1. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 David J. Ward, Ph.D. Founder & CEO CENTERGY ECONOMIC SUMMIT May 11, 2010

2. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 2 Presentation Overview:  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward  New Economy Trends

3. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 3 Four Big Trends to Watch 1.The nature of the economy is shifting rapidly as economic sectors expand and decline. 2.The nature of work is shifting away from manual labor to higher level analytic and interactive skills. 3.The pace of economic change has accelerated. 4.The U.S. is an important but shrinking share of the global economy.  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

4. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 4 U.S. Sector Employment Trends (% SHARE) Other (Retail, Construction, Government, etc.) Private Services Manufacturing Agriculture YEAR Perspective  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

5. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 5 Nonroutine manual Routine cognitive Routine manual Nonroutine analytic. Nonroutine interactive Changes in Skills Used at Work Based on Dictionary of Occupational Titles Source: K-12 Education and Economic Summit presentation by Alan B. Krueger, Princeton University  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

6. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 6 Remaking Wall Street in Three Months The Speed of the New Economy  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

7. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 The Global Economy 2008 World Population (Market) 6.5 Billion World Economy (GDP)$60.6 Trillion U.S. Population 0.3 Billion U.S. Economy$14.4 Trillion EU Economy $18.4 Trillion China’s Economy $4.3 Trillion Source: 2008 Estimates IMF and World Bank  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

8. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 Source: The National Bureau of Economic Research The Last 11 Recessions  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

9. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010  20041.85 million17.7 million  20051.95 million16.9 million  20062.07 million17.0 million  20071.81 million16.1 million  2008.95 million13.2 million  2009.55 million 9.9 million Housing = 4% GDP Normal Replace/ Growth 1.3 million Housing Starts Auto Sales Key Indicators Decline: 18% in 2008 25% in 2009 Autos = 3.5% of GDP Past declines: 21% in 1974 19.1% in 1980  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

10. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 The Budget Deficit: A Threat to the Dollar  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

11. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010  2006$91,000 The Quilters’ Index  2007$90,000  2009$45,000  2010$67,000 Spending of 2 busloads of quilters at the American Quilters Society show in Paducah, KY Source: Judy Ward, Master Quilter  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

12. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 The “New Normal” Economy  Consensus that we are in a new economic era  We have experienced many once in a generation economic changes.  The question is, what will return to “normal” and what is forever changed?  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

13. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 So what is the “New Normal”?  Savings Rate  Spending  Work Life  Standard of Living Consumer:      New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

14. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010  Regulation  Outsourcing  Globalization  Business Cycles Business:     So what is the “New Normal”?  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

15. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 In the New Normal economy, where is the advantage?  A back to basics economy  Huge global markets  A versatile workforce  Alignment with market opportunities  A  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

16. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 MN IA WI MI UP/WI Border Region Regional Organization and Thinking  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

17. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 17 The Centergy Economic Opportunity Plan  Funded by WI Dept. of Commerce &CWI GROW Grant  Included strategies, tactics, and action steps for implementation  2008 restructure & plan of work  11 Opportunities  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

18. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 18 Prime Economic Opportunities: 1.Bio-Fuels and Energy Production 2.Paper 3.Health Care 4.Logistics 5.Agriculture and Food Processing 6.Research Centergy Economic Opportunity Study 7.New Business Development 9.Workforce Education and Training 8.Wood Products and Composites 10. Finance, Insurance, Real Estate (FIRE) 11. Retirement Markets  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

19. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 19 1. Bio-Fuels and Energy Production  Position Central Wisconsin as a player in in the alternative energy / bio-fuels sector  Possibilities: Bio-refining, biodigesters  Support and invest in research, technology transfer and key businesses   Leverage abundant supply of natural materials to meet growing demand for renewable energy  Centergy Economic Opportunities First Tier Priorities  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

20. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 20 2. Paper  Support and invest in value-added products  Grow and enhance existing world-class assets and labor pool  Apply BioRefining to paper-making process  Exploit advances in nanotechnology  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward Centergy Economic Opportunities First Tier Priorities

21. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 21 3. Health Care  Medical research, education and training  Build economic activity in:  Regional health care delivery  Medical supplies  Medical software / bioinformatics  Take advantage of abundance of world-class assets and facilities  Leverage intellectual property from research to support high-tech startups  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward Centergy Economic Opportunities First Tier Priorities

22. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 22 4. Logistics  Take advantage of:  Build on existing base and attract new businesses  Central geographic location  Presence of trucking companies  Convergence of rail lines, interstate, highways  Prime opportunities:  Distribution of goods  Logistics management and technology  Intermodal operations  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward Centergy Economic Opportunities First Tier Priorities

23. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 23 5. Agriculture and Food Processing  Develop niche food markets  Build on strong base in processing and production of regional crops  Seek out key industry segments ripe for expansion and growth  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward Centergy Economic Opportunities First Tier Priorities

24. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 24 Overview of 2010 Work Plan Strategies: Workforce Development PreK-12 Higher Education Incumbent Worker Training Business Development Community Development Quality of Place Infrastructure Government Relations Advanced Manufacturing Bio-energy, Agriculture, Paper & Forestry Entrepreneurship Medical Sciences CENTERGY ECONOMIC OPPORTUNITY STUDY

25. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 25 How does Centergy maximize the economic opportunity of global market demand? MOVING FORWARD Do the Centergy priorities line up with global market demand?  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

26. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010  Energy  Fiber  Protein Key Global Market Demand  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

27. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 27 Centergy Priorities Global Market Do the Centergy priorities line up with global market demand? Biofuels Paper Health Care Logistics Agriculture & Food Processing Energy Fiber Protein  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

28. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 28 Four Big Ideas Moving Forward 1. Paper/ Fiber 2. Energy 3. Research & Development 4. Foreign Direct Investment  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

29. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 29 Big Ideas for Economic Prosperity in the Centergy Region in the 21 st Century Establish Central Wisconsin as the center for paper and paper manufacturing research in the state and the nation. UW-Stevens Point Pilot Machine  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

30. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 30 Position Central Wisconsin as a leader in the alternative energy/fuels market. Biodigester photo from Defense Environmental Network & Information Exchange Establish a “green” incubator to house businesses dealing with renewable and alternative energies and green products Big Ideas for Economic Prosperity in the Centergy Region in the 21 st Century  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

31. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 WE Energies Biomass Power Plant  50 megawatts  $155 million investment  400 construction, 150 permanent jobs  75 truckloads of biomass per day  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

32. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 At the University of Wisconsin-Stevens Point When you expect things to happen - strangely enough - they do happen. John Pierpoint Morgan  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

33. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010  A multidisciplinary institute drawing on resources of all colleges at UWSP  A collaborative institute, working with external partners in business, industry and other universities  Focused on sustainability  Funded:  State supports 4 FTE  Federal earmarks $3.2 million  Dept. of Defense $1-$2 million per year WIST is…  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

34. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 WIST Objectives  Create and keep jobs in Wisconsin  Develop research programs in sustainable resource utilization  Educate and inform general public  Provide expert knowledge in sustainable technologies  Provide student internships statewide, nationally and internationally  Develop new products, services and business opportunities  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

35. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 35 Make Central Wisconsin a model for research and technology transfer. Diagram from Vision 2020: A Model Wisconsin Economy - WI Technology Council Establish Central Wisconsin Research & Technology Transfer Consortium DISCOVERY OF NEW KNOWLEDGE TECHNOLOGY INNOVATION COMPETITIVE ADVANTAGE ECONOMIC PROSPERITY  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward Big Ideas for Economic Prosperity in the Centergy Region in the 21 st Century

36. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 36 Primary R&D Assets  Marshfield Clinic  UW-Stevens Point  WiSys  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

37. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 37 Play the global markets by exporting and attracting foreign direct investment. FDI is already here in paper and other sectors. What is the strategy to get more FDI investment? Foreign Direct Investment  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

38. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 38  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

39. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 CENTERGY BENCHMARKS of PROGRESS The Centergy Organization Focus: The 2010 Plan of Action A full time, professional executive director Collaboration internal/external Bio-Energy strategies & results Workforce development strategy UWSP – WIST, ABET accreditation for PSE program

40. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 Wrap-up and Summary  The Centergy plan is on target. Keep going.  Remember that Centergy is young. Work plan and organization structure in 2008.  Continue to look to leverage opportunities with other regional economic groups.  New Economy Trends  The U.S. Economy  The New Normal Economy  The Centergy Plan  Centergy: Moving Forward

41. © Copyright 2010, NorthStar Economics, Inc. All rights reserved. 2010 CENTERGY SUMMIT MAY 11 th 2010 41  David J. Ward, Ph.D., Founder and CEO  Phone: (608) 279-3393  Email: dward@northstareconomics.com  Fax: (608) 441-8064  Web: www.northstareconomics.com