Foundations for a Best in Midwest Strategy Internal Use Only

State Economic Agency Comparison 1. Economic Analysis 2. State Economic Agency Comparison 3. DED Organizational Assessment 4. Strategy Recommendations 5. Performance Management Support 10-15 Year Economic Projections Labor Supply & Demand Analysis Industry Specific Deep Dives Pilot and Implementation

Design Principles We all agree on why we need to reset our approach to economic and workforce development – because the status quo isn’t working any more. Before we create tactics of what we’ll do, we need to consider how we’ll do it. Over the next few hours, we’ll discuss some potentially opposing concepts. They don’t have to be mutually exclusive, but we need to explore them. Internal Use Only

Overarching statewide strategy or region specific strategies Internal Use Only

Accelerating urbanization Missouri Regional Employment and Wages – 2016 to 2017 Change Accelerating urbanization Across the United States urban regions are growing fastest Missouri from 2010 to 2017 ▲3.2% Metro county population change ▼1.1% Non-metro county population change Source: MERIC analysis of U.S. Bureau of Labor Statistics, Census of Employment and Wages Internal Use Only

The ratio of retirees to workers is increasing 2017 Retirees to Working Age Ratio Number of residents age 65+ per 100 residents age 18-64 Retirees to working age Americans 1980 19 2010 21 2017 25 2025 33 Canada and Germany even older (40, 44) by 2025 Source: Wall Street Journal Analysis of U.S. Census population figures, published June 21, 2018 Internal Use Only

Large or small, our economies are connected Change in Daytime Population Most counties lose daytime population as workers commute Source: MERIC analysis of U.S. Census 2012-2016 ACS commuting data of Missouri counties lose daytime population as workers commute Branson Kirksville Sedalia Cape Girardeau Lake Ozark Sikeston Chillicothe Lebanon Springfield Columbia Maryville St. Charles Hannibal Moberly St. Joseph Jefferson City Nevada St. Louis Joplin Poplar Bluff West Plains Kansas City Rolla 73% Towns and cities across Missouri are focal points of regional trade: Canada and Germany even older (40, 44) by 2025 Internal Use Only

Overarching statewide strategy or region specific strategies Accelerating urbanization Climate & resource scarcity Demographic changes Shift in global economic power Technological breakthroughs Overarching statewide strategy or region specific strategies Region specific strategies Regions and towns are tied to metro areas, but trends hinder our traditional strengths Link growth in both metro and rural areas Customize our approach and use resources differently based on local needs Overarching statewide strategy Metro areas and professional services are dominating growth Productivity, mobility and talent matter most Focus our resources on high-growth business needs Internal Use Only

Focus on targeted industries or be industry agnostic Internal Use Only

We are America – diversified with strong “coastal” economies St. Louis $160 billion 2016 Metro GRP 7th Most Diversified Economy Missouri has a broad portfolio of large industries Two-Thirds of our GSP is in St. Louis & Kansas City Like the United States, Missouri has huge east and west coast economies Northwest Northeast $9 billion $7 billion Kansas City $58 bn St. Louis $116 bn Kansas City $129 billion 2016 Metro GRP West Central Central $7 billion $24 billion Southeast Ozark Southwest South Central $11 billion $18 billion $9 billion $5 billion GRP (billions) values shown in green bubbles are regional product within Missouri only WDA region Internal Use Only

We are America – our workforce mirrors the United States Source: MERIC analysis of BLS Occupational Employment and Wages, 2015 Internal Use Only

We are the Midwest Selected Midwest Strengths Aerospace & Defense Automotive Transportation & Logistics Agribusiness Energy Solutions Life Sciences Manufacturing Concentrations Agribusiness Concentrations Our diversity makes it hard to stand out Life Science Concentrations Source: PwC Preliminary Cluster Analysis. Location Quotient (LQ). LQ of 2 means state is twice as concentrated as nation in a cluster. Internal Use Only

Focus on targeted industries or be industry agnostic Employ broad business climate improvements, infrastructure and talent strategies that will stimulate job growth regardless of the industry. Focus on targeted industries Direct specific training, incentives, and marketing to grow industries that will have a multiplier effect. Agribusiness Aerospace & Defense Automotive Energy Solutions Financial Services Transportation & Logistics Information Technology Life Sciences Industrial Engineering Extractives Healthcare Entertainment & Media Bold Clusters have been our targeted sectors since 2000. Internal Use Only

Raise education generally or train for specific occupations Internal Use Only

Raising education levels helps regional economies 1 more year of schooling among metro area employed ▲10.5% GDP ▲8.4% real wages Source: A Matter of Degrees, Milken Institute, 2013 http://www.milkeninstitute.org/publications/view/564 Internal Use Only

Missouri businesses have concerns 52% of St. Louis businesses say the Shortage of Skilled Workers is the Biggest Barrier to expanding employment for the third year in a row Source: St. Louis Community College State of the Workforce 2017 Survey 42% of Missouri business owners say Colleges prepare students for the workforce 15% of Missouri business owners say High Schools prepare students for the workforce Graph colors Source: Missouri Chamber 2030 Business Survey Sources: Missouri Chamber 2030 Survey at https://mo2030.com/wp-content/uploads/2017/10/MO2030-report-2017-01-preparing-p20-23.pdf and St. Louis Community College report at: http://workforcesolutions.stlcc.edu/2017/2017-state-st-louis-workforce-report/ Internal Use Only

Missouri service sector jobs are growing fastest 2006 – 2016 Employment Growth Rates History 2016 – 2026 Projected Growth Rates Future Goods Producers Manufacturing, Construction, Mining ▼15% ▲2.5% Services Trade, Transportation, Finance, Professional Services, Healthcare, etc. ▲7% ▲8.7% Government Federal, State, and Local ▼1% ▲1% Sources: Bureau of Labor Statistics for 2006-2016 figures. MERIC employment projections for 2016-2026 estimates. Internal Use Only

Middle-skilled workers are needed everywhere Requires training or education beyond high school but less than 4-year degree Middle-Skill : Source: St. Louis Community College State of the Workforce 2017 Survey 4 out of 7 Functional business areas need middle-skills to meet skill shortages in St. Louis High-Skill Middle-Skill Low-Skill Internal Use Only

Raise education generally or train for specific occupations We’re competing with increasingly educated economies Business surveys show critical thinking, communications, and problem-solving skills are in demand Use resources broadly to raise education quality, levels, talent attraction and retention Train for specific occupations Business surveys show STEM and STEM-Skills are in demand Specific jobs are needed (healthcare, business, technology) but there are few applicants Target resources on developing and deploying in-demand, skilled job training Internal Use Only

Maximize economic growth or maximize social impact Internal Use Only

Manufacturing job growth is slower than GDP growth Missouri Manufacturing GDP and Employment Growth Missouri Manufacturing Productivity ▲13% GDP ▲4% jobs Internal Use Only

Healthcare Practitioners & Technical Occupations High-demand jobs are in the service sector and range broadly in skill level Missouri’s fastest growing jobs through 2026 Forecasted to increase by more than 10% High Skill Low Skill Middle Skill Healthcare Practitioners & Technical Occupations Computer & Math Occupations Life, Physical, & Social Science Occupations Healthcare Support Occupations Construction Occupations Personal Care Occupations Sources: MERIC employment projections for 2016-2026 estimates. Internal Use Only

Social impact measures are harder to track than economic indicators Wages Differ by Region Welder 2016 Average Annual Pay April 2018 Unemployment Rates Southeast region often highest $43K in Kansas City $34K in Northeast Region $31K in South Central Region It’s difficult to get timely and detailed information on social impacts: Crime Rates, Housing Costs, Poverty, Impact on Diverse Populations, etc. Sources: Bureau of Labor Statistics for Occupational Wages and Unemployment Rates. Internal Use Only

Maximize economic growth or maximize social impact Gross State Product and GSP Per Capita are top measures of wealth but don’t necessarily equate to job growth It’s difficult to define a quality job Other macro measures should be considered Maximize social impact Simply counting jobs created does not capture wages and benefits Statewide measures may not suffice when regions are so diverse It’s difficult to get timely and detailed information Internal Use Only

It’s time to work During the breakout session, you’ll be asked to explore one side of the topics we just discussed. Later today, we’ll synthesize the discussions, and, through interactive technology, we’ll respond to all the positions. Before we adjourn, we’ll consider other design principles and establish a baseline to create our plans. These breakout sessions will shape our economic and workforce plans. This is real. Internal Use Only

Breakout Sessions On your badge, find your assigned group and room. In your room, you’ll have a packet of materials and a facilitator to help structure your conversation. After your breakout session, grab lunch and enjoy further conversation in the atrium. Return to this room by 12:30 p.m. to discuss your group’s work. Internal Use Only