Regional Industry Cluster Analysis

1
Regional Industry Cluster Analysis

• CLIENT WORKFORCE SOLUTIONS, INC.
• August 25, 2004

2
Agenda

• Introduction
• Project approach
• Preliminary data
• Next steps

3
TIP Strategies, Inc.

• TIP is an economic development consulting firm
  based in Austin, Texas, USA. Our services
  include
• Strategic Planning
• Target Sector/Cluster Analysis
• Workforce Analysis
• Economic Impact
• Site Selection

4
Representative Clients

• Texas
• Round Rock
• Envision Central Texas
• Cedar Park
• Denton
• Coastal Bend COG
• Deep East Texas COG
• TXU
• AEP
• Entergy
• City of Houston
• San Antonio EDF
• State of Texas

• National/International
• Southwest Mississippi
• Watsonville, CA
• New Orleans, LA
• Chicago-Milwaukee Corridor
• Richmond, VA
• Carolinas Gateway Partnership, NC
• Greene County, TN
• Portland, OR
• Stuttgart, AR
• Northern Ireland, UK
• The Netherlands

5
TIP Projects
6
TIPs Definition

• economic development (n)
• 1) the application of public resources to
  stimulate private investment.

7
Evolution of E.D. Goals
Quality of Place
2010
Knowledge
2000
1990
Higher Wages
evolutionary scale
More Jobs
1980
Buildings
1970
8
Quality of Place

• Redefining quality of life
• Understanding your target audience
• Offering a diversity of choices
• Authenticity (downtowns are important)
• Outside in versus inside out

9
ED Principles 1948-1998
Manufacturing
Sites
Jobs
10
ED Principles 1998-2008
Technology Capital
Quality of Place
Talent
11
US Manufacturing vs. Services
Source US Bureau of Economic Analysis
12
Texas 10-year Job Forecast
Office Activities1) Health Education
Services Retail, Leisure Hospitality Government
Other Logistics Wholesale Trade Industrial
Activities2)
NOTE 1) OFFICE ACTIVITIES include Information,
Financial Activities, Prof. Business
Services 2) INDUSTRIAL ACTIVITIES include
Mining, Construction, Manufacturing, Utilities
Source Economy.com
13
Project Approach
14
Theory Into Practice
DISCOVERY
OPPORTUNITY
IMPLEMENTATION
15
Project Goal

• Conduct a regional industry cluster analysis
  focused on workforce development to guide future
  investment decisions in the three-county Lower
  Rio Grande Valley Workforce Development Board
  region

16
Scope of Work

• Kick-off meeting
• Regional assessment
• Economic analysis
• Key informant focus groups
• Regional cluster analysis
• Analytical techniques
• Qualitative information
• Strategic implications
• Strategies and implementation
• Final report and presentation

17
Deliverables

• Master timeline (provided with proposal)
• Monthly progress reports
• Facilitation and related PowerPoint presentations
  for
• Focus groups with regional and community leaders
  and industry executives
• Three steering committee meetings (vision goals
  workshop, planning meeting, and final
  presentation)
• Regional Cluster Analysis study and supporting
  documents
• 25 draft copies and 50 final copies

18
Three-pronged Approach

• Quantitative
• Qualitative
• Strategic

19
Quantitative Tools

• Demographic and economic trends
• Cluster analysis
• Location quotients
• Industry-occupation matrix
• Industry trends
• Shift share

20
Cluster Analysis

• Clusters are geographic concentrations of
  interconnected firms and institutions utilizing
  related applications and serving similar markets.
  
• When fully developed, clusters can act as the
  principle drivers of economic growth and
  innovation in a region.

21
LQ Formula
EXAMPLE County

• industry employment in region
• total employment in region

industry employment in reference region total
employment in reference region
EXAMPLE Texas or US
22
Shift Share Analysis

• Statistical technique for identifying the source
  of changes in a given industry in the local
  economy by allocating shifts in employment among
  three components
• National mix Changes in the overall growth or
  decline in the parent economy.
• Industry mix Change in the industry on a
  national basis.
• Regional competitive share Influence of regions
  unique economic circumstances on employment
  growth or decline in a specific industry.

23
Hidalgo CountyShift-share by Sector, 2000-2004
Bubble size reflects local employment base for
each sector
Source Economy.com TIP Strategies
24
Qualitative

• Data analysis provides foundation, but is not
  sufficient for development of sound strategies.
• Interviews with businesses, trade associations,
  human resource managers, and other key
  stakeholders
• Research on current industry trends, expansions
  and locations, best practices
• Experience of consulting team

25
Project Website
26
Customizable On-line Surveys
27
Strategic

• Rise of the Creative Class (Richard Florida)
• Automotive supply chain
• Maquiladora industry
• Center of excellence concept

28
Toyota - San Antonio

• Overview
• Production estimated to begin in 2006
• 800 million investment
• 2,000 jobs to start
• 150,000 Tundras will be produced annually
• 6th North American Assembly plant
• Will supplement Tundra production at Toyota Motor
  Manufacturing, Indiana, Inc. (TMMI), which is
  currently the exclusive manufacturer of this
  model.
• Stamping, body weld, paint, plastics, and
  assembly

29
Automotive Plant Locations
500-mile radius
30
Example Advanced materials

• Materials science and engineering explore the
  basic structure and properties of matter, down to
  the molecular, atomic, and even subatomic levels.

CLUSTER STRATEGY
- National Science Foundation
31
Example Advanced materials (cont.)
ADVANCED MATERIALS
Services
Research
Labor Talent
Companies
Financing
32
Preliminary Data
33
Population Growth, 1990 to 2000
Source U.S. Census Bureau Unless otherwise
noted, Lower Rio Grande Valley (LRGV) defined as
Cameron, Hidalgo, Starr, and Willacy Counties
34
Population Growth, LRGV versus Reynosa Matamoros
Source U.S. Census Bureau INEGI
35
Average HH Size, 1970 to 2000
Source U.S. Census Bureau
36
Population Pyramids, 2002
Source U.S. Census Bureau
37
Educational Attainment, 2000 ( of population
age 25 years and over)
Source U.S. Census Bureau
38
College Experience, 2000
Source U.S. Census Bureau
39
Significant Job Shifts in the LRGV 1999 to 2004
Source Economy.com
40
Employment by Sector, 2000
Source Economy.com INEGI
41
LRGV Location Quotients, 2004
LQ of 1.0 same as national average
Source Economy.com TIP Strategies, Inc.
42
Next Steps
43
Progress To Date

• Project scoping (staff input)
• Preliminary data analysis
• Initial stakeholders meetings and interviews
• Kick-off meeting input

44
Next Steps

• Draft assessment
• Schedule additional interviews focus group
  meetings

45
Thank You

• TIP Strategies, Inc.
• 7000 N. MoPac, Suite 305
• Austin, Texas 78731
• www.tipstrategies.com
• 512.343.9113
• Theory Into Practice