Industry Cluster Opportunity Analysis
Kick-off Workshop
Energy Cluster
Wednesday, January 28, 2009
8:00am-11:00am
John A. Logan College
ViTAL Economy Alliance
Jim Haguewood.- jim@onegroupconsulting.com
Mark Madsen – mmadsen@priorityone-advisors.com
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©2009 ViTAL Economy, Inc.
Industry Cluster Kick-off Workshop Agenda
10 Min. – Welcome & Introductions – Kathy Lively
10 Min. – Connect SI Vision and Goals – Kathy Lively
30 Min. – VE Industry Cluster Approach
20 Min. – State of the Industry?
45 Min. – Let’s Get Started!
• What constitutes the SI energy industry cluster?
• What is the industry cluster sense of urgency?
• What is worth your time, talent and treasure to participate?
• Current industry initiatives and short term win opportunities?
• Define and agree on the cluster market niches (3-5) & hypothesis
10 Min. – BREAK
20 Min. – Industry Cluster Team Roadmap
15 Min. – Industry Cluster Team Recruitment Plan
10 Min. – Industry Cluster Team vs. Research Team Work Plan
10 Min. – 60-Day Work Plan
—2—
©2009 ViTAL Economy, Inc.
Why….? Connect SI Vision and Goals
Southern Illinois will:
• Be the fastest growing economic region in Illinois
• Be the regional gateway:
– From America’s Heartland to the global economy
– From the global economy to America’s Heartland
• Be named a national and regional model for
collaborative, regional rural economic transformation
• Achieve a positive balance between livability &
sustainable growth
—3—
©2009 ViTAL Economy, Inc.
Why….? Connect SI Vision and Goals
Strategy Economic Sectors Job Goals
• Global Workforce Opportunities
18,750
• Knowledge Based Enterprise (KBE)
8,023
• Senior Living
3,676
• Energy and Mining
5,680
• Tourism
4,450
• Logistics, Distribution and
Transportation
1,675
Greater Egypt
Greater
Wabash
16,379 New Jobs
@ $43,500
10,919 New Jobs From
$36,517 - $40,785
41,461
Existing Jobs >$5,000/Yr
Increase SI Export Value by
$1 Billion/yr
$642 Million
New KBE Activity
1,600+ Firms
4,500+ Families
with Healthcare Coverage
Lift 10,000
Citizens Out Of Poverty
Southern
Five
Southeastern
—4—
$200 Million
Information Technology
Investment
©2009 ViTAL Economy, Inc.
Why….? Connect SI Vision and Goals
• Tourism
• Bio-Agriculture
• Knowledge Based Enterprises (KBE)
Is SI worth fighting for?
– Healthcare Technology Products & Services
– Advanced Manufacturing
– Recreational, Marine, Hunting, Technology Products & Services
– Visual Creative & Performing Arts and Services
– International Incubation and Innovation
– Green Technologies
– Homeland Security Response and Services
– Life Sciences, Plant and Animal
• Global Workforce Opportunities
• Energy
•
•
•
•
All new jobs created by
Industry Clusters will be
targeted to include private
payer health benefits for
workers and families
Mining Technology
Transportation, Logistics & Warehousing
Senior Living
Education & Training (also supports all the other clusters)
—5—
©2009 ViTAL Economy, Inc.
—6—
©2009 ViTAL Economy, Inc.
ViTAL Economy Industry Cluster
Identification and Assessment System
1. System Framework
2. Characteristics of the Approach
3. Clusters vs. Clusters Teams
4. Guiding Principles of Success
5. Discover the Value Chain - Input
6. Identify Key Existing Local Research - Input
—7—
©2009 ViTAL Economy, Inc.
Framework…..Geographic Region
130 Miles East-West
100
Miles
North
to
South
Population=423,670 Workforce=195,429
—8—
©2009 ViTAL Economy, Inc.
Traditional Industry Cluster Definition
A cluster is a geographically proximate group of
interconnected companies and associated
institutions in a particular field, including product
producers, service providers, suppliers,
universities, and trade associations. Clusters arise
out of the linkages or externalities that pan across
industries in a particular location.
Vertical and independent orientation
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©2009 ViTAL Economy, Inc.
ViTAL Economy Industry Cluster Definition
Establish core value linkages both within and across industry
sectors. These linkages creatively leverage the indigenous
strengths of a region. Clusters are assessed and prioritized in a
collaborative process which insures that the critical challenges
and opportunities of a region are continually addressed.
Horizontal and interdependent orientation
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©2009 ViTAL Economy, Inc.
Framework…Cluster Assessment Outline
I. Market Description/Segmentation
II. Market Attractiveness
• Market size--regional, national, international
• Market growth rates
• General business trends within markets
• Demand trends--regional, national, international
• Supply trends--regional, national international
• Market profitability
III. Regions Competitive Position to Produce a Product or Service
• Local production capabilities
• Local technical capabilities
• Local capacity utilization
• Cost components, i,e, labor, raw materials, finance costs, etc
• Cost curve position vis-à-vis potential regional, state, national and international competitors
IV. Timing Issues to Establish Competitive Position in Market
• Length of time to establish industry
• Likely actions of potential competitors
V. Financial Viability and Financial Resources Required to Pursue Opportunity
• Business Case Assessment
• Capital requirements
• Availability of capital at the regional, state and national level
— 11 —
©2009 ViTAL Economy, Inc.
Framework…Structured Fact-Based Analysis
1. Structured framework utilizes fact-based hypotheses
• Followed by fact information gathering and analysis
• To prove or disprove the hypothesis
2. Defines the “boundaries” of an issue and breaks it down
into component parts
3. Eliminates blind alleys quickly, allowing you to focus on
the main issues
The VE approach uncovers opportunities for the industry clusters in SI.
It does not apply a “generic silver bullet” method typical of other processes.
— 12 —
©2009 ViTAL Economy, Inc.
Framework….Hypothesis Testing
1. A set of propositions based on facts already at hand, and intuition to
address issues, challenges, and industry and economic trends.
2. Propositions will be prioritized and evaluated through questions,
research and Quick and Dirty Testing (QDT)
“Not everything that can be counted counts and not
everything that counts can be counted.” Albert Einstein
Today, you as the core cluster team members will define the
key initiatives of this cluster team as you determine the critical
questions (hypotheses) for the research team to analyze.
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©2009 ViTAL Economy, Inc.
Clusters should leverage indigenous resources
HIGH POTENTIAL CLUSTER IDENTIFICATION APPROACH
Maximizing Economic Development Potential
INDIGENOUS
COMPETITIVE
ADVANTAGE
• People
• Location
• Indigenous
Assets
• Infrastructure
• Technology
Desired Economic
Development Goals
High
Potential
Clusters
High
• Diversify economy
• Create sustainable
economic growth
Low
• Create jobs which exceed
average national wage
Low
High
MARKET ATTRACTIVENESS
RESULTS
IN
• Create jobs with associated
benefits
• Increase workforce
capabilities
• Attract outside capital
The ViTAL Economy Alliance Brings
Significant Capabilities to Identify Competitive
Advantage Elements and Assess
Market Attractiveness
— 14 —
• Deepen and strengthen
capabilities of existing
industry clusters
©2009 ViTAL Economy, Inc.
Important Distinction; Clusters vs. Cluster
Teams
• Clusters are economic environments where
people turn ideas into businesses
– Better
– Faster
– More Reliably
• Cluster teams are catalysts….
–
–
–
–
To provide the vision and leadership
To assess and prioritize opportunities
To link resources, internal and external
To transform regional economies
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©2009 ViTAL Economy, Inc.
Industry Cluster Team Guiding Principles
The Vital Economy Industry Cluster approach
achieves measurable results through the recognition
and endorsement of key principles
1. Industry cluster leadership and participation are key to generating
outcomes
2. Work plan discipline, completing all elements of each phase, is key to
achieving success
3. Trust and respect is required between companies and individuals
4. Collaboration is recognized as a key to achieving regional goals
5. Uncovered opportunities will have action teams assigned with
leadership immediately
— 16 —
©2009 ViTAL Economy, Inc.
ViTAL Economy Core Principles
Collaboration
Builds Sufficient Critical Mass to Compete Globally, while
Emerging Cluster Strategies Assure Regional growth
+
Connectivity
Links Geographically Remote Resources to Increase Access, while
Creating Opportunity, Building Diversification, Enabling
Collaboration
+
Changed Spending
Increases Productivity and Revenues
Opens New Markets, Expands Opportunity,
Establishes Measurable Benchmarks and Goals
— 17 —
©2009 ViTAL Economy, Inc.
Cluster Teams Understand and Use the
8-steps of Managing Change
1. Establish a Sense of Urgency
2. Form Powerful Guiding Coalitions
3. Create a Vision
4. Communicate the Vision
5. Empower Others to Act on the Vision
6. Plan for, Create, and Communicate Short Term Wins
7. Consolidate improvements and Produce More Change
8. Institutionalize New Approaches
Source: Harvard Business School
— 18 —
©2009 ViTAL Economy, Inc.
Rural Economies Must Move Closer to “C”
P
Friction is the Cost of Getting From P to C
C
P=Producer & C=Customer
P
C
Move Up the Value Chain, Capture Greater Share of Value Chain
Margins, Increase Economic Prosperity
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©2009 ViTAL Economy, Inc.
Discover the SI Energy Value Chain Elements
Step #1 – Identify each element of the industry value chain (hydrocarbon)
Step #2 – Identify whether the element exists in the study region

Energy Storage
Fuel
Energy
Source
Generation
Transmission
Distribution
Customer
Energy
Services
Distributed Power
Fuel Energy
Source
Generation
Energy
Storage
Transmission
Distribution
Customer
Energy
Services
Company
Presence
Special
Infrastructure
Skilled Workers
R&D/Innovation
— 20 —
©2009 ViTAL Economy, Inc.
Discover the SI Energy Value Chain Elements
Step #1 – Identify each element of the industry value chain (alternative)
Step #2 – Identify whether the element exists in the study region

Energy Storage
Fuel
Energy
Source
Generation
Transmission
Distribution
Customer
Energy
Services
Distributed Power
Fuel Energy
Source
Generation
Energy
Storage
Transmission
Distribution
Customer
Energy
Services
Company
Presence
Special
Infrastructure
Skilled Workers
R&D/Innovation
— 21 —
©2009 ViTAL Economy, Inc.
Foundation: Key Local Research
Reports and studies five years or younger:
• CSI Readiness Assessment - www.mantracon.org/new_connectsi.htm
• CSI Asset & Indigenous Resource Mapping - www.mantracon.org/new_connectsi.htm
— 22 —
©2009 ViTAL Economy, Inc.
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©2009 ViTAL Economy, Inc.
State of the Industry…Major Trends?
With global demand for energy ever on the rise, and
renewable/alternative energy sources playing an increasing but
still minor role, U.S. coal — especially clean-coal — becomes
increasingly important.
Connect SI Readiness Assessment, Chapter 1.10
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©2009 ViTAL Economy, Inc.
— 25 —
©2009 ViTAL Economy, Inc.
What is the State of the Industry…Major Trends?
With global demand for energy ever on the rise, and
renewable/alternative energy sources playing an increasing but
still minor role, U.S. coal — especially clean-coal — becomes
increasingly important.
Connect SI Readiness Assessment, Chapter 1.10
• The recession has reduced the demand for energy and the price
of oil in the short-term
• While the speed of recovery remains unclear, longer term
expectation include
– increased global demand for energy
– development of renewable energy
– major short-term investment in alternative energy R&D and development
— 26 —
©2009 ViTAL Economy, Inc.
Trend…Oil Prices Projected to Increase
2007 dollars per barrel
250
History
Projections
200
High
150
100
50
Low
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
20
07
20
10
20
13
20
16
20
19
20
22
20
25
20
28
0
This EIA outlook and short term futures trading suggest that
high oil is here to stay, driven by global demand.
Source: EIA (Energy Information Administration) Annual Energy Outlook 2009
— 27 —
©2009 ViTAL Economy, Inc.
Trend…Major Investment in New Energy
Global Investment in New Energy
450
Biomass
Wind
Waste
Geothermal
Solar/PV
400
International
renewable energy
investment hit a
record in 2007,
nearly $150
billion, a 60%
increase over
2006.
350
History
Projections
300
250
200
150
100
50
19
90
19
93
19
96
19
99
20
02
20
05
20
08
20
11
20
14
20
17
20
20
20
23
20
26
20
29
0
President Obama’s New Energy for America Plan includes $150 billion
over 10 years to develop alternative energy and the proposed stimulus
package contains $20 billion in tax cuts for alternative energy and R&D
Source: EIA (Energy Information Administration) Annual Energy Outlook 2009; UNEP 2008
— 28 —
©2009 ViTAL Economy, Inc.
Unconventional liquid fuels will help compensate
for an expected shortfall in ordinary oil
2000-2030 Growth
12
Coal-to-Liquid
+138%
BioFuels
+66%
Heavy Crude
+65%
Canadian Oil
Sands
+260%
Projected
History
10
8
6
4
2
20
30
20
25
20
20
20
15
20
10
20
04
20
00
19
90
0
19
80
Millions of Barrels Oil Equivalent/Day
Trend…Liquid Energy Fuels Growth
Canadian Oil Sands
Ultra-Heavy Crudes
Biofuels
Coal-to-Liquids
Gas-to-Liquids
Other
• SI has the opportunity
to play a key role in
coal-to-liquid and
biofuels
Source: Business Week, October 29, 2007; Energy Information Administration
— 29 —
©2009 ViTAL Economy, Inc.
The Price of Oil and New Technology
Analysis:
When crude oil stabilizes at $75 per barrel or more, new
technologies and alternative sources of energy will
emerge and impact markets
•The price of crude oil slumped to its lowest level in 4
years, dropping from $145/barrel in Aug 08 to $48/barrel
in Jan 09.
•Cheaper oil dampened alternative energy development
– shares of alternative energy companies dropped
significantly and billions of dollars of projects were put
on hold
— 30 —
©2009 ViTAL Economy, Inc.
— 31 —
©2009 ViTAL Economy, Inc.
Identify the SI industry cluster components
Energy Storage
Fuel
Energy
Source
Generation
Transmission
Hydrocarbon
Distribution
Customer
Energy
Services
Distributed Power
— 32 —
©2009 ViTAL Economy, Inc.
Identify the SI cluster component parts
Energy Storage
Fuel
Energy
Source
Generation
Transmission
Alternative
Distribution
Customer
Energy
Services
Distributed Power
— 33 —
©2009 ViTAL Economy, Inc.
What is the cluster sense of urgency?
— 34 —
©2009 ViTAL Economy, Inc.
What is worth your time, talent and treasure
to participate?
— 35 —
©2009 ViTAL Economy, Inc.
Current Initiatives….Short term win opportunities
• New energy related projects?
— 36 —
©2009 ViTAL Economy, Inc.
Identify 3-5 Market Niche Opportunities
Readiness Assessment Identified Markets
• Green Technologies
• Mining Technologies
• Clean Coal
• Bio-fuels
Market
Niche
Hypotheses
Algae –
bio-diesel
Agricultural and old mining areas
with standing water are attractive
areas for algae growing ponds
Hypotheses
— 37 —
Hypotheses
©2009 ViTAL Economy, Inc.
Industry Cluster Recruitment Plan
What industry cluster segments are missing from the table?
— 38 —
©2009 ViTAL Economy, Inc.
Cluster Team Recruitment Plan
Prospect
Recruiter
— 39 —
©2009 ViTAL Economy, Inc.
Industry Cluster Roadmap
— 40 —
©2009 ViTAL Economy, Inc.
Industry Cluster Roadmap
START
3 MONTHS
5 MONTHS
8 MONTHS
Stage #1
Stage #2
Stage #3
Report
Stage #1 – Formation
• Establish broad-based core
leadership team
• Define the industry cluster,
geographic boundary, and
niche or sector
identification.
• Invite and recruitment of
key cluster participants
• What will keep a participant
at the table for 18 months?
• Define industry cluster
team vision
• Pursue short term wins
Stage #2 – Recognize & Research
• Begin industry cluster mapping
• Be on the lookout for linkage
opportunities
• Map the industry cluster indigenous
resources
• Determine economic value of the
industry
• Identification of workforce
development needs
• Industry cluster gap assessment
• Global and national industry
research exchange
• Pursue short term wins
— 41 —
Implementation
Institutionalize
Stage #3 – Report
• Global and national industry
research exchange
• Analysis and apply new
information into the industry
economy
• Benchmarking the industry
cluster
• Delivery of Industry Cluster
report
• Pursue short term wins
©2009 ViTAL Economy, Inc.
Energy Industry Cluster Team Schedule
Cluster Work Plan
Jan
Feb
Mar
Stage 1: Formation
x
x
x
Cluster Kickoff Event with VE
x
Apr
May
x
x
June
July
Aug
x
x
x
Market-Segmentation, Attractiveness
Identify Niche Markets
Interim Conference Call
x
Hypotheses Testing
2-3 Hour Update Meeting with VE
x
Review Primary and Secondary Research
Stage 2: Recognize-Research
x
Identify Trends and Opportunities
Interim Conference Call
x
Refine Niche Market Opportunities
2-3 Hour Update Meeting with VE
x
Identify Connectivity Requirements
Stage 3 :Report
x
Complete Competitive Analysis
Interim Conference Call
x
Issue Cluster Report
x
— 42 —
©2009 ViTAL Economy, Inc.
Industry Cluster Team Support Structure
Project Management
• Integration with overall CSI effort
• Deliverable quality
• Project timing
Kathy
Lively
Jim Haguewood
Mark Madsen
Research Team
• Cluster team management
• Approaches & methodologies
• Economic and business analysis
Steve Martin
Rob Beynon
Research
Analysts
Cluster Teams
• Data collection
• Economic and business analysis
• Recruitment
Energy
Cary
Minnis
Transportation,
Distribution and
Logistics
CSI Support
— 43 —
©2009 ViTAL Economy, Inc.
Industry Cluster & Research Teams
Work Plans
— 44 —
©2009 ViTAL Economy, Inc.
Overall Roles and Responsibilities
Industry Cluster Team
• Establish a leadership team
Research Team
• Recruit members to the cluster team
• Provide guidance and advisement to VE
industry cluster approaches
• Keep industry cluster team members
engaged
• Provide key primary research based
upon the cluster work plan
• Identify existing local research
–
Market Attractiveness
–
Macro and Micro analysis
• Attend key cluster meetings providing
input and analysis
• Regional and national industry interviews
• Create and lead action teams
• Provide facilitation of key industry cluster
meetings and teleconferences
• Provide input and analysis of market
niches and hypotheses
• Conduct industry cluster asset mapping
• Transfer knowledge to the cluster team
• Prepare final cluster report
• Provide input to final report
• Present cluster report in public session
— 45 —
©2009 ViTAL Economy, Inc.
Industry Cluster & Research Teams
Work Plans
Next 60 days
— 46 —
©2009 ViTAL Economy, Inc.
Stage #1 Work Plans Next 60 days
Interim Conference Call - Date:
Time:
Industry Cluster Team
Research Team
• Determine core cluster leadership team
• Draft cluster vision statement
• Complete cluster participant recruitment plan
• Conduct recruitment calls
• List indigenous resources leveraged – each
niche market
• Link resources to hypothesis to be tested SLIDE
29
• Begin list of key regional, national industry
interviews
• Refine niche market focus
• Market attractiveness research – each niche
–
–
–
–
Size
Growth rates
Business trends
Political, economic & business data
• Expanded value chain mapping
• Niche market
–
–
–
Demand trends
Supply trends
Regulatory and political trends
• Conduct hypotheses testing
• Conduct preliminary industry interviews
• Refine niche market focus
• Prepare for interim conference call
Month #3 Meeting - Date: March ? Time:
— 47 —
Location:
©2009 ViTAL Economy, Inc.
— 48 —
©2009 ViTAL Economy, Inc.
Industry Cluster Opportunity Analysis
Kick-off Workshop
Energy Cluster
Backup Slides
ViTAL Economy Alliance
Jim Haguewood.- jim@onegroupconsulting.com
Mark Madsen – mmadsen@priorityone-advisors.com
— 49 —
©2009 ViTAL Economy, Inc.
Jim Haguewood
Mark Madsen
Experience:
Experience:
• 21 years in property management & development,
• 27 years experience in business, education and government
• Transitional CEO, Board Member and mentor to startup or
expanding firms
• Founding President of the North Olympic Peninsula
Resource and Conservation District
• College Foundation Board
• Bachelors – Agricultural Economics, Brigham Young
University
• Masters – Economics and Business, Utah State University
• Doctoral – Economics, Oklahoma State University.
Teaching and research emphasis in Community and
Economic Development, and Applied Business Economics
• Executive Director of Clallam netWorks Economic
Development Council 2000-2005
• Leader in development of Clallam Business Incubator and
Clallam netWorks economic and community development
strategy
• Community leadership; Mainstreet, tourism committees, College
Foundation Board, Tribal Gaming Board
• 16 years President of Haguewood’s Restaurant, Inc.
• Bachelor of Arts, Washington State University, 1982
Areas of Strength:
 Industry Cluster Development Strategies and
Coordination
Areas of Strength:







 Presentation and Facilitation
 Strategic Planning
 Property Management
 Project Management
 Innovation Entrepreneurship Ecosystems
— 50 —
Business Organization and Management
Entrepreneur Training and Mentoring
Economic Counsel
Rural and Regional Economic Development
Community Development
Community Leadership
Management of complex real estate development
and construction projects
©2009 ViTAL Economy, Inc.
InterVISTAS Consulting
Steve Martin
Rob Beynon
Experience:
Experience:
• Senior Vice President, Strategic & Development Planning,
Washington, DC
• Vice President, Development Economics,
• Former Assistant Director, U.S. Government Accountability
Office, with experience in infrastructure issues
• Successful experience developing winning
business cases for airports, ports, and communities
seeking rail carriers
• 20+ years’ experience working with the US Congress,
including extensive contacts within the departments of
Transportation, Justice, Commerce, and State
• Working with issues concerning the economic vitality of
smaller communities.
Vancouver, Canada
• Specializes in work in rural economies with
smaller organizations and communities
• Work experience throughout the U.S. and Canada
• B.A., Miami University (Ohio), 1979
• M.A., Japanese Business/Economic History,
University of British Columbia, 1989.
• A.M., Duke University, 1982
• B.A., University of British Columbia, 1986
Areas of Strength:

Project Management

Economic Research and Analysis

Extensive contacts throughout federal government and
with DC-based trade associations

Areas of Strength:
 Economic Research and Analysis
 Business Case Development
 Strategic Planning
 Multiple Accounts Evaluation
Presentation and Facilitation
 Transportation and Logistics
— 51 —
©2009 ViTAL Economy, Inc.
Iterative “hypothesis-based” approach
Data Collection and Analytical Approach
STEP 1: Identify
Issues
Benefits of Approach
• Identify 3-5 issues
which address
questions
• Issues should fully
address all we need to
understand
Step 4: Collect Data/
Complete Analysis/
Iterate Process
• Collect required data
and complete
analysis to answer
key questions
• Reformulate issues
based on findings
Step 2: Formulate
Hypotheses
Consultant
Support
• Create hypotheses
that answer each
issue
• Hypotheses should
completely address
each issue
Step 3: Formulate
Key Questions

There is more data
available than time or
money to collect it

Delineates and limits
the scope of issues and
data that needs to be
collected

Identifies what data and
analysis is essential as
opposed to what is
merely interesting
• Key Questions
drive primary
research/data
collection &
analysis
— 52 —
©2009 ViTAL Economy, Inc.
SI’s Big Dilemma:
Climate of Limited Opportunity
Is SI worth Fighting for?
Resulted in
only 1.35%
AAGR for last
25 Years
•
•
•
•
•
•
•
•
•
•
Limiting mindset: willingness to accept mediocrity and
lack of a sense of excellence
Insufficient climate of collaboration and trust, making
change very difficult
Continued belief that “the cavalry is coming” despite
proof to the contrary
Losing the best and brightest — youth brain drain
Lack of participation in the global economy
Continued focus on traditional economic sectors in
decline rather than rising economic sectors
Climate of economic (and community) despair
Public policy reinforces & funds old economy
strategies, and inhibits new ones
•
•
Fragmented and poorly
leveraged
Primary focus on local
opportunities
Insufficient # of
visionary leaders
Too many boundaries
Keeps SI From Realizing
Its true Potential!
— 53 —
©2009 ViTAL Economy, Inc.
Why….? Connect SI Vision and Goals
• Southern Illinois is the global location where inter-generation active lifestyle families,
visitors & KBE workers choose to live work and play — growth abounds
• SI’s historic liability of remoteness and lack of access becomes an asset; instead of
forgotten by Chicago, Springfield and Washington, SI is a land and lifestyle treasured,
respected, sought after and envied — there is only one SI in the World
• SI communities see themselves in a new light; they are respectful of their place; they
see themselves as gateways to a land that is "The Garden of The Gods"
• Tourism venues, town centers,rural lands, business locations and neighborhoods all
demonstrate by their look and feel that SI is a very special place to be preserved and
enhanced for all time
• SI is a place of welcome for people of all cultures whether visiting or living here; in the
land of "The Garden of the Gods” all are welcome and of value
• It is a place many want to be, but only the fortunate choose to take advantage of this
unique opportunity; SI becomes a place that is worth a premium, rather than one that
feels it must offer a discount to be desired
— 54 —
Source: ViTAL Economy Alliance
©2009 ViTAL Economy, Inc.
Connecting SI’s Assets and Trends
to 2012 Goals
Regional Assets
• Global growth presents SI with
opportunity to accelerate its
economic growth from 1.34% to
3.85% per year
• SIU - a major R&D university with 60+
years history serving students from
over 100 world cultures supports
global KBE growth
• KBE activity now accounts for 50%
plus of GDP growth, 3x’s growth in
occupations and pays double the
average wage of other jobs
• Mild climate, unique natural
environment, active lifestyle assets,
arts and culture amenities, attractive
quality of life characteristics are
important factors for KBE, tourism and
senior living growth
• Inter-modal logistics, transportation
and distribution resources have a
strong foundation in SI
• SI has plentiful legacy and alternativeenergy assets. SI is a coal leader and
is strong in 2 of 4 areas of projected
alternative energy growth by 2030
CSI 2012
M/S1 Goals*
Global & Nat’l Trends
• Heartland of America location,
equidistant to 2/3 of U.S. markets,
central to economic expansion of the
Americas
• Robust education and training
resources position SI for global
workforce training opportunity
Is SI worth fighting for?
+
• By 2010, the U.S. will have a 10M
worker shortfall requiring strong
workforce development resources
• 3 of 4 factors required to support
KBE activity in rural America are SI
strengths
• 58% of all U.S. and global tourists
want authentic active, historic and
cultural experiences (50-80 million)
• Logistics is a $900 billion U.S.
industry in a global $3.43 trillion
market growing at 10-15% per year
• 74% global increase in coal
consumption, 138% in coal-to-liquid
and 66% in bio-fuels by 2030
27,298 New
Hi-Wage Jobs
41,461
Existing Jobs
>$5,000/Yr
=
$642 Million
New KBE Activity
1,600+ Firms
>$2 Billion
New Annual
Wages
4,500+ Families
with Healthcare
Coverage
Lift 10,000
Citizens Out
Of Poverty
$200 Million
Information
Technology
Investment
Note: Regional Assets (Chap 2); Trends (Chap 1); * Milestone #1 Connect SI Goals were announced to the Public 26 Feb 2007
— 55 —
©2009 ViTAL Economy, Inc.
Taking Control of SI’s Destiny:
Aggregate Results
“Stay the Course”
vs.
Is SI worth fighting for?
“Change the Course”
GDP Average Annual
Growth Rate %
7.0
6.0
6
5
6.89%
5.0
5.62%
4.0
4
3.0
3
3.14%
2
2.0
2.19%
1.34%
1
3.85%
1.0
M/S#5
M/S#1
0.0
0
AAGR 1977-2001
Worldwide
USA
State-wide
Southern Illinois
AAGR Connect SI
Goals 2008 - 2012
Milestone #1 Goals Increase GRP by $2.9B (2012); $162M in additional State & Local tax revenue
Milestone #5 Targets Increase GRP by $5.2B (2012); $292M in additional State & Local tax revenue
Source: “State of Working Illinois”, by Northern Illinois University (Nov 2005); “21st Century Workforce” (May 2004); IMF; VE research
— 56 —
©2009 ViTAL Economy, Inc.
Measurable Indicators of Progress
Towards 2012 CSI Goals
Is SI worth fighting for?
Healthcare Economics
are Transformed!
•
Insured population
•
Medicaid
SI is a Global Broadband
Leader
+10%
-26%
%
Penetratio
n of
Populatio
n
60.00
50.00
•
•
Medicare
+18%
54%
40.00
30.00
34%
20.00
Uninsured
-32%
24%
10.00
12%
0.00
2005
Southern Illinois
USA-Average
SI Becomes
an Innovation Economy
U.S.
IL
SI
70%
60%
67%
50%64%
40%
46%
30%
20%
10%
0%
USA-Rural
Best in World
It’s Time to Go Global!
12
54%
U.S.
36% 33%
Illinois
SI
Private Sector
Transfer
Payroll & Payments, All
Benefits
Gov't &
Education
Earnings
10
8
11%
8.4%
6
4
2
0
2.4%
Exports as a % of
GDP
— 57 —
©2009 ViTAL Economy, Inc.
Transforming
Southern Illinois: ROI
Is SI worth fighting for?
• Achieving 50% or 100% of Connect SI 2012 economic growth goals provides
substantial ROI on a five year $9M investment in Connect SI
Annual SI Return on Investment – 2012 and beyond
Percent of Goals Reached by 2012:
• Annual growth in the economy
– Current GRP = $17.6B
• Annual growth in wages
– Current Wages = $8B
• Annual growth in wage-related tax revenue
– State and Local Taxes
• Annual growth in assessable tax base
– Historic EAV growth of 2.72% AAGR
50%
100%
$1.75B
$3.5B
$1B
$2B
$82M
$164M
+800M
+1.6B
+2.5% AAGR
+5% AAGR
What ROI is enough to gain your commitment of time, treasure
and talent to transform the SI economy now?
— 58 —
©2009 ViTAL Economy, Inc.
Greater Wabash COI Goals
Greater Wabash Region
(23 Feb 2007)
Baseline
2012
Same Trend
2012
Goal
Change vs.
Baseline
Change vs.
2012 Same
Population (2004)
51,421
49,561
53,000
+3.1%
+6.9%
Employable Population (16-64)
(2000)
31,980
30,777
32,913
+2.9%
+6.9%
Labor Participation (16-64) (2000)
71.1%
71.1%
72.5%
+1.97%
+1.97%
Employed 2004 All Ages
26,400
25,445
27,746
+5.1%
+9.0%
$26,311
$33,671
$36,517
+$10,206
+$2,846
$694.6m
$856.8m
$1,013m
+$318.9m
+$156.4m
Average Wage 2004
Total Region Wages 2004
Determination of specific measurable, wage and employment goals from change in regional wages vs. 2012 trend
NEW JOBS:
1,381
WAGE: $43,500
$60.1m
NEW JOBS AT AVERAGE WAGE:
920
WAGE: $36,517
$33.6m
IMPROVEMENT OF EXISTING JOBS:
5,280
WAGE: $5,000
$26.4m
CLIMATE OF ECONOMIC OPPORTUNITY:
$36.4m
— 59 —
©2009 ViTAL Economy, Inc.
Southern Five COI Goals
Southern Five Region
(23 Feb 2007)
Baseline
2012
Same Trend
2012
Goal
Change vs.
Baseline
Change vs.
2012 Same
Population (2004)
58,644
53,971
63,000
+7.4%
+16.7%
Employable Population (16-64)
(2000)
35,887
33,014
40,950
+14.1%
+24.0%
Labor Participation (16-64) (2000)
62.8%
62.8%
71.0%
+13.1%
+13.1%
Employed 2004 All Ages
24,317
25,550
26,856
+10.4%
+5.1%
$27,959
$35,980
$37,591
+$9,632
+$1,611
$679.9m
$919.3m
$1,010m
+$329.7m
+$90.3m
Average Wage 2004
Total Region Wages 2004
Determination of specific measurable, wage and employment goals from change in regional wages vs. 2012 trend
NEW JOBS:
784
WAGE: $43,500
$34.1m
NEW JOBS AT AVERAGE WAGE:
522
WAGE: $36,517
$19.6m
IMPROVEMENT OF EXISTING JOBS:
4,863
WAGE: $5,000
$24.3m
CLIMATE OF ECONOMIC OPPORTUNITY:
$12.2m
— 60 —
©2009 ViTAL Economy, Inc.
Southeastern COI Goals
Southeastern Region
(23 Feb 2007)
Baseline
2012
Same Trend
2012
Goal
Change vs.
Baseline
Change vs.
2012 Same
Population (2004)
49,465
47,833
56,000
+13.2%
+17.1%
Employable Population (16-64)
(2000)
31,115
30,373
36,400
+17.0%
+19.8%
Labor Participation (16-64) (2000)
63.4%
63.4%
70.0%
+10.4%
+10.4%
Employed 2004 All Ages
21,903
19,256
25,500
+16.4%
+32.4%
$27,494
$35,604
$40,206
+$12,782
+$4,672
$602.2m
$685.6m
$1,027m
+$424.8m
+$341.4m
Average Wage 2004
Total Region Wages 2004
Determination of specific measurable, wage and employment goals from change in regional wages vs. 2012 trend
NEW JOBS:
3,746
WAGE: $43,500
$163.0m
NEW JOBS AT AVERAGE WAGE:
2,498
WAGE: $40,276
$100.6m
IMPROVEMENT OF EXISTING JOBS:
4,381
WAGE: $5,000
$21.9m
CLIMATE OF ECONOMIC OPPORTUNITY:
$56.0m
— 61 —
©2009 ViTAL Economy, Inc.
Greater Egypt COI Goals
Greater Egypt Region
(23 Feb 2007)
Baseline
2012
Same Trend
2012
Goal
Change vs.
Baseline
Change vs.
2012 Same
Population (2004)
253,049
258,869
274,432
+8.45%
+6.0%
Employable Population (16-64)
(2000)
164,134
167,909
179,238
+9.2%
+6.8%
66.0%
66.0%
71.0%
+7.6%
+7.6%
Employed 2004 All Ages
134,685
140,340
157,787
+17.2%
+12.4%
Average Wage 2004
$27,830
$35,765
$40,765
+$12,935
+$5,000
$3,748m
$5,019m
$6,432m
+$2,684m
+$1,413m
Labor Participation (16-64) (2000)
Total Region Wages 2004
Determination of specific measurable, wage and employment goals from change in regional wages vs. 2012 trend
NEW JOBS:
10,468
WAGE: $43,500
$455.4m
NEW JOBS AT AVERAGE WAGE:
6,979
WAGE: $40,765
$284.5m
IMPROVEMENT OF EXISTING JOBS:
26,937
WAGE: $5,000
$134.7m
CLIMATE OF ECONOMIC OPPORTUNITY:
$538.4m
— 62 —
©2009 ViTAL Economy, Inc.