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Milwaukee 7 Council Meeting
February 19, 2015
DRIVING
ECONOMIC
GROWTH
Chairman, President and CEO
Wisconsin Energy Corporation
Gale Klappa – M7 Co-Chair
Jim KreuserCounty Executive
Kenosha County
Frank UnickCFO
Uline
M7 Agenda
BusinessPlan
Driving Prosperity
Global Trends
M7 Mission
Help companies in our driver industries –
companies that EXPORT
goods and services from the region –
to create jobs and invest capital here.
M7
Privately-held former Fortune 1000 manufacturer of industrial compressors, blowers, pumps and loading arms
$2.5 billion annual sales; global employment of 7,000
Moving global HQ to Milwaukee’s Third Ward (competed against Houston and Quincy, IL)
200 highly-paid executives & professionals
Team effort: WEDC, City of MKE, M-7
Win: Gardner Denver
M7
Lake County (IL) CNC machining
company
Consolidating two facilities to
50,000 sf complex in Kenosha
77 skilled manufacturing jobs;
$1.5 million capex
Announcement February 2015
Team effort: WEDC and KABA
Among first meetings sourced via M-7
calls on Illinois manufacturers (2013)
Win: Toolamation
M7 Kenosha “Wins”
Jobs Payroll CapEx
Konecranes 50 2,346,000 250,000
Kenall 621 34,487,856 32,000,000Niagara Bottling 70 3,088,750 75,000,000
Quest 56 2,805,880 3,600,000
Toolamation 77 2,788,324 1,445,000
874 45,516,810 112,295,000
M7
Healthcare technology company
that provides IT systems and
services to manage the ordering
and tracking of patient injections
Locating office in downtown
Milwaukee
50 highly-compensated engineers
and software developers
Recipient of WEDC angel investor
tax credits
Emerged from MassChallenge
accelerator
Win: ConsortiEX
M7
Milwaukee-based screen
printer that specializes in eco-
friendly production methods
Milwaukee- and Wisconsin-
centric products and designs;
sold in Milwaukee, Madison
and Door County
Expect to add 15 employees
MEDC loan candidate
Win: Orchard Street Press
M7
Scorecard of Wins for the Region
* Results based on company projections at time of M7 engagement** Jobs accounted for at 5 year audit using public records*** Average regional wage $45,000
STRATEGY: GROW JOBS
Performance Measures 2010-To-Date 2005-2009
Project Wins 46 12
Pledged Jobs* 7,390 3,220
Audited Jobs** TBD 2,449 (76%)
Average Wage*** $49,998 $58,800
Payroll $369M (est.) $144M
Capital Investment Pledged $657M $156M
M7
50 Active Projects
16International
Pipeline of Prospects
M7
5,292Potential Jobs
Pipeline of Prospects
M7
Campaign Leaders
Campaign 3.0
$3,969,000
M7
Next Generation Manufacturing Council
ACCOMPLISHMENTS:
One of 12 federally designated
“Manufacturing Communities”
The Region receives preferential
consideration for up to $1.3 billion
in federal grant money
WHAT’S NEXT:
Create and integrate regional
manufacturing initiatives
Lead collaborative applications
for federal dollars
STRATEGY: BUILD REGIONAL CAPACITY
M7M7 NGM Council
National Manufacturing Institute Competition
Competition will award $70M in federal funding to the consortium best suited to execute the vision for a national Smart Manufacturing hub
$70M federal investment must be leveraged by at least $70M in matching private investments
The award is for five years with the goal of the institute being self-sustaining after that period
M7M7 Talent Initiative
Mission: Align workforce with growth opportunities in high potential industry clusters
Supporting → M7 Attraction & Expansion efforts
→ Employers in M7 driver industries
KEY STRATEGIES:
1. Provide a coordinated “Rapid-Response” to address immediate industry talent needs Link employers to 250 quality job placements per year.
2. Address the skills gap by improving the quality of the regional labor pool
Increase the # of apprenticeships in M7 region.
Expand the # of students in cluster-specific pathway programs (e.g., Welding and Machining 101)
Increase the number of students on a clearly articulated pathway (2+2+2) from basic credentials to Bachelor’s degrees in engineering.
3. Gather and disseminate real-time data of available talent for industry; and align
talent systems to meet current and future industry needs
M7
Export InitiativeRegional strategy to grow the number of exporting companies
RESULTS:
Selected as one of eight regions across the
nation to share export strategy best practices
Strategies
1. Catalyze export engagement by small and mid-
sized enterprises (SMEs)
2. Help companies navigate the exporting process
3. Use the region’s commercial strengths to
expand and intensify export engagement
4. Create a strong local export culture
In the past 10 years, exports have grown
45%offsetting a 6% loss in domestic sales.
STRATEGY: BUILD REGIONAL CAPACITY
Kenosha County
Jim Kreuser, County Executive
Kenosha Area Business Alliance
Todd Battle, President
Water Council Members
Carthage College
University of Wisconsin-Parkside
Gateway Technical College
Centrisys Corporation
FaB Wisconsin Members
Ocean Spray, Gina Balke, FaB Careers
Chair
Kenall Lighting
Gateway Technical College
M7 NGM Steering Committee
Carmel Ruffolo, UW-Parkside
Gordy Kacala, Gateway Technical College
M7 Talent Subcommittee
Gordy Kacala, Gateway Technical College
Doug Bartz, Kenosha County
Michelle Blanchard, SE WI WIB
M-WERC Members
UW Parkside
Gateway Tech College
Engendren
BizStarts Members
Procubed
Dossett
Centrifill
M7 Todd Battle
Chair Emeritus Chair
Quarles & Brady Greater Milwaukee Committee
John Daniels – M7 Co-Chair
February 19, 2015
Paul A. Laudicina
Critical Global Business Trends
Milwaukee 7 Economic Development Partnership Council
Opportunities for the Milwaukee 7 Region
23
Discussion agenda
■ What’s on the minds of business leaders?
■ Global trends
■ Technology and creative disruption
■ Worldwide economy
■ FDI flows
■ Opportunities for Wisconsin
24
Discussion agenda
■ What’s on the minds of business leaders?
■ Global trends
■ Technology and creative disruption
■ Worldwide economy
■ FDI flows
■ Opportunities for Wisconsin
25
Business leaders are optimistic for 2015, but they have concerns
■U.S. economic recovery
■Hard landing in China?
■Rising cost pressure
■Technology and innovation
■Climate change and resource scarcity
■Potential changes in taxes
■International trade agreements
26
Discussion agenda
■ What’s on the minds of business leaders?
■ Global trends
■ Technology and creative disruption
■ Worldwide economy
■ FDI flows
■ Opportunities for Wisconsin
27
Adaptation is the key to survival
We live in a world of continuous, disruptive change
“Strategy is a sense of direction around which to improvise.” – Peter Drucker
28
Trends will influence global change over the next 10 years
Globalization/geopolitics
Turbocharged by technology
Natural resources and environment
Social/politicaltensions
DemographicsConsumer behavior
& economics
29
Discussion agenda
■ What’s on the minds of business leaders?
■ Global trends
■ Technology and creative disruption
■ Worldwide economy
■ FDI flows
■ Opportunities for Wisconsin
30
As the pace of change accelerates, we are flooded with information
■ 90% of the world’s data ever created was generated in the last two years
■ It takes only 15 minutes to produce as much information as is in the Library of Congress
■ The Internet of Things could link some 50 billion smart objects by the year 2020
31
Technology is leading to creative disruption in business
Source: A.T. Kearney; IBM
3D Printing Biotech advances
Robotics
Internet of things
Big data
32
Augmented reality, augmented confusion
Information
Wisdom
Data
Knowledge
Knowledge Pyramid
33
Droning on: The global robotics revolution will accelerate
1.61.21.0
17.0
2007
6.5
2011
18.2
5.5
2015
32.6
34.2
+23%
Industrial Robots
Service Robots
Source: International Federation of Robotics
World robot population, millions of robots
If robots formed a nation, in 2015 it would be the 36th largest country, larger than Canada
Hen-na Hotel, to open July 2015
34
The Internet of Things could link some 50 billion smart objects by the year 2020
0
10
20
30
40
50
2000 2005 2010 2015 2020
Number of things connected to the internet, global population, bn
Source: IDC, Cisco
Connected things
People
0
10
20
30
40
50
2004 2006 2008 2010 2012 2014 2016 2018 2020
Machine generated data, % of digital universe
35
3D printing could transform the manufacturing landscape
Source: Stratasys
176
420-58%
Additive Manufacturing
Traditional Machining
1.5
18.0-92%
Traditional Machining
Additive Manufacturing
Current advantages, hand-tools example
Production cost, US$ Production time, days
Past
Present
Tool based manufacturing (Forging)
Un
it c
os
t
1 10 100 1k 10k 100k 1M
Future?
Units
Additive Manufacturing
Unit cost comparison
36
Biotech advances will mean the end of some diseases and the advent of personalized medicine
Source: Human Genome Research Institute
100,000
1,000
1,000,000
10,000
10,000,000
100,000,000
2014
4,008
2001
95,263,072
Cost of sequencing human-sized genome, US$ per genome, logarithmic scale
37
Discussion agenda
■ What’s on the minds of business leaders?
■ Global trends
■ Technology and creative disruption
■ Worldwide economy
■ FDI flows
■ Opportunities for Wisconsin
38
Policy choices impact competitiveness and growth
■ 3.3% base-case average annual real growth between 2015 and 2020
■ Lower global commodity prices
■ >4% growth for emerging economies
■ > 2% growth for advanced economies
■ Diverging economic performance based on policy choices
■ Significant risks
■ Positive wildcards
39
Discussion agenda
■ What’s on the minds of business leaders?
■ Global trends
■ Technology and creative disruption
■ Worldwide economy
■ FDI flows
■ Opportunities for Wisconsin
40
FDI inflows: 1998-2013 ($B)
Globally, FDI inflows are once again trending upwards
Source: UNCTAD, A.T. Kearney analysis
1,800
1,600
1,400
1,200
200
800
600
400
1,000
0
2,000
2,200
Developingcountries
Developedcountries
World
20132011200620011998
Shaded area indicates recession
Global FDI Inflows
41
Five developed countries account for >40% of FDI inflow to the U.S.
(1) Does not include Caribbean countries often used as tax shelters for global corporationsSource: UNCTAD, A.T. Kearney analysis
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
2006 2009 2013
231136 170230198144306216
2371051.2%1.1%
-0.1%
1.7%
0.2%0.1%
1.0%
0.0%-0.5%
1.4%
-0.4%
1.6%1.4%
-1.1%
0.1%0.2%
-0.2%
0.9%0.5%
0.0%
0.4%0.5%0.7%
0.3%0.4%
0.3%0.2%0.8%
0.2%
0.0%
Mexico
Brazil
India
FDI by Source Country ($B, % of US) FDI from Select Developing Countries (% of Total U.S. FDI)
1.0%
2013
2.1%
0.5%0.5%
2009
0.3%0.2%0.0%
2006
0.1%0.1%0.1%
China
Rest of World
JapanUnited Kingdom
CanadaFrance
Germany
2013 U.S. FDI: $231B
$B
42
Investor confidence in the U.S. has been the highest for the last two years
FDICI 2014 rankings
Source: A.T. Kearney FDI Confidence Index 2014
About the FDI Confidence Index
• Index is based on a
proprietary survey of
senior executives of 300
of the world’s leading
corporations
• 1 year after survey, 10
top ranked countries
have consistently
received 50% or more of
global FDI inflows
2.162.091.52
+3%+38%
201420132012
1.601.601.611.611.61
1.611.62
1.631.64
1.641.651.681.701.72
1.741.74
1.751.761.811.841.91
1.911.93
1.952.16
Denmark
Italy
Netherlands
Belgium
Indonesia
Spain
Japan
Chile
Sweden
Malaysia
Switzerland
South Africa
Mexico
UAE
France
Singapore
Australia
India
Germany
Brazil
United Kingdom
Turkey
Canada
China
United States2014
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
2013
1
2
4
8
3
7
5
6
10
12
14
9
15
18
25
--
22
16
13
--
--
--
--
--
24
2012
4
1
20
8
3
5
2
6
7
17
15
--
11
22
10
--
--
24
21
--
--
25
--
13
9
43
The largest FDI flows are directed towards Manufacturing, Wholesale Trade, and Information industries
FDI by Industry into the U.S. ($B)
(1) ‘Others’ includes agriculture, mining, utilities, construction, waste management, food service, and health care(2) ‘Information’ includes publishing, telecom, media, data processing, and softwareNote: Petroleum industry investment is included in the appropriate phase in the value chain, e.g. manufacturing through retail trade (Petroleum contributed ~20% of total FDI in 2010-2011)Source: Bureau of Economic Analysis, US Chamber of Commerce website, WEDC Website, A.T. Kearney analysis
Retail Trade
Information
Others
Professional, Scientific and Technology
Wholesale Trade
Depository Banking
-$5
$22
$84
Real Estate & Leasing
Finance & Insurance
Manufacturing
$6
$32
20132012
$231$230
2011
$26
$27
$94
$95$170
44
A number of factors will likely increase FDI in U.S. manufacturing
Source: BLS, ILO, EIU, Fraser Institute Economic Freedom Ratings, IEA Quarterly Energy Price Statistics, A.T. Kearney Analysis
Competitive labor costs
Attractive business and regulatory environment
Strong market potential
Abundant energy supply
45
Discussion agenda
■ What’s on the minds of business leaders?
■ Global trends
■ Technology and creative disruption
■ Worldwide economy
■ FDI flows
■ Opportunities for Wisconsin
46
Wisconsin has proven capabilities in manufacturing with a strong industry base and leading academic institutions
47
Wisconsin needs to define its investment personality
“Raise a glass with Scotland”“Ireland at the heart of things”
“We favour green lights over red tape”
“Our people and your business, a winning combination”
48
Americas Atlanta
Bogotá
Calgary
Chicago
Dallas
Detroit
Houston
Mexico City
New York
Palo Alto
San Francisco
São Paulo
Toronto
Washington, D.C.
Asia Pacific Bangkok
Beijing
Hong Kong
Jakarta
Kuala Lumpur
Melbourne
Mumbai
New Delhi
Seoul
Shanghai
Singapore
Sydney
Tokyo
Europe Amsterdam
Berlin
Brussels
Bucharest
Budapest
Copenhagen
Düsseldorf
Frankfurt
Helsinki
Istanbul
Kiev
Lisbon
Ljubljana
London
Madrid
Milan
Moscow
Munich
Oslo
Paris
Prague
Rome
Stockholm
Stuttgart
Vienna
Warsaw
Zurich
Middle East
and Africa
Abu Dhabi
Doha
Dubai
JohannesburgManama
Riyadh
A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since
1926, we have been trusted advisors to the world's foremost organizations. A.T. Kearney is a partner-owned
firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-
critical issues. For more information, visit www.atkearney.com.
49
StateColor & #1 Comments
CA (1) Stated focus on China
TX n/a Trade missions
NY (4) Trade missions
IL (9) FDI & export alignment
PA (11) Integrate local universities
NC (4) Integrate local universities
GA (10) Trade events
FL (13) Local events
SC (4) Country specific websites
MS (5) Country specific websites
LA (4) International trips to attend industry shows
WI n/a Trade Missions and Events
States are adopting different strategies to attract investors and are focusing on a handful of regions
Foreign Economic Development Office Presence – Sample States
Montreal, Toronto Czech
France
Germany
UK & IrelandSpain
S. East Africa
Beijing
Japan
Mexico
Brazil
Chile
Munich
Israel
Korea
Preliminary - based on public data1
(1) Analysis based on scan of Economic Development websites of each stateSource: State websites, Site Selector Magazine, A.T. Kearney analysis
Bangalore
Sydney
Netherlands
Poland
ShanghaiBelgium
New Delhi
Significant concentration of foreign offices
Only few in selected sample states have foreign offices
Hong KongTaiwan
M7
Question
& Answer
Milwaukee 7 Council Meeting
November 5, 2013
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