Economic Development 101

Improving the quality of life of the Greater Owensboro regionImproving the quality of life of the Greater Owensboro region

The EDC fulfills its mission through the following activities:Create an environment for economic

investment, business formation, company location, and talent

Primary point of contact for existing companies, new business prospects, and startup companies

Strategic positioning for long-term global competitiveness through infrastructure, a competitive workforce, and quality of place

GO-EDC 2011-2012

City of Owensboro (EDC, Skills, Inc., DOI)

$203,664

Daviess County Fiscal Court(EDC, Skills, Inc., DOI)

$178,100

Investment 2020(Private Investment)

$197,200

Commonwealth of Kentucky(KSTC- IN program)

$75,000

Total GO-EDC Budget

$683,764

Five employees

Coordinated multi-dimensional strategy (industrial, startup, downtown, workforce development-OwensboroWorks.com)

Fully funded innovation center program

Regional partnerships with Hancock, Ohio and northwest Kentucky counties and Indiana

Milestones 2006-2012• 2006

• Commerce Center • Life Science Strategy • Comprehensive ED

Strategy• Revival of Regional Alliance

for Education• 2007

• OwensboroWorks.com replaces Skills, Inc.

• DOI folds into EDC as Downtown Dev. Corp.

• Innovation Network- SBDC• WKU-O MOU

• 2008• Placemaking Strategy-

Downtown Master Plan• 2009

• Kentucky United• Emerge Partnership- LO• Hancock County MOU

• 2010• Centre for Business and

Research opens• 2011

• Community Campus• 2012

• eMerging Ventures- ICC

Results

GO-EDC 2005-2006

• 8 state projects• $12 million investment• No Innovation Network • Minimal activity in

downtown Owensboro

GO-EDC 2011-2012

• 14 state projects• $60 million investment• ICC program spawned

over 20 new firms with over $50 million in new investments and 70 new jobs with average wage of over $75,000

• Downtown private investment reached $75 million in 2012, nearly matching original $79 million public investment

Economic Development: Approaches

Community Strategy…

• Jobs Strategy• Existing Business

Retention• New Business Targets• Growing New

Companies- startups

• Product Development• Infrastructure• Placemaking- Quality of

Life• Workforce Development/

Education

Job Growth: 1990-2010

Source: Bureau of Economic Analysis; Owensboro peer region benchmarking done initially in 1998 by Paul Coomes, University of Louisville. Peers are regions within 30,00 of Owensboro MSA population in 1998, not located on an interstate, no public university, not a state capital region, not within 60 miles of major city of 1 million or more.

2012  Rank Among Small Cities

1 Odessa, TX2 Midland, TX3 Columbus, IN4 Lafayette, LA5 San Angelo, TX6 Blacksburg-Christiansburg-Radford, VA7 Casper, WY8 Williamsport, PA9 Glens Falls, NY

10 Lubbock, TX11 Laredo, TX12 Columbia, MO13 Cumberland, MD-WV14 Gainesville, GA15 Portsmouth, NH-ME NECTA16 Holland-Grand Haven, MI17 Bismarck, ND18 Houma-Bayou Cane-Thibodaux, LA19 State College, PA20 Fargo, ND-MN21 Ocean City, NJ

22Owensboro, KY23 Charlottesville, VA24 Tyler, TX25 Cheyenne, WY

Best Cities for Jobs 2012

70 Clarksville, TN-KY93 Bowling Green, KY

111 Elizabethtown, KY

Source: NewGeography.com

Manufacturing Jobs: 1990-2010

Source: Bureau of Economic Analysis; Owensboro peer region benchmarking done initially in 1998 by Paul Coomes, University of Louisville. Peers are regions within 30,00 of Owensboro MSA population in 1998, not located on an interstate, no public university, not a state capital region, not within 60 miles of major city of 1 million or more

Funding and Performance

Source: Funding data from GO-EDC survey of peer region economic development organizations; jobs date from Bureau of Labor Statistics and Bureau of Economic Analysis

Regional Demographics

Owensboro Region

Kentucky US

Per Capita Personal Income

$33,160 $33,667 $39,937

2000-2010 PCPI Growth Rate

3.1% 2.9% 2.8%

Real GDP Per Capita

$32,774 $33,273 $42,346

Source: US Bureau of Economic Analysis

Per Capita Income Growth

In 2010 Owensboro had a per capita personal income of $33,160. This PCPI was 83 percent of the national average, $39,937. In 2000 the PCPI of Owensboro was $24,540. The 2000-2010 average annual growth rate was 3.1%. The average annual growth rate for the nation was 2.8%.

Source: U.S. Bureau of Economic Analysis

Labor Availability

Labor Market Population

481,263

Labor Force (20 mile radius)

255,128

Owensboro MSA Population

112,266

Owensboro MSALabor Force

53,799

Age Distribution (20-44)

32%

Average Hourly Manufacturing Wage

$16.60

Industries that drive the regional economy

Industry LQ

Gas Pipeline Transportation 31

Aluminum/ Metal Production 14

Food Manufacturing 2

Finance/ Mortgage Processing 1.7

Transportation Equipment Production 1.5

Health Care 1.3

Transportation and Warehousing 1.2

LQ or Location Quotient is a ratio to measure the concentration of local employment compared to national employment in an industry cluster to determine the if industries are basic or non-basic industries. An LQ of 1 or higher indicates a greater concentration of jobs in any given region compared to the nation and therefore a basic industry. According to economic base analysis theory, jobs in basic industries drive the flow of outside wealth into a region and provide greater economic development than jobs in non-basic industries.

Top Workforce ClustersOccupation Employment Mean

HourlyMean

AnnualLQ Future

Growth

Milling and Planing Machine Setters, Metal and Plastic

90 $14.15 $29,430 9.48 -21.10%

Tool Grinders, Filers, and Sharpeners

50 $20.77 $43,210 8.42 -15.70%

Rolling Machine Setters, Operators, Metal and Plastic

340 $19.82 $41,220 8.42 -11.80%

Heat Treating Equipment Setters, Operators, Metal and Plastic

60 $15.76 $32,780 7.01 -14.80%

Industrial Machine Mechanics

550 $22.76 $47,340 5.42 9%

Source: US Bureau of Labor Statistics

Regional Occupational Concentrations Ranked in Top 5 in the Nation!

Production OccupationsLQ Future Growth

Metal, Plastic Industry Machine Setters 5.48 -12.20%

Metal and Plastic Workers 5.06 -25.10%

Welders, Cutters, Brazers 3.87 5.10%

Helpers, Production Workers 2.88 -0.5%

Packaging Machine Operators 2.5 -5.4%

Inspectors, Samplers, Weighers 2.25 -7%

First-line Supervisors, Managers 2.23 -4.48%

Industrial Production Managers 2.33 -5.8%

Bakers 2.35 10.5%

Electricians 1.44 7.4%

Source: US Bureau of Labor Statistics

Health Care OccupationsLQ Future Growth

Surgical Technologists 3.70 24.4%

Physical Therapy Assistants 2.24 16.7%

Radiology Technicians 1.99 15%

Pharmacy Technicians 1.71 28.9%

Nursing Aides, Orderlies 1.69 18.2%

Registered Nurses 1.65 23.5%

Other Nurses 1.21 14%

Lab Technologists 1.16 15%

Physicians Assistants 1.15 27%

Medical Records and Health IT 1.15 17.8%

Source: US Bureau of Labor Statistics

Professional Service Occupations

LQ Future Growth

Loan Officers 1.8 11.4%

Purchasing Agents 1.25 -8.6%

Cost Estimators 1.01 18.5%

Human Resource Managers 1.81 12.5%

Stock Clerks 1.09 -7.6%

Shipping, Receiving Clerks 1.09 3.6%

Source: US Bureau of Labor Statistics

Economic Development 101

Business Attraction: Strengths• River• Location• Low Cost Energy• Low Tax Burden• Diversity of Economic Base

• Manufacturing Retention• Enhanced Transportation

• Colleges and Universities

Business Attraction: ChallengesEPA Non Attainment Air Quality Region

Right to Work StateInterstate Access (I-65 and I-75)

Commercial Air Service

Workforce Skill Gap (production workers to technicians)

New Business Targets

Cluster Analysis using Location Quotients• Advanced Manufacturing

• Food, Automotive, Metals

• Distribution/ Logistics• Back Office/ Call

Centers

Kentucky United• Joint state-regional marketing effort• Kentucky Cabinet for Economic Development• Local EDO’s (GO-EDC)• Prospecting trips (New York, Detroit, California, Northeast)

• Site selector luncheons (Atlanta, Chicago, Indianapolis, New York)

Community Marketing

Infrastructure

• Certified Mega Site on River in Hancock County

• Riverport- Panama Canal Changes

• Cheaper-Faster Broadband

• Certified Work Ready Community

• Commercial Air Service

Higher Education Partnerships• Research Programs

• U of L/ Nucleus• WKU-O/CBR

• Degree Programs• WKU-O Campus• OwensboroU

• High School• Discover College• Community Campus

• Workforce Development• Workforce Solutions

• P-16 Alliance for Education

Growing Companies• Innovation/ Commercialization/ High Tech

• High Tech Business Attraction• Plant Therapeutics• Foods• Bio-Medical

• Centre for Business and Research• Seed Capital

CBR Tenants

• Hollison Technologies

• Adult Immunization Management

• WKU- Plant Biotech Center

• WKU- Food Science Research Program

• GuitarGoods.com• Brite Lite Logos• Dalisha’s Desserts• Craig O’Bryan

Graphics• Infinity Digital Media• Higher Ground

Consulting• KBP Analytics• Kentucky BioAlliance

Existing Business Retention

• Aluminum • Legacy Manufacturing• Energy Intensive Industries

Threats

New Investments, expansions, & retention: 4,864 jobs since 2008

ED 101: Economic GardeningStrategy Pros Cons Owensoboro

Economic Gardening

Focusing on business startups, entrepreneurs, and nurturing growth of stage II companies using data analysis, seed capital, and business incubators

Most cost effective strategy

Focus on retaining and growing existing companies and gazelle companies (3/4ths of jobs)

Long-term stability

Incremental gains, not headline-based, therefore, politically difficult to sell because it is slow growth and long-term

Requires a different skill set

eMerging Ventures Center (state funded)

GO-EDC Industry Advantage- existing industry program

Centre for Business and Research

ED 101: Workforce

Incentive ProcessKentucky Business Investment Program (KBI)- locally requires the local jurisdiction to abate 1% of occupational taxes for the 10-year term of the incentive on projects creating 10 or more jobs. State abates 3% of Kentucky payroll taxes on the project.

Other Types of Incentives or Shared Investments

•Industrial Revenue Bonds (IRB)•Build-to-Suit/Leaseback•Tax Increment Financing (TIF)•Seed capital funding- Emerging Ventures Seed Fund

ED 101: PlacemakingStrategy Pros Cons Owensoboro

Placemaking

Focus on developing a region that is attractive to highly educated people.

Investment always follows talent

Mobile people in global economy

Qualitative rather than quantitative

Encourages regions to make quality of place investments

Supported by data

Indirect approach based on correlations

Not a standalone program, compliments 1st and 2nd approaches

Downtown Placemaking initiative

Carnegie Village development around Centre for Business and Research

Support for the arts

Placemaking

Place, environment, amenities, and livability are the key factor for people in today’s world when choosing a place to live.

Talent, investment, and businesses are all attracted to quality places.

Placemaking is the tool used by communities and regions to capitalize on local assets to create public spaces that promote health, happiness, and propserity

Owensboro’s Place Strategy

Downtown

• Veterans Blvd• Marina- West Executive

Inn Site to English Park• Bluegrass Center• Carnegie Village• East Bridge District

Around Town

• OMHS Parrish Campus• OMHS- New Campus• Moreland Park- Rec-Plex• By-Pass Extension

Corridor- US 60 East

EDC Operating Budget2009-2010 Budget

Income

City of Owensboro $181,043

Daviess County Fiscal Court $155,000

Commonwealth of Kentucky- Innovation Center $66,000

Investment 2020- Private Companies $187,000

Total $589,043

Expenses

Salary and Staff Expenses $391,823

Marketing and Recruitment $52,428

Existing Industry Support $19,000

Operational Expenses (Rent, Office, Insurance) $124,792

Total $589,043