1. SET Overview & Exploration of Regional Data Northern Shenandoah Valley: Session 1

2. Today, we will... Lay the foundation for SET work together Review the Regional SET Civic Forum Explore the regional economic data: Regional industry clusters Employment and occupation Chart the next steps

3. The SET States 32 States Total - 13 states in 2015 including Illinois, Indiana, Iowa, Louisiana, Michigan, Missouri, Nebraska, New Mexico, North Carolina, North Dakota, Oklahoma, South Dakota, Virginia

4. Purpose of SET: Purpose of SET: Doing Better Together Guide the Regional Team in developing and implementing a High Quality Regional Economic Development Plan that builds on the region’s current and emerging economic strengths. 4

5. Virginia Tourism Steve Gaylean, Sandra Tanner Randy Rose, Staci Martin Virginia Economic Development Partnership Liz Povar Virginia Cooperative Extension – Virginia Tech Dr. Ed Jones, Dr. Jim Pease, Dr. Mike Lambur, & Dr. Martha Walker Virginia Tech Office of Economic Development Scott Tate The SET Partners USDA Rural Development Dr. Basil Gooden, Janice Stroud-Bickes, Craig Barbrow, David Foster, Dr. Kasey Martin, Anne Herring Office of the Secretary of Commerce and Trade Mary Rae Carter Virginia Department of Housing & Community Development Doug Jackson & Michelle Jones Virginia Rural Center Christy Morton Eastern Shore Region: State Resource Team National Team

6. High Quality Plan: Essential Components Evidence-Based Focused on Regional Economic Development Aligned with Goals Broadly Supported Practical

7. Building Shared Expectations Collaborating Cooperating Coordinating Networking Trust Effectiveness

8. Guiding Principles for Our Discussions Enter into the discussion enthusiastically. Give freely of your experience. Allow and encourage others to contribute. Listen attentively and take accurate notes. Ask questions when you don’t understand. Appreciate the other person’s point of view. Provide constructive feedback and receive it willingly. Keep confidences and assume others will. Confine your discussion to the topic.

9. Round I: Forum Review

10. Civic Engagement Forum Review Regional Strengths & Challenges Data Snapshot Reactions Opportunities

11. Northern Shenandoah Valley: Strengths Environmental & Natural Assets National/ State Parks Four Seasons, Natural beauty Battlefields River, Mountains, Caverns Outdoor Recreation, Tourism attractions Values of history and preservation Diverse Economic Base Manufacturing Federal/ State Government Small Businesses Agriculture Strategic Location Proximity to major metro areas Inland Port, I-81, 66 Airports (Dulles, Reagan, BWI) Quality of Life Healthcare Education Housing options Recognition of “Shenandoah Valley” Name Regional branding Regional identity Invokes region’s natural beauty Agriculture Business Apple, Equine, Livestock, Poultry Crop production Farm to table movements

12. Northern Shenandoah Valley : Strengths Transportation Major interstate/ transportation corridor Inland Port History Eras of history George Washington Civil War Patsy Cline Choice Place to Live Generations of longtime residents New residents Example of Regional Cooperation Regional Jail, Regional Airport, Regional Chambers, Regional Commission Healthcare Valley Health Diverse Land Use Good Mix of Public, Private, Rural Urban land Educational ‘bright spots’ Facilities and teachers Access to Resources for Business Development Training, higher Ed, Inland Port, etc Controlled Growth Less burdensome on already stretched resources

13. Workforce Development/ Lack of Specific Skills Misaligned human capital Certain skills/talents needed Need more “trade related” workforce Working in Silos within the Region Jurisdictional silos North/ South of Valley (Northern half of region oriented towards Winchester, Southern half towards Harrisonburg) Cost of Living /Affordable Housing Northern Shenandoah Valley : Challenges Resistance to Change NIMBY (Not in My Back Yard) balancing growth/ jobs with natural beauty Threat to Natural Resources Water supply limitations Water Quality Infrastructure Lack of broadband Technological infrastructure can attract high paying tech jobs Water/ sewer Electrical power

14. Attracting High Wage Jobs Mix of high wage jobs vs low wage jobs Maintaining Vibrant Agriculture Sector Population commuting to work outside of the region No Regional Economic Development Marketing Organization Transportation I-81, capacity Elderly in rural areas Access to higher education for low income Balancing tax dollars with growth Amenities for young adults/ families Lack of Four Year Public University Bedroom communities high wage employees leaving region Drug Traffic Use of region’s highways for distribution Region’s towns and counties as destinations Northern Shenandoah Valley : Challenges

15. Northern Shenandoah Valley : Opportunities Regional Tourism/ Regional Branding Virginia’s Outdoor Play Land Collaborative Regional Tourism/Marketing Plan with Economic Development Infrastructure Telecommunications Infrastructure Expanding access to internet Shuttle bus to DC Water Re-establish ATV in this region Workforce Training OJT and Apprenticeship Education More flexible workforce development Regional Technical College Skilled Trade Programs, Certification/ Technical skill programs More in roads to high school students (ie, WOW event) Collaboration between education from start to college Keep local workforce local Reverse commute strategy (what skills are leaving, and how to keep and grow)

16. Northern Shenandoah Valley : Opportunities Entrepreneur/ Small Business Development Programs Regional marketing/ efficiency of small business support Collaboration to help small businesses Create a regional new business incubator program Regional Economic Development Initiatives Infrastructure Land Transportation Market region together as a business location Increase intra-regional supply of products and services Attract high tech companies Encourage/ support renewable energy business Engagement Programs/Events /Activities for kids and families Community development Affordable housing opportunities for in- commuters Get more elected officials/ decision makers involved with SET Program

17. Round II: Economic Data

18. Data Scavenger Hunt: Thriving Businesses Number of employees Workforce skills needed Type of business (i.e. manufacturing, retail, health services) Average earnings County Size Large=over 100 employees Small= under 100 Other businesses/industries for which it is providing support

19. Round III: Explain, Examine, and Explore

20. 05 industry and occupation Establishments Employment by industry Cluster analysis Top occupations STEM occupations

21. NSV Farm Data 2012 Farms3,029 Farms by Sales less than $100,0002,663 Farms by Sales over $100,000366 Land in Farms (acres)420,298 Total Sales ($)$335,829,000 Crop Sales ($)$61,273,000 Livestock Sales ($)$274,557,000 Net Cash Farm Income ($)$55,104,000

23. 23 Industry and occupation section 05 Establishments by Company Stage ​ Source: National Establishment Time Series (NETS) – 2011 Database An establishment is a physical business location. Branches, standalones and headquarters are all considered types of establishments. Definition of Company Stages 0 1 2 3 4 Self- employed 2-9 employees 10-99 employees 100-499 employees 500+ employees

24. 24 Industry and occupation section 05 Establishments ​ Source: National Establishment Time Series (NETS) – 2011 Database Number of Jobs by Company Stages Year20002011% Change Stage 0 2,5225,178105.3% Stage 1 18,87936,43893.0% Stage 2 34,81841,97020.5% Stage 3 24,06025,5516.2% Stage 4 25,31912,679-49.9% Total 105,598121,81615.4% Questions What establishments are the most numerous based on company stages? What stages have experienced the largest growth? The greatest decline? What company stage employs the largest number of people? What stage captures the most sales? Which ones have experienced the greatest percentage loss over the 2000-11 period? Sales ($ 2012) by Company Stages Year20002011% Change Stage 0 $302,852,795$367,072,47021.2% Stage 1 $2,372,885,958$2,817,471,78918.7% Stage 2 $4,178,101,148$3,558,644,578-14.8% Stage 3 $2,991,661,550$3,252,485,5648.7% Stage 4 $2,596,003,663$1,241,081,727-52.2% Total $12,441,505,114$11,236,756,128-9.7%

25. Annual Sales per Job, 2000 and 2011 section 05 ​ Source: National Establishment Time Series (NETS) – 2011 Database Sales per Job ($ 2012) by Company Stages Year20002011 Stage 0 $120,084$70,891 Stage 1 $125,689$77,322 Stage 2 $119,998$84,790 Stage 3 $124,342$127,294 Stage 4 $102,532$97,885 Total $117,820$92,244

26. 26 Industry and occupation section 05 Top five occupations by number of jobs in 2014 Questions: What are the education and skill requirements for these occupations? Are they trained locally? Can local industries find sufficient qualified individuals for these occupations? ​ Source: EMSI Class of Worker 2014.4 (QCEW, non-QCEW, self-employed and extended proprietors)

27. Highest Earning Occupations

28. 28 Industry and occupation NAICS Description 2009 Jobs2014 Jobs Change Jobs NSVRP Change (%) 2015 Earnings per worker 52 Finance and Insurance3,6894,58389424%$60,707 53 Real Estate and Rental and Leasing5,0526,05199920%$38,929 56 Administrative and Support and Waste Management and Remediation Services 5,0755,92585017%$32,445 61 Educational Services3,0383,54450617%$40,162 71 Arts, Entertainment, and Recreation2,2552,63037517%$20,320 22 Utilities2402783816%$109,420 62 Health Care and Social Assistance11,98013,430145012%$54,545 55 Management of Companies and Enterprises 9121,01710512%$102,996 54 Professional, Scientific, and Technical Services 4,5365,02749111%$58,643 48 Transportation and Warehousing4,1084,4613539%$48,820 Industry Sectors with Highest Job Growth ​ Source: EMSI Class of Worker 2014.4 (QCEW, non-QCEW, self-employed and extended proprietors)

29. 29 Industry and occupation Industry Sectors with Greatest Job Decline ​ Source: EMSI Class of Worker 2014.4 (QCEW, non-QCEW, self-employed and extended proprietors) NAICS Description 2009 Jobs2014 Jobs Change Jobs NSVRP Change (%) 2015 Earnings per worker 31 Manufacturing13,27512,438-837-6%$58,262 42 Wholesale Trade2,4482,349-99-4%$57,132 23 Construction7,8947,590-304-4%$46,671 51 Information1,2331,196-37-3%$54,498 21 Mining, Quarrying, and Oil and Gas Extraction 238234-4-2%$59,802 11 Crop and Animal Production 3,5433,497-46-1%$25,094

30. Exploring Industry Clusters

31. Clusters Defined Similar and related firms in a defined geographic area that share: Common markets Technologies Worker skill needs Buyer-seller relationships

32. Clusters: Characteristics and Comparisons Size: Jobs, revenues Specialization: Proportion of employment relative to average Growth: Employment, revenue growth rate relative to average Depth: Proportion of good/service value that is exported Breadth: Of cluster segments in national/global industry Dynamism: Degree of company formation and survival Stage of Life Cycle: Evolution over time

33. Example Cluster Industry and occupation section 05

35. LIST OF CLUSTERS in SET Advanced Materials Agribusiness, Food Processing & Technology Apparel & Textiles Arts, Entertainment, Recreation & Visitor Industries Biomedical/Biotechnical (Life Sciences) Business & Financial Services Chemicals Computer & Electronic Product Manufacturing Defense & Security Education & Knowledge Creation Electrical Equip, Appliance & Component Manufacturing Fabricated Metal Product Manufacturing Energy (Fossil & Renewable) Forest & Wood Products Glass & Ceramics Information Technology & Telecommunications Machinery Manufacturing Manufacturing Super-cluster Mining Primary Metal Manufacturing Printing & Publishing Transportation & Logistics Transportation Equipment Manufacturing

36. 36 Clusters by Job Concentration and Job Growth The graph’s four quadrants tell a different story for each cluster. Industry cluster analysis section 02 ​ Modified from: http://www.charlestonregionaldata.com/bubble-chart-explanation/http://www.charlestonregionaldata.com/bubble-chart-explanation/ Emerging Bottom right (weak but advancing) Stars Top right (strong and advancing) Mature Top left (strong but declining) Transforming Bottom left (weak and declining) Contains clusters that are more concentrated in the region and are growing. These clusters are strengths that help a region stand out from the competition. Small, high-growth clusters can be expected to become more dominant over time. Contains clusters that are more concentrated in the region but are declining (negative growth). These clusters typically fall into the lower quadrant as job losses cause a decline in concentration. Contains clusters that are under-represented in the region but are growing, often quickly. If growth trends continue, these clusters will eventually move into the top right quadrant. Clusters in this quadrant are considered emerging strengths for the region. Contains clusters that are under-represented in the region (low concentration) and are also losing jobs. Clusters in this region may indicate a gap in the workforce pipeline if local industries anticipate a future need. In general, clusters in this quadrant show a lack of competitiveness.

37. 37 Industry cluster analysis NOTE: The first number after each cluster represents its location quotient while the second number represents the number of total jobs (full and part time jobs by place of work) in that cluster in the region in 2014. The clusters are sorted in decreasing order by location quotient. Percent Growth in Specialization Level of Specialization Mature Clusters Chemicals & Chemical Based Prod (2.96; 4,142) Forest & Wood Products (1.93; 3,190) Transportation & Logistics (1.22; 4,438) Printing & Publishing (1.15; 2,280) Advanced Materials (1.09; 3,748) Arts, Ent, Rec. & Visitor Industries (1.00; 4,734) Primary Metal Manufacturing (1.00; 263) Star Clusters Agribusiness, Food Processing & Tech (2.00; 6,836) Emerging Clusters Education & Knowledge Creation (0.91; 2,447) Apparel & Textiles (0.68; 580) Business & Financial Services (0.67; 10,273) Defense & Security (0.48; 2,355) Computer & Electronic Product Mfg. (0.24; 164) Transforming Clusters Mining (0.95; 324) Biomed/Biotechnical (Life Science) (0.94; 8,468) Fabricated Metal Product Mfg. (0.92; 867) Energy(Fossil & Renewable) (0.86; 5,367) Elec Equip., App & Component Mfg. (0.58; 145) Manufacturing Supercluster (0.48; 1,891) Information Technology & Telecom. (0.45; 2,048) Machinery Manufacturing (0.32; 246) Transportation Equipment Mfg. (0.20; 206) Glass & Ceramics (0.18; 36)

38. Economic “Leakages” In economic development terms, an economic leakage is money spent outside the regional economy. If some leakages can be efficiently and effectively “plugged”, then clusters may become stronger and more economic growth occur.

39. 39 Industry Clusters: Leakages Regional requirements, 2013 ​ Source: EMSI 2014.4 (QCEW Employees, Non-QCEW Employees, Self-Employed, and Extended Proprietors); Industry cluster definitions by PCRD section 05 Note: ** shows Star clusters

40. 40 Report Contributors This report was prepared by the Purdue Center for Regional Development, in partnership with the Southern Rural Development Center and USDA Rural Development, in support of the Stronger Economies Together program. Data Analysis Ayoung Kim Report Authors Bo Beaulieu, PhD Indraneel Kumar, PhD Andrey Zhalnin, PhD Report Design Tyler Wright This report was supported, in part, by grant from the USDA Rural Development through the auspices of the Southern Rural Development Center. It was produced in support of the Stronger Economies Together (SET) program.

41. Now What? Based on the assets of the region and current industrial trends… What clusters should this region explore further?

42. Reality Check and Next Steps Did the data reveal: Any new opportunities that should be considered? The need to eliminate previously considered opportunities? New partners that need to be included in the planning process.

43. Actions: Begin Writing the Plan Describe and summarize the Civic Engagement Forum process and results. Summarize key strengths and challenges based on the data Describe the selected clusters: Why were these clusters selected for further exploration? What are the strengths and challenges associated with the selected clusters? Which suggested opportunities are associated with each selected cluster?