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State of the Industry 2012

State of the Industry 2012. ,. Jeffrey A. Finkle , CEcD President & CEO International Economic Development Council (IEDC) January 30 , 2012. Methodology. Results of a 2012 online survey of our members about 2011 Update on U.S Job Growth Key Trends in ED. Survey Results.

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State of the Industry 2012

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  1. State of the Industry 2012 , Jeffrey A. Finkle, CEcD President & CEO International Economic Development Council (IEDC) January 30, 2012

  2. Methodology • Results of a 2012 online survey of our members about 2011 • Update on U.S Job Growth • Key Trends in ED

  3. Survey Results

  4. 1. In comparison to 2010, how has your organization's operating budget shifted?

  5. 2. Have you made the following changes in your organization?Increased Spending

  6. 2. Have you made the following changes in your organization?Decreased Spending

  7. We see improvements in 2011 over 2010

  8. 3. What THREE issues have posed the greatest challenges to your organization’s economic development efforts in the past year? 2011Responses: • Lack of access to capital/financing 47% • Declines in real estate development 39% • City/County/State budget cuts 38% 2010 Responses: City/County/State budget cuts 52% Lack of access to capital/financing 51% Declines in real estate development 41%

  9. Other challenges: • Lack of skilled labor 28% • Inadequate Infrastructure 23% • Business closures/downsizing 23% • Lack of political support for ED 21% • Industry restructuring 20% • Complicated permit process/regulations 15% • Taxes10%

  10. 4. In 2011, has your organization seen an increase in the following types of projects?

  11. Notable changes between 2010 and 2011 • Prospects decreased by 24% in2011, compared to the decrease of 35% in 2010 • Expansions increased to 47% in 2011, compared to 39% in 2010 • RE projects decreased by 39% in 2011, an improvement from the 55% decrease in 2010

  12. 5. Have you entered in partnerships or combined resources with other stakeholders in the community to enhance ED efforts?

  13. 6. With whom did you partner? • Chamber of Commerce 54% • Local or State government 48% • Regional EDO 45% • Community college/vocational school 43% • University 39% • Another Local EDO 39% • Workforce Investment Board 37% • State EDO 33% • Private sector company 32%

  14. 7. Has your organization taken a pro-active role to provide opportunities for the unemployed in your community?

  15. 8. How did you take an active role for the unemployed? • Partner with community colleges to offer training programs focused on reducing unemployment 61% • Act as an intermediary between employers & job seekers 48% • Facilitate Real Estate redevelopment to create job opportunities 28% • Partner with a private company for training and job skills 32%

  16. Other way that EDOs helped the unemployed: • Hosted or co-hosted job fairs Collaborated with local WIB • Started business incubators

  17. 9. In the past year, how have you altered your organization’s strategy?

  18. We note some shifts in strategy between 2010 and 2011 Notable increase in social mktg in 2011, with 34% usingit - - it was not even among top replies in 2010 • Business retention was 65% in 2010, but 52% in 2011 • Entrepreneurship & small business development was 51% in 2010 and is 41% for 2011 • Collaborating regionally remained steady with 46% in 2010 and 47% in 2011

  19. 10. What will be your organization's top objective for 2012? • More business attraction 60% • More business retention 47% • More entrepreneurship & small business dvpt. 36% • Engaging more in strategic partnerships 33% • Concentrating on a regional basis 20%

  20. Changes in Objectives for 2012 as compared to those of 2011

  21. 11. Does your organization plan to revamp its strategic development plan in 2012?

  22. 12. Compared to 2011, how would you rate your organization's outlook for ED activity for 2012?

  23. 13. How safe do you think your job is today?

  24. 14. Do you consider your community or organization appropriately funded given its size?

  25. 15. If you think you need more resources, how much more do you think you need?

  26. 16. Have local politics interfered with any incentive deals your organization was promoting?

  27. Jeff Finkle asked about job growth on LinkedIn - December 2011

  28. Jeff Finkle asked about job growth on LinkedIn - December 2011 - Synopsis of Accompanying Comments Positive expectations for job growth in 2012, but for jobs at the lower end of the pay scale • Expectations for consumer spending to remain flat • A desire to see more focused job training and retraining for workers and unemployed to increase U.S. competitiveness

  29. Update on U.S. Job Growth

  30. Update on U.S Job Growth As of Nov 2011, 239 of 372 metros had employment greater than the same time in 2010* • However most metros are still far from their pre-recession employment totals * According to the U.S. Bureau of Labor

  31. Number of U.S. Metros By Employment Activity Year Over Year Change in Nonfarm Employment Source: BLS • * For Nov 2011, only54 metros (15%) were at levels exceeding their November 2007 totals** • * 310metros are still below their pre-recession total • * On average, U.S. metros are 4.9% below their Nov 2007 levels** • ** Analysis from Garner Economics LLC

  32. Update on U.S Job Growth • 2011 has proven to be a year of few breakouts The average annual employment growth rate among metros held at around 0.7%

  33. Update on U.S Job Growth Only 34 metros exceeded their 2007 employment totals in all eleven months of 2011** • This group is comprised of 15metros in Texas  4 metros in the Dakotas 2 metros in Alaska Another 5 metros are home to military installations **Analysis from Garner Economics LLC

  34. Key Trends in Economic Development

  35. Key Trends in Economic Development Areas of Focus: Fundraising Strategy Hiring

  36. Key Trends in Economic Development Fundraising • Increased demand for accountability • A shift in the perception of ROI  A resilient economy long-term vs. # jobs & firms Smart Mayors are increasingly reaching out to private sector for support • Shift in funding from public sector to private  Over 60% of funding is from private sector today

  37. Changes in Public / Private Funding Since 1998* * Based on Data from 98 NCDS client organizations (Local & Regional Chambers and EDCs) that receive funding from municipal govts. and local business community

  38. Key Trends in Economic Development Fundraising-Players Traditional funders - i.e., utilities, banks - have diminished capacity Today: a broader spectrum includes hospitals, cable companies, law firms, waste management firms

  39. Key Trends in Economic Development Fundraising-Challenges Public EDOs often lack skills for engaging the private sector • Less public money available • Investors are streamlining funding • Pledges are no longer a given year to year, nor or they automatic

  40. Key Trends in Economic Development Strategy Increase in mergers & consolidations State level: shifts in ED delivery systems - moving towards PPPs • Developing strategic plans that focus more on Quality of Life issues OR that are product drive  QOL: harder to measure, more inspirational  Product driven: infrastructure, industrial parks

  41. Key Trends in Economic Development Hiring There is increased demand for ED professionals at senior levels Leadership crisis is forthcoming - - retirements at higher levels will increase in next 5 years

  42. Key Trends in Economic Development Hiring Collaboration & partnership skills of the EDO are more important to private sector CEOs • There is more emphasis on “pay for performance” – using metrics to evaluate job performance

  43. Key Trends in Economic Development Hiring • New top level ED professionals will need to be more business savvy…and know how to raise money…and know how to work with private sector & universities…and know how to start a company New PPPs will pay more for the right leader with ED & business experience

  44. Summary

  45. Summary - State of the Industry • Lack of access to capital/financing is still a big issue • Declines in RE development persist • City/county funding declines hinder local ED efforts • Lack of skilled labor is growing problem • EDOs are engaging in more strategic partnerships • Regional collaboration is on the rise • BRE remains a key strategy, but many looking to focus on attraction in 2012

  46. Summary - State of the Industry • Most EDOs will need more money to achieve goals • Job growth still lags behind pre-recession rates • Shrinking public sector funds mean that more EDOs will look to private sector for funding • ROI criteria has shifted towards resiliency • Investor scrutiny is ever more stringent • Shift towards PPPs and consolidation of EDOs • ED professionals will need to be ever more deft, knowledgeable and adaptable in the future

  47. Thank You! Questions? Please visit our website at www.iedconline.org Join IEDC on Facebook and LinkedIn!

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