Macomb County, Michigan Targeted Industries Study

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Macomb County, MichiganTargeted Industries Study
August 2006 Presentation to Focus Macomb
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Targeted Industries Study

• Part 1
• Targeted Industry Focus
• Part 2
• Branding and Marketing Macomb

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98 want to attract new business, but 70 have
no written business attraction plan
International City/County Management Association,
Economic Development Survey 2004
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Mapping Macombs assets
Study Objectives
for targeted growth.

• Business Retention Expansion
• Organic Growth
• Leap Growth

to economic opportunity

• What industries or business sectors would Macomb
  be most closely aligned with?
• Primary secondary targets

• What does Macomb have to offer?
• What strengths can be leveraged?

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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)

• Business Retention Expansion
• Organic Growth
• Leap Growth

Advanced manufacturing Alternative
Energy Bio-chemistry Homeland
Security/Defense Medical/Healthcare
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Mapping Macombs Assets
Targeted Industries Study
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Distribution of Employment in Macomb County
vs. other regions
Source U.S. Census Bureau, U.S. County Business
Patterns, 2003
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Mapping Current Employment
Leverage
As of Total Macomb Employment
Develop
Low
U.S. Projected Growth for Industry
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Mapping Macomb Current Employment
Enhance/Expand
Leverage
Retail Trade
As of Total Macomb Employment
Develop
Low
Finance, Insurance, Real Estate
Professional Business Srvs., Mgmt. Scientific
Technical Consulting
Construction
Wholesale
Information
Transportation Warehousing
Agriculture
U.S. Projected Growth for Industry
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Internal Perspectives

• A survey of Macomb County business (Mar. 2006)
  identified key drivers in their decision to
  choose Macomb
• Geographic proximity
• Proximity to markets and customers
• Availability/cost of land/buildings
• 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.

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How would you rate Macomb as a place to do
business?
Source Intellitrends LLC, Macomb County
Business Insight Study, 03/06
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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
Source Intellitrends LLC, Macomb County
Business Insight Study, 03/06
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Industry Situation Manufacturing Going Global

1. Quality products services
2. Competitive pricing/cost
3. Engineering capabilities

Economic Perception of your business over PAST 3 years? Total Business Manufacturing
Positive Growth 35 40
Unchanged 17 10
Decline 41 40

• Competitive pricing/cost
• Cost of labor
• Skilled workers

Markets
60 serve national/global markets
Source Intellitrends LLC, Macomb County
Business Insight Study, 03/06
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Optimistic Employment Outlook
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
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What are the primary skill areas you anticipate
needing for continued growth?
Source Intellitrends LLC, Macomb County
Business Insight Study, 03/06
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Targeted Industries Study
External Dynamics
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Key Drivers for Business Relocation/Development

• U.S. CEOs surveyed in March 2006 identified the
  7 most important issues in choosing where to do
  business
• Workforce quality
• Labor costs (including wages, Healthcare, Workers
  Comp.)
• Taxes
• Regulation
• Infrastructure
• Quality of Life
• Political Environment
• Source CEO Magazine, March 2006

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Geographic Migration of Projects in U.S.
1 State in the Region for Growth based on of
total projects
1 Massachusetts
1 Pennsylvania
1 Ohio
1 Minnesota
1 North Carolina
1 Alabama
1 Tennessee
1 Texas
1 Arizona
1 Washington
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Geographic Migration of Projects in U.S.
Top 10 Total Projects 2005 Top 10 Total manufacturing (NEW EXPANSION) Top 10 Total NEW manufacturing Top 10 Total Mfg. (OTHER facilities)
Texas Ohio Illinois Michigan North Carolina Pennsylvania New York Tennessee Virginia Georgia Ohio Michigan Tennessee North Carolina Texas Kentucky Pennsylvania Alabama New York Georgia Ohio North Carolina Texas Pennsylvania Georgia Michigan New York Illinois Alabama Kentucky Texas Illinois Michigan Ohio North Carolina New York Pennsylvania Virginia Indiana Florida
Source Conway Data Inc.s New Plant
Database/Site Selection On-line, March 2006
Other facilities includes offices, headquarters,
distribution centers, RD, mixed use facilities
hotels
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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

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Mapping Macomb Attributes

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

Focus Opportunities
Development Initiatives
Branding Initiatives
Differentiator
Cost of labor
Skilled manufacturing talent
Specific manufacturing skills
Grants, funding, tax incentives
Partnerships with education
Regional Resources
Low taxes
Ability to attract scientists
engineers/research universities
County economic health
Geographic proximity to customers, markets,
suppliers
Strong Automotive Image
Media Attention
Recognized business industry champion
Training to meet needs
Availability of land/bldgs
Technology transfer
Utilities cost capacity
Govt willing to collaborate/work with business
Avg. educational Levels
Coordination with regional partner/collaboration
Ability to attract retain youthful population
Strong work ethic
Significant Customer Segments (TACOM, Defense)
Dedicated funding for economic development
Importance to Site Selection
Population gain
Zoning Vision
Quality of life (housing, low cost of living, low
crime)
Presence of small support businesses
Evaluation of new markets, opportunities
Progressive culture outlook/understanding
Local competition
Strong support for start-ups/small business
Pursuit of funding for training, growth
Parity
Longevity of residents
Racial/religious diversity
Targeted Marketing
Eliminating hurdles
Macomb Attribute
Perceived Weakness
Perceived Strength
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Targeted Industries Study
Vision Synergies in Growth
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Projected Growth Emerging Sectors
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

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Regional Resources in Macomb
Macomb employment in each sector as a of 8
county region sector employment

• Macomb is
• 14 of total employment in the 8 county region
• 16 of total employment in the 8 county region
  Technology Cluster

Source 2003 County Business Patterns, U.S.
Census Bureau/Anderson Economic Group, Automation
Alleys First Annual Technology Industry Report,
2005
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(No Transcript)
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Macomb contribution to the 8 County Region
Technology Cluster 23
  Advanced Manufacturing
3329 Other Fabricated Metal Product Manufacturing
3331 Agriculture, Construction, and Mining Machinery Manufacturing
3332 Industrial Machinery Manufacturing
3333 Commercial and Service Industry Machinery Manufacturing
3336 Engine, Turbine, and Power Transmission Equipment Manufacturing
3339 Other General Purpose Machinery Manufacturing
3345 Navigational, Measuring, Electro-medical, and Control Instruments Manufacturing
3353 Electrical Equipment Manufacturing
3359 Other Electrical Equipment and Component Manufacturing
3364 Aerospace Product and Parts Manufacturing
3369 Other Transportation Equipment Manufacturing

• 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
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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.

• 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

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Advanced Manufacturing Employment 2003
Advanced Manufacturing employment in Macomb -
distribution within sector (compared to Michigan)
40 of employment in this cluster is machinery
manufacturing
Source 2003 County Business Patterns, U.S.
Census Bureau/Anderson Economic Group, Automation
Alleys First Annual Technology Industry Report,
2005
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Machinery Equipment Industry
Business Location Drivers

• 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 localitys
  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
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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.

• Pinpointed as one of the Presidents 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
3361 Motor Vehicle Manufacturing
3362 Motor Vehicle Body and Trailer Manufacturing
3363 Motor Vehicle Parts Manufacturing
Macomb contribution to the 8 County Region
Technology Cluster 19
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• 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

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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

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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/HomelandSecurit
y/
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• 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 RD 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

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Defense Industry TACOM
Number of Contracts Awarded by State
Contract Types Awarded to Michigan Companies
from 09/04 - 03/06
Source TACOM LCMC Advanced Planning Briefing to
Industry Tacom2005.ppt - 26-28 Oct 05
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Defense Industry TACOM
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
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Targeted Industries Study
Macomb County Opportunities
Whats next?
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Industry Expansion and Targeting
Strong Industry Potential
High Support Industries to Develop

Strong Industry Differentiation
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Trends in Economic Development Strategy
Targeted Industries Study
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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
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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 wouldnt 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
OConnell Underwood Executive Director/Mooresville
, NC Chamber (2005 302m/1,125 jobs)
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Top U.S. Economic Growth Areas 2005
Location 2005 Success Initiatives Message
Broomfield County, CO Pop 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, IL Pop 150,000 16 projects of 1m or greater Web-site enhancement, Expansion of Work-force training efforts Joint effort with state allowing developers and brokers to electronically update building site availability Location/Proximity to I-90 toll way Central location Easy access for good labor force Large pool of highly trained available tech labor
Grant County, IN Pop 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 Location Within 400 mile truck drive or 1 day of 12 major markets
Dallas/Ft. Worth-Arlington, TX 12 county area 309 projects 3.4b Promotion of existing company expansions in the area Telecom Corridor 50 technology companies/sq. mile
Houston, TX 12 county area 214 projects Promotion of reputation as fast growing technology center Promotion of younger than average workforce 2.6 million workforce 51 of worlds 100 large non-U.S. Corps Port of Houston is worlds 6th largest
Mobile, AL Pop 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, NC Pop 25,000 37 projects 307m/1,125 jobs Regional partnership (16 county region) New branding campaign/strategic direction Availability of land Adaptability of workforce Continued education/training
Covington, KY Pop 350,000 41 projects 444m/2,997 jobs Redesign of web-site for buildings sites database
Greensboro, NC Pop 1.5 m 42 projects Piedmont Triad Partnership focused on high-tech advanced manufacturing Construction costs 30 below avg. Lower cost of living Quality of life (cultural, sports, recreational) State tax credits for RD
Source Site Selection On-line, March 2006
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Industry Retention Expansion, Growth
Targeting

• Macomb Countys 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 customers industry Pressure on margins Cost of raw materials Cost of labor Computer electronics Plastics rubber products Machinery manufacturing Transportation manufacturing Motor parts Aerospace Advanced Automotive Advanced Manufacturing Medical Devices Defense
Healthcare Social Assistance 10.7 Growth 00-04 10 Assisted Living Residential Care facilities Outpatient/Ambulatory Research and Ancillary Services Medical devices equipment
Finance Insurance 4.0 Growth 00-04 23 Demand by primary customers industry Competitive nature of industry
Professional Scientific 8.6 Growth 00-04 (-19) Admin/Support services (Temporary staffing) Computer systems/design related Management/Technical consulting services Homeland Security
Construction 5.5 Growth 00-04 (-.3) Demand by primary customers industry Availability of skilled workers Competitive industry Cost 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 industry Competitive nature of industry Physical capacity for expansion Productivity enhancing tech. Supply distribution services e-commerce
Information 1.6 Growth 00-04 3 Software publishing Internet other information services Communications equipment