Greater St. Louis Financial Services & Information Technology. regional industry overview

Transcription

1 Greater St. Louis Financial Services & Information Technology regional industry overview

2 Table of Contents cluster definition industry profile concentration of employment monthly earnings by industry business profile industry trends employment & output forecast talent profile occupation forecast talent trends higher education & training support industries vendor & supplier opportunities innovation st. louis resources for enterpreneurs sources

3 executive summary 2 In today s market place, global commerce has become a truly wired, integrated and symbiotic network of financial exchanges, commodities markets, banking systems and corporate and individual traders functioning in real-time to buy, sell and trade securities, goods and services and move money. Finance and technology are inexorably linked in terms of how business is done in the modern world. i Greater St. Louis Financial and Information Services Industry Cluster employs over 76,900 working in nearly 6,200 establishments. The Cluster s dynamic presence of large corporations and small businesses is a growing force in the region s economy. The Cluster accounted for 6.7% of total employment in metro St. Louis in 2005 and 7.2% by mid Average annual industry wages range from $47,000 in other information services to $109,400 in the securities, commodity contracts, investments sector. The securities brokerage sector is an important component of the industry cluster, employing nearly 7,400 in The securities brokerage niche is a regional strength. With a location quotient of 2.65, the industry has a level of concentration that is third in its peer group, only behind Boston and New York. Nationally, employment in the financial activities industry is forecast to grow at an annual rate of 1% through Securities, commodity contracts, other financial investment, and related activities will account for the largest increase in jobs in the financial activities industry. The nation s growing number of retirees seeking advice on retirement options will drive demand. Nationally, business and financial operations occupations are projected to grow by 17.3% through 2020, indicating the occupational group is expected to grow faster than the industry. The computer and mathematical occupational group is forecast to be the sixth-fastest-growing major occupational group. The computer systems design and related services industry is driving the growth in this group with a projected growth of 3.9% per year. National and global trends will influence the Greater St. Louis Financial and Information Services Cluster in the coming years. Industry regulation ramped up following the financial crisis and there will be a focus on implementing many of the provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). The expansion of global trade makes the U.S. financial services firms vulnerable to international economic conditions and the uncertainty of European debt crises is likely to continue to concern the banking and securities industry. Persistent weakness in U.S. housing market continues to dampen the economic recovery which is leading banks to consider structural changes in their business models and seek alternative sources of income. The Greater St. Louis Financial Forum members will describe roadblocks to cluster growth, identify niches with the greatest potential for growth, and develop strategies to accelerate growth. The Forum will articulate a regional value proposition for the cluster, develop messaging themes, and identify companies to target for business recruitment.

4 This brief provides background information for the greater St. Louis financial forum s work to link, leverage, and align regional factors to promote firm and regional growth. 3 From 1999 to 2010, the Chamber s economic development initiative identified Financial Services and Information Technology as two separate industry clusters. In 2009, Market Street Services was engaged to refine and focus the cluster approach for the Chamber s strategic plan. The cluster definition was modified to capitalize on not only the headquarters presence of several major investment firms, but also the increasingly integrated information component of financial services operations. Market Street concludes that economic development efforts can leverage financial services companies need to integrate advanced technology in their local operations and identify additional opportunities to attract and grow information services companies with expertise in designing and maintaining complex, robust data management systems. In today s market place, global commerce has become a truly wired, integrated and symbiotic network of individual and corporate traders, commodities markets, banking systems, and financial exchanges functioning in real-time to buy, sell and trade securities, goods and services and move money. Finance and technology are inexorably linked in terms of how business is done in the modern world 1 cluster definition Clusters are groups of industries that are closely linked by common product markets, labor pools, similar technology, value chains, and/or other economic ties. A cluster description includes industry composition, occupational profile and supporting infrastructure. The following graphic illustrates these components of the financial and information services cluster. Figure 1 Cluster Definition FINANCIAL SERVICES INDUSTRY FINANCE & INSURANCE NAICS 52 CENTRAL BANKS NAICS 521 CREDIT INTERMEDIATION & RELATED NAICS 522 SECURITIES, COMMODITIES, & INVESTMENTS NAICS 523 INSURANCE CARRIERS & OTHER NAICS 524 FUNDS, TRUSTS, & OTHER FINANCIAL VEHICLES NAICS 525 Commercial Banks, Savings Banks, Credit Unions, Other Securities, Commodoties Brokerage, & Exchange Insurance Carriers, Insurance Brokerage MANAGEMENT OF COMPANIES & ENTERPRISES NAICS 55 OFFICES OF BANK HOLDING COMPANIES NAICS

5 4 Figure 1 Cluster Definition (cont d) INFORMATION NAICS 54 INFORMATION SUPPORT PROFESSIONAL & TECHNICAL SERVICES NAICS 54 DATA PROCESSING, HOSTING, & RELATED SERVICES NAICS 518 OTHER INFORMATION SERVICES NAICS 519 News, Libraries, Internet Computer Systems Design & Related Services NAICS 5415 Programming Services, Systems Design Services HIGHER $80,000 & UP Financial managers, Computer systems analysts, software engineers, securities, commodities, and financial sales agents OCCUPATIONS MID LEVEL $50,000 TO $79,999 Accountants, auditors, computer programmers, insurance sales agents, systems administrators, claims adjusters, examiners ENTRY LEVEL $20,000 TO $49,999 Customer services reps, bookkeeping, accounting/audition clerks, computer support specialist, bill and account collectors, tellers INFRASTRUCTURE RESEARCH UNIVERSITIES EDUCATION & TRAINING UTILITIES & INFRASTRUCTURE OTHER PROFESSIONAL & TECHNICAL SERVICES PROFESSIONAL ASSOCIATIONS Washington University, Saint Louis University, SIU-E, UMSL 30 Four Year Universities, 20 Two Year Universities, 200,000+ Total Enrollment Telecommunications, Real Estate Accounting & Bookkeeping, Real Estate, Legal Services, Market Research Financial Planning Association of Greater STL, Society of Financial Service Professionals, American Society of Women Accountants industry profile Current employment data for a broadly defined cluster includes the financial activities super-sector, which is comprised of finance, insurance, real estate renting and leasing; and the information super-sector, which includes telecommunications. Figure 2 shows that from 2000 through 2011 employment in financial activities have outperformed total employment growth, while employment in the information sector has lagged. Overall, employment and information employment declined from 2000 to 2011, while employment increased in the financial activities super sector over the same period.

6 Figure 2 Employment Trends in Financial Activities and Information Services Super-Sector St. Louis MSA = Source: BLS Nonfarm Employment Financial Activities Information dynamic presence of large financial and information services corporations employ tens of thousands of regional workers 2 Using a targeted approach to identify and drill down the important niches within the narrowly defined Financial & Information Services Cluster, the Quarterly Census of Employment and Wages series from the Bureau of Labor Statistics shows that the cluster accounts for over 76,900 jobs, in nearly 6,200 establishments throughout the region. The cluster s average annual wages range from $47,000 in the other information services industry to a $109,400 in the securities, investments, and commodity contracts, industry. The cluster has been a growing force in the region s economy, accounting for 6.7% of total employment in 2005 and 7.2% by mid Table 1 Industry Composition First Half 2011 NAICS Industry Establishments Jobs Avg. Annual Wages 521 Central Bank* N/A 522 Credit Intermediation & Related Services 1,568 27,216 N/A 523 Securities, Commodity Contracts, Investments ,502 $ Insurance Carriers & Related Services 2,187 19,787 $69, Funds, Trusts, & Other Financial Vehicles $63, Finance & Insurance 4,778 58,721 N/A Offices of Bank Holding Companies $72, Data Processing, Hosting, & Related Services 115 5,700 $118, Other Information Services $46, Computer Systems Design & Related Services 1,181 11,928 $78,305 Cluster Total 6,158 79,915 N/A Source: BLS & St. Louis Federal Reserve Bank

7 The credit intermediation and related activities industry, which includes banking, savings, loan and credit unions, credit card issuing and sale financing as well as mortgage brokers, with employment over 27,000, accounts for the largest share, 34.5%, of the cluster. More than a quarter of employment, 25.7%, is found in the insurance industry, which is followed by computer systems design at 15.5%, as well as investments and securities commodity contracts at 13.7% 6 Figure 3 Employment Distribution St. Louis MSA 1 st Half % Computer systems design & related services 0.4% Other information services 1.1% Central Bank 35.4% Credit intermediation & related services 7.4% Data processing, hosting & related services 0.3% Offices of bank holding companies 0.5% Funds, trusts & other financial vehicles 25.7% Insurance carriers & related activities 13.7% Securities, commodity contracts, investments Source: BLS concentration of employment The composition of the region s overall employment base is very similar to the U.S. as a whole. The region s financial activities and information super-sectors have location quotients of about 1, indicating that these sectors have the same concentration of employment in the regional economy as in the national economy. A measure of concentration, location quotient, represents the ratio of an industry s share of employment in a given area to that industry s share of employment in the overall U.S. economy. When an industry s employment concentration is greater than the nation, local firms typically produce more goods and services than the local market demands and therefore, are exporting goods and services. This type of specialized concentration drives wealth creation within the region. Table 2 shows a high concentration of employment in the central banking industry, due to the presence of the Federal Reserve Bank of St. Louis. The investment, securities, and commodity contacts industry, offices of bank holding companies, and data processing, hosting and related services industry also show above aver-age concentrations, with location quotients of 1.2 or higher. An important focus of the Greater St Louis Financial Forum is the securities brokerage industry which employed nearly 7,400 in 2010; Figure 4 illustrates the region s strength in the securities brokerage niche. In 2010, St. Louis had the third highest location quotient of 26 peer markets. Only New York with a location quotient of 4.40 and Boston s 2.75 exceed

8 St. Louis, with a location quotient of Further, from 2007 to 2010, the region experienced employment growth in the securities brokerage sector, while many metros experienced job losses. The region s location quotient increased from 1.25 in 2007 to 2.65 in 2010; during the 2007 to 2010 period both location quotients slipped in Boston and New York. Figure 4 shows the 2010 location quotient along the Y-axis and the change in location quotient from 2007 to 2010 on the X-axis. The bubbles are sized according to the number of employees in the local securities brokerage industry. 3 7 Figure 4 Securities Brokerage Employment ( NAICS 52312) Location Quotient and Change in Location Quotient St. Louis MSA and Selected Competitive Metros New York Location Quotient Boston St. Louis Phoenix 2.0 Minneapolis Tampa Denver San Francisco Cincinnati Indianapolis Miami Dallas Charlotte Kansas City 1.0 Seattle San Diego Chicago Philadelphia Atlanta Pittsburgh Houston Research Triangle Los Angeles Detroit Washington DC Baltimore Riverside 0.0 (1.50) (1.00) (0.50) Change in Location Quotient Sources: BLS & St. Louis Regional Chamber Table Location Quotients DRILLING DOWN FURTHER, 3 SUB INDUSTRIES HAVE LOCATION QUOTIENTS OVER 2.0 REAL ESTATE CREDIT 2.31 NAICS Industry Central Bank* Credit Intermediation & Related Services Securities, Commodity Contracts, Investments LQ SECURITIES BROKERAGE Insurance Carriers & Related Services 0.96 OTHER DIRECT INSURANCE Funds, Trusts, & Other Financial Vehicles N/A Offices of Bank Holding Companies Data Processing, Hosting, & Related Services Other Information Services N/A 5415 Computer Systems Design & Related Services 0.80 Sources: BLS, St. Louis Federal Reserve Bank, & St. Louis Regional Chamber

9 8 monthly earnings by industry One important goal for economic development is increasing community wealth by focusing on industries that provide strong and competitive wages. Growing the financial and information services cluster provide potential for wage growth. Earnings for employees in the financial and information services cluster are 1.2 to 2.6 times higher than the average for all industries in the region, and 1.7 to 2.5 times higher for new hires wages in the cluster. Average earnings have grown at a faster pace in the finance and information industries than in all industries with only two subsector exceptions; the insurance industry and funds and trusts industry. Earnings growth in data processing and hosting services was particularly strong. employees in the financial and information services cluster earn up to 2.6 times more than the regional average for industries Table 3 Average Earnings for Select Industries Financial and Information Services Cluster Missouri Portion St. Louis MSA 2010 Average ALL EMPLOYEES NEW HIRES NAICS Industry Quarterly Employment Monthly Earnings Earnings Growth % Quarterly Employment Monthly Earnings All Industries 905,449 $3, % 57,881 $2, Finance & Insurance 47,674 $5, % 2,359 $3, Monetary Authorities Central Banks 753 $6, % 17 $4, Credit Intermediation & Related Activities 19,630 $4, % 1,175 $3, Securities, Commodity Contracts, Investments 6,975 $8, % 292 $4, Insurance Carriers & Related Activities 19,891 $5, % 864 $3, Funds, Trusts, & Other Financial Vehicles 424 $5, % 11 $3, Information 21,689 $6, % 782 $3, Data Processing, Hosting, & Related Services 5,527 $10, % 179 $5,391 Source: U.S. Census Bureau business profile Four major financial services leaders anchor the cluster: St. Louis is home to Edward Jones, Scottrade, Stifel Nicolaus, & Well Fargo Advisors; all have added employment and out-performed the market during a period of extreme turmoil. The integration of the financial services and information services can be seen in the region s major employers including Thomson Reuters and MasterCard s Global Operations & Technology Center, as well as specialized service providers such as Savvis. Savvis provides infrastructure services to the financial industry and currently serves all of the top 200 financial services firms as clients. Savvis hosts trading platforms, risk management systems and provides connectivity to trading venues and sources of liquidity. Nearly 20,000 employees work in over 2,000 insurance related firms in the

10 St. Louis region. Many of them work in the offices of individual brokers representing nearly every major insurance carrier, but there are some insurance companies with a larger presence in the region. For example, St. Louis is the world headquarters for Reinsurance Group of America, Inc., the largest reinsurer in the nation and Fireman s Fund Insurance has 370 customer service and claims employees in St. Louis. Health insurance firms are a component of the insurance industry with companies such as Centene, Coventry HealthCare, and WellPoint. These companies are an important link between the Financial and Information Services Cluster and the Health Science and Services Cluster. Health insurance companies will participate in the Health Science and Services Leadership Council. 9 Figure 5 St. Louis MSA Major Employers by Primary Business Sector FINANCE & INSURANCE NAICS 52 CENTRAL BANKS NAICS 521 CREDIT INTERMEDIATION & RELATED NAICS 522 SECURITIES, COMMODITIES, & INVESTMENTS NAICS 523 INSURANCE CARRIERS & OTHER NAICS 524 FUNDS, TRUSTS, & OTHER FINANCIAL VEHICLES St. Louis Federal Reserve Bank Citimortgage, Scottrade Bank, Stifel Bank & Trust, Emerson Finance Corp., U.S. Bank, Wells Fargo Home Mortgage, Missouri Higher Education Loan Wells Fargo Advisors, Edward Jones, Stifel Nicolaus & Co., Scottrade WellPoint, GMAC, United Health Care, Reinsurance Group of America, Centene Corp., Coventry HealthCare The Realty Association Fund, NISA Investment Advisors, New England Financial & Met Life MANAGEMENT OF COMPANIES & ENTERPRISES NAICS 55 MID LEVEL OFFICES OF BANK HOLDING COMPANIES NAICS Reliance Bancshares, Magna Data Services, Business Bancshares, Warren County Bancshares INFORMATION NAICS 54 HIGHER DATA PROCESSING, HOSTING, & RELATED SCIENCES NAICS 518 PROFESSIONAL & TECHNICAL SERVICES NAICS 54 MID LEVEL ENTRY LEVEL OTHER INFORMATION SERVICES COMPUTER SYSTEMS DESIGN NAICS 519 & RELATED SERVICES NAICS 5415 SAVVIS, Connectria Corp., RJIS IBM, Thomson Reuters, MasterCard Network 1 Communications Corp., Cellcast Technologies, Petros Technology Internet Publishing Kelly Mitchell Group, Amdocs, Pericient, Dougherty Business School, Maverick Technologies, Rose International

11 employment & output forecast 10 According to 10-year national forecasts from the Bureau of Labor Statistics 5, employment in the financial activities industry is forecast to grow at an annual rate of 1% from 2010 to While this rate of growth is somewhat lower than the 1.3% projected annual growth rate for total employment, it is well above the employment growth rate from the 2000 to 2010, when the sector experienced 0.1% loss in employment each year. The securities, commodity contracts, and other financial investments sectors are projected to add over 201,400 jobs, which is the largest increase in jobs in the financial activities sector through This increase contrasts with the loss of 3,600 jobs during the previous period ( ). Factors that will drive growth include the movement of many members of the baby boom generation into retirement in the coming years. Many retirees will seek professional investment advice to manage their retirement accounts. Younger workers seeking advice on retirement options will also boost demand. Employment in computer systems design and related services is projected to grow at 3.9% per year, making this industry one of the fastest growing. The demand for increased network and computer systems security as well as the health care industry s ongoing move to electronic records will drive employment growth in this industry. Software publishers will be adding jobs at an annual rate of 3.1% The information sector is projected to have the fastest growth in real output among all majors sectors through 2020; however employment in the information sector is expected to grow at an annual rate of 0.5%. One reason for the slow growth is tied to declining employment in the newspaper, periodical book, and directory publishers industry. Another reason is advances in technology that increase productivity without the need for additional employees. For example, real output in the data processing, hosting, related services and other information services industry, which not only provides the infrastructure for hosting and data processing but also offers search engines, is projected to grow by an annual rate of 6.1%, making it one of the fastest growing industries. However, employment in this industry is projected to increase by only 0.8% per year. While this is an improvement over the 2000 to 2010 period where the industry declined by 2.1% per year, projected employment in 2020 will still be below the 2000 level. industry trends The effects of the great recession continue to influence the industry. Industry regulation ramped up following the financial crisis and there will be a focus on implementing many of the provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act in The expansion of global trade makes the United States financial services firms vulnerable to International economic conditions so the uncertainty of European debt crises is likely to continue to concern the banking and securities industry. Persistent weakness in the U.S. housing market continues to dampen the economic recovery which is leading banks to consider structural changes in their business models and seek alternative sources of income. financial & information services industries are predicted to experience long term regional and national growth 4

12 employment & output forecast 11 The region has developed a relatively large workforce involved in the provision of computer and technology services. This strength should be leveraged in the marketing of the region as an attractive destination to future prospects. The occupational profile of the cluster indicates that the region is likely best poised to support growth in a broad range of technology services. The development of a regional talent pipeline to support the growth of personal financial advisors and other financial specialists will be important for ensuring that cannibalization of existing occupational employment is minimized as financial service grow within the region. 6 Although firms within financial and information services can be described as a cluster, individuals in many financial or information services occupations are employed across all sectors of the St. Louis Metro economy. Some of these occupations are sector specifics (found almost exclusively within cluster firms) and others are cross cutting in that they serve a a wide range of industries. The region has a strong mathematical and computer occupations workforce; 9 of the 13 occupations have location quotients above 1.2. Database administrators have a LQ of The region s wage levels are very competitive; 11 of the 13 occupations have local median wages at or below the U.S. median. Tables 4 & 5 delineate the cluster s 35 various occupations; in 2010, they accounted for a workforce of over 146,600. The majority of these occupations, 71%, are business and financial operations, management, or office and administrative support occupations; the remaining 29% are computer and mathematical occupations. Three occupations: accounting and auditors; budget analysts; and brokerage clerks have above average concentrations, with location quotients above out of the 22 occupations have median wages at or below the U.S. median. Table 4 Computer & Mathematical Occupations 2010 SOC CODE Occupation Title St. Louis Employment Location Quotient St. Louis Median Wage National Median Wage STL Wages as Share of U.S Mathematical & Computer Occupations 43, $73,210 $73,720 99% Computer & Information Research Scientists N/A N/A $96,460 $100,660 96% Computer Systems Analysts 7, $75,430 $77,740 97% Computer Programmers 4, $74,290 $71, % Software Developers, Applications 7, $85,430 $87,790 97% Software Developers, Systems Software 2, $87,450 $94,180 93% Database Administrators 1, $72,680 $73,490 99% Network & Computer Systems Administrators* 4, $69,230 $69, % Computer Support Specialists 7, $44,520 $46,260 96% Information Security Analysts, Computer Network Architects, & Web Developers 2, $81,760 $75, % All Other Computer Occupations 2, $77,990 $79,660 98% Actuaries $86,320 $87,560 98% Operations Research Analysts $68,970 $70,960 97% Statisticians $65,520 $72,830 90% Sources: BLS TOTAL 43,110

13 high concentrations of occupations and employment occur in the financial and information services industry sectors 7 Table 5 Selected Management, Business & Financial Operations, and Office & Administrative Support Occupations SOC CODE Occupation Title St. Louis Employment Location Quotient St. Louis Median Wage National Median Wage STL Wages as Share of U.S Marketing Managers 1, $110,050 $112,800 98% Financial Managers 3, $108,400 $103, % Business & Financial Operations Occupations 64, $58,480 $60,670 96% Claims Adjusters, Examiners, & Investigators 2, $54,100 $58,620 92% Management Analysts 3, $73,400 $78,160 94% Business Operations Specialists, All Other* 9, $61,510 $62,450 98% Accountants & Auditors 14, $58,450 $61,690 95% Budget Analysts $66,970 $68,200 98% Credit Analysts $62,990 $58, % Financial Analysts 1, $71,810 $74,350 97% Personal Finance Advisors 1, $70,040 $64, % Insurance Underwriters $57,980 $59,290 98% Financial Examiners $76,520 $74, % Loan Officers 2, $56,680 $56, % Tax Examiners, Collectors, & Revenue Agents $68,820 $49, % Tax Preparers $34,690 $30, % Financial Specialists, All Other 1, $61,690 $60, % First-Line Supervisors of Retail Sales Workers 10, $34,320 $35,820 96% Securities, Commodities, & Financial Sales Agents 3, $51,860 $70,190 74% Bookkeeping, Accounting, & Auditing Clerks 15, $34,090 $34, % Tellers 4, $23,490 $24,100 97% Brokerage Clerks 1, $37,050 $40,160 92% Customer Service Representatives 22, $30,330 $30, % TOTAL 146,640 Sources: BLS

14 talent profile 13 Figure 8 shows the St. Louis median annual wages for occupations and the local range from 10 to 90 percentiles. While the median wage for securities, commodities, and financial services sales agents is $51,900 wages range from the bottom 10 percentile of $21,200 to the top 90 percentile of $164,400. This range reflects the high earning potential of these commission based occupations. Figure 8 Median Annual Wage by Occupational Group St. Louis MSA 2010 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- TELLERS CUSTOMER SERVICE REPRESENTATIVES BOOKKEEPING, ACCOUNTING, AUDITING CLERKS SUPERVISORS OF RETAIL SALES WORKERS TAX PREPARERS BROKERAGE CLERKS COMPUTER SUPPORT SPECIALISTS SECURITIES, COMMODITIES, FINANCIAL AGENTS CLAIMS ADJUSTERS, EXAMINERS, INVESTIGATORS LOAN OFFICERS INSURANCE UNDERWRITERS ACCOUNTANTS AND AUDITORS FINANCIAL OPERATIONS OCCUPATIONS BUSINESS OPERATIONS SPECIALISTS & OTHER FINANCIAL SPECIALIST S, ALL OTHER CREDIT ANALYSTS STATISTICIANS BUDGET ANALYSTS TAX EXAMINERS & REVENUE AGENTS OPERATIONS RESEARCH ANALYSTS COMPUTER SYSTEMS ADMINIST RATORS FINANCIAL ANALYSTS DATABASE ADMINISTRATORS COMPUTER AND MATHEMATICAL OCCUPATIONS MANAGEMENT ANALYSTS COMPUTER PROGRAMMERS COMPUTER SYSTEMS ANALYSTS FINANCIAL EXAMINERS COMPUTER OCCUPATIONS, ALL OTHER WEB DEVELOPERS, NETWORK ARCHITECTS SOFTWARE DEVELOPERS, APPLICATIONS ACTUARIES SOFTWARE DEVELOPERS, SYSTEMS SOFTWARE COMPUTER RESEARCH SCIENTISTS Source: BLS

15 occupation forecast 14 According to the U.S. Bureau of Labor Statistics to 2020 national occupation forecast, business and financial occupations are projected to grow more rapidly than overall occupation growth. This growth includes some recovery from losses between 2006 and Business and financial operations occupations are projected to grow by 17.3% from 2010 to This group includes business operations specialists - such as management analysts, human resources workers, and buyers and purchasing agents, and financial specialists, such as accountants and auditors, loan officers, and financial analysts. Business and financial operations workers are found in industries throughout the economy, but the largest numbers are found in government, professional and business services, as well as the insurance and finance industries. In these industries, business and financial operations occupations are projected to account for a larger share of industry employment in 2020 than in 2010, indicating the occupational group is expected to grow faster than the industry. Computer and mathematical occupations are projected to grow by 22.0% from 2010 to 2020, making the computer and mathematical occupational group the sixth-fastest-growing major occupational group. However, because it is a relatively small group, it ranks only 12 th (out of 22 groups) in the projected number of new jobs between 2010 and Computer occupations are much larger than mathematical occupations, accounting for 3.4 million of the total 3.5 million jobs in computer and mathematical occupations in Employment in computer occupations also is projected to grow faster than mathematical occupations, with growth rates of 22.1% & 16.7%, respectively. Although computer occupations are found throughout the economy, fast growth in the computer systems design and related services industry is driving this group s growth; this industry accounted for just over 20 percent of all jobs in computer occupations in 2010, but will generate more than half of all new computer jobs from 2010 to talent trends Today, a number of external trends are influencing both finance and IT, with implication for the talent that is needed now and in the future. The followings trends were identified in a 2011 Chamber analysis of talent in the St. Louis region 9 The digitization of finance is moving the industry toward a paperless future; credit cards, debit cards, pre-paid benefits cards, and smart phones are presently the preferred tools to move money, but many of these will soon be replaced by other technologies. The financial services industry has a more diverse customer base than ever before, spanning from young people raised with digital tools; older people with paper checkbooks and fixed incomes; immigrants with different cultural expectations; start-up companies, mid-size firms, large corporations; and every-one in between. Financial and information transactions are exposed to increased security risks from hackers and data hijackers who operate independently and through cross-national organizations; as a result computer security specialists are in high demand. The automation of many financial service functions, such as deposits, check cashing, and some auditing tasks have lessened the need for lower-skill occupations & increased the demand for individuals with credentialed specializations.

16 A critical shift is underway in information services, away from unique in-house information 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 a variety of Internet-connected digital devices. 15 Restructuring during the Recession saw an increase in mergers and acquisitions in the banking and financial services industry, meaning that there are fewer purely local enterprises and many talent management decisions are made outside the local area. The financial sector is globally connected, linked through complex IT networks that transcend geopolitical boundaries. Events in one part of the world have ramifications for what happens in others - for better or for worse. Customers demand convenient access to financial services at the community level, as a result, partnerships have formed between depository institutions and retail outlets, such as banks, grocery stores, malls, etc., as well as the entry of non-financial services firms into the finance business, such as Wal-Mart, General Motors, and Home Depot. There exists a tighter and more complexly intertwining regulatory environment, which now in flux, subsequently increases demand for talented people who can understand, monitor, and advise on issues surrounding regulatory compliance. Many of these trends signal increased demand for people with the most up-to-date technical skills but having the right technical skills will not be sufficient to launch a successful career in the financial and information services cluster today. Looking beyond the tumultuous times of the recent Recession, forward-looking firms recognize that a 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. 10 higher education & training The nature of work in these economic clusters has been and will continue to be transformed by technology and innovation. Businesses increasingly require a skilled, technically-proficient, and continuously-learning workforce. Examples of new and emerging occupations in the financial and information services industry include: Business intelligence analysts Network designers Risk management specialists A Chamber analysis of 41 occupations throughout the Financial and Information Services Cluster found that 30 are considered high growth occupations by the Missouri Economic Research and Information Center (MERIC); 80% of these jobs will require Bachelor s Degrees or higher. Education is an important aspect of St. Louis talent development; the region has a higher level of college graduates than the U.S., many of St. Louis competitor markets have significantly higher proportions of college graduates. St. Louis

17 enjoys a wealth of resources within higher education; over 200,000 students were enrolled in colleges and universities in the St. Louis region and nearly 36,500 degrees were awarded in the academic year. Washington University, Saint Louis University, University of Missouri- St. Louis, and Southern Illinois University Edwardsville have all received national recognition for entrepreneurship and business programs. there is a strong supply of training programs at several local universities focusing on the careers demanded by the cluster 11 Figure 9 Bachelor s Degrees or Higher Population Ages Figure 10 Most Significant Source St. Louis MSA Peer MSAS U.S of Education & Training Financial & Information Services 16 Washington, D.C. Boston San Francisco Research Triangle Minneapolis Denver New York Seattle Baltimore Chicago Philadelphia Atlanta Kansas City San Diego Charlotte Pittsburgh Indianapolis St. Louis Dallas Los Angeles Cincinnati Miami U.S. Detroit Houston Tampa Phoenix Riverside 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 0.5 Sources: U.S. Census Bureau, American Community Survey 2010 HIGH GROWTH OCCUPATIONS ALL OCCUPATIONS 80% Bachelor s degree or higher 13% Vocational or other training 7% Two-year degree 59% Bachelor s degree or higher 32% Vocational or other training 7% Two-year degree support industries The presence of a network of companies providing specialized support is a critical element of regional clusters. Two examples of support industries are law and accounting firms. Table 6 shows the while the major securities brokerage firms do not use the same accounting firms, there is overlap in the law firms used.

18 17 Table 6 ACCOUNTING FIRMS LAW FIRMS Firms Selected Cluster Clients Firms Selected Cluster Clients Deloitte Scottrade Bryan Cave Wells Fargo Advisors Stifel Nicolaus PricewaterhouseCoopers Edward Jones Greensfelder, Hemker & Gale Edward Jones KPMG LLP Wells Fargo Lewis, Rice & Fingersh Bank of America WellPoint Ernst & Young Stifel Nicolaus Polsinelli Shughart Heartland Bank St. John s Bank SNR Denton Wells Fargo Bank Stifel Nicolaus PNC Bank Sources: St. Louis Business Journal Book of Lists 2012 & Hoovers Senniger Powers Edward Jones vendor & supplier opportunities The spending patterns of regional financial services companies and information technologies firms provide important opportunities for local vendors and suppliers. Cluster firms are consumers of St. Louis-based goods and services including law, accounting, education & training, and business services. Tables 7 presents the estimated share of local company budgets devoted to operations categories & an estimate of how much of those purchases are made within the region. This information can inform discussions about opportunities for cluster firms to increase purchasing from local companies to grow the regional economy. Table 7 Local Spending Patterns for Regional Goods & Services Goods & Services Categories Securities, Commodity Contracts, Investments, & Related Services Telecommunications Real Estate Buying & Selling, Leasing, Managing, & Related Services Nondepository Credit Intermediation & Related Services Advertising & Related Services Management, Scientific, & Technical Consulting Services Legal Services Monetary Authorities & Depository Credit Intermediation Services Facilities Management & Other Computer Related Services Employment services Accounting, Tax preparation, Bookkeeping, & Payroll Services Management of Companies & Enterprises Computer Systems Design Services Insurance Agencies, Brokerages, & Related Services Insurance Products & Services of Fed Government Enterprises All Other Professional, Scientific, & Technical Services Services to Buildings & Dwellings Automotive Equipment Rental & Leasing Services Business Support Services Sources: MIG, Inc. & IMPLAN System Local Share of Budget 28.4% 12.3% 7.9% 5.4% 4.5% 3.9% 3.6% 2.9% 2.7% 2.4% 2.0% 1.9% 1.6% 1.6% 1.3% 1.1% 1.0% 1.0% 0.8% 0.8% Local Purchase Coefficient 83.3% 99.9% 69.4% 94.6% 74.0% 53.9% 91.7% 88.5% 94.5% 95.5% 97.4% 99.9% 91.3% 99.8% 78.6% 82.8% 94.7% 99.9% 86.5% 99.9%

19 innovation 18 In addition to growing established firms, innovation and high growth start-up businesses are also important components of a targeted cluster approach to economic development. Recent activity in the region is bringing new resources to support business start-ups in the region. One new resource for technology based startups is Railroad Exchange Building (T-REx), a low-cost, flexible-lease space oriented to the nascent IT startup entrepreneurs. Other resources for entrepreneurs include: Olin Cup: Washington University s business plan competition Capital Innovators: 3 month intense mentoring program Arch Grants: Downtown St. Louis business plan competition St. Louis Regional Business Plan Competition: Sponsored by the St. Louis County Economic Council and Edward Jones Angel Investors: St. Louis Arch Angels and Billiken Angels While the information component of the cluster is the focus of many of these resources, there is a new attention to innovation in the financial services sector with the creation of FinServe Tech Angels in This angel investor group is comprised of financial services executives and entrepreneurs who invest in early stage financial services information companies. FinServe Tech Angels offers an efficient option for high-net worth individuals, with a financial services background, to diversify their portfolios by investing in start-up companies. As such, the organization seeks out the top financial services related start-up companies from across the country, and brings them to St. Louis to present before its members. Individual members make their own investment decisions regarding each company that presents before the group; and the organization assists members with due diligence and deal syndication. Patents are a measure of innovation. Figure 11 shows that data processing patent activity has increased from 46 patents in 2006 to 74 patents issued in The data processing patents related to financial, business practice, management, or cost/price determination have grown at an increasing rate over this period. Three patents were issued in 2006 and by patents were issued. Figure 11 Patents Issued by Technology Class Data Processing St. Louis MSA Source: U.S. Patent and Trademark Office Other data processing and information patents Financial, business practice, management, or cost/price determination

20 st. louis resources for entrepreneurs 19 This summary of quantitative information about the financial and information services cluster serves as the starting point for a business-led effort to link, leverage, and align regional factors to promote regional growth. Forum members will work with RCGA staff to describe roadblocks to cluster growth, identify niches with the greatest potential for growth, and develop strategies to accelerate growth. The Greater St. Louis Financial Forum will articulate a regional value proposition for the cluster, develop branding and messaging strategies, and identify companies to target for business recruitment. The Forum will also work with RCGA staff to identify measures unique to the financial and information services cluster to monitor progress. The Forum will maintain conversations across clusters to insure that shared concerns are addressed comprehensively. All the Leadership Council s work points to a set of common goals: robust employment opportunities for residents and newcomers alike, a vibrant and growing business base, ever increasing community wealth, and continued improvement in a range of social factors closely aligned with employment and income.

21 sources 20 1 Regional Cluster Analysis Cluster Action Plan Greater Saint Louis, MO-IL, Market Street Services, Inc, July 27, 2009, p Ibid. p Note The QCEW is subject to non-economic code changes and changes in industry classification, therefore, time series should be interpreted with care and confirmed with local market knowledge. 4 Regional Cluster Analysis Cluster Action Plan Greater Saint Louis, MO-IL, Market Street Services, Inc, July 27, 2009, p Employment Outlook: Industry Employment and Output Projections to 2020 in Monthly Labor Review Industry, U.S. Bureau of Labor Statistics, January Regional Cluster Analysis Cluster Action Plan Greater Saint Louis, MO-IL, Market Street Services, Inc, July 27, 2009, p Regional Cluster Analysis Cluster Action Plan Greater Saint Louis, MO-IL, Market Street Services, Inc, July 27, 2009, p Employment Outlook: Occupational Employment Projections to 2020 in Monthly Labor Review Industry, U.S. Bureau of Labor Statistics, January Talent: The Future of Metro St. Louis in the Knowledge Economy, St. Louis RCGA, p Re-engineering the organization: Managing talent in the day after tomorrow, PricewaterhouseCoopers, pgs 3 7, February Regional Cluster Analysis Cluster Action Plan Greater Saint Louis, MO-IL, Market Street Services, Inc, July 27, 2009, p i Market Street Services

22 Financial Services St. Louis Regional Chamber Strategy Statement We are a broad community of leaders united for economic prosperity throughout the entire St. Louis bi-state region. In fact, our aspiration is for St. Louis to be one of the Top 10 U.S. regions in prosperity. Our one purpose is to inspire a greater St. Louis. Together, we will make St. Louis a more attractive place for people to live, work and invest. We will win on today s regional strengths in focused economic clusters. We will champion a better tomorrow through greater educational attainment, economic inclusion, innovation and entrepreneurship. One Metropolitan Square 211 North Broadway, Suite 1300 St. Louis, MO fax phone