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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
Targeted Industries Study
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
Professional & Business Srvs., Mgmt. Scientific & Technical
Consulting
Finance, Insurance, Real Estate
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
Finance, Insurance, Real Estate
Finance, Insurance, Real Estate
Transportation & WarehousingTransportation & Warehousing
Professional & Business Srvs., Mgmt. Scientific & Technical
Consulting
Professional & Business Srvs., Mgmt. Scientific & Technical
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?
Source: Intellitrends LLC, Macomb County Business Insight Study, 03/06
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
Source: Intellitrends LLC, Macomb County Business Insight Study, 03/06
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?
Source: Intellitrends LLC, Macomb County Business Insight Study, 03/06
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%
Source: Intellitrends LLC, Macomb County Business Insight Study, 03/06
16
External Dynamics
Targeted Industries Study
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
Targeted Industries Study
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
Advanced Manufacturin
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
Advanced Manufacturin
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
Advanced Manufacturin
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.
28
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?
Targeted Industries Study
38 38
High Support Industries to Develop
Strong Industry Potential
Strong Industry Differentiation
Advanced Automotive
Advanced Manufacturin
g
Homeland Security
Information Technology
Alternative Energy
Defense
Industry Expansion and Targeting
39 39
Trends in Economic Development Strategy
Targeted Industries Study
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
37 projects: $307m/1,125 jobs
Regional partnership (16 county region)New branding campaign/strategic direction
Availability of landAdaptability of workforceContinued education/training
Covington, KYPop: 350,000
41 projects: $444m/2,997 jobs
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
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