resurgent midwest, insurgent growth a project of the council of state governments and
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Resurgent Midwest, Insurgent Growth A Project of The Council of State Governments and GrowthEconomics, Inc. In Collaboration with the Institute for Work and the Economy’s Midwest Innovation Initiative Funded by a grant from the U.S. Department of Labor Graham S. Toft and Laura A. Tomaka - PowerPoint PPT PresentationTRANSCRIPT
Resurgent Midwest, Insurgent Growth
A Project of
The Council of State Governments
and
GrowthEconomics, Inc.
In Collaboration with the Institute for Work and the Economy’s Midwest Innovation Initiative
Funded by a grant from the U.S. Department of Labor
Graham S. Toft and Laura A. Tomaka
Prepared for the
Heartland Conference ,ChicagoApril , 2010
Outline1. Why “Resurgent Midwest-Insurgent Growth”?2. Purpose of this Presentation3. State of the Region4. Commonalities 5. Vulnerabilities6. Some Early Bird Regional Workforce Ideas.
1.Why This Initiative? Recent reports, books and unemployment ‘rather
depressing’ about the Midwest, but far too pessimistic.
CSG looking to take a more realistic well-researched approach, using past data but also future opportunities in a changing global economy.
This recession points to an urgent need to develop and customize “quality economic and workforce intelligence” for each of the Midwest’s states and provinces and to explore Midwest commonalities and collaboration.
1.Why this Initiative? Cont’d
‘Resurgent Midwest’ speaks to the goal of helping Midwestern states get back to a position of regional U.S economic strength, akin to the post–war period when the region outperformed in both manufacturing and agriculture and held its own in advanced services.
1.Why This Initiative? Cont’d
‘Insurgent Growth’ refers to how the Midwestern states will re-emerge: predominately by ‘growth from within’.
‘Growth’ means: -increasing numbers and percent of high pay jobs -increased opportunities to move up -lots of fast growth businesses, exceeding industry
averages -increasing sales per worker (value creation)
2. Purpose of this Presentation• Highlight workforce features of Dashboard
products and Report Card products for each state.
• Explore dimensions of workforce that are more than a response to demand— rather that ‘blaze a trail’ for growth.
• Search for intersections between workforce and other key determinants of growth.
3. State of the RegionTrend in Total Private Jobs, 1970 - 2008
(1970=100)
75
95
115
135
155
175
195
215
235
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Midwest United States
Source: Bureau of Economic Analysis
3. State of the Region cont’dMidwest Average Per Capita Disposable Income
As Percent of U.S., 1958 - 2008
80%
90%
100%
110%
120%
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
US
= 1
00%
Source: Bureau of Economic Analysis
3. State of the Region cont’d
Amex Semi-annual Survey
Small Business Growth Expectations, 2005-2009
0%
10%
20%
30%
40%
50%
60%
70%
Spring05
Fall 05 Spring06
Fall 06 Spring07
Fall 07 Spring08
Fall 08 Spring09
Fall 09
Perc
en
t o
f R
esp
on
den
ts in
No
rth
Cen
tral R
eg
ion
Cash Flow Issues Expect Growth Plan to Hire Plan to Invest
3. State of the Region cont’d Variation in State Economic Distress (Ranking)
• Illinois 35• Indiana 19• Iowa 5• Kansas 7 (tie)• Michigan 48• Minnesota 20• Missouri 6• Nebraska 4• North Dakota 1• Ohio 39 (tie)• South Dakota 7 (tie)• Wisconsin 39 (tie)
Source: Kaiser Family Foundation, average rank across three indicators: foreclosure rate Jan. 2010, Change in Monthly Unemployment Dec. 08-09, Change in monthly Food Stamp Participation Nov. 08-09.
3. State of the Region cont’d Variation in Fiscal Stress (Ranking)
• Illinois 41• Indiana 18• Iowa 2 • Kansas 15• Michigan 47• Minnesota 18• Missouri 22• Nebraska 2• North Dakota 4• Ohio 22• South Dakota 9• Wisconsin 41
Source: Pew Center on the States
3. State of the Region cont’d Variation in Labor Force Growth
Indiana Labor Force1999 - Dec. 2009 (prel.)
3,000,000
3,050,000
3,100,000
3,150,000
3,200,000
3,250,000
3,300,000
3,350,000
3,400,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Bureau of Labor Statistics, Local Unemployment Statistics. Seasonally adjusted.
Kansas Labor Force1999 - Dec. 2009 (prel.)
1,250,000
1,300,000
1,350,000
1,400,000
1,450,000
1,500,000
1,550,000
1,600,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Bureau of Labor Statistics, Local Unemployment Statistics. Seasonally adjusted.
3. State of the Region cont’d Variation in Unemployment Rate
Indiana Unemployment Rate1999 - Dec. 2009 (prel.)
0
1
2
3
4
5
6
7
8
9
10
11
12
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Perc
ent
Source: Bureau of Labor Statistics, Local Unemployment Statistics. Seasonally adjusted.
Kansas Unemployment Rate1999 - Dec. 2009 (prel.)
0
1
2
3
4
5
6
7
8
9
10
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Perc
ent
Source: Bureau of Labor Statistics, Local Unemployment Statistics. Seasonally adjusted.
3. State of the Region cont’d
East and West Comparison: States in recession Dec.2009 Moody’s economy.com/dismalscientist
3. State of the Region cont’d
Presentaions to Midwest Legislators so far-- very intersted in:• The demogrphics of those leaving the labor
force• Those unemployed or underemployed• Future mobility of wokers within and across
states• Determinants of future growth
4. Commonalities Economic Performance and Growth: sub par. Midwestern states rank well on government performance. Education scores better than workforce --some notable
improvements in education e.g. IN,OH; some exceptional education e.g. IA,KS,MN,WI.
Good education may not mean good economic performance; good workforce may not result in superior economic performance. e.g. KS,WI. Not just ‘workforce = economic development’, its more complex.
Business climate varies considerably. But much of the Midwest retains strengths in general business climate: cost of doing business, legal climate and economic freedom. But similar to workforce, superior business climate alone does not ensure superior growth.
4.Commonalities cont’d
Education and Workforce Report Cards (2008 data):• Am. Legislative Exchange Council• Beacon Hill Inst.• CNBC• Education Weekly, Quality Counts• GrowthEconomics• Forbes• Kauffman Foundation/ITIF• Measuring Up• Morgan Quitno• Tech America, Cyberstates• U.S. Chamber, Leaders and Laggards
TWELVE-STATE SUMMARY REPORT CARD COMPARISON
ILLINOIS INDIANA IOWA KANSAS MICHIGAN MINNESOTA MISSOURI NEBRASKANORTH
DAKOTAOHIO
SOUTH DAKOTA
WISCONSIN
OVERALL ECONOMIC PERFORMANCE
Overall Economic Performance
variable performer
low/very low performer
mid/low performer
low performervery low
performerlow performer
low/very low performer
mid/low performer
high/mid performer
very low performer
high/very high performer
mid/low performer
BUSINESS ATTRACTION / GOOD PLACE TO DO BUSINESS
Cost of Doing Business
low/very low performer
high/very high performer
very high performer
mid performer low performer low performerhigh/very high
performerhigh/very high
performervery high performer
mid/low performer
very high performer
low performer
Access to Capitalhigh
performerlow performer
very low performer
low performermid/low
performerhigh
performerlow performer
low/very low performer
low performerhigh
performervariable
performermid/low
performer
Legal Climatelow/very low
performerhigh
performerhigh
performerhigh/very high
performermid/high performer
high performer
variable performer
mid/high performer
very high performer
very high performer
high/very high performer
high performer
Regulatory Climate
variable performer
variable performer
high/very high performer
high/very high performer
variable performer
low performer mid performermid/high performer
variable performer
variable performer
variable performer
mid/low performer
Tax and Fiscal Climate
low performerhigh
performervariable
performervariable
performermid/low
performervariable
performermid/high performer
variable performer
high performer
variable performer
high/very high performer
low performer
BUSINESS DYNAMISM
Technology & Innovation Indices
high/very performer
mid/low performer
mid/low performer
low performerhigh
performerhigh/very performer
low performer low performervariable
performervariable
performerlow/very low
performermid performer
Entrepreneurial Economy
high performer
low/very low performer
low/very low performer
variable performer
low/very low performer
mid/low performer
low/very low performer
low performervariable
performerlow performer
low/very low performer
low performer
International Business Activity
high performer
mid/high performer
low/very low performer
mid/low performer
mid/high performer
low performer low performervery low
performerlow performer
mid/high performer
very low performer
low performer
OVERALL WORKFORCE/EDUCATION
Generalvariable
performermid/low
performermid/high performer
high performer
low performerhigh
performermid performer
mid/high performer
mid performer low performer mid performervariable
performer
Innovation Workforce
high/very high performer
low/very low performer
mid/low performer
high performer
high performer
high performer
mid performermid/low
performerlow performer
mid/low performer
low performer low performer
K-12variable
performermid performer
high performer
mid/high performer
low performerhigh/very high
performermid/low
performermid/high performer
mid performer mid performerhigh
performerhigh/very high
performer
Postsecondarymid/low
performervariable
performerhigh
performervariable
performermid/high performer
variable performer
mid performerhigh
performervariable
performerlow performer
mid/low performer
high performer
OVERALL GOVERNMENT PERFORMANCE
Overall Government Performance mid performer
high performer
high performer
high performer
high performer
high performer
high performer
high performer
high performer
high performer
low performerhigh
performer
5.Vulnerabilites Today’s growth equation is far from ‘all we need is better
workforce’ or ‘all we need is better financing’. We don’t yet know the right/ideal combination of economic foundations and agents for the Midwest— further research is needed + it varies by state.
We do know three missing ingredients in most Midwestern states are technology competitiveness, entrepreneurial dynamism and international business activity – all closely linked to talent/workforce.
And its all about innovation, entrepreneurial initiative, labor productivity, international trade/market expansion in the growth phase of the next business cycle.
20
6. Some Early-Bird Workforce Ideas Collaborative Regional Workforce Intelligence:
demographics of labor force leavers, unemployed; demographics of immigrant workforce; demographics of active aging; research on the proactive dimensions of workforce on economic growth and other growth determinants.
Regional Entrepreneurial Dynamics: Reinvigorating the Midwest entrepreneurial spirit in all educational and work force initiatives—rediscovery of an earlier culture!
Regional Research & Innovation: Coalition to reach out to past and present Midwest foreign students and staple a 5-yr visa to their diplomas!
Regional International Activity: Embrace trade, educational and cultural exchange; foreign credentialing.
21
Discussion
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Next Dance: return to growth