Leadership Denver….ED 101 What you will learn in this session…
How to explain economic development to your friends AND be the center of attention at all your parties
Good News Everywhere • #1 Economy in the nation • # 2 Most highly educated state • #1 Lowest obesity rate in nation • #3 State economy • #1 Physical activity • #1 Best place for business and careers • #1 City and region for job growth • Top 10 cities for population growth - Denver
Employment growth varies across the state Source: U.S. Bureau of Labor Statistics.
Metro Denver has highest median household income Area (Median HH Income) Source: U.S. Census Bureau, American Community Survey 2013.
Migration of people U.S. migration vector from East to West remains unchanged. Colorado now “first choice” New vector from Latin America of 25-34 year old migrants
Population Growth
Northwest Northeast Projected Annual Projected Annual Avg. Population Avg. Population Growth by 2035: Growth by 2035: 1.0% 2.6% Southeast Southwest Projected Annual Avg. Population Projected Annual Growth by 2035: Avg. Population 1.7% Growth by 2035: 1.1%
Metro Denver Annual l Change i Source: Colorado Division of Local Government, State Demography Office.
Job Growth
North east North west Projected Annual Avg. Projected Annual Avg. Employment Growth Employment Growth by 2035: by 2035: 1.3% 1.9% South South west east Projected Annual Avg. Projected Annual Avg. Employment Growth Employment Growth by 2035: by 2035: 1.2% 2.0%
ED = IFR I Follow Resources I Follow Rivers I Follow Railroads I Follow Roads Instrument Flight Rules Information Fiber Routes International Flying Routes I Follow readin’, ‘ritin’, and ‘rithmetic. I Follow roof tops I Follow rich people
The Basics The purpose of economic development is to give greater numbers of people greater access to wealth. To do so, your job is to increase “income” coming into your market. • There are Two Types of Income • Export income • Primary income
Export Income Export income occurs when a market produces more goods and services than can be absorbed by the local marketplace. Products and services are “exported” to other markets in exchange for cash.
Primary Income Message (ads) Primary income results from people, usually tourists, who come to the local marketplace to visit an “attraction.” Advertising is the usual means to inform tourists of the attractions. Ski resorts, sports teams, arts and culture are typical destinations for primary income producers.
Jobs that generate “primary” or “export” income are called “Primary Jobs.” Primary jobs are the principle focus of economic development and are the platinum standard in our profession. That’s why we chase them and why they’re so expensive to get. Primary jobs create new wealth in a community and replace dollars that flow out to other markets for services not available in the local market. Primary jobs can be found in “clusters” or not
“Spin - off” or Support Service Jobs • Each primary job creates a demand for services provided by other workers in the local market. • These spin-off jobs either support or provide needed inputs into primary jobs. • They do not create new wealth. They exist because of the primary or export income already circulating in the local economy.
The “multiplier” effect Is a way to express the number of spin-off jobs generated in support of a primary job. Some primary jobs have greater multipliers than others. This depends on two things: The number of inputs required to make the product, and The magnitude of the wages paid for the primary job. Typical Metro Denver multiplier: 2.0 – 2.6 Guided missiles = 3.0+ Retail trade = .3 - .6
Economic Impact and Economic Activity Commonly confused and can lead to really bad public policy decisions Example: Colorado Rockies baseball generates approximately $100 million in revenue from tickets alone. What is the economic impact of Rockies’ ticket revenues on Metro Denver? Well……………..it certainly is $100 million in economic activity , but how can you tell what’s the economic impact? What data is missing here?
Economic Drivers: Innovation Clusters in the Metro Region
Seein ing Ourselv lves as Oth thers See Us Th The Power of f Regionali lism • The economic powerhouses in the world are no longer countries, but the metropolitan regions within them. • The Top 100 metropolitan areas sit on only 12 percent of the U.S. land mass but are home to two-thirds of our population and generate 75 percent of the U.S. GDP • Metro Denver was among the first regions in the country to see, think and act regionally. • Pena’s “Water Card” • DIA • Metro Denver Network • SCFD • Stadiums • FasTracks • Lowry
What is a “Cluster”? • Cluster should not be confused with the vernacular, which we now call a “Monkey Wedding.” • “Cluster” is a grouping of employers who congregate in a market for mutual support, trade, work force skills or available resources
Metro Denver Industry Clusters Growth over Six Years 2005 - 2010 5.0 Nine-County Location Quotient Relative to U.S. (Avg.=1.0) 4.5 Aerospace 4.0 3.5 3.0 Telecom 2.5 Cleantech 2.0 Medical IT/Software Devices Investment Banking/Finance 1.5 Aviation Insurance Fossil Fuels 1.0 Pharma 0.5 0.0 -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% Total Employment Growth (2005-2010)
Metro Denver Industry Clusters 2012-2013 5.0 Aerospace Nine-County Location Quotient Relative to U.S. (Avg.=1.0) 4.5 4.0 3.5 T elecom 3.0 2.5 Medical I T/Software Devices 2.0 Banking/Finance C leantech Investments A viation Fossil Fuels 1.5 I nsurance 1.0 Healthcare & Pharma Wellness 0.5 0.0 -0.5% 0.5% 1.5% 2.5% 3.5% 4.5% 5.5% 6.5% One-Year Direct Employment Growth (2012-2013)
2014 - 2015
Why Companies Locate 60 minutes from Broadband international airport Quality of life issues Proximity to markets Cost of doing Labor business skills/availability Strong and stable Tax and regulatory political leadership Close to major Incentives universities New or planned infrastructure
Rate Metro Denver 60 minutes from international airport Proximity of markets Labor skills/availability Tax and regulatory environment Close to major universities Broadband availability Quality of life issues Cost of doing business Strong/stable political leadership Incentives New or planned infrastructure
“Every city gets to make “century” decisions. In all of these there is only one common element – the business community brings ‘continuity’.” Bruce Rockwell
The Century Decisions Prior to 1980 Denver Pacific Railroad to Cheyenne, Wyoming The water decisions of the 19 th & 20 th centuries The Moffat Tunnel The City Beautiful Movement Stapleton The Valley Highway Lowry and Fitzsimons purchases
City and County Building 1934 -2006
1930’s – A New “Port” Stapleton Airport opens as Mayor Ben Stapleton sees the opportunity of commercial air service
“The man who insists upon seeing with perfect clearness before he decides, never decides.” Frederic Amiel
A culture of collaboration • Putting an end to years of suspicion, prairie wars and ill will following the Oil Bust of 1983. • Scientific and Cultural Facilities District (arts and culture) • Metro Denver Network (economic development) • Stadium District • Metro Mayors Caucus (regional policy – transportation, housing, infrastructure projects) • DIA – sort of, but “regionalism” brings home a new, better opportunity • FasTracks
Regionalism becomes our trademark • National media, syndicated columnists, Brookings Institute, Governing Magazine, Fortune, Forbes, WSJ, London Times, New York Times, Boston Globe, LA Times….. “Denver’s collaboration results in stronger, more diversified economy.” • Compare to 1984 headline in Forbes: The Denver Economy: You Can’t fall off the floor.”
A $1.04 billion gift for collaboration • Gold Line, Westminster Line and DIA Line receive massive infusion for construction of three transit lines. • Secretary of Transportation Ray LaHood, when presenting check to RTD said, “I can say this without a single contradiction of all the 200+ metro areas I’ve visited as USDOT Secretary, ‘there is no more collaborative metropolitan area in the nation, than Denver.”
The Century Decisions since 1990 Mountain Backdrop The 470s DIA Lower Downtown Fitzsimons and Lowry T-REX and FasTracks
DIA
The 21 st Century Decisions
• FasTracks and Union Station • Doubling the Airport for 100 million passengers • Fixing I-70, east, west and thru town
Partial Cover Lowered Option Remove viaduct between Brighton and Colorado Blvd. and put I-70 below ground Cover highway near Swansea Elementary Keep Purina Plant and Swansea Elementary Greater cost and ROW impacts
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