GLOBAL CITIES INITIATIVEA J O I N T P R OJ ECT O F B R O O K I N GS A N D J P M O R GA N C H AS E
Salt Lake City, UT - July 22, 2015Metropolitan Policy Programat BROOKINGS
Metropolitan Policy Programat BROOKINGS
The Economy Has Recovered from the Great Recession
Source: Current Employment Statistics.
-10,000,000
-5,000,000
0
5,000,000
2007 2009 2014
Post-Recession U.S. Jobs Gap !Since start of recession
+865,000 jobs
Metropolitan Policy Programat BROOKINGS
-10,000,000
-5,000,000
0
5,000,000
2007 2009 2015
Payroll Count Jobs Gap Growth-Based Jobs Gap
However, We Still Need More Jobs
Source: The Hamilton Project analysis of Congressional Budget Office and Current Employment Statistics data.
3.5 million!missing jobs
Post-Recession U.S. Jobs Gap !Since start of recession
Metropolitan Policy Programat BROOKINGS
-5%
40%
1990 2000 2012
0%
10%
20%
30%
40%
0%
36%
0%
-4%
We Need To Improve Incomes for Families
Change in Output Per Capita and Median Household Income!Since 1990
Source: Current Population Statistics, BLS Consumer Price Index, Census Population Estimates, Moody’s Analytics.
Output per capita: !+$14,589
Median income: !-$2,120
Metropolitan Policy Programat BROOKINGS
These Economic Challenges Vary
Post-Recession Jobs Recovery by Metro Area!Pre-Recession Peak to 2014Q2
RecoveredNot recovered
Denver!+7.0%Salt Lake City!
+6.4%
Portland!+3.5%
Las Vegas!-5.1%
Boise!+2.3%
Phoenix!-2.4%
Colorado Springs!+2.2%
Detroit!-9.0%
Metropolitan Policy Programat BROOKINGS
Change in Employment Ratio of Working-Age Population!2007 to 2013
IncreasedDecreased 0 - 3 pointsDecreased 3 or more points
These Economic Challenges Vary
Phoenix!-3.3%
Portland!-2.3% Boise!
-3.7%
Denver!-1.2%
Las Vegas!-4.3%
Salt Lake City!-1.7%
Colorado Springs!-1.0%
Detroit!+0.4
Meanwhile, Metros in Rocky Mountain Region Lag International Metros
Source: Brookings, Global Metro Monitor, 2015
Growth Rate, 2009-2014!Top 300 Metro Regions
1 Xiamen, China
2 Nanning, China
3 Wuxi, China
4 Kuala Lumpur, Malaysia
5 Xuzhou, China
6 Hangzhou, China
7 Suzhou, China
8 Izmir, Turkey
9 Kunming, China
10 Macau, China
Growth Rank, 2009-2014!Top 300 Metro Regions
65 Austin, Texas
:!:
97 Salt Lake City, Utah
116 Denver, Colorado
159 Phoenix, Arizona
210 Las Vegas, Nevada
CONSUMPTIONCONSUMPTION
CONSUMPTION
CONSUMPTION
CONSUMPTION
DEBT
DEBT
DEBT
DEBTDEBT
CONSUMPTION
DEBTDEBT
DEBT
CONSUMPTIONDEBT
DEBT
DEBTDEBT
CONSUMPTIONDEBT
CONSUMPTION
INVESTMENT
EXPORTS
INFRASTRUCTUREHUMAN CAPITAL
ADVANCED
ENERGY
OPPORTUNITY STEM
R&DMANUFACTURING
EXPORTS
R&D
HUMAN CAPITAL
STEMR&D
We Need New Growth Strategies
Source: Ezell, Stephen and Robert Atkinson, 2012, “Fifty Ways to Leave Your Competitiveness Woes Behind,” ITIF.
Traded Manufacturing Job
=Local Jobs
Traded Sectors Are Key to High Quality Economic Growth
1 2 31 2 3
The Imperative for Global Engagement
Metros Are Centers of Global Trade and Investment
Metros Are Engaging Globally
81%share of global economic growth occurring outside the U.S. 2015-2020
The Bulk of Potential Demand for U.S. Products Comes from Outside of the U.S.
Global Middle Class - 2009 | Share of Global Totals
18%!North America
36%!Europe 28%!
Asia Pacific
Source: Kharas and Gertz, “The New Global Middle Class,” 2010
Global Middle Class - 2030 | Share of Global Totals
7%!North America
14%!Europe 66%!
Asia Pacific
Source: Kharas and Gertz, “The New Global Middle Class,” 2010
We Are Experiencing All-time Highs in Global Trade—And Trade is Still Growing
$7.3
Increase in exports to current FTA partners
since 2009
64 percent
US exports that go to our current
FTA partners
$765.2 billion
$2.3 trillionValue of all US exports in 2013
Metropolitan Policy Programat BROOKINGS
Share of GDP Growth
‘09-‘14
Share of Job Growth
‘09-‘14
Exports Create Jobs, Generate Income, and Support High Wages
Metropolitan Policy Programat BROOKINGS
International Exports’ Economic Impact!
Sources: Moody’s Analytics; Brookings “Export Nation”; J. Bradford Jensen, “Global Trade in Services,” Petersen Institute for International Economics, 2011; David Riker, “Do Jobs in Export Industries Still Pay More?” ITA, 2010.
Manuf. Trade Wage
Premium
Services Trade Wage
PremiumMetropolitan Policy Programat BROOKINGS
Metropolitan Policy Programat BROOKINGS
Share of Output
Share of Jobs
Exports Create Jobs, Generate Income, and Support High Wages
Metropolitan Policy Programat BROOKINGS
International Exports’ Economic Impact!
Brookings Institution, Export Nation 2015Metropolitan Policy Programat BROOKINGS
Share of Output
Share of Jobs
Salt Lake City Region
$98.6 b
Top 100!Metros
Salt Lake!Region
International Trade Share
15.8%11.9%
Total Goods Trade
40th out of top 100 metros
Top Regional Trading Partners
1 Provo-Orem $8.2 b
2 Ogden-Clearfield $6.5 b
3 Los Angeles-Long Beach $5.4 b
4 China $2.7 b
5 Canada $1.9 b
6 Atlanta $1.8 b
7 New York City $1.7 b
8 Phoenix $1.6 b
9 Mexico $1.6 b
10 Japan $1.0 b
Salt Lake City Region Trade Profile
Source: Brookings, Metro Freight (2013) & Global Gateways (2012)
Why Should Firms Export? More Resilience to Domestic Shocks?
U.S. Manufacturing Firms Revenue Growth !2005-2009
Source: U.S. International Trade Commission, 2010, “Small and Medium-Sized Enterprises: Characteristics and Performance,” Washington,
Source: Brookings and The National Center for the Middle Market, “Accelerating Exports in the Middle Market“ 2014
-7%
37%Exporting
Non-exporting
Why Should Firms Export? Stronger Middle Market Performance
Companies reporting revenue increases
Exporting
Non-exporting
76%
64%
Companies that added employees Non-exporting
Exporting 51%
39%
Companies projected revenue growth next year
Exporting
Non-exporting
6.6%
5.2%
The Middle Market is defined as companies with annual revenues between $10 million and $1 billionBrookings, National Association for the Middle Market, “Accelerating Exports in the Middle Market,” 2014
Foreign Direct Investment: Why Does it Matter?
5.6 millionemployees in foreign-owned firms, 2011
Foreign-ownedDomestic
$60,000
$77,000
Average Wages by Ownership2011
Source: Brookings, Bureau of Economic Analysis
FDI Bolsters Exports and Innovation
Source: Brookings, Metro FDI, 2014; Bureau of Economic Analysis
U.S. Manufacturing
Exports
U.S. Manufacturing Employment
2%
20%
Foreign-Owned FirmsGoods-Producing Industries, 2011
U.S. Corporate R&D
U.S. Employment
5%
19%
Foreign-Owned Firms 2011
Growth in Jobs Under Foreign OwnershipAverage year, 1991-2011
45% M&A
34% Expansion
21% Greenfield
FDI Capital Inflows1992-2008
87% M&A13% Greenfield
Source: Brookings, Bureau of Economic Analysis
Mergers and Acquisitions Are the Dominant Form of FDI
Though Volatile, Global Investment Flows Are Growing
FDI Flows (Capital)
Source: UNCTAD
Global$1.3 trillion
U.S.$168 billion
1984 1999 2012
$2 trillion
$1 trillion
The U.S. Is Capturing a Smaller Share of Global Investment
12 percent
26 percent
45 percent
U.S. Share of Global FDI (Capital)
Source: UNCTAD
1984 1999 2012
Advanced Industries
Innovation Human Capital Infrastructure
Pharmaceuticals
Medical EquipmentMotor Vehicles & Parts
Aerospace
Manufacturing35
Software Computer Systems Design
Telecommunications R&D Consulting Services
Services12
Oil & Gas !Extraction
Electricity !Generation
Energy
3
Advanced Industries
Metropolitan Policy Programat BROOKINGS
Advanced Industries Support High Wages
Wages
*Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations. Source:Brookings “Advanced Industries”, Mark Muro
Metropolitan Policy Programat BROOKINGS
$90,000 > $47,000average advanced
industry wageaverage wage
Skills
1 out of 2advanced industry jobs
require less than a 4-year degree
Advanced Industries Drive Value Creation and Productivity Growth
Advanced Industries!Share of U.S. Totals
*Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations. Source: Brookings Institution forthcoming.
Metropolitan Policy Programat BROOKINGS
PatentsGDP R&DJobs Exports
8.9%
17.9%
57.5%
81.2% 90.3%
Advanced Industries Drive Value Creation and Productivity Growth
Advanced Industries!Share of U.S. Totals
*Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations. Source: Brookings Institution forthcoming.
Metropolitan Policy Programat BROOKINGS
Salt Lake City Region
57.5%
81.2% 90.3%
11.1%16.5%
PatentsGDP R&DJobs Exports
Metropolitan Policy Programat BROOKINGS
Jobs in STEM Fields Are Accessible
Metropolitan Policy Programat BROOKINGS
STEM Jobs as a !Share of All Jobs
Share of STEM Jobs!Requiring 4-Year Degree
Source: Jonathan Rothwell, “The Hidden STEM Economy,” Brookings, 2012
26 millionSTEM Jobs
Metropolitan Policy Programat BROOKINGS
Jobs in STEM Fields Are Accessible
Metropolitan Policy Programat BROOKINGS
STEM Jobs as a !Share of All Jobs
Share of STEM Jobs!Requiring 4-Year Degree
Source: Jonathan Rothwell, “The Hidden STEM Economy,” Brookings, 2012
116,220STEM Jobs
Salt Lake City Region
11.1%Advanced Industry
Employment Intensity
15th out of top 100 metros
Largest Advanced Industries
1 Computer Systems Design 10,320
2 Architecture & Engineering 7,990
3 Medical Equipment and Supplies 7,870
4 Precision Instruments 6,170
5 Management Consulting 4,910
6 Data Processing and Hosting 4,320
7 Medical & Diagnostic Laboratories 3,670
8 Software Products 3,390
9 Misc Manufacturing 3,090
10 R&D Services 2,700
Total Advanced Industry Employment
71,590full time workers
Advanced Industry Output
16.5%of all output in the region
Salt Lake City Region Advanced Industry Profile
Metros are centers of global trade and investment
1 2 31 2 3
Bachelor’s Degrees
74%
92%
PatentsPopulation
66%75%
Graduate Degrees
90%
Advanced Industries
Source: Brookings analysis of US Census Bureau, FAA, BLS, and BEA data
Largest Metros’ Share of U.S. Market Assets
Air Freight
82%
Services Exports
72%
GDP
75%
Metro Areas Hold the Bulk of the Assets That Will Drive Exports
49%54%41%
87%90%89%
Source: Brookings Export Nation 2013, Census
Population GDP Exports
Salt Lake City and Utah’s Other Metropolitan Areas
Metros Have a Critical Role to Play in Exports
Increase export pipeline through proactive outreach in existing networks!!Coordinate federal, state, and local programs on the ground!!Catalyze cultural shift by mainstreaming exports and trade
Metro
State
Federal
Bring credibility of the Governor’s office to global trade!!Establish a state brand platform!!Organize trade missions!!Dedicate resources to global engagement
Open new markets through free trade agreements !Finance exports through Ex-Im and SBA!Provide on-the-ground expertise in U.S. and foreign markets!Produce export data to inform state and regional efforts
1 2 31 2 3
Metros are engaging globally in new ways
METROINNOVATION
38
Organize for Trade
28 U.S. Metro Areas at the Vanguard of Global Engagement
Exports: New Cohort Baltimore!Fresno!Houston!Kansas City!Philadelphia!Salt Lake City!Seattle!St. Louis
Exports: Current Atlanta!Charleston!Chicago!Columbus!Des Moines!Indianapolis!Jacksonville!Louisville-LexingtonLos Angeles!Milwaukee!Mpls-St. Paul!Phoenix!Portland!Sacramento!San Antonio!San Diego!Syracuse!Tampa Bay!Upstate SC!Wichita
Columbus!Mpls-St. Paul!Portland!San Antonio!San Diego!Seattle
FDI Pilot
Each Metro Area Is Leveraging its Unique Specializations and Global Brand
We Build Green Cities
Portland
Health and Wellness
Minneapolis - St. Paul
Life Sciences
San Diego
Services and Canada
Syracuse
41
Organize for Trade Invest in !What Matters
Innovation Human Capital Infrastructure
SUNY Albany!Nanotech Campus
Columbus
Clemson University!International Center for Automotive Research
Innovation Human Capital Infrastructure
Innovation Human Capital Infrastructure
DRIC!Detroit River International Cross
Organize for Trade Invest in !What Matters Network Globally
GLOBAL CITIES ECONOMIC PARTNERSHIP
“The massive changes in the global economy since World War II have had overwhelmingly positive effects.
But globalization hurts some subgroups within some countries, including the advanced economies.”!
!
Michael Spence!Nobel Prize Recipient, 2001!
Distinguished Fellow, Center on Foreign Relations !
GLOBAL CITIES INITIATIVEA J O I N T P R OJ ECT O F B R O O K I N GS A N D J P M O R GA N C H AS E
Salt Lake City, UT - July 22, 2015Metropolitan Policy Programat BROOKINGS
Somehow use this map to show current free trade agreements?