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Regional Growth Model: Dashboard Indicators

Regional Growth Model: Dashboard Indicators. Presentation at the Purdue University Conference on The Many Faces of Regionalism Robert Jaquay, Fund for Our Economic Future Ziona Austrian, Center for Economic Development, CSU Indianapolis, IN April 16, 2008.

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Regional Growth Model: Dashboard Indicators

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  1. Regional Growth Model: Dashboard Indicators Presentation at the Purdue University Conference on The Many Faces of Regionalism Robert Jaquay, Fund for Our Economic Future Ziona Austrian, Center for Economic Development, CSU Indianapolis, IN April 16, 2008

  2. The Fund for Our Economic Future: Mission • Unite philanthropy to support regional economic development in Northeast Ohio through • Grantmaking • Research • Civic engagement The Center for Economic Development, CSU The Fund for Our Economic Future

  3. What Really Matters? Fads vs. Research The Center for Economic Development, CSU The Fund for Our Economic Future

  4. Why Develop Dashboard Indicators? • The study answers three questions: • How do we measure economic growth? • What factors are closely tied to economic growth? • How do Northeast Ohio and other regions perform? The Center for Economic Development, CSU The Fund for Our Economic Future

  5. How Is the Dashboard Used? • A common language • Consistent metric to track over time (versus reacting to latest headlines) • Tool to focus resource investment • Initiatives to pursue • Defense against extraneous requests The Center for Economic Development, CSU The Fund for Our Economic Future

  6. Study Accomplishments • Developed a framework for regional growth • Established a set of dashboard indicators and the variables that underlie each indicator • Showed the association between each of the indicators and four measures of economic growth • Ranked the performance of metropolitan areas in each of the indicators and the measures of economic growth • Provided policy makers with information to design effective strategies and interventions The Center for Economic Development, CSU The Fund for Our Economic Future

  7. Methodology • Assemble data on over 40 variables that measure regional economic and social characteristics for 136 metropolitan areas with population between 300,000 and 3.5 million • Conduct a factor analysis to reduce the number of variables to a smaller set of related factors • Identify factors and name them The Center for Economic Development, CSU The Fund for Our Economic Future

  8. Methodology (cont.) • Use regression analysis to associate each factor with four measures of economic growth. Factors associated with economic growth become dashboard indicators • Rank metropolitan areas based on each measure of economic growth (using long-term and short-term periods) • Rank metropolitan areas based on each of the dashboard indicators (2000 and 2005) • Compare shifts in rankings for Northeast Ohio’s MSAs, Midwest MSAs, and select other areas The Center for Economic Development, CSU The Fund for Our Economic Future

  9. Measures of Economic Growth • Trends in • Per-capita personal income • Approximates regional standard of living • Employment • Measures job opportunities • Gross Metropolitan Product • Value added output; approximates scale of regional economy • Productivity • GMP per employee; approximates regional competitiveness The Center for Economic Development, CSU The Fund for Our Economic Future

  10. NEO’s Metro Areas are Lagging Other U.S. Regions: Per-Capita Income Per-capita income in NEO was higher than the U.S. through 1999, after which it fell and remained below the national average The Center for Economic Development, CSU The Fund for Our Economic Future

  11. NEO’s Metro Areas are Lagging: Gross Metropolitan Product • Growth patterns were similar between 1995 and 1998 • Between 1999 and 2000, NEO declined while the U.S. and sample MSAs continued to grow • The gap between NEO and the national economy has increased The Center for Economic Development, CSU The Fund for Our Economic Future

  12. NEO and Selected Midwest MSA Rankings by Measures of Economic Growth, 1995-2005 Note: Per-capita personal income is measured for the 1995-2004 period The Center for Economic Development, CSU The Fund for Our Economic Future

  13. NEO and Selected Midwest MSA Rankings by Measures of Economic Growth, 2002-2005 Note: Per-capita personal income is measured for the 2001-2004 period The Center for Economic Development, CSU The Fund for Our Economic Future

  14. Dashboard Indicators • Skilled Workforce andR&D • Technology Commercialization • Racial Inclusion & Income Equality • Business Dynamics • Urban Assimilation • Legacy of Place • Individual Entrepreneurship • Locational Amenities • Urban/Metro Structure Fund’s Priorities The Center for Economic Development, CSU The Fund for Our Economic Future

  15. Factors’ Impact on Regional Economic Growth The Center for Economic Development, CSU The Fund for Our Economic Future

  16. Main Variables Correlated with the SkilledWorkforce and R&D Indicator • % of population in professional occupations • % of population with graduate/professional degree • % of population with bachelor’s degree • Industry R&D per employee • SBIR & STTR awards per employee • Population dependency (-) • University R&D per employee Lesson: Improving educational attainment and enhancing research capacity is linked to regional competitiveness (per-capita income and productivity) The Center for Economic Development, CSU The Fund for Our Economic Future

  17. Rank of MSAs According to Skilled Workforce and R&D, 2000 and 2005 The Center for Economic Development, CSU The Fund for Our Economic Future

  18. Main Variables Correlated with the Technology Commercialization Indicator • Venture capital per employee • Number of patents per employee • Cost of living index Lesson: Product innovation that attracts investment capital is tied to economic growth (per-capita income, output, and productivity) The Center for Economic Development, CSU The Fund for Our Economic Future

  19. Rank of MSAs According to Technology Commercialization, 2000 and 2005 The Center for Economic Development, CSU The Fund for Our Economic Future

  20. Main Variables Correlated with the Racial Inclusion & Income Equality Indicator • % of black population • Isolation Index for black population • Income inequality • Share of students at schools with more than 70% free lunches • Violent crime rate Lesson: Overall economic growth (all 4 measures) is hindered when a large portion of the population is isolated or low income The Center for Economic Development, CSU The Fund for Our Economic Future

  21. Rank of MSAs According to Racial Inclusion and Income Equality, 2000 and 2005 The Center for Economic Development, CSU The Fund for Our Economic Future

  22. Main Variables Correlated with the Business Dynamics Indicator Business openings/business closings • Ratio of the number of single-location businesses that opened to the number of single-location businesses that closed Lesson: Increased entrepreneurial activity is associated with growth in employment and output The Center for Economic Development, CSU The Fund for Our Economic Future

  23. Rank of MSAs According to Business Dynamics, 2000 and 2005 The Center for Economic Development, CSU The Fund for Our Economic Future

  24. Firm Birth Rates* *Birth rates for companies with single establishments The Center for Economic Development, CSU The Fund for Our Economic Future

  25. Main Variables Correlated with the Urban Assimilation Indicator • % of Hispanic population • Share of minority business employment (in total employment) • % of foreign-born population • Productivity in information sector • % of Asian population Lesson: Diversified regions are associated with growing employment, output, and productivity The Center for Economic Development, CSU The Fund for Our Economic Future

  26. Rank of MSAs According to Urban Assimilation, 2000 and 2005 The Center for Economic Development, CSU The Fund for Our Economic Future

  27. Main Variables Correlated with the Legacy of PlaceIndicator • Business churning • Climate • % of houses built before 1940 • Dissimilarity Index for Black Population • City poverty ratio • No. of government units per capita • Share of manufacturing employment Lesson: Legacy costs act as an impediment to economic growth The Center for Economic Development, CSU The Fund for Our Economic Future

  28. Rank of MSAs According to Legacy of Place, 2000 and 2005 The Center for Economic Development, CSU The Fund for Our Economic Future

  29. Main Variables Correlated with the Individual Entrepreneurship Indicator • % self employed • Share of business establishments with under 20 workers Lesson: The growth of the small business sector is linked to growth in employment and output The Center for Economic Development, CSU The Fund for Our Economic Future

  30. Rank of MSAs According to Individual Entrepreneurship , 2000 and 2005 The Center for Economic Development, CSU The Fund for Our Economic Future

  31. Rankings by Dashboard Indicators, NEO and Midwest MSAs, 2005 The Center for Economic Development, CSU The Fund for Our Economic Future

  32. To Summarize: How is Northeast Ohio Doing in Economic Growth? The Center for Economic Development, CSU The Fund for Our Economic Future

  33. To Summarize: How is Northeast Ohio Doing in Indicators? The Center for Economic Development, CSU The Fund for Our Economic Future

  34. To Summarize: How is Northeast Ohio Doing in Indicators? The Center for Economic Development, CSU The Fund for Our Economic Future

  35. Role of History (Legacy of Place) Bucking the trend: Indianapolis Minneapolis Kansas City The Center for Economic Development, CSU The Fund for Our Economic Future

  36. Big Lessons from the Dashboard • No silver bullet • Several factors determine a region’s economic performance • History shapes present, not future • Focus on what matters • Set regional goals The Center for Economic Development, CSU The Fund for Our Economic Future

  37. How is the Dashboard Used? The Region’s Economic Action Plan: Shared priorities among business, political, civic, and philanthropic leaders The Center for Economic Development, CSU The Fund for Our Economic Future

  38. Advance Northeast Ohio: Action Areas and Action Teams • Business Growth and Attraction • Attraction and Retention • Innovation and Entrepreneurship • Talent Development • Racial and Economic Inclusion • Government Collaboration and Efficiency The Center for Economic Development, CSU The Fund for Our Economic Future

  39. Contacts • www.futurefundneo.org • http://urban.csuohio.edu/economicdevelopment/index.shtml • http://urban.csuohio.edu/economicdevelopment/reports/dashboard_report_final_0807.pdf • Robert Jaquay rjaquay@gundfdn.org • Ziona Austrian z.austrian@csuohio.edu The Center for Economic Development, CSU The Fund for Our Economic Future

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