Central Business District Association Reinvent Hampton Roads Update April 19, 2018

QUESTIONS/DISCUSSION OUTLINE HOW IS THE REGION DOING? WHAT TO DO ABOUT IT? GO VA REGION 5 RESULTS QUESTIONS/DISCUSSION 2

State and Regional Economic Performance: QUICK LOOK AT THE DATA 3

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Comparative Job Growth by Metro Area 7

Net New Civilian Jobs Gained/Lost in Selected MSA’s, Virginia, and North Carolina From 2007* to 2016 185.7 200 152.5 150 108.5 105.1 Thousands 100 76.7 48.7 41.3 50 19.5 -6.5 -50 Source: U.S. Department of Labor CES seasonally unadjusted data and the Old Dominion University Economic Forecasting Project. * Peak employment in Raleigh, Durham, Northern Virginia, and Virginia occurred in 2008. Change for these areas is shown for 2008 through 2016. Data will be revised in March 2017

Total Employment vs. Nonfarm Payroll 9

CONCLUSION: We Have A Serious Problem QUESTION: What To Do About It? 10

JOB CREATION MODEL LEADERSHIP Create More & Higher Paying Jobs, Which Diversify & Strengthen Regional Economy and Create a High Employment Multiplier Workforce Development, Attraction & Retention Existing Sector Job Growth Entrepreneurial Start-Up Job Growth Recruitment, Attraction Job Growth Non-Export, Retail & Local Service Job Growth Drivers of Existing Economy Potential Cluster Growth Scale-Up Small/Mid-Size Company Growth Start-Ups Regional Marketing Sites Supply Chain Growth Commercialized Research Non-Research Regional Culture and Infrastructure 11

Define assumptions and create long list A location strategy process goes through several phases, including significant screening to pre-select location before regional EDOs get engaged Step with possible/high EDO visibility and engagement Step with low/no EDO visibility and engagement Tactical site selection Strategic location assessment/selection De-select less attractive locations: Many location options High level, quick analysis Based on desk research Focus on key cost & quality drivers Confidential High level business case Select best location solution: Detailed analysis of many factors Forward looking Field work to understand dynamics and identify pitfalls Assess implementation risks Interviews and negotiations Full business case Few locations only (short list) Location Strategy process Define assumptions and create long list Screen options and identify short list Analyze short list and select region Select site Focus of the analysis 12

Competitiveness Analysis Results Shared services Hampton Roads' competitive position: Cost – Quality map and value proposition Hampton Roads’s value proposition Hampton Roads is positioned in the top-right quadrant offering a combination of high quality and competitive operating costs. In an international context, Hampton Roads can compete with a well established location like Dublin. Major competitive strengths Established shared services cluster Good pool of experienced skills in finance and HR Strong student base Relatively competitive operating cost Flexible labor market (in international context) Key weaknesses High competition for skills Relatively lower attractiveness for staff Quality of public transport in urban areas Lower office space availability Main competitors Key competitors are San Antonio, Nashville and Jacksonville. 13

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to Grow and Diversify the Private Sector in Each Virginia Region A Business-Led Statewide Initiative to Grow and Diversify the Private Sector in Each Virginia Region Good morning. It’s a pleasure to share the stage with Stephen and John to provide an update on significant aspects of economic development in Virginia. What I’d like to accomplish this morning is to start with a brief overview of the principles behind GO Virginia, and what motivated some of Virginia’s senior business leadership to undertake this effort, provide an update on our progress, and then close with a review of what I see as a rare and wonderful opportunity to dramatically and positively change the trajectory of economic growth in the Commonwealth. 15

What is GO Virginia? A bipartisan, business-led, game-changing initiative … that will provide a new framework for strengthening the economy in each Virginia region … through enhanced collaboration by business, education, and local government … that is incentivized and encouraged by the State. READ THE POINTS In sum, what we are focusing on is improving the economy in every region of the state through incentivized collaboration. To achieve this, GO Virginia facilitates bottom up priorities from each region to produce projects where at least two or more localities are collaborating. 16

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GROWTH AND OPPORTUNITY (GO) GRANTS: POTENTIAL PROJECTS Scale-ups of existing small and medium-sized businesses Credentialing and Talent Development Joint Site Development and Economic Development projects Commercialization of R&D (public and private) Startup collaborations (incubators/innovation centers/accelerators) Priority Clusters 18

REGION 5 GRANT PROPOSALS Virginia’s Digital Shipbuilding Workforce Program Hampton Roads Cybersecurity Education, Workforce, and Economic Development Alliance Collaboration Laboratory (HRCyber Co-Lab) 757 Seed Fund Hampton Roads Regional Unmanned Systems Facility Hampton Roads Regional Broadband Strategy 19

$ REGION FIVE Funding Request: Total Project Budget: $647,540 Virginia Digital Shipbuilding Program Old Dominion University’s Virginia Modeling, Analysis, and Simulation Center (VMASC) Hampton Roads’ advanced manufacturing industry leads the way through Industry 4.0; to support continues success a training program must be established locally that will generate a consistent pipeline of talent for local manufacturers to hire. This project will create a regional and statewide program to train approximately 8,500 future workers skilled craftsmen, engineers, designers, and IT professionals to work in the new digital manufacturing environment and will support Hampton Roads’ existing advanced manufacturing and shipbuilding clusters. Digital manufacturing theory and skills will be provided to align directly with the high job demand in the advanced manufacturing sector regionally, statewide, and nationally. 100% of region’s population impacted Strategy: Talent Development and Credentialing Private Industry Partners: Siemens and Newport News Shipbuilding Other Partners: Virginia Ship Repair Association, Thomas Nelson Community College, Norfolk Naval Shipyard, and Purdue University Participants: Hampton City Williamsburg City Isle of Wright County Project Outcomes: 8,500 Jobs Created in 5 years $74,000 Average Salary vs. $46,192 Average Per Capita Income for the Region Return on Investment (ROI): Increase state revenues by $6,640,805 over 5 years Targeted Clusters: Advanced Manufacturing Shipbuilding Information Technology Business Services Newport News City James City County Virginia Beach City Funding Request: $647,540 $ Total Project Budget: $ 6,200,000 20

$ REGION FIVE Funding Request: Total Project Budget: $642,713 Hampton Roads Cyber Collaboration Laboratory (HRCyber Co-Lab) Old Dominion University’s Virginia Modeling, Analysis, and Simulation Center (VMASC) The Hampton Roads Cybersecurity Education, Workforce, and Economic Development Alliance (HRCy-ber) is a collaborative partnership among educational institutions, government agencies, nonprofits, and private employers. GO Virginia support will formalize HRCyber with an industry-led governing board and extend its scope from educational pathways to include collaboration, workforce development, jobs creation, and innovation. The HRCyber Co-Lab will be a highly advanced collaboration hub at Old Dominion University’s Tri-Cities campus. HRCyber and the Virginia Modeling, Analysis, and Simulation Center (VMASC) will anchor a Tri-Cities innovation district in modeling and simulation, data analytics, and cybersecurity; and expand this regional center of in- novation to include autonomous and virtual systems. 89% of region’s population impacted Strategy: Talent Development and Credentialing Private Industry Partners: SimIS Other Partners: The Virginia Space Grant Consortium, Virginia Community College System, NASA and Virginia Center for Innovative Technology Project Outcomes: 54 Jobs Created in 5 years $63,882 Average Salary vs. $46,192 Average Per Capita Income for the Region Return on Investment (ROI): Increase state revenues by $9,175,818 over 5 years Participants: Targeted Clusters: Suffolk City Norfolk City Chesapeake City Virginia Beach City Hampton City Portsmouth City Newport News City Williamsburg City York County Cybersecurity Unmanned Systems Data Analytics Funding Request: $642,713 $ Total Project Budget: $ 3,844,996 21

HIGH GROWTH SCALE-UP COMPANIES INNOVATION PATHWAY LABS CITIES INCUBATORS INITIAL PROGRAMMING 757SEED FUND HIGH GROWTH SCALE-UP COMPANIES VC PEq ACCELERATOR 757 ACCELERATE ACADEMIA 757 ANGELS 22

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GROWTH & OPPORTUNITY QUESTIONS DISCUSSION 25