Brookings Metropolitan Policy Program: Global Cities Initiative, Louisville and Lexington

Louisville, KY / June 26, 2014@bruce_katz #globalcities

7.0 millionjobs needed

More Jobs

More Jobs & Better Jobs

81 millionpoor or near poor in 2000

107 millionpoor or near poor in 2011

HUMAN CAPITALINNOVATION

MANUFACTURING

INFRASTRUCTURE

STEM

ADVANCED ENERGY

EXPORTS

R&DOPPORTUNITY

CONSUMPTION

DEBTCONSUMPTION

DEBTDEBTCONSUMPTION

CONSUMPTION DEBTDEBT

CONSUMPTIONDEBT

Pre-Recession Economy Next Economy

The imperative for global engagement

1 2 3

1

2 3

Metros are centers of global trade and investment

1 2 31

2

3

1 2 31 2

3 Metros are engaging globally in new ways

METROINNOVATION

The imperative for global engagement

1 2 3

1

2 3

2013

Global GDP

22.8%US

17.5%BIC Countries

Source: International Monetary Fund, World Economic Outlook Database, April 2013

2018

Global GDP

25.9%BIC Countries

20.6%US

Source: International Monetary Fund, World Economic Outlook Database, April 2013

Global Metro Population

2009

50%

Global Metro Population

2030

60%

Source: UN Department of Economic-Social Affairs, World Urbanization Prospects, 2009

Source: UN Department of Economic-Social Affairs, World Urbanization Prospects, 2011

31%

China Africa

49% 39%

India

Urban Share of Total Population2010

Source: UN Department of Economic-Social Affairs, World Urbanization Prospects, 2011

China Africa India

+297 million by 2030

+227 million by 2030

+343 million by 2030

40%69% 48%

Urban Share of Total Population2030

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

5,600$1 billion increase in exports supports

jobs

11%wage premiumin exporting firms

Greater likelihood of health and retirement benefits in export-intense industries

Sources: ITA, Jobs Supported by Exports 2013; Brookings, ExportNation (2010)

Exports Share of GDP2010

13%

United States

29% 22%

15%

30%

Japan

China Canada India

European Union

15%

Source: Brookings analysis of WTO and EIU data, 2011

Can we get back into the export game?

billionUS manufactured exports 2010

$944

Japan

$680$944

United States GermanyFrance

$409

China

$1477

$1091

Top Manufacturing Exporting CountriesBillions, 2010

Source: World Trade Organization, 2011

$358

ServiceImports

ServiceExports

$518

US Service TradeBillions, 2010

$160 billiontrade surplus

Source: World Trade Organization, 2011 (Data reflect Commercial Services)

U.S. Value Added in U.S. Imports 2009

2%

25%

40%

4%

European Union

Canada MexicoChina

Source: Brookings, Metro North America (2013)

Can we realize the potential of global markets?

Advanced Industries

Innovation Human Capital Infrastructure

Software Computer Systems Design

Telecommunications R&D Consulting Services

Services

Pharmaceuticals AdvancedMachinery

Medical EquipmentMotor Vehicles & Parts

Computer & Electronic Devices

Aerospace

Manufacturing

Advanced Industries

85%advanced industry share of private sector R&D

67%advanced industry share of patents

30%advanced industryshare of engineers

Sources: Brookings analysis of BRDIS, Strumsky-Lobo Patent Database, and OES data

Advanced Industries

Drive Productivity in Other Industries

Stimulate Local Economies

Support LongSupply Chains

Develop Technology that Transforms Lives

Advanced Industries

Advanced Industries

Innovation Human Capital Infrastructure

Japan

3.5% 4.4%

France United States

United Kingdom

3.1%

European Union

5.0%3.8%

Germany South Korea

China

5.5%

10.9%

20.7%

Growth of Domestic R&D ExpendituresAverage Annual Growth, 2001-2011

Source: National Science Foundation, SEI 2014

Innovation

Advanced Industries

Innovation Human Capital Infrastructure

Source: US Census Bureau, 2010 American Community Survey

Hispanics

19%

African Americans

Non-Hispanic Whites

Asians

25%39%

56%

Educational AttainmentAssociate’s Degree or Higher

United States

36%

Human Capital

Source: US Census Bureau, 2010 American Community Survey

Hispanics

19%

African Americans

25%

Educational AttainmentAssociate’s Degree or Higher

Human Capital

Advanced Industries

Innovation Human Capital Infrastructure

Infrastructure

Transport Networks are Clogged and Congested

Metros are centers of global trade and investment

1 2 31

2

3

Source: Brookings analysis of US Bureau of Economic Analysis data

Louisville/Jefferson County Metropolitan AreaLexington-Fayette Metropolitan Area

Source: Brookings, Metropolitan Areas and the Next Economy (2011)

Population

43%

GDP

34%

Kentucky

Louisville/Jefferson County Metropolitan AreaLexington-Fayette Metropolitan Area

Source: Brookings, Metropolitan Areas and the Next Economy (2011)

Population

68%

GDP

57%

Kentucky

Service Exports

75%62%

Manufacturing Exports

Population

66%

Top 100 Metro ExportsShare of U.S. Totals

Source: Brookings, ExportNation 2013

Top 100 Metro Exports

Chemical Products

68% 76%

Business/Professional

Services

Computer/Electronic Products

78%

Population

66%

Share of U.S. Totals

Source: Brookings, ExportNation 2012

Top 100 Metro International Connectivity

Air Cargo

83% 83%

Water Cargo Air Passengers

96%

Population

66%

Share of U.S. Totals

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

Aerial imagery: © DigitalGlobe, GeoEye, Sanborn, USGS, USDA FSA, warrior481.blogspot.comPhotos: Freescale Semiconductor, Honeywell Aerospace, Arizona State University

Aerial imagery: © DigitalGlobe, GeoEye, Sanborn, USGS, USDA FSA, warrior481.blogspot.comPhotos: Freescale Semiconductor, Honeywell Aerospace, Arizona State University

Louisville and Lexington, KY - Human Capital & Innovation Dashboard

STEM JobsLouisville Metro

19.5%Share of Jobs in STEM

58th of Top 100 Metros

57.5%STEM Jobs Not Requiring BA

25th of Top 100 Metros

Source: Brookings, State of Metropolitan America (2010), Hidden STEM Economy (2013) and Patenting Prosperity (2013)

Education

Top 100Metros

LouisvilleMetro

Bachelor’s Degree Attainment

32%25%

LexingtonMetro

34%

Patents

162Average Annual Patents,

2007-2011

Louisville,87th of 358 Metros

0.3Patents per 1k Workers

Louisville,210th of 358 Metros

Top Patenting EntitiesLexmark International

General ElectricUniversity of KentuckyUniversity of Louisville

Sud-Chemie

Lexington,75th of 358 Metros

209

Lexington,80th of 358 Metros

0.8

$8.75 b

Top 100Metros

LouisvilleMetro

Export Intensity

12.7%15.0%

Export Value Goods & Services Exports

19.3%services share of exports

80.7%goods share

of exports

Top Sectors - LouisvilleTop Sectors - Louisville

Motor Vehicles 19%

Motor Vehicle Parts 10%

Household Appliances 5.1%

Top Sectors - LexingtonTop Sectors - Lexington

Motor Vehicles 25%

Motor Vehicle Parts 15%

Petroleum and CoalProducts 4.8%

Source: Brookings, ExportNation 2013

Louisville and Lexington KY - Export Dashboard

44th of 366 Metros

LexingtonMetro

18.8%

$4.38 b79th of 366 Metros

Louisville, KY

Lexington, KY

Louisville and Lexington, KY - North America Supply Chain

Source: Brookings, Metro North America (2013)

Motor VehiclesGoods Trade

Between Louisville and North American neighbor

metros

PueblaMexico City

TorontoKitchener

London

Monterrey

Louisville/Lexington

$123.8 b

Top 100Metros

LouisvilleMetro

International Trade Share

15.8% 12.7%

Total Goods Trade

Goods Trade Air Travel

International Passengers

51st of Top 90 Metros34th of Top 100 Metros220,954

Top Metros of Origin/DestinationTop Metros of Origin/DestinationTop Metros of Origin/Destination1 Cancun, Mexico 7.7%2 London, United Kingdom 4.6%3 Toronto, Canada 4.0%4 Montego Bay, Jamaica 3.9%5 Frankfurt, Germany 2.5%6 Nassau, Bahamas 2.1%7 Montreal, Canada 2.0%8 Freeport, Bahamas 1.9%

Top Global Country/Region Trading Partners

Top Global Country/Region Trading Partners

Top Global Country/Region Trading Partners

1 Canada $3.3 b2 China $2.3 b3 Mexico $2.1 b4 Japan $1.4 b5 Germany $.8 b6 Korea $.5 b7 United Kingdom $.4 b8 Rest of S.E. Asia $.4 b

Louisville, KY - Freight & Air Dashboard

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

1 2 31 2

3 Metros are engaging globally in new ways

METROINNOVATION

Organize for Trade

Market AssessmentTarget Sectors

8% 9%12%

Economic Profile15%

12%

13%

9%

Establish Goals & Strategies

Boost SME exportsIncrease global fluency

Double exports Support key sectors

Government

Philanthropy

Firms

Universities

Collaborate to Compete

Organize for Trade Invest in What Matters

Innovation Human Capital Infrastructure

SUNY AlbanyNanotech Campus

Columbus

Innovation Human Capital Infrastructure

Innovation Human Capital Infrastructure

Organize for Trade Invest in What Matters Network Globally

Chicago

Mexico City2nd largestMexican immigrant population resides in Chicago metro area

130Chicago-based firms with operations in Mexico City

$1.7 billiontotal bilateral trade of locally produced products

290,000tourists and business travelers between Chicago and Mexico City per year

GLOBAL CITIES ECONOMIC PARTNERSHIP

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Louisville, KY / June 26, 2014@bruce_katz #globalcities