Stephen McKnightVice President

Community and Market Assessments

www.fourtheconomy.com

Marketing & AttractionTrends, Tools, and Tactics

4 Key Discussion Points:

1. What is Economic Development 2. Product vs. Economic Development Marketing3. Getting to Know the New Customer (Pace of Change and Shifts Occurring)4. New Roles & Tactics

The Fourth Economy

Economic DevelopersHigher Ed

DevelopersNon-Profits

Strategic PlanningImpact StudiesAsset Mapping

Corporate Site Selection

This business of economic development is not getting any easier…

National Issues to be Determined: Global Financial Uncertainty Political Divides Federal Innovation Investment vs. Spending (NIH/NASA/DOD R&D?) Transportation Funding Revenue Generation (Taxes/Incentives/Global Competition)

Create Good Jobs

Family Sustaining Wages

Expand Tax Base

Keep Our Children Local

Land Development

Retention

Creation

Attraction

How Do You Define

Economic Development?

Why Here?

Great Place To Raise A FamilyLow Cost of Living

Live, Work, PlayQuick Commutes

Available Land

Phrase Million Pages

Phrase Million Pages

Business friendly 2.1 Good place to raise a family 1.81

Creative 2.1 Great business climate 1.79

Innovation / innovative 2.02 Beautiful parks 1.75

Natural resources 2 Biotechnology 1.69

Quality of life 1.98 Friendly business climate 1.26

World class technology 1.95 Hip 1.09

Leading research 1.95 Nanotech 0.673

Good or great work ethic 1.84 Most livable 0.638

Great place to raise a family 1.83 World class amenities 0.333

City/County & Economic Development Websites

SO WHAT?

Investment Decision Process: Competition is Fierce, Fluid and

Global…

What Sets You Apart?

SitesBuildings

CommunitiesLifestyle & Incentive Drivers

Regions Within/Across StatesCost & Lifestyle Drivers

State/Multi State LevelLogistic Drivers

Global or National LevelMarket Drivers

So What Do You Need to Know to Compete?

First, things Are Happening Fast

Second, Investment Priorities are Shifting

Raw Material Extractors & Farmers 1700s – 1850s (150 Years)

Industrialists 1850s – 1950s (100 Years)

Advanced Manufacturers 1950s – 1980s (30 Years)

Technology Developers and Communicators 1980s to early 2000s (20 Years)

The Digitals 2010s to 2020s (10 Years)

The Virtuals 2020s + (Every 3 to 5 Years)

The Law of The Fourth Economy

Economic Cycles and Disruptive Events Will Occur Every 3 to 5 Years

Wealth Based Model“Sustainable Wealth and Value”

Job Based Model“Job Creation”

Recognize the Shift

Product DrivenCost SensitiveMarket Driven

“Making the Sneakers”

Knowledge DrivenValue Sensitive

Place Driven

“Designing the Sneakers”

New StrategiesTools

TacticsRequired

Jobs

Products

Sites

Water / Sewer / Roads

Jobs Model

Customers Characteristics in a Jobs Model

Heavy Manufacturing Large, Centrally Located Employment Base People followed Jobs Cost and Wage Sensitive Use of Natural Resources Large Tracts of Land

We know Things Have Changed…

Large Traditional Expansions and Relocations Within the U.S. Are Increasingly Rare and Market Driven

Wealth

Knowledge

TechnologyHuman Capital

Financial Capital

Place

Corporate / Retail / Housing Quality and OptionsTransportation Infrastructure

Community – Civic Spaces“The Built Environment”

Wealth Model

Innovation is a Cornerstone Smaller Sizes – Many Locations – Higher Growth Talent Driven / Attract and Retain Grow by Buying or Joining Other Companies Business Follows the Talent Corporate Image Important Both Rural and Small Urban Settings Serial Reinvestment

Customer Characteristics in a Wealth Model

“Average Space Required Per Person

Down from 250 sq/ft to less than 150 sq/ft”

ULI

Businesses with fewer than 20

employees account for 90 percent of all U.S. firms and are responsible for more

than 97 percent of all new job

SBA

Higro businesses are those that expanded net employment at least twice between 2004 and 2009, with at least one year of expansion over the last two recession years.

Higros accounted for 2,322 of the 757,556 business establishments operating in the state at the end of 2009. Together these higros created a total of 60,850 net new jobs between 2004 and 2009, or an average of 26.2 new jobs each.

The other 755,234 businesses in PA created a total of 100,713 net new jobs over the same period, or an average of just 0.1 jobs each.

Most Job Gains Continue to Come from Smaller Firms

And new changes on the way….

Manufacturing 1850s – 1950s (100 Years)

Advanced Manufacturing 1950s – 1980s (30 Years)

Technology Development 1980s to early 2000s (20 Years)

Digital Generations 2010s to 2020s (10 Years)

The Virtuals 2020s + (Every 5 Years)

BUT – Most Economic Development Marketing Strategies are Stuck Here

Product vs. Economic Development Marketing

Board Education Is Required

I never knew I needed so much crap…

Happy Holidays!!

Product Marketing

Impulse Option – I need That!!Broad Consumer BaseProduct Duplicity is OK

It is Expected to Wear Out (Short-term/Small Investment)Advertising Works – Immediacy

Relatively Quick and Easy Product ChangesCentral Control of Product and Process

(Design/Manufacturing/Distribution)Cost Often Tops Value

Economic Development Marketing

Very Narrow/Specific Consumer BaseBig Investments for the Long Term

Cultural and Community Implications Human Element / Variable Impressions / Tomato Vs.

TomawtoSophisticated Modeling and Research Behind The

Scenes Without Your Awareness or Control of the ProcessYour Product Improvements Are A Long-term Proposition

Value Factors Increasingly Top Cost Factors

Effective Economic Development Marketing Strategies and Services

will…

Help Clients Connect & CollaborateEnhance The Corporate Brand

Attract and Retain TalentAttract Capital

Provide Live-Work-Play SettingsOffer Quality Housing Diversity

Access Knowledge Centers

Stapleton, CO

Southside Works Pittsburgh, PA

Oakland City, CA

Transit Linkages / OptionsGreen Space Development

Housing OptionsRecreation

Education & Training

Land Use PlanningDesign Guidelines

Technology TransferRisk Capital

Knowledge Network Management

Yes, Continue to Market your Sites and Buildings, put a map on our home page, but also take on New Roles as Economic Development Intermediaries

Attract and Sustain InvestmentEffectively Manage Growth

Attract and Grow TalentStrengthen Community Appeal

Community Development

Create Good JobsExpand Tax Base Keep Our Children LocalFamily Sustaining WagesLand Development

Modern Definitions and Goals

Big Picture Take-A-Ways

Recognize Your Customer Identify What Sets you Apart Align Your Assets Make Sure You Can Deliver

Tactical Level Take-A-Ways

Maps on Home Page Clear Contact Information Sites and Buildings Communicate Challenges

Stephen McKnightVice President

Community & Market Assessments

Fourth Economy Consultingsteve.mcknight@fourtheconomy.com

www.fourtheconomy.com

Thank you!