Philadelphia Competitiveness Profile Files/Philadelphia Metro Competitiveness...Philadelphia...
Transcript of Philadelphia Competitiveness Profile Files/Philadelphia Metro Competitiveness...Philadelphia...
Copyright 2014 © Professor Michael E. Porter120140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Philadelphia Competitiveness Profile
For further material on regional competitiveness and clusters: www.isc.hbs.edu/econ-clusters.htm
Michael E. Porter, Harvard Business SchoolMercedes Delgado, Fox School of Business
Rich Bryden, Harvard Business School
March 11, 2014
Innovation Leadership Speaker Series Fox School of Business, Temple University
Copyright 2014 © Professor Michael E. Porter220140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
• Competitiveness depends on the long-run productivity and efficiency of a location as a place to do business
- The productivity of existing firms and workers- The ability to achieve high participation of citizens in the workforce
• Competitiveness is not:- Low wages- A weak currency- Jobs per se
A nation or region is competitive to the extent that firms operating there are able to compete successfully in the regional and global economy while maintaining or improving wages and living standards for the average citizen
What is Competitiveness?
Copyright 2014 © Professor Michael E. Porter320140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Nation
Regions
States
Metropolitan Areas
Geographic Influences on Competitiveness
Copyright 2014 © Professor Michael E. Porter420140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Regions and Competitiveness
• Economic performance varies significantly across sub-national regions (e.g., provinces, states, metropolitan areas)
• Many essential levers of competitiveness reside at the regional level
• Regions specialize in different sets of clusters
• Regions are a crucial unit in competitiveness
• Each region needs its own distinctive strategy and action agenda • Business environment improvement
• Cluster upgrading
• Improving institutional effectiveness
Copyright 2014 © Professor Michael E. Porter520140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Philadelphia Performance Scorecard
Distribution and Electronic Commerce (133,049, rank 6)Education and Knowledge Creation (118,814, rank 6)Financial Services (78,239, rank 6)Insurance Services (42,971, rank 5)Marketing, Design, and Publishing (28,093, rank 10)
ProsperityGDP per Capita, 2001-2012
InnovationPatents per Employee, 2001-2011
Cluster StrengthEmployment in Strong Clusters, 2001-2011
Leading Clustersby employment size, 2011(national rank versus all metro areas)
Start Position Trend
40
19
1-10
21-30
31-40
11-20 41-50
Current Position
17
11
15
21
13
31
16
1315
20
WagesAverage Private Wage, 2001-2011
+4
+2
-2
+10
New Business FormationTraded Cluster Establishment Growth, 1999-2001 and 2009-2011
42 4320 -23
Labor MobilizationProportion of Working Age Populationin the Workforce, 2008-2012
25 3633 -3
Job CreationPrivate Employment Growth,1999-2001and 2009-2011
21 2430 +6
Labor ProductivityGDP per Labor Force Participant, 2001-2011 10 1516 +1
Rank vs. Top 50 Metro Areas
Copyright 2014 © Professor Michael E. Porter620140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Comparative Metro Prosperity Performance2001 - 2012
Notes: Source BEA. Data in 2005 constant dollars; compound annual growth rate on real values. 50 largest MSAs displayed.Real Growth in Gross Domestic Product per Capita, 2001 to 2012
Gro
ss D
omes
tic P
rodu
ct p
er C
apita
, 201
2
High but declining versus U.S.
Low and declining versus U.S.
Low but rising versus U.S.
Portland(3.8%, $62,028)
San Jose(2.8%, $90,528)
U.S. Metro GDP per Capita: $45,604
High and rising prosperity versus U.S.
U.S. Metro GDP per CapitaReal Growth Rate: +0.57%
New York
Los AngelesChicago
Washington
Houston
Dallas
Philadelphia
San Francisco
Boston
Atlanta
Miami
Seattle
Minneapolis
Detroit
Phoenix
San Diego
Denver
Baltimore
St. Louis
Charlotte
Pittsburgh
Tampa
Riverside(-1.1%, $22,411)
Kansas CityCleveland
Orlando
Indianapolis
Cincinnati
Columbus
Sacramento
Austin
Las Vegas
Hartford
Milwaukee
Bridgeport, CT
San Antonio
Nashville
Virginia Beach
New Orleans
Salt Lake City
Providence
Memphis
Richmond
Jacksonville
Oklahoma City
LouisvilleRaleighBirmingham
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
$70,000
$75,000
$80,000
$85,000
-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0%
Copyright 2014 © Professor Michael E. Porter720140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Source: BLS. 50 largest MSAs displayed.
Comparative Metro Labor Mobilization Performance2008-2012
Low but rising labor force participation versus U.S.
Prop
ortio
n of
Wor
king
Age
Pop
ulat
ion
in th
e W
orkf
orce
, 201
2
Change in Proportion of Working Age Population in the Workforce, 2008-2012
High but declining labor force participation versus U.S.
Low and declining labor force participation versus U.S.
High and rising labor force participation versus U.S.
U.S. Change in Labor Force Participation
Rate: -2.3%
Atlanta
Austin
Baltimore
Birmingham
Boston
Bridgeport
Charlotte
Chicago
Cincinnati
Cleveland
Columbus
Dallas
Denver
Detroit
HartfordHouston
Indianapolis
Jacksonville
Kansas City, MO
Las VegasLos Angeles
Louisville
Memphis, TN
Miami
Milwaukee
Minneapolis
Nashville
New Orleans
New York
Oklahoma City
OrlandoPhiladelphia
Phoenix
Pittsburgh
Portland
Providence
Richmond
Riverside
Sacramento
St. Louis
Salt Lake City
San Antonio
San Diego
San FranciscoSan Jose
Seattle
Tampa
Virginia Beach
Washington
55%
60%
65%
70%
75%
-7% -6% -5% -4% -3% -2% -1% 0% 1% 2% 3%
U.S. Labor Force Participation Rate: 63.7%
Copyright 2014 © Professor Michael E. Porter82014 Metro Competitiveness – Rich Bryden
Comparative Metro Wage Performance2001 - 2011
Notes: Average wage for private, non-agricultural employment. Growth calculated as compound annual growth rate. 50 largest MSAs displayed. Source Census CBP.
Aver
age
Wag
e, 2
011
High but declining versus U.S.
Low and declining versus U.S.
Low but rising versus U.S.
New York
Los Angeles
Chicago
Washington
Houston
Dallas
Philadelphia
San Francisco
Boston
Atlanta
Miami
Seattle
Minneapolis
Detroit(+1.95%, $48,621)
Phoenix
San Jose(+3.3%, $89,857)
San DiegoDenver
BaltimorePortland
St. Louis, MO
Charlotte
Pittsburgh
Tampa
Riverside
KansasCity, MO
Cleveland
Orlando
IndianapolisCincinnati
Columbus
Sacramento
Austin
Las Vegas
Hartford
Milwaukee
Bridgeport, CT(+3.0%, $77,922)
San Antonio
Nashville
Virginia Beach
New Orleans(+4.2%, $44,485)
Salt Lake CityProvidence
Memphis
Richmond
Jacksonville
Oklahoma City(+3.8%, $40,113)
Louisville
Raleigh
Birmingham
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
$70,000
2.0% 2.5% 3.0% 3.5%
High and rising wages versus U.S.
U.S. Average Wage Growth Rate: +2.8%
U.S. Average Wage, 2011: $45,535
Growth in Average Wage, 2001 to 2011
Copyright 2014 © Professor Michael E. Porter920140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Comparative Metro Labor Productivity Performance 2001 - 2011
Real Growth in Gross Domestic Product per Labor Force Participant, 2001-2011
Gro
ss D
omes
tic P
rodu
ct p
er L
abor
For
ce P
artic
ipan
t, 2
011
Sources: BEA, BLS. Notes: GDP in real 2005 dollars. Growth rate is calculated as compound annual growth rate. 50 largest MSAs displayed.
Low but rising versus U.S.Low and declining versus U.S.
High but declining versus U.S.
U.S. GDP per Labor Force Participant: $85,331
U.S. GDP per Labor Force Participant Real Growth: +0.77%
Highly productive and productivity rising
versus U.S.
New York
Los AngelesChicago
WashingtonHouston
DallasPhiladelphia
San Francisco
Boston
Atlanta
Miami
Seattle
Minneapolis
Detroit
Phoenix
San Jose(+4.7%, $191,781)
San Diego
Denver
Baltimore
Portland(+4.7%, $118, 578)
St. Louis
Charlotte
Pittsburgh
Tampa
Riverside(-.74%, $53,858)
Kansas City
Cleveland
Orlando
Indianapolis
Cincinnati
Columbus
Sacramento
Austin
Las Vegas
Hartford
Milwaukee
Bridgeport, CT(-.071%, $155,918)
San Antonio
Nashville
Virginia Beach
New Orleans
Salt Lake City
Providence
Memphis
Richmond
Jacksonville
Oklahoma City
Louisville
RaleighBirmingham
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
$130,000
$140,000
-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5%
Copyright 2014 © Professor Michael E. Porter1020140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Philadelphia Performance Scorecard
Distribution and Electronic Commerce (133,049, rank 6)Education and Knowledge Creation (118,814, rank 6)Financial Services (78,239, rank 6)Insurance Services (42,971, rank 5)Marketing, Design, and Publishing (28,093, rank 10)
ProsperityGDP per Capita, 2001-2012
InnovationPatents per Employee, 2001-2011
Cluster StrengthEmployment in Strong Clusters, 2001-2011
Leading Clustersby employment size, 2011(national rank versus all metro areas)
Start Position Trend
40
19
1-10
21-30
31-40
11-20 41-50
Current Position
17
11
15
21
13
31
16
1315
20
WagesAverage Private Wage, 2001-2011
+4
+2
-2
+10
New Business FormationTraded Cluster Establishment Growth, 1999-2001 and 2009-2011
42 4320 -23
Labor MobilizationProportion of Working Age Populationin the Workforce, 2008-2012
25 3633 -3
Job CreationPrivate Employment Growth,1999-2001and 2009-2011
21 2430 +6
Labor ProductivityGDP per Labor Force Participant, 2001-2011 10 1516 +1
Rank vs. Top 50 Metro Areas
Copyright 2014 © Professor Michael E. Porter1120140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden) Sources: Growth rate is calculated as compound annual growth rate. 50 largest MSAs displayed.
Low but rising versus U.S.Low and declining versus U.S.
High but declining versus U.S.
High and rising versus U.S.
Comparative Metro Business Formation2001 - 2011
Trad
ed E
stab
lishm
ents
per
10,
000
Empl
oyee
s, 2
011 New York
Los Angeles
Chicago
WashingtonHouston
Dallas
Philadelphia
San Francisco
Boston
Atlanta
Miami(+7.0%, 876)
Seattle
Minneapolis
Detroit
Phoenix
San Jose
San Diego
Denver
Baltimore
Portland
St. Louis
Charlotte
Pittsburgh
Tampa
Riverside
Kansas City
Cleveland
Orlando
Indianapolis
CincinnatiColumbus
Sacramento
Austin
Las Vegas
Hartford
Milwaukee
Bridgeport, CT
San Antonio
NashvilleVirginia Beach
New Orleans
Salt Lake City
Providence
Memphis
Richmond
Jacksonville
Oklahoma City
Louisville
Raleigh
Birmingham
300
350
400
450
500
550
600
-2% -1% 0% 1% 2% 3% 4%
U.S. Traded Establishments Growth: +0.41%
U.S. Traded Establishments per 10,000 Employees: 456
Growth in Traded Establishments, 2001-2011
Copyright 2014 © Professor Michael E. Porter1220140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Comparative Metro Innovation Performance 2001 - 2011
Change in Patents per 10,000 Workers, 2001 to 2011
Pate
nts
per 1
0,00
0 W
orke
rs, 2
011
= 700 patents in 2011
High and improving innovation rate versus U.S.
High and declininginnovation
Low and declining innovation
Low and improvinginnovation
San Jose(+44.9, 104)
San Francisco
Los Angeles
Boston
Seattle
San Diego
Minneapolis
Austin
Detroit
Portland
Atlanta
Raleigh
Cincinnati
Bridgeport
Kansas City, MO
Tampa
Milwaukee
Memphis, TNOklahoma City
0
5
10
15
20
25
30
35
40
45
50
-5 0 5 10 15 20
Philadelphia(-.49, 8.1)Rank: 17
Notes: Median number of patents per 10,000 workers among top 50 Metro Areas in 2011 is 6.99.Source: USPTO utility patents granted, Bureau of Labor Statistics.
U.S. Patents per 10,000 Employees: 9.6
U.S. Change in Patents per 10,000 Workers: +2.0
Copyright 2014 © Professor Michael E. Porter1320140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Comparative Metro Innovation Performance 2001 - 2011
Pate
nts
per 1
0,00
0 W
orke
rs, 2
011
High and improving innovation rate versus U.S.
High and declininginnovation
Low and declining innovation
Low and improvinginnovation
= 700 patents in 2011
New York
Los Angeles
Chicago
Minneapolis
Houston
Dallas
Detroit
Atlanta
Washington
Phoenix
Miami
Pittsburgh
Denver
Cincinnati
Cleveland
Baltimore
Bridgeport
Hartford
St. Louis, MO
SacramentoIndianapolis
Kansas City, MO
Providence
Tampa
Salt Lake City
Milwaukee Columbus
OrlandoRiverside
Charlotte
San Antonio
Memphis, TN
Las Vegas
Nashville Richmond
Louisville Jacksonville
BirminghamOklahoma City
Virginia Beach
New Orleans
0
2
4
6
8
10
12
14
16
18
-3 -2 -1 0 1 2 3 4
Philadelphia(-.49, 8.1)Rank: 17
Notes: Median number of patents per 10,000 workers among top 50 Metro Areas in 2011 is 6.99.Source: USPTO utility patents granted, Bureau of Labor Statistics.
U.S. Patents per 10,000 Employees: 9.6
U.S. Change in Patents per 10,000 Workers: +2.0
Change in Patents per 10,000 Workers, 2001 to 2011
Copyright 2014 © Professor Michael E. Porter1420140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Comparative Innovation Performance2001 - 2011
Pate
nts
per 1
0,00
0 W
orke
rs
.Source: USPTO utility patents granted, Bureau of Labor Statistics.
4
5
6
7
8
9
10
11
12
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
U.S.Philadelphia MetroTop 50 Metro Areas
Copyright 2014 © Professor Michael E. Porter1520140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Patents by Organization Philadelphia Metro
Organization Cluster Patents Issued* 2007 - 2011
1 E. I. Du Pont De Nemours And Company Chemical Products 985
2 Metrologic Instruments Inc. Information Technology and Analytical Instruments 151
3 University Of Pennsylvania Education and Knowledge Creation 149 4 Merck + Co., Inc. Biopharmaceuticals 147 5 Rohm And Haas Company Chemical Products 137 6 Wyeth LLC Biopharmaceuticals 125 7 Lutron Electronics Company, Inc. Lighting and Electrical Equipment 116
8 Interdigital Technology Corporation Information Technology and Analytical Instruments 107
9 Siemens Medical Solutions USA, Inc. Medical Devices 94 10 Bristol-Myers Squibb Company Biopharmaceuticals 91 11 Lockheed Martin Corporation Aerospace Vehicles and Defense 84 12 Janssen Pharmaceuticals, Inc. Biopharmaceuticals 80 13 General Instrument Corporation Communications Equipment and Services 66 14 JP Morgan Chase Bank, N.A. Financial Services 65 14 Smithkline Beecham Corporation Biopharmaceuticals 65 16 Lyondell Chemical Technology, L.P. Chemical Products 62 17 Rohm And Haas Electronic Materials Cmp Holdings Chemical Products 59 18 Synthes (U.S.A.) Medical Devices 55 19 Unisys Corporation Business Services 54 20 Gore Enterprise Holdings, Inc. - 53 21 Alcatel-Lucent USA Inc. Communications Equipment and Services 51 21 Zenith Products Corporation Furniture 51 23 Medical Components, Inc. Medical Devices 45 24 Lucent Technologies Inc. Communications Equipment and Services 43 25 AT&T Corporation Communications Equipment and Services 42
* Patents with inventors addresses in Philadelphia Metro Area.Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.
Copyright 2014 © Professor Michael E. Porter1620140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Top Patenting Universities and Research Institutes
Rank Organization Patents Issued 2007 - 2011
1 University of California, The Regents of 1,469 2 Massachusetts Institute of Technology 735 3 Harvard College, President And Fellows 659 4 Stanford University 590 5 Wisconsin Alumni Research Foundation 571 6 California Institute of Technology 539 7 University of Texas 503 8 University of Illinois 329 9 Johns Hopkins University 323
10 University of Michigan 318 11 Columbia University 307 12 Cornell Research Foundation Inc. 281 13 Georgia Tech Research Corp. 268 14 University of South Florida 267 15 Battelle Memorial Institute 257 16 University of Central Florida 256 17 University of Pennsylvania 255 18 University of Washington 250 19 University of Florida Research Foundation, Incorporated 244 20 Research Foundation of State University of New York 233 77 Drexel University 58
126 Temple University 24
143 The Children's Hospital of Philadelphia 21
Source: Prof. Michael E. Porter, Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School; Richard Bryden, Project Director.
Copyright 2014 © Professor Michael E. Porter1720140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
What is a Cluster?
A geographically concentrated group of interconnected companies and associated institutions in a particular field
Traded Clusters
• Compete to serve nationaland international markets
• 36% of employment
Local Clusters
• Serve almost exclusively the local market
• 64% of employment
Copyright 2014 © Professor Michael E. Porter1820140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Strong Clusters Drive Regional PerformanceResearch Findings
Source: Delgado/Porter/Stern (2010, 2012), Porter (2003)
• Presence of strong clusters (based on employment and innvation)
• Breadth of industries within each cluster
• Strength in related clusters
• Presence of a region’s clusters in neighboring regions
• Job growth
• Higher wages
• Higher patenting rates
• Greater new businessformation, growth and survival
• New regional industries
• The initial employment and patenting strength of a cluster each has a positiveeffect on the employment and patenting growth of the constituent industries
• Multiple types of externalities arise among firms participating in clusters(knowledge, skills, input-output linkages, and others)
• Economic diversification usually occurs within clusters and across related clusters
Copyright 2014 © Professor Michael E. Porter1920140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Philadelphia Performance Scorecard
Distribution and Electronic Commerce (133,049, rank 6)Education and Knowledge Creation (118,814, rank 6)Financial Services (78,239, rank 6)Insurance Services (42,971, rank 5)Marketing, Design, and Publishing (28,093, rank 10)
ProsperityGDP per Capita, 2001-2012
InnovationPatents per Employee, 2001-2011
Cluster StrengthEmployment in Strong Clusters, 2001-2011
Leading Clustersby employment size, 2011(national rank versus all metro areas)
Start Position Trend
40
19
1-10
21-30
31-40
11-20 41-50
Current Position
17
11
15
21
13
31
16
1315
20
WagesAverage Private Wage, 2001-2011
+4
+2
-2
+10
New Business FormationTraded Cluster Establishment Growth, 1999-2001 and 2009-2011
42 4320 -23
Labor MobilizationProportion of Working Age Populationin the Workforce, 2008-2012
25 3633 -3
Job CreationPrivate Employment Growth,1999-2001and 2009-2011
21 2430 +6
Labor ProductivityGDP per Labor Force Participant, 2001-2011 10 1516 +1
Rank vs. Top 50 Metro Areas
Copyright 2014 © Professor Michael E. Porter2020140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 120,000 130,000
Food Processing and ManufacturingApparel
Water TransportationAgricultural Inputs and Services
Textile ManufacturingWood Products
Leather and Related ProductsFurniture
Livestock ProcessingEnvironmental Services
Performing ArtsRecreational and Small Electric Goods
Medical DevicesHospitality and Tourism
Nonmetal MiningAutomotive
Printing ServicesDownstream Metal Products
PlasticsEducation and Knowledge Creation
Vulcanized and Fired MaterialsMetalworking Technology
Jewelry and Precious MetalsTransportation and Logistics
Paper and PackagingVideo Production and Distribution
Production Technology and Heavy MachineryConstruction Products and Services
Downstream Chemical ProductsMarketing, Design, and Publishing
Distribution and Electronic CommerceBiopharmaceuticals
Lighting and Electrical EquipmentUpstream Chemical Products
Aerospace Vehicles and DefenseUpstream Metal Manufacturing
Insurance ServicesCommunications Equipment and Services
Oil and Gas Production and TransportationBusiness Services
Information Technology and Analytical InstrumentsFinancial Services
Electric Power Generation and Transmission
Philadelphia Metro Wages in Traded Clustersvs. National Benchmarks
Wages, 2011
Philadelphia average traded wage: $73,350
U.S. averagetraded wage: $64,096
l Indicates average national wage in the traded cluster
Note: Wages are not available in all clusters due to data suppression to protect confidentiality.Source: Prof. Michael E. Porter, Harvard Business School; U.S. Cluster Mapping 2014 Benchmark Definitions (Delgado-Porter-Stern 2013), Richard Bryden, Project Director.
Copyright 2014 © Professor Michael E. Porter2120140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Metro Area
Metro Traded Wage
versus National Average
Cluster Mix Effect
Relative Cluster
Wage Effect Metro Area
Metro Traded Wage
versus National Average
Cluster Mix Effect
Relative Cluster
Wage Effect Bridgeport +68,598 10,066 58,532 Milwaukee -626 303 -929 San Jose +66,434 5,693 60,741 Pittsburgh -810 1,436 -2,246 New York +38,651 5,079 33,572 Kansas City -961 917 -1,879 San Francisco +36,126 3,870 32,256 Indianapolis -1,664 -463 -1,201 Boston +26,924 5,327 21,597 Nashville -1,981 -694 -1,287 Houston +24,602 4,548 20,054 Portland -1,988 984 -2,972 Washington +24,449 4,475 19,974 St. Louis -2,880 128 -3,007 Hartford +14,949 3,292 11,658 Cincinnati -3,999 -372 -3,627 Austin +11,678 5,412 6,266 Birmingham -4,731 208 -4,939 Denver +10,917 3,548 7,369 Oklahoma City -6,527 3,011 -9,538 Chicago +10,636 942 9,694 Cleveland -6,710 503 -7,213 Minneapolis +10,490 2,024 8,466 Columbus -6,808 1,275 -8,083 Seattle +8,377 4,350 4,026 Miami -7,253 -1,031 -6,223 Philadelphia +7,671 3,991 3,681 Sacramento -8,101 -555 -7,546 San Diego +5,500 150 5,350 Jacksonville -8,604 5,193 -13,797 Atlanta +5,350 1,471 3,879 Salt Lake City -10,298 749 -11,046 Dallas +4,702 4,517 185 Phoenix -10,388 1,187 -11,575 Los Angeles +3,847 112 3,735 San Antonio -10,789 2,978 -13,766 Detroit +3,005 -406 3,411 Providence -11,578 -2,945 -8,633 Baltimore +2,332 2,321 11 Tampa -12,226 3,491 -15,718 Charlotte +1,404 228 1,176 Louisville -12,286 -3,607 -8,679 Raleigh +1,308 3,340 -2,032 Virginia Beach -13,307 -2,700 -10,607 Richmond +626 4,132 -3,507 Orlando -18,052 -6,178 -11,874 New Orleans -262 -1,410 1,148 Riverside -20,720 -5,679 -15,041 Memphis -351 -2,437 2,086 Las Vegas -21,758 -16,500 -5,258
Productivity Depends on How a Metro Competes,Not What Industries It Competes In
On average, cluster strength is much more important (77.8%) than cluster mix (22.2%) in driving performance in the 50 largest metro areas
Note: All data are Census CBP 2011; author’s analysis.Source: Prof. Michael E. Porter, Harvard Business School; U.S. Cluster Mapping 2014 Benchmark Definitions (Delgado-Porter-Stern 2013), Richard Bryden, Project Director.
Copyright 2014 © Professor Michael E. Porter2220140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
101040801201902832903807807931,8301,9172,1732,2682,3392,4752,5822,8723,5444,0884,1914,5454,7734,7915,3485,4925,5145,6886,3526,8206,9977,4187,7757,834
11,75711,87312,63713,104
14,41014,497
23,18723,455
28,09337,039
42,97178,239
118,814133,049 219,120
13,352
0 50,000 100,000 150,000 200,000 250,000
Coal Mining 26Metal Mining 36
Fishing and Fishing Products 22Forestry 20
Footw ear 12Trailers, Motor Homes, and Appliances 29
Leather and Related Products 18Jew elry and Precious Metals 13Music and Sound Recording 9
Tobacco 3Nonmetal Mining 13
Environmental Services 6Agricultural Inputs and Services 2
Apparel 7Textile Manufacturing 8
Wood Products 12Vulcanized and Fired Materials 10
Video Production and Distribution 7Upstream Chemical Products 5
Recreational and Small Electric Goods 9Oil and Gas Production and Transportation 10
Upstream Metal Manufacturing 14Water Transportation 11
Furniture 7Dow nstream Metal Products 12
Communications Equipment and Services 19Electric Pow er Generation and Transmission 1
Medical Devices 8Lighting and Electrical Equipment 8
Livestock Processing 3Automotive 13
Performing Arts 9Paper and Packaging 4
Dow nstream Chemical Products 4Metalw orking Technology 9
Plastics 8Production Technology and Heavy Machinery 11
Biopharmaceuticals 5Food Processing and Manufacturing 6
Printing Services 5Construction Products and Services 9
Aerospace Vehicles and Defense 8Transportation and Logistics 13IT and Analytical Instruments 10
Marketing, Design, and Publishing 10Hospitality and Tourism 15
Insurance Services 5Financial Services 6
Education and Know ledge Creation 6Distribution and Electronic Commerce 6
Business Services 8
Philadelphia Metro Employment by Traded Cluster, 2011
Employment, 2011
Rank in U.S.
Note: Ranks are across top 50 Metro Areas.
Philadelphia overall employment rank = 5
Source: Prof. Michael E. Porter, Harvard Business School; U.S. Cluster Mapping 2014 Benchmark Definitions (Delgado-Porter-Stern 2013), Richard Bryden, Project Director.
Copyright 2014 © Professor Michael E. Porter2320140311 – Fox School of Business, Temple University Competitiveness Presentation (Porter, Delgado, Bryden)
Change in Philadelphia Share of National Employment, 2001 to 2011
Phila
delp
hia
Nat
iona
l Em
ploy
men
t Sha
re, 2
011
Employees 7,000 =
Traded Cluster Composition of the Philadelphia Metro, 2001-2011
Added Jobs
Lost Jobs
Employment 2001-2011
Overall change in the Philadelphia Share of US Traded Employment: -.104%
Philadelphia Overall Share of US Traded Employment: 2.25%
Source: Prof. Michael E. Porter, Harvard Business School; U.S. Cluster Mapping 2014 Benchmark Definitions (Delgado-Porter-Stern 2013), Richard Bryden, Project Director.
Marketing, Design,and Publishing
Distribution and Electronic Commerce
Education andKnowledge Creation
Transportation and Logistics
Aerospace Vehicles and Defense
Biopharmaceuticals(+.65%, 5.5%)
Performing Arts
Agricultural Inputsand Services
Footwear
Business Services
Financial Services
Insurance Services
Information Technology and Analytical Instruments
Printing Services
Downstream Chemical Products
Automotive
Electric Power Generation and Transmission
Communications Equipment and Services
FurnitureWater Transportation
Upstream Metal Manufacturing
Oil and Gas Production and Transportation
Upstream Chemical Products
Vulcanized and Fired Materials
Wood Products
Textile Manufacturing
Nonmetal Mining
Jewelry and Precious MetalsLeather and Related Products
Trailers, Motor Homes,and Appliances
ForestryFishing and Fishing Products0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
-2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5%
Copyright 2014 © Professor Michael E. Porter2420140311 – Fox School of Business, Temple University Competitiveness Presentation (Porter, Delgado, Bryden)
Change in Philadelphia Share of National Employment, 2001 to 2011
Phila
delp
hia
Nat
iona
l Em
ploy
men
t Sha
re, 2
011
Traded Cluster Composition of the Philadelphia Metro, 2001-2011
Added Jobs
Lost Jobs
Employment 2001-2011
Philadelphia Overall Share of US Traded Employment: 2.25%
Overall change in the Philadelphia Share of US Traded Employment: -.104%
Employees 7,000 = Source: Prof. Michael E. Porter, Harvard Business School; U.S. Cluster Mapping 2014 Benchmark Definitions (Delgado-Porter-Stern 2013), Richard Bryden, Project Director.
Transportation and Logistics
Performing ArtsEnvironmental Services
Business Services
Distribution and Electronic Commerce
Hospitality and Tourism
Marketing, Design,and Publishing
Construction Productsand Services
Printing Services
Food Processing and Manufacturing
Production Technology and Heavy Machinery
Plastics
Metalworking Technology
Paper and Packaging
Livestock Processing
Lighting and Electrical Equipment
Medical Devices
Downstream Metal Products
Furniture
Recreational and Small Electric Goods
Video Productionand Distribution
Vulcanized and Fired Materials
Textile Manufacturing
ApparelMusic and Sound Recording
Jewelry and Precious Metals
1.0%
1.5%
2.0%
2.5%
3.0%
-0.5% -0.4% -0.3% -0.2% -0.1% 0.0% 0.1% 0.2% 0.3% 0.4% 0.5%
Copyright 2014 © Professor Michael E. Porter2520140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Change in Philadelphia Share of National Employment, 2006 to 2011
Phila
delp
hia
Nat
iona
l Em
ploy
men
t Sha
re, 2
011
Employees 13,000 =
Traded Cluster Composition of Philadelphia Metro, 2006-2011
Philadelphia Overall Share of US Traded Employment: 2.25%
Source: Prof. Michael E. Porter, Harvard Business School; U.S. Cluster Mapping 2014 Benchmark Definitions (Delgado-Porter-Stern 2013), Richard Bryden, Project Director.
Overall change in the Philadelphia Share of US Traded Employment: .0021%
Added Jobs
Lost Jobs
Employment 2006-2011
BusinessServices
Education andKnowledge Creation
Hospitality and Tourism
Information Technology and Analytical Instruments
Transportation and Logistics
Aerospace Vehicles and Defense
Performing Arts
Livestock Processing
Agricultural Inputsand Services
Distribution and Electronic Commerce
Financial Services
Insurance Services
Marketing, Design, and Publishing
Construction Productsand Services
Printing Services
Food Processingand Manufacturing
Biopharmaceuticals(-4.4%,5.5%)
Production Technology and Heavy Machinery
Plastics
Metalworking Technology
Downstream Chemical Products
Paper and Packaging
Automotive
Lighting and Electrical Equipment
Medical Devices
Electric Power Generationand Transmission (-1.5%)
Communications Equipment and Services Downstream Metal Products
FurnitureWater Transportation
Upstream MetalManufacturing
Oil and Gas Production and Transportation
Recreational and Small Electric Goods
Upstream Chemical Products
Video Production and DistributionVulcanized &
Fired Materials
Wood Products
Textile Manufacturing
Apparel
Environmental Services
Nonmetal Mining
Tobacco(+1.4%, 5.2%)
Music and Sound Recording
Jewelry and Precious MetalsLeather and Related Products
Trailers, Motor Homes, and Appliances
Footwear
Forestry Fishing and Fishing Products0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
-1.0% -0.5% 0.0% 0.5% 1.0%
Copyright 2014 © Professor Michael E. Porter2620140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Philadelphia Metro Job Creation in Traded Clusters2006 - 2011
Job
Cre
atio
n, 2
006-
2011
-30,000
-25,000
-20,000
-15,000
-10,000
-5,000
0
5,000
10,000
15,000
20,000
25,000Bu
sine
ss S
ervi
ces
Educ
atio
n an
d Kn
owle
dge
Cre
atio
nAe
rosp
ace
Vehi
cles
and
Def
ense
Info
rmat
ion
Tech
nolo
gy a
nd A
naly
tical
Perfo
rmin
g Ar
tsAg
ricul
tura
l Inp
uts
and
Serv
ices
Tran
spor
tatio
n an
d Lo
gist
ics
Hos
pita
lity
and
Tour
ism
Live
stoc
k Pr
oces
sing
Vide
o Pr
oduc
tion
and
Dis
tribu
tion
Fish
ing
and
Fish
ing
Prod
ucts
Foot
wea
rTo
bacc
oM
usic
and
Sou
nd R
ecor
ding
Trai
lers
, Mot
or H
omes
, and
App
lianc
esC
oal M
inin
gFo
rest
ryJe
wel
ry a
nd P
reci
ous
Met
als
Prod
uctio
n Te
chno
logy
and
Hea
vy M
achi
nery
Leat
her a
nd R
elat
ed P
rodu
cts
Envi
ronm
enta
l Ser
vice
sM
etal
wor
king
Tec
hnol
ogy
Rec
reat
iona
l and
Sm
all E
lect
ric G
oods
Ups
tream
Che
mic
al P
rodu
cts
Med
ical
Dev
ices
Non
met
al M
inin
gLi
ghtin
g an
d El
ectri
cal E
quip
men
tD
owns
tream
Met
al P
rodu
cts
Elec
tric
Pow
er G
ener
atio
n an
d Tr
ansm
issi
onW
ood
Prod
ucts
Food
Pro
cess
ing
and
Man
ufac
turin
gVu
lcan
ized
and
Fire
d M
ater
ials
Text
ile M
anuf
actu
ring
Oil
and
Gas
Pro
duct
ion
and
Tran
spor
tatio
nU
pstre
am M
etal
Man
ufac
turin
gFu
rnitu
rePa
per a
nd P
acka
ging
Com
mun
icat
ions
Equ
ipm
ent a
nd S
ervi
ces
Dow
nstre
am C
hem
ical
Pro
duct
sPl
astic
sC
onst
ruct
ion
Prod
ucts
and
Ser
vice
sW
ater
Tra
nspo
rtatio
nAp
pare
lM
arke
ting,
Des
ign,
and
Pub
lishi
ngAu
tom
otiv
ePr
intin
g Se
rvic
esIn
sura
nce
Serv
ices
Dis
tribu
tion
and
Elec
troni
c C
omm
erce
Biop
harm
aceu
tical
sFi
nanc
ial S
ervi
ces
Net traded job creation, 2006-2011:
-66,764
Indicates expected job creation given growth in subclusters nationally.*
* Percent change in national benchmark times starting regional employment. Overall traded job creation in this region, if it matched national benchmarks, would be -51,158.Source: Prof. Michael E. Porter, Harvard Business School; U.S. Cluster Mapping 2014 Benchmark Definitions (Delgado-Porter-Stern 2013), Richard Bryden, Project Director.
Copyright 2014 © Professor Michael E. Porter2720140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
0.0
0.5
1.0
1.5
2.0
Agric
ultu
ral I
nput
s an
d Se
rvic
esAe
rosp
ace
Vehi
cles
and
Def
ense
Perfo
rmin
g Ar
tsBu
sine
ss S
ervi
ces
Info
rmat
ion
Tech
nolo
gy a
nd A
naly
tical
Inst
rum
ents
Educ
atio
n an
d Kn
owle
dge
Cre
atio
nLi
vest
ock
Proc
essi
ngTr
ansp
orta
tion
and
Logi
stic
sH
ospi
talit
y an
d To
uris
mVi
deo
Prod
uctio
n an
d D
istri
butio
nTo
bacc
oPr
oduc
tion
Tech
nolo
gy a
nd H
eavy
Mac
hine
ryM
etal
wor
king
Tec
hnol
ogy
Mus
ic a
nd S
ound
Rec
ordi
ngD
istri
butio
n an
d El
ectro
nic
Com
mer
ceFo
otw
ear
Food
Pro
cess
ing
and
Man
ufac
turin
gM
edic
al D
evic
esLi
ghtin
g an
d El
ectri
cal E
quip
men
tR
ecre
atio
nal a
nd S
mal
l Ele
ctric
Goo
dsIn
sura
nce
Serv
ices
Mar
ketin
g, D
esig
n, a
nd P
ublis
hing
Ups
tream
Che
mic
al P
rodu
cts
Dow
nstre
am M
etal
Pro
duct
sEl
ectri
c Po
wer
Gen
erat
ion
and
Tran
smis
sion
Con
stru
ctio
n Pr
oduc
ts a
nd S
ervi
ces
Envi
ronm
enta
l Ser
vice
sTr
aile
rs, M
otor
Hom
es, a
nd A
pplia
nces
Plas
tics
Pape
r and
Pac
kagi
ngFi
nanc
ial S
ervi
ces
Dow
nstre
am C
hem
ical
Pro
duct
sPr
intin
g Se
rvic
esFu
rnitu
reC
omm
unic
atio
ns E
quip
men
t and
Ser
vice
sJe
wel
ry a
nd P
reci
ous
Met
als
Woo
d Pr
oduc
tsU
pstre
am M
etal
Man
ufac
turin
gO
il an
d G
as P
rodu
ctio
n an
d Tr
ansp
orta
tion
Vulc
aniz
ed a
nd F
ired
Mat
eria
lsTe
xtile
Man
ufac
turin
gW
ater
Tra
nspo
rtatio
nN
onm
etal
Min
ing
Leat
her a
nd R
elat
ed P
rodu
cts
Auto
mot
ive
Fore
stry
Biop
harm
aceu
tical
sAp
pare
l
Philadelphia Recovery in Traded Cluster EmploymentPost-Recession vs. Pre-Recession (2011 vs. 2006)
Rat
io o
f Pos
t-to
Pre
-Rec
essi
on E
mpl
oym
ent
(201
1/20
06)
Note: Includes clusters with more than 100 employeesSource: Prof. Michael E. Porter, Harvard Business School; U.S. Cluster Mapping 2014 Benchmark Definitions (Delgado-Porter-Stern 2013), Richard Bryden, Project Director.
Indicates national recovery level>1 Recovered to 2006 level US traded employment: 0.93 recovery
PHL traded employment: 0.93 recovery
Copyright 2014 © Professor Michael E. Porter2820140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
High Employment Specialization and Share
High Employment Specialization
High Employment Share
Cluster Specialization by Economic Area, 2011Education and Knowledge Creation
Philadelphia-Camden-Vineland
Employment:121,836; Share: 4%
Note: Economic Areas with High Employment Specialization must have a Location Quotient of Cluster Employment greater than the 75th percentile; High Employment Share must have a Share of National Cluster Employment greater than the 90th percentile; High Employment Specialization and Share meet both criteriaSource: “Defining Clusters of Related Industries,” Delgado, Porter, Stern, 2013
Copyright 2014 © Professor Michael E. Porter2920140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
High Employment Specialization and Share
High Employment Specialization
High Employment Share
Dover, DE
Increased Employment 2006-2011
Decreased Employment 2006-2011
Harrisburg-Carlisle-Lebanon, PA
New York-Newark-Bridgeport
Philadelphia-Camden-Vineland
Scranton, PA
Washington-Baltimore-Northern Virginia
Potential Inter-Regional Spillovers: Education and Knowledge Creation
Note: Economic Areas with High Employment Specialization must have a Location Quotient of Cluster Employment greater than the 75th percentile; High Employment Share must have a Share of National Cluster Employment greater than the 90th percentile; High Employment Specialization and Share meet both criteriaSource: “Defining Clusters of Related Industries,” Delgado, Porter, Stern, 2013
Copyright 2014 © Professor Michael E. Porter3020140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
High Employment Specialization and Share
High Employment Specialization
High Employment Share
Cluster Specialization by Economic Area, 2011Biopharmaceuticals
Note: Economic Areas with High Employment Specialization must have a Location Quotient of Cluster Employment greater than the 75th percentile; High Employment Share must have a Share of National Cluster Employment greater than the 90th percentile; High Employment Specialization and Share meet both criteriaSource: “Defining Clusters of Related Industries,” Delgado, Porter, Stern, 2013
Philadelphia-Camden-Vineland
Employment:12,747; Share: 5.6%
Copyright 2014 © Professor Michael E. Porter3120140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Note: Economic Areas with High Employment Specialization must have a Location Quotient of Cluster Employment greater than the 75th percentile; High Employment Share must have a Share of National Cluster Employment greater than the 90th percentile; High Employment Specialization and Share meet both criteriaSource: “Defining Clusters of Related Industries,” Delgado, Porter, Stern, 2013
High Employment Specialization and Share
High Employment Specialization
High Employment Share
Dover, DE
Harrisburg-Carlisle-Lebanon, PA
New York-Newark-Bridgeport
Philadelphia-Camden-Vineland
Scranton, PA
Washington-Baltimore-Northern Virginia
Potential Inter-Regional SpilloversBiopharmaceuticals
Increased Employment 2006-2011
Decreased Employment 2006-2011
Copyright 2014 © Professor Michael E. Porter3220140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
Summary: Philadelphia Cluster Employment Performance
• Following a pattern seen in many regions of the U.S., Philadelphia’s traded employment in 2011 has declined to 93% of the level in 2006
• Strong clusters that have lost jobs and underperformed the U.S. over the period 2006-2011: – Biopharmaceuticals, Financial Services, Insurance Services, and
Distribution and Electronic Commerce
• Clusters that have created many jobs over the period 2006-2011: – Business Services, Education and Knowledge Creation, Aerospace Vehicles
and Defense, and IT and Analytical Instruments
Copyright 2014 © Professor Michael E. Porter3320140311 – Fox School of Business, Philadelphia Competitiveness (Porter, Delgado, Bryden)
U.S. Cluster Mapping ProjectData and Tools
• The U.S. Cluster Mapping Project is a joint initiative between the U.S.Department of Commerce, Economic Development Administration and Harvard’sInstitute for Strategy and Competitiveness
• The goal of the project is to improve U.S. competitiveness based on a bottom-up,regional perspective on economic development, and to support evidence-baseddecision making and thought leadership on cluster-driven economic policies
• US Cluster Mapping Project website will launch in late May/early June 2014. Thishighly optimized, modern website will provide access to:– Actionable cluster and regional data reflecting the state of today’s economy– User contributed repository of cluster initiatives, studies, and news– Community platform and registry for organizations
• The research is driven primarily by Harvard, MIT and Temple. Key researchupdates include improved cluster definitions:– Cluster categories are groups of related industries based on co-location patterns
across regions, input-output links and skill links– Clustering methodology: Delgado, Porter and Stern (2013), Porter (2003)