New Orleans' one of the fastest growing U.S. economies

Mark Waller, NOLA.com| The Times-Picayune 

Compared to pre-Katrina, the rate of entrepreneurship in the New Orleans metro has increased 129 percent." -- Greater N.O. Community Data Center

With the eighth anniversary of Hurricane Katrina impending, the New Orleans area is showing encouraging signs that it might be pulling off a rare reversal of a once-entrenched economic decline, but some weaknesses persist, concludes the latest check on the region's economic health by the Greater New Orleans Community Data Center.

The Data Center's report, called the New Orleans Index at Eight and released Wednesday, compared the city to national averages, a group of growing cities that New Orleans might hope to emulate and a group of cities with moribund economic numbers from 1990 to 2000, more resembling New Orleans during the same period.

It found New Orleans recovering from the recent recession better than the national average and approaching the strength of the "aspirational cities" with a job count in 2012 that beat the pre-recession count by 1 percent. The nation and historically weaker cities were still down more than 2 percent. The model cities were up 2 percent.

New Orleans area median household income dropped 8 percent from 1999 to 2011, to $44,404. But the United States as a whole fared worse, dropping 11 percent. The national median income was $50,502, still higher than New Orleans but with a narrowing gap.

Entrepreneurship rates in the New Orleans area sustained a growth pattern that started after Katrina and before the recession, beating national results and the model cities, with 501 of every 100,000 adults starting businesses in the three-year period ending with 2012. The growth also accelerated. The New Orleans number, still well above the national entrepreneurship rate, was 427 per 100,000 adults from 2008 to 2010.

The latest national number is 320. The sample group of prospering cities -- Austin, Houston, San Antonio, Nashville, Charlotte, Raleigh and Orlando -- had 376 start-ups per 100,000 adults. The larger group of weaker cities, 57 locales including Jackson, Birmingham, St. Louis, Detroit and Philadelphia, logged 303.

"Compared to pre-Katrina, the rate of entrepreneurship in the New Orleans metro has increased 129 percent," the report said.

"There are some ways in which we really have changed our trajectory," said Allison Plyer, executive director of the Data Center. Of the job growth and entrepreneurship results, she said, "That is great. And we could never have said that pre-Katrina. It's a real shift."

It's also unusual, she said, for longtime fading cities to achieve such a turnaround.

"Katrina caused a break in the status quo," she said, with a flurry of public policy reforms and economic development opportunities.

The report's summary says, "There is no doubt progress has been made. Leaders and residents have undertaken an unprecedented number of reforms that, over time, may have transformative outcomes."

Even a longtime strength of New Orleans, arts and culture, continued thriving with the data center counting 34 nonprofit groups focusing on creative pursuits per 100,000 residents in 2011, more than double the national rate of 13.

The report, however, stops short of declaring full economic victory for New Orleans and surrounding parishes. It's difficult, for example, to separate infusions of Katrina recovery money from some of the results, but Plyer said continued strong numbers in 2012, seven years out from the storm, show signs of a durable improvement.

Still, while crime rates in the city and suburbs are lower than they were before Katrina, New Orleans surpassed national rates in 2011 by 39 percent for property crime and 105 percent for violent crime.

Jail incarceration rates in New Orleans, down from 1,251 per 100,000 residents in 2004 to 912 in 2011, still exceeded the national rate and those of surrounding parishes.

Educational attainment lagged the rest of the country, the report found. About 25 percent of the New Orleans area adult population held a bachelor's degree or higher, falling short of the nation's 29 percent in 2011. Broken down by race and gender, New Orleans also lagged the aspirational cities. At 11 percent, the bachelor's degree rate for African-American men fell the most sharply below national averages and the high-performing cities.

Disparities in economic achievement followed the education numbers. The report found only 53 percent of working-age black men in the New Orleans area employed in 2011. The number was 61 percent for the successful metropolitan areas and 75 percent for white men in and around New Orleans.

Although the minority population dropped after Katrina, the share of all businesses with minority owners rose, reaching 27 percent, which topped the national 21 percent, but receipts to minority-owned businesses were stagnant, indicating small enterprises that might be struggling to grow, Plyer said.

A poverty rate of 29 percent in the New Orleans area was significantly more severe than the national 16 percent rate. The poor population has spread across the metropolitan area, with 56 percent of low-income people living in suburbs.

Extending the benefits of the growing economic prospects to groups getting left behind, Plyer said, will be crucial to ensuring that the city's gains continue. But unlike many other older cities with long records of economic waning, she said, Louisiana and the New Orleans region have resources with the potential to lift people from lower prosperity levels.

She cited a predicted boom in a wide range of jobs in the petrochemical industry, which is expecting a boost from lasting low prices for the natural gas that powers industrial plants. She also pointed to an expected surge in coastal restoration projects that could create a variety of jobs.

"Our economy has a lot of assets that would allow us to tackle some of these issues," Plyer said. "This does not have to be an intractable problem. We have assets in the fight, and not every metro does."

The Data Center, along with the Washington-based Brookings Institution policy research group, started tracking disaster recovery economic indicators on a monthly basis in the early aftermath of Katrina, producing what they called the Katrina Index and including the hurricane's entire strike zone, stretching through Mississippi.

The reports eventually slowed to quarterly, twice a year and then annual installments, focusing on New Orleans. Changes now are taking longer to register in statistics, Plyer said, so Brookings has turned the project over to the Data Center, which produces the reports every other year, the last one being in 2011 and the next one planned for the 10th anniversary of the hurricane in 2015.

© 2013 NOLA.com. All rights reserved.

New Orleans attracts entrepreneurs

New Orleans above national average for entrepreneurial activity

 By Allison Good, The Times Picayune 

Entrepreneurial activity in New Orleans is 40 percent above the national average, Idea Village co-founder and CEO Tim Williamson said during a speech in New Orleans on Tuesday.

"Most cities can't build an entrepreneurial ecosystem because it takes time and patince," he explained to members of the Association for Corporate Growth's Louisiana chapter. "The reason why New Orleans is getting all this traction in 2011 is because there's a connective tissue that ties together the universities, the government, the business community, the finance industry, and other sectors."

According to Converse Digital founder Tom Martin, the Idea Village, a nonprofit start-up incubator that supports promising entrepreneurs, has been crucial to the city's amplified entrepreneurial profile.

"It's probably the single biggest catalyst for entrepreneurship in New Orleans," he said.

Williamson co-founded the Idea Village in 2000, but he initially conceived it as a business plan contest.

"In the late 1990s when I moved back to New Orleans, the entrepreneurial consisted of myself and a few who had created local Internet websites," he said. "We identified the problem of the brain drain, which had resulted in a declining city.

"We felt we needed new thinking and new people to solve the problems here, but back in 1999 we did not have a network to retain them. Our goal is to find entrepreneurs and connect them to these resources."

Since 2005, the Idea Village has assisted 1,101 startups, invested $2.7 million in them and generated $82 million in revenue. They key, emphasized Williamson, is to mentor entrepreneurs whose ventures are in their infancy.

"We come in at the beginning when they're just formulating the idea, and we exit when it starts to work, when they start to make money," he said. "If we in the community start to engage in the early part of that cycle, it's going to be hard for companies to leave because they will already have this village."

Williamson also noted that the city ranked eigth on the Kaufman Index of Entrepreneurial Acivity for 2011, and that Inc. Magazine recently rated New Orleans the coolest start-up city in America.

"Nationally, there's a recognition of something going on that's special," he said. "We knew that if we could keep entrepreneurs in New Orleans, they would attract capital, talent and new people to create a new generation of wealth."

Sal LaMartina, co-founder and CEO of Kenner-based company Cordina MarGoRita, which manufactures and sells frozen blended alcoholic drinks in individual to-go pouches, says his success is a testament to the Idea Village's mission.

"Tim and the Idea Village mentored us, they helped us get to our next level," said LaMartina, an Idea Village graduate and winner of the 2010 IdeaPitch. "We've transformed this one little pouch into an extremely fast-growing company."

Williamson adds that this is a spirit he wants to continue to foster in the local entrepreneurial community.

"This is exactly what we're hoping to continue," he said.

© 2011 NOLA.com. All rights reserved.