TDL Cluster Wednesday, March 25, 2009 12:00am-2:00pm Wheeler Creek Grain, McLeansboro

1. Industry Cluster Opportunity Analysis Second Cluster Meeting TDL Cluster Wednesday, March 25, 2009 12:00am-2:00pm Wheeler Creek Grain, McLeansboro ViTAL Economy Alliance Steve Martin- steve_martin@intervistas.us Rob Beynon – rob_beynon@intervistas.com

2. Industry Cluster Second Workshop Agenda Step One – Getting to A Vision 5 Min.–Welcome & Introductions 5 Min. – 60 Day Work Plan Review 10 Min.–Draft Cluster Vision Statement 10 Min. –Preliminary Cluster Research and the Interim Call 40 Min. – Indigenous Resources to Leverage 7 Min. – BREAK Step Two - Action 20 Min.–Niche Market Prioritization 10 Min. – Cluster Recruitment Plan and Contact Assignments 10 Min. – One Month Cluster Team Work Plan 5 Min. – Next Meeting

3. Why….? Connect SI Vision and Goals Southern Illinois will: • Be the fastest growing economic region in Illinois • Be the regional gateway: • From America’s Heartland to the global economy • From the global economy to America’s Heartland • Be named a national and regional model for collaborative, regional rural economic transformation • Achieve a positive balance between livability & sustainable growth

4. Stage #1: 60 Day Workplan – Where We Are Industry Cluster Team Determine core cluster leadership team Draft cluster vision statement Complete cluster participant recruitment plan Conduct recruitment calls List indigenous resources leveraged – each niche market Link resources to hypothesis to be tested SLIDE 29 Begin list of key regional, national industry interviews Refine niche market focus Research Team Market attractiveness research – each niche Size Growth rates Business trends Political, economic & business data Expanded value chain mapping Niche market Demand trends Supply trends Regulatory and political trends Conduct hypotheses testing Conduct preliminary industry interviews Refine niche market focus Prepare for interim conference call COMPLETED STARTED

5. Energy Industry Cluster Team Schedule

6. Cluster VisionWhat is our goal? Jobs? Economic Impact?

7. Draft Cluster Mission The mission of the SI TDL Industry Cluster Team is to support the achievement of the overall Connect SI 2012 goals which include 1,675 transportation sector jobs in SI region

8. Additional Preliminary ResearchWhat regional indigenous resources will we leverage?

9. General Aviation Fleet Growth Actual Forecast 2007-25 Avg. Annual Growth Piston: 0.5% Turbine: 3.7% Exp, LSA, Oth: 3.0% General Aviation includes essentially all non scheduled, civilian aircraft

10. New Technology Creating New Opportunities • General Aviation and Business Aviation are growing • New markets and technology such as light weight jets, micro jets, fractional ownership, and jet chartering creating new opportunities Eclipse is a small Albuquerque, NM based company

11. General Aviation Aircraft Sales Are Up • Pre Recession • GA aircraft sales were up • Demand for private aircraft services was up • Recession has slowed demand • But sales are projected to return to trend Source: AOPA Long-term projections for aircraft sales are projected to return to trend

12. Industry Cluster Value Chain Mapping TDL Cluster ViTAL Economy Alliance Steve Martin Rob Beynon

13. Start ViTAL Economy Industry Cluster Opportunity Analysis Determine top two industry clusters to be opportunity analyzed • Cluster Analysis Milestones • Milestone #1 • Milestone #2 • Milestone #3 • Milestone #5 & #6 • 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 Identify niche markets and hypotheses for each initial industry List the key questions that need to be answered for each hypotheses Determine market segmentation for each niche market Cluster team inventory of indigenous resources supporting niche markets Prioritize niche markets for continued primary and secondary research Cluster Team conduct regional industry cluster mapping Return and identify other niche markets if current are not feasible • 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 Develop strategic and implementation strategy

14. Regional Niche Markets:Hypotheses from the 1st Meeting and Call TDL • Readiness Assessment Identified Markets • Green Technologies • Mining Technologies • Clean Coal • Bio-fuels

15. Regional Niche Markets:Initial Research Completed TDL • Readiness Assessment Identified Markets • Distribution Centers • Specialty Aviation • Barge/ COB

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

17. Inbound Logistics Operations Outbound Logistics Marketing & Sales Service Receiving Warehousing Inventory Control Input Materials Activities required to get the final products to the customer; warehousing, order fulfillment Activities that enhance the products value including customer service and repair services Value creating activities that transform inputs into final products Activities associated with getting buyers to purchase the products; channel selection, advertising, pricing Discover the SI TDL Value Chain Elements Step #1 – Identify each element of the industry value chain Step #2 – Identify whether the element exists in the study region 

18. Identify the SI industry cluster components Inbound Logistics Operations Outbound Logistics Marketing & Sales Service Receiving Warehousing Inventory Control Input Materials Activities required to get the final products to the customer; warehousing, order fulfillment Activities that enhance the products value including customer service and repair services Value creating activities that transform inputs into final products Activities associated with getting buyers to purchase the products; channel selection, advertising, pricing

19. BREAK TIME

20. Start ViTAL Economy Industry Cluster Opportunity Analysis Determine top two industry clusters to be opportunity analyzed • Cluster Analysis Milestones • Milestone #1 • Milestone #2 • Milestone #3 • Milestone #5 & #6 • 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 Identify niche markets and hypotheses for each initial industry List the key questions that need to be answered for each hypotheses Determine market segmentation for each niche market Cluster team inventory of indigenous resources supporting niche markets Prioritize niche markets for continued primary and secondary research Cluster Team conduct regional industry cluster mapping Return and identify other niche markets if current are not feasible • 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 Develop strategic and implementation strategy

21. Prioritizing Niche Markets: Group QDT Opportunity Thumb Nail Description Name: Relevant Indigenous Resources: Market Opportunity Served: How It Addresses Connect SI Goals: Opportunity Thumb Nail Description Name: Relevant Indigenous Resources: Market Opportunity Served: How It Addresses Connect SI Goals:

22. Prioritized Niche Market Teams Niche Market Action Team Team Name: Who Will Help: Niche Market Action Team Team Name: Who Will Help:

23. Observations

24. Cluster Recruitment PlanHow Are We Going to Get the Right People Here?

25. 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 Team Research Team

26. Cluster Recruitment Plan • Next Steps

27. WorkplanWhat are we doing next?

28. Stage #1 Work Plans Next 60 days Industry Cluster Team Determine core cluster leadership team Draft cluster vision statement Complete cluster participant recruitment plan Conduct recruitment calls List indigenous resources leveraged – each niche market Link resources to hypothesis to be tested SLIDE 29 Begin list of key regional, national industry interviews Refine niche market focus Research Team Market attractiveness research – each niche Size Growth rates Business trends Political, economic & business data Expanded value chain mapping Niche market Demand trends Supply trends Regulatory and political trends Conduct hypotheses testing Conduct preliminary industry interviews Refine niche market focus Prepare for interim conference call Interim Conference Call - Date: Time: Month #3 Meeting - Date: March ? Time: Location:

29. Next Steps

30. Industry Cluster Opportunity Analysis Second Cluster Meeting TDL Cluster Backup Slides ViTAL Economy Alliance Steve Martin- steve_martin@intervistas.us Rob Beynon – rob_beynon@intervistas.com

31. Industry Cluster Team Guiding Principles Industry cluster leadership and participation are key to generating outcomes Work plan discipline, completing all elements of each phase, is key to achieving success Trust and respect is required between companies and individuals Collaboration is recognized as a key to achieving regional goals Uncovered opportunities will have action teams assigned with leadership immediately The Vital Economy Industry Cluster approach achieves measurable results through the recognition and endorsement of key principles

32. 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

33. 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

34. Industry Cluster Roadmap Stage #1 – Formation Establish broad-based core leadership team Define the industry cluster, geographic boundary, and niche or sector identification. Invite and recruitment of key cluster participants What will keep a participant at the table for 18 months? Define industry cluster team vision Pursue short term wins Stage #2 – Recognize & Research Begin industry cluster mapping Be on the lookout for linkage opportunities Map the industry cluster indigenous resources Determine economic value of the industry Identification of workforce development needs Industry cluster gap assessment Global and national industry research exchange Pursue short term wins START 3 MONTHS 5 MONTHS 8 MONTHS Implementation Institutionalize Stage #1 Stage #2 Stage #3 Report • Stage #3 – Report • Global and national industry research exchange • Analysis and apply new information into the industry economy • Benchmarking the industry cluster • Delivery of Industry Cluster report • Pursue short term wins

35. Framework…Structured Fact-Based Analysis Structured framework utilizes fact-based hypotheses Followed by fact information gathering and analysis To prove or disprove the hypothesis Defines the “boundaries” of an issue and breaks it down into component parts 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.

36. Framework….Hypothesis Testing A set of propositions based on facts already at hand, and intuition to address issues, challenges, and industry and economic trends. Propositions will be prioritized and evaluated through questions, research and Quick and Dirty Testing (QDT) “Not everything that can be counted counts and not everything that counts can be counted.”Albert Einstein Today, you as the core cluster team members will define the key initiatives of this cluster team as you determine the critical questions (hypotheses) for the research team to analyze.