1. 1 ©2009 ViTAL Economy, Inc. TDL Cluster Indicator Scan Tuesday, July 21, 2009 1:00pm-3:00pm MAN-TRA-CON, Marion ViTAL Economy Alliance Rob Beynon – rob_beynon@intervistas.com Industry Cluster Opportunity Analysis Third Cluster Meeting

2. 2 ©2009 ViTAL Economy, Inc. Industry Cluster Third Workshop Agenda Where we have been Quick Review of principles Indicator Scan of Targets Wind Turbine Manufacturing Waste Energy Carbon Capture New Option: Coal Mixing Next Steps

3. 3 ©2009 ViTAL Economy, Inc. 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. 4 ©2009 ViTAL Economy, Inc. 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

5. ©2009 ViTAL Economy, Inc. ViTAL Economy Alliance Identification of a set of regional goals and issues to be addressed, ex. Increase regional average wage Raise per capital income Lower Poverty Increase private payer healthcare coverage Determine market segmentation for each niche market Identify niche markets and hypotheses for each initial industry Determine market attractiveness for each niche market Market size, growth rates, general trends, demand trends, supply trends, market profitability Cluster team and research team test hypotheses Conduct primary and secondary research review Identify and quantify industry trends and opportunities Cluster team inventory of indigenous resources supporting niche markets Cluster Team conduct regional industry cluster mapping Determine top two industry clusters to be opportunity analyzed List the key questions that need to be answered for each hypotheses Return and identify other niche markets if current are not feasible Develop strategic and implementation strategy ViTAL Economy Industry Cluster Opportunity Analysis Prioritize niche markets for continued primary and secondary research Start Cluster Analysis Milestones Milestone #1 Milestone #2 Milestone #3 Milestone #5 & #6

6. 6 ©2009 ViTAL Economy, Inc. Industry clusters and market sub-segments with an indigenous competitive advantage are identified through the asset mapping and research process PEOPLE TECHNOLOGY INFRASTRUCTURE LOCATION NATURAL RESOURCES INDIGENOUS ASSET MAPPING FOCUSES PRELIMINARY CLUSTER LIST PRIORITIZED CLUSTER AND MARKET SEGEMENT LIST ASSET MAPPING PROCESS PRELIMINARY CLUSTER LIST SCREENED AGAINST INDIGENOUS ASSETS

7. 7 ©2009 ViTAL Economy, Inc. 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 Framework…Cluster Assessment Outline

8. 8 ©2009 ViTAL Economy, Inc. 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

9. 9 ©2009 ViTAL Economy, Inc. 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.

10. 10 ©2009 ViTAL Economy, Inc. Areas Examined To Date CLUSTER Light Sport Aircraft Rail Maintenance and Cleaning Terminals River Intermodal Coal mixing TRANSPORTATION, DISTRIBUTION & LOGISTICS OPPORTUNITIES Carbon Capture Wind Turbine Manufacturing Energy from Waste ENERGY

11. 11 ©2009 ViTAL Economy, Inc. Indicator Scan Methodology: High Level Examination of the Clusters Comments on each indicator Technology Market Location Skills Government Support 1 1 2 2 3 3 Summary statement Clear Opportunity Competitiveness Business Interest Exists Community Interest Exists List of indicators Rating of indicator Each indicator within each cluster has been rated. Red is poor. Yellow is neutral. Green is an advantage.

12. 12 ©2009 ViTAL Economy, Inc. Indicator Scan Sport Aircraft Manufacturing

13. 13 ©2009 ViTAL Economy, Inc. Sport Aircraft Manufacturing Is there a clear opportunity? Sport pilot certification issued by FAA as of 2007 Rapid growth in licensed sport aircraft in 2007, from 500 to 4,000 aircraft in the US (2008 figures not available) Competitors exist for the opportunity Maintenance would create ongoing employment opportunities Sport pilot certification issued by FAA as of 2007 Rapid growth in licensed sport aircraft in 2007, from 500 to 4,000 aircraft in the US (2008 figures not available) Competitors exist for the opportunity Maintenance would create ongoing employment opportunities Technology Market Location Skills Government Support 1 1 2 2 3 3 There is a market niche though size is unclear. Clear Opportunity Competitiveness Business Interest Exists Community Interest Exists Source: FAA

14. 14 ©2009 ViTAL Economy, Inc. Sport Aircraft Manufacturing Competitiveness There are two types of manufacturing opportunities ready-to-fly and kit aircraft Approximately 70 manufacturers are represented in the US. Most are based overseas. Few manufacturers appear to be based in the Mid West There are two types of manufacturing opportunities ready-to-fly and kit aircraft Approximately 70 manufacturers are represented in the US. Most are based overseas. Few manufacturers appear to be based in the Mid West Competitiveness Technology Market Location Skills Government Support Numerous manufacturers exist but appear to be underrepresented in the Midwest Clear Opportunity Business Interest Exists Community Interest Exists 1 1 2 2 3 3

15. 15 ©2009 ViTAL Economy, Inc. Sport Aircraft Manufacturing Availability of Technology Technology well developed and available through existing manufacturers. Relationship with manufacturer easiest way to gain technology. Need to be manufactured to standards set by the American Society for Testing and Materials, approved by the FAA. Technology well developed and available through existing manufacturers. Relationship with manufacturer easiest way to gain technology. Need to be manufactured to standards set by the American Society for Testing and Materials, approved by the FAA. Competitiveness Technology Market Location Skills Government Support 1 1 2 2 3 3 Technology available Clear Opportunity Business Interest Exists Community Interest Exists

16. 16 ©2009 ViTAL Economy, Inc. Sport Aircraft Manufacturing Skills Staff need to be trained in line with the standardized manufacturing specifications of sport aircraft. SIU graduated 43 students from the Aviation Technologies program in 2008 Enrollment into the program reached 120 in 2008. Source: Southern Illinois University Competitiveness Technology Market Location Skills Government Support 1 1 2 2 3 3 SI has a competitive advantage in skills Clear Opportunity Business Interest Exists Community Interest Exists

17. 17 ©2009 ViTAL Economy, Inc. Sport Aircraft Manufacturing Location to Market The Mid West has a significant number of existing and potential pilots Few sport aircraft manufacturers are represented in the Mid West SI has an airport actively exploring developing these opportunities The Mid West has a significant number of existing and potential pilots Few sport aircraft manufacturers are represented in the Mid West SI has an airport actively exploring developing these opportunities Competitiveness Technology Market Location Skills Government Support SI appears to have a locational advantage. Clear Opportunity Business Interest Exists Community Interest Exists 1 1 2 2 3 3

18. 18 ©2009 ViTAL Economy, Inc. Sport Aircraft Manufacturing Government Support Governments typically strongly support manufacturing and aviation opportunities An example of this is the IL Manufacturers Purchase Credit (MPC) earned when a manufacturer purchases machinery and equipment that qualifies. Governments typically strongly support manufacturing and aviation opportunities An example of this is the IL Manufacturers Purchase Credit (MPC) earned when a manufacturer purchases machinery and equipment that qualifies. Source: Illinois Department of Revenue Competitiveness Technology Market Location Skills Government Support 1 1 2 2 3 3 Government support is anticipated. Clear Opportunity Business Interest Exists Community Interest Exists

19. 19 ©2009 ViTAL Economy, Inc. Sport Aircraft Manufacturing Competitiveness Technology Market Location Skills Government Support Stated Business Interest No public statement of interest Clear Opportunity Business Interest Exists Community Interest Exists Stated Community Interest Local interest 1 1 2 2 3 3 1 1 2 2 3 3

20. 20 ©2009 ViTAL Economy, Inc. Sport Aircraft Manufacturing - Summary Competitiveness Technology Market Location Skills Government Support Summary This opportunity appears worth exploring Clear Opportunity Business Interest Exists Community Interest Exists CLUSTER INDICATOR SCAN ANALYSIS SPORT AIRCRAFT MANUFACTURING INDIGENOUS COMPETITIVE ADVANTAGE People Location Indigenous Assets Infrastructure Technology MARKET ATTRACTIVENESS LowHigh Low High Potential Clusters INDICATOR SCAN

21. 21 ©2009 ViTAL Economy, Inc. Indicator Scan Rail Maintenance

22. 22 ©2009 ViTAL Economy, Inc. Rail Maintenance Is there a clear opportunity? Rail carriers pressuring system users to own their own cars, therefore a growing maintenance and cleaning market Class 1 rail carriers owned only 35% of rail cars in early 2007. In 2004, Class 1 rail carriers spent $306 million on car repairs outside their facilities Rail carriers pressuring system users to own their own cars, therefore a growing maintenance and cleaning market Class 1 rail carriers owned only 35% of rail cars in early 2007. In 2004, Class 1 rail carriers spent $306 million on car repairs outside their facilities Technology Market Location Skills Government Support Large, growing private maintenance, cleaning market exists. Clear Opportunity Competitiveness Business Interest Exists Community Interest Exists 1 1 2 2 3 3 Source: AAR

23. 23 ©2009 ViTAL Economy, Inc. Rail Maintenance Competitiveness This is a large established business. There are over 50 significant operations in the U.S. SI has existing car cleaning and engine refurbishing operations. SI is not close to a major rail terminals, but it does have numerous major rail lines running through it This is a large established business. There are over 50 significant operations in the U.S. SI has existing car cleaning and engine refurbishing operations. SI is not close to a major rail terminals, but it does have numerous major rail lines running through it Competitiveness Technology Market Location Skills Government Support As SI is not near major terminals, niche opportunities are the most probable Clear Opportunity Business Interest Exists Community Interest Exists 1 1 2 2 3 3

24. 24 ©2009 ViTAL Economy, Inc. Rail Maintenance Availability of Technology Technology is readily obtained. Skills required are typically mechanical and metal working skills such as welding. Competitiveness Technology Market Location Skills Government Support Technology is not a hurdle. Clear Opportunity Business Interest Exists Community Interest Exists 1 1 2 2 3 3

25. 25 ©2009 ViTAL Economy, Inc. Rail Maintenance Skills Skills vary from simple for cleaning to advanced for engine work. For some work courses on standards and regulations set by the Federal Rail Administration are required. SIU and regional colleges offer mechanical and related training A national shortage of skilled employees exists at the advanced level Skills vary from simple for cleaning to advanced for engine work. For some work courses on standards and regulations set by the Federal Rail Administration are required. SIU and regional colleges offer mechanical and related training A national shortage of skilled employees exists at the advanced level Competitiveness Technology Market Location Skills Government Support 1 1 2 2 3 3 SI appears to have neither an advantage nor a disadvantage Clear Opportunity Business Interest Exists Community Interest Exists

26. 26 ©2009 ViTAL Economy, Inc. Rail Maintenance Location to Market As SI is not near a major terminal, it appears unlikely to attract engine work from major rail carriers However, the private owners of cars are less likely to be concerned by this. Location makes maintenance and cleaning of rail cars used east of the Mississippi reasonable As SI is not near a major terminal, it appears unlikely to attract engine work from major rail carriers However, the private owners of cars are less likely to be concerned by this. Location makes maintenance and cleaning of rail cars used east of the Mississippi reasonable Competitiveness Technology Market Location Training Issues Government Support Well positioned for services for rail cars used east of the Mississippi. Clear Opportunity Business Interest Exists Community Interest Exists 1 1 2 2 3 3

27. 27 ©2009 ViTAL Economy, Inc. Rail Maintenance Government Support Rail maintenance does not fit government priorities so will probably not receive strong support or interest Conversely, does not have major impediments Rail maintenance does not fit government priorities so will probably not receive strong support or interest Conversely, does not have major impediments Competitiveness Technology Market Location Skills Government Support Government support probably neutral. Clear Opportunity Business Interest Exists Community Interest Exists 1 1 2 2 3 3

28. 28 ©2009 ViTAL Economy, Inc. Rail Maintenance Competitiveness Technology Market Location Training Issues Government Support Stated Business Interest Local businesses are active or have expressed interest Clear Opportunity Business Interest Exists Community Interest Exists Stated Community Interest Public community interest not noted, but expect support for job potential 1 1 2 2 3 3 1 1 2 2 3 3

29. 29 ©2009 ViTAL Economy, Inc. Rail Maintenance - Summary Competitiveness Technology Market Location Skills Government Support Summary This opportunity appears worth exploring Clear Opportunity Business Interest Exists Community Interest Exists CLUSTER INDICATOR SCAN ANALYSIS Rail Maintenance INDIGENOUS COMPETITIVE ADVANTAGE People Location Indigenous Assets Infrastructure Technology MARKET ATTRACTIVENESS LowHigh Low High Potential Clusters INDICATOR SCAN

30. 30 ©2009 ViTAL Economy, Inc. Indicator Scan Terminals

31. 31 ©2009 ViTAL Economy, Inc. Terminals Is there a clear opportunity? In the last decade, transportation and distribution has been one of the fastest growing sectors in the US Much of this growth has occurred in the Mid West Transportation is anticipated to recover with the overall US economy In the last decade, transportation and distribution has been one of the fastest growing sectors in the US Much of this growth has occurred in the Mid West Transportation is anticipated to recover with the overall US economy Technology Market Location Skills Government Support Transport and distribution anticipated to continue its growth as the economy recovers. Clear Opportunity Competitiveness Business Interest Exists Community Interest Exists 1 1 2 2 3 3 Source: BEA

32. 32 ©2009 ViTAL Economy, Inc. Terminals Competitiveness SI is well positioned on major interstates, Class I rail carrier lines, and major domestic waterways SI is not close to a major urban centers SI is well positioned on major interstates, Class I rail carrier lines, and major domestic waterways SI is not close to a major urban centers Competitiveness Technology Market Location Skills Government Support The connection of major transportation connections is attractive but as SI is not near major cities, niche opportunities are the most probable Clear Opportunity Business Interest Exists Community Interest Exists 1 1 2 2 3 3

33. 33 ©2009 ViTAL Economy, Inc. Terminals Availability of Technology Technology is readily obtained. Competitiveness Technology Market Location Skills Government Support Technology is not a hurdle. Clear Opportunity Business Interest Exists Community Interest Exists 1 1 2 2 3 3

34. 34 ©2009 ViTAL Economy, Inc. Terminals Skills Skills required vary from simple to advanced. SIU and regional colleges offer relevant training A national shortage of skilled employees exists at advanced levels Skills required vary from simple to advanced. SIU and regional colleges offer relevant training A national shortage of skilled employees exists at advanced levels Competitiveness Technology Market Location Skills Government Support 1 1 2 2 3 3 SI appears to have neither an advantage nor a disadvantage Clear Opportunity Business Interest Exists Community Interest Exists

35. 35 ©2009 ViTAL Economy, Inc. Terminals Location to Market SI has a unique geographic location on major waterways, interstates, and rail lines But it is not near a major urban center (consumers) as export port SI has a unique geographic location on major waterways, interstates, and rail lines But it is not near a major urban center (consumers) as export port Competitiveness Technology Market Location Skills Government Support Clear Opportunity Business Interest Exists Community Interest Exists The connection of major transportation connections is attractive but as SI is not near major cities, niche opportunities are the most probable 1 1 2 2 3 3

36. 36 ©2009 ViTAL Economy, Inc. Terminals Government Support Government support for transport opportunity is feasible The Delta Regional Authority (DRA) is supporting regional intermodal development USDA may support related initiatives Government support for transport opportunity is feasible The Delta Regional Authority (DRA) is supporting regional intermodal development USDA may support related initiatives Competitiveness Technology Market Location Skills Government Support 1 1 2 2 3 3 Government support is anticipated, particularly if strategic objectives are identified. Clear Opportunity Business Interest Exists Community Interest Exists

37. 37 ©2009 ViTAL Economy, Inc. Terminals Competitiveness Technology Market Location Training Issues Government Support Stated Business Interest Mixed comments from business Clear Opportunity Business Interest Exists Community Interest Exists Stated Community Interest A number of communities are actively exploring 1 1 2 2 3 3 1 1 2 2 3 3

38. 38 ©2009 ViTAL Economy, Inc. Terminals - Summary Competitiveness Technology Market Location Skills Government Support Summary This opportunity appears worth exploring Clear Opportunity Business Interest Exists Community Interest Exists CLUSTER INDICATOR SCAN ANALYSIS TERMINALS INDIGENOUS COMPETITIVE ADVANTAGE People Location Indigenous Assets Infrastructure Technology MARKET ATTRACTIVENESS LowHigh Low High Potential Clusters INDICATOR SCAN

39. ©2009 ViTAL Economy, Inc. 39 Workplan What are we doing next?

40. ©2009 ViTAL Economy, Inc. 40 Next Steps What deserves follow up? Why?