Posted on June 15, 2011 1:22 PM
Freight and Logistics Industry Health in Illinois Scores an "A"
GO TO 2040 places a strong emphasis on the region’s industry clusters -- firms that share common resources and technologies and depend on a similar labor pool and institutions. Clusters provide a substantial amount of the “value added” that the Chicago region brings to the economies of the Midwest, the nation, and the world. GO TO 2040 recommends that the region nurture its existing clusters to target investment decisions, which will enable long term job growth and economic prosperity.
One cluster highlighted by the plan is freight and logistics -- in large part, these are firms that manage the distribution and processing of goods destined for this region, as well as other places around the globe. According to the U.S. Department of Commerce,as of 2008 an estimated 236,000 of the region’s jobs (four percent of total private sector employment) were in the transportation and warehousing sector. These jobs annually provide more than $13 billion in personal income for our region’s residents. Other related industries like manufacturing and wholesale and retail trade are also closely tied to our region’s strength as a transportation and logistics center. These industries account for more than 30 percent of private sector employment in northeastern Illinois, resulting in nearly $80 billion in personal income for residents.
With these impressive numbers, it comes as no surprise that the Illinois logistics industry received the highest possible grade in the recently released 2011 Manufacturing and Logistics National Report, which features state-by-state rankings compiled by Conexus Indiana and Ball State University’s Center for Business and Economic Research. Illinois was one of only five states scoring an “A” in logistics health. The measurement was generated in part by including the share of total logistics industry income as a share of total state income, as well as the employment per capita. It is worth noting that the states of Indiana, Ohio, and Pennsylvania also received an “A” in logistics health, showcasing a comparative advantage in this sector for the entire Lower Great Lakes region.
The report also highlights areas where Illinois and its neighbors can improve. For instance, Illinois scores a “C” in human capital (based on high school and collegiate educational attainment and community and technical college retention rates, among other measures) and a “C” in productivity and innovation (based on manufacturing productivity growth, R&D expenditures, and patents issued). GO TO 2040 devotes an entire chapter to the subject of human capital, noting the worrisome (yet correctable) recent trends in the region’s job growth, workforce systems, educational attainment and accessibility, and pace of commercializing new products, services, and technologies.
One of GO TO 2040’s key recommendations is for CMAP and others to “drill down” into the region’s key industry clusters to identify infrastructure, workforce, and financing needs; to present strategies for coordination and communication; and to make policy recommendations. In partnership with the Chicago Workforce Investment Board (CWIC), CMAP is currently engaged in the first of these “drill down” efforts on the freight and logistics cluster. For information on how this effort is taking shape, see a recent update presented to CMAP’s Economic Development Committee. CMAP and CWIC plan to issue the freight report this fall.