POWERING AMERICA S AND NEVADA S ADVANCED INDUSTRIES Metropolitan Policy Program at BROOKINGS Las Vegas, October 2014
1 2 3 4 Context What, why Trends Strategy 2
2 3 4 1 Context 3
Real GDP 2005Q1-2014Q2 Index (2005 = 100) - 122,000 Jobs lost in Las Vegas + 46,500 Jobs gained in Las Vegas since Recession US Las Vegas Nevada 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 3rd Las Vegas recession, 3rd worst of all U.S. large metropolitan areas Source: Brookings Analysis of Moody s Analytics
Moving Nevada Forward: A Plan for Excellence in Economic Development 2012-2014 6
Tourism, Gaming, & Entertainment Business IT Ecosystem Aerospace & Defense Manufacturing Clean Energy Logistics & Operations Health & Med Services Mining Agriculture 7
1 3 4 2 What, why 8
Relentless pace of technological change Blurring distinction between manufacturing and services Digitization of everything
Advanced Industries R&D-intensive industries that concentrate the nation s science, technology, engineering, and mathematics (STEM) workforce
Advanced Industries Manufacturing Energy Services 35 3 12 Pharmaceuticals Aerospace Oil & Gas Extraction Telecommunications R&D Consulting Services Motor Vehicles & Parts Medical Equipment Electricity Generation Software Computer Systems Design
Advanced Industries Wages $90,000 average advanced industry wage > $47,000 average wage Skills 1 out of 2 advanced industry jobs require less than a 4-year degree Source: Brookings Analysis of Moody s Analytics and BLS OES Data
Advanced Industries Share of US Totals 79.0% 81.2% 90.0% 57.5% 8.7% 17.9% U.S. Workers U.S. GDP Exports Engineers / Architects Patents Private Sector R&D
Advanced Industries Develop Technology that Transforms Lives Drive Productivity in Other Industries Support Long Supply Chains Stimulate Local Economies
1 2 4 3 Trends 15
300 Advanced Industries Trends Indexed Performance, 1980-2013 (1980 = 100) Advanced Industries Output 200 100 Advanced Industries Employment 1980 2013 Source: Brookings Analysis of Moody s Analytics
110 Advanced Industries Trends Indexed Performance, 2010-2013 (2010 = 100) Advanced industries output Rest of economy output 105 Advanced industries employment Rest of economy employment 100 2010 2013 Source: Brookings Analysis of Moody s Analytics
20% 15% Semiconductor Manufacturing Advanced Industries Real Annual Output Growth, 1980-2013 Communications Equipment Petroleum and Coal Products Metal Ore Mining Software Publishing Medical Diagnostic Labs 10% 5% Commercial and Service Industry Machinery Manufacturing 0% Manufacturing Energy Services Basic Chemicals -5% Annualized Growth in GDP 1980-2013 Annualized Growth in Source: GDP Annualized 1980-2013 Brookings Analysis Growth of in Moody s GDP 1980-2013 Analytics
8% Advanced Industries Annual Employment Growth, 1980-2013 Audio and Video Equipment Manufacturing Computer Systems Design Satellite Telecommunications 4% Pharmaceutical Manufacturing Motor Vehicle Body and Trailer Oil and Gas Extraction 0% Aerospace and Products Manufacturing -4% Manufacturing Energy Services Growth in jobs 1980-2013 Growth in jobs Source: 1980-2013 Brookings Growth Analysis in jobs of Moody s 1980-2013 Analytics
Advanced Industries Share of Total Metro Area Employment in Advanced Industries 2.0 to 5.8 percent 5.8 to 8.3 percent 8.3 to 11.3 percent 11.3 to 16.0 percent 16.0 to 29.9 percent
Advanced Industries Manufacturing Specialized Metro Areas Detroit, MI Motor vehicles Motor vehicle parts Iron & steel mills Boise City, ID Computers and peripherals Semiconductors Commercial & service ind. machinery Palm Bay, FL Audio & video equipment Semiconductors
Advanced Industries Energy Specialized Metro Areas Oklahoma City, OK Oil & gas extraction Electric power generation Salt Lake City, UT Metal ore mining Birmingham, AL Electric power generation
Advanced Industries Services Specialized Metro Areas Boston, MA Software publishing Scientific R&D Web services Denver, CO Satellite telecommunications Cable subscription programming Data processing and hosting Washington, DC Satellite Telecommunications Scientific R&D Mgmt., Scientific, & Tech. Consulting
Advanced Industries Balanced Metro Areas Seattle, WA Aerospace products & parts Software publishing Wireless telecommunications San Jose, CA Computer & peripheral equipment Web services Semiconductors Austin, TX Computer & peripheral equipment Semiconductors Software publishers
Advanced Industries Nevada 61,000 Advanced Industry Jobs $16 billion Advanced Industry Output 10.0% job growth since 2010 15.1% output growth since 2010 Data processing and hosting Top growth industries Pharmaceutical and medicine manufacturing Computer systems design Software publishers Metal ore mining
Advanced Industries Las Vegas 30,800 Advanced Industry Jobs $6.0 billion Advanced Industry Output Stronger image 9.0% job growth since 2010 8.0% output growth since 2010 Data processing and hosting Top growth industries Computer systems design Medical and diagnostic laboratories Other miscellaneous manufacturing Software publishers
Global Challenges Slow Productivity Growth Annual average growth in output per worker (1999-2007) Hungary 12.5% Denmark Sweden Austria Germany 2007 Average United States Belgium 8.0% 7.9% 7.9% 7.8% 7.0% 6.9% 10.5% Spain Italy 5.7% 6.6%
Global Challenges Falling Contribution of AIs to Output Advanced industries share of total GDP (1995-2007) 50% 1995 2007 0% KOR DEU JPN FIN SWE AUT ITA DNK POL BEL USA GBR ESP KOR DEU JPN FIN SWE AUT ITA DNK POL BEL USA GBR ESP
$90,000 $0 -$100,000 -$210,000 Aerospace products and parts manufacturing Global Challenges Negative Trade Balance Trade Surplus / Deficit in Advanced Industries (2012, thousands) Rubber and related products manufacturing Semiconductor manufacturing Computer equipment manufacturing Motor vehicle manufacturing Oil and gas extraction Royalties Management consulting Computer and information services
Global Challenges Deteriorating Innovation Advantage 400 Triadic patents per million workers 2010-2012 average 300 200 100 0 Japan Switzerland Sweden Finland Germany Netherlands United States Denmark Israel Korea France Belgium Austria United Kingdom Luxembourg Ireland Norway Canada Singapore
Global Challenges Skills Share of population 20-34 with a STEM degree Percentage of graduates majoring in STEM fields RANK VALUE RANK VALUE 24 Slovenia 0.86% 30 Norway 22.0% 25 Estonia 0.84% 31 Australia 21.9% 26 Canada 0.82% 32 Poland 21.8% 27 United States 0.77% 33 United States 19.3% 28 Netherlands 0.76% 34 Chile 19.2% 29 Hungary 0.75% 35 Japan 18.7%
Global Challenges Metro Hollowing Out Major metropolitan areas with at least 10 percent of total employment in advanced industries 1980 2013
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Commit to innovation Expand basic and applied research Build research specializations aligned with industry needs Continue pursuit of Tier 1 research status
Develop the STEM pipeline ICON Set a strong vision of STEM s importance Invest in industry aligned regional skills initiatives Address the state s basic proficiency crisis
Embrace the ecosystem ICON Focus on bottom-up regional economic development Aid and abet the emergence of local clusters Create greater networking and collaboration hubs
Contact Mark Muro @MarkMuro1 Co-Director Brookings Mountain West mmuro@brookings.edu 38
Metropolitan Policy Program at BROOKINGS Las Vegas, NV / October 2014