a tale of two cities: anchorage & pittsburgh
TRANSCRIPT
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Joe Morrison, Principal
http://biz21.co
A TALE OF TWO CITIES
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PAST: Sole Employee/PM, 49th State Angel Fund
PRESENT: Consultant,
• Municipality of Anchorage (49SAF)
• Foraker Group (Rural Capacity Building Initiative)
FOCUS: Innovation, Strategy, Venture Development
OUR TALE BEGINS…
PROLOGUE
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PROLOGUE:
A SOIREE
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PROLOGUE
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BOOK I: PITTSBURGH
“Pittsburgh’s economic decline, already setting in back in the early 1960s, was an outgrowth of its highly specialized heavy industry economy – only Detroit’s was less diverse.” Richard Florida, “Pittsburgh – The Base Case Turns the Corner.”
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BOOK I: THE BURGH
PITTSBURGH MANUFACTURING JOBS 1955: 41.8% 1980: 25.3% 2013: 8%
PROBLEM: OVERCONCENTRATION
DEFINED: NATURAL RESOURCES CURSE
“The resource curse occurs as a country begins to focus all of its energies on a single industry…and neglects other major sectors. As a result, the nation becomes overly dependent on the price of commodities, and overall gross domestic product becomes extremely volatile.” - @investopedia
Sources: 1955, 1980: Wikipedia. 2013: BLS. Chart: Economist Chris Briem
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BOOK I: THE BURGH
SOLUTIONS?
Action Effect
1. Renaissance I and II (1950s – 1970s): Public/Private Partnership Clears Industrial Effects/Prime Real Estate, Invests in Downtown Core, infrastructure, Transit.
Cleaner air and improved infrastructure encouraged new businesses to come forward. Today much of the downtown skyline investment remains in good condition.
2. Medical School becomes UPMC (1950s): Mellons Donate $50 Million to provide new Medical School at U Pitt.
Today $1 Billion annually of research funds are driven by UPMC and U Pitt combined.
3. Entrepreneurship & Innovation: 1981: Ben Franklin Technology Partners. 2002- Life Sciences Greenhouse.
2014 VC Regional Investment: $338M 2013 VC Regional Investment: $138M
Renaissance & Medical: Mike Madison, U Pitt Law. VC: PWC Money Tree.
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BOOK I: THE BURGH
“There might never again be an anchor industry -- not just in Pittsburgh, but anywhere -- that exists as long as steel reigned here. Economic stability in the future requires not just anticipating, but encouraging, continuous change.” Christopher Briem, Regional Economist, U Pitt.
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BOOK II: ANCHORAGE
“It’s too early to panic. It’s also a time to be choosing our steps very carefully.” - Bill Popp, AEDC CEO. February 2015, New York Times.
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Source: ISER, 2008
BOOK II: ANCHORAGE
THREE LEGGED STOOL
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BOOK II: ANCHORAGE
Strengths(?): The AK LNG GigaProject ($50B). ANCSAs. AKPFC. Arctic Policy. Climate Change. Size of Alaska’s economy. Quality of Life.
TASKS
1. Goal Identification / Economic Planning
Targeted diversification of the Alaska economy with sector growth should occur.
2. Lever Core Energy Industry A. Welcome New Oil, Gas and Extractive Projects B. Identify and Spinoff Technologies and Resources
3. Commercialize University Tech A free market focus on wealth creation from technology created at universities is an area where Alaska can shine- given investment and patience.
4. Support Alaska Businesses “You can’t get there from here” is a false assumption based on forty years of an overconcentrated economy. Corporate taxation, regulations and cultural interactions need to be as business friendly as possible.
5. Help Alaskans Invest in Alaska Money, and more: Identify what kind of Alaska you want in 30 years, and work toward it.
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TAKEAWAYS/PERSPECTIVES
Alaskans, investing in Alaska.
EPILOGUE
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IV. VENTURE CAPITAL IN ALASKA
Stops, Starts, Attempts throughout Alaska History
My involvement: 49SAF
$13.2M US Treasury Allocation for Anchorage
Largely a “Fund of Fund” Investor
49SAF Partner Funds (Thousands)
49SAF TOT
Anchorage Opportunity $2000 $4000
Alaska Accelerator $ 850 $1700
49th $2000 $4000
Anchorage Equity Partners $4500 $9250
The real victory: 12 managers, >24 private investors
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Q: Alaska, what do these companies have in common?
Carr Brothers
Veltri Enterprises
McGee Airways
General Communications Inc.
Alaska Command Federal Credit Union
POP QUIZ!
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A: These Alaska grown companies—most built, then
sold—are some of Alaska’s largest employers.*
*2010 Data, Alaska Div. of Labor
#3
#8
#11
#12
#18
POP QUIZ!