Clusters, Disasters, and Global Value Chains Lessons in Resilience - Katrina and Beyond David Dodd 17 April 2015

Clusters, Disasters, and Global Value Chains Lessons in Resilience-Katrina and Beyond

David A. Dodd, CEcD/FM DADCO Consulting, Inc.

New Orleans, LA

Some of the places “Preacher Dodd”, aka “Disaster Dodd”, has performed disaster recovery or resilience efforts

TO SCALE Satellite Photo of

Hurricane Katrina as it Entered the Gulf of

Mexico: Diameter =

668 KM

Katrina—2005—Worst Disaster in U.S. History

• Top wind speed: 155mph (category five, highest category) • Official death toll: 1,464 direct, 135 missing, estimated 2,500

secondary deaths directly attributable to the storm • Amount of water estimated in New Orleans flooding: 140

billion gallons; number of houses lost in Louisiana: 204,500 • Estimated financial impact of Katrina alone: $150 billion • Estimated number of Businesses: 80,000; losses: $5 billion • Estimated number of job losses after Katrina: 220,000 • Estimated effect of Katrina on US national economic

growth: 0.75 per cent of GDP in last 4 months of 2005 • Total funds allocated by Congress for Katrina: $62.3 billion • Hurricane Rita, 5 days after Katrina cost another $50 billion • Total Katrina/Rita losses = $200 billion; twice global average

Katrina Economic Recovery Efforts

Multi-Faceted: Business Reinvestment Forum, Small Business Assistance, and Recovery Authority

Businesses: A Triage Approach

Gulf Business Reinvestment Forum

• Held in Washington, D.C.—Leaders from 4 states, Congress, U.S. Cabinet • Six Working Groups, meeting simultaneously, focusing on core economic

development issues: • 1. Infrastructure Development for Business/Industry • 2. Workforce Development • 3. Financial Tools for Both Small and Large Businesses • 4. Image Rebuilding and Crafting the Media Message • 5. Legislative Agenda to Encourage Reinvestment • 6. Coordination and Implementation

• Each Working Group developed Strategies, Goals, and Actions to address their core issue, then presented them for comment and approval

• Report issued 12/05, served as input into the Gulf Opportunity Zone Act

GBRF Generated Significant Attention-But, lower-profile efforts were also underway

• In 2001, New Orleans Adopted Cluster-based Development: • A historic city once known more for commerce than as a

tourist attraction • Population loss, economic stagnation, political corruption • Leadership recognized need for both new industry and

competitive help for existing • Organized eight cluster committees • Brought in consultant to research, activate, and develop

action plans for each • Included technology, marketing, and workforce development

strategies

• Research was conducted to determine concentrations, specializations, and “gaps” in value chains, including global connections in specific industries

• Each of the eight cluster committees chose leadership, drafted action plans • Relationships were build in and between clusters as the process unfolded • Workforce and Technology strategies for needs/opportunities of the clusters • Examples:

• IT: Partnering with Maritime on IT issues, filling gaps • Maritime: Lower MS ports working together for first time in history • Petrochemical: Identified up/downstream, matched plant production • Art/Entertainment: Using web 2.0 to promote New Orleans Music, Culture • Life Sciences: Wet-lab incubator/accelerator, focus on tropical medicine • Food/Coffee: Collaboration to promote LA seafood, attract decaffinator

New Orleans Clusters—Process, Results Pre-Katrina

After Katrina: What Happened • Information Technology and Maritime Clusters

• Met Immediately to work together in restoring communication • Aided Defense Accounting Facility that was flooded and lost all IT • IT and Maritime coordinated in restoring transportation on Mississippi

• Arts/Entertainment Cluster • Immediately produced system to locate stranded/exiled performers • Produced huge relief benefit with A-list film and music stars

• Food Cluster • Collaborated extensively to provide food to victims and aid workers

• Petrochemical Cluster • Provided safety, employee aid, and spare production capacity

After Katrina: What Happened

Many, many mistakes were made on all sides in the aftermath. It was a true disaster in every sense of the word. But it could have been worse “The collaborative spirit generated by the cluster development approach made a difference”.-Barbara Johnson, former CEO of Greater New Orleans, Inc. regional E.D. group

Other Disaster/Cluster Results • Oklahoma

• Known as “Disaster Central” of the U.S.-More than any other state • Tulsa region--Decided to embrace, not avoid, resilience as an economic

development advantage-Tulsa Partners, Rockefeller 100 Resilient Cities • Oklahoma City Region—Developing resilience industry cluster ($75bb/yr)

• State of Yucatan Mexico • International centre for PPP in resilience/recovery projects (UN PPP ICoE) • Hopes to attract engineering, design, development firms in PPP cluster

• Someplace north of here where Preacher began his ministry (??)

• Two-thirds of natural disasters occur in “tropical belt”—why not explore?

• New Orleans is having a remarkable recovery--However, still a long way to go: • New Orleans Population still only approximately 80% of pre-Katrina level Still thousands of abandoned homes and lots in the region PB Oil Spill severely damaged fishing for a second time (SE La Fisheries Cluster—another example of interfirm collaboration in action)

• Resilience is about primarily one thing: Capacity to endure adverse events • Clustering builds capacity • Clustering works in resilience and recovery

• Questions??

Summary