Cities Charting New Directions: Metropolitan Business Planning

Robert Weissbourd, RW Ventures, LLC

Cities Charting New Directions:

Metropolitan Business PlanningCity Reformers Group Workshop

March 22, 2011

Metropolitan Business Plans: A New Way of Doing Business Grounded in Economics and Business:

comprehensive, integrated growth strategies based on unique regional strengths

Gets the Job Done: not just a plan; cross-sector institutional capacity critical to regional performance

Continuous implementation, monitoring, adaptation and further strategy development

Demonstrate better ways to invest in metros to strengthen national economy; develop new federal policies and programs.

Source: Brookings Institution

Why Metros?

Service Exports

75%U

.S. Air Cargo Weight

79%

Airline Boardings

92%

Population

66%

Graduate D

egrees

75%

Venture Capital Funding

94%

Patents

78%

Wind +

Solar Energy Em

ployment

76%

Top 100 Metros Share of U.S. Total

Sources: Brookings analysis of US Census Bureau, FAA, BLS, NIH, NSF, and BEA data; Brookings, ExportNation, 2010 (2008 data); Forthcoming research from Brookings and Battelle

Gross Product

73%

Why Metros?


What is it About Place that Affects Economic Performance?

“Cities exist to eliminate transport costs for people, goods and ideas” – Ed Glaeser


• Urbanization and Localization Economies: general and industry-specific benefits of concentration as workers and firms co-locate; spillovers, synergies, shared labor and job pools, linkages among firms generate increased efficiency and productivity through flow of ideas and technologies, enhancements to human capital, economies of scale, reduced transaction and transport costs. (Marshall, Krugman)




• New Growth Theory: location is becoming more important, and with different benefits, in the knowledge economy, as metros increasingly become centers of idea creation and transmission (through technology, human capital externalities, intellectual spillovers). Increasing returns to knowledge and imperfect competition lead to metro specialization and divergence. (Romer, Lucas)





• Institutional Economics: growth, and particularly innovation, take place in the context of an institutional infrastructure – research, professional and learning networks; universities and civic/business organizations; quasi- and governmental organizations and regulation – which can hamper or accelerate all of the other benefits of concentration. (Coase, Atkinson)





• Institutional Economics: growth, and particularly innovation, take place in the context of an institutional infrastructure – research, professional and learning networks; universities and civic/business organizations; quasi- and governmental organizations and regulation – which can hamper or accelerate all of the other benefits of concentration. (Coase, Atkinson)


The Major Systems that Drive Efficiency and Productivity Operate at a Metro Level

Influencing Metro Economies

Influencing Metro EconomiesAct Comprehensively -- The Whole is Greater than the Sum of the Parts. Increasing productivity and efficiency requires influencing how the pieces fit together – the interactions and synergies between economic activities

Customize. Regional Economies are differentiated, complex and dynamic

Influencing Metro EconomiesAct Comprehensively -- The Whole is Greater than the Sum of the Parts. Increasing productivity and efficiency requires influencing how the pieces fit together – the interactions and synergies between economic activities



Develop Institutional Capacity and Intentionality. Growing metro economies entails continuously integrated, grounded and deliberate activity

Act Comprehensively -- The Whole is Greater than the Sum of the Parts. Increasing productivity and efficiency requires influencing how the pieces fit together – the interactions and synergies between economic activities



Develop Institutional Capacity and Intentionality. Growing metro economies entails continuously integrated, grounded and deliberate activity

Act Comprehensively -- The Whole is Greater than the Sum of the Parts. Increasing productivity and efficiency requires influencing how the pieces fit together – the interactions and synergies between economic activities

Key Question:What are the leverage points to improve system performance?

EnhanceRegional

Concentrations Deploy

Human CapitalAligned with

Job Pools

Increase Spatial

Efficiency

Create EffectivePublic & Civic

Culture & Institutions

DevelopInnovation-

EnablingInfrastructure

Leverage Points

Enhance Regional Concentrations:

Industries, Occupations and

FunctionsCluster Map Source: Bo Heiden, Strategic Uses of the Global Patent System

Deploy High Levels of Human Capital

Alignedwith Job Pools

Develop Innovation-

Enabling Infrastructure

Innovation Ecosystem

MarketResearch

Marketing

Manufac-turing

Finance

R&D

Suppliers

External

Consultants

Research Partners

Academics

Customers

Consumers

Image based on material from Land O’ Lakes Inc.

Housing Costs as Percent of Income

Housing + Transportation Costs as Percent of Income

Increase Spatial Efficiency

Source: Center for Neighborhood Technology

Create Effective Public & Civic Culture & Institutions

Create Effective Public & Civic Culture & Institutions

Source: Newsweek, Manyika, Lund and Auguste, “From the Ashes,” 8.16.2010

Global, Knowledge Economy

Specialization and Dynamism

Build on Your Assets

Coordinated, Cross-Sectoral, Flexible, Adaptive, Open,

Information-Rich, Inclusive,

Entrepreneurial

Compete on Value-Added

(not low-cost)

Intentionality

Governance in the Next Economy

Why “Metropolitan Business Planning”?

The steps to analyzing and improving a regional economy lend themselves to the proven discipline of business planning.

ECONOMIC GROWTH PLANNING TRADITIONAL BUSINESS PLANNING

Vision for the Regional Economy Business Mission & Vision

Status of Economy: Assets,Opportunities, Challenges Market Analysis

Goal-Setting & Strategy Identification Analysis of Strategic Alternatives & Risks

Identification of Policies, Programs, Products & Interventions Development of Products & Services

Operational Planning for Implementation Operational & Management Planning

Identification of Funding Needsand Sources Forecasting & Financial Planning

Definition of Outcome Measures & Targets Target-Setting & Performance Tracking


Metro Development Baseline/Overview (MDBO)Mission/Vision: MSP as a flexible, adaptable, dynamic region home to a business environment in which Fortune 500

companies and entrepreneurs alike can thrive.↓

Market Analysis: Strong, diverse clusters, but minimal strategic support; highly educated workforce, but flagging talent attraction; robust university & corporate R&D environment, but limited commercialization; culture of civic engagement,

but fragmented & uncoordinated efforts; ample regional data, but dispersed in multiple locations ↓

Goals: Highly networked cluster firms & institutions; workforce skills matched to emerging, in-demand jobs; enhanced levels of innovation & entrepreneurship; reduced congestion & spatial mismatch; dynamic public, civic & non-profit

institutions; more & better information for private-sector decision making↓

Strategies: MSP Regional Cluster Initiative; Regional Economic Development Partnership; Thinc.Green; Corridors of Opportunity; Entrepreneurship Accelerator.

↓

Business Plan Components








↓

Detailed Development Initiative (DDI): Entrepreneurship AcceleratorIntervention: Accelerate growth of innovative early- stage businesses & ideas into venture-

ready companies by providing continuum of resources to entrepreneurs & community↓

Operational Plan: Mentorship/advice (EIRs); technical support; capital; information-sharing↓

Financial Sources & Uses (3 yrs): $12-14MM public & philanthropic funds; 14 direct investments

↓

Metrics: # companies advised; companies’ achievement of business plan milestones; companies’ ability to attract follow-on investments; EA funds raised, etc.









↓

Detailed Development Initiative (DDI): Entrepreneurship AcceleratorIntervention: Accelerate growth of innovative early- stage businesses & ideas into venture-

ready companies by providing continuum of resources to entrepreneurs & community↓

Operational Plan: Mentorship/advice (EIRs); technical support; capital; information-sharing↓

Financial Sources & Uses (3 yrs): $12-14MM public & philanthropic funds; 14 direct investments

↓

Metrics: # companies advised; companies’ achievement of business plan milestones; companies’ ability to attract follow-on investments; EA funds raised, etc.


Metropolitan Investment Prospectus

Northeast Ohio

Minneapolis-St. PaulPuget Sound


Pilot Metro

Business Planning Regions

Affordable Housing

HUD Section 8

Workforce Training

Small Business

Assistance

Upgrading Roads and

Rail

Export Strategy

Dept. of Labor

Workforce Inv. Act

Dept of Commerce Int’l. Trade

Admin.

Dept. of Transpo.

SAFETEA-LU Programs

Small Business Admin. Loans

A New Economic Federalism

HUD Section 8

Dept. of Labor

Workforce Inv. Act

Dept of Commerce Int’l. Trade

Admin.

Dept. of Transpo.

SAFETEA-LU Programs

Small Business Admin. Loans

A New Economic Federalism

DevelopInnovation-




DeployHuman CapitalAligned with

Job Pools

EnhanceRegional

Concentrations

Increase Spatial

Efficiency

Comprehensive Metropolitan Strategy

A New Economic FederalismIntegrated Federal Investment

White House Office of Urban

Affairs

HUD Section 8

Dept. of Labor Workforce Inv. Act

Small Business Administration Loans

Department of Transportation

SAFETEA-LU Programs

Department of Commerce

International Trade Administration

DevelopInnovation-





Job Pools

EnhanceRegional

Concentrations

Increase Spatial

Efficiency


Cross-Agency Regional Teams Pooled and Flexible Funding Support for Regional Capacity Building “New Federalism” Partnership

A New Economic FederalismIntegrated Federal Investment

White House Office of Urban Affairs

HUD Section 8

Dept. of Labor Workforce Inv. Act

Small Business Administration Loans

Department of Transportation SAFETEA-LU

Programs

Department of Commerce International Trade

Administration

DevelopInnovation-





Job Pools

EnhanceRegional

Concentrations

Increase Spatial

Efficiency


Cities Charting New Directions:Metropolitan Business Planning Robert Weissbourd

City Reformers Group Workshop

March 22, 2011

DISCUSSION

Cities Charting New Directions: Metropolitan Business Planning

Economy & Finance

Transcript of Cities Charting New Directions: Metropolitan Business Planning