Governance: The Chicago Tri-State metro area is a powerful region – policy makers must work together to maintain a global pole position and fully realise the region’s potential

 

09/03/2012 - Chicago is at a tipping point: despite economic strengths, it faces considerable challenges to compete in the “Premier League” of world-class cities, warns the OECD’s review of the Chicago Tri-State Metropolitan Region. To fulfill its potential, the region must better match skills to jobs, become more innovative, and improve its transportation networks.


“As one of the richest regions in the world, the Chicago metropolitan area has all the ingredients for a vibrant economy. It’s now essential that all players work together to develop better policies for better lives in Chicago!”, said OECD Secretary General Angel Gurría in Chicago. “That means encouraging innovation-driven growth based on knowledge and skills.”


The tri-state region is the most important transportation and logistics hub in North America and home to numerous education and research institutions. It also boasts a comparatively young population and a large talent pool. Nevertheless, its economic performance since 2000 has been disappointing. In terms of labor productivity growth it ranks in the bottom half of all OECD metro-regions (48th out of 77).

Most other U.S. metro areas, including New York and Los Angeles, have been growing faster and creating more jobs. Since 1995 the region’s unemployment rate has been higher than the average for  US metro-regions; it has hovered around 10% since 2009.  If employment in the Chicago Tri-State metro-region had grown at the national rate over the past 20 years, the region would have almost 600 000 additional jobs today.


Skills mismatch lies at the heart of these challenges. Low-skilled workers are not finding jobs, while manufacturers can’t fill medium-skilled job vacancies. High-end knowledge-intensive companies are attracting talent from outside the region, while local university graduates are leaving for jobs elsewhere.


A racial and spatial divide is exacerbating this mismatch. The unemployment rate for African-Americans (24%) in the area is nearly four times that of whites, and minorities are more likely than white kids to drop out of high school. Low-income populations in the Chicago Tri-State metro-region are concentrated in pockets of poverty: 25% of the poor in Cook County and 20% of those in the metro-region live in neighbourhoods with poverty rates in excess of 35%, which typically have little access to jobs and services.


To develop the full potential of its many strengths, says the Review, state and local authorities and private-sector stakeholders in the Tri-State Region must cooperate more closely to promote innovation-driven economic development and job creation. The region needs to find more creative ways to support

start-ups in the region’s emerging business sectors and to enhance technology-transfer capacity from research institutions to businesses.

Chicago - GDP per Capita (Purchasing Power Parities)

An interactive and embeddable version of this map is available at http://oecdwash.org/chicagoreview


The OECD Review makes recommendations for economic and business development, including making a stronger shift toward the development of innovation clusters such as biotechnology and nanotechnology, focusing on emerging green technology sectors, and further enhancing the region’s manufacturing and finance strengths.


Recommendations:

  • Develop a region-wide approach to overcome the mismatch between skills and labor market demands and train lower skill workers to bring them to the level required by employers. The region’s workforce boards, institutions and agencies need to work across county and state boundaries to streamline training curricula.
  • Identify clusters with the potential for innovation-driven growth, support R&D, business and financial services, tech-transfer capacity between research institutions and business, to spur start-ups and SMEs across the region, especially in knowledge - intensive clusters.
  • Integrate the various existing plans for the region’s transport infrastructure across all modes of transportation and work with the federal government to seize the opportunities that the Chicago hub presents for the region and the country.
  • Identify sustainable financing mechanisms and technical assistance to capitalize on promising green sectors such as green building design and energy-efficiency services; public transit and congestion charges; the wind energy supply chain; and water conservation technologies.


Territorial Review: the Chicago Tri-State Metro Region was commissioned by the Chicagoland Chamber of Commerce, the Chicago Metropolitan Agency for Planning, and the Economic Development Administration/ U.S. Department of Commerce, and reflects broad stakeholder consultation across the Chicago region. It is the 23rd in a series of such OECD reports requested from metropolitan regions around the world, including Milan, Toronto, Stockholm, Seoul, Montreal and Istanbul.


About the OECD: The Organization for Economic Cooperation and Development (OECD) is the global economic policy forum. A key element of the U.S. vision for rebuilding Europe after World War II, it now provides analysis and advice to governments around the world in order to create better policies for better lives.

 

Further information on the OECD Territorial Review for the Chicago Tri-State Metro Region is available at http://oecdwash.org/chicagoreview.
More information about OECD work on Regional, Rural and Urban development: www.oecd.org/regional

 

Media contact


Matthias Rumpf
Phone: +1(202) 445 80 58
Matthias.Rumpf@oecd.org

 

 

 

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