National Trends in the New Economic Development Landscape

1. Jeffrey A. Finkle, CEcD President & CEO, International Economic Development Council (IEDC) MEDA Conference June 7, 2012 National Trends in the New Economic Development Landscape

2. About IEDC • Overview of the Economy • Challenges in the New Economic Development Landscape • Industry Clusters for Job Growth • Trends in Economic Development Presentation Outline

3. About IEDC The International Economic Development Council (IEDC) is the world's Largest membership organization serving the economic development profession. We are dedicated to helping economic developers do their jobs more effectively and raising the profile of the profession. When we succeed, our members create more high-quality jobs, develop more vibrant communities, and generally improve the quality of life in their regions.

4. IEDC Membership • From public to private, rural to urban, and local • to international, our 4,600+ members include: • Public state, regional, city and county ED • professionals • Chambers of Commerce and other business support • agencies • Technology development agencies • Redevelopment authorities • Educational Institutions & Non-profits • Consultants • Utility companies

5. Member Services • Conferences • Professional Development & Certification • Legislative Tracking • Clearinghouse • Career Services • Newsletters and Journal • Advisory Services & Research

6. Overview of the Economy

7. Globalization created a more uncertain and riskier economy, enabling opportunities throughout the globe, but also greater risks and • The Great Recession led to general economic deterioration across the nation, followed by a slow recovery Overview of the Economy

8. National Data: The Great Recession & the Recovery • Over 8.8 million jobs lost the since recession began in December 2007  we have regained only one-fifth of them to date • Over 14 M people remain unemployed today • Construction lost over 2 M jobs since the recession • Manufacturing lost 2 M jobs since the recession Overview of the Economy

9. Snapshot of Maryland • Unemployment in Maryland 2011: 7.1%  Lower than U.S. average for 2011 of 9.2% • Foreclosure crisis in the state resulted in:  Annual loss of more than $26 million in state & local income tax revenue • Maryland 2010 population over age of 65: 12%  National average 2010: 13% Overview of the Economy

10. Challenges in the New Economic Development Landscape

11. Economic developers have been increasingly • challenged due to the negative effects of the recession and global shifts These global shifts have instigated a reassessment of economic development strategic priorities and the role of the practitioner in the community Challenges in the New Economic Development Landscape

12. In the last 3 years, the profession overall has been greatly hindered by: • Lack of access to capital and financing • Business closures and downsizing • Declines in real estate development Other challenges have been… Challenges in the New Economic Development Landscape

13. Challenges in the New Economic Development Landscape More challenges to economic development in the new landscape: • City/county/state budget cuts •   Lack of political support for economic development • Home foreclosures •   Industry restructuring •   Complicated regulations/permit process •   Lack of skilled labor •   Inadequate education Moreover…

14. Jobs - the retention and creation of jobs - has taken precedent over business attraction and real estate development as priority goals in many communities • The recession has led to a broadening of ED efforts among strained communities i.e., places that were not focusing on small business development & entrepreneurship previously are creating programs to meet the unemployment challenges Challenges in the New Economic Development Landscape

15. In this new landscape, economic developers have had to shift gears What does this mean? It means restructuring local economies to more efficient, more diversified, and more resilient to shifts and challenges Challenges in the New Economic Development Landscape

16. Industry Clusters for Job Growth

17. Main Sectors with Job Growth for Today & Tomorrow • Healthcare • Information Technology • Energy: Utilities, Green • Financial Services Industry Clusters for Job Growth

18. The gap between industries that lost jobs vs. industries that are hiring: Jobs Lost vs. Jobs Available Auto (manufacturing) Healthcare Construction IT/Engineering Banking Energy ...and Manufacturing in various sectors Industry Clusters for Job Growth

19. Healthcare Nationally, 631,000 people hired in healthcare bt. Dec 2007  & June 2009 …despite the recession Since June 2009, job growth in healthcare grew by 3.5%  Growth is expected to remain steady in the sector as baby- boomers grow older & obesity increases  The need will increase for physical therapists, RNs, cardio technicians & occupational therapists Industry Clusters for Job Growth

20. Information Technology 1 million new technology-related jobs will be created over the next 4 years  an increase of about 10% • Database administrator jobs: a hot field with ample opportunity for growth *The intermingling of healthcare & IT – stemming from increased pressure to digitalize medical records - could provide a large number of new jobs Industry Clusters for Job Growth

21. Energy: Utilities, Green 1 • Nationwide, turnover for utilities positions will be high in the coming decade as older workers retire  2008: 53% of utilities workforce was age 45 or older • The job-creation potential of the green economy is immense  Jobs range from jobs high-paying science & research, engineering and legal fields to low & semi-skilled workers in construction and manufacturing Industry Clusters for Job Growth

22. Financial Services Accountant jobs:  growth of 22% predicted in the next decade • Financial advisers: growth of 41% predicted over the next decade • The actuarial field: growth of 24% predicted over the next decade Industry Clusters for Job Growth

23. About Manufacturing 21stcentury manufacturing has become highly technical & innovative • Manufacturing jobs can be found in most sectors, from energy, IT (making devices), life sciences, etc…  manufacturing is vital to U.S. competitiveness • About 5.5 million Americans today work in manufacturing - more than any other sector in the nation *However, the U.S. is facing a huge skills gap for technical and analytical workers in manufacturing Industry Clusters for Job Growth

24. What does this mean for economic development? To meet industry demands, communities will need to: • Upgrade the skills of existing workers • Begin transitioning the workforce to new skill sets today - to be prepared for tomorrow! • Attract new talent and youth *WFD efforts & ED efforts MUST be coordinated today Industry Clusters for Job Growth

25. In terms of manufacturing: • Education will be the key to the U.S. maintaining an competitive edge • ED practitioners and WFD leadership need to:  Engage manufacturers in identifying needs  Update curriculum at local training institutions Recruit manufacturers for local workforce investment boards Use local workforce data to inform existing manufacturers about opportunities in their local labor market Industry Clusters for Job Growth

26. Addressing the Skills Gap: Towson University’s Division of Economic & Community Outreach (DECO) in Maryland • Provides a pipeline to employers of both educated & professionally certified employees who meet immediate hiring needs  enables students to take professional certification courses while studying for BA and graduate degrees • The university has created a 3D Digital Object Lab that allows regional industries learn how to use advanced technologies to increase efficiency  also gives students exposure to advanced manufacturing techniques Industry Clusters for Job Growth

27. Trends in Economic Development

28. Economic development professionals are:   • Reassessing the role of the practitioner in the community • Altering strategic priorities and developing new strategies to support the prosperity of workers and regions The aim is to build a resilient local economic base & create quality jobs for the long-term Trends in Economic Development

29. From the 2012 IEDC Member Survey: In the past year, how have you altered your organization’s strategy?

30. Today, competitive communities are focusing on: • Strategic Partnerships • Regional Cooperation • Business Retention • Entrepreneurship & Small Business Development • Economic Gardening • Marketing/Social Networking • Clean Energy & Energy Efficiency Trends in Economic Development

31. * Communities are building on assets already in place and engaging in strategic partnerships Engaging in strategic partnerships is critical to creating quality job opportunities in the community Partnerships with: Chamber of Commerce, a local or state government, community-vocational college, another EDO, and the private sector Trends in Economic Development

32. From the IEDC 2012 Member Survey: Have you entered in partnerships or combined resources with other stakeholders in the community to enhance ED efforts ?

33. Regional collaboration has remained steady as an important ED strategy • Regional collaboration facilitates efforts for the retention & expansion of local/regional business Trends in Economic Development

34. * Fostering Entrepreneurship & Small Business Development are important ED strategies today  By strengthening the economic base, regions can better promote innovation and develop strategies to attract talent and business The Kauffman Center for Entrepreneurial Leadership describes entrepreneurs as “generative and self-renewing” Trends in Economic Development

35. * Most of the new jobs created in the U.S. over the last 25 years came from young entrepreneurial companies In todays competitive global marketplace entrepreneurial firms are the driving force behind economic recovery, job creation and regional economic growth Trends in Economic Development

36. Summary • The recession and global shifts have provided many challenges, but there are also many opportunities for communities to expand upon and evolve • Upgrading the skills of exiting workers and attracting talent are vital for local economic growth  WFD and ED practitioners must collaborate to establish a resilient workforce and create jobs • Strategic partnerships, regional collaboration and strategies to foster entrepreneurship & small business development are ever more important in the new economic development landscape National Trends in the New Economic Development Landscape

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