With the economy still reeling from the effects of the recession, metropolitan areas have become increasingly willing to explore new approaches to economic development. Moving away from traditional one-size-fits-all approaches that emphasized Starbucks, stadium-building, and stealing businesses, metro leaders are instead crafting metropolitan business plans that grow jobs from within, building on their distinct market advantages.

By partnering with private industry, nonprofit intermediaries, universities, civic leaders, research institutions, and other interested parties, regional public sector leaders are working to strengthen their economies by focusing on those industries with the greatest potential for future growth.

For some regions, these efforts have involved helping existing firms make the transition to emerging industries. Northeast Ohio’s long struggle with post-deindustrialization was made worse by the Great Recession and the collapse of the auto sector and the foreclosure crisis.

In response, regional leaders came together to launch PRISM, the Partnership for Regional Innovation Services to Manufacturers initiative. The goal of PRISM is to help small and medium-sized manufacturers in old commodities industries, like steel and automotive, reinvent their products and business models to take advantage of growth opportunities in emerging markets like bio-science, health care and clean energy.

Led by the Manufacturing Advocacy and Growth Network (MAGNET), a regional intermediary organization, PRISM brings together higher education institutions, regional economic development organizations, and Ohio’s Edison Technology Centers to provide market research and business consulting services, increase firms’ access to capital and talent, and foster stronger relationships within growing industry clusters. [Full disclosure: The Brookings-Rockefeller Project on State and Metropolitan Innovation provided initial advisory support to PRISM.]

“Through PRISM, we hope to demonstrate that a growing manufacturing sector is not only possible, but desirable for the region,” says MAGNET president and CEO Daniel Berry. “Reclaiming the legacy of manufacturing innovation in Northeast Ohio will enable the region’s companies to create more well-paying jobs.”

In other parts of the country, partnerships are linking up existing industry strengths to create new growth opportunities. To ensure the Seattle region continues to be a global hub of innovation, public and private sector leaders have formed the Building Energy-Efficiency Testing and Integration (BETI) Center and Demonstration Network to develop new products, services and technologies around energy efficiency for customers around the world. BETI capitalizes and integrates this region’s distinct, competitive advantages – unparalleled software and information technology, strong sustainability ethos, an emerging building energy efficiency sector, and strong post-secondary institutions and talent that can support future demand. This is not a cookie cutter idea but one that can best work with the market formula found in the Puget Sound region.

With financial support from a federal i6 Green Challenge grant and a state match, BETI will help local businesses commercialize innovations in building energy-efficient technologies, platforms, and materials by providing product validation and integration services. In addition, BETI will foster greater collaboration among industry stakeholders, including businesses, entrepreneurs, trade associations, local and state government agencies, state universities, research networks, venture capitalists, and regional utilities.  

Both Northeast Ohio and the Puget Sound region arrived at these collaborative partnerships during the course of their efforts to develop metropolitan business plans. Like private sector business plans, these regional economic development plans are rooted in market dynamics and competitive assets. The metropolitan business planning process offers a framework for regional business, civic, and government leaders to assess their metro’s distinctive market position, identify pragmatic economic development strategies that capitalize on regional assets and set forth detailed implementation-ready plans for economic growth. Once established, these metropolitan business plans will act as roadmaps for metro economies as they drive the nation toward greater prosperity, increased job creation, and a leading position in the next economy.

      

 

 

The ten innovations identified over the past week illustrate that the federal government is not the only political game in town. Our nation is a federal republic and when Washington dithers, states and metros are quick to innovate on matters of national significance. 

These innovations, however, are not singular events.

First, they are relevant to other states and metros that are similarly experimenting with bottom-up approaches in shaping the post-recession economy. States and metros have a long history of observing and learning from each other, and then adopting and adapting policy innovations to their own distinctive circumstances.

In a pre-Internet age, innovations were spread the old fashioned way, via conferences and other meetings. Today, they spread virally through multiple channels. Watching innovation is no longer merely a question of program performance or investment return; it is an issue of how quickly it spreads to other parts of the country, large and small.

Second, these policy and practice innovations have much to teach Washington. If history is any guide, an innovation in the states and metros today becomes a federal program or policy tomorrow. Obama’s health care reform emerged from Romney’s Massachusetts. Obama’s tri-agency Sustainable Communities Initiatives emerged from 15 years of smart growth experimentation at the state, regional and metropolitan scale. The recent Regional Innovation Clusters initiative, spearheaded by the Economic Development Administration, built upon over 20 years of cluster-focused economic development strategies implemented by states and metros throughout the United States. And so on across the entire federal government.

Similarly, the innovations identified the past week have the potential to affect both what Washington does and how it does it.

At the broadest level of narrative and paradigm, the state and metropolitan growth model offers the promise of more jobs (to resolve America's employment deficit), better jobs (to make work pay) and more accessible jobs (to ensure workers can actually get to jobs). At the more granular scale, each of the selected innovations has enormous implications for specific federal policies and institutional organization and practice.

Michigan’s infrastructure strategy illustrates the need for Washington to design and implement a national freight strategy and help modernize our freight hubs and corridors across the nation.

New York State’s cross-program regional competition shows the way for new multi-agency initiatives that join up investments that should be allocated in tandem rather than separately (e.g., economic and workforce development, housing and transportation resources writ large).

And Los Angeles’ invention of metropolitan export planning should be used to inform the much stated desire, across both parties, to consolidate trade and export agencies and programs under one roof.  

In the final analysis, however, the state and metro innovations in full bloom today may have even greater influence than the traditional American playbook of horizontal replication and vertical scaling. We may have entered a phase in our federal republic when the division of responsibilities between and among different tiers of government may be rearranged, due to federal fiscal retrenchment on one hand and state and metro willingness to engage on the other.

The post-recession rallying cry to the federal government may be: Do less, better. And, in a period marred by month-to-month extensions of critical federal programs and powers, that may be the most profound consequence of them all.

      

 

 

In March 2010, President Obama established a National Export Initiative to help American companies meet the administration’s goal of doubling U.S. exports by 2015.

Why focus on boosting exports? In a word: jobs. Because every $1 billion in exported goods and services supports roughly 5,400 jobs, an increase in American exports would bring much needed job creation to communities throughout the U.S.

Even as the federal government moves to increase exports, regional leaders from the public, private and academic worlds are taking action to foster higher levels of exports in their areas. Los Angeles has pledged to do its part through the newly established Los Angeles Regional Export Council (LARExC). Housed in the Los Angeles Area Chamber of Commerce, this public-private partnership aims to double regional export levels in five years by expanding access to export training and market research, streamlining export services, and providing networking opportunities for export-ready companies in twelve key industries. [Full disclosure: The Brookings-Rockefeller Project on State and Metropolitan Innovation provided some advisory support to LARExC before it launched.]

“We in Los Angeles are not waiting for Washington to create jobs,” says Mayor Antonio Villaraigosa. “We are launching the Los Angeles Regional Export Council to help local businesses find the export assistance they need to grow their businesses and create new jobs.”

The Los Angeles region has a number of strengths when it comes to exports. With established connections to Asian and Latin American economies on the Pacific Rim and infrastructure to move freight by land, sea and air, it’s little wonder that the region is second only to the New York City metro area when it comes to total exports by dollar value. LARExC aims to build upon these assets by creating a regional export support network that connects area firms to local, state and federal services.

Export-ready companies looking to enter new markets often need some extra help at first; this is especially true of smaller firms, which often lack the resources and know-how needed to begin exporting. LARExC’s MBA Export Champions program, a joint effort of the USC Marshall School of Business and the UCLA Anderson School of Management, aims to support new-to-export and new-to-market firms through this transition by connecting companies with local MBA students, who will provide market research as well as export plan development assistance. In addition, the Export Trade Assistance Program, administered through the state community college system, offers workshops to business executives interested in learning the basics of exporting.

      

 

 

In times of fiscal crisis, state and local governments often give infrastructure investments short shrift, based on the assumption that any major expenditure is simply too costly for tight budgets to bear. The trouble with this short-term logic is that it creates much larger expenses in the long run.

Michigan Gov. Rick Snyder’s state infrastructure plan rejects that common approach in favor of targeted data-driven investment in key projects that will support economic growth in the years ahead. Snyder recognizes that safe and efficient transport for both people and freight is essential to the state’s global economic competitiveness. At the same time, he understands that little if any help will be coming from the federal government in the near future. “To meet these challenges, we cannot depend on Washington,” Snyder says. “Investing today not only saves money, but builds the foundation for a reinvented 21st-century Michigan economy.”

Snyder’s “Special Message on Infrastructure” set forth his vision of Michigan as “a global trade center and logistics hub.” Achieving this vision will require large-scale investment, paid for in part through an increase in the state vehicle registration fee. By focusing the state’s limited resources on those parts of the state’s infrastructure that are crucial to economic growth―the most highly trafficked roadways and railways, major ports and airports and the border crossing between Michigan and Canada―this infrastructure plan will work to secure the greatest positive effect on the state’s economy.

The New International Trade Crossing (NITC) linking Detroit and Windsor, Ont. is a key component of Snyder’s proposed infrastructure plan. This crossing represents the busiest commercial border connecting the United States and its largest trade partner, Canada. Roughly 10,000 vehicles cross the border each day, along with 25 to 30 percent of all goods traded between the U.S. and Canada. The existing Ambassador Bridge, completed just weeks after the 1929 stock market crash, is proving unable to meet growing demand, and as Michigan’s economy recovers from the Great Recession, traffic―and expensive delays―will only increase.

Construction of the NITC, financed by a public-private partnership of the U.S. and Canadian governments and private investors, will strengthen cross-border trade relationships by speeding the exchange of goods between these two countries. As Snyder says, “Reinventing Michigan to become a center of global trade requires developing an infrastructure that will meet the modern day demands of the international economy. The people of Michigan are counting on us to put them back to work. This bridge provides an unprecedented opportunity to do that.”

      

 

 

As states and metros work to build capacity in areas important to the next economy, they’re becoming increasingly aware of the need for a next generation workforce that’s up to the task. With an unemployment rate of 8.6 percent and 3.3 million job openings as of the end of October, it’s clear that skills development must be part of strategies to promote a broad-based, sustainable labor market recovery.

The North Carolina Community College System (NCCCS) recognized that state-run community colleges have an important role to play in addressing this skills mismatch and increasing opportunities for people entering the workforce. Its SuccessNC initiative is working with all 58 community colleges in the state to strengthen the college and career pathways available to North Carolina students, with the ultimate goal of doubling the number of students completing career credentials by 2020. By fostering greater collaboration among the state’s community colleges and developing rigorous performance measures to assess and improve college offerings, SuccessNC is working to leverage the collective power of North Carolina’s community colleges to improve student outcomes across the state.

Encouraging knowledge-sharing among practitioners is central to SuccessNC’s mission. From February to October 2010, NCCCS representatives visited each of North Carolina’s 58 community college campuses to discuss SuccessNC’s aims and to learn more about each school’s triumphs and challenges. Over the course of the tour, colleges presented more than 200 best practices related to improving student success, access to course offerings and program quality. In addition, colleges identified specific barriers impeding their efforts to improve student outcomes. In the months ahead, a committee of NCCCS associate vice presidents will work to resolve those barriers that fall under the system’s purview.

Since the tour’s conclusion, SuccessNC has compiled information gathered through these listening sessions and made it available on its website. Best practices can be accessed through a searchable innovations database that provides a brief summary and point of contact for each innovation. This database offers a new resource for community college practitioners throughout North Carolina and beyond. “We want to make education more accessible. We want to improve the quality of our academic and training programs. And we want to increase the number of our students that leave our colleges prepared to be an employee, an employer and to move on to further education,” said NCCCS President Scott Ralls. “By sharing these ideas and innovations, we can learn from one another.”

      

 

 

Over the past two decades, the Puget Sound area’s innovation-driven economy has become a magnet for highly educated people from across the country and around the world. Drawn to the region by some of the nation’s most innovative companies—Microsoft, Boeing, Nintendo, Amazon, Genentech and the Fred Hutchinson Cancer Research Center, to name a few—the Puget Sound region ranks well on measures of educational attainment. Of the nation’s largest 100 metro areas, the Seattle-Tacoma-Bellevue area is 11th in bachelor’s degree holders and 17th in graduate degree attainment.

But for all its brainpower, the region has fallen behind in terms of cultivating homegrown talent, particularly in less affluent school districts located in South Seattle and South King County. Starting from an early age, low-income students and children of color in these communities tend to lag behind on important indicators of educational success. The effects of this achievement gap worsen with time, putting these students at a serious disadvantage that often affects their ability to find jobs and their earning potential. 

In an effort to address this achievement gap, the Community Center for Education Results has teamed up with the city of Seattle, the University of Washington, the Seattle Community Colleges District, the Puget Sound Educational Service District, the Bill & Melinda Gates Foundation and others to form the Road Map Project, a coalition working to double the number of South Seattle and South King County students pursuing a college diploma or career credential by 2020.

What’s innovative about the Road Map Project is its focus on collective action and community engagement. By bringing together key stakeholders to collaborate on shared goals, the project is creating a new model for efforts to reduce inequality in educational attainment. Its cradle-to-college-and-career approach aims to improve student outcomes beginning with access to prenatal care and kindergarten readiness all the way through to elementary and secondary schooling and beyond. Through a combination of community outreach and partnership building, data-driven goal-setting and performance management, the project supports area organizations working to boost student success and close the achievement gap in South Seattle and South King County.

      

 

 

In the United States and throughout the world, there is a growing consensus on the need for clean energy technology and greater energy efficiency. National security concerns about overreliance on foreign oil, climate change concerns, and the finite nature of fossil fuels all increase interest in expanding the capabilities of the clean economy.  

Yet, many firms in the clean economy have trouble accessing the capital needed to grow. Companies interested in bringing new clean energy and energy-efficiency technologies to the marketplace face a particular obstacle known as the ominous-sounding “deployment valley of death.” Because these technologies are not yet widely used, they require significant capital investment in order to take projects to scale. But private capital firms have proven reluctant to provide this capital because of concerns about uncertain demand, long cost curves, and other factors.

Connecticut has come up with what they hope will be a solution to this dilemma in the creation of a state green bank. Established in June 2011 with bipartisan support, the Clean Energy Finance and Investment Authority (CEFIA) is designed to provide low-cost financing to promising clean energy and energy efficiency projects. By consolidating and repurposing existing state funds into a quasi-public finance authority, CEFIA leverages limited state resources for maximum effect in an attempt to place no additional burden on state taxpayers or utilities users. 

As the nation’s first fully funded green bank, CEFIA aims to spark growth in Connecticut’s clean economy sector by providing low-cost capital for clean energy and energy efficiency deployment projects. "This is a model that is going to do much more to drive innovation," says Dan Esty, commissioner of the Connecticut Department of Energy & Environmental Protection. "Our hope is to turn Connecticut into the leader on clean energy in the country."

In addition to the environmental benefits of cleaner and more efficient energy use, CEFIA also has the potential to strengthen the state’s economy. "Connecticut has demonstrated that it is serious about putting people to work and lowering the cost of essential services for its residents,” says Reed Hundt, CEO of Coalition for Green Capital, a D.C.-based nonprofit. "This legislation will serve as a model for the nation."

      

 

 

Very soon, Qualcomm Stadium won’t be the only place to find chargers in San Diego. Thanks to the Smart City San Diego initiative, residents will soon have more electric vehicle (EV) charging stations to choose from and 50 electric vehicles for lease to go with them.

This collaborative endeavor brings together leaders from the public sector, private industry, and academia in an effort to boost EV use, increase the city’s energy independence, and spur growth in San Diego’s clean economy sector. With one of the largest EV rollouts in the United States to date, Smart City San Diego aims to spark consumer demand while at the same time learning more about how people incorporate EVs into their everyday lives.

Also, by exploring the feasibility of using solar energy to power EV charging stations, true zero tailpipe emissions may be achieved.

Each partner involved in Smart City San Diego has a particular role to play in this collaboration. San Diego Mayor Jerry Sanders got the initiative off the ground and convinced San Diegans to take part. The University of California-San Diego, led by Chancellor Marye Anne Fox, lent research capacity as well as a natural testing ground for smart grid technology and EV use. San Diego Gas & Electric, the area utility company, brought its track record in smart utility solutions. GE, creator of the WattStation EV charging station, will contribute technological expertise and CleanTECH San Diego, a nonprofit representing companies in the greater San Diego clean technology cluster, will bring its network and its experience advocating for clean technology innovation.

Because electric vehicles are still a very new industry, little is known about consumer behavior when it comes to EV use. Smart City San Diego aims to expand knowledge on this subject by studying how people use electric vehicles. A better understanding of consumer behavior will help cities and metros design EV infrastructure that meets the needs of users, ranging from locating charging stations in the right places to figuring out how to encourage EV users to charge their vehicles during off-peak times. These studies will also provide insight into what needs to be done to increase EV use. 

California’s Renewables Portfolio Standard (RPS) requires that 33 percent of energy use come from renewable sources by 2020. Smart City San Diego contributes to this goal by boosting demand for renewable energy technology. “San Diego is leading the way yet again in the field of energy innovation,” says Mayor Sanders. “This is the first of many initiatives that our partners throughout the region will undertake to make San Diego the foremost resource-conscious community in the United States.”

      

 

 

New York City has long been known as a hub of innovation and opportunity, a place where creativity and sheer force of will can produce achievements previously unimagined. Companies that have changed how we experience the world—from Alexander Graham Bell’s Bell Laboratories to Jay-Z’s Roc-A-Fella Records—all got their start in the city that never sleeps.

However, despite a burgeoning community of tech entrepreneurs, over 100 academic and research institutions, and more than 626,000 post-secondary students, New York City still lags the Bay Area in tech capacity and research commercialization. Silicon Valley remains the foremost location for dot-com entrepreneurialism and technological innovation—home to tech legends Apple and Google, social media giants Facebook and Twitter, the social philanthropy innovators at Kiva and the design visionaries at IDEO, among many, many others.

The Bloomberg administration wants to change all that. Its Applied Sciences NYC initiative aims to boost tech R&D, spark job growth, foster entrepreneurial endeavors and diversify the area economy by establishing a state-of-the-art applied sciences and engineering campus in the heart of New York City. To support this project, the city has pledged up to $100 million as well as a 99-year lease for nominal rent at one of three city-owned sites— the Goldwater Hospital Campus on Roosevelt Island, the Navy Hospital Campus at the Brooklyn Navy Yard or historic buildings and property on Governors Island. Applicants were to be judged based on proposed support for research commercialization and job creation, academic program strength, plans for community engagement, sustainability of design, and sensitivity to existing neighborhoods and surroundings.

In late December, the city announced its decision to partner with Cornell University and the Technion-Israel Institute of Technology to create the “NYCTech” campus on Roosevelt Island. Phase one of the campus build-out will develop 300,000 square feet by 2017, though the two universities aim to start classes at a temporary site this September. By the project’s culmination in 2043, NYCTech will encompass two million square feet with 280 faculty members and up to 2,500 graduate students. Cornell and Technion also plan to contribute to area K-12 education by training 200 science teachers each year.  

Based on current projections, the city expects that the new campus will create up to 20,000 construction jobs; up to 8,000 permanent, well-paying jobs for a broad range of skill levels; 600 new companies; and billions in additional economic activity. For Cornell President David Skorton, the prospect of job creation is especially compelling. "The most exciting thing to me in this election season is that we don’t have to roll over and die for lack of a way to create jobs. This is an example of a public-private governmental partnership: it’s government, it’s private industry and higher education," he says. "I think this could be a model that could be replicated across the country."

      

 

 

Although the Great Recession officially ended in June 2009, communities throughout the United States are still struggling to cope with the effects of the biggest economic downturn since the Great Depression. Unemployment is 8.6 percent, and income inequality is at its highest levels in decades. Despite incremental improvements over the course of 2011, metropolitan areas across America continue to suffer from sluggish hiring and lackluster growth.

As the nation inches toward economic recovery, it’s become increasingly apparent that restoring prosperity is not just a matter of bouncing back and returning to business as usual. Business as usual is what got us here. Instead, we need to move toward a new economic growth model, a next economy that prizes production over consumption, true innovation over financial wizardry and long-term growth over short-term speculation.

The next economy will be fueled by innovation and advanced manufacturing, so that the U.S. can stay on the cutting edge of invention and production. It will be powered by a next-generation workforce that’s well-prepared for employment opportunities in emerging fields. This will require the United States to take the lead in the clean economy, developing the renewable energy and energy-efficiency technologies necessary for a low carbon future. The next economy will also be export intensive, producing goods and services that are in demand in the global marketplace. And all this will demand a new approach to governance, predicated on public-private collaboration and cooperation.

In an ideal world, the federal government would take action to help make this new economic vision a reality. Indeed, most Americans would like to see Washington do just that. A recent poll by the Pew Charitable Trusts’ Economic Mobility Project found that 83 percent of Americans want the government to play a role in promoting economic upward mobility. But as long as party infighting and partisan gridlock rule the day, the likelihood of major federal action remains slim.

Fortunately, the United States is a federal republic. When the federal government cannot or will not act, states, cities, and metropolitan areas have the power to step into the breach and get things done themselves.

That’s what we’re seeing right now.

Throughout the nation, governors and state legislatures and mayors and city councils are crafting innovative solutions to the problems facing their economies. They are joining together with leaders from private industry, philanthropy and advanced research to boost exports, strengthen the clean economy, expand innovation capacity and train the next generation of workers. They are adopting new styles of governance that emphasize collaboration over conflict and partnership over partisanship.

Unwilling to wait for Washington, they are taking the reins and forging a pragmatic caucus capable of leading the transition to the next economy.

Over the next few days, we’ll present ten state and metro-level innovations that we think deserve your attention in 2012. These innovations to watch―all of which came to scale during the past year―represent some of the most forward thinking economy-shaping efforts underway in America’s states and metropolitan areas. We selected these innovations based on their ability to help create jobs and contribute to a stronger economy as well as their reliance on collaboration across the public, private, nonprofit and (in some cases) academic sectors. In choosing these innovations, we focused on efforts that were emblematic of the next economy and offered promising models that could be replicated in other states and metropolitan areas and scaled up by federal action. We’ll be keeping an eye on these innovations to watch in the months ahead, and we think that you should, too.

      

 

 

As states and metropolitan areas fight to regain ground lost during the economic downturn, the ability to innovate is proving increasingly crucial. Innovation allows economies to adapt as new technologies emerge. It enables existing companies to survive and thrive and encourages new businesses to develop. A strong innovation ecosystem facilitates the design of new products and the development of new production processes. Without it, states and metros will find themselves lagging behind in the next economy.

Recognizing the role that innovation will play in stimulating job creation and economic recovery in the decades ahead, Tennessee Gov. Bill Haslam’s INCITE initiative seeks to position his state as a innovation-driven job growth leader by enhancing innovation capacity. As part of Haslam’s larger Jobs4TN economic development plan, this $50 million program will foster innovation, expedite commercialization of new technologies and products and support entrepreneurship in each of the state’s nine economic development regions.

"Tennessee has remarkable assets in research and development," says Haslam. "We need to do a better job of leveraging these assets and growing innovative new companies to reach our goal of becoming the number one location in the Southeast for high quality jobs."

In contrast to the one-size-fits-all mentality that has often guided state economic development plans, INCITE will employ a regional approach that builds on the unique strengths of Tennessee’s various communities. By working with local leaders to craft regionally-specific strategies to increase innovation capacity, INCITE will leverage regional assets for maximum effect. The nine regions will also benefit from the support of the state’s Department of Economic and Community Development (ECD) and the Tennessee Technology Development Corporation, a legislatively-established nonprofit focused on increasing the number of science and technology-focused companies in the state. A network of regional business incubators will contribute to these efforts by providing support and capital for early-stage firms and by working together to share best practices and raise private capital.

In addition to expanding the state’s capacity for innovation, INCITE is also helping bring new ideas to market more swiftly. To that end, the governor has pledged $10 million to the Memphis Research Consortium, a public-private collaboration that counts the University of Memphis, the University of Tennessee Health Sciences Center, St. Jude Children’s Research Hospital, FedEx, Medtronic and Memphis Bioworks Foundations among its members. The consortium will use these funds to cultivate commercialization partnerships. ECD is also working with Tennessee Technology Development Corporation to identify other opportunities for boosting commercialization throughout the state. The efforts will help ensure that Tennessee’s regional economies are well positioned to capitalize on the breakthrough work of firms, universities, research institutions, and other actors in the innovation ecosystem.

By making innovation an economic development priority, INCITE is setting a platform for statewide economic growth through the strengths of its regions and metropolitan areas. "We feel INCITE is the best approach for the state in leveraging the energy and capital of the private sector to grow innovative companies in Tennessee," says ECD Commissioner Bill Hagerty. "Tennessee has a great entrepreneurial spirit and great innovation assets, we simply need to enhance the environment for those ideas to take root, grow and create new jobs."