The New North: From Concept to Reality

How it Got Started The Fox Valley WDB – “What’s happening?” The The New North Measuring Up Looking Ahead Moving Ahead Networking Welch & Winters The Bay Area WDB joins in The project evolves The concept of a regional plan emerges The

The Plan is Launched! October 2004 Key players/leaders emerge The Governor speaks The New North Measuring Up Looking Ahead Moving Ahead

The Keys to the New North Private sector leadership Money A plan A professional staff Buy in The New North Measuring Up Looking Ahead Moving Ahead

Is the New North plan a success? Basis for forming the New North Economic Partnership and all that followed Outside assessment – “We want a plan like the New North plan.” Stimulated economic development thinking within the New North region Led to other regional plans Centergy, Grow North, UP/Wisconsin Border Region

Regional Organization and Thinking MI WI MN IA UP/WI Border Region

Measuring Up: What has happened and where are we?

Key Strategies Leverage the regional brand Attract, develop and retain diverse talent Advance educational attainment Target growth opportunities Build entrepreneurial climate and small businesses Incorporate sustainability The New North Measuring Up Looking Ahead Moving Ahead

Key Events Since 2004 Formation of the New North Inc. A strategy to work the plan Hiring a first rate executive director The economic summits The branding initiative Targeted initiatives The New North Measuring Up Looking Ahead Moving Ahead

Some Leading Edge Thinking and Action The Wind Energy Cluster Sustainability and Green Jobs The New North Measuring Up Looking Ahead Moving Ahead Cellulosic Bio-Fuels Studies and Plans

Looking Ahead: The New Normal Economy

Perspective & Attitude Adjustment There is and will be bad economic news for at least six more months. The most successful Wisconsin industries – paper and dairy- came out of economic crisis Many Wisconsin industries were initial failures - paper T The New North Measuring Up Looking Ahead Moving Ahead

The Last 11 Recessions The New North Measuring Up Looking Ahead Moving Ahead Source: The National Bureau of Economic Research 13

What makes this recession different from the last five major recessions? 28 years since last major downturn First recession experience for 1+ generation(s) The multiple sources of economic trouble & risk The speed and depth of the economic downturn The first major recession in the age of the Internet The New North Measuring Up Looking Ahead Moving Ahead 14

U.S. Housing Starts 2003 1.4 million 2004 1.85 million The New North Measuring Up Looking Ahead Moving Ahead Housing = 4% GDP Normal Replace/ Growth 1.3 million 15

U.S. Auto Sales 2004 17.7 million 2005 16.9 million 2006 17.0 million 2009 (Est.) 9.9 million The New North Measuring Up Looking Ahead Moving Ahead Decline: 18% in 2008; 25% in 2009 Autos = 3.5% of GDP Past declines: 21% in 1974; 19.1% in 1980 16

The Global Economy 2008 World Population (Market) 6.5 Billion U.S. Population 0.3 Billion The New North Measuring Up Looking Ahead Moving Ahead World Economy (GDP) $60.6 Trillion U.S. Economy $14.4 Trillion EU Economy $18.4 Trillion China’s Economy $4.3 Trillion Source: 2006 Estimates IMF and World Bank 17

Economic Excess/Overhang Furloughs and wage freezes and give backs Mercury Marine Milwaukee labor contracts State furloughs Unemployment Housing glut/Housing cycle Consumer deleveraging Consumer savings rate> – to + New financial regulations Generational reality check The New North Measuring Up Looking Ahead Moving Ahead 18

The Budget Deficit: A Threat to the Dollar The New North Measuring Up Looking Ahead Moving Ahead 19

So what is the “New Normal”? Consumer: Savings Rate Spending Work Life Standard of Living The New North Measuring Up Looking Ahead Moving Ahead ä æ ä æ 20

So what is the “New Normal”? Business: Regulation Outsourcing Globalization Business Cycles The New North Measuring Up Looking Ahead Moving Ahead ä æ ä ä 21

Moving Ahead: Where do we go from here?

In the New Normal economy, where is the advantage? The New North Measuring Up Looking Ahead Moving Ahead A back to basics economy Huge global markets A versatile workforce Alignment with market opportunities A

Key Global Market Demand Energy Fiber Protein The New North Measuring Up Looking Ahead Moving Ahead

Some Economic Opportunities Waste transformation & technology Higher education & training International direct investment The New North Measuring Up Looking Ahead Moving Ahead

Why waste transformation? New North is full of waste producers – meat packing, paper, dairy farms and processors, etc Waste transformation is green Academic and private sector research assets Some proven models & pilots e.g. Encap The world’s largest fresh water clean up project.

Higher Education and Workforce Training Large markets – global markets UW, private colleges, proprietary, and WTCS assets Private sector training programs Good paying jobs Students as “educational tourists”

Foreign Direct Investment The record of foreign direct investment in the New North A different investing perspective and timeline An interest in R&D – Fincantieri, Kikkoman, Roche UW Task Force on International Investment

Parting Thoughts Focus on the plan: Most regions don’t have a strategic plan Think globally: The markets increasingly are over there Position for the next recovery: It will come and those with a good plan will prosper The New North Measuring Up Looking Ahead Moving Ahead

David J. Ward, Ph.D., CEO Phone: (608) 279-3393 Email: dward@northstareconomics.com Fax: (608) 441-8064 Web: www.northstareconomics.com