HomeMy WebLinkAbout2012-01-17; City Council; MinutesMINUTES
SPECIAL MEETING: CITY COUNCIL PLANNING SESSION AGENDA
DATE: January 17, 2012
TIME: 8:30 AM
PLACE: ENCINA WASTEWATER AUTHORITY BOARD ROOM, 6200 AVENIDA ENCINAS
The Mayor called the meeting to order on January 17, 2012 at 8:30 AM. Present: Hall, Packard,
Kulchin, Douglas, Blackburn.
The Planning Session began with a brief clip of a local newscast that depicted Carlsbad as "the happiest
place on earth".
Public Comment: Diane Nygaard, representing preserve Calavera, spoke of Carlsbad achievements and
the three areas that citizens thought the City could improve upon: controlling growth, managing traffic
and acquiring more open space.
Mayor Hall welcomed the participants and emphasized that two important issues for the City were
empowerment and working with the Community.
Session Facilitator Michelle Tamayo noted that the day's objectives were to 1) clarify critical issues and
2) create a high level strategic focus.
The Council participated in an exercise in which they chose what the predominant issues facing our
nation. They then heard from staff regarding the Citizen's Survey. Finance Director Chuck Mc Bride
gave a presentation regarding the City's financial picture and ten year forecast.
Council took a break from 9:20 A.M. and all returned to the Session at 9:32 A.M.
Assistant City Manager John Coates and Deputy City Manager Cynthia Haas gave short presentations on
the current trends:
Complete Streets
Aging neighborhoods
Fostering the next generation of leaders
Changing Recreation Needs
Aging Population
Population & demographic changes affecting land use
City Council Planning Session January 17, 2012
New approaches to generating revenue
Creating quality jobs In a new economy
Sustainable organization
Libraries in a digital age
Increased public Involvement through technology
Increased access to government through technology
Council took a break from 11:37 A.M. and all returned to the Session at 12:46.M.
Ms. Tamayo reported out the themes that she heard: Partnerships/relationships, Creative ways to do
business. Balance, Social Places and Building Community, Commercialism, Innovation, Higher Education
and that change is hard/now is the time.
By using voting stickers Council prioritized several trends for staff to pursue in FY 2012-2013.
1) Creating quality jobs in a new economy.
2) Sustainable Organization.
3) Population and demographics change affecting land use.
4) Changing Recreation needs.
5) Complete Streets.
6) Fostering next generation of Leaders.
Each Council person gave their five year vision of each of these trends.
Council took a break from 2:36 P.M. and all returned to the Session at 2:47 P.M.
Council and staff discussed how effective the day's planning was.
Public Comment: Don Christiansen - Discussed the PACE program (household energy efficiency) and
how it might pertain to San Diego County. He asked that the Council focus on open space and
community gardens.
Ed Scarpelli - Asked for maintenance of City Easements created by Sub Divisions built prior to 1975 with
no Home Owners Association requirements.
City Council Planning Session January 17, 2012
The Mayor noted that ail Planning Commissioners should attend the upcoming Planning Conference in
San Jose. He also indicated that a majority of Council should attend the IG Conference the 17'^ to 20*'' of
April.
Mayor Hall adjourned the meeting at 3:40 P.M.
Lorraine M. Wood, CMC
t:ity Clerk
The following documents were distributed for use in this Planning Session. All documents are on file in the
Office of the City Clerk.
Council Input for Planning Session 2012
Fulfilling the Community Vision
Resident Survey Report, January 17, 2012
City of Carlsbad, Ten Year Financial Forecast, January 2012
General Fund Preliminary FY 2012-13 Forecast
Trends
Complete Streets
Aging neighborhoods
Fostering the next generation of leaders
Changing Recreation Needs
Aging Population
Population & demographic changes affecting land use
New approaches to generating revenue
Creating quality jobs in a new economy
Sustainable organization
Libraries in a digital age
Increased public involvement through technology
Increased access to government through technology
Community Vision
City Council Planning Session January 17, 2012
10 New Rules for Elected Officials in Times of Economic Meltdown, Frank Benest
Understanding California's Demographic Shifts, Stanford Center on Longevity
What's the Future of Local Government? Presentation at Alliance for Innovation, October 2011
Local Government in the Wake of the Great Recession: Are Big Changes Ahead? Presentation at Alliance for
Innovation, October 2011
The New PC Era: The Personal Cloud, Stephen Kleynhans, January 6, 2012
Council Input for Planning Session 2012
> Take a step back to clarify how we are changing.
> What are the demographics of Carlsbad?
> How do we keep Carlsbad as a vibrant City?
> What do we want our City to be known for?
> Keep us as the 50,000-foot level.
> Staff: tell us the truth; tell us what you need & how we can help.
> Don't tell us about your accomplishments.
> Give us broad concepts...here's where the challenges are.
> Tell us what you know, understand, need.
> More time for Council to talk/debate/discuss issues.
> Staff available to answer questions.
> More talking, less presenting.
> Don't need to review Athena.
> Keep us out of the weeds.
> We like the dots!
Fulfilling the
Community Vision
City of Carlsbad
City Council
Strategic Goals
Broad policy level goals in
the areas critical to fulfillittg
the coiumutiity vision
2012 Strategic
Focus Areas
Priority areas of focus for
the next 12 to 24 months to
support Council goals and
the community vision
CITY OF
CARLSBAD
Resident Survey Report
City of Carlsbad
EXECUTIVE SUMMARY
For the fifth consecutive year, the City of Carlsbad and its Performance Measurement
Team partnered with BW Research Partnership, Inc. (BW Research) to conduct its
public opinion survey of residents. The main research objectives of the 2011 study were
to assess residents' perceptions regarding satisfaction with city services, quality of life,
sense of community, safety in their neighborhoods, city government, and city-resident
communication.
The city-wide survey of residents was administered by telephone (both land line and
mobile) from September 13 to October 2, 2011 and averaged 20 minutes in length. A
statistically representative sample of 1,000 Carlsbad residents 18 years and older
completed a survey, resulting in a maximum margin of error +/- 3.08 percent (at the 95%
level of confidence) for questions answered by all 1,000 respondents.
KEY FINDINGS
Satisfaction with City Services
94.4% 91.6% 88.9% 90.9% 91.5%
Ninety-four percent of residents were
satisfied with the job the City of
Carlsbad is doing to provide city
services, the highest percentage
reported in any survey year.
When asked about specific services,
residents who provided an opinion
reported the most satisfaction with
the city's efforts to "Provide library
services" (96%), "Maintain city parks"
(95%), "Provide fire protection and
emergency medical services" (94%),
and "Trash collection services" (93%).
Among those who provided an
opinion, satisfaction with the city's
efforts to "Manage traffic congestion
on city streets" (77%) and "Manage
residential growth and development" (72%) reached new highs in 2011.
Quality of Life
Also reaching a new high in 2011, 98 percent of residents rated the quality of life in
Carlsbad as "Excellent" (64%) or "Good" (34%). Residents were also more positive than
previous years regarding the direction of the quality of life. Only 11 percent indicated that
the quality of life was "Getting worse," 68 percent viewed it as "Staying about the same,"
and 17 percent rated it as "Getting better."
100%
80%
60%
40% -
20%
0% -H
2011 2010 2009 2008 2007
[bv^] RESEARCH
PARTNERSHIP
Resident Survey Report
City of Carlsbad
2011
2010
2009
2008
96.0%
94.5%
0% 20% 40% 60% 80% 100%
Taken together, the number of residents
who rated the quality of life in the city as
"Poor" or "Very poor" or felt it was
"Getting worse" was lower in 2011 than
previous years. As a follow-up question,
the 11 percent of residents (114
respondents) who indicated some
measure of dissatisfaction with the
quality of life were asked to report the
number one thing that the city could do
to improve quality of life. The most
frequently cited response among the
sub-group was to stop building and
growth (27%), followed by "Fix the traffic
problems" (16%) and "Increase/ improve
police services" (11%).
Safety
The overall safety percentages reported by residents in 2011 were the highest of any
survey year for both walking alone during the day and after dark in their neighborhoods.
An overwhelming 99 percent of residents reported feeling safe walking alone in their
neighborhoods during the day (86% "Very safe") and 90 percent of residents reported
feeling safe walking alone in their neighborhoods after dark (54% "Very safe").
Confidence in City Government
Eighty-four percent of residents
indicated confidence in Carlsbad
city government to make decisions
that positively affect the lives of
community members. Although
composition shifted (i.e., a lower
percentage in the "Very confident"
category and a higher percentage in
the "Somewhat confident"
category), the overall confidence
level reported by residents in 2011
was higher than any previous
survey year.
100%
73.7% 75.7% 78.5%
2011 2010 2009 2008 2007
[bw] RESEARCH
PARTNERSHIP
Sense of Community
Based on a seven-question series, 43 percent of
residents were classified as having a "High" sense of
community. Within the series, Carlsbad residents
reported the highest level of agreement with items
related to "Community values."
Resident Survey Report
City of Carlsbad
Sense of community was positively correlated with each of the survey's key metrics:
satisfaction with the job the city is doing to provide services, quality of life ratings,
perceptions regarding the direction of the quality of life, satisfaction with city-resident
communication, feeling safe walking alone in their neighborhoods (during the day and
after dark), and confidence in city government.
The top predictors of having a high sense of community were satisfaction with the city's
efforts to provide recreation programs and positive ratings for Cadsbad's quality of life.
City-Resident Communication and Information Sources
Eighty-seven percent of residents were
satisfied (48% "Very satisfied") with the
city's efforts to provide information to
residents through its website,
newsletters, water bill inserts, and
related sources of information.
The most utilized sources for
information about city issues, programs,
and services were television news
(77%), the community services and
recreation guide (73%), and the city's website (71%)
•Very satisfied
B Somewhat
satisfied
• Somewhat
dissatisfied
•Very
dissatisfied
• DK/NA
5.7%
CONCLUSIONS
Carlsbad Satisfaction High while California Satisfaction Languishes
Earlier this year, California residents gave the state its lowest quality of life rating^ in
almost 20 years. Other regional and national measures of quality of life and resident well
being have been equally dismal as the economic downturn and recent government
scandals appear to be having a substantial negative impact on resident satisfaction and
quality of life ratings. While statewide and national metrics of well being and resident
satisfaction have declined, Carlsbad residents have remained remarkably positive about
the city and its quality of life. Overall levels of satisfaction with city services have
increased over the last two years while reaching historically high levels. Cadsbad
residents also remain almost universally positive about the quality of life offered in the
city, with 98 percent rating it as either "Excellent" or "Good," also consistently increasing
over the last four years.
According to the Pew Research Center, "By almost every conceivable measure,
Americans are less positive and more critical of government these days"^ and yet
Carlsbad residents have bucked statewide and national trends and have shown an
increase in their confidence in city government, with more than four out of five
respondents "Somewhat confident" or "Very confident" in city government.
^ According to a joint UC Berkeley and Field Poll completed in February 2011 with 898 registered voters. For
more information, go to http://igs.berkeley.edu/reports/Rls2370.pdf
^ Pew Research Center, April 2010, for more information go to http://pewresearch.org/pubs/1569/trust-in-
government-distrust-dlscontent-anger-partlsan-rancor
[bw] RESEARCH
PARTNERSHIP
Resident Survey Report
City Of Carlsbad
The question becomes, how has Carlsbad been able to maintain - and in many
instances increase - resident satisfaction among multiple metrics in an economic
environment that has been historically challenging? The results of the survey show that
Carlsbad has maintained high levels of satisfaction with many of the City's specific
services like library services, fire protection and police services, with several of these
services reaching new highs for satisfaction either in 2011 or 2010. However, potentially
of greater significance are those specific services that have historically received
relatively low satisfaction, managing growth and development as well as managing traffic
congestion that have both consistently improved over the last five years, going from as
low as 57 percent to over 70 percent total satisfaction for both issues.
Carlsbad Communication Efforts
Another potential explanation for Carlsbad's high satisfaction across multiple measures
can be traced to residents' overall level of satisfaction towards the city's communication
efforts. With close to the majority (48%) "Very satisfied," 87 percent of indicated they
were satisfied with the city's communication efforts. In our experience with other
community resident surveys, satisfaction with a city's communication efforts is on
average ten percentage points below overall satisfaction with city services. In Carlsbad,
the differential between overall satisfaction with city services and satisfaction with the
city's communication efforts is only seven percentage points. Satisfaction with city-
resident communication is yet another example of Carlsbad surpassing norms, resulting
in a strong overall resident satisfaction profile.
[bw]^, ESEARCH
PARTNERSHIP
1/17/2012
Ten Year Fitiancial Forecast
lational Economy
lobai
Fed Polic
1/17/2012
iifiifl EcoiiiPin
Quarter-to-Quarter Growth in Real GDP
Unemployment Remains High
Housing
Slow Recovery
Governor's Proposals
1/17/2012
Overview
Regional Economic Trends
• USD Economic Indicator
• Local Unemployment
• Commercial Vacancy
1/17/2012
130
125
120
lis
110
105
100
Index of Lvading Economic Indicators
San Diego County, 2008- 2011
JOS J09 JIO Jll
BucJget Projected Variance
Property Tax $48,;7:? $•18,107 IS 16!))
Sales Tax .'7,S!>1 408
TOT ll,Oi-.S .17,04', //
Franchise 4,b:'.2 4,S28 (104)
Business License :',,4s.? ? ?b
All other S18,180 S17„97S (S20S)
Total $113,569 $113,905 $336
1/17/2012
Assumptions
• No Change in Timing of New Facilities
• Infrastructure Replacement Transfer
remains at 6.5% of GF revenues
• RDA Closure
• PERS Stabilization Remains
• BVS Effects are not considered
• Golf Course contribution decreasiAe—
_
1/17/2012
Transient Occupancy Taxes
1/17/2012
Franchise Taxes
10 Year Forecast
1/17/2012
General Fund Preliminary FY 2012-13 Forecast
Actual Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
IREVENUES 114,765 113,905 116,276 120,248 125,540 128,118 134,268 138,892 142,600 147,075 150,231 155,784
-2.7% -0.7% 2.1% 3.4% 4.4% 2.1% 4.8% 3.4% 2.7% 3.1% 2.1% 3.7%
Total Revenues 114,765 113,905 116,276 120,248 125,540 128,118 134,268 138,892 142,600 147,075 150,231 155,784
{EXPENDITURES
BASE: 98,951 101,584 104.605 106,937 109,629 112,413 115,305 118,372 121,513 124,742 128,046 131,446
-2.1% 2.7% 3.0% 2.2% 2.5% 2.5% 2.6% 2.7% 2.7% 2.7% 2.6% 2.7%
Capital outlay 0 110 150 200 250 300 350 400 450 500 500 500
Contingency 32 500 500 500 500 500 500 500 500 500 500 500
Transfers:
Innovation Project (HCMS) 350
PERS Stabilization 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400
Infrastructure Replacement (6.5%) 7,175 7,382 7,558 7,816 8,160 8,328 8,727 9,028 9,269 9,560 9,765 10,126
Golf Course Ops Transfer 1,406 920 850 750 700 700 700 700 700 700 700
Miscellaneous Transfers 1,135 215 221 231 240 250 255 265 275 286 296 305
LLD #1 Transfer 254 473 591 614 642 675 711 748 784 823 864 890
Golf Course Land Transfer
Total Base 107,897 113,070 115,944 118,549 121,572 124,565 127,948 131,413 134,891 138,511 142,071 145,866
ADDITIONAL BUDGET ITEMS: -6.3% 4.8% 2.5% 2.2% 2.5% 2.5% 2.7% 2.7% 2.6% 2.7% 2.6% 2.7%
Program Options
1 Budget Savings (note 1)
New Facilities:
Fire Station #3 (Add'l Staff) 34 35 36 37 38 39 41 42
Civic Center (net of vacated facilities) 1,100 1,134 1,169
Maintenance Operations Center 404 415 427 441 455 469 483 498
Safety Training Center 27 54 55 57 58 60 62 64 66 68 70
Alga Norte Park (net of fees) 760 781 802 825 852 879 906 934 963
Alga Norte Aquatic Complex (net of fees) 440 452 464 478 493 509 525 541 558
Poinsettia Park-Phase 2 500 516 532 549 566 583
Leo Carrillo Park Phase 3 150 155 160 165 170 175
Veteran's Memorial Park 751 774 798
ITOTAL EXPENDITURES 107,897 113,097 115,999 119,804 123,299 126,341 130,425 133,969 137,527 143,081 146,782 150,723
-6% 5% 3% 3% 3% 2% 3% 3% 3% 4% 3% 3%
{REVENUES OVER (UNDER) EXP 6,869 808 278 444 2,241 1,777 3,843 4,922 5,073 3,994 3,449 5,061
Percent of Budget 6% 1% 0% 0% 2% 1% 3% 4% 4% 3% 2% 3%
Trends
CITY OF
CARLSBAD
2012 GOAL SETTING
Demographics: Complete streets
Aging neighborhoods
Fostering the next generation of leaders
Changing recreation needs
Aging population
Population & demographic changes affecting land use
Economy: New approaches to generating revenue
Creating quality jobs in a new economy
Sustainable organization
Technology: Libraries in a digital age
Increased public involvement through technology
Increased access to government through technology
Demographics
CITY OF
Issues Briefs
Trends & Implications
CARLSBAD
2012 GOAL SETTING
Trend
Description Community values are shifting from designing roads to accommodate maximum
vehicle traffic to designing roads that meet the broader needs of the community.
This new approach, called "complete streets," recognizes that streets are an
important part of the livability of a community and ought to be for everyone,
whether young/old, motorists/bicyclist, walker/ wheelchair user, bus
rider/shopkeeper, tourist/resident. The concept also recognizes that designing
streets can be used to create destinations that encourage economic development.
More than 300 jurisdictions nationwide have adopted complete streets policies and
ordinances.
Affected
departments
Transportation, Community & Economic Development, Police, Fire, Housing &
Neighborhood Services, Parks & Recreation
How this affects us Challenges
• Carlsbad's existing roadways reflect the vehicle-centric approach of the past
often at the expense and safety of other modes.
• Roadways provide great levels of service for motorists their sheer size and speed
often creates challenges and constraints for pedestrians, bike riders, transit
users and people with disabilities.
Opportunities
• Realization of key elements of the community's vision for the future (small town
feel, recreation, healthy outdoor lifestyles, increased connectedness, business
diversity and tourism, sustainability, neighborhood design, revitalization and
livability)
• Carlsbad Boulevard presents several opportunities for demonstration projects
that could enhance tourism, recreation, healthy outdoor lifestyles and coastal
beach access.
• Increased visitation to Carlsbad Village, beaches and neighboring areas through
improved walkability and bikeability, leading to increased foot traffic and
opportunities for local businesses to expand and grow
• SANDAG TransNet "Active Transportation" Grant money is available
Benefits
• Increased transportation choices and opportunities
• Economic revitalization and improved safety
• Quality of place by making streets vibrant and livable
• More walking and bicycling (active transportation)
• Public health and air quality
Status Complete Streets will be incorporated into Envision Carlsbad (GP/LCPA/Zoning
Update Program) _ _
Example of existing "complete streets"
concepts on Carlsbad Boulevard
Existing conditions that constrain pedestrians
and bicycles, favoring vehicles.
Oft«T
e>m- tj^^*
see
terAii-
1>R£>POSei>
(FROM TAMA12ACK. TO CANNON)
OPTION 1
m»mmist€im»mf,m, SHEETS
Example of Carlsbad Boulevard as a "complete street" with added parking, enhanced walkways and
bikeways, all within the existing right of way.
1^
CLOSE UP: Example of Carlsbad Boulevard as a "complete street" with added parking, enhanced
walkways and bikeways, all within the existing right of way.
Existing view of State Street entrance to the City of Carlsbad
Example of State Street entrance to the City of Carlsbad using "complete streets" features,
including a roundabout, dedicated bike and pedestrian paths and creating a sense of place.
C 1 T Y O F
^ CARLSBAD
2012 GOAL SETTING Issues Briefs
Trends & Implications
Trend Aging neighborhoods
Description New neighborhoods continue to be built in Carlsbad, while many
neighborhoods are aging and require attention and focus to
prevent or reverse decline. Many Carlsbad neighborhoods have
been in existence for 50 years or more, and several (such as the
Barrio and Ponto) are showing signs of decline or neglect.
Affected departments Housing & Neighborhood Services, Police, Utilities, Transportation,
Community & Economic Development, Library, Parks & Recreation
How this affects us
Status
Virtually everyone in a community is affected in some way by an
individual neighborhood's health and relative vitality, including
homeowners, renters, schools, churches, business, commercial
centers, nonprofit organizations and the local government.
Declining or neglected neighborhoods are often associated with:
• the loss of property values;
• increasing crime and higher costs to address these unsafe
environments;
• increased need for city or other public services;
• decreasing school test scores or lack of quality school facilities;
• deteriorating/aging infrastructure;
• deferred maintenance of facilities and/or residences, which
results in higher costs at a later date to repair or replace;
• loss of "curb appeal" to attract private investment;
• low sense of community and lack of social support; and/or
• reduced or lost tax revenue.
Community problems related to aging neighborhoods are becoming
increasingly more complex, are often expensive to address and may
require multifaceted solutions.
City is currently setting funds aside for future replacement or
repair of infrastructure throughout the city, and staff will
continue to monitor this program for effectiveness.
Several neighborhood service programs have been developed,
and more are under development to address signs of decline or
problem areas in older neighborhoods.
More attention and resources will be required to address aging
neighborhood issues in the future.
issues Briefs
Trends & Implications
CITY OF
^ CARLSBAD
2012 GOAL SETTING
Trend
Description
Fostering the next generation of leaders
A strong, diverse base of community leaders is essential to a
healthy city government. Traditional methods of involving the
public in city affairs tend to draw from a more narrow segment of
the population -- primarily those who have the time and interest in
attending public meetings and digesting highly technical
government documents. As a result, some segments of the
community, especially young people and families with children at
home, do not have as many opportunities to participate in
leadership positions such as city boards and commissions or even
ad hoc committees and public workshops. Without gaining
experience participating in their city's issues at this level, it is
unlikely these segments of the public will be able to develop the
kind of leadership skills and experience needed to help the fill
future leadership voids in our community^
Affected departments Al
How this affects us
status
Benefits
• Encouraging the development of new leaders who reflect the
full array of community demographics and interests would help
ensure the city can meet the future needs of the entire
community.
• Developing leadership skills takes time. Enabling people to start
the process earlier will result in more experienced, effective
community leaders ready to serve the future needs of the city.
Challenges
• Existing opportunities are at times, locations and in formats not
convenient for these segments.
• Their interests and priorities are elsewhere/difficult to get their
attention and commitment to get involved.
• They have limited time available for community leadership
activities.
• The city partners with Junior Achievement on the City Stuff
program, a third-grade local government curriculum.
• The city recently launched a Citizens Academy leadership
module for graduates interested in continuing to develop their
leadership role with the city and community.
• The city has encouraged high school student participation in
Citizens Academy and the Envision Carlsbad Committee.
• Staff is currently working with Junior Achievement on a high-
school level curriculum focused on local government.
Issues Briefs
Trends & Implications
CITY OF
^ CARLSBAD
2012 GOAL SETTING
Trend
Description
Changing recreation needs
Changes in the size and composition of California's population,
more than anything, will drive the impacts on the delivery of parks
and recreation services in the coming years. While the baby
boomer generation relied on traditional recreation facilities to meet
their needs, the 18-40 year olds today trend toward extreme sports
and adventure recreation. As the aging population increases and
people live longer, older adults will have different needs than
previous senior citizens.
In order to accommodate the impacts of changing demographics,
public facility design trends have evolved over the past few decades
to provide multi-generational opportunities for recreation in one
location.
Affected departments Parks & Recreation
How this affects us Existing park and facility master plans may no longer reflect the
current and anticipated recreational needs ofthe community.
Evaluation and analysis of park and facility plans would require
public outreach that is balanced and provides factual and
detailed information.
Any recommended changes in plans should consider their
impact on the pyramid model of cost recovery.
The priority and timing of facility development may not be
consistent with the need.
Status Accepted pyramid model of cost recovery in 2009
Alga Norte Community Park has been master planned, designed
and is scheduled to be open in 2013
Aviara, Pine and Poinsettia parks all have planned future phases
to include community centers/gymnasiums, similar to Calavera
and Stagecoach parks
Veterans Park and Robertson Ranch Parks have yet to be master
planned
i4r CITY OF
CARLSBAD
2012 GOAL SETTING Issues Briefs
Trends & Implications
Trend Aging population
Demographic data collected and analyzed for the recent Envision
Carlsbad report show that the Carlsbad senior population,
identified as age 55 and older, constitutes about one-third of
Carlsbad residents.
The identified trend shows the senior population growth will
increase at a faster rate than all other age groups in Carlsbad
between now and 2050. Older adults are demonstrating different
expectations for services and life experiences.
Affected departments Parks & Recreation, Library & Cultural Arts
How this affects us Increased demand for senior services
Changes in services (technology, wellness, lifelong learning)
With expectations for services and life experiences evolving, so
must our service delivery to remain relevant to this population
Need to diversify programs and services at libraries, recreation
centers, and parks to meet the needs of two generations of
seniors
• The 50+ population is more active and engaged than the
population traditionally considered "seniors"
Need to evaluate continuous learning and wellness experiences
that integrate with their active lifestyles (time of day, type and
combination of offerings)
Determine if our current senior center operating model has the
capacity to meet future needs
Need to incorporate senior programs into existing facilities and
libraries; may require a change in the current facility/resource
allocation
This demographic will compete with other groups for
distribution of resources
status Existing dedicated senior center offers a wide variety of
recreational, social, and nutritional programs and services
Three libraries afford seniors the opportunity to experience
lifelong learning, technology training and community
engagement
Issues Briefs
Trends & Implications
tf C I T Y O F
CARLSBAD
2012 GOAL SETTING
Trmd Population ami demographic chmges
affecting land use
Description National and regional forecasts indicate significant changes in
population and demographics over the next 20 to 40 years. These
forecasted changes will greatly affect demand, type, intensity, and
density of future residential, commercial and office/industrial
development. These trends, coupled with Carlsbad's limited
amount of remaining vacant and under-utilized land, will pose
significant policy and implementation challenges for the city.
Affected departments Community & Economic Development, Housing & Neighborhood
Services, Finance, and all infrastructure and service providing
departments
How this affects us • Challenges with accommodating future growth and changes in
product type, density and intensity
• Balancing competing land use demands - housing versus jobs
and economic uses
• Balancing community values and neighborhood character with
economic and housing needs
• Neighborhood conflicts resulting from infill of vacant sites, and
intensification and reuse of existing developed buildings or sites
• Need for flexibility in our land use and development policies and
standards, while maintaining our high quality
• Managing future land use and development demands within our
current growth management policies and standards
status • Envision Carlsbad - GP/LCPA/Zoning Update Program -
underway (completion date: end of 2013)
• Existing 2005-2013 Housing Element - Ongoing implementation
of programs (Quarry Creek, Barrio, minimum mixed-use and
residential densities, etc.)
• Infrastructure Master Plan Updates (sewer, water, drainage)
• Growth Management Facility Plan Updates (as needed for major
projects; Quarry Creek, Dos Colinas, etc.)
• Village Revitalization Partnership - current initiative underway
to partner with Village property owners to create a sustainable
program in the Village to ensure local re-investment and
economic development in the Village area.
Economy
CITY OF
^ CARLSBAD
. 2012 GOAL SETTING Issues Briefs
Trends & Implications
New em^wiches togenermOaig revenue
Description Decreasing revenues from traditional sources such as property tax,
sales tax, community giving and earned income have led some cities
to adopt new approaches to generating revenue. Strategies vary
widely, but include selling advertising space on city assets, setting up
new commercial enterprises at city facilities, selling event
sponsorships, and pursuing grants and donations from private and
community foundations.
Affected departments All
How this affects us • While these efforts present an opportunity to provide much
needed funding for city services, cities must also be aware of the
possible pitfalls of these approaches.
• Some may see it as a public entity choosing to compete with \
local private businesses for customers and dollars. j
• In some situations it may even pit a city against a local non-profit
for funding from a foundation.
• The efforts to raise funds and pursue sponsorships by our
departments are not coordinated or centralized.
Status • Recently, a coffee kiosk has been opened at Dove Library to
serve patrons. The kiosk is operated by a private vendor.
• Programs such as TGIF Jazz in the Parks and Parks & Recreation's
Dinner and a Movie have experienced reduced giving, resulting
in additional pressure to generate funding to retain current
levels of programming.
• A citywide policy to guide the pursuit of sponsorships is in
development.
Issues Briefs
Trends & Implications
<<CC CITY OF
^ CARLSBAD
2012 GOAL SETTING
Trend Creating qualityjobs in a new economy
Description studies are showing that more and more companies in the new
economy have moved operations off-shore to reduce costs and
remain competitive. This has resulted in fewer companies
expanding operations in the U.S. In addition, companies are finding
it more difficult to find talent to support innovation that will help
them remain competitive. This has led cities and economic
development organizations to shift their strategies.
Economic Gardening
"Economic gardening" is a new model that seeks to create jobs and
enhance competitiveness by supporting targeted local companies
with access to technical information and other resources that
would not otherwise be affordable.
Talent Recruitment
Traditional economic development efforts have focused on
attracting companies to the community. New strategies focus on
helping existing companies attract the talent and innovators they
need to grow and compete in the global economy. This also
includes attracting entrepreneurial talent that will start and
relocate companies to the community.
Education Hub
studies show that when a city becomes a hub for higher education
and research, high quality jobs are created. By partnering with
institutions of higher learning and research organizations a
community becomes a magnet for new talent and attracts
companies looking to parlay local research into marketable
products and services.
Affected departments Community & Economic Development, Finance, Ubrary, IT
How this affects us As Carlsbad emerges from the recession, we need to build on the
diversity of our local economy and established industry clusters.
This will encourage growth and consequently reduce local vacancy
rates and enhance property values in office, industrial and R&D real
estate.
status
Many of Carlsbad's largest and most innovative companies were
started by people that wanted to live in Carlsbad. Our focus on
attracting talent can help bring in the innovators and entrepreneurs
who will create Carlsbad's next generation of great companies.
Meeting with existing companies in targeted industries. The
difficulty in attracting talent is mentioned as a barrier to their
future growth.
Working with the Carlsbad Chamber of Commerce to coordinate
economic development efforts.
Marketing library resources to local businesses.
Implemented on-line property search tool to help companies
with expansions and relocations to Carlsbad.
Meeting with new prospects for expansion, relocation and
business start-ups.
Meeting with local learning institutions to explore partnership
opportunities.
EDWARD LDWE FOUNDATION
Economic
Gardening
Economic Gardening
An entrepreneur-oriented approach to economic prosperity
It may seem ironic in today's global
economy, but place has become
more important than ever. Natural
resources, low-cost labor and tax
incentives used to be key drivers to
regional prosperity. Today, however, the
abiiit}' to support innovative companies
and entrepreneurs is also a critical
com.ponent to economic growth.
"We're living in a period of
exponential economic change,
which means economic developers
and community leaders must serve
businesses differently," says Mark
Lange, executive director of the Edward
Lowe Foundation in Cassopolis, Mich.
"That's where economic gardening
comes in — and why it takes a neutral
third party like the foundation to get
involved and be a catalyst for change."
Economic gardening takes an
entrepreneurial approach to job
creation. Sometimes referred to as a
"homegrown" or "inside-out" strategy,
economic gardening focuses on helping
existing growth-oriented companies
become larger.
"We're not saying that attraction
and recruitment activities should
be discontinued, but they've been
overemphasized, due partly to
competitive and political pressures,"
Lange says. "A balanced approach is the
key to building effective programs and
strategies. -i-'- ''i"':'
Economic gardening helps establish
an entrepreneurial culture within
communities and sets itself apart from
other economic-development strategies
by its target audience, tools and timing
of services.
Lor example, traditional economic-
development programs offer tax
incentives, workforce development
services and infrastructure
improvements to attract and retain
companies that may be considering
relocation — strategies that emphasize
movement rather than growth.
At the other end of the spectrum,
there are a variety of small-business-
ECOIXOMK: GARDENING I Edward Lowe Foundat tion
development organizations that serve
startups and small businesses by
providing assistance with operations
and management issues such as
business-plan review, cash-flow
analysis and succession planning.
In contrast, economic
gardening deals with growth-
oriented companies and strategic
issues like penetrating new
markets, refining business
models, developing teams and
embracing new leadership
roles. Economic gardening
provides information and
decision-making assistance
to companies that are
transitioning from small to
large, with services customized to meet
the just-in-time needs of this audience.
Communities currentiy nurmre
their economies through recruitment,
workforce development and small-
business development. "But there
is a fourth dimension we need to
add," Lange says. "Growth-company
development is the missing piece, which
is why the Edward Lowe Foundation is
an advocate for economic gardening."
Second-Stage benefits
Some of the greatest retorns
of economic gardening come
from working with second-stage
entrepreneurs — companies that have
advanced beyond the starmp stage with
the intent and potential for additional
growth. (Second-stagers typically have
10 to 99 employees and generate about
$1 million to $50 million in annual
revenue, depending on their industrj^.)
Many people associate second stage
with gazelles (companies with extremely
high growth). Although gazelles pass
through second stage, which makes it
a good place to find them, they're only
part of the story. Second stage also
includes: 1) companies with potential
for high growth and 2) companies
generating steady growth that may be
less dramatic than gazelles but remains
impressive.
This growth orientation is a critical
Small
Business
Oevefopment
Business
Attraction
* Recruitment
distinction that separates growth
companies from other types of
small businesses.
For example, some individuals may
be self-employed because they like
being their own boss, but job creation
isn't part of their game plan. Then there
are small businesses that provide jobs
in a community, but their growth is
somewhat restricted by the local trading
area they serve.
In contrast, second-stage
entrepreneurs are significant job
creators because of their focus on
growth. And because they often have
national or global markets, they bring
outside dollars into the community.
"It's time we treat growth-oriented
entrepreneurs differentiy than small
businesses — giving them their own
place in the overall scheme of economic
development," says Lange. "The
foundation can play an important role
by helping community organizations
collaborate more effectively to ser%^e
this audience."
According to Doug Tatum, author of
"No Man's Land," entrepreneurs face
four key challenges as their companies
transition from small to big:
• Market adjustments.
• Outgrowing early management
teams and their role as founders.
• Scaling business models to handle
growth.
• Understanding capital requirements.
"It's hard for entrepreneurs to
resolve these issues on their own —
or even identify them accurately,"
says Dino Signore, manager of
program development at the Edward
Lowe Foundation. "For one thing,
moving from Stage 1 to Stage 2
brings on an entirely new set of
challenges. Entrepreneurs face more
responsibilities, and everything becomes
magnified. Their core competencies
become stronger, but so do their
weaknesses."
Making things even more difficult,
changes in markets, management,
business model and money arc
interrelated, Signore continues. "Being
out of sync in one area can cause you to
be out of sync in others."
These conditions manifest
themselves in a variety of ways. Some
common symptoms: not being able
to fulfill commitments to customers;
quality problems become more
EC:ONOMICCJAm)ENING j Edward Lowe Foundation
pressing; and decisions become
increasingly complex and no longer
intuitive. In addition, reporting systems
no longer provide good information,
and founders feel they're no longer able
to lead every aspect of the business.
To help entrepreneurs resolve
growing pains, economic-gardening
organizations employ a variet}' of
techniques. These fall into two broad
categories: decision making and
information.
Making better decisions
Entrepreneurs need help with
strategy, identifying what they're good
at and finding a sustainable competitive
advantage.
They also need to shift their
leadership role as the company grows,
build a strong management team, create
a clear vision, and then communicate it
consistentiy.
This is where temperament tools
can help. Understanding temperament
(personality preferences, such as
extroversion and introversion or how
people process information), can help
entrepreneurs recruit high-performance
teams that balance their own inherent
strengths and weaknesses. Being
aware of temperament can also ensure
employees are in positions that enable
dneni to play to their strengths.
Sophisticated information
Economic-gardening specialists can
also provide valuable information by
using business-intelligence tools that
smaller or younger companies either
can't afford or don't know about. For
example:
• Sophisticated databases can identify
market trends, potential parmers or
competitors and unknown resources
often buried deep inside industry
information.
• Geographic information systems
can track customer expenditures,
psychographics and demographics and
then create color-shaded, density maps
that profile customers or show gaps in
market coverage.
• Search engine optimization tools can
raise visibility in search engine results
and increase traffic on websites.
• Social media monitoring applications
can track websites, blogs and online
communities to see what people are
saying about companies and products
— and reveal important market
influencers.
"Yet it's important to note that these
tools aren't a panacea to entrepreneurs'
problems," Lange says.
Businesses are biological entities,
where there is constant flux due to
employees, customers, markets and
economic conditions, he explains.
Applying mechanical rules (where the
same process always yields the same
output) won't work. Instead, economic-
gardening specialists leverage these
tools to find new ideas and approaches.
"What's more, economic-gardening
tools are constantiy changing," Lange
adds. "The ones generating today's
breakthroughs will become either
Working with entrepreneurs
updated or outdated quickly"
The tools and techniques described
here highlight the "one-to-one"
approach in economic gardening and
set the stage for an ongoing relationship
between a support organization and
individual companies.
Another important aspect of
economic gardening is connectivity (a
"one-to-many" approach), which uses
peer-to-peer networks, recognition
events, just-in-time workshops and
discussion groups to attract growth
entrepreneurs and serve their
immediate, pressing needs.
"Activities like these are critical to
launching and maintaining an overall
economic-gardening strategy," says
Lange. "They nurture the culture and
connectivity- that is so important to
growing regional economies."
To learn more about the Edward Tunve
Foundation, visit ivwiv.edwardlotve.org or call
800-232-5693.
The need for speed
Economic-gardening specialists
function much like an
outsourced team of experts.Their
goal is not to dictate or implement
solutbns, but to help CEOs identify
issues that might be hindering
gxwvth — and point them to
new tools, business concepts
and information to make better
decisions.
"Economic gardening is about
applying just-in-time, high-end
expertise rather than counseling,"
says Steve Quello. founder of CEO
Nexus in Winter Park, Fla, and
an economic-gardening expert
"Entrepreneurs know more about
their companies than anyone else.
Give them a better view of the
big picture, and they can make
adjustments themselves."
One challenge is getting up to
speed with entrepreneur.
During initial meetings,
considerable time is spent
discussing an entrepreneur's
background, company structure,
goals and grov^rth issues.Then. as
economic-gardening specialists learn
more about each company, they
become more efficient at delivering
actionable information. It's a back-
and-forth. ongoing relationship.
To gain trust and truly make
a difference, economic-gardening
organizations must act like the
entrepreneurs they serve.
"That means being nimble and
nonbureaucratic." Quello explains.
"Entrepreneurs need answers
in hours or days, not weeks or
months."
the new economic
DEVELOPMENT PLAYBOOK
By Christian S. Johansson
SEARCHING FOR ANSWERS TO AN
ECONOMIC DEVELOPMENT RIDDLE a t the beginning of 1939 with
the world on the precipice of
war, Winston Churchill famously
said, "I cannot forecast to you the
action of Russia. It is a riddle, wrapped
in a mystery, inside an enigma." what
Churchill, nor anyone else at the time could
have foreseen were the years of war, suffering,
and record economic growth that followed, as
well as the role that Russia would inevitably play
in changing the course of U.S., and our
world's, history.
Today, more than 70 years later, our world faces
a different kind of enigma, but one that is equally
challenging to forecast - a global economic struggle
thai is dramatically redefining our collective pros-
perities as countries, as companies, and as citizens.
While we cannot predict with certainly when or
how we will emerge from the economic malaise, 1
believe there are several axioms we can employ that
will help our nation prepare for better days ahead.
• First, talent drives innovation, which then
drives economic growth. The single most
important economic performance "input" is a
smart and talented workforce.
• Second, successful "organic gardening" is
the most significant contributor to sustained
economic growth. Moreover, small businesses
have historically been the key drivers of the
vast majority of job creation and investment.
• Third, the speed of globalization is rapidly
forcing the need for specialization and a focus
on core regional competitive advantages.
The BioMaiyknd Pavilion at the BIO 2011 Internaaonal Conference in Washington, D.C.
FOLLOWING A NEW ECONOMIC
DEVELOPMENT PLAYBOOK
Recognizing what successfully drives economic
growth fundamentally changes the approach that
economic developers use to build place-based
economies. Observing and quantifying them allows
us to shape policies and best practices that position
our states' and our counii7's economies for success
today and tomorrow.
After three years as Maryland's chief "jobs" ex-
ecutive, I believe the most important role an eco-
nomic development agency can play is as conve-
ner, coordinator, and collaborator Having run
a number of start-up companies and worked in
strategic consulting and regional development pri-
or to govemment, the strategies put forth in this
article originate from proven practices of venture-
backed entrepreneurs more so than those tradition-
ally practiced by economic development organiza-
Christian Johansson was
appointed Maryland's
secretary for business and
economic development in
2009. Before joining the
agency, he served for six
years as CEO of the Economic
Alliance of Greater Baltimore.
An entrepreneur and manage-
ment consultant, he also
sen/ed on President Obama's
transition team,
(Cjohansson®
choosemaryland.org)
FOCUS ON TALENT, HIGH GROWTH COMPANIES &
COMPETITIVE ADVANTAGES
Job creation is the top priority in our nation today. This article lays out a plan to grow jobs by attracting
and refciining talented workers; targeting resources on high impact, fast growing companies; and developing
an economic development plan around core advantages and assets.
Economic Development Journal / Fall 2011 I Volume 10 I Number 4
dons or officials. A three-pronged strategy focused on
talent, high-growth companies, and core competitive ad-
vantages is what I call "The new Economic Development
Playbook."
1. MAKE ATTRAaiNG. DEVELOPING, AND
RETAINING TALENTED PEOPLE IN YOUR
COMMUNITIES YOUR TOP ECONOMIC
DEVELOPMENT PRIORITY
Investing in education is one of the single most
effective ways to lower long-term unemployment, retain
companies, and attract new ones. Surveys of corporate
executives consistently find that a strong workforce and
talent are major factors in site selection. From 2007-2010
(see Chart 1), the gap between education levels and un-
employment rates has widened even further.. Students gather on ihe campus al Salisbury University,
CHART 1
Unemployment Rates by Education Level
Widening Gap Between Education Level and
Unemployment Since Recession Began
Unemployment Rate for Population Aged 25+
18.0 - - -
Dec-07 aiDec-10
All persons
aged 25+
No H.S,
diploma
H.S. degree, With college
no college degree
Source: Bureau of Labor Statistics, Current Population Sun/ey
At the same time, higher ecJucation affordability is be-
coming an issue for many students. Over the past five
years, while states' support for higher education has in-
creased an average of 8 percent, tuitions have gone up
nearly 50 percent. This trend looks likely to accelerate
as, according to the National Conference of State Legis-
latures, at least half of the states cut funding for higher
education in their 2011 legislative sessions.
In Maryland, we continue to make public education
investments a state budget priority As a result, Education
Week named our public schools the nation's best three
years in a row, Maryland also tackled the high cost of
getting a college degree by freezing tuition at our state
colleges and universities four years running. Bearing in
mind that not everyone will go to college, slates need to
have an aggressive plan to focus resources on develop-
ing middle skills. With many of today's jobs requiring
more than a high school diploma - but less than a bach-
elor's degree - we launched Sfeiik2Compete to increase
Maryland's skilled workforce 20 percent by 2012. We
are working with employers to align degree programs
to market demand and translate those requirements
through our Workforce Investment Boards.
In the end, it is not only about developing talent, it
is important to recruit and retain talent. To build suc-
cessful innovadon hubs, states must become attractive
destinations for global talent. After all, top talent is in-
finitely more mobile than companies. Like many states
with an extensive network of universities, Maryland ex-
ports talent as graduating students pursue opportunities
in other states rather than retaining the talent that can
generate new entrepreneurial ventures and innovations.
Aggressive campaigns to integrate student populations
into local communities can have a meaningful impact in
retaining them post-graduation. For example, Baltimore's
CoUegetown Network was founded in 1999 and over the
last decade has been successful in increasing the reten-
tion rate of students from 19 percent in 2003 to 31,5
percent in 2009,
The flip side of retaining talent is creating relevant
marketing campaigns to attract new talent into the state.
In a global economy, we need to increasingly market to
global talent. Contact Singapore and I Am Young Detroit
are two current campaigns designed to attract global tal-
ent to work, invest, and live in Singapore and Detroit
respectively A key component of Detroit's revitalization
involves attracting talent from across the nation. As pan
of this effort, the Wayne State's Detroit Fellows Program
will recruit and develop up to 25 outstanding mid-level
candidates in the nonprofit and economic development
spheres to I'elocate to Detroit for two years of grant-fund-
ed professional work. Also contributing to the strategy
In the end, it is not only about
developing talent, it is important to
recruit and retain talent. To build successful
innovation hubs, states nnust beconne
attractive destinations for global talent.
After all, top talent is infinitely nnore
mobile than companies.
Economic Development Journal / Fall 2011 I Volume 10 I Number 4
is 1 Am Young Detroit, a blog that profiles the city's young
up-and-comers and growing entrepreneurial ecosystem.
At my agency, we launched the Maryland of Oppor-
tunity campaign in January 2010 to profile successful,
smart, and sawy entrepreneurs based here. Their base
may be Maryland - but their markets are world-wide.
Today, the award-winning campaign has been viewed
by millions and is helping to educate, inspire, and build
confidence within Maryland's business community.
CAM't TELL VOJ WHAT
B< T lil CAN Vf*- i3W m^f.
The Maryland of Opportunity Campaign featwing
Chesapeake Candlefounder Mei Xu.
2. FOCUS RESOURCES ON HIGH-IMPACT,
IN-STATE COMPANIES FOR GREATEST JOB
GROWTH & BUSINESS CREATION POTENTIAL
With recent studies shedding new light on prior as-
sumptions about the source of job gains, we learn that a
state's economic performance is driven by how successful
it is in building world-class businesses inside its borders,
not in importing businesses from elsewhere. Particularly
in mature economies, almost all job growth is organic,
due to the expansion of existing firms and the birth of
new firms, A 2010 study by the Public Policy Institute
of California, "Business Relocation and Homegrown Jobs,
1992-2006" found that job relocations at the state level
accounted for 1.9 percent of job gains.
Moreover, a small number of firms in every jurisdic-
tion are ouisized contributors to economic growth and
job creation (see Chart 2). Studies vary in their findings
about the size and the age of these businesses. Neverthe-
less there is clear evidence that successful startups are an
important source of jobs. For example, research by the
Kauffman Foundadon shows that young businesses gen-
erate a disproportionate share of new jobs. The U.S. Small
Business Administration and others show that it is high-
impact "gazelles" that account for the largest share of job
growth. Google and Facebook are well-known as outsized
The 1 Am Young Detroit campaign, which profiles Young
Detroilers who are making their mark on the city ojDetroit
through their accomplishments and service lo the community,
contributors to job growth, while in Maryland, industry
leaders like Under Armour and Sourcefire are playing a
similar role, adding jobs at a rate of 30 percent a year.
Making the Case with Targeted Data
& Information
Economic development professionals need targeted
strategies to help propel these high-growth firms further,
faster. The challenge is that high growth firms are less
likely to proactiveiy seek assistance and in many cases
have had little interaction with state or local government.
States need to develop protocols to identify these rapidly
growing firms, proacuvely develop relationships with
their leadership, and provide targeted resources to help
them manage expedited growth. States also need better
data to target high growth firms.
The Kauffman and Edward Lowe foundations have
conducted important research in this arena to help build
support for tools that track outsized contributors, 'We
need the continued involvement and thought leadership
CHART 2
Outsized Contributors to the Economy
Less Than 1 % of Establishments Responsible for 74% of Net New Jobs
INon-High
growth
1 High-growth
I establishnnents
Establishments Net New Jobs
Source: Outlier ttC for Team Pennsylvania Foundation
Economic Development Journal / Fall 2011 I Volume 10 I Number 4
of these organizations together with state-based labor de-
partments to identify the most promising companies,
Pennsylvania is one state examining the potential
of targeting high growth companies. A recent study by
Dr. Gary Kunkle for die Team Pennsylvania Foundation
shows that less than one percent of a state's companies
have the potendal to generate more than 70 percent of
new jobs annually Through this research, Dr. Kunkle
idendfied the state's fastest growing companies from
2004 to 2009. The Pittsburgh Impact Iniuative has
implemented an economic development strategy using
this data which identified 150 high growth companies
in a 10-county region. The Pittsburgh Initiative will help
those companies with market research, permitting assis-
tance, and other services.
Building an Entrepreneurial Infrastructure
Another key tenet to building a belter organic growth
engine is developing the entrepreneurial infrastructure to
generate a more vibrant pipeline of new companies. In
2010, the Kauffman Foundation released The Importance
of Startups in fob Creation and Destruction, which conclud-
ed that virtually all net job creauon in the United States
between 1977 and 2005 was driven by startups. The
key to a successful entrepreneurial infrastructure is not
only the creation of startups, but the nurturing of them
as well. Only one in 20 entrepreneurial firms is high
growth in terms of adding jobs, but firms that survive
the first few years spur jobs and often create innovarive
goods, services, and processes, according to a 2008 U.S.
Small Business Administration study
In Maryland, we face a unique challenge as well as an
opportunity in that we are the top state for federal spon-
sored research, rank 2nd in the Milken Insntute's State
Technology and Science Index, and 3rd in Kauffman's
State New Economy Index, but lag behind to 42nd in
business starts. This delta between funding and busi-
ness start-ups is driving us to strategically invest in the
'entrepreneurial infrastracture' to narrow the gap be-
tween R&D and commercialization.
To close the gap, Maryland is implementing a program
called InveslMaryland, which will infuse a mmimum of
$70 million through venture capital investments into
promising early stage companies. The program emerged
from the tremendous success of our state-backed venture
fund. Launched in 1994, the Maryland Venture Fund
invested $25 million and returned $61 million, which
Only one in 20 entrepreneurial firtns
is high growth in terms of adding jobs,
but firms that survive the first few
years spur jobs and often create
innovative goods, services, and processes,
according to a 2008 U.S. Small Business
Administration study.
resulted in the creation of 2,000 jobs and more than a
billion in private funding invested into the companies we
helped to seed (see Chart 3).
The goal of InveslMaryland is to not only create jobs
and attract billions in follow on capital, but also to sup-
port organic growth and commercialize some of the in-
novative research being conducted at our universities
and private companies and move it into the marketplace.
The program is stmctured as a public-private partnership
with two-thirds of the funds raised to be invested by pri-
vate venture capital firms and one-third by the Maryland
Venture Fund,
CHART 3
Maryland Venture Fund Investments
IVIaryland Venture Fund Performance
over 15 years {$ millions)
$1,200
$1,000
$800 -
$600 '
$400 -
$200
$0
$1,000
State Total Funds Investment Invested Private Investment
Source: Maryland Department of Business and Economic Development
SUPPORTING HIGH PERFORMING GAZELLES
Under Armour Founded In 1996 by University of Maryland football
player Kevin Plank, the company created a line of moisture-wicking
athletic apparel. Launched in Plank's mother's basement, the company
now employs 4,000 employees world-wide
"IjHflH 3"'^'000 3t its Baltimore headquarters -
^pP^Pi generated revenues over $1 billion in
2010, Since 2003, Maryland has provided
$18 million in tax credits and training funds
to help the company expand and upgrade
the skills of employees.
A bridge that spans over
Under Annfiur's south BiiJtimore campus.
Sourcefire, located in Columbia, was founded in 2001 by Martin Roesch,
author of open source Snort* the world's most downloaded intrusion
detection and prevention technology with over 3,7 million downloads
to date, Sourcefire grew from a venture-backed startup and went public
in 2007, Maryland was an early investor in Sourcefire through our state-
backed Maryland Venture Fund. The company is consistently recognized
as a world leader in network security, protecting thousands of commercial
customers. The company's real-time adaptive solutions and open source
technologies are deployed in every military branch, more than 50 percent
of the Fortune 500 companies, and in the largest civilian government
agencies. Sourcefire's federal business almost tripled from $6.2 million
in 2007 to $15,8 million in 2008.
Economic Development Journal / Fall 2011 I Volume 10 I Number4
3. DEVELOP BUSINESS PLANS AROUND
COMPETITIVE ADVANTAGES & ASSETS
Global markets are changing the very fabric of how
business is done. Along with the opportunity to attract
billions of customers for American companies, we are at
the same time faced with the parallel threat of an increase
in global competiuon. With high speed broadband dra-
matically improving infrastructure to manufacture and
deliver goods to market, and rising skills, China and
other developing nations are fundamentally changing the
concept of a modern day supply chain. This new in-
terconnectivity of markets and the speed of globalization
require a renewed effort on core competitive advantages.
Cities, regions, states, and countries need to prioritize in-
vestments diat build on strengths and, equally important,
have a plan to market those competencies nanonally and
internationally
Investing in Maryland's Core Advantages:
Cyber, Space & Life Science
In Maryland, we have laid out a plan around our core
advantages - focusing on being world leaders in life sci-
ences, cybersecurity, and space/aerospace. In each area,
we assessed our assets and developed detailed plans
to move forward. Key to each one of these strategies is
creating a pipehne of talented workers, promoung com-
mercialization and innovation, and making the necessary
investment in infrastructure.
Home to flagship federal institutions such as the Na-
tional Institutes of Health, the Food and Drug Administra-
tion, and National Institutes of Standards and Technolo-
gy, along with premier
Global markets are
changing the
very fabric of how
business is done.
Along with the
opportunity
to attract billions
of customers for
American companies,
we are at the same
time faced with the
parallel threat of
an increase in
global competition.
research institution
and top NIH recipient
Johns Hopkins, it is no
surprise that between
CHART 4
Investments in
Maiyland Governor Martin O'Malley al lockheed Martin's Next
Generation Center
2002 and 2010, one third of all net new jobs in Mary-
land were created in the life sciences. Coupled with 500+
biotech firms, representing the 5th largest concentra-
tion of life sciences establishments in the US, there was a
compelling case to have the state significantly invest in
this industry
In 2009, Governor O'Malley proposed a record $1.3
billion, 10-year investment, to propel the life science sec-
tor even further, faster. As of July 2011, we have invest-
ed well over $300 million in areas such as strategic re-
search like stem cells, provided grants and tax incentives
to commercialize and develop biotech companies, and
committed dollars to key infrastructure such as bioparks
and incubation space next to our flagship universities.
Our end objective is to position Maryland to be a leading
global region for the discovery and commercialization of
life sciences products and services (see Chart 4).
Maryland's Life Sciences Industry 2010-2012
BioMaryland 2020 Investment
H Research and Development
1 Venture Capital Investment
I Tax Credits
Biotech Advancement (Other)
' I Technology Transfer and
J Commercialization
I Liniversity Capital
Development
2011 2012
Source: Maryland Biotechnology Center
Economic Development Journal / Fall 2011 I Volume 10 I Number 4
WINNING THE RACE FOR TALENT & CAPITAL
Much of the last century was defined by ideological
struggle whether between fascism or the cold war that
Churchill comments seemed to foreshadow in 1939,
The 21st centur>' appears to be much more defined by
global markets fueled by unconstrained movements of
capital and talent. This new world is full of challenges
and uncertainty Although it is impossible to predict
tomorrow's economic sucess story, we identify key trends
and as a result make impactful policy decisions.
As economic development professionals, we need to
realize that policy steps ahead require us to think beyond
the realms of our own agencies and
build a broader coalition of state
and local government to move our
economies forward. Our profes-
sion is already evolving from sim-
ply being driven by attraction and
retention of business to a more ex-
pansive view. More than ever before, this will require
us to serve as conveners, facilitators, and cheerleaders of
diverse interests that all play critical roles in propelling
our economies forward.
The new Economic Development Playbook key tenets-
whether it is attracting global talent, building support for
entrepreneurship, or making priority investments in a
Slate's most competitive industries - hold amazing prom-
ise for states willing to embrace change. In the end, the
Uon's share of benefits will be bestowed on those commu-
nities that are willing to lead and win the race for talent
and capital. €)
The new Economic Development Playbook key tenets - whether it is
attracting global talent, building support for entrepreneurship, or
making priority investments in a state's most competitive industries -
hold amazing promise for states willing to embrace change.
In the end, the lion's share of benefits will be bestowed on those
communities that are willing to lead and win the race for
talent and capital.
THE ECONOMIC DEVELOPMENT
RESEARCH PARTNERS (EDRP) PROGRAM
DESIGNATED FOR INNOVATIVE LEADERS
IN THE ECONOMIC DEVELOPMENT COMMUNITY
THE ECONOMIC DEVELOPMENT RESEARCH PARTNERS (EDRP) PROGRAM
Economic Development Research Partners Program meaibership opens doors to concepts and schemes
that assist economic development professionals in operating at a higher level.
AIMS OF THE EDRP Through the EDRP Program, lEDC is taking its mission to a new level, assisting practi-
tioners to successfully compete in the global economy and increase prosperity for communities at an acceler-
ated pace, empowering ED professionals to better define their vision and voice.
METHODS AND BENEFITS OF THE EDRP PROGRAM The Partners meet 4 times a year, sometimes with
experts in the field, to coordinate activities and focus agendas on pertinent and practical issues. This innova-
tive program provides an incredible opponunity to strengthen the communities in which we operate and the
profession as a whole,
FOR FURTHER INFORMATION on membership details, please contact:
M.iry Helen Cobb, Vice President Membership and Partnerships at
202-942-9460 or mcobb@iedconline,org
Economic Development Journal / Fall 2011 I Volume 10 I Number 4 10
Issues Briefs
Trends & Implications
CITY OF
^ CARLSBAD
2012 GOAL SETTING
Trmd
Description
Affected departments
Sustainable ommizaUon
Carlsbad, like cities throughout the nation, is coping with current
economic conditions w/hich mean operating with fewer resources.
At the same time, community expectations for value, accountability
and transparency have increased. As a result, it is more important
than ever that Carlsbad ensures taxpayers are receiving the most
efficient and cost-effective delivery of high quality city services.
Ali ~~
How this affects us Need to reexamine policies and procedures to make
government more efficient
Increased emphasis on analyzing and quantifying costs of
service delivery
Technology provides new opportunities to increase efficiency
while maintaining high quality services
Emphasis on downsizing/rightsizing
Need to reexamine salaries, benefits and pension to remain
competitive
Need to manage effects on employee morale due to pace and
magnitude of change
Emphasis on keeping reputation as employer of choice in light
of negative publicity surrounding local government employment
Fewer highly qualified people in the job market from which to
choose
Limited by antiquated civil service rules affecting employee
retention and succession planning
Status Embarking on Best Value Services initiative to identify areas for
improvement and increased efficiencies
Performing total compensation comparison related to public
sector competitors
Partnering with represented employees to explore the
possibility of a pay for performance compensation system
Providing training and workshops on employee wellness and
managing change
Technology
B lockbuster was much in
the news last fall, though
not in the favorable light it
once enjoyed. The cultural
phenonnenon and former stock
market darling that once
prospered through aggressive
marketing, savvy exploitation of
technology, and keen insights
into customer preferences filed
for bankruptcy in September
2010. Though some analysts
thought the filing could give the
franchise time to reinvent itself,
others predicted that the
onetime video-rental colossus is
steps from the graveyard of
retail obsolescence.
There is a lesson ortwo for libraries in this riches-
to-rags story.
In the New Yoi-ker's October 18. 2010. "Financial Page"
column, James Surowiecki catalogs a few of the causes of
the company's decline. Blockbuster was born in the age
ofthe "category killer": bricks-and-mortar stores that
"killed off all competition in a category by stockii^ a
near-endless variety of products at prices that small re-
tailers couldn't match." Many of these establishments
are still healthy. Surowiecki explained. But others—Toys
RUs. CompUSA, Circuit City, Borders Books and Music,
and Barnes & Noble, for example—have either given up
the ghost or seem to be in their death throes.
The internet has played an important role in this
trend. Newer businesses that were born during the
wired era have outplayed their older and less-agile
competitors by more aggressively exploitingthe advan-
tages of networked technology. This has been especially
true in the case of brands operating in well-defined
niche markets, such as video rentals. Netflix simply beat
Blockbuster's time—soundly. The ease of selection, de-
livery, and return coupled with a recommendation sys-
tem that, though not perfect, is better than the advice
offered by the average in -store sales associate--provid-
ed a cheaper and more convenient way to access a wider
selection of films.
The internet in particular and digital technology in
general are key in this game. Because of Netflix"s will-
ingness and ability to harness technology, customers no
longer needed to drive or walk to a physical store to
browse aisles of limited-selection stock arrayed in
broad categories in search of a movie for a quiet evening
at home, or to experience disappointment that a movie
was not on the shelf because another customer got there
hrst or was late returning the item. Further, Netflix"s
customers are not forced to wony about pesky little
matters like overdue dates and late fees.
Convenience above all
Early on in the wired era, Blockbuster seemed to have
all the advantages—a .strongbrand, a great customer
base, an experienced workforce, a large inventory,
and market saturation via thousands of physical stores
deployed across the country. It would have seemed a
simple matter to build an effective e-commerce busi-
ness on top of all this expertise and success in the tra-
ditional retail marketplace—"clicks and mortar," many
observers thought, the best of both worlds. But this
did not happen; in the end. none of the company's ad-
vantages mattered, and some of them turned out to be
millstones.
Surowiecki attributed Blockbuster's failure to two
factors. The hrst he termed the "internal constituency"
problem: "The company was full of people who had
been there when bricks-and-mortar stores were hugely
profitable, and who couldn't believe that those days
were gone for good. Blockbuster treated its thousands of
stores as if they were a protective moat, when in fact
they were the business equivalent ofthe Maginot Line."
The second problem exacerbated the first; the "simk-
cost fallacy," which stipulates that "once decision-mak-
ers invest in a project, they're likely to keep doing so,
because ofthe money already al stake. Rather than dra-
matically shrinking both the size and the number of its
stores. Blockbuster just kept throwing good money after
bad."
Blockbuster made an attempt to manage this change,
but its past success acted as an anchor rather than a sail
because it was not willing to jettison outmoded cargo.
Thus, even if the company had moved more aggressive-
ly to develop the clicks-and-mortar model, it probably
would nol have fared any better. The success of Netflix
suggests that in the video-rental and similar markets,
if products are available conveniently enough and
cheaply enough online, customers don't care about or
need a physical store and all the accouterments that go
with it. They can stock and make their own popcorn at
home, after all. Customers care most about getting the
film they want as cheaply and conveniently as possible.
% o
» Jl E S a.
91
E
There ;ire many interesting parallels for libraries. We
have a strong brand, a loyal ou,stomer base, hundreds of
millions of items in ourcoUective inventory, loads of
expertise aad talent, and decades (if not centuries) of
investment in brlcks-aud -mortar stiuctures. We have
also seen the rise of many onli rie competitors in recent
years, moat pjoininently Google. Like Blockbuster, our
internal consliluencv has not been blind to the advan-
tages of networked technology but perhaps has focused
too much on past .strengths. We have thus invested
heavily in a clicks-and-mortar solution. We've spent the
last couple of decades sinking more resources into sunk
costs by largely overlaying or augmenting legacy coUec-
I ions, services, skill sets, and buildings with electronic
equivalents and tools.
Leave your baggage behind
Are we throwing good money after bad? Should we have
been building the electronic library instead of—rather
than on top of the traditional library? For Blockbuster,
the click.s-and-moria r approach meant .spendinglots of
"money and time inlegratingan entirely new informa-
tion-technology system into the one its stores already
had." a circumstance rhat will .sound wearily familiar to
many librarians. (Ask an)ione who has attempted to in-
tegrate an enterprise resource management module or a
new discovery tool into an existing integrated iibraiy
system.)
In Ihe meantime, Netflix's focus was on "makingit.s
distribution system bigger and more efficienl." Of
course, it had the advantage of a clean .slate, which meant
that it could more easily imagine and build a systcmun
constrained by a previous model. Netflix was not bui-
dened by the need to support and retain a lot of praci ices,
services, and structures lhat had once worked well, li had
the freedom (o locus exclusivclv on the needs and wants
of con.sumers. In this process, technology itself was sec-
ondary, a means to an end. Customers were the point.
But Netflix does not have t ime to rest on its laurels ei -
ther. The dist ribui ion model it has used .so effenrivelv is
changi ug-evolving from a mail-order system where
networked computers facililale discoveiy and ordering
to a fully automated system where streaming" and down-
loadable video close the circle to forma fully net-en-
abled process. In these ciroum,stances. an elTitienl
snail-mail order operation will not siilTice. The kev lo
remaining competitive in the next round of this game
would seem lo be accurately anticipating what nel-
ji o t3 o
a>
Jl E
0)
It could take days to read through, the aew best- seller.
Fortunately, it only takes 15 minutes to see how much
YOU COULD SAVE WITH GEICO.
ALA members could get an additional di.scount on car insurance.
Get a free quote. Call 1-800-368-2734.
geico.com
CM
issues Briefs
Trends & Implications
CITY OF
CARLSBAD
2012 GOAL SETTING
Trend Libraries in a digital age
Description The shift toward digital content and delivery (eBooks, electronic
information sources) is quickening, but not replacing other formats.
Affected departments Library & Cultural Arts; IT; Property & Environmental Management
How this affects us
Status
Surging interest in eBooks and other digital content competes
with sustained demand for print resources
Competition for dominance among providers of content and
devices has created multiple, fragmented delivery systems
Device variety and preferences (smartphones, tablets, e-readers)
have created demand for device-specific content availability
Changing delivery methods require constant training of both
patrons and staff on new devices and how to access content
Network and physical infrastructure (bandwidth, wiring,
electrical, buildings and their support systems) need frequent
updating to keep up with changing technology and demand
Future buildings must be designed flexibly to support
continuously changing service delivery
Formats will increasingly overlap as they're introduced more
quickly*. The need to support multiple formats and delivery
methods requires frequent change in work processes
This trend is being watched constantly, and formats evaluated
for phase-out; currently, 21 percent of collection funding is
dedicated to digital content
Investment in multiple, overlapping formats and systems is
strategic; Carlsbad is maintaining a regionally innovative position
while issues of rights and ownership of digital content are
addressed at a national level
Concepts for future facility spacial and infrastructure needs are
being developed
The rapid pace of technology advancement requires more
frequent reinvestment in complex systems to continuously
deliver services efficiently
*New format introductions/phase-outs
1916 1971-2010 1981-2010 <1987-97 1987 1996 2000 2005 2007 2010 2011
Print Audiocassette VHS Record CD CD-ROM eDatabase MP3 Plavawfav eAudlobook eBook
worked devices most people will watch videos on in the
nextfew years, and then quickly building the pipelines
necessary to feed product to those devices.
But guessingcorrectly, while important, is not really the
key. What matters is responding to customer wants and
needs in a timely and efficient manner, even at the expense
of letting go of past practices and tools no matter how
cherished or successM. A baggage - free focus on custom-
ers is what gave Netflix its original competitive advantage.
Innovating past the graveyard
It would behoove libraries to adopt a similar focus. Aveiy
simple formula is at work in determining satisfaction for
most library users. If a patron co mes to the library or logs
in and finds what she wants, or a close approximation to
it, she is happy. To the extent that she does not, she isn't.
Period.
Impressive buildings, glitzy web pages, fat acquisi-
tions budgets, high volume counts (electronic, print, or
both) are fine, but they are not the most important
thing—which is simply whether or not the patron is able
to locate the an.swer. fact, statistic, idea, or data set she
needs -and the quicker and easier, the better.
Libraries used to score highly on this
metric by owning a lot of things and
keeping them close at hand. Now, more
and more, they ring the user-satisfaction
bell by connecting to a lot of things, re-
gardless of where the items are, who
owns them, what time of day it is, or
where the patron is. The old, ownership-
based system is akin to the just-in-case
business model, where companies keep lots of stock on
hand just in case someone needs a particular widget or
gizmo. The new libraiy should be based on the just- in-
time model, where access and deliveiy networks are more
important than vast quantities of nearby inventory.
Another lesson for libraries is that once content is
delivered in a new medium, Ihe old medium no longer
matters—except for the purposes of preservation and
historical scholarship. Came over for those who i nsist
on blindly holding onto the old format in needlessly re-
dundant storage facilities, ei.spccially if that facility is
located on prime real estate. This is not to say that the
old format does not need to be preserved. But not every-
one needs to do so—far from it. There may have been a
time when eveiy Blockbuster store needed 12 VHS or
DVD copies of Top Gun. No more. Si milarly, we no lon-
ger need print runs of The Most Important journal in the
Field of XY7Studies on every .shelf of every library i n the
country. A few for preservat ion purposes are quite
enough. Our customers want the conle nt in the most
convenient and efficient form possible.
The new library should
be based on the just-
in-time model, where
access is more important
than vast quantities of
nearby inventory.
Of course libraries have other things to offer -spaces,
for one, to which the same formula for satisfaction ap-
plies. If a patron comes to the 1 ibraiy in search of a quiet
study area, a room for group research, an environment
conducive to intellectually stimulating social exchange, or
space for inspiration and the freedom to think big
thoughts and finds it, she is happy. If not, then not so
much.
The extent to which we think of our libraries exclu-
iiively as warehouses for the protection and storage of
physical objects is probably also the extent to which we
also miss the mark in this regard. If we are to retain a
meaningful bricks-and-mortar component to our ser-
vices, we must deploy our spaces with the aim of deliv-
ering to our patrons the room they need when they need
it, instead of vast storage areas, or—when we are able lo
escape the warehouse paradigm—inflexible, single-pur-
pose areas that lie fallow for large periods of time. Our
emphasis must be on flexible, multipurpose space thai
is available 24/7, or as close to that as possible. On this
point we differ from Blockbuster, whose physical pres-
ence has become beside the point. We have spaces that
our users want and need, and lhat can be useful to our
overall mission if deployed effectively
and efficiently: what patrons want,
when they want it.
Increasingly, libraries are engaging
in additional activities, such as open-
access initiatives and other publishing
ventures lo help counter the rising cost
of commercial publications, and build-
ing learning commons and other forms
of technology-rich spaces where users can capture and
manipulate information into newproducts and forms of
knowledge. However, the focus of our networked collec
tions, spaces, and services should be to meet the needs
and wants of users rather than maintaining the systems
and structures we previously constructed to serve them.
The computers and networks thai link items and collec-
tions, the buildings that we inhabit, and the tools we of-
fer are not primary to our purpose. Primary are the
people who need and want these things. If we are going
to sink costs somewhere, that is where we should sink
them. If our focus shifts from servi ng individuals to
tools, systems, and stnictures. the graveyard of obsoles-
cence will beckon. I
a
j> o 13
•§ o Jl
e
STEVEN ESCAR SMITH is dean of
/ibrar/es at the University of Tennessee
in Knoxville, andCARMELITA PICKETT
is head of collection development and
acquisitions seruices for Texas A&M
University Libraries in College Station.
CO
\€ Cl T Y O F
Issues Briefs
Trends & Implications
CARLSBAD
2012 GOAL SETTING
Trend Increased public involvement through technology
Affected departments
Technology now allov\/s for new/ ways for tlie public to more directly
participate in their government's decision mai<ing. With the click of
a mouse (or tap of a mobile device) people can vote in an online
survey, post a comment on a government social media site or
organize a large group around a single issue. Cities across the
nation are experimenting with a mix of these tools with varying
results. A consistent question that arises is determining the
appropriate level of involvement for the public for a given issue. If
these tools are promoted and increased public input is encouraged,
governments need to set expectations in advance for how that
input will be considered in the decision making process. Ignore
these tools altogether, and the public may lose faith in a
government's responsiveness to those they serve.
All
How this affects us Challenges
• As these tools become more common in the commercial sector,
the public will increasingly expect them to be available for their
government too.
• Public expectations of their influence might be unrealistic on
some issues.
• Public can easily become disappointed if they feel their input
was not used.
• Requires increased resources to manage and process increased
public input.
Opportunities
• To hear from a broader segment of community on issues
important to them.
• Demonstrate transparency and openness.
• Increase understanding among the public regarding city issues
and decision making process.
Status Currently using social media to communicate about city issues.
Increasing use of online surveys to gather information from the
public (trails survey. Envision Carlsbad online surveys, etc.).
Resources
Note: Certain portions redacted that pertain to marketing or advertising of a certain product.
Online Public Connment Forums: Why Public Hearings Need to be Augmented via the Internet
http://icma.org/en/icma/knQwledge network/bIogs/blogDOSt/524/Online Public Comment
Forums Whv Public Hearings Need to be Augmented via the Internet
Across the US and in other democracies, public hearings have been a mainstay of civic
engagement and feedback to government leaders. Indeed, public hearings are often the most
influential channel for feedback to government decision makers. However, this long-standing
tradition of democracies has become incompatible with the lifestyles and mindsets of many
citizens. This incompatibility is especially problematic for citizens with moderate views or an
inclination to compromise, as well as parents with young children, adults with busy work
schedules, and people that aren't too mobile (i.e. sick or incapacitated).
This blog post details a series of problems with public hearings, and then culminates with an
explanation of how online public comment forums complement public hearings in ways that (1)
address their deficiencies, (2) enhance the insights and deliberations of government decision
makers - and ultimately, (3) increase public trust in government.
The Problem:
The conventional approach to making decisions in local governments culminates at the city
council meeting (or facsimile). These meetings are typically run under Robert's Rules of Order,
and each issue incorporates a public hearing. This public hearing isn't the only source of
community input to the decision makers, but it's typically the only channel of public input that
is officially unfiltered and open to the public. This transparency imbues the public hearing with
extraordinary influence.
As the only official, unfiltered, transparent forum for citizen feedback, many residents,
decision makers, and journalists erroneously conclude that the feedback at a public hearing is
representative of the community. In other words, if the public hearing is dominated by one-side
of an issue, then many mistakenly conclude that the community must be commensurately for
that one-side. Likewise, if the public hearing is polarized by uncompromising opposite sides of
an issue, then many mistakenly conclude that community must have few if any people that
have moderate views on the issue and would advocate for compromise. Without other official,
unfiltered, transparent channels of input, it's hard not to assume that the public hearing is a
proxy for the community. However, that assumption can weaken the decision making process
and frustrate the public. Why is that assumption risky? Because public hearings have attributes
that have become incompatible with the lifestyle and mindset of many Americans.
From a lifestyle perspective, public hearings are typically held in the evening and have
agendas that don't have time allocations and are subject to reordering. Consequently many
meetings run late into the night. Perhaps these attributes weren't a problem decades ago,
when life was slower, young children were living with extended families, work schedules were
less hectic, and most families had two spouses with only one working full time. But these days.
attending public hearings is challenging for adults that are responsible for young kids or
consumed by full time work responsibilities.
From a mindset perspective, constituents with an opinion on an issue but who are not
passionate about the issue are unlikely to make the commitment to participate in the issue's
public hearing. Likewise, constituents with moderate views and inclinations to compromise are
also unlikely to incur the inconvenience to attend the public hearing. This results in public
hearings that are frequently dominated by people with extreme views - and that further
discourages moderates from attending because the mob of extremists can intimidate the
moderates from speaking.
Some might argue that the people who don't prioritize attending a public hearing are
indifferent or apathetic about the hearing's topic. But that's an insensitive outlook because it's
tantamount to believing that voting should be more challenging so that only those citizens that
feel passionately about a particular candidate should vote in that candidate's election.
The Solution:
The solution to this community feedback and decision-making problem is straightforward:
establish other forums for community feedback that are official, unfiltered, transparent and
have attributes that augment and diversify participation beyond public hearings. For example,
establish online public comment forums (OPCFs) that emulate the order and decorum of public
hearings.
OPCFs enable time-constrained residents to participate at the time and place of their
convenience. By emulating the order and decorum of public hearings, OPCFs are fair and enable
everyone to understand and learn from other perspectives. Also, integrating OPCFs with online
analysis tools enables decision makers to efficiently synthesize voluminous feedback - and
thereby enhance their preparation for public hearings.
OPCFs aren't a replacement for public hearings. Instead, OPCFs complement public hearings
by augmenting and diversifying civic engagement. This will enhance the perspectives of
government decision makers, lead to more informed deliberations, and ultimately increase
public trust in government.
Eventually, the use of OPCFs will become a pervasive best practice in government agencies in
all democracies.
Postscript: Providing communities with OPCFs for feedback to government leaders isn't a
radical idea - as a high percentage of Americans (and residents of other democracies) already
provide huge amounts of feedback to communities, organizations and companies via popular
online services such as Facebook, Twitter, Yelp, and TripAdvisor. However, in contrast to
businesses, the challenges for governments are to offer OPCFs that are legal, civil, fair,
insightful, cost-effective and don't usurp the decision-making authority of government leaders
(known as the "Referendum Effect").
Online Public Comment Forums: How to Avoid the Referendum Effect that is Common with
Online Crowd-Sourcing
httP;//icma,org/en/icma/knowledge network/hlng.s/hlngnost/.S2.S/nnline Public Cnmment-
Forums HQW to Avoid the Referendum Effect that i.s Common with Online Crnwri.Snnr
Government officials that are augmenting and diversifying feedback from their community via
the internet should be aware of several challenges and potential pitfalls. These challenges
include keeping the forums legal, civil, and fair - and equally important, preventing a pitfall
with crowd-sourcing known as the Referendum Effect.
This blog post starts with a brief description of the Referendum Effect, and then focuses on
how it can be impeded using online public comment forums (OPCFs).
What is the Referendum Effect?
The Referendum Effect characterizes the loss of decision-making autonomy that government
leaders incur when a community expects decisions to be based solely on the majority opinion of
public feedback. More specifically, the Referendum Effect occurs when public feedback usurps
the decision-making independence of government leaders. This dynamic is prevalent in
conventional public hearings (and is especially problematic when the feedback from the public
hearing is not representative of the community). The Referendum Effect can also arise when
public feedback is gathered using online crowd-sourcing techniques in which participants are
encouraged to vote on comments.
How to Minimize or Prevent the Referendum Effect:
There are techniques that can minimize the potential of online forums to create the
Referendum Effect. The most straightforward technique is to caveat the forum with messaging
that explicitly addresses expectations. For example, IHHUHHIHjUHIHiiH
OPCFs integrate the followin^riessag^^ the user interface: As with any public comment
process, participation inHHIHilH'^ voluntary. The statements are not necessarily
representative of the population, nor do they reflect the opinions of any government agency or
elected officials.
Another straightforward technique to minimize the Referendum Effect is to exclude the
word "vote" from the user interface - as the "v-word" can create an expectation that feedback
with the most votes wins.
An additional and more sophisticated approach to minimizing the potential for the
Referendum Effect is to structure the online forum to solicit only qualitative feedback (as
opposed to quantitative feedback). For example, instead ofthe online forum requiring
participants to indicate "yes" or "no", or option 1 or 2, the online forum can simply ask for a
comment.
Structuring an OPCF using a qualitative format can eliminate the Referendum Effect, but if
the qualitatively formatted forum garners lots of participation, then it can be difficult for
decision makers to read all of the comments. This challenge can be addressed with clever
analytical tools. For example, HBHHHiHIHOPCFs be configured to
4
enable participants to support comments. The comments can then be listed in order of most to
least supported, and links to similarly supported comments can be provided. This "related
comments" graph enables decision makers to synthesize voluminous online feedback.
Enabling users to support other comments makes the OPCF structure slightly more
quantitative. However, the risk of the forum becoming a vote for the most popular comment
can be reduced by not showing the number of supporters that each comment obtains, and
instead only listing comments in order of most to least supported.
In summary, caveating online forums, not using the v-word, and structuring forums for
qualitative feedback can prevent the Referendum Effect, and thereby enable government
leaderstojeverage OPCFs without the risk of losing their decision-making authority.
CITY OF
^ CARLSBAD
2012 GOAL SETTING Issues Briefs
Trends & Implications
Trend
Description
Affected departments
Increased access to govemment through technology
Public expectations of government are changing as digital
communication and information technologies become a more
regular part of daily life. People are starting to expect instant
access to government information and services anywhere, anytime,
from any device. Meeting those changing expectations requires
government to transform to a new paradigm focused on leveraging
technology to increase speed, efficiency and convenience.
• Fully 82 percent of internet users (representing 61 percent of all
American adults) looked for information or completed a
transaction on a government website in the past year.
• 31 percent of online adults use online platforms such as blogs,
social networking sites, email, online video or text messaging to
get government information.
• By 2015, more U.S. Internet users will access the Web through
mobile devices than through PCs.
• The number of people accessing the City of Carlsbad website
using a mobile device increased 845 percent in the last year.
Non-mobile use increased 133 percent.
All
How this affects us
Status
Challenges
• Requires changes to how the city does business and provides
services and information to the community.
• Requires resources to develop and implement a comprehensive
approach.
• Technology changes very quickly, requiring an adaptive, agile
and innovative organizational culture.
Opportunities
• Potential to save money, improve service, and increase
public confidence and engagement.
City's website provides a great wealth of information as well as
some online services: bill paying, class registration, library
catalog, ebooks and maps.
The city's website is being redesigned to improve ease of access
to information and online services.
The city is in the process of establishing a CRM system that will
include online service requests and tracking.
Community Vision
Through an extensive outreach and involvement process, the Carlsbad
community created a vision for the future that includes these core values,
which serve as a guide for city leaders as they carry out their service.
Small town feel, beach community character and connectedness
Open space and the natural environment
Access to recreation and active, healthy lifestyles
The local economy, business diversity and tourism
Walking, biking, public transportation and connectivity
Sustainability
History, the arts and cultural resources
High quality education and community services
Neighborhood revitalization, community design and livability
Strategic Goals
City of Carlsbad provides exceptional, top quality services on a daily basis by proactiveiy
listening, engaging and responding to its residents.
Balanced community development: Be a city that connects community, place and spirit,
through balanced and economically sustainable land uses.
Resident connection and partnership: Be a city that embraces community connectivity
through the effective use of technological and interpersonal mediums.
Communication: Ensure that community members, council and staff are well informed,
continuing to be a more responsive government while providing a high level of citizen
confidence in its government.
Economic Development: Strengthen the city's strong and diverse economy, supporting local
businesses, attracting new businesses in targeted industries and solidifying the city's
position as a key employment hub.
Environmental management: An environmentally sensitive community by focusing on
conservation, storm water, sewage collection and treatment, solid waste, and cost effective
and efficient use of energy including alternative energy sources.
Financial health: Pursue and implement proactive strategies that support sustainable
economic health and manage city resources effectively.
Learning, culture and arts: Promote and support continuous learning, cultural opportunities
and the arts within the community and the city organization.
Parks, open spaces and trails: Acquire, develop and maintain a broad range of open space
and recreational facilities that actively address citizen needs which are fiscally responsible,
and are consistent with the general plan and growth management standards.
Safe community: Maintain a safe and secure community through collaborative partnerships.
Public safety providers support high standards, deliver protection of life and property and
encourage community involvement in prevention and preparedness efforts.
Transportation and circulation: Provide and support a safe and efficient transportation
system that moves people, services and goods throughout the city.
Water: Ensure, in the most cost-effective manner, water quality and reliability to the
maximum extent practical, to deliver high quality potable and reclaimed water incorporating
drought-resistant community principles.
10 New Rules for Elected Officials In
Times of Economic Meltdown
by Frank Benest
Jel^o^''''"''"' '''''^ ^"^'^•^'^ ^"-^"^ g-erning in the midst of economic
Topically candidates Jiave run on platforms to make community im Once elected snv^mino
board members have historically enjoyed access to some "slack reJ^..rrr«";^ !; ^! '.^ ^
A Diminished Capacity to Respond
10 New Rules
1. Identify the "core."
To allocate scarce resources, governing boards must first identify core versus non-core businesses or
program areas. For example, in one Northern Caiifomia county, the counrr2erTonrtr^^^
economic v.tahty) and park programming (affecting the quality of life in ZZZltyl
2. Focus on a few priorities.
The governing board as a whole must identify a few priorities (three to five at the most) and then
relendessly pursue those priorities with limited resources. To assist die board in this courageous
conversation about hard choices, it is wise to engage a broad range of conununity groups and thus make the
resulting priorities more legitimate and enduring.
When new demands for local government action arise, as they will, the governing board must insist that
any new demand replace an existing obligation. When I first arrived in Palo Alto as the new city manager,
the department directors identified 39 high-priority projects approved by die council. Witii the assistance of
city management, the council was able to identify and then focus on five priorities. We tiien hung banners
in die council chambers, one banner for each priority. When someone suggested a new priority, die mayor
or the city manager could then ask which banner the council would like to remove.
3. Subtract, subtract, subtract.
To aggressively pursue a few priorities with shrinking resources, governing boards must help their
organizations relendessly subtract. When I became city manager in Palo Alto, we created a 90-day "Office
of Bureaucracy-Busting." Employees submitted hundreds of ideas to eliminate ritualistic activities tiiat
drained resources and provided no added value. Some ideas were simple and easy to implement, such as
eliminating quarteriy activity reports that no one read or verbatim minutes of commissions. Other ideas
were more complicated, such as re-engineering and simplifying the city's contracting process, which
ultimately reduced die time needed to approve major contracts from six months to three.
An organization must "accelerate" so it can effectively pursue a few priorities or respond to new demands
in economic hard times. To accelerate, it must subtract.
4. Limit requests for new analysis and reports.
While governing board members may resist a community group's demand to immediately respond to some
problem with a new service, the board often directs staff to conduct a new analysis or prepare a report. In
good times, these kinds of governing board reactions to new demands may mollify constituents making the
service request. In bad times, such referrals of nonpriority items to staff simply divert scarce staff resources
and undercut tiie local government's ability to perform.
5. Have the courage to say "no."
Once a governing board identifies core program areas and a few priorities, it must remain focused and help
the organization stay the course. Elected officials must have the courage to say "no" when groups make
new demands.
6. Avoid a zero-risk environment.
To overcome the resource challenges facing local govemment, governing boards must encourage
innovation. Examples include self-service kiosks for certain kinds of permits, selling computer support or
other ser\ ices to adjacent public agencies, or sharing public safety services with odicr jurisdictions (for
more on this topic, read "What You Need to Know About Regionalizing Public Safety Responsibilities."
The problem is that local governments are risk averse. In fact, in an economic meltdown, the media,
community groups and elected officials jump on any mistake and personally criticize committed staff. In
such a hypercritical culture, most employees will hunker down and avoid taking any calculated risks.
Innovation does not occur in a zero-risk environment. Learning from mistakes is a key element in the
innovation process. Employees must be encouraged to experiment, test ideas and fix problems and mistakes
along the way.
If governing boards do not protect creative and risk-taking employees from abuse, no innovation will occur
— regardless of exhortations from the dais.
7. Pursue nongovernmental strtutions.
U}CAI govenjment can no longer be the center of all problem-solving. Elected leaders must put the issue or
challenge in die center and work with private, nonprofit and otiier community partners to address the
St s"e.tr °" '^^^ and avoid proposing new
8. Free up funds for a few targeted Investments.
Even in severe budgetary times,alocal government must make a few strategic investinents to position itself
=5^S£5L~™3—^^^^
9. Provide meaning and emotional support to staflf.
Again, elected officials cannot achieve their policy agenda witiiout the commitment of creative
Public agencies face a "productivity paradox." At precisely tiie point tiiat local governments need ^i^n,
leaps m prtKluctivi.y to overcome the cuts, productivity spLs downwid l^lS oSs caStKe
organization survive difficult times by showing concern for employees, ^oviL7e?«^^^^^^^^^
10. Help develop talent and rebuild organizational capacity.
Without talent, the governing board cannot solve the problems facing the local government In times of
severe budget cuts, the local government faces a "free exiter" problem. The "star? or '^rplaveJs" ^^^^
orgamzation can freely exit and get a job with beOer pay elsewhere. If they s^U mtS L new
opportunities as tiie economy improves. Employees esoeciallv thP "A ni,LJc", . ,
growing and stretching, infarct, le^arningisrr;^;^^^^^^^^
To support employee development, board members must resist gutting talent development budgets Th^
good news is tiiat ralent development p«>grams are inexpensive Cost-effec!^ve pS^^^
exchanges with otiier agencies, leadership academies orSucational webinars s^^XS t^y a c^nSLl of
local governments, and interim or rotational assignments. *l~"surea oy a consortium of
Courageous Conversations
Certainly following these 10 rules will not be easy for elected officials. Adhering to the new rule,
requires focus, discipline and will. Perhaps more tiian anything, elected leaderrm'uSlxhScotlge.
CO—sandengagingallgrotips^
Elected Officials are stewards of our local governments. To help our organizations adapt to chance
STANFORD
CENTER ON
^ LONGEVITY
Understanding California's
Demographic Shifts
California Demographic Overview
Adele M. Hayutin, PhD
Kimberly Kowren
Gary Reynolds
Camellia Rodriguez-SackByrne
Amy Teller
Prepared for the California State Library
September 2011
Stanford Center on Longevity
http://longevity.stanford.edu
This project was supported in whole by the U.S. Institute of Museum and Ubrary Services under the
provisions of the Library Services and Technology Act, administered In California by the State
Librarian. The opinions expressed herein do not necessarily reflect the position or policy ofthe U.S.
Institute of Museum and Library Services or the Califomia State Ubrary, and no official
endorsement by the U.S. Institute of Museum and Library Services or the California State Library
should be inferred.
Understanding California's Demographic Shifts
California Demographic Overview
California is the country's most populous state and liome to nnany diverse communities. As tlie
accompanying demographic profiles of the library jurisdictions demonstrate, there is tremendous
demographic variation across the state. This visual overview provides the general context for
understanding how communities differ from each other and from the state overall.
Population Growth
Pop in millions
40
Population Growth
1900
Source: US Census Bureau
Change by Race and
Ethnicity, 2000-10
White, NH
Black, NH
Asian, NH
Other, NH
Hispanic
Note: NH=non-Hispanic
Source: US Census 2010
Components of Growth
Natural
Increase
Net
Foreign
Immigration
Net
Domestic
Migration
1990-2000 2000-2010
+4.3 +3.4
Source: CA Department of Finance
California's population increased by 10% over the past decade to 37.3 million. Overall population growth
has slowed from the high-growth decades of the 1970s and 1980s, but growth from 2000 to 2010 still
matched the overall US growth rate. California is by far the most populous state and accounts for 12% of
total US population.
• Over the past decade, the Hispanic and Asian populations each grew about 30%, while the white,
non-Hispanic population declined by 5% and the black population declined by 1%.
• Natural increase (births exceeding deaths) added 3.1 million to the total population from 2000 to
2010.
• International immigration added 1.7 million people, but was largely offset by domestic
outmigration of 1.4 million. As a result, net migration totaled only 302,000 for the decade. Net
foreign immigration declined 19% from the 1990s level, while net outmigration to other states
increased by 15%.
, STANFORD
m CENTER ON
Zd LONGEVITY
Understanding California's Demographic Shifts
Diversity
in^iiions Population by Race and Ethnicity
White, NH
15 !
10
Black, NH
1980 1990 2000 2010
Includes Asians, Native Hawallans & Pacific Islanders
Note: NH=non-Hispanic
Source: US Census Bureau
Share of Total 70% 67%^
60%
50%
40%
30%
20%
10%
0% 0%
1980 1990 2000 2010
The population mix in California continues to shift, as the white, non-Hispanic population declines and
the Hispanic population increases.
• The white, non-Hispanic population peaked at 17.0 million in 1990 and has since declined by 12%,
falling to 15.0 million in 2010. In contrast, the Hispanic population increased from 7.7 million in
1990 to 14.0 million in 2010. Since 1990, the Hispanic share of California's total population has
increased from 26% to 38%. The white, non-Hispanic share decreased from a majority 57% in 1990
to 47% in 2000 and 40% in 2010.
• Another shift in the population mix occurred as the Asian population grew from 2.7 million in 1990
to 4.8 million in 2010, increasing from 9% of California's total population to 13%.
• In contrast to high growth in the Hispanic and Asian populations, the black population in California
increased by just 3% from the 1990 level to 2.2 million in 2010. The black share of California's total
population declined from 7% in 1990 to less than 6% in 2010.
California's racial and ethnic mix differs sharply from the nation's overall population—California has
larger shares of Hispanics and Asians than the country overall and smaller shares of blacks and white,
non-Hispanics.
• California's population is 38% Hispanic, compared with 16% nationally; the share of white,
non-Hispanics is 40%, compared with 64% nationally.
• The share of blacks in California has fallen to 6% of total compared with 12% nationally and the
share of Asians has risen to 13%, compared with 5% nationally.
STANFORD
CENTERON
a LONGEVITY
Understanding California's Demographic Shifts
Age Structure
Population by Age
l-ilspanic
Non-
Hlspanlc
1.5 0.75 0 0.75
33,871,648
Population In millions by 5-year age bracket; males on left, females on right
Source: US Census 2000, 2010
0.75 0 0.75
37,253,956
Change by Age, 2000-10
80-84
70-74
60-64
50-54
40-44
30-34
20-24
10-14
0-4
Older
+650.856
+18.1%
^Working Age
ii+2,513,981
I +12,5%
You ng
+2,1 %
-400 0 400 800
Total 1 +3,382,308
Change/ +10.0%
Although California remains relatively young compared with the rest ofthe country, over the last decade
the population shifted toward the older age brackets, and the median age increased from 33 to 35.
• The two histograms above show how the population has aged. Each histogram is a snapshot of the age
structure for that year, with the bars showing total population by five-year age bracket with children (age 0-
4) at the bottom and old people (age 85 and older) at the top. IVIales are on the left and females on the right.
The red segments show the Hispanic population in each age bracket.
• One notable change Is the upward shift In the whole age structure as the upper age brackets became wider,
while the lower brackets remained relatively static.
• Another notable shift is the increase in the Hispanic population. While California's total population increased
by 10%, the Hispanic population increased by 28%. The Hispanic share increased from 32% to 38% of total.
The Hispanic age structure also shifted upward over the past decade. As the size of the upper age brackets
increased, the median age increased from 25 to 27.
The greatest absolute growth occurred in the working-age population, especially in the upper brackets
from age 45 to 64. The fastest growth, however, occurred in the population age 65-I-.
• The chart at the right shows the change in each bracket size over the ten-year period.
• Overall, the working-age population increased by 2.5 million (13%) from 2000 to 2010 and accounted for
nearly three-quarters ofthe total population gain.
• In contrast, the population age 65+ grew at a faster rate, 18%, but added only 650,000, bringing the total
population age 65+to 4.2 million.
• The number of young people, those under 20, grew by only 2% adding just 217,000. . - , ...
The age mix in California is similar to the country overall, except that California has a slightly smaller
share of older people.
• In California the population age 65+ accounts for only 11% of the total population, compared with 13%
nationally.
• Relative to the countr^^, California has a slightly larger share of young people, 28% compared with 27%, as
well as a slightly larger share of working age people, 61% compared with 60% nationally.
r STANFORD
LWI CENTERON
Si LONGEVITY
Understanding California's Demographic Shifts
Age Structure by Race and Ethnicity
Population by Age, 2010
White, Non-Hispanic Biacl<, Non-Hispanic Asian, Non-Hispanic Hispanic
700 350 0 350 700
15.0 million
700 350 0 350 700
2.2 million
700 350 0 350 700
4.8 million
700 350 0 350
14.0 million
700
Population In thousands by S-year age bracket; males on left, females on right
Source: US Census 2010
California's age structure differs significantly by race and ethnicity. The Hispanic population is relatively
young and its age structure is "pyramid shaped" with a broad base of young people and a relatively
narrow top. In contrast, the white, non-Hispanic population is much older and its age structure has a
smaller base of young people and a higher concentration of older people. The combination of the
youthful Hispanic population and the aging white, non-Hispanic population gives California a relatively
even age distribution and makes California younger than the nation.
California's total population Is aging but still growing.
• Median age is 35, up from 33 in 2000.
• Young people age 0 to 19 account for 28% of total population, down from 30% in 2000. The working-age
population increased to 61% of total population and the population age 65+ remained at 11%.
• The number of young people increased by 2% over the past decade. Total population increased by 10%.
The white, non-Hispanic population is older and rapidly aging.
• Median age is 45, up from 40 in 2000.
• Just 19% of the population is under age 20, and 18% is age 65+.
• The number of young people declined by 19% over the past decade. Total population declined by 5%.
The black, non-Hispanic population is similar to the state, but aging faster.
• Median age Is 35, up from 32 in 2000.
• The age mix is similar to that of the state: 28% ofthe population is under age 20, and 10% is age 65+.
• The number of young people declined by 17% over the past decade. Total population declined by 1%.
The Asian, non-Hispanic population is older, with a larger concentration in the working ages.
• Median age is 38, up from 34 in 2000.
• The young population accounts for 23% of the total, the working-age population for 65%, and the population age
65+ for 12% of the Asian population.
• The young population grew by 13% from 2000 to 2010. Total population grew by 31%.
The Hispanic population is much younger.
• Median age is Just 27, up from 25 in 2000.
• People under 20 make up 38% of the population; only 5% of the population is age 65+.
• The young population grew by 19% over the past decade. Total population grew by 28%.
STANFORD
mi CENTERON
a LONGEVITY 4
Understanding California's Demographic Shifts
The Intersection of Age and Ethnicity
11%
Age Mix by Race and Ethnicity, 2010
~~10%" 12%^^ 6%—5%:'
Total White, Blaol<, Asian, Other, Hispanic
NH NH NH NH
Note: NH=non-Hispanic
Source: US Census 2010
Race and Ethnicity by Age, 2010
• White, NH siBlaci<, NH Asian, NH Other, NH ^Hispanic
0% 20%
Note: NH=non-Hispanic
Source: US Census 2010
The Hispanic population in California is significantly younger than the white, non-Hispanic population
and has a large share of young people, 38% compared with 19% for the white, non-Hispanic population
and 28% for the state overall. Conversely, the white, non-Hispanic population has a higher share of older
people, 18% compared with 5% for the Hispanic population and 11% for the state overall. As a result of
these divergent age structures, the racial and ethnic composition of the various age groups differs
significantly.
• The young population is majority Hispanic; 51% of the state's young population (age 0 to 19) is
Hispanic and 28% is white, non-Hispanic. Ten percent is Asian and 6% is black.
• Conversely, the older population is predominantly white, non-Hispanic: of the population age 65+,
62% is white, non-Hispanic and 18% is Hispanic. Thirteen percent is Asian and 5% is black.
. STANFORD
.W) CENTERON
ZA LONGEVITY
Understanding California's Demographic Shifts
income, Poverty, and Unemployment
Household Income
Distribution, 2005-09
in thousands of $ (2009)
25% 1
20%
15%
10% -
Less 10 25 50 75 100 150
than to to to to to or
10 <25 <50 <75 <100 <150 more
Source: ACS 2005-09
Median Household Income by
Race and Ethnicity, 2005-09
Note: NH=non-Hlspanlc
Source: ACS 2005-03
Labor Force and Unemployment
Unemployment Rate
14%
Labor Force
In millions
18.3 T—
12%
10%
•07 '08
Labor Force —»~
Source: CA Employment Development Department
'10 June
•11
Unemployment
The statewide median household income in 2005-09 was $60,392, about 17% higher than the US
median income of $51,425. Income varies greatly across racial and ethnic groups, with median
household income ranging from $43,397 for black households to $73,570 for Asian households.
• In 2005-09, California households were more heavily concentrated in the higher income brackets
than households nationally: 12% of households in California had incomes of $150,000 compared
with 8% nationwide.
• California also had proportionally fewer lower-income households: 20% of households in California
had income of less than $25,000 compared with 24% nationwide.
The poverty rates in California are similar to nationwide rates, with 13% of individuals and 10% of
families living below the federal poverty level.
• For individuals age 65-I-, the poverty rate in California is 8%, lower than the 10% nationwide rate.
California's unemployment rate rose steeply from 4.9% in 2006 to 12.4% in 2010. The June 2011
unemployment rate was 12.1%, well above the national rate of 9.3%.
(Note: The most recently released statewide data on household income from the Current Population
Survey show that inflation-adjusted median income in California dropped by 5% from 2009 to 2010 and
that the share of individuals with income below the federal poverty level increased to 16% and the share
of children in poverty increased to 23%. These data provide useful information about statewide trends,
but they are not comparable to the five-year ACS data used for the demographic profiles in this series.)
STANFORD
. CENTERON
a LONGEVITY
Understanding California's Demographic Shifts
Education
% Of Adults Who Did Not Complete High School
:t 2000 •2005-09
60%
40%
20%
0% White, Black Asian Hispanic CA US
NH Total
Note: NH=non-Hlspanic
Source: ACS 2005-09
% of Adults Who Attained a BA or Higher
R2000 •2005-09
60%
40%
20% -r
0% -i-White, Black Asian Hispanic CA US
NH Total
Note: NH=non-Hispanic
Source: ACS 2005-09
Educational attainment in California varies significantly by race and ethnicity, particularly for high school
completion.
One-fifth of adults in California have not completed high school.
• Forty-four percent of Hispanic adults have not completed high school, compared with 14% of
Asians and blacks. Just 7% of white, non-Hispanics have not completed high school.
• Although high school completion rates have increased since 2000, California still underperforms
relative to the nation. Nationally, only 15% of adults have not completed high school, compared
with 20% in California.
Statewide, 30% of adults have Bachelor's degrees or higher.
• Asians have the highest Bachelor's degree attainment at 48% and Hispanics have the lowest at 10%.
Bachelor's degree attainment among black adults is 21% and among white, non-Hispanics it is 38%.
• Bachelor's degree attainment has increased since 2000 in both California and the US—to 30% in
California and 28% nationwide.
STANFORD
CENTERON
^ LONGEVITY
Understanding California's Demographic Shifts
Households
Households, 2000-10
Living alone
Family w/o
children
FMiMrivhawi
wfehlidrM,
nehinband
Mal* hMd
w/cMMran,
no wife
2000
Source: US Census 2000, 2010
2010
By Race and Ethnicity, 2010
Living alone
family,
nohusbancP
Male-headed
family,
no wife*
10%
White, Black Asian Hispanic
NH
'wltti or witiiout children
Source: US Census 2010
Living Arrangements
Age 65+, 2005-09
I
7%
I
Group home
With non-
relatives
46% Mate alone
With other
relatives
Source: ACS 2005-09
The share of family households has remained stable since 2000, accounting for 69% of all households,
but the mix of family types has shifted.
• Statewide, the traditional family household—a married couple with children—has been on the
decline, with the share decreasing from 27% to 23% of total.
• In contrast, family households without children have increased from 33% to 36% of total.
Nonfamily households have increased in number but still represent about 31% of all households, with
single-person households still accounting for 23% of total.
• Single person households are most common among blacks and white, non-Hispanics at 30% of
households, and least common among Hispanics, at just 11% of households.
Husband-wife households, with or without children, account for almost half of all households.
• The share is highest among Asians, at 59%, and Hispanics, at 54%.
While most individuals age 65+ live with a spouse or other relatives, one quarter live alone, and most of
those living alone are women.
STANFORD
CENTERON
LONGEVITY
Understanding California's Demographic Shifts
Foreign Born
100%
80%
60% •
40%
20% i
0%
Region of Origin, 2005-09
34%
11%
Foreign Born: 9,739,226
% Foreign Born: 26.8%
Asia
Other Latin
America
Source: ACS 2005-09
Household Language, 2005-09
»i Linguistically isolated*
At least one other language and English
o English only
30%
•Linguistically lsolated=No one In the household age 14 and over speaks English
at least "very well"
Source: ACS 2005-09
More than one quarter of California's population is foreign born.
• Mexico is the most common country of origin, accounting for 44% of the immigrants. Another 11%
come from other Latin American countries and 34% come from Asia. Only 7% come from Europe.
• With nearly 10 million immigrants, California accounts for 26% of the nation's foreign-born
population, more than any other state.
• International immigration has declined over the last decade. Net international immigration totaled
2.1 million during the 1990s, but fell to 1.7 million from 2000 to 2010.
Across California, 10% of all households are linguistically isolated, meaning that no one in the household
age 14 or older can speak English at least "very well." In addition, 30% of all households speak at least
one other language besides English.
STANFORD
CENTERON
'ii LONGEVITY
Demographic Profile Carlsbad City Ubrary
Highlights
Population Growth: The total population in Carlsbad
increased by 35% over the past decade to 105,000, while
California grew by just 10% overall. The greatest growth
occurred in the white, non-Hispanic population (16,000).
Diversity: Racial and ethnic composition of Carlsbad has
shifted somewhat since 2000, though Carlsbad remains
predominantly white, non-Hispanic. The white, non-Hispanic
share of the population decreased from 81% to 75% of total,
while the Hispanic and Asian shares increased slightly.
Age Structure: Carlsbad is older than California as a whole, though the age structure
has stayed fairly constant over the past decade. The median age is 40, up from 39 in
2000, and compared with the current statewide median of 35. The share of the
population age 65+ remains unchanged at 14%, compared with 11% statewide.
Education: Educational attainment is much higher here than in the state overall. Just
4% of adults have not completed high school, compared with 20% of adults statewide,
and 52% have a Bachelor's degree or higher, compared with 30% in California overall.
Income: Incomes are significantly higher in Carlsbad than In California overall-
median household income is $85,000, which is 41% higher than the California median
of $60,000.
Population by Age
This demographic profile Is part of a series of library Jurisdiction profiles prepared for the California State Library by the
Stanford Center on Longevity. The project, "Understanding California's Shifting Demographics," was supported in whole by
the U.S. Institute of Museum and Library Services under the provisions of the Library Services and Technology Act,
administered in California by the State Librarian. The opinions expressed herein do not necessarily reflect the position or
policy of the U.S. Institute of Museum and Library Services or the California State Library, and no official endorsement by the
U.S. Institute of Museum and Ubrary Services or the California State Ubrary should be inferred.
rAV STANFORD
CENTER ON
^ LONCEVITY Page 1
Demographic Profile Carlsbad City Library
Key indicators
Population Growth
Total population
10-year growth
Diversity
Aging
Households
% Hispanic
% Asian, non-Hispanic
% White, non-Hlspanic
% Black, non-Hispanic
% 65+
Median age
% Married couple with children
% Living alone
2000
78,247
24.0%
11.7%
4.2%
80.5%
0.9%
14.0%
38.9
24.2%
24.6%
2010
105,328
34.6%
13.3%
7.0%
74.9%
1.2%
14.0%
40.4
25.5%
23.9%
1. Population by Library-Defined Age Group, 2010
In thousands; males on left, females on right
2. Race and Ethnicity by Library-Defined Age Group, 2010
• White,NH «Black,NH Asian,NH Other.NH w Hispanic
Age group
Total
86+, Oldest
66 to 84, Older adults
46 to 64, Midlife
33 to 46, Adult
19 to 32, Young
14 to 18, Teens
11 to13, Tweens
6 to 10, School age
0 to 6, infants/toddlers
16 16 0% 20% 40% 60% 80% 100%
3. Population Growth by Library-Defined Age
Group, 2000-10
1 2010 t
Change: % Change
Total j 105,328 27,0811 34.6%
86+1 2,709 1,579! 1397%
66 to 84 1 12,089 2,239 j 22.7%
46 to 64 1 28,548 10,763' 60.5%
33 to 46 I 20,156 1,810i 9.9%
19 to 32 1 15,319 3,185i 26.2%
14 to 18 1 6,977 2,394r 52,2%
lltoisi 4,4231 1,353; 44.1%
etolo 1 7,375 38.4%
0to6 ! 7,732 1,710; 28.4%
4. Population Total, 1990-2010
In thousands
1990 2000 2010
5.10-Year Population Change
• 1990-2000
• 2000-2010
California
0% 20% 40%
Source: US Census 2010, 2000, or 1990
Prepared for the Califomia State Library by Stanford Center on Longevity, 9/12/2011 Page 2
Demographic Profile Carlsbad City Library
6. Population by S-Vear Age Brackets
In thousands; males on left, females on right
a)2000 b)2010
7.10-Year Change in Population, 2000-10
a) By Age
In thousands
b) By Race and Ethnicity
In thousands
White.
NH
Black,
NH
Asian,
NH
other,
NH
Hispanic
10 20
Chang* J34.6%
8. Population by Age, Race, and Ethnicity, 2010
In thousands; males on left, females on right
White, Non-Hlspanic Blacl<, Non-Hlspanic Asian, Non-Hlspanic Hispanic
White, NH
Population 78,879
Share of Total 74.9%
%66+ 16.3%
% 20-64 60.8%
% under 6 5.1%
Black, NH
1,232
1.2%
7.5%
63.2%
5.4%
Asian, NH
7,336
7.0%
11.7%
64.4%
5.9%
Hispanic
13,988
13.3%
6.0%
57.2%
8,9%
100+
90-94
80-84
70-74
60-64
50-54
40-44
30-34
20-24
10-14
0-4
Total*
106,328
100,0%
14.0%
60.0%
6.0%
9. Age Mix by Race and Ethnicity, 2010
100% y--: r ,-_.
Total Wh, BI, As, Oth, Hisp
NH NH NH NH
10. Foreign Born, 2005-09
Region of Origin
100% T
80%
60% i
40% -I
20% 4
0%
Foreign Bom: 11,807
% Foreign Bom: 12.5%
SouiM.'ACS200S-0S
Other
Latin
AiTWfiea
11. Household Language, 2005-09
!«Linguistically Isolated**
At least one other language and English
« English only
Sourer ACS 2009.09
Wh=Whtte; BI=Black; As=Aslan; Oth=Other Race or Two or More Races; Hisp=Hispanlc; NH=Non-Hispanlo; ACS=Amerioan Community Survey 2005-09
"See pages S-6 for detail on Other, Non-Hispanic
••Linguistically Isolated = No one In the household age 14 and over speaks English at least "very weir
Source: US Census 2010, unless othenvise noted
Prepared for the Califomia Slate Libraiy by Stanford Center on Longevity. 9/12/2011 Page 3
Demographic Profile Carlsbad City Library
12, Household Income, 2005-09
In thousands of $ (2009)
a) Income Distribution
Less 10 25 50 75 100 ISO
than to to to to to or
10 <25 <60 <7S <100 <1S0 more
Source: ACS 2005.09
b) Median Household Income by
Race and Ethnicity'
$S0,3S2
Total
Wh,NH
Hisp
$0 $50
$86,146
$88,627
$91,643
$100
13. Labor Force and Unemployment, 2006-11
Un«mployment Rats
'07 '08
Labor Force •™'-
Source: CA Employmertt Development Depatlment
Unemployment
14. Household Type, 2010
% of all households
a) Total, 2000-10
2000 2010
b) By Race and Ethnicity," 2010
Wh,NH BI As Hisp
15. Average Household Size,
2010
By Race and Ethnicity*
6 r
t
5 t
4
Total Wh.NH BI As Hisp
16. Living Arrangements
Age 6S+, 200S-09
1%
Group homo
With non-
rolatives
43%
With
Source; ACS 2D05-D3
17. Educational Attainment for the Population Age 25 and Over by Race and Ethnicity*
b) % of Adults Who Attained a BA or Higher
100%
a) % of Adults Who Did Not Complete High School
«2000 •2005-09 S2000 •2005-09
80% 4 I
60% •!•
i
Wh.NH BI
Sourc*: Census 2000, ACS 2005-09
As Hisp Total CA Wh,NH BI As Hisp Total CA
"Wh,NH=White.Non-Hispanic; 8l=Blacl<,Hispanicinclusive; As=Aslan,Hispanic Inclusive; Hisp=Hispanic(lnciudes all races); CA=California Total
Note: In the American Community Suruey and for Census variables other than population, Hispanic origin Is not broken out for ail races.
Source: US Census 2010, unless otherwise noted
Prepared for the California State Library by Stanford Center on Longevity, 9/12/2011 Page 4
A..,u. ''"'"'•^ Government?
A White Paper Intended To Provoke a Needed Conversation
Prepared by
A, '^^''^ (^^"^ratlon Advisors, Principal
MarkDanaj, Debra Figone,and Kim Walesh, City of San Jose
Presented at
The Alliance for Innovation
BIG IDEAS: The Future of Local Government
October 14-16,2011
Fort Collins, Colorado
BIG IdEAS
The Futlire of Local Government'
October 14-16, 2011 For. Collins, CO
-1-
Big economic, technological and social mega-forces threaten the viability of local governments across
the nation. The question "What's the future of local govemment?" is not just a topic of academic
interest but a critical business issue for public agencies. If a local government can create a vision or
story about its future, it can help shape that future. Without a vision, a public agency will be reactive
and forced to change, one crisis after another.
Sponsored by the Alliance for Innovation, this white paper suggests an emerging model for local
government, discusses the experience of the City of San Jose, CA, in re-Imagining Its future, and provides
some big questions that will hopefully provoke further conversation about the future of local
government.
Crippled Public Agencies
The traditional direct service model of local government is now seriously threatened. It is not just the
budget, staffing and service cutbacks crippling local governments. A whole series of forces calls into
question the traditional model, including:
Escalating demands and mission creep. Over time, citizens have increased their demands on local
government to respond to a whole variety of issues. Currently, local governments are being urged to
respond to climate issues, the home foreclosure disaster, the "retirement wave" of baby-boomers and
the adolescent obesity challenge (to name just a few). Consequently, local governments have become
full-service organizations that attempt to be all things to all people. To exacerbate matters local
govemment leaders have an heroic urge to respond to any new community problem or demand with a
public service.
Mandates without money. Local agencies have increasingly been mandated by state and federal
governments to provide new services or enforce new regulations without sufficient funding thus
siphoning money from other more basic services.
Static structures. The organizational structures, systems, processes and rules of local government are
onented toward a static world, Rigid job classifications, civil service and hiring rules, and purchasing and
contracting systems are not aligned with a dynamic and disruptive world. For instance, a public agency
cannot compete with a private corporation that can hire a soon-to-graduate student on the soot at a
university career fair.
Accelerating technolnpy. Technology is changing all service delivery. As just one example, a number of
local governments have launched smart phone applications so that residents can report potholes
graffiti, sidewalk damage, and other sen/ice needs. Several years ago, whoever would have guessed that
public officials would be tweeting constituents about community issues? Local govemments that failed
to invest earlier m enterprise-wide systems now commonplace in the private sector (1 e to manage
constituent relationships, content, assets) can't harness the true benefits of the social media revolution.
Big challenges cross honndarips. No one institution-govemment, business, faith-based groups non-
profits, educational agencies-can solve any one problem. Regardless of budget resources the dty
police department cannot resolve by itself a major gang violence problem. All the big adaptive
challenges of the day (e.g., economic vitalltv, climate protection, family stability, reinvestment in
infrastructure, educational achievement, and immigration) require boundary-crossing
-2
S^^^'Sa'glt^^^^^^^^^ Often based on the old industrial
economy is now service and knowledge-based ^he ornl . ^^"'^our
does not generate tax revenue to fund locSln J ^ " °^ °' of knowledge
politicalwillformodemizationthTa^^y^^^^
govemments are to perform their historic rote. '"^""^ ^'"^^ economy if local
^^^ssZllZZc^^^^^^^^ ^-«ts in the past could
provider. Oeciining confideL in alS, ^^^T^^^^^^^^^^^^^
convergence of forces, including anti-government Inf. '"''"'^'"^ government, is based on a
cty hall, an inability to effectivdy address tTbig^^^ -^o run against
scandals. Citizen mistrust is reflected in hJnf T > confounding communities, and periodic
public's seeming unwillingnes:tt^^^^^^^^^^^ -^^^ -trictions' as we,, as the
worse, citizens do not understand how servi L are^!^^^^^^^ ^o make matters
betweentheimpactsofba,,ot.boxbudgetln:rdr^^^^^^^^
The "Vending Machine" Is Broken
responsibility for the problem or the solution ' <=o"s<^mers, people take no
adaptive challenges which cross boundaries ' " " '"^'^^''''^^^ to tackle the big
The Emerging Model
we are entering a new era "where the gr^at task of 2 """"''^ ^^P^rt has stated
awaythings from people." AS local gove?^^^^^^^^^^^
restrain pay and roll-back benefits, shutterSin«s and ^ '"""'"^ '"'^ ^^^'"S'
to businesses, we will need to eng ge in d fficTt co'^^^^^^^^^^^ '° ^"^ ^"^sidtes
roles and systems of loca, govemment ""^^^^^^.ons focused on redefining the expectations.
Given this new era, we belipwp that tt,«,«
local governments. ' ''''' «'«'"«nts to an emerging model for viable
1. More disciplined government, focused on its "core" businesses
-3
services may be essential but police and firTpraerar nn^^ . K ^ ^"T"''"*' ^^^^^V
the county or a joint powers authority 1 erhX m^^^^^^^^^ ''''''''
indicate that their agencies wanted to keepTn houseTand / T^'T ^'"^ ^'"^
and economic viability of their communTties nl i^ '"^ ^'^'"'^"^ *° P^^ysical character
in their communities) '=°'"'^""'t,es) and park programming (related in part to the quality of life
^Sei:^^iSc~^
core is defined (no easy t sk), then eSed^^^^^^^^^^^^ '"^ ^"^^ ^^^^
core businesses and not get distracted ' management need to be focused on the
desired by the Council a'nd "e rmunrty 1^^^^^^^^^ °" ^
and the governing board can decirtriur^of th^n . ^'^^-P™"*^ management
should local govemment de ver e v^e tse°f o '^^^^^^^^^ -a-P'e,
(presumably at a lower cost and perha^"fS:^ ' ""^^ -*'*V
2. Demonstrating value
increasingly strident voices if they are r^^^ n^^^^^^^^^^^ -^-^ i"
streamlining, performance measures and othefaccoulbHitv Iffol V^^^^ cost structure,
govemment improves its value proposition '"ftiatives as local
3, Integration of technology into ail service delivery
requir, flexible and e e"Z*T=mplov«^^^^^^^^^^ organizational structures and practices will
little, do some research, respr' make Sll f ?™ «"V kno»
model of loyal, compllam c^^^I.^^^^^ *T '""""'^ =^ '"^ 8o along. The
motivated, Chang JrofWe Tar^TaSe* ""'•o are self-
•4-
^e*mesll:rn',^'^^^^^^^^^^^
5. Shared services
include: '"'"B i-ervices to the public. Shared service approaches
kinds of sen/lce. Instead of directs Serin,' T" """""^ "Santeations to deliver ali
facilities, some level o, JZn2, t ZV's,^^^^^^^^^^^^ ".TT"" P™"'* '"^Ir expertise,
organize aner-school programs, n^lZ rood s^a^
economic development activities. Planting and maintenance, and
6. Nongovernmental solutions
Given the continuing llmftations of pubt^^^^^^^^^^^^ 1?"^" ^'"^'^ S'^^" ^°"^trained resources.
Vitality, affordable housing, gangs, e^c:^^:^^^^^^^^
among many. With an issue-centric approach local sov^rllTi T '"^^^^^'"^•i^st one partner
urge to take on every new challenge. government leaders can better resist the heroic
7. Authentic civic engagement
g":r:;,Trrn:r^j::.t-- .ocai
local govemment officials IT,« stert conveiSttas llthtE T ' '""^
problem-solving, integrate the InterlrSe L"e "nd^ X"' T'"'
authentic engagementcanlocalgovernmen^trSo"^^^
Committing to authentic engagement requires a "bam-raisini!" model ,„„i
agtanan past, fami,.s who needed to raise a barn wou« Z:ZI:ZZ''';ZoT.l°"'
hold a ladder; someone else would hammer; others would bring the food for all the workers In
addressing complex adaptive challenges, local govemment needs to put out a call for different kinds of
contnbutors and engage them in "barn-raising" As opposed to the vending machine approach barn
raising IS an asset, not a deficit, model. ^-Mproacn, oarn
8. Change in Workforce
Even for the most sophisticated agency, all of the above elements in the emerging model portend
goals will be based upon alliances with intemal and external partners, with a lean core organ^a^n
managing relationships with providers on behalf of the organization's constituents. For ex mp l in San
JO e the city parks department was able to avoid some summer pool closures because of new
th nr^^'t. T^^J ^""''^ ^P^^^*^'-^- Th'^ ^°del was very different than the traditional and increasingly unaffordable model of staffing pools with city employees.
Given the move toward self-motivated, adaptable workers, agencies will have to prepare for employees
who are more se f-reliant in their careers. Workers will depend more on themselves thanThe '
organization, looking to the agency less for lifetime employment and security and more for sklll-
building-something smart organizations will provide In order to have a competitive edge in attracting
a! onl It th f °^ '°^"^P'°V- -changi for Jfe ime mp ym^^^^^^ has long left the private sector. Local govemments need to adapt to the new social contract of pub,'
Knowledge-sharing and portability will also continue to grow and influence the local government
ndscape Knowledge used to be something that was hoarded (the more knowledge I haveThe more
I m worth) bu now this approach is progressively viewed as weakness, especially among knowledge
workers. Employees want opportunities to leverage knowledge-sharing. This is mosrevfdentl the
explosion of social networking opportunities. In addition, few boundarL will exbt for len and wh^^^
work IS done with perhaps some continued exceptions for public safety services. Emp oy e wH exl
flexibility on where and when work will be performed. As job tenures becoming shorter ^me mav see
rill" TI7 ° f movemen tayZr tradit onal defined benefit toward the defined contribution retirement plans may be seen a complementary to this portability trend. "ciyDeseenas
Lastly as local govemments become leaner core organizations that provide services through convening
stakeholders, facilitating adaptive challenges and managing relationships with internarand external
providers, the relative make-up ofthe local govemment workforce will become evTn more ^olL
worker in composition. Knowledge work involves more diverse and amorphous tasksIuTded by '
professional judgment as opposed to traditional production or clerical work whirh k r«n i .
and predictable USOepartment of LaborstatlstiLlreadydem^l^^^^^^^^^^^^^
government workers are twice as likely as their private sector counterparts to have a cnlS nr
advanced degre^ The leaner local govemment of the future is C^^^^^
than the general labor market and represent a diversity of professionals.
-6-
Promoting the Emerging Model
To promote the new model of local govemment in an era of take-aways, appointed and elected officials
need to engage diverse stakeholders in courageous conversations about limitations, expectations, and
the what and how" of govemment. While modernizing and reforming contracting, purchasing and
CIV. service systems are absolutely essential elements of the emerging model, local govemments will
still be held to high standards. Citizens and their elected representatives will continue to require
fairness, equity, accountability and transparency-key ethical values that are the hallmark ofthe public
sector, especially local govemment. These changes will first require conversations with all parties in
order to surface issues and obstacles and then ultimately political courage by local govemment leaders.
In addition to demonstrating courage, local govemment agencies must free up "slack resources" to
make strategic investments, either by over-cutting or by partnering with other entities. These strategic
investments include investments in technology and employee development.
Government now needs to reap the benefits of IT-led productivity growth that has acci-ued to the
private sector in the last three decades. This means investing in enterprise-wide IT systems, such as
Customer Relationship Management {CRM) systems, Enterprise Resource Planning (ERP) systems and
Knowledge Management (KM) systems. Of course, with approximately 70% of all our resources invested
in employees, we cannot Increase the productivity of knowledge work without Investing in employee
development through new learning and employee development initiatives. As opposed to IT
mvestments, learning Initiatives are relatively cheap. These include job rotations, special assignments
interim positions, talent exchanges internally and externally, team leadership assignments, and soft '
skills training.
The San Jose Experience
In a time of transition and uncertainty, the City of San Jose, CA, is proactiveiy envisioning a new future.
The City of San Jose serves over one million residents under a mayor/city council/city manager form of
government. Over the last decade, the City has faced persistent budget shortfalls as cost escalation
continued to outpace revenue growth. This structural problem grew far worse in the last few years as a
result ofthe economic meltdown that led to significant declines In the City's major revenue sources as
well as escalating retirement and benefit costs.
Drastic budget balancing actions have closed General Fund budget gaps totaling $565 million over the
past nine years, with more than $200 million of this addressed in 2009-2010 and 2010-2011 alone
Since 2001-2002, more than 1,600 positions have been eliminated, a 22% decline in the workforce
Over 1,100 of these positions were eliminated in the last two years, resulting in over 200 layoffs and the
bumping of hundreds of employees into other positions and departments. City staffing levels now
stand at 1994-1995 levels-when the City's population hovered near 825,000.
Under the leadership of Debra Figone, City Manager of San Jose, the city's senior management team has
begun to develop a new story for its local government. The senior management team initiated a
discussion around three key questions:
What Is our city government like today?
-7-
What should our city govemment be like in four years?
What must city leadership prioritize to achieve our new vision ?
(at end of document)
Provol<ing a Needed Conversation
^™s"t\~?u?:hX:re ''"-"^ •«
TO help initiateZ ~T:::iZZ~^^^^^^^^^ "^^'^ *k,„g.
*:,Lnge?""°''^-"ory or long-term
ro^Wmlnrjeto^^'^^''^'^ ^'^ '"-«^« - «-'o*g*e viahiiitv of
;:ctg;::a:re«:r:v;''"''^""''^=^^""''*
in practice, how do local government leaders rebuild trust and confidence in our public agencies?
if the traditional model of local government is not viable In the mW t„ i„™.
must loca, govemment leaders take now to move towardT^^^^^^^^^ '^'^'''^ ^'^^^
Again, the future of local govemment is not an academic issue The viahil/tu nf /
agencies is based on our ability to re-envision our gove nmln!'JH f, 7 ,
us in the desired direction. government and figure out real-world actions to move
Participating in the Conversation
To participate in this needed conversation, local govemment leaders cAn pm.ii th •
white paper and respond to the following issues " *°
• What resonates with you?
• What does not resonate?
• What do you have to add to the discussion?
Please email your responses to Dr. Frank Benest at frank(afrankh.n,.t
-8-
lL^7aS:rtn~ ''^^ ' '""ow-up document via
Thank you for your concern and commitment to the future of local government.
.r;rrHiri~o^.Tj^:;rid"or'^^^ " ^ark Pa„a| is
Fremont, CA^Dr Frank Benest IS thrf rmer c,"^
consultant to San Jose. 'vianager ot Palo Alto, CA, and currently serves as a
-9-
' Security and certainty gone; ail is
in flux
' Fiscal sustarnability threatened
Antiquated systems: revenue, civil
service, IT
Now doing less with less
Some "traumatized" workforce
Public-private is blurring
• Open government is way of life
• Boomer retirements coming;
looming loss
Civil service rules prevent
sustainable workforce and
succession planning
Traditional City model feels
outdated
• Align expectations to reduced
organizational capacity
• Deal with financial challenges head on
• Take smart risks, reinforce safety net
• Reform retirement benefits
• Reform compensation structure
Reform civil service system
• New Models/Outsourcing/lnnovation
• Succession planning
• More partnership with community
• Cost control for public saiety
• "Green" infrastructure replacements
Revenue generation
• Embrace technology solutions; make IT
investments
Consolidate services across departments
• Uneven approach: regulating vs.
facilitating
3.
• Enable outside partners to deliver
services, rather than delivering
them ourselves
• Smaller, highly skilled, expensive
core staff
• Residents are citizen-partners, not
just customers "buying services"
• More focused; more capacity to
prioritize work
• Employee costs aligned; but "Tier 1"
talent retained/attraaed
• rr fosters more efficiency & reliability
• Smooth transition to next-
generation leadership
• Willing to take risks to get rewards
• Many alternate models
• No silos within or across
departments
7
7
WORKING DRAFT: For conversationjpnlyj
.^^wt^wUg-n.j<,.,^aw ^^^^^^
I T
WORKING DRAFT: For cowersation ^^itiT]
Local Govemments in the Wake ofthe Great Recession-
Are Big Changes Ahead?
Prepared by
David N. Ammons. Karl W. Smith, and Carl W. Stenberg
University ofNorth Carolina at Chapel Hill
Prepared for
The Alliance for Innovation
BIG roEAS: The Future of Local Government
October 14-16,2011
Fort Collins, Colorado
- BIG lbEA5\
The Fuflire of Local Government*
Octobers-16, 2011 Fort Collins, CO
Introduction
The U„iW S,»,es. „d worldeconomie,, look .„ „„„„„us hi, i„ ^ 2m do«„m, s™di„g
waves ftrough gov.m„e„.^„ ^ ^ ^
Of U.S. local gove^mcs have led »me observers u, predic, ^ ^ ^
will sweep across the local govemment landscape as cities and counties not only adjust to a "new
nomal" of perpetually constrained resources but also cope with mounting problems of deferred
infrastructure maintenance and unsustainable pension and health care commitments. Forecasted features
of local govemments of the new normal include frugal budget choices and reduced scope of services;
slower growth or even decline in employee compensation; more privatization, intergovernmental
contracting, and public-private partnerships; and perhaps even a transformation in how govemments
choose their tasks and generate their revenue (Goldsmith 2010, Brock 2009, Miller 2011, ICMA 2009),
We will offer in this paper our owft thougiits on the future of local government, based in part
on our assessment of the resiliency of cities and counties in the wake of previous crises and tlieir
tendency to adjust modestly and evolve gradually to a changing environment.
Forecasts from Others
In the late 1970s the Intemationai City Management Association's (ICMA) Committee on Future
Horizons confronted a troubled local government environment in which service demands outstripped
resources and encouraged governments to "learn to get by modestly" and rely on more public-private
cooperation (ICMA 1979).' Other groups studying the pliglit of state and local government in the
1970s and 1980s similarly noted a mismatch of service demands and resources, compounded by "a
cascade of infrastructure and environmental problems" (Hitchcock and Coates 1985),
Today's predictions of the future of local government emphasize the persistent problems of
escalating demands, mandates, rigid systems, citizen mistrust, and a tax system that is "out of whack"
(Figone, Walesh, Danaj, and Benest 2011). Warner (2010) forecasts strong pressure to privatize
infrastmcture investment but waning zeal for outsourcing local services; the further fragmentation of
local govemment, fueled by "private 'club'" approaches to providing public goods; greater attention
directed toward long-term consequences of decisions; and a rebuilding of the capacity of local
govemment, especially with regard to fmances. public employment, and citizen engagement, figone et
al (2011) forecast an emerging model of more disciplined local govemments that focus on core
"businesses." make greater uses of technology, emphasize collaborative service delivery and
.ong„v,« ^_ ^^^^ ^^^^ ^ ^^^^^^^^ ^
citizens more than in the recent past.
M«y Of .he challe-^es ftoi,g l„.al g„v™«, ^^^^^
P».i«en, ra..e,.a..oow. B=ca.» *e ohaUeng. ,„ ^ „,„„^
government landscape.
Change in Local Government through the Years
A^aHcn i„., .^evoL^over o,„,3.
-io. Have oh.„,.. P„ ^ ^^^^ ^^^^^^
....o,.o™,„ .0,0. «l omo.. ,„ ™. ^^^^
way ,0 ,„„„ .„..o,.i„ ,he h„d, of an „ ^
«e» op»a«„g .aer... „ayo,.„„ocll of „, ^
S.r„c. .,v. „pa,*. a., ^ ^^^^^ ^ ^^^^ ^^^^^
P.0f..l„.., ^^^^ ^^^^
01..=.,, .ew „,«s of ciWo oo™.„..,o„ a„. engage™. .„ available ,o .os. wKo ,„
use them,
.ore Of,™ ... ,ee„ „„,„,„„.^ . ^
i..n. pre,s„re.-.Ke Grea. Oep.eaaioa a. ,Ke
—most changes have come gradually. 3
LOC. go..™,. „„, ,^ „„,„„^ ^ ^^^^^ , _ ^ ^^^^^
2009, atao.. .o.*Wa of r.p„*g lc„a, gov.r„„™, „^
impa^ .Ke econo^, ^^^^^^^
or .Ke r..p„„.e„« „ .„ ^_ ^^^^
y«(Wa,„»a„.Z.e„,,„„, W a. aot ,|g„.|„f ^
few *a an. oon.,,.. ^„ ,^„, „ ^ ^^^^^^ ^^^^
these bca, g„v«s will be far ou«.,ed by .tose ™Hng less .,a.o..ie or .emporary *.„g.
lo cushion .he blow, adaphng only to .he exttn. necessary.
Lmon. from Severely Dl.t™.ed Loci G«,emmen.t ot the Past
Many individoa, d,ies and counties have ..p.,i.„e.d .hoi, own financial cri.es every bl. a. severe ss
.he cnsis n,o,. b,o.dly conf^onhng local gov.™.. „d.y, Local gove™. fhctog defaul. often
have fou,.d .he au^o.^, of .heir elects and appointed ofBdais le^po,.,,,, ,e,„ced o, suspended and
theiv affairs managed by a s.a...appoh,«d financial conM bo.,d (FBC) (Henry e. al. 1998) Th.
power. Of an FBCfar e.c«d .hose of ,he loCly CecM „fr,cl.s .hey s.,pplan.-p„w„s g™n.d i„ an
effort .0 ngh. a sinkhrg s^p, granrin, s„ch powe., s.a.. has "chosen ,o pass up opporh.i^
.0 mvoive ci«.ens in decision making ,ha, affec „,eir |iv. ,„ „f , ^^^^^^
decisive aodon by •experB' ire. fron, poMcal co„side»Uons" (Henry ., al. 1998).
Tha. s*. co„sis..nUy »e Ure s«p of appoinhng ,„ FBC when local g„ve« f... fiscal
emergencies is .estoony » dre difKcul^ of imposing sweeping refc„ns on oneself. Even on ,h. brink
of financial «a„h .hes. local gove„™»« hav. b„„ nnabl. „ ...p ,,3^
appolnled .„ do for tan wha. .hey had been unable .0 do f„, .hemselves. FCBs ,00k .he steps .ha. had
been .00 pahrfn, for eieced officials facing .h. c.r«ln wra^ of employees and co„s.i.u.„,s » «ke
Wh..does *iss.y abou. ,„. likelihood of d«n.ric and sweeping changes in .he wake of ,he Grea.
Recession?
The i^sons of d,les and counlies ta severe economic crises of >he pas. have shong
implicaUon. for onr view of ta. tarr. of local govemmen. more b,.,dly. Absen. o.«e con.,ol
majo, e«br. for reform are likely .„ be blocked by insid.™ as well as tae popuiadon a. large. S.v.„l
cases illuswe how difficuK change can be.
When .he city of Chelsea, Massachusete, feced defanl. in early 1990s, local
officials found i. impossible ••u. stay focused on tae primary ml.,i„n-p,„,idtag basic
aewices ,„ ta., dteen.. ,ns«.d, pollhcian. ^ ^ ^ _ ^^^^
of conrpedng Interest, law. and rradlUons which have created a dangerous polUicai
s»iema,e" (Cyr, ,993). The ci^ was s„b.,ne„dy placed under receivership. Many of ,he
reform, naade ,0 move Chelsea from tae brink of di.as.er we„ possible „„„ because of tae
fecial nata„ of tae ,eceiver relationship. F„, example, . new conlrac wi,h fi,^,gh,ers
d^ed .Tai, .0 tae ci^,, .h. ci.i.ens and the fr^fighta. " by .he assist receiver. " was
only possible because tae receiver did no. have » nm for „.el„.ic„ and face .he wrata of
an organized, focused opposition" (Cyr, 1993).
Chelsea underwen. radical Chang.. I. adopled a council-manager fo™ of govennnen. and
emerged ftom receivership in 2005. Sri., .he opposidon ta change remained ^le„.i„,. On. of tae
candidal. e,ec« ta tae cily council wa. a former police officer, who had been indictad earlier on
co^up-icn Charges, bu. ran for tae council o„ac»,paig„ .ediced » reverstag „,e effor. of tae
receiver (Cauellos, 1997).
This s,o,y Of enormous poliiica, „bs,.c,es .o change has been repeatad m Cher localities The
c.^- of Vonkers repeatadly smuggled agains. anancial dimculries, ,„ ,975 Vonkers ™s placed
Vonkers in ,980, ye. by , 984 Yorkers was again l„ „.c., n,„,,,
« by dramahc changes bu. instead via "a hiring free, and pl... fo, drasdo cuh," (NVT, ,998,
When s,.,..appoi„ed reformers a,e given special autaorily and do no, hav. ta answer ta .he
opportunity.
Tension Points
on. of .h. reason. „„ ^ „,,„^^ . ^^^^^^^ ^ ^^^^
change has no. been ..nsfo^adona, is ,he presence of compedng polidcai. economic, .d syslemic
pressure poln. 0«« l™a| o,«e,als and many ci.l.„s « taemselves d„™ ta „„. ^
.he otaer of eompeilng demands and ar^men.. Poilowing are nine key areas of .ension taa. have been
featured in .he on-going "tag of wa.. over ,he si.e, scope, and shuc^e of ,oca, govemmenis, .oge.he,
wita ourpr^licions regarding taei, influence on fi,ta,e dir^Hons.
Onfy Core Senica „. FuU-Smlce Local Grnvrntenl
H ha. ^ .„gg„.ed ,h.,^ ^ ^
eore services, and adj... cito, expooladon. regaling tae »ope and ,uall^ of services prided
trough 1.0,1 and fees. Insfead of tae -vendtag machine" model of local govemmen. wita
—ng for oid^ens. every desire, tae new norina, will cal, for l.a„„, Itariw se„ice orgam.a.io„s
with a "less for less" philosophy (Mill., 2011. Scoison. and Pierhopie. 2010).
Wha. ,emai„. unci..,, howev.,, i. how local oaicinls wil, choose "core" ,„cl services and ta
wha. ,hes. .ervice. wil, be advantaged. Hi.tarical,y. essentad services in mo,. oi.ies included
lire and police protacSon, watar and sewer services; she., and sid.„alk m.i„.enance, and »a.h
cllecdon. Some conamunide., ..pecially .tae wita g,ea«r affl.,e,.ce, added libraries and parks and
r.c„.ho„ ta taeir lis,. During previous periods of budgetary ctaack, tancioos considered core m a
given communis, were usually „fr,he ,ab,e due ta tae polirical clou, of .heir shrkeholdcrs.
As tae economic crisis co„ta,ues, wepredic. taa, even co„ services will be ta,^eW as
candidates fo, .rhnming bu. taa. few s»vioes-eve„ „on-co,e servrce^™,, be e,imina.ed. Advooata.
for a given service wi„ be abta ta preven. outagh, e,imtaado„-^.cep. potaaps ,b, tae few services
whh smalto, polidcally weak „„.dtaeucies-.„d maybe able ta co,.vi.oe local manages and eieced
Officials ta restate cuta ta taeir fivor^ services when budge. oondiSons improve. oon.„ry ta new
nomral expecta.io„s. Core .„™.s win receive f.v„„d tre.,m.n. .^oughout tae crisis, bu. tae norion
tha. taey will b. cushioned by ,..„.,,.., made available .ho=„gh .he eliminadon of many non-core
services is unlikely to be realized.
2. Cutting Costs vs. Raising Revenues
Adjus.i„g ta an enviromneo. of growing s„vice demands and dimi„,.hed resource will refute local
govemm»,. ta And ways of cutang cos... rWing revenues, „, appro^hiug ,h. p,„b,e„ on each
«de of tae ledger by dotag some of bota. Comlnumg reiuo^nce ta «se tax. will pu. addlrionai
ag^ssively. The open ,ue.hon, however, is whether tae economic downtam will acually p„pe, tae
adopdon cf d.ta-driv., resuhs-orien.,. managemen. p«i.es a^^^d by cridc. of ,he statas
,»o bu. embraced by «,a,lve,y few local govenm,en« undl now. mi .he public and ils
represenutaves now insis. on smartar aud more aggressive r.«.geme.. and tolerale no less,
Ahnos. inevitably, c«,hac,lng for ,enrtc» will ^ata pa„ of tae «rr,ice delivery mix.
Whether co„«c.tag Wita f«.-pn.fitl,„n,n,„p,o„,,„,„^„^„ Wh„ is les. ee«.ta is
whetae, gcver^en^ will be p„den. abou. .hei, con.a.d„g choices-i.e., Wring conriacring wita ta.
pr,va,e secta, ta tastances whe,e tae local economy .„ly provides a comperidve envlrorunen. and
hmi,tag all fomr. of connacring (private, nonprofit, and intergoveounental, ta l„.«nc. where careful
analysis demonstaates the Idteiihood of actaal cos. savings.
D«pita c„ri„, dis^ess, public p« ,0 manage Imiovadvely and aggressively migh, no. be
as strong as some may presume. Survey research shows taa. ci.i.n sa,istacrion wita tae services taey
are receiving ftom taeir local govemmen. has no. declined durtag tae econom.. downnun (Mller and
Hayden 20U). Even in .bese difflcul. ec«„mic rimes, "mos. residents in mos, commmutles across
America ar, pleased M,, where Ihey live and wita ta. services ,h.ir local govenunen. provld..-
(Mill.r and Hayden 2011, „), This is «y tae semlmen.wiil compe, drama.,, tasrupdon of ,h.
status quo.
Uldmately, we envision a modes, increase in p,essu„ ta adopt .mar,er, more aggressive
mauagdn™ practe. bu, such pracics «-|l * roo. only ta seleced local government rataer taan
witaou. reducing servic. We also envision co..i„ulng effort ta broaden tax bas..-f„r instance by
•ddtag services and Interne, sale, ta .he base-ratae.. .han by relying on increasing tax rates. W. ...
little encouragement for the latter.
3. Regionalism vs. Localism
•nte condnuum taa. ™,. from regionUism ta localism p,«e„« a ™g. of possibiildes fo, organizing a
in..ropol,.an area. At one extreme, a region would be characerized by an authoritative me,ropo,ltan o,
area wide government probably as a resuh of a ciiy-coumy consolidation. A. ,he otaer exuenre a
region would exhibi. ex.e..lv. fr,g„.„ta.io„ of govenunentai um., which would engage ta volmrta^
coperalion ordy where mutaally desired. Evidence mdlcate. taa. the vast majority of me.opol,.„
areas m tae United State, are closer ta the localist end ot .he speo.,.m, but wita extensive
cilaboralionl., arrangemorta for various hmc,l„„.-e.pecla„y for capital i„.e„,ve ,ta„io„. .uch as
water and sewer.
The Grea. Recall™, undoubted^, will „kindle i„,«es, ta l»»l govenrme., structaral refonn.
•mong .gionalis.. bu. ta our Judgmen. .here I. Ii„ta ta suggest .hat tai. will go bey^rd .he rhetoric of
a few proposals and perhaps initial merger talks. Governors in at least four states (Indiana, New Jersey.
Michigan, and Maine) have proposed that their legislature enact bills to eliminate non-viable units like
to^stips and smaU general purpose units or to strengthen counties to become regional govemments.
but these proposals have not been supported by legislators or local officials. Not since 1969 when the
Indiana legislature consolidated Indianapolis and Marion County (with local leadership support) has
there been a state-initiated merger. Nor have the states provide incentives for interlocal collaboration
in their grant-in-a^'d applications or denied flnancial aid to small or non-viable junsdicttons. The
movement to merge mostly small and mral school districts wiil perhaps continue-but little beyond
that.
The most recent locally-initiated efforts at regionalization were in 2008, and there have been no
successM mergers smce. Instead, failure to demonstrate the economic and functional advantages of
consoHdation to a public and professional staff skeptical that "bigger is better," resistance from council
members reluctant to give up their seats, and opposition from upper and middle manage, who stand to
lose their positions have eroded support for upsetting the status quo in many comm:miries. Added to
these obstacles are tl,e political dynamics of racial divisiveness. local official parochialism, resistance
by suburban voters, and citizen distrust of big govemment (Martin and Schiff 2011),
Although in ti.e wake of the Graat Recession there will be calls for merger in order to achieve
purported efficiency gains and other presumed advantages, we predict that few if any major local
consolidations will occur. The emphasis wii, continue to be on incremental, pragmatic, and politically
acceptable approaches to se.-vice deliveiy such as special districts, functional consolidations, and
interlocal contracts.''
4. Infrastructure Investment vs. Deferral
The U.S. economy grew to its position of global leadership in part on the strength of massive
investments in public infrastmcture. Ten years ago. Greenstone and Looney concluded: "Previous
generations of Americans endowed today's economy with an extremely valuable infrastmcture network.
However, underinvestment in maintenance and overcrowding and overuse tlueatens to reduce the value
Americans get from these resources. Devoting more resources to mnin.enanc, implementing new
technologies and practices, and introducing appropriate user fees has the potential to incase the social
valueofexistingi„fVastructure"(GreenstoneandUK,„ey2001, ,5). Their call tor investment was
ignored by many communities, and today capital infrastmcture is in desperate need of maintenance and
development.
Unfortunately these issues are likely to be continually deferred. Federal and state grants and
support for local infrastructure face stiff opposition and are likely to get leaner. The American
Recovery and Reinvestment Act provided more Ihnited infrastmcture funding than proponents sought.
Findil^g ways to finance local projects and rebuild the nation's physical infrastructure will be
increasingly challenging in view of severe state and federal spending consfraints.
Limited resources and the need to deal with immediate problems tempt local govemments to
stretch the current infrastructure to its breaking point and sometimes beyond. Ata time of economic
iunnoil and high unemployment, bdlding public support for the mix of increased fees and taxes
necessary to fund infrastructu.-e overhaul will be difficult. Thus, we predict that even the most forward
thinking local govemments will address their infrastructure problems on a piecemeal basis and many
local leaders will ignore aging infrastructure until crisis strikes.
5. Rebuilding Human Capital: Systemic vs. Piecemeal
Local govemments face an enomous human capital challenge over the coming decades. On the one
hand, a significant fraction of their workforce will be retiring and with that local govemments face the
loss of managerial capacity and institutional knowledge. Simultaneously, new technology, an
mcreasingly computer savvy citizenry, and the opportunity for long temi savings will pressure local
govemments to make increased investments in technology and the human capital needed to make it
work. A redesigned and more sophisticated work environment will require that talented professionals
be given perhaps more autonomy and held to higher standards than ever before,
Yet rather than forcing local govemments to systematically address their current and long-temi
human capital needs through workforce development, succession planning, and other steps, the current
economic downturn has more often led "reaction and reduction." with city and county personnel
targeted, than to innovation and investment (Stenberg 2011). Indeed, some local leaders think the
Foblem will take care of itself They remain optimistic about the fixture of local govemment human
capital, noting an entering cadre of motivated and capable professionals.
Pressures on local govemments to increase emphasis on developing their own professional
staff and rebuilding managerial capacity will continue. This pressure, however, is counterbalanced by
the need to address legacy pension and health care costs, and to develop a more sustainable plan for
current and future employees. Health care and pension costs have been steadily escalating. While some
local govemments cun-ently share these responsibilities with state health and retirement plans, many
localities will experience serious fiscal sfram in meeting their obligations. The primary revenue tools
available to local govemments - properiy and sales taxes - offer little flexibility. Therefore, unless
dramatic changes are made to current benefit plans, these entitlements will command a growing portion
of local budgets, constrain the ability of local govemments to cover increasing costs of other services,
and reduce investments in innovative practices, The high cost of supporting previous generations of
professional staff will likely mean lean resources fornew personnel. Thus, like investment in physical
infrastructure, investment in human capital will likely be piecemeal and incremental.
6.
Innovation vs. Status Quo
Asserting that "a crisis is a ten-ible thing to waste," some optimists urge govemments to see the Great
Recession as an historic opportunity for innovation (Svara 2010), Although examples of imiovation in
times of crisis can be found, ample evidence suggests that wo,.emng economic conditions will cause
local elected officials and public administrators to "hunker down" and focus on cutting and capping
programs and personnel, not on taking risks on untested ideas or launching initiatives requiring new
spending.
Fonnidable challenges lie in the path of local innovators, including these;
• Economists forecast that locaUties will not emerge from the recession until at least 2014,
and many will be preoccupied witli making tough budget-balancing choices until then.
• Local managerial capacity has been stretched and dimmished by furloughs, retirements, and
layoffs.
• The administrative "status quo" - characterized by rigid regtilations and procedures,
hierarchical command-control systems, and anachronistic personnel, budgeting, and
personnel processes - while intended to promote consistency, compliance, and confonnity
could stifle innovation.
• Rewards are not often provided (and sometimes there are penalties) for risk-takmg,
creativity, and exercise of discretion, and a fear-of-failure mentality exists m many public
bureaucracies.
Indeed, while crisis conditions can .omedmes spur cre«ivi.y. innovadon is easier wha.
growing and flexible ft,ndi„g is available. When budge., ar. constaataed, ta many commrmides local
mnovaiicn ,abo,,,ories could b. Cosed unri, ecno^o condidons „„p,ov. (Thor^on and Svar. 2010,
If promising new ideas are sparired by tae G.a. Recession, sonre of taem a. mos. IWy ta focus o„
new ways o,«.d.sstag employe, reriremen. and b.„efl,.,Otae™is,w. envision only pockels Of
local inn„v.«.„ across ta. counny, chiefly but no. exclusively in communldes and regions d,a.have
been affected less adversely by the economic downtam.
7. ''VnsiMUireDemtcneym Direct Democracy
Todays tatares. to ciS^en engagemen. and modem, more expansive noiions of -goven.anc." are
aligned ta push local govemmenh, in tae drredon of direc. democr^y. Engaged ci.izens-n,o„
intluenria, ta« ever before ta policy and service choices and more aodv. ta ser^ce co-produdon and
ovalualion, no. on,y .taough surveys „,d focus g™„ps bu. a,so .hrough "orowdsouming.. soludon. „
problems via social neiworktag^offe, promising „ppor.u.,.ies for ciries and counlies of tae futare ("A
Conversation with Goldsmith" 2011, 23),
Ci.i.e. engagement on a much large, scale .han eve, before holds eu„™„us p,o„is. if ci.i.ens
tmly Wish ta be regarded as owner. ,a.h., .han as cus.„me,s-.. p.„,cipa„. ta decision presses and
pedraps even as partaers ta service producion and dellve^. Bu, wha. if tae no,iou .ha. ci.l... preii,
.0 be owncs and parlicipan. rataer .han c„..om,rs i. incorrec., a. leas, for .i^bl. poriions of .he
chizenry, Wl„. If a |.,g. ^ ^,
several provide™ of ba.ic services for daily life-„„ch like tae cable .elevislon company, the
telephone p^vider. »d tae local groc«y ..„„, Wha. if .hey do no. wan, ta be engaged? What if .hey
simply wan. ta be served and otaerwise l.fl „on.7 Wha. if taey ,v« ta be taealed a. a,s.omers and
prefer taa, Ihelr indirect engagemer,. be .hrough an e,ec,ed goveming body? If tai. is Ihe case, ,he
principles of represe„..„ve democr«y arrd .he ro,. of ,h. e,ec.ed govenring body deserve ta be
protaced .galas, inroads ,ha, purpori ta be direc. democ„cy bu. .c.ua„y represen, somelhing much
naiTower.
Engagtag oitas as senricc-delivery voluntaers i. especially amaetive ta cries and counde,
"^H«g ta make ends meet nnanoially. James Svara „ri,e., "Many le^al goven^nenrs are exploring
how to better involve citizens in the dehvery of public services. A shift from a government-centered
model to co-production with citizens is anticipated. Neighborhoods will shift from a dependent to an
mterdependent state. The approaches include increasing opportunities for volunteerism; encouraging
neighborhoods to raise funds to support nearby parks and other amenities; and generally includmg
residents in decision-makmg roles in areas that affect their quality of life" (Svara 2011, 81). The
positives of these arrangements are abundant and obvious; the potential negatives are more subtle. If
local govemments strip away pubHc fading and count on co-production and neiglaborhood funding.
will only affluent neighborhoods and those having civic-minded residents with discretionary time for
volunteerism have nice parks while others have much less?
We anticipate that concerns about equity, representativeness, and stalemate will be heightened
as communities experiment with new forms of dh-ect democracy. We anticipate that movement in die
direction of direct democracy will continue but will be held in check to a degree by the recognition
that qualities embedded in representative democmcy have distinctive value. too.
8. Self-Determination vs. State Control
Over the past several decades there has been growing tension in the relationship between local and state
authorities. City and county officials have sought support for constitutional and statutory changes that
would give their units greater discretion over tiieir form of goveminent. types of services provided,
personnel policies, and fmances. At the same time, they have called on governors and legislators to
increase financial assistance to locahties, exercise restraint on unfunded mandates, and assume greater
financial and administrative responsibihty for auctions like courts, social welfare, niental health,
coirections, elementary and secondary education, and transportation.
The state's responses have varied widely In recent years, greater financial and functional
responsibilities have been transferred from the federal govem^nent to the states and from states to local
govemments. However, these shifts have come with adverse ramifications for local govemments. as
Keamy et al. (2011) suggest: "The imphcation is that financial devolution has two faces: one shows
that local govemmeivts are receiving enhanced authority, power, and discretion over finances; the other
shows that states are increasingly withdrawmg state-shared taxes and fees, 'borrowing' from state-
funded local government accounts, and imposingnew financial .^uirements on local govemments.
The inequitable exchange is akin to a second-order version of the classic 'shift and shaft' federalism
usually atttibuted ta .he federal govemmen.- (Keamy e. al. 2011).
The expanded scale of local gov^nen. operations aad tae need for commensurata r«
have cr«.d grea... .».ion bebveeu suburts and cantaa, cihes. Increased operadng r..pon.ibili.i.. and
financial burden, have been le.. ta«ening ta .ubutas taan ta cenW oides. Suburts often face f.w.r
of tae social problems taa, ^ve th. need fo, many program, and .end ta he more ..Buent They a,so
have a highe, „tai, acdviri, and have fe«, staains placed on ta.r infrasUuchue and o,her services ,ha„
taeir cenn,, ciry co.„ta,^„s. While cental ci.i. h.ve higher commcroi. proper^ «x bases. ,hes.
properties rcuire high level, of service, p.r.ic„larly ta,„.po«i„ ^„f„.^,^,, ,„
.fl«.ive ..ata nidi,b:ib,rdo„ policies taese dlsparides and ine,ui.i« are likely ta grow.
While the second-order devolution trend condnues, the respecive roles of stales and loc.li.ies
have been blurred rataer than clarified. Cides »d couniies oflen find .hemselves taapped m a cyCe ta
which sta,e reia.i„„.hips a. flnanclally and tancion.ily .uppo„i,e i„ good rimes and leuse ta bad
.mes. in ,he ,o«g run. a so«,„g ou. of responsibihfa between staie and ,oca, govemmen. could be
beneficia, ta .oh,.ving greatar efficiency and e,ui.y, . well a. p™,idi„g ..a™... „f
in tarius of firncional perfonnanoe, bu. ,h..e ..Tom wil, likely b. tao.me.tal, „o. s,...„.ac.
9. Service Prcvimn vs. Increasing^ Vne,ual C«m„mUes
Income dispariry in .he Unitad States ha. r^ched levels unseen since the Gilded Ag. of .he ,a.e ,9"
and 20* cntaries (Sae. and PInkney. 2004), This, .00, w,ll pose a challenge fo, local
governments.
More diverse communldes wil, face g„ater chahenges In achieving a ,.ix of services taa.
have ,he capaciiy ta pay for .hem. However, less ,m„ reside.., while tae, rnigh. prefer such
services, wil. be less able ta afford Local governments will have ta walk a, Incasingly n„e
,me i. determining tae correct service mix, TIrese strain, will only be exacerbated by co„c« over
redistabudon. Mo. affluen. .esiden. will b. in^astagly subsidizing services fo, lower income
resldenis even under tae fla. ..x sh^cta,., tha, tad g„_
and retail spending by high income ™ldenta wlil be used ta comperi.,.. f.,
lower .pending of l.s .m^, resldeata. We do no. expect .ha. Ihls will go uanoliced by ta™. asked
ta pay m^e. We predta, incased pressure f,.„ tae. resident ta focus ex.ra or highe, r^liiy
services on communities within a locahty ti,at ate paymg more. This conflicts dhectly widi principles
of equality and will challenge the ability of local govemment managers to maintain equal services for
aU.
This tension will also exist between neighboring communities. Efforts towards collaboration
will be more difficult in an enviromnent where high income residents increasingly see themselves as
subsidizing those of moderate means. Even in cases where efficiency gains could be achieved,
collaboration will be opposed by those who fear it will result in redistribution of resources.
Svara (2011) predicts that communities will involve "a partiiership between govemment.
community organizations and citizens" in the face of dwindling resources. While on the surface this
will solve some of the strains facing local govemment, it does so only by exacerbatimig inequalities.
Communities with greater capacity to fomi and fund their own partnerships will receive greater
services, while communities that lack the capacity will go without This puts in jeopardy the public
nafiure of public services.
We predict both collaboration and partnership will be difiicult to reconcile with increased
income inequality and the maintenance of equal service provision for all.
Conclusion
Since the Progressive Era, several notable changes have taken place in the world of local govemment
that over time have influenced the landscape generally. Some of these-such as the introduction and
widespread adoption of the merit system, introduction of new fomis of govemment (i,e. commission
and council-manager forms), expansion of modem budgeting aad management techniques, and growth
in staff professionahsm-viewed over a span of years are dramatic changes. But most changes in local
govemment are dramatic to only a few adopting local govemments at a time and evolutionary to the
body as a whole.
As indicated in the preceding discussions of lessons from past periods of economic stress. local
govemments have demonstrated a remarkable ability to bounce back in the wake of crises without
atndamentally altering then-jurisdictional boundaries, governing and organizational structures, core
services, or personnel. While there has been greater collaboration atnong local govemments and
between cities and counties and non-governmental organizations, and changes have occurred in the
mode of deliveo. of some services, most of this activity has involved a limited range of Unctions and
« has no. pennanendy alta,ed tae si., shape, or tanda.en.al m„.gem..t ..r„ch„. of local uni.
Th. new no.™, is tae la.es, bu. no, tae 1.. .eriou. economic dov^tam dra. local
that Cdes and cou.de. .^luk ta. untainkab,.- and make tandamental changes ta d... revenues
-ice., shuctares. andpolitlcs. .e, taere is little evidonc. drat ta.. foreoasis hav. proven ac„.
or .ha. ta. r.omm.„ded ..ep. have be. taken by mos. local govemm«. Coptag and adapdve
-ta,.s, rataer ta« ta™.om,ado„a, approaches, have typically cba„ctari..d the response of local
l-ers ,T„or.son and Svara 20,1,. And pnbhc optalon polls by ta. Cup Organi.don show taat
*c «i.y of tad govorir^en, , handle taeir problem., .ducing p^nr. for dra^ric chmges
(Gallup 2011).
we exp« taa. .his p,.«m will condnue a. greater challenges conta. local officials
Uoming cutaaoks ta stata ,l„a.cl.l aid and dlscdona. spending will dr.np. ci, and conn,
budgeta and programs. The p„fe,e„e. of e,e«ed olHcia. ta cu. .pending In.....
While tae,e will be pe,m.nen. changes I. the shape, sl„. and services of tacal gove™„,e., In
-e communldes, on balance .he resilience of tae sysrem will preval, l„ mos. chies and coundes
Ung.s.a„ding tartans ta local gover^en. - Including „p,.ser,ta.ive democracy, weulta lne,uldes
regionalism, infra..,.., _ „„, ^^^^^^ ^ ^^^^^ ^^^^^^^^ ^^^^ ^'^^
evolutionary adaptations,
Notes
2. Cat s.^' h~ v,:r''T''.?'=°""''
-^d,he,rnu„^,slJr-=S-^^
Wita i,s appota. Chief .x«ivl durin'g Z^'r^l^^^ '?^Z*=ytThe°Ul
The authors gratefully acknowledge helpful suggestions on this paper by Catawba Countv NC ro.m^
Tom .Lundy ai^d Durham, NC City Manager Tom Bonfield. ^' ""^
References
"A Conversation with Stephen Goldsmith, Deputy Mayor for Operations. City of New York " ra. « •
Govemr,.nt (IBM Center for the Business of Government. Spring/Sum^^er 20n).^r 19-23.
Brecher. Charies and Raymond D. Horton, "Retrenchment and Recovery American Citre. .nH tT, M v ,
Expenence." A,.//c Re.ie.. Vol. 45, No. 2 (March/AprT 19^ ^7-274 "
Brock. Ed, "Frugality is the Now Nomial," American City & County, November 1. 2009. ar>line posting.
Cauellos. Peter, "Chelsea forgives, Forges Ahead." Boston Globe, December 11.1997.
Cyr. Ed. "Thoughts on the Chelsea receivership." Govemment Finance Review 9.4 (1993).
.Figone. Debra. Kim Walesh. Mark Danaj. and Frank Benest "MJhot'^ fi,. u . r T ,
Mlance ^ Pap„ , p,. J; . ^J^^^^^. "^t^^.H^Z^'mT
ta.2,Z2«.""' » Co„„.y Megheuy
Oold.™lta. s.epheo, .The Red Ink Tsu„™i: wh, Old Ideas C.„., .h. o.v.m„en, Pe,„..ci,is
Eccnomrc Pol.cic. f„ Ih. 21 Centtiy. I.nua,, ,0, 2010. pMing
Martin, Lawrence L. and Jeannie Hock Srhiff "prh, r'^. \, o ,.. .
and Local W„ ^avriAu^t 'mij; .J^^j^^^J.^^^^-''^^^^-' Versus Perfom,a„oe," Slate
Miller, Girard. •'Navigating the New Normal Economy. ^'Go.ernin,, August 1,. 201,. online posting.
2011). ' DC: infcn«.(,onal City/County Management Association.
Miller, Thomas L and Shannon E Havrien "Th» w-w r» -J ^ .
annon t. Hayden, The Hurt Dmdend: Residents' Appreciation for Local Govemment
Services in Toueh TitTiM" ».f • • ,
City/County MaLgemTiAsllS:^^ ^« (Washington. D.C: Intemationai
Sji^ t^S:^^^ ^^^^^^ «-or An Empirical Analysis of the
(2) (October 1990): 443-457. Metropohtan Areas m the U.S.." Southe,-n Economic Journal, 57
"Notes: Missed opporfunify; Urban fiscal cri,e^ r>,.Ar • ,
1597) 110 (3): 733-750. '''''''' ^^^-^aanua,y.
^^^Z^tt^t'^ ^^'"^ (Reading, MA: Addison-Wes.ey Publishing
in state and Loca,
(August 2010) 42(2): 176-187, ^''"''"^ *° State and Local Government Review.
"State Oversight Panel Disbands and Leaves Vonkers on Its Own " Me. Yor, T r ,
g ^ J vjwji, i^ien ror/i Times, My 10 1995
P'^Zn:s7kZ!::::rz:ZuZ^^^^^^ ^^-^ s.-k"dfocki.«
M.nag.,„e„, A„oc|.„„, 2„, „ 2"". V.I, !8 (Wa.hing.o., D,C,: IM.m.rion.l Ci™Ln.y
ta.he t,.!,., s,.,..cf A..,,.,,..
Thoreson. Karen and James H. Svara "HOWIOP^I r-
C.ly/Cou„.y M.n.g.„„, A.s„i.a„.. '« W-^Hing.on, D,C,: IMcaBc^r
W.in,au,«.ro,d, uta.u Pohey .a, „.
;0G22o51
The Mew PC Era: The Personal C-!cud
Published: 6 January 2012
Analyst(s): Stephen Kieynfians
As the reign of the personal computer as the sole corporate access device comes to a close, a new
era is emerging The personal cloud era provides users with a new level of flexibility with the devices
fl^T^ '''' ^""^^ '^^«^^9'"9 ^t^«"9ths of each device This
flexibility will ultimately enable new levels of user satisfaction and productivity. However, it will
require enterprises to fundamentally rethink how they deliver applications and services to users.
Key Findings
Major trends in client computing have shifted the market away from a focus on personal
computers to a broader device perspective that includes smartphones, tablets and other
consumer devices.
Emerging cloud services will become the glue that connects the web of devices users choose
to access during the different aspects of their daily life.
The personal cloud era will mark a power shift away from devices toward services.
Applications and devices must become operationally obvious in that users will respect
simplicity and insist on experiences that require no training. Any experience with a learning
curve will be for experts only and will not achieve broad acceptance
Recommendations
Empower your users:
Establish a "bring your own devices" program, including policies and support processes
that enable personal cloud usage, yet ensure corporate security standards.
Embrace a self-serve approach to outfitting users.
Move toward device-neutral development processes, and stop building for specific physical
Q6VIC6Si
Build and develop corporate cloud services internally or through secure public cloud services to
improve accessibility to corporate resources.
Table ot Contents
r Strategic Planning Assumption 2
Analysis 2
The Current State of the Market - The Big Refresh , 3
The Driving Forces 3
IVIegatrend No. 1: Consumerization — You Ain't Seen Nothing Yet 3
Megatrend No. 2; Virtualization — Changing How the Game Is Played 4
Megatrend No, 3: "App-ification" — From Applications to Apps 5
Megatrend No. 4: The Ever-Available Self-Service Cloud 6
Megatrend No. 5: The Mobility Shift — Wherever and Whenever You Want 6
Welcome to the Personal Cloud Era 7
Ramifications on Devices and Hardware 8
Recommendations for Enterprises 9
Recommended Reading 10
C
Sti'ategic Pianning Assumption
By 2014, the personal cloud will replace the personal computer as the center of users' digital lives.
Analysis
A powerful set of forces are combining to drive the close of one era in personal computing and
begin the next. Many have labeled this the post-PC era. However, it should really be termed the era
of the personal cloud. The personal cloud will gradually replace the personal computer as the
location where individuals keep their personal content, access their services and personal
preferences, and center their digital lives. It will be the glue that connects the web of devices they
choose to use during the different aspects of their daily life. The personal cloud will entail the unique
collection of services, Web destinations, and connectivity that will become the home of their
computing and communication activities. Users will see it as a portable, always (usually) available
place where they go for all their digital needs.
The corporate PC era began slowly. While personal computers of various sorts had existed for
several years, things really only kicked off in 1981 when IBM released the first IBM PC. While a few
intrepid folks brought the new device to work (mostly to run what seemed like a magical new tool to
help with budgeting — Lotus 123), for the most part, companies were slow to adopt the new
devices. However, as LANs began to emerge in the late 1980s and terminal emulation software
bridged the gap between these new devices and their terminal predecessors, companies shifted
purchasing and work styles to embrace the new devices. By the time Windows 95 and Windows 98
emerged, the PC was well established as a tool for many workers, and we were deep into the PC
era. We see similar patterns emerging in today's market, pointing us toward the sea change that is
occurring.
Page 2 of 11 Gartna-.lnc. IG00226511
Gartner
The Current State of the Market - The Big Refresh
The past two years have been a whirlwind in the client computing space. An unprecedented
upgrade cycle for traditional business PCs has resumed from the unique a^nmenTofeve^^^^^ across
the industry. The recession, coupled with the extended life of Windows XP anXSbn of
Windows Vista in the corporate market, has created tremendous pressure on compS
with aging fleets and software. When coupled with the impending end of life for Zdows XP
companies are responding with the biggest co^orate PC upgrade cycle eve^ Zevrmany are
llrSZ'^llT"' T " ^^'9 °^ ^"d- ^o, what w i our ' environment look like in five years?
Further driving these questions has been a surprising new entrant: the media tablet. Everybody
recognizes that something basic has changed in the market, but exactly what and how!t win ly
out remain topics for significant discussion. The media tablet and the increasing pen^asivenls o^
thTp?s^??e^T^^^^^^
the post PC era. However, this is a poor moniker, ft isn't about being "after" the PC but rather
about a new style of personal computing that frees individuals to use computing in fundamentallv
new ways to improve multiple aspects of their work and personal lives. UsL a^ dZSig me
mr!J«.! f. ""^f applications from multiple devices with multiple fomi factors and ownership
o^nnlT .""y Applications and data are king, and device selection is now a maS of
personal choice, becoming increasingly disposable unlike the traditional-lived, corporate-controlled
assets o the past. We are seeing the birth of the era of the personal cloud. To unSnd whaf hfs
the'change ' """""" *° ''^ "^^^^-^ to look at the f'ces SLIng
The Driving Forces
ITIH'K J'f .2 ^"""^'"'""^ *° ""'^^^^ "^^ megatrends have roots that extend back through the past decade but are aligning in a new way.
Megatrend No. 1; Consumerization - You Ain't Seen Nothing Yet
Sfrr'.f^f °f 'T for the better part of a decade, and we've seen the
3?° f ^'^'''^"^'r''^^^ what we've seen so far have
been simply precursors to the major wave that is starting to take hold across all aspects of
information technology. Several key factors are coming together:
Users are more technologically savvy and have very different expectations of technology. Users
rnay not understand the details of how technology works, but they certainly understand what
lecnnoiogy can do.
Internet and social media have empowered and emboldened users. Today, consumers provide
insten feedback on what they like to anyone who happens to be llstening^eyrionger^^^^^
on just a small group of specialist interniediaries to tell them what and how things are but
rather can chose their own unique set of information channels.
Gartner, Inc. IG00226511
Pages Of 11
The rise of powerful, affordable mobile devices changes the equation for users. They now have
the technology in their hands - devices that are truly portable and powerful enough to do real
work. However, to appeal to the consumerist masses and get the kind of broad adoption they
need, vendors have been forced to simplify how these devices work.
Users have become innovators. New devices and applications have become the basic building
blocks of a new wave of innovation. Users are familiar with discovering a new gadget and
turning it into a tool - sometimes playful, sometimes useful. Corporate data is making its way
onto devices and into applications dictated by users, and there may be no way to stop it.
Consumerization is leading to a whole new wave of unexpected consequences.
The democratization of technology, as users of all types and status within organizations can
now have similar technology available to them. Organizations that today rely on high-end
concierge services for senior executives are being forced to expand those services to all users
and. therefore, must rethink how to support this managed diversity.
Not all aspects of consumerization are positive when viewed through a corporate lens. Users aren't
very good at dealing with the details of keeping technology working and secure. They are easily
fnjstrated when something breaks or is difficult to use, and they don't like when something they
want to use doesn't live up to their expectations. Consumers are also easily swayed by style and
fads, rather than function, and this can lead to disappointment. What's hot today may be forgotten
tomorrow. While this may be fine for individuals, this could prove devastatingly expensive for
enterprises. Furthermore, it reinforces a culture in which manufacturers are more interested in
selling the next device than supporting the last one, resulting in a continual churn of features and
capabilities. This makes it tough for IT planners to build around specific devices with any level of
confidence. Further, supporting and optimizing around the chum adds cost and complexity to
nearly every IT function.
Megatrend No. 2; Virtualization - Changing How the Game Is Piayed
Virtualization is nothing new. Indeed, virtualization techniques have been fundamental to computing
for well over five decades, since virtual memory was first introduced. The basic goals have always
been to reduce reliance on the physical by emulating a resource - creating a virtual instantiation of
the physical resource. This was initially done to share scarce resources like memory or disk space,
but overtime it has also been used for isolation, reliability, utilization, and flexibility. Over the past'
five years, virtualization has radically expanded in new directions, virtualizing entire systems,
through to operating system interfaces. This has improved flexibility and increased the options for
how IT organizations can implement client environments.
Using different forms of virtualization, applications are somewhat freed from the peculiarities of
individual devices, operating systems, or even processor architectures. This raises the possibility
that, in the future, a large portion of the processing power in a system will be devoted to
implementing virtualization layers for the primary reason of breaking physical ties, thus enhancing
flexibility and removing management chokepoints. Increased computing power can also be applied
to abstracting and refactoring user experiences across devices. Virtualization technologies will
radically challenge many long-standing management and operational practices.
Page4of 11 Gartner, Inc. | G00226511
.h.s expanding .heir utility an. InaeaL, .hat^^oTprelTl^eS^pS
Megatrerid No, 3: "App-ification" From Applications to Apps
Changing packaging - Bite-sized, narrowly focused chunks rather than large all-
"^X^ZZ::lZrT ^^^^ t increasingly small, cost effective targeted applets will cover many users' needs and provide more flexibility.
t^lnr? f"<^« "^odel - Users have come to expect software at much lower prices even
In!!!.''^"^.^ "^'^ ^ P'*'^'^"^ '"'P^^t °" applications are written and manaaed in
diSllLn?Z!f H ^^'^f °^ incompatibility between tools as various users select different apps to do similar functions and discover they can't effectivelv ^h^m Hatr nf !!
Gartner, Inc. | G00226511
Page 5 of 11
c
wegaxo-'io No. -i; The hver-Avaiiable Seit-Service Cioiici
The Internet and the Web have certainly changed daily life. Being able to access content,
information and even application functionality from a common client has impacted individual
companies, created and crushed markets, and even impacted global politics.
The advent of the cloud for servicing individual users opens a whole new level of opportunity. Every
user can now have a scalable and near-infinite set of resources available for whatever they need to
do. The impacts for IT infrastructures are stunning, but when this is applied to the individual, there
are some specific benefits that emerge.
Users' digital activities are far more self-directed than ever before. Users demand to make their own
choices about applications, services and content, selecting from a near-limitless collection on the
Intemet. TTiis encourages a culture of self-sen/ice that users expect in all aspects of their digital
experience.
Users can now store their virtual work space or digital personality online. This enables the user to
access his or her environment from anywhere and any device.
Compute tasks can be offloaded, when necessary, to the cloud for instantly available personal
"supercomputing" tasks involving either big data or big compute.
Since most users consume far more than they create, the cloud provides a strong storage
mechanism for virtually all data, even though upload speeds are problematic at the moment. Cloud-
based data stores, such as Dropbox, iCIoud or SkyDrive, enable users to more easily share large
files with others.
It is likely that future versions of Windows will enable users to log on to any suitable Windows
workstation with a Live ID and get their desktop environment. The flaw in this scheme is the
availability of applications, but with the shift to just-in-time application delivery techniques, even
that problem disappears. As Microsoft extends Windows to a broader range of devices, it is likely
that a single ID and set of preferences (if not the entire desktop environment) will be accessible from
everything from a Windows smartphone to a kiosk computer in an Intemet cafe. We are also seeing
the seeds of similar models being planted in products from Apple and Google, both of whom will
use this to challenge Microsoft's dominance.
Megatrend No. 5: The Mobility Shift - Wherever and Whenever You Want
The march of computing and communications over time has been govemed by a series of so-called
laws. Moore's Law and Metcalfe's Law have led to the mobile environment we have today. One
important result has been the race to ever smaller, more portable and power-efficient electronic
devices. What filled a desktop a decade ago now fits in your pocket — only with much more
capability. This plays on another truism — people like to move around. Users don't want technology
dictating where and when they can access information, talk to someone or play a game. They want
it whenever and wherever they happen to be.
^: The reality is that many of the traditional form factors for computing simply do not lend themselves
%' to these kinds of computing needs. In the past, we made excuses about tradeoffs in processing
Page 6 of 11 Gartner, inc.! Ga)226511
provided by the mobile devices. ^ ^'^^ convenience and flexibility
practical. Tou 'n: a^dTZra b^^LT «'<P«*noes te making mobility
Si^:r r:^r;s^ trrc^ ^
Welcome to the Personal Cloud Era
Gartner. Inc. iG00226511
Page? of 11
of Cloud serJ^S^^ T °''''' '^'"^ '^"^^ ^^e strict definition
of cloud sen/ices, but rather encompasses all the online services that users see. To consumers
there is effectively no difference between cloud, Web and Internet - it's all the same. As noted'
earlier, the personal cloud will become the center of the user's digital experience - the one place
fhl r ^T^°' ''^^'"'^'^ °^ "^^^^ ""^''^^ °' h^l^P^"^ ^° have handy. It marks a distinct
shift from the device-centric viewpoint of previous computing eras, to a sen/ice-centric approach.
This new personal cloud supports the characteristics demanded by users, such as:
Being highly mobile.
Being always available,
Being user directed - the user is in control of what he or she uses, how he or she uses it, and
what he or she shares with others.
Embracing multiple experiences and device classes - the device becomes secondary to the
The user can switch between devices based on situation and need.
No device can be considered essential all the time.
Providing rich interactions and content.
Providing a seamless shift between computing and communicating.
Supporting both private and public clouds, thus providing resources when a user needs it not
when IT can get around to delivering it. The personal cloud will be a federated blending of'
different sen/ices and cloud offerings, presented to the user as a single environment.
Providing contextual awareness to deliver the services and content to users that are appropriate
to their situation or immediate needs, rather than overwhelming them.
Providing operationally obvious computing - no training required:
Well-designed, straightfonward UXs are respected and craved by users.
Simple, task-focused, bite-sized applets.
The learning curve is dead. If it takes training, it will be relegated to the specialists and not
be broadly adopted.
Ramifications on Devices and Hardware
The ramifications for hardware are similarly stunning:
Limited local staage for apps or data - The local store will mostly be used for caching content
that IS pnmanly held elsewhere and synched to the local device. This shift won't happen right
away, but we are already seeing enterprises limiting the size of local storage on PCs.
Increased reliance on synchronization services as a way to ensure a consistent collection of
resources, regardless of how or where the user is accessing his or her data.
Page 8 of 11
Gartner, Inc. 1300225511
Focus on displays - This includes richer, higher pixel count displays, coupled with the abilitv to
l.nk to external displays. Users will demand the ability to take content from Seirtocal d^^^^^^^
and project it on to any suitable, available screen. ""^
tlZTS^^^^^' °" components that bridge the gap between the physical and the diqital
fnr nn J T ^""^ ^^^^^"^^ ^^^^^^ion, microphones foraudio senso^f
iTuser 'oucsoreens and other devices to capture gestures aTd "eract
*° ~ -"<^- ^-^'^^ and appea. to
They are thinner, lighter, cheaper, more reliable and interchangeable. As users carry the devices
w,«i them continually light weight and extreme portability will become more™
Furthermore users will want to be able to swap between multiple devices based on their
situations, thus necessitating lower cost and higher reliability.
Recommendations for Enterprises
Faced wi^ these major changes, enterprises must take the following steps to ensure thev are not
caught off-guard as user expectations and demands shift: ^
Get ahead of the cun/e on "bring your own. devices" (BYODs) - Users will increasinqlv be usino
devices not provided by the enterprise to assist them in their daily work. C^hhg up to and
Ultimately, gett^g ahead of the users in this area is critical IT is to provide anZde s^ tn
see"^'lZ;.fv°^^^^ ''''''''' ^ P^°9ram. including policies and pToce ses (see Gartner'sViewon'Bnng Your Own'in Client Computing").
Stop building for physical environments - Select techniques and designs that will support
multiple operating environments. This includes developing expertise with desktop virtualization
^^T"' K"^* "T'' *° e"^^- that user'focusT
thp^^riT. °^ '^a^^Oed diversity (see "Use Managed Diversity to Support
the Growing Variety of Endpoint Devices"). ^
Look for ways to abstract and secure applications and data, not devices (see "How Will Users
Access the PC Apps They Need on Their Alternative Devices?").
d^tTn^T/r";?"^"® .'""''•'•^ ~ ^^^'^ ^ab'« "s^^s to "^ake their own decisions about technology in order to gain a higher level of self-sufficiency without the need for
Whi^thp?7 by IT personnel. Where it isn't possible, work to'make i^s^if
Wh le the IT organization will always play a role in directing users, providing them guidance and
^d^rs^^^^^^
Move corporate resources to a secure cloud - A move to a secure corporate cloud (either
internally managed or leveraging public cloud sen^ices) makes applic^ns and ^ici
m^ a frl^f^^^^^^^ r'"'"'°" "^""'^^ IcK^aLs and dellfceTThTdoesn't
mean a free-for-all approach to corporate data or services. Restrictions will always be
Gartner, Inc. | G00226511
Page 9 of 11
necessary for certain types of sensitive data. For example, access to customer credit card or
patient data must be tightly controlled.
Adopt browser-based applications with local assistance - the "app" model. While not every
app lends itself to decomposition into smaller chunks or delivery through the browser,
companies need to get away from device-dependent, locally-installed applications. At the same
time, companies should look for new delivery techniques to ease the burden of administration
(for example, moving away from application installation by using App-V or other techniques to
eliminate the need to store or manage devices).
Recommended Reading
Some documents may not be available as part of your cunent Gartner subsciiption.
"How Will Users Access the PC Apps They Need on Their Altemative Devices?"
"Use Managed Diversity to Support the Growing Variety of Endpoint Devices"
"Gartner's View on 'Bring Your Own' in Client Computing"
"Windows Applications Will Be Critical Through the Planning Horizon, but Lose Majority in 2012"
"Client-Cloud Applications: The Rebirth of Client/Server Architecture"
"iPad and Beyond: The Media Tablet in Business"
"Managing the Next Generation of Client Computing"
Page 10 of 11 Gartner. Inc. IGO0226511
Regional Headquarters
Corporate Headquarters
56 Top Gallant Road
Stamford, CT 06902-7700
USA
+1 203 964 0096
Eur<Hiaan Headquarters
Tamesis
The Glanty
Egham
Surrey, TW20 9AW
UNITED KINGDOM
+441784 431611
Asia/Pacific Headquarters
Gartner Australasia Pty. Ltd.
Levels, 141 Walker Street
North Sydney
New South Wales 2060
AUSTRALIA
+61 2 9459 4600
Japan Headquarters
Gartner Japan Ltd,
Aobadai Hills, 6F
7-7, Aobadai, 4-chorTie
Meguro-ku, Tokyo 163-0042
JAPAN
+81 3 3481 3670
Latin America Headquarters
Gartner do Brazil
Av. das Nagees Unidas, 12551
9° andar-World Trade Center
04578-903-SSo Paulo SP
BRAZIL
+5511 34431509
1
pub;.cat,on has been o&ta.ned from sources Seiieved :o be el^t^B GartT; wilf Permission. T,ne infonnation contained n this
adequacy of such inforn^ation and shall nave mij^^ ^^^^SZso^n^^Z^ ^° ^o-^'P^'eteness or
consists Of the opinions of Gartner's research oroanization andTnournTw.ntfn 2!'°'"' P"t>i>cat:on
herein are subject to change without notice. Although GLer r:^al7,%lV^- ^^^^^ssed
provide legal aOvice or slices and its research sho.=rno be ™^ nr °' '^^^"^ '«9^' ^a^tner does no'
sharehoiders n.ay include fin.s and funds that H vs^^^^t^^^j:^' ^-f ""'^' ^"^'^ ^^^P^^^' '^^
Directors may include senior managers of these f.rr;s orfSndr'S r^l r ^"""'^ ^^^'"^^^'^ ^^^^ ^1
without input or infiuence from these firms, funds oTte r rranaoers For^^^^ f independently by its research oroan.zaton
.^s^rch. soe -Guiding P^ncipies on .ncepend^ a °" '"^^^^"^^"^ and ..tegntyo' Gartner
Gartner, Inc. i G00226511
Page 11 of 11