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XBriggs-Inventing the Next American Economy (APA Keynote) 0413
Transcript of XBriggs-Inventing the Next American Economy (APA Keynote) 0413
The Big Challenges Filling the gap takes time, and the workforce is expanding Fastest Growing Occupations in the U.S.
by projected growth and median wages, 2010-2020 Source: Bureau of Labor Statistics Only about 1 in 4 jobs pays a living wage. The low-wage recovery Two main drivers of real economic growth:
Commodities and innovation Unemployment Rate, February 2013 The innovation economy is not a “bandwagon”—it’s the biggest transformation of our lifetimes.
And it is driving the have’s and have-not’s—not just people but places—farther apart. Patent production remains highly concentrated geographically (Total patents, 2000 - 2008) (% Growth in Patents, 2000 - 2008) Innovation hubs have added jobs and skilled workers faster in recent decades EVERY ECONOMY IS
REALLY TWO The TRADED sector
sector Traded-sector jobs pay about $15k more per year, and every traded-sector job creates about
2.5 local-service jobs. ...which suggests the need for more balanced, comprehensive strategies. But what ideas are driving our
CURRENT efforts to chase economic growth and create more good jobs?
And do those ideas make sense? PART TWO:
THE COSTLY MYTHS ABOUT BUILDING LOCAL PROSPERITY—ECONOMIC GROWTH AND JOBS Myth #1:
Our city/town/region can compete if we lower the cost of doing business
(the old logic of attraction). Reality:
Use a complete play book to enhance the value of place. Attract companies to fill strategic gaps Enhance
Barriers to Growth Myth #2:
If we invest in education and support “entrepreneurship,” the next economy will materialize (genius-of-the-market logic). Reality:
Need to target and integrate investments ("upgrades") with a focus on key clusters, occupations and gaps—without assuming perfect foresight. Most
Companies Myth #3:
To get jobs and growth, we need a strategy that’s all about attracting and retaining tech companies (sector logic). Reality:
Need to focus on cooperative innovation (ecosystem logic) and job quality, expanding and capturing the benefits of both your traded and local service economies. So where do we go from here ? PART THREE:
LESSONS FOR PLANNING AND PLANNERS Lesson 1
Have a plan—not a fixed blueprint
but a roadmap with clear priorities. a. Clear picture of how your economy is changing c. Prioritizing some growth drivers and catalytic projects to cultivate them. b. Well informed about innovative clusters and global markets. Develop List of
"Top Asset Sectors" Strategy 1: Become a Leading
Hub of Advanced Manufacturing Identify Clusters: Manufacturing, Business Services, Logistics, Tourism Address the demand for human capital among middle and high skilled jobs Lesson 2
Support innovation with vibrant, mixed-use focal places and critical infrastructure. 1.Focal places: “innovation districts” are promising, but it’s unclear how widely the benefits are shared.
2. Infrastructure: Need transportation, telecoms and more—prioritized by highest benefit to your growth drivers. Examples Barcelona@22
Guadalajara’s Ciudad Creativa Digital
Boston Innovation District MassChallenge
Boston Redevelopment Authority Lesson 3
Strengthen demand for local goods and services, and upgrade jobs. 1. Targeted procurement by public agencies and anchor institutions.
2. Encourage local sourcing by innovative firms—problem solve.
3. Good-job procurement standards
4. Local wage ordinances Example
Anchor-Driven Strategies in Cleveland MIT/University of Maryland Report on Cleveland's
University Hospitals Vision 2010 $800 million in total demand
Project Labor Agreements
New construction jobs Living Wage
Ordinances 2000: 53
Now: 140+ Lesson 4
Pursue targeted skill development. Develop demand (employer)-driven workforce partnerships: targeted, relationship-driven, outcome-driven, aligned with your growth drivers. Example
Investing in Workforce Intermediaries Summary We need to invent the next American economy—not “declare” it or expect it to materialize.
It will take work to make it inclusive—The innovation economy is driving very unequal outcomes so far.
Planning is central—This kind of “inventing” is not a solo act of inspiration or luck. "If creating jobs and distributing money were easy, someone else would have done it." Source: Enrico Moretti, The New Geography of Jobs Barcelona@22 Source: Brookings Institution Source: The Atlantic, using BLS data Source: Bureau of Labor Statistics Source: OECD Source: OECD Source: Brookings Institution Source: ECONorthwest and U.S. Census Bureau Source: Bureau of Economic Analysis Source:
National Employment Law Project Top Innovation Sectors for Growth Companies
“Advanced industries—characterized by dynamic R&D and engineering-intensive industrial concerns—must be a focal point ... delivering products and services in industries ranging from aerospace and space to auto assembly, advanced energy systems, IT, and medical devices."
Source: Brookings Institution Total Output but 45% of all U.S. exports
(and have highest multipliers) Advanced
Industries are just 10% of overall economy Source: Moretti, The New Geography of Jobs Example Brazilian President Luiz Inacio “Lula” da Silva, to the press, 2004 An initiative of Jobs for the Future and the Annie E. Casey, Ford, and Rockefeller Foundations Source Four Macro Challenges Equitable
Returns Total Demand Global
Fair trade and intellectual property enforcementt Commodities Innovation But increases are quite dispersed Brain hubs offer higher wages to all A tale of two economies
Rochester, NY and San Diego, CA Compound annual growth rate of GDP, 2008 - 2011, by metro Source: Bureau of Economic Analysis Most high-growth economies are innovation-driven trade engines We face a dilemma:
Only trade generates growth, but with limited direct employment in most regions.
Think: energy source, dynamic and volatile. Most jobs are in the local service economy, which offers limited innovation and job quality.
Think: big platform, missing ladders. Identify your community’s trade partners and growth clusters--even nascent ones. Model: Metro Business Planning And yet America's economy has drifted toward more local consumption, smaller export share Traded Non-traded Cultivate
Expand access Upgrade jobs
"Graduate" workers to traded Strategies Example Source: M. Porter, Harvard Business School