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W H A T W H A T W H E R E W H E R E W H Y W H Y B R O O K I N G S B R O O K I N G S A D V A N C E D A D V A N C E D I N D U S T R I E S I N D U S T R I E S P R O J E C T P R O J E C T

Intermountain West MPO-TMA-Transit Meeting March 3rd, 2015

1 2 3 4 Context Advanced Industries: What, why Trends Strategy 3

2 3 4 1 Context 4

Intermountain West Recovery The region has fully recovered from the recession in terms of lost jobs and output 2008Q1 2009Q3 2011Q1 2012Q3 2014Q1 EMPLOYMENT OUTPUT

Intermountain West Recovery Six out of the region’s 10 large metropolitan areas have fully recovered lost jobs ABQ BOI COS DEN LAS 2008Q1 2014Q1 2008Q1 2014Q1 2008Q1 2014Q1 2008Q1 2014Q1 2008Q1 2014Q1 OGD PHX PVU SLC TUS 2008Q1 2014Q1 2008Q1 2014Q1 2008Q1 2014Q1 2008Q1 2014Q1 2008Q1 2014Q1

Intermountain West Recovery However, average annual earnings are lower in the nine of the region’s 10 largest metros $59,361 U.S. $50,129 $49,803 $48,781 $47,561 $46,089 $44,571 $44,159 $40,794 $40,177 $39,940 ABQ BOI COS DEN LAS OGD PHX PVU SLC TUS

2 3 4 2 Advanced Industries: What, why 8

Blurring distinction Relentless pace between “Digitization of of technological manufacturing everything” change and services

Advanced Industries R&D-intensive industries that concentrate the nation’s science, technology, engineering, and mathematics (STEM) workforce

Advanced Industries Energy Manufacturing Services 35 12 3 Telecommunications R&D Consulting Aerospace Pharmaceuticals Oil & Gas Services Extraction Motor Vehicles & Medical Equipment Software Computer Systems Electricity Parts Design Generation

Advanced Industries Concentrate the assets of the innovative economy 90.0% 81.2% 80.0% 60.0% 17.7% 8.7% Private U.S. U.S. Exports Engineers / Patents Sector Workers GDP Architects R&D

Advanced Industries Provide steady wage growth, at 5 times the rate of other industries $100,000 Advanced Industries $80,000 Average Wage $60,000 United States $40,000 $20,000 1975 1980 1985 1990 1995 2000 2005 2010

Advanced Industries Offer a significant wage premium at every level of education $160 $153 50 percent $130 of advanced industry jobs $120 Average Wage (thousands) require less than a bachelor’s degree $117 $115 $89 $89 $80 $69 $60 $56 $54 $44 $40 $38 $33 $32 $28 $20 $0 Doctoral Professional Master’s Bachelor’s Associate’s Some Secondary No Secondary Degree Degree Degree Degree Degree College Diploma Diploma

Imp Al Advanced Industries Ad d in Develop technology that $ fro transforms lives co tri lo U Sp b cre Drive productivity in d other industries cre lo T mi in w su th co o su fo Support long supply chains Stimulate local economies

Imp Al Advanced Industries Ad d in Develop technology that $ fro transforms lives co tri lo U Sp b cre Drive productivity in d other industries cre lo T mi in w su 39 million th co o su fo Support long total jobs supported by supply chains advanced industries Stimulate local economies

1 2 4 3 Trends 17

Advanced Industries Trends Indexed Performance, 1980-2013 Advanced (1980 = 100) Industries 300 Output 200 Advanced Industries 100 Employment 1980 2013 Source: Brookings Analysis of Moody’s Analytics

Advanced Industries Computer Systems Design Gross Employment Changes, 2010-2013 260,000 Motor Vehicle Parts 191,125 Oil and Gas Extraction 122,250 Pharmaceutical Manufacturing Ship and Boat Building Communications Equipment Manufacturing 53,375 Source: Brookings Analysis of Moody’s Analytics -15,500 EMP2010_2013 Manufacturing Energy Services

Advanced Industries Are unevenly concentrated across states Share of Total State Employment in Advanced Industries 9.8 to 11.8 percent 8.3 to 9.6 percent 7.8 to 8.3 percent 6.3 to 7.8 percent 5.1 to 6.3 percent

Advanced Industries Are highly metropolitan and vary across the mountain west Share of Total Metro Employment in Advanced Industries 2.0 to 5.8 percent 5.8 to 8.3 percent 8.3 to 11.3 percent 11.3 to 16.0 percent 16.0 to 29.9 percent

Advanced Industries Are Highly Metropolitan and Vary Across Regions 22,900 $81,320 Advanced Industry average pay, advanced industries Jobs $40,790 8.0% average pay, all industries AI share of total employment Boise Semiconductor Manufacturing Advanced Industry Architecture and Engineering Select top Profiles industries by Computer Equipment Manufacturing employment Management Consulting Computer Systems Design

Advanced Industries Are Highly Metropolitan and Vary Across Regions 134,760 $100,250 Advanced Industry average pay, advanced industries Jobs $59,360 10.3% average pay, all industries AI share of total employment Denver Architecture and Engineering Advanced Industry Computer Systems Design Select top Profiles industries by Oil and Gas Extraction employment Aerospace Products and Parts Software

Advanced Industries Are Highly Metropolitan and Vary Across Regions 25,090 $70,990 Advanced Industry average pay, advanced industries Jobs $39,940 12.0% average pay, all industries AI share of total employment Provo Computer Systems Design Advanced Industry Software Publishing Select top Profiles industries by Semiconductor Manufacturing employment Web Search and Internet Publishing Pharmaceutical Manufacturing

Innovation shortfalls R&D Spending By Universities, Millions 2013 Patents Per Thousand Workers, 2007-2011 2.54 RANK VALUE 1 Johns Hopkins $2,168 2 U Michigan $1,375 31 UT Austin $634 32 Arizona $629 33 Purdue $595 0.75 38 VA Tech. $496 39 Utah $494 51 NC State $417 52 U Co. Denver, Med. $409 53 ASU $405 57 SUNY Buffalo $387 Intermountain U.S. 58 U Co. Boulder $385 West 72 Colorado State $313

Skills deficits Share of population 20-34 with a STEM degree, 2013 1.45% 1.00% RANK VALUE 0.92% Japan 18 0.59% 0.81% Switzerland 19 0.59% Israel 20 0.58% 0.59% Italy 21 0.57% 0.58% U.S. Canada 22 0.57% 0.53% 0.45% 0.45% United States 23 0.53% 0.29% Spain 24 0.52% Norway 25 0.52% 0.13% Estonia 26 0.52% Belgium 27 0.46 ABQ BOI COS DEN LAS OGD PHX PVU SLC TUS

Ecosystem erosion Major metropolitan areas with at least 10 percent of total employment in advanced industries 1980 2013

1 2 3 4 4 Strategy 28

Commit to innovation Seek to maximize Build research Expand basic and the commercial specializations aligned applied research impact of innovation with industry needs activities

Develop the STEM pipeline ICON Set a strong vision Invest in industry Address the basic of STEM’s aligned regional skills proficiency crisis importance initiatives

Embrace the ecosystem Focus on bottom-up Create greater Aid and abet the regional economic networking and emergence of local development collaboration hubs clusters

Advanced industries interactive www.brookings.edu/advancedindustries

Contact: Mark Muro W H A T W H E R E Co-Director W H Y Brookings Mountain West B R O O K I N G S mmuro@brookings.edu A D V A N C E D I N D U S T R I E S P R O J E C T A M E @MarkMuro1 R I C A ’ S A D V A N C E I D N D U S T R I E S W H AT T H E Y A R E , W H E R E T H E Y A R E , A N D W H Y T H E Y M AT T E R View the report: www.brookings.edu/advancedindustries 33

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