CREATING OUR (ECONOMIC) FUTURE: HIGHER EDUCATION AND ECONOMIC DEVELOPMENT

CREATING OUR (ECONOMIC) FUTURE: HIGHER EDUCATION AND ECONOMIC DEVELOPMENT

LSU Transition Advisory Team April 16, 2013

2

1980

1985

1990

1995

2000

2007

85

100

115

130

145

160

175

Louisiana

United States

Rest of South

Total nonfarm, annual employment (100=1980)

FOR DECADES, LA’S ECONOMY HAD UNDERPERFORMED THE SOUTH AND THE U.S….

3

U.S. annual employmentLouisiana annual employment

SEVERAL OF LA’S PRIMARY INDUSTRY SECTORS HAVE BEEN LOSING JOBS FOR MANY YEARS

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '1026

29

32

35

38

41

44

47

2500

2600

2700

2800

2900

3000

3100

3200

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12

20.0

22.0

24.0

26.0

28.0

30.0

750.0

800.0

850.0

900.0

950.0

1000.0

1050.0

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '127

8

9

10

11

12

13

360.0

420.0

480.0

540.0

600.0

660.0

Agriculture / FarmingChemical Manufacturing Paper Manufacturing

JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJF93

100

107

Total non-farm, seasonally-adjusted employment (100 = January 2008)

LA entered the recession late…

…and exited faster than other states

…experienced smaller job losses…

2008 2009 2010 2011

Louisiana

United States

South

2012

SINCE 2008, LOUISIANA’S EMPLOYMENT LEVELS HAVE OUTPERFORMED BOTH THE SOUTH AND NATION

2013

5

MOODY’S EXPECTS LA’S INDUSTRY MIX TO LEAD OUR STATE TO UNDERPERFORM IN JOB CREATION OVER THE NEXT 20 YEARS

Current LA forecast

LA at US rate2.3

2.2

2.1

2.0

020302025202020152010

2.8

2.7

2.6

2.5

2.4

LA at Aspiration rate (GA, NC, TX)

LA at Peer rate (South)

Employment (millions)

Gap of 400,000 jobs

vs. Peer

Gap of 525,000 jobs vs.

Aspiration

LA projectedto gain 290,000

new jobs

6

LED’S NO. 1 GOAL: POSITIONING LA. TO ADD ~40,000 NEW

JOBS PER YEAR

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Growing tax revenues Population in-migrationSmall business growth Economic opportunity

WHAT WOULD 40,000 NEW JOBS PER YEAR MEAN TO LOUISIANA?

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HOW DO WE POSITION LOUISIANA

TO GROW FASTER THAN THE SOUTH

AND U.S. ON A REGULAR BASIS?

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WE HAVE AGGRESSIVELY PURSUED EIGHT INTEGRATED ECONOMIC DEVELOPMENT STRATEGIES

Cultivate top regional economic development assets

Focus on business retention and expansion

Develop national-caliber business recruitment capacity

Improve state economic competitiveness Enhance community

competitiveness

Cultivate small business, innovation and entrepreneurship

Aggressively tell our story

Develop robust workforce solutions

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competitiveness




11






competitiveness




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LED FASTSTART, OUR CUSTOMIZED WORKFORCE INITIATIVE, WAS RANKED NO. 1 IN THE U.S. IN 2010, 2011, AND 2012

“Louisiana’s FastStart continues

to be the gold standardfor workforce training

programs,which increasingly are an

essentialelement in successful

economicdevelopment projects,”

Jack Rogers - Editor in ChiefBusiness Facilities Magazine

August 2012

Workforce Training Leaders

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“ “Probably the most notable statewide workforce-development initiative comes from Louisiana. Its FastStart programme, launched in 2008, helps companies recruit and train workers.

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LOUISIANA’S BUSINESS CLIMATE RANKINGS HAVE IMPROVED SUBSTANTIALLY SINCE 2008

Ranking 2008 Today

Pollina

Chief Executive

Forbes

Area Development

Business Facilities

Site Selection

40

48

49

Unranked

Unranked

Unranked 7

6

5

34

13

16

15

IDENTIFY AND CULTIVATE NEW GROWTH SECTORS

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WE UTILIZED A STRUCTURED PROCESS TO GENERATE AND PRIORITIZE POTENTIAL GROWTH SECTORS

Fit w

ith s

treng

ths

Pot

entia

l for

job

grow

th

Oth

er p

riorit

izat

ion

met

rics

Tim

e ho

rizon

List of top growth

optionswith

ideas for capturing

Idea generation Prioritization & portfolio shaping

Most attractive growth options

Explore Louisiana strengths

Review industry characteristics + growth trends

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LED IDENTIFIED SIX TARGET AREAS WITH GREAT POTENTIAL FOR JOB CREATION AND ECONOMIC GROWTH

Digital media & enterprise software

Advanced manufacturing

Clean technology

Life sciences

Water management

Next generation oil & gas

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Opportunity

LA job growth 2009-29 (thousands)

▪ Next generation digital media/software development ecosystem

▪ Water management: The Netherlands of the US

▪ Specialty research hospital and medical district: Treating the nation

▪ Ultra-deep water: Under the sea

▪ Unconventional gas: Not everything’s bigger in TX

▪ Auto: Supplying the future driving experience

▪ Energy efficiency: Green building, green living, green manufacturing

▪ Renewable energy: Power and fuel for the future

▪ Enhanced Oil Recovery techniques: Scraping the bottom of the barrel

▪ Nuclear power: Parts and modular production

▪ Obesity/diabetes research and treatment

▪ Manufacturing pharmaceuticals

Total

▪ 11-23

▪ 10-20

▪ 10-20

▪ 10-15

▪ 10-15

▪ 5-15

▪ 5-10

▪ 8-12

▪ 5-7

▪ 3-5

▪ 1-2

▪ 1-2

▪ 25-55

▪ 20-45

▪ 20-40

▪ 40-55

▪ 40-55

▪ 10-35

▪ 10-20

▪ 20-30

▪ 20-25

▪ 10-20

▪ 2-4

▪ 5-10

~80 - 145 ~225 - 400

Direct Total

THESE TARGETS COULD ADD 225,000 - 400,000 EXTRA JOBS OVER THE NEXT 20 YEARS

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290

690

815LA at Aspiration rate

LA at rate of South

Baseline forecast

Total jobs added, 2009-29 (thousands)

690

815

PURSUING THESE TARGETS CAN HELP US ACHIEVE OUR TARGET GROWTH RATE WHILE GENERATING NEW POPULATION AND TAX REVENUES

20


290

690

815

225-400

LA at Aspiration rate

LA at rate of South

515-690Baseline forecast + Growth Sec.

Growth Sectors

Additional economic impact over 20 years

▪ ~$18-24 billion in new State and local tax revenue

▪ ~515-920K in new population


690

815

21

290

690

815LA at Aspiration rate

LA at rate of South

Baseline forecast + all other efforts

Other efforts


225-400 125-300 ~815


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KEY ROLES OF HIGHER EDUCATION IN THE ECONOMIC DEVELOPMENT OF LOUISIANA

• Workforce Development

• Scientific, Technical, and Medical R&D

• Intellectual Talent Development

• Teacher Training/Development

• Technology Transfer

• Intellectual Talent Retention and Attraction

• Research on Issues of State Importance

• Business Development Assistance

• Brand Building of State

NOT COMPREHENSIVE

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24

25

26

27

28

29

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PARTNERSHIPS WITH HIGHER EDUCATION HAVE BEEN CRITICAL TO RECENT WINS AND ARE MODELS FOR FUTURE COLLABORATIONS

Louisiana Tech

Company High Ed Partner Initiative~$2 million over seven years to expand telecommunications technology curriculum

$20 million for a new training facility and equipment focused on industrial technology

~$29 million to build the Louisiana Digital Media Center (~2/3 academic space, ~1/3 EA)

$5 million over 10 years for enhanced software development-focused academic programs

$22 million for a new training facility and equipment focused on manufacturing technology

Sowela

LSU

UNO, possibly others

Bossier Parish CC

CenturyLink

Sasol

Electronic Arts

GE Capital

Benteler

Several significant research contributions that helped secure the project

LSU Ag CenterConAgra

$14 million over 10 years to increase the number of computer science graduates

LSU, others TBDIBM

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32

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WHAT DO THESE COMPANIES HAVE IN COMMON?

•Amazon.com•Dell•Gameloft•Google•EA•GE Capital

NOT COMPREHENSIVE

•HP•IBM•Intel•Microsoft•Samsung•Texas Instruments

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THE ULTIMATE FRONTIER FOR ECONOMIC DEVELOPMENT IN LOUISIANA WILL BE REALIZED THROUGH THE DEVELOPMENT

OF HIGHER EDUCATION