greater cleveland partnership (gcp) regional action plan

Greater Cleveland Partnership (GCP)Regional Action Plan

Ford Fellowship for Regionalism and Sustainable Development

Executive Summary

Regional Action Plan (RAP)• The focus of my RAP is creating a regional economic

inclusion model. “Economic inclusion” is defined as the meaningful incorporation of minorities into the economic engines that drive our region.

– Northeast Ohio, similar to most regions, is becoming more diverse. As of 2005, minority population in the City of Cleveland and in the region was at 61.2% and 23.1%, respectively. Cleveland has also twice in the last several years been ranked number one on the U.S. Census Bureau Poverty Ranking.

– Recent studies indicate that significant barriers exist relative to the growth and development of medium to large size African American and Hispanic owned businesses in Northeast Ohio. The primary barriers to minority business development include the lack of social capital, availability and access to intensive high-level technical assistance, and limited access to financial capital. Also impeding the growth of minority businesses in Northeast Ohio is the lack of widespread corporate supplier diversity programs.

Regional Action Plan (RAP)• RAP Focus: Economic Inclusion

– The Greater Cleveland Partnership (GCP), the largest private-sector economic development organization in Ohio and the voice of Northeast Ohio’s business community, has set an organizational priority of leveraging the region’s diversity as a source of economic strength. This focus will make the region a leader in diversity and inclusion and will assist with attraction/retention of key business partners in our community. Additionally, meaningful effort in this area will begin to address persistent poverty in our core city and region.

– The Commission on Economic Inclusion, a program of the GCP, is a broad-based group of Northeast Ohio business and community leaders working to make the region’s diversity a source of economic strength. Through the focus of “Jobs & Opportunities, Wealth & Titles” for minority individuals and minority-owned businesses (MBEs), the Commission works to ensure that economic inclusion is integrated into all aspects of the business community’s economic agenda.

– The Commission is now focusing greater attention on a regional inclusion model in an effort to further develop minority businesses in Northeast Ohio through a collaborative Minority Business Accelerator for which the Commission acts as the program manager.

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This diagram represents a collaborative economic development model, that leverages the existing resources in the region, to provide the best services to the constituents. The primary goal is to facilitate the growth of MBE and Corporate business.

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Program Management

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Assessment Tools Registration and Database Tools

Survey Tools

- Aggregate Addressable Spend- Affirm MBE Readiness

- Affirm Corporate Readiness- Align MBEs and Corporations

- Facilitate Commercial Deal Structuring- Monitor MBE Growth Plans

- Monitor Corporate Diversity Plans- Consolidated MBE Status Reporting

Reporting Tools

RECRUITiNG

Technology and Tools

On-going Revenue form Membership FeesOn-going Revenue from Deal Making Fees

Regional Economic Inclusion Model

• The Accelerator seeks to match medium to large MBEs (generally revenues of $2.5M+) in Northeast Ohio with Commission corporate members who have immediate purchasing opportunities. Prior to “closing the deal,” the MBE will work with a portfolio manager to develop a customized growth plan and to receive any of the necessary minority development services on the left side of the model. Concurrently, our corporate members will also work with a portfolio manager to identify and develop strategies that enhance both the utilization of MBEs and their overall competitiveness through receiving any necessary corporate development services (right side of the model). After the MBE and the corporate have focused on individual development, each will be matched with a company meeting its needs and capabilities for the purpose of executing a business contract. The Commission has a goal of facilitating 12 MBE contracts during the first year of the Accelerator.

Regional Action Plan (RAP)

• The outcomes of the Minority Business Accelerator will begin to address economic challenges in Northeast Ohio:

1. The capacity, scale and infrastructure of existing minority firms will increase.

2. Participating minority firms will experience an increase in the total number of employees and payroll.

3. The Commission’s corporate members will expand supplier diversity initiatives with a positive affect on the region’s overall corporate community.

4. Economic inclusion becomes a “win-win” value proposition for all in the community.

Regional Action Plan (RAP)

Actions Taken• The Regional Economic Inclusion Model (i.e. Accelerator) was

proposed to the Fund for Our Economic Future for funding of the $2.5M+ “horizontal.” Funding of $1M (renewable up to 3 years) was granted in Fall 2007. A program planning document and communications plan have been developed.

• Because the Accelerator is a collaborative model, the idea was shopped to key partners and constituencies for approval.

– The model was first presented to internal GCP and Commission leadership and Commission task forces composed of corporate volunteers and minority business owners.

– After internal approval, the Commission’s proposed external partners, such as the Hispanic Business Association, JumpStart, and the Northern Ohio Minority Business Council were polled for interest. A steering committee consisting of these partners (plus the Akron Urban League) has been formed and meets weekly to oversee the operation of the Accelerator.

– The model was also presented to MBEs for feedback and to determine what minority development services were desired.

Actions Taken• The Commission is assisting its members to quantify their

addressable spend in specific areas (construction, supplies and products, financial services, etc). Addressable spend refers to that projected amount which could be spent with a new supplier, excluding budgeted expenditures currently under contract or others which would not be available for bid or transfer to a different vendor.

• The Commission has also benchmarked similar economic inclusion models or components outside the region in cities such as Cincinnati, Milwaukee, Buffalo and St. Louis. Commission staff also spoke with staff of the Noisette Company’s HUB Contractor Business Academy in North Charleston regarding their MBE construction academy.

• The Commission identified specific development services to be offered to construction-related MBEs as part of the bonding vertical through a partnership with the Surety & Fidelity Association of America in presenting their Model Contractor Development Program (MCDP) in Cleveland. The program will consist of ten weeks of workshops regarding the essentials of running a strong contracting business along with the opportunity for one-on-one consultations with sureties, construction attorneys, accountants and other construction-related professionals. A stakeholder meeting was convened in December and a MOU is currently being drafted.

Next Steps• The Commission will implement its

communications plan and begin limited media for late January kickoff of the Accelerator.

• MBEs responding to outreach will be registered in the Commission’s consolidated database.

• Work continues on formalizing partnerships with the appropriate constituencies (City of Cleveland, Cuyahoga County, Port Authority, unions, etc.) for the MCDP. Planning and finalization will continue leading to the implementation of the MCDP in March. The program will run from March – May and include modules on topics such as construction accounting and financial management, bonding, estimating and bidding, etc.

Next Steps• Commission staff continues to work with

corporate members to quantify addressable spend and opportunities for purchasing from MBEs undertaking the Accelerator process.

• Upon successful launching and implementation of the Accelerator, the Commission plans to seek funding for additional horizontals of the model such as other revenue levels ($1-2.5M, $500K-$1M, etc.) and industry-specific (healthcare, etc.).

Key Learning• Any regional economic inclusion model must be a

collaborative model that hinges on partnerships and cooperation.

• The value proposition for each partner must be presented clearly and succinctly. As with any aspect of regionalism, each player must feel there is more personal value to playing in the big sandbox with everyone’s toys versus staying in his individual sandbox with his own. The case for more effective delivery of services through joint action must be persuasive.

• To make the Accelerator the dominant regional model, funders must direct all other entities (corporations, MBE groups, other advocacy organizations, etc.) approaching them for funding for similar projects or outcomes to the model. The funders have the power to say this is the only (or the “recommended”) game in town.

Key Learning• “Where does the $$$ go?” All partners must be

comfortable with the flow of funding to a central program manager.

• MBEs must also have some “skin in the game.” To create this investment, a percentage of resulting revenues from deals through the model can be required to be reinvested in the model to make it a sustainable program.

• A regional inclusion model such as the Accelerator hinges on market-driven demand. Currently in Northeast Ohio, the construction market is booming. As a result, the Accelerator’s early focus will be on construction-related MBEs and Commission members who are undertaking large construction projects within the next 12-18 months.

Background

About GCP• The Greater Cleveland Partnership mobilizes private-

sector leadership, expertise and resources to create jobs and wealth and improve the economic vitality of the region.

• Membership by company size– 14,850 = 97.1% small companies (< 100 employees) – 260 = 1.7% mid-size companies (100-499

employees)– 82 = .5% large companies (≥ 500 employees)

• Annual operating budget: 2004 - $25.8M; 2005 - $26.1M; 2006 (projected) - $26.4M

• Staff members: 2006 – 104 FTEs (31 new hires); 2005 – 94 FTEs (26 new hires). Hiring goals (2007) include addition of 4-5 employees in COSE Workers Compensation group.

• Board members: 68 (GCP Regulations allow a maximum of 70); 12 member Executive Committee

About GCP•Example membership

–AT&T–Eaton Corporation (Alexander (Sandy) Cutler, Chairman, President and CEO; former Chairman and Current Exec. Committee member of GCP)

–Sherwin-Williams (Christopher Connor, Chairman & CEO; Exec. Committee of GCP)

–KeyCorp–National City Bank

•Unique aspects of GCP–Largest percentage of members (40.9%) are in the service industry, followed by manufacturing (12.5%); largest percentage of our members are based in Cuyahoga County (59.8%).

–Involvement of not for profit organizations: Cleveland Clinic; University Hospitals; The Cleveland Foundation; Federal Reserve Bank of Cleveland (all Board members)

–We are the only metropolitan chamber of commerce in the eight county region that we cover - Cuyahoga, Lake, Lorain, Summit, Ashtabula, Portage, Geauga, Medina.

–All organizations who join are GCP members - if they are small enough (generally under 250 employees) they also become Council of Smaller Enterprises (COSE) members

–Competition: Greater Akron (OH) Chamber of Commerce; Lorain County (OH) chambers; various local chambers. GCP also competes with anyone selling products such as health insurance, Worker’s Compensation coverage, etc.

Regional Economic ContextTotal Metro Population

2004 PopulationToronto Metropolitan Area 5,341,000

Washington-Arlington-Alexandria, DC-VA-MD-WV (MSA) 5,157,608

San Francisco-Oakland-Fremont, CA (MSA) 4,146,980

Baltimore-Towson, MD (MSA) 2,644,744

Pittsburgh, PA (MSA) 2,397,767

Cleveland-Elyria-Mentor, OH (MSA) 2,133,778 Portland-Vancouver-Beaverton, OR-WA (MSA) 2,062,109

Las Vegas-Paradise, NV (MSA) 1,648,524

West Palm Beach-Boca Raton-Boynton Beach, FL Metropolitan Division 1,244,189

Louisville-Jefferson County, KY-IN (MSA) 1,199,424

Buffalo-Niagara Falls, NY (MSA) 1,153,753

Birmingham-Hoover, AL (MSA) 1,081,722

Baton Rouge, LA (MSA) 727,413

El Paso, TX (MSA) 712,617

Winston-Salem, NC (MSA) 441,472

Racine, WI (MSA) 193,862

Source: Bureau of Economic Analysis, REIS

Regional Economic ContextMetro Population Growth

1994-2004 Population CAGRLas Vegas-Paradise, NV (MSA) 5.4%

West Palm Beach-Boca Raton-Boynton Beach, FL Metropolitan Division 2.3%

Portland-Vancouver-Beaverton, OR-WA (MSA) 1.9%

Washington-Arlington-Alexandria, DC-VA-MD-WV (MSA) 1.6%

Winston-Salem, NC (MSA) 1.3%

US Metropolitan Average 1.2%

El Paso, TX (MSA) 1.0%

Baton Rouge, LA (MSA) 0.9%

Louisville-Jefferson County, KY-IN (MSA) 0.9%

Birmingham-Hoover, AL (MSA) 0.8%

San Francisco-Oakland-Fremont, CA (MSA) 0.7%

Baltimore-Towson, MD (MSA) 0.7%

Racine, WI (MSA) 0.6%

Cleveland-Elyria-Mentor, OH (MSA) -0.1%Pittsburgh, PA (MSA) -0.4%

Buffalo-Niagara Falls, NY (MSA) -0.4%

Toronto


Regional Economic ContextJob Base: 1990’s Job Growth

1990-2000 Job CAGRLas Vegas-Paradise, NV (MSA) 6.2%


Portland-Vancouver-Beaverton, OR-WA (MSA) 2.9%


Louisville-Jefferson County, KY-IN (MSA) 2.0%

U.S. Metropolitan Average 1.7%


Birmingham-Hoover, AL (MSA) 1.6%

Winston-Salem, NC (MSA) 1.6%

San Francisco-Oakland-Fremont, CA (MSA) 1.3%


Cleveland-Elyria-Mentor, OH (MSA) 0.9%Pittsburgh, PA (MSA) 0.9%


Racine, WI (MSA) 0.7%

Buffalo-Niagara Falls, NY (MSA) 0.2%

Toronto


Regional Economic ContextJob Base: Post-Recession Job Growth

2001-2004 Job CAGRLas Vegas-Paradise, NV (MSA) 3.9%






US Metropolitan Average 0.0%

Birmingham-Hoover, AL (MSA) -0.1%

Buffalo-Niagara Falls, NY (MSA) -0.2%

Racine, WI (MSA) -0.3%

Portland-Vancouver-Beaverton, OR-WA (MSA) -0.5%

Louisville-Jefferson County, KY-IN (MSA) -0.6%

Pittsburgh, PA (MSA) -0.7%

Winston-Salem, NC (MSA) -0.8%

Cleveland-Elyria-Mentor, OH (MSA) -1.3%San Francisco-Oakland-Fremont, CA (MSA) -2.2%

Toronto


Regional Economic ContextJob Base: Average Wage

2004 Average WageSan Francisco-Oakland-Fremont, CA (MSA) $55,227

Washington-Arlington-Alexandria, DC-VA-MD-WV (MSA) $52,825

Baltimore-Towson, MD (MSA) $41,752

US Metropolitan Average $40,534

Portland-Vancouver-Beaverton, OR-WA (MSA) $39,610

Cleveland-Elyria-Mentor, OH (MSA) $38,810Las Vegas-Paradise, NV (MSA) $37,994

West Palm Beach-Boca Raton-Boynton Beach, FL Metropolitan Division $37,959

Birmingham-Hoover, AL (MSA) $37,550

Pittsburgh, PA (MSA) $37,464

Racine, WI (MSA) $36,388

Winston-Salem, NC (MSA) $36,087

Louisville-Jefferson County, KY-IN (MSA) $35,947

Buffalo-Niagara Falls, NY (MSA) $34,956

Baton Rouge, LA (MSA) $32,479

El Paso, TX (MSA) $28,487

Toronto


Regional Economic ContextMedian Household Income

2005 Median Household IncomeWashington-Arlington-Alexandria, DC-VA-MD-WV Metro Division $74,708

San Francisco-San Mateo-Redwood City, CA Metro Division $65,382

Baltimore-Towson, MD Metro Area $57,447

Racine, WI Metro Area $50,465

Las Vegas-Paradise, NV Metro Area $49,571

Portland-Vancouver-Beaverton, OR-WA Metro Area $49,227

Cleveland-Elyria-Mentor, OH Metro Area $44,281Birmingham-Hoover, AL Metro Area $43,802

Louisville, KY-IN Metro Area $43,344

West Palm Beach-Boca Raton-Boynton Beach, FL Metro Division $43,091

Winston-Salem, NC Metro Area $42,444

Buffalo-Niagara Falls, NY Metro Area $42,315

Pittsburgh, PA Metro Area $41,719

Baton Rouge, LA Metro Area $40,904

El Paso, TX Metro Area $30,968

Toronto Metropolitan Area

Source: U.S. Census Bureau, American Community Survey

Regional Economic ContextDemographic Trends: Population

Cleveland-Elyria-Mentor, OH (MSA)Total Population (2004) 2.13 million

Population Growth, CAGR (1994-2004)

MSA = -0.1%US Metro Avg. =

+1.2%

Population Growth Indexed (1994=1.0)

0.9

1.0

1.0

1.1

1.1

1.2

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Clev MSAUS Metro


Regional Economic ContextIncome Trends: Median Household Income

(2005)

$24,105

$44,281

$0

$10,000

$20,000

$30,000

$40,000

$50,000

Median HH Income

Cleveland, OH Metro Area

Central CityMetro Area

Source: U.S. Census Bureau, American Community Survey, 2005

Regional Economic ContextIncome Trends: Poverty Rate (2005)

32.4%

13.8%

0%

10%

20%

30%

40%

Poverty Rate


Central CityMetro Area


Regional Economic ContextDemographic Trends: Education (2005)

26.6% 28.1%

0%

10%

20%

30%

Bachelors Degree or More


Metro AreaUS Metro


Regional Economic ContextJob Base: 1990’s Job Growth

Job Growth Indexed (1990=1.0)

0.00.20.40.60.81.01.21.4

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Clev MSAUS Metro


Regional Economic ContextJob Base: Post-Recession Job Growth

Job Growth Indexed (2001=1.0)

0.8

0.9

1.0

1.1

1.2

2001 2002 2003 2004

Clev MSAUS Metro


Regional Economic Context1990’s and Post Recession Wage & Salary

Growth (CAGR)

1.6%

3.0%

-0.4%

0.7%

-1%

0%

1%

2%

3%

1990-2000 2001-2004

Cleveland, OH (MSA)

Metro AreaUS Metro


Regional Economic Context

Major industry clusters and segments

• Manufacturing - ↓ 20.6%• Health Care & Social Assistance - ↑ 11.9%• Retail Trade - ↓ 3.1%• Accommodation & Food Services - ↑ 4.4%• Administrative & Support & Waste

Management & Remediation Service (establishments performing routine support activities for the day-to-day operations of other organizations) - ↑ .6%

Sources: 2002 Economic Census: Summary Statistics by 2002 NAICS Cleveland-Elyria-Mentor, OH MSA; 2002 Economic Census: Comparative Statistics for Ohio Summary Statistics by 1997 NAICS


Top Ten Northeast Ohio Corporate Employers by Company & Total Local

Employees –Cleveland Clinic: 24,166 –University Hospital Health System: 14,276 –Progressive Corp.: 8,475 –National City Corp.: 6,233 –KeyCorp: 6,044 –Case Western Reserve University: 5,362 –MetroHealth System: 5,353 –Ford Motor Co.: 5,182 –Summa Health System: 4,690 –Continental Airlines: 3,018

Source: Team NEO, 2004 NEO Counties

Regional Economic ContextCleveland-Elyria-Mentor MSA

Occupations with Most Annual Openings

2004-2014

Total Average

Annual Wage

Occupational Title Openings 2004

Cashiers 1,600 $7.82

Retail Salespersons 1,404 $10.74

Waiters and Waitresses 1,153 $7.51

Registered Nurses 1,026 $25.99

Comb. Food Preparation & Serving Workers, inc. Fast Food 859 $7.74

Source: Ohio Department of Job and Family Services, Bureau of Labor Market Information, February 2006.


Entrepreneurship Ranking (of Top 50)Entrepreneurship Magazine 2005

24

U.S. Census Bureau Poverty Ranking 2006

1

Region’s Minority PopulationCity’s Minority Population (2005)

23.1%61.2%

City population as percent of region (2005)

21.3%

Number of Daily Newspapers

1

Regional Economic Context• Other economic strengths, assets, or challenges

– Strong entrepreneurial and innovative environment, with a focus on biotechnology, IT, stem cell research, etc.• BioEnterprise• National Center for Regenerative Medicine

– Key advocacy successes on issues impacting the economic development of our region• Achieving state tort reform to substantially reduce

the cost of doing business in the state and the region

• Partnering with the public sector to attract $205M of federal transportation investment into infrastructure priorities

– Strong foundation community (The Cleveland Foundation, Gund Foundation) and innovative funding vehicles (The Fund for our Economic Future)

– Variety of resources for minority business community

Regional Public Policy / Political Challenges

• Economic inclusion of minorities– GCP strives to ensure full participation by minorities in job

and wealth creation

• The racial demographics of our region, specifically in Cuyahoga County and Cleveland, mandate that we use diversity as a source of economic strength

• “Bottom-line” benefits must be identified and ROI continuously measured to communicate the business case for diversity

• New sources of venture capital for minority business development must be identified

• Private-sector diversity spend must be increased through improved assessment of MBE capacity; wider utilization of MBE certification; and meaningful “matchmaker” events

– Entities addressing these issues include: Northern Ohio Minority Business Council; MVP Pinnacle Fund; Commission on Economic Inclusion; Urban League; Fund for Our Economic Future

GCP’s Regional Efforts• Commission on Economic Inclusion

– Broad-based group of Northeast Ohio business and community leaders working to make the region’s diversity a source of economic strength. Through the focus of “Jobs & Opportunities, Wealth & Titles” for minority individuals and MBE’s, the Commission works to ensure that economic inclusion is integrated into all aspects of the business community’s economic agenda.

– Partners: 85 corporate, nonprofit and government members with business operations in Northeast Ohio

– Challenges: Business case for diversity must continually be communicated; increasing private-sector diversity spend; identifying and assisting with hurdles to MBE development

– Successes: Development of a scorecard to assist members in tracking success of diversity initiatives; establishment of the Diversity Professionals Group; dissemination of best practices and actionable strategies to members; sustained CEO commitment and participation

Regional Action Plan• Potential RAP Focus: Economic Inclusion

– Our region, similar to most, is becoming more diverse and an organizational priority is to leverage our diversity as a source of economic strength

– Further development of minority businesses in Northeast Ohio will significantly improve minority inclusion in the economic engines that drive our region

– Becoming a regional leader in diversity and inclusion will assist with attraction/retention of key business partners in our community

– Meaningful effort in this area will begin to address persistent poverty in our core city and region

Actions Taken

What’s the Problem? • Northeast Ohio has not capitalized on its

diversity as a source of economic strength. As a result, minorities are not full participants in job and wealth creation in the region, resulting in income inequality. Wealth creation in the region is impeded.

What’s the Solution?• Minority Business Accelerator

1. Increase the capacity, scale and infrastructure of existing minority firms

2. Increase the total number of employees and payroll of participating minority firms

3. Expand corporate supplier diversity initiatives among the region’s corporate community

4. Make economic inclusion “win-win” value proposition for all in the community

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This diagram represents a collaborative economic development model, that leverages the existing resources in the region, to provide the best services to the constituents. The primary goal is to facilitate the growth of MBE and Corporate business.

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Program Management

Deal Making

Assessment Tools Registration and Database Tools

Survey Tools

- Aggregate Addressable Spend- Affirm MBE Readiness

- Affirm Corporate Readiness- Align MBEs and Corporations

- Facilitate Commercial Deal Structuring- Monitor MBE Growth Plans

- Monitor Corporate Diversity Plans- Consolidated MBE Status Reporting

Reporting Tools

RECRUITiNG

Technology and Tools

On-going Revenue form Membership FeesOn-going Revenue from Deal Making Fees

Regional Economic Inclusion Model

Progress • The Fund for Our Economic Future has funded

<$2.5M horizontal at $1M/yr. renewable for 3 yrs.• Model has been successfully shopped and accepted

by key partners and constituencies– Internal Leadership and Task Forces– External Partners– MBEs

• Program planning document developed• Communication plan developed• Initial conversations on MCDP (bonding vertical)• Talks continuing on health care horizontal• Talks continuing on consolidated MBE database• Talks with Workforce Development Board (people

development vertical)

Next Steps

Steps Toward Implementation

• Proposing Model to Fund for Economic Future for funding by revenue “horizontal”

• Shopping Model to Key Partners and Constituencies

– Internal Leadership and Task Forces– External Partners– MBEs

• Assisting Commission members quantify their addressable spend

• Benchmarking similar economic inclusion models or components outside the region

– Cincinnati, Milwaukee, Buffalo, St. Louis

Next Steps• Begin limited media for mid-November kickoff• Continued assistance to Commission members

to quantify their addressable spend• Convene stakeholders on MCDP model

(bonding vertical)• Populate consolidated MBE database• Collaborate with Workforce Development

Board regarding workable model for skilled labor development across industries

Key Learning

Key Learning• Collaborative model that hinges on

partnerships and cooperation• Value proposition for each partner must be

presented clearly and succinctly• To make this the dominant regional model,

funders must direct entities to the model• “Where does the $$$ go?”• MBEs must also have some “skin in the game”

– percentage of resulting revenues reinvested in model

• Model hinges on market-driven demand

greater cleveland partnership (gcp) regional action plan

Documents

minority business development

economic engines

growth of minority businesses

source of economic strength

minority individuals

minority population

regional inclusion model

minorityowned businesses