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Home My WebLink AboutRESPONSE - RFP - P1008 INDUSTRY ANALYSIS AND CLUSTERREQUEST FOR PROPOSAL PROPOSAL NUMBER P1008 INDUSTRY CLUSTER ANALYSIS AND TARGETING STUDY February 10, 2006 Prepared For: ia 215 North Mason Street, 2nd Floor Fort Collins, Colorado 80524 Submitted by: Development Research Partners, Inc. Patricia Silverstein, President 10184 W Belleview Ave, Suite 100 Littleton, Colorado 80127 www.DevelopmentResearch.net (303) 991-0073 Patty@DevelopmentResearch.net Development Research Partners R&M Resource Development Jessica A. Morgan Development Research Partners, Research Analyst Jessica Morgan's specialty is in the evaluation of issues relating to urban development and revitalization. Jessica's experience includes international economics, sales analyses and intellectual property studies. As a researcher for Development Research Partners, she conducts market analyses, real estate feasibility studies, and economic and fiscal impact analysis. Ms. Morgan holds a Bachelor's Degree in Business Economics from Miami University in Oxford, OH. Personnel Available for Consultation on the Project: Jesse D. Silverstein Development Research Partners, Principal Jesse Silverstein is an expert in preparing economic and real estate -related analysis. He has extensive experience in developing economic development strategies, real estate market analysis and feasibility studies. His expertise includes redevelopment analysis for environmentally -impaired property. Mr. Silverstein's prior employment includes positions as Policy Analyst with the Western Interstate Energy Board,,Director at Equitable Real Estate Investment Management, and Chief Appraiser for the Resolution Trust Corporation (FDIC) in Washington, D.C. He is actively involved in organizations including the Denver Association of Business Economists and the Colorado Sustainability Project. Mr. Silverstein holds a Bachelor's Degree in Economics from the University of Delaware, a Master's Degree in Economics from the University of Colorado at Boulder, and is an MAI designated member of the Appraisal Institute. R. Michael McCarthy, CEcD, FM R&MResource Development, Principal With 38 years of experience in economic development, Mike McCarthy has been a Certified Economic Developer (CEcD) since 1982. He received his Fellow Member (FM) designation from the International Economic Development Council in 1992. He is nationally and internationally recognized as a top economic development strategist. He has written numerous articles on the subject of economic development and taught at the E.D. Institute in Norman, Oklahoma and Indianapolis, Indiana. Mike has worked in every facet of economic development, from military reuse and downtown revitalization to attraction of target industries, leading successful international trade missions and developing workforce improvement initiatives. He is a former President of the Columbus (Ohio) Chamber of Commerce, and was Deputy Director of International Trade, State of Ohio. Mike earned his MBA from Central Michigan University and his BS from Lake Superior University. Fort Collins Industry Cluster Analysis and Targeting Study Proposal Page 8 Development Research Partners ��R&M Resource Development RECENT SIMILAR PROJECTS Developing a Balanced Economy: Key Industry Clusters in the Denver Metropolitan Area Development Research Partners, on -going effort since 2001 There are nine key industry clusters operating in the Denver metro area. Constant monitoring of current trends in the industries helps to identify prevailing business cycles so that efforts related to the industries can be shifted strategically. At some points, these clusters present opportunities for recruitment and growth. At other points, economic development efforts should be focused on retention of the companies and their employment base. This on -going industry cluster effort includes numerous components ranging from providing research and assistance in the creation of widely -distributed marketing materials to the development of internal market intelligence to be used in conjunction with deal -specific activities. Mr. Tom Clark Executive Director Metro Denver Economic Development Corp. 1445 Market Street Denver, CO 80202 Phone:303.620.8029 BreakThrough! Denver, Metro Denver Economic Development Corporation R&MResource Development The Metro Denver Chamber of Commerce and Metro Denver Economic Development Corporation set a ten-year economic vision with a specific five-year work program devoted to creating 100,000 new jobs in the Denver area. The 13-month campaign raised $13.3 million, which includes substantial increases in public sector support, and totaling 170 private -sector investors. The success of this capital campaign is a landmark event and represents a model every economic development group in North America admires and strives for. Mr. Tom Clark Executive Director Metro Denver Economic Development Corp. 1445 Market Street Denver, CO 80202 Phone: 303.620.8029 Understanding Regional Strengths: A Study of Key Industry Clusters in the Buffalo Niagara Region Development Research Partners, completed January 2006 Employment growth in Buffalo Niagara is lagging the rest of the country and the challenge for the region is how to maximize the existing labor and other resources of the region. This study identifies five industry clusters that present strong opportunities for the future growth and vitality of the Buffalo Niagara region. Fort Collins Industry Cluster Analysis and Targeting Study Proposal Page 9 Development Research Partners R&M Resource Development The study included industry trend research and analysis, the development of industry cluster profiles, and a discussion of the region's strengths and weaknesses as it relates to the industry clusters. Mr. Charles E. Webb President/Executive Director Erie County Industrial Development Agency 275 Oak Street Buffalo, NY 14203 Phone: 716.856.6525 City of Englewood Industry Cluster Analysis Development Research Partners, in process The City of Englewood is facing dynamic opportunities with the upcoming integration of the existing Southwest Corridor light rail line with the Southeast Corridor line that will open in late 2006. While the community has no opportunity to expand its boundaries, it has great potential for redevelopment of its existing land. The industry cluster analysis that is currently underway is focused on identifying the key opportunities for industry growth that may enhance and preserve the competitive advantages of the community. Mr. Mark Graham Senior Planner City of Englewood, Community Development Department 1000 Englewood Parkway Englewood, CO 80110 Phone: 303.762.2353 Leadership 2010, Northern Colorado Economic Development Corporation R&MResource Development, completed October 2005 The Northern Colorado Economic Development Corporation (NCEDC) set a five-year economic vision and work program dedicated to creating 9,175 new jobs in the Loveland/ Fort Collins area. The 10-month campaign is raising $5 million, which includes considerable increases in public sector support and private sector investors. The economic development budget is expanding from $400,000 per year to $1 million. December 7th was the kick off of the campaign and they announced $3 million December 16, 2004. Mr. J.J. Johnston President & CEO Northern Colorado Economic Development Corporation 2725 Rocky Mountain Ave., Suite #410 Loveland, CO 80538 Phone: 970.667.0905 Fort Collins Industry Cluster Analysis and Targeting Study Proposal Page 10 Development Research Partners February 10, 2006 Mr. James B. O'Neill II City of Fort Collins Administrative Services, Purchasing Division 215 North Mason Street, 2nd Floor Fort Collins, CO 80524 Re: Request for Proposal, Proposal No. P1008: Industry Cluster Analysis and Targeting Study Dear Mr. O'Neill: On behalf of Development Research Partners, I am pleased to respond to your request for proposal regarding an industry cluster analysis and target industry study for the City of Fort Collins, Colorado. The Development Research Partners team will include Development Research Partners and R&M Resource Development. Our two companies provide the City of Fort Collins with exceptional economic research and analysis skills, along with proven expertise in all facets of economic development. The enclosed response presents our proposed scope of work, team qualifications, and project timeline and budget. Our team will be available to make this project progress in a manner consistent with the needs and expectations of the community. We look forward to the opportunity to assist you with this important project. Respectfully Submitted, Patricia L. Silverstein President 10184 W Belleview Ave • Suite 100 • Littleton, Colorado 80127. 303-991-0070 9 FAX 303-991-0075 Development Research Partners FORT COLLINS INDUSTRY CLUSTER ANALYSIS AND TARGETING STUDY SCOPE OF WORK A major step in developing a region's economic development strategy focuses on what types of industries to target for growth and retention. Industry targets may be chosen to meet varying community goals ranging from diversifying the economic base to increasing the average wage to utilizing natural and labor resources more fully. A community's economic development efforts should focus on those industries in which the community has some clear competitive advantages. Further, industries selected need to be acceptable economically, environmentally, and socially to the community. This proposed study is based on the concept of industry clusters. Industry clusters are geographic concentrations of interconnected companies and institutions in a particular field. These industry clusters drive wealth creation within a region, primarily through the export of goods and services. An industry cluster may consist of industries that share the same or similar workforce, factors of production or infrastructure. It may also be defined by the production of similar outputs, complementary output or other interdependent relations. Ideally, clusters also include the institutions and professional organizations that provide research assistance and support to the industry. The identification and description of industry clusters operating in Fort Collins, Colorado will be accomplished through the completion of the following tasks. Task 1: Identifv Industry Clusters The first step will be to identify industry clusters currently operating in Fort Collins. Development Research Partners (DRP) uses a cluster methodology similar to that developed by Michael E. Porter, Professor of Business Administration at the Harvard Business School. Employment concentration (industry employment as a share of total employment) will be used to determine industry cluster strength. We will be looking for a diverse mix of industries, including both technology -based and "traditional" industries. In particular, this task will be accomplished through the following research activities: Research Industry Classifications — DRP will examine the 2004 (2005, if available) annual employment concentration of each 4-digit (or, in some cases, 6-digit) North American Industry Classification System (NAICS) code in Fort Collins. The employment concentration in each industry will then be compared to the national employment concentration for the industry to determine if Fort Collins has relative strength. Where concentration of an industry is greater than the national economy, it is presumed that the production of goods and services is more than sufficient to meet local demand, and is therefore exported — either physically or financially. Where concentration of an industry is greater than the national average, it is presumed that a high degree of specialization among firms exists, a characteristic of competitive industry clusters. A,QereQate Clusters - The NAICS industries with strong employment concentrations will be aggregated, along with additional relevant industries, to define strong industry clusters in the Fort Fort Collins Industry Cluster Analysis and Targeting Study Proposal Page 1 Development Research Partners Collins area. If appropriate, "subclusters" may also be developed. Each industry cluster will be defined by a set of NAICS codes. Task 2: Industry Cluster Rankin Often, the list of potential industry clusters needs to be shortened for further analysis. If that is the case in Fort Collins, an industry cluster ranking analysis exercise may be used as a guide for narrowing the list. This process used by DRP is based on qualitative input as well as quantitative measures. To begin theQ ranking analysis, various criteria are ranked according to its importance to the economic development goals of the community. Based onthe..ineut ^�^ ^^a ^^ ^^~• ghts are serous b cinec leaders wei assigned to varying economic development goals such as projected long-term job growth rates, high employment multiplier impacts, large current employment base, high average annual salary and the like. Using a combination of qualitative and quantitative data, the industry clusters are ranked according to each criterio' an tthe appropriate number of clusters selected based on those that best meet the community's goals. The selected clusters offer strong growth potential and/or a high degree of employment concentration. While some industry clusters may exhibit strong employment concentrations but slow or no employment growth in recent years, there is value in recognizing large employment sectors for retention efforts. How many industry clusters should be pursued as targets? The answer to this question depends upon the community's priorities, resources, political will and the current level of economic diversity. First, financial and personnel resources may limit the number of clusters actively pursued. Second, the number of industry clusters pursued as targets may be dictated by the level of involvement and support of industry business leaders. Third, the current composition of the economic base needs to be considered. Economic development goals may range from bolstering the employment base of one sector to increasing employment in a number of sectors in order to enhance the diversity of the economic base. These goals are not mutually exclusive; the desired outcome is to bring or maintain the balance of the local economy. The decision of which industry clusters to actively pursue needs to consider the community's goals for industry specialization and economic diversification. We will work with the City of Fort Collins to target the appropriate number of industry clusters initially. The City may wish to conduct more comprehensive industry cluster analysis on the other industry clusters identified at some later date. Task 3: Industry Cluster Profile Report Clusters continually evolve as new companies and industries emerge or decline. They can maintain competitive strength for decades or lose their competitive edge due to both external and internal forces. Because industries ebb and flow in strength, it is important to examine industry clusters historically to understand how to support and promote the cluster. Fort Collins Industry Cluster Analysis and Targeting Study Proposal Page 2 I'\ Development Research Partners For each of the industry clusters identified in Tasks 1 and 2, a comprehensive set of data will be prepared to describe and define the cluster. The following information will be provided: Cluster Overview - A description of the industry cluster, including why this is an important cluster to the future economic health of Fort Collins and a discussion of the growth potential of the industry at the national, state and regional level. • Economic Profile - An analysis of the concentration of the industry cluster, including such items as the number of companies, a listing of key companies within this industry cluster currently located in the region, the total employment, companies by employment size, average salaries and growth trends. Employment trends for the period from 2000 to 2005 will be examined, data permitting. Business Advantages - A discussion of other locations in the U.S. that have strong concentrations of this cluster and the identification of where Fort Collins currently ranks relative to these other areas. This section will be supplemented with the locational advantages and disadvantages information collected in the focus group section below. Task 4: Locational Advantanes & Disadvantages To determine if the data is painting an accurate picture of industry clusters in Fort Collins, discussions with community leaders and business professionals will be used to validate the cluster identification_ researc . n particular, we are seeking input on the factors that tend to drive the location ecis�ons of companies within the industry cluster. Based on these factors that drive the growth of the industry cluster, how well does Fort Collins compete? Ideally, one focus group session with 8-10 participants within the same industry cluster will be held. Therefore, the number o�groups will depend upon the final industry clusters selected. The City's assistance in identifying potential participants, contacting the participants and handling the logistics for each of the focus groups is essential given the short time frame for this project. Task 5: Recommended Action Items Targeting industries based on the idea of industry clusters provides focus to an economic development program in four key areas. First, an understanding of existing industry strengths helps to create an identifiable regional image and message, improving marketing programs. Second, retention campaigns can be focused on protecting existing industries and resources. Third, recruitment strategies can be focused on cluster companies and their suppliers or service providers. Finally, cluster analysis may identify industries that the community does not currently have a strong concentration in but also present unique, new opportunities for developing the regional economy. Our Development Research Partners / R&M Resource Development team will deliver to the City of Fort Collins recommendations for cost-effective, actionable strategies that will propel the City toward its goal of creating a sustainable economic environment for current and future generations. Our recommendations will include specific short-term (within 18 months) and long-term (19 months and beyond) action items. Fort Collins Industry Cluster Analysis and Targeting Study Proposal Page 3 Development Research Partners We will also propose objective performance measures as a way to evaluate/ recognize success and demonstrate accountability. Our process for developing recommendations will include the following: SWOT - Analyze the outcomes of cluster research, economic outlook data and competitiveness. Identify strengths, weaknesses, opportunities and threats. Menu of Strategies - Develop a menu of traditional and non-traditional economic development strategies that represent viable options for the targeted clusters and competitive issues identified in our research. These may include, but are not limited to: o Creation of industry cluster advisory boards o Marketing and public relations o Land use or preservation of commercial corridors o Development process, Regulatory and incentive policy o Workforce development and education o Infrastructure development o Entrepreneurial development (economic gardening) o Neighborhood revitalization or targeted area development • Prioritize - Evaluate and prioritize the menu options based on: o fit with Fort Collins' goals, core values and competitive position o effectiveness (based on empirical data) o human and financial capital required to implement o compatibility/synergy with other economic development efforts • Tracking Performance - Organize the proposed strategies into short- and long-term implementation plan, and develop measurable performance indicators. DELIVERABLES Meetings and Presentations: In an effort to contain project costs, the Development Research Partners team recommends conducting most data and report reviews and discussions via email and telephone. Still, we feel that three�meetings are needed, as follows: Meeting One: Introduction and explanation of the project; discussion regarding community's perception < of existing industry clusters and goals of the project. In addition, the criteria ranking discussion could occur at this meeting. Meeting Two: Presentation of the identified industry clusters. It is important for the community leaders to agree on the final selection of industry clusters. Meetin Tie hree: Presentation of the final results and report. The structure and timing of these meetings will be finalized in conjunction with the City of Fort Collins staff. Fort Collins Industry Cluster Analysis and Targeting Study Proposal Page 4 Development Research Partners Industry Focus Groups: The number of focus groups is yet to be determined based on the industry clusters selected. In general, each of these industry focus groups will include 8 to 10 business leaders in a two-hour discussion. The City's assistance with identifying and contacting potential participants and �So assisting with session logistics is cr tica . Professional Report: DRP will provide a professional report detailing the process and findings. We will provide one original, reproducible copy of the report and one electronic copy of the report in Microsoft Word, Microsoft Excel database and/or Adobe Acrobat PDF, as appropriate. Reproduction and dissemination of the final report will be the responsibility of the City of Fort Collins. COMPLETION SCHEDULE DRP could begin the assignment as early as the week of March 20, 2006. DRP will work with the City of Fort Collins to establish estimated delivery dates for the various research components, depending upon the overall project timeline. Generally, we estimate the following completion schedule: Task 1: Identify Clusters: 2 week project, beginning with project kick-off. Task 2: Cluster Rankings: 1 week Task 3: Industry Cluster Profile Report: 9 weeks Task 4: Locational Advantages & Disadvantages: 4 weeks Task 5: Recommended Action Items: 3 weeks In summary, the total project is estimated to take about five (5) months. The final documents will generally be completed about two weeks after receiving Cli i nt comments on draft reports, depending upon the extent of any requested revisions. DRP will gladly work with the City of Fort Collins to establish a timeline that is mutually acceptable. FEE SCHEDULE The project as described in this document will be completed for an estimated total fee of $70,000, based on the analysis of five industry clusters. The fee will increase commensurately with the number of clusters to be analyzed. Additional research and assistance above and beyond the Scope of Work identified herein may be negotiated at any point during the course of this project. Any additions or deletions to the Scope of Work will be documented via a change order and will generally result in an adjustment in the fee quoted above. The DRP team provides professional research and consulting services at a rate of $125.00 per hour. Fort Collins Industry Cluster Analysis and Targeting Study Proposal Page 5 Development Research Partners LR&M Resource Development TEAM QUALIFICATIONS Development Research Partners specializes in economic research and analysis for local and state government, and private -sector businesses. Development Research Partners combines extensive experience in real estate economics and economic development to provide clients with reliable consulting services in four areas of expertise: • Economic and Demographic Research - research in support of business and community activities, ranging from community profiles to evaluating and forecasting economic conditions. • Industry Studies - specialized research projects including industry cluster research, industry trends analysis and strategic competitive analysis. • Fiscal and Economic Impact Anal - comprehensive analysis and analytical tools to evaluate site specific public -private sector relationships. • Real Estate Economics - preparation of market data and analysis for prospective real estate investments. Development Research Partners will be teaming with R&M Resource Development to complete this industry cluster analysis and begin the strategic economic development planning process. R&M Resource Development specializes in customized economic development program strategy, organizational development and fund-raising. R&M's principals combine more than 50 years of experience in economic development at state, regional and local levels. Our team is committed to providing professional research services based on a philosophy of detailed and reliable analysis, concise and timely reporting, regular and responsive communications, and confidentiality. Personnel Assigned to the Project. Patricia L. Silverstein Development Research Partners, President Patricia Silverstein is the president of Development Research Partners, a Jefferson County, Colorado - based real estate analysis and economic development research company founded in 1994. Ms. Silverstein's expertise is in economic research and economic development, including industry cluster studies and strategic economic development planning. She has extensive experience in preparing economic impact and fiscal impact analysis for community development purposes. In addition, she serves as the rp. and the Denver Metro Chamber of Commerce. In these roles, she compiles, interprets and forecasts economic and demographic data for the Denver metropolitan area and performs in-depth research on issues and proposed developments impacting the region. Fort Collins Industry Cluster Analysis and Targeting Study Proposal Page 6 Development Research Partners R&M Resource Development Ms. Silverstein received a bachelor's degree in economics from Nebraska Wesleyan University in Lincoln, Nebraska (1983) and a master's degree in economics from the University of Colorado at Boulder (1986). Ms. Silverstein is active in a number of business and professional organizations, including chair of the manufacturing committee of the University of Colorado Business Economic Outlook Forum and member of the Economic Developers' Council of Colorado, the Denver Regional Council of Governments Long Range Economic Forecast Task Force; and the Denver Association of Business Economists. Susan Blansett, CEcD R&M Resource Development, Principal Susan Blansett has 20 years of experience in economic development, and has been consulting in community, economic and workforce development since 1998. Blansett specializes in economic development strategy, investor/client relations and fund-raising for economic development agencies; she is also experienced in workforce and community development. She is an experienced facilitator and mediator. She has led community assessment teams and consulted for rural, suburban and urban community development organizations on organizational development, marketing and operations. Recent clients include the Will County Center for Economic Development (Joliet, IL), the Colorado Workforce Development Council (Denver, CO), the Northern Colorado EDC (Ft. Collins/Loveland, CO), the Obion County Chamber of Commerce (Union City, TN) and the Arvada Economic Development Association (Arvada, CO). Blansett honed her community/economic development skills in increasingly responsible positions with the Illinois rural electric cooperatives, the Colorado Governor's office, the Aurora Economic Development Council and the DIA Partnership in Colorado. Clients praise her professionalism, thoroughness and dedication to customer satisfaction. Blansett has been a frequent faculty member of the E.D. Games (Washington State) and the Northwest Community Development Institute (Idaho). Blansett earned her Master's degree in Business Administration from the University of Colorado and her Bachelor's degree from Western Illinois University. She is a Certified Economic Developer (IEDC) and received her NDC Finance Professional certification in 1992. She received her Certified Mediator designation in July of 2005. Karen B. Lecker Development Research Partners, Research Analyst Karen Lecker is skilled in economic and demographic analysis, especially as it relates to urban and regional planning. While completing a Master's Degree in Urban and Regional Planning from the University of Colorado at Denver, Ms. Lecker served as an intern with the Arapahoe County Planning Division. In addition, she holds a Paralegal Certificate from the Denver Paralegal Institute and a Bachelor's Degree in Economics from Colorado State University. Fort Collins Industry Cluster Analysis and Targeting Study Proposal Page 7