Competitive Design Internal Use Only

What will I take away from this presentation? See how the State of Missouri compares to Midwestern peers in terms of key economic and talent factors, and how Missouri DED compares on jobs created and investment attracted Share Colorado’s experience in creating and executing a new strategy Understand how these findings will inform DED’s transformation efforts Internal Use Only

PwC’s Work with Missouri DED Internal Use Only

Who are our competitors? Our analysis compares the State of Missouri – and Missouri DED – with thirteen Midwestern peers and four leaders from around the U.S. Ken notes: We selected a handful of states around the U.S. to use as models I’ll elaborate on more of my experience in Colorado toward the end of the presentation Peer state Other leader * Selected data was not available for Illinois at the time of presentation Internal Use Only

Results of Our Peer Benchmark Internal Use Only

This presentation tells two stories… How does the State of Missouri compare to peer states in terms of key economic and talent factors? Story 1 State-Level Comparison How does Missouri DED compare to peer agencies in terms of jobs created, investment attracted, and workforce outcomes? Story 2 Agency-Level Comparison Internal Use Only

State-Level Comparison We begin with Story 1… How does the State of Missouri compare to peer states in terms of key economic and talent factors? Story 1 State-Level Comparison Internal Use Only

GDP Growth (2007-16 CAGR) by State Missouri trails on GDP growth, and Michigan’s more recent GDP growth has outstripped Missouri’s considerably GDP Growth (2007-16 CAGR) by State Missouri trails considerably on GDP growth, and Michigan’s more recent GDP growth has outstripped Missouri’s considerably Source: U.S. Bureau of Economic Analysis (BEA) Internal Use Only

Missouri lags peers in job growth; several peers have seen rapid job growth post-recession Source: Economic Policy Institute (EPI) analysis of U.S. Bureau of Labor Statistics (BLS) Local Area Unemployment Statistics data Internal Use Only

Missouri is among the low-to-mid range for wage growth in the last year, and its growth was only half of Tennessee’s and Arkansas’ Source: U.S. Bureau of Economic Analysis (BEA) Internal Use Only

Missouri also struggles on key talent factors, like labor force quality and availability – showing room for improvement What we assessed Labor force quality and availability (2017) Labor force productivity (2017) Migration of college-educated young people (2009-2016) Adults with associate degree or higher (2017) STEM graduates living in-state (2015) Ken comments: We looked at a handful of talent factors to get a sense of Missouri’s ability to attract and retain residents with an Associates degree or higher, and those with a focus on STEM Missouri benefits from having a stronger education system and pipeline (in general) than many of its Midwestern peers, though outmigration after schooling is certainly an issue to be addressed Sources: U.S. Census Bureau; U.S. Bureau of Labor Statistics; U.S. News & World Report; The Integrated Postsecondary Education Data System. Note: Talent Factors Score is calculated by taking the sum of rankings from multiple dimensions. All dimensions are weighted equally (13 points each). Internal Use Only

We continue with Story 2… How does Missouri DED compare to peer agencies in terms of jobs created, investment attracted, and workforce outcomes? Story 2 Agency-Level Comparison Internal Use Only

Missouri lags behind the “leadership group” of Kansas to Wisconsin, which are more effective in creating jobs than other peers Jobs Created (#) by ED Agencies as a Percentage of Missouri DED (Weighted by Workforce Size) 2,721 7,863 6,511 10,668 3,591 21,861 5,278 9,411 25,678 22,848 37,356 17,373 27,171 2,721 7,863 6,511 10,668 3,591 21,861 5,079 9,411 25,678 22,848 37,356 17,373 27,171 Ken comments: These numbers are weighted for the size of the total workforce in the state, and you can see each state’s effectiveness at creating jobs (compared to Missouri) in the percentages The numbers within the columns are the actual jobs created by each state – but it’s the percentages that are more critical For the final report, we will examine these numbers with other types of weightings, such as Jobs Growth and others We will also introduce stats comparing efficiency of spend in terms of jobs created NOTE: These figures are influenced by macroeconomic factors – like the resurgence of the auto industry. *Figures in columns indicate average number of jobs created per state over most recent three fiscal years (or closest data available). Figures are awaiting validation by peer state ED agencies and should not be treated as definitive. Sources: State ED Agency Annual Reports and related sources Internal Use Only

Kentucky is a clear leader in investment attraction, and Missouri trails the rest of its peers $1.59 $1.80 $1.04 $1.03 $2.35 $1.06 $5.80 $2.12 $6.33 $4.92 $5.14 $2.29 $6.25 $1.59 $1.80 $1.04 $1.03 $2.35 $1.06 $5.80 $5.42 $2.12 $4.92 $5.14 $2.29 $6.25 Ken comments: Here we can see another example of how investment attraction is going comparatively more slowly in Missouri For the final report, we will examine this number with other types of weightings, such as GDP Growth, Manufacturing Investment Growth, and others We will also introduce stats comparing efficiency of spend in terms of investment attracted NOTE: These figures are influenced by macroeconomic factors – like the resurgence of the auto industry. *Figures in columns indicate average investment attracted per state over most recent three fiscal years (or closest data available). Figures are awaiting validation by peer state ED agencies and should not be treated as definitive. Sources: State ED Agency Annual Reports and related sources Internal Use Only

Initial research into efficiency measures – like total incentive costs by state – shows that Missouri gets a lot for what it puts in Ken comments: Key here is what’s in the title – Missouri expends little in incentives, gets a good return GDP on the little that is spent. Suggest highlighting the good no Incentive Cost as a Percent of GDP (2015) Source: Upjohn Institute data, supplied by DED. Includes tradable GDP. Data not available for all peer states (AR, KS, OH excluded). Internal Use Only

Missouri significantly lags its peers on key federal workforce measures of employment rates… Entered Employment Rate (Average of PY 2014 and PY 2015, %) $1.59 $1.80 $1.04 $1.03 $2.35 $1.06 $5.80 $2.12 $6.33 $4.92 $5.14 $2.29 $6.25 $1.59 $1.80 $1.04 $1.03 $2.35 $1.06 $5.80 $5.42 $2.12 $4.92 $5.14 $2.29 $6.25 Nuance is not as much the rankings, but the fact that other states are simply more effective – even if MO serves more people or different types of people Source: Department of Labor, Employment and Training Administration Internal Use Only

…and on average six-month earnings for those entering employment Entered Employment Earnings (Average of PY 2014 and PY 2015, $/six months) $1.59 $1.80 $1.04 $1.03 $2.35 $1.06 $5.80 $2.12 $6.33 $4.92 $5.14 $2.29 $6.25 $1.59 $1.80 $1.04 $1.03 $2.35 $1.06 $5.80 $5.42 $2.12 $4.92 $5.14 $2.29 $6.25 Source: Department of Labor, Employment and Training Administration Internal Use Only

Organizational Comparison Internal Use Only

Focus is essential to increasing job growth and investment Missouri’s Department of Economic Development is responsible for more core functions than many of its peers Business Attraction Existing Business Support Minority Business Development Community Assistance Most Peers Some Peers Workforce Development Tourism & Film Ken notes: Alignment of resources is the most critical item to “get right” at this juncture What are examples of Colorado’s and other states’ strategies? What is effective and ineffective about these? Few Peers Energy Other core Missouri DED functions: Housing Development, Utility Regulations, Arts, Entrepreneurship Internal Use Only

Colorado’s Story & Habits of Leaders Internal Use Only

Colorado’s six pillars guide its economic development strategy and execution Build a Business-Friendly Environment Retain, Grow & Recruit Companies Increase Access to Capital Create & Market a Stronger Colorado Brand Educate & Train the Workforce of the Future Cultivate Innovation & Technology Ken notes: Tell story about where Colorado began (Already effective? Not so?) and where it went during Ken’s tenure Was an effective EcoDevo machine already started or did they create it? Internal Use Only

What’s Next? Internal Use Only

Our upcoming assessment will examine several key research themes Agency Functions and Structures Staffing and Specialization Revenues, Budgets and Expenditures Strategy and Tie-Ins to Workforce Development Internal Processes and Performance Management Relationships with Other Stakeholders Internal Use Only

Questions? Internal Use Only