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Southeastern Vermont Economic Development Strategies(SeVEDS)Woodford MeetingJune 14, 2012www.seveds.com1SeVEDS History and MakeupStarted over four years ago as a small group of people from across the region looking to improve broadband and cell service

After many meetings it became painfully clear that the regions problem wasnt lack of broadband, it was lack of economic development

Understanding we couldnt go it alone, professional assistance was sought from Fairpoint Communication and their contractor Vital EconomiesOver the past 1 years the SeVEDS organization has solidified. With a Board of Directors, an Executive Committee Chaired by Bob Stevens.The Board is comprised of individuals from the private and public sector 2Theory and PracticeEconomic Development Theory and Practice has changed from a focus on company recruitment to a focus on asset-based community driven processIn practice this means a change from relying on professional practitioners (marketing and sales people) to building community based interestThe effect is that effort goes into educating people about facts and developing strategies compatible with community valuesPractical EffectsStrengths:Economic activity consistent with local valuesCompanies that share local scale and goalsGrowth that builds on existing strengths of workforce and infrastructureVulnerabilitiesTakes time to grow commitment and knowledgeBuilding companies is slower than importing themTraining and attracting workforce is slower than drawing it in How long does it take?Windham started this process about five years agoSmall group reacting to two bad snow winters and to lack of broadbandChamber directorTown managerRegional planning directorTown planning directorInterested citizenRegional development corporation directorWhat are the steps?Confusion and uncertaintyWe tried to define our sense of urgency based on our feelings and the data we could identifyFrustratingly unsuccessful. We could not find the words or facts to tell the story we knew was thereLuck brought Vital Economy to our doorstep, but we were readyNecessary conditionsA group committed to achieve the goals of change and growthWillingness to admit we dont know how to do what has to be doneLeaders: people willing to take the risk to say to their peers, constituents, and the public that something has to be doneSufficient ConditionsLeaders secure in their positions and willing to take some risksA source of example, research, data and some moneyAn open field or opportunity to actSeVEDS Mission and VisionMission:SeVEDS exists to reverse the economic decline of our region.

Vision: Southeastern Vermont will have an economythat generates long-term growth and prosperity and that improves our quality of life and sustains our quality of place. 9Asset Based Economic DevelopmentA key asset is the group that builds the core team, and then the core team itselfSeVEDS Board isMajority private sectorMostly under 50Women strongly presentEnergeticCore team built around the key assetsquality of place and life, key businesses and employers, long term playersNot for AmateursEconomic Development is hard work built on continually refreshed dataCore team has to rely on others to do the data and execute programs to achieve goalsRequires a mature understanding of economic activityThe economy is not a matter of opinionFavorite industries are not solutionsRisk is endemic to the undertakingWhere are we nowSeVEDS has some budget resources and a dedicated staff personSeVEDS has strategies and working task forcesSeVEDS is seeking additional resources to drive forward on strategiesSeVEDS has credibilityGovernor proposing college campusesState proposing significant investment in the area to mitigate the potential closing of Vermont Yankee

Where do we go nextWe have to do the things we have pointed atWe have to continue to expand the social capital we have built in the Core TeamWe have to broaden the relationships we have with key businesses and institutions, like the state collegesWe have to resolve the relationship with our existing RDC, Brattleboro Development Credit Corporation

Questions and discussionIs it really bad?Is the region really in a decline?What is the data?

15WindhamVTMENHMAUSAverage wage $ 38,820 $ 40,940 $ 38,550 $ 43,720 $ 52,710 $ 43,460 2009 AVERAGE WAGEWe are just ahead of Maine in many measures16Notice how high this is17AgePopulationForecastProjected ChangeBrackets19902000201020151990-20151990-20150-19 11,620 11,522 9,220 8,213 -29.3%-3,407-8,32220-44 16,848 14,479 12,398 11,933 -29.2%-4,91545-64 7,726 12,042 14,349 13,483 74.5%5,7578,53865 + 5,394 6,173 6,889 8,175 51.6%2,781Total 41,588 44,216 42,856 41,804 Average Age34.64044.746.5Implications:By 2015, there could be a workforce shortage of roughly 8,000 +/-.Increased demand for elders service.Commuters will fill the gap or work will disappear.Climate of innovation will be more difficult to build and maintain.Vicious cycle of declining younger population is difficult to reverse.This trend can accelerate if not addressed.

Population ForecastSource: US Census Bureau / Decision Data Resources18Source: BEAImplication Analysis ofPopulation & Economic ChangeYear 2000 was a watershedMore small businesses, less income19Percent Contribution to Total Personal Compensation

Windham 1990

US 1990VT 1990

Windham 2000VT 2000US 2000

Windham 2009VT 2009US 2009

Increasing reliance on Transfer Payments as a percentage of Total Personal Compensation implies that fewer people are directly engaged and reliant upon the regional economy for their livelihood.Source: BEAWe are earning less of our living20

VT 2000US 2000Windham 2000US 2009VT 2009Windham 2009Percent Contribution to Total Personal CompensationDigging into the mix of sources of Total Personal Compensation we further find that the percentage of compensation that comes from the Private Sector compared to the Public Sector continues to decline in Windham County. This is moving in the opposite direction from the US and State metric.

This implies that there is a lack of economic risk taking behavior necessary to drive a vibrant innovative regional Economy.Source: BEA

Note the sizeable proportion of public sector jobs21We are highly educatedWe lag behind in Technical Skills TrainingSource: US Census Bureau2009 Educational Attainment of Region22Source: US Census Bureau2009 Median Earnings by Educational AttainmentMedian Earnings by Educational Attainment shows the dramatic impact of job loss on wages in SeVEDS. College grads earn 18% more in Cheshire County, NH and 23% more in Hampshire County, MA.23Source: BEA Vermont GDP Growth Continues to Lag National Growth RateGDP Under-performance is impacted by five key factors:DemographicsDeclining JobsLack of ImmigrationEducational AttainmentMiddle-Skill Workforce

Declining prime worker cohort in the 25-44 age group is directly related to declining jobs. This is further exacerbated by lack of immigration.

Educational Attainment and Workforce disconnects reduced the ability of the ability of the region to supply high-GDP growth, high demand middle-skill jobs.

24Source: US EDASeVEDS Innovation Climate

Windham CountyVermontNew HampshireUS = 100 Innovation Index components:Human Dynamics 30%Economic Dynamics 30%Productivity & Employment 30%Economic Well-Being 10%

Innovation Index demonstrate the need for SeVEDS to develop an effective innovation environment and strategy. This requires that SeVEDS capitalize on its indigenous assets, reverse demographic trends, develop the proper mix of workforce skills, and invest in an innovation ecosystem.25Source: BEASources of Income andA Vibrant Innovation EconomyRegions with a rich entrepreneurial business environments achieve long-term growth and regional economic prosperity. We evaluate three different measures as each provides a different insight in the regional economy:

High Average Non-Farm Proprietor Income is an indicator of the depth of EntrepreneurshipThe ratio of Net Earned Income to Total Personal Income is a measure of propensity for risk as it demonstrates the relative reliance on earned income as compared to transfer payments in the region.The ratio of Private Sector Employment to Public Sector employment is another measure of propensity for entrepreneurial activity in a region

The SeVEDS region scores lower in #1 and #2 but has a better ratio of private to public employment than average. The data confirms an anecdotal expectation of the higher score in #3 since the concentration of State Government employment in SE Vermont is low. 2009 DataWindham, VTHampshire, MA New EnglandUSAverage Non-Farm Proprietor Income $ 14,732 $ 19,550 $ 30,682 $ 27,898 Net Earned income to Total Income0.5660.6540.6590.645Private Employment to Total Employment0.8870.7750.8760.84326

Regional employment by sector and growthWe want regional industry sectors in this quadrant growing nationally and with a higher concentration of regional jobs For example: Information sector is growing nationally but we have a lower then average % concentration of regional jobs in this sector. 27Source: Growing Vermonts Next Generation Workforce, (April 2007), Next Generation ConsultingQuality of Life Perceptions versus RealityThe Growing Vermonts Next Generation Workforce report clearly demonstrates that there is a disconnect between the perception of Vermont Quality of Place values and peoples actions SeVEDS should develop Quality of Life goals based on NGC Values vs. Perception indicators.

This dissonance is significant28Low wages, a rising cost of living and limited job opportunities create a disconnect between the skills needed by employers and the skills held by the workforce. This leads to a widely shared sense of economic insecurity resulting in many Vermonters looking for economic opportunity elsewhere, and few choosing Vermont as a place to live and conduct business.

This data results in a Shared Sense of Urgency 29Now what?Identify 5 year goals Develop initial objectives and strategiesRegional review and input in processStart working on implementation and funding plans in process30Goals and MetricsGoals:End Population Decline 2009 = 42,605 est.669 new jobs @$ 43,833 and 446 new jobs @$39,848 (NNE Average Wage)Improvement of 4,464 jobs by $5,000/yr.$69M new wages $141M in new GDPReach Regional GDP of $2.8BIncrease Median Annual Income for Associates/Some College from $26,855 to $32,000 Increase Median Annual Income for Bachelors Degree from $32,518 to $39,000 Improve the Ratio of Net Earned Income to Total Income from .566 to .65 31Create Operational and Fiscal Sustainability Plan for SeVEDS by December 2011Increase the Size and Quality of the Workforce (1-8)

Objective 1. Create Operational and Fiscal Sustainability Plan for SeVEDS by December 2011Create Legal SeVEDS Entity Create Board of Directors Incorporate SeVEDS as a Non-Profit Affiliation Agreement with BDCC Outline multiyear budget and fundraising needsHire SeVEDS staff person to provide organizational and funder planning support. Prepare 3-year budget Develop and implement private fundraising campaign Develop and implement public fundraising campaign Develop Comprehensive Economic Development Strategy for submission to EDAComplete EDA Technical Assistance Grant Create Action teams to identify and support implementation of priorities and projects including VY closure, work force, redevelopment, and floodCreate CEDS plan33Objective 2: Increase the Size and Quality of the Workforce (1-8)Develop a Workforce Center of Excellence Collaborative between providers and users of workforce development services that identifies and connects existing workforce development assets, defines future workforce requirements and gaps by September 2012 Key Metric: Recommend Preferred Workforce Development Collaborative Plan by December 2012 Map workforce development assets and define gaps to be filledBuild strategic relationships between assetsDefine 3 to 5 Career Pathways that will meet the needs of the priority industries Identify workforce development Best Practices appropriate to the region Recommend Preferred Workforce Development Collaborative Plan by December 2012 34Objective 2: Increase the Size and Quality of the Workforce (1-8) continued Increase 20-44 age group employment by 20% in five years Key Metric: By January 2012 Define Top 3 5 Industry Clusters with the potential for increasing high-value jobs within the next five years By January 2012 Define Top 3 5 Industry Clusters with the potential for increasing high-value jobs within the next five years Create Action Teams in Q1-2012 around Clusters to identify Strengths (Assets), Weaknesses, Opportunities, Threats and value chain gapsPrioritize at least 2 Clusters for Opportunity Analysis Research that will Action 3.2.D define at least 2 Niche Markets per Cluster for implementation by October 2012 Develop Immigration Attraction Strategy by April 2012 focused on doubling the percentage of foreign born population in the region from 3.5% to 7% by 2016Develop a Highly Skilled Professionals recruitment and retention strategy 35Objective 2: Increase the Size and Quality of the Workforce (1-8) continued

Increase Associate Degrees/Some College and Technical Certificates Key Metric: 18-24 year old age bracket from 38% (1495 persons) to 47% (1884 persons) for net increase of 389 persons by 2016 18-24 year old age bracket from 38% (1495 persons) to 47% (1884 persons) for net increase of 389 persons by 2016 Identify Industry Sectors with critical skill needsWork with Secondary, Post-Secondary and Vermont State College System and the broader region to develop education programs to meet industry needs Partner with UMassIdentify public and private resources to support a sustainable implementation of workforce development plan 36Objective 3: Increase population proportion of 24-44 year-olds from 23% to 28% of total population by 2017 (1)KBE Strategy connecting the SeVEDS region to the NE Next Generation Knowledge Corridor

Develop a Livable Communities Strategy by 2014

Leverage Tourism and Second Homeowner Assets to attract 1,000 young families

Develop a coordinated regional marketing plan to promote SE Vermont as the best place to live, place, and work.

Action Plans for Objective 4 Strategies will be developed during Phase II

37Objective 4: Create an Entrepreneurial Environment (1-8)Define and implement an Innovation Ecosystem within 3 years In 2012, assess regional innovation and entrepreneurial climate based upon best practice criteria (Innovation Index): facilities, governance, business services, access to capital, business networks, culture, R&D capacities, etc. Convene an Action Team to use the Innovation Index for SeVEDS developed in 12.a to address complex regulatory and other concerns with State and Local jurisdictions. Assess business needs and set a goal to assist xx existing businesses and XX new or potential businesses each year. Create a Young Professionals Group (YPG) to support and attract 20-44 year old professionals and workers By Q4-2011 identify and evaluate strengths and weaknesses of existing young professional networks and social organizationsEngage a representative group of existing younger individuals (especially 18-35 yrs. old) in the community to assess interests and the role of young professions in the regions economic future As a result of Action 13b recommend a set of activities and actions to be adopted supporting both the YPG and entrepreneurial climate of the regions, such as: business seminars, speakers, business plan competitions, investment forums, social events, etc. 38Objective 4: Create an Entrepreneurial Environment (1-8)

Create a sustainable start up funding program by March 2013Define and implement a plan to benchmark and track new businesses looking for funding by December 2012Define and implement a plan to benchmark and track new jobs created by December 2012Create a mentor/investor network plan utilizing especially the services and assets of 44-75 year olds by December 2012Take advantage of opportunities under the federal crowdfunding bill (if passed)Create marketing plan including social media to package and publicize local funding sources, mentor networks, incubator spaces, etc.Reach out to UMass/Amherst area via recruitment events, advertising, etc.Identify Incubator Space

39Objective 4: Create an Entrepreneurial Environment (1-8) continued

Recognize and blend Quality of Place characteristics and concepts into the SEVEDS strategies Establish a group of relevant regional stakeholders to review Quality of Place concepts and index methodologies to craft a set of appropriate regional metricsDevelop and conduct several community presentations describing the role and critical components of Quality of Place within the SeVEDS strategyDevelop internal (within Windham Region) and external (out of Windham Region) marketing planFacilitate bringing challenged properties in the Windham Region back into purposeful useAggregate relevant environmental, financial and land record information for qualified interest groups.Aiding qualified individuals and/or groups in purchase and rehab planning consistent with regional, economic, environmental and town planning.Create a mechanism to facilitate intermediary ownership if there are no other alternativesIdentify and work with redevelopment efforts underway40Objective 4: Create an Entrepreneurial Environment (1-8) continued

Expand Percentage of the Regional Economy coming from the Global Economy by leveraging businesses w/global connections seeking higher skilled workers in high wage jobs.Create a database of businesses with international relationshipsMap international, linguistic, cultural, and technical knowledge assets Create a Global Marketing plan that links with International trade marketing tools and programs to expand markets and attract new business to leverage regional assets Define three (3) Global Niche Markets having value chain gaps that can be filled by regional assets Identify workforce skill gaps that might be filled by international workers coming to the region and create an worker recruitment plan Identify potential needs of international workers and develop a plan to meet those needs

41Objective 5: Plan for a Post VY Economy (1-5)Establish a sustained effort to cope with and recover from the closure of Vermont YankeeBuild a broad based steering committee to guide planning and action on economic and social impacts. Conduct Substantial study of other nuclear plant closings and other plan shutdowns and find major learnings - WRPCEstablish Site decommissioning, deconstruction, clean up, restoration and reuse planning group:Identify potential impacts from VY closure completed November 2011. Major categories include Jobs, GDP declines, Real Estate prices decline, Human Capital, TaxesIdentify possible mitigation, barriers and means of overcoming barriers in process

42Objective 6: Plan, Track and Participate (1-8)Maintain list of issues and sectors for development of additional objectives and strategiesEnergy Prices, Broadband and Cell expansion, Disaster preparedness, Transportation Infrastructure, Railroads, Regional Plan

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