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©2009 ViTAL Economy, Inc. 1 Energy Cluster Wednesday, January 28, 2009 8:00am-11:00am John A. Logan College ViTAL Economy Alliance Jim Haguewood.-

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Presentation on theme: "©2009 ViTAL Economy, Inc. 1 Energy Cluster Wednesday, January 28, 2009 8:00am-11:00am John A. Logan College ViTAL Economy Alliance Jim Haguewood.-"— Presentation transcript:

1 ©2009 ViTAL Economy, Inc. 1 Energy Cluster Wednesday, January 28, :00am-11:00am John A. Logan College ViTAL Economy Alliance Jim Haguewood.- Mark Madsen – Industry Cluster Opportunity Analysis Kick-off Workshop

2 ©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. – Lets 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

3 ©2009 ViTAL Economy, Inc. 3 Southern Illinois will: Be the fastest growing economic region in Illinois Be the regional gateway: –From Americas Heartland to the global economy –From the global economy to Americas 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 Americas Heartland to the global economy –From the global economy to Americas 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

4 ©2009 ViTAL Economy, Inc. 4 Strategy Economic SectorsJob Goals Global Workforce Opportunities18,750 Knowledge Based Enterprise (KBE) 8,023 Senior Living 3,676 Energy and Mining5,680 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 $43,500 16,379 New $43,500 $642 Million New KBE Activity 1,600+ Firms $642 Million New 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

5 ©2009 ViTAL Economy, Inc. 5 All new jobs created by Industry Clusters will be targeted to include private payer health benefits for workers and families All new jobs created by Industry 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? Why….? Connect SI Vision and Goals

6 ©2009 ViTAL Economy, Inc. 6

7 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

8 ©2009 ViTAL Economy, Inc. 8 Framework…..Geographic Region 100 Miles North to South Population=423,670 Workforce=195, Miles East-West

9 ©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 orientation

10 ©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

11 ©2009 ViTAL Economy, Inc. 11 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 Framework…Cluster Assessment Outline

12 ©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.

13 ©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 not everything that counts can be counted. Albert Einstein 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.

14 ©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 INDIGENOUS COMPETITIVE ADVANTAGE People Location Indigenous Assets Infrastructure Technology MARKET ATTRACTIVENESS LowHigh Low High Potential Clusters 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 RESULTS IN

15 ©2009 ViTAL Economy, Inc. 15 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

16 ©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

17 ©2009 ViTAL Economy, Inc. 17 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

18 ©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

19 ©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 C PC PC P=Producer & C=Customer

20 ©2009 ViTAL Economy, Inc. 20 Fuel Energy Source GenerationEnergy Storage TransmissionDistributionCustomer Energy Services Company Presence Special Infrastructure Skilled Workers R&D/Innovation Step #1 – Identify each element of the industry value chain (hydrocarbon) Step #2 – Identify whether the element exists in the study region Discover the SI Energy Value Chain Elements Distributed Power Energy Storage Fuel Energy Source GenerationTransmissionDistribution Customer Energy Services

21 ©2009 ViTAL Economy, Inc. 21 Fuel Energy Source GenerationEnergy Storage TransmissionDistributionCustomer Energy Services Company Presence Special Infrastructure Skilled Workers R&D/Innovation Step #1 – Identify each element of the industry value chain (alternative) Step #2 – Identify whether the element exists in the study region Distributed Power Energy Storage Fuel Energy Source GenerationTransmissionDistribution Customer Energy Services Discover the SI Energy Value Chain Elements

22 ©2009 ViTAL Economy, Inc. 22 Foundation: Key Local Research Reports and studies five years or younger: CSI Readiness Assessment - CSI Asset & Indigenous Resource Mapping -

23 ©2009 ViTAL Economy, Inc. 23

24 ©2009 ViTAL Economy, Inc. 24 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

25 ©2009 ViTAL Economy, Inc. 25

26 ©2009 ViTAL Economy, Inc. 26 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

27 ©2009 ViTAL Economy, Inc. 27 Trend…Oil Prices Projected to Increase Source: EIA (Energy Information Administration) Annual Energy Outlook 2009 This EIA outlook and short term futures trading suggest that high oil is here to stay, driven by global demand.

28 ©2009 ViTAL Economy, Inc. 28 Trend…Major Investment in New Energy International renewable energy investment hit a record in 2007, nearly $150 billion, a 60% increase over Source: EIA (Energy Information Administration) Annual Energy Outlook 2009; UNEP 2008 President Obamas 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 Global Investment in New Energy

29 ©2009 ViTAL Economy, Inc. 29 Trend…Liquid Energy Fuels Growth Source: Business Week, October 29, 2007; Energy Information Administration Unconventional liquid fuels will help compensate for an expected shortfall in ordinary oil Millions of Barrels Oil Equivalent/Day History Projected SI has the opportunity to play a key role in coal-to-liquid and biofuels Growth Coal-to-Liquid+138% BioFuels+66% Heavy Crude+65% Canadian Oil Sands +260%

30 ©2009 ViTAL Economy, Inc. 30 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

31 ©2009 ViTAL Economy, Inc. 31

32 ©2009 ViTAL Economy, Inc. 32 Identify the SI industry cluster components Distributed Power Energy Storage Fuel Energy Source Generation Transmission Distribution Customer Energy Services Hydrocarbon

33 ©2009 ViTAL Economy, Inc. 33 Identify the SI cluster component parts Distributed Power Energy Storage Fuel Energy Source Generation Transmission Distribution Customer Energy Services Alternative

34 ©2009 ViTAL Economy, Inc. 34 What is the cluster sense of urgency?

35 ©2009 ViTAL Economy, Inc. 35 What is worth your time, talent and treasure to participate?

36 ©2009 ViTAL Economy, Inc. 36 Current Initiatives….Short term win opportunities New energy related projects?

37 ©2009 ViTAL Economy, Inc. 37 Identify 3-5 Market Niche Opportunities Market Niche Hypotheses Algae – bio-diesel Agricultural and old mining areas with standing water are attractive areas for algae growing ponds Readiness Assessment Identified Markets Green Technologies Mining Technologies Clean Coal Bio-fuels Readiness Assessment Identified Markets Green Technologies Mining Technologies Clean Coal Bio-fuels

38 ©2009 ViTAL Economy, Inc. 38 Industry Cluster Recruitment Plan What industry cluster segments are missing from the table?

39 ©2009 ViTAL Economy, Inc. 39 Cluster Team Recruitment Plan ProspectRecruiter

40 ©2009 ViTAL Economy, Inc. 40 Industry Cluster Roadmap

41 ©2009 ViTAL Economy, Inc. 41 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 #3Report 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 Implementation Institutionalize

42 ©2009 ViTAL Economy, Inc. 42 Energy Industry Cluster Team Schedule Cluster Work PlanJanFebMarAprMayJuneJulyAug Stage 1: Formationxxx Cluster Kickoff Event with VEx Market-Segmentation, Attractiveness Identify Niche Markets Interim Conference Callx Hypotheses Testing 2-3 Hour Update Meeting with VEx Review Primary and Secondary Research Stage 2: Recognize-Researchxxx Identify Trends and Opportunities Interim Conference Callx Refine Niche Market Opportunities 2-3 Hour Update Meeting with VEx Identify Connectivity Requirements Stage 3 :Reportxxxx Complete Competitive Analysis Interim Conference Callx Issue Cluster Reportx

43 ©2009 ViTAL Economy, Inc. 43 Industry Cluster Team Support Structure Kathy Lively Kathy Lively Jim Haguewood Mark Madsen Jim Haguewood Mark Madsen Steve Martin Rob Beynon Steve Martin Rob Beynon Energy Transportation, Distribution and Logistics Cary 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 Analysts

44 ©2009 ViTAL Economy, Inc. 44 Industry Cluster & Research Teams Work Plans

45 ©2009 ViTAL Economy, Inc. 45 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 TeamResearch Team

46 ©2009 ViTAL Economy, Inc. 46 Industry Cluster & Research Teams Work Plans Next 60 days

47 ©2009 ViTAL Economy, Inc. 47 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 market focus 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:

48 ©2009 ViTAL Economy, Inc. 48

49 ©2009 ViTAL Economy, Inc. 49 Energy Cluster Backup Slides ViTAL Economy Alliance Jim Haguewood.- Mark Madsen – Industry Cluster Opportunity Analysis Kick-off Workshop

50 ©2009 ViTAL Economy, Inc. 50 Jim Haguewood Experience: 21 years in property management & development, Executive Director of Clallam netWorks Economic Development Council 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 Haguewoods 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

51 ©2009 ViTAL Economy, Inc. 51 Steve Martin Experience: 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 US Congress, including extensive contacts within the departments of Transportation, Justice, Commerce, and State Working with issues concerning the economic vitality of smaller communities. B.A., Miami University (Ohio), 1979 A.M., Duke University, 1982 Areas of Strength: Project Management Economic Research and Analysis Extensive contacts throughout federal government and with 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, 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

52 ©2009 ViTAL Economy, Inc. 52 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: Identify Issues 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: Formulate Key Questions Key Questions drive primary research/data collection & analysis Step 2: Formulate Hypotheses Create hypotheses that answer each issue Hypotheses should completely address each issue Consultant Support Data Collection and Analytical Approach

53 ©2009 ViTAL Economy, Inc. 53 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 SIs Big Dilemma: Climate of Limited Opportunity 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?

54 ©2009 ViTAL Economy, Inc. 54 Southern Illinois is the global location where inter-generation active lifestyle families, visitors & KBE workers choose to live work and play growth abounds SIs 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

55 ©2009 ViTAL Economy, Inc. 55 Regional 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 SIs Assets and Trends to 2012 Goals >$2 Billion New Annual Wages >$2 Billion New Annual Wages 41,461 Existing Jobs >$5,000/Yr 41,461 Existing Jobs >$5,000/Yr 27,298 New Hi-Wage Jobs 27,298 New Hi-Wage Jobs $642 Million New KBE Activity 1,600+ Firms $642 Million New 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 & Natl 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, 3xs 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, 3xs 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 = = 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?

56 ©2009 ViTAL Economy, Inc. 56 Source: State of Working Illinois, by Northern Illinois University (Nov 2005); 21st Century Workforce (May 2004); IMF; VE research GDP Average Annual Growth Rate % 3.85% Stay the Course vs. Change the Course AAGR Connect SI Goals AAGR Worldwide USAState-wideSouthern 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 SIs Destiny: Aggregate Results 6.89% M/S#1 M/S#5 Is SI worth fighting for?

57 ©2009 ViTAL Economy, Inc. 57 Measurable Indicators of Progress Towards 2012 CSI Goals Its Time to Go Global! 11% 8.4% 2.4% 54% 33% 36% 46% 67% 64% SI Becomes an Innovation Economy % Penetratio n of Populatio n SI is a Global Broadband Leader 12% 24% 34% 54% Insured population +10% Medicaid -26% Medicare +18% Uninsured -32%Uninsured -32% Healthcare Economics are Transformed! Is SI worth fighting for?

58 ©2009 ViTAL Economy, Inc. 58 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?

59 ©2009 ViTAL Economy, Inc. 59 Greater Wabash COI Goals Greater Wabash Region (23 Feb 2007) Baseline2012 Same Trend 2012 Goal Change vs. Baseline Change vs Same Population (2004)51,42149,56153, %+6.9% Employable Population (16-64) (2000) 31,98030,77732, %+6.9% Labor Participation (16-64) (2000)71.1% 72.5%+1.97% Employed 2004 All Ages26,40025,44527, %+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 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

60 ©2009 ViTAL Economy, Inc. 60 Southern Five COI Goals Southern Five Region (23 Feb 2007) Baseline2012 Same Trend 2012 Goal Change vs. Baseline Change vs Same Population (2004)58,64453,97163, %+16.7% Employable Population (16-64) (2000) 35,88733,01440, %+24.0% Labor Participation (16-64) (2000)62.8% 71.0%+13.1% Employed 2004 All Ages24,31725,55026, %+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 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

61 ©2009 ViTAL Economy, Inc. 61 Southeastern COI Goals Southeastern Region (23 Feb 2007) Baseline2012 Same Trend 2012 Goal Change vs. Baseline Change vs Same Population (2004)49,46547,83356, %+17.1% Employable Population (16-64) (2000) 31,11530,37336, %+19.8% Labor Participation (16-64) (2000)63.4% 70.0%+10.4% Employed 2004 All Ages21,90319,25625, %+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 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

62 ©2009 ViTAL Economy, Inc. 62 Greater Egypt COI Goals Greater Egypt Region (23 Feb 2007) Baseline2012 Same Trend 2012 Goal Change vs. Baseline Change vs Same Population (2004)253,049258,869274, %+6.0% Employable Population (16-64) (2000) 164,134167,909179, %+6.8% Labor Participation (16-64) (2000)66.0% 71.0%+7.6% Employed 2004 All Ages134,685140,340157, %+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 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


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