1. Robert Weissbourd, RW Ventures, LLC Cities Charting New Directions: Metropolitan Business Planning City Reformers Group Workshop March 22, 2011 City Reformers Group Workshop March 22, 2011

2. Metropolitan Business Plans: A New Way of Doing Business  Grounded in Economics and Business: comprehensive, integrated growth strategies based on unique regional strengths  Gets the Job Done: not just a plan; cross-sector institutional capacity critical to regional performance  Continuous implementation, monitoring, adaptation and further strategy development Demonstrate better ways to invest in metros to strengthen national economy; develop new federal policies and programs. Source: Brookings Institution

3. Service Exports 75% U.S. Air Cargo Weight 79% Airline Boardings 92% Population 66% Graduate Degrees 75% Venture Capital Funding 94% Patents 78% Wind + Solar Energy Employment 76% Top 100 Metros Share of U.S. Total Sources: Brookings analysis of US Census Bureau, FAA, BLS, NIH, NSF, and BEA data; Brookings, ExportNation, 2010 (2008 data); Forthcoming research from Brookings and Battelle Gross Product 73% Why Metros? Source: Brookings Institution

4. What is it About Place that Affects Economic Performance? Urbanization and Localization Economies: general and industry-specific benefits of concentration as workers and firms co-locate; spillovers, synergies, shared labor and job pools, linkages among firms generate increased efficiency and productivity through flow of ideas and technologies, enhancements to human capital, economies of scale, reduced transaction and transport costs. (Marshall, Krugman) New Growth Theory: location is becoming more important, and with different benefits, in the knowledge economy, as metros increasingly become centers of idea creation and transmission (through technology, human capital externalities, intellectual spillovers). Increasing returns to knowledge and imperfect competition lead to metro specialization and divergence. (Romer, Lucas) Institutional Economics: growth, and particularly innovation, take place in the context of an institutional infrastructure – research, professional and learning networks; universities and civic/business organizations; quasi- and governmental organizations and regulation – which can hamper or accelerate all of the other benefits of concentration. (Coase, Atkinson) “Cities exist to eliminate transport costs for people, goods and ideas” – Ed Glaeser The Major Systems that Drive Efficiency and Productivity Operate at a Metro Level

5. Customize. Regional Economies are differentiated, complex and dynamic Influencing Metro Economies Develop Institutional Capacity and Intentionality. Growing metro economies entails continuously integrated, grounded and deliberate activity Act Comprehensively -- The Whole is Greater than the Sum of the Parts. Increasing productivity and efficiency requires influencing how the pieces fit together – the interactions and synergies between economic activities Key Question: What are the leverage points to improve system performance? Key Question: What are the leverage points to improve system performance?

6. Enhance Regional Concentrations Deploy Human Capital Aligned with Job Pools Increase Spatial Efficiency Create Effective Public & Civic Culture & Institutions Create Effective Public & Civic Culture & Institutions Develop Innovation- Enabling Infrastructure Leverage Points

7. Enhance Regional Concentrations: Industries, Occupations and Functions Cluster Map Source: Bo Heiden, Strategic Uses of the Global Patent System

8. Deploy High Levels of Human Capital Aligned with Job Pools

9. Develop Innovation- Enabling Infrastructure Innovation Ecosystem Market Research Market Research Marketing Manufac- turing Manufac- turing Finance R&D Suppliers External Consultants Research Partners Academics Customers Consumers Image based on material from Land O’ Lakes Inc.

10. Housing Costs as Percent of Income Housing + Transportation Costs as Percent of Income Increase Spatial Efficiency Source: Center for Neighborhood Technology

11. Create Effective Public & Civic Culture & Institutions Source: Newsweek, Manyika, Lund and Auguste, “From the Ashes,” 8.16.2010

12. Global, Knowledge Economy Specialization and Dynamism Build on Your Assets Coordinated, Cross- Sectoral, Flexible, Adaptive, Open, Information-Rich, Inclusive, Entrepreneurial Compete on Value-Added (not low-cost) Compete on Value-Added (not low-cost) Intentionality Governance in the Next Economy

13. Why “Metropolitan Business Planning”? The steps to analyzing and improving a regional economy lend themselves to the proven discipline of business planning. ECONOMIC GROWTH PLANNINGTRADITIONAL BUSINESS PLANNING Vision for the Regional EconomyBusiness Mission & Vision Status of Economy: Assets, Opportunities, Challenges Market Analysis Goal-Setting & Strategy IdentificationAnalysis of Strategic Alternatives & Risks Identification of Policies, Programs, Products & Interventions Development of Products & Services Operational Planning for ImplementationOperational & Management Planning Identification of Funding Needs and Sources Forecasting & Financial Planning Definition of Outcome Measures & TargetsTarget-Setting & Performance Tracking Source: Brookings Institution

14. Metro Development Baseline/Overview (MDBO) Mission/Vision: MSP as a flexible, adaptable, dynamic region home to a business environment in which Fortune 500 companies and entrepreneurs alike can thrive. ↓ Market Analysis: Strong, diverse clusters, but minimal strategic support; highly educated workforce, but flagging talent attraction; robust university & corporate R&D environment, but limited commercialization; culture of civic engagement, but fragmented & uncoordinated efforts; ample regional data, but dispersed in multiple locations ↓ Goals: Highly networked cluster firms & institutions; workforce skills matched to emerging, in-demand jobs; enhanced levels of innovation & entrepreneurship; reduced congestion & spatial mismatch; dynamic public, civic & non-profit institutions; more & better information for private-sector decision making ↓ Strategies: MSP Regional Cluster Initiative; Regional Economic Development Partnership; Thinc.Green; Corridors of Opportunity; Entrepreneurship Accelerator. ↓ Detailed Development Initiative (DDI): Entrepreneurship Accelerator Intervention: Accelerate growth of innovative early- stage businesses & ideas into venture- ready companies by providing continuum of resources to entrepreneurs & community ↓ Operational Plan: Mentorship/advice (EIRs); technical support; capital; information-sharing ↓ Financial Sources & Uses (3 yrs): $12-14MM public & philanthropic funds; 14 direct investments ↓ Metrics: # companies advised; companies’ achievement of business plan milestones; companies’ ability to attract follow-on investments; EA funds raised, etc. Business Plan Components Metropolitan Investment Prospectus

15. Northeast Ohio Minneapolis-St. Paul Puget Sound Source: Brookings Institution Pilot Metro Business Planning Regions

16. Affordable Housing HUD Section 8 Workforce Training Small Business Assistance Upgrading Roads and Rail Export Strategy Dept. of Labor Workforce Inv. Act Dept of Commerce Int’l. Trade Admin. Dept. of Transpo. SAFETEA-LU Programs Small Business Admin. Loans A New Economic Federalism Develop Innovation- Enabling Infrastructure Create Effective Public & Civic Culture & Institutions Create Effective Public & Civic Culture & Institutions Deploy Human Capital Aligned with Job Pools Enhance Regional Concentrations Increase Spatial Efficiency Comprehensive Metropolitan Strategy

17.  Cross-Agency Regional Teams  Pooled and Flexible Funding  Support for Regional Capacity Building  “New Federalism” Partnership HUD Section 8 Dept. of Labor Workforce Inv. Act Dept of Commerce Int’l. Trade Admin. Dept. of Transpo. SAFETEA-LU Programs Small Business Admin. Loans A New Economic Federalism Integrated Federal Investment White House Office of Urban Affairs HUD Section 8 Dept. of Labor Workforce Inv. Act Small Business Administration Loans Department of Transportation SAFETEA-LU Programs Department of Commerce International Trade Administration Develop Innovation- Enabling Infrastructure Create Effective Public & Civic Culture & Institutions Create Effective Public & Civic Culture & Institutions Deploy Human Capital Aligned with Job Pools Enhance Regional Concentrations Increase Spatial Efficiency Comprehensive Metropolitan Strategy

18. Cities Charting New Directions: Metropolitan Business Planning Robert WeissbourdRobert Weissbourd City Reformers Group Workshop March 22, 2011 City Reformers Group Workshop March 22, 2011 DISCUSSIONDISCUSSION