Talent: The Future of Metro St. Louis in the Knowledge Economy

Transcription

1 Talent: The Future of Metro St. Louis in the Knowledge Economy

2 Talent: The Future of Metro St. Louis in the Knowledge Economy Contents Preface Today s Challenges: St. Louis and the Great Recession Regional Collaboration: A New Approach for a New Economy Talent Development, Job Creation, and Economic Growth: A Virtuous Circle for the Future The St. Louis Metro Economy Opportunity: Financial and Information Services Opportunity: Sustainable Technologies Opportunity: Health Science and Services The Forces of Continuous Change A New Regional Framework for Talent Development Leveraging Resources: The Importance of Partnerships Recommendations Supplemental reports published under separate cover: St. Louis Regional Chamber & Growth Association June 2011 The views and opinions expressed in this report are those of the author and do not necessarily represent the views and opinions of the funders or partners. 2 Talent: The Future of Metro St. Louis in the Knowledge Economy

3 Preface CHAPTER 1 Talented people are capable of many things. They: Have developed their natural ability to do something well (The Dictionary) Demonstrate the knowledge, skills, and abilities to perform jobs in demand in today s economy (O*Net) Exhibit a recurring pattern of thought, feeling, or behavior that can be productively applied in the workplace (Gallup Management Journal) Are a good fit with the culture of the organization or situation in which they work (St. Louis area employers) Can think creatively (The Economist) Have a continuing hunger for learning (Malcolm Gladwell). Without talent, the St. Louis metro economy cannot thrive in the competitive global marketplace of which we are a part. RCGA 3

4 1 Today s Challenges: St. Louis and the Great Recession Impacts of the Recession reverberated throughout the economy. Many St. Louis area companies quickly evaluated risk and sought to avoid the worst by modifying business plans, changing product lines, reducing labor costs, reorganizing, merging, or when all else failed closing their doors. Even the strongest firms battened down the hatches in the face of a global economic storm. employment peak) and the first quarter of 2010 (its trough), the area lost 78,400 jobs 5.7 percent of its total employment base. 1 Although no data base is available to document the origin of all workforce reductions during the Recession, the St. Louis Regional Chamber and Growth Association assembled as much information layoffs that took place between 2007 and Five industry sectors accounted for 80 percent of the layoffs: manufacturing (47 percent); financial services (11 percent); pharmaceutical / medical (8 percent); transportation / distribution (7 percent); personal services (7 percent). Among the St. Louis area employers shedding 250 or more workers each were DaimlerChrysler, job market involuntarily in small groups two or five or 20 at a time, many without the formalized The Recession technically at an end, many St. Louis area companies continued to trim employment in response to economic restructuring in 2010 and the first quarter of 2011, although at a slower pace. Government agencies, experiencing the delayed impact of reduced tax revenues, announced significant reductions in force. The Emerging Recovery during the Great Recession, recovery has been comparatively sluggish. Among the nation s 100 largest metro areas, St. Louis ranked 35 th in percentage of job loss from peak to low point, but 55 th in the rate of recovery between the trough and the fourth quarter of ,000 between April 2010 and April 2011, and the number of unemployed individuals decreased by 15,240. Despite such positive news, the unemployment rate remained high at the end of April 2011: 8.5 percent of the metro labor force, or 122,977 people, were unemployed. 3 4 Talent: The Future of Metro St. Louis in the Knowledge Economy

5 CHAPTER 1 Quarterly Employment in Four Recessions and Recoveries St. Louis MSA Jobs (100 = initial quarter of each national recession) Number of quarters since the start of each national recession Dots indicate end dates of each national recession Early in 2011, IHS Global Insight predicted that the St. Louis metro area will turn the corner from jobs decline to recovery later in the year. They forecast that after losing 4.1 percent of its jobs in 2009 and another.4 percent in 2010, the St. Louis MSA will see employment growth of 1.4 percent in 2011, 2.1 percent in 2012, 2.0 percent in 2013, and 1.9 percent in This represents an overall increase peak in the third quarter of Government and private economic reports being released as this document goes to press suggest that St. Louis should take all forecasts under advisement, but know that uncertainty is the most certain aspect of what lies ahead. The first half of 2011 had many ups and downs, with global events, fiscal continuing to shake companies and the people who comprise the region s workforce. Hiring in the St. Louis Market Help Wanted Analytics documented 74,928 job postings by firms located in the St. Louis metro area in the 120 days between November 2010 and February Of this total, 79 percent were listed by firms in the metro area s center St. Louis City and County. Other core counties of Franklin, Jefferson, St. Charles in Missouri and Madison and St. Clair in Illinois all posted more than 1,000 job openings during that time period. Almost half (46 percent) of the total job postings were in computer and mathematical, sales, and healthcare fields. The table describes the distribution by major occupational category. RCGA 5

6 Total Job Postings by Category St. Louis MSA, Nov Feb Occupation Total Occupation Total Computer & Mathematical 14,711 Transportation and Material Moving 2,144 Sales & Related Occupations 10,779 Life, Physical, and Social Science 1,224 Healthcare Practitioners & Technical 9,243 Installation, Maintenance, and Repair 770 Other 8,075 Healthcare Support 266 Office & Administrative Support 7,910 Production 153 Management Occupations 7,593 Education, Training, and Library 88 Business & Financial Operations 5,113 Arts, Design, Entertain., Sports, Media 19 Miscellaneous 2,348 Community and Social Services 11 Architecture & Engineering 2,320 Construction and Extraction 8 Food Preparation & Serving Related 2,149 Personal Care and Services 4 Total Postings for All Categories 74,928 Despite an abundance of applicants for every opening, businesses in the St. Louis area report problems in finding the right people with the right skills. The talent mismatch is not confined to this 62 percent of companies that planned to conduct hiring in 2010 were asked if their new jobs would require different skill sets. Among those who responded yes, a combined 39 percent said that they expected to encounter some degree of difficulty in finding qualified individuals for these new positions. 6 Population Dynamics Slow population growth makes the task of meeting the shifting demand for talent even more difficult. It holds the St. Louis metro economy back by limiting the size of the talent pool and the mix of new perspectives and insights that can spark innovation in today s competitive environment. The population of the St. Louis metro area increased by only 4.2 percent between 2000 and 2010 less than half the 9.7 percent rate of increase of the nation as a whole. This increase may be entirely due to natural factors such as an excess of births over deaths. Migration flows are not strong into the St. Louis area region, as evidenced by 2008 data in the chart on the next page, which originated with the IRS and was compiled by Moody s, an information service to the global business and economic development community. Moody s notes that in the long term, weak migration trends will be the primary hindrance, ensuring that STL s economy grows more slowly than the nation s. 7 puts pressure on existing businesses and the education and workforce and development system to global standards. 6 Talent: The Future of Metro St. Louis in the Knowledge Economy

7 CHAPTER 1 Regional Migration St. Louis MSA 2008 Largest In-Migration Markets Number Largest Out-Migration Markets Number Chicago, IL 1,926 Chicago, IL 2,055 Kansas City, MO 1,323 Kansas City, MO 1,539 Columbia, MO 950 Columbia, MO 900 Springfield, IL 598 Atlanta, GA 837 Phoenix, AZ 574 Dallas, TX 836 Dallas, TX 554 Phoenix, AZ 791 Los Angeles, CA 501 Houston, TX 756 Jefferson City, MO 479 Springfield, IL 652 Cape Girardeau, MO 478 Washington, DC 625 All other Markets 49,619 Los Angeles, CA 600 Total In-migration 57,002 All other Markets 49,183 Total Out-migration Net Migration 58,774-1,772 Perspectives of Human Resource Professionals St. Louis area human resource professionals who are on the front lines of both talent acquisition and layoffs are moderately optimistic about where the market stands today. In the spring of 2011, the St. Louis RCGA conducted a survey of HR professionals from throughout the St. Louis area, in cooperation with the Human Resource Management Association (HRMA). 8 One survey question (26 percent) said they believe the economy is improving, and 54 percent said it is slowly improving. Another 18.5 percent rated the economy as weak. Only 1.8 percent classified it as strong. The HR professionals responding to the survey said their companies used several internal talent management measures in response to economic shifts and uncertainties. The most frequently mentioned were to: The first two on this list are consistent with the most popular responses to a similar survey of HR professionals nationwide, conducted by the Society for Human Resources Management (SHRM) earlier in Perspectives of Displaced Workers conditions. To gather their perspectives, the RCGA conducted an online survey of displaced professionals during April All 397 respondents to this survey had been laid off at some point RCGA 7

8 Less than half (43 percent) of the respondents agreed that the region s economic outlook is better now than it was one year ago. The percentages varied between those who had gone back to work and that the economy had improved, compared to 38 percent of those still trying to find new work. The 236 individuals who provided information about the length of time they had been looking for work described a wide range of experiences. Almost 32 percent said that they found work within six months, but another 34 percent looked for more than one year. One of every ten (10.6 percent) indicated that they have been in and out of several jobs during the past three years. The Future: Strengths, Weaknesses, Opportunities, and Threats Recession, the sluggish and uncertain recovery, the complex global environment, and slow population growth in St. Louis all represent significant external threats and internal weaknesses for the future. not been for the region to throw up our collective hands in resignation; rather it has been to chart a new path forward to ensure that the St. Louis metro economy has the talent it needs to fuel a better future building on the internal strengths and external opportunities we have identified. The rest of this report presents the research, the players, the process, and the learnings that carved that path. Section 2 identifies the business leaders and the many public and private sector partners that formed the core leadership of this planning process. They are among our most important strengths. talent strategy and how we sought to connect it to the Greater St. Louis Economic Development Plan the partners, building on key strengths and overcoming the weakness of previously fragmented Section 3 articulates the vision of a more economically competitive region, names our key competitors in the national marketplace of talent and jobs, and provides baseline numbers for the of economic vitality as a symbol of the inextricable relationship between talent development, job creation, and economic growth and point to the importance of coordinated plans as a foundation for collaboration. Section 4 defines the St. Louis metro economy in terms of population, workforce, employment, and business trends. The three sections that follow provide similar detail about the economic opportunity clusters targeted under this plan: Financial and Information Services (Section 5), Sustainable Technologies (Section 6), and Health Science and Services (Section 7). In these sections, the fact that our greatest strengths can, in fact, become weaknesses if we do not pay careful attention to the transformation underway inside and external to them. 8 Talent: The Future of Metro St. Louis in the Knowledge Economy

9 CHAPTER 1 Section 8 identifies 11 macro forces of continuing change that will shape and reshape workforce demand in the near future. These forces are altering the work that we do, who does it, where and how it gets done. They also are driving significant change within the higher education system that prepares threats to future competitiveness. Section 9 brings together much of what the partners have learned in this planning process and presents an original framework for coordinated talent development. This framework is at the heart of the strategy. It describes the three elements of a great workforce and provides informational tools with which to advance them. It provides a shared reference for business, education, economic development, Section 10 acknowledges the impact that the economic downturn has had on resources available to support talent development and points to the importance of leveraging existing programs in the recommendations to advance economic vitality in metro St. Louis s future. Readers who would like to know more are referred to a series of supplemental reports that have been published as separate documents. They are listed on the Contents page. 1. IHS Global Insight, Inc. Summary of U.S. Metro Unemployment / Employment Forecasts. Population Survey. Note that April 2011 rates are preliminary IHS Global Insight, Inc. Summary of U.S. Metro Unemployment / Employment Forecasts. Help Wanted Analytics, accessed by the Missouri Economic Research and Information Center (MERIC), February 24, Survey of St. Louis Area HR Professionals. This survey is described in more detail in Section 9, A New Regional Framework for Talent Development, and is available as a supplemental report. 9. Society for Human Resource Management Workplace Forecast: The Top Workplace Trends According to HR Professionals St. Louis Regional Chamber and Growth Association. Perspectives of St. Louis Area Professionals Changing Careers in a Turbulent Economy. May Available as a supplemental report. RCGA 9

10 2 Regional Collaboration: A New Approach for a New Economy Participants in Talent Strategy Development Total, % Displaced Workers A Broad Regional Collaboration Almost 300 individuals have been engaged in the development of the metro St. Louis talent strategy. This broad regional collaboration brought diverse interests together and created new organizational linkages within the community. In addition to those represented in the pie chart, 169 human resource professionals and 397 individuals who lost their jobs during the Great Recession participated in surveys that informed our research. 11% Non-Profit Sector 17% Post-Secondary Education and interviews throughout the 12 months of strategy development. These events enabled us to discuss data findings and to test and refine elements of the strategy as it was being developed. 27% Business 21% Public Sector Business Leadership Council, convened by the St. Louis Regional Chamber and Growth Association and administered out of its Department of Economic Development. Members of the Talent Council are senior human resource, technology, and administrative leaders of corporations Lindgren, Vice President of Human Resources at Ameren, and Pat The adopted purpose of the Council is compatible with a broad and inclusive approach to talent development: Serving at the direction of the St. Louis RCGA and working with employers, educators, civic groups, government agencies, job seekers and students, we will advocate talent as an advantage in the retention, attraction, and development of business in the St. Louis region; identify and communicate actions and opportunities fostering that advantage; and The Talent Council met monthly throughout the planning period. In addition, members of the Council met in special sessions with leaders of the workforce development system, chancellors of area 10 Talent: The Future of Metro St. Louis in the Knowledge Economy

11 CHAPTER 2 Public Sector Leadership Members of the Talent Council, senior staff at the RCGA, and project consultants conferred with County Partners. implemented an innovative program for displaced workers, with special outreach to individuals transitioning into work in the targeted economic clusters of this plan: information technology, finance, time experiences with education, training, and job search in the region. The Network of Collaboration The diagram illustrates the network of leaders, colleagues, and innovators engaged in the development of the St. Louis regional talent strategy. Regional Collaboration: Partners in Talent Strategy Development Human Resource Planning Society (HRPS) Human Resource Management Association (HRMA) RCGA Talent Council Greater St. Louis Economic Development Network Colleges & Universities Graduate! St. Louis RCGA Board Economic Development Programs Chief Locally Elected Officials (CLEOs) Missouri Department of Economic Development Missouri Division of Workforce Development Programs Innovate St. Louis Gateway to Innovation Initiative for Creative Comebacks BounceBack Workforce Investment Boards (WIBs) / Career Centers Community Colleges Convenes/Operates Linked Thru Membership Funding Partners Society for Information Management (SIM) Business Core Leadership Innovation Partners Education Public Sector RCGA 11

12 3 Talent Development, Job Creation, and Economic Growth: A Vision and a Virtuous Circle for the Future A Vision for the Future It should not be surprising that metro St. Louis envisions its future in terms of its ranking in the national marketplace. Civic leaders who have been around a while speak longingly of the day when the Today, people, jobs, products, money, and sports teams are far more mobile that they once were, and metro areas compete for all of them. In 2010, business and economic development leaders articulated a new vision for St. Louis, based on modern superlatives: By the year 2020, Greater St. Louis will be consistently ranked among the top 10 of the 20 largest metropolitan areas in indicators of regional vitality, economic health, and the creation of community wealth. Realizing that the region cannot get to the new vision by means of the traditional path, area driven, and closely aligned with 21st Century economic development and job creation goals. The Virtuous Circle of Future Vitality The Virtuous Circle as a Unifying Concept growth, and talent development, as expressed in the virtuous circle below. This circle serves as the unifying concept for the strategy unfolding in this document. It anchors our work in the understanding that St. Louis will not be able to compete for its share of jobs in the dynamic global marketplace nor will it be able to create the wealth needed to support business growth and quality of life without a skilled and competent workforce. Economic Growth Job Creation Coordinated Plans Talent Development Adapted from a design by Trevor Parscal via Wikimedia Commons Coordinated Plans At the center of the virtuous circle, we have positioned the coordinated plans that will support ongoing coordination of efforts and achievement of shared goals. The talent strategy for metro St. Louis described in this report is one of those plans. Through the collaborative process described in Section 2, this talent strategy is linked with two important economic development plans: the 1 and the State of Missouri s Strategic Initiative for Economic Growth. 2 their agendas: Greater St. Louis: Priority 4 Address Regional Talent as a Strategic Imperative State of Missouri: Strategy 1 Missouri will attract, retain, and develop a workforce with the education and skills to succeed in a 21st Century economy. 12 Talent: The Future of Metro St. Louis in the Knowledge Economy

13 CHAPTER 3 Targeted Economic Sectors Specific cluster targets for the St. Louis metro area and the State of Missouri were identified through parallel research efforts, both supported by Market Street Services, a consulting firm based in Atlanta. capacity and expertise as building blocks for success. The Missouri counties of the St. Louis MSA account for 40 percent of the private sector jobs in the state. It is therefore reasonable to expect considerable overlap in the sectors targeted under both the regional and the state plans. Acting on the concept of the virtuous circle, business leaders on the RCGA s Talent Council selected a subset of these sectors for the talent strategy. The chart identifies and compares the economic clusters of the three plans. Sector Greater St. Louis Economic Development State of Missouri Strategic Initiative St. Louis Metro Talent Strategy Financial and Information Services Services Information Technology Health Science and Services Health Science Health Care Sustainable Technologies Advanced Energy Technologies t Sciences and Ag Tech Materials ciences ciences omedical Multi-Modal Supply Chain Management Transportation and Logistics Aerospace and Aviation Advanced Manufacturing Transportation equipment Targeted Economic Clusters for Coordinated Plans Metrics metrics to guide the talent strategy. The metrics and the baseline measurements for each are provided in the charts that follow. RCGA 13

14 A growing population ensures an expanding workforce and also serves as an attractor to talented people seeking opportunity in vibrant urban centers. Today, the St. Louis MSA ranks 15th among the nation s 20 largest metro areas on this measure. Job creation is key to business growth and the creation of community wealth. Communities where jobs are being created experience greater success in retaining and attracting talented people. Today, the St. Louis MSA ranks 14th among the nation s 20 largest metro areas on this measure. Metropolitan Population Growth 3 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% 29.8% 28.9% 26.1% 24.0% 23.4% 16.4% 16.2% 13.0% 11.1% 10.5% 10.0% 9.7% 6.2% 5.1% 4.9% 4.2% Riverside, CA Phoenix Houston Atlanta Dallas Washington DC Tampa Seattle Miami Minneapolis San Diego United States Baltimore San Francisco Philadelphia St. Louis Employment Growth Chicago 4.0% 3.7% Los Angeles 3.7% Boston 3.1% New York -3.5% Detroit 4 15% 10% 12.4% 12.4% 10.7% 5% 6.9% 0% -5% 3.7% 2.2% 1.7% 1.3% -0.6% -10% -15% -20% -25% Riverside, CA Houston Washington DC Phoenix Dallas San Diego Baltimore Miami Seattle New York Atlanta Unied States Philadelphia Minneapolis St. Louis Tampa Boston Los Angeles Chicago San Francisco Detroit -1.2% -1.3% -1.5% -1.7% -3.38% -3.6% -3.6% -4.4% -6.2% -7.1% -10.7% -21.4% 14 Talent: The Future of Metro St. Louis in the Knowledge Economy

15 CHAPTER 3 refers to the proportion of the population that has a job. Some analysts prefer this measure over the unemployment rate as an indicator of economic activity and performance. Today, the St. Louis MSA ranks 8th among the nation s 20 largest metro areas on this measure. 5 80% 70% 60% 50% 40% 30% 20% percentage of total employment The share of total jobs accounted for of the climate for entrepreneurship. The selected measure quantifies employment in Stage 2 firms, which have between 10 and 99 employees. Today, the St. Louis MSA is tied with Seattle in 10th place among the nation s 20 largest metro areas on this measure. 10% 0% 2% 1% 0% -1% -2% -3% -4% -5% Atlanta Miami Tampa Washing ton DC Phoenix Houston Dallas Riverside, CA Baltimore Seattle St. Louis United States San Diego Chicago Philadelphia Los Angeles New York San Francisco Minneapolis Boston Detroit 67.5% 66.3% 64.9% 64.7% 63.1% 62.9% 62.4% 62.0% 61.1% 60.7% 60.6% 60.0% 59.3% 58.7% 58.6% 58.5% 58.4% 56.3% 56.2% 54.2% 52.1% Washington DC Minneapolis Dallas Seattle Baltimore Boston Atlanta St. Louis San Francisco Houston Phoenix Chicago United States Philadelphia San Diego Growth of Jobs in Stage 2 Firms 6 1.5% 1.2% 0.5% 0.4% 0.3% New York Los Angeles Tampa Miami Riverside, CA Detroit -0.1% -0.3% -0.4% -1.2% -1.4% -1.4% -1.9% -2.0% -2.2% -2.5% -2.7% -3.0% -3.0% -3.1% -3.2% -4.6% RCGA 15

16 Bachelor s or higher degrees job. Economic developers use the percentage of the population with the measure of a skilled workforce. The average wage per job in a metro market is used by job seekers, students, and analysts to gauge the value of economic opportunity. It is also an essential factor in the creation of community wealth. Today, the St. Louis MSA ranks 17th among the nation s 20 largest metro areas on this measure. Percent of Population Aged with Bachelor s or Higher Degrees 7 60% 50% 40% 30% 20% 10% 0% $80,000 $70, % 46.0% 45.6% 39.8% 38.8% 38.7% 37.3% 36.0% 35.8% 35.7% 35.1% 31.9% 31.2% 30.9% 29.8% 29.5% 28.5% 28.5% 27.9% Washington DC Boston San Francisco Minneapolis Seattle New York Baltimore Chicago San Diego Atlanta Philadelphia St. Louis Los Angeles Dallas United States Miami Houston Detroit Phoenix Average Wage per Job % Tampa 19.3% Riverside $60,000 $50,000 $40,000 $30,000 $20,000 $45,673 $66,683 $64,601 $63,043 $59,763 $42,916 $46,234 $42,508 $54,864 $54,282 $52,915 $41,899 $37,052 $37,703 $52,318 $51,808 $51,528 $38,957 $36,912 $34,336 $34,345 $50,719 $37,303 $49,856 $36,708 $49,773 $40,272 $48,546 $32,041 $46,016 $45,959 $45,831 $45,553 $32,709 $33,071 $33,255 $43,603 $41,136 $40,564 $29,652 $31,312 $28,484 $10,000 $ San Francisco Washing ton DC New York Boston Seattle Houston Los Angeles Chicago Philadelphia 1999 Baltimore San Diego 2009 Dallas Minneapolis Detroit Miami Phoenix United States St. Louis Tampa Atlanta Riverside, CA 16 Talent: The Future of Metro St. Louis in the Knowledge Economy

17 CHAPTER 3 1. St. Louis RCGA. Five Core Strategies to Achieve Quality Jobs and Investment Market Street Services, Inc. Final Report of the Strategic Initiative for Economic Growth: State of Missouri laugp.htm. youreconomy.org/pages/ranking/?region=msa, Note: Stage 2 (10-99 employees) At this phase, a company typically has a proven product, and survival is no longer a daily concern. Companies begin to develop infrastructure and standardize operational systems. Leaders delegate more and wear fewer hats. acs/www/products/. Note: All state and local area dollar estimates are in current dollars (not adjusted for inflation). RCGA 17

18 4 4.1 The St. Louis Metro Economy St. Louis Metropolitan Statistical Area Defining the Metro Economy Although divided by two great rivers, two states, hundreds of local government boundaries, and an abundance of educational and workforce development jurisdictions, the St. Louis metropolitan area functions as a single economy, knit together by the daily interaction of businesses and the talented people who work for them. 8,650 square miles in eastern Missouri and adjacent southwestern Illinois. 1 Home to more than 2.8 million residents in 2010, the metro area is the 18 th The area enjoys the economic advantage of being located near the geographic and population centers of the nation. Companies located in the St. Louis metropolitan area are within 1,500 miles of 90 percent of the people in North America. 2 (4.2) 4.2 Distribution of Population in U.S. Urban Areas 2 Economic Vitality entrepreneurial: the qualities most frequently used to describe the emerging global economy are almost who make up a metropolitan market are essential to its economic vitality. St. Louis has both strengths and weaknesses in this regard. 18 Talent: The Future of Metro St. Louis in the Knowledge Economy

19 CHAPTER 4 Sluggish population growth has challenged metro St. Louis since the th Century, resulting in the area falling behind in the race to attract people and jobs. From 2000 to 2010, the metro area s population expanded by 4.2 percent, while the nation s population grew at more than twice that rate, 9.7 percent. Metro St. Louis s rate of population growth tracked more closely with that of the Midwest. (4.3) Absent effective change measures, slow growth is expected to be a continuing challenge for the area. Moody s Analytics forecasts the St. Louis region s population will expand by 2.1 percent between 2009 and 2014, an annual average rate of 0.4 percent. During the same time period, by about 1 percent per year. 5 Migration Patterns Slow overall population growth is accompanied by a troubling trend of outmigration. As illustrated in the chart, more people left the St. Louis area than moved in for 14 out of the 16 years between 1993 to (4.4) Moody s Analytics forecasts that the region will continue to experience negative net migration thorough Immigration of foreign nationals and aspiring new citizens has been a critical factor in reversing population declines in many economic centers decades. In the St. Louis metro area, immigration has not been as 4.3 Annual Change in Population 4 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% U.S. Midwest St. Louis MSA 4.4 Net Metropolitan Migration 7 1, (1.000) (2,000) (3,000) (4,000) (5,000) (6,000) (7,000) RCGA 19

20 robust. Immigrants make up only four percent of the population significantly less than in other urban areas, including several in the Midwest. Although they may be proportionately small in number, St. Louis area immigrants do help raise the educational attainment level of the population, however. In 2009, a full 46.1 percent of St. Louis immigrants of working age had a compared to 30 percent of immigrants nationwide. 8 A diverse talent pool is considered a strategic economic advantage. Economic centers with a diverse workforce enjoy the mix of perspectives and ideas that is essential to creating a culture of innovation. The following statistics describe the diversity of the St. Louis metro area in terms of race and ethnicity, age, and disability. Of the more than 2.8 million people approximately 77 percent are white, 2 percent are Asian, and 3 percent are of other races or two or more races. those of other races is far lower in St. Louis than in other large metro areas. About 2.5 percent of metro area residents are Hispanic. Hispanics can be of any race. 4.5 Median Age of the Population 9 Metropolitan Statistical Area (MSA) Riverside-San Bernardino-Ontario, CA Houston-Sugar Land-Baytown, TX Dallas-Fort Worth-Arlington, TX San Diego-Carlsbad-San Marcos, CA Phoenix-Mesa-Glendale, AZ Atlanta-Sandy Springs-Marietta, GA Los Angeles-Long Beach-Santa Ana, CA Chicago-Joliet-Naperville, IL-IN-WI Minneapolis-St. Paul-Bloomington, MN-WI Washington-Arlington-Alexandria, DC-VA-MD-WV Seattle-Tacoma-Bellevue, WA U.S. New York-Northern New Jersey-Long Island, NY-NJ-PA Baltimore-Towson, MD Philadelphia-Camden-Wilmington, PA-NJ-DE-MD St. Louis, MO-IL San Francisco-Oakland-Fremont, CA Boston-Cambridge-Quincy, MA-NH Detroit-Warren-Livonia, MI Miami-Fort Lauderdale-Pompano Beach, FL Tampa-St. Petersburg-Clearwater, FL Median age (years) 4.6 Distribution of Population by Generational Groups % 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 0.0% Age < = 29 Millenials Age Gen Xers St. Louis MSA Age Boomers U.S. Age 65+ Traditionalists 20 Talent: The Future of Metro St. Louis in the Knowledge Economy

21 CHAPTER 4 Age In 2010, the median age for the St. Louis region was 38.2 years compared to the Almost 46 percent of St. Louis area residents of traditional working ages of 45 and 64. There were 777,056 people in this age group in St. Louis in The workforce of the St. Louis metro area includes members of four generations. Given continuing uncertainties surrounding financial markets and retirement savings, traditionalists aged 65 and older can not be assumed to be retired. (4.6) Managing employees from four different generations with different work, learning, and communication styles has been identified as a significant challenge by human resource professionals. Gender About 49 percent of the region s working age population (20 to 64) is male and 51 percent is female. 4.7 Age Distribution of Working Age Population with Bachelor s or Higher Degrees % 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 25 to Unemployment Trends St. Louis 35 to 44 U.S. 45 to Nearly one of every nine (10.7 percent) St. Louis area residents of working age reported to the Census that he or she has a disability. Of the disability, 20 percent are between the ages of 18 and 34, and 80 percent are between the ages of 35 and St. Louis, MO-IL MSA 2007 U.S RCGA 21

22 The St. Louis metro area is defined in part by workforce commuting patterns. The City of St. Louis, at the core, draws its work force from the surrounding counties and beyond. A full 92 percent of the City s workforce comes from the 16 county area. Another eight percent come from somewhere outside the region. About 13 percent of the City s workforce comes from the Illinois portion of the St. Louis MSA. 4.9 Unemployment Rates for Counties and Select Municipalities 13 The share of St. Louis s population with higher education credentials trails many other metros. Section 3 documents the metro area s rank as 12 th among the nation s 20 largest MSAs in the proportion of higher degrees. The relationship and economic vitality is explored in greater detail in Section 9 and in the supporting report, The Case for Increasing College Completion Rates in Greater St. Louis. Nonetheless, the percent of in St. Louis is slightly higher than that The competitive advantage is greatest among younger workforce cohorts. (4.7) 4.10 Employment Index St. Louis, MO-IL MSA U.S. 22 Talent: The Future of Metro St. Louis in the Knowledge Economy

23 CHAPTER 4 Since 2004 the unemployment rate has paralleled but slightly exceeded area, the highest unemployment rates are found in the urban core and some of the outlying rural counties. (4.9) Labor force participation rates in the region are somewhat higher than the national rates. In 2009, the civilian labor force participation rate was 65.4 percent nationally and 69.3 percent in the St. Louis region Share of Jobs by Industry Sector % 20.0% 15.0% 10.0% 5.0% 0.0% Economic Health Following population patterns, total employment in metro St. Louis has grown at a considerably slower pace than the nation over the past two decades. The graph shows the area s employment performance compared to the nation. (4.10) Moody s Analytics forecasts that jobs will grow at an annual rate of 1.3 percent in St. Louis between 2009 and 2014, compared to an annual rate of 1.6 percent nationally. 14 Natural Resources, Mining & Construction Industry Sector Manufacturing Trade, Transportation, & Utilities Information Financial Activities St. Louis, MO-IL MSA NAICS Retail trade NAICS 81 Other services, except public administration NAICS 23 Construction NAICS 54 Professional and technical services NAICS 62 Health care & social assistance Professional & Business Services U.S. Education & Health Services 4.12 Number of Business Establishments by Industry 17 Number of Establishments 8,725 8,588 7,740 7,537 6,539 Leisure & Hospitality Other Services Government One of the region s strengths is a highly diversified industrial structure. Among the most notable shifts in industry share over the past decade has been the declining manufacturing sector. (4.11)In 1999, 17.4 percent of the metro St. Louis s employment base worked in manufacturing, to 8.2 percent, less than the national average of 8.9 percent. Job loss during NAICS 72 Accommodation & food services NAICS 52 Finance & insurance NAICS 42 Wholesale trade NAICS 56 Administrative & waste services NAICS Manufacturing NAICS 53 Real estate & rental & leasing NAICS Transportation & warehousing NAICS 51 Information NAICS 71 Arts, entertainment, & recreation NAICS 61 Educational services NAICS 55 Management of companies & enterprises NAICS 11 Agriculture, forestry, fishing & hunting NAICS 22 Utilities NAICS 21 Mining, quarrying, & oil & gas extraction Total, all industries 5,657 4,842 4,818 4,169 3,103 2,760 2,090 1, ,555 RCGA 23

24 the Great Recession accounted for some of this change. As described in Section 1, 47 percent of documented layoffs in the area between 2007 and 2009 were in manufacturing. The metro economy had 70,555 business establishments in 2010, with as many as 8,725 and as few as 99 firms in every major category of the North American Industrial Classification System (NAICS). (4.12) Of the 30 largest employers in the region, ten were in the health science, health care, financial and information services clusters. All of the 30 companies, however, need employees with financial and IT competencies. (4.13) Creation of Community Wealth Metro economies are considered the engines of economic growth in the competitive marketplace of today. The gross metropolitan product (GMP) which measures the value of all goods and services produced within a metro market in a given year is an important measure of the extent to which that engine is performing. The region s GMP was $124.6 billion (in current dollars) in The gross metropolitan product data for 2009 further illustrates the impact that the Great Recession had on St. Louis economy. The St. Louis GMP dropped by 5.1 percent from the previous year, with losses in automobile manufacturing as well as in professional and business services. (4.14 ) The drop in GMP resulted in 18 Company Industry St. Louis BJC HealthCare Boeing Defense, Space & Security Washington University in St. Louis SSM Health Care Scott Air Force Base Schnuck Markets Inc. Wal-Mart Stores Inc. Archdiocese of St. Louis Sisters of Mercy Health System AT&T Communications Inc. United States Postal Service Saint Louis University McDonald s Special School District of St. Louis County St. Louis Public Schools Wells Fargo Advisors Tenet Healthsystem Medical Inc. Enterprise Holdings Edward Jones Ameren Corporation Supervalu Inc. St. Louis County Government Imo's Pizza City of Saint Louis Monsanto Co. Anheuser-Busch InBev Citimortgage Dierbergs Markets Home Depot USA Inc Express Scripts Inc. Health Care Manufacturing Education Health Care Government Retail Retail Education Health Care IT Government Education Accommodation & Food Services Education Education Financial Services Health Care Transportation Financial Services Utilities Retail Government Accommodation & Food Services Government Biotech Manufacturing Financial Services Retail Retail Health Care 24,882 15,600 13,483 12,548 12,344 10,951 10,800 9,912 8,926 8,900 7,872 7,758 6,700 5,894 5,488 5,300 5,125 4,887 4,873 4,615 4,401 4,310 4,300 4,296 4,100 4,000 4,000 4,000 3,972 3, Change in Gross Metropolitan Product 19 Change in millions of chained $ 4,000 2, ,000-4,000-6,000-8, Service Providing Industries Government Goods Producing Industries 24 Talent: The Future of Metro St. Louis in the Knowledge Economy

25 CHAPTER 4 St. Louis slipping backward from a ranking of 17 th out of 20 largest MSAs in 2008 to 19 th in The mix of occupations in the St. Louis MSA economy is diversified and The chart describes the occupational composition of the metro economy. It also details wages associated with each occupation in metro St. Louis in 2009, and relates them to comparable data In St. Louis, per capita personal 2001 to 2009, however, the area s per capita personal income increased by an annual average rate of 2.98 percent faster pace of 3.06 percent. (4.16) Targeted Economic Clusters Against this backdrop and knowing that structural shifts are underway in the economy, the St. Louis Regional Chamber and Growth Association initiated a process in 2009 to help the region better understand and exploit the greatest opportunities for St. Louis going forward. 22 They engaged Market Street Services, Inc. to conduct a detailed analysis of the economy and identify strengths on which the region could build. The result of this process was an economic development strategy focused on five key regional clusters, which are identified in the chart. Regional clusters are sectors of a 4.15 Occupational Employment and Wages 20 SOC Code Occupation Title All Occupations Management Business & financial operations Computer & mathematical Architecture & engineering Life, physical, & social science Community & social services Legal Education, training, & library Arts, design, entertainment, sports, & media Healthcare practitioners & technical Healthcare support Protective service Food preparation & serving related Building & grounds cleaning & maintenance Personal care & service Sales & related Office & administrative support Farming, fishing, & forestry Construction & extraction Installation, maintenance, & repair Production Transportation & material moving 4.16 Per Capita Personal Income St. Louis MSA 1,301,320 54,010 64,740 41,530 22,430 10,930 16,720 8,540 83,040 17,370 81,080 39,060 25, ,660 41,510 33, , , ,020 51,340 83,740 84,060 Employment Mean Annual Wage Share 4.20% 5.00% 3.20% 1.70% 0.80% 1.30% 0.70% 6.40% 1.30% 6.20% 3.00% 2.00% 9.50% 3.20% 2.60% 10.60% 17.00% 0.10% 4.50% 3.90% 6.40% 6.50% U.S. 130,647,610 6,116,380 6,063,670 3,303,690 2,412,730 1,308,380 1,891, ,020 8,488,740 1,745,670 7,200,950 3,886,690 3,172,420 11,218,260 4,269,480 3,461,910 13,715,050 22,336, ,200 5,751,630 5,114,150 8,927,130 8,844,700 Share 4.70% 4.60% 2.50% 1.80% 1.00% 1.40% 0.80% 6.50% 1.30% 5.50% 3.00% 2.40% 8.60% 3.30% 2.60% 10.50% 17.10% 0.30% 4.40% 3.90% 6.80% 6.80% St. Louis MSA 21 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $ St. Louis MSA 2005 U.S U.S. $42,900 $43,460 $100,710 $102,900 $61,950 $65,900 $70,740 $76,290 $70,920 $73,590 $60,200 $65,660 $40,370 $42,750 $87,630 $95,820 $48,770 $49,530 $48,190 $51,720 $62,450 $69,690 $25,690 $26,710 $39,040 $41,740 $19,750 $20,880 $24,690 $24,970 $23,250 $24,680 $37,480 $36,020 $33,110 $32,990 $29,770 $23,990 $53,970 $43,350 $43,440 $42,210 $35,640 $33,290 $32,620 $32, St. Louis Wages As a Share of the U.S. 99% 98% 94% 93% 96% 92% 94% 91% 98% 93% 90% 96% 94% 95% 99% 94% 104% 100% 124% 124% 103% 107% 101% 2009 RCGA 25

26 local economy that exhibit growth in value, jobs, and wages. They are dense networks of companies and institutions that are interdependent, characterized by competing firms and as common labor pools and other specialized infrastructure. As described in Section 3, the talent strategy has been aligned with the economic development approach in order to ensure more positive public sector leaders engaged in the talent development effort selected three of the five economic clusters as a starting point. (4.17) These clusters are: Financial and Information Services, Sustainable Technologies, and Health Science and Services. Sections 5, 6, and 7 (following) detail each of these clusters, with a particular emphasis on factors relevant to talent demand and work opportunities Selected Economic Development Clusters 23 Financial & Information Services 6,200 Establishments & 73,000 Jobs Health Science & Services 6,000 Establishments & 170,000 Jobs Sustainable Technologies 540 Establishments & 14,000 Jobs Multi-Modal Supply Chain Mgt. 6,700 Establishments & 85,000 Jobs Aerospace & Aviation 1,150 Establishments & 33,000 Jobs Advanced Energy Technologies Plant Sciences & Ag-Tech Building Design & Materials 1. Throughout this report, the terms St. Louis MSA, metro St. Louis, St. Louis metropolitan area, and St. Louis region are recognized by area stakeholders. Later in the report, we address assets and recommendations for action, and these are largely focused on Missouri players. 2. Missouri Census Data Center. Circular Area Profiles (CAPS) Talent: The Future of Metro St. Louis in the Knowledge Economy

27 CHAPTER 4 6. Ibid. June Ibid. gov/acs/www/products/. Population Survey Ibid. Estimates by County. htm#gsp. 22. St. Louis Regional Chamber and Growth Association. Five Core Strategies to Achieve Quality Jobs and Investment: Campaign for a Greater St. Louis Page 2. Estimates by County. Note: Clusters cannot be added to total, as some industries are included in more than one cluster and cluster definitions are subject to change. RCGA 27

28 5 Opportunity: Financial and Information Services Introduction The financial and information services cluster operates at the core of the 21st Century global economy, where the most competitive firms use the most sophisticated digital technologies to count, manage, secure, move, and account for money and information with amazing speed and accuracy. In the events leading up to the Great Recession, this cluster was not only at the core of the economy, but at the center of the storm. Today, a number of external trends are influencing both finance and IT, with implications for the talent that is needed now and in the future. A select few of them are listed below. geopolitical boundaries. Events in one part of the world have ramifications for what happens in others for better or for worse. computer security specialists are in high demand. financial services industry, meaning that there are fewer purely local enterprises and many talent management decisions are made outside the local area. Many of these will soon be replaced by other technologies, including biometrics. individuals with credentialed specializations. demand for talented people who can understand, monitor, and advise on regulatory compliance issues. partnerships between depository institutions and retail outlets (banks, grocery stores and malls, for 28 Talent: The Future of Metro St. Louis in the Knowledge Economy

29 CHAPTER 5 young people raised with digital tools; older people with paper checkbooks and fixed incomes; corporations; and everyone in between. systems toward shared and leased services, such as those provided in The Cloud. The Cloud allows businesses and individuals to access applications, content, and computing power remotely through vendors locally, nationally, and internationally. skills, but, as will be discussed more fully in Section 9, having the right technical skills will not be sufficient to launch a successful career in the financial and information services cluster today. Looking different set of skills, smart deployment of talent and the realignment of compensation structures will be critical to their ability to address the demands of this new world financial order. Companies are looking to ascertain whether they have enough people with the necessary balance of innovation, risk, compliance, and relationship skills, and gearing their training and recruitment to bridging any gaps. 1 Definition of Financial and Information Services Cluster The financial services sector is comprised of banks; securities, commodities, and investment firms; insurance carriers; funds, trusts, and other financial vehicles; and bank holding companies. The information services sector includes companies that host and process data and those that design and manage IT systems and services. (5.1) The financial services sector accounted for 5.6 percent of total employment in metro St. Louis related activities sector demonstrated the strongest performance over this period. This sector includes banking, savings and loan and credit unions, credit card issuing and sales financing, and mortgage brokers. (5.2) These firms operate in a dynamic and interdependent environment. Employment losses in the information industry, driven by contractions in the telecommunications sector, lead the overall information sector to trail the region s total employment performance. The cluster definition incorporates only a portion of the larger information sector. In the taxonomy of the North American Industrial Classification System, the cluster includes NAICS 52, and parts of NAICS 51, 54, and 55. (5.3) RCGA 29

30 5.1 The Financial and Information Services Cluster INFORMATION SUPPORT FINANCIAL SERVICES INDUSTRY Finance & Insurance NAICS 52 Management of Companies & Enterprises NAICS 55 Information NAICS 54 Central Banks (NAICS 521) Data Processing, Hosting & Related Services (NAICS 518) Depository Banks (NAICS 522) ed Other Information Services (NAICS 519) Ne g We Se Securities, Commodities & Investments (NAICS 523) & & Ex Offices of Bank Holding Companies NAICS Insurance Carriers & Other (NAICS 524) Professional & Technical Services NAICS 54 Funds, Trusts, & Other Financial Vehicles (NAICS 525) Computer Systems Design & Related Services (NAICS 5415) Se Sy Se Se Se OCCUPATIONS Higher ($80,000 and up) Softw Sy Mid Level ($50,000 $79,999) A Sy Entry Level ($20,000 $49,999) okkeep pp b INFRASTRUCTURE Research Universities Education & Training Utilities & Infrastructure Other Professional & Technical Services Professional Associations 30 Talent: The Future of Metro St. Louis in the Knowledge Economy