1 “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” NH Economic Indicators – Where to Next? April 17, 2014 Concord Chamber of Commerce Concord, NH Board of Directors William H. Dunlap, Chair David Alukonis Eric Herr Dianne Mercier James Putnam Todd I. Selig Michael Whitney Daniel Wolf Martin L. Gross, Chair Emeritus Directors Emeritus Sheila T. Francoeur Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Kimon S. Zachos

2 Economic Opportunity

3 Past economic growth was driven by high rates of migration Percent Change in NH Population 8.5% 13.8% 21.5% 24.8% 20.5% 11.4% 6.9% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Growth in NH’s population, capital and productive have declined, suggesting that New Hampshire’s economic experience of Tailwinds may have turned into headwinds? Source: New Hampshire Center for Public Policy Studies, analysis of U.S. Census data

4 The Urgency? Strong demographic tailwinds have ended. NH’s economy has fundamentally changed –1990: high tech (2%) and manufacturing (25%) accounted for 27% of NH’s economy –2010: high tech ( 4%) and manufacturing (15%) accounted for 19% of NH’s economy Zero job creation between 2000 and 2010.

5 In this context, where should we invest? Health Care Education/Workforce Natural and Cultural Resources Energy Fiscal Infrastructure Workforce Housing Regulatory Business Growth and Retention

6 Dashboard Development NH Business and Industry Association stakeholder groups identified goals Center developed a series of indicators that track with goals. –Example of a goal: “All New Hampshire residents are among the healthiest in the nation and have lifelong access to a high quality, affordable integrated and preventive health and community support system.” Health Care Expenditures Per Dollar of Gross State Product, 2010 Age Adjusted Mortality Rates, 2011 State-specific Standardized Infection Ratios (SIRs), 2011 Percent Uninsured, 2011 Average Family Premium per Enrolled Employee For Employer- Based Health Insurance, 2011

7 Health Care (Example)

8 Indicators Compared to neighbors and major advanced high tech manufacturing competitor states With whom are we competing?

9 Cultural and Natural Resources State spending on natural resources per person Percent of tree cover in urban areas Domestic tourism spending per capita Creative Economy Jobs Concentration Voter turnout rate Volunteering rate

10 Education, Labor and Workforce Change in population share, 2000 to 2010 Percent of adult population with an associate degree or higher Percent of population in Science and Engineering workforce High school graduation rate Student debt per person Rate at which high school graduates go on to post- secondary institutions Percent of children aged 3 to 4 years old enrolled in preschool

11 Fiscal Policy State Business Climate Tax Index Top Marginal Corporate Tax Rate Public Health, Welfare, Hospital Spending per Person in Poverty State Debt per Dollar of Personal Income Public Government and Administration per Dollar of Personal Income

12 Energy Industrial Electric Prices Natural Gas Prices in Dollars per Million BTUs Energy Consumption Expenditures Per Capita Energy Efficiency Rank

13 How Does NH Rank?

14 NH excels on “current climate” indicators

15 But NH lags on “future climate” indicators

16 State averages hide large regional variation

17 For its size, the Nashua-Manchester Corridor is in the top 10 with fastest growing companies 17

18 At the median …. Merrimack Mirrors the state. AreaMedian Age, 2010 US37.2 NH41.1 Strafford36.9 Hillsborough39.3 Cheshire40.7 Grafton41.2 Merrimack41.4 Rockingham42.2 Sullivan43.9 Belknap44.7 Coos46.4 Carroll48.3 Source: Daniel Lee, Plymouth State University

19 Size of Labor Force Working-Age Population (Age 20-64) Assuming no migration the working- age population in New Hampshire will decline nearly 10% in the state. The northern rural counties will see larger declines. Carroll County sees the biggest declines. % Change US1.0% NH-9.7% Strafford-2.4% Hillsborough-5.5% Cheshire-8.9% Merrimack-10.2% Grafton-11.2% Rockingham-12.3% Sullivan-14.7% Belknap-16.3% Coos-20.0% Carroll-24.4% Source: Daniel Lee, Plymouth State University

20 Skill of the Workforce % of persons 25 years old or over with BA or higher, 2000 Gain in % of persons 25 years old or over with BA or higher, United States24% New Hampshire29% Grafton33% Rockingham32% Hillsborough30% Merrimack29% Cheshire27% Carroll26% Strafford26% Belknap23% Sullivan20% Coos12% United States4.1% New Hampshire4.3% Grafton6.3% Rockingham5.7% Strafford4.8% Hillsborough3.7% Merrimack3.7% Sullivan3.2% Carroll3.1% Belknap2.8% Cheshire2.7% Coos0.9% Source: Daniel Lee, Plymouth State University

21 Capital Stock Growth Grafton ranked the first in the state in the growth of private business investments during Only Grafton exceeded Merrimack. Areas% change, United States29.6% New Hampshire30.0% Grafton54.8% Merrimack38.9% Cheshire37.4% Strafford36.0% Carroll30.5% Rockingham28.2% Sullivan27.3% Belknap25.9% Hillsborough22.8% Coos13.6% Source: Daniel Lee, Plymouth State University

22 Affordable Housing?

23 Job Growth Driven by Health Care

24 Looking forward: The ecology of a successful economy There’s this … Human Capital Financial Capital Economic Creativity Business Base Costs of Business Infrastructure Quality of Life And then … Brad Feld A Strong Pool of Tech Founders Local Capital Killer Events Access to Great Universities Motivated ‘Champions’ Local Press, Organizational Tools Alumni Outreach Wins Recycled Capital Second-Time Entrepreneurs Attractive to Engineers Tent-pole local tech companies 24

25 How does this relate to existing initiatives Many initiatives designed to deal with perceived long term issues. –Governor Hassan: Innovate NH Jobs –Former Governor Lynch: The green launching pad –New use of unemployment funds – train individuals to build new small businesses. –Community College System Hypertherm and Community College collaboration The Advanced Manufacturing Partnership (Albany) –UNH Innovation –UNH, STEM initiatives (NHCF, Business NH coalition) –Granite State Futures – planning generally – housing and transportation. –Stay, Work, Play. Question: Are they working? Is there a problem? –Are conditions getting better/worse? –What about regional approaches

26 What is the goal of economic development? Targeting Industries? State efforts to amplify ‘economic ecology’ development? Retention of existing businesses? Targeted Industry development? What/which tactics are necessary to meet strategic goals? –Enhance human capital? Workforce Development (make your own vs. import) –Workforce housing? How does one align and amplify existing efforts given scarce human and financial resources?

27 New Hampshire Center for Public Policy Studies Want to learn more? Online: nhpolicy.org Facebook: facebook.com/nhpolicy Our blog: policyblognh.org (603) “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” Board of Directors William H. Dunlap, Chair David Alukonis Eric Herr Dianne Mercier James Putnam Todd I. Selig Michael Whitney Daniel Wolf Martin L. Gross, Chair Emeritus Directors Emeritus Sheila T. Francoeur Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Kimon S. Zachos