Baton Rouge’s economy, while doing better than most in Louisiana, trails that of peer cities in other states and is projected to grow more slowly than those of comparable markets, according to a new high-level market analysis by McKinsey & Co., prepared for Mayor Sharon Weston Broome’s administration.
All of the analysis’s findings point to Baton Rouge’s need to identify new industry sectors if the city doesn’t want to continue losing talent and the economic firepower that comes with it.
The shortcomings identified in the McKinsey study are nothing new, but they point to the systemic issues that continue to plague the area.
When compared with its peers, the metro area has the highest poverty rate, highest unemployment rate, a lower educational attainment, and a population that is rapidly aging. More specifically as it relates to business development, Baton Rouge universities receive more R&D funding than the peer average, but produce nearly six times fewer patents. Innovation also continues to lag behind peer cities as Baton Rouge has fewer startups and fewer companies that make it to the critical five-year survival milestone.
But, despite these challenges, the market has several strengths it can build on if it can figure out how to overcome its inherent problems.