Virginia’s Economic Development Landscape

1. Virginia’s Economic Development Landscape Hampton Roads Association of Financial Professionals Robert W. McClintock Vice President, Research February 25, 2014

2. Virginia Unemployment Virginia Economic Development Partnership

3. Virginia Unemployment Virginia Economic Development Partnership

4. Virginia Employment Virginia Economic Development Partnership

5. Virginia Employment Growth Virginia Economic Development Partnership

6. Virginia Employment Growth Virginia Economic Development Partnership

7. Virginia Employment Growth Virginia Economic Development Partnership

8. Hampton Roads Employment Growth Virginia Economic Development Partnership

9. Virginia Employment Forecast Virginia Economic Development Partnership

10. FED Forecast • Projections from Federal Reserve Open Market Committee (FOMC) December 2013 meeting • Median of central tendency cited, excludes three highest and three lowest projections • Core PCE excludes food and energy as these prices tend to be more volatile • PCE makes up about 70% of GDP • Source: www.federalreserve.gov/monetarypolicy/fomccalendars.htm Virginia Economic Development Partnership

11. Virginia Calendar Year 2013 Highlights • Announcements results are mixed compared with 2012 • Jobs: +8% (16,361) • Capital Investment: -13% ($3.58 billion) • Projects: -2% (322) • Existing business expansions remain fundamentally important to economic performance: 72% of jobs, 86% of capital investment • Manufacturing represents 39% of job totals, 43% of total capital investment • Data centers (17 projects) a dominant sector for investment; ($1.45B), and over two-thirds of all non-manufacturing investment • Professional, Scientific, and Technical Services dominant sector for job growth (6,214 jobs) • International investment up 18% ($667 million), 16% of all projects, 3,317 new jobs (up 31% from 2012); slowly climbing back to the 2008 recent peak of almost 7,000 jobs All announcements are subject to revision

12. CY 2013 Virginia Announcements by Region Virginia 16,361 jobs $3.58 billion investment 322 announcements Northern Virginia 7,156 jobs $1.37 billion investment 120 announcements Valley 1,051 jobs $429 million investment 29 announcements Southwestern Virginia 1,277 jobs $118 million investment 23 announcements Central Virginia 2,724 jobs $503 million investment 56 announcements Hampton Roads 2,017 jobs $527 million investment 54 announcements Southern Virginia 2,136 jobs $636 million investment 40 announcements All announcements are subject to revision

13. Announced investment and employment by Region All announcements are subject to revision Virginia Economic Development Partnership

14. Virginia Announced investment and employment All announcements are subject to revision

15. Recent Major Announcements Virginia Economic Development Partnership

16. Selected Statewide Projects, 2013 All announcements are subject to revision

17. Selected Hampton Roads Area Projects, 2013 All announcements are subject to revision Virginia Economic Development Partnership

18. Virginia’s Federal Exposure Virginia Economic Development Partnership

19. VEDP’s Response to sequestration • Mitigation Strategies • Increase business attraction efforts in sectors which can utilize impacted workers • Expand export assistance programs to replace lost U.S. government contracts with foreign military sales or other international sales • Maintain and expand workforce leadership role, including real-time identification of growing labor pool to compete for projects including companies which repatriate foreign profits Virginia Economic Development Partnership

20. GOING GLOBAL DEFENSE INITIATIVE VEDP - INTERNATIONAL TRADE • Market research • Export compliance • Digital marketing • International certification • Export training • Travel to market

21. International trade • 160+ graduate companies • 50 active • 300+ participants in last 3 years • 1,000+ projects in last 3 years • 57 countries • Market entry • Due diligence • Export licensing • 300+ participants annually • 30+ publications • 230+ attendees • Corporate sponsors

22. Top 10 Virginia Exports market by county: Jan. to Sep. 2013 Virginia Economic Development Partnership

23. Top 10 Virginia Merchandise Exports by commodity: Jan. to Sep. 2013 Virginia Economic Development Partnership

24. Building Team Virginia • MOUs signed to promote message unification and resource alignment • Presidents of our State Universities • Virginia Port Authority – joint marketing • Discussions are underway with the regional economic development leaders, Center for Innovative Technology, and various chambers, associations and tech councils • “Expand the Tent” – Economic development is too important to not leverage all stakeholders • Be a “Voice of Virginia” • Actively promote • Seek opportunities • Refer leads to VEDP Virginia Economic Development Partnership

25. Virginia’s Economic Development Team Governor Terry R. McAuliffe Maurice Jones Secretary of Commerce & Trade Martin J. Briley President & CEO Virginia Economic Development Partnership Virginia Economic Development Partnership

26. Other key issues/ initiatives • VEDP Gold Account Strategy • Targeted approach to key firms with substantial VA operations • 400+ companies identified • 2013 – 41 accounts with project expansions ($1.3 billion; 3200+ jobs) • International Outreach “Re-set” • New Richmond Based Managing Directors (Europe, Asia, Canada & India) • New Team in Our International Markets (Berlin, United Kingdom, Tokyo, Shanghai, India) • FAA Certification for Unmanned Aerial Systems Virginia Economic Development Partnership

27. Other key issues/ initiatives • Attraction of Foreign Direct Investment • Current service delivery model focuses on discrete “projects”: $$ and jobs, production line, new facility, etc. • Large amounts of foreign capital sitting offshore, seeking safer, productive investments. (ex. Smithfield Foods) • Mergers, acquisitions, strategic partnerships. • How best for a state to help facilitate capital attraction and put buyers/seekers together to support new job creation? • Will explore potential “new models” with key players, legal firms, accountants, Administration. Virginia Economic Development Partnership

28. Other key issues/ initiatives • Increasing Virginia’s Market Visibility • Competitor states keep up the pressure • Need to tell our compelling story globally in various media • Preparation of “Shovel Ready” properties, especially for large scale projects • Inventory needs replenishing across the state • Regional approaches, aligned with key assets, strategies • Takes time to prepare to be “client ready” • Workforce Development (training & retraining) • Benchmark against best practices in other states • Simplify for companies and workers in the system Virginia Economic Development Partnership

29. Planning • 2013 process led by Virginia Chamber of Commerce • Broad engagement from business & community leaders • Regional workshops and hearings • Can provide core of the Commonwealth’s Economic Development Strategy • Goals for Education, Workforce, Business Climate, Transportation, Health Care, Technology, Innovation, Energy, Manufacturing, Environment, Military & Veteran Affairs Virginia Economic Development Partnership

30. VirginiaScan Virginia Economic Development Partnership

31. New World currency? 2013 Virginia Economic Development Partnership