Engage Gwinnett Economic Development in Gwinnett County February 3, 2010 www.engagegwinnett.com
Today s Meeting Today s Economic Realities Creating Prosperity in Challenging Times Partnership Gwinnett Case Studies Questions/Comments
Today s Economic Realities Source: Atlanta Journal Constitution; November 4, 2008
Economic Forecasting The only function of economic forecasting is to make astrology look respectable. John Kenneth Gailbreath Economist Economic forecasting makes weather forecasting look like physics. Ben Bernanke Chairman Federal Reserve July 26, 2009
The Great Recession Jobs lost in 2008 & 2009 Source: Bureau of Labor Statistics, seasonally adjusted Total Jobs Lost During Current Recession: 7.24 million 15.3 million unemployed 9.3 million working part time, wanting full-time work. 321,000 380,000 597,000 681,000 741,000 681,000 652,000 519,000 72,000 144,000 122,000 160,000 137,000 161,000 128,000 175,000 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 303,000 May 09 463,000 Jun 09 304,000 Jul 09 154,000 139,000 Aug 09 Sep 09 127,000 Oct 09 85,000 4,000 Nov 09 Dec 09 100,000 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000
State Unemployment Rates December 2009 United States 10.0% Atlanta MSA (Nov) 10.1% Michigan 14.6% Nevada 13.0% Rhode Island 12.9% South Carolina 12.6% California 12.4% D.C. 12.1% Florida 11.8% North Carolina 11.2% Illinois 11.1% Alabama 11.0% Oregon 11.0% Ohio 10.9% Tennessee 10.9% Kentucky 10.7% Mississippi 10.6% Georgia 10.3% Source: U.S. Bureau of Labor Statistics, seasonally adjusted
12-Month Employment Change December 2008 December 2009 Southern Metro Area Jobs Jobs Raw Percent (Dec 2008) (Dec 2009) Change Change Atlanta Sandy Springs Marietta, GA 2,381,300 2,276,000 105,300 4.4% Charlotte Gastonia Concord, NC 847,500 811,600 35,900 4.2% Tampa St. Petersburg Clearwater, FL 1,214,100 1,163,100 51,000 4.2% Orlando Kissimmee, FL 1,064,900 1,025,200 39,700 3.7% Houston Sugar Land Baytown, TX 2,628,100 2,535,600 92,500 3.5% Nashville Davidson Murfreesboro Franklin, TN 755,400 728,700 26,700 3.5% Greensboro High Point, NC 360,600 348,200 12,400 3.4% Georgia's Largest Metro Areas Jobs Jobs Raw Percent (Dec 2008) (Dec 2009) change change Macon, GA 101,000 95,400 5,600 5.5% Atlanta Sandy Springs Marietta, GA 2,381,300 2,276,000 105,300 4.4% Savannah, GA 157,400 153,200 4,200 2.7% Augusta Richmond County, GA 214,500 210,000 4,500 2.1% Columbus, GA AL 119,500 117,200 2,300 1.9% Georgia 4,013,600 3,839,700 173,900 4.3% Source: U.S. Bureau of Labor Statistics
Foreclosure Goes Upscale Source: Business Week June 15, 2009
Household Net Worth 1981-2009 $700,000 Average Net Worth of Households and Non Profits, United States (Adjusted for Inflation, 2009 dollars) = National Recession $650,000 $600,000 $550,000 24.3% Q1'07 Q3'09 $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 Households regained some wealth during late 2009 (+9.7%) $200,000 Source: United States Census Bureau, Moody s Economy.com
Gaining Confidence A Little? The consumer confidence index from a survey of 5,000 U.S. households: Seasonally adjusted: 1985=100 120 100 55.9 80 60 40 20 January 2006: 110.2 January 2009: 37.7 January 2010: 55.9 0 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan 2007 2008 2009 2010 Source: The Conference Board
How Far Down? Recession Realities Mortgage and financial crisis continuing problems Huge decline in discretionary (especially retail) spending in 2009 The continuing decline in housing value, sales, and new construction Widely fluctuating consumer confidence down 50% from 2007 Job losses every month of 2008 and huge losses throughout 2009 still falling Federal and state deficits soaring across the country Commercial real estate market is falling rapidly Exports have dropped rapidly and are very low The continuing cost in Iraq and Afghanistan (human and fiscal) new questions Enormous stock losses and continuing market volatility Fluctuating price of oil rising now Citizen anger and distrust (AIG, Madoff, TARP, etc.) Source: J. Mac Holladay, January 2010
The World in 2009 and 2010 Anyone hoping for a period of calm after the turbulence of the past year will be disappointed. For the economy and for business, as well as for politics, 2009 promises to be a year of bracing adjustment to a changed world. Daniel Franklin, Editor The World in 2009 The Economist The good news about 2010 is that the world will emerge from recession and the post-crisis economic landscape will become clearer. Less cheerful is what that landscape will look like. Daniel Franklin, Editor The World in 2010 The Economist
Key Issues for 2010 and beyond 1) Economic Stimulus Package and Financial Recovery Plan 2) Regulation and Recovery - A Different Economy 3) Health Care Reform 4) State and Local Budget Shortfalls 5) Green Revolution 6) Immigration Law Reform Federal, state, and local
Elvis Has Left the Mountain First, if it is not apparent to you yet, it will be soon: there is no magic bullet for this economic crisis, no magic bailout package, no magic stimulus We are going to have to learn to live with a lot more uncertainty for a lot longer than our generation has ever experienced. Thomas L. Friedman New York Times February 1, 2009
Creating Prosperity in Challenging Times
Economic Development Requirements Now and Future Reality Talent Recruitment Generation X Boom Generation Leadership? Transportation Options? Access Place Welcoming? Inclusive? Options? Greenspace? Infrastructure Traditional Telecommunication Educational Capacity Assets Attainment Attitude Cooperative Proactive Water Quality Capacity Public/Private Partnership Necessity Across Boundaries
Tax Incentives and Tax Digest Impact Tax Incentives Several levels (City, County, State, Federal) Tax competition A smaller factor behind infrastructure, public K-12 education, and workforce. Icing on the cake Trade off: near-term vs. long-term Need to be balanced: New vs. Existing Businesses New investment and job creation Tax Digest Diversity Enhances tax stability and reduces burden on residents Can be volatile because of economic conditions and business operations
Partnership Gwinnett
Gwinnett Chamber of Commerce and its partners Questions guiding the 2006 process How can a clear consensus be created on what kind of place Gwinnett County wants to be? How can community leaders work to achieve quality economic growth while also sustaining a high quality of life? Are there plans and strategies that need updating to reflect the changes that have occurred in Gwinnett County in recent years? How can Gwinnett County maximize its resources including land, infrastructure, intellectual capital, and natural resources to ensure quality growth in the decades to come? Can Gwinnett County offer destinations for visitors and residents without losing sight of the economic needs of its citizens, particularly those requiring training and workforce assistance?
Scope of Work
Research Findings 2006 Economic & Demographic Profile Gwinnett s population and diversity growth continues at a rapid pace Demographic and employment sector trends are impacting Gwinnett s average incomes Labor force participation is down, per capita incomes are falling and poverty is rising slightly. Manufacturing jobs have been lost, replaced by lower-paying services jobs Gwinnett is becoming an increasingly prominent regional job center Competitive Assessment Gwinnett and cities remain attractive places to live, work, and visit Integration of an increasingly diverse population into Gwinnett s leadership, business community, and educational-support networks will also be key
Vision Statement Gwinnett will be known as an inclusive community where businesses thrive and residents maximize their potential through world-class schools, opportunities for life-long learning, a vibrant economy, diverse partnerships and a superior quality of life.
Partnership Gwinnett Strategy - Final Goals Goal I: Economic Diversification and Wealth Creation Objective 1: Attract new opportunities in targeted business sectors Objective 2: Retain and expand existing firms Objective 3: Nurture entrepreneurs and small business opportunities Objective 4: Advance economic opportunities for international and minority businesses Goal II: Education and Workforce Excellence Objective 1: Objective 2: Ensure the pre-k through 12th grade educational system is able to serve local needs Maintain a demand-driven approach to post-secondary education and training
Partnership Gwinnett Strategy - Final Goals Goal III: Quality of Life Enhancements Objective 1: Promote redevelopment and more sustainable development patterns Objective 2: Enhance mobility in Gwinnett and throughout the region Objective 3: Objective 4: Strengthen arts, cultural, and recreational assets Improve public safety and code enforcement Goal IV: Marketing and Outreach Objective 1: Initiate an external marketing campaign Objective 2: Make Gwinnett attractive and welcoming for young professionals Objective 3: Expand community-building, involvement and outreach Objective 4: Partner with local and regional entities
Implementation Plan Critical to the success of the Strategy Key components: Designation of Lead Community Organizations Program assessments and recommended enhancements Funding allocation recommendations Timetable 1-year and 5-year Priority actions identified to provide early victories Benchmarks and performance measures keep implementation on track; Strategy is a living document Communication strategy Work Groups created: Economic Diversification, Education, Quality of Life and Marketing & Outreach
Partnership Gwinnett - Accomplishments Year One (2007-2008) Partnership Gwinnett was officially formed in 2007. Raised resources to hire a vice president, economic development staff, and officially roll-out Partnership Gwinnett. Mobilized volunteers to support each Goal Area. Chairs were established for the four Action Committees, members of subcommittees were selected, and regular meetings were held.
Partnership Gwinnett - Accomplishments Year Two (2008-2009) Created target sector councils, other subcommittees, and task forces critical to the success of the Strategy. Activities in Goal I significantly increased (60 business expansions that represented 3,300 new jobs), A robust website and promotional materials, and new high quality relationships were established. Enhanced image with regional, state, national, and international partners Launch of hype and participation in Innovation Crescent VISION television Receipt of the 2008 National Award of Excellence from the American Chamber of Commerce Executives Wins: NCR (center of excellence and HQ), AES Clean Technology (biosciences), Suniva (solar panels), Habisit, Yes Video, Hisense USA, and others
Case Studies
Austin, Texas Then Dramatic job loss during high-tech recession Workforce quality at risk Limitations of physical infrastructure Perceived anti-business climate Limited support for small business creation and growth Several assets not leveraged
Austin, Texas Now Opportunity Austin I Capitalize on Existing Strengths Recruit & Target Specific Sectors Entrepreneurship & Small Business Marketing Opportunity Austin II Opportunity Austin II Education and Talent Development Transportation Regional Collaboration
Cabarrus & Rowan County, North Carolina Then Decline of textile and tobacco industry Closure of Pillowtex in 2003 Mill mentality Low educational attainment Other business closures
Cabarrus & Rowan County, North Carolina Now New and different opportunities North Carolina Research Campus Transforming the region Action Plans Cabarrus Regional Chamber Organizational Structure & Board Retreat Entrepreneurship Education and Workforce Development Quality of Life
What are other communities doing? Memphis, Tennessee Nashville, Tennessee Southwest (Lake Charles) Louisiana Tulsa, Oklahoma Montgomery, Alabama
Questions/Comments?
We can t solve problems by using the same kind of thinking we used when we created them. - Albert Einstein Insanity is doing the same thing over and over again and expecting to get different results. -Albert Einstein
Confront the Brutal Facts If it ain t broke, don t fix it is the slogan of the complacent, the arrogant, or the scared. It s an excuse for inaction, a call to non-arms. It s a mindset that assumes (or hopes) that today s realities will continue tomorrow in a tidy, linear, and predictable fashion. Pure fantasy. Colin Powell, Former Secretary of State Excerpt from Leadership
Engage Gwinnett Economic Development in Gwinnett County www.engagegwinnett.com