NH Economic Indicators Where to Next? to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshires future.April 17, 2014Concord Chamber of CommerceConcord, NHBoard of DirectorsWilliam H. Dunlap, ChairDavid AlukonisEric HerrDianne MercierJames PutnamTodd I. SeligMichael WhitneyDaniel WolfMartin L. Gross, Chair EmeritusDirectors Emeritus Sheila T. FrancoeurStuart V. Smith, Jr.Donna SytekBrian F. WalshKimon S. Zachos

Economic Opportunity

Past economic growth was driven by high rates of migration Growth in NHs population, capital and productive have declined, suggesting that New Hampshires economic experience of Tailwinds may have turned into headwinds? Source: New Hampshire Center for Public Policy Studies, analysis of U.S. Census data

The Urgency?Strong demographic tailwinds have ended.NHs economy has fundamentally changed 1990: high tech (2%) and manufacturing (25%) accounted for 27% of NHs economy2010: high tech ( 4%) and manufacturing (15%) accounted for 19% of NHs economyZero job creation between 2000 and 2010.

In this context, where should we invest?Health CareEducation/WorkforceNatural and Cultural ResourcesEnergyFiscal InfrastructureWorkforce HousingRegulatoryBusiness Growth and Retention

Dashboard Development

NH Business and Industry Association stakeholder groups identified goalsCenter developed a series of indicators that track with goals. Example of a goal: All New Hampshire residents are among the healthiest in the nation and have lifelong access to a high quality, affordable integrated and preventive health and community support system.Health Care Expenditures Per Dollar of Gross State Product, 2010Age Adjusted Mortality Rates, 2011 State-specific Standardized Infection Ratios (SIRs), 2011 Percent Uninsured, 2011 Average Family Premium per Enrolled Employee For Employer-Based Health Insurance, 2011

Health Care (Example)

Indicators Compared to neighbors and major advanced high tech manufacturing competitor statesWith whom are we competing?

Cultural and Natural ResourcesState spending on natural resources per personPercent of tree cover in urban areasDomestic tourism spending per capitaCreative Economy Jobs ConcentrationVoter turnout rateVolunteering rate

Education, Labor and WorkforceChange in 35-44 population share, 2000 to 2010 Percent of adult population with an associate degree or higherPercent of population in Science and Engineering workforceHigh school graduation rateStudent debt per personRate at which high school graduates go on to post-secondary institutionsPercent of children aged 3 to 4 years old enrolled in preschool

Fiscal PolicyState Business Climate Tax IndexTop Marginal Corporate Tax Rate Public Health, Welfare, Hospital Spending per Person in Poverty State Debt per Dollar of Personal Income Public Government and Administration per Dollar of Personal Income

EnergyIndustrial Electric Prices Natural Gas Prices in Dollars per Million BTUs Energy Consumption Expenditures Per Capita Energy Efficiency Rank

How Does NH Rank?

NH excels on current climate indicators

But NH lags on future climate indicators

State averages hide large regional variation

For its size, the Nashua-Manchester Corridor is in the top 10 with fastest growing companies*

At the median .Merrimack Mirrors the state. Source: Daniel Lee, Plymouth State University

Size of Labor ForceWorking-Age Population (Age 20-64)Assuming no migration the working-age population in New Hampshire will decline nearly 10% in the state.The northern rural counties will see larger declines.Carroll County sees the biggest declines. Source: Daniel Lee, Plymouth State University

Skill of the Workforce

% of persons 25 years old or over with BA or higher, 2000Gain in % of persons 25 years old or over with BA or higher, 1990-2000Source: Daniel Lee, Plymouth State University

Capital Stock GrowthGrafton ranked the first in the state in the growth of private business investments during 2000-2010.Only Grafton exceeded Merrimack. Source: Daniel Lee, Plymouth State University

Affordable Housing?

Job Growth Driven by Health Care

Looking forward: The ecology of a successful economyTheres this Human CapitalFinancial CapitalEconomic CreativityBusiness BaseCosts of BusinessInfrastructureQuality of Life

And then Brad FeldA Strong Pool of Tech FoundersLocal CapitalKiller EventsAccess to Great UniversitiesMotivated ChampionsLocal Press, Organizational ToolsAlumni OutreachWinsRecycled CapitalSecond-Time EntrepreneursAttractive to EngineersTent-pole local tech companies*

How does this relate to existing initiativesMany initiatives designed to deal with perceived long term issues. Governor Hassan: Innovate NH Jobs Former Governor Lynch: The green launching padNew use of unemployment funds train individuals to build new small businesses.Community College System Hypertherm and Community College collaborationThe Advanced Manufacturing Partnership (Albany)UNH Innovation UNH, STEM initiatives (NHCF, Business NH coalition)Granite State Futures planning generally housing and transportation.Stay, Work, Play.Question: Are they working?Is there a problem? Are conditions getting better/worse?What about regional approaches

What is the goal of economic development?Targeting Industries? State efforts to amplify economic ecology development? Retention of existing businesses?Targeted Industry development?What/which tactics are necessary to meet strategic goals?Enhance human capital? Workforce Development (make your own vs. import)Workforce housing? How does one align and amplify existing efforts given scarce human and financial resources?

New Hampshire Center for Public Policy StudiesWant to learn more? Online: nhpolicy.org Facebook: facebook.com/nhpolicy Twitter: @nhpublicpolicy Our blog: policyblognh.org (603) 226-2500to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshires future.Board of DirectorsWilliam H. Dunlap, ChairDavid AlukonisEric HerrDianne MercierJames PutnamTodd I. SeligMichael WhitneyDaniel WolfMartin L. Gross, Chair EmeritusDirectors Emeritus Sheila T. FrancoeurStuart V. Smith, Jr.Donna SytekBrian F. WalshKimon S. Zachos

The Center estimated Net Capital Stock in the states by apportioning the BEA's national estimates of non-residential fixed estimates to each state based on "earnings by place" component of personal income.

*What does this say about the role of DRED? Will these demographic trends change? Theres no clear answer now, but we are clearly at an inflection point, that warrants watching these indicators and the states initiatives carefully to see if the way we are allocating our political and financial capital is bearing fruit for NHs economic future? Are state and local policies responding to real needs and geared towards dealing with these issues?