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©2009 ViTAL Economy, Inc.— 1 —
Transportation, Distribution & Logistics (TDL) Cluster
Wednesday, February 11, 20091:00pm-4:00pm
Mt. Vernon, Illinois
ViTAL Economy Alliance Jim Haguewood.- [email protected]
Mark Madsen – [email protected]
Industry Cluster Opportunity Analysis
Kick-off Workshop
©2009 ViTAL Economy, Inc.— 2 —
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 TDL 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
©2009 ViTAL Economy, Inc.— 3 —
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
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
Why….? Connect SI Vision and Goals
©2009 ViTAL Economy, Inc.— 4 —
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
10,919 New Jobs From$36,517 - $40,785
10,919 New Jobs From$36,517 - $40,785
41,461 Existing Jobs >$5,000/Yr
41,461 Existing Jobs >$5,000/Yr
16,379 New Jobs @ $43,500
16,379 New Jobs @ $43,500
$642 MillionNew KBE Activity
1,600+ Firms
$642 MillionNew KBE Activity
1,600+ Firms
4,500+ Families with Healthcare Coverage
4,500+ Families with Healthcare Coverage
Lift 10,000 Citizens Out Of Poverty
Lift 10,000 Citizens Out Of Poverty
$200 Million Information Technology
Investment
$200 Million Information Technology
Investment
Increase SI Export Value by$1 Billion/yr
Increase SI Export Value by$1 Billion/yr
Why….? Connect SI Vision and Goals
Greater Egypt
Southern Five
Southeastern
Greater Wabash
©2009 ViTAL Economy, Inc.— 5 —
All new jobs created byIndustry Clusters will be
targeted to include private payer health benefits for workers and
families
All new jobs created byIndustry Clusters will be
targeted to include private payer health benefits for workers and
families
• Tourism
• Bio-Agriculture
• Knowledge Based Enterprises (KBE)– 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
• Mining Technology
• Transportation, Logistics & Warehousing
• Senior Living
• Education & Training (also supports all the other clusters)
Is SI worth fighting for?Is SI worth fighting for?
Why….? Connect SI Vision and Goals
©2009 ViTAL Economy, Inc.— 6 —
©2009 ViTAL Economy, Inc.— 7 —
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
©2009 ViTAL Economy, Inc.— 8 —
Framework….Geographic Region
100 Miles North
to South
Population=423,670 Workforce=195,429
130 Miles East-West
©2009 ViTAL Economy, Inc.— 9 —
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 orientationVertical and independent orientation
©2009 ViTAL Economy, Inc.— 10 —
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 Horizontal and interdependent orientation
©2009 ViTAL Economy, Inc.— 11 —
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
©2009 ViTAL Economy, Inc.— 12 —
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.
The VE approach uncovers opportunities for the industry clusters in SI.
It does not apply a “generic silver bullet” method typical of other processes.
©2009 ViTAL Economy, Inc.— 13 —
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 noteverything that counts can be counted.” Albert Einstein
“Not everything that can be counted counts and noteverything 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.
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.
©2009 ViTAL Economy, Inc.— 14 —
Clusters should leverage indigenous resources
HIGH POTENTIAL CLUSTER IDENTIFICATION APPROACH
The ViTAL Economy Alliance Brings Significant Capabilities to Identify Competitive
Advantage Elements and Assess Market Attractiveness
The ViTAL Economy Alliance Brings Significant Capabilities to Identify Competitive
Advantage Elements and Assess Market Attractiveness
Maximizing Economic Development Potential
INDIGENOUSCOMPETITIVEADVANTAGE
• People• Location
• Indigenous Assets
• Infrastructure• Technology
MARKET ATTRACTIVENESS
Low High
Low
HighHigh
PotentialClusters
Desired Economic Development Goals
• Diversify economy
• Create sustainable economic growth
• Create jobs which exceed average national wage
• Create jobs with associated benefits
• Increase workforce capabilities
• Attract outside capital
• Deepen and strengthen capabilities of existing industry clusters
RESULTSIN
©2009 ViTAL Economy, Inc.— 15 —
• 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
Important Distinction; Clusters vs. Cluster Teams
©2009 ViTAL Economy, Inc.— 16 —
Industry Cluster Team Guiding 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
The Vital Economy Industry Cluster approach achieves measurable results through the recognition
and endorsement of key principles
The Vital Economy Industry Cluster approach achieves measurable results through the recognition
and endorsement of key principles
©2009 ViTAL Economy, Inc.— 17 —
ViTAL Economy Core Principles
CollaborationBuilds 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 RevenuesOpens New Markets, Expands Opportunity,
Establishes Measurable Benchmarks and Goals
©2009 ViTAL Economy, Inc.— 18 —
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
©2009 ViTAL Economy, Inc.— 19 —
Rural Economies Must Move Closer to “C”
Move Up the Value Chain, Capture Greater Share of Value Chain
Margins, Increase Economic Prosperity
Friction is the Cost of Getting From P to CP C
P C
P=Producer & C=Customer
©2009 ViTAL Economy, Inc.— 20 —
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Company Presence
Special Infrastructure
Skilled Workers
R&D/Innovation
Step #1 – Identify each element of the industry value chainStep #2 – Identify whether the element exists in the study region
Discover the SI TDL Value Chain Elements
Inbound
Logistics
Operations Outbound
Logistics
Marketing &
Sales
Service
Receiving
Warehousing
Inventory Control
Input Materials
Activities required to get the final products to the customer; warehousing, order fulfillment
Activities associated with getting buyers to purchase the products; channel selection, advertising, pricing
Activities that enhance the products value including customer service and repair services
Value creating activities that transform inputs into final products
©2009 ViTAL Economy, Inc.— 21 —
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
©2009 ViTAL Economy, Inc.— 22 —
©2009 ViTAL Economy, Inc.— 23 —
State of the Industry…Major Trends?
As more and more global opportunities open up, logistics, transportation and distribution increase in
importance — Southern Illinois is truly at the crossroads of virtually all modalities.
Connect SI Readiness Assessment, Chapter 1.09
©2009 ViTAL Economy, Inc.— 24 —
©2009 ViTAL Economy, Inc.— 25 —
State of the Industry…Major Trends?
• Recession has reduced demand for transportation in short term, despite lower cost of oil
• While the speed of recovery remains unclear, longer term expectation is – increased global trade and related transportation
– continuing supply chain changes to reduce costs
– green transportation developments
As more and more global opportunities open up, logistics, transportation and distribution increase in
importance — Southern Illinois is truly at the crossroads of virtually all modalities.
Connect SI Readiness Assessment, Chapter 1.09
©2009 ViTAL Economy, Inc.— 26 —
Trend…Transportation Is a Growth Sector
Source – DOT Department of Transportation Statistics
The DOT TransportationServices Index Shows the national growth ofPassenger and Freight services
Since 1990, this sectorhas experienced steady growth
9/11 reducedpassenger servicessignificantly, but theyreturned to trend insubsequent year
The DOT TransportationServices Index Shows the national growth ofPassenger and Freight services
Since 1990, this sectorhas experienced steady growth
9/11 reducedpassenger servicessignificantly, but theyreturned to trend insubsequent year
DOT Transportation Services Index, 1990-2008DOT Transportation Services Index, 1990-2008
TSI Freight TSI Passengers
Impact of 9/11on passengers
©2009 ViTAL Economy, Inc.— 27 —
Trend….US Rail Traffic Projected to Increase
The thickness of the lines in 2020 show projected demand for rail services. How to serve these demands is unclear as
rail lines do not currently have the required capacity.
The thickness of the lines in 2020 show projected demand for rail services. How to serve these demands is unclear as
rail lines do not currently have the required capacity.
©2009 ViTAL Economy, Inc.— 28 —
Trend….US Ports Cannot Keep Up with Demand
By 2020 demand will exceed current capacity of many U.S. ports by as much as 200%.
By 2020 demand will exceed current capacity of many U.S. ports by as much as 200%.
Source: Vickerman & Associates, 2008
©2009 ViTAL Economy, Inc.— 29 —
Rail-Truck Intermodal Traffic Growth Strong
KEY: U = Data unavailable NOTE: Container-trailer breakdown not available prior to 1988.
SOURCE: U.S. Department of Transportation, Research and Innovative Technology Administration, Bureau of Transportation Statistics, based on data from Association of American Railroads, 2004: Class I Rail Road Statistics, page 2; 1990-2003 Rail Road Facts 2003, page 26; 1980-1985 Rail Road Facts 1991, page 26; 1986-1989 Rail Road Facts 2001, page 26.
Container movements by truck have increased rapidly, and surpassed trailer movements in 1992.
Container movements by truck have increased rapidly, and surpassed trailer movements in 1992.
Mill
ions
of
Uni
ts
Trailers Containers Total
Container Movements by Truck, 1988-2004Container Movements by Truck, 1988-2004
©2009 ViTAL Economy, Inc.— 30 —
Short-Term Container Trends
• With the slowing world economy, container imports into the U.S. were expected to decline 8.2% in 2008– Mostly because of Gulf port closures during the summer
Source: Global Insight
• Exports, however, were forecast to grow 22.6%– Destinations included Brazil, India, Indonesia, Malaysia, and South Korea
Grain container exports down
year over year in 2008, but 3-year average trending
upwards
Grain container exports down
year over year in 2008, but 3-year average trending
upwards
©2009 ViTAL Economy, Inc.— 31 —
©2009 ViTAL Economy, Inc.— 32 —
Identify the SI industry cluster components
Inbound
Logistics
Operations Outbound
Logistics
Marketing &
Sales
Service
Receiving
Warehousing
Inventory Control
Input Materials
Activities required to get the final products to the customer; warehousing, order fulfillment
Activities associated with getting buyers to purchase the products; channel selection, advertising, pricing
Activities that enhance the products value including customer service and repair services
Value creating activities that transform inputs into final products
Microsoft Office Excel 97-2003 Worksheet
©2009 ViTAL Economy, Inc.— 33 —
What is the cluster sense of urgency?
©2009 ViTAL Economy, Inc.— 34 —
What is worth your time, talent and treasure to participate?
©2009 ViTAL Economy, Inc.— 35 —
Current Initiatives….Short term win opportunities
©2009 ViTAL Economy, Inc.— 36 —
Identify 3-5 Market Niche Opportunities
Market
Niche
Hypotheses Hypotheses Hypotheses
RFID Technologies
Crossroad areas are attractive for modern distribution centers using new technologies
Readiness Assessment Identified Markets• Multimodal/transload facilities
• Distribution Centers
• KBE Logistics
• Niche markets leveraging aviation assets
Readiness Assessment Identified Markets• Multimodal/transload facilities
• Distribution Centers
• KBE Logistics
• Niche markets leveraging aviation assets
©2009 ViTAL Economy, Inc.— 37 —
Industry Cluster Recruitment Plan
What industry cluster segments are missing from the table?
©2009 ViTAL Economy, Inc.— 38 —
Cluster Team Recruitment Plan
Prospect Recruiter
©2009 ViTAL Economy, Inc.— 39 —
Industry Cluster Roadmap
©2009 ViTAL Economy, Inc.— 40 —
Industry Cluster Roadmap
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
START 3 MONTHS 5 MONTHS 8 MONTHS
Stage #1 Stage #2 Stage #3 Report
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
ImplementationInstitutionalize
©2009 ViTAL Economy, Inc.— 41 —
TDL Industry Cluster Team Schedule
Cluster Work Plan Jan Feb Mar Apr May June July Aug
Stage 1: Formation x x/Report x
Cluster Kickoff Event with VE 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 x 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 x x x
Complete Competitive Analysis
Interim Conference Call x
Issue Cluster Report x
©2009 ViTAL Economy, Inc.— 42 —
Industry Cluster Team Support Structure
KathyLivelyKathyLively
Jim HaguewoodMark Madsen
Jim HaguewoodMark Madsen
Steve MartinRob BeynonSteve MartinRob Beynon
EnergyEnergyTransportation, Distribution and
Logistics
Transportation, Distribution and
Logistics
Cary MinnisCary
Minnis
CSI Support
Project Management• Integration with overall CSI effort• Deliverable quality• Project timing
Project Management• Integration with overall CSI effort• Deliverable quality• Project timing
Research Team• Cluster team management• Approaches & methodologies• Economic and business analysis
Research Team• Cluster team management• Approaches & methodologies• Economic and business analysis
Cluster Teams• Data collection• Economic and business analysis• Recruitment
Cluster Teams• Data collection• Economic and business analysis• Recruitment
Research AnalystsResearch Analysts
©2009 ViTAL Economy, Inc.— 43 —
Industry Cluster & Research TeamsWork Plans
©2009 ViTAL Economy, Inc.— 44 —
Overall Roles and Responsibilities
• Establish a leadership team
• Recruit members to the cluster team
• Keep industry cluster team members engaged
• Identify existing local research
• Attend key cluster meetings providing input and analysis
• Create and lead action teams
• Provide input and analysis of market niches and hypotheses
• Conduct industry cluster asset mapping
• Provide input to final report
• Present cluster report in public session
• Provide guidance and advisement to VE industry cluster approaches
• Provide key primary research based upon the cluster work plan
– Market Attractiveness
– Macro and Micro analysis
• Regional and national industry interviews
• Provide facilitation of key industry cluster meetings and teleconferences
• Transfer knowledge to the cluster team
• Prepare final cluster report
Industry Cluster Team Research Team
©2009 ViTAL Economy, Inc.— 45 —
Industry Cluster & Research TeamsWork Plans
Next 60 days
©2009 ViTAL Economy, Inc.— 46 —
Stage #1 Work Plans Next 60 days
Industry Cluster 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 markets
Research Team• 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
Interim Conference Call - Date: Time:
Month #3 Meeting - Date: March ? Time: Location:
©2009 ViTAL Economy, Inc.— 47 —
©2009 ViTAL Economy, Inc.— 48 —
Transportation, Distribution & Logistics (TDL) Cluster
Backup Slides
ViTAL Economy Alliance Jim Haguewood.- [email protected]
Mark Madsen – [email protected]
Industry Cluster Opportunity Analysis
Kick-off Workshop
©2009 ViTAL Economy, Inc.— 49 —
Jim HaguewoodExperience:• 21 years in property management & development, • 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 Presentation and Facilitation Strategic Planning Property Management Project Management Innovation Entrepreneurship Ecosystems
Experience:• 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
Areas of Strength 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
Mark Madsen
©2009 ViTAL Economy, Inc.— 50 —
Steve MartinExperience:• Senior Vice President, Strategic & Development Planning,
Washington, DC
• Former Assistant Director, U.S. Government Accountability Office, with experience in infrastructure issues
• 20+ years’ experience working with the U.S. Congress, including extensive contacts within the departments of Transportation, Justice, Commerce, and State
• Working with issues concerning the economic vitality of smaller communities.
• Principal investigator. Transportation Research Board, Guidebook for Small Community Air Service Development
• A.M, Duke University, 1982
• B.A., Miami University (Ohio), 1979
Areas of Strength: Project Management Economic Research and Analysis Extensive contacts throughout federal government and
DC-based trade associations Presentation and facilitation
Experience:• Vice President, Development Economics,
Vancouver, Canada
• Successful experience developing winning business cases for airports, ports, and communities
seeking rail carriers
• Specializes in work in rural economies with smaller organizations and communities
• Work experience throughout the U.S. and Canada
• M.A., Japanese Business/Economic History, University of British Columbia, 1989;
• B.A., University of British Columbia, 1986
Areas of Strength: Economic Research and Analysis
Business Case Development
Strategic Planning
Multiple Accounts Evaluation
Transportation and Logistics
Rob Beynon
InterVISTAS Consulting
©2009 ViTAL Economy, Inc.— 51 —
Iterative “hypothesis-based” approach
Benefits of Approach
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
STEP 1: IdentifyIssues
• 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 3: FormulateKey Questions
• Key Questions drive primary research/data collection & analysis
Step 2: FormulateHypotheses
• Create hypotheses that answer each issue
• Hypotheses should completely address each issue
ConsultantSupport
Data Collection and Analytical Approach
©2009 ViTAL Economy, Inc.— 52 —
• 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
SI’s Big Dilemma:Climate of Limited Opportunity
Resulted in only 1.35%
AAGR for last 25 Years
Resulted in only 1.35%
AAGR for last 25 Years
Keeps SI From Realizing Its true Potential!
Keeps SI From Realizing Its true Potential!
• Fragmented and poorly leveraged
• Primary focus on local opportunities
• Insufficient # of visionary leaders
• Too many boundaries
Issues Weighing
Down SI
Indigenous
Resources &
Innate Talents
Is SI worth Fighting for?Is SI worth Fighting for?
©2009 ViTAL Economy, Inc.— 53 —
• 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
Source: ViTAL Economy Alliance
Why….? Connect SI Vision and Goals
©2009 ViTAL Economy, Inc.— 54 —
Regional AssetsRegional Assets
• Heartland of America location, equidistant to 2/3 of U.S. markets, central to economic expansion of the Americas
• SIU - a major R&D university with 60+ years history serving students from over 100 world cultures supports global KBE growth
• Robust education and training resources position SI for global workforce training opportunity
• 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 alternative-energy assets. SI is a coal leader and is strong in 2 of 4 areas of projected alternative energy growth by 2030
• Heartland of America location, equidistant to 2/3 of U.S. markets, central to economic expansion of the Americas
• SIU - a major R&D university with 60+ years history serving students from over 100 world cultures supports global KBE growth
• Robust education and training resources position SI for global workforce training opportunity
• 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 alternative-energy assets. SI is a coal leader and is strong in 2 of 4 areas of projected alternative energy growth by 2030
Connecting SI’s Assets and Trends to 2012 Goals
>$2 BillionNew Annual
Wages
>$2 BillionNew Annual
Wages
41,461 Existing Jobs>$5,000/Yr
41,461 Existing Jobs>$5,000/Yr
27,298 NewHi-Wage Jobs27,298 New
Hi-Wage Jobs
$642 MillionNew KBE Activity
1,600+ Firms
$642 MillionNew KBE Activity
1,600+ Firms
4,500+ Families with Healthcare
Coverage
4,500+ Families with Healthcare
Coverage
Lift 10,000 Citizens Out Of Poverty
Lift 10,000 Citizens Out Of Poverty
$200 Million Information Technology Investment
$200 Million Information Technology Investment
Global & Nat’l TrendsGlobal & Nat’l Trends
• Global growth presents SI with opportunity to accelerate its economic growth from 1.34% to 3.85% per year
• KBE activity now accounts for 50% plus of GDP growth, 3x’s growth in occupations and pays double the average wage of other jobs
• 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
• Global growth presents SI with opportunity to accelerate its economic growth from 1.34% to 3.85% per year
• KBE activity now accounts for 50% plus of GDP growth, 3x’s growth in occupations and pays double the average wage of other jobs
• 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
++ ==
CSI 2012 M/S1 Goals*
Note: Regional Assets (Chap 2); Trends (Chap 1); * Milestone #1 Connect SI Goals were announced to the Public 26 Feb 2007
Is SI worth fighting for?Is SI worth fighting for?
©2009 ViTAL Economy, Inc.— 55 —
Source: “State of Working Illinois”, by Northern Illinois University (Nov 2005); “21st Century Workforce” (May 2004); IMF; VE research
GD
P A
vera
ge
An
nu
al
Gro
wth
Rat
e %
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
3.85%
“Stay the Course” vs. “Change the Course”
AAGR Connect SI Goals 2008 - 2012
0
1
2
3
4
5
6
AAGR 1977-2001
Worldwide USA State-wide Southern Illinois
1.34%
2.19%
3.14%
5.62%
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
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
Taking Control of SI’s Destiny: Aggregate Results
6.89%
M/S#1
M/S#5
Is SI worth fighting for?Is SI worth fighting for?
©2009 ViTAL Economy, Inc.— 56 —
Measurable Indicators of ProgressTowards 2012 CSI Goals
It’s Time to Go Global!
0
2
4
6
8
10
12
Exports as a % ofGDP
U.S.
Illinois
SI
11%
8.4%
2.4%
0%10%20%30%40%50%60%70%
Private SectorPayroll &Benefits
TransferPayments, All
Gov't &EducationEarnings
U.S.
IL
SI
54%
33%36%
46%
67%64%
SI Becomes
an Innovation Economy
0.00
10.00
20.00
30.00
40.00
50.00
60.00
2005Southern Illinois USA-RuralUSA-Average Best in World
%
Pen
etra
tio
n o
f P
op
ula
tio
n
SI is a Global Broadband Leader
12%24%
34%
54%
• Insured population +10%
• Medicaid -26%
• Medicare +18%
• UninsuredUninsured -32% -32%
Healthcare Economics are Transformed!
Is SI worth fighting for?Is SI worth fighting for?
©2009 ViTAL Economy, Inc.— 57 —
Transforming Southern Illinois: ROI
• Achieving 50% or 100% of Connect SI 2012 economic growth goals provides substantial ROI on a five year $9M investment in Connect SI
Percent of Goals Reached by 2012: 50% 100%
• Annual growth in the economy– Current GRP = $17.6B
$1.75B $3.5B
• Annual growth in wages
– Current Wages = $8B$1B $2B
• Annual growth in wage-related tax revenue– State and Local Taxes
$82M $164M
• Annual growth in assessable tax base– Historic EAV growth of 2.72% AAGR
+800M+2.5% AAGR
+1.6B+5% AAGR
Annual SI Return on Investment – 2012 and beyond
What ROI is enough to gain your commitment of time, treasure and talent to transform the SI economy now?
What ROI is enough to gain your commitment of time, treasure and talent to transform the SI economy now?
Is SI worth fighting for?Is SI worth fighting for?
©2009 ViTAL Economy, Inc.— 58 —
Greater Wabash COI GoalsGreater 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%
Average Wage 2004 $26,311 $33,671 $36,517 +$10,206 +$2,846
Total Region Wages 2004 $694.6m $856.8m $1,013m +$318.9m +$156.4m
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
©2009 ViTAL Economy, Inc.— 59 —
Southern Five COI GoalsSouthern 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%
Average Wage 2004 $27,959 $35,980 $37,591 +$9,632 +$1,611
Total Region Wages 2004 $679.9m $919.3m $1,010m +$329.7m +$90.3m
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
©2009 ViTAL Economy, Inc.— 60 —
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%
Average Wage 2004 $27,494 $35,604 $40,206 +$12,782 +$4,672
Total Region Wages 2004 $602.2m $685.6m $1,027m +$424.8m +$341.4m
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
©2009 ViTAL Economy, Inc.— 61 —
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%
Labor Participation (16-64) (2000) 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
Total Region Wages 2004 $3,748m $5,019m $6,432m +$2,684m +$1,413m
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