©2009 ViTAL Economy, Inc. 1 TDL Cluster Wednesday, March 25, 2009 12:00am-2:00pm Wheeler Creek Grain, McLeansboro ViTAL Economy Alliance Steve Martin-

©2009 ViTAL Economy, Inc.— 1 —

TDL ClusterWednesday, March 25, 2009

12:00am-2:00pmWheeler Creek Grain, McLeansboro

ViTAL Economy Alliance Steve Martin- [email protected] Rob Beynon – [email protected]

Industry Cluster Opportunity Analysis

Second Cluster Meeting


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


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

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

Why….? Connect SI Vision and Goals


Stage #1: 60 Day Workplan – Where We Are

COMPLETED

STARTED

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


Energy Industry Cluster Team Schedule

Cluster Work Plan Jan Feb Mar Apr May June July Aug

Stage 1: Formation x x x

Cluster Kickoff Event with VE x

Market-Segmentation, Attractiveness

Identify Niche Markets

Interim Conference Call x

Hypotheses Testing

2-3 Hour Update Meeting with VE x

Review Primary and Secondary Research

Stage 2: Recognize-Research x x x

Identify Trends and Opportunities


Refine Niche Market Opportunities

2-3 Hour Update Meeting with VE x

Identify Connectivity Requirements

Stage 3 :Report x x x x

Complete Competitive Analysis


Issue Cluster Report x


Cluster VisionWhat is our goal? Jobs? Economic Impact?


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


Additional Preliminary ResearchWhat regional indigenous resources will we leverage?


General Aviation Fleet Growth

0

50,000

100,000

150,000

200,000

250,000

300,000

2000 2005 2010 2015 2020 2025

Fiscal Year

No

. O

f A

ircra

ft

Piston Turbine Exp, LSA, Oth

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


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


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


TDL Cluster

ViTAL Economy Alliance Steve MartinRob Beynon

Industry Cluster Value Chain Mapping


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

Determine market segmentation for each niche market

Identify niche markets and hypotheses for each initial industry

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

Cluster team inventory of indigenous resources supporting niche markets

Cluster Team conduct regional industry cluster mapping

Determine top two industry clusters to be opportunity analyzed

List the key questions that need to be answered for each hypotheses

Return and identify other

niche markets if current are not

feasible



feasible

Develop strategic and implementation strategy

ViTAL Economy Industry Cluster Opportunity Analysis

Prioritize niche markets for continued primary and secondary research

Start

Cluster Analysis Milestones

• Milestone #1

• Milestone #2

• Milestone #3

• Milestone #5 & #6


Regional Niche Markets:Hypotheses from the 1st Meeting and Call

Niches Hypotheses Hypotheses Hypotheses

Containers on barges

SI has river systems, Ports of Entry, Trucking, & Rail support infrastructure

Central Location of SI is a competitive advantage

Aircraft mftg and maintenance

There is a market for import of Light Sport Aircraft and value added support services

SI has excess Airport system unused capacity

SI has skilled workforce (marketing, sales and support services) for this market

Distribution center

SI is served by three Class 1 rail lines

There is demand for unit train breakdown, and the rail-lines are interested in unit train breakdown

Readiness Assessment Identified Markets• Green Technologies

• Mining Technologies

• Clean Coal

• Bio-fuels


Niches Hypotheses Hypotheses Hypotheses

Distribution Centers

SI is in a Mid West distribution sweet spot geographically

National companies have already setup or expressed interest in setting up DCs

Barge / COB Energy costs pushing transportation towards marine and rail

Containerization is growing rapidly in North America

The Mississippi and Ohio River systems are ideal to support river traffic

Shortline Rail Industry is requesting improved rail access in SI

Specialty Aviation

Specialty aviation is a growth market

Many aviation firms have developed at regional airports

Readiness Assessment Identified Markets• Distribution Centers

• Specialty Aviation

• Barge/ COB

Regional Niche Markets:Initial Research Completed


Industry clusters and market sub-segments with an indigenous competitive advantage are identified through the asset mapping and research process

PEOPLE

TECHNOLOGY

INFRASTRUCTURE

LOCATION

NATURALRESOURCES

INDIGENOUSASSET MAPPING

FOCUSES

PRELIMINARY CLUSTER

LIST

PRIORITIZEDCLUSTER AND

MARKET SEGEMENT LIST

ASSET MAPPING PROCESS

PRELIMINARY CLUSTER LIST

SCREENED AGAINST INDIGENOUS ASSETS


Inbound Logistics

Operations Outbound Logistics

Marketing & Sales

Service

Company Presence Special

Infrastructure

Skilled Workers R&D/Innovation

Step #1 – Identify each element of the industry value chainStep #2 – Identify whether the element exists in the study region

Discover the SI TDL Value Chain Elements

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 associated with getting buyers to purchase the products; channel selection, advertising, pricing

Activities that enhance the products value including customer service and repair services

Value creating activities that transform inputs into final products


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 associated with getting buyers to purchase the products; channel selection, advertising, pricing

Activities that enhance the products value including customer service and repair services

Value creating activities that transform inputs into final products

Microsoft Office Excel 97-2003 Worksheet


BREAK TIME


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

Determine market segmentation for each niche market

Identify niche markets and hypotheses for each initial industry

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

Cluster team inventory of indigenous resources supporting niche markets

Cluster Team conduct regional industry cluster mapping

Determine top two industry clusters to be opportunity analyzed

List the key questions that need to be answered for each hypotheses



feasible



feasible

Develop strategic and implementation strategy

ViTAL Economy Industry Cluster Opportunity Analysis

Prioritize niche markets for continued primary and secondary research

Start

Cluster Analysis Milestones

• Milestone #1

• Milestone #2

• Milestone #3

• Milestone #5 & #6


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:


Prioritized Niche Market Teams

Niche Market Action Team

Team Name:

Who Will Help:

Niche Market Action Team

Team Name:

Who Will Help:


Observations


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


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


Cluster Recruitment Plan

• Next Steps


WorkplanWhat are we doing next?


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:


Next Steps


ViTAL Economy Alliance Steve Martin- [email protected] Rob Beynon – [email protected]

Industry Cluster Opportunity Analysis

Second Cluster Meeting

TDL ClusterBackup Slides


Industry Cluster Team Guiding Principles

1. Industry cluster leadership and participation are key to generating outcomes

2. Work plan discipline, completing all elements of each phase, is key to achieving success

3. Trust and respect is required between companies and individuals

4. Collaboration is recognized as a key to achieving regional goals

5. 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

The Vital Economy Industry Cluster approach achieves measurable results through the recognition

and endorsement of key principles


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


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


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


START 3 MONTHS 5 MONTHS 8 MONTHS

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


ImplementationInstitutionalize


Framework…Structured Fact-Based Analysis

1. Structured framework utilizes fact-based hypotheses• Followed by fact information gathering and analysis

• To prove or disprove the hypothesis

2. Defines the “boundaries” of an issue and breaks it down

into component parts

3. 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.

The VE approach uncovers opportunities for the industry clusters in SI.

It does not apply a “generic silver bullet” method typical of other processes.


Framework….Hypothesis Testing

1. A set of propositions based on facts already at hand, and intuition to

address issues, challenges, and industry and economic trends.

2. Propositions will be prioritized and evaluated through questions,

research and Quick and Dirty Testing (QDT)

“Not everything that can be counted counts and noteverything that counts can be counted.” Albert Einstein

“Not everything that can be counted counts and noteverything 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.

Documents

©2009 ViTAL Economy, Inc. 1 TDL Cluster Wednesday, March 25, 2009 12:00am-2:00pm Wheeler Creek Grain, McLeansboro ViTAL Economy Alliance Steve Martin-