CREATING OUR (ECONOMIC) FUTURE: HIGHER EDUCATION AND ECONOMIC DEVELOPMENT
LSU Transition Advisory Team April 16, 2013
2
1980
1985
1990
1995
2000
2007
85
100
115
130
145
160
175
Louisiana
United States
Rest of South
Total nonfarm, annual employment (100=1980)
FOR DECADES, LA’S ECONOMY HAD UNDERPERFORMED THE SOUTH AND THE U.S….
3
U.S. annual employmentLouisiana annual employment
SEVERAL OF LA’S PRIMARY INDUSTRY SECTORS HAVE BEEN LOSING JOBS FOR MANY YEARS
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '1026
29
32
35
38
41
44
47
2500
2600
2700
2800
2900
3000
3100
3200
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
20.0
22.0
24.0
26.0
28.0
30.0
750.0
800.0
850.0
900.0
950.0
1000.0
1050.0
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '127
8
9
10
11
12
13
360.0
420.0
480.0
540.0
600.0
660.0
Agriculture / FarmingChemical Manufacturing Paper Manufacturing
JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJF93
100
107
Total non-farm, seasonally-adjusted employment (100 = January 2008)
LA entered the recession late…
…and exited faster than other states
…experienced smaller job losses…
2008 2009 2010 2011
Louisiana
United States
South
2012
SINCE 2008, LOUISIANA’S EMPLOYMENT LEVELS HAVE OUTPERFORMED BOTH THE SOUTH AND NATION
2013
5
MOODY’S EXPECTS LA’S INDUSTRY MIX TO LEAD OUR STATE TO UNDERPERFORM IN JOB CREATION OVER THE NEXT 20 YEARS
Current LA forecast
LA at US rate2.3
2.2
2.1
2.0
020302025202020152010
2.8
2.7
2.6
2.5
2.4
LA at Aspiration rate (GA, NC, TX)
LA at Peer rate (South)
Employment (millions)
Gap of 400,000 jobs
vs. Peer
Gap of 525,000 jobs vs.
Aspiration
LA projectedto gain 290,000
new jobs
6
LED’S NO. 1 GOAL: POSITIONING LA. TO ADD ~40,000 NEW
JOBS PER YEAR
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Growing tax revenues Population in-migrationSmall business growth Economic opportunity
WHAT WOULD 40,000 NEW JOBS PER YEAR MEAN TO LOUISIANA?
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HOW DO WE POSITION LOUISIANA
TO GROW FASTER THAN THE SOUTH
AND U.S. ON A REGULAR BASIS?
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WE HAVE AGGRESSIVELY PURSUED EIGHT INTEGRATED ECONOMIC DEVELOPMENT STRATEGIES
Cultivate top regional economic development assets
Focus on business retention and expansion
Develop national-caliber business recruitment capacity
Improve state economic competitiveness Enhance community
competitiveness
Cultivate small business, innovation and entrepreneurship
Aggressively tell our story
Develop robust workforce solutions
10
WE HAVE AGGRESSIVELY PURSUED EIGHT INTEGRATED ECONOMIC DEVELOPMENT STRATEGIES
Cultivate top regional economic development assets
Focus on business retention and expansion
Develop national-caliber business recruitment capacity
Improve state economic competitiveness Enhance community
competitiveness
Cultivate small business, innovation and entrepreneurship
Aggressively tell our story
Develop robust workforce solutions
11
WE HAVE AGGRESSIVELY PURSUED EIGHT INTEGRATED ECONOMIC DEVELOPMENT STRATEGIES
Cultivate top regional economic development assets
Focus on business retention and expansion
Develop national-caliber business recruitment capacity
Improve state economic competitiveness Enhance community
competitiveness
Cultivate small business, innovation and entrepreneurship
Aggressively tell our story
Develop robust workforce solutions
12
LED FASTSTART, OUR CUSTOMIZED WORKFORCE INITIATIVE, WAS RANKED NO. 1 IN THE U.S. IN 2010, 2011, AND 2012
“Louisiana’s FastStart continues
to be the gold standardfor workforce training
programs,which increasingly are an
essentialelement in successful
economicdevelopment projects,”
Jack Rogers - Editor in ChiefBusiness Facilities Magazine
August 2012
Workforce Training Leaders
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“ “Probably the most notable statewide workforce-development initiative comes from Louisiana. Its FastStart programme, launched in 2008, helps companies recruit and train workers.
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LOUISIANA’S BUSINESS CLIMATE RANKINGS HAVE IMPROVED SUBSTANTIALLY SINCE 2008
Ranking 2008 Today
Pollina
Chief Executive
Forbes
Area Development
Business Facilities
Site Selection
40
48
49
Unranked
Unranked
Unranked 7
6
5
34
13
16
15
IDENTIFY AND CULTIVATE NEW GROWTH SECTORS
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WE UTILIZED A STRUCTURED PROCESS TO GENERATE AND PRIORITIZE POTENTIAL GROWTH SECTORS
Fit w
ith s
treng
ths
Pot
entia
l for
job
grow
th
Oth
er p
riorit
izat
ion
met
rics
Tim
e ho
rizon
List of top growth
optionswith
ideas for capturing
Idea generation Prioritization & portfolio shaping
Most attractive growth options
Explore Louisiana strengths
Review industry characteristics + growth trends
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LED IDENTIFIED SIX TARGET AREAS WITH GREAT POTENTIAL FOR JOB CREATION AND ECONOMIC GROWTH
Digital media & enterprise software
Advanced manufacturing
Clean technology
Life sciences
Water management
Next generation oil & gas
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Opportunity
LA job growth 2009-29 (thousands)
▪ Next generation digital media/software development ecosystem
▪ Water management: The Netherlands of the US
▪ Specialty research hospital and medical district: Treating the nation
▪ Ultra-deep water: Under the sea
▪ Unconventional gas: Not everything’s bigger in TX
▪ Auto: Supplying the future driving experience
▪ Energy efficiency: Green building, green living, green manufacturing
▪ Renewable energy: Power and fuel for the future
▪ Enhanced Oil Recovery techniques: Scraping the bottom of the barrel
▪ Nuclear power: Parts and modular production
▪ Obesity/diabetes research and treatment
▪ Manufacturing pharmaceuticals
Total
▪ 11-23
▪ 10-20
▪ 10-20
▪ 10-15
▪ 10-15
▪ 5-15
▪ 5-10
▪ 8-12
▪ 5-7
▪ 3-5
▪ 1-2
▪ 1-2
▪ 25-55
▪ 20-45
▪ 20-40
▪ 40-55
▪ 40-55
▪ 10-35
▪ 10-20
▪ 20-30
▪ 20-25
▪ 10-20
▪ 2-4
▪ 5-10
~80 - 145 ~225 - 400
Direct Total
THESE TARGETS COULD ADD 225,000 - 400,000 EXTRA JOBS OVER THE NEXT 20 YEARS
19
290
690
815LA at Aspiration rate
LA at rate of South
Baseline forecast
Total jobs added, 2009-29 (thousands)
690
815
PURSUING THESE TARGETS CAN HELP US ACHIEVE OUR TARGET GROWTH RATE WHILE GENERATING NEW POPULATION AND TAX REVENUES
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PURSUING THESE TARGETS CAN HELP US ACHIEVE OUR TARGET GROWTH RATE WHILE GENERATING NEW POPULATION AND TAX REVENUES
290
690
815
225-400
LA at Aspiration rate
LA at rate of South
515-690Baseline forecast + Growth Sec.
Growth Sectors
Additional economic impact over 20 years
▪ ~$18-24 billion in new State and local tax revenue
▪ ~515-920K in new population
Total jobs added, 2009-29 (thousands)
690
815
21
290
690
815LA at Aspiration rate
LA at rate of South
Baseline forecast + all other efforts
Other efforts
Total jobs added, 2009-29 (thousands)
225-400 125-300 ~815
PURSUING THESE TARGETS CAN HELP US ACHIEVE OUR TARGET GROWTH RATE WHILE GENERATING NEW POPULATION AND TAX REVENUES
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KEY ROLES OF HIGHER EDUCATION IN THE ECONOMIC DEVELOPMENT OF LOUISIANA
• Workforce Development
• Scientific, Technical, and Medical R&D
• Intellectual Talent Development
• Teacher Training/Development
• Technology Transfer
• Intellectual Talent Retention and Attraction
• Research on Issues of State Importance
• Business Development Assistance
• Brand Building of State
NOT COMPREHENSIVE
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24
25
26
27
28
29
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PARTNERSHIPS WITH HIGHER EDUCATION HAVE BEEN CRITICAL TO RECENT WINS AND ARE MODELS FOR FUTURE COLLABORATIONS
Louisiana Tech
Company High Ed Partner Initiative~$2 million over seven years to expand telecommunications technology curriculum
$20 million for a new training facility and equipment focused on industrial technology
~$29 million to build the Louisiana Digital Media Center (~2/3 academic space, ~1/3 EA)
$5 million over 10 years for enhanced software development-focused academic programs
$22 million for a new training facility and equipment focused on manufacturing technology
Sowela
LSU
UNO, possibly others
Bossier Parish CC
CenturyLink
Sasol
Electronic Arts
GE Capital
Benteler
Several significant research contributions that helped secure the project
LSU Ag CenterConAgra
$14 million over 10 years to increase the number of computer science graduates
LSU, others TBDIBM
31
32
33
WHAT DO THESE COMPANIES HAVE IN COMMON?
•Amazon.com•Dell•Gameloft•Google•EA•GE Capital
NOT COMPREHENSIVE
•HP•IBM•Intel•Microsoft•Samsung•Texas Instruments
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THE ULTIMATE FRONTIER FOR ECONOMIC DEVELOPMENT IN LOUISIANA WILL BE REALIZED THROUGH THE DEVELOPMENT
OF HIGHER EDUCATION