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Bridging the Red River: A Regional Economic Strategy for the

Texoma Regional Consortium Garvin

Pontotoc Coal

Murray Carter

Johnston

Atoka

Marshall Love

Cooke

Bryan

Grayson

Fannin

September 2007

Prepared by:


Texoma Regional Consortium Members and Contributors Texoma Workforce Development Board

Southern Oklahoma Workforce Investment Board

Texas Workforce Commission Oklahoma Department of Commerce Denison Development Alliance – Denison, TX Sherman Economic Development Corporation – Sherman, TX

Durant Industrial Authority – Durant, OK Ardmore Development Authority – Ardmore, OK

Bonham Chamber of Commerce and Economic Development – Bonham, TX

Ada Jobs Foundation – Ada, OK

Gainesville Economic Development Corporation – Gainesville, TX

Pauls Valley Chamber of Commerce – Pauls Valley, OK

Center for Workplace Learning (at Grayson County College) – Denison, TX

Murray County Industrial Authority – Sulphur, OK

North Central Texas College – Gainesville, TX

Southeastern Oklahoma State University – Durant, OK

Grayson County Airport – Denison, TX

Murray State College – Tishomingo, OK

US Department of Labor – Region IV

East Central University – Ada, OK


Table of Contents Executive Summary ........................................................................................................................................................... i Introduction ....................................................................................................................................................................... 1 Defining the Texoma Economic Region ............................................................................................................................ 4 Demographic and Economic Trends ................................................................................................................................. 6 Regional Population Characteristics .................................................................................................................................................. 6 Regional Economic Structure ........................................................................................................................................................... 13

Cluster Analysis .............................................................................................................................................................. 25

Cluster Methodology ........................................................................................................................................................................ 26 Findings about Key Clusters ............................................................................................................................................................ 28 Sub-regional clusters ........................................................................................................................................................................ 35

State and Regional Planning Efforts to Date................................................................................................................... 40 Texas Statewide Targets .................................................................................................................................................................. 40 Texoma (Texas) Economic Development Strategies ....................................................................................................................... 41 Oklahoma’s Statewide Economic and Workforce Strategy .............................................................................................................. 42 Summary of Planning Efforts to Date ............................................................................................................................................... 44

Cluster Inspired Targets .................................................................................................................................................. 44

Finance and Insurance ..................................................................................................................................................................... 45 Motor Vehicles .................................................................................................................................................................................. 46 Aviation ............................................................................................................................................................................................. 47 Plastics Products .............................................................................................................................................................................. 49 Packaged Food Products ................................................................................................................................................................. 50 Warehousing and Distribution .......................................................................................................................................................... 51 Computer and Electronics Equipment .............................................................................................................................................. 53 Basic Health Services ...................................................................................................................................................................... 55 Hotel and Passenger Transportation Services ................................................................................................................................. 56 Ranching and Equine ....................................................................................................................................................................... 57 Petroleum and Gas .......................................................................................................................................................................... 58

Assets and Issues Analysis............................................................................................................................................. 59 Strategic Themes: Identifying Challenges and Opportunities ......................................................................................................... 60

A Regional Vision and Action Plan.................................................................................................................................. 70 Our Vision: Texoma as a “Hometown Hotspot” ............................................................................................................................... 71 Our Planned Actions: The Economic Strategies ............................................................................................................................. 71 Implementation Management: Next Steps ...................................................................................................................................... 75


Bridging the Red River: A Regional Economic Strategy for the Texoma Regional Consortium Executive Summary The 13 counties located in south central Oklahoma and northern Texas make up a largely rural and small town area historically reliant on oil and gas, ranching, and manufacturing for jobs and income. The

Texoma Counties and Population (2006)

Map 1

counties (shown in Figure 1) cover an area roughly the size of Connecticut and Rhode Island combined. The region is bisected east and west by the Red River and its

Pontotoc

Garvin

managed by the US Army

Coal

(35,350)

(27,375)

(5,634)

Murray

Atoka

(12,945) Johnston (10,436) Ardmore Tishomingo

Carter

(14,340) Atoka

0

30 Miles

Marshall

(47,503)

Love (9,162)

namesake, Lake Texoma, an 89,000-acre reservoir

Total Texoma Population 406,459

Ada

Pauls Valley

(14,558)

Bryan

Madill

(38,395) Durant

Denison Gainesville

Cooke (38,946)

Bonham

Sherman

Grayson (118,478)

Fannin (33,337)

Corps of Engineers. In addition, the Chickasaw

Source: US Census Bureau

and Choctaw Tribal Nations contribute significantly to the regional economy, not only through their highly visible tribal casinos and resorts, but also through their investments in a variety of business operations. However, the area’s location along two major highway corridors—Interstate 35 and US 75—north of fast-growing Dallas-Fort Worth and south and east of Oklahoma City opens up many possibilities for a completely different future. The critical question is what that future will be and how much the region’s leaders can play a role in shaping that future. A plan for the future will require a collaborative response. The Texoma Workforce Development Board and the Southern Oklahoma Workforce Board have joined forces with a number of economic development organizations and educational institutions across the 13-county Texoma region to create the Texoma Regional Consortium (TRC), an informal network of regional leaders designed to engage participating counties in defining a common vision for the region’s future prosperity.

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The TRC engaged the Corporation for a Skilled Workforce (CSW) and the Center for Regional Economic Competitiveness (CREC) to help frame key issues and facilitate the discussions among leaders toward developing a regional economic growth strategy. The resulting strategy will help the area transition from its dependence on traditional manufacturing and resource-based activities to a greater reliance on an emerging knowledge-based economy. As the Texoma region continues its economic transformation, leaders will be faced with a number of key decisions that will affect their citizens, workers, and businesses for the coming decades. Although peripheral to two rapidly growing urban areas, the region possesses unique characteristics that suggest the need for considering this 13-county Texoma area as an economic area separate from its more populous neighbors to the north and south. The region consists of one metropolitan area and five micropolitan areas that currently constitute three labor sheds. The I-35 Corridor Sub-region includes Ardmore, and the counties that surround it (Carter, Johnston, Marshall, Love, and Cooke Counties). Commuting in this area follows I-35, but Oklahoma’s Arbuckle Mountains create a natural geographic and psychological boundary from the counties northward. The US 75 Corridor Sub-region centers on the economic activity along the Sherman-DenisonDurant corridor and includes Grayson, Fannin, Bryan, and Atoka counties. The fastgrowing northern Dallas suburbs have a particularly strong influence on this sub-region. The South Central Oklahoma Sub-region is very rural with an important urban center in Ada and smaller centers elsewhere in Garvin, Murray, Pontotoc, and Coal counties. Leaders in this sub-region have already begun efforts to support regionalism by creating the South Central Oklahoma Regional Enterprise (SCORE) initiative, supported by Garvin, Murray and Pontotoc counties. However, over time, economic forces will most likely encourage the South Central Oklahoma Sub-region to align more closely with the counties in the I-35 Corridor Sub-region. Overall, the Texoma regional economy has grown somewhat slower than the US economy. According to US Bureau of Economic Analysis (BEA) employment estimates and projections provided by a University of Georgia-developed econometric forecast model, Texoma employment grew by 0.3 percent annually while the US employment grew 1.5 percent annually between 2001 and 2006. The structure of the region’s economy explains much of this slower growth. Several resource extraction activities – agriculture (ranching and animal husbandry) and mining (oil and gas) – are critical sources of employment. These industries tend to be highly cyclical in their growth patterns. Furthermore, the region has lower than expected employment in fast growing sectors such as professional and business services, financial activities, and real estate. The region’s largest occupational concentrations include ranchers/farmers and related occupations, representing about 7 percent of area employment and a much larger share

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than most other regions. Based on current projections, the area’s fastest growing occupations will likely include low-skill, low-wage occupations such as retail salespersons, cashiers, wait staff, and farmhand positions. The mix of new jobs results, in part, due to national patterns of employment growth in these occupations as well as to the region’s current economic structure, especially the region’s large concentration of ranching, low, and moderate-wage manufacturing. In examining the existing and projected future economic opportunities, the consultants identified several industry clusters as offering the greatest potential growth opportunities for the region. Several of these clusters typically provide high wage, high skill jobs that could enhance the Texoma region’s standard of living. These clusters include: •

Finance and insurance

Motor vehicles

Aviation

Plastics products

Packaged food products

Warehousing and distribution

Computer and electronic equipment

Basic health services

Hotels and passenger transportation services

Ranching and equine

Petroleum and gas

To prepare the region to support these targeted clusters, the TRC identified its core assets and acknowledged its key challenges in: (1) enhancing its knowledge capacity; (2) fostering innovation; (3) creating a global image and competitive location; (4) offering appealing amenities; (5) engaging community and civic support; (6) providing connectivity; and (7) supporting regional collaboration. Texoma already has a number of key assets that support its future economic growth prospects, including strong educational institutions, economically relevant research activities at the Noble Foundation and GWERD, large metro-market access, consequential outdoor amenities, a small town character, a relatively strong existing road network, and the benefit of an emerging regional consortium. Unfortunately, the regional leaders recognize that they have many challenges to overcome in (a) ensuring that Texoma has the right kind of talent available for knowledge-driven industry clusters, (b) increasing the utilization of its research resources, (c) improving its limited local urban amenities, (d) addressing its inadequate broadband and inter-regional transportation network, and (e) addressing traditional parochialism in the outlook of the region.

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To address these challenges and develop a new economic vision, leaders would like to make Texoma an economically diverse and entrepreneurial region that supports innovation and appeals to families with… •

A distinct regional identity

Vibrant downtowns

More highly educated citizens

Growing companies in emerging industries

Supportive, connected environment

More collaborative governance

This vision is designed to provide a positive statement about where Texoma would like to go. It is designed not only to provide a framework for the priorities of the TRC action plan, but also to serve as a guide that assists other regional stakeholders in their strategic and operational planning. The Texoma Regional Consortium identified nine specific actions designed to help the region achieve its vision in the coming months and years. 1. Develop industry-driven “just-in-time” career and technical education for the region’s targeted clusters 2. Develop an integrated entrepreneurial development initiative 3. Develop a “business” recruitment plan tied to DFW and OKC as key regional assets 4. Develop a coordinated regional “people” attraction plan for the Texoma Region 5. Develop and deliver affordable workforce housing 6. Assess and address workforce transportation needs 7. Develop “cross-border” Texoma multi-modal transportation for freight and passengers 8. Increase the region’s broadband capacity 9. Implement a sustainability plan that engages the region’s leaders and citizens in the plan’s success

Undertaking these nine actions requires the Texoma Regional Consortium to develop detailed implementation and monitoring plans. Many implementation activities will likely be accomplished most effectively through sub-regional collaboration because leaders in various parts of the 13-county area have different priorities. Each TRC action plan would have a working task force dedicated to designing and implementing relevant activities. In some cases, the task force may choose to form sub-regional committees to help the TRC achieve goals. The TRC will continue to manage the actions, encourage regional collaboration, and provide on-going support to the task forces. In this way, the TRC, with the participation of additional stakeholders, will monitor overall regional and sub-regional activities to ensure that the economic vision of its leaders is achieved and the region becomes a true “hometown hotspot” for its citizens. Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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Bridging the Red River: A Regional Economic Strategy for the Texoma Regional Consortium Introduction Texoma Background The Texoma Regional Consortium is a network of leaders serving 13 counties located in south central Oklahoma and northern Texas, including Cooke, Fannin and Grayson counties in Texas and Atoka,

Texoma Counties and Population

Bryan, Carter, Coal, Garvin,

(2006)

Johnston, Love, Marshall, Murray and Pontotoc counties

Pontotoc

Garvin

(35,350)

(27,375)

Region is currently home to

Total Texoma Population 406,459

Ada

Pauls Valley

in Oklahoma. The Texoma

Map 1

Coal (5,634)

Murray

Atoka

(12,945) Johnston (10,436) Ardmore Tishomingo

about 406,500 people. It encompasses an area of

Carter

Atoka

0

30 Miles

Marshall

(47,503)

several thousand square

(14,340)

Love (9,162)

miles and is approximately

(14,558)

Bryan

Madill

(38,395) Durant

Denison

the size of Connecticut and

Gainesville

Cooke

Rhode Island combined.

(38,946)

Sherman

Grayson (118,478)

Bonham

Fannin (33,337)

The area is bisected east and west by the Red River.

Source: US Census Bureau

Lake Texoma, an 89,000-acre reservoir managed by the Army Corps of Engineers, lies at the center of the region on the Red River and attracts six million visitors annually. While tourism is important to the regional economy, Texoma has traditionally relied on ranching, oil and gas, and certain types of manufacturing for a large proportion of its employment and income. The region also has a significant tribal presence, represented by the Chickasaw and Choctaw Tribal Nations. The economic success of the area’s large tribal casinos and resorts add to the economic impacts of the area’s considerable oil and gas reserves, growing equine industry, and location along two major highway corridors—Interstate 35 and US 75. The relatively recent development of area casinos represents an example of a changing regional economy. The region’s economy, long relying on its traditional Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

1


economic mainstays, may be undergoing a significant transition. The most important sign may be the area’s location between two rapidly growing metropolises, each growing fastest in the areas immediately adjacent to the Texoma region. To the south, the Dallas-Fort Worth Metroplex has nearly six (6) million people and is growing northward along US 75 and I-35. Population in the Metroplex increased 16 percent since 2000, driven by rapid growth to the north and east of Dallas. Immediately adjacent to the southern part of Texoma, housing development in Collin and Denton Counties helped to add 358,000 new residents in those two counties alone since 2000. Meanwhile, with 1.2 million people, Oklahoma City’s growth has been more modest at 7.0 percent in the past six years. Even so, most of that area’s growth has been to the south and west of Oklahoma City. Immediately north of the Texoma region, Cleveland and McClain Counties were two of the fastest growing counties in the Oklahoma City metro area, increasing by nearly 24,000 people since 2000. During that same period, all 13 Texoma counties added 18,700 people, of which about 7,900 new residents moved into Grayson County. Taken together, these trends illustrate how growth pressures from counties immediately to the north and south will likely influence the Texoma region as it continues to spread to the counties along the Texoma region’s key north-south transportation corridors. These growth patterns offer new economic opportunities for the entire 13-county Texoma region. At the same time, technological change, globalization, and the 2001 recession, combined with the volatile energy bust-to-boom cycle, all demonstrate the region’s potential economic vulnerabilities in an increasingly competitive environment. While the economy is currently operating more smoothly than earlier in the decade, area leaders are concerned that Texoma’s economic growth may not be sustainable, and citizens should be preparing for a different kind of economic base. Furthermore, Texoma’s leaders are becoming increasingly convinced that the solutions to the region’s complex economic challenges will require teamwork. One challenge in organizing a collaborative response is the traditional competitive climate among the region’s communities, especially between Oklahoma and Texas. While there may be natural rivalries, the reality is that the counties on both sides of the Red River have many common concerns, which might be more effectively addressed regionally.

Study Purpose To help achieve the necessary cooperation, the Texoma Workforce Development Board and the Southern Oklahoma Workforce Board have joined forces with a number of economic development organizations across the 13-county Texoma region. Combined, these organizations created the Texoma Regional Consortium (TRC), an informal network of regional leaders designed to engage participating counties in Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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defining a common vision for the region’s future prosperity. The TRC engaged the Corporation for a Skilled Workforce (CSW) and the Center for Regional Economic Competitiveness (CREC) to help frame key issues and facilitate the discussions of regional leaders toward developing a regional economic growth strategy. The resulting strategy is expected to chart a new economic future for the region’s residents, workers, and businesses. This course is expected to help transition the area from its dependence on traditional manufacturing and resource-based activities to a more knowledge-based economy. Many other US regions are undergoing similar transformations, but without the benefit of their leadership making informed collective choices. As the Texoma region continues its own economic transformation, leaders will be faced with a number of key decisions that will affect their citizens, workers, and businesses for the coming decades.

How to Read the Study This report provides a summary of key background information, findings from research prepared for this study, the outcomes of discussions and decisions made by the TRC, and proposed actions for implementation. The information and analysis contained in this report represents a snapshot in time, and the data remain subject to continuous change. In the first section, the research identifies key regional characteristics as well as the differences among three sub-regions identified within the 13-county Texoma region. The discussion also reviews where the greatest economic growth opportunities lie among different targeted clusters. The second section identifies a number of strategic issues derived from an analysis of the data and input from stakeholder interviews held across the region. During the course of several retreats, TRC members considered how best to address these issues in order to develop the region’s economic development strategy. The identified issues are organized into several themes as a way to help manage the process of prioritizing which issues to address and how best to address those priorities. The next section focuses on potential strategies and suggests priorities for implementation. The document concludes with comments on implementation of these strategies.

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Defining the Texoma Economic Region Although peripheral to two rapidly growing urban areas, the region does possess unique

Employment in the Texoma Region, 2005

Oklahoma Co. 557,415 Cleveland Co. 115,275

Map 2

characteristics that suggest the need for considering

50

this 13-county Texoma

25

area separately from its

10 Thousands of Workers

larger neighbors. The area differs in large part because a number of smaller urban areas, each of which represents a

Grayson Co. 49,751

Denton Co. 201,220

Tarrant Co. 973,282

modest growth center in its own right, characterize it.

Collin Co. 317,000

Dallas Co. 1,781,339

0

30 Miles

Source: RegionalOneSource

The region consists of one metropolitan area and five micropolitan areas. Grayson County, which constitutes the Sherman-Denison Metropolitan area, is the region’s most populous county. In 2006, Grayson County’s population was almost 118,500. The region’s five micropolitan areas are located around Ada, Ardmore, and Durant in Oklahoma, and Bonham and Gainesville in Texas. From among these population centers, Sherman-Denison, Ardmore, Ada and to a lesser extent Durant, stand out as the region’s largest employment centers. Of course, these population and employment centers, pale in comparison to the magnitude of nearby metropolitan areas—Dallas-Fort Worth Metroplex and Oklahoma City. As shown in Map 2, Grayson County is the region’s largest employment center with nearly 50,000 workers, but this number represents only 16 percent of Collin and 3 percent of Dallas County’s employment. In the region’s northern counties, the main employment centers in Pauls Valley and Ada are relatively small when compared with the number of jobs in nearby Oklahoma City.

Defining Sub-regional Economies To further identify the region’s natural economic areas, we analyzed the inter-county commuting activity. Map 3 reveals several key patterns. Ardmore stands out clearly as an employment center for the counties surrounding Carter County. Not only are employees drawn from the counties bisected by I-35, but they are also drawn from rural Marshall and Johnston Counties to the east. Lake Texoma also influences the commuting patterns of these counties, particularly Marshall County. The Lake impedes easy access for residents of several southern Oklahoma counties to employment centers in Sherman-Denison. Consequently, these counties are more closely tied economically

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to Ardmore. Ironically, the Lake serves as both

Commuting Patterns in the Texoma Region

OKLAHOMA CITY

a common feature and

(US Census Bureau, 2000)

asset that brings the

Map 3

region together and a

35

Ada

physical barrier separating residents

4,000 Commuters 2,000 Commuters

Ardmore 70

and businesses on the two sides of the Red

500 Commuters

75 70

< 500 Commuters 82 82

Sherman

River. 35

The Texoma

75

region’s northern counties—Garvin,

0

DALLAS

30 Miles

Pontotoc, Coal and Atoka—do not possess so clearly defined commuting patterns. Garvin County is beginning to demonstrate the influence of Oklahoma City’s growth as roughly two percent of the county’s population commutes northward on I-35. There also appears to be modest levels of commuting into the Ada area, both from Seminole and Hughes Counties. Sparsely populated, Coal County has only 6,000 residents, but over five percent of the county’s population commutes into the Ada area. Atoka County’s commuters, meanwhile, are more likely to work in Bryan County. In the Texas counties, Sherman-Denison draws significant commuters from the surrounding counties particularly from Bryan County in Oklahoma and Fannin County in Texas. Even though some East-West commuting patterns exist between the three Texas counties, the North-South patterns

Texoma Sub-Regions Map 4

along US-75 and I-35

I-35 Corridor Sub-region

clearly dominate. The most significant flows of workers commute

US 75 Corridor Sub-region

Denton, and there are growing commuter flows

Murray Ardmore

Carter

Johnston

Atoka

Atoka

Marshall

0

30 Miles

Bryan

Love Durant Denison

These data are drawn More recent data, were

Coal

Tishomingo

directly to Dallas County. from the 2000 Census.

South Central Oklahoma Sub-region

Pontotoc

Garvin

southward from Grayson to Collin and Cooke to

Ada

Pauls Valley

Gainesville

Cooke

Sherman

Grayson

Bonham

Fannin

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it available, would likely reflect Dallas’ continued sprawl northward and the growing pull of employment centers located in the north Dallas suburbs. In both Texas and Oklahoma, I-35 and US-75 appear to exert a powerful influence over the region’s future economic development patterns. Based on these data and interviews with local experts about how the regional economy is developing, the consultants identified three economic sub-regions in Texoma, as illustrated in Map 4. The I-35 Corridor Sub-region includes Ardmore, and the counties that surround it (Carter, Johnston, Marshall, Love, and Cooke Counties). Commuting in this area follows I-35 but Oklahoma’s Arbuckle Mountains create a natural geographic boundary from the counties northward. The US 75 Corridor Sub-region centers on the economic activity along the Sherman-Denison-Durant corridor and includes Grayson, Fannin, Bryan, and Atoka counties. Furthermore, the northeast Dallas suburbs have a particularly strong influence on this sub-region. The South Central Oklahoma Sub-region is very rural with an important urban center in Ada and smaller centers elsewhere in Garvin, Murray, Pontotoc, and Coal counties. Leaders in this sub-region have already begun efforts to support regionalism by creating the South Central Oklahoma Regional Enterprise (SCORE) effort, supported by Garvin, Murray and Pontotoc counties. However, over time it is likely that natural economic pulls will more closely tie many of the counties in this South Central Oklahoma Sub-region more closely to the I-35 Corridor Sub-region. There are many ways in which the region could be sub-divided, but these best reflect the region’s current economic development trends as well as support the efforts already underway toward encouraging Texoma residents to think regionally, especially across the state border.

Demographic and Economic Trends Regional Population Characteristics Texoma’s population is expected to grow nearly 4 percent during the next few years, adding an expected 9,000 people to reach 415,000 people by 2010. About three in five residents live in rural parts of the region. Texoma is also undergoing significant demographic and economic changes. This section describes several of the key trends that will affect the region’s future development

An Aging Population The age structure of the Texoma region is decidedly older than the U.S., Texas, and Oklahoma. Nearly one in six residents in South Central Oklahoma is 65 and over. Likewise more than 16 percent of residents along the I-35 corridor are 65 and over, and more than 15 percent of the residents along the US 75 corridor.

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At the same time that

Figure 1

Texoma has many more citizens Percentage of Population 65 and Over

over 65 than one might expect, it also has slightly fewer young people (citizens aged 18 or

12.6%

15.8%

16.2%

Texoma

I-35 Corridor

16.7% 15.2%

13.4%

lower) than the US, Oklahoma,

10.1%

and Texas, and a great deal fewer younger “prime-working age” adults (aged 25-44). By comparison, this working age group represents only 25.4

U.S.

Oklahoma

Texas

percent of Texoma’s population,

U.S. 75 Corridor

South Central Oklahoma

lower than any of its comparator regions: the US at 28.7 percent of the population, Oklahoma at 27.2 percent, and Texas at 29.4 percent. With a population that is slightly older than average and a prime working age population to support the older population that is smaller than average, the labor force may simply not be large enough to meet local demand without attracting new working age residents from outside the region. In addition, the region has a relatively low labor force participation rate – below 60 percent. By comparison, the US labor force participation rate is currently 66 percent Texoma’s participation rates is similar to those of many other predominately rural areas in which there are limited opportunities for spouses or second-income earners.

Ethnicity The Texoma region’s population is becoming

Figure 2

increasingly diverse. This is particularly true for the

Compound Annual Growth Rate Overall and Hispanic Population (1990-2004)

region’s Hispanic population which grew from 2.2 percent of the region’s total population in 1990, to over 5 percent in

10% Annual Growth in Hispanic Population

9.0%

Annual Growth in Overall Population

8%

8.3% 7.7%

7.6% 6%

6.4%

2000. The region also has a very significant Native American population.

4%

of the region’s population.

4.4%

2% 2.0%

Native Americans represent approximately 6.4 percent

4.6%

1.2%

1.0%

0.8%

1.0%

1.4% 0.2%

0% US

OK

TX

Texoma

Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

I-35

US 75

S. Central OK

7


While this figure is smaller than

Figure 3

Oklahomaâ&#x20AC;&#x2122;s 8 percent, it is still significantly larger than

Two Key Ethinic Groups as a Proportion of the Population, 2004 36.0%

proportion of Native Americans

35.1% 32.0%

in either Texas or the United 28.0%

States. Percent of Population

24.0%

Native Americans represent the largest minority group in the region, with 25,654 people.

20.0%

16.0% 14.3% 12.0%

Meanwhile, Hispanics account for approximate 23,700

12.3%

8.0% 7.9%

residents in the Texoma region.

5.9%

5.8%

4.0%

6.4%

6.9%

6.5%

6.4% 4.0%

However, the growth rate

0.9%

0.0%

U.S.

among the Hispanic population

Hispanics

3.3%

0.6% Oklahoma

Texas

Native Americans

Texoma

I-35 Corridor

U.S. 75 Corridor

South Central Oklahoma

Region

is much greater that for Native Americans. If recent growth rates continue, Hispanics will become Texomaâ&#x20AC;&#x2122;s largest minority group by the end of 2006, and 10 percent of the overall area population by 2017.

Educational Attainment Nearly one in four (23.7 percent) Texoma adults (aged 25 and higher) have not yet earned a high school diploma. This translates into more than 62,000 adults. By comparison, the US rate is 19.6 percent, and the Oklahoma rate of 19.4 percent. The Texas rate of 24.4 percent is slightly higher. This high school non-completion rate is similar in counties throughout the region. Only slightly more adults do not complete high school in the rural areas of South Central Oklahoma (at 25.0 percent) than in the more urbanized counties of the US 75

Figure 4

Corridor where 23.0 percent that do not

Adults with Some Post-Secondary Education Experience, 2000

have a high school 50.0%

51.8%

diploma.

50.7% 49.1%

Percent of Adults, Aged 25 or higher

44.8% 42.6%

40.0%

41.2% 39.2%

30.0%

20.0%

10.0%

0.0% U.S.

Oklahoma

Texas

Texoma

I-35 Corridor

U.S. 75 Corridor

South Central Oklahoma

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Figure 5 Educational Attainment Levels by Region

19.6%

19.4%

24.4%

23.7%

24.1%

23.0%

South Central Oklahoma 25.0%

28.6%

31.5%

24.8%

33.6%

34.7%

32.2%

35.8%

21.1%

23.4%

22.3%

22.1%

22.1%

23.0%

19.8%

6.3%

5.4%

5.2%

5.0%

4.9%

5.9%

2.9%

24.4%

20.3%

23.2%

15.5%

14.2%

15.9%

16.5%

U.S.

Less Than High School Diploma High School Graduate Some College, No Degree Associates Degree Bachelors and Above

Oklahoma

Texas

Texoma

I-35 Corridor

U.S. 75 Corridor

In contrast, the proportion of the Texoma population that has some experience with college (even if they did not finish) is about 43 percent. Nationally, the college-going rate (including those who have some college as well as those with associates, bachelors, or more advanced degrees) is 52 percent. As a result, the regions overall education attainment levels are below the U.S. average. Texoma is competing at a disadvantage for the increasing number of jobs that require post secondary education.

Income Area income can be examined through a variety of lenses, but they tend to lead the analyst to the same conclusion—wages in Texoma are lower than elsewhere. First, the region’s median household income1 consistently trail the US, Texas, and Oklahoma’s median levels. Second, average wages are significantly below the US, Texas, and Oklahoma averages. The lower income and wages are somewhat (but not entirely) offset by a lower cost of living in the region. Thus, many of the new lower wage jobs (paying $9-$11 per hour) being created pay just enough to allow a family of four to live slightly above the federal poverty rate $18,8502 and earn a self-sufficient wage. Of course, households with two wage earners are better off, but the relatively low labor force participation rate suggests that many families live with one wage earner in the household. Median Household Income and Growth During the past 25 years, household incomes in the region have averaged about two-thirds to three-fourths the US average and about 80 to 90 percent of the median household income in Texas and Oklahoma, respectively. In 2004, the US median household income was $45,684, about $11,500 higher than the Texoma region’s median household income of $34,128. Texoma’s median household income levels also trailed 1

The median household income is the level at which half of households have incomes higher and half have incomes lower. 2 United States Department of Health and Human Services 2004 Poverty Guidelines Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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both Texas and

Figure 6

Oklahoma. The highest

Annual Growth Rate of Median Household Income, 1990-2004

income area in the Texoma region was along the U.S. 75

3.5%

corridor with a 2004

3.0%

3.1%

U.S.

Oklahoma

3.6%

3.8%

3.7%

I-75 Cor.

South Central OK

3.3%

household income level of $36,699. Texas and Oklahoma were able to increase median household income at a faster pace (3.5 percent

Texas

Texoma

I-35 Cor.

and 3.1 percent, respectively) than the nation (3.0 percent) from 1990 to 2004. The relatively lower wages in the region increased more rapidly, but they still were not able to keep pace in actual dollar growth. Furthermore, Texomaâ&#x20AC;&#x2122;s mix of jobs and the minimum required education for those jobs suggest that income growth rates will likely to continue trailing the US and Texas while just keeping pace with the rest of Oklahoma during the next five Figure 7 Median Household Income in 1990, 2004 and 2009 U.S.

1990 2004 2009* (projected)

$30,099 $45,684 $51,252

Oklahoma $23,641 $36,269 $39,401

Texas

Texoma

I-35 Corridor

U.S. 75 Corridor

$27,061 $43,526 $49,216

$20,809 $34,128 $37,286

$21,175 $33,406 $36,443

$21,850 $36,699 $39,840

South Central Oklahoma $18,003 $29,837 $32,658

Source: US Census Bureau and projections AGS

years. Average Wages Average wages in the Texoma region are about 36 percent lower than US average wages. In 2005, the average wage in Texoma was $26,518 while the average for the U.S. was $41,663. Texomaâ&#x20AC;&#x2122;s average wages also trail Texas and Oklahoma. Again, average wages in the US 75 Corridor are highest in the region while South Central Oklahoma trails with average wages that are 57 percent of the US average. Grayson County leads the Texoma region with 2005 average wages of $32,682, the only county with annual wages above $30,000. Coal County trails with a 2005 average annual wage of $16,895. Wages are expected to grow slowest in the US 75 Corridor at Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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Figure 8 Average Annual Wages in 2005 and 2009 U.S.

2005 2009 projected

$41,663 $44,292

Oklahoma

Texas

Texoma

I-35 Corridor

U.S. 75 Corridor

$33,681 $36,071

$42,750 $45,219

$26,518 $28,122

$26,143 $28,120

$28,295 $29,710

South Central Oklahoma $23,727 $25,599

Source: US Census Bureau and projections AGS

1.2 percent pear year, the only part of the Texoma region that is not expected to keep pace with US wage growth rates. Recent economic development successes have focused on lowering the regionâ&#x20AC;&#x2122;s unemployment rate, which had climbed

Figure 9

during the 2001

Annual Growth Rate of Wages from 2004 to 2009

recession because of several large factory lay-offs. Now that unemployment rates

1.5%

1.4%

have subsided to near

1.9%

1.8%

1.7% 1.4%

1.2%

full-employment levels in some of the more urbanized counties of the region, local leaders have the luxury of

U.S.

Oklahoma

Texas

Texoma

concentrating on job

I-35 Corridor

U.S. 75 Corridor

creation efforts

South Central Oklahoma

designed to increase area wages.

Cost of Living and Self-sufficiency To some degree, wages reflect the cost of living. Due to the more rural setting of the Texoma region,

Figure 10

the cost of living is generally lower than the national average.

Cost of Living Index, 2006 First Quarter Metro/Micro Area

Ardmore and Sherman-Denison have a relative cost of living that is at about

Ardmore OK Micro Sherman-Denison TX Metro US Average

Housing Component Index 78.3 75.9 100.0

ALL ITEMS Composite Index 87.3 92.7 100.0

Source: ACCRA Cost of Living Index, 2006, First Quarter

87 to 92 percent of

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the national average. One of the most critical variable costs, the region enjoys housing costs that are about 76-78 percent of the national average. Unfortunately, this relative difference in cost of living does not fully make up for wages that are 36 percent below the national average. Certainly, the relatively low cost of housing in the region may also reduce the willingness of housing developers to operate in a region in which their profit margins are much smaller than in the nearby metro areas. Self-sufficiency In many regions, the Wider Opportunities for Women (WOW) estimates the income required to meet basic needs (including paying taxes) in the regular “marketplace” without public or private/informal subsidies. This standard includes the costs required to meet the need for childcare, nutrition, transportation, housing, taxes, health care, and miscellaneous consumer expenditures. WOW refers to these levels of income as “family sustaining wages.” The most recent WOW data for the Texoma area is for Carter County in Ardmore (2002), and the project team used inflation indexes to develop 2004 self-sufficiency estimates. Self-sufficiency income in Texoma is estimated at between $22,900 for a family of one adult and one child of preschool age and $26,300 for a family of two adults and one child of preschool age. In 2004, 31.5% of households in Texoma made less than $20,000 annually. At that time, a family of four (two adults, one preschooler, one infant) needed to earn $34,994 annually to be self-sufficient. For a single adult with one infant child, the self-sufficiency wage is $19,531 in Carter County. By inflating the WOW estimate to 2004 dollars, the self-sufficiency wage for a family of four would be $36,660 (or $8.81 per hour for each of two adults).3 For a single adult with one child, the selfsufficiency wage would be $20,461 (or $9.84 per hour). In 2004, the median household income for Carter County was $31,439, slightly below the income required to sustain a family of four. The most recent data for the Texas-side of the Texoma region was 1997 for the Sherman-Denison MSA (Grayson County). At that time, WOW determined that a family of four (two adults, one preschooler, one infant) needed to make $30,618 annually, or $7.36 per hour for each of the two adults. For a single adult with one infant child, the self-sufficient wage is $17,638 or $8.48 per hour to be self-sufficient. Inflating these data to 2004 dollars, the comparable self-sufficiency wages would be similar to those determined for the more recent Carter County study -- $35,223 for a family of four and $20,291 for a single adult with an infant child (inflated to 2004 dollars). By comparison, in 2004, the median household income for Grayson County was $40,875, 16 percent above the self-sufficiency income level. 3

Source: Annual consumer price index for Southern urban consumers, US Bureau of Labor Statistics. Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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Regional Economic Structure This section examines the region’s overall economic structure at the super-sector and the industry level. The economy has 12 super-sectors – defined as broad groups of industries and economic sectors, including commonly understood components such as manufacturing, trade, government, and construction. They are organized in the North American Industrial Classification System (NAICS) using two-digit codes. These supersectors are divided into more than 650 industries. The following discussion explores the broad structure of the Texoma economy by examining key trends in the super-sectors and the core industries that drive the region’s economy. The NAICS industry definitions are defined at the five-digit level.

General Economic Structure (2-digit NAICS Super-sectors) Overall, the Texoma regional economy has grown somewhat slower than the US economy. Between 2001 and 2006, employment within the Texoma region grew by 0.3 percent annually while the US economy grew 1.5 percent annually.4 At the same time, productivity growth rates lagged behind the US. US annual productivity grew at a pace of 1.8 percent annually between 2001 and 2006 while productivity increased in Texoma at 1.2 percent per year. The Texoma region’s economic structure differs significantly from the overall US economic structure, and this partly explains its slower growth. Half the region’s employment is concentrated in government, trade, natural resources/mineral extraction, and the education/health sectors. Three key trends are important to follow. First, several resource extraction activities – agriculture (ranching and animal husbandry) and mining (oil and gas) – are critical sources of the region’s employment. Second, the government sector is significantly larger than in other regions due to the presence of Tribal governments. The third trend that emerges from the data is that the Texoma region has several underdeveloped sectors. Most notably, the region’s share of professional and business services employment is only half the national share. In addition to professional and business services, the Texoma region share of Leisure and Hospitality and Finance, Insurance and Real Estate are also significantly smaller than the national share. Given these larger trends, it is worth examining the Texoma region’s largest super-sectors more closely.

4 These data were provided by Regional OneSource. The data were developed using ReDyn, a national econometric model with regional components developed at the University of Georgia, to provide more detailed national and local employment estimates and projections. Benchmarked to federal data, the model provides much more geographic and industry detail than is available from federal sources. Total employment in the model is benchmarked to the employment definitions used by the US Bureau of Economic Analysis. The model also provides employment forecasts for years that are not available from BEA, the US Bureau of Labor Statistics, or state labor market information agencies.

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Figure 11 Texoma Employment by Super-sector, 2006 Professional & Business Services 7.0%

Manufacturing 9.9%

Education & Health Services 11.0%

Other Services 6.9% FIRE 6.8%

Leisure & Hospitality 6.7%

Construction 6.0%

Transportation & Utilities 3.3% Unclassified 1.1% Information 0.9% Natural Resources and Minerals 11.4%

Government 14.6%

Wholesale & Retail Trade 14.4% Source: Regional OneSource

Government Government is the Texoma region’s largest sector, representing 14.6 percent of the region’s employment. Government accounts for only 12.8 percent of overall US employment. Since 2001, the sector has grown 0.9 percent annually, a pace slower than the US annual rate of 1.5 percent. The sector’s average earnings are higher than the regional average but are still roughly 75 percent of the US average earnings. The sector’s productivity rates are growing slower than the average earnings, but this pattern is similar to the US trend. It is important to note that Texoma’s government sector is unusual. It includes the Tribal Nations, which provide services outside the region functioning much like the US federal government or a state capitol. In addition, the Tribal Nations also control resources and employment in other non-government sectors. Wholesale and Retail Trade Wholesale and retail trade is the largest super-sector nationally, and is the Texoma region’s second largest sector in terms of employment. That said, both nationally and regionally, the sector accounts for 14.4 percent of overall employment. Regional employment in this super-sector is growing at a slower pace than nationally. Between 2001 and 2006, the sector grew 0.2 percent in the Texoma region and 1.1 percent nationwide. The Texoma trade sector’s average earnings are also roughly 70 percent of those nationally in the sector. Productivity also lags behind the US rate, but productivity

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grew faster than the US average between 2001 and 2006, and it is projected to exceed the US pace between 2006 and 2011. Consequently, Texoma’s productivity rates should more closely converge with the national rate in the future helping to spur faster increases in earnings. Natural Resources and Minerals One of the unique aspects of the regional economy is the importance of natural resources and minerals to Texoma’s economic success. Whereas it is the 11th largest super-sector nationally with 2.7 percent of employment, the natural resources and minerals super-sector is the Texoma region’s 3rd largest with 11.4 percent of employment. The super-sector’s prominence reflects, in large measure, the oil-related activities in the western part of the region. This part of the region’s economy has shed jobs during the past several years, declining 1.1 percent annually between 2001 and 2006. With the recent spike in oil prices, employment is likely to increase. However, economists are mixed in their outlook about the stability of oil prices in the longer term. Thus, the industry certainly provides good jobs today, but area leaders should be concerned about balancing the current positive climate for energy prices with past down cycles in oil and gas prices. Global political instability and a stronger public interest in developing alternative energy sources hint of future sectoral shifts. While regional employment declined in the first half of the decade, US employment grew and is projected to continue growing at a faster pace. This suggests that Texoma’s oil and gas sector may not be as competitive as other regions. Average industry earnings in Texoma are also significantly lower than US average earnings. In 2006, the average earnings for natural resources and minerals were 45 percent of the US average. Overall, earnings in this super-sector tend to be relatively low compared with other sectors due to the large number of part-time jobs and the seasonality of the work. Nevertheless, workers in the region’s natural resources and minerals super-sector increased their earnings at a faster rate than the nation and are projected to continue this relatively more rapid growth. Education and Health Services At 11.0 percent of total employment, education, and health services is the fourth largest employment super-sector. This share of employment is slightly less than the US education and health services sector, which represents 11.9 percent of national employment. In addition, the education and health services super-sector is growing more slowly in Texoma than nationally. Texoma may be at a competitive disadvantage because leakage of economic activity in both education and health services is occurring to the nearby metropolitan areas. Many interviewees indicated that they go to Dallas-Fort Worth for advanced medical

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services and both Oklahoma City and DFW have nationally recognized higher education institutions. The recent announcement of construction of a new Texoma Medical Center could help to capture parts of the regional market share currently being lost to health care providers outside the region. Average earnings and productivity growth rates in the region have not kept pace with the US. Manufacturing Manufacturing is the fifth largest sector in both the US and the Texoma region, although it represents a slightly larger share of the Texoma workforce than nationally. Overall, manufacturing employment will likely continue to decline as it has nationally. That said, Texoma’s manufacturing employment appears to be declining at a faster rate than US manufacturing job losses. Not every manufacturing sector will lose jobs. Continued lay-offs in textiles, apparel, and electronics are offset by gains in other sectors, but as a whole, the industry will likely continue its overall decline in the Texoma region between 2006 and 2011. Even so, recent goods news, including the recent expansions by two major food processors and other recent announcements, has helped to offset those declines to some extent. While Texoma enjoys a diverse mix of manufacturing, the data reveal that a significant share of industry employment in Texoma is concentrated in low-skill production occupations. Jobs in these segments of the manufacturing sector are most at-risk to the twin forces of technological development and globalization. What frequently remains after these industries restructure are fewer, but more highly skilled value-added manufacturing jobs. This is reflected in an average earnings growth that is on par with the national average. Texoma’s manufacturing average earnings—albeit still trailing the US average—are relatively strong for the region as a whole. With a 4 percent annual increase, the sector also showed strong productivity gains between 2001 and 2006. However, this productivity growth trails the 6 percent annual increase for the entire US manufacturing sector. Any discussion of the Texoma region’s manufacturing sector must address the high concentration of employment within a small number of companies. While the region has numerous manufacturing facilities, roughly 30 percent of the region’s 20,000 manufacturing workers are employed in five facilities—the Michelin tire plant in Ardmore, Texas Instruments and MEMC in Sherman, and Tyson foods in Sherman and Ruiz Foods in Denison. This concentration of workers in such a few firms leaves the region’s manufacturing sector vulnerable to shifts in global corporate strategies. These plants are major assets supporting their respective global supply chains. Any of the corporate headquarters managing these facilities might, at some point, decide to move production elsewhere due to consumer market declines or shifts affecting the rubber, electronics, or packaged foods industries. Even small shifts in the global marketplace could completely Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

16


transform the region’s manufacturing landscape in a very short period as witnessed by the area’s semiconductor plants when the dot-com industry declined so rapidly during the 2001 recession. Professional and Business Services Professional and business services represent the least developed Texoma supersector relative to the US. Whereas it is the second largest super-sector in the US economy, professional and business services comprise the Texoma region’s sixth largest super-sector. Although projected future growth (2006-2011) will more closely resemble the US at 1.3 percent annually, Texoma’s past employment growth has not kept pace with the US’s annual rate of 1.9 percent. In addition, average wages and productivity have trailed US growth and are projected to continue growing slower than the US annual rate. This suggests that businesses are turning to service providers outside the region and that there are numerous potential opportunities in this economic supersector.

Major Industry Trends and Forecasts (5-Digit NAICS Industries) Texoma’s Largest Industries Looking at more detailed industry data about the region’s largest industries reveals Figure 12 Texoma Region’s Largest Industries*, 2006 NAICS 62211 72221 81311 72211 62311 52211 44511 21311 45291 44711 23531 62161 32621 23511 45211 44111 48412 54121 33621

Industry Name General Medical & Surgical Hospitals Limited-Service Eating Places Religious Organizations Full-Service Restaurants Nursing Care Facilities Commercial Banking Supermarkets & Other Grocery (except Convenience) Stores Support Activities for Mining Warehouse Clubs & Superstores Gasoline Stations with Convenience Stores Electrical Contractors Home Health Care Services Tire Mfg Plumbing, Heating, & Air-Conditioning Contractors Department Stores New Car Dealers General Freight Trucking, Long-Distance Accounting, Tax Preparation, Bookkeeping, & Payroll Services Motor Vehicle Body & Trailer Mfg

Avg Empl 2006 Earnings 2006 7,661 $37,559 6,071 $10,854 5,772 $10,705 4,331 $11,749 3,810 $17,377 3,552 $22,763 3,281 $17,560

Texoma Annual Prod. Growth 2001-2006 1.0% -0.1% 3.3% 0.1% -0.5% 3.5% 2.6%

US Annual Prod. Growth 2001-2006 1.0% 0.6% 3.1% 0.5% -0.6% 2.0% 2.4%

3,000 2,859 2,296 2,211 2,197 2,155 2,108

$32,075 $23,262 $15,704 $20,333 $13,782 $63,367 $19,665

-2.2% 2.4% 2.9% -0.1% 1.7% 3.7% -0.6%

-2.3% 2.6% 2.5% -0.1% 0.7% 3.4% -0.1%

2,085 1,930 1,857 1,852

$19,568 $41,386 $32,658 $23,402

3.1% 2.3% -0.6% 0.0%

2.5% 2.4% 1.5% -0.1%

1,811

$43,607

5.8%

5.1%

Source: Regional OneSource

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several clear trends. Figure 12 provides data about the region’s 20 largest industries.5 First, these data clearly demonstrate the importance of healthcare as a regional employer. General medical and surgical hospitals are the region’s largest industry by employing 7,661 workers, which are 1,500 more than the next largest industry. Two other healthcare-related industries—nursing care facilities and home health care services—combine to employ another 6,000 workers. Whereas hospitals represent one of the higher paying industries, nursing care and home health care facilities both have average earnings well below the regional average of $26,990. Retail, wholesale, and food services account for seven of the largest employing industries. With the exception of new car dealers, all of these industries show average earnings well below the regional average. The seasonality and part-time nature of many of these industries contributes to their relatively low average earnings (and the large number of jobs). Only two manufacturing activities appear among the region’s 20 largest industries—tire and motor vehicle body/trailer manufacturing. This employment is the product of the Michelin tire plant in Ardmore and the horse trailer manufacturers in Johnston and Marshall Counties. These two industries also offer average earnings well above the regional average earnings. Of these 20 largest industries, eight industries experienced annual productivity growth rates that were greater than the US rate. Among the industries showing the highest annual productivity gains were the aforementioned manufacturing industries, as well as religious organizations and department stores. The latter two industries however are relatively low-wage industries that employ mostly part-time workers. There were two industries that showed annual productivity declines when their US counterpart saw gains overall. These sectors include limited-service eating-places and long distance general freight trucking. Whereas both industries gained employment between 2001 and 2006, their annual employment growth rate lagged behind the US figure. Texoma’s Growing and Declining Industries Figures 13 and 14 show the industries that have gained and lost the most employment between 2001 and 2006. The industries highlighted in orange are among the region’s 20 largest. Eight of the 20 largest industries are among the region’s fastest growing. In particular, these data demonstrate the growing importance of healthcare. Five of the industries that gained the most employment were involved in healthcarerelated activities. Nursing care activities gained over 500 net new jobs between 2001 and 2006, thereby gaining more employment than any other industry. Home health care services, general medical and surgical hospitals, offices of physicians and vocational rehabilitation services also gained significant employment. The recent announcement of 5 These data were provided by Regional OneSource. Crop Production (NAICS 11100) was excluded because the data were available only at a 3-digit NAICS level. Government and Private Households were also excluded from these lists.

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Figure 13 Texoma Region’s Fastest Growing Industries*, 2001-2006 NAICS 62311 56133 81311 53112 33621 56132 53121 52211 62161 53223 11511 62441 56131 32621 62211 48412 62111 53241 62431 52412

Industry Name Nursing Care Facilities Employee Leasing Services Religious Orgs. Lessors of Nonresidential Buildings (except Miniwarehouses) Motor Vehicle Body & Trailer Mfg Tem porary Help Services Offices of Real Estate Agents and Brokers Comm ercial Banking Home Health Care Services Video Tape & Disc Rental Support Activities for Crop Production Child Day Care Services Employm ent Placem ent Agencies Tire Mfg General Medical & Surgical Hospitals General Freight Trucking, Long-Distance Offices of Physicians Construction, Transportation, Mining, & Forestry Machinery & Equipment Rental & Leasing Vocational Rehabilitation Services Direct Insurance (except Life, Health, and Medical) Carriers

Emp 2006 Emp Gain 01-06 3,810 504 1,754 458 5,772 383 1,085 331 1,811 1,625 766 3,552 2,197 885 692 1,082 600 2,155 7,661 1,857 1,784 540

305 282 269 263 226 217 215 204 179 176 172 165 165 161

492 957

148 137

Source: Regional OneSource *Excluding Crop Production and Government **Highlighted industries are one of the region's 20 largest industries in 2006

the new Texoma Medical Center will likely reinforce this growth trend. The region’s two biggest and most productive manufacturing industries—tire manufacturing and motor vehicle body and trailer manufacturing—were also the only Figure 14 Texoma Region’s Fastest Declining Industries*, 2001-2006 NAICS 62311 56133 81311 53112 33621 56132 53121 52211 62161 53223 11511 62441 56131 32621 62211 48412 62111 53241 62431 52412

Industry Name Nursing Care Facilities Employee Leasing Services Religious Orgs. Lessors of Nonresidential Buildings (except Miniwarehouses) Motor Vehicle Body & Trailer Mfg Tem porary Help Services Offices of Real Estate Agents and Brokers Comm ercial Banking Home Health Care Services Video Tape & Disc Rental Support Activities for Crop Production Child Day Care Services Employm ent Placem ent Agencies Tire Mfg General Medical & Surgical Hospitals General Freight Trucking, Long-Distance Offices of Physicians Construction, Transportation, Mining, & Forestry Machinery & Equipment Rental & Leasing Vocational Rehabilitation Services Direct Insurance (except Life, Health, and Medical) Carriers

Emp 2006 Emp Gain 01-06 3,810 504 1,754 458 5,772 383 1,085 331 1,811 1,625 766 3,552 2,197 885 692 1,082 600 2,155 7,661 1,857 1,784 540

305 282 269 263 226 217 215 204 179 176 172 165 165 161

492 957

148 137

Source: Regional OneSource *Excluding Crop Production and Government **Highlighted industries are one of the region's 20 largest industries in 2006

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two manufacturing sectors among the 20 biggest gainers. Some manufacturing employment might be found in the growth associated with the employee leasing services, temporary help services, and employment placement agencies industries. Several regional manufacturers use these employment agencies in order to screen and try out potential workers. Regardless, workers in these industries are often paid relatively lower wages and offered only limited benefits. Four of the region’s 20 largest industries also appear in the list of the region’s largest declining industries. These industries include direct life, health, medical insurance carriers, warehouse clubs and superstores, plumbing, heating, air conditioning contractors, and new car dealers. The car dealers were the only large retail sector that paid above the region’s average wage. However, the most notable trend emerging from Figure 14 is the decline in manufacturing employment that occurred between 2001 and 2006. Thirteen of the 20 industries listed in Figure 14 are from the manufacturing sector. The largest manufacturing job losses during the first half of the decade occurred in semiconductor and other electronic component manufacturing and computer and peripheral equipment manufacturing. These employment losses reflect the consequences of the deflation of the tech bubble in the first half of this decade and the subsequent structural changes occurring in these industries. All of the manufacturing industries that experienced job losses are susceptible to advances in technology and the growing influence of globalization. Many of these manufacturing industries also lost experienced job losses nationally. Projections Figures 15 and 16 show the industries that are projected to gain and lose the most employment between 2006 and 2011. It is important to note that these projections use past trends to generate an informed prediction of the future, but in some cases, the trends may not continue due to external influences or economic shifts. It is also important to note that the further into the future the prediction, the less reliable it will be. That said, these data offer a useful guide for short-term economic, workforce, and education trends that should influence regional planning. A number of the industries that will continue to gain employment are both the industries that gained significant employment during the past five years, and those industries that are among the largest. Nine of the industries projected to grow most rapidly (i.e., those listed in Figure 15) are among the region’s largest industries. The role of healthcare-related industries and employment services industries once again becomes apparent as a growing employer. In addition, several additional manufacturing sectors are set to grow. For instance, the region’s “other plastics products” industry currently employs roughly 1,500 people and is projected to add 167 jobs. By themselves, two food-processing industries—one in animal processing (Tyson Foods) Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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Figure 15 Texoma Region Industries Projected to Add the Most Jobs *, 2006-2011 NAICS 31161 56133 81311 33621 62311 31182 72221 62441 56132 32621 31141 56131 32619 54161 54121 71329 44511 62419 62161 54151

Industry Name Animal Processing Employee Leasing Services Religious Orgs. Motor Vehicle Body & Trailer Mfg Nursing Care Facilities Cookie, Cracker & Pasta Mfg Limited-Service Eating Places Child Day Care Services Temporary Help Services Tire Mfg Frozen Food Manufacturing Employment Placement Agencies Other Plastics Product Mfg Management Consulting Services Accounting, Tax Preparation, Bookkeeping, & Payroll Services Other Gambling Industries Supermarkets & Other Grocery (except Convenience) Stores Other Individual & Family Services Home Health Care Services Computer Systems Design & Related Services

Emp 2006 Emp Gain 06-11 706 1,106 1,754 697 5,772 474 1,811 472 3,810 356 733 303 6,071 286 1,082 263 1,625 231 2,155 200 174 194 600 171 1,489 167 556 164 1,852 163 523 3,281

161 158

439 2,197 531

156 155 146

Source: Regional OneSource *Excluding Crop Production and Government **Highlighted industries are one of the region's 20 largest industries in 2006

and another frozen food manufacturer (Ruiz Foods)â&#x20AC;&#x201D;are projected to add more several hundred more workers.

Figure 16 Texoma Region Industries Projected to Lose the Most Jobs *, 2006-2011 NAICS 33441 52411 33271 21111 62211 31521 23511 48211 45291 33911 33251 33636 33592 23531 33291 61131 32721 33429 31192 31522 33411

Industry Name Semiconductor & Other Electronic Component Mfg Direct Life, Health, & Medical Insurance Carriers Machine Shops Oil & Gas Extraction General Medical & Surgical Hospitals Cut & Sew Apparel Contractors Plumbing, Heating, & Air-Conditioning Contractors Rail Transportation Warehouse Clubs and Superstores Medical Equipment & Supplies Mfg Hardware Mfg Motor Vehicle Seating & Interior Trim Mfg Communication & Energy Wire & Cable Mfg Electrical Contractors Metal Valve Mfg Colleges, Universities, & Professional Schools Glass & Glass Product Mfg Other Communications Equipment Mfg Coffee & Tea Mfg Men's & Boys' Cut & Sew Apparel Mfg Computer & Peripheral Equipment Mfg

Emp 2006 Emp Gain 06-11 1,779 -569 1,799 -480 1,139 -170 1,149 -165 7,661 -164 339 -159 2,108 -145 852 -136 2,859 -134 634 -109 416 -104 485 -96 234 -91 2,211 -89 239 -66 455 -60 214 -55 224 -55 209 -54 69 -47 99 -47

Source: Regional OneSource *Excluding Crop Production and Government **Highlighted industries are one of the region's 20 largest industries in 2006

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Just as manufacturing activities figured prominently on the list of industries that lost the most employment between 2001 and 2006, those same industries are projected to continue their employment declines during the next five years resulting from productivity gains from increased investment in technology as well as global competition pressuring companies to reduce US employment. Thirteen of the 21 industries that are expected to shed jobs fall within the manufacturing sector. Likewise, resource extraction activities, such as oil and gas drilling, were projected to lose jobs before the recent run-up in global oil prices, which may under gird employment gains for a short time. Many economists expect that alternative fuel products will soon become economically viable and begin to take market share, especially if oil and gas prices sustain their current levels.

Texoma Occupational Profile The Texoma region’s occupational mix reflects the region’s most significant industries. This section provides more detailed information about these occupations and forecasts the continued importance of these occupations for employing workers in the Texoma region. Employment and Earnings by Occupation A few occupations account for a significant portion of employment in the Texoma region. In 2006, about 38 percent of the region’s jobs are concentrated in the top 25 occupations. Ranchers/farmers, farm workers/laborers, and farm/ranch managers represent three of the region’s largest occupations. Together, these occupations constitute 6.7 percent of area employment, a percentage that is much larger than most other regions, reflecting the critical role that agriculture and animal husbandry play in the region. Based on a calculation of average earnings (which include non-wage compensation such as benefits and employer contributed tax payments), the two highest paying occupations with many jobs in the area are chief executives and general/operations managers. These two occupations require bachelor’s degrees, plus significant work experience. The only other relatively high paying occupations among the Top 25 are nurses and elementary school teachers. Of these occupations, only nursing does not require a bachelor’s degree as a minimum educational requirement (although many health care providers are increasingly encouraging nurses to complete their four-year degree and, in some cases, obtain advanced professional degrees).

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Figure 17 Texoma Region Largest Employing Occupations, 2006 Occupation

2006

Annual Earnings

Education

Farmers and ranchers

8,705

$16,390

Long-term on-the-job training

Retail salespersons

5,872

$18,886

Short-term on-the-job training

Cashiers, except gaming

5,647

$14,248

Short-term on-the-job training

Chief executives

4,493

$72,946

Office clerks, general

3,415

$17,597

Bachelor’s degree plus work experience Short-term on-the-job training

Truck drivers, heavy and tractor-trailer

3,240

$26,478

Moderate-term on-the-job training

General and operations managers

3,202

$64,210

Laborers and freight, stock, and material movers, hand

3,179

$17,701

Bachelor’s degree plus work experience Short-term on-the-job training

Farmworkers and laborers, crop, nursery, and greenhouse

3,092

$14,269

Short-term on-the-job training

Maids and housekeeping cleaners

3,076

$12,064

Short-term on-the-job training

Combined food preparation and serving workers, including fast food

3,006

$13,957

Short-term on-the-job training

Bookkeeping, accounting, and auditing clerks Secretaries, except legal, medical, and executive

2,992

$22,360

Moderate-term on-the-job training

2,983

$20,176

Moderate-term on-the-job training

Farm, ranch, and other agricultural managers Registered nurses

2,964

$33,696

2,881

$45,011

Bachelor’s degree plus work experience Associate's degree

Janitors and cleaners, except maids and housekeeping cleaners

2,866

$15,933

Short-term on-the-job training

Waiters and waitresses

2,716

$13,707

Short-term on-the-job training

Nursing aides, orderlies, and attendants

2,714

$17,368

Postsecondary vocational award

Customer service representatives

2,674

$20,842

Moderate-term on-the-job training

Elementary school teachers, except special education

2,668

$34,445

Bachelor's degree

First-line supervisors/managers of retail sales workers

2,655

$26,770

Work experience in a related field

Licensed practical and licensed vocational nurses

2,437

$29,162

Postsecondary vocational award

Child care workers

2,425

$11,669

Short-term on-the-job training

Stock clerks and order fillers

2,400

$19,053

Short-term on-the-job training

Personal and home care aides

2,351

$12,667

Short-term on-the-job training

Employment Projections by Occupation To identify the number of new workers that the Texoma economy requires, it is critical to look at two factors: (1) the projected number of new jobs likely to be created during the next five years and (2) the number of jobs that will need to be replaced as a result of workers leaving their occupation due to career changes, retirements, death, or simply leaving the workforce. These projections are based on recent historical trends and are benchmarked to national occupational forecasts. Combined, these two factors provide an estimate of the number of new workers required to fill the anticipated jobs in each occupation. Both the “new” and “replacement” worker numbers are important

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because they provide an estimate of the number of new workers that need to be trained for each occupation. For Texoma, the number of new and replacement jobs that will require new workers trained during the next five years is estimated to represent about 19 percent of the total, or 46,000 jobs. About 45 percent of these 46,000 jobs are expected to be new jobs created and the remaining 55 percent are expected to be replacement jobs. Of course, not all of the workers for these jobs will need to move into the area. In some Figure 18 Texoma Region Occupations Requiring the Most New Entrants, 2006-2011 Change in Jobs, 20062011

Replacement Jobs, 20062011

Retail salespersons

635

1,003

New & Replacement Jobs, 20062011 1,638

Cashiers, except gaming

66

1,357

1,423

Farmers and ranchers

204

876

1,080

$16,390

Long-term on-the-job training

Waiters and waitresses

312

664

976

$13,707

Short-term on-the-job training

Occupation

Annual Earnings

Education

$18,886

Short-term on-the-job training

$14,248

Short-term on-the-job training

Personal and home care aides

767

174

941

$12,667

Short-term on-the-job training

Laborers and freight, stock, and material movers, hand

433

501

934

$17,701

Short-term on-the-job training

Chief executives

457

399

856

$72,946

Combined food preparation and serving workers, including fast food

240

598

838

$13,957

Bachelorâ&#x20AC;&#x2122;s degree plus work experience Short-term on-the-job training

Registered nurses

525

275

800

$45,011

Associate's degree

Customer service representatives

617

176

793

$20,842

Child care workers

459

299

758

$11,669

Moderate-term on-the-job training Short-term on-the-job training

Maids and housekeeping cleaners

454

301

755

$12,064

Short-term on-the-job training

Office clerks, general

282

352

634

$17,597

Short-term on-the-job training

General and operations managers

348

278

626

$64,210

Janitors and cleaners, except maids and housekeeping cleaners

378

247

625

$15,933

Bachelorâ&#x20AC;&#x2122;s degree plus work experience Short-term on-the-job training

Nursing aides, orderlies, and attendants Elementary school teachers, except special education

381

172

553

$17,368

298

253

551

$34,445

Truck drivers, heavy and tractor-trailer

300

247

547

$26,478

Licensed practical and licensed vocational nurses

293

254

547

$29,162

Farmworkers and laborers, crop, nursery, and greenhouse

46

473

519

$14,269

Short-term on-the-job training

Postsecondary vocational award Bachelor's degree Moderate-term on-the-job training Postsecondary vocational award

Stock clerks and order fillers

-15

527

512

$19,053

Short-term on-the-job training

First-line supervisors/managers of retail sales workers

261

228

489

$26,770

Work experience in a related field

Bookkeeping, accounting, and auditing clerks Executive secretaries and administrative assistants

152

263

415

$22,360

222

182

404

$28,787

Moderate-term on-the-job training Moderate-term on-the-job training

202

194

396

$25,813

Maintenance and repair workers, general Source: EMSI Strategic Advantage

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cases, replacement workers will be current residents transitioning from other fields or upgrading their skills to fill available jobs. Not surprisingly, many of the jobs at the top of the list of fast-growing and highturnover occupations are low wage, low skill. Only four of the Top 25 high demand occupations pay greater than 120 percent of the region’s average earnings—chief executives, general/operations managers, nurses, and elementary school teachers. Planners are particularly interested in these higher paying positions because they are important to help increase the region’s average earnings per worker and improve the overall standard of living.

Cluster Analysis The following section provides an analysis of the economic and occupational data aimed at helping to identify the most critical targets for the Texoma regional economy. Using a cluster analysis approach, researchers can look at the economy from the perspective of how different industries interact with one another. Unlike the industry approach used to analyze the economy in the previous section, cluster analysis provides a different way of looking at the region’s economy that focuses on how firms in an industry typically buy and sell from one another. Using an industry approach, researchers look at companies that do similar things. However, a cluster analysis aims to identify how companies (and industries) develop and grow based on interactions with one another and can often identify how otherwise seemingly unrelated industries might actually be linked with one another. The goal of the cluster analysis approach is to account for growth in complimentary industries that comprise the links in a “value-chain” for producing products in the Texoma Region. Understanding how cluster-related industries interact can significantly affect the outcome of regional economic, workforce, and education planning strategies. However, creating a cluster from scratch is nearly impossible without tremendous amounts of public assistance (as exemplified by the amount of incentives required to introduce automotive assemblers in South Carolina and Alabama). Frequently, the most cost-effective economic development strategies involve activities such as: •

Supporting the expansion of existing clusters that are growing

Retaining key firms that serve as the core of mature clusters

Attracting or creating businesses to support potential or emerging clusters

Ensuring that target clusters have the appropriate public infrastructure to complement private investment and innovation

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WHAT EXACTLY IS A “CLUSTER”? Clusters are groups of industries organized in a variety of ways. “Value-chain clusters” buy and sell from one another in global supply chains. Some industries in a value-chain cluster may be more likely to choose a location near other firms in their supply chain. Cluster analysis helps to identify groups of industries in which the Texoma Region appears to specialize. The goal is to help economic developers seek out firms that might be more interested in locating in the region to be near potential customers or suppliers.

To help frame Texoma leaders’ economic development vision and strategies, CSW/CREC examined the Texoma region’s economic base to identify its existing value chain clusters. With additional information about industry-to-industry cluster linkages, economic developers can attract jobs and investment aimed at expanding the size of existing industries or by filling gaps in the region’s value chain clusters.

Cluster Methodology It is important to note that cluster researchers often assume that linked or related industries are located geographically near one another. In reality, linkages among industries are often national or global. For instance, the semiconductor manufacturers in Grayson County sell to other companies around the world, and these manufacturers buy their equipment and materials or acquire their operating capital from global sources. CSW/CREC’s approach to cluster analysis first analyzes how given industry clusters are structured nationally. Then, CSW/CREC searches for the strongest clusters locally. The goal is to build on the stronger clusters and recruit or grow companies in industries where cluster gaps exist.6 Not every cluster found on the national list of clusters will be found in the Texoma region.7 At the same time, the region also has a significant amount of local employment in certain clusters. For instance, the region has a relatively large motor vehicles manufacturing cluster. In the case of the Texoma region, much (but not all) of this motor vehicles cluster focuses around horse trailer manufacturers. The Texoma region is said to “specialize” in this cluster region because the cluster is not found in many other regions or because the cluster employs so many more people locally than might be expected if the region’s economy were structured like the national economy.

6

The project team used 6-digit NAICS data developed by Economic Modeling Specialists Inc. The clusters used for this study were developed by Dr. Edward Feser at the University of Illinois. A full list of the clusters and the industries that comprise these clusters, can be found on his website at: http://www.urban.uiuc.edu/faculty/feser/Pubs/1997_VC_Clusters.xls 7

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It is also important to make a further distinction between clusters that produce for markets outside the region and those that produce for local markets. Exporting clusters are those that sell their goods outside of their home region, and therefore bring new money into the community. For instance, while some of the horse trailers manufactured in Johnston and Marshall Counties are sold locally most of them are sold outside the region. As a result, these activities bring new money into the Texoma region that result in spin-off jobs in supplier firms and area service providers.

HOW DO WE KNOW A CLUSTER IS IMPORTANT? Many analysts look at the employment in a region’s cluster relative to a “reference area” (usually the US or the state) to determine the cluster’s economic importance. To illustrate, a higher percentage of workers are employed in motor vehicles manufacturing in Texoma than in the US as a whole. This relative percentage of the region’s cluster employment as compared with the cluster’s national employment share is an index of concentration called a “location quotient” (or LQ). If 4,000 of the region’s 200,000 workers (or 2 percent) were employed in an industry cluster and if 2 percent all US workers were also employed in that cluster, then the location quotient for Texoma is said to be 1.0. The LQ is calculated by dividing the regional employment percentage by the national employment percentage (e.g., 2 percent divided by 2 percent which equals 1.0). One could interpret a Texoma cluster’s LQ of 1.0 as meaning that the region employs just enough people to produce a sufficient amount of the cluster’s products or services to meet local demand. If the LQ were greater than 1, then one might assume that the excess employment would produce extra products or services for export from the region. The LQ calculation is admittedly a simplistic tool, but it provides a useful gauge for finding unique aspects of a regional economy. Clusters will not often have an LQ of exactly 1.0, but the figure frequently approaches 1.0 for many clusters and industries. Only highly specialized regional clusters that tend to export a significant portion of their products or services have location quotients of 2.0 or higher. As will be described later, the rubber products and motor vehicle clusters, among others in Texoma, represent clusters with high relative concentrations in the region.

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Locally-serving clusters create employment, but do not necessarily introduce new money into the community. They are more likely to recycle the money already being spent for goods and services in the area. Activities such as healthcare and retail often have LQs around 1.0, and are most often considered locally-serving clusters. There are, on occasion, exceptions. For instance, large factory outlet malls may attract people from outside the region to shop in the region. Within healthcare, some advanced hospitals may provide very specialized care and therefore attract patients to the region. These instances however are more commonly exceptions rather than the rule. In most cases, local serving activities grow in proportion to the region’s population. Unlike many exporting clusters, they do not create large numbers of indirect jobs in the community. Upon examining the region’s mix of industries, CSW/CREC highlighted 17 exporting and 5 locally-serving clusters of related industries that have both a significant local presence AND a significant concentration of activity. All but one of these value-chain clusters employed at least 500 employees in the region, and almost all had location quotients above 0.5. In addition, quite a number of these industries were adding jobs. Presumably, these value-chain clusters are relatively competitive in the Texoma region.

Findings about Key Clusters In addition to distinguishing between exporting and locally serving clusters, CSW/CREC divided the 22 most significant regional clusters into four categories. Figure 19 lists the region’s most important clusters. These categories include: (1) at-risk clusters, (2) existing clusters, (3) emerging clusters, and (4) potential clusters. Categorizing these clusters involved consideration of the cluster’s relative regional employment concentration as a share of the overall economy, change in concentration, total employment and employment change, average earnings, and the number of establishments in the cluster. It is important to note that these categories and the criteria for assigning industries to them do not represent hard and fast rules. In fact, the analysis and selection of targets is as much an art as it is a science—an art that often relies on local knowledge. Events on the ground change constantly and these changes are not always reflected in the data available for analysis. These cluster categorizations provide a basis for selecting targets of most interest to regional leaders. At-risk clusters possess substantial current employment, but they have typically experienced significant employment losses in recent years. They also show a decrease in relative concentration (as defined by the change in their Location Quotient over time), and future growth is projected either weak or lag behind the national growth rate. This suggests that their competitive position is weakening in the region. Efforts to address their concerns must acknowledge the global forces and technological changes that are driving the restructuring of the firms and industries in these clusters.

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Much like at-risk clusters, existing clusters have significant numbers of firms and significant amounts of employment. However, unlike at-risk clusters they are projected to add future employment (or lose minimal amounts of employment in a “down” business cycle). Their relative concentration is often close to the national average (LQ approximately 1), and that concentration is projected to resemble the US average in the future. These clusters are very important as the economic base of the region, the source of many jobs, and are contributing to current growth. Even though the Texoma region may have no particular advantage relative to other places nationwide, these sectors represent an important workforce development target and with some help from economic developers could possibly offer a future competitive advantage. Emerging clusters are smaller existing clusters in terms of employment and the number of establishments. Emerging clusters tend to have a stronger relative concentration of employment, and they tend to have projected regional growth rates that are higher than the US average. While they offer potential, these clusters tend to have so few companies that most of the decisions about future growth are made by a few corporate officers. For emerging clusters dominated by branch plants, those decisions are made outside the region based on that company’s position in a global supply chain. For example, the rubber cluster is growing quickly and has a large number of workers, but it is defined as an emerging cluster because it has so few establishments. Michelin in Ardmore represents almost all of the region’s employment so one cannot assume that the region could rely on that cluster for continued growth. Potential clusters are similar to emerging clusters in that they have generally smaller employment numbers and small numbers of firms. They differ from emerging clusters though in that they may have weaker relative concentrations, but they are growing more quickly in relative terms. Within the Texoma region, three potential clusters appear—aerospace, information services and hotels and transportation services. Of the three, aerospace is the smallest—and the only cluster below the 500-worker threshold. Yet, there are a number of aviation-related activities in the region that do not yet appear in the cluster and that may be possible targets.

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Figure 19 Texoma Value Chain Clusters

Potential Emerging

Existing

At-Risk

Type

Exporting Clusters Textiles & Apparel Machine Tools Concrete, Brick Bldg Products Nondurable Industrial machinery Financial Services & Insurance Construction Machinery & Distribution Eqpt Motor Vehicles Petroleum & Gas Ranching & Equine Packaged Food Products Computer & Electronic Equipment Warehousing & Distribution Plastic Products Metalworking & Fabricated Metal Products Feed Products Rubber Products

Aviation

Locally-serving Clusters

Basic Health Services Higher Education & Hospitals Business Services

Information Services Hotels & Transportation Services

Note: Highlighted clusters are those viewed as “targets” for economic and/or workforce development.

In sum, existing clusters offer the greatest potential for attracting more cluster activity (and expanding the number of jobs available) based on the region’s current economic structure. Potential clusters offer the greatest opportunity for diversifying the region’s economic base from its traditional sectors. It offers job opportunities, but the relative number may be few until the cluster establishes a critical mass of activity in the region. Emerging and at-risk clusters bear watching. Emerging clusters have so few companies that developers must focus on tracking specific corporate issues within the context of relevant cluster concerns while at-risk clusters represent those that are mature and may be on a long-term path of employment decline. Certainly, clusters may move among these categories. For instance, the researchers initially categorized food packaging as an at-risk cluster. However, the recent announcements by Tyson Foods and Ruiz Foods suggested that perhaps the cluster has turned a corner and will now sustain a more growth-oriented path. Thus, the cluster was reassigned to “existing.” It is also important to remember that projections are being used to make some of these distinctions. As the food processing industry illustrates, much can change in a short amount of time, and one of the goals of the region’s economic development efforts is to help ensure that positive changes occur.

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Locally-serving clusters Existing locally-serving clusters The data show that the Texoma has three large existing or stable locally serving clusters. These three clusters—business services, higher education and hospitals and basic health services, are all services related activities. The business services cluster is the region’s largest cluster and employs almost 15,000 workers. It is slightly less concentrated than the national average, but it grew by almost 11 percent annually between 2002 and 2005. It is projected to add roughly 1,400 jobs between 2005 and 2010. This employment growth will occur at a pace somewhat faster than the US growth rate. Earnings for those employed in this cluster are slightly lower than the region’s overall average earnings. The higher education, hospitals, and basic health services clusters are the two other large locally serving clusters. Much like business services, these clusters are slightly less concentrated than the national average but not significantly. These clusters, however, have been significant employment generators. Combined these clusters generated over 3,000 new jobs in the region between 2002 and 2005. This growth is projected to continue in the future. Potential locally-serving clusters Two other locally serving clusters—hotels and transportation services and information services, are considered potential clusters due to their relatively weak Figure 20 Texoma Locally-Serving Clusters $100,000 Red=At-risk Cluster Green=Stable or Growth Cluster Blue=Emerging Cluster Yellow=Potential Cluster

Average Earnings

$80,000

Information services 797

$60,000

Basic health services 10,055

$40,000

Business services 14,642

$20,000

Higher ed. & hospitals 14,948

Hotels & trans. services 4,091 $0 0.00

Texoma Region Average Earnings= $36,430 Source: EMSI

1.00

2.00

3.00

4.00

5.00

6.00

Concentration (LQ 2005)

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concentration in the region. The hotels and transportation services cluster is the larger of the two, employing roughly 4,100 workers in 2005. If the regional economy resembled the national economy, then one would expect this cluster to be twice as large as it is presently. It is, however, projected to grow slightly faster than the US annual rate between 2005 and 2010. It also has some of the lowest average earnings in the region, but this is partly due to the significant amount of part-time employment included in the total. It is also important to note that these data do not include the hotels associated with the region’s Indian casinos, so the “official” employment data are most likely somewhat smaller than what one might actually find in the region. The other locally serving potential cluster is the information services cluster. It has relatively high average earnings, but is very weakly concentrated in the region. This indicates that many businesses meet their needs for information services by going outside of the region or by hiring the workers in-house. Employment growth in the cluster remained somewhat stagnant between 2002 and 2005, but is expected to grow somewhat in the period between 2005 and 2010.

Exporting clusters At-risk exporting clusters The Texoma region possesses 17 exporting clusters of note. Four of the clusters— textiles and apparel, machine tools, concrete and brick building products and nondurable industrial machinery are considered at-risk clusters. Much like the rest of the US, the Texoma region’s textiles, and apparel cluster is in significant decline. The cluster lost almost half of its employment between 2002 and 2005. It is further expected to decline at a faster annual rate than the US average between 2005 and 2010. Similarly, the machine tools cluster in the Texoma region declined at an annual rate faster than the national rate. While the cluster is projected to continue declining nationwide, the projections for the Texoma region show that the cluster will maintain its current level of employment between 2005 and 2010. Unlike textiles and machine tools, the nondurable industry machinery cluster actually gained employment between 2002 and 2005. Nevertheless, in spite of strong average earnings and recent increases, the Texoma region’s nondurable industry machinery cluster is projected to shed jobs in the near future. The data projections show that between 2005 and 2010 this cluster will decline at an annual rate of 10 percent faster than the US industry. The concrete and brick building products cluster is another at-risk cluster. It is a cluster that is growing nationally, but has been declining in the region and is projected to continue declining. It should be noted that there are some key subregional differences in this cluster. For instance, the US 75 sub-region grew quickly between 2002 and 2005, perhaps reflecting the growing demand from construction in

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the Dallas Metroplex. It is also the only sub-region that is projected to add jobs in the concrete and brick-building cluster in the near future. Existing exporting clusters The region has ten exporting clusters that are considered existing or stable clusters. Five of these clusters focus around manufacturing-related activities. With approximately 2,600 workers, the motor vehicles cluster is the Texoma region’s largest manufacturing cluster and the cluster showing the greatest concentration in the region. The horse trailer manufacturers in Johnston and Marshall Counties contribute a large portion of this employment. Between 2002 and 2005, the cluster had a compound annual growth rate of 8.5 percent, much faster than the national growth rate. In the near future, the cluster is projected to have an annual growth rate comparable to the US rate. Another one of the region’s large manufacturing clusters is the computer and electronic equipment cluster. Texas Instruments and its related companies in Sherman contribute the bulk of the roughly 1,900 workers in this cluster. Many of these activities require high-skilled workers and therefore provide high paying jobs. As a result, the cluster has one of the region’s highest average earnings. It should also be noted that the cluster’s employment is declining and projected to decline in the future due to continued productivity improvements and global competition. That said, this decline is consistent with the US pace. Figure 21 Texoma Exporting Clusters

Average Earnings

*Petroleum & Gas (Existing) not shown due to extremely high average earnings ($176,877).

Nondurable industry machinery 1,226

$80,000

$60,000

Red=At-risk Cluster Green=Stable or Growth Cluster Blue=Emerging Cluster Yellow=Potential Cluster

Computer & electronic equipment, 1,927

$100,000

Financial services & insurance 2,716

Machine tools 1,087

Rubber products 2,085

Concrete, brick building products 598

Packaged food products 976 Mining 606

Motor vehicles 2,604

Plastics products 1,937

$40,000 Aerospace 180 $20,000

$0 0.00

Warehousing & Distribution Metalworking & 1,256 Textiles & fabricated apparel metal products 530 706 1.00

2.00

Construction machinery & distribution eqpt 663

Texoma Region Average Earnings= $36,430 Source: EMSI

Feed products 852

3.00

4.00

5.00

6.00

Concentration (LQ 2005)

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The plastics products cluster has roughly the same number of employees as the computer and electronics cluster, although that employment is somewhat more evenly spread throughout the region. The cluster’s average earnings also more closely resemble the regional average earnings. The cluster experienced some decline between 2002 and 2005 as it lost almost 500 employees. Nonetheless, the plastics products cluster is expected to rebound as its annual growth rate is projected to exceed the US annual growth rate between 2005 and 2010. The packaged food products cluster is another cluster that experienced employment declines between 2002 and 2005, losing 38 percent of its jobs due to two major plant closures. In spite of this decline, investments from Tyson Foods and Ruiz Foods in Grayson County will create significant employment, so this cluster should grow significantly in the immediate future. However, the earnings in this industry are below average for the region. The smallest of these five manufacturing-related clusters is the construction machinery and distribution equipment cluster. In 2005, the cluster employed 663 workers. Region-wide, the recent growth has been relatively steady although the South Central Oklahoma sub-region is the only area to gain new employment between 2002 and 2005. The data do show that the Texoma region will likely lose employment overall in the machinery and distribution equipment cluster between 2005 and 2010, but at a pace slower than the US annual average rate of decline. The region also has two existing and stable clusters that center around servicesrelated activities. The financial services and insurance cluster is the region’s second largest exporting cluster with over 2,700 workers. The development of this cluster is fueled in large part by the growth of call centers and other back-office activities. The cluster is projected to add 1,000 new jobs between 2005 and 2010. The compound annual growth rate during that period is 7.3 percent, a rate much higher than the 3.7 US rate. Warehousing and distribution is the other services-related cluster, but these companies shed almost 700 jobs between 2002 and 2005. In the next five years, the warehousing and distribution cluster is expected to gain back more than 250 of those jobs, depending in large part on continued growth along the I-35 and US 75 corridors. Petroleum and gas represents the region’s largest exporting cluster with over 2,800 workers. This is no surprise given that the area along I-35 between Pauls Valley and Ardmore is one of Oklahoma’s primary oil producing regions and the home to several large refineries. Consequently, the cluster is twice as concentrated in the Texoma region than the nation as a whole. The cluster added 570 workers between 2002 and 2005, but it is projected to lose employment in the future due to its cyclical nature and expected competition from alternative energy sources.

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Mining is the region’s other natural resources cluster, although it is only about 20 percent the size of the petroleum and gas cluster. It is also a less profitable cluster as the average earnings are significantly smaller and more closely resemble the regional average. Employment in the regional cluster however is declining, albeit not as rapidly as the national cluster. Emerging exporting clusters The region has three exporting clusters that can be considered emerging— metalworking and fabricated metal products, rubber products and feed products. The metalworking and fabricated metal products cluster employed 706 people in 2005, about 200 fewer than in 2002. This employment decline occurred at a more rapid rate than the national declines in the metalworking and fabricated products clusters. That said, projections show that the cluster will rebound slightly to make modest employment gains between 2005 and 2010 even though national employment is projected to decline. The rubber products cluster is another emerging cluster that is highly concentrated in the region. The cluster employed 2,085 people in the 2005. The cluster is considered emerging rather than existing because about 90 percent of the employment is concentrated within one firm—the Michelin tire plant in Ardmore. Consequently, the region’s employment in the rubber products cluster will largely depend upon the future of that particular plant. The feed products cluster is the third emerging products. It is a cluster that grew much more rapidly than the national average between 2002 and 2005. Employment is expected to continue growing, but employment is concentrated in only a few establishments. Potential exporting cluster The region’s only potential exporting cluster is in aerospace. The cluster employs the smallest number of workers of the clusters highlighted in this analysis. It is however, growing relatively quickly and its growth rates exceed the US growth rates. There are also several initiatives in the region, particularly in Grayson County and around Ada, designed to support the cluster’s continued development.

Sub-regional clusters US 75 Corridor Sub-region Given the presence of the region’s largest employment center—Grayson County, the US 75 sub-region has several large locally serving clusters. Specifically, the business services and basic health clusters both employ more than 6,000 people, and both are projected to grow slightly faster than the US average between 2005 and 2010. The subregion’s basic health services cluster is also more concentrated than might be expected, Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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Figure 22 Texoma--US 75 Sub-regional Clusters $100,000

Computer & electronic equipment 1,843

$80,000

Average Earnings

Red=At-risk Cluster Green=Existing Cluster Blue=Emerging Cluster Yellow=Potential Cluster

Warehousing & Distribution 385

$60,000

Financial services & insurance 1,487

Machine tools 531

Motor vehicles 559

Packaged food products 656

Plastics products 1,252

$40,000

Metalworking & fabricated metal products 524

$20,000

Hotels & transportation services 2,008

Business services 7,168

Texoma Region Average Earnings= $36,430 Source: EMSI

Basic health services 6,046

$0 0.0

1.0

2.0

3.0

4.0

5.0

6.0

Concentration (LQ 2005)

and as a result, we can assume that the hospitals in Grayson County and Bryan County serve patients from counties outside the sub-region. With over 2,000 people, hotels and transportation services represents the subregionâ&#x20AC;&#x2122;s major locally serving cluster. This cluster appears underdeveloped given its relatively low concentration, and is therefore considered a potential cluster rather than an existing cluster. That said, these data do not include the employment generated by the Indian casinos and resorts found in the sub-region. Many of the regionâ&#x20AC;&#x2122;s exporting clusters are in manufacturing-related activities. For instance, the computer and electronics equipment cluster employs over 1,800 people. It is both highly concentrated in the region, but also has high average earnings. This clearly represents the influence of Texas Instruments and its related firms. Plastics products is another concentrated cluster employing more than a thousand people, but whose average earnings more closely approximate the regional average. Packaged food products is a cluster where significant growth is anticipated as Tyson Foods and Ruiz Foods ramp up their new production facilities in Grayson County. Although growing in the Texoma region, the Motor Vehicles cluster lost employment in the US 75 corridor since 2002. It is identified as an at-risk cluster in that sub-region because the clusterâ&#x20AC;&#x2122;s growth in the sub-region is projected to significantly trail the Texoma region as well as the US average between 2005 and 2010.

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Two exporting clusters are involved primarily in services activities. Financial services and insurance has a slightly higher than average concentration. The cluster’s annual growth rate between 2005 and 2010 is projected to be 6 percent faster than the US annual growth rate. This growth is most likely associated with the sub-region’s growing number of back-office activities, including customer service centers. Warehousing and distribution is the other services related cluster. Certainly, Big Lots in Durant represents a relative large establishment, but overall, the clusters have a relatively smaller concentration of activity than that found in the I-35 sub-region. As the US 75 corridor continues to develop; however, there is potential for future growth.

I-35 Corridor Sub-region The clusters within the I-35 sub-region are generally smaller than those in the US 75 corridor, but larger than those in the South Central Oklahoma sub-region. Nevertheless, the sub-region’s largest locally serving clusters are business services with nearly 5,000 workers and basic health services with almost 3,000 workers. Much of this activity is concentrated in Carter County, where Ardmore represents the sub-region’s largest employment center. Similar to the other sub-regions, hotels, and transportation services employs many people, not all of which are accounted for in the data because Indian casino employees are counted as part of the Tribal Nation – a government enterprise. The I-35 sub-region’s exporting clusters include those involved in manufacturing, natural resources, and some services-related clusters.

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Figure 23 Texoma--I-35 Sub-regional Clusters $100,000

Red=At-risk Cluster Green=Existing Cluster Blue=Emerging Cluster Yellow=Potential Cluster

Average Earnings

$80,000

$60,000

Machine tools 372

*Petroleum and Gas (Existing) had an LQ=3.57, Empl=1,452 and Avg. Earnings=$178,930. **Non-residential Bldg products (Emerging) had an LQ=5.36, Empl=357 and Avg. Earnings=$246,279.

Nondurable industry machinery 885 Warehousing & Distribution 607

Rubber products 2,020

Plastics products 532

Motor vehicles 1,992

Mining, 275

$40,000 Basic health services 2,708

Feed products 659

$20,000 Hotels & transportation services 1,355

Texoma Region Average Earnings= $36,430 Source: EMSI

Business services 4,738

$0 0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Concentration (LQ 2005)

The region’s two largest manufacturing clusters—each employing approximately 2,000 people—are in rubber products and motor vehicles. The rubber products cluster— with the Michelin tire plant in Ardmore representing the bulk of the employment—is considered an emerging rather than an existing cluster. Whereas most motor vehicle clusters nationwide center on automotive and truck manufacturing, the motor vehicles cluster in the I-35 sub-region is largely related to the area’s horse trailer manufacturers in Johnston and Marshall Counties. In fact, Sundowner Trailers is one of largest firms in Oklahoma’s automotive industry. The sub-region also has several other manufacturingrelated clusters such as nondurable industry machinery, machine tools, and plastics products. Nondurable industry machinery and machine tools are considered at-risk clusters due to the significant decline both experienced since 2002, and continued job losses projected for nondurable machinery. The plastics products cluster was defined as a potential cluster because it has only a few establishments located in the sub-region. The I-35 sub-region also has notable clusters in the natural resources. The largest is petroleum and gas which is very highly concentrated in the region (LQ=3.6) and offers much higher than average earnings. The cluster employs almost 1,500 in the subregion. Mining is another natural resources-related activity in the sub-region, albeit significantly smaller than the petroleum and gas cluster. Mining is considered at-risk because its employment has declined since 2003 and its projected growth is expected to fall even further behind the US annual average growth rate for the period between 2005 Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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and 2010. The I-35 area is also the only sub-region projected to lose employment in its mining cluster. Finally, the most significant services-related cluster in the I-35 sub-region is warehousing and distribution. Although this cluster’s employment declined significantly between 2002 and 2005, warehousing and distribution employment is projected to increase by approximately 25 percent between 2005 and 2010. This is due in large part to increased activity serving Oklahoma City and the Metroplex along the I-35 corridor.

South Central Oklahoma Sub-region With the South Central Oklahoma sub-region’s smaller population base, it is no surprise that many of its clusters are smaller than those in the other sub-regions. Much like the other sub-regions, the largest clusters are the locally serving clusters of business services, higher education and hospitals, and basic health care services. These clusters however have a relatively weak concentration, and therefore one can assume that many firms and people look outside the region to meet their needs for business, education, and health services. While these aforementioned clusters are considered existing or stable clusters, hotels and transportation services is considered a potential cluster because of its very small level of relative concentration. The sub-region’s exporting clusters are less focused around manufacturing than in either the US 75 or I-35 sub-regions, but these clusters still play an important role in the economy. Construction machinery and distribution equipment not only has a high concentration, but has grown in the past and is projected to grow in the future. The nondurable industry machinery cluster grew rapidly between 2002 and 2005, but the cluster’s growth is projected to slow over the second half of the decade. The subregion’s only at-risk cluster is textiles and apparel, which generates not only lower than average earnings, but is also declining most everywhere nationwide. That said, it now only employs approximately 200 workers, so it is not a large part of the region’s economic base. Much like the I-35 corridor sub-region, the South Central Oklahoma sub-region relies on its petroleum and gas cluster for employment. The cluster employs approximately 1,100 people—slightly less than the I-35 sub-region cluster—but is slightly more concentrated and has somewhat higher average earnings. The sub-region’s mining cluster employs roughly the same number of people as the I-35 sub-region, but it differs because the mining cluster in South Central Oklahoma is projected to grow at the same pace as the US average between 2005 and 2010. Another relatively strong exporting cluster in the sub-region is the financial services and insurance cluster. The cluster has a relatively strong concentration, has grown in

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Figure 24 Texoma--South Central Oklahoma Sub-regional Clusters $100,000 Red=At-risk Cluster Green=Existing Cluster Blue=Emerging Cluster Yellow=Potential Cluster

Average Earnings

$80,000

$60,000

*Petroleum and Gas (Existing) had an LQ=3.99, Empl=1,096 and Avg. Earnings=$185,309. **Concrete & Brick Bldg products (At-Risk) had an LQ=6.99, Empl=395 and Avg. Earnings=49,934.

Basic health services 1,300

Nondurable industry machinery 274 Fin. Services & insurance 884

Information services 294

Construction machinery & distribution eqpt 344 Mining 278

$40,000 Warehousing & Distribution 264 Textiles & apparel 209

$20,000 Higher education & hospitals 2,097

Hotels & trans. services 728

Texoma Region Average Earnings= $36,430 Source: EMSI

Business services 2,736

$0 0.0

1.0

2.0

3.0

4.0

5.0

6.0

Concentration (LQ 2005)

the past, and is projected to grow faster than the US average in the immediate future. Much of this growth is due to the expansion of Pre-paid Legal Services in Ada.

State and Regional Planning Efforts to Date This study does not represent the first analysis of the region’s economy. Several previous studies identified industries that certain parts of the Texoma region should target. Some studies cover a few of the 13 Texoma region’s counties. For example, the Texoma Council of Governments (Cooke, Grayson, and Fannin) completed an analysis of that three-county economy. On the Oklahoma side of the Red River, most of the studies are statewide with some regional breakdowns by industry. These studies offer a few key points that are particularly relevant to the research completed thus far of the 13county Texoma region.

Texas Statewide Targets In 2004, the Texas Workforce Commission, working in conjunction with Harvard economist Michael Porter and Texas economist Ray Perryman identified six industry clusters that were deemed as critical to the state’s future. Those include: •

Advanced technologies and manufacturing

Aerospace and defense

Biotechnology and life sciences

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Information and computer technology

Petroleum refining and chemical products

Energy

Of these, advanced technologies and manufacturing, aerospace, information and computer technology, and petroleum refining and chemical products are key sectors for the Texoma region.

Texoma (Texas) Economic Development Strategies In 2001, the Texoma Council of Governments commissioned the Center for Economic Development Research and Service at the University of Texas-Arlington to prepare a Strategic Economic Adjustment Plan. This analysis identified industrial opportunities within the manufacturing, retail and services sectors for the three Texas counties included in the Texoma Regional Consortium. That plan expressed concern about past efforts aimed at pursuing firms that perform routine operations and suggested that regional economic developers target their operations on activities that involve R&D and management, as well as seek to support entrepreneurial efforts in tourism, vacationing and assisted living for seniors. The study also noted that the region did not have the workforce capable of supporting a wide array of high-value added activities. An earlier version of the study, published in 1999, found that the three-county Texas region was is in close to parity with national average of high school completion but much lower in college completion rates than the national average.8 The study also noted that population growth pressures from the Dallas-Fort Worth Metroplex had created a shortage of affordable housing and increased demanded for public services and infrastructure. The study suggested that the region should broaden its economic base, invest in transportation and infrastructure, expand the availability of affordable housing, and develop the Grayson County Airport as a business attraction asset. An update of the plan in 2002 identifies 25 priority projects in four major areas. Half of these projects are related to transportation and infrastructure expansion. Updated again in 2004, the plan acknowledges the continuous expansion of the Dallas-Fort Worth Metroplex and anticipated regional shifts from traditional manufacturing sectors to an economy more dominated by services and retail. As such, the plan prioritizes economic development strategies in four major areas: 9 •

Construct and plan for new housing development and communities

8

The Texoma Council of Governments, A Strategic Economic Adjustment Plan for Cooke, Fannin and Grayson counties, 1999. 9 Texoma Economic Development District, Comprehensive Economic Development Strategy 2004-2005, August 4, 2004. http://www.texoma.cog.tx.us/ED/2004%20CEDS%20UPDATE.pdf Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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Promote itself as a profitable location for manufacturing facilities and to provide one-stop online job resources for Texas employers and employees

Enhance regional tourism opportunities and promote regional cooperation for tourism planning and expansion

Support the enhancement and improvement of transportation infrastructure and advocate for the extension of the Dallas North Toll way and the DART system into the Texoma region

Oklahoma’s Statewide Economic and Workforce Strategy While Texan leaders actively collaborated with local stakeholders to plan for regional economic development strategies, Oklahoma’s workforce and economic development leaders completed a statewide strategy aimed at integrating workforce, economic and educational development in an effort to create a comprehensive advantage in a global economy for the state. This comprehensive development strategic plan has five basic goals: •

Monitor and report regularly on trends and issues that affect workforce and economic development

Increase the public awareness and support of workforce and economic development issues and initiatives

Ensure the state has a workforce that is competitive and meets the needs of target industry clusters and employer groups

Establish a single collaborative network for the state’s workforce and economic development efforts among state, local and partner organizations

Benchmark, measure, reward and report the progress and impact of the state’s workforce and economic development system

To achieve those goals, the Governor’s Council for Workforce and Economic Development in 2005 recommended some short-term and long-term plans in order to move the state towards a more strategic and competitive position in the global economy. The recommendations include the creation of a one-stop Internet-based Workforce and Economic Development Opportunity System, the identification and analysis of the state’s target industry clusters, the establishment of a state system of career pathways for labor force planning and development, the development of a comprehensive outreach program to the public, and the creation of a high-level policy governance leadership program for broader strategic decision-making. Other important studies spinning off from this comprehensive workforce development effort include the 2005 State Workforce Report and a series of analyses in regional employment, industry cluster, and local area labor force. The Governor’s Council for Workforce and Economic Development took the lead to collaborate with key state agencies, university, and community economic development organizations to conduct those studies in order to provide policy leaders with detailed information on the

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Figure 25 Oklahoma Target Industries, 2005 Industries Identified by the Oklahoma Council for Workforce and Economic Development Administrative & Support Services

Government Services

Aerospace

Oklahoma High Tech Industry

Agriculture & Food Processing

Hospitality, Recreation & Tourism

Automotive Building Materials & Prefabricated Construction Business Services & Information Technology Finance and Insurance

Local Health Care Logistics Manufacturing Oil and Gas

Forestry and Lumber

stateâ&#x20AC;&#x2122;s workforce. The industry studies focused on the 15 important statewide clusters listed in Figure 25. The Oklahoma Department of Commerce also collaborated with the University of Oklahomaâ&#x20AC;&#x2122;s Public Opinion Learning Laboratory to collect detailed labor force data for a number of local labor markets, including Ada, Durant, and Ardmore. The survey results show that a significant number of residents in the Texoma area are either underemployed or are job shifters readily available to change jobs. The Southern Oklahoma Workforce Board also conducted several focus groups with local business leaders during the summer of 2005 to identify strategies for improving existing labor force conditions in the region. Those focus groups revealed that the most critical problem confronted by local employers is a shortage of labor for both entry level/unskilled positions and skilled jobs. In addition, the turnover rate is relatively high in all entry level/unskilled positions, but not so apparent for skilled jobs. Overall, the study found that employers have to be creative in finding ways to retain their workers. Because businesses in nearby regions often provide higher wages, Southern Oklahoma businesses are losing many of their most qualified workers to other regions. Furthermore, business leaders expressed a need for on-the-job and customized supervisory training for workers, particularly in the health care industry, in order to meet the increased demand. The Southern Workforce Board also created its Quality Workforce Initiative to improve communication between employers and training providers in an effort build a more effective workforce system that would deliver higher wage job opportunities for higher skilled workers in Southern Oklahoma.10 Recently, the Southern Workforce Board has sponsored workforce summits for the manufacturing and health care industries. 10

Southern Workforce Board One Stop Oversight Committee, Quality Workforce Initiative: Operations and Administration Policy, November 30, 2005. Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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Summary of Planning Efforts to Date Communities on both sides of the Red River have carried out many planning efforts to search for their own economic opportunities and develop strategies for providing a competitive and high-quality workforce to support and sustain future economic development. However, a more regional approach involving community, business, economic, and workforce development leaders on both sides of the river was not placed into action until late 2005. Several key local workforce and economic development organizations - including Workforce Texoma, the Southern Oklahoma Workforce Board, Denison Development Alliance, Durant Industrial Authority, Bonham Economic Development Corporation, and Sherman Economic Development Corporation – established a collaborative partnership in 2006 to bring forward a joint economic and workforce development planning process. Of the clusters identified by the two states, several are among those key to the Texoma region’s future, including aerospace, energy, logistics, manufacturing, business services, and value-added agriculture.

Cluster Inspired Targets Cross-referencing the two state’s targets with Texoma’s key clusters, several emerge as key targets, which would most likely receive state support from both Oklahoma and Texas. Those clusters include manufacturing (especially motor vehicle and plastics), petroleum and gas, and computer and electronics. Even so, all of the Texoma targets are important since they reflect the unique elements of the regional economy. Some of the Texoma clusters are more important to the State of Texas while others are more important to the State of Oklahoma. In the following section, each Texoma targeted cluster is described in more detail. The clusters described include: •

Finance and insurance

Motor vehicles

Aviation

Plastics products

Packaged food products

Warehousing and distribution

Computer and electronic equipment

Basic health services

Hotels and passenger transportation services

Ranching and equine

Petroleum and gas

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Finance and Insurance In 2005, the Finance and Insurance cluster employed 2,716 people in the Texoma region, and is projected to grow by 72 percent in the next decade. More than 70 percent of this cluster’s employment is located in Grayson and Pontotoc counties. Although commercial banking is part of this cluster, back office operations (e.g., call centers) account for the bulk of the employment. Prominent firms include Prepaid Legal Services in Ada, Trailblazer Health Services, and CIGNA Health Care in Grayson County, CustomerLinx in Bryan County and 1-800-Flowers in Carter County. The Texoma region has benefited from several emerging trends in the call center industry. While this sector was tremendously impacted by global outsourcing in the late 1990s and early 2000s, many firms are bringing their call center activities back from India and similar locations. The current trend within the industry is ‘nearshoring.’ Many firms find that the Indian call centers are less productive than initially envisioned. As a result, many companies are moving their call center activities to places like the Philippines and Jamaica. This trend has also created opportunities for rural and exurban locations within the United States, especially those near major airports. The cluster is projected to grow, and the Texoma region should be well placed to take advantage of these trends, as it already hosts a number of call centers. While some of these call centers are dedicated facilities like 1-800-Flowers in Ardmore, most work as sub-contractors or vendors that provide call center services for other companies. For instance, one regional call center sells subscriptions for The New York

Times. These firms are attracted to the region by the relatively low wages, a workforce with call center experience and the region’s proximity to a major airport. The region also offers several 4-year liberal arts colleges that provide a source of potential workers. The cluster offers job opportunities in several high paying occupations as well as more traditional lower paying call center jobs. The top 20 occupations in this cluster are expected to add 473 jobs during the next five years in a variety of fields. The mix of skill and training requirements in the Finance and Insurance occupations offer a clear career pathway for cluster workers. The career-related capabilities needed for many jobs in this cluster include higher order skills such as systems evaluations, economic and accounting as well as critical thinking. The post-secondary schools in the region have the potential to meet the future demand for labor in the cluster. Currently the business and financial management programs in the schools are producing enough graduates to meet the industry need. However, the amount of people graduating must be sustained and those who do graduate in fields related to this industry must be retained in the region to meet future demand.

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Finance and Insurance Cluster Issues The firms in the region’s call center industry face numerous workforce and economic development challenges. Most notably, the industry has high employee turnover where a 150-percent turnover rate is the industry norm. High turnover results not only because the work is demanding, but also because many entry-level positions pay relatively low wages. This is particularly true for outbound centers (telemarketing as opposed to technical support). Like many regional employers looking for relatively cheap, low skilled workers, employers for call centers experience difficulty in finding workers that possess not only the needed math, communications and IT skills, but also the soft skills necessary for success in the workplace. In many cases, women constitute a majority of the workforce and as result, childcare issues make finding workers more difficult, particularly for shift work. Moreover, the region’s attractiveness to firms has created some wage inflation among entry-level positions, thereby diminishing some of the cost advantages for locating within the region. The increased number of call centers has also led to employee poaching among firms. This, in turn, has exacerbated the turnover problem. In addition to many low wage jobs, call centers also create a number of higher paying, higher skill jobs. For instance, call center operations employ managers and IT workers. However, these workers frequently opt to commute from the Metroplex rather than live in the region. The industry also faces a number of economic development challenges, but none more pressing than the region’s inadequate IT infrastructure. While some of these issues can be overcome through individual firm initiatives, to a number of business people there does not appear to be a coordinated master plan for increasing the region’s broadband capacity or for filling many of the specific telecommunications infrastructure gaps. In addition, the region lacks adequate childcare, public transportation, and housing required to support the cluster’s mostly low-income, low-skill and predominantly female workforce.

Motor Vehicles The region’s motor vehicles cluster does not yet include any large-scale automotive assembly plants, but it does have a number of suppliers and a unique group of horse trailer producers. The cluster employs 2,604 workers, but region wide, the industry is projected to decline by four percent in the next decade. However, this projection was made before the recent announcement of an MG production facility in the Ardmore area. Other Chinese suppliers are expected to co-locate near the MG facility in south central Oklahoma or northern Texas.

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Much of the current employment is associated with horse trailer production in Johnston and Marshall Counties. Sundowner Trailers is the largest trailer manufacturer in the area and one of Oklahoma’s largest motor vehicle-related firms. The region’s other large horse trailer manufacturers include CM Trailers and S&H trailers. This cluster provides the region with a particularly unique economic asset. They most likely also benefit from the significant equine industry located in the nearby counties of North Texas. Current and anticipated future employment opportunities in the motor vehicles industry cluster generally require long-term on-the-job training or experience in a related field of work. However, many of these traditional occupations are projected to require fewer workers while higher skilled occupations expand, including a greater need for industrial engineers, mechanics, welders, and the various types of managers. Advances in manufacturing technology are expected to be integral to the most indemand jobs. For instance, the fastest growing occupations will require mechanical, mathematics, production and processing, as well as computing and electronics knowledge. The cluster also traditionally has had many low skilled occupations requiring a high school education with core reading, math, and active listening skills. The higher skilled, higher paying production labor (including welders and mechanics as well as managers), however, typically requires some post-secondary education.

Motor Vehicle Cluster Issues The firms in this cluster face many of the same workforce challenges as other manufacturers. Many companies report that finding qualified welders and maintenance workers is particularly difficult despite the current efforts of the area’s career and technical colleges. Emerging from the region’s ranching tradition and horse culture, the motor vehicle cluster will likely evolve substantially in the coming years. Certainly, the MG announcement is indicative of this transformation. When operational, the Chinesebased Nanjing Automobile Group’s MG automobile assembly plant at the Ardmore Airpark is expected to employ approximately 325 workers and new suppliers will likely employ hundreds more workers in the region. It is worth noting that Ardmore’s proximity and easy access to Oklahoma City, the ability of the airport to handle large cargo planes, and the research capabilities of the University of Oklahoma in Norman were all key factors cited in the region’s success in attracting the facility.

Aviation Aviation is the region’s smallest targeted cluster, employing just 180 people in 2005. The cluster is projected to grow by 76 percent in the next decade. The region’s aviation cluster currently involves aircraft and aircraft parts manufacturing. Included among the Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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firms in the cluster are Weber Aircraft in Gainesville, Tornado Alley Turbo in Ada and Starr Aircraft in Denison. Weber Aircraft makes tray tables used in commercial airliner seats, Tornado Alley Turbo makes and repairs parts for use in small planes, and Starr Aircraft manufactures aircraft seat covers. The region also has several firms involved in small aircraft refitting and maintenance. For instance, Higgins Interiors in Ardmore refits and modifies the interiors of corporate jets. Best Jets, an operation of Best AeroNet, provides fueling and maintenance services at the Grayson County Airport. Even though these activities do not appear in the aviation cluster, they should be considered when discussing aviation more broadly as there are a number of these activities going on at one of the regionâ&#x20AC;&#x2122;s 15 local airports. While these smaller airports cannot (and should not try to) compete with large commercial airports for commercial passenger traffic, they can succeed in supporting key aviation industry niches. These niches include small aircraft repair, maintenance and refitting, as well as pilot training. The region also boasts Southeastern Oklahoma State Universityâ&#x20AC;&#x2122;s Aviation Sciences Institute in Durant as an added asset. The Aviation Sciences Institute not only offers professional pilot training, but the curriculumâ&#x20AC;&#x2122;s aviation management option offers tracks relating to business, maintenance management, safety and security. Job opportunities in the aviation cluster demand extensive education and training. The large majority of the top 20 occupations in the cluster require at least some postsecondary education. The jobs available in this small cluster offer average annual earnings of about $60,000, much higher than the regional average earnings. The advanced skill requirements also mean that the vast majority of jobs are full-time and in great demand. The most common occupations in the cluster include aerospace engineers, mechanical engineers, industrial engineers, engineering managers, computer software engineers, and management analysts, all requiring four-year degrees or more. These jobs frequently require extensive knowledge of computers and electronics, design, engineering and technology, and physics. Post secondary schools in the region are graduating large numbers of computer science and engineering related graduates that could help funnel workers into the cluster.

Aviation Cluster Issues Finding the right workers with the right skills represents the single most important challenge for the aviation cluster. Skilled welders and electricians are especially hard to find, but area companies are also seeking workers with airframe and power plant mechanics. Regional employers benefited from recent layoffs at American Airlines at DFW. Nevertheless, area employers note that they must compete for these workers with places like Tulsa and Tinker Air Force Base for available skilled workers. Firms in

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the cluster must also utilize recruiting strategies that cover a wider than normal geography to find the most skilled workers. One firm noted that they have hired aircraft mechanic trainees graduating from the Gordon Cooper Technology Center in Shawnee, Oklahoma. Another firm noted that they were working with an aviation maintenance program at a community college in Massachusetts to find and provide workers. In addition to the skilled worker shortage, several area airports report that they do not have enough space in their existing facilities to support expansion. Recent efforts in both Ada and Grayson County aim to develop those airports to meet their future needs. Access to the local airports is another issue of concern. For the Grayson County Airport, the completion of State Highway 289 will significantly enhance access to and from the airport, but other airports, such as the Ada Municipal Airport, do not have adequate highway access. Consequently, companies are not always able to use the airport as a location for shipping large quantities of goods and equipment.

Plastics Products The plastics products cluster employed 1,937 workers in the Texoma region in 2005 and is projected to grow by 10 percent in the next decade. Much of this employment can be found in the region’s urban areas, including Sherman-Denison, Durant, Gainesville, and Ada. Some of the region’s larger firms include Consolidated Containers, Royal Case, and Presco in Grayson County, Polypipe in Cooke County, Custom Molded Plastics in Bryan County, and Solo Cup in Pontotoc County. Many of these firms fulfill big contracts for major retail and restaurant operations. For instance, Solo Cup in Ada makes items such as straws or plastic utensils for Pepsi, Coke, McDonald’s, and Starbucks. Many of these firms are also part of other industries. For example, Polypipe makes piping used in the petroleum and gas industries. Consolidated containers make containers for water and dairy products. Nevertheless, it appears that the region’s role in the cluster is limited to the production of these products. Corporate headquarters functions are located elsewhere. In that sense, the establishments are branch plants that are only weakly embedded within the regional economy. Instead, they are more focused on national and global markets. That said, opportunities might exist for interaction with other regional firms by providing, for instance, packaging for the large food processing firms. Job opportunities in the region’s plastics products cluster tend to be primarily available in lower skilled occupations, including team assemblers, packagers, sorters, and testers. The cluster is shedding jobs in machine operator and moldings making occupations as a consequence of advances in manufacturing technology. In the cluster’s high growth occupations, workers need knowledge about operating, controlling, and maintaining specialized equipment. These jobs require a high school degree plus Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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on-the-job training. Management and business operations personnel, of course, require college degrees with related experience.

Plastics Products Cluster Issues The regionâ&#x20AC;&#x2122;s plastics firms face significant workforce challenges and they are battling price competition caused in part by rising energy costs. Although few of their production positions require degrees or long-term training, these firms still report that they have difficulty finding people with the requisite problem solving and soft skills. In addition, the entry-level jobs, with relatively low skills, tend to have a high turnover rate and do not retain workers. One firm noted that it overcame these staff turnover difficulties by investing in more in-house training and using more technology to reduce the number of workers required. Nonetheless, some positions are still difficult to fill. For instance, one firm noted that finding workers to do blow molding and extrusion was a particular challenge. While the companies can train employees to do these processes in-house, viable job candidates must at least have mechanical experience â&#x20AC;&#x201C; an apparently difficult talent to find in the region. Plastics products firms report that other key challenges inhibiting their growth, including the lack of adequate access to public transportation, daycare, and workforce housing. These issues tend to exacerbate many of the difficulties the cluster faces among its high-turnover entry-level positions. Rising utility costs have also increased the cost of the clusterâ&#x20AC;&#x2122;s most energy-intensive processes. Several firms have overcome these difficulties by making strategic buys of energy designed to lock in lower prices, but these provide only temporary measures. Plastics products firms also could probably find new market opportunities through greater interaction with other regional firms, especially in providing packaging for large food processors as well as producing some aviation or motor vehicle-related products.

Packaged Food Products In spite of the closure of several food-processing plants like Oscar Meyer and Pillsbury in the late 1990s, the packaged food cluster will gain new employment in 2006 and beyond as Tyson Foods and Ruiz Foods grow to full capacity. The Tyson Foods facility in Grayson County, producing packaged beef and pork products, already employs roughly 600 of the 1,600 workers expected to be hired by 2007. Ruiz Foods prepares frozen Mexican foods, currently employing about 150 of the 500 workers the plant plans to hire. Other large employers in this cluster include JC Potters Sausage in Durant and Dot Foods in Ardmore. Much of the meat products these plants prepare are grown in other states. For instance, raw pork and beef are produced in places like North Carolina, Iowa, and Indiana. Their products are prepared for large retailers. For example, Ruiz Foods Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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prepares their Mexican food for companies like Costco, Walmart and 7-11. The Tyson Foods facility prepares beef and pork products solely for Walmart. From these centers, the processed meat is distributed to each retailerâ&#x20AC;&#x2122;s respective distribution centers. Many of the products prepared in Tysonâ&#x20AC;&#x2122;s facility goes directly to Walmart distribution centers serving stores in Texas and Oklahoma. Many of these food-processing establishments must be relatively close to their markets. With a large expansion of jobs expected during the next two years, workers in the packaged food products industry cluster will also likely see moderate growth in their average annual earnings to about $29,000 for the largest occupations. While the average annual wages are lower in comparison to many other clusters, there is high growth in specialized occupations that require short-term training. Occupations such as meat packers and food batch makers will be in high demand and will only require short term to moderate term on-the-job training. This makes the industry ideal as a career opportunity for low skilled workers transitioning from other low skill fields. Many of the occupations serving packaged foods are not cluster specific. For instance, the food processors require maintenance and repair workers, truck drivers, and laborers, all occupations that cut across clusters. Of course, food products processors require workers to understand food production, food safety, and processing activities, but this can often be gained from a combination of high school education and supplementary on-the-job training.

Packaged Food Products Cluster Issues Because the cluster employs a lot of low-skill, low-wage workers, the packaged foods processors report a number of related challenges. For more established firms, reported employee turnover rates are currently running as high as 65 to 75 percent per year. Most of the people that work within these industries live locally. These firms increasingly are using automation to reduce labor demands. Some are relying on a growing low-skill, in-migrant workforce. The most difficult-to-fill positions are for industrial maintenance workers, especially those with refrigeration maintenance experience.

Warehousing and Distribution The warehousing and distribution cluster employed 1,256 workers in 2005, and is projected to grow by 23 percent in the next decade. The cluster includes, among others, many of the regionâ&#x20AC;&#x2122;s large distribution centers such as Best Buy, Dollar General, and Dollar Tree in Ardmore, Wal-Mart in Pauls Valley, and Big Lots in Durant. Although the cluster lost employment between 2001 and 2006, it is projected to grow in the future.

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This growth is predicated on the region’s relatively advantageous location. The region’s proximity to the air and rail facilities associated with the Dallas Metroplex make the region well suited for these activities. Firms require bimodal transportation networks to facilitate their supply chain. For example, items may arrive at the Los Angeles harbor from China, be shipped by train to Fort Worth, and trucked from a distribution center to stores around the Midwest and South. This is why the region’s location along the key transportation corridors gives it an important advantage. Not only are I-35 and US 75 important assets, but these highways offer the added advantage of relatively easy access to Interstate 40—the Southern US’s main East-West highway. Jobs in the warehousing and distribution industry cluster include a mix of occupations that require a wide range of education and training, from short-term onthe-job training to four-year education requirements. The cluster requires truck drivers, sales representatives, and laborers, but it also needs a number of educated workers. For instance, in-demand occupations include management analysts, operations managers, accountants and auditors, computer software engineers, and bookkeepers. Key knowledge sets include public safety and security, and the skills required include active listening, time management, monitoring quality control analysis, and critical thinking. With the mix of occupations and a concentration in office administration and management, the business operation programs at the post secondary institutions are supplying talent for these occupations.

Warehousing and Distribution Cluster Issues The region’s distribution centers face many of the same challenges already described, but there are a few unique issues. For the trucking firms, finding people with Certified Driver’s Licenses and experienced mechanics proves difficult. One trucking firm noted that the average salary for its drivers was $32,500 annually. Many warehouses and distribution centers face the same difficulties that other relatively low-skilled industries face—high turnover and workers lacking the basic skills to succeed in the workforce. One distribution center noted that they usually have 30 to 40 openings at any given time. Most of those jobs require a basic skills set and work ethic. The average wages for warehouse employees ranged between $9 and $13 per hour. Given that most distribution centers must run three shifts, finding people to work later shifts has proved particularly difficult due to childcare commitments. While relatively easy access to I-35 and US 75 provide the region with a unique advantage, several businesses noted that the region’s transportation infrastructure could be better. Several distribution business owners noted that there did not appear to be any kind of master plan for these key transportation corridors. As a result, the lack of significant planning has led to several bottlenecks emerging, such as the one around the

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interchange of US 70 and US 75 in Durant. Business owners say that these bottlenecks must be eliminated for these transportation corridors if the area were to remain a competitive location to attract and retain its major distribution centers.

Computer and Electronics Equipment The region’s computer and electronic equipment cluster focuses primarily around Texas Instruments (TI) in Sherman, and two related companies—MEMC Southwest and Globitech. The region employed 1,927 workers in 2005, and those three companies employed roughly 1,400 of those workers Texas Instruments started its Shermanbased operations in 1965 and designs, tests, and produces semiconductors. TI currently employs approximately 750 people to do semiconductor design, testing, and production. MEMC Southwest employs about 500 people to manufacture silicon wafers. The firm was started as a joint venture with Texas Instruments in 1995, and began actual operations in 1997. Globitech is the smallest of these firms, employing 120 workers. Globitech is a foundry for creating the silicon used for wafers. The linkages among these firms provide an excellent example of a cluster. The three companies represent nearly three-quarters of total employment in the region’s computer and electronic equipment cluster. Although the cluster has seen significant employment declines, many of the jobs that remain are very high-value added activities. More so than many other clusters, these firms compete and operate in truly global markets. Given competition with facilities worldwide, these activities face significant cost pressures. For instance, the TI facility is expected to reduce its production costs five percent annually. Between 1990 and 1995, Texas Instruments shed many of the divisions that were doing anything outside of the company’s core competency. Even more jobs were shed during the first half of this decade as the semiconductor market declined as part of the tech bubble bursting. While the market for semiconductors has improved since 2001, it is still not regained pre-2000 levels, and production capacity still outweighs market demand. In the silicon market, there has been growing demand for use in the construction of photovoltaic cells used for solar panels, which has helped the industry find new market opportunities. Yet, future employment is not expected to grow significantly because these plants are under continuous cost pressures and investments in technology have dramatically increased productivity. Workers in the computer and electronics industry cluster tend to earn above average wages and the jobs demand above average educational attainment. The average annual earnings in the cluster’s 20 largest occupations in the cluster were $47,500. A majority of the most common occupations require post-secondary education as minimum education and training requirements. The most in-demand occupations are computer software systems and applications engineers, as well as electrical engineers and technicians. These most highly sought occupations require knowledge and skills in Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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complex problem solving, technology design, production and processing, and computer and electronics knowledge. Area four-year institutions are graduating some of the engineers and programmers required to meet local demand, but employers require considerably more engineering technicians and technologists than are available from these institutions.

Computer and Electronics Equipment Cluster Issues Firms in the computer and electronics equipment cluster face workforce challenges at both the high and low end of their workforce. High-skilled workers are difficult to find. Roughly half of TIâ&#x20AC;&#x2122;s workforce is involved in high-skilled engineering work. Of these workers, approximately 10 percent have PhDs, 40 percent have Masterâ&#x20AC;&#x2122;s degrees, and the rest have four-year degrees. Finding such highly skilled people requires national recruitment strategies since only 10 percent come from Texas. Moreover, most workers in this field actually live in the Metroplex and commute to the facility. Even though the area around the facilities offers cheaper property and more rural appeal, more highly educated workers at these facilities indicate that they believe the Texoma region does not have the cultural amenities, recreational assets, and adequate IT infrastructure that they prefer and expect. The recruitment strategies for production workers and less skilled positions are far more local in nature. As a result, firms in this cluster deal with many challenges common to the manufacturing sector. Specifically, industrial maintenance workers are difficult to find and retain. In addition, company representatives note that finding workers with the proper math, IT, problem solving, and soft skills proves difficult. Some employees move between Globitech, MEMC Southwest, and TI. The companies report that they hire workers through the temporary agencies, which can more effectively conduct drug screening and filter out workers with inadequate skills. Those workers viewed as most capable after a period (e.g. 90 days) are given the opportunity to become full-time workers. Whereas workers might make $9 per hour as a temporary worker, full-time employees with some experience can make as much as $20 per hour. Once workers get past the temporary stage, then firm turnover becomes less problematic. The companies also report that they have unique education and training needs, which are not completely addressed through local community colleges. Many of the firms do the bulk of their training in-house. The lack of public transportation and the regionâ&#x20AC;&#x2122;s weak IT infrastructure also creates some difficulties. With rising gasoline prices, the area firms worry that skilled workers may begin seeking jobs closer to their homes in the Metroplex. Moreover, the region does not have sufficient broadband capacity or an extensive enough cell coverage network so its existing information technology infrastructure serves to limit telecommuting options available to workers living in the Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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region. The region’s high, and rising, utility costs were another area of concern given TI’s position as Grayson County’s greatest user of electricity.

Basic Health Services The basic health services cluster is one of the region’s largest job generators, employing 10,055 workers in 2005. Furthermore, this cluster is expected to grow by 57 percent in the next decade. Many of these workers are found in the region’s larger hospitals such as Valley View Regional Hospital in Ada, Medical Center-Southeast Oklahoma in Durant, Texoma Health Care Systems, and Wilson Jones Regional Health System in Grayson County and Mercy Memorial Health Center in Ardmore. An aging population with access to a number of newer treatment options has created a growing demand for health services both in the region and nationwide. In most instances, healthcare services providers serve their local areas. Healthcare can be an exporting industry, but only in those cases where specialized care attracts patients from outside the region. In the case of the Texoma region, the healthcare services are locally serving and area residents tend to go to facilities in the Metroplex or to Norman and Oklahoma City for specialized care. Nevertheless, the demand for these basic services will continue to grow as the region’s population ages. Much like other clusters, a number of firms in this cluster are also strongly affected by the growth of the Dallas Metroplex. For instance, one hospital in Grayson County noted that the larger hospitals in the Metroplex were beginning to encroach into their service area. As a result, they found themselves challenged by competition from medical facilities in adjacent counties. Some of the fastest growing occupations can be found in the basic health services cluster. Between 2005 and 2010 the basic health services cluster is projected to add 780 new jobs, many of them requiring some form of post-secondary education. The cluster’s average annual earnings were $34,700, making it slightly lower than the region’s average earnings. The cluster offers job opportunities requiring all levels of education and training, providing several entry points into the industry and the ability to create career ladders. The highest growth occupations include health care practitioners and technical occupations such as registered nurses, licensed practical nurses, medical records technicians, and dental hygienists. Additional high growth occupations are in management and office support such as health service managers and office clerks and receptionists. Most of the region’s higher education institutions have created programs designed to meet the needs of the basic health services industries. Health professionals and related sciences produced the second largest number of graduates among area colleges and Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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universities. In the 2003 to 2004 school year, there were over 600 graduates from programs related to health professionals and sciences. While not all of the graduates will work in the industry, there appears to be an increasingly large labor pipeline being developed to meet the demands of the industry.

Basic Health Services Cluster Issues Like the rest of the country, the region faces an increasingly difficult situation of finding the healthcare workers in key occupations such as doctors and registered nurses (RNs), particularly those with intensive care and trauma care experience. In addition, difficulties arise in nursing education due to the limited number of clinical training spots available for new nurses. After nurses, lab technicians and radiological technicians are also difficult to find. Some hospitals have found RNs among the spouses of people attracted to the region for jobs in other industries. After nurses, lab technicians and radiological technicians are also difficult to find. Much of this difficulty arises from the competition for these people from higherpaying healthcare providers in the Metroplex. In some cases, smaller hospitals simply cannot compete with large urban hospitals for workers. The wages and opportunities offered in the Metroplex are more competitive than what can be offered in the Texoma region. As a result, recruiting doctors to work in rural areas is proving increasingly difficult.

Hotel and Passenger Transportation Services The local hotels and passenger transportation services cluster employed 4,091 workers in 2005 and is projected to grow by 19 percent in the next decade. The industries that make up this cluster include not only those pertaining to lodging, but also related industries including landscaping and janitorial services. In addition to the hotels that cluster along the regionâ&#x20AC;&#x2122;s transportation corridors, there are several large hotels and resorts particularly around Lake Texoma. One of the largest is the Tanglewood Resort in Pottsboro. The 700-acre resort has a 120-room hotel, vacation villas, and a conference center. It also has a golf course and access to Lake Texoma. In addition to these workers, over 3,000 people are employed in the regionâ&#x20AC;&#x2122;s gaming operations. It should also be noted however, that the data related to this cluster does not include the jobs created at the Chickasaw and Choctaw casinos and resorts, even though these attractions bring hundreds of thousands of people to the region each year. The clusterâ&#x20AC;&#x2122;s largest occupations are projected to add more than 190 jobs between 2005 and 2010. These jobs primarily require on-the-job training designed to provide key skills such as reading comprehension, time management, active listening, critical thinking, and social perceptiveness and speaking. In the hotel and passenger transportation services industry, customer and personal service skills are particularly in Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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demand. Fast growing, high demand occupations include office clerks, hotel and motel desk clerks, bookkeeping, and auditing clerks, janitors and cleaners, and management occupations.

Hotel and Passenger Transportation Services Cluster Issues The region’s accommodations and resort owners did not report shortages of applicants to fill lower skilled positions, but they did indicate that finding qualified higher skilled workers can be a challenge. The biggest issues facing the industry may be the need to expand the number of overnight visitors to the region. On both sides of the Red River, the region has tremendous tourism assets, but marketing those assets is done on an ad hoc basis with little regional collaboration.

Ranching and Equine The Texoma region also possesses a rather prominent ranching and equine industry. The cluster is part of a large farming sector in the region that employs approximately 17,252 and will grow slightly in the next 10 years. The equine industry creates a number of opportunities for other goods and services. For instance, horse ranches must purchase feed products, leather and tack, as well as veterinary supplies. The prominence of the region’s equine industry most likely plays a role in supporting the region’s horse trailer manufacturing industry as well. Furthermore, horse shows and competitions attract many tourists to the region. Some of the larger venues that host equestrian events include the Spring Creek Arena in Gainesville and the Choctaw Coliseum in Durant. Jobs in the ranching and equine industry include many occupations related to raising and training quarter horses. These activities are concentrated primarily along US 82 between Sherman and Gainesville and along I-35 from Gainesville to the Oklahoma border. While we do not have detailed data to describe just how large the industry or its indirect effects, the data do show that the crop and animal production industries11 represented one in 13 area jobs in 2005. The US 75 sub-region accounts for nearly half of the jobs, 8,195. The second largest sub-region was the I-35 region which employed roughly 5,000 workers in 2005. Ranchers account for 8,552 of the cluster’s jobs in 2005. Average wages in the industry are relatively low, reflecting the part-time and seasonal nature of much of the work.

Ranching and Equine Cluster Issues One of the issues facing the industry is that there has been no systematic or comprehensive study about the industry’s economic impact on the region. Such a study

11

NAICS 111 and 112

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is necessary in order for economic developers to better understand the industry, as well as the possible opportunities it may create.

Petroleum and Gas The petroleum and gas cluster is one of the region’s largest exporting clusters. In 2005, firms in this cluster employed 2,831 workers. Just over 60 percent of these workers were employed in Carter and Garvin Counties. The I-35 corridor, especially Carter County, represents a major oil-producing region in Oklahoma. In 2001, Carter County led Oklahoma’s counties in crude oil production with 7.5 million barrels, representing 11 percent of the state’s total.12 Although the presence of oil provides a natural competitive regional advantage, several factors affect the region’s petroleum and gas firms. Changes in the global supply and demand heavily influence the industry. Rising gas prices are good for oil companies, but also make alternative fuels like bio-diesel more attractive. Firms are also heavily influenced by government regulations in terms of the mixtures they must make and also health, safety and environmental regulations. Changes in any of these regulations can significantly affect area firms’ production processes. The leading firms in the region include Chesapeake Operations in Pauls Valley, Felderhoff Brothers Drilling in Gainesville, Valero, and Noble Energy in Ardmore. Valero for instance, employs 250 people and produces gas, diesel, and asphalt. They anticipate expanding to as many as 2,000 workers, although much of their work is seasonal and situational. Noble Energy is a large energy concern that was once headquartered in Ardmore. In 2000, they moved their headquarters functions to Houston to be closer to other energy companies. Today they employ about 100 people locally and growing. In addition to traditional oil and refinery work, the region is also starting to become an important player in alternative energy sources. Earth Bio-fuels, a bio-diesel company, plans to open a 150-worker facility in Durant. As gas prices continue to rise, demand for bio-fuels will likely continue to grow. Consequently, the race is to become an early developer of alternative fuels will likely determine future market leaders in this cluster. For instance, Earth Bio-fuels is seeking to develop contracts with the Indian Tribes and Tinker Air Force Base as a way to establish a large customer base in the region. Employment in the petroleum and gas industry cluster will likely grow, and the jobs being created represent a wide mix of production and highly specialized jobs. The cluster’s occupations that are more specialized include electrical power-line installers and 12

Mark Snead, “The Local Impact of Oil and Gas Production and Drilling in Oklahoma,” Office of Business and Economic Research, Oklahoma State University, October 2002.

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repairers, hazardous materials removal workers, chemists, chemical equipment operators and tenders, and chemical plant and system operators. To succeed in these jobs demand workers to have relevant production, processing, math, and mechanical skills. The cluster also employs occupations that can be found in a variety of other industries. For instance, customer service representative, truck drivers, office assistants, and laborers are in-demand occupations that offer potential entry points for workers transitioning from other fields. Area educational institutions are producing sufficient new-to-entry workers with computer, math, and physical science skills, but the challenge may be in retaining those workers to the region.

Petroleum and Gas Cluster Issues Firms in the petroleum and gas cluster face a number of key workforce challenges. Key experienced workers are aging, and many are leaving the field for less demanding work or for retirement. Finding replacement workers with appropriate skills is proving difficult. Business owners in the cluster report that finding industrial maintenance workers with experience and the requisite problem solving skills are particularly difficult to find and retain. Like other industries, finding people with commercial driver licenses is difficult, but the petroleum and gas industry also needs drivers certified in handling hazardous materials transportation, which makes finding drivers even more challenging. The cluster is also heavily affected by environmental and worker safety regulations. The seasonality of work in these industries is also off-putting to people seeking more steady work. In addition, the damage done to the refineries in the Gulf of Mexico during the 2005 hurricane season siphoned away many contractors from places to the Gulf Coast region, making specialized contractors hard to find.

Assets and Issues Analysis In late 2005, leaders from the region organized themselves into an informal working group â&#x20AC;&#x201C; the Texoma Regional Consortium (TRC) â&#x20AC;&#x201C; to commission this research and to begin identifying appropriate responses to the key issues identified. Working collaboratively with their colleagues and supported by the CSW/CREC consulting team, the TRC met several times to review the findings, identify the most significant opportunities and the most critical challenges, and develop a vision and plan of action for moving forward. In the following section, the TRC, with guidance from the consulting team, examined a wide variety of issues raised by the previous research and integrated that information with their own experience.

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Strategic Themes: Identifying Challenges and Opportunities After numerous interviews with area businesses as well as other local stakeholders, the TRC, in collaboration with the CSW/CREC consulting team, identified a number of key challenges to be addressed and opportunities on which the Texoma Region might build its economic future. These issues were organized around seven strategic themes: •

Knowledge Capacity

Innovation

Global Image and Competitive Location

Amenities

Community and Civic Support

Connectivity

Regional Collaboration

The following documents the relevance and importance of each of the themes and catalogues some of the most important assets on which to build potential strategies as well as some of the key challenges facing leaders in enhancing the region’s prosperity.

Knowledge Capacity The region’s human capital provides a fundamental building block on which to develop its economic future. TRC leaders identified the following key assets and opportunities on which the economy might be improved: •

The region’s traditional economic base of agricultural, petroleum, manufacturing, and tourism

Available higher education and training resources

While the regional economy is currently doing relatively well, Texoma is susceptible to business cycles. Many regions are learning that diversifying their economy and shifting to knowledge-based industries helps to protect their regions somewhat from the vagaries of these cycles. The region’s education and training resources are particularly important for meeting many of the region’s key occupational needs in this knowledgeintensive environment. First and foremost, East Central University (ECU), Southeastern Oklahoma State University (SOSU), and Austin College produce many of the teachers needed in the region—an important foundation for building a more educated workforce. These institutions also offer off-campus and distance learning opportunities for the incumbent workforce. The Ardmore Higher Education Center provides access to programs available through ECU, SOSU, Murray State, and Oklahoma State UniversityOklahoma City.

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In addition, the region’s community colleges offer specialized and contract training that is often quite response to labor market needs. Grayson Community College’s Center for Workplace Learning provides a model for linkages with business. Kiamichi Technology Center also provides training in areas such as nursing, welding, IT and auto mechanics. SOSU has the unique asset of the Aviation Sciences Institute, which could potentially support the region’s burgeoning aviation cluster. While not located in the Texoma region, the Dallas-Fort Worth Metroplex and Oklahoma City metro areas provide ready access to many more higher education resources. The University of Texas at Dallas, the University of North Texas, and the University of Oklahoma are major research institutions that are relatively nearby. The region must continue to explore ways to take better advantage of these institutions graduates and research capacity in support of its growing target clusters. The region has significant challenges to overcome because a substantial portion of the population does not have the requisite skills required for growing advanced manufacturing and service jobs. Many regional employers have not traditionally Figure 26 Knowledge Capacity Assets & Challenges Assets • A strong traditional economic base of agricultural, petroleum, manufacturing, and tourism • Significant higher education and training resources • East Central University, Southeastern Oklahoma State University and Austin College produce many of the teachers needed and offer off-campus and distance learning opportunities. • Ardmore Higher Education Center provides access to programs from ECU, SOSU, Murray State and Oklahoma State University-Oklahoma City. • Community colleges specialized and contract training in a number of areas including nursing as well as to the region’s businesses at Grayson Community College’s Center for Workplace Learning • Kiamichi Technology Center also provides training in areas such as nursing, welding, IT and auto mechanics with programs in Durant and Atoka. • Pontotoc and Southern Oklahoma Technology Centers • North Central Texas College • The Aviation Sciences Institute at SOSU • Higher education resources in DFW and OKC (e.g., UT-Dallas, the University of North Texas, and the University of Oklahoma).

Challenges • Substantial portion of the population has few skills for growing advanced manufacturing and service jobs. • Low educational attainment as a consequence of the abundance of low skill job opportunities • Large number of working poor • Out-migration of educated young adults (esp. to DFW and OKC) • Lack of workers available to fill skilled professions including business and finance, computer and information technology, nursing and healthcare and general office and administrative positions.

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demanded much in the way of educational attainment from their employees and frequently offered low wages. These employers have traditionally dominated the area’s economic landscape, and consequently, the region has a large number of working poor. As the region’s young adults do become educated, they frequently leave the area to find jobs in large metropolitan areas, especially nearby Dallas and Oklahoma City. This leaves the Texoma region unprepared to meet the growing demand for workers in skilled professions including business and finance, computer and information technology, nursing and healthcare and general office and administrative positions. Many believe that Texoma’s greatest challenge may be determining how best to aggressively enhance the population’s overall educational attainment level.

Innovation Innovation and entrepreneurship are two driving forces in determining future economic prosperity and development. Innovative and entrepreneurial activities not only help create new goods and services, but also new jobs and companies. One-third of all the net new jobs created in the US were contributed by small entrepreneurs or start-up companies.13 Entrepreneurial activity also tends to produce local firms committed to remaining in the region. While not as well endowed as larger metro areas, Texoma does possess several key assets on which to build an entrepreneurial future. First, the cluster that has grown up around Texas Instruments (including MEMC Southwest and Globitech) provide the region with real capacity for innovation in electronics and semiconductors. While these companies employ fewer workers today than in the past, the workers who remain are high-skill. Likewise, the region’s two research centers -- the Samuel Roberts Noble Foundation and Environmental Protection Agency’s Ground Water and Ecosystems Restoration Division (GWERD) – provide research activities that could be potentially captured locally. Ardmore’s Noble Foundation provides expertise in agricultural, forage improvement and plant biology research, and Ada’s GWERD employs 160 people in research and provides technical assistance related to the protection and restoration of ground water, surface water, and ecosystems.

Robert W. Bednarzik, “The role of entrepreneurship in U.S. and European job growth,” US Department of Labor Bureau of International Labor Affairs, http://www.bls.gov/opub/mlr/2000/07/art1full.pdf, p.10

13

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Figure 27 Innovation Assets & Challenges Assets • The Texas Instruments cluster (including MEMC Southwest and Globitech) provide the region with real capacity for innovation in electronics and semiconductors • Region’s two research centers -- the Samuel Roberts Noble Foundation (agricultural, forage improvement and plant biology research) and Environmental Protection Agency’s Ground Water and Ecosystems Restoration Division-GWERD (research and technical assistance to protect and restore ground water, surface water and ecosystems) • Research capacities of institutions in the in the Metroplex and at the University of Oklahoma • Technical support for companies from the Texas Manufacturing Assistance Center and the Oklahoma Center for the Advancement of Science and Technology programs • Existing industry clusters in unique fields such as trailer manufacturing, equine, casinos • Entrepreneurial energy of the tribal nations (including their willingness to invest in an array of business ventures)

Challenges • Limited utilization of these assets in the region • Area’s technology infrastructure (for wireless and broadband communications) appears underdeveloped

Just outside the region are major research institutions in the Metroplex and in Norman. These institutions provide research and development capacity that will allow firms to improve not only their technological capabilities, but also to serve as an important resource for improving and developing business practices. On both the Texas and Oklahoma sides of the Red River, the Texas Manufacturing Assistance Center and the Oklahoma Center for the Advancement of Science and Technology programs aim to help turn innovation into technology-driven enterprises, particularly among the region’s manufacturers. Leaders suggested that the region must also develop a better environment for supporting and growing entrepreneurs, especially those in non-technology fields. Some opportunities exist around the equine industry and activities like trailer manufacturing and ranching. The tribal nations are particularly responsible for significant entrepreneurial energy as they diversify into a broad array of economic activities. While casinos and resorts represent the Chickasaw and Choctaw nations’ highest profile activities, the tribal nations are investing in business ventures related to healthcare, construction, manufacturing, and retail.

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While there are many opportunities, many regional leaders feel that the region’s entrepreneurial environment remains relatively weak. Several issues must be addressed in order to enhance entrepreneurship. Young, skilled professionals are the most likely source of potential entrepreneurs so the area has to be attractive as a place to live for people in this age group. In addition, the area’s underdeveloped information technology infrastructure (including wireless and broadband communications) precludes many people from working out of their home or small offices.

Global Image and Competitive Location The Texoma region possesses a number of unique competitive advantages. These assets include, but are not limited to the I-35 and US 75 transportation corridors, close proximity to DFW Airport, Dallas’ Love Field, and Oklahoma City’s Will Rogers World Airport, access to the large labor pools of Dallas to the south and Oklahoma City/Norman to the north, as well as area tourist attractions (including Lake Texoma, area resorts, and casinos). In spite of these advantages, the region lacks a clear identity that it can project and market to the rest of the world. In many ways, the region’s identity is tied to the metropolitan areas to the north and south. Urban encroachment from these metro areas is probably the most powerful force currently shaping the region’s future as growth pressures from the Metroplex sprawls northward and Oklahoma City and Norman extend southward. This growth presents both numerous challenges and opportunities. In terms of the region’s physical development, a growing bedroom population is creating more demand on the road and IT infrastructure, water and sewer systems, and public services like schools and policing. Furthermore, these nearby metro areas offer a Figure 28 Global Image & Competitive Location Assets & Challenges Assets • Location and access to DFW Metroplex and OKC • Proximity to DFW Airport, Love Field and Will Rogers World Airport • Availability of large labor pools in Dallas to the south and Oklahoma City/Norman to the north • Major area tourist attractions (including Lake Texoma, area resorts, and casinos) • Attractiveness of area’s cost of living, housing costs, and bucolic lifestyle to metropolitan workers • Attractiveness of region for employers seeking low-wage, low-skill workers

Challenges • Lack of a clear, cohesive identity to project and market to the rest of the world • Urban encroachment is creating growth pressures related to urban sprawl • A growing population that is creating more demand on the road and IT infrastructure, water and sewer systems, and public services like schools and policing • Proximity to large pool of jobs and urban amenities that are attractive to the region’s educated young people • Area businesses must compete directly with businesses in adjacent metropolitan areas and increasingly with businesses across the globe

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number of job opportunities and urban amenities that are attractive to the region’s educated young people. This nearby talent pool may also be critical in the region’s effort to transform to higher value-added activities, but higher educated workers may be lost to better opportunities in the nearby metropolitan labor markets. In addition, area businesses must compete directly with businesses in those metropolitan areas, requiring Texoma area companies to find specific market advantages or specialties to succeed. For area businesses, access to the metropolitan labor markets provides a potentially large labor pool from which to draw. The area has the potential to provide residences for metropolitan workers who prefer a more bucolic lifestyle or cheaper housing. The metropolitan markets also afford access to a broader array of services and research support than would otherwise be available to a region with Texoma’s population base. Yet, even with these advantages, the region has traditionally competed for new companies based largely on its relatively low cost of living and doing business. While this strategy does make the region an attractive option for many businesses, it tends to focus development efforts on companies that provide low-wage, low-skill jobs. The area has been successful in this endeavor as demonstrated by the near full employment for many low-skill jobs. Companies operating in this cost-driven environment tend to be most sensitive to changes in relative costs. Meanwhile, higher value-added activities that are dependent on a unique set of skills found only in the region are far less vulnerable to relocation pressures than those constantly driven to find cheaper labor and locations.

Amenities The Texoma region offers many great outdoor amenities and historical sites to attract tourists. A prominent feature, Lake Texoma is one of the nation’s largest reservoirs and attracts millions of visitors every year. Many of those visitors come from the Metroplex as the lakeshore is only one to two hours away. Lake Texoma is managed by the US Army Corps of Engineers so it has neither been overdeveloped nor has the region taken full advantage of this asset. The region also has several other national parks and wildlife refuges, including the Tishomingo National Wildlife Refuge, the Hagerman National Wildlife Refuge, and the Chickasaw National Recreation Area. Combined, these parks offer quality outdoor amenities for the region’s residents as well as an important draw for tourists looking for opportunities to fish, camp, boat, and hike. The Chickasaw and Choctaw nations offer additional unique cultural resources. While the Choctaw Tribal Museum is located outside of the Texoma region, it is nearby and could be part of a regional tourism effort that would include the Chickasaw Nation Visitor Center located in Ada. The Chickasaw Visitor Center allows people the opportunity to learn not only about the Chickasaw’s history, but also about modern tribal

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Figure 29 Amenity Assets & Challenges Assets • Lake Texoma is one of the nation’s largest reservoirs and attracts millions of visitors every year for fishing, camping, boating, and hiking • Several national parks and wildlife refuges, including the Tishomingo National Wildlife Refuge, the Hagerman National Wildlife Refuge, Turner Falls Park and the Chickasaw National Recreation Area. • The cultural resources of the Chickasaw and Choctaw nations (including the Choctaw Tribal Museum, the Chickasaw Nation Visitor Center, and the large casinos and resorts)

Challenges • Preponderance of strip mall development and lack of unique retail options • The struggles of many urban center downtowns

life. The tribal nations operate several large casinos and resorts that attract large numbers of visitors to the region, and offers entertainment and urban amenities that are not common to most rural areas. Among the other tourist attractions found in the region, include a variety of sites that represent key aspects of American history and culture. Despite these natural and cultural resources, the region has several deficiencies. For instance, the region lacks many unique retail options. Strip mall development along major transportation corridors on I-35 and US-75 threatens to crowd out many smaller, local retailers. Little retail or other activities are available in the downtown, leaving some of them empty and run down. Such amenities are important for retaining young adults or attracting educated workers.

Community and Civic Support The region has several key community-related issues that could affect its ability to succeed economically. A number of people interviewed specifically identified housingrelated issues as a challenge facing the region. The housing issue is a multifaceted problem. At the high-end, many senior managers and professionals express frustration with the region’s limited availability of high-quality housing. This creates several problems for the region. It increases the difficulty in attracting highly skilled professionals to local jobs, and it leads many skilled professionals working locally to look for housing outside of the region. This not only causes them to spend most of their earnings outside of the region, but it also presents an obstacle for them to become true regional stakeholders because they do not live in the region in which they work. In addition to the lack of high quality housing, many employers also noted that the region lacks a sufficient stock of workforce housing. With many parts of the Texoma area already operating at full employment, the limited amount of affordable housing available for area workers will make filling new entry-wage jobs even more difficult. Corporation for a Skilled Workforce and the Center for Regional Economic Competitiveness

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Figure 30 Community and Civic Support Assets & Challenges Assets • Several distinct downtown areas • Overall small town feel and rural living • Civic leadership that has recognized the need for collaboration

Challenges • Lack of available high-quality housing for senior managers and professionals • Inadequate stock of workforce housing, especially in rural areas • Limited public transportation and childcare options • Perceptions of significant drug problems, especially among the low-skill workforce • Perceived crime in some downtown areas of the region’s major urban centers

This challenge is particularly acute in the region’s most rural areas. Furthermore, limited public transportation and childcare options available in the region exacerbate these issues and limit the potential labor pool from which many employers can draw. Public safety is another issue facing the region. A number of employers noted that, like many places, there is a significant drug problem in the region. This further limits the potential labor pool for firms employing primarily low-skill workers, for whom the problem seems to be especially acute. In conjunction with perceived crime in some downtown areas of the region’s major urban centers, this issue could make it harder to sell the region to new businesses and in-migrating skilled workers.

Connectivity Two key transportation routes--Interstate 35 and US 75—serve as major north-south highway corridors linking the Dallas-Fort Worth Metroplex with Oklahoma City to the west and Tulsa to the east. Furthermore, construction of state highway 289, planned for completion in 2008, will greatly expand linkages between Sherman-Denison and the DFW airport area. DFW along with Love Field and Will Rogers World Airport are critical assets for the region. In particular, DFW links the region to more than 170 cities globally and serves more than 50 million passengers annually, making it the country’s third busiest airport.14 The City of Dallas’ Love Field provides short-haul passenger service for about 6 million people annually primarily via Southwest Airlines.15 The Will Rogers World Airport, Oklahoma’s busiest airport, had more than 3.5 million passengers in 2005 and recently underwent major redevelopment to increase its current aircraft and passenger capacity.16 Texoma’s 15 local airports provide general aviation functions, but have a limited ability to expand to meet either business or tourism needs. Currently, northern Texas leaders are preparing an expansion plan for the Grayson County Airport. The facility 14

US Bureau of Transportation Statistics and http://www.dfwairport.com/visitor/facts.htm http://www.dallas-lovefield.com/lovenotes/statistics.html 16 www.flyokc.com 15

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Figure 31 Connectivity Assets & Challenges Assets • Highway transportation corridors (I-35 and US 75) and linkages to nearby I-40 • Construction of TX state highway 289, planned for completion in 2008 (providing direct linkage between Sherman-Denison and the DFW airport area) • DFW, Love Field and Will Rogers World Airports • Texoma’s 15 local general aviation airports, especially Grayson County Airport (with its 9,000-foot runway capable of accommodating most aircraft)

Challenges • Poor intra-regional linkages, especially among rural communities without major highway corridors, to locations where retail and recreational activities are concentrated • No regional transportation systems plan envisioned to link Texoma efficiently to its adjacent metro areas via air, rail and freeway connections • Lack of high-speed internet access and sporadic wireless telephone coverage (and lack of information about the status of this infrastructure)

already has a 9,000-foot by 150-foot runway capable of accommodating most types of aircraft, including 747s.17 The proposed master plan seeks to develop the capacity necessary to support both general aviation and industrial development. Improved highway access via state highway 289 would help the airport in its efforts to expand its aircraft maintenance, flight operations, aviation and industrial manufacturing and intermodal (air/truck/rail) cargo facilities. However, the region still faces critical challenges in providing up-to-date public infrastructure to support future economic development. First many rural communities do not have an easy access to these major highway corridors where retail and recreational activities are concentrated. No transportation systems plan is envisioned that would link Texoma to its adjacent metro areas via efficient air, rail and freeway connections. The other significant obstacle for the region’s economic development is its lack of high-speed internet access and sporadic wireless telephone coverage. Anecdotal evidence suggests poor information technology connections in parts of the region. This potentially limits telecommuting and entrepreneurial development activities for people who live and work in the region’s more rural areas. The extent of the problem remains unclear because no information is readily available about the availability of broadband networks or commercial or residential buildings completed with modern telecommunications equipment.

Regional Collaboration A critical element in addressing the region’s key issues will be bringing together leaders in a structured way. The formation of the Texoma Regional Consortium represents the beginning of just such a process, but there are several obstacles in 17

Grayson County Airport Master Plan

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creating this effective collaboration that must be recognized. These obstacles focus around two primary issues—a lack of significant intra-regional communication and the lack of a tradition of coordinated planning for future growth. Greater intra-regional communication must begin with the business community taking a more active role in the area’s workforce development, economic development and education and training efforts. Even in instances where the business community is active, the efforts tend to be local-oriented. Some of the region’s largest employers have senior managers who live outside the region and may not even see themselves as vital regional stakeholders. Likewise, key intermediaries, such as economic development organizations, are also locally oriented because they are locally funded. Many of the factors that promote parochialism stem from the lack of a regional identity combined with a tradition of local rivalries. The distances between the urban growth centers have historically prevented area residents and leaders from collaborating so they have not always seen the common challenges they face. Yet, the complex issues identified earlier are familiar to many localities and effective responses to those issues will need to be regional in nature. The region has a long tradition of independence and self-sufficiency. This can be both an asset and a challenge. The frontier spirit reflects an in-grained belief among many leaders that they can solve their own problems. However, in an increasingly complex world, this may also lead to parochialism and avoidance of opportunities to collaborate. Consequently, it should not come as a surprise that there is little coordination in public sector planning for economic growth or anticipated changes in

Figure 32 Regional Leadership Assets & Challenges Assets • Texoma Regional Consortium • South Central Oklahoma Regional Enterprise (SCORE) initiative -- a partnership between the economic development groups in Garvin, Murray and Pontotoc counties designed to better market those counties • Existing coordination of region’s community colleges in academic scheduling and course offerings (as well as offering in-state tuition for residents of border counties in the other state) • National outlook of Chickasaw and Choctaw tribes which have a significant proportion of their membership in the Texoma region • Tradition of self-sufficiency and independence

Challenges • Lack of significant intra-regional communication • Parochialism of area economic development efforts to date (due to local funding sources and leadership direction) • Many senior managers of area companies live outside the region • Distance between urban growth centers have inhibited collaboration • Traditional local rivalries • Lack of a tradition of coordinated planning for future growth. • Fragmentation of local leadership in the area between Metroplex and OKC • Haphazard and less-than-appealing development along key transportation corridors

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land use in the jurisdictions located between the Metroplex and Oklahoma City. A number of private businesses in the region noted that this independent, will-do attitude may actually be holding the region back in many ways. Many issues have not been addressed in the face of growing population demands. For instance, development is allowed to occur haphazardly, leaving the region with inefficient and ineffective infrastructure or with development projects that may be appealing to neither visitor nor resident. As a result, the region’s transportation corridors, information technology infrastructure, and housing stock may not be adequate for a knowledge-driven regional economy. Regional collaboration is beginning to happen, of course. Certainly, the Texoma Regional Consortium represents the best illustration of the kinds of collaboration that will be required to transform the region’s economy and transition its workforce. In addition, the South Central Oklahoma Regional Enterprise (SCORE) initiative -- a partnership between the economic development groups in Garvin, Murray and Pontotoc counties designed to better market those counties – is another. In areas other than economic development, there are a few ongoing collaborative efforts that could serve as models for cooperation. For instance, the region’s community colleges collaborate in coordinating their academic schedules and offerings as well as offering in-state tuition for residents of border counties on each side of the state line. The Chickasaw and Choctaw tribal nations have the potential for creating jobs and investing in new regional opportunities. A significant proportion of their respective tribal membership lives in the region so they have a stake in the region’s success, yet like many business enterprises, they have a uniquely national outlook that could help in moving beyond traditional parochial concerns.

A Regional Vision and Action Plan To address the assets and challenges identified and position the region in transforming the economy successfully, the Texoma Regional Consortium underwent a process of identifying a cohesive framework for making regional decisions. In moving forward, the issues may continue to be reformulated, reflecting changes in the economic outlook or the social context, but the first goal is to set a “stake in the ground” about what Texoma’s leaders would like to see happen. To that end, the TRC leaders devised a regional vision statement and the actions that would help to achieve that vision. The vision statement was developed after reviewing several alternatives and determining the most basic principles that would guide future policy decisions about growth and development.

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Our Vision: Texoma as a “Hometown Hotspot” In 20 years, Texoma will be an economically diverse entrepreneurial region, supporting innovation and appealing to families, with… •

A distinct regional identity

Vibrant downtowns

More highly educated citizens

Growing companies in emerging industries

Supportive, connected environment

More collaborative governance

This vision is designed to provide a positive statement about where Texoma would like to go. It is designed not only to provide a framework for guiding the priorities of the TRC action plan, but also to provide a basic guideline for the development of organizational strategic and operating plans for any of the stakeholders influencing economic development, workforce development, community development, government, or educational planning within the region’s 13 counties.

Our Planned Actions: The Economic Strategies The Texoma Regional Consortium reviewed a laundry list of more than 50 possible actions that could help in achieving the Texoma vision. Recognizing that its successful implementation will rely on accomplishing a few “impactful” strategies, the TRC prioritized that list and identified the following nine as the most important actions to move forward during the coming months and years.

Strategic Action #1: Develop industry-driven “just-in-time” career and technical education for the region’s targeted clusters Theme: Knowledge Capacity and Institutions Goal: To Achieve More Highly Educated Citizens Planned Tasks: •

Establish a skill alliance for each targeted cluster (including finance and insurance, motor vehicles, aviation, plastics products, packaged food products, warehousing and distribution, computer and electronic equipment, basic health services, hotels and passenger transportation services, ranching and equine, as well as petroleum and gas).

Determine the most important skill gaps for that cluster (based on industry input)

Identify providers to deliver needed education and training

Recruit individuals to participate in targeted education and training

Assess impacts and provide feedback to the skill alliance

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Strategic Action #2: Develop an integrated entrepreneurial development initiative Theme: Innovation Goal: To grow companies in emerging industries Planned Tasks: •

Conduct an inventory of existing entrepreneurial development education and assistance efforts

Produce a “Entrepreneurs in Texoma” website to share information about these resources

Develop a calendar of activities designed to encourage networking among area entrepreneurs and potential angel capital investors

Explore the need and opportunity for one or more incubators in the region

Conduct an annual entrepreneurship summit to profile growing smaller enterprises and to provide an opportunity for new entrepreneurs to present their business ideas

Develop a match-making initiative between area colleges and universities and companies to link area managers with students that have ideas about new business models and/or products

Strategic Action #3: Develop a “business” recruitment plan tied to DFW and OKC as key regional assets Theme: Global image and competitive location Goal: To develop a distinct regional identity for businesses Planned Tasks: •

Engage the “greater Texoma” area’s economic development organizations and local government agencies to gain buy-in into the idea of a regional marketing strategy and action plan

Develop a new brand for the “greater Texoma” region that articulates the region’s unique competitive features

Design a joint regional marketing campaign targeted to the most promising growth clusters, including communication media and messages

Develop performance metrics associated with plan implementation

Implement the marketing plan elements

Develop a client handling and management protocol designed to ensure open communication among area economic development, workforce development, and education partners

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Strategic Action #4: Develop a coordinated regional “people” attraction plan for the Texoma Region Theme: Global image and competitive location Goal: To develop a distinct regional identity for residents and workers Planned Tasks: •

Identify region’s important/strategic outdoor assets and the attributes of small town life as key themes and messages of the people attraction plan

Test findings with region’s citizens and OK City/Dallas area leaders

Develop value statement and present to regional leaders for backing

Identify and utilize regional marketing groups to position theme

Release theme and begin marketing through multiple access points (print, audio, video, web, organizations, etc.)

Survey success components

Strategic Action #5: Develop and deliver affordable workforce housing Theme: Community and civic support Goal: To create a supportive, connected environment for area residents Planned Tasks: •

Assess the region’s current stock of workforce housing, and the region’s current workforce housing needs

Seek out “Promising Practices” used by other rural areas to address workforce housing shortages

Identify potential partners for regional workforce housing advocacy group

Explore potential financing options

Strategic Action #6: Assess and address workforce transportation needs Theme: Community and civic support Goal: To create a supportive, connected environment for area workers and businesses Planned Tasks: •

Survey the region’s workers to assess their transportation needs

Identify ‘promising practices’ used by other rural regions to address workforce transportation needs

Establish a regional website for workers to post ride sharing and carpooling opportunities

Attempt to partner with large employers to establish regional shuttle buses

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Strategic Action #7: Develop “cross-border” Texoma multi-modal transportation for freight and passengers Theme: Connectivity Goal: To support grow companies in emerging industries Planned Tasks: •

Identify existing planning activities designed to support cross-border (Oklahoma-Texas) transportation

Convene transportation planning and logistics industry experts from across the region to review status of existing plans/resource opportunities

Assess the needs and feasibility for multi-modal transportation projects

Influence project funding decisions in the two states

Identify potential participants in an advocacy network to support relevant projects in Texas and Oklahoma

Strategic Action #8: Increase the region’s broadband capacity Theme: Connectivity Goal: To create a supportive, connected environment for entrepreneurial activity Planned Tasks: •

Conduct a region wide needs assessment of the region’s existing broadband capacity

Identify partners within the region to form a regional taskforce to champion the issue

Develop a strategy for increasing the region’s broadband penetration

Encourage the development of internet hotspots within the region’s urban centers

Work with Internet Service Providers (ISPs) both inside and outside the region to enhance the region’s capacity and remove any potential bottlenecks to future expansion

Strategic Action #9: Implement a sustainability plan that engages the region’s leaders and citizens in the plan’s success Theme: Regional collaboration Goal: To create collaborative governance to support plan implementation Planned Tasks: •

Establish TRC as an ongoing entity

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9 9 9 9 •

Recruit and develop next-generation leaders 9

Combine region “leadership institute” assets to develop region focused leaders

Identify other key stakeholders critical to the plan’s success 9 9

Establish formal organization design with regional leadership and supported by staff Adopt the TRC plan and create champion-led committees to drive success of each strategic theme across region Measure success to sustain plan Present plans in one-on-one meetings and regional forums with identified stakeholders

Develop regional core leadership to lead TRC Expand TRC leadership to include champions for critical themes from the plan

Conduct annual economic/workforce/education summit 9 9 9

Develop annual themes and develop agenda around that theme Provide success metrics at each summit Solicit input from region at-large during annual summit

Implementation Management: Next Steps Undertaking these nine actions requires the Texoma Regional Consortium to develop detailed implementation and monitoring plans. The TRC must recruit and attract interested and vested stakeholders from across the region to participate. To engage these potential partners and allies, the TRC should form a series of task forces, one dedicated to each action. Each of the task forces would take the primary lead in developing detailed plans aimed at achieving the goals associated with the action. These action plans not only would include the tactics necessary to implement the strategies, but also would identify appropriate metrics needed to measure progress. The task forces should also consider methods for securing the funding required to put the plan into action. Each task force will need to consider how to most effectively implement their proposed actions. Many activities will likely be best accomplished through sub-regional collaboration because leaders in various parts of the 13-county area have different priorities. Each TRC working task force should consider how best to implement its action. Where a task force so chooses, it may form sub-regional committees to enhance its ability to achieve the TRC task force’s goals. These sub-regional committees would allow Ardmore/Gainesville, Sherman/Denison/Durant, and Ada/Paul’s Valley leaders to all work more closely together in smaller groups and smaller geographic areas, focused on issues of particular concern to their respective sub-regions. The idea would be that these committees, wherever deemed appropriate, would then share their efforts and experiences with the regional task force as it helps to achieve the regional goals of the broader TRC plan. The added benefit of this approach is that it allows the TRC to support current and on-going efforts in certain areas of the region that are working toward the same goals as the TRC.

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Ultimately, the TRC would serve as the primary plan oversight entity, but it would also provide a governance structure to organize the variety of activities on-going in the region and monitor those efforts to ensure that everyone is pulling in the same direction. The TRC will continue in its role as overall monitor, manager, and coordinator. In this role, the TRC would continue to manage the task force action steps, implement activities aimed at fostering regional collaboration, and provide on-going support to the Task Forces and their sub-regional committees in the form of fund-raising and leadership. In this way, the TRC, with the participation of additional stakeholders, will provide the leadership required to move overall regional and sub-regional activities forward to ensure that the economic vision of its leaders is achieved and the region becomes a true â&#x20AC;&#x153;hometown hotspotâ&#x20AC;? for its citizens.

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Bridging the Red River 2007  

A regional economic strategy for Cooke, Fannin, and Grayson Counties in Texas and Atoka, Bryan, Carter, Coal, Garvin, Johnston, Love, Marsha...

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