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Exploring Opportunities for a Stronger Regional Economy

Exploring Opportunities for a Stronger Regional Economy. Module Five. Reflecting on the Previous Session. What did you find most useful or valuable? What progress have you made since then? Any questions or clarification needed?. Overview of Module Five.

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Exploring Opportunities for a Stronger Regional Economy

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  1. Exploring Opportunities for a Stronger Regional Economy Module Five

  2. Reflecting on the Previous Session • What did you find most useful or valuable? • What progress have you made since then? • Any questions or clarification needed?

  3. Overview of Module Five • Examine the concept of competitive advantage • Explore tools and data to detect regional competitive advantage • Investigate regional workforce and industry trends

  4. BASIC CONCEPTS OF COMPETITIVE ADVANTAGE

  5. Competitive Advantage Business shapes the economic value of a region, but places can help shape, nourish, and sustain local enterprises and industry.

  6. Competitive Advantage Elements • Demand conditions • Factor conditions • Firm strategy, structure, rivalry • Related and supporting industry

  7. How many competitors? What is the threat of new entry? Local customer base? What do people want? What value chains or clusters exist in our region? How does place influence the quantity, quality and cost of input factors?

  8. TOOLS FOR DETECTING REGIONAL COMPETITIVE ADVANTAGE

  9. Element One: Demand Conditions What are some of the region’s demographic characteristics that may support or diminish demand for goods or services in the region?

  10. Element Two:Factor Conditions • Infrastructure • Quality of Life • Quality Workforce Availability

  11. Factor Conditions: Infrastructure • Current leading employers • New/expanding companies • Research and development facilities • Available land and buildings • Telecommunications/Internet access • Cost of living • Access to transportation networks • Tax structure

  12. Factor Conditions: Infrastructure Cost of Living Composite Cost of Living (Scaled)2nd Quarter 2010 Source: Missouri Economic Research and Information Center

  13. Factor Condition: Infrastructure Basic Broadband Adoption, 2009 Source: Federal Communications Commission

  14. Factor Conditions: Quality of Life • Population and labor force • Education • Health care • Recreational opportunities • Shopping • Crime, weather, etc.

  15. Quality of Life: Natural Amenities Source: Economic Research Service, USDA

  16. Quality of Life: Health Insurance, 2006

  17. Factor Conditions: Workforce Who are the region’s workers? • Skilled/unskilled • Labor force participation rate • Unemployment rate • Occupation mix • Experience/age

  18. Identifying Skills in the Region Example: Manufacturing /

  19. 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.

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

  21. Element Three:Firm Strategy, Rivalry, Composition • What is the portfolio of businesses? • What does entrepreneurship look like? • What is the mix of industrial sectors?

  22. Industry Overview

  23. Business and Industry

  24. Size of Establishments Source: http://www.youreconomy.org

  25. Percentage Change in Net Jobs by Development Strategy Source: http://www.youreconomy.org

  26. Element Four: Related and Supporting Industry Do industries buy and sell from each other regionally? Are there any strong value chains in the region?

  27. Value Chain Example Wine Winemaking equipment Grape stock State government agencies Fertilizers, Pesticides, Herbicides Barrels Bottles Growers/ Vineyards Wineries/ Processing facilities Caps & Corks Grape harvesting equipment Labels Public Relations & Advertising Irrigation technology Educational, Research & Trade organizations Specialized publications California Agricultural Cluster Food Cluster Tourism Cluster Source: California Department of Food and Agriculture

  28. Putting It All Together

  29. Industry Clusters Groups of similar and related firms in a defined geographic area that share common markets, technologies, worker skill needs, and that are often linked by buyer-seller relationships

  30. Two Types of Clusters • Strong value chains (Vertical clusters): working together toward a common product • Competing (horizontal clusters): drawing from the same raw materials, infrastructure, labor force

  31. Identifying Industry Clusters • Views firms and industries as interdependent, not isolated • Identifies value chains • Discovers collections of businesses producing similar outputs

  32. MAPPING THE CLUSTER

  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 • Computer & Electronic Product Manufacturing • Defense & Security • Education & Knowledge Creation • Electrical Equipment, Appliance & Component Manufacturing • Energy (Fossil & Renewable) • Fabricated Metal Product Manufacturing • Forest & Wood Products • Glass & Ceramics • Information Technology & Telecommunications • Machinery Manufacturing • Manufacturing Super Cluster (6 sub-clusters) • Mining • Primary Metal Manufacturing • Printing & Publishing • Transportation & Logistics • Transportation Equipment Manufacturing

  34. Examining Clusters in Your Region

  35. Cluster Illustration: Bubble Chart Source: EMSI.com

  36. Clusters in the Region Health Cluster

  37. Behind the Bubble Chart

  38. Cluster Jobs and Earnings

  39. Distribution of Jobs

  40. 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

  41. Homework for Next Time • Identify the potential clusters for the region • Read the “Import Substitution” flow chart to prepare for Module Six

  42. Final Reflections • What topics did you find most helpful? • What did you find confusing? • What other data do you need? • Other items you want to mention?

  43. Looking Ahead to Module Six • Identify the economic leaks in the region • Explore basic avenues for strengthening clusters • Provide an overview of some specific strategies within each avenue • Select potential directions for the region to explore

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