100M Capital NorTech

Entrepreneurship $15.5 M 2.3K Jobs$221M Capital

7.7K Jobs$350M Capital JS ‐ JEN

Company recruitment $3.9M 1.4K Jobs$52M new payroll

8 K Jobs$300M new payroll Team NEO

Retention and expansion

$4.9M 4 K New Jobs

8 K Retained Jobs$1.5B Capital

40K New Jobs, 83K Retained Jobs

$13B Capital

JobsOhioNetwork

65Source: NorTech, BioEnterprise, TeamNEO, MAGNET, FFEF

ESTIMATING THE COLLECTIVE IMPACT OF INITIATIVES REQUIRES CONSISTENCY OF METRICS

We have compiled a database of nearly 100 mega‐regional, regional, local and hyper‐local initiatives

including…

Key Insights

Strong, vibrant cities and communities are critical for the long‐term vibrancy of the region

The NEO Regional Competitiveness Strategy is interested in understanding the potential collective impact of local initiatives

We recommend that funders encourage consistency of key metrics (job creation, capital attracted or invested, etc) and timelines to enable regional data aggregation

Mahoning River ConsortiumEvergreen Cooperatives

The Oberlin ProjectUniversity Park Alliance

Food Security ClusterStark Education Partnership

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ASSESSING INITIATIVES BY IMPACT & PROBABILITY OF SUCCESS PROVIDES INSTRUCTIVE INSIGHT

Impact

Low

Low High

High

Prob

ability of S

uccess

67

SECTORS TO BE ASSESSED

Manufacturing – related to value added manufacturing that MAGNET is leading

Biomedical – led by BioEnterprise and its partner organizations

Advanced Energy – NorTech is leading in 11 sectors of energy with different emphasis depending on the sector

Flexible Electronics – NorTech is leading

Ag‐Bio – Early stages with OARDC and Wayne County Economic Development leading

Water Technologies – NorTech is leading a industry driven roadmapping process specif ic to waste and storm water clean up

Tourism – dispersed in many organizat ions across the region

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ENABLERS TO BE ASSESSED

Entrepreneurship – Jumpstart Entrepreneurial Network

Company recruitment – Team NEO tradit ional role

Retention & expansion – JobsOhio regional network

Workforce/talent – dispersed throughout the region

Technology Commercialization – focused within the cluster areas more than cohesive regional strategy

Inclusion in identified industry sectors – NorTech is leading a regional effort with the regional partners and the Fund

External Marketing and Communications – Cleveland Plus

Advocacy ‐ Chambers

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Impact

QUALITATIVE SECTOR ASSESSMENT REVEALS CONSISTENCY RE:IMPACT, UNCERTAINTY ABOUT TOURISM

Advanced Energy

Water Technologies

Ag‐Bio

Biomedical

Flexible Electronics

Manufacturing

TourismTourism

70Low

Low High

High

Prob

ability of S

uccess

Impact

Workforce/Talent

Company Recruitment

Technology Commercialization

Entrepreneurship

Company Recruitment

Retention and ExpansionAdvocacy

Inclusion

Marketing

Marketing

71Low

Low High

High

Prob

ability of S

uccess

QUALITATIVE ENABLER ASSESSMENT REVEALSUNCERTAINTY IN SOME CURRENT AREAS OF FOCUS

Inclusion

NEXT STEPS FOR ASSESSINGTHE IMPACT OF OUR INTERVENTIONS

Assess existing sector and enabler interventions based on potential impact and likelihood of success

Obtain additional input, as appropriate, about the potential impact of additional initiatives

Connect the dots between this analysis and the economic deep dive into driver industries and potential interventions

Connect the dots between this analysis and the competitiveness gaps that have been identified

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Strategic Drivers

1. Help companies take advantage of immediate growth opportunities through transactional excellence and effective marketing

2. Drive private sector job growth by strengthening the region’s driver industries –with a specific focus on manufacturing

3. Strengthen and connect the region’s innovation, research and commercialization capacity to increase product development in driver and emerging industries

4. Build coalitions that accelerate growth of more emerging industries –leveraging our current and targeted regional advantages

5. Continue to foster and grow the region’s entrepreneurial environment


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Strategic Drivers

6. Develop workforce to meet short‐term employer needs; elevate educational attainment and attract high‐skilled people to maximize long‐term competitiveness

7. Align local and regional initiatives that will improve our Quality of Place competitiveness to appeal to growing companies and talented people

8. Strengthen and connect the region’s transportation assets (hub air service, highways, rail and ports) to improve access for people and products to markets near and far

9. Advocate for public policies that lower the cost of living and of doing business in the region, including more efficient government, effective land use and legislation that fosters business growth

10.Develop the coalition(s) of business, philanthropic, education and government leaders to monitor, refine and deliver on the Strategy


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Activities/EDOs• Retention & Expansion• Attraction• Advocacy• Workforce Development• Nortech• Bio Enterprise• Jump Start• Magnet• Chambers• City/County Strategies• Others…

Green: Current strength but may require some refinement/clarifications

Orange: Significant opportunity to align with regional strategy

Red: Significant gap to be addressed

IMPACT OF STRATEGIC DRIVERS ARE SPREAD OVER TIME –ALIGNING INITIATIVES IS KEY TO VERSION 2.0


INTERMEDIATE TERM

2 – 10 Years


Strategic Driv

ers

Enable short‐term Demand growth and expand regional marketing

Transportation strategy maintaining/growing air service and grow ground transport competitiveness

Workforce for short term demand

Drive private sector job growth‐ focus on core industries/manufacturing

Improve education attainment across the region

Workforce to develop a long‐term supply for to support growth

Leverage and Build on Innovation strengths

Align local and regional initiatives to improve Quality of Place

Attract and Develop emerging industry clusters

Foster and grow Entrepreneurial environment

Advocate to improve cost of living and of doing business in the region

Coalition to monitor progress, refine and deliver strategic initiatives

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NEXT STEPS FOR THE TASK FORCE& THE OVERALL STRATEGY EFFORT

Communicate with and obtain input and endorsement from key organizationsUpdate and solicit initial input from key elected officials and select organizations re: Version 1.0

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VERSION 1.0

VERSION 2.0Develop and prioritize proposed actions to enable strategic driversDeep dive selected areas to better understand and quantify the gaps/opportunities Develop a process and engage a broader community across the region to refine the strategy, gain broader endorsement and ownershipDevelop organization options for ongoing ownership, monitoring, reporting and refinement of Regional Strategy

NEO ED Strategy Executive Summary Presentation 120205

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Transcript of NEO ED Strategy Executive Summary Presentation 120205