amy liu | metropolitan business planning | global cities initiative

Metropolitan Business PlanningA New Approach to Transforming a Region’s Future

Metropolitan Policy Programat BROOKINGS

@BrookingsMetro@Amy_Liuw

Sao Paulo, Brazil / November 28, 20121Monday, November 19, 2012

The U.S. Economic Recovery Has Been Slow and Uneven Since the Great Recession

0

2.5

5.0

7.5

10.0

2000 2012130

135

140

145

150

2000 201250

55

60

65

70

2000 2010

Employment (1,000,000s) Unemployment Rate Median Family Income ($1,000s)

Source: U.S. Bureau of Labor Statistics; Lawrence Mishel and others, “The State of Working America, 12th Edition,” Washington: Economic Policy Institute, 2012.

10.0%

1.46M

1.43M7.9% $62K

$67K

2Monday, November 19, 2012

The Fiscal Crisis Is Putting a Squeeze on Public Sector Solutions

0

20

40

60

80

100

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Publicly Held Federal Debt as a Share of GDP

Source: Congressional Budget Office, “An Update to the Economic and Budget Outlook: Fiscal Years 2012 to 2022,” Washington, 2012; Committee for a Responsible Federal Budget.

Alternative Scenario

Fiscal Cliff

89.7%

58.5%


To Prosper, We Need a New Growth Model


To Prosper, We Need a New Growth Model

TRANSFORMATIVE

INVESTMENT


The Next Economy Will be Powered by Metro Areas

Share of Population

Share of Employment

Share of Output

100 Largest Metropolitan Areasʼ Share of U.S. Prosperity

12%

2007Share of

Land Area

Source: Brookings analysis of U.S. Census Bureau and Moodyʼs Analytics data.

65%

2007

67%

2007

75%

2007


Metro Business Planning Is an Emerging Model to Transform the Economy


MBP: Applying the Discipline of Private Sector Planning to a Region

Know Your Market Niche

Identify a Regional Economic Vision and Mission

Identify Strategies and Goals

Specify Products, Services and Policies

Develop an Operational Plan

Develop a Financial Plan

Target and Monitor Performance

Traditional Economic Development


MBP: Applying the Discipline of Private Sector Planning to a Region

Know Your Market Niche







Metropolitan Business Plans


• Output• Employment• Population• Productivity• Wages• Income

To Start, A Region Must Know Its Overall Economic Performance


Governance

Spatial Efficiency

Concentrations of industries, functions, and occupations

Talent production, attraction, retention, and matching to jobs

Human Capital

Innovation

Clusters

Innovation performance

Entrepreneurial ecosystem

Prosperity Government efficiency and efficacy

Business environment

Tax value proposition

Linkages and movement of goods, people, and information to support economic efficiency

Enablers


A Dozen Metro Areas Are Acting on Business Plans for Growth

Minneapolis-St. PaulNortheast OhioPuget Sound

ChicagoBaltimoreBuffaloNewark

Louisville/LexingtonMemphisPhoenixSyracuse

New York

Chicago, ILNortheast Ohio


Chicagoʼs Share of State Economy Northeast Ohioʼs Share of State EconomyChicago-Joliet-Naperville, IL-IN-WI MSA Cleveland-Elyria-Mentor, OH; Youngstown-Warren-Boardman, OH-PA MSA;

Akron, OH MSA; Canton-Massillon, OH MSA

71.4%

35.9%

These Metro Areas Comprise a Large Share of Their State Economies

Source: Brookings analysis of Moodyʼs Analytics data.11Monday, November 19, 2012

Strong manufacturing base

Top tier research institutions

Weak job growth and productivity

Shrinking workforce with low BA attainment

Fragmented, high-cost local governments

NE Ohio: Applying the Discipline of Private Sector Planning to a Region

Know Your Market








Create a connected, collaborative region that can compete for jobs, market share and investments in the next global economy


Know Your Market








Help SMMs innovate in growth markets

Grow/ connect employers with skilled workers

Create entrepreneurial ecosystem

Link regional planning and revenue sharing with economic growth

Reward government efficiency/ collaboration


Know Your Market








Partnership for Regional Innovation

Services (PRISM)

•Access to equipment, research, and training

•Assistance identifying new market opportunities

•Access to flexible risk capital for commercialization


Know Your Market








MAGNET as lead entity

Services provided by key partners (e.g. Nortech, community colleges, business schools)


Know Your Market








$2.4 million start-up costs

$8.4 million budget over 5 years

Shift to revenue-based model in year 3


Know Your Market








12 SMMs served in the first year

$275 million projected new firm revenue growth by 2014

425projected new jobs at portfolio companies by 2014


Know Your Market








These Metros Are Also Transforming the Civics to “Staff” an MBP

Northeast Ohio ChicagoProject Manager Fund for our Economic Future World Business Chicago

Core Working Group

MagnetNorTechTeam NEO and others

McKinsey & CompanyCity of Chicago

Board of Directors

Loraine Community CollegeGreater Cleveland PartnershipGeorge Fund FoundationCleveland FoundationMunicipalitiesCase WesternGreater Akron Chamber

Metropolitan Planning CouncilExecutivesʼ ClubCivic CommitteeChicago Community TrustChicago Federation of LaborMcArthur FoundationChicago Land Chamber of Commerce


OhioRegional Economic

Partners to JobsOhio

New York

Regional Economic Councils

States Are Aligning to Regional Strategies

Tennessee

Regional Jobs Base Camps and Plans


In Sum, MBPs Can Lead to Results in Economic Performance

Metropolitan Business Plans

Rooted in analytic rigor

Nested in market dynamics

Surfaces transformative opportunities

Identifies cross-cutting initiatives

Leverages private/philanthropic investments

Operationalized with clear accountability


Metropolitan Policy Programat BROOKINGS

Metropolitan Business PlanningA New Approach to Transforming a Region’s Future

@BrookingsMetro@Amy_Liuw

Sao Paulo, Brazil / November 28, 201216Monday, November 19, 2012

amy liu | metropolitan business planning | global cities initiative

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