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A Search for the New Knowledge Economy Establishing a Baseline: The Economy Today… and Tomorrow

A Search for the New Knowledge Economy Establishing a Baseline: The Economy Today… and Tomorrow When they Vote with their Feet, where do they go? A New Entrepreneurship Index. What about the Great American Bread Machine?. U.S. 8.9% Alabama 9.3% Huntsville 8.2%.

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A Search for the New Knowledge Economy Establishing a Baseline: The Economy Today… and Tomorrow

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  1. A Search for the New Knowledge Economy • Establishing a Baseline: The Economy Today… • and Tomorrow • When they Vote with their Feet, where do they go? • A New Entrepreneurship Index

  2. What about the Great American Bread Machine?

  3. U.S. 8.9% Alabama 9.3% Huntsville 8.2%

  4. Source: U.S. Department of Commerce and Wells Fargo Securities, LLC

  5. GDP Forecast, 2011

  6. TWO KEY U.S. INDICATORS

  7. National Mortgage Delinquencies, 1Q2010, 90+ Days

  8. Unemployment Rate December 2010 Greater than 12.5% 6 .0% to 8 .0% 10 .0% to 12 .5% Less than 6.0% 8 .0% to 10 .0% County Unemployment Rate Source: US Department of Labor and Wells Fargo Securities, LLC

  9. I wonder what’s going on inside the Huntsville economy.

  10. Huntsville MSA, Per Capita Income, % of U.S., 1969-2008 Huntsville MSA, Per Capita Real GDP, % of U.S. Metro, 2001-2009

  11. What of the next two Years??? Alabama? Huntsville? U.S.?

  12. December 2007 April 2011 June 2009

  13. Voting with their Feet Voting with their Feet

  14. When voting with their feet. Where do the brains head? Toward freedom? security?

  15. CREATIVITY INDEX 2003 RANKINGS

  16. How did we model migration? • MIGRATION = f(PCI, PBS, EFI, FFI, CRI) • Migration : Share of 2000 population for 25-39 year old in-migrants, 1995-2000. • PCI : Per capita income, 2000. • PBS : Professional Business Services, share of employment, 2000. • EFI : Economic Freedom Index, 1999. • FFI : Fiscal Freedom Index, 1999. • CRI : Richard Florida Creativity Index, 2003. • What did we learn? • Go-getters are not attracted by higher income locations. • They are highly attracted to large PBS states. • Economic freedom is a strong positive • They love “cool” states. • 5. They hate taxes.

  17. When they move, what moves them? Freedom? Cool? Income? Cities? Knowledge Economy?

  18. We asked this question by way of statistical models. Our final model included a new Knowledge Economy Index. We also included a Freedom Index, a creativity index, and other economic variables. Knowledge Economy IndexIndex is based on statistical modeling of per capita income across the 50 states. Variation in income is explained by 1) education variable, 2) industry R&D expenditures weighted by employment, and 3) the relative number of fast growth firms (INC 500 & Deloitte Technology fast 500).Regression coefficients are used as weights applied to state data to build index

  19. MIGRATION = f(KEI, OFI, CRI, COL, PCI , POP) Migration: Average annual in-migration of 25-39 year olds, 2004-2008. KEI : Knowledge economy index, 2008, Watkins-Yandle. OFI : Overall freedom index, 2008, Mercatus. CRI : Creativity index, Richard Florida, updated 2008. COL : Cost of living index, 2009, Council for Community & Economic Research. PCI : Per capita income, 2008. POP : Average population, 2004-2008.

  20. What did we learn? • Domestic and international movers prefer urbanized states. • International movers head toward highly ranked knowledge economy states; domestic movers are indifferent. • Domestic and international movers are high on overall economic freedom. • “Cool” locations matter to domestic movers but not to international movers. • Personal freedom matters to international movers, but not to domestic movers. • OVERALL: Freedom matters.

  21. Southern MSA Knowledge Economy Index

  22. Regional MSA Index Ranking

  23. FINDING THE NEW ENTREPRENEUR ONE-PERSON FIRMS

  24. Toward a Nonemployer Entrepreneurship Index Firms & Establishments, 2008 Nonemployers Establishments Prof., Scientific, Tech N/E PST/Non U.S. 21,351,320 7,601,169 3,028,695 2.80 14.0% ALA 311,388 103,875 30,897 2.99 9.9 Huntsville 25,760 9,557 3,603 2.70 13.9 Auburn 8,464 2,464 1,099 3.43 13.0 Tuscaloosa 12,005 4,469 1,202 2.70 10.0 Austin 130,728 40,134 26,275 3.28 19.9 Durham 35,923 11,680 7,864 3.01 21.8 Greenville 40,780 15,781 5,295 2.58 12.9

  25. Nonemployer Firm Entrepreneurship Index

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