Detroit Region Aerotropolis A Model for Achieving Economic Vitality and Sustainability October 21, 2

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Detroit Region AerotropolisA Model for Achieving
Economic Vitality and SustainabilityOctober
21, 2009
Wayne Countys Innovation Technology Solutions
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Discussion Outline

• Achieving Enhanced Economic Vitality and
  Sustainability
• Economic Trends
• Regional Assessment
• Opportunities for Success
• Wrap Up

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Economic Vitality and Sustainability

• Underlying Principles
• Believe in yourself but not what your Mom told
  you
• Understand that change is both inevitable and
  difficult
• Build a New Model
• Not your fathers Pittsburgh and unlike
  Oldsmobile, they pulled it off.
• Be willing to change based on long term market
  realities
• Allocate Resources to Achieve Optimal ROI
• Know your target market
• Establish public policy that is effective and
  supported by the region
• Communicate Effectively
• Talk to people who can make a difference
• Make sure message is clear, concise and relevant

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Economic Trends

• National Jobs Trends
• 2008 and 2009 total number of unemployed
  nationally jumped from 7.6 million
• to 15.1 million.
• September job losses equaled 263,000
• 9.2 million are involuntary part-time workers
• 2.2 million are marginally attached to work
  force
• Market place is unpredictable Capital Markets
  are difficult to access
• Current claims of economic recovery are
  unconvincing and lack job
• creation capacity

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Economic Trends

• Local Observations
• International Activity is still relatively
  strong
• Transportation and industrial equipment are
  among leading sectors of
• international inward investment to U.S.
• Europe and Japan are still leading source of
  investment but India is climbing
• Surrounding states (e.g., Ohio, Illinois and
  Indiana) are among leading job
• destinations for international investment

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Regional Assessment
INTRODUCTION

• Important Regional Assets
• Tremendous workforce capabilities
• Education institutions (Michigan, Michigan
  State, Eastern Michigan
• and Wayne State) nearby
• Excellent multimodal transportation network
• Developable parcels of land
• History of Creativity and Technology Prominence
• Challenge
• Adjust to new market realities
• Be great again just in a different way

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INTRODUCTION
Opportunities for Success

• Primary Sectors
• Logistics Distribution
• Renewable Energy Energy Efficiency
• Advanced Manufacturing
• Life Sciences
• Supporting Sectors
• Corporate Headquarters
• Hotels Tourism
• Retail

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TARGET SECTOR PRIORITIZATION

• Based on four primary criteria
• Economic Capacity Must have significant
  ability to grow regionally based on regional
  or national trends
• Logistics Distribution, Renewable Energy, Life
  Sciences all growing nationally Advanced
  Manufacturing exports up significantly
• Wealth Generation search for high-paying and
  above-average jobs
• Average regional salaries ranging between 46K
  and 85K annually
• Logistics and Distribution Tie-Ins must relate
  to the Aerotropolis idea of logistics-based
  industry sectors
• In general, adv. mfg. and renewable energy some
  tie-in with life sciences
• Local Assets must have strong local assets to
  support development
• Importance of universities outside of
  boundaries existing companies/research

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RENEWABLE ENERGY
ADVANCED MANUFACTURING
ENERGY EFFICIENCY

• Focus on the design, manufacturing, and assembly
  of the chemicals, electronic, and mechanical
  parts, machinery, and products that provide the
  basis of modern telecommunications,
  transportation, health care, and energy supply.
• Industry Sub-sectors
• Aerospace Components
• Automobile Manufacturing
• Pharmaceutical Medical Devices
• Renewable Energy Equipment

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• National Growth Trends
• Increased productivity has helped fuel
  significant wage increases (20 since 2001)
• The simultaneous rise in wages and decline in
  employment has increased the competition for jobs
  
• Decline in value of the dollar has increased the
  competitiveness of exporters, including
  industrial supplies
• Advanced manufacturing sector lost more than
  400,000 jobs since 2002

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• Greater Detroit Industry Overview
• Workforce has declined by nearly 25 since
  2002.
• In 2006, the average wage approached 75,000/yr
• Detroit wages are 12 higher than U.S.
• Wages in the Detroit region have not grown as
  quickly as national increases

• Aerotropolis Assets Opportunities
• Existing advanced manufacturing workforce
• Expanding exports require access to
  international air cargo, trucking, rail, and
  intermodal transportation, all of which are
  available in the Aerotropolis
• Significant opportunities for research
  development / engineering centers of excellence
  located to take advantage of passenger
  connections to Asia
• Opportunities for assembly / distribution based
  on air cargo flight assets

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• Industry Definition
• Technology services that reduce or eliminate
  the environmental impact of primary energy
  production, energy consumption and electricity
  generation.
• Focused on the production of energy forms that
  are environmentally sustainable and reduce the
  environmental impacts of energy production.
• Driven by advances in green building and energy
  and water conservation technologies, battery
  technologies and energy storage, smart grid
  technologies, superconducting electrical
  transmission lines, and a wide variety of
  electronic, mechanical, and industrial processes
  and services

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• Industry Subsectors
• The Aerotropolis has competitive advantages for
  companies in several sectors
• Vehicle systems
• Fuel cells
• Energy storage
• Wind geothermal component mfg.

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• Greater Detroit Overview
• The Detroit and Ann Arbor metropolitan areas have
  significant potential to become a national
  center of the renewable energy and energy
  efficiency industry.
• The region boasts several research and corporate
  assets that can form the basis of an effective
  industry cluster.
• Aerotropolis Assets Opportunities
• Significant startup and corporate assets
  already in place in and around Aerotropolis
• Workforce development assets in and around
  Aerotropolis (i.e. wind turbine repair)
• Research into batteries and vehicle propulsion
• Next Energy
• University Research Corridor
• On-going research efforts at EMU, UM, MSU, WSU
• Proximity to Willow Run with flights to Texas
  and ability to handle component part cargo

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• Industry Definition
• Process of planning, implementing, and
  controlling the efficient flow of goods and
  services through the supply chain from producer
  to consumer
• Distribution includes all freight carriers
  (air, sea, trucking, and intermodal) and
  warehousing
• Focus on outsourcing to develop advanced
  just-in-time (JIT) delivery systems
• Integration of international trade, logistics,
  and distribution into one continuous and
  extensive supply chain driven by global free
  trade

• Logistics Distribution Company Types
• Freight Forwarders
• Air Cargo
• Trucking
• Rail/ Intermodal
• 3rd Party Logistics Companies

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• National Growth Trends
• Skyrocketing fuel costs are shifting shares of
  the market between modes
• The role of the weak dollar in increasing U.S.
  exports
• Continued addition of new air rights opens new
  markets for air transportation
• Increased security and Customs regulations
• Need for significant transportation
  infrastructure investment
• Greater Detroit Industry Overview
• The Aerotropolis positions Detroit to
• recapture logistics activity currently served by
  competitors,
• capture Asian trade flows, and
• continue to serve the logistics needs of the
  automobile industry.

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LOGISTICS

• Aerotropolis Assets
• Top international passenger gateway to Asia and
  Europe
• Significant available capacity at both Detroit
  Metro and Willow Run
• Location between competitors with significant
  capacity and service issues (position Detroit as
  a high-quality alternative)
• Better weather and lower levels of delays than
  regional competitors
• Ability to capture SE Michigan cargo being
  shipped overseas via Chicago

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• Industry Definition
• Provides accommodations, entertainment, and
  recreation to a wide variety of tourists,
  visitors, and convention attendees.
• The industry is primarily comprised of service
  jobs.

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Wrap Up

• Where to now?