Buffalo Investment Development Plan

1. Buffalo Investment Development Plan Initiatives for the Governor December 4, 2012

2. The Buffalo Investment Development Plan is defined by 6 Strategies that create a plan for sustainable economic and inclusive jobs growth High potential sectors with the potential to form the foundation of Buffalo’s next economy and to drive economic growth, employment, productivity and wealth Manufacturing Life Sciences Tourism Sustainable economic growth Key enablers that will support Buffalo’s new economy across high priority sectors Workforce Revitalization Entrepreneurship

3. The Buffalo Investment Development Plan is defined by overarching Strategies and supporting Initiatives • Wave 1 Signature Initiatives Visions:Aspirations to achieve top-line economic growth: GRP, jobs, productivity, wages/income • Investment Development Plan • Buffalo Investment Development Plan will comprise 6 Strategies, and 6 Wave 1 Signature Initiatives Strategies Advanced manu-facturing Health & Life Sciences Tourism Entre-preneur-ship Work force Revitali-zation Initiatives 3

4. Contents • Manufacturing • Health and Life Sciences • Tourism • Entrepreneurship • Workforce • Revitalization

5. Market analysis: Advanced Manufacturing PRELIMINARY • 3rd largest employment sector, with 50K employment and $6.2B GRP (11% of total) • Chemicals and machinery manufacturing account for the two largest export sectors and 33 percent of total Why is it important Buffalo's assets • Shows specialization and projected growth verses nation in sub-sectors: materials, machinery, medical devices and chemicals • Strong university research (UB, Alfred) expertise in materials and ceramics Barriers • Steady decline in jobs (-5% per year), GDP (-1.7% per year) and productivity, all trailing the US average • Majority of manufacturers cite local talent pool as not meeting needs in just completed survey Strategy Buffalo Niagara will accelerate the growth of the specialized subsectors that are well positioned for high growth in a globally competitive manufacturing sector by supporting R&D activities, while improving the competitiveness of the broader regional manufacturing industry by enabling cross-cutting productivity and export interventions 5 5 5

6. Wave 1: The Buffalo Niagara Institute for Advanced Manufacturing Competitiveness A state-of-the-art facility to support the region’s manufacturing sector A B • Applied R&D • Process Excellence • Applied research services to drive local manufacturers’ innovation • Advising services to assist manufacturers in implementing competitive operational processes in their factories • Process excellence • Applied R&D C D • Export Assistance • Workforce • Market entry (domestic and international) assistance for expanding manufacturers • Hands-on instruction designed to up-skill current mid-career workers, providing opportunities to transition to higher-value tasks • Workforce • Export Assistance

7. Contents • Manufacturing • Health and Life Sciences • Tourism • Entrepreneurship • Workforce • Revitalization

8. Market Analysis: Health Life Sciences PRELIMINARY • Over 130 life science companies across medical devices, research and biotech in the region • WNY is home to 28 hospitals; the region employs ~3,600 doctors, ~20,500 nurses and ~16,700 other medical personnel Why is it important Buffalo's assets • Buffalo Niagara Medical Campus – new precinct offering co-location of high quality facilities (e.g., Global Vascular Institute, Roswell Park), students and new companies • High concentration of medical device and pharmaceutical companies • Life sciences R&D brings in approximately two thirds of the $350 million in region’s research funding Barriers • Industry frequently cites that translating research into businesses is a challenge • Attracting VC funding to the region has proven challenging • Few medium and large companies present to help support and provide workforce mobility and mentorship Strategy Buffalo Niagara will accelerate health and life sciences commercialization in the region by leveraging its unique areas of excellence. This new level of commercialization will be achieved by creating an environment conducive for small, medium, and large health and life sciences companies to start, grow, and invest in Buffalo Niagara 8 8 8

9. 25 Launch commercialization fund • Create an accelerator to house and promote new enterprises • Invest launch pad funds to help research Improve commercial-relevance of research • Connect researchers with industry • Inform research agendas based on industry needs and trends Wave 1: The Buffalo SPaRC (Science Productivity and Research Catalyzer) • PRELIMINARY The Buffalo SPaRC enables the translation and commercialization of health and life sciences research in the Buffalo Niagara region Improve IP process • Identify key barriers to IP productivity and support solutions • Improve transparency of existing research

10. Contents • Manufacturing • Health and Life Sciences • Tourism • Entrepreneurship • Workforce • Revitalization

11. Market Analysis: Tourism PRELIMINARY • Tourism a significant job creator (15 jobs per $1M tourist spend) and is growing faster than the economy (5% p.a.) • Buffalo’s natural and cultural assets match the needs of the largest, fastest growing customer segment (outdoor adventure/ heritage) Why is it important Buffalo's assets • Niagara Falls attracts more visitors annually than most national parks (8M vs. 4.4 M in the Grand Canyon) • Multiple cultural assets exist in Buffalo from the museum district to the historic Michigan Street Corridor Barriers • Few tourists stay overnight (21% in Niagara vs. 28% in Grand Canyon) and spend less (US Niagara: ~$159/day; Ontario Niagara: ~$225/ day) • High returns to marketing spend (5:1), but current spend is low (a third of Pittsburgh) • Limited tourist amenities exist near the Falls Strategy Buffalo Niagara will generate significant near-term economic growth by enticing tourists to stay longer and spend more while experiencing the natural, cultural, heritage, architectural, and retail offerings throughout the entire region in addition to the natural wonder of Niagara Falls 11 11 11

12. PRELIMINARY A B C Wave 1: Three complementary tourism initiatives • Regional marketing and City of Buffalo • Conduct detailed consumer research to drive regionally integrated marketing campaign and investments in Buffalo tourist assets • Niagara Falls State Park • Introduce new programming and environmentally sustainable developments that excite tourists • City of Niagara Falls • Launch a design competition, and then execute the development of a signature parcel and other projects to jump start development near the Falls

13. Contents • Manufacturing • Health and Life Sciences • Tourism • Entrepreneurship • Workforce • Revitalization

14. Market Analysis: Entrepreneurship PRELIMINARY Buffalo's assets • High quality institutions that could drive innovation in the region (e.g., University at Buffalo has $350 million in research expenditure and houses the Center for Entrepreneurial Leadership) • Existing presence ininnovative industries such as life sciences and healthcare • Newly formed innovation hubs at BNMC and Z80 Oppor-tunities • Buffalo Niagara experienced low net business start ups relative to peer cities • Low patent production (Buffalo Niagara ranked 87th of 374 in USA) • Low venture capital (0.29% of VC deals nationally by value in Q2 2012) and only 23% invested in start ups and early stage (versus expansion) Strategy Buffalo Niagara will become a place where entrepreneurs from a multitude of backgrounds are eager to start a business, are ready to grow it aggressively because it is easier here than elsewhere, and are strongly attracted by investment opportunities 14 14 14

15. Wave 1: Buffalo Breakthrough Business Challenge (B3C) The most ambitious annual business-plan competition ever launched in America • Venture capital investment • Access to top VCs, investment from State-funded incentives, and crowd-sourced funding • Incubator • Business plan competition • Free working space, training, volunteer mentorship from experienced entrepreneurs, and introductions toworld-class networks • An internationally recognized business plan competition with multiple winners receiving prizes of up to $500K in grant money

16. Contents • Manufacturing • Health and Life Sciences • Tourism • Entrepreneurship • Workforce • Revitalization

17. Market analysis: Workforce PRELIMINARY Buffalo’s assets • Strong mid-skilled workforce with low unemployment • Size of high-skilled workforce mirrors the US • Buffalo has >20 higher education institutions • Advancing skills drives productivity and employment (people with bachelor’s degrees earn 65% more than high school graduates, and have less than half their unemployment rate) Oppor-tunities • High skilled workers have above average unemployment levels (29% of unemployed, versus 20% nationally) but could be redeployed if demand increases • Large pockets of unemployment exist – particularly African Americans who have the highest unemployment rate (22%) • 50% of manufacturers indicate they don’t know about or don’t use the educational or workforce systems in the region Emerging strategy Align the skills of Buffalo Niagara’s workers behind the career paths, certificates and degrees required for growth in core industries, such as manufacturing, healthcare, and tourism, and beyond by creating the most flexible, industry-demand-driven, and inclusive training environment 17 17 17

18. Wave 1: Three complementary workforce initiatives • Skills Partnership • Establish “skills brokers” labor market intermediary will act as a point of entry for employers into the educational and workforce system • Rapid Right Skilling • Invest in scaling vocational credential, and internship programs, with proven track records, based on strong industry partnerships in critical industries; starting with manufacturing • Say Yes to Education • Support Say Yes, a program to improve high school graduation and post-secondary education achievement

19. Contents • Manufacturing • Health and Life Sciences • Tourism • Entrepreneurship • Workforce • Revitalization

20. Market analysis: Revitalization PRELIMINARY • Significant infrastructure capacityin the region to support smart growth • Steady, inexpensive, reliable hydro power Buffalo’s assets Buffalo’s progress • Waterfront development is moving forward with 26 planned projects and ~$140M in capital from ECHDC • Land Bank created to assist planning and green solutions to water run-off being piloted • Plan underway to restore Olmsted parks • Significant adaptive reuse / residential growth in downtown Oppor-tunities • Innovative contract models can attract private sector investment and expertise; “smart” utilization techniques can lower maintenance costs • Extension of a cooperative regional approach can drive innovation across the various infrastructure sectors and attract capital Emerging strategy The Buffalo Niagara region would combine State, local and private sector resources to make targeted capital investments in priority “turn around” areas with a specific focus on disadvantaged neighborhoods, areas where the presence of anchor tenants reduce development risks and community-owned assets that enhance attractiveness and livability 20 20 20

21. Wave 1: The Better Buffalo Fund A competitive public-private financing vehicle focused on annual investments in pre-designated geographic areas • Support the enhancement of existing or development of new public infrastructure • Infrastructure 1 • Improve impoverished residential neighborhoods B • Housing • Other development • Enhance the City’s public spaces, building on strengths for smart growth C

22. Back Up

23. Buffalo Niagara Institute for Advanced Manufacturing Competitiveness The Buffalo Niagara Institute for Advanced Manufacturing Competitiveness will be a state-of-the-art facility to support the growth of the region’s manufacturing sector by enabling it to commercialize applied research, develop more efficient operational processes, enable entry into new markets, and upskill the existing workforce. |

24. Buffalo SPaRC • PRELIMINARY • Signature Initiative 1: The Buffalo SPaRC (Science Productivity and Research Catalyzer) • The Buffalo SPaRC enables the translation and commercialization of current health and life sciences research in the Buffalo Niagara region. It will have 3 core activities: • IP process improvement:Buffalo SPaRC will identify and recommend key IP policies and regulations that are barriers to innovation and company partnership formation. SPaRC will also develop a central database to enable fast and open sharing of research portfolio with potential partners. • Launch Pad fund captures the value of the highly commercializable research: SPaRC will create a Launch Pad fund that helps: a) currently unfunded translational research, b) provide proof of concept and prototype funds, and c) business formation support (in exchange for up to 10% equity). Entrepreneurs leverage accelerator space and use local infrastructure for research development (e.g., lab tools, UB’s super computer, and datasets) via facility-use agreements to decrease start-up costs • Market viable research and improved levels of commercial impact: Buffalo SPaRC will influence research agendas to become more commercially viable by facilitating connections between academia and industry through existing and new relationships

25. Tourism initiatives • PRELIMINARY • Key activities • A • Develop the downtown of the City of Niagara Falls • Launch a competition to select a team of designers, developers and operators to execute the development of a signature parcel, attracting the talents of leading architectural firms and tourist operators • Acquire the signature parcel in downtown Niagara Falls adjacent to the entrance to the State Park, on which to build the winning design • Acquire and develop additional parcels adjacent to the signature parcel and the State Park (including the development of the Rainbow mall complex) • Make investments in Niagara Falls State Park and increase programming • Generate creative and environmentally sensitive development ideas from the private sector (including profit and non-profit entities) at the state park • Request proposals to implement the best ideas from the private sector interest process; use consumer research as basis for selecting winners (i.e., what will best meet consumer demand) • Evaluate opportunity to reconfigure the Robert Moses Parkway to reconnect the City of Niagara Falls to the waterfront and the Park • Develop and launch a regional marketing program and make investments in City of Buffalo assets • Conduct detailed consumer research to identify high priority tourist segments for Buffalo-Niagara and to understand gaps in current offerings • Develop and launch a regional marketing and promotional strategy that is grounded with a better understanding of tourism demand characteristics to improve the national profile of the region • Use data from market research to make targeted investments in City of Buffalo tourist assets • B • C

26. Buffalo Breakthrough Business Challenge (B3C) • PRELIMINARY The Buffalo Breakthrough Business Challengewill be the most ambitious annual business-plan competition ever launched in America. It will attract entrepreneurs and investors from around the world to compete for prizes that will turn ideas into enterprises, accelerate growth and attract appropriate financing.

27. Workforce Initiatives • PRELIMINARY • Wave 1 Signature Initiatives • Make Buffalo Niagara’s workforce system the most flexible and responsive in the nation by aligning education and training behind the skills employers need to expand and workers need for jobs success • Buffalo Niagara Skills Partnership: A “skills broker” labor market intermediary will act as a point of entry for employers into the educational and workforce system. It will match employers with the skilled workers they need, identify training programs that build skills demanded by employers, and make grants and investments that align the education and training system, from K-12 to work, with career pathways in critical industries. Among the initial investments made by the skills partnership will be to expand Rapid Right Skilling programs. • Rapid Right Skilling: Rapid Right Skilling will scale up (~24 weeks) vocational credential and internship programs with proven track records that are based on strong industry partnerships in critical industries, starting with manufacturing. • Say Yes: The launch of a program in Buffalo Niagara to improve high school graduation and post-secondary education achievement through aligned academic, social, and health supports coupled with a college scholarship promise for Buffalo Public School students. Say Yes has a 25 year track record of improvement in other regions across the country. An initial investment in Say Yes will aim to improve the future pipeline of workers.

28. Revitalization Better Buffalo Fund • PRELIMINARY The Better Buffalo Fundwill be a public-private financing vehicle focused on capital investments that could improve disadvantaged areas in the city of Buffalo and develop community-wide assets. Projects will receive funding through a competitive bid process. In general, the fund will support actionable, high impact infrastructure, housing, and other development projects with proven capacity for execution and commitment of additional funds.