December 2004 [pdf version]
To the strains of the famous gospel song Amazing Grace, the Prosperity Partnership's Regional Economic Summit got under way. An appropriate song, perhaps, as it may take amazing grace to accomplish the goal of the partnership.
After all, all the partnership wants to do is forge a regional economic strategy for over three million people who live in King, Snohomish, Pierce and Kitsap counties that will drive development and investment decisions into the future. Plus, the Partnership's measuring rod of success is an agenda that creates 100,000 primary jobs above the 290,000 jobs baseline forecasts say will be generated by business-as-usual economic growth in the four-county area by 2010.
More than 1,100 civic, business, academic, labor and nonprofit leaders gathered Friday, November 19, at the Qwest Field Event Center to begin the work of the partnership, spearheaded by the Puget Sound Regional Council. Speakers included Governor Gary Locke, King County Executive Ron Sims, newly elected attorney general Rob McKenna, plus Seattle City Councilman Richard McIver, president of the PSRC, and Kathy Keolker-Wheeler, the mayor of Renton - these were just a sample of the many cities and towns represented in the room.
Aaron Brown, CNN
"When I left home, the region had this kind of
snap in its step, a confidence, and this combination
of things, whether it was Boeing's decision, the
technology bust or WTO or whatever it was,
looking back at the region, it seems
less confident to me. The snap that was in
the step a decade ago seems a little slower now
and I guess that is why you are all here.
To figure out what to do about it."
"Absolutely a success," beamed Bob Drewel, Executive Director of the PSRC, as the meeting concluded. Attendance was much greater than organizers had expected when the meeting was first proposed, even more than expected as late as a week before the meeting.
Many of the speakers at the meeting focused on a long-standing problem for the region - its tendency to talk about issues and not act on them. If there was a theme that ran through the sometimes impassioned remarks of speakers it was that the time for talk is over. It is time for the region to act and act as a cohesive whole.
"We hear the world economy is changing," said John Ladenburg, Pierce County executive and one of the co-chairs of the partnership. "That's wrong. It is not changing. It has changed."
The partnership grew out of the successful drive to keep production of the Boeing 7E7 in Washington. That effort helped many see the value in cooperation, especially on a regional level.
Ladenburg said he was asked during the 7E7 effort why he in Pierce County was working to help Everett in Snohomish County land the production. "The threads connect," he told the group, pointing to the recent announcement by Japan-based Toray Composites, a 7E7 supplier, that it will spend $30 million to expand its plant in Pierce County, creating 100 new jobs. Ladenburg noted that this investment "would not have happened" without our commitment to a new rail-barge facility in Snohomish County.
Just the Beginning
While a "Summit" is often seen as the end product of a process, in this case it was the beginning of one that organizers hope will lead to the regional economic strategy. The partnership is the first time government, business and community leaders from throughout the Central Puget Sound area have agreed to work together on an overall regional economic approach.
The partnership is funded by the federal Economic Development Administration, local governments and the private sector. The co-chairs are some of the region's heavy hitters - Mark Emmert, President, University of Washington; Tomio Moriguchi, Chairman and Chief Executive, Uwajimaya; Alan Mulally, President, Boeing Commercial Airplane; Rita Ryder, President, YWCA; Brad Smith, Senior Vice President, Microsoft, and Executive Ladenburg.
There will be those who will find it easy to criticize the meeting - there was no specific "news" outcome. Small-group sessions in the afternoon came up with a list of "opportunities," pointedly avoiding prioritizing them. The idea was to open the door to dialogue and see what the group came up with.
If there was any "news" it was the size of the meeting. There were over 1,100 people in attendance at the Summit with only a handful of no-shows when got under way. No one could remember a larger regional gathering, or one with so many representatives from the four counties, the non-profit sector and business.
The results of the Summit brainstorming will be combined with analysis by Puget Sound Regional Council planners and economists, together with research being done for the partnership by the Economic Competitiveness Group, Inc. (ECG), a Berkeley, Calif., consulting group with a track record in helping regions form economic strategies around the idea of clusters.
Regional Reality Check
Ted Lyman, Senior Principal at ECG, provided the Summit with a "reality check," a look at some of the forces in the world economy that are pushing the need for change.
For starters, the world economy is doing very well right now with the International Monetary Fund forecasting that world gross domestic product will increase 5 percent this year, "a rate not seen for a quarter century," Lyman said. Another trend, important to the trade dependent Puget Sound region, is the emergence of large trading blocks.
What was once a global economy with hundreds of national players is rapidly changing into a world dominated "by a handful of trading blocs, and the World Trade Organization gaining increasing strength as a global referee," he said.
It means, he said, that the Puget Sound area faces a much different world than it did only a few years ago. It means Puget Sound's up and down economic history will continue to be a factor in determining how well it functions in the world. And it means the region likely faces a period ahead where regional unemployment will trail national figures.
Lyman outlined some of the recent economic history for the region - another one of its down periods after a strong upturn in the late 1990s. The impact of the terrorist attacks, the dot-com bust, the sharp decline in employment and the continued slump in manufacturing jobs are signs the boom-bust nature of the regional economy holds true.
Warning signs for the region include the continued loss of manufacturing jobs - the kind of primary job the partnership is trying to create. New jobs tend to be in services and government. And outsourcing remains a particular threat here.
Lyman said that a third of the 372,000 information technology jobs lost in the country in the past three years was due to outsourcing. The region as a result not only competes with such domestic regions as the Bay Area, San Diego and Denver, it also competes with international places such as Hyderabad, India. Microsoft recently said it would double the size of its operation there while slowing some of its expansion in the Seattle area.
Lyman said that focusing on clusters is one of the best ways for regions to fight back.
Clusters are "geographically concentrated sets of competing and complementary industries, operating in similar markets, linked by their buyer-supplier relationships and their shared reliance on inputs from local universities, colleges, sources of technology and capital" Lyman said.
Clusters are important. Lyman's group identified a number of clusters already here - aerospace, software and others. Clusters generate only about 34 percent of the jobs, but the other two thirds are dependent on them for their existence, Lyman said.
In his study of the region, Lyman found five initial specific cluster areas that appear to present the most opportunity for the future, although the study is in its preliminary stages and could change over time.
The initial five clusters:
"The Prosperity Partnership is not a study," Lyman said. "It is designed to use analysis to excite and mobilize the region's leaders and work with this new energy to get stakeholders on the same page, with a jointly developed and shared economic vision. From this point forward, the initiative moves into action."
Several working groups will be formed around the pilot clusters to develop concrete actions to overcome the roadblocks to cluster development. The Summit itself is expected to generate 300 to 400 people who will continue to work on issues raised during the meeting. Results of the efforts are expected by March.
A Time To Act
A grand plan, but again many of the speakers urged the region to be ready to act, not talk.
Smith, the Microsoft executive, said the four-county area is a "single economic region." He called the goal of creating 100,000 new jobs "the kind of bet we love because it brings us together around a long-term vision."
Locke, with about two months to go as governor, called on the group to pay attention to education. The region needs world class education to compete in the new global economy, he said.
While Locke and others talked about education from kindergarten to the university level, the focus was clearly on higher education and its role in producing a strong regional economy. Attorney General-elect McKenna said UW regents need more authority to set tuition levels.
One of the unusual aspects of the Prosperity Partnership is the strong role being played by the region's non-profit community. Almost a quarter of the people at the Summit were from the non-profit sector. It is recognition that any region claiming a stake in the world economy had better pay attention to such things as arts, culture and social services.
Ryder, the president of the YWCA, said that jobs are the "fundamental building blocks" for the community because "jobs create hope." She said the non-profit sector "stands ready to help," to "join hands and create a strong economy for all our people."
Bob Watt, vice president, Boeing Commercial Airplanes, filling in for Mulally, said work to keep the 7E7 program here was successful in part because of the support of the International Association of Machinists and the Society of Professional Engineering Employees in Aerospace, one of the mentions during the day of labor's role in regional prosperity.
But Watt, too, called for action. He said the region is often stuck in bargaining and discussion on issues and actions. "It is time to get unstuck," he said. For example, he said, "This group has the power to demand the integration of growth management and transportation. What a concept."
The early part of the Summit was taken up with trying to get a sense of the region from the 1,100 people who were there, using interactive polling by Stuart Elway of Elway Research.
In trying to establish a regional economic "foundation," quality of life not surprisingly emerged at the top of the list. The region does fairly well in technology transfer and human resources. The business climate and support for small business are in the middle. And bringing up the rear, again to no one's surprise, was physical infrastructure.
The Summit and the partnership are based on three basic assumptions that ran through the day:
After the Summit, the Qwest Field operators invited anyone who wanted to walk onto the field. The message up on the big stadium screen was "Welcome Prosperity Partnership."
Drewel, the PSRC Executive Director, walked out on the field, saw the message and let out a cheer. "Touchdown!" he shouted. Touchdown it was that day for the Prosperity Partnership, but it is only the first quarter and there is a long way to go to a win.
Don't Miss Out on the VISION 2020 Awards
Nominations are being accepted until January 5, 2005. Application materials are available online at www.psrc.org/projects/awards or from Michele Leslie at 206-587-4819, mleslie@psrc.org.
Arterial Traffic Increases Slightly with Rising Employment in Most Areas
PSRC collects screenline data to determine traffic volumes on regionally significant arterials and minor road connections between geographic sectors. The map shows the screenlines where volumes were recorded by PSRC in 2002 and 2004, the change in arterial traffic volumes on the screenlines, and the percent of change the new volumes represent. With the exception of the Seattle area, south King County, and southeast Lake Sammamish, most screenlines showed a slight increase in traffic.
Traffic volumes for 2004 on Interstate and State Routes on the screenlines will be available from the Washington State Department of Transportation in late 2005. The four county area has also seen a slight increase in covered employment for the period from 2002 to 2004, a net increase of 202 jobs according to the Employment Security Department estimate. Variations in employment levels are more apparent by county. King County employment dropped by 1.76%, and Pierce, Kitsap, and Snohomish counties each showed an increase. Pierce County employment went up by 4.46%, Kitsap County increased employment by 6.35%, and Snohomish County showed an increase of 2.13%. Changes in employment levels may be related to the change in traffic volumes.
Arterial screenlines at the Seattle Ship Canal, south of the Seattle Central Business District and lower King County all show some losses in volumes. The Bellevue area and north of Bellevue show small traffic increases as well as the area north into Snohomish County. Pierce County shows some increase in volumes except for the southernmost screenline. The Kitsap County screenlines show an increase in traffic, perhaps in part due to increased employment in that county.
Washington State Ferries data shows traffic across the Sound (vehicles) experienced a small decline in volumes. However, this may have been affected bythe fare increase during this time period.
For more information, contact Mark Charnews at 206-464-5355 or mcharnews@psrc.org
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