BR 1st in productivity growth

• By GARY PERILLOUX
• Advocate business writer
• Published: Jul 25, 2008 - Page: 1D - UPDATED: 12:05 a.m.

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Baton Rouge leads the nation in a key measure of productivity growth but needs work on educational attainment and social inequality issues, according to the Brookings Institution.

Also, a new federal Small Business Administration report shows Baton Rouge needs to cultivate more high-impact firms — those with sales and employment doubling over a four-year period.

On Thursday, the Baton Rouge Area Chamber released the Brookings finding that shows Baton Rouge first in productivity growth rate — a measure of the metro area’s gross domestic product divided by jobs.

That productivity number for 2005 was $88,961 — about $8,000 lower than the national metro average — but Baton Rouge’s growth rate for 2001 through 2005 was 21.9 percent.

The growth percentage more than doubled the U.S. average and ranked first in the nation.

“This is a tremendous measure of Baton Rouge’s growth,” Mayor-President Kip Holden said in a statement Thursday. “As we work together to diversify our economy and focus on attracting high-tech, digital media and other quality jobs, the national rankings reflect our accomplishments, which in turn attracts more growth.”

Chamber officials said they would use the productivity ranking in marketing the region to business prospects.

At Brookings, a lead author of the report completed in June, “MetroPolicy: Shaping a New Federal Partnership for a Metropolitan Nation,” said Baton Rouge’s productivity ranking is significant and it comes from a new experimental data set developed by the federal Bureau of Economic Analysis.

Baton Rouge’s leadership in the period may owe to various reasons, Mark Muro said, but “suggests at least in a key area you’re moving in the right direction: And that’s the economy.”

Muro is the policy director for Brookings’ Metropolitan Policy Program. An independent 92-year-old research group based in Washington, D.C., Brookings is viewed by most as having a centrist to left-leaning orientation on the political spectrum.

Given the years covered by the metro study, Muro said rising energy prices this decade likely were already at work in Baton Rouge from 2001 through 2005 and aided the productivity growth.

“It clearly is tied up with the energy run-up,” he said. “We don’t see, in other respects, any fundamental drivers that would suggest such a strong performance, so it likely has to do with growing returns on every unit of labor due to the energy run-up.”

Baton Rouge, for instance, hasn’t changed dramatically in education levels or industry mix, he said.