Setting the Stage

1
Setting the Stage

• Brian Bosworth
• Presentation to The Ford Foundation
• Regionalism and Sustainable Development
  Fellowship
• Memphis TN
• February 7, 2007

2
Two Objectives

• Review some of the big global trends that are
  driving changes in the regional agenda, making
  regions more important, and raising the bar for
  Chambers of Commerce.
• Discuss the logic framework of this Fellowship
  our theory of change.

3
The U.S. and the Global Economy(stuff you
already know)

• We live in a flat world causing rapid shifts in
  competitive advantage of nations.
• Technology change has been a constant but never
  at this velocity and with this transforming
  quality.

4
The U.S. and the Global Economy (continued)

• A global talent explosion led by such nations as
  Brazil, Russia, India, and China.
• Facing a perfect storm in U.S. science,
  engineering, technology
• Retirements declining high school math and
  science flagging interests of young Americans
  under-represented minorities decline in talent
  emigration to U.S.

5
The U.S. and the Global Economy(continued)

• We face intense competition for and conflict over
  energy resources
• U.S. has huge fuel dependencies with very little
  RD into new solutions
• Already a source of global conflict
• We have global savings-debt crisis in a radically
  imbalanced global economy
• Personal savings in U.S. lowest in 70 years
• U.S. seeking well over 2 billion per day of
  foreign capital to balance trade deficit

6
Of Course, A Lot of Assets

• Very highly functioning system of democratic
  capitalism.
• A national economy more than three times larger
  than any other nation.
• An extraordinarily creative, entrepreneurial
  population
• But Some Troubling Demographic Trends

7
Huge Demographic Changes in the U.S.(stuff you
might not know)

• From 1960 to 2000, U.S. labor force doubled (from
  70 million to 141 million).
• Number of prime age workers (25-54) increased
  over 130.
• Percentage of adults with high school degree
  doubled (from 41 to 80.4).
• Percentage of adults with B.A. or higher tripled
  (from 7.7 to 24.4).

8
Demographic Changes in the U.S.(continued)

• Several studies conclude that this rise in
  education attainment has been a major driver of
  U.S. economic growth.
• From 25 to 40 of average annual growth in output
  since mid-1900s can be attributed to increases in
  education attainment.

9
Demographic Changes in the U.S.(continued)

• But, this era of labor force growth has come to
  an end.
• BLS projects total growth from 2000 to 2040 of
  only 29 (compared to 102).
• Number of prime age workers will increase only
  16 (compared to 130).
• Labor force participation will decrease.

10
Demographic Changes in the U.S.(continued)

• Thats only half the story.
• Education attainment wont increase its likely
  to decline.
• Older workers as educated or more than new ones
  coming in.
• Attainment slowdown already underway
• High school graduation rate is declining
• College entrance rate is flat and,
• College completion rate is declining

11
Demographic Changes in the U.S.(continued)

• Big changes in racial/ethnic composition of
  younger age cohorts -- much larger percentage of
  those not well served by education systems.
• 2000 census showed Whites twice as likely as
  African-Americans and three times as likely as
  Hispanics to earn a B.A

12
Demographic Changes in the U.S.(continued)

• Two big wild cards
• Immigration -- Now, it is accelerating the trend
  to low attainment. Doubtful that this will
  change.
• Prolonged labor force participation of older
  workers -- The percentage of age 65 who still
  work is on the slow increase. But, its not
  likely to increase further at the magnitude
  necessary to change these big numbers.

13
So, What Does This Mean?

• As labor force and educational attainment grow
  slowly or not at all, overall economic growth
  will slow.
• But differences among regions will become even
  more important some will slow more than others
  some will buck the trend and grow.
• Even over the past 40 years, while national
  economic growth helped all regions, some regions
  did much better than others.

14
Regional Differences

• Regions with above average numbers of college
  graduates have experienced faster growth and
  higher per capita incomes.
• From 1980 to 1998, the 10 regions with the most
  college graduates had per-capita income growth of
  1.8annually.
• Regions with fewer than average numbers of
  college graduates experience lower per capita
  incomes and slower growth.
• From 1998 to 2000, the 10 regions with the fewest
  college graduates saw an annual income growth of
  0.8.

15
Widening Regional Gaps

• In 1980, average per-capita income in the
  most-educated regions was 12 above the U.S.
  average and in the least-educated regions 3
  below the national average.
• By 1998, most-educated regions had average
  incomes 20 above the national average, while
  average incomes in the least-educated regions had
  fallen to 12 below the national average.
• The most-educated regions enjoyed productivity
  growth of 0.5 per year, compared with growth of
  0.1 for the least-educated ones.
• Source Gottlieb and Fogerty Educational
  Attainment and Metropolitan Growth (2003)

16
In Future, Some Regions Will Do Better Than Others

• Especially, those that do a better job at
  educating their less advantaged young people, and
  then retaining them.
• Those that do a better job at educating their
  adult workers and then retaining them.
• Those that do a better job at attracting
  well-educated people from other regions, and then
  retaining them.

17
Regions Do Well When

• They have globally-oriented businesses good at
  applying and converting technology into
  innovative products and services.
• They have RD institutions good at spinning out
  technological adaptations of science and
  engineering innovations.
• Their businesses and RD institutions can attract
  and retain talented and creative people.
• They have strong and flexible institutions for
  education and skill development.
• Everyone contributes. Everyone can be moved,
  housed, and schooled.

18
Leads to New Economic Development Paradigm

• Innovation
• Learning
• Place-making
• Reducing Disparities

19
Innovation

• Focus on traded sectors -- e.g., biotechnology,
  advanced manufacturing and information
  technology.
• Nurture and support emerging established
  industry clusters.
• Foster university-industry partnerships.
• For RD if you have it, for rapid and widespread
  technology application if you dont.

20
Learning

• Provide rich and continuous supply of human
  capital (education, skills, flexibility,
  creativity, and drive)
• Requires strong K-12, robust 2-year college
  system and world-class universities
• Sophisticated and well-coordinated public
  workforce development system

21
Place-making and Distinctive Identity

• Whats important in a time of high mobility?
• Transportation
• Culture and Recreation
• Public Education
• Housing Choices
• Vibrant Center City
• Authentic Neighborhoods
• Tolerance and Diversity

22
Reducing Economic and Social Disparities

• Shift from charity to investment
• Recognition that growing socio-economic disparity
  is bad for business
• Utilizing market mechanisms to create opportunity

23
The Ford Foundation Regionalism and Sustainable
Development Fellowship Our Theory of Change
24
Our Theory of Change 1

• Regions are the primary geographic building block
  for global economic competitiveness.
• The region is the operating landscape for traded
  sector businesses.
• It takes a region to achieve the economies of
  scale, scope, and opportunity necessary for the
  diversity of people and specialized businesses
  that are essential to succeed in tough global
  competition.
• Workforce, transportation, housing, education,
  supplier networks -- all exist on a regional scale

25
Our Theory of Change 2

• Businesses gain or lose competitive advantage
  based on the health of the region.
• Businesses competing in a global economy gain
  competitive advantage from a healthy regional
  economy that on a long-term, sustainable basis
• Produces and attracts educated, skilled, and
  creative people
• Fosters innovation and accelerates its rapid
  diffusion through the region
• Moves people and goods quickly and efficiently
• Makes smart use of environment and natural
  resources
• Offers affordable housing, near jobs and,
• Works to reduce disparities of income and
  opportunities.

26

• But businesses and their performance are hurt if
  they are based in an unhealthy region where poor
  public policy and private sector neglect combine
  with short-sighted vision to create
• high levels of concentrated poverty,
• traffic congestion and commuting delays,
• jobs-housing mismatch and affordability
  barriers,
• urban-suburban disparities,
• inner-city decline, and
• limited access to good jobs for low-income
  people.
• Businesses cannot recruit locally or attract
  nationally or internationally (much less retain)
  the technical skills and business savvy they need
  for competitive success.
• See readings by Manuel Pastor

27
Our Theory of Change 3

• The business sector must lead the region in
  pursuit of sustainable development.
• Business has the most at stake.
• Business can lead at the regional scale, where
  civil jurisdictions lack effective mechanisms and
  too frequently compete rather than collaborate in
  economic development.
• The business sector has the capacity to mobilize
  resources, the expertise to organize and
  implement complex undertaking, and the continuity
  of presence that extends beyond the term of
  elected public officials.

28
Our Theory of Change 4

• Individual business action is just too daunting
  and usually ineffective
• No single business can effect wholesale regional
  change,
• Challenges just too big, too deeply embedded.
• Most business leaders just dont have the time.
• Few business leaders have the skills.
• Lean management has reduced corporate hierarchy.
• Newer, more entrepreneurial business leaders not
  comfortable with the slower pace of civic
  decision-making.
• Other groups in the region sometimes view
  business leaders with suspicion.

29
Our Theory of Change 5

• Collective action through general purpose
  business associations is essential.
• Because immediate costs of engaging in regional
  agenda are high for individual firms, its up to
  business-based, mediating institutions to
  mobilize collective business action.

30

• In fact, in a knowledge-based, global
  economy, its now the central challenge of
  business-based, civic institutions (Chambers of
  Commerce) to help their member businesses
• find and pursue opportunities for collective
  action in pursuit of sustainable regional growth
• create long-term partnerships and,
• use their combined economic power and influence
  to promote business practices and public policies
  that build efficient and inclusive metropolitan
  regions.

31
Our Theory of Change 6

• Chambers of Commerce will develop and expand
  their capacity for regional leadership.
• The skills and tools to support the mission of
  modern regional business organizations are quite
  different from those required for traditional
  civic boosterism.
• strategic analysis
• coalition building and agenda setting
• product development, implementation, and
  evaluation
• Chamber execs still need highly developed process
  skills, but now also need deep content knowledge.

32
Our Theory of Change 7

• This Fellowship can build knowledge and the
  capacity for action.
• Participation will include chamber from 32 major
  metropolitan regions who will
• learn from national experts and from each other.
• develop a Regional Action Plan with peer support.
• engage regional business leaders in supporting
  that Plan.
• spread the word and help build the capacity of
  other chamber executives in North America.

33
Sustainable Development Defined

• Economic development that can be sustained over
  time because it is not environmentally or
  economically self-limiting.
• It is a growth strategy It aims to build per
  capita income and wealth within the region while
  explicitly creating wider opportunity for all
  residents to contribute to and participate in the
  benefits of economic growth.
• It advances regional patterns of growth that meet
  environmental quality attainment standards,
  combating fragmented, inefficient land use
  planning and wasteful development patterns that
  can concentrate poverty and increase business and
  taxpayer costs.

34
Some of the Questions

• What does this mean for your Chambers
• Geographic scope -- whats the region?)
• Relationship with other business organizations?
• Mission, objectives, services, and performance
  metrics?
• Organization, membership, and revenues?
• Who are your partners (who is not) and what is
  your relationship to local and state governments?
• What are the most important issues and how do you
  establish priorities?

35
Our Style?

• Challenging, iconoclastic, curious,
  non-ideological, and with high mutual
  expectations.
• Friendly, supportive, respectful.
• Informal, serious in intent (if not always in
  demeanor).