cmfa 12.11.15

What Will It Take?Mark Lautman | [email protected]

1. How much influence do really we have over New Mexico’s economic future?

2. Are we doing as much as we can?3. If so, will it be enough?4. If not, what is is it going to take? 5. Why are we miscalculating?

?

2

Economic development is a new, faster, more complicated game that we can’t play with a Twentieth Century program mix and planning effort.

3

The Community Economics Lab

The CELab is a 501(c) 3 non-profit think tank, focused on new ways to do economic and workforce development in

a labor and capital constrained economy.

Top 10 Reasons We WillMiscalculate

1Failure to

Plan

6

2015

Freelance W-2

The Shift from W2 to Freelance2

2010

2020

13.4

86.6 67.2

33

50 50

7

REPLACEMENTHow many economic base jobs are you losing?

3 Higher Attrition Rates

LIFE CYCLECompanies don’t last as long; globalization and new business models.

ARTIFICIAL INTELLIGENCEComputers that talk, think and create.

AUTOMATIONMachines doing the work of humans.

8

Retiring Boomers

4Zero Sum

Labor

9

Falling Birth Rate

4Zero Sum

Labor

9

Failing Schools

4Zero Sum

Labor

9

4Zero Sum

Labor

9

5 The Phantom WorkforceCliff EffectsSkills Mismatch

10

The Reversal of Chi6

11

The Reversal of Chi6Traditional Employer Focused

Talent Attraction

Rainforest

11

7 SpeedPlanning Horizon: 5 is the new 20

12

8 Higher Program CostsLower ROI

13

Less Government Largess…More Transparency9

14

10Leadership?

15

Ten Reasons Why You Are Miscalculating

1 Failure to plan - metrics.

2 The shift from W2 to freelance.

3 Higher attrition rates: life cycle, artificial intelligence and automation.

6 Reversal of chi – the qualified workers decide.

7 Speed and the new planning horizon - 5 is the new 20.

8 Rising fixed costs & falling risk/reward ratios.

4 Zero sum labor dynamics –retirement, birth rate and education.

5 The phantom workforce – skills mismatch and cliff effects.

9 End of government largess, beginning of more transparency.

10 Leadership and leadership succession.

16

The New Mexico Jobs Council (NMJC) formed in 2013 when New Mexico legislative leadership approached The CELab to develop a framework and a process to help them determine what it would take to return the state to full employment by 2024.

The New Mexico Jobs Council

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Goals of the Jobs Council

1. Develop a framework, process and criteria for sorting out economic development priorities.

2. Assess what it will take to get back to pre-recession employment levels.a. How many jobs? b. Where could they come from? c. What factor of production gaps must be cured?d. What specific programs, projects and policies changes are

indicated? 3. Develop a slate of legislative initiatives.

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What will it take to get back to pre-recession employment levels in 10 years?

1. How many economic base jobs do we need?

2. Where will they come from?3. What factors of production gaps will have to be cured?

4. Who will do it? How much will it cost? 5. How will we know it is working?

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2015-2016 Program of Work

1. Legislation Development – Appropriations sensitive > New legislation.

2. County/Regional Assessments - Completion, validation and refinement.

3. Economic Base Program Program Theaters – Definition and Assessment.

4. Database and Dashboard Development – Refinements.5. New Program Development – Staff Augmentation, Solowork,

Workforce Model.6. Accountability System Development – Framework, source data and

metrics .7. Develop options for institutional succession.

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Wk 1 Wk 2 Wk 3 Wk 4 Wk 1 Wk 2 Wk 3 Wk 4 Wk 1 Wk 2 Wk 3 Wk 4 Wk 1 Wk 2 Wk 3Wk 4 Wk 1 Wk 2 Wk 3 Wk 4 Wk 1 Wk 2 Wk 3 Wk 4 Wk 1 Wk 2 Wk 3 Wk 4

Council Meetings Jun 9 SF

jul 6 ruidoso

Aug 10 Dem

Sep. 14 ABQ

Oct. 23 SF

nov. 16 SF

New Legistlation with Appropriations

New Legislation Without Appropriations

Complete 2014-‐15 County/Regional Assessments

Validaition and Refinement Sessons

Program TheatersEDOsGovernmentI>E and IndependentIndependentVisitorRetirement OthersDashboard System DevelopmentRefine Database Data ReviewProgram DevelopmentSolo WorkStaff AugmentationWorkforce Gap predictive testPerformance metrics longitudinal and attribution metricsInstitiution Succession Plan

2015-‐2016 Jobs Council Preliminary Work Plan

Tech. Team Meeting Statewide

Review System Design Overhaul

Tech. Team Meetings Statewide

Report

Report

ReportReport

Tech. Team Meetings State Wide

MR COG NC-‐EP COG NW COG SC COG

Tech. Team Meetings State Wide

December

Soccorro SE Cog SW COG

June July August September October November

21

Think Plan Do

DiscourseAssessment

StrategyPlan

OrganizationRamp

ReportResults

Execute

22

Attributes of an Effective Planning Process

1. Clarity: Achieves clarity about the nature and scale of the challenges and what can be done.

2. Consensus: Achieves consensus among increasingly diverse and contentious set of stakeholders.

3. Actionable: Instructs specific concerted action.4. Measurable: Establishes a system for tracking results and measuring ROI.5. Accountable: Establishes a responsible organization(s) and individual(s) 6. Iterative: Can be quickly and easily updated or adapted to new insights, conditions or

opportunities.7. Customizable: Can work for any sized community or region. 8. Integrated: Aggregated with region and state efforts.9. Comprehensive: Includes all significant program approaches and factor solutions.10. A convener: a respected (powerful) leader or institution must be willing to convene the

process 23

Attributes of an Effective Planning Process

11. Fast: Moves quickly from assessment to plan to action.12. Simple and logical: must bring needed order, logic and common sense to the

discussion. 13. Transferable and teachable 14. Scalable: Able to expand to include large numbers of stakeholders 15. Open and transparent 16. Coherent: Establishes a common nomenclature, framework, time frame and rules etc. 17. Intuitive: Operates with a lack of perfect data.18. Institutionalized: Permanently funded, staffed and managed free of electoral political

influence.19. Collaborative: Works with, contributes to and helps order the planning efforts of other

entities. 20. Proprietary: the assessment, plan and accountability system is owned by the

stakeholders. 24

Process Requirements

1. Focus: Economic base job creation2. Conveners: Speaker of the House and Senate President Pro Tem 3. Participants: Diverse, balance essential4. Process: CELab5. Methodology : Wisdom of Crowds, Clinical Consensus -Refined6. Criteria: Unanimity7. Data Platform: Tri-level data calculator and dashboard

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• Councils of Government

• Economic Development Districts• Workforce Districts

228,749

283,327

887,077 89,216

63,228

268,495

239,087

Population of Individual COG1-NW

2-NC

3-MR

4-EP

5-SW

6-SE

7-SC

New Mexico’s 7 Economic Regions

26

Coherence: Agree on the theoretical construct,

nomenclature and process

Economic Predicament:

Agree on the number of new, economic-base

jobs that must be created

Economic Sector

Selection: Agree on a ranked list of the sectors with the highest

potential for generating the economic-base

jobs

Geographic Distribution &

Resource Gaps:

Agree on areas of the state in which

the new, economic-base jobs are most

likely to be created

Policy and Program

Implications: Agree on job

creation program and policy

initiatives needed to deliver the job

numbers

NM Jobs Council Process

27

E > P P

Economic Contraction Scenario

28

“We have taken something incomprehensible and made it really simple.”

http://nmjc.thecelab.org/http://nmdashboard.thecelab.org

The Dashboard

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2. Where will they come from?

3. What factors of production gaps will have to be cured?

4. Who will do it? How much will it cost?

5. How will we know it is working?

?

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Factor of Production Gaps:1. Qualified Labor: 102,296 Jobs2. Bandwidth: 81,227 Jobs3. Tax and Regulatory: 76,891 Jobs

Statewide Assessment

Organic, 44,616

Current capacity, 55,910

Capacity Needed, 66,136

Attrition, 80,457

Unemployment, 17,075

Pop. Growth , 42,157

-‐

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Jobs Needed Jobs Estimated Possible

Theater Jobs% Program Reliant Organic

Program Reliant

Employer 49,744 85% 7,462 42,282 Fed Gov 38,035 75% 9,509 28,526 E&E 21,089 85% 3,163 17,926 Visitor 21,082 50% 10,541 10,541 Solo 11,920 25% 8,940 2,980 Film/DM 11,281 100% - 11,281 Startup 8,771 70% 2,631 6,140 Ag 4,739 50% 2,370 2,370 Total 166,661 44,616 122,046

Current Capacity 55,910 Capacity Needed 66,136

Unemployment 17,075 Growth 42,157 Attrition 80,457 Total New E-Base Jobs over 10 Years 139,690 Estimated Potential 166,661 Surplus (Shortage) 26,971

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Northwest RegionCounties: Cibola, San Juan, McKinley

Factor of Production Gaps:1. Qualified Labor: 4,555 Jobs2. Marketing/Lead Generation: 750 Jobs3. Bandwidth: 575 Jobs

Unemployment 1,539 Growth 5,299 Attrition 9,515 Total New E-Base Jobs over 10 Years 16,353 Estimated Potential 6,855 Surplus/(Shortage) (9 ,498)

Organic, 1,028

Current capacity, 760


Attrition, 9,515

1,539 , Unemployment

Pop. Growth , 5,299

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

Jobs Needed Jobs EstimatedPossible


Program Reliant

Employer 1,850 85% 278 1,573 Fed Gov 1,510 75% 227 1,284 E&E 1,500 85% 225 1,275 Visitor 750 50% 113 638 Ag 575 50% 86 489 Solo 400 25% 60 340 Startup 200 70% 30 170 Film/DM 70 100% 11 60 Total 6,855 1,028 5,827

7605,067

Current CapacityCapacity needed

32

North Central RegionCounties: Santa Fe, Taos, Colfax, Rio Arriba, San Miguel, Mora, Los Alamos

Factor of Production Gaps:1. Capital: 12,500 Jobs2. Qualified Labor: 7,075 Jobs3. Bandwidth: 3,810 Jobs

Unemployment 2,329 Growth 5,116 Attrition 10,171 Total New E-Base Jobs over 10 Years 17,616 Estimated Potential 26,780 Surplus (Shortage) 9 ,164

Organic, 9,596



Attrition, 10,171

Unemployment, 2,329

Pop. Growth , 5,116

0

5000

10000

15000

20000

25000

30000


Theater Jobs

% Program Reliant Organic

Program Reliant

Fed Gov 7,730 75% 1,933 5,798 Visitor 7,700 50% 3,850 3,850 Employer 4,180 85% 627 3,553 Ag 2,200 50% 1,100 1,100 Solo 2,130 25% 1,598 533 Startup 1,230 70% 369 861 Film/DM 810 100% - 810 E&E 800 85% 120 680 Total 26,780 9,596 17,184

1,750 15,434

Current CapacityCapacity Needed

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Factor of Production Gaps:1. Qualified Labor: 40,800 Jobs2. Building Inventory: 13,500 Jobs3. Marketing & Lead generation: 10,600 Jobs

Unemployment 6,504 Growth 15,222 Attrition 36,761 Total New E-Base Jobs over 10 Years 58,487 Estimated Potential 83,800 Surplus/(Shortage) 25,313

Organic, 21,665



Attrition, 36,761

Unemployment, 6,504

Pop. Growth , 15,222

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

Jobs EstimatedPossible

Theater Jobs


Program Reliant

Employer 30,400 85% 4,560 25,840 Fed Gov 20,700 75% 5,175 15,525 Film/DM 10,000 100% - 10,000 Solo 8,500 25% 6,375 2,125 Visitor 7,000 50% 3,500 3,500 Startup 5,100 70% 1,530 3,570 E&E 1,500 85% 225 1,275 Ag 600 50% 300 300 Total 83,800 21,665 62,135

Current Capacity 20,360Capacity Needed 41,775

Mid-Region Counties: Bernalillo, Torrance, Sandoval, Valencia

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Factor of Production Gaps:1. Capital: 1,022 Jobs2. Leadership: 611 Jobs3. Qualified Labor: 484 Jobs

Unemployment 165 Growth 1,194 Attrition 3,388 Total New E-Base Jobs over 10 Years 4,747 Estimated Potential 2,330 Surplus (Shortage) (2,417)

Organic, 695


Capacity Needed, 445

Attrition, 3,388

Unemployment, 165

Pop. Growth , 1,194

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000


Theater Jobs


Program Reliant

Fed Gov 648 75% 162 486 Employer 642 85% 96 546 Visitor 445 50% 223 223 Ag 283 50% 142 142 E&E 226 85% 34 192 Solo 40 25% 30 10 Startup 30 70% 9 21 Film/DM 16 100% - 16 Total 2,330 695 1,635

Current Capacity 1,190Capacity Needed 445

Eastern Plains RegionCounties: Union, Harding, Curry, Quay, Guadalupe, De Baca, Roosevelt

35

Factor of Production Gaps:1. Tax and Regulatory: 826 Jobs2. Capital: 667 Jobs3. Qualified Labor: 337 Jobs

Unemployment 966 Growth 928 Attrition 2,296 Total New E-Base Jobs over 10 Years 4,189 Estimated Potential 3,037 Surplus (Shortage) (1,152)

Organic, 1,021


Capacity needed, 1,936

Attrition, 2,296

Unemployment, 966

Pop. Growth , 928

0

500

1000

1500

2000

2500

3000

3500

4000

4500



Program Reliant

Employer 847 85% 127 720 Visitor 505 50% 253 253 E&E 501 85% 75 426 Ag 446 50% 223 223 Fed Gov 352 75% 88 264 Solo 320 25% 240 80 Startup 51 70% 15 36 Film/DM 15 100% - 15 Total 3,037 1,021 2,016

Current Capacity 80Capacity Needed 1,936

Southwest RegionCounties: Luna, Grant, Hidalgo, Catron

36

Southeast RegionCounties: Lincoln, Otero, Chaves, Eddy, Lea

Factor of Production Gaps:1. Housing: 6,650 Jobs2. Bandwidth: 1,860 Jobs3. Leadership: 1,435 Jobs

Organic, 5,049



Attrition, 8,150

Unemployment, 684

Pop. Growth ,

8,685

-

5,000

10,000

15,000

20,000

25,000

30,000

Jobs Needed Jobs Estimated Possible


Program Reliant

E&E 16,050 85% 2,408 13,643 Employer 6,940 85% 1,041 5,899 Fed Gov 1,710 75% 428 1,283 Visitor 1,680 50% 840 840 Startup 425 70% 128 298 Ag 275 50% 138 138 Solo 90 25% 68 23 Film/DM 45 100% - 45 Total 27,215 5,049 22,167


Unemployment 684 Growth 8,685 Attrition 8,150 Total New E-Base Jobs over 10 Years 17,518 Estimated Potential 27,215 Surplus/(Shortage) 9,697

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Factor of Production Gaps:1. Qualified Labor: 6,800 Jobs2. Leadership: 5,222 Jobs3. Capital: 1,735

Unemployment 4,889 Growth 5,715 Attrition 10,176 Total New E-Base Jobs over 10 Years 20,779 Estimated Potential 16,644 Surplus (Shortage) (4,135)

Organic, 4,687



Attrition, 10,176

Unemployment, 4,889

Pop. Growth , 5,715

0

5000

10000

15000

20000

25000



Program Reliant

Fed Gov 5,385 75% 1,346 4,039 Employer 4,885 85% 733 4,152 Visitor 3,002 50% 1,501 1,501 Startup 1,735 70% 521 1,215 E&E 512 85% 77 435 Solo 440 25% 330 110 Ag 360 50% 180 180 Film/DM 325 100% - 325 Total 16,644 4,687 11,957


South Central RegionCounties: Socorro, Sierra, Dona Ana

38

Economic Base Program Theaters

39

Theater Job Estimates ActivitiesEmployer 43,944 Major employer Recruiting, retention & expansion

Federal 38,035 Federal agencies, healthcare, higher education

Visitor Driven 38,035 Tourism, hospitality, transit services

Retirement 21,000 Affluent retirement strategies

Extractives & Energy 11,689 Mining, oil & gas, power plants, wind, solar, bio

Solos 11,920 Freelancers, 1099 contractors, independents

Film & Digital Media 11,281 Film, TV, games

Start Up 8,771 Innovation to Enterprise, start ups, tech transfer

Agriculture 4,739 New crop development, food processing, forestry

Export Substitution ??? Produce locally instead of importing

Total Jobs Estimated 151,461Total Jobs Needed 139,690Difference +11,771

Jobs per Theater SoloRetirementStartupVisitorEmployerFilm/DMFed GovAgE&EImport Sub

01000020000300004000050000

Organic

Program Reliant

Economic Base Job Creation Theaters

40

Employer Recruitment, Retention & Expansion

1. Jobs Potential: 49,744 - 29% of total economic base jobs estimated statewide. Program Reliant: 37,000.

2. Major Economic Sectors: Back Office, Exported Services, Integrated IT/Cyber, Manufacturing.

3. Procuring Agents: EDCs, Local Government, NM Partnership, NMEDD.4. Program status: Underfunded and understaffed. 5. Major FOP Gaps: Workforce, Marketing/Sales, Real Estate.6. FOP Gap solutions: Lack critical diagnosis and planning: Weak Metrics.7. Legislative Action: Staff Augmentation, Coop Marketing, Incentives Support.8. Definition: Procuring economic base jobs by attracting new companies and

helping existing companies survive and grow. Jobs in this theater take place in commercial office and industrial facilities, and the employees are hired as W2 employees.

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Federal Government

1. Jobs Potential: 38,035 – 23% of state-wide economic base job estimate. 2. Major Economic Sectors: Most federal departments, healthcare, and

university research. 3. Procuring Agents: Congressional delegation, NMEDD, EDOs, Local BRAC

groups.4. Program status: Unorganized, uncoordinated piecemeal efforts. 5. Major FOP Gaps: Marketing and sales apparatus, tax and regulatory climate,

real estate.6. FOP Gap solutions: Develop an opportunity set for each economic district

and formally organize theater operations state-wide.7. Legislative Action: Matching fund for Epscor projects.8. Definition:

42

Extractives and Energy

1. Jobs Potential: 21,089 – 13% of statewide economic base job estimate.2. Major Economic Sectors: Oil & Gas, mining, power generation & transmission3. Procuring Agents: EDOs, industry associations, local government4. Program status: Active but lacks organization as a state-wide job creation

theater. Local program efforts include recruiting of suppliers to extractive industries and recruiting and retention of major energy production projects.

5. Major FOP Gaps: Workforce, workforce housing, transportation and transmission

6. FOP Gap solutions: 7. Legislative Action:8. Definition: Creating jobs in the extraction and processing of raw materials

from the land for export and the production and transmission of energy for export out of state.

43

Visitor

1. Jobs Potential: 21,082 – 13% of state-wide economic base job estimate. 2. Major Economic Sectors: Hospitality, Travel, Tourism, Arts and Culture, Sports

and recreation3. Procuring Agents: Hospitality Association, CVBs, Chambers of Commerce. 4. Program status: Well organized, strong metrics.5. Major FOP Gaps: Net new economic base job growth requires incremental

increases to state tourism budget and scale increases in local capacity.6. FOP Gap solutions:7. Legislative Action: Increase in state Tourism Marketing Budget.8. Definition: Jobs with salaries paid from the local sale of goods and services to

visitors from out of state. Excludes travel by New Mexico Residents.

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Solowork

1. Jobs Potential: 11,920 – 13% of state-wide economic base job estimate.2. Major Economic Sectors: Includes virtually all economic sectors.3. Procuring Agents: Potential agents include SBDCs, incubators, accelerators,

community colleges. 4. Program status: No Program effort currently, pilot programs ready in several

communities. 5. Major FOP Gaps: Marketing, sales and concierge support platforms are

required, tax and regulatory, and bandwidth.6. FOP Gap solutions: Develop a state-wide pilot program, special tax class for

qualified solo economic base workers, broadband planning. 7. Legislative Action: Funding a 5 year Solowork Pilot.• Definition: Solo economic base workers perform full time work from a home

office, workshop, studio, or mobile platform. While they may work for a corporation, they do not work in a centralized workplace. They must also be a resident taxpayer of the state earning twice the poverty rate with half of their revenue derived from out of state work. 45

Film and Digital Media

1. Jobs Potential: 11,281 – 7% of the state-wide economic base job estimate.2. Major Economic Sectors: Film and digital media3. Procuring Agents: New Mexico Film Office, local film offices, studios4. Program status: Well organized 5. Major FOP Gaps: Incremental increases in the state rebate program are

required to generate new economic base jobs.6. FOP Gap solutions: Gradually raise the cap.7. Legislative Action: None at this time.8. Definition: Recruiting and developing the production of feature films,

independent films, television, regional and national commercials, documentaries, animation, video games, webisodes, mobile applications, and post production work indented for commercial exploitation and exhibitions out of state.

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Startup

1. Jobs Potential: 8,771 – 5% of the state-wide economic base jobs estimated.2. Major Economic Sectors: All sectors.3. Procuring Agents: Incubators, accelerators, SBDCs, enterprise funds, 4. Program status: Active, growing but unorganized as a job creation theater,

lacks metrics 5. Major FOP Gaps: Capital, tax and regulatory 6. FOP Gap solutions: Remove out of state restriction on venture capital tax

deduction, eliminate capital gains on rollover VC investment, matching funding for skilled program staff.

7. Legislative Action:8. Definition: The focus of this theater is entrepreneurs that intend to become

economic base employers. Program efforts in this theater are focused on raising the metabolic rate of innovation and entrepreneurial activity and the conversion of that activity into an increasing number of new economic base employers.

47

Agriculture

1. Jobs Potential: 4,739 – 3% of state-wide economic base job estimate.2. Major Economic Sectors: Food and fiber production, processing marketing3. Procuring Agents: NMSU, Extension service, EDOs, production associations 4. Program status: Active but unorganized as theater, lacks a job creation focus

and metrics 5. Major FOP Gaps:, Tax and regulatory, marketing and sale apparatus 6. FOP Gap Solutions: Theater requires more definition and organization7. Legislative Action:8. Definition: Procuring economic base jobs by attracting, expanding and

creating enterprises that grow, process and distribute food and fiber.

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Import Substitution (non- economic base jobs)

1. Jobs Potential: Unexplored – potentially significant. 2. Major Economic Sectors: All sectors.3. Procuring Agents: Chambers of commerce, EDOs, Mainstreet.4. Program status: Unexplored.5. Major FOP Gaps: TBD6. FOP Gap solutions: TBD7. Legislative Action: TBD8. Definition: Leakage prevention. New induced non-economic base jobs can be

added to a regional economy by expanding or developing new local product and service providers that allow local non-economic base businesses and residents to spend their money locally instead of outside the region. New induced jobs are additive to the economy as long as the economic base is growing and the new induced jobs being created do not result in destruction of existing jobs or enterprises.

49

Factor of Production Gaps Summary

Statewide Factor of Production Gap Assessment

Capital

Infrastructure: Water

& Sewer

Infrastructure:

Bandwidth

Infrastructure:

Transmission

Infrastructure: Roads &

Drainage

Infrastructure: Power

& GasInfrastructure: Public

Safety Tra

nsportation

Qualified W

orkforce

Tax and Regulatory

Issues

Land Inventory

Building Inventory

Marketing and Lead

Generation

Sales and Deal

Structuring

Leadership

Housing

Statewide Jobs at risk 55,736 2,295 65,427 16,667 1,725 6,650 150 11,570 80,696 61,691 1,235 35,408 40,386 21,360 25,297 13,936

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Jobs Impacted

StatewideJobs at risk

50

Division of Responsibility for Job Creation

98,407

21,082

11,281

20,691

-

20,000

40,000

60,000

80,000

100,000

120,000

EDCs (ERR&E, Ag, E&E, Fed Gov)

Tourism NM Film Office No Program

Jobs by Program

51

Theater10 Year Potential

% share of state 10 yr goal

Program Reliance potential

% Share of state program reliant

Org/Planning Status

E-Base Focus

Is there a plan?

E-Base Metrics

Major FOP Gaps

Procuring Agents

Action Required

1. Employer 43,944 29% 37,352 33%

Poorly Organized, Under capacity

Mixed Maybe WeakWorkforce, Marketing/Sales, RE

EDCs, Local Government, NM Partnership, NMEDD Discipline

2. Fed Gov 38,035 25% 28,526 25%

Unorganized but programmable

N/A No N/A Marketing/Sales, Tax Climate

EDCs, Local Government, Federal Organize

3. Visitor 21,082 14% 14,757 13%Well organized, Growing capacity

High Yes StrongMarketing/Sales

Tourism, Hospitality Plus up

4. Solowork 11,920 8% 5,960 5%

Unorganized but programmable TBD No TBD

Program Development, Tax & Regulatory No Program Innovate

5. Energy & Extractives 11,689 8% 5,845 5%

Unorganized difficult to program

High No TBDHousing

EDCs, Local Government Housing

6. Film/ Digital Media 11,281 7% 11,281 10%

Well organized, Growing capacity High Yes Strong Capital, (Real

Estate) NM Film Office Plus up

7. Startup 8,771 6% 6,140 5%

Poorly Organized TBD No TBD Capital, Tax and Regulatory

Incubators, Accelerators, SBDCs Discipline

8. Agriculture 4,739 3% 2,370 2%

Unorganized difficult to program

High No TBDNatural Resources, Workforce, Tax & Regulatory

EDCs, Agricultural estate service Organize

9. (Retirement) ~21,000

Unorganized but programmable TBD No TBD

Program Development, Tax & Regulatory, Marketing/Sales No Program Innovate

10. (Import Substitution)

Unorganized but programmable

TBD No TBD TBD TBD Discipline

Theater Impact Evaluation Matrix

Potential Impact Theater Status Action IndicatedPotential Program Impact

Program Theater Assessment Summary

52

State Assessment Summary

• Economic base job needs 140,000 – 14,000 year.

• 3 Region’s estimated potential for more economic base jobs than they project they will need.

• Program planning, organizational capacity and infrastructure.

• The first cut of job creation program capacity shows every region except SE dramatically short of program resources.

• 4 Region’s estimated fewer economic base jobs.

• Averaging 14,000 – 12,000 are program dependent.

• EcD IQ too low to get traction.

53


140,0002. Where will they come from?

Employers, Federal Government, Extractives & Solos.3. What factors of production gaps will have to be cured?

Workforce, Bandwidth, Tax and Regulatory & Capital.

4. Who will do it? How much will it cost? Local plans are required - See legislative agenda

5. How will we know it is working? Accountability Act

?54

2015 Jobs Council Legislative Agenda

Initiative Amount CommentsLEDA $50M October Meeting

Partnership $2M October Meeting

EDO Staff Augmentation $4.5M Matching

Co-op Advertising $2M Matching

Solowork $500K October Meeting

Broadband $300K Engineering Plan and Priority Infrastructure

Workforce Gap Study $125K Pending-Pilot, CHE

Middle School Physics $250K

Workkeys Assessment $35K NMDWS Offset

Metrics and Accountability $150K Draft bill in development

55

2015 Council Supported Legislation

Initiative Amount ActionJTIP $10M Support EDD

NMSU STEM Program $408K Support NMSU

Tourism Marketing Funding $4.7M Support Tourism

Rapid Workforce Deployment $1.25M Support Higher Education

Public Private Legislation - Support Legislation

Rural Infrastructure Tax Credit - Support Legislation

Scenic Byways Program $500K Support Tourism

Technology Maturation $2.5M Support Legislation

Workers Comp Evaluation $500K Support Legislation

56

Local Economic Development Act - LEDA

• Description: Increase scale of closing resources for major economic base job creation projects. Increase funding of the existing LEDA program to keep New Mexico competitive in terms of available closing funds to land major economic development projects.

• Appropriation: Maintain at $50m passed last year.

• Status: No new funds requested for this year. Plans are to replenish as the fund is drawn down.

57

NM Partnership Funding

• Description: Increase marketing and case management for major economic base job creation projects. Provide additional funding of the New Mexico Economic Development Corporation (New Mexico Partnership) in order to increase marketing and business development of the state to attract and expand additional economic base employers.

• Appropriation: $2 Million

• Action: Draft in House Bill 2

58

Co-op Marketing Funding

• Description: Re-build the pipeline of prospective economic base job creation project opportunities. Funds the New Mexico Economic Development Department to match regional and local efforts to generate qualified economic base business leads for target industries.

• Appropriation: $2 Million

• Action: To be moved by Co-chairs

59

Local Staff Augmentation Matching

• Description: Fund provides matching state grant funds to regional and local economic development organizations to hire professionals to expand job creation in their area.

• Appropriation: $4.5M

• Passed, Needs funding

60

Broadband Infrastructure Solutions

• Description: Conduct a comprehensive study and report on available assets, capabilities and gaps, design and engineering needs, gap solutions, necessary funding sources, etc., needed to erase the competitive disadvantage of current broadband inadequacies across the state. Complete broadband infrastructure upgrades at high priority rural locations

• Appropriation: $950K

• Action: Draft bill in development

61

Solowork Pilot Programs

• Description: Develop a new statewide program approach for creating economic base jobs. Establishes a new economic base job creation program focused on solo and independent workers. The matching fund would be used to create a minimum of two local pilot programs, one rural and one urban or suburban. Solo and independent work, aside from being one of the fastest growing sectors in the New Mexico economy, may be the only opportunity available to many of the state’s rural communities to create economic base jobs.


• Bill updated, run through HB2

62

Workforce Gap Analysis

• Description: Analyze statewide workforce needs. Conduct analysis of current and future workforce needs through the study of job openings, employer surveys and focus groups, WorkKeys and O*Net data, as well as from data in available forecasting models. Workforce being the key factor of production in advancing New Mexico’s economy, understanding of areas of worker and skill shortages will be vital.


• Action: Bill updated, run through HB2

63

Middle School Physics

• Description: Better prepare students for the future New Mexico workforce. The bill appropriates $250,000 to fund a pilot for a middle school physics program developed by See the Change USA a 501 (c) (3) to conduct a three-year pilot program in five of the poorest performing middle schools around the state. The program requires a one time $50,000 fee for the curriculum modules and teacher training. This program will assist New Mexico communities in helping them produce local workforce with the skillsets needed to sustain their economies in the future.


• Action: Bill updated, run through HB2

64

Workkeys Assessment

• Description: Support NMDWS program of assessing job applicants to determine their mathematics and reading skills necessary to successfully accomplish occupational work requirements

• Appropriation: $35,000

• Action: Draft Bill

65

Metrics and Accountability

• Description: Establish program for ongoing collection and reporting of economic base jobs, standardize and report incentives, and calculate project ROI.


• Action: Draft Bill in development

66

Job Training Incentive Program

• Description: Expand the scope of the existing training program. Enhance current on-the-job training programs for newly hired New Mexico residents to better supply the needs of the target sectors of the New Mexico economy.

• Appropriation: $10M Non-reverting

• Action: Support Economic Development Dept.

67

NMSU STEM Program

• Description: Support a STEM entrepreneurship and diversity outreach and retention program

• Appropriation: $408K• Action: Support NMSU

68

Tourism Marketing

• Description: Expand the marketing and promotion of New Mexico as a tourism destination

• Appropriation: $4.7M• Action: Support Tourism

69

Rapid Workforce Deployment

• Description: Establish community college program to provide immediate training for workers needed by new or expanding companies

• Appropriation: $1.25M

• Action: Support Dept. of Workforce Solutions

70

Public Private Legislation

• Description: Provide legal means for public and private sectors working together on broadband and other appropriate initiatives.

• Appropriation: None

• Action: Support in Legislature

71

Rural Infrastructure Tax Credit

• Description: Tax credit for designated sector and projects• Appropriation: None• Action: Support in Legislature

72

Scenic Byways Program

• Description: Promotion of area attractions• Appropriation: $500K• Action: Support Tourism Dept.

73

Technology Maturation

• Description: Facilitate tech transfer from national laboratories to small businesses.

• Appropriation: $2.5M/year for 5 years.

• Action: Support in legislature.

74

Workers Compensation Evaluation

• Description: Evaluation of various workers compensation program aspects


• Action: Support Dept. of Workers Compensation

75

To alter economic development trajectory of the state, local community leaders will have to devote an order of magnitude more time and resources to thinking through, planning and measuring their economic development efforts.

Bottom Line

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Accountability Act - The Commitment Device

• Local and Regional job creation efforts will have to scale up dramatically over the next ten years if we are to have any chance of making these numbers.

• Scaling to this new level of thinking planning and investing will require, what behavioral psychologists call, a commitment device.

• In this case that commitment device is a more comprehensive and rigorous accountability system.

• It is the linchpin to any strategic effort.

• Without a rigorous and comprehensive system of metrics, analytics and reporting in place, most community leaders and their program managers will be unwilling to go through the considerable effort or bear the risks of

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The rationale for a comprehensive and rigorous metrics, analytics and reporting system…

1. Help bring much needed clarity and order to state and local economic development deliberations.

2. Required to comply with GASB Rule 77.

3. Serve as a commitment device to:

• Compel and reward investment in prescriptive planning efforts.

• Attract the scale increases in investment and policy support required.• Help ensure execution of plans and policies.

4. Help stakeholders, leaders, managers and staff gauge progress against program goals.

5. Improve public perception of economic development investments and ROI.

6. Help de-politicize economic development initiatives. 79

Constraints and Concerns

1. Additional reporting costs and inconvenience on already over regulated employers.

2. Additional reporting costs to state and local governments.3. Additional reporting costs to economic development organizations.4. Confidentiality of employers.5. Degrading of the ability of state and local job creation agencies to negotiate

and manage the client relationship.6. Further politicization of economic development and workforce issues.

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Accountability System Components

1. Uniform framework for legal and administrative coherence• Comprehensive; all theaters, all levels • Conceptual clarity; economic base, • Definitions; transactions, • Segmented by; theater, factor of production • Jurisdictions; state, regional, local• Negotiating principles; but for, moral, strategic, tactical, ROI

2. Classes of metrics• Economic base source data and analytics; • Incentives compliance and ROI analytics; by incentive, by theater.• Program performance state and local; calibrated to plans.

3. Building Commitment• Set measureable program recruitment and expansion goals.• Identify major factor of production gaps.• Define, fund and implement strategies and reporting. 81

COMMENTS OR QUESTIONS?

Mark Lautman, CEcD505.818.8218 | [email protected]

cmfa 12.11.15

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