Yet another set of centrally planned clusters for Spokane!

This Spokane industry cluster report is freshly harvested in 2009. It suggests we focus on “Five Vital industry clusters”:

  1. Manufacturing – “Manufacturing is expected to outperform both national and state growth rates. “.  (Reality – one third of manufacturing jobs lost during the past decade)
  2. Health care (Reality – true!)
  3. Construction – “The outlook for commercial construction is good” due to growth in government stimulus spending. (Reality – practically on its death bed.)
  4. Transportation/Warehousing. (Reality – this is doing well – its trucking and warehouse distribution)
  5. Business Services – they get this one right – “Jobs may not come back to
    pre-recession level due to credit/mortgage re-structuring and emerging technology. However, even with loss of jobs replacement needs will need to be met
    “. (Reality – Many of the of the jobs are things like receptionist and admin assistants.)
  6. Oddly, their FIVE cluster list has SIX CLUSTERS! “Clean energy/Green jobs” – “It is anticipated that the emerging Clean Energy discipline will become a well defined cluster in the future“. (Reality – oh stop your laughing)

Can you spot the technology and bioscience innovation clusters on the list?

Now compare to the 2005 list of clusters:

“…financial services, advanced manufacturing, logistics, information technology, health and biomedical, and higher education and research and development.”

The 2nd largest employer in Spokane – government – appears on neither list. Go figure.

GreaterSpokane, Inc pushes Spokane as a great place to locate a technology business – yet by State law, technology businesses will not be supported by the State’s local higher education institutions, and several tech related agencies were shut down in Spokane between 2005 and 2008.

These top down, centrally managed cluster lists change constantly. The only consistent cluster, besides government and health care, seems to be the production of economic cluster strategies.

Spokane’s cluster policy is inconsistent and incoherent to the point of causing confusion that likely causes harm to the local economy.

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Why the push for industry clusters?

To make a region more competitive? May be not:

WASHINGTON ECONOMIC DEVELOPMENT COMMISSION: Regional Innovation Clusters: A Strategy to Compete for Federal Funds

Why economic development directed “clusters” are not working

The following quote is from a short essay by Dan Robles on the folly of industry clusters:

I recently attended another one of those economic development summits where a bunch of people with long titles gets a chance to speak on a panel touting the mysterious benefits of a mysterious innovation clusters that create mysterious wealth that can only be realized if their mysterious department is funded.

Nearly every speaker concluded with the following paraphrase: “if only government would fund this or that, everything will be fine”, or, “if only corporations would fund this or that, then we’ll all be better off”

Uhmmm…sorry to break the news, it ain’t gunna happen.

via Feeling the Cluster Funk? |.

Most existing clusters came about because of natural causes – as mentioned in Part 6, below, such as geography, weather or a happenstance of history (World War II, the Cold War).

Observing that clusters have developed in the past into some success does not mean that governments can create their own clusters. I suspect that organic clusters do have merit; I have doubts about intentionally created clusters going much of anywhere except into a government run, centrally planned economy.

History of Spokane Economic Plans – Part 5 – Clusters

CIMG1989

Image by Piutus via Flickr

Back in the early 1990s, Harvard Business School professor Michael Porter proposed that regions could strive to bring clusters of related industries together to create a synergy that would improve regional competitiveness.

Government economic planners seized upon this idea and began to make “industry clusters” a centerpiece of their planning.

Here in Washington, they commissioned clustering reports from the University of Washington and later also Seattle University to help the state identify which clusters should be where.

This meant identifying existing clusters and then establishing state laws and policies to grow those regional clusters. For Spokane, for example, they identified clusters such as “regional health care delivery” and “warehousing and distribution” (trucking).

The State legislature passed laws to generally enforce these clustering efforts by requiring about six different agencies to conform to the identified clusters. For example, through the state’s Higher Education Coordinating Board, public colleges and universities were directed to emphasize programs that support the identified clusters and remove support for non-cluster programs.

If this looks a lot like central economic planning, it is. It is not, as they argue, “bottom up” planning merely because they chose existing clusters. In effect, the State is pouring concrete over the existing cluster structures which will then set and leave these communities largely stuck with what they have.  Rural areas, sometimes designated for industries like mining or wood products, are largely now stuck with those forever.

The State can not prohibit people from starting a non-cluster business but there will not be the same support available to those in the chosen fields as explained on page 68 of the Innovation Economy.

At some point, we will need to develop a specific cluster strategy wherein we concentrate on two, or possibly three, clusters. To be clear, we definitely support and encourage all innovation in the Inland Northwest. To this end, we encourage and promote the development of as many clusters as possible. However, there are resource constraints which oblige us to focus on a small number of clusters.

In other words, entrepreneurs and workers that wish to pursue a non-selected cluster are mostly on their own. Which may mean few or no local workers trained at local colleges and universities, for example. If you are not in the State selected cluster for this region, you would be best off moving elsewhere.

What should the clusters be in Spokane?

Read more of this post

“Industry Clusters” Assigned to Spokane

The State of Washington has chosen an industrial policy known as “regional economic clustering” or “industry clustering” where the State government selects which industry clusters will operate within each of the 12 Workforce Development Areas defined in the State. The State further has enacted several state laws that require State agencies to prioritize their support for the State-selected industry clusters.

For Spokane, the focus will be

  • Health Care services,
  • Business Support Services,
  • Colleges and Universities,
  • Sheet Metal & Metal Buildings.

Or

  • Health Care,
  • Business Services,
  • Manufacturing,
  • Construction,
  • Transportation/Warehousing

Depending on who made the list. (Why the discrepancy? This inspires confidence in central planning…)

State law requires agencies and programs to support the identified clusters. The side effect is that all support for businesses outside the clusters is largely eliminated.

(This is a very long post – click on Read More to see the entire post) Read more of this post

EXCLUSIVE: They can publish a Mohammed cartoon, but not these charts

Free speech, sensitivity clash in media outlets – Spokesman.com – Jan. 15, 2015.

The Spokesman-Review published an image of Mohammed (also known as Muhammad) that offends many, with editor Gary Graham saying

The cover illustration itself is a significant news development and I believe we have an obligation to our readers to let them see it for themselves and form their own opinions about it.”

The “Mohammed” charts of Spokane: the charts that must not be seen!

The Spokesman-Review believes it is not important for readers to form their own opinions about the airport and Public Facilities District usage trends.

Click on any chart for the full size version. See previous posts on this blog for additional information, sources, other confirmations of the data, and the raw data

AirVsConvention

AllFacilities

SIA

FeltsField

Propaganda

“In this sense, propaganda serves as a corollary to censorship, in which the same purpose is achieved, not by filling people’s heads with false information, but by preventing people from knowing true information. What sets propaganda apart from other forms of advocacy is the willingness of the propagandist to change people’s understanding through deception and confusion, rather than persuasion and understanding.” SourceWatch.

The Spokesman-Review has demonstrated its inability to report on important local issues by “preventing people from knowing true information” – the definition of a propaganda outlet.

Local media completely missed – and in fact, enabled – Rachel Dolezal’s long term deceptions – a story better reported in the national and UK press than local Spokane media which has reached a new low since then. Under the circumstances, Spokane and Rachel Dolezal were a match made in, well, the scam and fraud capitol of America. Update Sep 2015: The nonsense just goes on and on.

What has ailed Spokane for the long term is now quite apparent.

There is no longer much purpose for this blog.  The problems are apparent: lies, the liars that tell them (see this blog for a long list of tall tales, lies and local myths and exaggerations), deception, fraud, and the propaganda industry that enables this culture (and the latest set of lies).  No one gives a shit that everyone here lies all the time. Indeed, bull shit is the area’s leading economic output.

That is the end of the story. Our questions have been answered.

From “The X Report”, good bye.

Continue on to re-read our final words reprinted from an earlier post.

Read more of this post

“The X Report”

A review of some “big picture” economic indicators for the Spokane area.

Spokane Airport passenger usage remains weak – now less than in 1995.

chart_1 (1)

We call this “growth”, of course. (See the Comments to this post to see how a rise in passenger use was called a positive economic indicator by local promoters in 2001, 2005 and 2006 but when passenger levels declined they now pretend passenger usage no longer matters. Right.)

Felts Field air operations fell off a cliff:

chart_2 (2)

Total air operations in the area have collapsed (but local political leaders refer to this as “continued growth of aviation!” – may be if we turn the chart upside down!)

CombinedSIAFeltsAllOps-3Non-stop year-round destination cities have declined from 18 to 11 (including the subsidized daily flight to Los Angeles).

The rate of growth in jobs (for the entire County) has slowed. The area is no longer producing jobs at the same rate as natural population growth (from births and inbound migration, over time). That means the population is getting larger but the number of jobs is not keeping up. Here’s a chart highlighting the slow down in job growth:

SpokaneCountyJobGrowthRateSlowing

Spokane County non-farm jobs trend – mostly flat since 1998.

2013JanBLSTotalEmployed

City of Spokane jobs have been going down for about two decades – there is no increase in net jobs since the mid 1990s.

Can you spot the increase in jobs created by the Convention Center expansions? The total number of jobs in the City of Spokane has continued to fall, even after passing their expansion initiatives. (Chart from US BLS, updated to early 2014.) The City of Spokane has flat lined. 

LAUCT536700000000005_742370_1398301192417

Unfortunately, Spokane was ranked as the worst metro area out of 100 for job growth in a 2012 poll.

While the United States has recovered nearly all jobs lost since the 2008 downturn, and Washington State has recovered more than all the jobs lost since the downturn, Spokane County has recovered about half the jobs lost. Here are the charts for the U.S. as a whole, the State of Washington, and then Spokane County.

(At the end of 2014, there are some indications that the US economy may be headed into a slowdown. If this happens, the effects on Spokane would be bad, very bad, as Spokane has not yet fully recovered from the 2008 downturn.) (deleted as the economic situation seems to have stabilized since that was written)

Specifically:

  • US jobs regained – about 100%
  • WA jobs regained – more than 100%
  • Spokane County jobs regained: 52% using seasonally adjusted totals, or 44% using non seasonally adjusted data

United States

(From US BLS)

CES0000000001_729328_1398279732234

Washington State

SMS53000000000000001_729393_1398279809663

Spokane County

SMS53440600000000001_729435_1398279884691

Median Family Income Compared to Other Washington Cities

Spokane’s economic situation is not good: Spokane ranks 53d out of 59 Washington cities for median family income

Spokane’s Housing Stock is Old – Highlighting the Limited Economic Growth in the Area

Growing cities, with growing economies, show newer housing – Spokane has a stock of old housing, indicating low growth. The boom years are obvious in this chart – 20% of homes here were built in 1900-1919 (mining boom), and 31% in 1940-1959  (aluminum processing boom, post World War II growth of families):

app

Here is a typical growing city housing age pattern (in this example, Olympia, WA) – in a modern, growing city, you can see that more homes are built to meet the demand of contemporary growth.

app

Spokane has essentially no growth and hence, very little new home construction compared to thriving cities. More example cities are here.

Home Sales

Chart of the number of home sales from 2000 to 2014 (only through spring as this chart is slightly out of date):

image The original chart for the above (from Trulia.com) used a logarithmic scale for the Y-Axis which makes the peaks and valleys nearly flat.  A software tool was used to convert the log scale chart into a linearly scaled Y-Axis to show the trend in a format that most readers understand.

The next chart shows that median sales prices are basically flat since 2006.

Spokane-Median

Income and spending lag:

This chart shows how taxable spending per household has trended downwards in the past decade. The data for this chart is based on retail sales taxes collected through 2011. Since then (not shown in chart), retails sales have begun to grow again.

The blue line shows real median household income while the red line is an indicator of spending per household.

SpokaneMedianHouseholdIncome

Per Capita Income Trend Is Downwards

This chart has not been updated since 2008 but per WSU’s CORE research report, current per capita income is at 2007 levels. Per capita income is continuing to sink over the long term, relative to elsewhere. The lines in this chart indicate Spokane per capita income as a percent of the average per capita income in the state of Washington (red) and the U.S. as a whole (blue). Over time, the per capita income in Spokane, relative to everywhere else, goes down. Note that GSI will be happy to show you a chart of rising per capita income in the area – their chart is true too. But the problem is that Spokane incomes rise much slower than elsewhere such that over time, Spokane residents fall further and further behind the rest of the state and the country.

The Spokane County GDP per capita is unchanged from 2001 through 2011 (see bottom line in chart) – in other worlds, flat lined, like Convention Center attendance (well, not quite the same – the PFD’s facility usage actually went down over this period):

GDPPerCapita

A chart of pay in Spokane County versus King County

Attracting high skilled talent for high paying job categories is tough due to the large difference in pay between Spokane and the other big city in Washington:

SpokaneVsKing

The next chart has not been updated but the trend remains the same today. Incomes in the rest of the state climb twice as fast as those in Spokane.  The blue line represents the rate of increase in Washington State; the red line is the rate of increase in Spokane County. Over 30 years, Spokane pay is falling further and further behind the rest of the state.

SpokaneBirthsByMedicaid

Transfer payments are now about 23% of area personal income.

Transfer payments are primarily Federal payments made without a contemporary service or product delivered in return. Examples include disability payments, unemployment compensation, Medicare/Medicaid payments, government pensions and other government benefit programs. In other words, almost $1 out of every $4 here is government payouts, not earnings from contemporary work. The problem is not that there are transfer payments – the problem is that the steady growth in transfer payments is not sustainable.

Spokane’s Heavily Subsidized Economy

The primary purpose of the Spokane Public Facilities District, like nearly all municipal convention centers, is to provide a tax subsidy to the local hotel and restaurant industry. This use of publicly funded convention centers as a hidden subsidy of local hotels is widely documented in the convention center industry literature. In Spokane, it is codified – one member of the five member Board of the Spokane PFD is required to be someone working in the hotel industry. There is no requirement that, say, the PFD Board include a member of the general public to represent the interests of Spokane residents and taxpayers (the peons do not rank in this community).

The long vacant Ridpath Hotel may get re-opened and turned into downtown condos some day. But only with substantial tax subsides. About 1/4th of the cost is proposed to be funded by tax credits issued after declaring the not very old hotel as a historic building.  The city is also proposing to give Federal Housing and Urban Development grants to the developer. More taxpayer subsidies for downtown.

The proposed Spokane Field House in downtown is an extension of the PFD’s subsidy program to local hotels. Taxpayers will fund a downtown sports complex with the goal of bringing in some outside visitors to fill downtown hotels and restaurants. This is an indirect subsidy to Walt Worthy’s “convention center” hotel across the street.

Indeed, the PFD’s own economic study shows who actually benefits – and its hotels and restaurants:

WhoBenefits

The sad thing about all these subsidies to the hotel industry is that they do not actually work.

Here is a chart of hospitality industry jobs in Spokane County.  After THREE expansions of the Convention Center, we have fewer jobs in the hotel industry than we did in 1999 when we first began expanding the Convention Center!

Hospitality industry employment chart from the US BLS from 1993 to 2014:

SMU53440607000000001_730618_1398282555622

The downtown meme of ever expanding public facilities and more subsidies turns out not to have met the original claims for increasing jobs. Today we have fewer hotel jobs and fewer overall jobs in the City of Spokane than before the expansion. Expanding the Convention Center has resulted in FEWER JOBS.

Nothing happens in Spokane unless what are the local oligarchs are subsidized by the taxpayers. This is a form of transfer payments from poor people to developers.

Now we hang our hat on future medical school with an exaggerated economic benefit calculation  (local promoters nationwide engage in absurd and inflated exaggerations of all economic studies – most of these studies are not worth the digital ink they’ve spilled – same for Spokane). And of course, salvation will come with a heated pedestrian bike bridge!

Spokane needs real industry, designing and building products. From insect traps to pharmaceutical manufacturing to perhaps restoration of the lost high tech manufacturing sector, these are the sectors that generate real growth and jobs. But we just keep subsidizing downtown businesses that fail to deliver on their promises. Always have, and always will. Consequently, Spokane is going no where – the trends all remain negative (see charts above).

The Primary Economic Cluster in Spokane is Land Development

The primary economic cluster of Spokane is manipulating government so land speculators can profit. Here is a quote from Bob Herold of the Inlander:

“Well, I’ve learned that in Spokane, economic development most often begins and ends with making a profit off land speculation. It’s a cultural thing, and government’s job here is to help make the speculation pay off.”

And this business model works well for those who have influence. The largest media operator is one of the largest landowners in the region and has a long history of using their media influence to push government programs that benefit the owners (see The Fancher Report, the non-fiction novel Breaking Blue, or this blog for examples).

Contemporary examples include:  repeated Convention Center expansions (and their inability to meet any objectives) the “grand iconic unique in the world (except its notheated pedestrian/bike bridge, a proposed downtown “trolley” to benefit downtown, the “growing University District” (whose numbers show no growth) and the past and future for a light rail line that passes by the oligarchs’ properties runs from the underused airport to downtown and then to Liberty Lake (remember the two votes on that last decade?)

Update: Another economic cluster is government funded torture research hidden away in our small town. It’s a big industry in Spokane. Really big.

Crime

We cannot draw an accurate long term crime trend chart because of changes made in the reporting system last decade that resulted in a drop in crime reports. We’ll leave this topic with this chart – in 2011 and 2010, the auto theft rate in Spokane was the 4th highest in the nation but dropped in 2012 to 9th place:

image004

Accountability

A related crime problem is the culture and general corruption of the police in Spokane.  A week hardly goes by without yet another police scandal – from having sex on duty to running steroids and drugs to shooting people in the back of the head to killing Otto Zehm. This is likely a symptom of the difficulty in attracting high quality, high performing individuals to Spokane. And that is not just a police problem but one that impacts a wide swath of organizations both public and private.

We end up with local organizations having the same leadership for a quarter century, a sure sign of stagnation. From head dog catcher to GSI to the PFD to the STA -while some organizations are effective, some are not – yet their leadership is held on forever. There is no accountability for the PFD’s failure (by the core metrics of attendees and local jobs) or GSI’s long term ineffectiveness (as seen in the overall local economy numbers).

Bad leaders come to Spokane to retire on the job. And no one cares. In fact, one Washington State labor economist concluded that Spokane attracts unemployed people 🙂

Mental Health

Youth suicide rate is 4 to 6 times greater than the State of Washington and Washington’s suicide rate is higher than the national rate.

SpoSuicides2005-2009Youth

How Bad is the Suicide Rate?

(There are counties, especially with high populations of native American populations living in poverty, such as in Alaska, where the suicide rates are much higher.)

For each successful suicide, there are 7 hospitalizations for attempted suicides, and 15 ER visits for suicide. There are even more cases of depression that result in 9-1-1 calls to the police (but which do not end up in an ER), and even more cases than that of people who never seek help. (Also see these youth suicide statistics). Multiplying that times the rates in the chart above yields a staggering number of severely depressed people in the area. Throw in the reports of bodies turning up in parks and rivers and you get the picture.

Nearby Kootenai County, Idaho has the 2nd highest rate of suicide in Idaho.

The Spokane Regional Health District says health is an indicator of the economy. This is an indicator of despair and hopelessness. And its off the radar as recommendations for reporters discourage reporting of suicides.

Related to the above, the annual days of sunshine in Spokane is on par with Seattle. But don’t tell that to the Spokane Visitors Bureau which believes Spokane has 260 days of clear skies per year!

Telling Outright Lies is the Local Pastime

A selection of prominent lies and the liars who tell them is listed here.

The basic culture of Spokane seems to be based on lies and deceit, causing the area to repeatedly earn a designation as the Scam and Fraud Capitol of America.

The Problem is Ignorance 

The long term trend in the Spokane area economy is poor – its been treading water for 15 years.

In spite of much media PR puffery, people have a sense that things are bad. And the data confirm it is a bad situation.

Much of the local media act as cheerleaders, engage in “errors of omission” (a method of telling a lie which fits right into the local culture), and hide poor performance of elected and non-elected leaders. Failed leaders are not held accountable – instead, long term declining attendance at Spokane Public Facilities District is defended and actively covered up by the local newspaper. A decline in airport usage is called “continued growth” – and not one person in Spokane’s media even bats an eye at the egregious lie.  Visit Spokane claims it is nearly always clear and sunny in Spokane. A local promoter misquotes a tech industry publication to falsely claim Spokane is a high tech hot spot (when the publication actually said Spokane is NOT a high tech hot spot).

To this day, the Spokesman-Review is pained to present data in easy to understand charts, even when the State provides the charts for free. For example, here is the September 2014 employment chart and here is how they babbled on about this in words:

employment

The chart cannot be spun – Spokane has recovered about half of the jobs lost in the economic downturn while the State and the nation have recovered more than 100%. By hiding this from readers and viewers, Spokane’s local media censors the news through “lying by omission”.  Except for The Inlander, perhaps. (Note – former SR staffer Ryan Pitts left the SR to work on CensusReporter, a tool to make it easy for reporters to obtain Census data in easy to read charts. Tools exist. It’s not hard to illustrate stores with charts. But its hard to spin actual data.)

The outright lies and exaggerations are non-stop – hence, Spokane remains the scam and fraud capitol of America – but the zero credibility local media itself is complicit in re-telling and defending the lies (follow the links on this blog to see specific examples of the local media’s participation).

When land speculation is one of the top 3 industry clusters and the media is conflicted with land ownership and development,  reporting is warped.

The public has been intentionally kept in the dark as to the true state of Spokane – but many have seen these issues for a long time. Out of town visitors arrive and often the first thing they say is “Spokane looks like a run down dump” (check out the weeds growing out of the streets and sidewalks in August and you can see why).

This blog shed a light on the truth that has been hidden from the public – by showing the actual data, in simple to read charts, that directly contradict the local memes and the local liars. Data is the enemy of the propagandists in the local media.

The X Report

This site will remain on line as “The X Report“, just as “The Fancher Report” (summary here) lives on today, or how local corruption is documented in “Breaking Blue” or at Camus Magazine and other web sites.  It is no longer safe to publish skeptical inquiry on the Internet.

Before I moved to Spokane, an old friend who grew up here said, “X, Spokane is just a small town. Only bigger.”

Was not sure what he meant back then – but now I know: And he was right.

Nothing has changed in decades. Three decades of economic studies reached identical conclusions and were filed on dusty shelves never to be looked at again. Spokane remains behind the times, never reaching up to its potential as the 2nd largest city in Washington – but always hoping for an external savior (the current meme is the medical school brouhaha) to drop in and save the day. Before that it was regional health care. Before that Spokane was going to be an information technology center on par with Austin, Texas or may be even Silicon Valley. Before that it was going to be a manufacturing mecca. So we come up with an entirely incoherent cluster strategy for economic growth.

But nothing has fundamentally changed. At this point, its down to more land speculation and more transfers to the oligarchs who will bleed the cash cow dry as long as they can keep it bleeding. And not one god damned local politician gives a hoot at the obvious decay and decline – they just continue to play along to earn bennies for themselves.

And because of that, this might be the very last post on this blog. The web site will stay online and be known as “The X Report”.

——

This blog is taking a break. No idea if it will return. Hard to imagine but 1/4th of all the posts made on this web site were never published! There are nearly 200 posts sitting in draft form 🙂 They were not published for many reasons including timeliness (the information was useful for a limited time), insufficient time to complete the post, insufficient data, or for a few I feared I would be run out of town if I let them fly. Ouch!

If you want to improve something, measure it

The previous blog post about tall tales and lies of Spokane ended with this quote:

It’s why so many countries are so badly broken because they go by appearances, rather than by results.

The idea that we should go by results, rather than by processes, by outcomes rather than by appearances, was revolutionary.

We should evaluate local projects objectively – rather than by appearance – using, if possible, their own goals to determine if they are successful or not.

Let us look at the Spokane Public Facilities District and compare their results with their publicly stated goals.

We discussed the Spokane Public Facilities District earlier this year in the context of hiding the  reduction in NCAA seating requirements.  Turned out that they did not need to add Arena seats for the NCAA. Read the link to learn about that.

Objective Measures

Each time the PFD has sought taxes to enlarge their facilities, they say this:

  • Will lead to increased attendance and usage of their facilities
  • Will create local jobs
  • Will increase the number of visitors to the area
  • Will have a large economic impact on the area
  • Will attract larger conventions to Spokane

Their claims provide objective metrics to measure the effectiveness of the PFD’s management in meeting these goals.

PFD Facility Attendance

  • Even though taxpayers have granted the PFD every tax asked for, attendance is down over the long term.

    In 2011 the combined attendance at Spokane Public Facilities events was 1,319,044. This was a 18.6% decrease compared to 1,619,773 people in 2001” (quote from Community Indicators of Spokane, jointly run by the City of Spokane and Eastern Washington University)

    and

    “The Spokane Veterans Memorial Arena had the highest attendance at 639,081 in 2011 and throughout the period. This represented a 9.8% decrease from 2001. The Spokane Convention Center had the second highest attendance at 247,678 in 2011; a 4.5% decrease from 2001. Spokane County Fair and Expo Center had the third highest at 189,000 attendees in 2011 and the INB Performing Arts Center had 157,285 attendees. These represented 18.2% and 39.4% decreases since 2001 respectively.” (quote from Community Indicators of Spokane, jointly run by the City of Spokane and Eastern Washington University)

    Original chart, below, is from the Community  Indicators of Spokane (CIS) web site through 2011. 2012 data points and notations added by us as best we can. PFD facility usage, by attendance is less than in 1999 and 2001.  Repeated expansions do not show increase in attendance.

  • Follow each facilities attendance line from left to right. The Arena attendance line, at top, is easy to follow downwards – the Convention Center and the INB attendance figures cross in about 2006. INB attendance is sharply below its 1999 level and Convention Center attendance peaked in 2002. This chart, from the CIS web site, is a spaghetti chart of crossing lines, making it difficult to see that attendance at PFD facilities has been in long term decline. Spaghetti charts are often used to intentionally hide something.


PFDFacilitiesAttendance

The next chart shows “Convention Delegates”, which picks the low point in 2005 as its starting point, rather than the high attendance figure of 2002.  (The numbers in the chart, below, do not agree with the numbers in the chart above, both from the same Community Indicators web site. The trends are identical but the left axis is different. The original data is said to come from the Spokane Journal of Business.)

ConventionDelegates

PFD Expansion Impact on Jobs

  • Non-farm jobs in Spokane are at the same level as the mid-1990s as shown in this chart of total jobs in the City of Spokane (Chart from US Bureau of Labor Statistics).  Based on the jobs data, the claim that repeated expansions of PFD facilities will increase jobs was not true (unless Spokane was simultaneously hemorrhaging jobs in other areas).

SpokaneJobsPFD

PFD Expansions Will Increase Visitors to the Area

Per the PFD’s economic studies, the majority of users of PFD facilities are local residents. Local use is mostly re-arranging how local money is spent, moving it from say, going to a local movie theater or restaurant to attending an event at the PFD .  The PFD’s economic studies, which we will get to in a moment, say that without the PFD, local residents would drive to Seattle and spend their money there instead of in Spokane (which is true for some events and some people).

Because Spokane is an isolated community in a sparsely populated region, a proxy for out of town visitors is the number of passengers using the local airport. Oddly, the more expansions we make to PFD facilities, the fewer the number of visitors arriving by air.  Passenger data through August 2013, pro-rated to end of 2013 for the chart (data from the FAA via the Spokane International Airport – more data is here.)

2013Apr-SpokaneAirports

Hotels

We see a slight increase in use of hotel facilities in terms of total room nights.  The data, however, ends in 2010, which was the last year of the National Skating Championships. There are slight peaks in 2007 and 2010. Percent occupancy is flat over the period and runs between 55% and 62%. What does the missing 2011 and 2012 data show? (Chart from Community Indicators of Spokane.)

Hotelrooms

PFD’s Economic Studies

During the campaign to expand the PFD facilities, the PFD provided two economic impact studies. One was completed for 2007 and one for 2010 (sort of). In the latter case, they shifted the calendar to include a 12 month period with two large events that occurred at the beginning and end of the period. Sort of jiggery pokery.

The attendance chart shows that 2007 and 2010 were not typical years for the Arena. The PFD used the two “spike” years for their economic studies. Neither year is representative of typical annual results. Both years featured prominent national events that brought more outside visitors than normal, skewing the body count and the out of town visitor count.

PFD Convention Center Usage

Average daily Convention Center attendance is 778 people/day in a facility that can hold around 12,000 people (Exhibit halls, meeting rooms and banquet room and not including the 2,700 seats in the adjoining INB, and the actual capacity # varies depending on use e.g. classroom, theater, reception, trade show).  In 2007, a PFD economic study pegged occupancy at 16%. Outside of Bloomsday (the big spike), the Convention Center’s overall capacity appears lightly used, as seen in this chart of total attendees by month. (Data from the PFD.)

ConventionCenterAttendanceByMonth

Should Management Be Accountable for Meeting Their Own Objectives?

Except for the truncated data on hotels, the PFD has missed their goals:

  • Attendance at facilities is in a long term decline
  • Repeated expansions have not stopped the decline
  • Net employment in the City of Spokane has gone down
  • Visitors arriving by air are down to  levels last seen in 1995-1996.
  • Hotel room nights are up slightly through 2010 but data for 2011, 2012 and 2013 are missing.

Should the PFD management and/or Board of Directors be held accountable – such as being replaced for not meeting most of their goals? If not, then who should be held accountable?

Holding Public Projects Accountable

Look at the attendance chart again, then the City of Spokane total jobs trend, then the airport passenger usage. This is a  poor track record. 

This is a management problem, not a concrete problem. Pouring concrete has not produced the desired results in the past.

There are other large public projects that have been completed or are planned for Spokane which seem to lack objective measures of their success, including:

  • Spokane International Airport “improvements”: About one quarter of a billion $s worth of improvements have been made to the airports in the past decade. Next up are the addition of high speed taxiway exits fof the runways and eventually a third runway – to accommodate our “continued growth“! Yet the number of air travelers has fallen to mid-1990s levels and the number of aircraft operations has fallen steadily for a quarter of a century and is now less than half what it was in 1990. What are objective measures for these projects as it appears not to be, say, actual usage of the airport?
  • The heated pedestrian/bike bridge in the University district. What is an objective measure for this project? A $350 million biotech industry clusters around the bridge within 5 years? An average of 1,000 (or 2,000 or 5,000) users per day?
  • The downtown electric trolley project. Define an objective measure for success. 40% average occupancy? 60% of costs collected from fares? Total number of riders per day? Cost per rider?
  • The North-South freeway. The only objective measure seems to be that it is finished within a century.
  • Proposed (and voted down) light rail line between downtown Spokane and Liberty Lake.
  • Proposed light rail between the Spokane Airport and downtown Spokane.

What are the objective metrics by which these projects and their management will be judged and held accountable?

Who will hold them accountable?

  • Spokane leaders and agencies should be measured by objective results – not appearances.
  • To paraphrase Lord Kelvin, if you want to improve something, measure it.
  • To which we add: If you measure something, say something! 
  • Keeping secrets means no one will be held accountable

Unfortunately,  local news coverage does not report on the effectiveness of these projects – instead of a “4th estate“, we have cheerleaders.

Cheerleading may happen due to a lack of resources (its easy to paraphrase a press release) – plus conflicts of interest.

For example, the owner of the Spokesman-Review and KHQ owns significant parts of downtown Spokane and was tied as the 2nd largest campaign contributor to the last PFD tax campaign. Their real estate holdings benefit from taxpayer supported improvements to downtown. You can read more about these conflicts in the Seattle Times, the Spokesman-Review, the Fancher Report and the true life novel “Breaking Blue” by NY Times and Pulitzer Prize winning reporter Timothy Egan. When covering downtown issues, they rarely mention their conflict of interest. Same with water quality issues.

Local news, including TV news, is mostly non-existent from Friday evening until Monday morning – its just wire service reports and stories produced during the week. Obviously a lack of resources.  The Inlander and KXLY talk radio shows are the only outlets asking uncomfortable questions, when they can.

Voters are kept in the dark by cheerleading – and cannot hold government accountable when the voters are unaware.

A side effect is we endure tall tales, exaggerations and lies, leaving the economy stuck in neutral.

This blog is going into hibernation after perhaps one more post. Comments are likely to be turned off.

Update: This is a great step in the right direction for measuring local government services – but what about the PFD and other big $ capital projects (as in cumulatively hundreds of millions of $s)? Silence.

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Hospital-sector recession looming?

The two primary industry clusters in Spokane are regional health care delivery and government.  Nationally, the health care sector is seeing signs of an industry recession and layoffs.

The Harvard Business Review thinks the growth in health care jobs is about to halt because the health care industry has been adding jobs faster than it is adding patient volumes – leading to long term, year over year declines in productivity.  A long term year-over-year productivity decline is not sustainable.

This change has apparently already started and could have impacts on Spokane with its over-sized health care sector:

Hospitals, a reliable source of employment growth in the recession and its aftermath, are starting to cut thousands of jobs amid falling insurance payments and in-patient visits.

via Layoffs reflect hospital recession | The Clarion-Ledger | clarionledger.com.

Potential reductions are not a certainty but are a possibility.

The following chart illustrates the dramatic impact the health care sector has had on Spokane County employment. Watch the blue line near the top. If the recent decline were to accelerate, per the above linked news report, this would be of concern to the Spokane area.

image002

 

The next chart is from the Washington Employment Security Department. Their horizontal chart has been flipped and rotated into a vertical format as it makes the sector size comparison easier for us humans. As you can see, the health care sector is the largest single employment sector in Spokane County.

2013MaySectorEmplRotated

 

Innovate Washington loses state funding

Formerly known as SIRTI, the state funded economic development agency whose mission changed every few years – Innovate Washington loses state funding – Spokesman.com – July 11, 2013.

Bet if the heated pedestrian/bike bridge was built, those often empty SIRTI buildings would have been teeming with industry!

—————

Update:

And it probably should be shut down.

SIRTI and its successor, Innovate Washington, did not deliver close to the hype of their own PR. SIRTI started out as the Joint Center for Higher Education, then became SIRTI with a constantly evolving mission, and then became Innovate Washington.

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“6 Things That Can Kill Your City’s Startup Community”

6 Things That Can Kill Your Citys Startup Community.

The co-founder of TechStars explains why communities fail to have an entrepreneurship community. He lists six broad categories that hinder startup and economic growth – and incredibly, Spokane ranks high on all six categories (most of which have been previously written about on this blog – See the History of Spokane Economic Plans and Recommendations, in links to right of this page).

This seems a reasonable summary that matches up with Spokane and may give hints as to how to overcome the problems …

Read more of this post

Spokane unemployment rises to 9.0%

As I predicted in August, Spokane MSA unemployment has gone up to 9.0%.

Read more of this post

Spokane area unemployment worsens in June 2011

The May report was revised downwards to 8.8% from 9.0%. June, however, came in at 9.1%.  The high unemployment level has remained constant in Spokane for 3 years running.

 

The total number of non-farm jobs increased slightly. June and July are typically peak employment months in Spokane. Its down hill from here, until a spurt of seasonable temporary jobs around Christmas. The unemployment rate is based on an estimate of those working and an estimate of those looking for work. As can be seen in the chart, the unemployment rate can and does go down, even as the total number of those working also goes down. Which seems paradoxical but that is due to how the estimates are produced.

Initial unemployment claims rose, although “continuing” claims went down. The latter could have gone down because workers found jobs or because they reached the end of their unemployment benefits and gave up looking for work.

 

Good thing we will be cutting bus service while building a downtown trolley and pouring more concrete out at the under used Spokane (Not) International Airport!

Spokane’s economic plan du jour

Picture of the Duncan Garden at Manito Park an...

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Spokane’s future industry clusters:

  1. Retirees and transfer payments
  2. Health care services and health care academics
  3. Government, including education
  4. Manufacturing
  5. Low skill, low wage categories including retail, restaurants, hotels, recreation, trucking, warehousing.
  6. Various small categories including low skilled and high skilled workers.

Categories 1, 2 and 3 will account for 60+% of the local economy. Here’s the number of workers, per category, flipped from horizontal to vertical to present the relative size differences.  Retirees and transfer payments are not shown in the chart but would be in the top 3.

Here is the impact of transfer payments. As you can see, transfer payments are a large component of the local economy. For more information on transfer payments please see “Trend of Transfer Payments into Spokane County“.

Data Data from washington.reaproject.org

Retirees

Previously, many people retired from Southern California and took their large real estate capital gains to low cost Spokane. That source of retirees is diminished due to the housing collapse and its return in the future is not predictable. This is an important driver for health care, housing and service sectors.  Inbound migration may be at reduced levels for a long time.

Clusters

The State adopted an industrial clustering policy where the state selects the industry clusters to be supported in each region. The primary clusters for Spokane are health care, education, and trucking and warehouse operations. Manufacturing has been in a slow national decline for 30 years.

Health care is on a growth streak due to retirees, a doubling in individual use of medical services over the past 30 years, and more recently by expectations of “ObamaCare” leading to an expectation of increased demand for services primarily paid for by someone else.

Risks

The loss of retirees from Southern California produces risks to the area’s current strategy and may be why the 2011’s local economy continues to remain stuck well below 2007 levels. On the plus side, the nation’s overall large “baby boom” approaches retirement years. However, where they choose to settle in their retirement years will have a big impact – and some think relocating as part of retirement may be thing of the past, not of the future.

There is a risk that the health care act might not play out as expected. It is possible that court challenges may limit the growth in the health business sector.

There is a risk that shifting more money into health care services without addressing the exorbitant prices charged and excess consumer demand for health services paid for by other people means less money for the production side of the economy. This is not a sustainable path.

Spokane’s future is based on retirees and health care – but that future has risks. And a big risk is there is no plan B.

Low Wages Are By Design

Greater Spokane says our region’s primary competitive advantage is low wages and low land and housing costs (or stated another way, poverty). Per Greater Spokane, our region’s competitive advantage is low prices. And no one in power wants that to change.

Spokane will be the state’s low wage, low cost housing and low cost land destination. This appears to be by design.

Outside of the key clusters, wages and opportunities will be limited.

The substantial quantity of data collected on this web site, and reviews of all the economic plans going back to the 1980s show that the chronic low wages and limited opportunities are endemic to Spokane. Every one of the plans mentions these problems. These problems remain because not many people want to embrace change – low wages are a feature and are by design.  The area is settling into a future as a comfortable government-funded enclave of government and health care workers, and retirees collecting benefits.

Everything on this website has been mentioned before, often many times, in prior economic studies about Spokane. What I present on this website is not my opinion but is backed by data and numerous studies. This view is shared by business leaders of the past, by various politicians, current and former academic administrators and many more. The data tell this story, not me.

Why?

See the recommendations links at the right of this page. Lots of bad decisions were made in the past.

Hiatus

It’s been an interesting experience to go from wondering why so many businesses disappeared to finding out what really happened. The answer was not at all what was expected.

Unfortunately, no one cares. It’s always been this way in Spokane. As a friend said to us in the 90s, “It’s just a big small town, only bigger.” So true. (Well, at least one other person gets it…)

And nothing will change.

This web site will now be updated primarily for major events or changes.

Spokane’s SIRTI to be replaced

This State House bill 2ESB 5764 – 2011-12 was passed and signed by the Governor. This bill abolishes the original Spokane Intercollegiate Research Technology Institute (SIRTI).

Under the bill, SIRTI will be replaced with a new state agency called “Innovate Washington”, which by law, will be required to work with public and private universities, industry and government to grow “the innovation-based economic sectors of the state and responding to the technology transfer needs of existing businesses in the state”.

Innovate Washington seems to have some leeway with regards to state’s top-down, centralized planning “industry cluster” model, although its goals are aligned with a “sector-focused economy”. With regards to education, “Priority shall be given to applicants that have an established education and training program serving the targeted industry and that have in their home district or region an industry cluster with the same targeted industry at its core.” What this means is that educational programs are primarily intended to be aligned with the local region’s, state-selected industry clusters.

The list of clusters selected by the state for Spokane varies from month to month, year to year, and so on. See Washington State’s Innovation Ecosystem, What Does This Mean for Spokane, Why Washington’s Top Down Industrial Clustering Policy Will Fail, Washington State Reinforces the Health Services Cluster, and Yet Another Set of Centrally Planned Clusters for Spokane. For practical purposes, your business needs to align with the State supported clusters.

The eastern office will be the current SIRTI office on the WSU-Spokane campus, and the western office will be at UW-Seattle. Each campus will have a designated representative on the Board, which will have 15 members, 8 of which should come from industry and the rest are WSU/UW or political appointees.  This seems to address my previous comments that the Board structure of SIRTI was disconnected from their contemporary mission.

Regarding Spokane, specifically, we still need to create an innovation culture which is lacking here.

That’s all I have time to write now.

Past items on SIRTI

Spokane and Kootenai County economic zones to be merged into one

The Spokane County statistical zone used for economic and other data reporting by government will be combined with Kootenai County starting in 2013.

The main impact is that by combining two smaller entities into one larger group, the combined group moves in to the “top 100” lists of economic reporting zones.

And “It could also help the region collect more federal funding.

But that might not be so good …

Read more of this post

Recommendations 2: Part 4 – Plans – Let’s Aim High

Mount Spokane and surrounding peaks, as viewed...

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Plans, plans and more plans.

Spokane has no shortage of economic plans going back decades. Please see the links in the right most column of this web page to read about past plans and summaries of what they proposed.

All of them had mostly the same findings and same recommendations.

Poverty and low wages are mentioned in all of them.

The lack of a research university is also prominent. Let’s look at that.

Former Representative Tom Foley said the lack of a research university with graduate research programs hindered Spokane’s forward progress. This idea, going back to the 1980s, led to the opening of SIRTI in the early 1990s.

The Spokane Intercollegiate Research and Technology Institute (SIRTI) was created by former Speaker of the House Tom Foley, the area’s longtime congressional representative, who was convinced that the lack of a top-notch research facility was a factor holding back Spokane’s economic progress. Initial funding came through a federal grant, and it is now supported by state funds and fees paid by participating companies.

Source: 2003 Brookings Institution study and Ten Years of Innovation (SIRTI publication).

And also:

“Spokane is not at the forefront of higher education. Lack of a major research institution has consistently been called a weakness as community officials assemble a 21st-century information-based economic curriculum.”- Bert Caldwell, Spokesman-Review newspaper.

And:

Throughout the 70’s and 80’s, there was a growing hope that high technology industries could add markedly to the Spokane metro area. Some challenged the feasibility of this goal without a research university saying that Spokane could not hope to compete in the newly emerging world of high technology or biotechnology without this vital asset. Although Spokane has four 4-year universities and a thriving community college system, Spokane has been bereft of a technology transfer, research university

Source

Foley and others helped the Spokane Intercollegiate Research and Technology Institute – which was supposed to create spin offs from local university and government lab research into start ups and industry, and assist other start ups in creating a thriving community of science and technology start ups (some historical background).

To answer the challenge, the Washington State Legislature, with local guidance, created the Spokane Riverpoint Higher Education Park and created the Joint Center for Higher Education JCHE. The JCHE mandate was to catalyze a high tech sector, begin the effort to provide high tech worker education programs, and to be the administrative agent for the newly created Spokane Intercollegiate Research and Technology Institute SIRTI. The JCHE was to spur university collaboration in teaching of computer science, biotechnology, and other technology classes; collaboration in research projects especially with industry partners; and foster high-tech worker education and training programs. SIRTI was to be operated as a research and technology-facilitating institute that would provide grants, independent research laboratory space, project management help, infrastructure, and the capability of scientists from all local colleges and universities to collaborate.

Source

SIRTI was structured with a Board dominated by academic and government labs due to the thinking that its mission was to move academic and government lab research into the private sector. Over the years, its role has morphed. Today SIRTI is an economic development agency working to help science and tech start ups state wide.

On their website intro they no longer mention the university and government lab connection:

Sirti accelerates Inland Northwest technology-based companies toward success and positive regional economic impact. We deliver entrepreneurial coaching, a mix of no- or low-cost business services, access to capital, and the legal services needed for successful formation, IP protection and long-term growth.

Yet the majority of their Board are still members of the academic and government lab communities, followed by roughly financial services … it seems its original organization structure has not kept up with its contemporary mission. Unfortunately, its Board is specified by State law – as if they poured concrete into the org chart …

Update: There is a bill pending before the legislature that would merge SIRTI and the Seattle-based Washington Technology Center and …. reconstitute the Board so that it was no longer dominated by academic and government agencies. The bill is here.

In addition to assisting start ups, which SIRTI certainly does, SIRTI has, over the years, been seen as a substitute for the lack of local network clusters in science and technology. This is plagiarized from my previous post on this topic:

The Ecosystem Problem

With the loss of the regions early tech and tech manufacturing sector, the area lost its ecosystem and peer networks that in other high innovation locales help to create a culture of risk taking and rule breaking:

“To be blunt, the startup networks that exist in the Inland Northwest are a far cry from the ‘dense network of relationships’ that exist in places like Silicon Valley.”

The Innovation Economy author saw incubators, like SIRTI,  trying to substitute for the “dense networks” that exist in innovation ecosystems by providing “access to mentors, peers, enablers, resources, education and information”. But … there is always a but … at the cost of requiring “exclusivity, requiring an extremely high level of success prior to providing assistance, and requiring the use of in-house services”.

SIRTI was going to help move academic research into the private sector, substitute for the lack of graduate research programs in the area and substitute for the lack of network clusters. But this missed a real world path from lab to industry – the path runs through the students, not a state agency incubator:

The best technology transfer program comes from the students themselves, not from government agencies set up to create university technology transfer (SIRTI).  We need undergraduates and graduate students who pursue their own entrepreneurial instincts to turn great ideas into even better ideas. The real world path from lab to start up goes through  undergraduate and especially graduate research students working in research labs, who license or take ideas from the labs in to their own start ups.

This may explain why we do not have the rich ecosystem of science and technology start ups that were originally envisioned. We’ve got SIRTI. But we do not have the graduate research students who are a critical path to migrate great ideas into profit making ventures. We also lack the graduate education opportunities that attract ambitious students to the area – most all of these students must go elsewhere to get the education they seek and then probably go to work some place else too.

In other words, perhaps the model is broken. It sort of worked but looking at the local economic numbers and the local ecosystem, it did not achieve the orbit that was originally planned. Total jobs here are now down by 10% over the past decade.

Please do not conclude that SIRTI is not working. That is not the message. The message is that a lot more might have happened if we had the rest of the ecosystem.

I previously documented on this web site, that we have close to zero graduate degrees in science, technology and engineering available in this area. Follow the links to learn more.  More information here.  And enrollment in undergraduate technology fields has fallen by 2/3ds.

(GSI says “With its strong base of research and academic resources, Spokane is concentrated on becoming a burgeoning center for information technology and telecommunications.” …. really?)

WSU-Spokane has big plans to greatly expand its health science programs in Spokane in coming years, including moving its College of Pharmacy from Pullman to Spokane.

As many observed since the 1980s, without graduate programs in multiple disciplines, Spokane’s innovation economy is ham strung.

Do we have what is needed for a 21st century innovation-based economy?

Are we Aiming High Enough?

Spokane is the 2nd largest city in the State and the County is the 4th largest by population.

In terms of the much desired research university, Spokane has the smallest branch campus of any research university, as shown in the following chart of WSU branch campuses. Tacoma, with UW-Tacoma branch campus has 3,155 students enrolled today, Bothell has 3,227 students while Spokane has 1,267, even though its been here since 1989. (Crossed out “branch”. Since 2004, WSU-Spokane is not a branch campus but an actual campus.)

While WSU-Spokane will grow larger, so will the others. Spokane’s campus is the smallest and now its the slowest growing. Why?

Local promoters have asked the State to open a 2nd medical school in Spokane. That would be a great asset but due to funding, the Governor says not until sometime after 2021.

This doesn’t feel right – Is Spokane being short changed?  Have we aimed high enough?

Aiming High or Low

Way back in the 1980s, local leaders identified the lack of a research campus as a weakness.  We settled for SIRTI and the smallest of all research branch campuses in the State, plus a fine non-research university (EWU, and also GU and the smaller Whitworth).

Some one suggested to me that this is due to the area’s culture-“we settle for good enough” rather than consistently aiming high, seeking excellence and really doing what it takes to compete on a world class level. To clarify that comment, there are people here who seek and deliver excellence, but I understand what is being said and hopefully you understand too.

Doing “good enough” shows up in the data (e.g. low participation rates on high school SAT exams). Anecdotally, I’ve run into this “good enough” attitude many times myself.

We settle for good enough. It’s a nice place to raise a family. There’s lots of golf courses. It’s a nice place to retire. It’s near nature, near good enough. But good enough will not be a winning strategy in a globalized economy (unless we settle for regional services where we have some regional market power).  Someone else hints a good enough mind set could have been a factor in why Agilent left town (see the next couple of comments there).. I have no idea, those assertions could be right or wrong.

Why not think big, on the order of another World’s Fair Expo? How about an all out effort to put together all the pieces for a comprehensive innovation based ecosystem? Not just bits and pieces but the whole deal?

Ecosystems

Related Past Posts on this web site that will help in understanding the problems, the issues and possible solutions:

Unfortunately, local leadership (and state law) has us headed down a path through an incoherent industrial cluster strategy.  We need to build the whole ecosystem and stop drawing ever expanding geometric shapes on a map to proclaim we have clusters that we do not actually have.

Recommendation

Keeping in mind that I am probably off the wall, possibly clueless and perhaps just wrong – with that in mind, here goes:

  1. Let’s invest in people and ideas, not concrete.

  2. Aim high. Really high.

  3. Do not settle for anything less than excellence.

Will that happen?  It will if we can break out of the good enough mindset. Kinda hard to break but like concrete, when hit with a big enough sledge hammer cracks can develop …

But it might not happen without financial incentives to well connected landowners in town: Benefiting from poured concrete paid for by someone else has been a pretty good gig! (Of course, the med school will be built right where you can guess and benefit … oh, you get the idea …)

Odds favor that we continue to pour concrete to eternity, wages will be unacceptable, ambitious people seeking excellence and and young people with skills and seeking opportunity will head for the coastal cities. Like they’ve been doing for some time. Read what Timothy Egan wrote about Spokane in the NY Times.

“Good enough” and “pouring concrete” are possibly the root cause issues to address. That would make for an interesting discussion topic.  For those that asked for recommendations, there you go!

I could be completely wrong, but at least its different than 30 years of existing plans and strategies.

Alternatives?

The alternative is to settle into a collection of regional service industries which is what we have today. Government is a service, health care is a service, and most of the next largest sectors (retail, hotels and restaurants, business and professional services) are services meeting the needs of the two big kids on the block (government and health care and their work force).

Those that prefer to compete at a world-class, globalized economy level in fields other than government and health care, local service and niche market industries, will find better opportunities somewhere else. Fair enough.

But we will need to re-align our local promotional efforts with this goal (they are not now aligned). And we will still be stuck with our stubborn wage problem: except for the big government and health care sectors, most of our remaining services sectors do not pay well.

Recommendations 2: Part 2 – How to “hide the decline”

Some local agencies and organizations provide some data, and some times, information, on their web sites – but sometimes they practice “hide the decline”. We do not know if this is due to lack of resources, is inadvertent, is an “honest mistake”, is due to sloppiness or carelessness, incompetence or deliberate decision to hide something, or that my common sense interpretation of what I see is just weird. We don’t know.

But if you want to hide the decline, some of the examples may give you some ideas 🙂

These examples involve good to outstanding organizations who are usually doing good to outstanding work. These comments are intended as suggestions for improvement and should be taken that way. They may be embarrassing to a few people – I am sorry if that is the case. The goal is to show how improvements can be made to make these items better!

Spokane International Airport – Lots of Numbers

SIA is a fine airport and has done a lot very good things. But sharing data?  Not where they need to be. I’ve covered this item already and am repeating this here in part to show what it took to get to the actual data and turn it into useful information.

The airport’s long term passenger load has been approximately flat since 1996. But you would not discover this unless you tortuously went through the tables of numbers they provide, but spread across many pages and many links. And you would definitely not know this because the historic data back to 1995 was well hidden on the web site. When you click on a link for the data for a single month, you see a URL like this: http://spokaneairports.net/Pass_stats/12-10ep.pdf

If you delete the filename at the end to leave http://spokaneairports.net/Pass_stats/

you obtain the full file directory of older data going back many years. While painstaking, each monthly report can be transcribed, by hand, into spreadsheet, and turned into a useful chart.

Hidden deep within this file directory is a document named historic.pdf that provides historic data. There is no clickable link on the airports web site to access this data. But the file becomes visible if you use the trick to truncate the URL as shown.

Regardless of the effort to get to the data, it should not be hidden. SIA should have charts up on their web site.  Making it visible would help local leadership make informed decisions.

When this data was combined with a forecast chart in the airport’s master plan (issued in 2000), we saw that the forecast was wrong the year it was issued and deviated further and further away from reality every year since. The forecast part of the chart had to be interpolated from a chart printed in the master plan; the data was not available.

The airport management announced in the fall of 2010 that they would – ten years later – be updating their master plan with a revision expected in 2011.

By comparison, check out SeaTac Airport Statistics. The PDF reports at the top create some nice charts (would be better if they were visible on the web page) and data can be downloaded in .xls spreadsheet files. Here’s an example of how SeaTac makes their data accessible – I just opened their PDF report:

I tried to identify the money spent on infrastructure improvements at SIA over the past decade. That information is not obviously available on the SIA web site. I eventually found it in an EWU study on economic effects of the airport (about $190 million of improvements over the past 8 years). Historic and trend data on revenues and spending should be easily available to the public so we know how our fee and tax money is being spent. This applies to all local governments.

I think SIA is a fine airport – the new airport director and management will likely do a better job of sharing important information with stakeholders in the future.

Washington State University – Funny Press Releases

I am big supporter of WSU; we need more support for higher education in this state, not less. And I will discuss that further in Part 3 and Part 4.

With that in mind, I found the following example to be funny. The following text appeared in the 2010 press release on spring semester enrollment. Similar wording was used in 2009 and 2011. Can you spot the odd one out?

The university’s fastest-growing campus continues to be WSU Tri-Cities, which enrolled 1,508 students, an increase of 160 or 11.9 percent over last spring. Enrollment at WSU Vancouver is 2,892, up 105 students or 3.8 percent over spring 2009.

The Pullman and Spokane campuses, which are considered one campus for state enrollment reporting purposes, showed an overall increase of 1.3 percent or 265 students over spring 2009. The Pullman campus enrollment is 18,629 students and WSU Spokane has 1,311 enrolled for spring.

When the enrollment rose at branch campuses, the enrollment increase was highlighted.  For WSU-Spokane, only an enrollment number is provided. That’s a data point – not information.

The omission of whether there was an increase or decrease made me laugh – this is a press release issue. The local media never noticed the decline in enrollment at WSU-Spokane.

WSU has  an Institutional Research office that provides a lot a TON of data –  on enrollments including in downloadable .xls spreadsheet format.  Charts would be nice but with easily accessible data, we can create our own charts. WSU (overall) and the IR group are doing a great job.

The chart above and below are produced by me from the enrollment data provided by WSU’s Office of Institutional Research.

It is hard to see but the blue line, which is Spokane’s enrollment, goes down. I created this chart and an accident of how I made the chart presents an interesting way to hide a decline – just cover it up with other lines on the chart! This is a common technique but blame me for this chart, not WSU!

To see the decline a bit better, here is a chart showing only the branch campus enrollments. The blue line and section represents WSU-Spokane.

WSU provides a lot of great data through their Institutional Research web site. It could be improved with more charts – but they are to be commended for providing the raw data. But the press release wording-that’s just funny!

The WSU-Spokane campus will be revisited in Part 4.

The News Media – Lacking Context

It would be helpful if local news would present trend charts showing how things have changed over time. Typically, they present the raw number someone put in the press release (like the above). Without seeing the historical trend in news reports, the story is just noise and not useful information that the reader can use for understanding.

For example, compare seeing today’s stock report with no knowledge of where the market has been yesterday, last month or during the past years.  Which is more useful? A single stock price quote or a chart? Numbers in most news stories are just numbers and devoid of important context.

When I tracked down the companies that left the area or downsized, it was hard to find out how many employees the companies once had. When a company folded or moved out, and if the closure was even covered (we cover new business openings but sometimes miss closures) some news reported the loss of employees as of the last day. But most of these companies had been downsizing for a period of time. I saw one report that said when Agilent closed, it was the loss of 99 jobs. Really? The company had been downsizing from a high of at least 1,500 staff.  Some old reports said that when contract workers, consultants, on-site vendors and others were included, the site in Liberty Lake might have had nearly 2,000 people total (SR news article quoting former Agilent Human Resource manager). Seeing the total loss in context – from between 1,500-2,000 workers is quite a bit different than reading about a loss of 99 workers (update: the SR, by the way, reported this with the full context).  When Itronix closed, 380 workers were affected. But just before that, the company had 450 workers and may be even 520 said some old news reports.

Seeing the full context helps us understand the overall impact of a business that is growing, shrinking or closing.

With all the cutbacks at the local media, I assume they lack the time and resources to do the job that they really want to do (I think this is the main issue). The problem affects many stories. For example, reports about local and state budgets never show us past budget plans, actual spending or tax revenues or trends in those values.  This is critical information needed for the reader to put the present situation into historical context and see what trends there might be in spending or taxes.

And then there’s the happy talk news – read the comments to this news story – especially the one by “Zelda” … see how leaving out the context creates a “fake but accurate” style of report.

Local Government – More Info Please!

Most local government agencies need to greatly improve their data reporting to the public.  How has their spending changed over time? Their staff? Their revenue collection?  What metrics do they collect to monitor their effectiveness? Do the metrics show improvements over time?

GreaterSpokane, Inc – Pick Cherries!

A time honored technique to minimize a decline is to just move the start or end points of your graph  – delete the data you would rather others did not see.

In 2010, I looked at patent production per 100,000 population, which is a measure sometimes used to indicate a region’s innovation capability.  GreaterSpokane, Inc (GSI), used the following table to show only a minor drop in local patent production:

The “trick” here was to set the start to 2004. In reality, the local patent production rate fell by -75% since the late 1990s. The chart above may have been due to insufficient research, an “honest mistake”, carelessness or that someone else handed them the chart and they just republished it.  They may not have been picking cherries.

GSI’s job is to promote the region. Understandably their focus is promotion and to highlight the positive. However, as a means for understanding our local economy and planning purposes, GSI’s reports can be misleading as they focus on the positive and miss the negative.

GSI’s web site also has a lot of out of date information. They need to audit every page – and verify that every claim is still true or meaningful.  For example, about 25% of their list of top local tech employers are either out of business, not actually tech companies or not local.

Various local web sites also have lists of “awards” or proclamations by magazines about life in Spokane – but most are undated. Tracking some of them down, some are old and no longer mean anything useful about today’s Spokane.

There are other examples but you get the idea.

As we will see in the next two examples, when we see sloppiness, it makes Spokane look dated, quaint and out of date. We can do a lot better than this!

Terabyte Triangle – Spokane is a High Tech Hot Spot!

This phrase “Spokane is a High Tech Hot Spot – Network World Magazine” appears on many local promotional web sites.  Unfortunately, it is not what Network World actually said. What Network World actually said all the way back in 1998 was that “Spokane is not a high tech hot spot, but is warming up“.

Inaccurate claims such as that are sloppy or untruthful. Take your pick.  Who knows where this phrasing first appeared – its on several local web sites and I suspect the claim developed a life of its own.

DowntownSpokane.org

This is a very useful web site with great information about downtown happenings.  But like the above, some pages are hopelessly out of date.

We begin with, oh dear:

  • Spokane is a high tech hot spot – Network World

Then,

  • Downtown Spokane is a great place for high-tech with more miles of fiber per capita than any other city in the nation

The “more miles of fiber per capita than any other city in the nation” is really, really old. No source has ever been provided for this old claim.

This is quote also has a life of its own across many local web sites. GSI quotes IEEE Today’s Engineer for the source of this, giving the claim a bit of authority. But some sleuthing around suggests that IEEE Today’s Engineer lifted the claim directly from a local promotional web site … nearly identical wording appears on other local web sites up to two years prior to the published story. That does not look good … And today, Spokane ranks #17 out of 19 cities in Washington for overall Internet access speed. In other words the above claim, if it was true once upon a time, is doubtfully true today. But what ever …

Going down the page, this claim is  embarrassing:

  • More than 20 Downtown buildings have been rewired to provide easy and affordable access to high-speed—and redundant—internet connectivity

Only 20? Hello? It’s 2011 and this may be a surprise but in many parts of the country, personal homes even have fiber optic connections today!

  • Spokane is already home to high-tech firms including General Dynamics, Cyan, Vivato, Telect and Itron. This clustering of mutually beneficial businesses provides a synergism that attracts businesses providing support services to help high-tech companies grow.

Except that General Dynamics (Itronix) is closed and gone, Vivato is closed and gone and Cyan and Telect have both shrunk their local presence considerably from their hey day.  But other than that …

Always a nice supportive quote:

  • “There are clusters of established companies here that high tech start-ups can draw from, plus a lot of interest in creating business to business relationships.”

Except the quoted CEO was with a start up that is no longer in business. Nice quote, too bad its not quite relevant anymore.

Other pages (and here too) are dated and should be brought up to date. The above is just a small sampling of questionable data and claims seen on local “official” web sites.

Have you spotted a pattern in promotional web sites? They are often old and out of date and say things that are no longer true.  Collectively it reflects badly on Spokane.  Attention to detail? Not here. Inaccuracies and incorrect claims do not help promote the area at all.

I am sorry these observations appear embarrassing to some local groups. Whether I write about them here or not they are out there for the world to see and they are embarrassing. Let’s pay attention to details and fix them and make these web sites even better!

Recommendation 2: Part 2

For what ever reason – honest mistakes, laziness, sloppiness, lack of attention to detail or perhaps  “hiding the decline”, the sort of things described above – and those are only a partial list – suggest “good enough” is common here.  Parts 3 and 4 will address why good enough is not good enough – we need to aim high and seek excellence.

On a brighter note – Good ideas come from other good ideas!

Good ideas come from analyzing, synthesizing and understanding what we see around us. Getting an accurate picture of the situation in Spokane and at local institutions will help all of us know where we are and help us to make better decisions to get to where we want to go!

Local agencies need to be producing useful information, not just data points (see Part 1).

Local agencies and organizations need to making their useful information readily accessible to everyone (Part 2).

Local agencies and organizations need to provide accurate information.

The more accurate data and useful information that all of us see, the better the quality of our decision making!

The Part 2 recommendation is then:

  • Accurate data, portrayed accurately is best for all of us. All of the mistakes above (and that is just a sample) when seen together portray an area that is sloppy or careless. This does not make Spokane look good.
  • Clean up old promotional web sites, audit every page and every claim
  • For those of us who consume data and information, keep your eyes wide open for sloppiness in the data provided to us – be skeptical!
  • If you have responsibility for any of the above – let’s fix these and make them better!

Part 3 reviews the low wage problem and hypothesizes that we’ve been investing in pouring concrete for far too long. For the 21st century we need to invest in people and ideas, not more concrete.

Part 4 follows up with more on our concrete obsession, but adds that we seem to aim low instead of aiming high.

Relative wage distribution in Spokane County

Notice anything unusual about the wage distribution in Spokane County?

What this chart shows

This chart is an attempt to capture the relative impact of industry wages, by sector. The normal way of looking at sectors is as a count of total employees in each sector, or sometimes as average wages by sector. This chart is a little different.

The data comes from the WorkForceExplorer. The average wage for each sector, from that data source, is multiplied by the percent of the workforce of each sector.  This weights each sector according to income (or if you prefer, weights income according to sector).

Government and health care combined are just over 40% of all wages in Spokane County. (WorkforceExplorer produces a similar chart as the above but sorts the columns and draws them as a horizontal bar chart. Our brain judges relative sizes in the vertical direction better than in the horizontal direction. When the columns are left unsorted, and drawn as vertical columns, the distribution of wage income is apparent.) The government category, as provided by WorkforceExplorer includes public schools and colleges.

Retail trade accounts for two-thirds the number of jobs found in health care and government but wages are very low. When the impact of retail trade is weighted by the low wages the importance of retail wages falls to a low level considering how many people work in retail.

If you squint at the chart for a bit, you can see that Spokane has two large clusters: government and health care. Plus three small clusters: manufacturing, retail trade and finance and insurance. The latter two are not really competitive advantage clusters – every comparable city has similar sized retail and finance industries.

What does it mean?

It means that the next time some one tells you that Spokane has a greatly diversified economy that its okay for you to ask them how much they have been drinking. There are several groups in town that incorrectly claim the local economy is highly diversified. Perhaps they drink too much 🙂

In seriousness, the chart shows that Spokane does not have a diversified economy. Related:  the incoherent cluster strategy that I have described elsewhere on this web site does not include government as a cluster even though it is the largest employer and produces the largest portion of wages.

Another component not shown is that transfer payments, primarily from government, for unemployment, disability, retirement and other benefits programs are not included. These total almost 20% of all local income. There is not an easy way to include this data in the above chart (we do not know how many recipients there are nor how to split out the portion of benefits that would end up being counted in health care).

If we could include the transfer payments, the top three clusters would be government, health care, and transfer payments. This is no way to run an economy.

What it does not mean – this chart does not directly reflect wages in each category. For example, Management shows up as a small column but the average wage in this category is very high – but has relatively few people working in that category.  Health care and government wages, on average, are slightly higher than the overall average (about 10%), but the relative size of the columns in the chart is due to how many people are employed in those categories.

Update: If the medical school is ever built in Spokane, the economy will become even less diverse as the proportion of income due to health care will rise much higher.

Questions

  • Should we have a diversified economy?
  • Do we want to have a diversified economy?
  • How do we develop a diversified economy?
  • What steps need to be undertaken to diversify the economy?
  • Are government policies enhancing diversity or limiting diversity?
  • What new policies are needed to improve diversity of income sources?
  • Is data, such as the above chart useful for decision making?

Related:

Government poised to pour more money into Spokane International Airport

The government has already poured hundreds of millions into Spokane International Airport. The result of that can be seen in the charts below.

AIRWAY HEIGHTS, Wash. — Senator Maria Cantwell and Mayor Mary Verner came together Sunday to address the local implications of the U.S. Senate passing the FAA Reauthorization Bill. Both say the bill could bring millions to Spokane International Airport for technology and infrastructure improvements.

via FAA Bill Would Bring Millions To GEG – News Story – KXLY Spokane.

The following charts show the result of continued spending on SIA, where passenger counts and cargo have been flat for 15 years. In both 2009 and 2010, there were fewer passenger boardings than in 1996.

Source for the following charts: here, here and here.

This is wasteful “feel good” spending to temporarily create a few jobs and boost some politically connected businesses. This diverts funds from programs that could make a long term – as compared to a short term jobs program – difference. Read more of this post