2013 NEBRASKA POLICY AND ISSUES SUMMIT NEBRASKA CHAMBER OF COMMERCE NOVEMBER 18, 2013 JONATHAN HAUGHTON SENIOR ECONOMIST, BEACON HILL INSTITUTE PROFESSOR, DEPARTMENT OF ECONOMICS, SUFFOLK UNIVERSITY [email protected]State Competitiveness, November 2013 NE: Competitive or not?
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2013 NEBRASKA POLICY AND ISSUES SUMMIT NEBRASKA CHAMBER OF COMMERCE NOVEMBER 18, 2013 JONATHAN HAUGHTON SENIOR ECONOMIST, BEACON HILL INSTITUTE PROFESSOR,
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2013 NEBRASKA POLICY AND ISSUES SUMMITN E B R A S K A C H A M B E R O F C O M M E R C EN O V E M B E R 1 8 , 2 0 1 3
J O N AT H A N H AU G H T O NS E N I O R E C O N O M I S T, B E A C O N H I L L I N S T I T U T E P R O F E S S O R , D E PA R T M E N T O F E C O N O M I C S , S U F F O L K U N I V E R S I T Y
J H A U G H T O N @ S U F F O L K . E D U
State Competitiveness, November 2013
NE: Competitive or not?
The Ratings Cacophony
State Competitiveness, November 2013
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Key ideas
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NE GDP weathered the recession about as well as the US Because fundamentals of competitiveness are solid?
Competitiveness: Our measure is Broad Associated with per capita income Helpful in identifying policy-relevant areas of strength,
weaknessNE: Knocking at the top 10
Some others are improving Several problems need attention
Personal Income per capita
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NE: Muted recession damage
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Competitiveness Is …
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A state is competitive if it has in place the policies and conditions that ensure and sustain a high level of per capita income and its continued growth. Naturally leads to the question of what these policies and
conditions are
Michael Porter: Competitiveness measures “the microfoundations of prosperity”
and “wealth is actually created at the microeconomic level.”
The BHI index: Inspired by Porter but developed in-house Long-term: what makes a persistent difference to real income?
Policy is important, but only part of the story Natural resources; culture; history.
The Big Picture: Top 5 + Neighbors
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MASSACHUSETTS 1 (7.77) COLORADO 6
(6.36) NORTH DAKOTA 2 (6.99) KANSAS
10 (5.77)
MINNESOTA 3 (6.81) NEBRASKA 11
(5.75) SOUTH DAKOTA 4 (6.48) IOWA
13 (5.55)
UTAH 5 (6.42) MISSOURI 32
(4.64)NE: Index was 5.97 in 2011 and 6.36 in 2010.
Real personal income per capita = 30,873 + 1,893 × Competitiveness Index
2011 p=0.01
R2 = 0.23PI per capita deflated using a spatial pNEce index (Aten et al. 2011)
3500
040
000
4500
050
000
3 4 5 6 7Competitiveness Index 2011
Rea
l Per
sona
l In
com
e p
er c
apita
, $
'000
Applied to NE
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Ranked 11th with index of 5.75 Business: 28th (4.84) Openness: 40th (4.26)
Raise these to the mean (5.0): Rank would rise to 9th with index of 6.02 Real personal income would rise $500 per person per
year That’s a total of $900 million annually.
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Suffolk University was founded in 1906, and has over 9,000 students in its College of Arts and Sciences, Sawyer Business School, and Law School.
The Beacon Hill Institute was founded at Suffolk University in 1991 for the purpose of bringing economic analysis to bear on current public policy issues.