2010Getting Beyond Turbulent Times

SMITH-TRG

By: Richard D. Smith, CEO, SMITH-TRGExecutive Briefing, Washington, D. C.January 5, 2010

‘The Need for U. S. Job Growth & Wealth Creation Machines’

2010 Challenges You Face

Some ‘Turbulent Times’ Facts

Enterprise Path to Prosperity

SMITH-TRG

WHY: Act Now?

Contents . . .

some ‘Turbulent Times’ facts(a.k.a. inconvenient realities . . .)

SMITH-TRG

57% of GDP is Publicly Held Federal Debt Source: Congressional Budget Office

SMITH-TRG

Peter Orszag, Director, Office of Management & Budget (OMB)

SMITH-TRG

U. S. Debt is $12.1 TrillionNearly $39,000 for Every U.S. Resident

Deficit Growth: $162 Billion in 2007, $455 Billion 2008, and $1.8 Billion by YE 2009 (was $1.4 Billion in Oct.)

a.k.a. the

DEBT BOMB!

legacy. . .

SMITH-TRG

WITHIN A DECADE…

Average American Household

(that pays income taxes)

Will Owe the equivalent of

$155,000In Federal Debt

(about $90,000 more than last year)

Source: FORTUNE June 22, 2009

As of October 2009, the average American’s annual income was up only 5.3% in inflation-adjusted terms from the end of the 1980s. That's the slowest growth

registered in at least six decades.

Source: Bureau of Economic Analysis

SMITH-TRG

$39,446 is Average American’s Income

SMITH-TRG

U.S. Population grew by 35 million from 1999 to 2009, while the economy gained virtually no jobs. Employed people: 1999 – 130,532,000 vs. 2009 – 130,996,000

26.5 Million or 17.3%of Americans are Jobless or Underemployed

The government's broadest measure of labor underutilization (known as the U6) has more

than doubled in the two years since the recession began to 17.5%, and it is up from

12% just a year ago. Source: Bureau of Labor Statistics

The number of people involuntarily working part-time jobs has more

than doubled to 9.3 million the highest number on record.

SMITH-TRG

1 in 5 People. . .are Either Unemployed, Involuntarily Working Part-Time

or “Marginally Attached“

SMITH-TRG

Career Day10% U.S. UnemploymentOn Track to Hit 11+% in Q1, 2010

The transportation and material-moving sectors saw unemployment

rise to 11.6% from 7.9% over the same period.

19.1 % up from 10.7% Construction Industry’s Unemployment Rate

SMITH-TRG

Projected 9.4 Million Private-Sector Jobs Deficit by Year End 2009

SMITH-TRG

Currently, 25 states have run out of unemployment money and have borrowed $24 billion from the federal government to cover the gaps.

The nation's jobless toll is draining unemployment-compensation funds so fast that, according to federal projections, 40 state programs will go broke by 2011 and need $90 billion in loans to keep issuing benefits.

SMITH-TRG

Job losses are causing income losses, which in turn are constraining private demand, reducing tax revenues

and causing higher deficits.

SMITH-TRG

THE BIGGESTLOSERS: States

2010 Challenges You Face

SMITH-TRG

We’re AlmostRunning On Empty!

Data Source: Office of Management & Budget

I. Even with a strong recovery, annual deficits will average about 5% of GDP over the next decade, and total debt will climb to nearly 77% of GDP, its highest level since 1952.

II. Persistent deficits of this size will put upward pressure on long-term interest rates, crowding out investment and stunting long-term growth. Interest payments on the debt will be onerous - by 2019 they will exceed defense spending.

III. Investor anxiety about the huge borrowing needs of the U.S. government could trigger a sharp decline in the dollar and another crisis in global financial markets.

SMITH-TRG

New Year Assessment

3 Key Challenges

Jobless Growth

Paying Nations’ Bills

Jobs Creation

SMITH-TRG

2010, Must Be About Jobs . . .

WHY?

Every 1 Million New Jobs Puts $50 Billion into

Nations Economic Gas Tank!

SMITH-TRG

Each month delay in creating and

filling 1 million U.S. jobs defers $50 Billion in annual national economic benefit/value.

Employing 8 million of 16million unemployed wouldadd $400 Billion to nationaleconomy.

$100 Billion Value

Fill 2Million

Jobs

Fill 5Million

Jobs

Fill 10 Million

Jobs

$250 Billion Value

$500 Billion Value

SMITH-TRG

Economic Impact of Deferred Jobs Creation

“Even if the nation could add 2.15 million private-sector jobs per year starting in January 2010, it would need to maintain this pace for more than 7 straight years (7.63 years), or until August 2017, to eliminate the jobs deficit!”

- Advance & Rutgers Report, Sept. 09

By James W. Hughes and Joseph J. Seneca

Edward J. Bloustein School of Planning

& Public Policy

SMITH-TRG

Your Biggest Challenge

Remember. . .

7 years (2010 to 2017) just to recover 9.4 million

lost jobs (a.k.a. jobs deficit.)

+Nation still needs to create 100,000 additional net newjobs per month (1.2 Mil. Yr.,

2010 to 2017) to support workforce growth.

SMITH-TRG

200,000 new jobs monthly: to reduce ‘jobs deficit’

100,000 new jobs monthly: for ‘workforce’ growth

YE 2010 Total: 3,600,000 ‘Net New’ Jobs

$180 Billion – National Value

SMITH-TRG

Need Jobs Beginning January 1st, 2010(‘Net New’ Job Needs Per Month/Every Month)

Enterprise Path to Prosperity(FUTURE-WORLD opportunities. . .)

SMITH-TRG

SMITH-TRG

Position for FUTURE-WORLD Commerce

Build 21ST Century Job Growth & Wealth Creation Machines

C R E A T E ‘S U S T A I N A B L E’ U. S. J O B S!

“Now is the time for America to doa business growth paradigm shift.A transformative rethink of how it designs, finances, builds and grows

market competitive U.S. based businesses.”

SMITH-TRG

B E T R A N S F O R M A T I V E

“A new world order is dawning – one

in which the West is no longer dominant,

capitalism (at least the American version)

is out of favor, and protectionism

is on the rise.”- Roger Altman

Former Deputy Treasury Sec., Clinton Administration

GLOBALIZATION

SMITH-TRG

A C C E P T G L O B A L I Z A T I O N

BUSINESS MODEL INNOVATION

PRODUCT/SERVICE INNOVATION

PROCESS INNOVATION

TECHNOLOGY INNOVATION

“Innovation has become the new currency of global

competition as one country after another races toward a new high

ground where the capacity for innovation is viewed as a

hallmark of national success.”- John Kao, quotes

Author, INNOVATION NATION, 2007

SMITH-TRG

E M B R A C E I N N O V A T I O N

SMITH-TRG

A R T I C U L A T E V I S I O N (photos of visionary CEO’s from across industry sectors)

Customer Centricity. Performance Improvement. Innovation. Value Creation.

SMITH-TRG

F O C U S O N ‘FUTURE-WORLD’ N E E D S

“I think fanaticism is underrated.

I’m a fanatic about the engineering

groups. Steve (Jobs) is a fanatic

about the user experience and

the design.”- Bill Gates, Microsoft

Advice for entrepreneurs, enterprise game changers

SMITH-TRG

U N D E R S T A N D F A N A T I C I S M

SMITH-TRG

B E E N T R EP R E N E U R I A L(photos of entrepreneurs who drive change and create value in diverse market sectors)

A S S E S S E ME R G I N G M A R K E T S

SMITH-TRG

Emerging Market Opportunities

(in no particular order) 8

SMITH-TRG1) Modular Kitchens:

Think college dorm rooms, worker housing, disaster recovery

lodging, NYC apartments, etc…

Opportunities continued . . .

(in no particular order) 8

SMITH-TRG2 & 3) Flexible Screen

Technologies & Roll-up Laptop (closed/open)Digital-Media applications of technology, lines-of-business

segments unlimited…

Opportunities continued . . .

(in no particular order) 8

SMITH-TRG4 & 5) Cyber Security & Intranets.

Gartner Research estimates that about 15 percent of all small businesses suffered a hack attack in 2008.

The financial and economic impact of a one day cyber sabotage effort that disrupts US credit and debit card transactions is estimated at being about $35 billion USD.

NATO Chief of Cyber Defense:“Cyber terrorism poses as great a threat to national security as a missile attack. In 2008, the Department of Defense suffered an estimated 80,000 network attacks. On government networks alone, a new software vulnerability is exploited every 82 minutes.”

Opportunities continued . . .

(in no particular order) 8

SMITH-TRG6) Cyber Secure Digital-Media Cities,Eco Future-World New & Upgraded Multi-Purpose Population Centers

Capital intensive ($5 to $45 Bil.) strategic long-term investments – energy efficient digital-enabled life.

Opportunities continued . . .

(in no particular order) 8

SMITH-TRG7) Health Care Solutions

Technology enabled health care treatment solutions forecasted by some to be $2 Trillion U.S. market.

Opportunities continued . . .

(in no particular order) 8

SMITH-TRG8) Wireless Application SolutionsThink beyond Apple’s iPhone, Google smartphones, Nokia, Samsung and others. Think about Tablets, in-car systems, multi-touch flex-screens – all part of digital media future-world.

“The greatest value creation opportunity will fall to those who give the end-user consumer what they want…really, really want. And that is: an integrated, easy to use, video media experience, anytime, anywhere, and on any platform.”

- Richard D. Smith, SMITH-TRGAuthor, AD-MIRED, 2006, book quote

WHY MOBILE APPLICATIONS?Market Forecast: From $7 Billion 2008 to $25 Billion 2014

Sources: Juniper Research & IDC

– 2008 - 1.19 Billion Mobile Phones

Sold World-wide. 155 Million (13%) were Smartphones

– By 2013 20% or 280 Million (SP’s)

– Apple: 100,000 APP’s vs. RIM’s: 2,000 APP’s

– Others: Google, Sprint’s Palm, Motorola – 2 new devices, then Nokia, Samsung, and host of new entrants. . .

“What you carry on your belt

is now your MP3 player, will

be your plasma TV, is your

social networking machine,

is your Internet terminal,

your camera, your personal

navigation device.”

- Jim Basillie

Co-CEO, Research-in-Motion

Mobile APPs continued . . .

SMITH-TRG

show methe money!

SMITH-TRG

New Enterprise Associates (Large VC)

SMITH-TRG

Just Closed 13th FundRaised nearly

$2.5 Billion

Core Investment AreasInformation Technology

Energy TechnologyHealth Care Art by: John Kuczala

– Every morning in Africa, a gazelle wakes up. It knows that it must run faster than the fastest lion, or IT WILL BE KILLED.

– Every morning in Africa, a lion wakes up. It knows that it must outrun the slowest gazelle, or IT WILL STARVE TO DEATH.

– In Africa, it doesn’t matter whether you’re a lion or a gazelle. When the SUN COMES UP, YOU’D BETTER BE RUNNING!

SMITH-TRG

K E E P: E Y E O N T H E P R I Z E

WHY: Act Now?

SMITH-TRG

“The Ultimate Measure Of A Healthy & Recovering Economy. . .Jobs Growth!”

SMITH-TRG

If Not Now, When?

If Not You, Who?

SMITH-TRG

RDSmith@SMITH-TRG.com

Thank You!