Transcript Clusters of Opportunity: Strategies to Accelerate Economic

Clusters of Opportunity:
Strategies to Accelerate Regional
Economic Growth
A Discussion with the Kaneohe Business Group
Lisa H. Gibson
President
March 23, 2011
Background
• 35 Years in Marketing and Fund Development
• 15 Years in Economic Development
• Sustainable Oahu Initiative 1999 – Chattanooga Best Practices Tour
• COO – Enterprise Honolulu – Co-Author of Target 2005: A Five
Year Pathway to Local Prosperity and Global Prominence
• Project Manager Hawaii Life Sciences Roadmap
• Founder and Past President the Hawaii Science & Technology
Council & Institute
• Oct 2006 published S & T baseline data: Innovation and
Technology in Hawaii: An Economic and Workforce Profile
Today’s Discussion
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The Structure of Hawaii’s Economy
Hawaii’s Economic and Workforce Crisis
Role of Innovation in Global Competition
Strategies for an Economic Intervention
– Role of Regions
– Focus on Clusters of Opportunity
– The Process
– Potential for the Kaneohe
The Structure of Hawaii’s Economy
Imports (goods & services) $14.954B
Exports (goods & services) $ 2.194B
Visitor Expenditures
$10.033B
(goods & services)
Trade Deficit:
$ -2.727B
Imports-(Exports+Visitor Expenditures) = Trade Deficit
Foreign Direct Investment
Federal Expenditures
Source: DBEDT
$11.63B
$ 9.015B
Hawaii’s Growing Gap Between
Rich and Poor
In comparison to other U.S. States, Hawaii ranks:
• Highest # of households receiving government financial
aid (2.9%)
• Highest # households receiving Food Stamps (12%)
• 3rd Highest with 10.7% of population below 100% of
federal poverty
• 4th Highest with 25.9% of population below 200% of
federal poverty
• 7th Lowest with a per capita income of $21,888
• 43rd in Nation for growth of average pay
• 47th for economic diversification
• 49th for home ownership
Source: Honolulu Advertiser 10/23
The Role of Ideas
Tough Choices Tough Times
The National Center on Education and Economy
“This is a world in which comfort with ideas and
abstractions is the passport to a good job, in
which creativity and innovation are the key to the
good life, in which high levels of education….are
going to be the only security there is.”
Global Challenges Facing
America’s Communities
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New global innovation economy
New opportunities for prosperity
Raised stakes for participation
Disruptive – rewards regions which
innovate and hardship for bystanders
Why Innovation is Central to Rising
Living Standards
• The key to prosperity is productivity
• The basis for increasing productivity is
innovation.
• Only way to compete and raise our
standard of living is to find new and better
ways to use natural, human and capital
resources to increase productivity.
• Better – Faster – Cheaper
Creating Prosperity is a
Social Justice Issue
“Economic growth -- meaning a rising standard of living
for the majority of citizens – more often than not fosters
greater opportunity, tolerance of diversity, social mobility,
commitment to fairness and dedication to democracy.”
In contrast, when an economy stagnates, “the resulting
generates intolerance, un-generosity, and resistance to
greater openness of individual opportunity.”
The Moral Consequences of Economic Growth
By Benjamin N. Friedman
Cannot Cut or Tax the Path to Prosperity
Hawaii Deficit nears $1B
Star Advertiser 3/11/11
Higher Alcohol tax will destroy
restaurant and hospitality jobs
Star Advertiser 3/2011
GROWING ECONOMY DRIVES
VITAL CYCLE
Regions as Critical Units of
Economic Activity
• Big enough to compete globally
• Small enough to benefit from network economics
• Regions are the scale at which to efficiently and
productively deploy assets to create wealth
• Communities and regions must focus on the
systems and interactions which account for
regional economic performance.
• Aspire to better understand systems, explore
factors which influence performance, identify
interventions which will be most effective
Challenges for Communities
• Regions must now compete on the basis of increasing
productivity not simply costs
• There is no such thing as a “high tech” or “low tech”
industry anymore, only innovative or non-innovative.
• To achieve success, regions must understand the
evolving nature of innovation.
• To recognize its own strengths, identify other regional
“spikes” based on their strengths, and connect to those
“spikes” for mutual benefit.
• To transform the deleterious single interest/zero-sum
game into the pursuit of integration to achieve mutual
gain.
How to Close the Gap Between
Theory and Execution?
Two Quotes from Peter Drucker
“Innovation is the purposeful
pursuit of opportunity”
“Strategy is worthwhile when it
degenerates into work”
Focus on Regional
Clusters of Opportunity
• Mobilizes Cluster Leadership
• Apply Business Planning methods to
economic development
• Use of data to identify clusters of
opportunity and to measure performance
• Create the framework for a continuous
improvement process
• Inclusive and transparent
A New Kind of Assessment:
Focus on Cornerstones of Innovation
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Assets
Networks
Culture
Community
Best Practices Examples
• California Wine Industry Cluster Map
• San Luis Obispo Clusters of Opportunity
Economic Strategy – Collaborative
Economics
Cluster Mobilization Process Seeks
to Answer Two Questions
• What are the opportunities for growth of
your industry in this region?
• What are the requirements for promoting
those opportunities?
PROCESS OVERVIEW
• ASSESS the region’s economy and identified key clusters of
opportunity.
• CONVENE groups of employers by cluster to discover highpriority opportunities and requirements for industry growth,
vitality, and competitiveness.
• FORM CLUSTER ACTION TEAMS based on these meetings,
develop Action Plans, with specific outcomes, strategies, and
implementation commitments.
• COMPLETE an Economic Strategy Plan
• LAUNCH IMPLEMENTATION PROCESS
• MONITOR PROGRESS
CLUSTERS OF OPPORTUNITY ARE
SPECIALIZED AND GROWING
UNIQUELY SAN LUIS OBISPO COUNTY:
SPECIALITY PRODUCTS & EXPERIENCES
“Uniquely San Luis Obispo”
Action Plan
• Expand Funding to Promote Cluster
• Launch a unified and Countywide branding
and marketing campaign
• Launch a parallel community awareness
campaign
• Promote local policy changes that support
individual specialties and combinations of
specialties
Why This Matters to Policy Makers
“The global economic crisis has made it clear that our economies will
never be the same and that we must all adjust to a new normal”
House Budget Chair Marcus Oshiro
Honolulu Star Advertiser 3/18/2011
• Hawaii cannot cut its way to prosperity
• There is no business plan to create a tax base
for Hawaii
• Must develop a business plan which focuses on
existing and emerging clusters of opportunities.
• Process must be driven by business and regions
Need to Reframe the Question
How much does Hawaii’s GDP need to
grow to achieve our economic, social,
environmental and cultural goals?
Questions and Discussion
How is this process relevant to
business in Kaneohe?
Mahalo
There is no sustainability if
you don’t have a job
15 Steps to Regional Prosperity
4 Planning Phases
Promote your success
Monitor your progress
Building New
Foundations
Approach
Leverage your resources
Execute
Your Plan
Design implementation plan
Prioritize your actions
Define your actions
Construct a vision statement
Prioritize issues of concern
Formulate
Strategies &
Prioritize
Actions
Inventory assets & challenges
Conduct baseline assessment
Define your geography
Detect Regional
Economic Advantage
Frame your analysis
Engage your leaders
Call the region to action
Assess your capabilities
Lead the Planning
Effort
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CLUSTER ANALYSIS
Export Engine – Direct /Traded
Additional Industries of same kind
Primary Indirect Firms: Local
Indirect Support Firms: Local
Induced Demand
Export
Engine
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2
3
4
5
(10)
Create an
Ongoing
Process
(9)
Celebrate
Success
(8)
Evaluate
the Effort
* One tool to
accomplish this is
Targeted Economic
Development
(1)
Begin/ Continue
the Process
(2)
Engage the
Community and
Legitimize
the Process
Community &
Economic
Development
(7)
Implement
the Plan
(6)
Seek Community
Feedback and
Commitment
(3)
Form Organized
Structure
& Partnerships
(4)
Conduct
Community/economic
Assessment(s)*
(5)
Develop a
Strategic Plan