Manufacturing Cluster

1. Manufacturing Cluster • Manufacturing Cluster Strategies recognize existing concentrations of manufacturing businesses and suppliers in the region. • Oshkosh/Winnebago County has a substantial manufacturing workforce across occupational types. • The region has the ability to recruit and develop a job ready workforce to meet growing demands. • Strategies reflect current and future market-based needs for manufacturing skills, management expertise and global experience. • Recommended strategies emphasize focus on further developing this cluster through actions that will: • Establish and strengthen exports among current companies • Attract prospective companies and Foreign Direct Investment to the area • Expand trained and skilled workforce in the area • Accelerate growth and expansion of new and expanding manufacturing businesses • Identify additional market opportunities for integrating the regional supply chain including professional and technical services. • Reinforce the image and recognition of the region as a key manufacturing cluster in the State of Wisconsin and the U.S.

2. Manufacturing Cluster Strategy Recommendations Strategy 1 – Sustain and Diversify Existing Manufacturing Base Focus on the retention, growth and diversification of existing base of manufacturing companies, industries and regional suppliers. • Rationale: • Very high concentration of existing manufacturing companies and employment • High value regional workforce • High value regional supply chain and support services • Local training programs, experience and know-how • Existing concentration of export companies and industries • Existing concentration of Foreign Direct Investment in the region

3. Manufacturing Cluster Strategy Recommendations Strategy 1 – Sustain and Diversify Existing Manufacturing Base • Background: The following diagram shows the various parts of the existing manufacturing cluster in the region and opportunities to grow that cluster. • Oshkosh/Winnebago County has an established and expanding cluster of manufacturing companies that form the base for further development of products and expanding markets • The current manufacturing employment and export base includes the following: • Paper Products • Converted Paper • Printing • Plastics and Rubber Products • Machinery • Transportation • Metal Fabrication

4. Manufacturing Concentrations Woods and Poole, 2012

5. Metropolitan Areas by Degree of Manufacturing Specialization, 2010 Note: Metropolitan areas colored gray are not specialized in manufacturing, green are strongly specialized, blue are very strongly specialized, and red are highly specialized. Source: Brookings Institution

6. Manufacturing Cluster – Oshkosh/Winnebago County Mfg Base Foreign Direct Investment Expanded Exports WMEP WEDC UWO Mfg Opportunity Sustainability Viessmann Group NEW ERA Cooperative Engineering Programs Paper Products Converted Paper Printing Plastics/ Rubber Products Machinery Transportation Metal Fabrication Supply Chain Integration Supply Chain Workforce Training Manufacturing Culture Professional, Scientific and Technical Services to Manufacturing Sector Manufacturing Cluster Base Oshkosh Corporation; KC; Bemis; Plexus; Jay; Triangle; Nercon; Menasha Corp.; Shallbetter; Hoffmaster; Banta; Milprint; JJ Keller; Baldor; Axeltech; Perfecseal; and others

7. Regional Manufacturing Employment as a % of total County employment- 2010 17.8 13.8 16 10.6 14.8 24.43 12.1 16.6 Source: Woods and Poole 2012 State Profile – Wisconsin Counties

8. Regional Manufacturing Employment Growth Number and Percentage by County (2010/2035) 2010 - 4,550 5% 2035 - 4,820 5% 2010 - 24,680 27% 2035 - 25,360 27% 2010 - 20,030 22% 2035 - 21,290 23% 2010 - 900 1% 2035 - 1,030 1% 2010 - 3,130 3% 2035 - 25,360 3% 2010 - 26,350 29% 2035 - 28,090 30% 2010 - 1,210 1% 2035 - 810 1% 2010 - 9,460 10% 2035 - 8,580 9% Source: Woods and Poole 2012 State Profile – Wisconsin Counties

9. Manufacturing Cluster Strategy Recommendations Strategy 1 – Sustain and Diversify Existing Manufacturing Base • Tactic 1A: Strengthen Regional Support for and Implementation of Advanced Manufacturing Growth • Rationale: Advanced manufacturing is growing rapidly and impacting the global manufacturing climate by combining industrial automation with information technology to optimize efficiencies, productivity, and output of plants and supply networks. The competitiveness of the regions concentration of manufacturing firms and workforce make it imperative that local companies employ higher levels of advanced manufacturing capabilities. It is also critical that the regional workforce is prepared to meet the changing nature of automation and advanced manufacturing. • Key Challenges:The pace of change and increasing global competitiveness of manufacturing demands increased investment in equipment, research and development and workforce training. • Action Steps: • Work with FVTC to document regional manufacturing status and requirements with regard to levels of automation, capabilities and workforce readiness. • Identify regional leaders in advanced manufacturing and solicit input on regional opportunities • Establish regional partnerships to recruit, train and place individuals with advanced manufacturing skills and experience in firms that are making investments in automation and advanced processes. • Explore the creation of additional funding sources to encourage advanced manufacturing investments in the region, regardless of net jobs created • Timeline: 12 – 24 months

10. Advanced Manufacturing • Recent studies suggest that “as smart manufacturing advances, the employment multiplier significantly increases. Thus, the next generation of smart manufacturing will generate a dramatic ripple effect through the indirect creation of jobs in the industries that supply, support, and service manufacturers.” • On average, the manufacturing multiplier is 1.58, according to National Association of Manufacturers. That means a typical manufacturing facility that employs 100 people actually supports 158 jobs, 100 directly and 58 through employment at suppliers. • As manufacturers get “smarter” and more advanced, the multiplier increases significantly. In some advanced manufacturing sectors, such as electronic computer manufacturing, the multiplier effect can be as high as 16 to 1, meaning that every manufacturing job supports 15 other jobs. • Highly automated , high-tech manufacturing regions already have employment multipliers closer to 3.5, according to the Milken Institute’s Manufacturing 2.0 research study. • Boston Consulting Group expects up to 800,000 manufacturing jobs to be added in the U.S. by mid-decade. They also estimate the that a 4x employment multiplier will create about 2.4 million indirect jobs.

11. Manufacturing Cluster Strategy Recommendations Strategy 1 – Sustain and Diversify Existing Manufacturing Base • Tactic 1B: Expand export activities of local manufacturers. • Rationale: Manufacturing companies and industries in the area are already active in export activity and have an interest in increasing export revenues as a percentage of their overall sales. • Key Challenges: Company management teams are stretched with current demands and need to allocate resources to explore, pursue and manage export markets and contracts. • Action Steps: • Convene group of companies that are currently exporting and those that have an interest in pursing international customers and contracts , to discuss export experiences, common interests and opportunities to collaborate. • Establish partnership with the Wisconsin Economic Development Corporation (WEDC) and Wisconsin Manufacturing and Extension Partnership (WMEP) to provide services and resources to regional manufacturers to increase export based revenues. • Work with UWO to establish additional resources and commitment that can assist in identifying international and domestic market opportunities. • Build on current relationships of area exporters to network with international companies and industries to identify other potential market opportunities. • Timeline: 12 – 24 months

12. Winnebago County Export Summary Industries exporting more than $20 million (2009/2010) Source: Brookings Institution 2012, State of Wisconsin

13. Winnebago County Export Summary Industries exporting more than $20 million (2009/2010) Source: Brookings Institution 2012/State of Wisconsin

14. Manufacturing Cluster Strategy Recommendations Strategy 1– Sustain and Diversify Existing Manufacturing Base • Tactic 1C: Establish working relationships with existing and potential Foreign Direct Investment partners in the region. • Rationale: Several regional companies have foreign ownership and investment. The great majority of foreign ownership and investment is in the manufacturing sector. On average, these companies experience higher levels of investment, higher rates of growth as well as higher average wages. The U.S. and North American market is growing at a higher rate than Europe, the work force is more adaptable and the labor costs are more competitive than in Europe. As a result, foreign direct investment is growing in the U.S. and in the region. • Key Challenges: Developing personal and institutional relationships with potential partners will require time allocation and ongoing commitment of senior management to be effective. • Action Steps: • Convene group of senior management from regional operations of foreign owned companies to develop a better understanding of opportunities to work with them and their foreign counterparts to encourage additional regional investment and the development of regional supply chains. • Establish regional partnerships with the Wisconsin Economic Development Corporation (WEDC) to deliver services, resources and reporting of national and Statewide FDI trends to area manufacturers interested in FDI. • Work with UWO to establish a research resource center that can assist regional companies and industries with the identification of potential international partnering opportunities • Timeline: 12 – 24 months

15. 25% of Wisconsin’s foreign-owned operations Represents approximately 20,000 total employees Majority in the manufacturing industry Top countries by number of operations: Canada 40 Germany 19 Finland & UK 9 Italy 6 Brazil & France 5 International Assets Northeast Wisconsin Foreign-Owned Operations Source: Wisconsin Department of Commerce, Wisconsin Department of Workforce Development

16. Foreign-Owned Firms in Winnebago County

17. Manufacturing Cluster Strategy Recommendations Strategy 1 – Sustain and Diversify Existing Manufacturing Base • Tactic 1D: Establish Regional Supply Chain Council to address current relationships and potential opportunities to further integrate the regional supply chain. • Rationale: The regions manufacturing base is well established and the associated supply chain is strong. It is important to recognize cyclical demands for goods and the affect those cycles have on the regions supply chain. Further integration and diversification of the supply chain can provide additional stability to the region through these cyclical periods. • Key Challenges: Manufacturers have existing relationships that have developed over time and are made up of regional, national and international business partners. All opportunities need to be based on superior business value that can be delivered by new or additional partner suppliers. • Action Steps: • Convene group of operations, purchasing and logistics managers from the regions largest manufacturers to discuss the status of the regional supply chain and what current and future needs and opportunities might exist to further the integration of the regional supply chain. • Establish regional partnerships with Wisconsin Manufacturing Extension Partnership (WMEP) and the Wisconsin Economic Development Corporation (WEDC) to deliver services and resources to area suppliers. • Work with FVTC to monitor required skills and certifications that may be required to allow suppliers to expand and diversify their products and capabilities to meet large manufacturers competitive needs. • Timeline: 12 – 24 months

18. Manufacturing Cluster Strategy Recommendations Strategy 1 – Sustain and Diversify Existing Manufacturing Base • Tactic 1E: Establish Regional Association of Professional, Scientific and Technical Service providers to address current and evolving opportunities to serve the regional and national market. • Rationale: The nature of manufacturing project management and staffing continues to evolve, with more project based, outside contracting for product development and process improvements. At the same time, more experienced engineers, managers and others are leaving the workforce to start new businesses that provide niche expertise through consulting contracts. • Key Challenges: Professional, Scientific and Technical firms vary in size, age, focus and capabilities. There are also diverse and varied opportunities to match capabilities with regional and national market needs. • Action Steps: • Convene group of regional Professional, Scientific and Technical Service providers to discuss the range of project types they are currently involved in and potential areas of networking, mentoring and partnering to develop business opportunities for the group and its members. • Establish partnership with UWO and the Business Success Center to help convene this group and provide ongoing training and trending information with the group. The group may also drive the development of additional curriculum specifically geared to the nature and needs of this group within the region. • Work with FVTC to monitor required skills and certifications that may be required to support the technical and project needs of specialized, growth oriented consulting firms. • Timeline: 6 – 12 months

19. Manufacturing Cluster Strategy Recommendations Strategy 1 – Sustain and Diversify Existing Manufacturing Base • Tactic 1F: NEW ERA – Cooperative Engineering Programs • Rationale: The nature of manufacturing continues to evolve with more rapid and diverse product development and delivery models responding to dynamic changes in customer needs and demands, and the competitive environment. These changes are driving the demand for design and engineering staff that often need to be recruited from outside of the region. Having regional programs that can develop the engineering and technical talent required can benefit employers and the regional economy. • Key Challenges: There are no current 4 year engineering degree programs that are resident within the NEW region. UW Madison, UW Milwaukee, Milwaukee School of Engineering, Marquette, UW Platteville and UW Stout offer programs, but proximity to the region is a challenge. The recent partnership to deliver engineering classes through UW Platteville at the UW Fox Valley campus in Menasha is a positive step, but additional capacity is needed to serve the region. • Action Steps: • Work with NEW ERA and regional manufacturers to document needs and opportunities for the growing engineering demands in the region. Continue the pursuit and development of local delivery of engineering programs to serve the needs of part and full time students. • Work in partnership with UWO and UW Fox Valley to staff the efforts of this group and provide ongoing facilitation of the group. The group may also drive the development of additional curriculum specifically geared to the nature and needs of regional employers. • Work with regional employers to develop cooperative recruiting efforts with current Wisconsin engineering programs and other Midwest universities in the recruitment of full time hires and interns. • Timeline: 12 – 24 months

20. Manufacturing Cluster Strategy Recommendations Strategy 1 – Sustain and Diversify Existing Manufacturing Base • Tactic 1G: Pursue Development of Regional Sustainability Council • Rationale: Energy costs in all sectors is an important component of overall costs. Manufacturing continues to require higher levels of energy input than other sectors. As companies strive to be cost competitive, good stewards of the environment, and meet the expectations of environmentally minded customers, they are searching for cost effective ways to manage their energy inputs, waste streams and overall environmental impacts. These trends are affecting both the supply and demand sides of Sustainability projects and service providers. • Key Challenges: There are diverse and expanding resources available to assist companies in the assessment and installation of sustainable options and their implementation. New technologies and opportunities are developing rapidly. Matching appropriate solutions in a timely manner can be difficult to achieve. • Action Steps: • Work in partnership with UWO and the NEW ERA Sustainability Task Force inventory and communicate the focus and achievements of campus sustainability projects. Build on the University’s brand as a regional institutional leader and partner in the UWO Biodigester. • Support and disseminate information about the public-private biodigester pilot programs and bio-plastics research projects. Position area as a leader in field. • Work with Wisconsin Public Service Corporation (WPS) and regional manufacturers to document needs and opportunities for energy conservation that can positively impact companies and WPS load demands and assets. • Establish Regional Sustainability Council to provide private sector input regarding regional opportunities on the supply and demand sides of Sustainability. • Timeline: 6 – 12 months