Opportunities and Challenges OPPORTUNITIES: 1. Vermont Brand 2.Location 3.Imminent Technology infrastructure 4.Manufacturing base 5.Educational institutions 6.Recreation 7.Cultural and Arts 8. Tourists, second home owners bringing dollars into region 9.Key tourism infrastructure 10.Access to government 11.Healthcare Infrastructure 12.Healthy and health-focused population CHALLENGES: 1.Lack of Cell Service and Broadband 2.Weak local market/economy 3.Declining workforce population 4.Taxes 5.Declining earned income 6.Finding employment – not enough jobs 7.Lack of investment capital 8.Disconnect between education and jobs 9.Capacity -- Lack of critical mass 10.Declining student enrollment 11.Qualified Workforce recruitment Source: SeVEDS Foundation Milestone Meeting Output from Community Leaders

SeVEDS Economic Issues & Implications Economic IssueImplication Low Average Wage Limits the ability to attract and retain mid and high level skilled workers. Low Earned Income as a Proportion of Personal Income Reduces support for a climate of innovation and risk taking central to economic growth Income producing activity declines and so will regional rate of GDP growth Decreasing % of Population Reduced vibrancy of the community from young personalities and activities Lower education system enrollments Reduced family spending on domestic and basic products and services Businesses cannot grow or will be forced to leave the region due to lack of workforce. Weak Entrepreneurial Climate Limits the attraction of risk based business capital Reduced attractiveness to young bright highly educated demographic Lack of Cell and Broadband Service 21st Century “on the go” wireless connected business & workers cannot be served Regions develops a reputation as not enabling or meeting citizens expectations Work and workers serving a 24/7 connected economy will not find region attractive Weak Local Economy & Local Market Limits the attraction of new capital and investment Not attractive to new business and services, no ROI opportunity

Assets and Gaps Economic & Community Assets Precision Technology Driven Manufacturing Logistics Global presence Second Homeowners Natural Environment for Skiing and Outdoor Recreation Concentration of Health and Mental Health Care Facilities Capacity Gaps Incubators Redevelopment Workforce Development Broadband/Telecom Rail Post VY Planning Source: SeVEDS Asset Mapping Meetings conducted throughout the region

Vermont Industry Markets Source: Vermont Competitiveness: State and Cluster Economic Performance, Porter, Michael E., Harvard Business School, paper presented at National Governors Association Winter Meeting, February 26, 2011

SeVEDS Industry Clusters Based on Asset Mapping, Industry Interviews, and VE Research, the following Sectors appear to present significant opportunities for SE Vermont: SE Vermont Economic Sectors Technology Driven Precision Manufacturing Business & Technology Services High Quality Post-Secondary Education Logistics & Distribution Hospitality, Retail & Tourism Healthcare - Optics - Medical Devices - Aerospace - International Business & Culture Center of Excellence - Nursing & Medical Admin. Support - Shared Services Center - Software & IT Services - Environmental Services - Assembly & Distribution Medical Devices - NNE Hub - Passenger Rail Gateway - Winter Sports - Fall Foliage - Arts & Cultural - Vibrant Downtown Retail - Mental Healthcare - Regional Health Services Niche Markets Source: VE and SeVEDS Asset Mapping and Cluster Analysis

Macro Economic Trends SeVEDS Region Should Consider 1.Demographics – Immigration filled 90% of the job growth over the last 15 years 2.Workforce – % of jobs will require beyond high school education 3.Quality of Place – knowledge workers have a choice, 1 st where to live, 2 nd where to work, key to attracting and retaining young worker families 4.On Shoring & Near Shoring – 5M new jobs by 2020, CI share 7,800 5.Exports – Manufacturing exports to grow 2%-7% to Europe & Japan 6.US Manufacturing Growth – Driven by low cost energy, rising global wage rates and a reduced risk profile 7.Food Security – growing local food trends, agriculture science, healthy choices 8.Healthcare – healthy communities, extension and improved quality of life through health sciences, convergence of product innovation and system design

Analysis Trend data shows that the SeVEDS region has been declining as an employment hub over the past ten years. This is evidenced by the absolute decline in number of jobs in the region as well as the quality of the employment regardless of age cohort. Additional data for the labor shed that serves the SeVEDS region demonstrates that median earnings for those living outside Windham County are far more favorable than for those living in Windham County, whether in Massachusetts or New Hampshire counties. The perception of overall high educational attainment across a broad spectrum of the local populous in the region is not borne out by the data. In fact, the region is producing a much higher percentage of under-educated younger workers than Vermont or the surrounding regions under age 45. This flies in the face of increasing trends for workers with high demand skills across almost all industry sectors. The preponderance of an undereducated working age population and the inability of the region to meet workforce demand for high demand middle skill sets results in a staggering decline in the age group, which are the primary birthing and family rearing years. This reality calls for a real focus on increasing educational attainment in the region.