1. Economic Growth and Well-being in the Mountain Empire Bill Shobe Center for Economic & Policy Studies, U.Va. Wise Virginia, February 23, 2013

2. You heard it hear first… Prosperity is not about money.

3. Income Growth in SWVA Source: Bureau of Economic Analysis, Regional Economic Information System

4. Income Growth: Another View Source: Bureau of Economic Analysis, Regional Economic Information System

5. Income Growth: Sources Source: Bureau of Economic Analysis, Regional Economic Information System

6. The Economy is Dynamic Jobs and people move around (a lot).

7. Unemployment Source: Virginia Employment Commission

8. Employment by Sector

9. Population Source: Virginia Employment Commission

10. Development Conundrums Higher productivity labor implies higher potential wages and more opportunities elsewhere Higher wage jobs imply greater productivity, so fewer workers are needed Increased economic activity implies higher costs (price of fixed assets) Entrepreneurship increases with density

11. What Contributes to Prosperity? Human capital Health and education Natural capital Resources Amenities Social capital Entrepreneurship Effective and responsive government

12. The Elephant in the Room Coal has been a great natural advantage for the region But has it also been a curse? Has it limited diversification? Has it reduced the focus on human capital and entrepreneurship?

13. Coal Production

14. Coal and Natural Gas Prices

15. Increasing Prosperity Must address all three stocks of regional capital People Place Institutions Must be based on a realistic assessment of advantages and potentials rather than simplistic comparisons to other places

16. If You Build It… There is a sense in which a region is like a firm: If you provide something people want And do it efficiently And let them know about your product Your prospects are good. BTW: A firm that has to pay people to consume your product, you have some thinking to do.

17. A Land of Natural Advantage There is enormous untapped potential here The way forward is: Grounded in realistic assessment And focused on the elements of prosperity rather than simple money measures of economic activity, which are a consequence of prosperity rather than a cause.

18. Thank you Bill Shobe Center for Economic & Policy Studies Weldon Cooper Center for Public Service University of Virginia shobe@virginia.edu