Exploring Opportunities for a Stronger Regional Economy

1. Exploring Opportunities for a Stronger Regional Economy Module Six

2. Review of Previous Session • Competitive Advantage • SADA Regional Economy • SADA Workforce • Innovation / entrepreneurship

3. Competitive Advantage: Four Factors Business shapes the economic value of a region, but places can help shape, nourish and sustain local enterprises and industry. What determines competitive advantage? • Firm Strategy, Structure and Rivalry • Factor Conditions • Related and Supporting Industries • Demand Conditions

4. What Are the Keys toEconomic Growth? • People • Place • Businesses • Innovation • Clusters or branding

5. Regional Economy

6. Regional Economy

7. Manufacturing Changes

8. Manufacturing Employment Changes SADA Region

9. Manufacturing Output Changes SADA Region

10. Manufacturing Value Added Changes SADA Region

11. Agriculture & Forestry EmploymentSADA Region 2010

12. Travel & Tourism Visitor IndexArkansas & SADA Region

13. Travel & Tourism Per Visitor ExpendituresSADA Region

14. Travel & Tourism ExpendituresSADA Region

15. Travel & Tourism ExpendituresSADA Region

16. Travel & Tourism EmploymentSADA Region

17. Travel & Tourism Local Tax CollectionsSADA Region

18. SADA Workforce Occupations

19. SADA Education Levels

20. Assessing Entrepreneurship Capacity Inventory of Entrepreneurship: BEA-REIS data Census (non-employer statistics) County Business Patterns Panel Study on Entrepreneurial Dynamics Business owners survey Capacity for New Entrepreneurs: Educational attainment Immigration and diversity Financial resources Business resources

21. Your Region’s Capacity for Innovation • Research & Development (R&D) assets • Regional universities or community colleges • Other resources that foster innovation

22. The Creative Class • Should be attracted and retained • Develop, design or create new applications, ideas, relationships, systems or products • Considered “footloose” • Attracted to amenities Florida, 2002

23. Why the Creative Class? • The density of creative class has a positive effect on job growth both in the ‘creative’ and ‘non-creative’ sectors. • Creative capital and entrepreneurship work in synergy with one another to increase employment opportunities in both sectors.

24. Where is the Creative Class in the US? How "creatively-driven" is your economy compared to the national average? Dark-blue is the least creative and dark-red the most creative areas.

25. An Example

27. Fifth Key to Economic Growth:Clusters or Branding • Cluster –making the whole greater than the sum of the parts • Branding–consolidating the essential characteristics of the individual identity into a brand core

28. Industry Cluster Analysis • Views firms and industries, as interdependent, not isolated • Identifies value chains • Discovers collections of businesses producing similar outputs

29. What Can Regional Cluster Analysis Tell Us? Where we have . . . • Gaps • Growing industries/clusters • Declining industries/clusters

30. Data Needs • Industry sector data: number of establishments (over time), number of employees, payroll, earnings & value added • Potential linkages to determine value chains

31. You Think There Is a Regional Cluster, So Now What? • Map the cluster • Determine if growing or declining • Evaluate regional capacity • Identify potential leakages & opportunities • Determine potential strengthening strategies

32. Examining Clusters in Your Region

33. Cluster Choices • Advanced Materials • Agribusiness, Food Processing & Technology • Apparel & Textiles • Arts, Entertainment, Recreation & Visitor Industries • Biomedical/Biotechnical (Life Sciences) • Business & Financial Services • Chemicals & Chemical Based Products • Communications • Computer & Electronic Product Manufacturing • Computers & Software • Construction Materials • Defense & Security • Education & Knowledge Creation • Electrical Equipment, Appliance & Component Manufacturing • Energy • Energy (Fossil & Renewable) • Fabricated Metal Product Manufacturing • Food Products & Services • Forest & Wood Products • Glass & Ceramics • Health • Information • Information Technology & Telecommunications • Machinery Manufacturing • Manufacturing Super Cluster (6 sub-clusters) • Metals & Machining • Mining • Primary Metal Manufacturing • Printing & Publishing • Transportation & Logistics • Transportation Equipment Manufacturing

34. 2011 LQ Bubble size represents cluster’s average earnings in 2011 Pg. 4 SADA (2006-­‐2011) – Arkansas 2006-­‐2011 % Change Jobs -1.00 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 Electrical Glass Computer Mining Printing Primary Metal Fabricated Metal Machinery -100.00 -20.00 -40.00 -60.00 -80.00 40.00 80.00 60.00 20.00 0.00 Defense Transp. & Logistics Chemicals Forest Energy Agribusiness Adv. Mat. Ag. Business Apparel AER Biomedical Business & Financial Chemicals Computer Defense Education Electrical Energy Fabricated Metal Forest Glass IT Telecomm Machinery Mining Primary Metal Printing Transp. & Logistics Transp. Equip.

35. Employment Growth 2001 to 2010 Bubble size represents number of employees

36. Projected Employment Growth Bubble size represents number of employees

37. MAPPING THE CLUSTER

38. Value Chain Cluster Example Forestry Sawmills Forest stock Veneer & Plywood State government agencies Fertilizers, Pesticides, Herbicides Wood Windows & Doors Caps & Corks Private, Industry & Public Forests Forest harvesting equipment Paper Mills Engineered Wood Products Forest harvesting services Educational, Research & Trade organizations Reconstructed Wood Products Energy Cluster - Biomass Tourism Cluster

39. Example: Forest Products

40. Economic Linkages Secondary Industries Suppliers of goods & services Value Added Industries Basic Industries Employees Employees Employees Tertiary Industries Supply goods & services to households Food, Clothing, Transportation, Recreation, Entertainment, etc

41. Identify Potential Leakages and Business Opportunities For the cluster, determine the: • Current regional capacity • Industry potential • Future growth of industry • Types of skills needed

42. MAPPING THE CLUSTER

43. Pull Factors

44. EXPLORING POSSIBLE ECONOMIC DEVELOPMENT STRATEGIES

45. Strategies to Strengthen a Cluster or Brand • Targeted attraction of industry • Business retention and expansion • New firm creation/entrepreneurship • Attraction of the creative class • Network development and meta-business creation

46. Targeted Attraction of Industry • Past:Blindly attracting industry • Now: Targeting businesses likely to be successful in the region • Strategies: • Cluster mapping • Location models • Community Business Matching model

47. Location Models Employs place specific data to: • Analyze the probability of an industry moving to the region • Evaluate the region’s ability to respond to industry needs • Select industries with the highest likelihood of success

48. Community Business Matching Model Community Assets Goals The Ideal Needs Profile Business Source: Cox et al., 2009

49. Business Retention & Expansion • Lets businesses know they are valued • Helps solve local business issues • Improves community awareness • Connects businesses to community resources • Creates connections between community organizations • Fosters job retention & growth

50. How BR&E Works • Planning Phase • Action Phase • Recruit volunteer visitors • Visit local businesses • Follow-up • Respond to concerns • Plan for future