Job Creation. Trends, Needs, and Opportunities. a Presentation for the Maryland Chamber of Commerce Tom Sadowski President & CEO

Transcription

1 Job Creation Trends, Needs, and Opportunities a Presentation for the Maryland Chamber of Commerce Tom Sadowski President & CEO

2 Key Findings The number of net new jobs closely follows net new jobs from establishment openings. Over 97% of net new jobs created in Maryland since 1996 can be attributed to establishment openings and expansions. National trends indicate that job growth is driven disproportionately by young firms. Despite Maryland being a leader in net job growth from establishment relocations, establishment relocation creates relatively few jobs. Maryland has a competitive advantage in many emerging knowledge-based industries. Encouragement and aid for small and young companies can be improved to drive continued, sustainable job growth.

3 Trends Unemployment Unemployment Rate Selected US States April 2012 and April Unemployment Rate Unemployment Rate, 3-Year Time Series 3-Year Time Series Rank Metro Area Virginia 5.2% 5.5% 17 Massachusetts 6.4% 6.3% 20 Maryland 6.5% 6.4% 25 Colorado 6.9% 7.9% 27 Ohio 7.0% 7.1% 28 Washington 7.0% 8.0% 29 Florida 7.2% 8.3% US 7.5% 8.1% 33 Pennsylvania 7.6% 7.2% Unemployment Rate, % New York 7.8% 8.1% 43 DC 8.5% 8.1% 6.0 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr North Carolina 8.9% 8.9% USA Maryland Source: Bureau of Labor Statistics, April 2013

4 Trends Employment Employment Growth in Past Year Selected US States April April 2013 Rank Metro Area % Change 4 Colorado 2.69% 7 North Carolina 2.02% 9 Washington 1.93% 15 Florida 1.56% US 1.56% 17 Massachusetts 1.48% 23 New York 1.38% 26 Maryland 1.18% 29 Virginia 1.08% 41 Pennsylvania 0.54% 45 DC 0.41% 47 Ohio 0.09% Employment Growth in Past Decade Selected US States April April 2013 Rank Metro Area % Change 7 DC 8.98% 9 Colorado 8.51% 11 Washington 8.22% 13 North Carolina 6.55% 14 New York 5.75% 17 Virginia 5.56% 22 Maryland 3.92% 23 Massachusetts 3.63% US 3.24% 31 Pennsylvania 2.38% 39 Florida 0.78% 50 Ohio -4.09% Source: Bureau of Labor Statistics, April 2013

5 Trends Job Creation Young firms contribute disproportionately to net job growth. While young firms are not limited to small organizations, the majority have few employees. Startups account for only 3% of total employment but almost 20% of gross job creation 60% of jobs created by startup firms still exist five years later Source: Kauffman Foundation; John Haltiwanger, Ron Jarmin, & Javier Miranda

6 Trends Job Creation There is no correlation between net new jobs from relocation and net new jobs. Net New Jobs in Maryland Net New Jobs Net New Net Relocated Source: National Establishment Time Series, YourEconomy.org

7 Trends Job Creation There is a strong positive correlation between net new jobs from openings and net new jobs. 97% of net new jobs in MD since 1996 are due to openings and expansions. Net New Jobs in Maryland Net New Jobs Net New Jobs Net Opened Net Expanded Source: National Establishment Time Series, YourEconomy.org

8 Trends Job Creation Total Net New Jobs from Relocation Selected US States Rank Metro Area Jobs 1 Texas 44,900 2 Tennessee 24,800 3 Virginia 14,100 5 North Carolina 13,000 8 Maryland 9, Colorado 3, Florida 2, Pennsylvania 1, Massachusetts -1, Ohio -3, Washington -5, New York -11, DC -19,615 Maryland is a leader in net job growth from establishment relocation. Time series data shows an inability of most states to repeat job growth through establishment relocation. Texas and Tennessee are the only states to have consistent significant job growth from relocation. Most of the top states benefit from one or two years of significant job growth from relocation.

9 Trends Maryland Growth in the Last Decade by Size of Establishment Establishment Size Establishments Jobs 10-Year Change 10-Year Growth % 10-Year Change 10-Year Growth % Self-Employed (1) 135, % 135, % Stage 1 (2-9) 85, % 146, % Stage 2 (10-99) -1, % -23, % Stage 3 ( ) % -50, % Stage 4 (500+) % -102, % Maryland Growth in the Last Year by Size of Establishment Establishment Size Establishments Jobs 1-Year Change 1-Year Growth % 1-Year Change 1-Year Growth % Self-Employed (1) 53, % 53, % Stage 1 (2-9) 38, % 81, % Stage 2 (10-99) % -18, % Stage 3 ( ) % -8, % Stage 4 (500+) % -12, % Source: National Establishment Time Series, YourEconomy.org

10 Opportunities Industry Growth in the Past Year Maryland April April 2013 Rank Metro Area % Change % Change Baltimore MSA % Change US 1 Mining, Logging, & Construction 4.18% 10.62% 2.89% 2 Administrative & Support Services 3.23% 8.67% 3.97% 3 Prof., Scientific, & Tech Services 3.07% 3.84% 3.10% 4 Health Care & Social Assistance 2.48% 2.14% 2.20% 5 Financial Activities 1.48% 2.17% 1.33% Total 1.18% 1.99% 1.56% 6 Educational Services 1.16% 1.41% 0.42% 7 Local Government 0.99% -1.14% -0.08% 8 Leisure and Hospitality 0.96% 1.35% 2.74% 9 Wholesale Trade 0.81% 6.90% 1.49% 10 State Government 0.69% 0.86% -0.19% 11 Retail Trade 0.64% 3.03% 1.61% 12 Transportation & Utilities 0.38% 0.00% 1.89% 13 Other Services -0.98% -0.91% 0.98% 14 Federal Government -1.50% -2.07% -2.37% 15 Manufacturing -2.74% -5.38% 0.54% 16 Information -2.84% -1.80% 0.56% Rank Employment Concentration Maryland April 2013 High Concentration US Index Federal Government 2.72 Prof., Scientific, & Technical Services 1.55 Mining, Logging, & Construction 1.20 State Government 1.18 Educational Services 1.16 Average Concentration Other Services 1.06 Health Care & Social Assistance 1.05 Administrative & Support Services 1.02 Retail Trade 0.99 Financial Activities 0.96 Local Government 0.92 Leisure and Hospitality 0.90 Below Average Concentration Transportation & Utilities 0.83 Wholesale Trade 0.79 Information 0.73 Manufacturing 0.47 Source: Bureau of Labor Statistics

11 Opportunities 100% 90% 80% 70% 8.96% Share of State Share GDP by Industry of State GDP by Industry 9.14% 8.95% 8.52% 8.41% 8.49% 8.59% 8.82% 8.85% 8.62% 7.78% 8.14% 8.16% 8.15% 8.22% 8.37% 8.73% 9.06% 9.08% 9.30% 10.59% Over time, the Health Care and PST industries have become a larger share of the State economy than the national economy. In Maryland, these industries are growing faster than the national average. 60% 8.71% 9.19% 9.29% 9.47% 9.57% 9.71% 10.02% 10.53% 10.14% 10.16% In the last 10 years: % of State GDP 50% 40% 30% 7.78% 7.60% 7.82% 7.32% 7.74% 7.17% 7.03% 6.33% 6.41% 6.47% 5.77% 6.09% 6.83% 6.74% 6.50% 7.44% Health Care Industry s share of State GDP grew 19.5% PST services industry s share of State GDP grew 15.26% 20% 10% 0% 7.04% 6.29% 6.53% 7.19% 8.02% 8.00% The Health Care Industry s share of US GDP rose 12.79% The PST Industry s share of US GDP rose 5.32% Health Care and Social Assistance Professional, Scientific and Technical Services Source: Bureau of Economic Analysis

12 Opportunities Market Merge The Baltimore-Washington region is well-connected and features a fluid labor force, which expands the talent pool and market of Greater Baltimore far into the DC Metro area. More than 135,000 DC Metro area residents commute to Greater Baltimore for work daily. More than 200,000 Baltimore MSA residents commute to the DC Metro for work daily. Residents of Maryland suburbs that are traditionally defined as part of the DC MSA constitute over 10% of the Greater Baltimore workforce. Source: US Census Bureau OnTheMap

13 Opportunities Port of Baltimore Recent improvements to the Port create efficiencies in importing and distributing products throughout the Mid-Atlantic and Northeast Corridor. Furthest inland East Coast port A 1,200-foot long, 50-foot deep berth 4 new super-post-panamax cranes Baltimore-Washington Rail Intermodal Facility, to be completed in 2015, will act as on-rail origin for double-stacked trains Projected Economic Growth Panama Canal Expansion and Intermodal Facility Scenario State GDP Impact Total Employment Impact Construction Phase +$136,461, jobs Operation Phase - +$10,336, jobs Intermodal Facility Operation Phase - +$63,751, jobs Contractors 1-25% Increase in +$39,837, jobs Cargo 2-10% Increase in Cargo +$15,935, jobs Note: Scenario 1 and 2 represent increases in containerized cargo derived from the construction of an intermodal facility and the completion of the Panama Canal expansion. Hub for double-stacked trains accomodated by the National Gateway Project The Panama Canal expansion is expected to drive a 10-25% increase in containerized cargo imported at the Port of Baltimore. Source: Regional Economic Studies Institute at Towson University

14 Opportunities Information Technology More people are employed in IT fields in the Baltimore-Washington corridor than in Silicon Valley. Greater Baltimore is one of the most concentrated markets in the country in terms of Computer Systems Design and Related Services employment. The Greater Baltimore Computer Systems Design and Related Services industry grew three times faster than the US average from Information Technology Industry Concentration and Employment 2012 LQ Rank CSA LQ Employment Washington, DC ,900 1 Baltimore-Washington ,420 2 San Jose-San Francisco ,480 3 Austin MSA ,440 4 Seattle ,960 5 Raleigh ,590 6 Denver ,590 7 Boston ,560 Baltimore MSA ,770 8 Dallas ,350 9 Minneapolis , Atlanta ,790 Source: Bureau of Labor Statistics

15 Opportunities Cyber Security National & Regional Trends $41.7 billion in 2013 non-military IT expenditures $769 million 2013 intrusion and detection budget for government departments and agencies 13,393 cyber job openings in Greater Baltimore Applications Banking & Finance e-commerce Healthcare Government K 270 AIRFAX NIA MONTGOMERY 8 34 CARROLL APPROVED INTER-COUNTY CONNECTOR (ICC) Rockville 9 Bethesda 24 DISTRICT 35 OF COLUMBIA ARLINGTON 29 Washington 11 REAGAN NATIONAL AIRPORT Westminster 3 95 CHARLES PRINCE GEORGES BALTIMORE COUNTY HOWARD 7 Columbia 3 Owings Mills Woodlawn AMTRAK / MARC RAIL LINE Bowie BALTIMORE CITY BWI AIRPORT Amtrak / MARC Rail Station ANNE ARUNDEL CALVERT PENNSYLVANIA Hunt Valley 9 White Marsh Towson Baltimore Dundalk 1 Patapsco River Annapolis Chesapeake Bay HARFORD Middle River Havre de Grace Aberdeen 2 1 Port Deposit KENT QUEEN ANNE'S TALBOT BALTIMORE CITY CECIL 36 Philadelphia 4 Inner Harbor Elkton CAROLINE DORCHESTER Patapsco River BWI AIRPORT Amtrak

16 Opportunities BioHealth Total BioHealth Industry Industry Concentration and Employment 2011 LQ Rank Region LQ Employment The Baltimore-Washington BioHealth industry is the second largest in the country. Baltimore ranks first in concentration of hospital employees. A strong IT base positions the region for Bio- Health innovations in the tech space 1 Boston ,799 2 Baltimore ,367 3 Washington, DC ,581 4 New York ,129,867 Baltimore/CMD ,880 5 Detroit ,120 6 San Francisco ,057 7 Philadelphia ,426 8 Tampa ,516 9 Pittsburgh , San Diego ,099 Source: County Business Patterns Note: Baltimore and Central MD figures include Cecil County

17 Opportunities Industry Intersection Greater Baltimore is well positioned to lead industry intersection. Industries have increasingly blurred boundaries and are quickly becoming less siloed. Innovation is happening in spaces occupied by two or more industries: Health IT Education Technology

18 Needs Venture Capital DC Metroplex Analysis Amount in USD Industry / Area Q1 IT Services DC Metroplex $1,047,569,100 $175,563,700 $283,198,800 $33,465,900 Maryland 28.6% 29.5% 44.8% 1.6% Virginia 70.3% 64.2% 41.7% 91.5% DC 1.3% 6.3% 13.5% 6.9% Biotechnology DC Metroplex $330,390,800 $1,323,261,500 $872,638,600 $222,405,000 Maryland 88.7% 84.9% 61.8% 22.7% Virginia 11.3% 1.8% 34.0% 77.3% DC 0.0% 7.6% 4.2% 0.0% Healthcare Services DC Metroplex $550,564,000 $170,523,900 $111,599,000 N/A Maryland 35.9% 65.9% 82.9% N/A Virginia 59.9% 30.0% 5.6% N/A DC 4.2% 1.8% 11.5% N/A Total Venture Capital DC Metroplex $11,722,268,000 $5,529,825,900 $5,154,009,500 $1,021,776,100 Maryland 34.4% 56.9% 44.9% 36.0% Virginia 56.7% 38.0% 48.0% 43.5% DC 8.6% 4.2% 6.0% 18.9% Source: PricewaterhouseCoopers MoneyTree

19 Needs Culture Shift Greater Baltimore universities are home to incredible experiments and innovations, but have been unable to commercialize their discoveries. Our educators and researchers should be encouraged to pursue small business creation. Opening channels of communication with EIRs, serial entrepreneurs, and investors can fuel a shift toward commercialization as a goal of academia. Entrepreneurship Index 2012 Rank Metro Index 1 Montana 0.53% 2 Vermont 0.52% 3 New Mexico 0.52% US 0.30% 30 Georgia 0.27% 31 North Carolina 0.26% 32 Indiana 0.26% 33 DC 0.26% 34 Maryland 0.25% 35 Tennessee 0.24% 36 Wyoming 0.24% 37 Alabama 0.23% 38 Kansas 0.23% 39 Oregon 0.22% Source: Kaufmann Foundation