|Tuesday, April 28, 2015|
|Numbers to Ponder|
Last Saturday I was on a 4-person panel convened by State Senator John Kefalas to talk about the future of the workforce. Since we only had 10 minutes each for comments before the Q&A, I rummaged around in the attic of my brain for things I’ve been thinking about relative to workforce and presented them on one slide like this:
Numbers to Ponder
9th out of 365
250,000 in 2045, 164,825, additional 65,050 jobs
$31,608 vs. $55,628
$38,877 (‘07) $37,732 (‘09) $41,311 (‘12)
66.2% to 62.7%
39% of 16-24 years old, +10% in 14 years
7% (‘95) 15% (‘14) ~20% (‘20)
3 billion vs. 1.2 billion
50 – 60 years, technology revolutions
42% vs 45% vs 72%
0.52% (‘02) to 0.34% (‘12)
Here’s what they mean:
I-25. As in Interstate 25. My point to the group was that the growing congestion on I-25 is shrinking the labor-shed to the detriment of both employers and jobseekers.
9th out of 365. This is how Fort Collins ranks in under-employment. Out of 365 metro areas in the nation, we are 9th in the percentage of our residents that are working at jobs below their education attainment level. In essence, the community isn’t producing enough good-paying jobs.
250,000 in 2045, 164,825, additional 65,050 jobs. The population of Fort Collins will grow to 250,000 by the year 2045. That’s not the goal, but based on demography, it is likely. A city of that size will need a workforce of around 165,000 people. The punch line is that the community will need to add a net of 65,050 more jobs in the next 30 years.
-10-15%. This is the share of jobs the typical community loses every year through the natural creative destructive process of capitalism. Most displaced workers are able to transition into a new role. The point here is to stay focused on the fact that jobs do disappear in the natural course of things and to pay attention to the need to replace them.
$31,608 vs. $55,628. All jobs have intrinsic value but some have more economic value. $31,608 is the average wage of non-primary employer jobs in Fort Collins. $55,628 is the average wage for primary jobs in Fort Collins. Primary employers are companies, large and small, that produce more than they consume locally and sell at least half of it outside the market. Primary jobs drive economic prosperity.
$38,877 (‘07), $37,732 (‘09), $41,311 (‘12). These numbers are the per capita personal income in Larimer County for 2007, 2009 and 2012. You need to look at a variety of numbers to get a good understanding of what is going on in a local economy, but per capita personal income is a good overall indicator. These numbers show the impact of the Great Recession in 2009.
66.2% to 62.7%. The national labor participation rate has declined from 66.2% in March 2006 to 62.7% today. We are at the lowest rate since 1984. This is a disturbing number to me because as job openings have gone up, labor participation has not. It’s an indication that we are incenting people not to work through public support programs.
39% of 16-24 years old, +10% in 14 years. Here’s another disturbing number. 39% of 16-24 year olds don’t want a job. That’s up 10% over the past 14 years. This is an indication of work ethic and motivation. This reflects in lifetime earnings and the quality of entry level skills when this job does eventually make it into the workforce.
7% (‘95), 15% (’14), ~20% (‘20). These numbers represent the growing ‘freelance economy,’ with 7% of people working independently in 1995 growing to 15% by 2014 and estimated to grow to 20% by 2020. Is this by choice or necessity and is it good or bad? My answer to the group was ‘yes’ and ‘yes’. It is both choice and necessity and both good and bad. For the short-term many displaced seasoned workers and new grads have had to make their own way by creating their own job. The big plus in all of this is that a more fluid and flexible way of working has emerged that deploys talent in a timely way to where it’s most needed.
3 billion vs. 1.2 billion. A few years ago Gallup Corporation did a worldwide survey on attitudes regarding work. They found that 3 billion people want good paying jobs (defined as steady work, 30+ hours per week). The rub is that only 1.2 billion such jobs exist. This could be a point of social and political unrest in different countries around the world. The key message for us is that our workers are competing globally and that our primary employers are other communities’ prospects. Staying focused on creating a good business climate and creating jobs should be Job 1 of all local leaders and policymakers.
50 – 60 years, technology revolutions. Every couple of generations we go through massive techno-economic revolutions. While they propel us forward, they are also disruptive. We are in the middle of one of those revolutions and some of the numbers cited above are indicative to the impacts. According to Future Trends, the last 5 techno-economic revolutions include: the Industrial Revolution (1771, started in Britain), the Age of Steam & Rail (1829), the Age of Steel, Electricity, Heavy Engineering (1875), the Age of Oil, Auto, Mass Production (1908) and the Age of Information / Telecommunications (1971). In the middle of these revolutions, old models and processes no longer work very well and begin to change, and there is a glut of capital and surplus of labor. This type of change / disruption is ripe for temporary political ‘solutions’ that become permanent or long standing – minimum wage increases, Lifeline Assistance Program, mortgage assistance programs, expansion of disability insurance, food stamps, health care subsidies, etc.
42% vs. 45% vs. 72%. There is a lot of talk in the country about a ‘skills gap’ between what employers need and what works can do. In some locales that leads to the ironic situation of companies saying they can’t find good workers while the unemployment rate or underemployment rate is higher than average. However, these numbers represent a ‘perception gap.’ Research by McKinsey & Company found that 42% of business executives believe that students are ready for work and students generally agree with that with 45% saying students are ready. The punch line is that 72% of educators think young people are work-ready. This would indicate a need for closer collaboration between business and education providers.
0.52% (‘02) to 0.34% (‘12). But, businesses have some culpability when it comes to the quality of the workforce. These numbers reflect a decline of in-house company training programs. According to Training Magazine, the share of GDP spent on instruction fell from 0.52% in 2000 to 0.34% in 2014.
What’s the story with all of these numbers? The message is that infrastructure (think I-25) impacts labor, be conscious as community leaders about disruptive macro-changes that impact the community and be proactive in doing something to create good paying jobs while not reaching for non-solution solutions. Finally, the working relationships between education providers and business leaders at all levels could be strengthened.
|Tuesday, December 9, 2014|
|Fighting Against Voodoo Economics|
Last Saturday the Fort Collins City Council had a planning retreat. One of the items on the Council’s agenda was discussion about an update to the City’s economic strategy. Let me go to the bottom line first: based on that discussion, it is and will continue to be the official policy of the City of Fort Collins to support a strong local economy through the retention and attraction of primary employers.
Behind that good news, however, is a more nuanced conversation. There are actually a couple of Council Members who don’t want the city government to encourage private sector job creation, especially primary jobs.
Their colleagues on the Council were having none of it. Starting with Mayor Weitkunat, Council Members Gino Campana and Wade Troxell and Mayor Pro Tem Gerry Horak schooled them on the importance of primary employers.
They reminded all of us how important primary employers are to the local economy. The jobs (and the big payrolls) they create allow the retail and service sectors to thrive. Fostering and protecting community income streams – the flow of outside money into Fort Collins – should be the key objective of the City’s economic health strategy. Buzz phrases like ‘steady state economies’ were thrown around as an alternative to focusing on primary employers, but most of the Council understands that it’s a form of voodoo economics with no grounding in the real world.
The short definition is that primary employers are companies that sell most of their product or service outside the local market and bring income into the area. Jobs at these firms on average pay significantly better than those at retail or service companies. And, remember that these companies don’t just hire engineers; they also need truck drivers, receptionists, shipping clerks, janitors, etc.
One positive from this discussion was a reminder that we can’t take for granted that people understand the importance of primary employers. That’s one reason the Chamber created FortCollinsWorks.com. If you’re interested in the topic of economic prosperity and primary employers, I’d suggest you visit the site and look at:
- Page 4 of the document titled “2012 Primary Employment Update.” The report was prepared by Dr. Martin Shields. On Page 4 you’ll find a definition of primary employers and why they are important.
- “Why Focus on Primary Jobs.” This short document explains the economic value of primary or base jobs.
In closing, hats off to the Mayor and Council Members for keeping the City focused on supporting a strong local economy.
|Tuesday, October 22, 2013|
|Strong Economy, Sticking Up for Biz, Widening I-25|
|As a member of the Chamber, you are probably aware of the Moving Fort Collins Forward! campaign now underway. It’s a volunteer-led effort to secure the resources for the Chamber to operate next year and accomplish key things for the community and business community.|
Three strategic initiatives being promoted during the campaign involve promoting the local economy, sticking up for business and supporting infrastructure projects. Here’s a little bit of information about each:
Job Creation Initiative. It’s great to be Fort Collins in terms of quality of life and the overall economy. Even so, we have a few challenges, especially when in comes to keeping up with job creation. We rank 7th in the nation in under-employment. That means many of our residents are working far below their education and skill level. This initiative lays out the business community’s economic vision for the community and specific programs to foster job creation. Read more here.
Stand Up for Business Initiative. In a relatively small place like Fort Collins it is important for the local government and business community to work well together. Mostly, that is the case. However, city government does not understand business. Its actions have a profound, and sometimes negative, impact on business and the business climate. This initiative is about directly, aggressively, persistently sticking up for business. Read more here.
Improved Infrastructure Initiative. How is it getting around town these days? How about the drive to Denver on I-25? In light of recent droughts and wildfires, are you concerned about the region’s water supply? Basic community infrastructure impacts our quality of life, our safety and the local economy. This initiative is about telling that story and lobbying for resources to improve key infrastructure in our region. Read more here.
If you see yourself or your company as a ‘community builder,’ consider supporting one or more of these initiatives. We need the financial support to move the dial on these important issues.
|Tuesday, August 13, 2013|
|Fort Collins: Aspirational City?|
|According to Forbes magazine, the Fort Collins area is one of the best places in America for business and careers.|
The Forbes Best Places for Business and Careers list published in early August ranks the Fort Collins / Loveland metropolitan statistical area, as 7th best in the nation. Factors contributing to the score include ‘Cost of Business,’ ‘Job Growth,’ and ‘Education.’ We rank 78, 19 and 9, respectively, out of 200 cities. Other Colorado cities making the list include Denver (#6), Boulder (#26), Colorado Springs (#44) and Greeley (#51).
Then there is the story on TheDailyBeast.com by Joel Kotkin and Wendell Cox titled Hot U.S. Cities That Offer Both Jobs and Culture Are Mostly Southern and Modest Sized. The Fort Collins area did not make this particular list, which includes, in this order, Austin, New Orleans, Houston, Oklahoma City, Raleigh, Nashville, Richmond VA, Washington DC, San Antonio, Minneapolis-St. Paul, Dallas, Seattle, Salt Lake City, Charlotte NC and Columbus OH.
Kotkin and Cox used 3 broad factors to determine their cities with an emphasis on economics. They include economy (50 percent), quality of life (25 percent) and demographics (25 percent). They write “…we believe aspirational cities reflect a kind of urban arbitrage, where people look for those places that provide not just economic and cultural opportunity but a cost structure that allows them to enjoy their success to the fullest extent.”
What to make of these two lists? Well, let’s begin with what I call the ‘analytical subjectivity’ used to compile most of these kinds of lists. Said another way, the data used and interpreted by the compilers depends on the judgment of the compilers and what they decide to include and how they weight the factors.
We’ll make great use of the Forbes Best Places for Business and Careers ranking to market the community.
However, we won’t dismiss the Hot U.S. Cities list outright because it does place a strong emphasis on economic factors and affordability. Both the economy and affordability have been key messages that the Chamber has shared with city government officials in recent years. Making a great community by spending a lot of money on quality of life amenities is a good investment only if it adds to the community’s economic competitiveness. In part that means remaining affordable to the bright young talent that will drive the success of our primary employers in the years ahead.
|Tuesday, July 30, 2013|
|Chamber Leading Dialogue on Jobs|
Here are some numbers for you to ponder:
- The Fort Collins area is 7th in the nation in under-employment.
- Research has shown that 10 – 15 percent of jobs in a community disappear annually due to the creative destruction process inherent in the free enterprise system.
- 3 billion people around the world want a good-paying job but only 1.2 billion such jobs exist.
- On a list of 18 community issues, the top three most important things to Fort Collins residents according to a recent poll are creating more quality jobs in Fort Collins, improving the quality of public education and attraction of major employers to Fort Collins.
As one of the community’s biggest cheerleaders, I love bragging about the Fort Collins area. Things are certainly going our way on many fronts. That doesn’t mean that we can afford to be complacent, which is the point of the top three numbers listed above. The short version is that we aren’t creating enough good-paying jobs, we have to run fast just to keep up and the competition for our jobs is fierce.
Clearly the residents of Fort Collins understand all that based on their strong support for economic development.
The Chamber is holding a ‘Future of Jobs’ summit tomorrow morning at Hilton Fort Collins to discuss the latest on the economy and efforts to create more jobs. The Coloradoan editorial board wrote about it on Sunday as you can see here and below. We have a lot of work to do on the job creation front, and the Coloradoan is right when they say we can’t rest on our laurels.
I hope to see you there tomorrow.
|Tuesday, July 9, 2013|
|Whatís On Horizon for Local Economy?|
Would you rather be living and working in Fort Collins or Detroit? While the once mighty ‘Motor City’ continues to implode, the gods continue to smile down on the ‘Choice City’ of Fort Collins. Clearly different choices by the communities are leading to different results.
So, what is going on in the greater Fort Collins economy and how do we keep our positive momentum? Are there any dark clouds on the horizon? These and similar topics will be covered at the second annual Future of Jobs summit coming up on the morning of July 31 at Hilton Fort Collins.
It’s a ‘don’t miss’ event for anyone interested in the economic future of the area. To learn more and register for the event go to the Chamber’s home page, www.FortCollinsChamber.com or click here.
|Tuesday, June 25, 2013|
How much control do we have as a community to create a vibrant local economy? As I noted before, there is a long list of issues and trends that can impact us that are beyond our control.
Fortunately, through the deliberate process of economic development, we can do a great deal to influence private sector investment in our area. We outline many of those actions at www.FortCollinsWorks.com.
One of the things we can do in our smart university town is ‘grow our own,’ meaning foster start-up companies. All cities can do this, of course, but we have a strong set of attributes and assets that makes it more likely in a place like Fort Collins.
One of those assets is the Rocky Mountain Innosphere, which is located on Vine Drive. The Innosphere is a business incubator. Its mission is to “accelerate the success of high-impact scientific and technology startup companies and promote the development of a regional entrepreneurial ecosystem in Northern Colorado.” Fancy words for ‘grow our own.’
While challenging to do, the simple concept is to identify promising start-up companies and provide the support they need through their early days. Not all of them make it and not all of the companies that do survive will become the next Apple. However, the support through the Innosphere improves their chances.
At this time, there are 34 companies in the Innosphere.
The Chamber’s Red Carpet Committee just held an event at the Innosphere this morning to honor them as Business of the Month. It was a reminder to me about what a great asset the Innosphere is for Northern Colorado. The Innosphere doesn’t guarantee that we’ll have a vibrant economy in the years ahead but it does let us focus on our own assets and the things we can control.
To learn more about the Rocky Mountain Innosphere go to www.rmi2.org.
|Tuesday, April 9, 2013|
|The Community Money Machine|
Primary employers are a big net benefit to the community. That should be self-evident, but apparently that is not the case based on some of the comments made recently during the City Council deliberations about the so-called ‘incentive package’ to retain Woodward in Fort Collins
To begin, primary employers are companies that produce a product or service in excess of what can be consumed locally. Half or more of that product / service is sold outside the area with the revenue flowing back into and circulating around the community. In short, primary employers are the key to community prosperity.
In the case of Woodward, 85 percent of the $23.5 million ‘incentive package’ is actually paid for by the Woodward expansion itself. Literally, for pennies on the dollar, city government is able to help retain the community’s most prominent private sector employer. And even those pennies spent upfront comeback many times over as the company prospers and grows in the future.
To help people grasp all this, the Chamber has launched Fort Collins Works. To see a short video and read a 1 ½ page brief on the importance of primary (also called ‘base’) employers, go here.
|Tuesday, April 2, 2013|
|Elections Today, Woodward Stays|
I have two topics for you this week.
First, today is Election Day. Hopefully, if you are a resident and registered voter in Fort Collins, you have already sent your mail-in ballot. If not, hand-carry them to one of the three ballot drop-off locations by this evening. Ballots must be in the hands of the City Clerk by 7:00 PM. The locations are:
– Fort Collins City Hall, 300 LaPorte Avenue (open until 7:00 PM)
– Fort Collins Police Services building, 2221 S. Timberline Road (open until 7:00 PM)
– Larimer County Courthouse Offices Building, 200 W. Oak (open until 5:00 PM)
The Chamber has endorsed candidates that it thinks are ethical and will have the best interests of the entire community at heart while supporting policies that foster the creation of good-paying jobs. The Chamber has endorsed:
– Mayor: Karen Weitkunat
– District 1: Butch Stockover
– District 3: Gino Campana
– District 5: Ross Cunniff
# # #
The other topic is Woodward. As you know from the news media and communications from the Chamber, the company was in the process of making a decision about where to site its new $220 million corporate headquarters. Though company leaders looked at numerous locations, Woodward’s first choice was the Link-N-Greens property at the northwest corner of Mulberry and Lemay. Last Tuesday night the City Council voted 6 to 1 to approve a package of tax rebates and fee waivers. Members of the City Council supporting the ordinance were Karen Weitkunat, Gerry Horak, Aislinn Kottwitz, Ben Manvel, Lisa Poppaw and Wade Troxell.
There was strong support from the business community.
City Manager Darin Atteberry, several members of the Council and citizens discussed how epic this decision was for the community. It will have strong positive impacts for decades.
There were a few detractors, of course. One speaker that night said that companies need to ‘pay their fair share’ and the community should not give out ‘corporate welfare.’ I don’t want to dignify that with too much attention other than to say that it reflects a tired and misguided philosophy common with a vocal minority of citizens.
My response is that Woodward has been ‘paying their fair share’ for 57 years. The company’s economic contribution to the community has far, far, far outweighed the ‘cost’ of having them here. And as far as the ‘corporate welfare’ slur, the headline in the paper the next day should have been “Woodward Makes $220 Million Investment in Fort Collins; Might Get $23 Million Back.” The animus of some people toward business is a thing of wonder! Fortunately, a huge majority of Fort Collins residents don’t share this view. (See polling data here on FortCollinsWorks.com)
In the end, after a year-and-a-half, Woodward and the City were able to come to mutually acceptable and beneficial terms. The community will benefit for decades in the future.
|Tuesday, March 26, 2013|
|Decision Time for Woodward|
Fort Collins’s top private sector employer, Woodward, is on the City Council agenda this week. After months of negotiations between Woodward and city government, a proposal is on the table said to be worth $23 million. It will be used to secure the company’s proposed corporate headquarters on the Link-N-Greens property at the northwest corner of Mulberry and Lemay.
This is good news for the community, assuming the City Council adopts the proposal and the company decides to actually move ahead. Council action is scheduled for tonight (Tuesday evening March 26) with Second Reading set for April 2.
Unfortunately, the so-called ‘business assistance plan’ (Shouldn’t it actually be called a ‘community economic investment plan?’) has been characterized in the press as an incentive. I want to take a moment to correct that.
|Tuesday, January 22, 2013|
|Jobs Agenda 2013|
The Fort Collins Area Chamber of Commerce is very focused on creating a climate where businesses can locate here, expand and invest. In the process of doing so, jobs are created for area residents. Chamber leaders are in the revising our ‘jobs agenda’ but following is a preliminary list for your reading pleasure.
Retain Woodward in Fort Collins and help the company expand. As a 57-year business resident of Fort Collins, Woodward has a long track record of being an outstanding corporate neighbor and employer. The company’s decision on where to build its new corporate headquarters complex is equal parts opportunity and peril for the community. Woodward will be presenting its plans for the Link-N-Greens site (northwest corner of Mulberry and Lemay) to the city’s Planning and Zoning Board on February 21. This item is the community’s #1 economic priority for 2013, by far.
Redevelop Foot Hills Mall. Fort Collins is still the retail trade center of Northern Colorado and Southern Wyoming. The decline of the mall over the past decade, however, has eroded that standing. Purchase of the mall in 2012 by Alberta Development was very welcome. The redevelopment plans are exciting and visionary.
Codify reasonable business assistance policies and procedures. Attractive places like Fort Collins do not need to ‘bribe’ businesses to locate in them by lavishing companies with lucrative incentives packages. However, incentives are an indication of a community’s attitude towards business and its willingness to be a good partner. Sometimes they can be a deal maker or breaker. The city government is in the middle of a process to review its incentive policies and procedures. When done, the City should adopt a reasonable policy towards business assistance.
Eliminate the use tax on Fort Collins manufacturers. Few Colorado communities impose a use tax on companies and ever fewer impose it on manufacturers. The fact that Fort Collins does creates a significant barrier to the attraction and expansion of primary employers. Waiving or reimbursing the tax to employers is not a ‘tax giveaway’ or ‘corporate welfare’ as some contend because it is a tax that should not be imposed anyway. Eliminating it removes a large job-killing obstacle and evens the playing field vis-a-vis other communities.
Implement the City of Fort Collins’ new strategic economic plan. Adopted in 2012, the plan is a good roadmap for creating good-paying jobs in Fort Collins. The plan is detailed and multi-faceted, but several of the recommendations should receive priority attention:
- Emphasize entrepreneurship. In particular, the community, especially city government, should continue to support the work of the Rocky Mountain Innosphere.
- Focus on clusters. The City should finish its work to update the cluster study, so that limited community resources can be used to yield the best economic benefit for the community.
Identify the gaps in workforce skills. Good data needs to be gathered on the current workforce’s skills and what employers need then work with the community college, university and others to fill those skills gaps.
|Friday, December 28, 2012|
|2012 is History, 2013 will be Eventful|
Another year has come and gone. Thank you for making 2012 a great one for the Chamber. In a future post I’ll update you on our key accomplishments. The short version is that the community continued to enjoy a strong reputation as a great place to live and the economy continued to strengthen.
The coming year will be interesting and challenging in some ways. In many respects, the uncertain policy and tax environment of 2012 continues into 2013. As I write this Congress and the President are engaged in a titanic political tug-of-war. The question isn’t about whether taxes will go up but rather by how much.
Locally, the first three months of the new year city council politics will be in full swing. Nearly every issue coming before the council will be politicized. Then, due to term limits, a new group will be leading city government for better or worse.
For our part, the Chamber will continue to press ahead with an aggressive ‘jobs agenda.’ Life is good in Fort Collins and the region, for sure, but too many people are unemployed and under-employed. Regardless of what is happening in D.C. and with local politics, staying focused on creating good jobs is a priority.
Happy New Year to you! The team at the Chamber looks forward to working with you to make 2013 a great year for your company and the community.
|Sunday, December 9, 2012|
|Poll: Small Companies Reluctant to Hire|
Many people hoped after the presidential election that the sense of uncertainty gripping the country would decline. That is not the case according to small businesses responding in November to the quarterly Wells Fargo/Gallup Small Business Index survey. Small companies expect to hire fewer people in 2013 than at anytime since November 2008, which was the depth of the recession. You can find the story here in the Financial Times.
|Tuesday, November 13, 2012|
|Fiscal Cliff Primer|
A common phrase in the media at the present time is ‚Äėthe fiscal cliff.‚Äô It refers to a set of tax increases, new taxes and federal budget cuts that in combination threaten to tip an already soft economy into recession.
On tap are five new taxes due to the Affordable Health Care Act (aka ‚ÄėObamacare‚Äô), a possible increase to the estate tax, income tax increases for all taxpayers, a short-term fix on the Alternative Minimum Tax and expiration of the 2 percent payroll tax holiday.
On top of these issues, the federal government is spending money like a drunken sailor. (Apologies if I‚Äôve offended any drunks or sailors by associating them with a fiscally incontinent federal government!) How bad is it? Federal borrowing averages $2.7 BILLION a day meaning a new debt ceiling crisis will come up in early 2013.
The best primer I‚Äôve seen explaining all of this has been produced by the Tax Foundation. You can find it here.
|Tuesday, October 30, 2012|
|Fort Collins Works|
|Monday, October 22, 2012|
|Council Supports Avago 7-0|
Hats off to the Fort Collins City Council for supporting an incentive package for Avago last Tuesday evening by a vote of 7 to 0. The no-growth community was out in force to block the package, which they feared would cause population growth. A strong showing from the business community, however, countered this with a case for the economic benefits to the community. The incentive package was bascally performance-based rebating of the manufacturers' use tax and part of the business personal property tax. Both are barriers to investment. The economic benefits far outweigh the potential taxes.
|Tuesday, September 25, 2012|
|The Economic Anchor of Over-Regulation|
Oppressive government regulations are a very common complaint of Chamber members. I hear it with numbing regularity. In the name of safety or fairness government passes laws and regulations that place enormous burdens on businesses. The business costs of compliance have an aggregate cost to the national economy. On his blog, "Economics One," economist John B. Taylor recently wrote "While correlation does not prove causation, regulations, whatever their benefits, tend to raise the cost of doing business and thus discourage business expansion and economic growth." Taylor contrasts the economic policies enacted during the recessions of 1981-82 and 2007-09. During the former, the number of federal regulators declinesd while the number of regulators has grown dramatically during the latter. The results can be seen with a robust 5.7 percent recovery from the 1980s recession compared to a very anemic 2.2 percent recovery now. Taylor‚Äôs blog post is short and you can find it here.
|What Companies Really Want|
When mid- to large-sized companies are looking to expand, they contract with professionals known as site locators who help them identify communities and sites suitable to meet the companies‚Äô needs. It‚Äôs a sophisticated and number-driven process, but it‚Äôs also about relationships.
To foster more awareness of the Denver Metro area and strengthen relationships, the Denver Metro Economic Development Corporation annually hosts a group of site location professionals. They tour the region, meet civic and business leaders and are briefed on the economic prospects of the Denver area and Colorado. The culminating event is a breakfast at which the site locators shared some of their thoughts. The Northern Colorado Economic Development Corporation was a host of the Metro Denver Site Selection Conference this year, and I was a guest at their table for the breakfast. Eight site locators participated.
Among the trends and observations they shared:
- Less expansion and more consolidation. Companies are looking at their entire facility platform and rationalizing what they have. this is being done in the context of their entire operating footprint. That means that each location is being looked at in the context of the whole.
- There is no such thing as a ‚Äėtop 3 communities‚Äô list for companies. It depends on the industry and is very company specific.
- Ten years ago companies shifted into smaller sized communities, but the trend is the now back to bigger cities due to the size of the available labor market.
- Globalization continues to be a big trend. American towns and cities are competing worldwide for capital investment and workforce requirements are much more sophisticated.
- For many companies, the cost of power is very important.
- In most cases community incentives are not THE deciding factor for where companies locate but they matter at the final point of decision. Access to an airport, community reputation, the quality of the workforce and a pipeline for the future workforce tend to matter more. Also important are tax burden and the ability of a company to get a facility up and running quickly. However, incentives have a big psychological impact. They are a signal of community support and intent.
- Many communities have established ‚Äėdeal closing funds.‚Äô This is cash used to sweeten the deal. Some small Texas communities have as much as $20 million set aside in such funds. The incentives are performance based and have ‚Äėclaw back‚Äô provisions if a company does not meet its end of the arrangement.
As Fort Collins is working with several existing companies that are looking to expand or consolidate, there are some salient points here to keep in mind.
|Wednesday, September 19, 2012|
|A Fracking Good Story|
Until recently, the Sierra Club was in favor of hydraulic fracturing ("fracking") because natural gas reduces carbon emissions. Then it realized that fracking was actually working, and it undermined their agenda of promoting ‚Äėrenewable energy‚Äô such as wind, solar and biofuels.
No wonder they‚Äôre alarmed. If the goal is to promote specific technologies instead of actually improving air quality and reducing carbon emissions, the success of fracking must be an unwelcome development.
Not long ago only 20 percent of America‚Äôs energy came from natural gas. Most came from coal. Now natural gas and coal each provide about 32 percent of the fuel for power generation. Because natural gas produces 45 percent less carbon than coal, America‚Äôs CO2 emissions are the lowest in 20 years.
Natural gas is a great bridge fuel as we transition from traditional fossil fuels to clean and renewable energy. The greater Fort Collins area is a center of research and development for clean and renewable energy technologies. But unless an unexpected technological break-through occurs, that transition will take decades. In the meantime, it happens that Northern Colorado is a major source of natural gas because of the Niobrara shale rock formation.
My point? As you read stories and hear alarming testimony from community activists and environmentalists about fracking think critically about what they are saying and what the real agenda might be. Is it really about protecting the public and environment or are there other agendas at play?
For more, there‚Äôs a great article by Bj√łrn Lomborg titled " A Fracking Good Story " at Project Syndicate.
|Tuesday, September 4, 2012|
|Speaking Up to Keep Woodward|
With a neighborhood meeting on August 20 to discuss the development of the Link N Greens property on the northwest corner of Mulberry and Lemay, it became public that Woodward (www.woodward.com) would like to site their corporate headquarters there.
This is a great and rare opportunity for Fort Collins. Nationally, very few of these kinds of corporate decisions are made on an annual basis. It is not a stretch to say that for a community of the size of Fort Collins these opportunities come along about once in a generation. (Think Woodward 1950s, HP 1970s, Anheuser Busch 1980s)
From what I understand, the company is looking to make a decision this fall and there is at least one other very viable non-Fort Collins site under consideration.
The formal process of rezoning the land begins with a special hearing of the City Planning & Zoning Board on Thursday evening September 13. The meeting will be in the Council Chambers at City Hall, 300 LaPorte Avenue beginning at 6:00 PM.
If you want to show your support for retaining Woodward in Fort Collins, this would be a great time to do so. Simply show up and make a few comments in support of the project. You don‚Äôt need to make a long speech; 15-45 seconds would suffice.
Questions? Feel free to give me a call at 970 482-3751 x 102 or Ann Hutchison at extension 107.
|Tuesday, August 28, 2012|
|Note to City: Keep Companies in Fort Collins|
What role should the community have in retaining primary employers? Should the government have a role in trying to keep such employers and should taxpayer money be used?
These kinds of questions are being raised regularly now in Fort Collins. The ‚ÄėGreat Recession of 2008‚Äô had the effect of making businesses reexamine all of their operating assumptions. That includes reviewing their facilities and the costs of operating them in specific locales.
I personally know of four key, longstanding Fort Collins employers that are looking to expand or that we are at risk of losing due to corporate facility consolidations. The Chamber, the Northern Colorado Economic Development Corporation and the City of Fort Collins are working together to try to keep them here.
Wanting to retain these companies should be a no-brainer, but a few no-growth citizens are worried about the possibility that the city government might offer incentives. Having worked in the chamber / economic development world for three decades, I have seen some states and communities do incentives wrong. But, there is a right way to offer them that is mutually beneficial to the company and the community.
Following is a starter checklist of questions to guide such discussions.
|Tuesday, July 31, 2012|
|Where Will Fort Collins Jobs Come From?|
Where will the jobs come from? As American workers struggle to recover from the Great Recession, they aren‚Äôt alone. According to Gallup polling, the number 1 issue on the minds of people everywhere in the world is a good paying job.
As I mentioned last week, in his recent book, The Coming Jobs War, Gallup Chairman Jim Clifton says that there 3 billion people on the globe looking for a good job and there are only1.2 billion such jobs available. The 1.8 billion jobs shortfall is a ticking time bomb. He contends that creating jobs is Job #1 for all public and community leaders.
In that spirit, the Fort Collins region is focused on creating jobs, which is the topic of a Chamber event on August 9 called "The Future of Jobs." Sessions include: Primary Employer Trends in Larimer County; An Economic Roadmap for the City of Fort Collins; What Kinds of Companies are Looking at Northern Colorado; and How We are Growing Our Own Companies.
If you‚Äôre interested in the economic future of the community, development insights, and career insights, this is a must session to attend.
You can learn more and make reservations here.
|Tuesday, July 24, 2012|
|The Future of Jobs in Fort Collins|
First, a book recommendation: Consider reading The Coming Jobs War by Jim Clifton. The author is the Chairman of Gallup, the international polling firm. His back contention is that the number one issue on the minds of the vast majority of people on the planet is having a good paying job. The rub is that there are 3 billion people wanting those jobs but only 1.2 billion full-time, formal jobs in the world.
|Tuesday, June 19, 2012|
|Colorado #2 in Innovation & Entrepreneurship|
Economic growth and prosperity are driven by innovation. Based on a new report titled "Enterprising States: Policies that Produce," Colorado is one of the top 10 states for entrepreneurship and innovation. Colorado also ranks 8th as a 'future boom state.'
Researchers looked at 33 state performance criteria in the categories of economic performance, exports, innovation and entrepreneurship, taxes and regulations, talent pipeline and infrastructure. Here's how Colorado ranked in some of the areas:
#2 high-tech share of all businesses
#3 business birth rate
#4 entrepreneurial activity
#5 STEM (science, technology, engineering, math) job concentration
#7 median family income
#8 bridge quality
#8 educational attainment
#8 high school advanced placement intensity
#9 short-term job growth
#9 small business survival index
#15 broadband provider availability
#15 road quality
#16 business tax climate
#16 higher-ed degree output
#16 long-term job growth
#18 economic output per job
#19 academic research and development intensity
#24 productivity growth
You can find the full report here.
|Tuesday, May 15, 2012|
|Beer = Economic Prosperity|
"No, Mom, Dad, really. Beer is, like, you know, important and stuff like that. It can be a job." How about this?! The 20-something's dream is real! You really can have your beer and a career, too! According to a study by Colorado State University's Regional Economics Institute, in 2010, local breweries supported 938 direct jobs and accounting for spinoff impacts, Larimer County breweries support a total of $309.9 million in output, 2,488 jobs and $141.9 million ot local payrolls. So, sit back, pop the top on your favorite brewsky, and read all about it right here.
|Monday, May 14, 2012|
|Why the Slow Economic Rebound|
As you know, I've made the point several times on this blog that regulations and economic policy uncertainty dampen economic activity. Economic history says that at this point, after a sharp economic contraction, there should be a very strong recovery underway. So, why isn't that the case? According to two recent studies, the answer is: increased regulations and policy uncertainty.
|Thursday, May 10, 2012|
|The Shrinking Workforce|
In a previous post I mentioned that the unemployment rate would be one of the most politicized numbers of the year because it's a presidential election year. With a lethargic recovery underway, that has certainly been the case. While the official unemployment number continues to drift down towards 8 percent, the real story is the shrinking workforce. For American men, the labor force participation rate is the lowest since this number started being tracked in 1948. You can find a couple of interesting charts and analysis here.
Time will tell what all of this means but having experienced people still young and healthy enough to work drop out of the workforce is not a good thing.
|Friday, April 13, 2012|
|Q2 2012 Confidence Index is Mixed|
The quarterly survey by the Kauffman Foundation and Legal Zoom of startup business owners shows mixed results with most expecting lowered consumer demand over the next 12 months but with employee hiring expected to increase. Find the results here.
|Friday, March 16, 2012|
|7 Steps to Improve U.S. Competitiveness|
On the Harvard Business Review blog Harold Sirkin and Richard Lesser argue that America is ‚Äúpoised for a manufacturing renaissance‚ÄĚ and offer seven recommendations to improve U.S. competitiveness including:
1. Political leaders from both parties should use the bully pulpit to educate the business community and the public on the new math of global manufacturing.
2. The government needs to reform the U.S. tax system, then leave it alone for a while. The U.S. tax code currently is a deterrent to business‚Ä¶
3. Washington needs to get serious about leveling the playing field. While there's always risk of a trade war, all countries need to play by the same rules ‚ÄĒ and government's job is to enforce those rules.
4. The government needs to rethink regulations‚Ä¶ The speed of our regulatory processes must also be addressed; excessive delays encourage shifting investments to other locales.
5. The government needs to focus on talent development to ensure that Americans are prepared for the 21st century workplace. This is an area where we need to think strategically.
6. Washington needs to focus on infrastructure. Every infrastructure problem ‚ÄĒ decaying bridges, congested highways and ports, overcrowded airports and outdated air traffic control systems, weaknesses in the electric grid, and inadequate broadband spectrum ‚ÄĒ costs us dearly.
7. Washington should encourage foreign companies to manufacture in the United States. TheUnited States offers the lowest-cost manufacturing platform in the developed world today.
Their full post can be found here.
|Monday, March 5, 2012|
|Workers in Demand, Skills in Short Supply|
Lots of people are out of work or under-employed, yet, companies are having trouble hiring people. How can that be? The short answer is that the country is part way through a gradual realignment of labor in response to waves of technological innovations. Said another way, technology is outpacing the current skills of many people to do the work employers need done. I hear this frequently from area employers and it's a national problem as shown in this story in the Atlanta Journal Constitution.
In time this situation will correct itself. Employers will pay for the skilled employees they need and education institutions and workers will respond to the demand. In the meantime, we'll continue to see stories like this one.