global cities initiative | salt lake city

GLOBAL CITIES INITIATIVEA J O I N T P R OJ ECT O F B R O O K I N GS A N D J P M O R GA N C H AS E

Salt Lake City, UT - July 22, 2015Metropolitan Policy Programat BROOKINGS

Metropolitan Policy Programat BROOKINGS

The Economy Has Recovered from the Great Recession

Source: Current Employment Statistics.

-10,000,000

-5,000,000

0

5,000,000

2007 2009 2014

Post-Recession U.S. Jobs Gap !Since start of recession

+865,000 jobs

Metropolitan Policy Programat BROOKINGS

-10,000,000

-5,000,000

0

5,000,000

2007 2009 2015

Payroll Count Jobs Gap Growth-Based Jobs Gap

However, We Still Need More Jobs

Source: The Hamilton Project analysis of Congressional Budget Office and Current Employment Statistics data.

3.5 million!missing jobs

Post-Recession U.S. Jobs Gap !Since start of recession

Metropolitan Policy Programat BROOKINGS

-5%

40%

1990 2000 2012

0%

10%

20%

30%

40%

0%

36%

0%

-4%

We Need To Improve Incomes for Families

Change in Output Per Capita and Median Household Income!Since 1990

Source: Current Population Statistics, BLS Consumer Price Index, Census Population Estimates, Moody’s Analytics.

Output per capita: !+$14,589

Median income: !-$2,120

Metropolitan Policy Programat BROOKINGS

These Economic Challenges Vary

Post-Recession Jobs Recovery by Metro Area!Pre-Recession Peak to 2014Q2

RecoveredNot recovered

Denver!+7.0%Salt Lake City!

+6.4%

Portland!+3.5%

Las Vegas!-5.1%

Boise!+2.3%

Phoenix!-2.4%

Colorado Springs!+2.2%

Detroit!-9.0%

Metropolitan Policy Programat BROOKINGS

Change in Employment Ratio of Working-Age Population!2007 to 2013

IncreasedDecreased 0 - 3 pointsDecreased 3 or more points

These Economic Challenges Vary

Phoenix!-3.3%

Portland!-2.3% Boise!

-3.7%

Denver!-1.2%

Las Vegas!-4.3%

Salt Lake City!-1.7%

Colorado Springs!-1.0%

Detroit!+0.4

Meanwhile, Metros in Rocky Mountain Region Lag International Metros

Source: Brookings, Global Metro Monitor, 2015

Growth Rate, 2009-2014!Top 300 Metro Regions

1 Xiamen, China

2 Nanning, China

3 Wuxi, China

4 Kuala Lumpur, Malaysia

5 Xuzhou, China

6 Hangzhou, China

7 Suzhou, China

8 Izmir, Turkey

9 Kunming, China

10 Macau, China

Growth Rank, 2009-2014!Top 300 Metro Regions

65 Austin, Texas

:!:

97 Salt Lake City, Utah

116 Denver, Colorado

159 Phoenix, Arizona

210 Las Vegas, Nevada

CONSUMPTIONCONSUMPTION

CONSUMPTION

CONSUMPTION

CONSUMPTION

DEBT

DEBT

DEBT

DEBTDEBT

CONSUMPTION

DEBTDEBT

DEBT

CONSUMPTIONDEBT

DEBT

DEBTDEBT

CONSUMPTIONDEBT

CONSUMPTION

INVESTMENT

EXPORTS

INFRASTRUCTUREHUMAN CAPITAL

ADVANCED

ENERGY

OPPORTUNITY STEM

R&DMANUFACTURING

EXPORTS

R&D

HUMAN CAPITAL

STEMR&D

We Need New Growth Strategies

Source: Ezell, Stephen and Robert Atkinson, 2012, “Fifty Ways to Leave Your Competitiveness Woes Behind,” ITIF.

Traded Manufacturing Job

=Local Jobs

Traded Sectors Are Key to High Quality Economic Growth

1 2 31 2 3

The Imperative for Global Engagement

Metros Are Centers of Global Trade and Investment

Metros Are Engaging Globally

81%share of global economic growth occurring outside the U.S. 2015-2020

The Bulk of Potential Demand for U.S. Products Comes from Outside of the U.S.

Global Middle Class - 2009 | Share of Global Totals

18%!North America

36%!Europe 28%!

Asia Pacific

Source: Kharas and Gertz, “The New Global Middle Class,” 2010

Global Middle Class - 2030 | Share of Global Totals

7%!North America

14%!Europe 66%!

Asia Pacific

Source: Kharas and Gertz, “The New Global Middle Class,” 2010

We Are Experiencing All-time Highs in Global Trade—And Trade is Still Growing

$7.3

Increase in exports to current FTA partners

since 2009

64 percent

US exports that go to our current

FTA partners

$765.2 billion

$2.3 trillionValue of all US exports in 2013

Metropolitan Policy Programat BROOKINGS

Share of GDP Growth

‘09-‘14

Share of Job Growth

‘09-‘14

Exports Create Jobs, Generate Income, and Support High Wages

Metropolitan Policy Programat BROOKINGS

International Exports’ Economic Impact!

Sources: Moody’s Analytics; Brookings “Export Nation”; J. Bradford Jensen, “Global Trade in Services,” Petersen Institute for International Economics, 2011; David Riker, “Do Jobs in Export Industries Still Pay More?” ITA, 2010.

Manuf. Trade Wage

Premium

Services Trade Wage

PremiumMetropolitan Policy Programat BROOKINGS

Metropolitan Policy Programat BROOKINGS

Share of Output

Share of Jobs

Exports Create Jobs, Generate Income, and Support High Wages

Metropolitan Policy Programat BROOKINGS

International Exports’ Economic Impact!

Brookings Institution, Export Nation 2015Metropolitan Policy Programat BROOKINGS

Share of Output

Share of Jobs

Salt Lake City Region

$98.6 b

Top 100!Metros

Salt Lake!Region

International Trade Share

15.8%11.9%

Total Goods Trade

40th out of top 100 metros

Top Regional Trading Partners

1 Provo-Orem $8.2 b

2 Ogden-Clearfield $6.5 b

3 Los Angeles-Long Beach $5.4 b

4 China $2.7 b

5 Canada $1.9 b

6 Atlanta $1.8 b

7 New York City $1.7 b

8 Phoenix $1.6 b

9 Mexico $1.6 b

10 Japan $1.0 b

Salt Lake City Region Trade Profile

Source: Brookings, Metro Freight (2013) & Global Gateways (2012)

Why Should Firms Export? More Resilience to Domestic Shocks?

U.S. Manufacturing Firms Revenue Growth !2005-2009

Source: U.S. International Trade Commission, 2010, “Small and Medium-Sized Enterprises: Characteristics and Performance,” Washington,

Source: Brookings and The National Center for the Middle Market, “Accelerating Exports in the Middle Market“ 2014

-7%

37%Exporting

Non-exporting

Why Should Firms Export? Stronger Middle Market Performance

Companies reporting revenue increases

Exporting

Non-exporting

76%

64%

Companies that added employees Non-exporting

Exporting 51%

39%

Companies projected revenue growth next year

Exporting

Non-exporting

6.6%

5.2%

The Middle Market is defined as companies with annual revenues between $10 million and $1 billionBrookings, National Association for the Middle Market, “Accelerating Exports in the Middle Market,” 2014

Foreign Direct Investment: Why Does it Matter?

5.6 millionemployees in foreign-owned firms, 2011

Foreign-ownedDomestic

$60,000

$77,000

Average Wages by Ownership2011

Source: Brookings, Bureau of Economic Analysis

FDI Bolsters Exports and Innovation

Source: Brookings, Metro FDI, 2014; Bureau of Economic Analysis

U.S. Manufacturing

Exports

U.S. Manufacturing Employment

2%

20%

Foreign-Owned FirmsGoods-Producing Industries, 2011

U.S. Corporate R&D

U.S. Employment

5%

19%

Foreign-Owned Firms 2011

Growth in Jobs Under Foreign OwnershipAverage year, 1991-2011

45% M&A

34% Expansion

21% Greenfield

FDI Capital Inflows1992-2008

87% M&A13% Greenfield

Source: Brookings, Bureau of Economic Analysis

Mergers and Acquisitions Are the Dominant Form of FDI

Though Volatile, Global Investment Flows Are Growing

FDI Flows (Capital)

Source: UNCTAD

Global$1.3 trillion

U.S.$168 billion

1984 1999 2012

$2 trillion

$1 trillion

The U.S. Is Capturing a Smaller Share of Global Investment

12 percent

26 percent

45 percent

U.S. Share of Global FDI (Capital)

Source: UNCTAD

1984 1999 2012

Advanced Industries

Innovation Human Capital Infrastructure

Pharmaceuticals

Medical EquipmentMotor Vehicles & Parts

Aerospace

Manufacturing35

Software Computer Systems Design

Telecommunications R&D Consulting Services

Services12

Oil & Gas !Extraction

Electricity !Generation

Energy

3

Advanced Industries

Metropolitan Policy Programat BROOKINGS

Advanced Industries Support High Wages

Wages

*Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations. Source:Brookings “Advanced Industries”, Mark Muro

Metropolitan Policy Programat BROOKINGS

$90,000 > $47,000average advanced

industry wageaverage wage

Skills

1 out of 2advanced industry jobs

require less than a 4-year degree

Advanced Industries Drive Value Creation and Productivity Growth

Advanced Industries!Share of U.S. Totals

*Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations. Source: Brookings Institution forthcoming.

Metropolitan Policy Programat BROOKINGS

PatentsGDP R&DJobs Exports

8.9%

17.9%

57.5%

81.2% 90.3%

Advanced Industries Drive Value Creation and Productivity Growth

Advanced Industries!Share of U.S. Totals

*Advanced Industries spend over $450 on R&D per job annually and over 20 percent of jobs are in STEM occupations. Source: Brookings Institution forthcoming.

Metropolitan Policy Programat BROOKINGS

Salt Lake City Region

57.5%

81.2% 90.3%

11.1%16.5%

PatentsGDP R&DJobs Exports

Metropolitan Policy Programat BROOKINGS

Jobs in STEM Fields Are Accessible

Metropolitan Policy Programat BROOKINGS

STEM Jobs as a !Share of All Jobs

Share of STEM Jobs!Requiring 4-Year Degree

Source: Jonathan Rothwell, “The Hidden STEM Economy,” Brookings, 2012

26 millionSTEM Jobs

Metropolitan Policy Programat BROOKINGS

Jobs in STEM Fields Are Accessible

Metropolitan Policy Programat BROOKINGS

STEM Jobs as a !Share of All Jobs

Share of STEM Jobs!Requiring 4-Year Degree

Source: Jonathan Rothwell, “The Hidden STEM Economy,” Brookings, 2012

116,220STEM Jobs

Salt Lake City Region

11.1%Advanced Industry

Employment Intensity

15th out of top 100 metros

Largest Advanced Industries

1 Computer Systems Design 10,320

2 Architecture & Engineering 7,990

3 Medical Equipment and Supplies 7,870

4 Precision Instruments 6,170

5 Management Consulting 4,910

6 Data Processing and Hosting 4,320

7 Medical & Diagnostic Laboratories 3,670

8 Software Products 3,390

9 Misc Manufacturing 3,090

10 R&D Services 2,700

Total Advanced Industry Employment

71,590full time workers

Advanced Industry Output

16.5%of all output in the region

Salt Lake City Region Advanced Industry Profile

Metros are centers of global trade and investment

1 2 31 2 3

Bachelor’s Degrees

74%

92%

PatentsPopulation

66%75%

Graduate Degrees

90%

Advanced Industries

Source: Brookings analysis of US Census Bureau, FAA, BLS, and BEA data

Largest Metros’ Share of U.S. Market Assets

Air Freight

82%

Services Exports

72%

GDP

75%

Metro Areas Hold the Bulk of the Assets That Will Drive Exports

49%54%41%

87%90%89%

Source: Brookings Export Nation 2013, Census

Population GDP Exports

Salt Lake City and Utah’s Other Metropolitan Areas

Metros Have a Critical Role to Play in Exports

Increase export pipeline through proactive outreach in existing networks!!Coordinate federal, state, and local programs on the ground!!Catalyze cultural shift by mainstreaming exports and trade

Metro

State

Federal

Bring credibility of the Governor’s office to global trade!!Establish a state brand platform!!Organize trade missions!!Dedicate resources to global engagement

Open new markets through free trade agreements !Finance exports through Ex-Im and SBA!Provide on-the-ground expertise in U.S. and foreign markets!Produce export data to inform state and regional efforts

1 2 31 2 3

Metros are engaging globally in new ways

METROINNOVATION

38

Organize for Trade

28 U.S. Metro Areas at the Vanguard of Global Engagement

Exports: New Cohort Baltimore!Fresno!Houston!Kansas City!Philadelphia!Salt Lake City!Seattle!St. Louis

Exports: Current Atlanta!Charleston!Chicago!Columbus!Des Moines!Indianapolis!Jacksonville!Louisville-LexingtonLos Angeles!Milwaukee!Mpls-St. Paul!Phoenix!Portland!Sacramento!San Antonio!San Diego!Syracuse!Tampa Bay!Upstate SC!Wichita

Columbus!Mpls-St. Paul!Portland!San Antonio!San Diego!Seattle

FDI Pilot

Each Metro Area Is Leveraging its Unique Specializations and Global Brand

We Build Green Cities

Portland

Health and Wellness

Minneapolis - St. Paul

Life Sciences

San Diego

Services and Canada

Syracuse

41

Organize for Trade Invest in !What Matters

Innovation Human Capital Infrastructure

SUNY Albany!Nanotech Campus

Columbus

Clemson University!International Center for Automotive Research

Innovation Human Capital Infrastructure

Innovation Human Capital Infrastructure

DRIC!Detroit River International Cross

Organize for Trade Invest in !What Matters Network Globally

GLOBAL CITIES ECONOMIC PARTNERSHIP

“The massive changes in the global economy since World War II have had overwhelmingly positive effects.

But globalization hurts some subgroups within some countries, including the advanced economies.”!

!

Michael Spence!Nobel Prize Recipient, 2001!

Distinguished Fellow, Center on Foreign Relations !

GLOBAL CITIES INITIATIVEA J O I N T P R OJ ECT O F B R O O K I N GS A N D J P M O R GA N C H AS E

Salt Lake City, UT - July 22, 2015Metropolitan Policy Programat BROOKINGS

Somehow use this map to show current free trade agreements?