Posted: May 7, 2012, 4:54 PM
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The OECD Reviews Chicago - First Study In U.S.
The OECD Reviews Chicago
May 6th, 2012
Read More: http://www.urbanophile.com/2012/05/0...views-chicago/
332 Page PDF Report: http://www.urbanophile.com/2012/05/0...views-chicago/
Quote:
The Organization for Economic Cooperation and Development (OECD) is an international organization that has its roots in the administration of Marshall Plan aid to rebuild Europe after World War II. The OECD was invited by the Chicagoland Chamber of Commerce* to perform a “territorial review” of Chicago’s regional economy. I believe this is the first such review the OECD has ever undertaken in the United States. The results were released a couple months ago.
- The review focused on the Chicago metropolitan area, though frequently included the Milwaukee metro area as well. Wisconsin and Indiana were invited to participate in the project, which was notable given the city-centric nature of most civic development initiatives in Chicago and the fact that the lion’s share of the people and economic output are in Illinois. It’s a recognition of the need to think regionally. Wisconsin did participate, but Indiana declined. Explaining why, Indiana economic development chief Mitch Roob said, “We don’t do studies, we do deals.” Indiana also made it clear that it intended to differentiate itself from Illinois to attract jobs, and that luring jobs across the border from Illinois was a core plank in their economic development strategy.
- “Although still high in absolute terms, GDP and labor productivity growth rates are sluggish – both by US and international standards. The Chicago Tri-State metro-region’s contribution to national growth has slowed over the past decade and the region does not stand out as a top knowledge hub. Despite a dynamic and numerically large labor force, the region has experienced virtually no growth in the size of its prime working-age population and displays limited ability to attract and retain talent when compared to its US peers. More worrisome are the persistence of unemployment and the lack of sufficient job creation.” – OECD Territorial Review, The Chicago Tri-State Metropolitan Area.
- To be sure, the Chicago Tri-State metro-region remains an attractive place for many migrants, but it is less attractive than many of its US metro-region peers. Moreover, if the analysis is confined to highly educated people of prime working age (25+, with at least a bachelor’s degree), then the picture is even more problematic. During 2005-09, more such people moved into the area than left it, but the net gain was relatively small compared with other large US metro-regions. Los Angeles, for example, benefited from a net gain of nearly 80,000 highly educated people in 2009, compared with 3,500 for the Chicago Tri-State metro-region.
This report is a goldmine of stats and there’s way too much to list here, but a few things that jumped out:
• The OECD report benchmarked labor productivity, which is less commonly looked at in economic studies. Chicago’s is above average but growing more slowly than average.
• Chicago has trailed the nation in job growth. Had Chicago simply matched the national average in job growth since 1990, the region would have 600,000 more jobs than it does today.
• There was quite a bit of sectoral analysis of Chicago’s economy. In fact, they actually normalize the sectoral composition of Chicago’s economy when looking at job growth to see if its under performance in job growth was due to concentration in slow growing sectors – but it was not.
• Chicago is known for having America’s second largest business district, but it ranks only fifth out of the top ten regions in America for the percentage of its jobs in the core city. Between 1960 and 1990, over 96% of new regional jobs were created outside downtown.
• There were many other interesting statistics around labor force participation, mobility of educated labor, elderly dependency ratios, educational attainment, poverty, patents, the structure of governments, taxation, etc.
The OECD’s recommendations were not nearly as strong as its assessment of the region’s conditions. This shouldn’t be surprising as it is easy to look at data and see what may be wrong, but it is not always obvious what to do about it. The recommendations fall into five broad categories:
• Better Skills Matching
• Improving Innovation and Entrepreneurship
• Investments in Transportation and Logistics
• More Green Industry Growth
• More Effective Institutional Arrangements
.....
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