“Metro-Economics” Towards a “Unified Field Theory” Robert Weissbourd, RW Ventures, LLC

1. Portland Plan Inspiring Community Series January 17, 2011 “Metro-Economics”Towards a “Unified Field Theory”Robert Weissbourd, RW Ventures, LLC

2. 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

3. Origins: From “Equity” to … “Equity” Civil Rights Empowerment Economic Development: Assets Economic Development: Markets Putting the Economics in Economic Development

4. 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

5. Connectedness Poverty Productivity Isolation Market Failure in Lower Income Communities • Employment networks • Entrepreneurial opportunities • Business, real estate investment • Expanded products and services • Competitive, healthy communities • Undervalued, underutilized assets

6. Equity and Opportunity are Good for Business .6 .4 Wage Growth (1990-2000) .2 0 -.2 0 .1 .2 .3 .4 Poverty Rate (1990) Inequality has a negative effect on income growth.

7. “I N C L U S I V E G R O W T H” Economics & Markets Asset Development Innovation Constructive Government Productivity Inclusiveness Sustainability

8. Amartya Sen: “… human beings are not merely the means of production, but also the ends of the exercise.” Social Political Economic

11. 94% 92% 78% 79% Venture Capital Funding Airline Boardings 75% 76% 75% U.S. Air Cargo Weight Patents 66% 73% Wind + Solar Energy Employment Service Exports Graduate Degrees Population Gross Product 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 Source: Brookings Institution

12. Why Metros?Economic Geography and Place-Based Development 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

13. Cities Are the Critical Core of Metros Suburban % of total MSA employment City % of total MSA employment Suburbs City

14. Neighborhoods are Nested in Larger Systems Which Drive the Flows of People and Capital SOCIALSYSTEMS ECONOMICSYSTEMS POLITICALSYSTEMS Labor Markets Social Capital GovernmentServices Business Markets Civic Networks Infrastructure Housing Markets PublicGoods Capital Markets Governance Consumer Markets Neighborhoods arise from the interaction of regional economic,social and political systems with characteristics of place.

15. 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.) Transformative Systems (Market processes – housing, labor, business; production dynamics – clusters, value chains, etc.; innovationdynamics - 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

16. 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.)

17. Inputs to Production (Human capital; real estate; capital; natural and knowledge resources; etc.)

18. Transformative Systems (Market processes – housing, labor, business; production dynamics – clusters, value chains, etc.; innovationdynamics - knowledge creation, networks, commercialization, entrepreneurship, etc.) Economic Outputs (Businesses – gross regional product, profits; households – wages, other income, etc.)

19. The Knowledge Economy 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 % Change • Lead to New Drivers of Productivity which Favor Cities • Dense knowledge networks • Functional specialization • Innovative capacity

20. Source: Brookings Institution

21. Global GDP 2010 Portland ranks 3rd in exports (as % of GMP) 2002-2008 GMP Growth = 144.5% Exports make up 25% of Portland’s GMP 21.4% BIC Countries 20.2% US Global GDP 2015 25.8% BIC Countries 18.3% US Source: Brookings Institution

22. Demand for clean energy generation Demand for products that reduce energy consumption Demand for products that reduce pollution

23. Source: Brookings Institution

24. Portland is the 24th least segregated metro 11.3% of Portlanders live in poverty Portland ranks 17th in income equality Source: Brookings Institution

25. These Five Key Leverage Points Take Us from Theory to Practice EnhanceRegionalConcentrations Increase SpatialEfficiency DeployHuman CapitalAligned withJob Pools Leverage Points DevelopInnovation-EnablingInfrastructure Create EffectivePublic & CivicCulture & Institutions

26. Portland Plan Clusters Athletic and Outdoor Industry Cleantech Software Advanced Manufacturing Enhance Regional Concentrations: Industries, Occupations and Functions Cluster Map Source: Bo Heiden, Strategic Uses of the Global Patent System

27. Portland has the 19th most educated population, 1/3 have at least a bachelor’s degree Deploy High Human Capital Alignedwith Job Pools

28. Develop Innovation-Enabling Infrastructure Research Partners Consumers 19th most high impact firms – 7.5 mid-size firm births per 10,000 employees 56th in business churn; 22.3% firm births and deaths as % of total R&D 24.1% establishment births and deaths as % of total Market Research Academics Innovation Ecosystem 16.7 patents per 10,000 employees Finance Marketing Suppliers Manufac- turing External Consultants Customers Image based on material from Land O’ Lakes Inc.

29. Housing Costs as Percent of Income Housing + Transportation Costs as Percent of Income Increase Spatial Efficiency Source: Center for Neighborhood Technology 6.4% of Portlanders travel to work using public transit, putting Portland in 11th place. Portland ranks 24th in traffic congestion Portland ranks 63rd in average travel time to work at 25.3 minutes 82% of Portlanders live within urbanized areas 24% of jobs are within 3 miles; 29% of jobs are more than 10 miles away from city center

30. Create Effective Public & Civic Culture & Institutions Portland ranks 37th in most governments, with 0.3 governments per 10,000 people Portland has .77 special district governments per 10,000 people, putting it in 63rd place

31. A Dynamic Economy Source: Newsweek, Manyika, Lund and Auguste, “From the Ashes,” 8.16.2010 The economy is changing rapidly.

32. A Dynamic Economy Success depends on open, adaptive, networked governance.

33. Summary: Implications for Practice • Cities are the Solution • High Road Development • Intentionality • New Governance • Metropolitan Business Plans

34. 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

35. Why “Metropolitan Business Planning”? The steps to analyzing and improving a regional economy lend themselves to the proven discipline of business planning. Source: Brookings Institution

36. Northeast Ohio Puget Sound Minneapolis-St. Paul Source: Brookings Institution

37. Small Business Admin. Loans Dept. of Transpo. SAFETEA-LU Programs Dept. of Labor Workforce Inv. Act Dept of Commerce Int’l. Trade Admin. Small Business Assistance Upgrading Roads and Rail Export Strategy Workforce Training HUD Section 8 Affordable Housing A New Economic Federalism Increase SpatialEfficiency EnhanceRegionalConcentrations Developand DeployInformationResources DeployHuman CapitalAligned withJob Pools DevelopInnovation-EnablingInfrastructure Create EffectivePublic & CivicCulture & Institutions Comprehensive Metropolitan Strategy

38. Integrated Federal Investment Dept. of Transpo. SAFETEA-LU Programs Department of Commerce International Trade Administration Small Business Admin. Loans Dept. of Labor Workforce Inv. Act Dept of Commerce Int’l. Trade Admin. Department of Transportation SAFETEA-LU Programs HUD Section 8 White House Office of Urban Affairs Dept. of Labor Workforce Inv. Act Small Business Administration Loans Increase SpatialEfficiency EnhanceRegionalConcentrations Developand DeployInformationResources DeployHuman CapitalAligned withJob Pools DevelopInnovation-EnablingInfrastructure Create EffectivePublic & CivicCulture & Institutions HUD Section 8 Comprehensive Metropolitan Strategy A New Economic Federalism • Cross-Agency Regional Teams • Pooled and Flexible Funding • Support for Regional Capacity Building • “New Federalism” Partnership

39. 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

40. DISCUSSION

41. “Metro-Economics”Towards a “Unified Field Theory”Robert Weissbourd, RW Ventures, LLC Portland Plan Inspiring Community Series January 17, 2011