1. The Coastal Index 2015 Tracking the development of the water management cluster in Southeast Louisiana Nihal Shrinath nihals@datacenterresearch.org Allison Plyer allisonp@datacenterresearch.org 2. Dr. George Dr. Allison Plyer Ben The Water Management Economy Source: Greater New Orleans Urban Water Plan 3. The Coastal Index 2015 What are the key demand drivers of the water management economy, and what are their relative sizes? 4. Dr. George Dr. Allison Plyer Ben Demand Drivers of Water Management 4Demand Drivers13 5. Dr. George Dr. Allison Plyer Ben CPRA Demand Drivers15 6. Dr. George Dr. Allison Plyer Ben Between 2007 and 2013, partner-led projects accounted for an average of $209 million annually in total project costs. The rest of master plan projects are led fully by CPRA, with the contracts awarded to companies by CPRA. Source: The Data Center analysis of data gathered from CPRA IDIQ services contracts and LaTrac, CPRA completion reports, cash transfer data gathered by GNO Inc., and internal CPRA project data. Demand Drivers14 7. Source: The Data Center analysis of data gathered from CPRA IDIQ services contracts and LaTrac, CPRA completion reports, cash transfer data gathered by GNO Inc., and internal CPRA project data. Demand Drivers The CPRA awarded $53 million annually in professional services contracts and $94 million annually in construction contracts. 16 8. Source: The Data Center analysis of data from RIBITS, an Army Corps database. Demand Drivers Mitigation banks, which restore wetlands for the sale of future credits to companies that impact wetlands, averaged an estimated $78 million in revenue from credit sales annually, with a major uptick in credits sold from 2013 to 2014. 17 9. The Data Center analysis of data from USASPENDING.gov, a federal contracts database mandated by the Federal Funding Accountability and Transparency Act (FFATA) of 2006 and managed by the Office of Management and Budget (OMB). Demand Drivers The Army Corps, which does coastal protection and urban water management, awarded major construction contracts averaging $453 million annually. Just $24 million in professional services contracts was awarded annually. 19 10. Source: The Data Center analysis of data from Appendix A of the Draft Fiscal Year 2016 CPRA Annual Plan. CPRA projects have benefitted over 18,000 coastal acres since 2010 and over 30,000 coastal acres since 2007. Over three-fourths of this environmental footprint has been within the Southeast Louisiana Super Region. Environmental Footprint 20 11. Source: The Data Center analysis of data from RIBITS, an Army Corps database. Over 20,000 acres of wetlands have been initiated to be restored by mitigation companies since 2010. Coastal acreage is a small share of this total. 21 Environmental Footprint 12. The Coastal Index 2015 How is Southeast Louisiana performing on key economic, social, and political factors shown to affect the formation of new industries? 13. Research Domains 23 14. Industrial Structure Economic Factors Source: Markusen, A. (1996) "Sticky Places in Slippery Space: A Typology of Industrial Districts. 24 15. Economic Factors The water management economy is currently a hybrid of two types of industrial structures, hub- and-spoke and satellite platform. Winners of prime contracts tend to be mid-size local companies or branches of large companies from outside. These primes then subcontract out to an array of mostly small, mostly local firms. Source: Markusen, A. (1996) "Sticky Places in Slippery Space: A Typology of Industrial Districts.24 16. Economic Factors Less than 50 percent of CPRA regular services and construction contracts went to Louisiana firms. The CPRA awards contracts for mostly coastal restoration work. Source: The Data Center analysis of data gathered from CPRA IDIQ Services Contracts Notes: Location of firm was determined by corporate headquarters.25 17. Economic Factors Louisiana firms were less likely to receive contracts for engineering services, environmental science consulting, and geotechnical services, but more likely to win contracts for surveying and professional land services. Source: The Data Center analysis of data gathered from CPRA IDIQ Services Contracts Notes: Location of firm was determined by corporate headquarters.28 18. Economic Factors On average, each prime had six subs, which were mostly local 60 percent were either Louisiana firms or had a majority of employees on the project domiciled in Louisiana. On average, subs were anticipated to receive 45 percent of prime contract dollars. Source: The Data Center analysis of data gathered from CPRA IDIQ Services Contracts 29 19. Economic Factors From 2010 to 2014, over 80 percent of both Army Corps services and construction contracts went to Louisiana firms. The Army Corps awards contracts for mostly coastal protection and urban water management work. Source: The Data Center analysis of data from USASPENDING.gov, a federal contracts database mandated by the Federal Funding Accountability and Transparency Act (FFATA) of 2006 and managed by the Office of Management and Budget (OMB). Notes: Location of firm was specified in the USASPENDING.gov data. 26 20. Growth Economic Factors Source: The Data Center analysis of data from EMSI and Cluster Mapping.34 21. Economic Factors The Super Region grew nearly 14,000 jobs in water management since 2010, keeping pace with most comparison metros. Source: The Data Center analysis of data from EMSI and Cluster Mapping.34 22. Economic Factors The Super Region grew nearly 14,000 jobs in water management since 2010, keeping pace with most comparison metros. Source: The Data Center analysis of data from EMSI and Cluster Mapping. 31 23. Labor Force Quality Economic Factors Source: U.S. Census Bureau, Decennial Census & American Community Survey, 2013. 32 24. Economic Factors Source: U.S. Census Bureau, Decennial Census & American Community Survey, 2013. In the Super Region, only 53 percent of adults 25 years and older have at least some college education compared to 62 percent in comparison metros. Trends indicate a widening gap. 32 25. Economic Factors Louisiana dropped from 38th in the nation in share of science and engineering bachelors students to 45th in the nation between 2001 and 2011. Source: National Science Foundation analysis of data from IPEDS. Note: State ranking is out of the 50 states and the District of Columbia. 33 26. Economic Factors Super Region jobs in the water cluster pay on average $14,000 less in 2014 than in comparison metros. This gap has risen since 2010 despite job and population growth within the Super Region. Source: National Science Foundation analysis of data from IPEDS. Note: State ranking is out of the 50 states and the District of Columbia. 35 27. Innovation Capital Economic Factors Research & DevelopmentPrivate Investment Source: Florida, Richard. 2013. High-Tech Challengers to Silicon Valley, Retrieved from http://www.citylab.com/work/2013/07/per-capita-challengers-silicon-valley/6011/ 28. Economic Factors The Super Region is lacking in investment across four stages of investment: seed, angel, venture, and post-venture. The only stage for which the Super Region ranked 7th or higher among comparison metros was seed funding. Source: The Data Center Analysis of data from Mattermark.36 29. Economic Factors Venture capital investment is similarly anemic compared to other metros, making it that much harder for new firms to emerge, innovate, and create competition. Source: The Data Center Analysis of data from Mattermark.37 30. Economic Factors In Louisiana, academic science and engineering R&D has decreased over the last decade while other states across the US have seen an overall increase. Source: The National Science Foundation analysis of data from NCSES and the BEA. Note: Academic R&D is reported for institutions with over $150,000 in R&D. 38 31. Economic Factors Louisiana businesses have consistently invested in a paltry level 49th or 50th among states of R&D compared to businesses nationwide. Source: The National Science Foundation analysis of data from the Census Bureau Business R&D and Innovation Survey and BEA.39 32. Export Potential Economic FactorsSource: The Data Center analysis of data from USASPENDING.gov, a federal contracts database mandated by the Federal Funding Accountability and Transparency Act (FFATA) of 2006 and managed by the Office of Management and Budget (OMB).40 33. Economic Factors Army Corps contracts for projects outside Louisiana have reached an average of nearly $1 billion annually since 2010. 40 Source: The Data Center analysis of data from USASPENDING.gov, a federal contracts database mandated by the Federal Funding Accountability and Transparency Act (FFATA) of 2006 and managed by the Office of Management and Budget (OMB). 34. Economic Factors Louisiana companies were awarded $13 million in outside Army Corps contracts per year since 2010. Source: The Data Center analysis of data from USASPENDING.gov, a federal contracts database mandated by the Federal Funding Accountability and Transparency Act (FFATA) of 2006 and managed by the Office of Management and Budget (OMB). Notes: This data represents contracts funded by the USACE and includes exclusively civil programming financing.41 35. Economic Factors Louisiana companies averaged more than a million dollars per year for projects performed in Florida, New Jersey, Texas, and Missouri. Source: The Data Center analysis of data from USASPENDING.gov, a federal contracts database mandated by the Federal Funding Accountability and Transparency Act (FFATA) of 2006 and managed by the Office of Management and Budget (OMB). Notes: Total includes states not in the top ten.41 36. Economic Factors Louisianas firms win more Army Corps contract dollars than firms in any other state. However, eight states win a higher share of out-of-state contract dollars, including Illinois with over $300 million in out-of-state contracts annually. Source: The Data Center analysis of data from USASPENDING.gov, a federal contracts database mandated by the Federal Funding Accountability and Transparency Act (FFATA) of 2006 and managed by the Office of Management and Budget (OMB). Notes: Out-of-state contract total pot is total available contract dollars outside of the relevant states pot.43 37. Economic Factors Louisiana firms secured approximately $78 million in Sandy contracts from the State of New York, State of New Jersey, and New York City, in addition to approximately $158 million in federal Sandy contracts. Source: The Data Center analysis of data from the New York Office of the State Comptroller, New York Rising, New Jersey Hurricane Sandy Office of Transparency, and the New York City Sandy Funding Tracker.45 38. Social FactorsSource: The Data Center analysis of data from the Foundation Center. Notes: National Foundations are foundations located outside Louisiana. Philanthropic Support 47 39. Social Factors Just 5.3 percent of total grant-giving by Super Region foundations in 2012 was for environmental causes. In contrast, national foundations gave 7.2 percent of their Super region grants and 7.1 percent of their nationwide grants to environmental causes. Source: The Data Center analysis of data from the Foundation Center. Notes: National Foundations are foundations located outside Louisiana. 47 40. Social Factors Across Louisiana, environmental grant-giving is just $1.79 per capita, 8th among 17 vulnerable coastal states. Yet Louisiana has the most per-capita miles of highly vulnerable coast line among coastal states. Source: The Data Center analysis of data from the Foundation Center, the 2013 American Community Survey, and NOAA. 48 41. Social Capital Social Factors 42. Social Factors The Super Region contains 74 formal environmental organizations, placing it 5th among comparison metros. However, combined annual revenue for these organizations are low (at $53 million), dropping the regions ranking to 7th. Source: The Data Center analysis of data from NCCS, an Urban Institute database of IRS 990 forms and metadata.49 43. Social Leadership Social Factors Source: The Data Center analysis of 990s pulled from NCCS, an Urban Institute database of IRS 990 forms and metadata.50 44. Social Factors Within the Super Region, environmental organizations have no substantial overlap with other areas of the nonprofit sphere. Source: The Data Center analysis of 990s pulled from NCCS, an Urban Institute database of IRS 990 forms and metadata.50 45. Public Funding Political Support Source: Coastal Protection and Restoration Authority, Fiscal Year 2016 Annual Plan, Appendix A. 52 46. Over $6 billion was spent from 2007 to 2014 by the CPRA and partner agencies. Political Support Source: Coastal Protection and Restoration Authority, Fiscal Year 2016 Annual Plan, Appendix A. 52 47. 96 percent of reported spending from 2007 to 2014 was sponsored by various federal programs and agencies. Just 4 percent came from state coffers. Political Support Source: Coastal Protection and Restoration Authority, Fiscal Year 2016 Annual Plan, Appendix A. 55 48. State Subsidies Political Support Source: The Data Center analysis of data from Good Jobs First and Cluster Mapping. Notes: 6-digit NAICS codes were matched to cluster definitions from the U.S. Cluster Mapping Project to calculate cluster totals. Notes: Subsidies/exemptions include those under the following programs: Industrial Tax Exemption, Quality Jobs Program, Enterprise Zone Program, Motion Picture Investor Tax Credit, and Megadeals (deals over $75,000,000). 56 49. Many industries outside of water management received hundreds of millions annually in subsidies and tax exemptions from 2010-2013. Water management companies on the other hand received an average of $6 million annually in subsidies. Political Support 56 Source: The Data Center analysis of data from Good Jobs First and Cluster Mapping. Notes: 6-digit NAICS codes were matched to cluster definitions from the U.S. Cluster Mapping Project to calculate cluster totals. Notes: Subsidies/exemptions include those under the following programs: Industrial Tax Exemption, Quality Jobs Program, Enterprise Zone Program, Motion Picture Investor Tax Credit, and Megadeals (deals over $75,000,000). 50. Dr. George Dr. Allison Plyer Ben Conclusions 1. Southeast Louisianas water management demand drivers representing billions of dollars in investmentinclude public and private stakeholders. 2. The water management cluster is currently a hybrid of hub-and- spoke and satellite platform style districts with a mix of mid- size to large local companies and branches of large companies from outside. 3. Louisiana water management firms compete well locally and are starting to compete outside the state, resulting in thousands of new jobs since 2010. 51. Dr. George Dr. Allison Plyer Ben Conclusions 4. Louisiana firms have room for growth in tapping markets outside the state, with billions of dollars available in water management contracts nationwide. 5. Workforce development initiatives that produce more skilled labor must be scaled up to support the development of Southeast Louisianas water management cluster. 6. Public and private programs are needed to buoy the investment and research & development ecosystems in Southeast Louisiana. 52. Dr. George Dr. Allison Plyer Ben Conclusions 7. Greater philanthropic support for environmental organizations as well as recruiting board members with influence in economic development, education, and employment organizations can help to increase civic clout and foster idea exchange in support of the water management cluster. 8. While there is significant political support for water management in Louisiana, a deficit in sustainable sources of state funding for coastal restoration and protection and a subsidy/exemption system that favors other industries are concerning. 9. The research is clear: it takes time and sustained effort to create a cluster. A water management cluster will not emerge overnight, but the fundamentals for one in Southeast Louisiana are there. 53. Dr. George Dr. Allison Plyer Ben Check out the full report online @ datacenterresearch.org