Economic Goals for Vermont’s Comprehensive Economic

Development Strategy

Ken Jones, Economic Research AnalystVermont Agency of C0mmerce and Community

DevelopmentJanuary 27, 2014

CEDS – A Strategy for Vermont

Productivity (GDP and

GPI)

Labor

Capital

Consumption

Broad Goal – Increase GDP

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

0

5,000

10,000

15,000

20,000

25,000

30,000

State and National GDP

US GDP VT GDP

Millions of Chained 2006 dollars – real growth

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.150%

0.155%

0.160%

0.165%

0.170%

0.175%

0.180%

0.185%

0.190%

Vermont GDP compared to US

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

74.0%

76.0%

78.0%

80.0%

82.0%

84.0%

86.0%

88.0%

90.0%

92.0%

Vermont per capita GDP compared to US

Vermont per capita GDP Percent of US per capita GDP

~ 6% decrease

in 15 years

~ 4% increase in 15 years

The Vermont Economy

2001 2003 2005 2007 2009 20110

5000000000

10000000000

15000000000

20000000000

25000000000Total State GDP

Other Services

Construction

Educational Services

Transportation and Utili-ties

Information

Professional and business services

Leisure and hospitality

Financial Activities (Minus Real Estate)

Health care and social assistance

Manufacturing

Real estate

Natural resources and mining

Government

Trade

Incorporating Genuine Progress Indicator

Factors that influence GPI

•Starts with consumer purchases, like GDP•Non renewable energy depletion (-$3.6

billion)•Value of housework (+$3.5 billion)•Income inequality (-$3.2 billion)•Value of higher education (+$2.3 billion)•Loss of farmland (-$1.4 billion)•Climate change and ozone depletion (-$1.8

bill.)•Commuting cost and car crashes (-$.65

billion)•Cost of underemployment (-$.5 billion)

Draft Goal Statement

•Increase ratio of Vermont GPI to US GPI by 1% in the next five years (about $300 million annual)

•To translate – increase GDP and…▫Reduce factors that reduce GPI (income

inequality, climate change emissions)▫Increase factors that increase GPI (beyond

GDP – increase level of higher income, volunteer labor)

CEDS – A Strategy for Vermont

Labor+

CapitalProduction (GPI)Magic

BusinessEnvironment

Workforce Development and

Education

Public Infrastructure

Capital Finance

InnovationWorking Lands and Tourism

Labor

•Number of employed and self –employed•Wages and salaries of employed and self

employed•GDP output per employee (labor

efficiency)

The Vermont Economy

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

50000

100000

150000

200000

250000

300000

350000Employment

Working Lands

Other

Housing

Transportation

Services

Education

Healthcare

Tourism

Retail/Wholesale

Government

Manufacturing

The Vermont Economy - Income

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

0

1000000000

2000000000

3000000000

4000000000

5000000000

6000000000

7000000000

8000000000

Salaries and wages in AGITotal Income

18-24 25-34 35-44 45-64 65+0

10000

20000

30000

40000

50000

60000Education by Age in Vermont Females

Less than 9th grade

9th to 12th grade, no diploma

High school graduate, GED, or alter-native

Some college, no degree

Associate's degree

Bachelor's degree

Graduate or professional degree

18-24 25-34 35-44 45-64 65+0

10000

20000

30000

40000

50000

60000 Education by Age in Vermont Males

Less than 9th grade

9th to 12th grade, no diploma

High school graduate, GED, or alternative

Some college, no degree

Associate's degree

Bachelor's degree

Graduate or professional degree

(45-64 data divided by 2)

Draft Goal Statement - Labor

•Increase worker output 1% in the next five years above national increases

▫(Via workforce development and education)

Capital

•Direct Foreign Investment (EB-5)

•Venture Capital

•Vermont in traditional equity markets

•New capital sources

Draft Goal Statement – Private Capital

•Increase capital investment by $1 billion in next five years

Draft Goal Statement – Public Infrastructure

• Increase number of communities with adequate water and wastewater for growth by z

• Transportation

• Broadband

• Energy (incorporate the 90% by 2050 goals of the Comprehensive Energy Plan)

CEDS – A Strategy for Vermont

Labor+

CapitalProductivity

BusinessEnvironment

Workforce Development and

Education

Public Infrastructure

Capital Finance

InnovationWorking Lands and Tourism

Draft Goal Statement – Business Environment

•Increase business survival rate x% in the next five years

•Increase business growth y% in the next five years

2000 2001 2002 2003 2004 2005 2006 2007 2008 20098.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

13.0%

Business Failure rate

Vermont

New Hampshire

Massachusetts

Maine

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

20.0%

22.0%

24.0%

26.0%

28.0%

30.0%

Percent of companies that grow employment

Vermont

New Hampshire

Massachusetts

Maine

Draft Goal Statement – Other bucket groups

•Innovation

•Working Lands and Tourism

TimelineToday – Add flesh to the initiatives • Who can take responsibility for specific actions?• What data and analysis will support the initiative?

February - March –• Draft action plan matrix including intiatives• Finalize data documents• Draft CEDS document for review• Targeted review workshops

April –• Get administration approval, add final details• Public review period

May – Preparation and delivery of final CEDS document

June 1 – Report completed

Fall, 2014 – Economic Development Summit • Review baseline information • Report progress in workplan implementation

CEDS Report outlineCharacterize Vermont economy

Production, Labor, CapitalFor each Bucket Area

GoalsInitiatives (as work plans)

Topics (not incorporated in bucket areas)PovertyResilienceCommunity Development and HousingSectors of particular interest

10:00am-10:15am Welcome by Commissioner Lisa Gosselin

10:15am-10:45am Presentation: Goal areas and Initiatives: Ken Jones

10:45am-11:00am Join Groups: Personal Introductions.

11:00am-11:30amRead Initiatives and make notes: All participants will have time to privately read through the initiatives for their chosen goal area, and make notes about improvements.

11:30am-12:30pm

Review Initiatives: The Team Leader(s) will invite participants to consider initiatives and bucket goals. Groups will contribute their ideas about improvements/additional information for the initiatives. The improvements will be captured on computer by a Recorder assigned to each group. (Allow 10-20 minutes for each initiative)

12:30pm -1:30pm Working Lunch

1:30pm-2:15pmReview Initiatives: (Continued) and consider any gaps or new initiatives.

2:15pm-3:45pm Report back: (allow 5-6 minutes per group)

3:45pm-4:00pm Conclusions/Next steps: Commissioner Lisa Gosselin

4.00pm Close

In your work groups:

a)Read through the initiatives.

b)Make private notes.

c) Indicate to the facilitator/recorder which initiatives you would like to contribute to.

d)Prioritize – start work on those with the most contributors/or which people regard as the most important.

e)Focus on completing fewer initiatives rather adding minor improvements to them all.

Time to get to work.