State of the Region 2007 Presenting Sponsors

1. State of the Region 2007 Presenting Sponsors Associate Sponsors

2. State of the Region 2007 Presented by Welcome!

3. State of the Region 2007 Presented by John Cox, CCE, CEcD President and CEO Cabarrus Regional Chamber & Economic Development

4. State of the Region 2007 Presented by John Silvia, Ph. D. Managing Director, Chief Economist Wachovia Corporation

5. State of the Region 2007 Presented by Mac Holladay Founder & CEO – Market Street Services Atlanta, Georgia

6. State of the Region SummitCabarrus Regional Chamber Presented by J. Mac Holladay, CEO November 13, 2007

7. Agenda • Current Economic Trends and Realities • North Carolina Research Campus: Review of SWOT Analysis and Economic Impact Analysis Findings • Small Business & Entrepreneurial Development Action Plan (Cabarrus and Rowan Counties) • Cabarrus Regional Chamber: Strategic Plan

8. Current Economic Trends & Realities

9. Recent Headlines “Fresh Credit Worries Grip Market” Wall Street Journal November 2, 2007 “Crippling oil price spike is a clear and present danger” The Kiplinger Letter November 2, 2007 “Winter Heating Crisis Looms” Wall Street Journal November 5, 2007 “On Guard Against Recession” James C. Cooper Business Week November 12, 2007

10. The Changing Structure of the Economy • Fundamental changes in the U.S. economy are ongoing • Until mid-2001, the U.S. experienced the strongest growth and development in history– record lows in unemployment and record growth in per capita income • Fortune 500 companies made up 26% of nonagricultural workforce 30 years ago, and those firms have lost over 12 million jobs • In the 1990s, medium and small companies accounted for all of the net job growth across the country

11. Exxon Mobil General Motors Texaco Chevron Ford Motor Amoco IBM Gulf Oil Atlantic Richfield General Electric DuPont Shell Oil ITT Industries ConocoPhillips Tenneco Automotive Sunoco Occidental Petroleum U.S. Steel United Technologies BP America AT&T Technologies Getty Oil Dow Chemical Procter & Gamble 1982 Fortune 500: Top 25

12. Wal-Mart Stores Exxon Mobil General Motors Chevron ConocoPhillips General Electric Ford Motor Citigroup Bank of America Corp. American International Group J.P. Morgan Chase & Co. Berkshire Hathaway Verizon Communications Hewlett-Packard IBM Valero Energy Home Depot McKesson Cardinal Health Morgan Stanley UnitedHealth Group Merrill Lynch Altria Group Goldman Sachs Group Proctor & Gamble 2007 Fortune 500: Top 25

13. 2007 Finance/Insurance 10 Manufacturing 5 Energy 4 Retail 2 Health 2 Communications 1 Technology services 1 Fortune 500: Top 25 by Sector 1982 Manufacturing 11 Energy 13 Communications 1

14. The New and Old Economies Issue Markets Scope of competition Organizational form Production system Key factor of production Key technology driver Competitive advantage Relations between firms Skills Workforce Nature of employment Old Stable National Hierarchical Mass production Capital/labor Mechanization Economies of scale Go it alone Job-specific Organization Man Secure New Dynamic Global Networked Flexible production Innovation/ideas Digitization Innovation/quality Collaborative Broad and changing “Intrapreneur” Risky Source: 2007 State New Economy Index, March 2007

15. “Creative Destruction” “A market economy will incessantly revitalize itself from within by scrapping old and failing businesses and then reallocating resources to newer more productive ones.” Alan Greenspan The Age of Turbulence October 2007 • Commenting on Harvard Economist Joseph Schumpeter’s term “Creative Destruction” (1942).

16. What I See – November 2007 “We muddle along. There is an equilibrium or balance here to the labor market, but at a fairly slow trend in terms of employment growth…we’re avoiding a recession by the skin of our teeth.” John Silva Chief Economist Wachovia National Bank USA Today November 5, 2007

17. The South Net Job Change in the South January 2001 to December 2006 Source: Bureau of Labor Statistics

18. The South Net Job Change in the South January to December 2006 Source: Bureau of Labor Statistics

19. The South Net Job Change in the South January to August 2007 Source: Bureau of Labor Statistics

20. The South Decline of Manufacturing January 2001 to December 2006 Source: Bureau of Labor Statistics

21. The South Decline of Manufacturing January to December 2006 Source: Bureau of Labor Statistics

22. The South Decline of Manufacturing January to August 2007 Source: Bureau of Labor Statistics

23. Cabarrus County - Community Context • Continued economic transition is being accelerated by these impacts: • Development of Research Campus • Outward growth of the Charlotte metro area • Strength of motorsports and tourism sectors

24. Major News – Cabarrus County, 2007 • NorthEast Medical Center merger with Carolinas HealthCare System • Closing of Philip Morris – 2500 jobs • Windstream buyout of CT Communications – 150 jobs • Great Wolf Lodge waterpark/resort opening in Concord • Threat of Speedway relocation • Moving ahead with Research Campus • $35M M.U.R.D.O.C.K. study through Duke • County & City of Kannapolis agreement on TIF bonds • Research Campus new tenants – Red Hat, Biomarker Group, etc.

25. North Carolina Research Campus: Review of SWOT Analysis and Economic Impact Analysis Findings

26. Total Cumulative Job Impacts – By County

27. Additional Population Estimated - 2032

28. Total Population, Household, and Job Impacts by 2032

29. Key Strengths & Opportunities • Proximity to Charlotte • Opportunity to capture some of natural growth • Proactive public communication • Need to continue this – multiple audiences • Strong, coordinated regional support for entrepreneurship • Develop local connections • Organizations need to understand the way biotech works • State support for biotechnology • Continue strengthening connections, tap into knowledge • Organizations in Charlotte area working well together to prepare for NCRC • Keep going!

30. The Need to Plan & Take Action • Research Campus is unique project, enormous opportunity • Can transform the local community & economy • BUT, potential economic impacts will not just happen • Need targeted investments, proactive planning and marketing, and a welcoming attitude • Competition for biotech is tough, other cities are far ahead • Lots of choices for biotech workers and businesses • Community, region, & state need to be aggressive, define & market competitive advantages • Community can’t afford “wait & see” approach • Reactive response will be too late

31. PRIORITY Issues to Address • #1: Improving K-12 education • Improve performance, expand gifted programs, link biotech • #2: Preparing the workforce • Identify skills/positions needed, communicate opportunities, create training programs • #3: Expanding amenities & improving government services • “Catch up” on QOL factors • #4: Promoting smart growth & creating a sense of place • Mix of housing, multiple modes of transportation, land use, aesthetics • #5: Embracing diversity • Promote a welcoming community

32. Summary of Issues

33. Next Steps Three priority areas of work need strong community involvement and action plans. • Workforce development and education • Status: Seeking funding to develop plan • Small business and entrepreneurship • Status: Action Plan recently completed • Quality of life/Growth management • Status: Delayed Investments to make the economic potential become reality.

34. Small Business & Entrepreneurial Development Action Plan (Cabarrus and Rowan Counties)

35. Project Background • SWOT Analysis key issues: • Developing entrepreneurial culture • Supporting small business development • Small Business & Entrepreneurial Development Action Plan • Entrepreneur System Assessment • Action Plan

36. Strengths Collaboration among some service providers Wide range of education & training options available Technical assistance available regionally & locally Bank loans are available Chambers are valuable networking resources Weaknesses Expand collaboration beyond a select group of service providers Limited awareness of available resources Reactive rather than proactive approach to contacting entrepreneurs Review of Assessment Summary –Strengths & Weaknesses

37. Opportunities K-12 entrepreneur education Awareness campaign about available resources Additional access to capital Network for high-growth entrepreneurs Proactive contact with NCRC tenants “Go-to” resource and/or physical presence/facility at NCRC Become regional leader for entrepreneurship Threats Historical climate (risk-averse, mill-town mentality, wary social attitude) makes it hard to establish entrepreneurial culture If growth management not done well, then risk of overburdening infrastructure and losing potential businesses and workers/residents Need to address workforce development of current residents and talent attraction Review of Assessment Summary – Opportunities & Threats

38. Action PlanPart 1: Create a Systematic Approach • Create the Cabarrus-Rowan Area Entrepreneurial Council to provide a more systematic, centralized public face of Cabarrus-Rowan’s commitment to entrepreneurs and small businesses • The Council will serve the following 6 focus areas: • Assistance – Provide answers and referrals • Education – Refer entrepreneurs to available instruction • Capital Formation – Facilitate access to capital • Networking – Strengthen networks and mentoring relationships • Youth – Build a pipeline of entrepreneurial talent • Culture – Foster an environment that values entrepreneurship

39. Part 2: Reorganize around 6 focus areasAssistance – Provide answers and referrals • Offer basic technical advice and a comprehensive list of helpful referrals • Maintain a comprehensive service provider, regulatory office, and available capital resource guide • On the Council’s website, maintain a step-by-step, interactive web-based “how to” guide about starting a business in Cabarrus or Rowan County • Host quarterly networking meetings for local and regional service providers.

40. Part 2: Reorganize around 6 focus areasEducation – Refer entrepreneurs to available instruction • Refer entrepreneurs to available instruction • Assemble and staff an education partners’ task force dedicated to filling gaps and resolving unnecessary overlaps in available instruction • Offer equipment for entrepreneurs to view video, online, or other “on-demand” training services

41. Part 2: Reorganize around 6 focus areasCapital Formation – Facilitate access to capital • Refer entrepreneurs to available capital resources • As local demand supports, pursue feasible means of creating a local angel investors network, revolving loan fund, and seed capital fund • Begin generating support for the creation of a locally-based angel investors network for Cabarrus-Rowan area high-growth entrepreneurs. • Determine an entity to offer a revolving loan fund for Cabarrus-Rowan area lifestyle entrepreneurs. • Consider also establishing a local seed-capital fund for Cabarrus-Rowan area start-ups with the potential to become high-growth entrepreneurs.

42. Part 2: Reorganize around 6 focus areasNetworking – Strengthen networks and mentoring relationships • Create a comprehensive peer-based mentoring program • Focus on getting mentors who are experienced entrepreneurs, and representative of different business sectors • Coordinate a high-growth networking group • Identify entrepreneurs already affiliated with the NCRC who can help organize this • Refer lifestyle entrepreneurs and small business owners to the networking opportunities at the Cabarrus Regional Chamber, Rowan Chamber, and other area providers

43. Part 2: Reorganize around 6 focus areasYouth – Build a pipeline of entrepreneurial talent • Advocate for area schools and non-profit agencies serving area youth to offer entrepreneurial education programs at the elementary, middle, and high school levels • Include both classroom-based and after-school/summer activity focused programming • Determine the best means of creating more comprehensive entrepreneur educational programs for Cabarrus-Rowan’s youth • Convene a “Youth Entrepreneurship Conference” • Involve businesses in program design/offerings • Develop a Cabarrus-Rowan Area High School Business Plan Competition

44. Part 2: Reorganize around 6 focus areasCulture – Foster an environment that values entrepreneurship • Raise awareness about available services and capital support • Demonstrate that Cabarrus-Rowan is an entrepreneur-friendly community • Support opportunities to hire and elect qualified leaders with experience in entrepreneurship • Maintain awareness of business climate concerns, and work with business and government partners to advocate for improvements

45. Implementation Considerations: Council OrganizationCoordinated Timeline & Milestones

46. Action Plan – Implementation Status • Cabarrus Regional Chamber/EDC, Rowan-Cabarrus Community College, SBTDC staff have been working together to plan next steps • Need to: • Identify/convince key champions • Develop message to sell • Start talking to local governments, other partners

47. Cabarrus Regional Chamber: Strategic Plan

48. Project Overview

49. SWOT Analysis - Strengths • Proactive and aggressive • Community leadership, business advocacy, public policy • Communicating information • Leadership development of members • Quality of staff • Ability of Chamber, CVB, and EDC to work together

50. SWOT Analysis - Weaknesses • Staff capacity/size • #2 person, governmental affairs, workforce development & education, membership/marketing • More effectively use Chamber Foundation • Increase revenue • Expand program offerings • Education & workforce development • Minority & women-owned business development • Specific networking groups – young professionals, biotech • Formalized government affairs programs • Expansion of Leadership Cabarrus • Member services – lead generation, member-to-member mentoring • Awareness of international trade issues & opportunities • Stronger impact on public policy