Macomb County, Michigan Targeted Industries Study August 2006 – Presentation to Focus Macomb

Macomb County, MichiganTargeted Industries Study

August 2006 – Presentation to Focus Macomb

2

• Part 1Targeted Industry Focus

• Part 2Branding and Marketing Macomb

Targeted Industries Study

“98% want to attract new business, but 70% have no

written business attraction plan”

International City/County Management Association, Economic Development Survey 2004

4

Mapping Macomb’s assets… What does Macomb have to offer?

What strengths can be leveraged?

… to economic opportunity

What industries or business sectors would Macomb be most closely aligned with?

Primary & secondary targets

Study Objectives …for targeted growth.

Business Retention & Expansion

Organic Growth

Leap Growth

5

Leap Growth

Organic Growth

Business Retention

& Expansion

s

Macomb

County

Business Retention & Expansion

Organic Growth

Leap Growth:

*Advanced manufacturing*Alternative Energy*Bio-chemistry*Homeland Security/Defense*Medical/Healthcare

…for targeted growth.“An economic entity that

exists on its own, but draws strength from

regional partnership and collaboration”

(Personal interview/Internal Macomb, 03/06)

6

Mapping Macomb’s Assets


70% 20% 40% 60% 80% 100%

Oakland

Wayne

Macomb

Total MI

Construction ManufacturingWholesale trade Retail tradeTransportation & warehousing InformationFinance & insurance Real estate & rental & leasingProfessional, scientific & technical services Admin, support, waste mgt, remediation servicesEducational services Health care and social assistance

Source: U.S. Census Bureau, U.S. County Business Patterns, 2003

% Distribution of Employment in Macomb County vs. other regions

8U.S. Projected Growth for Industry

As

% o

f Tota

l M

aco

mb E

mplo

ym

ent

Leverage

Low Develop

Mapping Current Employment Manufacturing

Healthcare &

Social Assistance

Retail TradeRetail Trade

Professional & Business Srvs., Mgmt. Scientific & Technical

Consulting


Consulting

Finance, Insurance, Real Estate


ConstructionConstruction

WholesaleWholesale

Transportation & WarehousingTransportation & Warehousing

InformationInformation

AgricultureAgriculture

9

ConstructionConstruction

InformationInformation

U.S. Projected Growth for Industry

As

% o

f Tota

l M

aco

mb E

mplo

ym

ent

Enhance/Expand Leverage

Low Develop

Manufacturing

Healthcare &

Social Assistance

WholesaleWholesale

Retail TradeRetail Trade



Transportation & WarehousingTransportation & Warehousing


Consulting


Consulting

Mapping Macomb Current Employment

AgricultureAgriculture

10

Internal Perspectives

• A survey of Macomb County business (Mar. 2006) identified key “drivers” in their decision to choose Macomb:

1. Geographic proximity2. Proximity to markets and customers3. Availability/cost of land/buildings 4. Skilled workforce (only mentioned by

manufacturing segment)

• Perceived “good business environment”: 63% of businesses surveyed rated Macomb “very good” to “excellent” as a place to do business.

• Optimistic growth outlook: 60% of manufacturing companies anticipate needing “manufacturing skilled trade” and 50% anticipate needing engineering skills for continued growth.

11

50

60

80

56

73

75

40

20

20

32

27

25

10

20

0

12

0

0

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Manufacturing

Construction

Healthcare/SocialAssist.

Wholesale

Finance

Other

Very good to Excellent Satisfactory Not good to poor

How would you rate Macomb as a place to do business?

Source: Intellitrends LLC, Macomb County Business Insight Study, 03/06

12

73

72

69

69

64

61

57

56

52

45

37

35

19

1611

20

17

24

23

27

25

36

28

29

33

44

36

45

2325

0 10 20 30 40 50 60 70 80 90 100

Geographic location

Quality of life

Lifestyle infrastructure

Proximity to markets

Proximity to suppliers

Skilled workforce

Business services infrastructure

Education infrastructure

Availability of land

Support infrastructure

Cost of labor

Cost of land

Taxes

Availabilty of tax incentives

Grants, other funding

Very good to Excellent Satisfactory

How would you rate Macomb as a place to do business?


Highest rated:

Geographic location

Quality of life

Lifestyle infrastructure

Proximity to markets

Proximity to suppliers

Lowest relative rated:

Grants, funding

Tax incentives

Taxes

Cost of land

Cost of labor

13

Industry Situation: Manufacturing – Going Global

Economic Perception of your business over PAST 3 years?

Total Business Manufacturing

Positive Growth 35% 40%

Unchanged 17% 10%

Decline 41% 40%

12%35%

13%

25%

33%

30%

37%

10%

0% 10% 20% 30% 40% 50% 60% 70%

Local Michigan

Midwest region

National U.S.

Global

Total

Manufacturing

1. Quality products & services2. Competitive pricing/cost3. Engineering capabilities

1. Competitive pricing/cost2. Cost of labor3. Skilled workers

Markets


60% serve national/global markets

14

Optimistic Employment Outlook

12%

15%

25%

13%

7%

15%

0%

13%

31%

25%

60%

38%

13%

20%

48%

35%

40%

38%

60%

80%

0% 20% 40% 60% 80% 100%

Total

Manufacturing

Construction

Wholesale

Finance

Healthcare

Decrease # of employees (decrease in business) Decrease employees (increase productivity)No changeWill add employees

Over the NEXT 3 YEARS, how do you anticipate your Macomb employee base will change?


15

50%29%

5%

19%

35%35%

15%37%

60%

33%

0% 10% 20% 30% 40% 50% 60% 70%

Manufacturing skilledtrades

Technology/IT (CAD,Network, Programming,

Tech support)

Operations/Planning(Mgmt., Financial, Acct'g,

Marketing)

Medical

Engineering (R&D,Electrical, Mechanical,

Chemical, Civil)

Manufacturing Total

What are the primary skill areas you anticipate needing for continued growth?

How would you assess the current availability of those skills in Macomb’s employee base?

Total Manu.

Strong 36% 30%

Moderate 25% 30%

Limited 20% 10%

Scarce/Not at all/DK 19% 30%


16

External Dynamics


17

Key Drivers for Business Relocation/Development

• U.S. CEO’s surveyed in March 2006 identified the 7 most important issues in choosing where to do business:

1. Workforce quality2. Labor costs (including wages, Healthcare,

Workers Comp.)3. Taxes4. Regulation5. Infrastructure6. Quality of Life7. Political Environment

Source: CEO Magazine, March 2006

18

Geographic Migration of Projects in U.S.

0.7%

13.0%

21.8%

10.0%

23.9%

12.7%

12.3%

2.0%

3.6%

0.7%

10.1%

27.7%

8.3%

21.8%

12.6%

16.1%

1.0%

1.7%

New England region

Middle Atlantic region

East North Central region

West North Central region

South Atlantic region

East South Central region

West South Central region

Mountain region

Pacific region

New Mfg. as a % of total U.S. Total facilities as a % of total U.S.

#1 Pennsylvania

#1 Ohio

#1 Minnesota

#1 North Carolina

#1 Alabama

#1 Tennessee

#1 Texas

#1 Arizona

#1 Washington

#1 Massachusetts

#1 State in the Region for Growth based on % of total projects

19

Top 10 Total Projects 2005

Top 10 Total manufacturin

g (NEW &

EXPANSION)

Top 10 Total NEW

manufacturing

Top 10 Total Mfg.

(OTHER facilities)

1.Texas2.Ohio3.Illinois4.Michigan5.North Carolina6.Pennsylvania7.New York8.Tennessee9.Virginia10.Georgia

1.Ohio2.Michigan3.Tennessee4.North Carolina5.Texas6.Kentucky7.Pennsylvania8.Alabama9.New York10.Georgia

1.Ohio2.North Carolina3.Texas4.Pennsylvania5.Georgia6.Michigan7.New York8.Illinois9.Alabama10.Kentucky

1.Texas2.Illinois3.Michigan4.Ohio5.North Carolina6.New York7.Pennsylvania8.Virginia9.Indiana10.Florida

*Other facilities includes offices, headquarters, distribution centers, R&D, mixed use facilities & hotels

Source: Conway Data Inc.’s New Plant Database/Site Selection On-line, March 2006

Geographic Migration of Projects in U.S.

20

Manufacturing Drivers• NAM Survey (March 2006)

• One in two manufacturers plans to increase employment in 2006

• 47% will hire skilled workers for production jobs

• In terms of site selection, manufacturing companies globally are also paying more attention to:

• Proximity to institutions of higher learning• Customized training programs• Availability of incentives• Keeping workers up to speed with the

latest technologies

Macomb Attribute

Imp

ort

an

ce t

o S

ite S

ele

cti

on

Development Initiatives Focus Opportunities

Perceived Weakness Perceived Strength

Mapping Macomb AttributesD

iffere

nti

ato

rPari

ty

Cost of labor

Quality of life (housing, low cost of living, low

crime)

Longevity of residents

Progressive culture – outlook/understanding

Ability to attract scientists & engineers/research universities

Ability to attract & retain youthful population

Avg. educational Levels

Partnerships with education

Strong work ethic

Skilled manufacturing talent

Regional Resources

Training to meet needs

Racial/religious diversity

Geographic proximity to customers, markets, suppliers

Availability of land/bldgs

Low taxes

Significant Customer Segments (TACOM, Defense)

Targeted Marketing

Utilities cost & capacity

Strong support for start-ups/small business

Strong Automotive Image

Technology transfer

Local competition

Presence of small support businesses

Evaluation of new markets, opportunities

Recognized business & industry champion

Gov’t willing to collaborate/work with

business

Eliminating hurdles

Media Attention

Pursuit of funding for training, growth

Dedicated funding for economic development

Coordination with regional partner/collaboration

Branding InitiativesSpecific manufacturing skillsGrants, funding, tax incentives

Zoning Vision

•1.) Skilled Workforce/Resources, 2.) Infrastructure; 3.) Business Environment and 4.) Government Support

County economic health

Population gain

22

Vision & Synergies in Growth


23

U.S. Dept. of Labor: High Employment Growth Industries

Key Industries in Michigan (MEDC)

Automation Alley Technology Clusters

Advanced Manufacturing Advanced Manufacturing

Advanced Manufacturing

Aerospace Advanced Automotive

Advanced Automotive/

Automotive Plastics Chemical & Materials

Biotechnology Life Sciences Info Technology

Construction Chemicals & Materials

Life Sciences(Biotech, Pharma)

Alternative Energy Agriculture Homeland Security

Financial Food Processing Alternative Energy

Healthcare Homeland Security

Homeland Security

Info Technology

Geospatial

Projected Growth & Emerging Sectors

24

0

5

10

15

20

25

30

% of 8 county sector 13.9 15.8 19.3 22.5 15.4 5.4 8.9 19.3

Total employment

Total "Technology

Industry"

Advanced Automotive

Advanced Manufacturin

g

Chemical & Material

Information & Technology

Life SciencesOther

Technologies

Macomb employment in each sector as a % of 8 county region sector employment

Source: 2003 County Business Patterns, U.S. Census Bureau/Anderson Economic Group, Automation Alley’s First Annual Technology Industry Report, 2005

Regional Resources in Macomb

Macomb is •14% of total employment in the 8 county region

•16% of total employment in the 8 county region Technology Cluster

25

Pre

sence

in

8 c

ounty

R

egio

n

(em

plo

ym

ent

contr

ibuti

on

to c

lust

er)

Supporting Areas Collaborate Regionally

Geographic Niche Clusters

Primary Differentiation for Macomb

Presence in Macomb County (employment contribution to cluster)

Advanced Automotive


g

Life Sciences/

Biotechnology

Chemicals & Materials

Homeland Security

Information Technology

Alternative Energy

Defense

Collaborating and Differentiating within the Region

26

Macomb % contribution to the 8 County Region Technology Cluster : 23%

Advanced Manufacturing

3329 Other Fabricated Metal Product Manufacturing

3331Agriculture, Construction, and Mining Machinery

Manufacturing

3332 Industrial Machinery Manufacturing

3333Commercial and Service Industry Machinery

Manufacturing

3336Engine, Turbine, and Power Transmission

Equipment Manufacturing

3339Other General Purpose Machinery

Manufacturing

3345Navigational, Measuring, Electro-medical, and

Control Instruments Manufacturing

3353 Electrical Equipment Manufacturing

3359Other Electrical Equipment and Component

Manufacturing

3364 Aerospace Product and Parts Manufacturing

3369 Other Transportation Equipment Manufacturing


g

•2003 survey of U.S. manufacturing employers found that 80% of respondents said that they had a serious problem finding qualified candidates for the highly technical world of modern manufacturing (National Association of Manufacturing)

Sources: www.doleta.gov/BRG

27

• Flexible manufacturing cells or systems • Robotics• High-speed machining• Supervisory control and data acquisition (SCADA)• Automated sensor-based inspection/testing systems • Automated vision systems• Lasers used in material processing• Distributed control systems• Rapid prototyping systems• Computer-aided design/engineering software (CAD/CAE)• Programmable logic controllers (PLCs)• Use of inspection data in manufacturing control• MRP or Enterprise Resource Planning (ERP) software • Automated parts identification (i.e. bar coding)• Modeling or simulation techniques


g

Advanced manufacturing technologies (AMTs) involve new manufacturing techniques and machines combined with the application of information technology, micro electronics and new organizational practices within the manufacturing sector.

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0%

5%

10%

15%

20%

25%

30%

35%

40% Michigan

Macomb

Michigan 19.7% 2.8% 9.1% 2.7% 10.0% 25.8% 12.6% 4.5% 5.5% 4.9% 2.4%

Macomb 34.9% 1.9% 7.2% 2.2% 4.3% 27.0% 3.3% 10.5% 2.1% 4.2% 2.4%

Other Fabricated

Metal Product

Agriculture, Construction,

and Mining

Industrial Machinery

Manufacturing

Commercial and Service

Industry

Engine, Turbine, and

Power

Other General Purpose

Machinery

Navigational, Measuring,

Electromedical

Electrical Equipment

Manufacturing

Other Electrical

Equipment and

Aerospace Product and

Parts

Other Transportation

Equipment

Advanced Manufacturing employment in Macomb - % distribution within sector (compared to Michigan)

Advanced Manufacturing Employment 2003

Source: 2003 County Business Patterns, U.S. Census Bureau/Anderson Economic Group, Automation Alley’s First Annual Technology Industry Report, 2005

40% of employment in this cluster is “machinery

manufacturing”

29

Machinery & Equipment Industry

• Rising shipping costs, particularly for sectors that must transport massive machines, will see many firms investing in plants closer to the customer

• Finding the right work force will play an equally important role

• Factories now need highly trained workers – decisions could hinge on a state of locality’s commitment to work force training– New York State and St. Louis region are two areas that have made a

significant commitment to the type of technical workforce training initiatives that machining and equipment manufacturing firms will need n the 21st center

Sources: www.siteselection.com, On the Rebound, March 2005

Business Location Drivers

30

Advanced Automotive

3361 Motor Vehicle Manufacturing

3362Motor Vehicle Body and Trailer

Manufacturing

3363Motor Vehicle Parts

Manufacturing

Advanced Automotive

Macomb % contribution to the 8 County Region Technology Cluster : 19%

•Pinpointed as one of the President’s High Growth Employment Industries

•Employment is expected to grow more rapidly in firms that manufacture motor vehicle parts, bodies and trailers than in firms that make complete vehicles

•Creates 6.6 million direct and spin-off jobs. For every worker directly employed by an automaker, nearly 7 spin-off jobs are created

Advanced Automotive has been identified as the new sector, defining an industry not by what is made but how it is made. This new advanced automotive sector is defined by hundreds of advanced technology initiatives in energy, safety and materials that improve vehicle quality, safety and extend longevity.

31

• Body & Exterior– Lightweight materials, Unit body construction– Paint/Coatings/Adhesives– Lighting

• Power train– Enhanced fuel economy: Fuel cell, Hybrid electric, Hydrogen

fueled – Advanced batteries, Emissions control

• Ride & handling– Brake & Gas – Low rolling resistance tires

• Safety systems– Sensing systems – Safety features

• Interiors– Seating– HVAC – Navigation

Advanced Automotive

32

Advanced Technologies Market Penetration 2004 - 2030

Market penetration of advanced technologies:

• Lightweight materials Improved pumps

• Improved aerodynamics Low rolling resistance tires

• Engine friction reduction

• Unit body construction

33

Homeland Security: Michigan

• Majority of homeland security is performed in the private sector, with 85% of all critical infrastructures privately controlled; 35% of all U.S. companies plan to invest in and expand security programs (ASIS International Foundation Trends Report, 2005)

• Approximately $33 billion of federal funding in FY 2005 with heavy emphasis on developing new technology to assist the four main parts of effective preparedness:

– Prevention: Biometrics, vaccines, intelligent systems, cargo screening systems

– Detection: Bio and radiation sensors, training– Reaction: EMS equipment, communications,

computer modeling– Recovery: Bioremediation, decontamination

Source: www.michigan.org/medc/ttc/HomelandSecurity/

Homeland Security

34

• Michigan companies already play a lead role in development and production of equipment and expertise: improved body armor producers, concrete strengthening systems, portable tracking and communications systems and advanced detection systems

• Strong R&D and manufacturing capabilities make Michigan a natural leader in emerging areas

Technology

Information analysis and infrastructure protection

Emergency preparedness and response

Threat assessment tools and strategies

Defense

35

Defense Industry: TACOM

11% 11%

11%

22%

11% 33%

Electric wire & power & distribution equipment

Electrical and electronic equipment components

Engines, turbines & components

General purpose information technology equipment

Vehicular equipment components

Weapons

Source: TACOM LCMC Advanced Planning Briefing to Industry – Tacom2005.ppt - 26-28 Oct 05

Contract Types Awarded to Michigan Companies from 09/04 - 03/06

AK AZ KS LA MA RI SD VTME OR TX

IA KY VAWI

MD SCIN MO TN

FLOH

AL GA IL NYNJ PA

CA

MI

0

2

4

6

8

10

12

14

16

Number of Contracts Awarded by State

Defense

36

Defense Industry: TACOM

87%

2%

3%

3%

2%

4%

Electric wire & power & distribution equipment

Electrical and electronic equipment components

Engines, turbines & components

General purpose information technology equipment

Vehicular equipment components

Weapons

Percentage of Total Dollars by Contract Type Awarded to Michigan Companies from 09/04 - 03/06

Source: TACOM LCMC Advanced Planning Briefing to Industry – Tacom2005.ppt - 26-28 Oct 05

Defense

37

Macomb County Opportunities

What’s next?


38 38

High Support Industries to Develop

Strong Industry Potential

Strong Industry Differentiation

Advanced Automotive


g

Homeland Security

Information Technology

Alternative Energy

Defense

Industry Expansion and Targeting

39 39

Trends in Economic Development Strategy


40

Current Trends and Issues in Business Attraction & Development

40

Economic Development Survey 2004 & 2005

Focus of economic development activities: Business attraction/recruitment = 44% Business retention = 41%

Top business retention activities: Partnering with other non-governmental organizations = 81% Local government representative calls on local company = 78%

Top promotional activities used to attract business: Website = 86% Working with Chamber of Commerce = 84% Offer high quality of life = 74% Promotional and advertising activities = 63%

Average local budgets for economic development in 2004 = $753,161

Source: ICMA. Economic Development 2004

41 41

Common Characteristics of Winning Organizations in attracting business

• Every winning agency used a state of the art Web-site

• On-line databases of available buildings and sites

• Work-force training initiatives moved to the top of the “to do list”

• The ability to quantify and deliver a trained work force in specialized skill-set categories

• “Partnerships”: The ability to bring together diverse groups under one effort to market and promote a geographical area “won more projects than stand-alone cities and counties”

Without the region as a whole, we wouldn’t be where we are today. Creating new jobs and investing capital investment in our community takes a cooperative effort on behalf of local governments, businesses and citizens.”Melanie O’Connell Underwood

Executive Director/Mooresville, NC Chamber (2005 = $302m/1,125 jobs)

42 42Source: Site Selection On-line, March 2006

Location 2005 Success Initiatives Message

Broomfield County, COPop: 48000

5 corporate HQs/ 1 divisional HQ

Expanded available data on web-site (real estate information, demographics, links to state information on taxes, transportation, labor & incentives)

Large pool of highly trained & available tech labor

Elgin/Kane Counties, ILPop: 150,000

16 projects of $1m or greater

Web-site enhancement, Expansion of Work-force training effortsJoint effort with state allowing developers and brokers to electronically update building & site availability

Location/Proximity to I-90 toll wayCentral locationEasy access for good labor forceLarge pool of highly trained & available tech labor

Grant County, INPop: 71,000

5 projects: $260m/2,000 jobs

Partnered with regional workforce investment board, local community college & 2 liberal arts colleges to develop training programs

LocationWithin 400 mile truck drive or 1 day of 12 major markets

Dallas/Ft. Worth-Arlington, TX12 county area

309 projects: $3.4b

Promotion of existing company expansions in the area

“Telecom Corridor”50 technology companies/sq. mile

Houston, TX12 county area

214 projects Promotion of reputation as fast growing technology center Promotion of younger than average workforce

2.6 million workforce 51 of world’s 100 large non-U.S. CorpsPort of Houston is world’s 6th largest

Mobile, ALPop: 400,000

25 projects: $800m

Maintains buildings & sites database for the area (photo, characteristics, map)

Hub, linking major U.S. markets and emerging markets in Central & South America

Mooresville, NCPop: 25,000


Regional partnership (16 county region)New branding campaign/strategic direction

Availability of landAdaptability of workforceContinued education/training

Covington, KYPop: 350,000


Redesign of web-site for buildings & sites database

Greensboro, NCPop: 1.5 m

42 projects Piedmont Triad Partnership focused on high-tech & advanced manufacturing

Construction costs 30% below avg. Lower cost of livingQuality of life (cultural, sports, recreational)State tax credits for R&D

Top U.S. Economic Growth Areas 2005

43 43

Macomb County’s Opportunities

Macomb Industry % of Employment

Base

Retention & Expansion(Issues re: growth)

Organic Growth(Hot areas of growth)

Leap Growth(Emerging Sectors)

Manufacturing 23.4%Growth ’00-’04: (-11%)

Demand by primary customer’s industryPressure on marginsCost of raw materialsCost of labor

Computer & electronicsPlastics & rubber productsMachinery manufacturingTransportation manufacturing-Motor parts-Aerospace

Advanced AutomotiveAdvanced Manufacturing-Medical DevicesDefense

Healthcare & Social Assistance10.7%Growth ’00-’04: +10%

Assisted Living Residential Care facilitiesOutpatient/Ambulatory

Research and Ancillary Services Medical devices & equipment

Finance & Insurance 4.0%Growth ’00-’04: +23%

Demand by primary customers industryCompetitive nature of industry

Professional & Scientific 8.6%Growth ’00-’04: (-19%)

Admin/Support services (Temporary staffing)Computer systems/design relatedManagement/Technical consulting services

Homeland Security

Construction 5.5%Growth ’00-’04: (-.3%)

Demand by primary customer’s industryAvailability of skilled workersCompetitive industryCost of labor

Non-residential-remodeling of industrial plants-nursing care facilities

High technology medical treatment facilities

Wholesale Trade 4.2%Growth ’00-’04: +.8%

Demand by primary customers industryCompetitive nature of industryPhysical capacity for expansion

Productivity enhancing tech.Supply & distribution servicese-commerce

Information 1.6%Growth ’00-’04: +3%

Software publishing Internet & other information services

Communications equipment

Industry Retention & Expansion, Growth & Targeting

Documents

Macomb County, Michigan Targeted Industries Study August 2006 – Presentation to Focus Macomb