A Blueprint for Success: A Master Plan for

E July 14, 2011 A Blueprint fr Success: A Master Plan fr Ecnmic Redevelpment Prepared especially fr the: In Cllabratin with Newmark Knight Frank and Applied Marketing Sciences 1

TABLE OF CONTENTS INTRODUCTION AND METHODOLOGY... 3 SECTION 1: ASSETS AND CHALLENGES ASSESSMENT... 5 SECTION 2: DASHBOARD INDICATORS SUMMARY... 15 SECTION 3: DEMOGRAPHIC & LABOR DYNAMICS... 18 SECTION 4: ECONOMIC DYNAMICS... 35 SECTION 5: LOCAL SPECIALIZATION, COMPETITIVENESS & GROWTH... 51 SECTION 6: OPTIMAL INDUSTRY TARGETS... 70 SECTION 7: OBSERVATIONS, CONCLUSIONS & RECOMMENDATIONS... 96 CONCLUSION... 119 ABOUT OUR COMPANIES... 120 APPENDICES... 122 2

INTRODUCTION AND METHODOLOGY T he Ecnmic Develpment Calitin f Suthwest Indiana (EDC) retained a team led by Garner Ecnmics, LLC in late January f 2011 t develp a master plan fr utilizatin f the frmer Whirlpl manufacturing site in Evansville, Indiana as a new design and innvatin technlgy park alng with ther ptential educatinal and cmmercial uses. In April 2011, Whirlpl Crpratin frmally backed away frm the agreement with the cmmunity t acquire the site when it sld the prperty t a lcal develper the Kunkel Grup. Thugh the cmpany cited better cntrl f redevelpment as the fficial reasn fr the change, the issues that arse frm the plant clsure remained the same. Fllwing the sale f the frmer Whirlpl prperty, Garner Ecnmics was instructed t prceed at lking at alternative sites fr develpment with the primary fcus fr the analysis fllwing the same criteria as prpsed in the riginal grant applicatin t the Ecnmic Develpment Administratin. Jay Garner, President f Garner Ecnmics, served as the lead cnsultant with this prject fr the regin. Tm Tveidt, research ecnmist fr Garner Ecnmics, prvided the analytical analysis and business target recmmendatins. Rbert Hess and Tim Walden f Newmark Knight Frank (NKF) were invlved in analyzing the regin s assets and challenges and in prviding real estate recmmendatins fr the EDC t help in gaining a cmpetitive advantage in business develpment and ecnmic grwth pprtunities. Leigh Hwe f Applied Marketing is prviding industry intelligence and qualified leads t the EDC based n the industry targets selected. This final reprt includes a Cmpetitive Realities Reprt, Industry Targets the regin shuld pursue based n the best shrt and midterm grwth pprtunity, and Recmmendatins t enhance the regin s glbal cmpetitiveness. Our apprach began with the team cnducting an Assets and Challenges assessment f the regin. We have cnducted hundreds f Assets and Challenges assessments (als referred t as a SWOT analysis) n behalf f ur ecnmic develpment and crprate clients thrughut the United States. We apply many f the same criteria t assess a cmmunity that we use when a crprate client engages us t evaluate cmmunities n their behalf fr pssible crprate investment. Our assessment, which fllws in this reprt, is bth an bjective and subjective evaluatin f the cmmunity frm the eyes f a site lcatin cnsultant. Our Assets and Challenges assessment allws us t dcument what prblems exist in the regin that cnstitutes barriers fr successfully achieving the visin f its leadership. 3

The bjectives f this assessment are t: Identify key strengths t emphasize in ecnmic develpment marketing effrts, and; Identify key weaknesses that may limit investment in the regin s that remediatin f these lcal challenges may ccur. A multi-day windshield tur was prvided by representatives f the EDC t review thse items that were necessary fr us t evaluate as utlined in ur assets and challenges belw. This research then supplemented the ecnmic analysis we cnducted t identify the best pssible pprtunities fr business targets. We then cnducted fcus grups and interviews with key stakehlders in the regin. This gave us an verview f hw lcal businesses and residents evaluate the business climate f the area. We facilitated eight fcus grups ver a tw day perid with seventy participants. Fcus grup categries included large emplyers, small t midsized emplyers, elected/gvernment fficials, entrepreneurs/start-ups, financing/banking, academia/career Discvery Cluster analysis and industry targets Observatins, Cnclusins and Recmmendatins Our Apprach Cmpetitive analysis f the regin t Chattanga and Davenprt Stakehlder input n the business climate f the regin Assets and Challenges f the regin Real Estate prtfli analysis Lcatin Qutient Shift Share Industry Specializatin Input/Output Analysis Ecnmic Impact Analysis Organizatinal Prduct Marketing Prduct Imprvement develpment, and design/engineering (see the appendix fr a summary f the fcus grups). We evaluated key demgraphic and ecnmic indicatrs fr the regin as cmpared t state and natinal trends as well as the cmparisn f the Chattanga, TN MSA and the Davenprt-Mline- Rck Island, IA-IL MSA, which were selected as benchmark cmmunities by the EDC. These areas bth have r had a high cncentratin f similar industry specializatin t the Evansville regin, and all three MSA s have multiple states in their gegraphy. 4

SECTION 1: ASSETS AND CHALLENGES ASSESSMENT T he Garner Ecnmics team analyzed seventy ne (71) cmmunity factrs as part f the assessment fr the regin. These are many f the same factrs that are used when we cnduct a site/cmmunity evaluatin fr a cmpany that is cnsidering a new lcatin, expansin, cnslidatin r clsure. Our methdlgy was bth bjective - using published statistical surces such as crime rate data and wage data, and subjective - based n ur many years f wrking in the ecnmic develpment prfessin and in representing cmpanies evaluating cmmunities fr investment. Turs f the regin tk place in February and March as part f ur asset mapping methdlgy. The Garner Ecnmics team analyzed seventy ne (71) cmmunity factrs as part f the assessment fr the regin. These are many f the same factrs that are used when we cnduct a site/cmmunity evaluatin fr a cmpany that is cnsidering a new lcatin, expansin, cnslidatin r clsure. We define an Asset as a psitive feature f the regin that wuld be evaluated and rated by the Garner Ecnmics team as nrmal r better. A challenge is cnsidered by us as a deficiency that shuld be addressed fr future remediatin and may be an impediment fr ecnmic develpment if nt reslved ver time. Neutral is cnsidered nrmal in the realm f ecnmic develpment pprtunity and cmpetitiveness. T enable readers a summary verview f the reprt s main findings, a set f dashbard icns is presented. Each finding has an accmpanying icn t assist with interpretatin. Readers are encuraged t review the supprting data t gain a mre cmplete understanding in thse areas f interest in the full reprt. REPORT DASHBOARD Indicates the regin is better (mre psitive) cmpared t a majrity f the benchmark gegraphies, r pints t a psitive trend r asset within the regin. Indicates the regin is neutral, neither psitive nr negative. Indicatr may represent an bservatin, r be in the middle f the benchmark gegraphies. Indicates the regin is wrse cmpared t a majrity f the benchmark gegraphies, r pints t a negative trend r challenge within the regin. 5

A ccess t Markets: The Evansville regin is well psitined gegraphically fr access t reginal, natinal and in sme aspects, internatinal markets. The area is within a ne day drive f mre than tw-thirds f the U.S. ppulatin. It has gd east/west access ACCESS TO MARKETS RATING with I-64, but its nrth/suth access is 1 cntingent n the successful cmpletin Centrally lcated fr majr reginal market f I-69. Fur rail lines serve the area and 2 Centrally lcated fr natinal market the Prt f Indiana at Munt Vernn in Psey Cunty has a 30ft. river depth. Cmpanies like She Carnival hwever Well psitined t serve internatinal markets 3 4 Interstate highways use a rail/truck land bridge system t transprt imprts frm the Prt f Lng 5 Rail service Beach r ther west cast prts t area distributin centers. The Prt f Indiana s fcus is bulk cmmdities. Prt facilities 6 High speed internet service is slw. Accrding t the Natinal Bradband Map, Evansville ranks 368 f 370 metrs in the U.S. n uplad and dwnlad speeds (see endnte 8). This is a serius impediment fr the attractin f certain IT types f cmpanies, and t mbile entrepreneurs that rely n the internet fr their wrk. Scheduled airfreight services Within 1 hur f cmmercial air passenger service General aviatin airprt capable f handling crprate aircraft High speed internet services Cnnectin f lcal telephne cmpany t natinal fiber ptics netwrk The Evansville Reginal Airprt prvides gd air service fr a regin f its size. Hwever, the schedule is nt necessarily business friendly. Fr example, it is difficult t d a day trip t and frm Atlanta. As f April 1, 2011 when this analysis was written, the first flight frm ATL t EVV which is nnstp arrives in EVV at 10:25am. The last departure frm EVV back t ATL (nnstp) is at 3:45pm. This nly leaves a fur hur windw f wrk. This prvides a challenge fr cmpanies that are engaged in ffice/shared services, and in sme sales psitins. An arrival and departure link can be fund in the end ntes at reference number 7. 7 8 9 6

L abr: During the fcus grup sessins, many f the respndents wh are either emplyers, r wh serve as a resurce t help train emplyees fr emplyers, cited the difficulty t find and retain skilled industrial, technical and managerial talent. There was LABOR RATING near unanimity f that pinin frm mst if nt all f the 70 fcus grups participants we interviewed. The cst Availability f skilled industrial wrkers Availability f skilled clerical wrkers f labr is cmparable t the benchmark regins we analyzed, Availability f technicians and scientists except fr certain cunties that are skewed because f a dminate emplyer. Suthwest Indiana is the Availability f managerial persnnel Cst f labr hme f the University f Evansville, the University f Suthern Indiana and Oakland City University. Ivy Tech Cmmunity Cllege and Vincennes University bth d a gd jb f prviding a curriculum t meet the demands and needs f emplyers. Quality f labr-management relatins Availability f pst-secndary vcatinal training Availability f free n-the-jb training assistance Within 1/2 hur f fur year university/cllege and pst graduate degrees U f E ffers civil, cmputer, electrical Availability f engineering prgram and mechanical engineering degrees and is a valuable asset t the regin with its degreed fferings. USI ffers a BSE degree in engineering and a Bachelr f Science degree in Industrial Supervisin. Many regins arund the U.S. are experiencing the same challenges Suthwest Indiana faces in finding and retaining skilled talent. Thse that are able t differentiate their regins with a methd t attract and retain peple will flurish in a highly cmpetitive glbal marketplace. 10 11 12 13 14 15 16 7

R prcessing manufacturers t lcate clser t the fd cmmdity, Suthwest Indiana can ptentially psitin itself as a suitable lcatin fr fd prcessing manufactures. esurces: Agricultural prductin is an unsung asset in the regin. Psey and Gibsn cunties are large grwers f crn, sybean, wheat, melns and srghum (see endnte 17). With a mvement by many fd Cal prductin is dminant in the regin. We believe that there is ptential fr energy research related t cal t be mre f a factr in the area. This wuld typically be dne in cperatin with an academic institutin, e.g. Indiana Center fr Cal and Technlgy Research at Purdue University. ACCESS TO RESOURCES Availability f agricultural prducts fr fd prcessing RATING Availability f minerals 18 Availability f manufacturing prcesses 19 Availability f business and prfessinal services Cst f electricity fr industrial use 20 Availability f high quality electric service Availability f uninterruptible natural gas Availability f water/cst f water/sewer Varies by cunty Suthwest Indiana has a high per capita rati f bth manufacturing emplyment and manufactures shipments cmpared t many ther regins in the U.S. Shipments frm the regin are in excess f $3.6 billin annually. 17 8

E cnmic Develpment Effrts: Many f the respndents that we interviewed during ur fcus grups were cmplimentary f the EDC and its effrts t wrk seamlessly with its lcal ecnmic develpment partners (LEDO s). Hwever, the REGIONAL ECONOMIC DEVELOPMENT EDC s budget f $1.4 mm f which PROGRAM nly $144,500 is dedicated fr RATING marketing, is drastically lw Adequate level f prfessinal staff cmpared t ther reginal ecnmic develpment grups Invlvement f bth public and private sectrs whse lcatins the Evansville area wuld cmpete with fr lcatin prjects, e.g. Chattanga and Luisville. During ur interviews, it was als evident that many lcal leaders, elected fficials and in sme instances, ecnmic develpers, did Lcal ecnmic develpment rganizatin has a strategic plan Level f leadership supprt f ecnmic develpment prgram Level f cperatin between varius rganizatins invlved in ecnmic develpment activity Level f awareness f cmmunity regarding ecnmic develpment Level f funding fr lcal/reginal ecnmic develpment prgram nt quite understand the ecnmic develpment prcess, hw industry clusters are identified, hw t market the regin effectively and what rle the EDC and the LEDO s shuld undertake s that there is n duplicatin f effrt. 21 22 9

A ACCESS ccess t Space: Clearly, ne f the mst significant challenges in the regin is the lack f suitable and available industrial and ffice space related t industrial parks, industrial sites and available, quality class A ffice space. There are available industrial parks in Warrick Cunty, but mst f the prperty the EDC shws as available is land that may be fr sale and with little t n infrastructure already t the lcatin. It is nt defined as a site until there is an agreed t price n the prperty with infrastructure in place. As such, the regin is site deficient and the fcus grup participants said the same. TO SPACE RATING Availability f fully served and attractive industrial sites Availability f fully served and attractive ffice sites Reasnably priced sites Availability f suitable industrial space Availability f suitable ffice space 23 C ACCESS apital: The availability f venture r angel capital fr entrepreneurs and startup TO CAPITAL Availability f tax-exempt financing fr new industrial RATING ventures related t nn-retail facilities enterprises is virtually nnexistent Availability f lw interest lans fr small business in the regin. Entrepreneurial Availability f venture capital frm lcal surces fr grwth and the need t attract and business startups retain early-stage, high-grwth, innvative cmpanies is imprtant fr the regin t grw ecnmically. Many analysts and ecnmists believe that up t 70% f the net new jbs in this decade will be created by high ptential entrepreneurial cmpanies in a variety f industries and niches. 24 10

G vernment: The State f Indiana ranks in the tp 10 f 50 states in the business climate index as determined by Tax Fundatin.Org. Additinally, the quality f the schl systems, especially as it relates t many ther cmpetitive lcatins ranks well. GOVERNMENT IMPACT ON BUSINESS (LOCAL And the quality f pst-secndary & STATE) RATING educatin, frm technical clleges t pst degreed, is superb. Suthern Indiana Career and Technical Center is Availability f adequate wastewater treatment capacity Availability f adequate water and sewer lines t Varies by cunty especially impressive, where high industrial sites schl students frm the suthern half f Spencer Cunty and all f Gibsn, Cnditin and maintenance f lcal streets Level f traffic-carrying capacity f lcal streets and Psey, Vanderburgh, and Warrick highways cunties can receive classrm and Availability f tax incentives hands-n training in 18 diverse areas f Availability f labr training incentives (cmpared t study using the latest emerging ther states and lcalities) technlgies and equipment. Challenges ccur with infrastructure. Water and sewer extensins utside f municipalities are limited. Tax incentives are nt nearly as cmpetitive as thse in Kentucky and ther highly cmpetitive lcatins, e.g. Availability f relcatin incentives fr transferees Quality f lcal elementary and secndary educatin 26 Quality f pst-secndary educatin State (IN) cmpetitiveness versus benchmarks states f TN, IL, and IA Tennessee. State budget cuts have severely impacted labr training incentives, as cmpared t ther states which will train emplyees fr new and expanding industries at n charge. Lcal street capacity in Evansville and surrunding municipalities received negative reactin frm fcus grup participants. 25 27 11

Q uality f Place: The regin s quality f place ranks neutral t high in many categries such as cst f husing cmpared t the U.S., level f cultural activity assciated with perfrming arts activities fr the regin f its size, the presence f cllegiate sprting QUALITY OF LIFE/PLACE RATING events and minr league prfessinal hckey and baseball, and excellent medical facilities. Hwever, the general appearance f many f the cmmunities within the Availability f executive-level husing Availability f mderate cst husing Availability f apartments fur cunties we visited displayed blight, an aging husing stck (average Cst f husing 28 age f 52 years), decaying dwntwns Level f crime 29 and central business districts, litter, and in general, a perceptin f lack f Level f cultural activity 30 cmmunity pride. Based n the type f crprate investment which may be cnsidering the area, the current Availability f recreatinal pprtunities Presence f majr sprting events 31 aesthetics f sme f the cmmunities culd be a negative in the attractin r Level f air pllutin 32 retentin f businesses (nt the case fr Newburgh). Quality f the climate Attractiveness f the physical envirnment General appearance f the cmmunity(s) 33 Availability f majr shpping facilities Availability f adequate medical facilities Availability f first-class htels, mtels, and resrts Quality f lcal restaurants Appearance f the Central Business District (Evansville nly) 12

End Ntes fr the Assets and Challenges Assessment 1 The Evansville regin is within a ne-day drive f mre than tw-thirds f the U.S. market. 2 Suthwest Indiana is lcated 60 miles suth f the median center f the U.S. ppulatin (the pint where latitude and lngitude lines intersect, and the ppulatin is the same n all sides), accrding t the EDC web site. 3 ABB is lcated n the Ohi River in Psey Cunty as well as ther large industrial users that use inland waterways t mve gds frm internatinal destinatins, e.g. Asia. 4 I-64 (E/W), I-164 and future(under cnstructin) I-69 (N/S 5 CSX, Nrflk-Suthern, Evansville, Western Railway, Inc, and Indiana Suthern RR all serve the SW IN regin 6 Prt f Indiana Munt Vernn lcated in Psey Cunty, in Suthwest Indiana Access t the Gulf f Mexic. 30 ft. river depth maintained by the US Army Crps f Engineers. 7 EVV has air service t six hubs, Atlanta, Chicag, Cincinnati, Dallas, Detrit and Memphis, and ne stp cnnectins t virtually anywhere in the wrld. Hwever, the schedule is nt necessarily business friendly r cnducive fr day trips t/frm varius hubs, e.g. ATL. http://evvairprt.cm/airlines_and_flights/flightschedule.html 8 Many fcus grup participants cmplained abut the speed f the internet in the area, and the availability f high speed internet access in certain cunties/lcatins. Our wn usage f bradband in the area cnfirmed the slw speeds assciated with using the internet. Accrding t the Natinal Bradband Map, the EVV metr area ranks 368 f 370 metrs fr Speed Dwnlad Greater Than 3 Mbps and Uplads Greater Than 0.768 Mbps. See Table 27. 9 ATT has a custmer service call center in Evansville 10 Many fcus grup attendees representing emplyers nted the difficulty f finding skilled industrial, managerial talent and technicians. 11 There is a wage disparity depending n the Cunty. Psey, IN $ 46,318 Gibsn, IN $ 42,632 Webster, KY $ 41,222 Vanderburgh, IN $ 38,937 Warrick, IN $ 38,755 Hendersn, KY $ 34,901 12 Unin percentages nted belw. Whirlpl has had several prtracted strikes ver the years. Hwever, new additins like Tyta have been able t perate unin free. The ttal number f unin emplyees is higher than many cmpetitive lcatins and may be an issue f cncern fr bth cmpanies and site lcatin cnsultants. Many cmpanies tday are evalusitng the ttal level f uninizatin, which included public emplyee unins. Metrplitan Area Sectr Emplyment Members %Mem Evansville, IN-KY Ttal 100,174 14,633 14.6 Private 83,074 6,355 7.6 Public 17,100 8,278 48.4 2011 by Barry T. Hirsch and David A. Macphersn. 13 Ivy Tech Cmmunity Cllege f IN and Vincennes University Advanced Manufacturing Campus. 14 IN budget reductins has caused free jb training fr new and existing emplyers that are expanding t becme less cmpetitive t the ther State s and regins that have practive emplyee training prgrams. 15 University f Evansville, University f Suthern Indiana, Oakland City University. 16 UE ffers civil, cmputer, electrical and mechanical engineering degrees. UE als ffers internet technlgy and cmputer science.usi ffers a Bachelr f Science degree in industrial supervisin. 17 Psey and Gibsn cunties are large grwers f crn, sybean, wheat, srghum and melns, accrding t the USDA AG Census, 2007. 18 Cal prductin is dminant in SW Indiana 13

19 Manufactures shipments are valued in excess f $3.656 billin annually. 19% f the regin s wrkfrce is emplyed in mfg. 20 Average Retail Price f Electricity t Ultimate Custmers by End-Use Sectr, by State, Year-t-Date thrugh Nvember 2010, U.S. Energy Infrmatin Administratin, fr industrial users: East Nrth Central 6.52 Illinis 6.72 Indiana (includes Duke and Vectren) 5.96 Michigan 7.19 Ohi 6.32 21 Sme fcus grup participants nted that there is a discnnect between lcal elected fficials and a better understanding f the ecnmic develpment prcess. We t bserved that as a challenge during the fcus grups. 22 The EDC s annual budget is $1.4mm, f which $144,500 is designated fr marketing and external utreach. Based n ur analysis f best practice reginal ecnmic develpment prgrams, the EDC s marketing budget is drastically lw. 23 There are tw industrial parks in Warrick Cunty. 24 Venture capital and a frmal angel netwrk are nnexistent in the regin 25 Many fcus grup participants cmplained abut the cnditins and traffic flw f lcal streets 26 http://www.evscschls.cm/admindefault.aspx?prtalid=c45369af-1b9a-4929-a2a1-446af4fcbf7d&pid=65744905-4419-4c19-81ae-03f1440d3d4d 27 Indiana ranks number 10 f the 50 states in the State rankings business climate index, as determined by the Tax Fundatin, 2011 http://www.taxfundatin.rg/research/shw/22658.html 28 *Fr Evansville (Sperling s 2011): Husing Evansville, IN United States Median Hme Age 52 33 Median Hme Cst $97,020 $183,450 Hme Appreciatin 1.91% -5.21% Hmes Owned 53.10% 60.14% Husing Vacant 10.91% 10.50% Hmes Rented 35.99% 29.36% Prperty Tax Rate $7.85 $11.20 29 See Table 10. 30 Fr the size f the regin s ppulatin, there are a number f dcumented perfrming arts activities that give the area a gd rating. Hwever, mst fcus grup participants did nt feel that there were many cultural assets in the regin. 31 UE, USI and Oakland City University bth ffer NCAA Div I and II cllege sprts. There is minr league hckey and baseball team. 32 Vanderburgh and Warrick Cunties are bth attainment areas with a maintenance plan. Psey and Gibsn cunties are attainment. Air quality in Evansville, IN is 38 n a scale t 100 (higher is better). This is based n zne alert days and number f pllutants in the air, as reprted by the EPA. 33 Newburgh shws exceptinally well. Evansville, which is the dminant city in the regin, des nt. Princetn and Oakland City d nt present itself well either. An aged husing stck and what appears t be lack f cmmunity pride in the aesthetes f the cmmunity is evident. The median age f Evansville real estate is 52 years (Sperling s, 2011). 14

SECTION 2: DASHBOARD INDICATORS SUMMARY T he fllwing analysis examines the ecnmic psitin and cmpetitiveness f the six cunty Evansville metrplitan ecnmy. Thrughut the reprt, references t Evansville imply the entire metrplitan area, unless therwise nted. Besides the natin and state f Indiana, the reprt als cmpares Evansville t tw benchmark cmmunities, which are Chattanga TN, and Davenprt-Mline-Rck Island IA-IL. The analysis relies heavily n raw bjective data cllected by impartial gvernmental r impartial agencies. In all cases the riginal and mst current available data as f March 31, 2011 is used. All unique calculatins and cmputatins frm the riginal data were cnducted by Garner Ecnmics, wh will gladly share methdlgy t clients upn request. Ppulatin grwth, while psitive at a rate f 4.6 percent ver the last decade, is belw bth the natin, state and ne benchmark cmmunity. Over the perid f 2000-2009, natural grwth accunted fr an estimated 83 percent f net new residents. Over the same perid, Evansville lst a net f 657 residents due t dmestic ut-migratin. Grwth frm natural and internatinal surces, while psitive, is less likely t satisfy immediate wrkfrce demands. With 89.9 percent f the ppulatin categrizing themselves as white, the ppulatin f Evansville is less diverse relative t the state, natin, and benchmark cmmunities. At 38.5 years, the median age in Evansville is very clse t the medians in bth benchmark cmmunities, and apprximately tw years abve the state and natin. Relative t the state and natin, Evansville has a lwer prprtin f its ppulatin ages 5-24, and 35-44. Cnversely, the area has a higher relative prprtin f ppulatin ages 45 and lder. Evansville has a higher relative prprtin f residents whse highest level f educatinal attainment is High schl diplma, cmpared t the natin, state and bth benchmark cmmunities. Likewise, the area has a lwer relative prprtin f residents whse highest level f attainment is Bachelr s Degree and abve. At eight percent, r 3,952 f all bachelr degree hlders, Evansville has a relatively high prprtin f residents with degrees in Engineering. Average ACT scres fr Evansville schls within the fur metr Indiana cunties are ntably abve the natin, and bth benchmark cmmunities, acrss all subjects tested. A ttal f 8 percent f the ppulatin age 18 and ver are enrlled in cllege r graduate schl in Evansville, a percentage that is slightly less than the natin, state, and ne benchmark cmmunity. 15

Vilent and Prperty crime rates in Evansville are belw the natin, state and the ne benchmark cmmunity fr which rates were available. The percentage and number f persns wh bth wrk and live in the fur Evansville metr Indiana cunties has declined ver the last five years. Per capita real GDP has been declining in Evansville since 2003. Althugh still higher than the state, and benchmark cmmunities, Evansville fell belw the natin in 2004. As f 2009, Evansville had exprts ttaling $2 billin, up nearly 40 percent abve 2008. In per capita terms, at $5,724, Evansville exprts are abve the state, natin, and ne benchmark cmmunity. The five and ten-year pace f grwth f Evansville s average wage per jb is belw the natin and bth benchmark cmmunities. The five and ten-year pace f grwth f Evansville s per capita incme is belw the natin and ne benchmark cmmunities. Thrugh February 2011, Evansville has experienced 12 straight mnths f year-t-year emplyment grwth. The current rate f jb grwth averages 1.6 percent, utpacing the natin, state and bth benchmark cmmunities. Since the end f the recessin, Evansville s unemplyment rate has averaged 8.5 percent, a rate belw the averages fr the state, natin, and benchmark cmmunities. Evansville has a relatively higher prprtin f emplyment in Cnstructin, Manufacturing, Private Educatin and Health Services. Cnversely, the area has a lwer relative prprtin f emplyment in Financial Activities, and Federal, State and Lcal Gvernment. Evansville has experienced a decline in the ttal number f private establishments, dwn by 2 percent ver the last nine years, and up just 0.5 percent ver the last five year. The rates are belw the natin, state, and ne benchmark cmmunity. As f 2008, prprietrs accunted fr 14.3 percent f ttal emplyment in Evansville, prprtinally less than in the natin, state r bth benchmark cmmunities. Evansville s 2010 cmpsite Cst f Living scre f 96.1 demnstrates a lw relative rate cst fr residents. The tw benchmark cmmunities als enjy scres belw 100. Utility prices appear the exceptin in Evansville, scring at 120.3. Relative t the benchmark cmmunity airprts, Evansville Dress Reginal Airprt has significantly less passenger activity and scheduled fights, ranging frm 40 t 60 percent lwer. Evansville s bradband cverage ranks frm the lwest 50 t 10 percent amng all U.S. metrs fr fur key measures, and is als belw the benchmark cmmunities in mst areas. Evansville s mst highly specialized ccupatinal grup is Prductin. Other lcal highly specialized ccupatinal grups are Installatin, maintenance & repair, Cnstructin & extractin, and Transprtatin & material mving. 16

Several ccupatinal grups in Evansville have experienced grwth exceeding natinal trends, implying a lcal cmpetitive edge; the leaders are Cnstructin & extractin, Office & administrative supprt, and Prductin. The Life, physical & scial science ccupatinal grup has the highest median hurly earnings in Evansville at $29.24, exceeding the natinal median fr that grup. Other ccupatinal grups with lcal median hurly earnings greater than the same-grup natinwide are Cnstructin & extractin, Prductin, and Farming, fishing, & frestry. Five majr industries are highly specialized in Evansville; Utilities, Mining, Quarrying, & Oil & Gas Extractin, Manufacturing, Management f Cmpanies & Enterprises, and Transprtatin & Warehusing. Three majr industries in Evansville experienced grwth exceeding same-industry natinal trends; Administrative & Supprt Services, Cnstructin and Retail Trade. Utilities and Management f Cmpanies & Enterprises have the highest industry earnings per wrker in Evansville. Only tw industries have earnings per wrker abve natinal same-industry averages; Manufacturing and Cnstructin. Evansville has tw industry clusters which display lcal specializatin and psitive emplyment grwth; Bimedical/Bitechnical (Life Sciences) and Energy. The tw mst highly specialized industry clusters in Evansville are Primary Metal Mfg., and Plastics Mfg. Earnings in several Evansville clusters exceed their same-cluster natinal average and the verall natinwide earnings average f $51,661; Transprtatin Equipment Mfg., Primary Metal Mfg., Mining, Chemicals & Chemical Based Prducts, Plastics, and Glass & Ceramics. 17

SECTION 3: DEMOGRAPHIC & LABOR DYNAMICS Ppulatin Grwth The rate f ppulatin grwth can be a significant factr in lcal ecnmic health, and is ften a key cnsideratin in business expansin and site selectin decisins. Mst firms are wary f areas with ppulatin declines, very slw grwth rates, r significant amunts f dmestic ut-migratin Accrding t the just released 2010 decennial Census figures, the ttal ppulatin f the Evansville metr equals 358,676. This marks an increase f 4.6 percent, r 15,861 ver the last decade, a tepid rate belw the state, natin, and ne benchmark cmmunity (Figure 1 and Table 1). Only the Davenprt-Mline-Rck Island metr has a lesser grwth rate, equaling a mere ne percent ver the decade. Figure 1 2000-2010 Ppulatin Change Evansville 4.6% Chattanga 10.8% Davenprt--Mline--Rck Island 1.0% Indiana 6.6% US 9.7% 0% 2% 4% 6% 8% 10% 12% Surce: US Census Bureau Table 1 2000-2010 Ppulatin Change 2000 2010 Change Change % Evansville 342,815 358,676 15,861 4.6% Chattanga 476,531 528,143 51,612 10.8% Davenprt-Mline Rck Island 376,019 379,690 3,671 1.0% Indiana 6,080,485 6,483,802 403,317 6.6% US 281,421,906 308,745,538 27,323,632 9.7% Surce: US Census Bureau 18

Surces f Ppulatin Change Ppulatin change has three majr surces: 1) natural (births minus deaths), 2) dmestic migratin, and, 3) internatinal migratin 1. The leading cntributr t changes in Evansville ppulatin is natural (Figure 1 and Table). Over the perid f 2000-2009, natural grwth accunted fr an estimated 83 percent f net new residents. Internatinal in-migratin was respnsible fr the remaining 17 percent f net new residents. Over the same perid, Evansville lst a net f 657 residents due t dmestic utmigratin. Grwth frm natural and internatinal surces, while psitive, is less likely t satisfy immediate wrkfrce demands. Cmpared t the benchmark cmmunities, the cntributin t net the ppulatin increase in Chattanga has been due verwhelmingly t dmestic in-migratin, while Davenprt-Mline-Rck Island s slw grwth is due t strng ut-migratin (Figure 3). Figure 2 Annual Surces f Ppulatin Change Evansville Metr 2,500 2,000 1,500 1,000 500 0-500 -1,000-1,500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Natural Internatinal Dmestic Surce: US Census Bureau 1 Migratin f the freign brn; lawful permanent residents (immigrants), temprary migrants (such as students), peple illegally present in the United States, and additinally net mvements f the Armed Frces ppulatin between the United States and verseas. 19

Table 2 Annual Surces f Ppulatin Change Evansville Metr Year Natural Internatinal Dmestic 2000 193 38 (69) 2001 960 260 (891) 2002 747 249 154 2003 997 224 810 2004 1,102 221 347 2005 1,083 226 (62) 2006 1,082 228 34 2007 1,355 204 (185) 2008 1,159 198 (796) 2009 1,091 203 1 Cmpnents d nt ttal exactly due t inter-year residual adjustments made by the Census Bureau. Surce: US Census Bureau Figure 3 Net Surce f Ppulatin Change 2000-2009 Estimate 40,000 30,000 20,000 10,000 0-10,000-20,000 Evansville Chattanga Davenprt-Mline-Rck Island Natural Internatinal Dmestic Surce: US Census Bureau 20

Race & Hispanic While by itself, racial diversity is nt a determinant factr in lcal ecnmic cmpetitiveness, sme firms may prefer higher rates f diversity in rder t attract and retains wrkers. This is particularly true fr multinatinal firms lking t attract wrkers frm utside the U.S. With 89.9 percent f the ppulatin categrizing themselves as white, the ppulatin f Evansville is less diverse relative t the state, natin, and benchmark cmmunities (Figure 4 and Table 3). The Hispanic/Latin categry, at 1.9 percent, makes up a ntably smaller prprtin f the ttal ppulatin in Evansville than in the tw benchmark cmmunities and natin. Tw r Mre Race, 1.9% Sme Other Race, 0.9% Asian, 1.0% American Indian & Alaska Native, 0.2% Figure 4 2010 Race by Percent f Ttal Ppulatin Black r African American, 6.2% White, 89.9% Evansville Chattanga Davenprt Indiana US Surce: US Census Bureau Table 3 2010 Race by Percent f Ttal Ppulatin Evansville Chattanga Davenprt Indiana US White 89.9% 81.1% 86.0% 84.3% 72.4% Black r African American 6.2% 13.9% 6.8% 9.1% 12.6% American Indian & Alaska Native 0.2% 0.3% 0.3% 0.3% 0.9% Asian 1.0% 1.4% 1.6% 1.6% 4.8% Native Hawaiian & Other Pacific Islander 0.1% 0.1% 0.0% 0.0% 0.2% Sme Other Race 0.9% 1.6% 2.6% 2.7% 6.2% Tw r Mre Race 1.9% 1.6% 2.7% 2.0% 2.9% Hispanic (can be f any race) 1.9% 3.5% 7.6% 6.0% 16.3% Surce: US Census Bureau 21

Age The age cmpsitin f a lcal ppulatin can be an imprtant determinant in business decisins and cmpetitiveness. The lack r underrepresentatin f yunger wrkers may defer sme firms frm cnsidering sme cmmunities fr their lng term plans. Lw prprtins f middle age wrkers may prevent firms frm initiating expansins requiring quick start-up peratins. The presence f lder wrkers may indicate certain incumbent skills r the need t replace sn-t-retire wrkers. Median Age At 38.5 years, the median age in Evansville is very clse t the medians in bth benchmark cmmunities, but apprximately tw years abve the state and natin. (Figure 5 and Table 4). 39 Figure 5 Median Age 2005-2009 38.5 38.6 38.6 38 37 36.4 36.5 36 35 Evansville Chattanga Davenprt-Mline Rck Island Surce: US Census Bureau Table 4 Median Age 2005-2009 Indiana US Evansville 38.5 Chattanga 38.6 Davenprt-Mline Rck Island 38.6 Indiana 36.4 US 36.5 Surce: US Census Bureau 22

Age Grups Relative t the state and natin, Evansville has a lwer prprtin f its ppulatin ages 5-24, and 35-44 (Figure 6 and Table 5). Cnversely, the area has a higher relative prprtin f ppulatin ages 45 and lder. Relative t the tw benchmark cmmunities the cmparisns are mixed, with n significant differences (Figure 7 and Table 5). Figure 6 Age Grups by Percent f Ttal Ppulatin 2005-2009 16% 14% 12% 10% 8% 6% 4% 2% 0% Under 5 5-14 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Evansville Indiana US Surce: US Census Bureau, Garner Ecnmics Calculatins 23

Figure 7 Age Grups by Percent f Ttal Ppulatin 2005-2009 16% 14% 12% 10% 8% 6% 4% 2% 0% Under 5 5-14 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ Evansville Chattanga Davenprt-Mline-Rck Island Surce: US Census Bureau, Garner Ecnmics Calculatins Evansville # % Table 5 2010 Age Grup by Percent f Ttal Ppulatin Chattanga Davenprt-Mline Rck Island Indiana Under 5 22,697 6.5% 6.2% 6.6% 7.0% 6.9% 5-14 22,299 12.8% 12.6% 13.0% 13.8% 13.4% 15-24 22,238 13.4% 13.0% 13.2% 14.4% 14.1% 25-34 23,611 13.2% 13.2% 12.8% 13.0% 13.4% 35-44 22,921 13.2% 13.7% 12.9% 13.9% 14.2% 45-54 46,065 15.5% 14.9% 15.1% 14.6% 14.5% 55-64 46,234 11.5% 12.2% 11.9% 10.9% 10.8% 65-74 54,328 7.0% 7.5% 7.3% 6.5% 6.5% 75-84 22,450 5.0% 4.9% 4.9% 4.4% 4.4% 85+ 17,792 2.0% 1.7% 2.2% 1.7% 1.7% Surce: US Census Bureau, Garner Ecnmics calculatins US 24

Educatin Increasingly, the level f educatin f a cmmunities ppulatin is becming a decisive factr in ecnmic cmpetitiveness. Firms understand the need t perate in ecnmies that ffer a sufficient supply f wrkers that meet r exceed their demands. They als knw that the lack f an educated wrkfrce can significantly affect business perfrmance. Educatinal Attainment Cmparing levels f educatinal attainment reveals several distinct characteristics amng Evansville s residents ages 25 and ver. Evansville has a higher relative prprtin f residents whse highest level f educatinal attainment is High schl diplma, cmpared t the natin, state and bth benchmark cmmunities. Likewise, Evansville has a lwer relative prprtin f residents whse highest level f attainment is Bachelr s Degree and abve (Figure 8, Figure 9 and Table 6). While the differences are nt entirely striking, they may influence the attractin f firms demanding a sizeable pl f highly educated wrkers, r cause firms t recnsider Evansville fr large scale research and develpment type peratins. Figure 8 Educatinal Attainment Percent Ttal Ppulatin Age 25+ 2009 40% 35% 30% 25% 20% 15% 10% 5% 0% Less Than High Schl Diplma High Schl Diplma Sme Cllege Assciate's degree Bachelr's degree Master's degree Prfessinal schl degree Dctrate degree Evansville Indiana US Surce: US Census Bureau, Garner Ecnmics calculatins 25

Figure 9 Educatinal Attainment Percent Ttal Ppulatin Age 25+ 2009 40% 35% 30% 25% 20% 15% 10% 5% 0% Less Than High Schl Diplma High Schl Diplma Sme Cllege Assciate's degree Bachelr's degree Master's degree Prfessinal schl degree Dctrate degree Evansville Chattanga Davenprt-Mline-Rck Island Surce: US Census Bureau, Garner Ecnmics Calculatins Table 6 Educatinal Attainment Percent Ttal Ppulatin Age 25+ 2009 Evansville # % Chattanga Davenprt-Mline Rck Island Indiana Less Than High Schl Diplma 29,354 12.3% 17.0% 10.4% 13.4% 14.7% High Schl Diplma 87,547 36.6% 30.4% 30.8% 35.5% 28.5% Sme Cllege 52,743 22.0% 22.7% 24.0% 21.1% 21.3% Assciate's degree 20,513 8.6% 7.4% 9.4% 7.5% 7.5% Bachelr's degree 32,030 13.4% 15.1% 17.8% 14.5% 17.6% Master's degree 12,982 5.4% 4.9% 5.9% 5.8% 7.2% Prfessinal schl degree 2,882 1.2% 1.5% 1.0% 1.4% 1.9% Dctrate degree 1,422 0.6% 1.0% 0.8% 0.9% 1.2% Surce: US Census Bureau, Garner Ecnmics calculatins US 26

Field f Bachelr's Degree Beynd the level f educatinal attainment, the specific fields in which residents hld degrees may ffer implicatins n the cmpetitiveness and applicability f lcal knwledge and skills. At eight percent, r 3,952 f all bachelr degree hlders, Evansville has a relatively high prprtin f residents with degrees in Engineering (Table 7). Additinally, hlders f bachelr s degrees in Educatin, at 9,887 r 20 percent, are als prprtinally high. Science and Engineering Cmputers, Mathematics & Statistics Bilgical, Agricultural, & Envirnmental Sciences Table 7 Field f Bachelr s Degree Percentage f Ttal Bachelr s Degree Hlders, Age 25+ 2009 Evansville # % Chattanga Davenprt- Mline- Rck Island Indiana 1,441 2.9% 3.7% 4.0% 3.7% 4.2% 2,533 5.1% 5.1% 6.9% 5.8% 6.1% Physical and Related Sciences 1,198 2.4% 2.9% 1.6% 2.3% 2.4% Psychlgy 1,663 3.4% 4.9% 5.4% 3.6% 4.6% Scial Sciences 2,971 6.0% 5.7% 4.4% 5.1% 7.9% Engineering 3,952 8.0% 6.6% 8.1% 7.0% 7.9% Multidisciplinary Studies 633 1.3% 1.6% 2.2% 1.5% 1.9% Science & Engineering Related Fields 4,641 9.4% 8.9% 7.1% 11.7% 8.8% Business 10,990 22.3% 23.0% 20.6% 20.4% 20.1% Educatin 9,887 20.0% 13.5% 18.1% 18.3% 13.7% Arts, Humanities, & Other Literature & Languages 1,401 2.8% 4.9% 3.5% 3.6% 4.6% Liberal Arts & Histry 2,373 4.8% 6.6% 5.9% 6.0% 5.6% Visual & Perfrming Arts 1,239 2.5% 3.5% 3.5% 2.8% 3.9% Cmmunicatins 1,716 3.5% 3.3% 3.0% 3.2% 3.6% Other 2,678 5.4% 5.6% 5.5% 5.1% 5.0% Surce: US Census Bureau, Garner Ecnmics calculatins US 27

ACT Scres The ACT (American Cllege Testing) examinatin is a standardized test fr high schl achievement, and cllege admissins in the United States, and a widely excepted measure f educatin quality. ACT scres are especially relevant t businesses because they prvide a measure f the final prduct f public schls, and the educatinal quality f thse entering the wrkfrce. ACT scres are generally available fr mst schl systems, but unfrtunately published at varius degrees f lcality 2. Average ACT scres fr Evansville schls within the fur metr Indiana cunties are ntably abve the natin, and bth benchmark cmmunities, acrss all subjects tested (Figure 10 and Table 8). Scres generally match the statewide results. See the APPENDIX fr individual schl scres. 23 Figure 10 Average ACT Scres 2010 22 21 20 19 Evansville Chattanga Davenprt-Mline-Rck Island US Indiana 18 17 Cmpsite English Math Reading Science Surces: Individual State Departments f Educatin, Garner Ecnmics calculatins 2 We use scres that best represent average cunty r metr-level results, understanding that perfrmance may vary widely between schls within a cunty r metr. In terms f verall cmpetitiveness, firms are likely t cmpare area averages and discunt specific schls; but may be attracted t the perfrmance f specific schls in regards t their persnal lcal preferences r that f thers in executive psitins. 28

Table 8 Average ACT Scres 2010 Cmpsite English Math Reading Science Evansville (Indiana cunties) 22.4 22.0 22.5 22.5 22.0 Chattanga 19.6 19.3 18.9 20.1 19.6 Davenprt-Mline-Rck Island 21.3 20.9 21.1 21.5 21.2 Indiana 22.3 21.7 22.4 22.6 21.9 US 21 20.5 21 21.3 20.9 Surces: Individual State Departments f Educatin, Garner Ecnmics calculatins Pstsecndary Participatin A ttal f 8 percent f the ppulatin age 18 and ver are enrlled in cllege r graduate schl in Evansville (Figure 11 and Table 9). The percentage is slightly less than the natin, state, and ne benchmark cmmunity. Public schls cmprise the majrity f enrllment. 10% Figure 11 Enrlled in Cllege r Graduate Schl Percent f Ppulatin Age 18+ 2005-2009 Survey 9% 8% 2.1% 2.4% 7% 6% 1.4% 1.8% 3.1% 5% 4% 3% 6.6% 5.6% 5.4% 7.0% 6.9% 2% 1% 0% Evansville Chattanga Davenprt Mline Rck Island Indiana US Public Private Surce: US Census Bureau, Garner Ecnmics calculatins 29

Table 9 Enrlled in Cllege r Graduate Schl Percent f Ppulatin Age 18+ 2005-2009 Survey Ttal Public Private 21,459 17,682 3,777 Evansville 8.0% 6.6% 1.4% Chattanga 7.4% 5.6% 1.8% Davenprt-Mline-Rck Island 8.5% 5.4% 3.1% Indiana 9.1% 7.0% 2.1% US 9.3% 6.9% 2.4% Surce: US Census Bureau, Garner Ecnmics calculatins Crime Rate Crime rates may seem utside the typical measures f ecnmic cmpetitiveness, but they represent a widely-accepted bjective gauge used by firms. Crime rates generally reflect underlying ecnmic cnditins, and may signal deeper systemic prblems better than standard ecnmic measures. Accrding t the mst current FBI data, 2009 Vilent and Prperty crime rates in Evansville are belw the natin, state and ne benchmark cmmunity (Figure 12 and Table 10). The FBI des nt publish rates fr the Davenprt-Mline-Rck Island metr. 30

Figure 12 2009 Crime Rates Per 100,000 Residents 4,500 4,296.0 4,000 3,500 3,000 2,731.4 3,116.2 3,036.1 2,500 2,000 1,500 1,000 500 235.2 589.9 333.2 429.4 0 Vilent Crime Rate Prperty Crime Rate Evansville Chattanga Indiana US Rates unavailable fr the Davenprt-Mline-Rck Island metr. Surce: Federal Bureau f Investigatin Table 10 2009 Crime Rates Per 100,000 Residents Vilent Crime Rate Prperty Crime Rate Evansville 235.2 2,731.4 Chattanga 589.9 4,296.0 Indiana 333.2 3,116.20 US 429.4 3,036.10 Rates unavailable fr the Davenprt-Mline-Rck Island metr. Surce: Federal Bureau f Investigatin 31

Wrker Flws Wrker flws help define the size f a lcal ecnmy s labr draw, and trends help describe attractin and reginal cmpetitin. Fr this analysis we measure wrker flws fr the fur cunties that cmprise the Indiana prtin f the Evansville metr (Warrick, Vanderburgh, Psey, and Gibsn cunties). Wrker flws represent bth daily cmmuters, and shrt-term away-frm-hme assignments (majr cnstructin prjects, nsite-cnsulting, etc.). In 2009, seventy-five percent f private-industry wrkers, ttaling 100,778, bth live and wrk in the fur cunties (Figure 13 and Table 11). This number has drpped by 12 percent, r 12,781 fewer ver the last five years. In 2004, persns living and wrking in the fur cunties made up 83 percent f the wrkfrce. Over the same five-year perid, in-cmmuting has increased by 28.6 percent, adding 7,475 wrkers. Out-cmmuting, which ttals 22,684 wrkers, has increased by a similar percentage, a fiveyear increase f 5,013. Vanderburgh Cunty is hme t 45.7 percent f persns emplyed in the fur cunty area, and is the lcatin fr 62.2 percent f where persn are emplyed (Table 12 and Table 13). All fur Indiana cunties have experienced a decline in the number f persns wh live and wrk in the same area. Figure 13 Wrker Flws fr Warrick, Vanderburgh, Psey, and Gibsn Cunties 2009 Private Emplyment 140,000 120,000 100,000 Live & Wrk 100,778 80,000 60,000 40,000 20,000 In-Cmmute 33,612 Out-Cmmute 22,684 0 2002 2003 2004 2005 2006 2007 2008 2009 Surce: US Census Bureau 32

Table 11 Wrker Flws fr Warrick, Vanderburgh, Psey, and Gibsn Cunties Private Emplyment 2004 2009 5-Year Net Change 5-Year Percent Change Live & Wrk 113,559 100,778 (12,781) -11.3% Out-Cmmute 17,671 22,684 5,013 28.4% In-Cmmute 26,137 33,612 7,475 28.6% Surce: US Census Bureau, Garner Ecnmics calculatins Table 12 Where Wrkers Live Wh are Emplyed in Warrick, Vanderburgh, Psey, and Gibsn Cunties 2009 Private Emplyment Hme Cunty Percent f Ttal 5-Year Change Vanderburgh IN 61,411 45.7% (11,056) Warrick IN 20,037 14.9% (798) Psey IN 9,681 7.2% (494) Gibsn IN 9,649 7.2% (433) Hendersn KY 3,792 2.8% (210) Marin IN 2,679 2.0% 524 Spencer IN 2,056 1.5% 187 Dubis IN 1,783 1.3% 550 Pike IN 1,348 1.0% 322 Daviess KY 1,258 0.9% (30) All Other Lcatins 20,696 15.4% 6,132 Surce: US Census Bureau, Garner Ecnmics calculatins 33

Table 13 Where Wrkers are Emplyed Wh Live in Warrick, Vanderburgh, Psey, and Gibsn Cunties 2009 Private Emplyment Wrk Cunty Percent f Ttal 5-Year Change Vanderburgh IN 76,758 62.2% (9,787) Warrick IN 9,376 7.6% (998) Gibsn IN 8,797 7.1% (1,162) Psey IN 5,847 4.7% (834) Marin IN 4,526 3.7% 1,739 Hendersn KY 1,445 1.2% (301) Dubis IN 1,279 1.0% (26) Knx IN 959 0.8% 159 Hamiltn IN 810 0.7% 433 Vig IN 747 0.6% 26 All Other Lcatins 12,918 10.5% 2,983 Surce: US Census Bureau, Garner Ecnmics calculatins 34

SECTION 4: ECONOMIC DYNAMICS Grss Dmestic Prduct Grss Dmestic Prduct (GDP) is the mst cmprehensive measure f ecnmic activity. GDP fr metr areas is derived as the sum f the GDP riginating in all the industries in the area. GDP fr metr areas is nly available fr the years 2001-2009. In 2009, the inflatin adjusted real GDP fr Evansville was $14 billin. The figure was 3.3 percent belw 2008, and mirrrs a decline experienced by 80 percent f all U.S. metrs. Per capita real GDP has been declining in Evansville since 2003. Measured in per capita terms, at $39,977 Evansville has a higher amunt f ecnmic activity than the state, and the tw benchmark cmmunities. Hwever, since 2004 per capita GDP in Evansville has fallen belw the natin (Figure 14 and Table 14). Figure 14 Per Capita Real GDP 2005 Dllars $46,000 $44,000 $42,000 US, $41,632 $40,000 $38,000 Evansville, $39,977 Davenprt-Mline- Rck Island, $39,188 $36,000 Indiana, $36,168 Chattanga, $34,912 $34,000 $32,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Surces: US Bureau f Ecnmic Analysis, Garner Ecnmics calculatins 35

Table 14 Per Capita Real GDP 2005 Dllars 2001 2009 Change Change % Evansville $39,434 $39,977 $543 1.4% Chattanga $36,511 $34,912 ($1,599) -4.4% Davenprt-Mline Rck Island $35,058 $39,188 $4,130 11.8% Indiana $35,626 $36,168 $542 1.5% US $39,863 $41,632 $1,769 4.4% Surces: US Bureau f Ecnmic Analysis, Garner Ecnmics calculatins Exprts In a glbal ecnmy, exprts are playing a mre critical rle in lcal ecnmic cmpetitiveness. Exprting has prven t be a pwerful means t generate wealth, and prvides evidence f an area s capacity t cmpete with firms utside the U.S. As f 2009, Evansville had exprts ttaling $2,014,256,564. The figure is nearly 40 percent abve 2008, and marks a significant jump in exprt value ver the last fur years. Transprtatin equipment and chemicals make up fr the majr exprts frm the area. In per capita terms, at $5,724, Evansville exprts are abve the state, natin and ne benchmark cmmunity (Figure 15 and Table 15). Figure 15 Per Capita Exprts $14,000 $12,000 $10,000 Davenprt-Mline- Rck Island, $9,346 $8,000 $6,000 Evansville, $5,724 $4,000 $2,000 Indiana, $3,566 US, $3,440 Chattanga, $1,260.22 $0 2005 2006 2007 2008 2009 Surces: Internatinal Trade Administratin, US Census Bureau, Garner Ecnmics calculatins 36

Table 15 Per Capita Exprts 2005 2006 2007 2008 2009 Evansville $3,602 $3,318 $4,023 $4,112 $5,724 Chattanga $1,074 $1,390 $1,569 $2,025 $1,260 Davenprt-Mline Rck Island $8,431 $9,116 $11,036 $13,940 $9,346 Indiana $3,453 $3,597 $4,090 $4,149 $3,566 US $3,047 $3,436 $3,807 $4,230 $3,440 Surces: Internatinal Trade Administratin, US Census Bureau, Garner Ecnmics calculatins Average Wage Per Jb Accrding t the U.S. Bureau f Ecnmic Analysis, in 2009 Evansville s average wage per jb equaled $39,232 3. The figure is 16 percent belw the natin and 5 percent belw the Davenprt-Mline-Rck Island metr (Table 16). Evansville s average wage per jb is ne percent abve the state and three percent abve Chattanga. Over the last ten years, the nminal (unadjusted fr inflatin) average wage per jb in Evansville has increased by 34.9 percent; the pace is belw the natin and tw benchmark cmmunities, but abve the state (Figure 16 and Table 16). Over the five mst recent years, the rate f grwth is 12.4 percent in Evansville, again, belw the natin, and tw benchmarks, but abut the state. Crrecting grwth in the average wage per jb t real values (adjusting fr inflatin) prvides a mre realistic view f the actual spending value f the wage dllars. Over the last ten years, grwth in real values fr the average wage per jb in Evansville has increased by 4.8 percent, and in the last five years has declined by 1 percent (Figure 17 and Table 17). The pace is belw the natin and bth benchmarks. 3 Average wage per jb is wage and salary disbursements divided by the number f wage and salary jbs (ttal wage and salary emplyment). Wage and salary disbursements cnsists f the mnetary remuneratin f emplyees, including the cmpensatin f crprate fficers; cmmissins, tips, and bnuses; and receipts in kind, r pay-in-kind, such as the meals furnished t the emplyees f restaurants. 37

$14,000 Figure 16 Change in Average Wage Per Jb 1999-2009 (1999 = 0) $12,000 US Davenprt-Mline- Rck Island $10,000 Evansville Chattanga Indiana $8,000 $6,000 $4,000 $2,000 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Surce: US Bureau f Ecnmic Analysis, Garner Ecnmics calculatins Table 16 Average Wage Per Jb 2009 10-Year Net Change 10-Year Percent Change 5-Year Net Change 5-Year Percent Change Evansville $39,232 $10,159 34.9% $4,340 12.4% Chattanga $38,017 $10,049 35.9% $5,271 16.1% Davenprt-Mline-Rck Island $41,265 $12,240 42.2% $6,495 18.7% Indiana $38,809 $8,878 29.7% $3,778 10.8% US $45,831 $12,760 38.6% $6,442 16.4% Surce: US Bureau f Ecnmic Analysis, Garner Ecnmics calculatins 38

$3,500 Figure 17 Change in Average Wage Per Jb (Adjusted fr Inflatin) 1999-2009 (1999 = 0) $3,000 $2,500 Davenprt-Mline- Rck Island US $2,000 $1,500 Chattanga Evansville $1,000 $500 $0 Indiana -$500 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Surce: US Bureau f Ecnmic Analysis, Garner Ecnmics calculatins Table 17 Average Wage Per Jb Trends Adjusted fr Inflatin (1999 = 0) 10-Year Net Change 10-Year Percent Change 5-Year Net Change 5-Year Percent Change Evansville $1,393 4.8% ($307) -1.0% Chattanga $1,554 5.6% $642 2.2% Davenprt-Mline-Rck Island $3,020 10.4% $1,379 4.5% Indiana $206 0.7% ($758) -2.5% US $2,519 7.6% $851 2.5% Surce: US Bureau f Ecnmic Analysis, Garner Ecnmics calculatins 39

Per Capita Incme Accrding t the U.S. Bureau f Ecnmic Analysis, in 2008 Evansville s per capita incme equaled $36,329 4. Evansville s mst current figure is 10 percent belw the natin, 6 percent belw Davenprt- Mline-Rck Island, but abve the state by 4 percent abve the state and Chattanga (Table 18). Over the last ten years, nminal (unadjusted fr inflatin) per capita incme in Evansville has increased by 44.2 percent and in the last five years by 19.2 percent. The ten and five year rates f grwth are abve the state and Chattanga, but belw the natin and Davenprt-Mline-Rck Island (Figure 18 and Table 18). Crrecting the grwth in per capita incme t real values (adjusting fr inflatin) prvides a mre realistic view f the actual spending value f the incme dllars. Over the last ten years, real (adjusted fr inflatin) per capita incme in Evansville has increased by 9.2 percent, and in the last five years has experienced an increase f 1.9 percent (Figure 19 and Table 19). The five and ten year rates f grwth utpace the state, but nt the natin. Figure 18 Change in Per Capita Incme 1998-2008 (1998 = 0) $14,000 $12,000 $10,000 US Davenprt-Mline- Rck Island Evansville Chattanga Indiana $8,000 $6,000 $4,000 $2,000 $0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Surce: US Bureau f Ecnmic Analysis, Garner Ecnmics calculatins 4 Per capita incme is the incme that is received by persns frm all surces. It is calculated as the sum f wage and salary disbursements, supplements t wages and salaries, prprietrs' incme with inventry valuatin and capital cnsumptin adjustments, rental incme f persns with capital cnsumptin adjustment, persnal dividend incme, persnal interest incme, and persnal current transfer receipts, less cntributins fr gvernment scial insurance. This measure f incme is calculated as the persnal incme f the residents f a given area divided by the resident ppulatin f the area. 40

Table 18 Per Capita Incme 2008 10-Year Net Change 10-Year Percent Change 5-Year Net Change 5-Year Percent Change Evansville $36,329 $11,134 44.2% $5,850 19.2% Chattanga $34,784 $10,189 41.4% $5,613 19.2% Davenprt-Mline-Rck Island $38,571 $12,588 48.4% $8,276 27.3% Indiana $34,543 $9,374 37.2% $4,970 16.8% US $40,166 $12,908 47.4% $7,895 24.5% Surce: US Bureau f Ecnmic Analysis, Garner Ecnmics calculatins $4,000 Figure 19 Change in Per Capita Incme (Adjusted fr Inflatin) 1998-2008 (1998 = 0) $3,500 $3,000 Davenprt-Mline- Rck Island US $2,500 Evansville $2,000 Chattanga $1,500 $1,000 Indiana $500 $0 -$500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Surce: US Bureau f Ecnmic Analysis, Garner Ecnmics calculatins 41

Table 19 Per Capita Incme Trends Adjusted fr Inflatin (1998 = 0) 10-Year Net Change 10-Year Percent Change 5-Year Net Change 5-Year Percent Change Evansville $2,309 9.2% $503 1.9% Chattanga $1,739 7.1% $492 1.9% Davenprt-Mline-Rck Island $3,218 12.4% $2,364 8.8% Indiana $983 3.9% ($46) -0.2% US $3,151 11.6% $1,821 6.4% Surce: US Bureau f Ecnmic Analysis, Garner Ecnmics calculatins Ttal Emplyment Thrugh February 2011, Evansville has experienced 12 straight mnths f year-t-year emplyment grwth (Figure 20, Figure 21 and Table 20). The current pace f jb grwth is averaging 1.6 percent, r an annual increase f 2,675 net new jbs. Evansville current pace f grwth is greater than the natin, state and bth benchmark cmmunities. At its lwest pint, Evansville was dwn 9,800 jbs, r -5.5 percent, just ne mnth past the fficial end f the recent recessin. 5 4% Figure 20 Ttal Emplyment Mnthly Year-t-Year Change 2% 0% -2% -4% -6% -8% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Evansville Indiana US Surce: US Bureau f Labr Statistics, Garner Ecnmics calculatins 5 The recessin is fficially dated as beginning December 2007 and ending June 2009. 42

4% Figure 21 Ttal Emplyment Mnthly Year-t-Year Change 2% 0% -2% -4% -6% -8% -10% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Evansville Davenprt-Mline-Rck Island Chattanga Surce: US Bureau f Labr Statistics, Garner Ecnmics calculatins Table 20 Ttal Emplyment Trends 2001-2011 (Feb) Evansville Average Annual Pre-Recessin Grwth Rate -0.2% (-390) Trugh -5.5% (-9,800) Mnths f Pst-Recessin Grwth 12 Average Annual Pst-Recessin Grwth Rate 1.6% (+2,675) Chattanga 0.8% -8.5% 11 1.5% Davenprt-Mline-Rck Island 0.2% -6.3% 8 0.8% Indiana 0.3% -7.0% 11 1.1% US 0.7% -5.1% 6 0.5% Surce: US Bureau f Labr Statistics, Garner Ecnmics calculatins 43

Unemplyment Since the end f the recessin, Evansville s unemplyment rate has averages 8.5 percent, a rate belw the averages fr the state, natin, and benchmark cmmunities (Figure 22, Figure 23 and Table 21). Evansville s highest unemplyment rate ver the last decade equaled 9.2 percent, which was reached three times; February 2009, January 2010, and February 2010. Evansville s peak unemplyment rate was belw peaks made in the natin, state, and benchmark cmmunities. While rates are drpping, the number f persns cunted as unemplyed is still well abve the pre-recessin average; 15,070 versus 8,400. 12 Figure 22 Unemplyment Rate 11 10 9 8 Indiana US Evansville 7 6 5 4 3 2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Surce: US Bureau f Labr Statistics, Garner Ecnmics calculatins 44

Figure 23 Unemplyment Rate 11 10 9 8 7 Chattanga Evansville Davenprt-Mline- Rck Island 6 5 4 3 2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Surce: US Bureau f Labr Statistics, Garner Ecnmics calculatins Evansville Table 21 Unemplyment Trends 2001-2011 (Jan) Average Pre-Recessin Rate (%) 4.6 (8,400) Peak Rate (%) 9.2 (16,675) Average Pst-Recessin Rate (%) 8.5 (15,070) Chattanga 4.3 10.1 9.2 Davenprt-Mline-Rck Island 4.9 10.8 8.6 Indiana 5.0 11.6 10.3 US 5.2 10.6 9.6 Surce: US Bureau f Labr Statistics, Garner Ecnmics calculatins 45

Majr Industry Sectr Cmpsitin A cmparisn f majr industry cmpsitin prvides a brad relative assessment f differences amng ecnmies, and may help indicate areas f uniqueness. Generally, Evansville has a relatively higher prprtin f emplyment in Cnstructin, Manufacturing, Private Educatin and Health Services (Table 22). Cnversely, the area has a lwer relative prprtin f emplyment in Financial Activities, and Federal, State and Lcal Gvernment. A much mre detailed analysis f Evansville s industrial, ccupatinal, and cluster specializatin relative t the natin can be fund in Sectin 5. Table 22 Percentage f Emplyment by Sectr September 2010 Evansville # % Chattanga Davenprt- Mline Rck Island Indiana Natural Resurces & Mining 2,063 1.2% 0.1% 0.7% 0.8% 1.5% Cnstructin 10,459 6.3% 4.0% 5.7% 4.4% 4.4% Manufacturing 27,575 16.6% 13.1% 15.3% 16.6% 9.0% Infrmatin 2,320 1.4% 1.5% 1.8% 1.3% 2.1% Financial Activities 5,556 3.3% 7.4% 5.3% 4.5% 5.7% Prfessinal & Business Services 18,732 11.3% 9.2% 14.1% 10.2% 13.1% Leisure & Hspitality 16,707 10.0% 10.9% 11.8% 10.2% 10.3% Trade, Transprtatin, & Utilities 32,440 19.5% 21.5% 24.5% 19.6% 19.0% Private Educatin & Health Services 27,576 16.6% 13.4% 16.8% 14.5% 14.5% US Ttal Private 148,780 89.4% 84.2% 85.8%* 85.1% 83.3% Ttal Gvernment 17,575 10.6% 15.8% 12.7%* 14.9% 16.7% Federal Gvernment 1,336 0.8% 2.8% na 1.4% 2.2% State Gvernment 3,249 2.0% 2.2% na 3.3% 3.6% Lcal Gvernment 12,990 7.8% 10.8% na 10.2% 10.8% Surce: US Bureau f Labr Statistics, * US Bureau f Ecnmic Analysis 2009, Garner Ecnmics calculatins 46

Private Business Establishments Tracking the grwth and decline in the number f private business establishments is a brad indicatr f ecnmic vitality and dynamism. Over the nine mst current years f data available, Evansville has experienced subpar establishment activity, dwn ver the entire 9 year perid by 2 percent, and up just 0.5 percent ver the last five years (Figure 24 and Table 23). The rates are belw the natin, state, and ne benchmark cmmunity. Figure 24 Change in the Number f Private Business Establishments 2001 (3Q) - 2010 (3Q) Evansville -2% 0% Chattanga -1% 8% Davenprt-Mline-Rck Island 2% 5% Indiana 2% 3% US 5% 13% -2% 0% 2% 4% 6% 8% 10% 12% 14% 5-Year 9-Year Surce: US Bureau f Labr Statistics, Garner Ecnmics calculatins Table 23 Private Business Establishments 2010 (3Q) 9-Year Net Change 9-Year % Change 5-Year Net Change 5-Year % Change Evansville 8,228 (147) -1.8% 40 0.5% Chattanga 10,649 801 8.1% (82) -0.8% Davenprt-Mline-Rck Island 9,736 457 4.9% 189 2.0% Indiana 151,190 4,744 3.2% 2,783 1.9% US 8,746,332 997,988 12.9% 409,355 4.9% Surce: US Bureau f Labr Statistics, Garner Ecnmics calculatins 47

Prprietr Emplyment Measuring the relative prprtin f prprietr emplyment is a means t gauge entrepreneurial activity, which in turn prvides a view f lcal risk-taking and dynamism. Accrding t the U.S. Bureau f Ecnmic Analysis, as f 2008, prprietrs accunted fr 14.3 percent f ttal emplyment in Evansville (Figure 25 and Table 24). The percentage is less than in the natin, state r bth benchmark cmmunities. 25% Figure 25 Prprietr Emplyment as a Percent f Ttal Emplyment 2008 20.9% 21.3% 20% 17.2% 18.2% 15% 14.3% 10% 5% 0% Evansville Chattanga Davenprt-Mline Rck Island Indiana US Surce: US Bureau f Ecnmic Analysis, Garner Ecnmics calculatins 48

Table 24 Prprietr Emplyment 2008 Prprietr Emplyment Prprietr Emplyment Percent Ttal Emplyment Evansville 30,396 14.3% Chattanga 67,243 20.9% Davenprt-Mline-Rck Island 41,051 17.2% Indiana 677,128 18.2% US 38,742,100 21.3% Surce: US Bureau f Labr Statistics, Garner Ecnmics calculatins Cst f Living The ACCRA Cst f Living Index measures relative price levels fr cnsumer gds and services. The average fr all participating places in each quarter equals 100, and each participant's index is read as a percentage f the average fr all participating places. Evansville and the tw benchmark cmmunities each enjy relatively lw Cst f Living scres, all belw 100 (Table 25). Utility prices (residential electric and gas) appear the exceptin in Evansville, scring at 120.3. Table 25 Cst f Living Survey Scres Annual 2010 Evansville Chattanga Davenprt Mline Rck Island Cmpsite Index 96.1 91.1 96.7 Grcery 97.9 97.4 98.7 Husing 86.1 83.7 98.4 Utilities 120.3 82.7 81.6 Transprtatin 97.1 96.4 104.3 Health Care 97.3 93.1 97.7 Misc. Gds & Services 96.4 95.7 96.8 Surce: ACCRA 49

Air Traffic Reginal airprt activity reflects flight availability; an increasingly imprtant variable in cnsideratin f business attractin and firm site selectin. Relative t the benchmark cmmunity airprts, Evansville Dress Reginal Airprt has significantly less passenger activity and scheduled fights, ranging frm 40 t 60 percent lwer (Table 26). Table 26 Airprt Activity Statistics 2010 Passenger Scheduled Flights Arrivals Departures Departures Evansville: Evansville Dress Reginal (EVV) 170,000 169,000 4,865 Chattanga: Lvell Field (CHA) 287,000 290,000 8,196 Davenprt-Mline-Rck Island: Quad/City (MLI) 472,000 474,000 10,087 Surce: U.S. Department f Transprtatin (US DOT) Bradband Cverage Bradband Cverage represents cmmunicatin technlgy available t a percentage f the lcal ppulatin. The Natinal Telecmmunicatins and Infrmatin Administratin prvides metrplitanlevel rankings amngst 370 U.S. areas. Evansville ranks in the lwest 50 t 10 percent f rankings fr fur key measures, and is als belw the benchmark cmmunities in mst areas (Table 27). Characteristics Table 27 Bradband Cverage Metrplitan Areas (ttal f 370) 2010 Evansville % Ppulatin Rank Cvered Chattanga Davenprt-Mline Rck Island Speed Dwnlad Greater Than 3 Mbps, Uplad Greater Than 0.768 Mbps 16.9% 368 188 136 Wireline DSL 88.4% 206 268 128 Wireline Cable Mdem 79.2% 263 155 79 Wireless 93.4% 333 236 47 Surce: Natinal Telecmmunicatins and Infrmatin Administratin 50

SECTION 5: LOCAL SPECIALIZATION, COMPETITIVENESS & GROWTH T he fllwing sectin prvides a detailed and bjective assessment f the Evansville ecnmy. The analysis examines the lcal ecnmy frm several different perspectives, each adding a supprting layer f infrmatin. The assessment s main gals are t prvide histric cntext, reveal areas f unique specializatin, gauge cmpetitiveness, and help uncver emerging trends and pprtunities. The three main subjects f analysis are: ccupatins, majr industries, and industry clusters. Fr each area there are relative measures f specializatin, grwth, lcal cmpetitiveness, and earnings. The presentatin tls f the assessment are bubble/scatter charts, ranking charts and tables. Definitins: Specializatin: measured using lcatin qutient (LQ). 6 Reflects the level f relative cncentratin f a particular ccupatin/industry/cluster in Evansville t the natin. In simple terms, a high LQ s (abve 1.2) indicates what a lcal ecnmy is gd at ding, and infers there are unique skills, institutins, raw materials, etc. that supprt this psitin. Occupatinal r Industry Effect: The prtin f grwth/decline attributed t a particular ccupatin r industry natinwide. Fr example, if nurse r hspital emplyment grew by 5 percent natinwide in 2009, we wuld expect t see the same percentage increase lcally, assuming that the frces driving natinwide grwth wuld have a similar lcal impact. Lcal Cmpetitive Effect: The prprtin f grwth/decline nt captured by the ccupatinal r industry effect, indicating lcal unique perfrmance. The lcal cmpetitive effect measures lcal activity utside the expected natinwide trend. A cnsistent psitive lcal cmpetitive effect signals superir lcal perfrmance. 6 T measure lcal specializatin, lcatin qutients (LQs) fr each ccupatin, industry r cluster is derived. LQs are ratis f an area's distributin f emplyment fr a specific ccupatin/industry/cluster cmpared t a reference r base area's distributin. In this analysis the reference area is the U.S. If an LQ is equal t 1, then the industry has the same share f its area emplyment as it des in the reference area. An LQ greater than 1 indicates an industry with a greater share f the lcal area emplyment than is the case in the reference area and implies lcal specializatin. LQs are calculated by first, dividing lcal industry emplyment by the all industry ttal f lcal emplyment. Secnd, reference area industry emplyment is divided by the all industry ttal fr the reference area. Finally, the lcal rati is divided by the reference area rati. 51

T assist the reader in interpreting the bubble charts each quadrant is labeled with a brad descriptive. These labels shuld be read as general guides resulting frm purely quantitative analysis, nt definitive cnclusins. Each bubble chart is meant as nly ne-piece f a multiple part analysis. Quadrant label definitins: At-Risk Lcally- Lcally specialized and recent lcal jb lsses. Cmpetitive- Lcally specialized and recent lcal jb gains. Declining- Nt lcally specialized and recent lcal jb lsses. Emerging- Nt lcally specialized and recent lcal jb gains. Lcally Uncmpetitive/Grwing- Industry r ccupatin gains natinwide and negative lcal effect (lcal lsses r gains belw natinwide trend). Lcally Cmpetitive/Grwing- Industry r ccupatin gains natinwide and psitive lcal effect (lcal gains r lsses abve natinwide trend). Lcally Cmpetitive/Declining- Industry r ccupatin lsses natinwide and psitive lcal effect (lcal lsses r gains abve natinwide trend). Lcally Uncmpetitive/Declining- Industry r ccupatin lsses natinwide and negative lcal effect (lcal lsses r gains belw natinwide trend). Detailed ccupatinal and industry infrmatin fr Evansville can be fund in the Appendix. 52

Degree f Specializatin Occupatinal Specializatin & Grwth Evansville s mst highly specialized majr ccupatinal grup is Prductin, with an LQ f 2.06 and ttal emplyment equaling 22,303 (Figure 26 and Table 28). Other highly specialized ccupatinal grups are Installatin, maintenance & repair, Cnstructin & extractin, and Transprtatin & material mving. Althugh nt as specialized, Healthcare practitiners & technical and Healthcare supprt experienced net grwth ver the 2006-2011 (1Q) perid. 2.5 AT-RISK Figure 26 Majr Occupatinal Grups Grwth & Specializatin Evansville Metr COMPETITIVE 2.0 Prductin Installatin, maintenance, & repair 1.5 Transprtatin & material mving Cnstructin & extractin Healthcare practitiners & technical Fd preparatin & serving related 1.0 0.5 Office & administrative supprt Life, physical, & scial science Cmmunity & scial services Sales & related Architecture & engineering Persnal care & service Prtective service Arts, design, entertainment, sprts, & media Farming, fishing, & frestry Legal Healthcare supprt Building & grunds cleaning & maintenance Management Educatin, training, & library Business & financial peratins Cmputer & mathematical science Military DECLINING EMERGING 0.0-5,000-4,000-3,000-2,000-1,000 0 1,000 2,000 Emplyment Grwth 2006-2011 (1Q) Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 53

Table 28 Majr Occupatinal Grups Grwth & Specializatin (Ranked by Specializatin) Evansville Metr 2011 1Q Ttal Jbs LQ 5-Year Change Prductin 22,303 2.06 (4,038) Installatin, maintenance, & repair 10,432 1.49 (824) Cnstructin & extractin 12,102 1.29 (1,091) Transprtatin & material mving 14,162 1.22 (1,720) Healthcare practitiners & technical 11,359 1.20 998 Healthcare supprt 5,772 1.10 559 Fd preparatin & serving related 14,917 1.10 37 Architecture & engineering 2,930 0.96 (118) Office & administrative supprt 26,658 0.95 (542) Life, physical, & scial science 2,019 0.94 103 Building & grunds cleaning & maintenance 7,306 0.93 335 Cmmunity & scial services 2,766 0.92 194 Sales & related 22,896 0.90 (734) Management 13,957 0.88 669 Educatin, training, & library 9,204 0.79 55 Persnal care & service 5,914 0.74 (4) Prtective service 2,710 0.71 2 Arts, design, entertainment, sprts, & media 3,919 0.64 (139) Business & financial peratins 6,706 0.61 534 Legal 1,031 0.61 47 Cmputer & mathematical science 2,319 0.51 67 Military 1,218 0.49 124 Farming, fishing, & frestry 506 0.39 (95) Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 54

Occupatinal/Industry Effect Occupatinal Cmpetitiveness Several ccupatinal grups in Evansville have experienced grwth exceeding natinal trends, implying a lcal cmpetitive edge; the leaders are Cnstructin & extractin, ffice & administrative supprt, and Prductin (Figure 27 and Table 29). Fur ccupatinal grups experienced psitive Occupatinal/Industry and lcal cmpetitive effect grwth; Management, Building & grunds cleaning & maintenance, Military, and Legal. Figure 27 Majr Occupatinal Grups Surces f Emplyment Change Evansville Metr 2006-2011 (1Q) 2,000 1,000 Persnal care & service Fd preparatin & serving related Educatin, training, & library 0-1,000 Lcally Uncmpetitive Grwing Field Arts, design, entertainment, sprts, & media Sales & related Healthcare supprt Life, physical, & scial science Installatin, maintenance, & repair Business & financial peratins Healthcare practitiners & technical Legal Prtective service Management Cmmunity & scial services Building & grunds cleaning & maintenance Cmputer & mathematical science Military Architecture & engineering Office & administrative supprt Lcally Cmpetitive Grwing Field Farming, fishing, & frestry -2,000 Transprtatin & material mving -3,000 Cnstructin & extractin -4,000 Prductin -5,000 Lcally Uncmpetitive Decling Field -1,000-500 0 500 1,000 1,500 Lcal Cmpetitive Effect Lcally Cmpetitive Declining Field Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 55

Table 29 Majr Occupatinal Grups Cmpetitiveness (Ranked by Lcal Effect) Evansville Metr 2011 1Q Lcal Effect Occupatinal/ Industry Effect Ttal Jbs Cnstructin & extractin 1,209 (2,298) 12,102 Office & administrative supprt 401 (938) 26,658 Prductin 381 (4,415) 22,303 Management 143 528 13,957 Building & grunds cleaning & maintenance 82 254 7,306 Military 70 54 1,218 Architecture & engineering 44 (161) 2,930 Legal 15 32 1,031 Cmputer & mathematical science (40) 107 2,319 Cmmunity & scial services (51) 246 2,766 Farming, fishing, & frestry (80) (15) 506 Installatin, maintenance, & repair (106) (716) 10,432 Healthcare practitiners & technical (109) 1,109 11,359 Life, physical, & scial science (114) 217 2,019 Prtective service (126) 128 2,710 Healthcare supprt (238) 798 5,772 Business & financial peratins (248) 783 6,706 Transprtatin & material mving (367) (1,351) 14,162 Arts, design, entertainment, sprts, & media (396) 257 3,919 Fd preparatin & serving related (441) 481 14,917 Sales & related (457) (273) 22,896 Educatin, training, & library (558) 615 9,204 Persnal care & service (774) 771 5,914 Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 56

Occupatinal Earnings The Life, physical, & scial science ccupatinal grup has the highest median hurly earnings in Evansville at $29.24, exceeding the natinal median fr that grup (Figure 28 and Table 30 and Table 31). Other ccupatinal grups with lcal median hurly earnings greater than the same-grup natinwide are Cnstructin & extractin, Prductin, and Farming, fishing, & frestry. Figure 28 Majr Occupatinal Grups Median Hurly Earnings 2010 Life, physical, & scial science Healthcare practitiners & technical Architecture & engineering Cmputer & mathematical science Educatin, training, & library Management Legal Cnstructin & extractin Business & financial peratins Installatin, maintenance, & repair Prtective service Prductin Cmmunity & scial services Transprtatin & material mving Office & administrative supprt Arts, design, entertainment, sprts, & media Farming, fishing, & frestry Healthcare supprt Sales & related Military Persnal care & service Building & grunds cleaning & maintenance Fd preparatin & serving related Natinal Median $18.06 $0 $10 $20 $30 $40 Natinal Evansville Surce: Ecnmic Mdeling Specialist, Garner Ecnmics Calculatins 57

Table 30 Majr Occupatinal Grups Median Hurly Earnings (Ranked) 2010 Evansville Natinal Life, physical, & scial science $29.24 $26.65 Healthcare practitiners & technical $28.99 $32.16 Architecture & engineering $28.89 $32.79 Cmputer & mathematical science $25.68 $32.72 Educatin, training, & library $24.65 $25.37 Management $24.54 $26.77 Legal $23.29 $36.08 Cnstructin & extractin $21.25 $18.95 Business & financial peratins $20.67 $23.83 Installatin, maintenance, & repair $19.32 $18.85 Prtective service $17.76 $18.34 Prductin $16.33 $15.07 Cmmunity & scial services $14.08 $16.48 Transprtatin & material mving $13.75 $14.80 Office & administrative supprt $13.25 $14.90 Arts, design, entertainment, sprts, & media $12.64 $14.47 Farming, fishing, & frestry $12.33 $10.39 Healthcare supprt $12.27 $12.37 Sales & related $12.11 $13.29 Military $10.09 $17.41 Persnal care & service $9.86 $10.31 Building & grunds cleaning & maintenance $9.52 $9.80 Fd preparatin & serving related $8.89 $9.41 Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 58

Degree f Speciaizatin Industrial Specializatin & Grwth Five majr industries are highly specialized in Evansville; Utilities, Mining, Quarrying, & Oil & Gas Extractin, Manufacturing, Management f Cmpanies & Enterprises, and Transprtatin & Warehusing (Figure 29 and Table 31). Tw industries are specialized and experienced grwth ver the 2006-2011 (1Q) perid; Mining, Quarrying, & Oil & Gas Extractin and Health Care & Scial Assistance. Figure 29 Majr Industries Grwth & Specializatin Evansville Metr 3.5 AT-RISK Utilities COMPETITIVE 3.0 2.5 Mining, Quarrying, & Oil & Gas Extractin Manufacturing 2.0 Management f Cmpanies & Enterprises 1.5 Transprtatin & Warehusing Accmmdatin & Fd Services Whlesale Trade Health Care & Scial Assistance 1.0 0.5 0.0 DECLINING Retail Trade Cnstructin Agriculture, Frestry, Fishing & Hunting Educatinal Services Infrmatin Arts, Entertainment, & Recreatin Gvernment Real Estate & Rental & Leasing Administrative & Supprt Services Prfessinal, Scientific, & Technical Services Finance & Insurance EMERGING -8,000-6,000-4,000-2,000 0 2,000 4,000 Emplyment Grwth 2006-2011 (1Q) Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 59

Table 31 Majr Industries Grwth & Specializatin (Ranked by Specializatin) Evansville Metr 2011 (1Q) Jbs LQ 5-Year Change Utilities 2,209 3.27 (21) Mining, Quarrying, & Oil & Gas Extractin 5,083 2.85 1,910 Manufacturing 27,442 1.96 (6,925) Management f Cmpanies & Enterprises 3,713 1.74 (236) Transprtatin & Warehusing 7,832 1.22 (1,567) Health Care & Scial Assistance 26,870 1.19 2,331 Cnstructin 12,382 1.05 (1,994) Whlesale Trade 7,465 1.02 (430) Retail Trade 21,421 1.02 (1,214) Accmmdatin & Fd Services 14,150 1.01 (157) Educatinal Services 4,306 0.95 33 Arts, Entertainment, & Recreatin 3,733 0.89 (3) Agriculture, Frestry, Fishing & Hunting 3,129 0.81 (164) Administrative & Supprt Services 12,701 0.75 2,982 Infrmatin 2,641 0.73 (460) Gvernment 18,030 0.65 48 Real Estate & Rental & Leasing 5,773 0.64 25 Prfessinal, Scientific, & Technical Services 8,021 0.57 289 Finance & Insurance 6,009 0.55 500 Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 60

Industry Effect Industrial Cmpetitiveness Three majr industries in Evansville experienced grwth exceeding natinal trends; Administrative & Supprt Services, Cnstructin and Retail Trade (Figure 30 and Table 32). Health Care & Scial Assistance benefited frm the largest industry effect grwth, up 3,514 jbs, but did nt shw any lcal cmpetitive advantage. Figure 30 Majr Industries Surces f Emplyment Change Evansville Metr 2006-2011 (1Q) 6,000 4,000 Lcally Uncmpetitive Grwing Industry Agriculture, Frestry, Fishing & Hunting Health Care & Scial Assistance Lcally Cmpetitive Grwing Industry 2,000 0 Prfessinal, Scientific, & Technical Services Educatinal Services Gvernment Transprtatin & Warehusing Finance & Insurance Mining, Quarrying, & Oil & Gas Extractin Utilities -2,000 Real Estate & Rental & Leasing Management f Cmpanies & Enterprises Infrmatin Whlesale Trade Retail Trade Administrative & Supprt Services Accmmdatin & Fd Services -4,000 Arts, Entertainment, & Recreatin Cnstructin -6,000 Manufacturing -8,000 Lcally Uncmpetitve Declining Industry -2,000-1,000 0 1,000 2,000 3,000 4,000 Lcal Cmpetitive Effect Lcally Cmpetitve Declining Industry Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 61

Table 32 Majr Industries Surces f Emplyment Change Ranked by Lcal Effect Evansville Metr 2006-2011 (1Q) Lcal Effect Industry Effect Ttal Jbs Administrative & Supprt Services 3,390 (407) 12,701 Cnstructin 1,008 (3,000) 12,382 Retail Trade 216 (1,427) 21,421 Whlesale Trade (31) (398) 7,465 Mining, Quarrying, & Oil & Gas Extractin (41) 1,951 5,083 Utilities (121) 100 2,209 Real Estate & Rental & Leasing (137) 162 5,773 Agriculture, Frestry, Fishing & Hunting (191) 27 3,129 Infrmatin (209) (250) 2,641 Finance & Insurance (301) 802 6,009 Prfessinal, Scientific, & Technical Services (303) 594 8,021 Manufacturing (340) (6,581) 27,442 Management f Cmpanies & Enterprises (391) 156 3,713 Arts, Entertainment, & Recreatin (412) 409 3,733 Accmmdatin & Fd Services (524) 369 14,150 Educatinal Services (529) 563 4,306 Gvernment (617) 667 18,030 Transprtatin & Warehusing (1,118) (447) 7,832 Health Care & Scial Assistance (1,179) 3,514 26,870 Administrative & Supprt Services 3,390 (407) 12,701 Cnstructin 1,008 (3,000) 12,382 Retail Trade 216 (1,427) 21,421 Whlesale Trade (31) (398) 7,465 Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 62

Industrial Earnings Utilities and Management f Cmpanies & Enterprises have the highest industry earnings per wrker in Evansville (Figure 31 and Table 33). Only tw industries have earnings per wrker abve natinal averages; Manufacturing and Cnstructin. Figure 31 Earnings Per Wrker Majr Industries Evansville Metr 2010 Utilities Management f Cmpanies & Enterprises Manufacturing Mining, Quarrying, & Oil & Gas Extractin Whlesale Trade Cnstructin Prfessinal, Scientific, & Technical Services Gvernment Transprtatin & Warehusing Health Care & Scial Assistance Infrmatin Finance & Insurance Educatinal Services Agriculture, Frestry, Fishing & Hunting Retail Trade Administrative & Supprt Services Real Estate & Rental & Leasing Arts, Entertainment, & Recreatin Accmmdatin & Fd Services Natinal Average $51,661 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 Natinal Evansville Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 63

Table 33 Earnings Per Wrker (Ranked) Majr Industries Evansville Natinal Utilities $89,764 $114,357 Management f Cmpanies & Enterprises $83,477 $111,389 Manufacturing $77,798 $71,060 Mining, Quarrying, & Oil & Gas Extractin $67,074 $99,496 Whlesale Trade $58,906 $73,035 Cnstructin $57,021 $54,651 Prfessinal, Scientific, & Technical Services $51,485 $74,110 Gvernment $50,360 $65,322 Transprtatin & Warehusing $49,812 $53,994 Health Care & Scial Assistance $47,969 $50,191 Infrmatin $46,445 $78,657 Finance & Insurance $45,713 $79,726 Educatinal Services $29,212 $40,451 Agriculture, Frestry, Fishing & Hunting $28,181 $28,879 Retail Trade $26,285 $30,438 Administrative & Supprt Services $23,543 $32,240 Real Estate & Rental & Leasing $22,814 $28,020 Arts, Entertainment, & Recreatin $18,608 $26,756 Accmmdatin & Fd Services $15,314 $20,377 Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 64

Degree f Specializatin Industry Cluster Specializatin & Grwth Evansville has tw industry clusters 7 which display lcal specializatin and psitive emplyment grwth; Bimedical/Bitechnical (Life Sciences) and Energy (Figure 32 and Table 34). The tw mst highly specialized industry clusters in Evansville are Primary Metal Mfg. and Plastics Mfg. Figure 32 Industry Clusters Grwth & Specializatin Evansville Metr 8 AT-RISK Primary Metal Mfg COMPETITIVE 7 Plastics Mfg 6 5 Electrical Equipment, Appliance & Cmpnent Mfg 4 Chemicals & Chemical Based Prducts 3 2 1 0 Advanced Materials DECLINING Transprtatin & Lgistics Frest & Wd Prducts Arts, Entertainment, Recreatin & Visitr Industries Fabricated Metal Prduct Mfg Transprtatin Equipment Mfg Glass & Ceramics Agribusiness, Fd Prcessing & Technlgy Mining Printing & Publishing Energy (Fssil & Renewable) Defense & Security Machinery Mfg Educatin & Knwledge Creatin Cmputer & Electrnic Prduct Mfg Infrmatin Technlgy & Apparel & Textiles Telecmmunicatins Emplyment Grwth 2006-2011 (1Q) Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins Bimedical/Bitechnical (Life Sciences) Business & Financial Services EMERGING -4,000-3,000-2,000-1,000 0 1,000 2,000 3,000 7 Industry clusters are gegraphic cncentratins f intercnnected businesses, suppliers, and assciated institutins in a particular field. Clusters are cnsidered t increase the prductivity with which cmpanies can cmpete, natinally and glbally. Fr the analysis we start with cluster definitins develped by the Purdue Center fr Reginal Develpment, and the Indiana Business Research Center at Indiana University's Kelley Schl f Business thrugh wrk funded by U.S. Cmmerce Department's Ecnmic Develpment Administratin. Garner Ecnmics adjusts cluster cmpnents t better match the lcatin and particular ecnmic situatin. Additinally new clusters are develped t align with unique reginal ecnmic activity. 65

Table 34 Industry Clusters Grwth & Specializatin (Ranked by Specializatin) Evansville Metr 2011 (1Q) Cluster Name LQ Jbs 5-Year Change Primary Metal Mfg 7.47 3,046 (1,332) Plastics Mfg 6.96 4,708 (1,064) Electrical Equipment, Appliance & Cmpnent Mfg 4.02 1,679 (1,357) Transprtatin Equipment Mfg 3.83 5,949 (366) Chemicals & Chemical Based Prducts 3.72 8,834 (2,043) Advanced Materials 2.02 11,285 (3,489) Glass & Ceramics 1.95 594 (234) Energy (Fssil & Renewable) 1.88 10,643 1,728 Bimedical/Bitechnical (Life Sciences) 1.31 20,912 2,128 Transprtatin & Lgistics 1.16 6,810 (1,442) Agribusiness, Fd Prcessing & Technlgy 1.11 6,616 (485) Fabricated Metal Prduct Mfg 0.93 1,387 (404) Mining 0.90 490 (66) Frest & Wd Prducts 0.85 2,460 (904) Apparel & Textiles 0.79 1,151 (335) Educatin & Knwledge Creatin 0.75 3,413 (198) Machinery Mfg 0.70 817 (230) Arts, Entertainment, Recreatin & Visitr Industries 0.69 5,658 (529) Printing & Publishing 0.67 2,321 (310) Infrmatin Technlgy & Telecmmunicatins 0.60 4,901 (649) Business & Financial Services 0.50 12,356 821 Defense & Security 0.48 2,907 181 Cmputer & Electrnic Prduct Mfg 0.30 379 (214) Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 66

Industry Effect Industry Cluster Cmpetitiveness The Transprtatin Equipment Mfg. and Plastics Mfg. clusters have experienced grwth exceeding natinal trends, implying a lcal cmpetitive edge (Figure 33 and Table 35). The Energy industry cluster is the nly industry cluster in Evansville that experienced bth a psitive industry and lcal cmpetitive effect. Figure 33 Industry Clusters Surces f Emplyment Change Evansville Metr 2006-2011 (1Q) 2,500 2,000 1,500 1,000 Lcally Uncmpetitive Grwing Industry Bimedical/Bitechnical (Life Sciences) Business & Financial Services Agribusiness, Fd Prcessing & Technlgy Energy (Fssil & Renewable) Lcally Cmpetitive Grwing Industry 500 Educatin & Knwledge Creatin Arts, Entertainment, Recreatin & Visitr Industries Defense & Security 0 Transprtatin & Lgistics -500 Machinery Mfg Mining Glass & Ceramics Printing & Publishing Apparel & Textiles -1,000 Infrmatin Technlgy & Telecmmunicatins Cmputer & Electrnic Prduct Mfg Electrical Equipment, Appliance & Cmpnent Mfg Primary Metal Mfg Frest & Wd Prducts Plastics Mfg Transprtatin Equipment Mfg -1,500 Fabricated Metal Prduct Mfg Advanced Materials -2,000 Chemicals & Chemical Based Prducts -2,500 Lcally Uncmpetitive Declining Industry Lcally Cmpetitive Declining Industry -2,000-1,500-1,000-500 0 500 1,000 1,500 Lcal Cmpetitive Effect Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 67

Table 35 Industry Clusters Surces f Emplyment Change Evansville Metr 2006-2011 (1Q) Cluster Name Lcal Effect Industry Effect Ttal Jbs Transprtatin Equipment Mfg 1,230 (1,541) 5,949 Plastics Mfg 235 (1,298) 4,708 Frest & Wd Prducts 91 (899) 2,460 Energy (Fssil & Renewable) 55 1,661 10,643 Apparel & Textiles 1 (299) 1,151 Glass & Ceramics (17) (189) 594 Defense & Security (19) 152 2,907 Mining (58) (20) 490 Machinery Mfg (63) (193) 817 Printing & Publishing (78) (164) 2,321 Chemicals & Chemical Based Prducts (123) (1,867) 8,834 Fabricated Metal Prduct Mfg (133) (339) 1,387 Cmputer & Electrnic Prduct Mfg (153) (115) 379 Primary Metal Mfg (225) (976) 3,046 Business & Financial Services (431) 1,347 12,356 Agribusiness, Fd Prcessing & Technlgy (478) (14) 6,616 Educatin & Knwledge Creatin (523) 312 3,413 Electrical Equipment, Appliance & Cmpnent Mfg (556) (547) 1,679 Infrmatin Technlgy & Telecmmunicatins (589) (227) 4,901 Arts, Entertainment, Recreatin & Visitr Industries (673) 223 5,658 Bimedical/Bitechnical (Life Sciences) (677) 2,095 20,912 Transprtatin & Lgistics (1,162) (454) 6,810 Advanced Materials (1,472) (2,065) 11,285 Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 68

Industry Cluster Earnings Earnings in several Evansville clusters exceed their same-cluster natinal average and the verall natinwide earnings average f $51,661; Transprtatin Equipment Mfg., Primary Metal Mfg., Mining, Chemicals & Chemical Based Prducts, Plastics, and Glass & Ceramics (Figure 34 and Table 36). Figure 34 Industry Clusters Average Earnings Per Wrker 2010 Transprtatin Equipment Manufacturing Primary Metal Manufacturing Mining Chemicals & Chemical Based Prducts Electrical Equipment, Appliance & Cmpnent Manufacturing Advanced Materials Energy (Fssil & Renewable) Plastics Machinery Manufacturing Cmputer & Electrnic Prduct Manufacturing Glass & Ceramics Infrmatin Technlgy & Telecmmunicatins Fabricated Metal Prduct Manufacturing Frest & Wd Prducts Bimedical/Bitechnical (Life Sciences) Transprtatin & Lgistics Defense & Security Business & Financial Services Printing & Publishing Agribusiness, Fd Prcessing & Technlgy Apparel & Textiles Educatin & Knwledge Creatin Arts, Entertainment, Recreatin & Visitr Industries Natinal Average $51,661 $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 Natin Evansville Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 69

Table 36 Industry Clusters Average Earnings Per Wrker 2010 Cluster Name Evansville Natinal Transprtatin Equipment Manufacturing $92,584 $79,133 Primary Metal Manufacturing $90,260 $75,546 Mining $87,096 $84,366 Chemicals & Chemical Based Prducts $82,795 $78,458 Electrical Equipment, Appliance & Cmpnent Manufacturing $76,610 $78,004 Advanced Materials $75,887 $82,704 Energy (Fssil & Renewable) $73,910 $96,926 Plastics $73,767 $61,351 Machinery Manufacturing $67,732 $70,001 Cmputer & Electrnic Prduct Manufacturing $66,044 $102,761 Glass & Ceramics $65,772 $52,774 Infrmatin Technlgy & Telecmmunicatins $62,831 $90,006 Fabricated Metal Prduct Manufacturing $51,853 $57,294 Frest & Wd Prducts $51,654 $46,566 Bimedical/Bitechnical (Life Sciences) $49,537 $53,150 Transprtatin & Lgistics $49,196 $55,063 Defense & Security $48,826 $72,220 Business & Financial Services $46,788 $71,478 Printing & Publishing $43,622 $63,442 Agribusiness, Fd Prcessing & Technlgy $39,977 $36,356 Apparel & Textiles $36,614 $49,957 Educatin & Knwledge Creatin $32,119 $46,575 Arts, Entertainment, Recreatin & Visitr Industries $21,955 $33,908 Surce: Ecnmic Mdeling Specialist, Garner Ecnmics calculatins 70

SECTION 6: OPTIMAL INDUSTRY TARGETS Optimal industry target selectin is based n the site-specific characteristics f the Evansville (reginal) ecnmy. Using results frm past studies, the Cmpetitive Realities Reprt, Cmmunity Assets and Challenges Assessment, field visits, and the Business Climate Survey; fur industry targets were chsen that best match the unique cmpetitive advantages in Evansville t the needs f particular industry sectrs. Each sectr selected has a recrd f abve-average wages, prjected grwth, and participatin in cmmercial activities that will create wealth in Evansville, bth in the shrt and lng term. 8 Prspects are particularly interested in an established and skilled wrkfrce, plus the regin s capacity t supply newly trained wrkers, especially amng higher-skilled ccupatins, s special effrts were made t link demanded ccupatins and training t Evansville s wrkfrce and supply pipeline. Because ecnmies are dynamic and impssible t precisely predict, these fur targets ffer pprtunities acrss several nn-cmpeting sectrs, affrding a means t diversify ecnmic develpment strategies and avid risky ver-cncentratin. The infrmatin is presented in a practical and wrkable frmat; aviding cmplex analysis and extensive prjectins f future utcmes. Instead, the justificatins fr the targets shuld be clearly apparent and make sense t the average practitiner. Under each majr target sectr, a list f individual subsectrs is prvided, with accmpanying NAICS classificatins and descriptins. This is t help bridge the gap frm brad ecnmic cncepts t a wrkable means fr identifying specific prspective industries and firms. Fr each target a brief descriptin f industry trends and specific applicatins f select sub-sectrs are discussed, then a bulleted list f ratinales are presented and identified as appealing t the needs f prspects (P) r the cmmunity (C). This material can be used in marketing and cmmunity supprt effrts, r t help ecnmic develpment persnnel priritize targeting effrts. 8 Lcal wealth creatin is driven by exprting value-added prducts and services, r in sme cases by imprting utside dllars via activities such as turism. All ther activities, which primarily serve the lcal market, such as retail, wuld nt be cnsidered as viable industry targets fr recruitment r expansin. 71

The Evansville Regin Optimal Targets Plastics Prcess Manufacturing Health/Life Sciences Lgistics & Distributin Subsectr Targets Plastics & Rubber Industry Machinery Mfg Plastics Material & Resin Mfg. Unlaminated Plastics Prfile Shape Mfg. Plastics Pipe & Pipe Fitting Mfg. Urethane & Other Fam Prduct Mfg. Plastics Bttle Mfg. All Other Plastics Prduct Mfg. Aut Assembly & Related Assembly Supprt Machinery Mfg. Mining and il and gas field machinery mfg. Turbine and turbine generatr set units mfg. Fluid pwer pump and mtr mfg. Electrnic Prduct Mfg. Bradcast and wireless cmmunicatins equip. Electrnic cnnectr mfg. Industrial prcess variable instruments mfg. Other measuring & cntrlling device mfg. Fd Prcessing Dg and Cat Fd mfg. Sybean prcessing Breakfast cereal mfg. Cnfectinery mfg. Mixes and dugh made frm purchased flur Other snack fd mfg. Cffee and tea mfg Maynnaise, dressing, and sauce mfg. Spice and extract mfg. Health Related Mfg. Medicinal & btanical mfg Pharmaceutical preparatin mfg In-vitr diagnstic substance mfg Other bilgical prduct mfg Optical instrument & lens mfg Surgical appliance & supplies mfg Clinical Research/ Ag Technlgy Research & Develpment in Bitechnlgy Research & Develpment in the Physical, Engineering, & Life Sciences Research & Develpment in the Scial Sciences & Humanities (clinical research) Medical Labratries Scheduled Passenger Air Transprtatin (air service) Nnscheduled Chartered Passenger Air Transprtatin (charter air service) Rail transprtatin General Freight Trucking, Lng-Distance, Trucklad General Freight Trucking, Lng-Distance, Less Than Trucklad Specialized Freight Trucking, Lng-Distance Supprt Activities fr Rail Transprtatin Prt and Harbr Operatins Marine Carg Handling Navigatinal Services t Shipping Freight Transprtatin Arrangement General warehusing and strage Refrigerated Warehusing and Strage Prcess, Physical Distributin, and Lgistics Cnsulting Services Thse items marked with a blue target symblize a high pririty target fr the EDC t pursue. 72

Plastics T he Plastics target recgnizes a well-knwn strength and area f established industrial specializatin in Evansville. As such, the required supprt structure fr the industry is already in place. The targeting bjectives wuld be t leverage existing assets, strengthen the supply chain, and increase the emplyment base. As industry clusters grw; s als d pprtunities fr prduct innvatin and vertical integratin, alng with respective industry wages. Innvatins in plastics can be exemplified by the mve twards bi-based prducts versus fssil fuel, which has been prmted by the firm DSM 9, which has facilities in Evansville. Evansville has the necessary industrial framewrk t becme a leader in plastic technlgies. The lcal Plastics cluster includes sixty firms and emplys mre than 4,700. Examples f lcal firms in the cluster include Berry Plastics, SABIC Innvative Plastics, Rexam, Frtis Plastics, Wabash Plastics, the Matrixx Grup, Ilpea, Guardian Industries, DSM Engineering Plastics, Crescent Plastics, and Adc Prducts. The industry earned the highest number f mentins fr the best fit fr the area amng participants in the EDC f Suthwest Indiana Business Climate Survey. Ptential dmestic prspects ttal nearly 10,000 plastics firms. The rise f emerging technlgies and prducts are making the plastics industry mre reliant n research, innvatin and the knwledge ecnmy. This is the single mst imprtant trend impacting the ability t create a cmplete plastics cluster that will be sustainable int the future: Bidegradable Plastics (Envirnmentally Respnsible Materials) Mst significant paradigm shift in the industry since the emergence f synthetics. A wide range f feedstck can be used in the prductin f bidegradable plastics natural fibers (hemp, jute, flax, etc.); Starches (rganic and industrial); Fats and Oils; Prteins (Sy); Cellulsic (Cellphane, Engineered wd prducts); Plysaccharides (Pectin, Chitin, Levan, Pullulam). Tw key design principles: 1) Bibased & Bidegradable single use, shrt-life prducts ften fund in packaging, agricultural films and marine prducts. 2) Bi based & Durable industrial and autmtive uses. Nantechnlgy Nancmpsites used in a variety f therm plastics t raise heat resistance, stability, stiffness flame retardancy and electrical cnductivity. Typical applicatins include autmtive parts and electrnics (cmputing). Nancmpsites are being evaluated fr the use in films and fd packaging. 9 In 2010 DSM annunced the launched f tw new bi-based plastics; EcPaXX and Palapreg ECO. Althugh the cmpany is targeting the aut industry as a prime ptential custmer, it expects bth bi-resins t be used in a variety f prducts. 73

Electrically Cnductive Plymer Very new material develpment that allws plymer nancmpsites materials t carry r dissipate significant electrical charges. Ptential applicatins include cnductive pains, catings, caulks, sealants, adhesives, fibers, thin films, thick sheets and tubes fr use in the aerspace, autmtive and chemical industries. Slar Cells Experimental semicnductr-plymer phtvltaic material that will be cheaper and easier t prduce than cnventinal PV panels and wuld maintain the same mld-ability f traditinal plymers. Nancmpsite Fams - Experimental dense fam that may be able t replace slid plastic. Ptential applicatins culd include seat cushins, carpet padding, hme insulatin, dispsable diapers, fast fd cntainers, cffee cups and packaging material. Radi Frequency Identificatin Technlgy (RFID) Virtually every majr applicatin f RFID technlgy (wrist band IDs, carg labels, tll passes, building security, etc.) requires plastic delivery devices. Upcming prduct uses will cme frm the pharmaceutical industry and the tagging f ALL cnsumer gds fr supply chain security and efficiency. These applicatins will require tens f billins f units per year. APPLICATION Cst f prductin is driving this emerging prduct sectr. In rder t prepare lcal prducers fr entry int this market the wrkfrce develpment and academia cmmunity can lead efficiency initiatives thrugh the prvisin r incentivizing f six sigma/lean training. In relatin t the industry trends, the fllwing are key site selectin factrs that are cnsidered by Plastic Manufacturers when making decisins relative t lcatin: Labr Mst plastic manufacturers will strive t reach a pint where they can perate three shifts per day. Therefre, their labr demands are typically much greater than initial ramp-up. They must be assured that the lng-term labr pl is deep enugh fr scalability. Plastics demand a mix f lwer and medium skilled manufacturing wrkers; e.g. lw skills include line wrkers, machine peratrs, etc. and typical medium skills include CNC peratrs. Hwever, as technlgy drives plastics the imprtance f chemists and material scientists will increase in imprtance. Many manufacturers are cncerned with the risk f uninizatin. In sme markets plastic manufacturers have chsen t prvide benefits and wages abve industry averages in rder t avid uninizatin. If the regin wishes t attract R&D in additin t prductin capabilities then the knwledge wrkers required will demand a certain quality f life: diversity f husing ptins, schl quality, entertainment, etc. In additin, knwledge wrkers spuses/partners are typically als highly educated and wuld demand access t similar ccupatins. Nt being able t emply partners can hinder the ability t recruit scientists, engineers, etc. Utilities Ability t secure large lad electrical service redundancy preferred 74

Sme plastic manufacturing prcess will require water that has nt been pretreated; if this cannt be prvided by the lcal utility than the ability t drill n site wells will becme imprtant. Plastics typically prduce significant amunts f wastewater cst and regulatins arund treatment are crucial. Transprtatin Plastic manufacturers like t receive raw material shipments by rail (resins, petrleum based cmpnents, etc.) and ship prducts utbund by truck. Therefre rail served sites (n site spurs) are critical, and highway access must be cnvenient. Other Relatinships and ability t cnnect with research institutins will becme increasingly imprtant as the emerging technlgies discussed abve grw in imprtance fr differentiatin and industry cmpetitiveness. Ratinales (Prspect, Cmmunity): Highly specialized, scred the secnd highest degree f cluster specializatin (LQ f 7.44) amng 23 majr industry clusters. (P) Large existing labr pl f key industry demanded ccupatins: (P) Industrial engineers (308) Mechanical engineers (452) Team assemblers (6,220) Mlding, cremaking, and casting machine setters, peratrs, and tenders (520) Extruding and drawing machine setters, peratrs, and tenders (699) Cutting, punching, and press machine setters, peratrs, and tenders (682) Helpers--Prductin wrkers (1,266) Lcal institutinal supprt: (P) Mechanical Engineering BA degree prgram at the University f Evansville (15 annual cmpletins) Reginal (IN-KY) institutinal supprt: (P) Mechanical Engineering BA degree prgrams at Indiana Institute f Technlgy, Indiana University-Purdue University-Frt Wayne, Indiana University-Purdue, University-Indianaplis, Purdue University-Main Campus, Rse-Hulman Institute f Technlgy, Trine University, University f Kentucky, University f Ntre Dame, Valparais University, Vincennes University, University f Luisville, Western Kentucky University (720 annual cmpletins). Mechanical Engineering Master s degree prgrams at Purdue University-Main Campus, Trine University, Indiana University-Purdue University-Indianaplis, University f Ntre Dame, Rse-Hulman Institute f Technlgy, University f Kentucky, University f Luisville (101 annual cmpletins). Mechanical Engineering Dctrate degree prgrams at University f Kentucky, University f Luisville, University f Ntre Dame, Purdue University-Main Campus (58 annual cmpletins). 75

Industrial Engineering BA prgrams at Indiana Institute f Technlgy, Purdue University-Main Campus, and University f Luisville (184 annual cmpletins). Industrial Engineering Master s prgrams at Purdue University-Main Campus, and University f Luisville (54 annual cmpletins). Industrial Engineering Dctrate prgrams at Purdue University-Main Campus, and University f Luisville (16 annual cmpletins). Ability t emply the existing wrkfrce withut extensive training, mst Plastics prductin ccupatins require mderate-term n-the-jb training, matching the cmmunity s existing educatinal attainment prfile (P, C) Lcal industry earnings per wrker are abve the same-industry natinal average. (C) Cmmunity assets: lw cst-f-living, cultural activities, majr sprting events, familyfriendly, and excellent K-12 educatin (P) Access t markets: central lcatin, rail, prt facilities, and interstate highway access (P) NAICS Cde Name Table 37 Plastics Target US Industry Overview Emplyment 2010 3Q Firms 2010 3Q Annual Pay 2009* Five-Year Prjected Emplyment Change (%) 333220 Plastics and Rubber Industry Machinery Mfg 12,648 494 $55,934 4.5% 325211 Plastics Material And Resin Mfg. 52,130 1,051 $77,917 4.0 326121 Unlaminated Plastics Prfile Shape Mfg. 22,518 503 $46,980-11.9 326122 Plastics Pipe And Pipe Fitting Mfg. 24,309 612 $46,416 2.9 326150 Urethane And Other Fam Prduct Mfg. 30,508 791 $41,568 10.5 326160 Plastics Bttle Mfg. 32,008 493 $45,133 11.4 326199 All Other Plastics Prduct Mfg. 258,024 6,053 $40,852-12.9 *Evansville s average annual private industry pay is $38,366, manufacturing is $55,312. Surce: US Bureau f Labr Statistics, Ecnmic Mdeling Specialist 76

Prcess Manufacturing T he Prcess Manufacturing target fcuses n high value manufacturing practices, while leveraging Evansville s strng existing manufacturing sectr presence. Prcess Manufacturing targets are rganized int fur main grups: Aut Assembly & Related Assembly Supprt, Machinery Manufacturing, Electrnics Prduct Manufacturing, and Fd Prcessing. Each grup shares sme similar wrkfrce demands, but retains its wn unique prduct demand and utlk prfile. The Aut Assembly & Related Assembly Supprt grup is a definite area f ptential fr Evansville. The assciated industry subsectrs are numerus and diverse, hwever bth the Machinery and Electrnic Prduct Manufacturing grups may als be participants in the sectr; as well as prducts frm the Plastics Manufacturing identified earlier. Overall, Evansville s existing manufacturing sectr emplys ver 27,000 within 469 establishments. Sme lcal firms that fall within the targeted sectr are Flanders Electric Mtrs, Perfectin Hydraulics, Lewis Bakeries, Kerry Ingredients, Azteca Milling, and AmeriQual Fds. Ptential dmestic prspects ttal mre than 8,500 firms. As Suthwest Indiana mves frward t retain and attract the recmmended target industries, there are a number f industry trends that drive new ecnmic develpment issues. The fllwing are industry directinal trends that prvide a cntext fr research and strategy develpment: Manufacturing in majr prductin based ecnmies is mving up the value chain t higher value-added prducts. This puts mre emphasis n the nn-prductin cmpnents f manufacturing R&D, Testing, Service, etc. This has significant impacts n hw manufacturers think abut their prcess, lcatin decisins and glbal ftprint: Talent, innvatin and technlgy transfer becme just as imprtant as cst in lcatin decisins, even fr traditinally lw skill manufacturing. This is especially true as manufacturers understand the impact f quality n bttm line perfrmance. The U.S. s advanced manufacturing envirnment is nw in direct cmpetitin with lw-wage lcatins such as China, Suth Krea and India. These cuntries can ffer skill, technlgy and lw wages. The United States has created a hle in the innvatin equatin; after decades f utsurcing the cnnectin between R&D, innvatin and prductin is strained. China, Israel and India are grwing their R&D infrastructure and selling a mre cmplete business envirnment. Manufacturing glbal ftprints are resulting in increasingly cmplex supply chains and distributin netwrks. The result is a renewed fcus n infrastructure quality and capacity: Intermdal infrastructure is increasing in imprtance. 77

Cmpanies are taking a critical lk at the cst f cmplex supply chains and inventry management. Transprtatin and lgistics cst can eliminate labr savings frm lw cst markets. Electric pwer reliability & telecmmunicatins fiber are grwing in imprtance acrss all manufacturing sectrs. APPLICATION: Take stck f the entire reginal transprtatin netwrk; frm raw materials entering the regin t finished prducts exiting. Fcus effrts n prcess manufacturing sectrs that have supply chain needs that align with yur infrastructure. Financing and capital resurces are limited and stuck in the pst-recessin perid. Banks are unwilling t lend (r hesitant t risk again), and cmpanies are apprehensive in deplying their large cash reserves. APPLICATION: Lcatins where deals can get dne with ut f the bx thinking are increasing in attractiveness. The public sectr may have t take the lead in creating financing plans r unlcking private investment. Prven strategies include mnetizing future incentive stream and stepping in with lcal incentives like tax incremental financing which are tied t private investment gals. There is a grwing mismatch in talent within the manufacturing sectr fr tw primary reasns. 1) Expectatins f next generatin wrkfrce des nt align with manufacturing; it is n lnger viewed as a desirable career. 2) Manufacturers increasingly demand highly specialized skills. Mst recent statistics shw that nly 40 percent f wrkers in the manufacturing sectr in the United States were invlved in prductin. In relatin t the industry trends, the fllwing are key site selectin factrs that are cnsidered by Prcess Manufacturers when making decisin relative t lcatin: Labr Custmized training prgrams that allw fr manufacturers t cntinually refine their labr skill set as prcesses change and needs evlve; skilled labr ften viewed as a limiting factr fr certain prcess based industries (2 year degree machinists, maintenance mechanics and electricians, millwrights, certified technicians, PLC Prgrammers and Machine Operatrs, etc.) Deep labr pl familiar with basic manufacturing prcesses, including lean and six sigma cncepts and applicatins as the wrkplace n the manufacturing flr becmes mre abut prblem slving and remving cnstraints and waste in a system The ability t attract and retain knwledge wrks fr nn-prductin ccupatins Utilities Abundant, untreated water supply (fd manufacturing in particular) Access t large lad electrical capacity; redundant pwer preferred in mst sectrs 78

Abundant wastewater capacity and ability t pre-treat certain effluent requirements in a municipal system (avid unnecessary csts) Air attainment regin fr emissins tracked by EPA and Ambient Air Quality standards Transprtatin Access t Class A rail; intermdal facility demanded fr efficient mvement f cntainerized gds (althugh imprtant fr all gds) Other Dual rail access n site fr majr prducers Efficient transprtatin rute t internatinal custmers and shipping capability. There is currently little internatinal shipping leaving frm the Great Lakes because f shipping tax issues. That means all internatinal prducts wuld likely g t Seattle, Vancuver r Ls Angeles n the west cast r Baltimre n the east cast. The rute that the prduct takes has a significant impact n time and cst, and in the near future widening f Panama Canal culd have an incremental impact n nrth/suth lgistics and supply chain management trends. Certified mega sites are attractive because they remve risk. These sites shuld be prepared with redundant utilities, excellent rad access and rail access with all envirnmental and apprval prcesses delineated and mitigated (r plans in place t mitigate) fr fast track permitting and readiness fr develpment. Fast-track, ne-stp shp permitting, air, water and land use/zning. Ratinales (Prspect, Cmmunity): High relative wages, averaging $60,348 annually. (C) The Manufacturing sectr has the third highest average earnings per wrker f all 19 majr industries in Evansville. (C) Lw water rates and high availability. (P) Psitive five-year prjected grwth. (C) The mst specialized ccupatinal grup in Evansville is Prductin, 22,303 wrkers with an LQ f 2.06. (P) Ability t emply the existing wrkfrce withut extensive training, mst prductin ccupatins require mderate-term n-the-jb training, matching the cmmunity s existing educatinal attainment prfile (P, C) Availability f agricultural prducts fr fd prcessing (P) Identified in earlier reprts as a viable target. (P, C) Large labr pl f key demanded ccupatins: (P) Industrial engineers (308) Mechanical engineers (452) Mechanical drafters (146) Team assemblers (6,220) Cmputer-cntrlled machine tl peratrs (161) Machinists (668) 79

Tl and die makers (300) Welders, cutters, slderers, and brazers (640) Inspectrs, testers, srters, samplers, and weighers (1,112) Occupatins specific t Fd Prcessing: (P) Industrial machinery mechanics (1,428) Maintenance and repair wrkers (2,228) Bakers (133) Fd batchmakers (122) Packaging and filling machine peratrs and tenders (343) Labrers and freight, stck, and material mvers, hand (3,238) Lcal institutinal supprt: (P) Mechanical Engineering BA degree prgram at the University f Evansville (15 annual cmpletins) Welding Technlgy AA prgram at Oakland City University Industrial Mechanics and Maintenance Technlgy AA prgram at Hendersn Cmmunity Cllege (5 annual cmpletins) Culinary Arts AA prgram at Oakland City University (10 annual cmpletins) Reginal (IN-KY) institutinal supprt: (P) Mechanical Engineering BA degree prgrams at Indiana Institute f Technlgy, Indiana University-Purdue University-Frt Wayne, Indiana University-Purdue, University-Indianaplis, Purdue University-Main Campus, Rse-Hulman Institute f Technlgy, Trine University, University f Kentucky, University f Ntre Dame, Valparais University, Vincennes University, University f Luisville, Western Kentucky University (720 annual cmpletins). Mechanical Engineering Master s degree prgrams at Purdue University-Main Campus, Trine University, Indiana University-Purdue University-Indianaplis, University f Ntre Dame, Rse-Hulman Institute f Technlgy, University f Kentucky, University f Luisville (101 annual cmpletins). Mechanical Engineering Dctrate degree prgrams at University f Kentucky, University f Luisville, University f Ntre Dame, Purdue University-Main Campus (58 annual cmpletins). Industrial Engineering BA prgrams at Indiana Institute f Technlgy, Purdue University-Main Campus, and University f Luisville (184 annual cmpletins). Industrial Engineering Master s prgrams at Purdue University-Main Campus, and University f Luisville (54 annual cmpletins). Industrial Engineering Dctrate prgrams at Purdue University-Main Campus, and University f Luisville (16 annual cmpletins). Cmmunity assets: lw cst-f-living, cultural activities, majr sprting events, familyfriendly, and excellent K-12 educatin (P) Access t markets: central lcatin, rail, prt facilities, and interstate highway access (P) 80

NAICS Cde Name Table 38 Prcess Manufacturing Target US Industry Overview Emplyment 2010 3Q Firms 2010 3Q Annual Pay 2009* Five-Year Prjected Emplyment Change (%) Machinery Manufacturing 333131 Mining and il and gas field machinery mfg. 71,340 1,447 $71,278 3.4% 333611 Turbine and turbine generatr set units mfg. 26,935 311 $77,794 11.7% 333996 Fluid pwer pump and mtr mfg. 17,038 244 $63,357 0.6% Electrnics Prduct Manufacturing 334220 Bradcast and wireless cmmunicatins equip. 66,715 1,110 $85,862 0.7% 334417 Electrnic cnnectr mfg. 18,364 289 $52,006 5.3% 334513 Industrial prcess variable instruments mfg. 56,592 1,712 $68,318 3.4% 334519 Other measuring and cntrlling device mfg. 29,474 1,055 $62,127 7.8% Fd Prcessing 311111 Dg and Cat Fd mfg. 20,447 362 $58,850 0.1% 311222 Sybean prcessing 6,351 137 $61,534 7.8% 311230 Breakfast cereal mfg. 14,380 84 $63,371 1.8% 311320 Cnfectinery mfg. 6,915 154 $54,502 1.9% 311822 Mixes and dugh made frm purchased flur 15,195 276 $44,567 2.9% 311919 Other snack fd mfg. 34,209 422 $45,713 1.0% 311920 Cffee and tea mfg 14,922 508 $49,205 6.9% 311941 Maynnaise, dressing, and sauce mfg. 12,679 292 $46,359 2.7% 311942 Spice and extract mfg. 20,019 467 $59,224 7.8% *Evansville s average annual private industry pay is $38,366, manufacturing is $55,312. Surce: US Bureau f Labr Statistics, Ecnmic Mdeling Specialist 81

Health/Life Sciences T he Health/Life Sciences target fcuses n three majr areas f pprtunity: Health Related Manufacturing, Clinical Research, and Ag Technlgy. All f these target areas cmprise sectrs that can be fund within the mre bradly defined Life Sciences categry and have areas f crss-ver amngst themselves. The Health Related Manufacturing emphasis builds ff Evansville s existing manufacturing strengths and existing activity in Pharmaceutical Preparatin Mfg. (emplying nearly 2,000). Clinical Research leverages Evansville s present clinical activities, and depth f specialized labr expertise; with current ccupatin numbering mre than 2,000, while supplied by ver 200 annual cmpletins frm lcal educatinal institutins. Ag Technlgy is based n Evansville s unique areas f industrial strength, cupled with striking educatinal supprt frm lcal and reginal institutins. Majr lcal firms in the target sectr include Mead Jhnsn Nutritin, Bristl-Myers Squibb (Pharmaceutical Preparatin Mfg.), Cvance, and Medisphere Medical Research. Ntable cntributins and clinical activity als cme ut f health related specializatin at Deacness Health System, St. Mary's Health System, and Methdist Hspital (Hendersn Cunty KY). Ptential dmestic prspects ttal mre than 39,000 firms, f which 6,000 are manufacturers. The Ag Technlgy target des nt fit neatly int a traditinal industry classificatin, but falls within the brader bitech arena dealing specifically with fd and agriculture. Accrding t Bi, the bitech industry trade rganizatin, bitechnlgy related t fd and agriculture is generally centered n ne r mre f these activities: Nutraceuticals; prduct derived frm fd surces that prvides extra health benefits in additin t the basic nutritinal value fund in fds; Generating higher crp yields with fewer inputs; Lwering vlumes f agricultural chemicals required by crps-limiting the run-ff f these prducts int the envirnment; Using bitech crps that need fewer applicatins f pesticides and that allw farmers t reduce tilling farmland; Develping crps with enhanced nutritin prfiles that slve vitamin and nutrient deficiencies; Prducing fds free f allergens and txins such as myctxin; and imprving fd and crp il cntent t help imprve cardivascular health The innvative Ag Technlgy target recgnizes the imprtant rle f the agricultural sectr in the lcal ecnmy, and the presence f existing wrk n nutraceuticals at Mead Jhnsn Nutritin (a differentiatr fr the Evansville regin). Hwever, the mst striking ptential is the area s access t 82

student cmpletins in the specialized fields highly demanded by this industry. The fast evlving nature f the Life Sciences field requires a steady supply f wrkers with the mst current knwledge and training. Evansville can psitin itself as the natin s hub t students with annual cmpletins in fields demanded by the sectr; with 71 annual BA degree cmpletins frm lcal institutins, 3,192 annual BA degree cmpletins frm reginal institutins, 382 annual Master s degree cmpletins frm reginal institutins, and 259 annual Dctrate degree cmpletins frm reginal institutins. As Suthwest Indiana mves frward t retain and attract the recmmended target industries, there are a number f industry trends that drive new ecnmic develpment issues. The fllwing are industry directinal trends that prvide a cntext fr research and strategy develpment: The Health/Life Science industry has always been divided int targeted niches, driving very specialized R&D, wrkfrce and lcatin requirements. Tday, the cnvergence f related technlgies and industries are creating new platfrms fr cmpetitive advantage such as nutraceuticals. The trend tward cnvergence is driving new thinking n business mdels, talent acquisitin and lcatin. The cnvergent f cmplementary industries such as healthcare rganizatins, medical devices, and bi-tech with industries such as micrelectrnics, telecmmunicatins, instrumentatin, bitechnlgy, sftware develpment are driving new and advanced prduct and services. Cnvergence is driving the industry t lk at labr talent in nn-traditinal ways. As the lines between industries begin t blur, new alignment f talent will drive the need fr greater crss functinal skill sets. Industry cnvergence will als impact the way cmpanies lcate facilities. Traditinally cmpanies lcated facilities relative t specialized labr, infrastructure and centers f expertise. Cnvergence will drive these industries t lcate within a cluster f ther health, life science, medical device r high-tech cmpanies t share in the labr, technlgies and specialized infrastructure requirements Similar t the autmtive industry, large Health/Life Science cmpanies are revamping their R&D business mdels in rder t drive new innvatin. The R&D mdels are transitining int the rle f technlgy integratrs which pushes mre f the cre research twards smaller targeted Health/Life Science cmpanies, universities and glbal centers f expertise. This will drive specific needs within the industry: The push twards third-party technlgy discvery and applicatins will drive an increase in new start-up businesses. This will drive the need fr greater levels f angel and venture capital t fuel prmising ventures. The incubatin f new technlgies will drive the need fr best-in-class talent, high-end R&D facilities and business supprt. In additin t specific needs there is a greater reliance n cllabratin netwrks between industry, universities and financial partners. Agriculture Technlgy and Nantechnlgy are cmbining t drive new innvatins in agriculture prductins, prcessing and distributin. 83

Research is under way n bisensrs and radi frequency identificatin tags t identify trace and mnitr fd prducts frm farm t frk. Advancements in agrichemicals that release nly when they re in cntact with crp plants, spilage indicatrs n fd prducts, and smart packaging that interacts with cntents t reveal infrmatin n prduct spilage, safety and nutritinal cntent. Nantechnlgies are als driving innvatins in the efficiency f inventry tracking and management frm warehuse t cnsumer. Electrnic (RFID) tags are cmmnly used in case, pallet and shipping cntainer tracking and truck and trailer tracking in shipping yards. The R&D mdels have been structured in a way that drives mre cllabratin between private and public sectr entities. The trend in Agricultural R&D has fcused much f the cre research at the university level while relying n private sectr R&D fr applicatin research. A key trend in clinical research is the mvement twards the Site Management Organizatin (SMO). SMO s are usually a hspital r a similar health care institutin that has adequate infrastructure and staff t meet the requirements f the clinical trial prtcl. SMO s rganize and manage multi-site clinical trials either by wning the sites themselves r by cntracting with the site wners In relatin t the industry trends, the fllwing are key site selectin factrs that are cnsidered by Health/Life Sciences Industry and relevant functinal asset types when making decisins relative t lcatin: Labr Health/Life Sciences, Medical Device manufacturers and related segments require prximity t a knwledgeable, highly trained and prductive wrkfrce; and als lk t partner with lcal universities n innvatin and R&D prjects Ability t lcate t areas with significant engineering talent pls. Alternative career pprtunities are held in high esteem by this industry, s the maturity f the lcal cluster and ther R&D, Manufacturing and dwnstream cmpanies becme a site selectin factr (especially fr recruiting scientific and technical talent frm ut f state) Utilities Access t large lad electrical capacity; redundant and reliable pwer preferred in mst sectrs, especially if FDA regulated prcesses are invlved, ften a majr cncern f this sectr (validatin, cmpliance, etc.). Transprtatin Telecmmunicatins; ften a data intensive and highly regulated industry; high quality and high capacity fiber ptic and telecmm services becming extremely imprtant fr infrmatin management and business cntinuity Adequate ability f the cmmunity t handle untreated waste t avid pretreatment csts fr certain effluent unique t the industry 84

Other Cmmercial air service is very imprtant; Health/Life Sciences is a glbal industry and the talent base in this sectr and many f the identified subsectrs requires access t metrs and targeted clusters arund the U.S. and the glbe Air parcel package, vernight curier and trucking service (typically LTL and ptentially third party lgistics) are required t facilitate custmer and supplier shipments Efficient transprtatin rute t internatinal custmers and shipping capability. Lcatin within a cluster f ther health, life science, medical device r hightech cmpanies t share in the infrastructure built t supprt such industries. Clinical research typically requires standard medical ffice space and is best serviced within medical clusters and areas where tech transfer has been successfully cmpleted. Ratinales (Prspect, Cmmunity): Evansville s Bimedical/Bitechnical (Life Sciences) cluster registered the strngest verall emplyment grwth, and highest industry effect grwth amng all 23 clusters, plus a displayed a high degree f lcal specializatin. (P) Capacity t retain lcal students cmpleting prgrams frm lcal institutins. (C) Identified in earlier reprts as a viable target. (C,P) Psitive five-year prjected grwth. (C) Cmpetitive energy rates, lw water rates and high availability. (P) At $28.99, the Healthcare Practitiners & Technical ccupatinal grup in Evansville has the secnd highest median hurly earnings amng all 23 majr ccupatinal grups. (C) Availability f agricultural prducts fr fd prcessing (P) High industry wages, averaging ver $100,000 annually in research peratins. (C) Cmmunity assets: lw cst-f-living, cultural activities, majr sprting events, familyfriendly, and excellent K-12 educatin (P) Access t markets: central lcatin, rail, prt facilities, and interstate highway access (P) Large labr pl f specialized key demanded ccupatins: (P) Bichemists and biphysicists (42) Medical scientists (160) Chemists (332) Chemical technicians (229) Chemical equipment peratrs and tenders (147) Mixing and blending machine setters, peratrs, and tenders (380) Bilgical technicians (89) Medical and clinical labratry technlgists (208) Medical and clinical labratry technicians (196) 85

Medical and health services managers (515) Lcal institutinal supprt: (P) Nutritin Sciences BA prgram at University f Suthern Indiana (8 annual cmpletins) Chemistry BA prgrams at University f Suthern Indiana and University f Evansville (12 annual cmpletins) Bilgy/Bilgical Sciences BA prgrams at Oakland City University, University f Suthern Indiana, and University f Evansville (43 annual cmpletins) Biphysics BA prgram at University f Suthern Indiana (3 annual cmpletins) Bichemistry BA prgram at University f Evansville (5 annual cmpletins) Clinical/Medical Labratry Technician AA prgram at Hendersn Cmmunity Cllege (4 annual cmpletins) Health/Health Care Administratin/Management BA prgrams at Harrisn Cllege-Evansville, University f Evansville, and University f Suthern Indiana (114 annual cmpletins) Health/Health Care Administratin/Management Master s prgrams at University f Evansville, and University f Suthern Indiana (20 annual cmpletins) Cmputer Science BA prgram at University f Suthern Indiana (8 annual cmpletins) Cmputer Engineering BA prgram at University f Evansville (4 annual cmpletins) Cmputer and Infrmatin Sciences BA prgrams at University f Suthern Indiana, University f Evansville, and Oakland City University (32 annual cmpletins) Cmputer and Infrmatin Sciences AA prgrams at Oakland City University, Hendersn Cmmunity Cllege, and Ivy Tech Cmmunity Cllege-Suthwest (31 annual cmpletins) Pre-Med, Pre-Pdiatry and Pre-Ostepathy prgrams at University f Suthern Indiana Reginal (IN-KY) institutinal supprt :(P) Agriculture BA prgrams (256 annual cmpletins) Agriculture Master s prgrams (25 annual cmpletins) Agrnmy and Crp Science BA prgrams (41 annual cmpletins) Agrnmy and Crp Science Master s prgrams (12 annual cmpletins) Agrnmy and Crp Science Dctrate prgrams (14 annual cmpletins) Animal Sciences BA prgrams (141 annual cmpletins) Animal Sciences Master s prgrams (19 annual cmpletins) Animal Sciences Master s prgrams (19 annual cmpletins) Animal Sciences Dctrate prgrams (10 annual cmpletins) Bichemistry BA prgrams (156 annual cmpletins) Bichemistry Master s prgrams (19 annual cmpletins) 86

Bichemistry Dctrate prgrams (39 annual cmpletins) Bichemistry/Biphysics and Mlecular Bilgy BA prgrams (3 annual cmpletins) Bichemistry/Biphysics and Mlecular Bilgy Dctrate prgrams (9 annual cmpletins) Bilgy Technician/Bitechnlgy Lab Technician Dctrate prgrams (4 annual cmpletins) Bilgy/Bilgical Sciences BA prgrams (1,986 annual cmpletins) Bilgy/Bilgical Sciences Master s prgrams (199 annual cmpletins) Bilgy/Bilgical Sciences Dctrate prgrams (50 annual cmpletins) Bitechnlgy BA prgrams (31 annual cmpletins) Btany/Plant Bilgy BA prgrams (9 annual cmpletins) Btany/Plant Bilgy Master s prgrams (3 annual cmpletins) Btany/Plant Bilgy Dctrate prgrams (8 annual cmpletins) Chemistry BA prgrams (534 annual cmpletins) Chemistry Master s prgrams (69 annual cmpletins) Chemistry Dctrate prgrams (104 annual cmpletins) Fd Science BA prgrams (29 annual cmpletins) Fd Science Master s prgrams (13 annual cmpletins) Fd Science Dctrate prgrams (6 annual cmpletins) Micrbilgy BA prgrams (6 annual cmpletins) Micrbilgy Dctrate prgrams (12 annual cmpletins) Nutritin Sciences Master s prgrams (4 annual cmpletins) Nutritin Sciences Dctrate prgrams (3 annual cmpletins) Pharmaclgy Master s prgrams (2 annual cmpletins) Pharmaclgy Dctrate prgrams (2 annual cmpletins) Plant Pathlgy/Phytpathlgy Dctrate prgrams (2 annual cmpletins) Plant Sciences Master s prgrams (8 annual cmpletins) Sil Science and Agrnmy Dctrate prgrams (2 annual cmpletins) 87

NAICS Cde Name Table 39 Health/Life Sciences Target US Industry Overview Emplyment 2010 3Q Firms 2010 3Q Annual Pay 2009* 325411 Medicinal & btanical mfg 19,683 412 $101,501-0.7% 325412 Pharmaceutical preparatin mfg 211,515 1,740 $106,390 6.2% 325413 In-vitr diagnstic substance mfg 19,238 321 $78,190 18.7% 325414 Other bilgical prduct mfg 26,395 364 $87,195 9.4% 333314 Optical instrument & lens mfg 21,791 543 $69,491 16.3% 339113 Surgical appliance & supplies mfg 97,632 2,774 $61,039 0.2% 541711 Research & Develpment in Bitechnlgy 135,659 6,016 $109,024 8.1% 541712 Research & Develpment in the Physical, Engineering, & Life Sciences 426,018 13,656 $94,905 9.4% 541720 Research & Develpment in the Scial Sciences & Humanities (clinical research) 57,177 4,104 $64,377 5.0% 621511 Medical Labratries 159,658 9,712 $53,401 13.0% *Evansville s average annual private industry pay is $38,366, manufacturing is $55,312. Surce: US Bureau f Labr Statistics, Ecnmic Mdeling Specialist Five-Year Prjected Emplyment Change (%) 88

Lgistics & Distributin T he Lgistics & Distributin target is supprted by Evansville s central gegraphic lcatin, its rich mdes f distributin, and the pprtunity t leverage the rapid transfrmatin (and changing needs fr reliable delivery f services and prducts) ccurring in glbal lgistics and supply chain management. Evansville is set apart by its wide variety f distributin means; east/west highway interstate, fur rail lines, cmmercial airprt, and river prt access. This psitin will imprve with cmpletin f the nrth/suth Interstate-69. These infrastructural assets and its central lcatin prvide a strng basis t capture firms that are participating in the fast develping sectr f supply chain management. Evansville can prfit by invlving itself in this transfrmatin driven by: the search fr efficiency in light f rising fuel csts, cmplex glbal supply chains, just-in-time inventry management, new technlgical applicatins (fr example radi frequency identificatin (RFID), increased utsurcing, and creatin f specialized third-party prviders. Majr lcal firms participating in the target sectr include Atlas Wrld Grup, Inc., She Carnival, TJ Maxx Distributin Center, and Warehuse Services, Inc. Ptential dmestic prspects ttal mre than 95,000 firms, demnstrating the mstly smaller firm size typified in the target. It shuld als be nted that much lgistics & distributin activity is departmentalized within crpratins, such as She Carnival, hidden frm standard industry classificatin searches. As Suthwest Indiana mves frward t retain and attract the recmmended target industries, there are a number f industry trends that drive new ecnmic develpment issues. The fllwing are industry directinal trends that prvide a cntext fr research and strategy develpment: Cst uncertainty is driving sme cmpnents f manufacturing related supply chains back t Nrth America; this trend is called back-shring. Back-shring is changing the dynamics f where transprtatin infrastructure is being develped and where it is demanded. APPLICATION: Understand the cmplete supply chain f the reginal industry clusters (nt just in Indiana); specifically, find ut if they are predicting an adjustment raw material surcing, transit rutes, custmer lcatin, etc. If Suthwest Indiana hpes t play a rle in the transprtatin and lgistics netwrk f these industries yur infrastructure must be able t meet their ptentially changing demands. Be practive in develping the capacity t capture new pprtunities that may arise thrugh back-shring r increased fuel csts (see trend belw). As fuel csts cntinue t rise r fluctuate thrugh uncertainty, manufacturers and distributrs begin t ship in larger quantities t save n transprtatin. This places higher demands n reginal infrastructure capacity. 89

The need t recrd and track an increasing number f shipment attributes is increasing the imprtance f telecmmunicatins infrastructure. Althugh speed is always imprtant, the always n nature f the lgistics industry truly demands redundancy in the telecmmunicatins netwrk. In relatin t the industry trends, the fllwing are key site selectin factrs that are cnsidered by the Lgistics/Distributin Industry when making decisins relative t lcatin: Labr The mst cmmn ccupatin type fund in lgistics is truck and van drivers, fllwed by administrative staff and then manual labrers. The majrity f these jbs is medium skill and shuld be able t be supplied by any reasnably develped blue cllar industry cluster, r easily trained thrugh lcal cmmunity cllege prgrams. Lgistics Certificate prgrams ften hused in lcal cmmunity clleges are an expected attribute these days given that cmpanies lk fr as this industry t cntinue t autmate and use mre technlgy, thus skill levels will increase. Transprtatin Access t interstates (sites less than 5 miles frm a limited access 4-lane highway). Other Drive time t inter-mdal hubs with Cntainer-n-Flat Car (COFC) and Trailern-Flat Car (TOFC) infrastructure and rbust material handling capabilities. Presence f high vlume Nrth/Suth r East/West transprtatin line (rad, rail r water) t prmte agile, flexible and cst effective custmer service and efficient, lw cst supply chain management. Percent f ttal ppulatin cvered by 1-day and 2-day freight. The map belw illustrates the apprximate ne and tw day transit times frm Evansville, IN. Cmparing that map t a standard ppulatin density map reveals that grund transit cverage emanating frm Suthwest Indiana is fairly rbust. The availability f lcal trucking firms with break bulk and vernight shipping services capacities (pick up and drp ff 7 x 24 hurs) Density f industrial areas. Clustered industrial areas ffer higher efficiencies t transprtatin cmpanies. Percent f uninized wrkfrce and verall unin electin activity (e.g., labrmanagement). 90

Ratinales (Prspect, Cmmunity): Access t markets: central lcatin, rail, air, prt facilities, and interstate highway access (P) Ability t emply the existing wrkfrce withut extensive training. Outside f the Prcess, Physical Distributin, and Lgistics Cnsulting Services industry, mst Transprtatin ccupatins require mderate-term n-the-jb training, matching the cmmunity s existing educatinal attainment prfile (P, C) Psitive five-year prjected grwth. (C) Cmmunity assets: lw cst-f-living, cultural activities, majr sprting events, familyfriendly, and excellent K-12 educatin (P) 91

NAICS Cde Name Table 40 Lgistics & Distributin Target US Industry Overview Emplyment 2010 3Q Firms 2010 3Q Annual Pay 2009* 481111 Scheduled Passenger Air Transprtatin 392,542 2,126 $55,861 2.7% 481211 Nnscheduled Chartered Passenger Air Transprtatin 40,702 3,300 $65,626 4.3% 482110 Rail transprtatin 225,664 97 $67,887 1.4% 484121 General Freight Trucking, Lng-Distance, Trucklad 470,670 3,0663 $39,741 5.4% 484122 General Freight Trucking, Lng-Distance, Less Than Trucklad 207,033 6,840 $48,921 5.4% 484230 Specialized Freight Trucking, Lng- Distance 108,815 8,973 $43,064 7.7% 488210 Supprt Activities fr Rail Transprtatin 22,784 1,363 $42,800 4.3% 488310 Prt and Harbr Operatins 17,709 305 $69,344 0.6% 488320 Marine Carg Handling 42,688 720 $49,872 2.4% 488330 Navigatinal Services t Shipping 19,288 943 $70,683-1.5% 488510 Freight Transprtatin Arrangement 171,059 17,508 $53,299 5.5% 493110 General warehusing and strage 529,756 10,963 $39,200 9.9% 493120 Refrigerated Warehusing and Strage 48,375 1258 $41,657 8.9% 541614 Prcess, Physical Distributin, and Lgistics Cnsulting Services 94,427 11,995 $70,152 22.6% *Evansville s average annual private industry pay is $38,366, manufacturing is $55,312. Surce: US Bureau f Labr Statistics, Ecnmic Mdeling Specialist Five-Year Prjected Emplyment Change (%) 92

Industry Targets Appendix Table 41 Plastics Target Industry Descriptins 333220 Plastics and Rubber Industry Machinery Manufacturing This industry cmprises establishments primarily engaged in manufacturing plastics and rubber prducts making machinery, such as plastics cmpressin, extrusin and injectin mlding machinery and equipment, and tire building and recapping machinery and equipment. 325211 Plastics Material and Resin Manufacturing This industry cmprises establishments primarily engaged in (1) manufacturing resins, plastics materials, and nnvulcanizable thermplastic elastmers and mixing and blending resins n a custm basis and/r (2) manufacturing nncustmized synthetic resins. 326121 Unlaminated Plastics Prfile Shape Manufacturing This industry cmprises establishments primarily engaged in cnverting plastics resins int nnrigid plastics prfile shapes (except film, sheet, and bags), such as rd, tube, and sausage casings. 326122 Plastics Pipe and Pipe Fitting Manufacturing This industry cmprises establishments primarily engaged in cnverting plastics resins int rigid plastics pipes and pipe fittings. 326150 Urethane and Other Fam Prduct (except Plystyrene) Manufacturing This industry cmprises establishments primarily engaged in manufacturing plastics fam prducts. 326160 Plastics Bttle Manufacturing This industry cmprises establishments primarily engaged in manufacturing plastics bttles. 326199 All Other Plastics Prduct Manufacturing This industry cmprises establishments primarily engaged in manufacturing plastics prducts (except film, sheet, bags, prfile shapes, pipes, pipe fittings, laminates, fam prducts, bttles, plumbing fixtures, and resilient flr cverings). Table 42 Prcess Manufacturing Target Industry Descriptins 33313 Mining and Oil and Gas Field Machinery Manufacturing This industry cmprises establishments primarily engaged in manufacturing il and gas field and undergrund mining machinery and equipment. 333611 Turbine and Turbine Generatr Set Units Manufacturing This U.S. industry cmprises establishments primarily engaged in manufacturing turbines (except aircraft); and cmplete turbine generatr set units, such as steam, hydraulic, gas, and wind. 333996 Fluid Pwer Pump and Mtr Manufacturing This industry cmprises establishments primarily engaged in manufacturing fluid pwer (i.e., hydraulic and pneumatic) pumps and mtrs. 334220 Radi and Televisin Bradcasting and Wireless Cmmunicatins Equipment Manufacturing This industry cmprises establishments primarily engaged in manufacturing radi and televisin bradcast and wireless cmmunicatins equipment. Examples f prducts made by these establishments are: transmitting and receiving antennas, cable televisin equipment, GPS equipment, pagers, cellular phnes, mbile cmmunicatins equipment, and radi and televisin studi and bradcasting equipment. 334417 Electrnic Cnnectr Manufacturing This industry cmprises establishments primarily engaged in manufacturing electrnic cnnectrs, such as caxial, cylindrical, rack and panel, pin and sleeve, printed circuit and fiber ptic. 334513 Instruments and Related Prducts Manufacturing fr Measuring, Displaying, and Cntrlling Industrial Prcess Variables 93

This industry cmprises establishments primarily engaged in manufacturing instruments and related devices fr measuring, displaying, indicating, recrding, transmitting, and cntrlling industrial prcess variables. These instruments measure, display r cntrl (mnitr, analyze, and s frth) industrial prcess variables, such as temperature, humidity, pressure, vacuum, cmbustin, flw, level, viscsity, density, acidity, cncentratin, and rtatin. 334519 Other Measuring and Cntrlling Device Manufacturing This industry cmprises establishments primarily engaged in manufacturing measuring and cntrlling devices (except search, detectin, navigatin, guidance, aernautical, and nautical instruments and systems; autmatic envirnmental cntrls fr residential, cmmercial, and appliance use; instruments fr measurement, display, and cntrl f industrial prcess variables; ttalizing fluid meters and cunting devices; instruments fr measuring and testing electricity and electrical signals; analytical labratry instruments; watches, clcks, and parts; irradiatin equipment; and electrmedical and electrtherapeutic apparatus). 311111 Dg and Cat Fd Manufacturing This U.S. industry cmprises establishments primarily engaged in manufacturing dg and cat fd frm ingredients, such as grains, ilseed mill prducts, and meat prducts. 311222 Sybean Prcessing This U.S. industry cmprises establishments engaged in crushing sybeans. Examples f prducts prduced in these establishments are sybean il, sybean cake and meal, and sybean prtein islates and cncentrates. 311230 Breakfast Cereal Manufacturing This industry cmprises establishments primarily engaged in manufacturing breakfast cereal fds. 311320 Chclate and Cnfectinery Manufacturing This industry cmprises establishments primarily engaged in shelling, rasting, and grinding caca beans and making chclate caca prducts and chclate cnfectineries. 311822 Flur Mixes and Dugh Manufacturing frm Purchased Flur This U.S. industry cmprises establishments primarily engaged in manufacturing prepared flur mixes r dugh mixes frm flur grund elsewhere. 311919 Other Snack Fd Manufacturing This U.S. industry cmprises establishments primarily engaged in manufacturing snack fds (except rasted nuts and peanut butter). 311920 Cffee and Tea Manufacturing This industry cmprises establishments primarily engaged in ne r mre f the fllwing: (1) rasting cffee; (2) manufacturing cffee and tea cncentrates (including instant and freeze-dried); (3) blending tea; (4) manufacturing herbal tea; and (5) manufacturing cffee extracts, flavrings, and syrups. 311941 Maynnaise, Dressing, and Other Prepared Sauce Manufacturing This U.S. industry cmprises establishments primarily engaged in manufacturing maynnaise, salad dressing, vinegar, mustard, hrseradish, sy sauce, tartar sauce, Wrcestershire sauce, and ther prepared sauces (except tmat-based and gravy). 311942 Spice and Extract Manufacturing This U.S. industry cmprises establishments primarily engaged in (1) manufacturing spices, table salt, seasnings, flavring extracts (except cffee and meat), and natural fd clrings and/r (2) manufacturing dry mix fd preparatins, such as salad dressing mixes, gravy and sauce mixes, frsting mixes, and ther dry mix preparatins. Table 43 Health/Life Sciences Target Industry Descriptins 325411 Medicinal and Btanical Manufacturing This U.S. industry cmprises establishments primarily engaged in (1) manufacturing uncmpunded medicinal chemicals and their derivatives (i.e., generally fr use by pharmaceutical preparatin manufacturers) and/r (2) grading, grinding, and milling uncmpunded btanicals. 325412 Pharmaceutical Preparatin Manufacturing 94

This U.S. industry cmprises establishments primarily engaged in manufacturing in-viv diagnstic substances and pharmaceutical preparatins (except bilgical) intended fr internal and external cnsumptin in dse frms, such as ampules, tablets, capsules, vials, intments, pwders, slutins, and suspensins. 325413 In-Vitr Diagnstic Substance Manufacturing This industry cmprises establishments primarily engaged in manufacturing in-vitr (i.e., nt taken internally) diagnstic substances, such as chemical, bilgical, r radiactive substances. The substances are used fr diagnstic tests that are perfrmed in test tubes, petri dishes, machines, and ther diagnstic test-type devices. 325414 Bilgical Prduct Manufacturing This industry cmprises establishments primarily engaged in manufacturing vaccines, txids, bld fractins, and culture media f plant r animal rigin (except diagnstic). 333314 Optical Instrument and Lens Manufacturing This industry cmprises establishments primarily engaged in ne r mre f the fllwing: (1) manufacturing ptical instruments and lens, such as binculars, micrscpes (except electrn, prtn), telescpes, prisms, and lenses (except phthalmic); (2) cating r plishing lenses (except phthalmic); and (3) munting lenses (except phthalmic). 339113 Surgical Appliance and Supplies Manufacturing This industry cmprises establishments primarily engaged in manufacturing surgical appliances and supplies. Examples f prducts made by these establishments are rthpedic devices, prsthetic appliances, surgical dressings, crutches, surgical sutures, persnal industrial safety devices (except prtective eyewear), hspital beds, and perating rm tables. 541711 Research and Develpment in Bitechnlgy This industry cmprises establishments primarily engaged in cnducting bitechnlgy research and experimental develpment. Bitechnlgy research and experimental develpment invlves the study f the use f micrrganisms and cellular and bimlecular prcesses t develp r alter living r nn-living materials. This research and develpment in bitechnlgy may result in develpment f new bitechnlgy prcesses r in prttypes f new r genetically-altered prducts that may be reprduced, utilized, r implemented by varius industries. 541712 Research and Develpment in the Physical, Engineering, and Life Sciences (except Bitechnlgy) This industry cmprises establishments primarily engaged in cnducting research and experimental develpment (except bitechnlgy research and experimental develpment) in the physical, engineering, and life sciences, such as agriculture, electrnics, envirnmental, bilgy, btany, cmputers, chemistry, fd, fisheries, frests, gelgy, health, mathematics, medicine, ceangraphy, pharmacy, physics, veterinary and ther allied subjects. 541720 Research and Develpment in the Scial Sciences and Humanities This industry cmprises establishments primarily engaged in cnducting research and analyses in cgnitive develpment, scilgy, psychlgy, language, behavir, ecnmic, and ther scial science and humanities research. 621511 Medical Labratries This industry cmprises establishments knwn as medical labratries primarily engaged in prviding analytic r diagnstic services, including bdy fluid analysis, generally t the medical prfessin r t the patient n referral frm a health practitiner. Table 44 Lgistics & Distributin Target Industry Descriptins 481111 Scheduled Passenger Air Transprtatin This U.S. industry cmprises establishments primarily engaged in prviding air transprtatin f passengers r passengers and freight ver regular rutes and n regular schedules. Establishments in this industry perate flights even if partially laded. 481211 Nnscheduled Chartered Passenger Air Transprtatin This U.S. industry cmprises establishments primarily engaged in prviding air transprtatin f passengers r passengers and carg with n regular rutes and regular schedules. 48211 Rail Transprtatin 95

This industry cmprises establishments primarily engaged in perating railrads (except street railrads, cmmuter rail, urban rapid transit, and scenic and sightseeing trains). Line-haul railrads and shrt line railrads are included in this industry. 484121 General Freight Trucking, Lng-Distance, Trucklad This U.S. industry cmprises establishments primarily engaged in prviding lng-distance general freight trucklad (TL) trucking. These lng-distance general freight trucklad carrier establishments prvide full truck mvement f freight frm rigin t destinatin. The shipment f freight n a truck is characterized as a full single lad nt cmbined with ther shipments. 484122 General Freight Trucking, Lng-Distance, Less Than Trucklad This U.S. industry cmprises establishments primarily engaged in prviding lng-distance, general freight, less than trucklad (LTL) trucking. LTL carriage is characterized as multiple shipments cmbined nt a single truck fr multiple deliveries within a netwrk. These establishments are generally characterized by the fllwing netwrk activities: lcal pickup, lcal srting and terminal peratins, line-haul, destinatin srting and terminal peratins, and lcal delivery. 484230 Specialized Freight Trucking, Lng-Distance This industry cmprises establishments primarily engaged in prviding lng-distance specialized trucking. These establishments prvide trucking between metrplitan areas that may crss Nrth American cuntry brders. 488210 Supprt Activities fr Rail Transprtatin This industry cmprises establishments primarily engaged in prviding specialized services fr railrad transprtatin including servicing, rutine repairing (except factry cnversin, verhaul r rebuilding f rlling stck), and maintaining rail cars; lading and unlading rail cars; and perating independent terminals. 488310 Prt and Harbr Operatins This industry cmprises establishments primarily engaged in perating prts, harbrs (including dcking and pier facilities), r canals. 488320 Marine Carg Handling This industry cmprises establishments primarily engaged in prviding stevedring and ther marine carg handling services. 488330 Navigatinal Services t Shipping This industry cmprises establishments primarily engaged in prviding navigatinal services t shipping. 488510 Freight Transprtatin Arrangement This industry cmprises establishments primarily engaged in arranging transprtatin f freight between shippers and carriers. These establishments are usually knwn as freight frwarders, marine shipping agents, r custms brkers and ffer a cmbinatin f services spanning transprtatin mdes. 493110 General Warehusing and Strage This industry cmprises establishments primarily engaged in perating merchandise warehusing and strage facilities. These establishments generally handle gds in cntainers, such as bxes, barrels, and/r drums, using equipment, such as frklifts, pallets, and racks. They are nt specialized in handling bulk prducts f any particular type, size, r quantity f gds r prducts. 541614 Prcess, Physical Distributin, and Lgistics Cnsulting Services This U.S. industry cmprises establishments primarily engaged in prviding perating advice and assistance t businesses and ther rganizatins in areas, such as: (1) manufacturing peratins imprvement; (2) prductivity imprvement; (3) prductin planning and cntrl; (4) quality assurance and quality cntrl; (5) inventry management; (6) distributin netwrks; (7) warehuse use, peratins, and utilizatin; (8) transprtatin and shipment f gds and materials; and (9) materials management and handling. 96

SECTION 7: OBSERVATIONS, CONCLUSIONS & RECOMMENDATIONS T he Suthwest Indiana regin needs t fcus n several fundamental issues f ecnmic transitin as well as imprtant internal and external preparative steps befre it can realize its fullest ptential as a dynamic, reginal ecnmic center. The recmmendatins belw prvide the steps t meet this challenge. Recmmendatins fr actin are categrized under three areas f pprtunity: Prduct Marketing 10 Prduct Imprvement 11 Organizatinal The Prduct is cnsidered the fur cunty Suthwest Indiana regin which cmprises the Ecnmic Develpment Calitin f Suthwest Indiana. The Suthwest Indiana regin has had a lng and successful histry f being a center fr manufacturing excellence. Prduct Marketing (Prduct marketing is defined as marketing/prmting r selling the Suthwest Indiana regin wrldwide fr business develpment pprtunities and investment.) Observatin - Image: The Suthwest Indiana regin has had a lng and successful histry f being a center fr manufacturing excellence. Tday, 16.6% f the wrkfrce in the regin is emplyed by manufacturing. Cnversely, the regin has a higher unin prfile than many f its cmpetitrs and benchmarked regins (48.4% ttal unin prfile). High prfile labr unrest with emplyers like Whirlpl has given the regin a negative biasness by sme ptential emplyers. Recmmendatins: 1. Cnduct a brand identity and image survey f the regin with site lcatin cnsultants, cmpanies within the targeted industry recmmendatins and clusters, and large existing emplyers. The result f this effrt will help the EDC t craft brand messaging based n the assets and challenges f the regin as perceived by the custmer and ptential client. This shuld be dne in partnership with ther external rganizatins invlved in ecnmic develpment, such as the lcal ecnmic 10 Prduct marketing is defined as marketing/prmting r selling the regin wrldwide fr business develpment pprtunities and investment. 11 Prduct imprvement is defined as the regin having the necessary infrastructure, including a favrable business climate that attracts investment t the area. 97

develpment rganizatins, the CVB, Chamber f Cmmerce, and any ther ancillary grup that markets the regin externally fr investment. 2. Create a unified brand identity fr the regin based n the feedback nted abve. Having the LEDO s, the EDC and lcal bdies f gvernment having a unified message will help in glbal brand awareness. Best practice example: Piedmnt Triad f Nrth Carlina. 3. In ur fcus grups, we heard frm a number f respndents that the cultural aspects and recreatinal amenities in the regin were lacking. Hwever, based n ur wn asset mapping f amenities, we fund just the ppsite with venues in the visual and perfrming arts, the z, Divisin I and II cllege sprts, and mre. We recmmend that the EDC develp a marketing piece, bth electrnically and in print, t cnvey the cultural assets f the regin and t disseminate it bth externally (ut f market) and internally (within the regin) t cnvey the area s assets related t activities. Other rganizatins such as the area Chambers f Cmmerce shuld be utilized t cnduct a reginal cmmunity pride campaign. 4. Enhance the EDC s already gd web site t psitin Suthwest Indiana as a natinal leader in key clusters previusly identified in this reprt. Enhance the web site by adding the value prpsitin, nted in the Sectin n Industry Targets, n why these specific clusters are gd fr the regin and its value prpsitin. 5. Fcus the EDC s external marketing effrts and trips n the highest value trade shws and events fr each cluster r targets. Utilize the apprpriate public relatins firm r ther external experts t identify the best f these events t attend. 6. Establish target industry wrking grups fr each f the fur fcused targets (Plastics, Prcess Manufacturing, Health and Life Sciences and Lgistics). The EDC shuld create task frces r wrking grups that seek input int the knwledge f ther business leaders within these clusters and industry targets. These business experts can help the EDC craft specific messages and marketing activities related t the clusters and their related targeted industries. 98

Prduct Marketing Recmmendatins Summary Recmmendatin Brand identity and image survey Create a unified brand identify fr the regin Develp a marketing piece, bth electrnically and in print, t cnvey the cultural assets f the regin Psitin Suthwest Indiana as a natinal leader in key clusters n the EDC web site Fcus the EDC s external marketing effrts and trips n the highest value trade shws and events fr each cluster r targets Respnsible Org EDC and ther rganizatins that have an external marketing effrt EDC and ther rganizatins that have an external marketing effrt EDC, Chambers f Cmmerce Schedule Estimated Cst Tactic 2012 $20K Interview site lcatin cnsultants, cmpanies within the targeted industry recmmendatins and clusters, and large existing emplyers. 2012-2013 $35K Agree t a unified reginal brand t prmte the regin s brand awareness 2011-2012 $10K Disseminate it bth externally (ut f market) and internally (within the regin) t cnvey the area s assets related t activities. EDC 2012 NA Enhance the web site by adding the value prpsitin, nted in the Sectin n Clusters, n why these specific clusters are gd fr the regin and its value prpsitin. EDC 2012 - $30K Utilize external expertise t determine the best f these events t attend. Establish target industry wrking grups fr each f the fur fcused industry targets (Plastics, Prcess Manufacturing, Health & Lgistics) EDC 2012 Nne Seek input int the knwledge f ther business leaders within these clusters and industry targets. These business experts can help the EDC craft specific messages and marketing activities related t the clusters and their related targeted industries. 99

Prduct Imprvement (Prduct imprvement is defined as the regin having the necessary infrastructure, including a favrable business climate that attracts investment t the cmmunity. Prduct imprvement is the fundatin that allws prduct marketing t succeed. Items reviewed fr cnsideratin include sites and buildings, transprtatin infrastructure, utility infrastructure, wrkfrce develpment, leadership and incentives.) Observatin slw internet access: In ur many visits t the regin, we were struck n the slw internet speeds we experienced in different htels. Additinally, a number f fcus grup respndents viced cncern abut the slw cnnectivity, limited availability f wireless ht spts and pr bradband cverage in bth urban and rural areas. In further due diligence, we learned that accrding t the Natinal Bradband Map, Evansville ranks 368 f 370 metrs in the U.S. n uplad and dwnlad speeds. Accrding t the FCC, Gibsn Cunty is the nly cunty in Indiana where 20 percent r less f its husehlds has basic bradband access. When lking at the faster BTOP/BIP definitin, Gibsn and Psey cunties have adptin rates f 20 percent r less, while Vanderburgh Cunty has adptin rates f 40 percent r less. The link between high-speed Internet cnnectins and ecnmic develpment has becme mre crucial in recent years. A Brkings Institutin reprt estimated that fr every 1 percentage pint increase in bradband penetratin in a state, nnfarm private emplyment is prjected t increase by 0.2 t 0.3 percent. Lack f bradband in Suthwest Indiana is a serius impediment fr the attractin f certain types f cmpanies, and t mbile entrepreneurs that rely n the internet fr their wrk. Recmmendatins: 1. Lcal fficials shuld wrk with Indiana s Cngressinal Delegatin t avail itself f Federal bradband funding and t create a prgram fr the regin similar it Alabama s Cnnecting Alabama initiative. http://www.cnnectingalabama.gv/ca/default.aspx?bhcp=1. This effrt is a multiyear initiative prmting the availability and adptin f bradband internet access thrughut the State f Alabama and is ne f several best practice examples t enhance bradband in states and regins. 2. The City f Evansville shuld install free wireless bradband in the central business district. This largely symblic effrt dwntwn will shw mbile entrepreneurs that the cmmunity has embraced technlgy and supprts mbile entrepreneurs (peple wh can wrk anywhere but select a cmmunity based n the quality f place and physical assets f a lcatin). Observatin Evansville Reginal Airprt terminal and air service: The airprt terminal has a dated lk t it and cnveys a pr perceptin t visitrs that the cmmunity r regin is antiquated. 100

Recmmendatins: 3. Install jet ways fr passengers which will allw peple t avid inclement weather and allw fr easier access t and frm flights fr the physically impaired. 4. The mst realistic way fr Evansville t enhance its air service is by subsidizing an airline, e.g. Panama City, FL and Suthwest Airlines. The nly realistic funding mechanism t allw this t ccur is thrugh ur recmmendatins n a public surce f funding frthcming in the Organizatinal recmmendatins. Observatin enhance the cmmunity aesthetics and livability f dwntwn Evansville and many f the ther CBD s f the area cunties: The aesthetics f the area are nt cnducive t presenting the regin in its best light. The gateways int the cmmunity, an lder husing stck, litter, and a general perceptin f lack f cmmunity pride are all ptential impediments t ecnmic investment in the area. Recmmendatins: 5. Get USI and/r UE t add dwntwn density with significant classrm instructin in dwntwn, which wuld then ffer student residential pprtunity. Best practice examples: Savannah with the Savannah Cllege f Art and Design, Appletn, WI with Lawrence University and Detrit, Center fr Creative Studies. 6. Other best practice examples f cmmunity beautificatin and successful redevelpment f blighted neighbrhds include the Paducah Renaissance Alliance, a natinal Main Street prgram; the City f Walterbr, SC and its Village Renaissance develpment, a CDBG initiative; and, Suthside Greensbr, NC, an award winning redevelpment neighbrhd. Observatin wrkfrce develpment: We believe that the quality f the K-12 schls system in the regin is quite gd. Many f the cllege prep scres cnfirm ur perceptins. Additinally, Suthern Indiana Career and Technical Center is unique in that high schl students frm five cunties are able t receive a technical educatin. Pst-secndary educatin with the area clleges, universities and tw year cllege is utstanding. Hwever, in ur fcus grups with emplyers, large and small, it became evident quickly that mst emplyers are having difficulty in finding a skilled and talented wrkfrce, and that in the pinin f many f the emplyers, there may be a discnnect between what the end user, the custmer needs, and what is being taught in the schls. Recmmendatins: 7. Clusters are characterized by planned interactin amng firms. It is recmmended that the EDC fster this type f synergy by bradening the cluster marketing wrking grups t include dialg assciated with prduct imprvement. These wrking grups r task frces wuld prvide a frum fr firms within a cluster t identify cmmn needs (in terms f cmpetitive and business climate issues such as infrastructure, 101

wrkfrce develpment, etc.), and t cmmunicate these needs t plicy makers in the regin. 8. Nurture and grw the talent pipelines t supprt sustainable grwth in the regin s identified clusters. The utilizatin f career academies r career pathways in middle and high schl with a curriculum that meets the needs f businesses in the identified clusters will help sustain and grw the talent pipeline. 9. Engage the K-12 schl systems, cmmunity clleges and fur year institutins in the area t wrk with the area high schls s that each high schl student has the ability and ptin t graduate frm high schl with an Assciate Arts degree frm an area cmmunity cllege r tw years f credit hurs frm a fur year university. Expand the Early Cllege High Schl Initiative in ther cunties besides Vanderburgh. 10. Create career awareness f cluster ccupatins thrugh internships. In ur fcus grups with emplyers, a big cncern they identified was a lack f awareness f existing firms and specific jb penings within the regin. The varius emplyment rganizatins need t feature these cmpanies and emplyment pprtunities with students, graduates and educatrs. A best practice example is the Intern t Earn prgram spnsred by HIRE, an alliance f clleges and universities in the Luisville, KY regin. It is a prgram fr identifying internships pprtunities. The prgram wrks t imprve the talent pl f wrkers and yung talent in the Luisville area by recgnizing that interns tend t return t the cmmunities in which they interned, if they leave the area in the first place. The prgram is spnsred by the Greater Luisville Chamber f Cmmerce. http://www.greaterluisville.cm/interntearn/ Observatin - Entrepreneurship: The lcal ecnmic develpment rganizatins such as GAGE and the lcal Chambers f Cmmerce; and ancillary rganizatins that are invlved in ecnmic develpment such as USI, and the area K-12 public schl systems, and ther grups, shuld all engage entrepreneurship as a cnduit t ecnmic sustainability fr the Suthwest Indiana regin. All f the abve named entities (and ther applicable nes) shuld incrprate sme r all f the fllwing as part f their shrt term business plan and lng term strategic visin. Recmmendatins related t Entrepreneurship: Develp a base f early-stage capital ptins* Supprt angel investrs Ensure that risk capital is available in underserved rural areas Remve legal restrictins n equity wnership by the state, public universities, and ther gvernment entities (if they exists) 102

Put regulatry and licensing prcesses n-line Use ne-stp business and licensing mdels Wrk with immigratin lawyers and the US Immigratin Service t expand and prmte the EB-5 visa fr immigrant wrkers in the Evansville regin. This initiative can help derive entrepreneurial activity and investment t the regin. The immigrant investr, r EB-5, prgram is a highly beneficial permanent residence ptin fr the wealthy individual. Since there is n quta waiting list in this preference categry, it enables a freign natinal t btain permanent residence status mre expeditiusly than with mst ther ptins. The EB-5 categry requires an investment f $1 millin (r $500,000 in a high unemplyment r rural area) in a cmmercial enterprise that will emply 10 full-time US wrkers. Althugh the investr s rle cannt be cmpletely passive, he r she des nt have t be invlved in any way in the day-t-day management f the business unless he r she wants t d s. It is critically imprtant that the investr be able t dcument the lawful surce f investment funds, whether his r her wn r funds given t him r her as a gift. The permanent residence btained by the investr is cnditinal fr tw years and can be made permanent upn satisfying USCIS at the end f the tw years that the investment prceeds have nt been withdrawn and the requisite jbs have been created. The investr may invest in his r her wn cmmercial enterprise r in a cmmercial enterprise wned by ther parties. The investr may als chse t invest in a preapprved reginal center. Reginal centers are gegraphical areas fr which USCIS has determined that investments will create the necessary 10 jbs per investr, whether directly r indirectly, in the gegraphical area. *Nte: The implementatin f capital frmatin ptins nted abve is predicated n the creatin f an ecnmic develpment fund nted in the Organizatinal sectin. Observatin/Recmmendatin - Incentives: Each gvernmental jurisdictin that ffer s r prvides incentives fr new and existing business shuld create a unifrmed incentive plicy that incrprates plicies and prcedures based n a cmmunity return n investment and in ecnmic impact analysis f the prject. Best practice example: Wichita and Sedgwick Cunty, Kansas. http://www.sedgwickcunty.rg/ecdev/gwedc.asp Observatin Energy Research Under the guidance f the Suthwest Indian WIRED prgram Phase I f the Prject GREEN study was cmplete. The study fcused n each individual energy sectr t determine if feasible pprtunities existed fr industry grwth in each f these energy sectrs. The 103

reprt cncluded that there were significant pprtunities in wind turbine manufacturing, nuclear cmpnent manufacturing, energy efficiency and advanced cal technlgies. The energy sectr grwth pens a number f pprtunities in bth the research and develpment and advanced manufacturing areas f these industries. This cupled with Suthwest Indiana s majr energy base in cal and pwer and research in clean cal technlgy being cnducted by Purdue University, Suthwest Indiana has the ptential t build center f excellence in energy research. Recmmendatins: 11. Suthwest Indiana shuld wrk clsely with Purdue University in develping a center f excellence in advanced cal technlgy. A key step in develping the center f excellence is t wrk with Purdue University t develp a Purdue Research Park in ne f Suthwest Indiana s certified parks. The park wuld fcus n applicatin research fr clean cal technlgies in energy, mining and prductin. Other research wuld include develpment f technlgy transfers t direct cal and cal bi-prduct develpment. The advanced energy research center wuld fcus n applicatin develpment f energy technlgies with a fcus n clean cal technlgies. Other research wuld include develpment f technlgy transfer t ther cal direct and biprduct applicatins. This culd include industries such plastics, medical, purificatin and ther advanced prcess manufacturing technlgies. Suthwest Indiana shuld cnsider leveraging its plastics, medical, fd and energy base as a platfrm t attract Purdue s research extensin prgrams t the area. A key step is t develp an advance energy research calitin that s made up f members frm the Ecnmic Develpment Calitin, related industry and ther lcal clleges and universities that have prgrams related t energy research and applicatin. The calitin shuld fcus n develping a prpsal t Purdue t lcate an energy extensin prgram t the area with the lng term gal f develping a Purdue Research Park in the area. Observatin - Suthwest Indiana Lgistics Park Lgistics and distributin industry data recently published by FTR Assciates and presented June 28, 2011 at the Inland Prt Lgistics Cnference in Chicag illustrates, pst-recessin, that verall demand fr intermdal traffic in the natin has recvered t single digit grwth year ver year in recent mnths and has achieved vlumes recrded pst-recessin in 2007. Hwever, data presented in a study cmmissined by the Suthwest Indiana Wired Taskfrce shws that intermdal demand in the greater Evansville regin (defined as a 9 cunty regin including Indiana and Kentucky) is either declining r stable in recent perids. In additin, panel experts at the Inland Prt Cnference frm leading Class I Railrads (including CSX), leading trucking cmpanies, develpers, 3PLs and cean freight frwarders went n recrd tday that they wuld prefer t see a sustained grwth in demand abve 10 percent fr a perid f 2 t 3 years befre they see adding mre intermdal capacity t the current supply chain infrastructure in the Ohi Valley and Midwest Regins. Additinally, the trend 104

right nw fr railrads and develpers f lgistics parks is t ptimize existing assets and imprve thrughput and efficiency in existing intermdal peratins in nearby states (current intermdal U.S. capacity at 70%) primarily in large mega parks like Jliet in the Chicag area, Memphis r recently apprved smaller intermdal terminals in places like Nrthwest Ohi (Tled). In additin, the railrads are paying much clser attentin t gegraphic custmer density and utilizatin as capital imprvement prjects are getting tremendus scrutiny in the Bardrm and therefre new intermdal centers either must shw a cmpelling ROI r immediate payback r the alternative t push csts t the lcal cmmunity and develpers under a private intermdal cncept. In summary, the data des nt supprt an aggressive apprach t develping the Suthwest Indiana Lgistics Park in its current design. Hwever, the mst successful effrts acrss the cuntry in develping intermdal facilities are ften 20 year strategic plans and the Suthwest Indiana Lgistics Park is a defensive lng term strategy that is prudent and needed. As the regin grws its industry base and advances the target industry strategies laid ut in this study (e.g., prcess industries, distributin and lgistics, agricultural cmmdities and value added fd prcessing, existing cre industries like autmtive, life sciences and cal mining and prcessing), the intersectin f rail, water and highway and the need fr cnnectivity t internatinal markets and suppliers will becme a business imperative and be a determinant variable in the vitality and sustainable grwth bjectives f the regin. The visin is valid and feasible, but the means t get there must be tempered, realistic bjectives must be agreed t by reginal and lcal stakehlders, and the reality that this will be primarily driven and funded at the lcal level (with little investment frm CSX in the shrt term) has t be accepted. Other demand dynamics that may accelerate the develpment f a full service intermdal cmplex include new CSA rules n truck drivers, green and sustainability initiatives, federal trade plicy and reginal ecnmic develpment success stries (including areas beynd the 9 cunty regin t far Western Kentucky mega sites, large heavy industry needing translad facilities) shuld be cnstantly mnitred by the intermdal park s cmmunity wner and champins and re-evaluated every 3 years. Recmmendatin: 12. The EDC and future designated spnsrs f this cncept shuld prceed ahead with the next steps f the lgistics intermdal park strategy as utlined in the Wired Taskfrce Study, albeit with a phased apprach t develpment and smaller initial ftprint t mitigate csts, risk and t align with realistic shrt term market needs and stakehlder bjectives. Real Estate Prtfli A key element f any ecnmic develpment strategy is the regin s ability t utilize in place real estate (e.g. sites, buildings and infrastructure) t supprt key target industries. Alignment between real estate pprtunities and ecnmic develpment shuld facilitate a number f business needs ranging frm start-ups, lcal market infill and expansin pprtunities. 105

The State f Indiana has develped a number f prgrams such as Certified Industrial & Technlgy Parks, Shvel Ready Sites and Mega Sites. These prgrams are designed t facilitate fast-t-market cycle times trends that drive shrter facility develpment and are key lcatin decisin criteria fr small and medium sized enterprises. The fllwing utlines general bservatins f the current real estate prtfli and recmmends actins that the Ecnmic Develpment Calitin f Suthwest Indiana shuld implement t align the real estate assets with the recmmended industry targets. Observatin Current Real Estate Prtfli After a number f turs and review f the lcal real estate data (Surce: David Matthews Assciates Real Estate Market Update 2010), Suthwest Indiana has a number f independent real estate assets that wuld serve as a cmpetitive attribute in attracting the recmmended target industries. Fllwing are data n current real estate market dynamics and an assessment f current develpments within Suthwest Indiana. Office The verall ffice envirnment in the Central Business district remains tight with vacancies fr Class A at 14% and Class B at 16%. There is cnsiderable pprtunity within Class C space which has a vacancy f 37%. If this space is marketable, there is a ptential t market this space t start-ups r cmpanies lking fr lw rent ptins. The suburban ffice market prvides a little mre in the way f pprtunities. With vacancies fr Class A at 22%, Class B at 18% and Class C at 22%, these represent viable pprtunities t market t cmpanies lking t lcate utside f the Central Business District and mst likely at affrdable ccupancy rates relative t cmpeting Midwest Reginal centers like Luisville and Indianaplis. Medical ffice space remains as a strng market segment but, a number f medical ffice buildings remain n the market. Research & Develpment Based n ur bservatin, there is a lack f general R&D space in the market. This will pse a cnstraint fr attracting R&D based cmpanies. This is t be expected as Evansville and Suthwest Indiana are nt knwn t be R&D destinatin lcatins. Industrial Industrial space remains at a 3 year supply level. The average absrptin rate is 3 t 3.5 years fr existing industrial space. With the recent additin f new warehusing space, the verall situatin cntinues t mve twards an ver supplied market. This versupply is an pprtunity fr Suthwest Indiana. There are a number f small t mid-sized industrial facilities that are priced cmpetitively and culd be used t draw ptential targets t the area. Farm Land Farmland prices are expected t rise in the freseeable future as a result f land displacement created by the I-69 cnstructin and greater land yields. This will be an issue t watch if Suthwest Indiana plans n assimilating large parcels f land fr future develpment at reasnable land acquisitin ptin prices fr key targeted industries. Certified Technlgy & Industrial Parks Suthwest Indiana has a number f technlgy and industrial parks that are well develped and psitined t facilitate expansin f existing business and prvide a cmpetitive factr fr attracting new and expanding industries. The fllwing is an inventry and assessment f each park lcated within Suthwest Indiana: 106

Nrth Warrick Industrial Park This develpment is a well-designed and planned industrial site that is sited between I-94 and the new I-69 highways. Its lcatin in rural farm land makes it an ideal fr sustainable site develpment. Shvel Ready Indiana Shvel Ready Prgram (Pad Ready) 236 Acres Available (Expandable t 800) Zning: M-2 General Industrial Onsite Utilities & Available Rail Warrick Cunty Industrial Park This develpment is nt well planned and lacks attractive site features fund in highly marketable sites. The verall site is land lcked by residential and retail develpment. The remaining parcels are nt well divided and nt suitable fr new develpment. Hwever, the remaining parcels d prvide pprtunities fr existing businesses t expand. Nt certified under Indiana s Shvel Ready Prgram 17 Acres Available Zning: M-1, M-2. R-O General Industrial Onsite Utilities & Available Rail Innvatin Pinte This develpment is a Class A ffice space that prvides rentable ffice space, equipment and business cunseling services (a business incubatr). Certified under Indiana s Certified Technlgy Parks Vanderburgh Industrial Park This develpment is a well-designed and planned industrial site. The site is adjacent t the RR57 crridr and is lcated within the airprt develpment zne. Shvel Ready Indiana Shvel Ready Prgram & pre-designated as part f the Airprt Develpment Zne 207 Ttal Acres with 106 Available Zning: M-1 General Industrial Onsite Utilities & Available Rail Warrick Cunty Wellness Trail This planned medical develpment is currently anchred by Deacness Hspital and the future St. Mary s Hspital, which started cnstructin in 2011. The develpment is planned t attract physician ffices, drug stres, medical billing ffices, htels, medical equipment prviders, research facilities, labs and life science develpment. The Wellness Trail is in the beginning stages f develpment. Frmer Whirlpl Manufacturing Facility In April 2011, the Kunkel Grup cmpleted the purchase f the 1.2 millin square ft manufacturing facility. Since the purchase there has been psitive lease activity. Kunkel has signed deals with Whirlpl t lease ffice and lab space and three new small manufacturing tenants are secured r are in 107

prcess f signing leases. After discussins with Kunkle, the plan is t cntinue t market t smaller manufacturing and prductin users. This early mmentum and fcus n smaller manufacturing tenants prvides a unique pprtunity t market the space t start-ups lking fr flexible, smaller and less cstly manufacturing cells with a landlrd that is mtivated and sensitive t lcal and reginal ecnmic develpment effrts. Mega Sites Currently Suthwest Indiana des nt have a certified mega site in place. This creates a cmpetitive cnstraint fr the area with cmpeting mega sites in central Indiana and Kentucky. The fllwing is a prfile f the surrunding Mega Sites: Chink Site (Indiana) 7,000 acres Current Status Available Full Service Utility and Rail Glendale Site (Kentucky) 1,550 acres Current Status Available Full Service Utility and Rail Hpkinsville Site (Kentucky) 2,100 acres Current Status Available Full Service Utility and Rail Purchase Reginal Industrial Park (Kentucky) 2,141 acres (tw parcels) Current Status Available Full Service Utility and Rail West McCracken/Paducah Site Tw Sites: 1,200 and 1,000 acres Current Status Sn t Be Certified Dual Rail, Utilities and Ohi River Access Recmmendatins: In March f 2011, Garner Ecnmics and Newmark Knight Frank cnducted a number f fcus grup meetings designed t slicit feedback frm a number f key business grups within Suthwest Indiana. During the Fcus Grup meetings, the need t supprt start-up and small business ventures was identified as an imprtant issue highlighted during the entrepreneurial and small business sessin. A number f elements (wrkfrce, funding, etc.) were identified as key issues fr these types f businesses t flurish in the lcal ecnmy. In rder fr Suthwest Indiana t be in the psitin t spur and attract small business, it is imprtant fr the area t have a scalable real estate prtfli that 108

facilitates multiple grwth stages f a business. The fllwing table is a cntext that utlines the typical stages f cmpany grwth and the asset types required thrugh the varius stages. Grwth Stage Business Characteristics Asset Types Cncept Design & Develpment f Prduct, Services, Technlgy Applicatins & Brand Office Incubatr Space R&D Incubatr Space Inceptin Prttype f Prduct Office Incubatr Space R&D Incubatr Space (Prttype) Manufacturing Space (Small Cell) Survival Grwth Expansin Grwth in Custmers and Human Resurces (Small Vlume Manufacturing) Full Prductin Capability and Capacity, Inventry Management, Management Systems Braden Operating Capabilities, Gegraphical Markets and Channels Office Space (Lnger term lease) Manufacturing Space Office Space Manufacturing Space Headquarter Facility Labratry Facility Manufacturing Facility Distributin Centers Call Centers Data Centers Maturity Cst Fcus and Market Grwth Headquarter Facility Labratry Facility Manufacturing Facility Distributin Centers Call Centers Data Centers In additin t supprting key business segments, the reginal real estate prtfli shuld align with the requirements f the regin s ecnmic target industries. As a result f the Cmpetitive Realties Reprt and the Cmmunity Asset and Challenges Assessment, fur ptimal target industries were recmmended as key sectrs fr Suthwest Indiana t fcus attractin and retentin effrts n. The table belw identifies the crrelating asset types with each f the primary target industries. 109

Optimal Target Industries Primary Functins Typical Asset Types Plastics Prcess Manufacturing Health & Life Sciences Lgistics & Distributin Administratin Research & Develpment Prduct Develpment Custmer Service Manufacturing Distributin Manufacturing Distributin Administratin Research & Develpment Data Management and Sftware Develpment Manufacturing Administratin Data Management Light Manufacturing Distributin Office Labratry Labratry Office/Call Centers General Industrial General Industrial General Industrial General Industrial Primary & Back Office Labratry Data Center General Industrial Office Data Center Light Industrial Warehusing The fllwing recmmendatins are designed t psitin each f the independent facilities and/r develpments (current real estate prtfli) t be a cmpetitive asset t Suthwest Indiana s ecnmic develpment effrts. In rder t accmplish this, the Ecnmic Develpment Calitin f Suthwest Indiana will need t wrk with lcal develpers, prperty wners and lcal cmpanies t align each real estate asset with the ecnmic develpment directin f Suthwest Indiana. 13. Psitin Innvatin Pinte and the Whirlpl Facility t facilitate small business start-ups. The plastics, prcess manufacturing and the health & life sciences industry sectrs have the ptential t create a number f new start-ups that in the cncept and inceptin stages f the business grwth cycle. In rder t spur grwth in this area, Suthwest Indiana will need t have in place facility ptins that prvide start-ups with lw perating csts and the flexibility t supprt changing business needs. Innvatin Pinte Tech Park is a key asset and shuld be maintained as a business incubatr that prvides frnt and back ffices capabilities fr new business start-ups. 110

Innvatin Pinte Tech Park shuld cntinue t facilitate the needs f lcal business start-ups and target and attract new start-ups in the Medical and Life Sciences sectrs. Innvatin Pinte is well psitin t attract agricultural tech statins and healthcare service prviders that desire incubatr space during the cncept and inceptin stages. The central lcatin t lcal businesses (business utreach), health prviders and universities makes it a prime lcatin fr business start-ups. On the manufacturing side, many f the start-ups in the plastics, prcess manufacturing and medical devices require smaller manufacturing and/r R&D mdules t supprt prf-f-cncept r small vlume builds. In mst cases, manufacturers at this stage are nt ready fr full scale prductin and search fr existing facilities that prvide shrt term lease with space needs belw 25,000 square feet. Space needs are cupled with the need fr pen bays fr flexible prcesses, reliable utilities services, and mdern drive-in and tractr trailer level dcks fr inflw and utflw f materials. In April f 2011, members f the Newmark Knight Frank team meet with the Kunkle Grup t discuss the develpment directin f the current Whirlpl facility. It was learned during the meeting that the Kunkle Grup was ging t fcus n marketing that facility t smaller manufacturers rather than ne large user. It was als learned that the Kunkle Grup had already signed leases with Whirlpl and a few start-up businesses that were lking fr smaller manufacturing space. Based n a number f develpment cncepts discussed with the Kunkle Grup, Suthwest Indiana shuld wrk with the Kunkle Grup t develp and market the Whirlpl facility as a flexible and ready-t-g manufacturing mall. Defined as a plug-and-play apprach, the manufacturing mall is a cncept that centralizes and shares cmmn manufacturing functins such as pwer generatin, shipping and receiving, lbby, facility management and ther building supprt functins. The balance f the manufacturing space is segmented int marketable manufacturing mdules that allw fr cmpanies t set up prttype peratins r small vlume builds at much lwer csts than renvate existing r buildt-suite ptins. Suthwest Indiana shuld actively market these facilities t small vlume build and start-up manufacturers. 14. Re-certify Nrth Warrick Industrial Park t a State Certified Technlgy Park. Other than specialized research & develpment space dedicated t cmpanies with existing R&D, Suthwest Indiana has limited marketable research and develpment space. This will be a significant challenge t the regin if it plans n mving up the value chain and attract R&D and Prduct Develpment t the area. T ffset this risk, the Ecnmic Develpment Calitin f Suthwest Indiana shuld assist in re-certifying Nrth Warrick int a State Certified Technlgy Park. The re-certificatin wuld psitin Suthwest Indiana t attract research & develpment and prduct develpment functins assciated with the Plastics, Health & Life Sciences target industries and prpsals fr Energy and Cal Research. 111

There are a number f psitive factrs abut this develpment that makes it prime fr a technlgy park. One is flexibility the prperty is still a green-field site and n cncrete develpment directin has been established. The lcatin ff f the I-64 and future I-69 Interstate Highway makes it easily accessible and prvides gd marketing fr cmpanies lking fr frntage. The Nrth Warrick rural lcatin makes it prime fr sustainable park develpment, which is a key lcatin decisin factr fr many technlgy cmpanies. Nrth Warrick is central t many f Suthwest Indiana s cllege and universities, making it easier fr cllabratin activities. T spur research cllabratin, Suthwest Indiana shuld wrk with lcal clleges, universities and lcal businesses t develp a feasibility study fcused n develping a R&D Incubatr n the Nrth Warrick Technlgy Park site. The R&D Incubatr wuld fcus n applicatin technlgy and serves as a central frum fr technlgy and crss-technlgy develpment between universities and industry. Since Suthwest Indiana des nt have a full scale technlgy park, this is a prime pprtunity t develp utside f the city cre and manufacturing districts. Such a develpment culd spur further develpment f high-tech, headquarters and supprting facilities alng the I-64 and future I-69 crridr. Suthwest Indiana shuld take initial steps t determine the prcess and requirements fr recertifying a site within the State f Indiana. Once the prcess and requirements are determined, the Ecnmic Develpment Calitin f Suthwest Indiana shuld wrk with the State and current develper t develp a feasibility analysis and business plan fr the recertificatin. 15. Maintain Vanderburgh Industrial Park and Warrick Cunty Industrial Park as Certified Industrial Parks. Given the level f develpment, lcatin, land & building vacancy, and Shvel Ready sites, bth the Vanderburgh and Warrick Cunty Industrial Parks shuld be maintained as Certified Industrial Sites. Bth Industrial Parks are ideal fr attracting small t midsized Plastic, Prcess Manufacturing and cmpanies cming ut f the startup/incubatin phase and int larger full scale prductin facilities. These parks shuld target plastics and prcess manufacturing cmpanies lking t build r purchase facilities within the 50,000 t 100,000 square ft range and require access t bth highways and rail systems. In additin t the site attributes, the parks are well psitined t attract cmpanies lking t make expedited site decisins t supprt fast-t-market prduct cycles with Indiana Shvel Ready Sites. 16. Psitin Warrick Wellness Trail t Attract Health Related Manufacturing and Clinical Research. The Warrick Wellness Trail is a new reginal healthcare develpment that is designed t centralize the entire spectrum f medical, healthcare and related services t a central 112

lcatin. Anchred by Deacness Gateway Hspital, the Warrick Wellness Trail develpment is targeting hspitals, specialty clinics, medical practices, labratries, research facilities and pharmaceutical prviders. The Warrick Wellness Trail is well suited fr attracting small t mid-sized health related manufacturers and clinical research. The develpment prvides central access t majr medical prviders, easy access t I-64 and shvel ready sites. Suthwest Indiana shuld appint a liaisn t wrk with Warrick Cunty and develpers fr the Warrick Wellness Trail t assure that the develpment is planned and zned t meet the site and facility requirements f the recmmended industry targets. 17. Certify Tw Mega Sites in Suthwest Indiana Area. The Suthwest Indiana regin has bth large parcels f land lcated alng the Ohi River and large parcels f land lcated in the nrthern part f the regin. In rder t cmpete with bth sites in central Indiana and Kentucky, Suthwest Indiana shuld cnsider leveraging pprtunities t develp and certify mega sites alng the Ohi River and in the central part f the regin alng I- 64. In additin, certified mega sites are attractive because they remve risk. These sites shuld be prepared with redundant electrical and rail access. The Ecnmic Develpment Calitin f Suthwest Indiana shuld test the feasibility f an 800 t 1,000 acre mega site alng the Ohi River and target larger prcess manufacturers that require high vlume water resurces fr either prcess needs r prductin cling. Land shuld be brught under cntrl and the site shuld be taken thrugh a rigrus certificatin prcess. Nte that ther river access mega sites are under final develpment stages in Paducah and a smaller develpment in Calvert City in Kentucky. The secnd certified mega site wuld be lcated alng the I-64 crridr and wuld target larger manufacturers such as transprtatin and heavy prcess industry cmpanies either new t the area r existing industry that desires t expand with a new line r synergistic prductin prcess. Suthwest Indiana shuld take the initial step by hiring a cmpany that can develp a feasibility analysis t determine the apprpriate lcatins, the feasibility f assimilating land and prviding required infrastructure needs, and a slid name fr certifying sites that will be well respected by crprate users and site selectin prfessinals. 113

Prduct Imprvement Recmmendatin Summary Recmmendatin Lcal fficials shuld wrk with Indiana s Cngressinal Delegatin t avail itself f Federal bradband funding. Evansville shuld install free wireless bradband in the central business district. Install jet ways fr passengers which will allw peple t avid inclement weather and allw fr easier access t and frm flights fr the physically impaired. Enhance EVV s air service by subsidizing an airline. Get USI and/r UE t add dwntwn density with significant classrm instructin in dwntwn, which wuld then ffer student residential pprtunity. Wrk t enhance cmmunity beautificatin and successful redevelpment f blighted neighbrhds by using best practice examples. Braden the cluster marketing wrking grup t include dialg assciated with prduct imprvement. Nurture and grw the talent pipelines t supprt sustainable grwth in the regin s identified clusters. Expand the Early Cllege High Schl initiative in ther cunties besides Vanderburgh. Create career awareness f cluster ccupatins thrugh internships. The lcal ecnmic develpment rganizatins, the lcal Chambers f Cmmerce; and ancillary rganizatins that are invlved in ecnmic develpment such as USI, and the area K-12 public schl systems, and ther grups, shuld all engage entrepreneurship as a cnduit t ecnmic sustainability fr the Suthwest Indiana regin. Respnsible Org Cities and Cunties Schedule Estimated Cst Tactic 2012- NA Use Cngressinal and Gubernatrial assistance t enhance the regin s bradband capabilities. City f Evansville 2013 NA As nted Airprt Authrity 2012 NA As nted Airprt Authrity 2013 $2m+ Develp a sustainable ecnmic develpment fund. USI/UE 2014- NA Utilize vacant buildings and rehab them fr classrm usage. Varius gvernmental jurisdictins 2012 - NA As nted in the reprt, recmmendatin 6. EDC, LEDO s 2012 NA As nted in recmmendatin number 7. Schl systems, higher ED Schl Systems, higher ED Schls systems, higher ED 2012 - NA As nted in recmmendatin 8. 2013 NA As nted in recmmendatin 9. 2012 - NA As nted in recmmendatin 10. All parties nted 2012 NA See full reprt fr mre detail n pages 100-101. 114

Recmmendatin Respnsible Org Schedule Estimated Cst Tactic Create a unifrm and cnsistent incentive plicy n incentives fr each jurisdictin. Suthwest Indiana shuld wrk clsely with Purdue University in develping a center f excellence in advanced cal technlgy. The EDC and future designated spnsrs f the intermdal lgistics park shuld prceed with the next steps f the park strategy as utlined in the Wired Taskfrce Study, albeit with a phased apprach t develpment and smaller initial ftprint t mitigate csts. Psitin Innvatin Pinte and the Whirlpl Facility t facilitate small business start-ups. Re-certify the Nrth Warrick Industrial Park t a State Certified Technlgy Park. Psitin Vanderburgh Industrial Park and Warrick Cunty Industrial Park t attract Prcess Manufacturing Cmpanies. Psitin Warrick Cunty Wellness Trail t attract Health Related Manufacturing and Clinical Research. Certify Tw Mega Sites in Suthwest Indiana area. Municipal gvernments, EDC All interested parties in the regin Develpers f intermdal 2012 Nne Fllw Wichita, Sedgwick Cunty, KS as an example. 2013 NA As nted Current $10-20mm per NKF. Secure final seed mney frm The Lilly Endwment t acquire land and cmmence prject. EDC 2011 NA Wrk with the Kunkel Grup t explre develpment cncepts and start-up target markets fr manufacturing. EDC 2011-2012 NA Begin wrk with the State f Indiana t recertify develpment t a Technlgy Park. EDC On-ging NA Onging marketing f Industrial Parks as part f the ED strategy. EDC 2011 2012 NA Begin dialgue with Warrick Cunty n ED Strategy and secure funding fr the develpment f the medical crridr master plan. EDC 2012-2014 $150K+ Hire cnsultant t begin mega site certificatin. 115

Organizatinal (Organizatinal recmmendatins include staffing, budget, gvernance and ther related items that allw fr the effective service delivery f ecnmic develpment fr the EDC r Regin.) Observatins - Budget and Staffing: The EDC currently has an verall budget f $1.4 millin. It has a ttal staff f seven. Hwever, there is nly ne persn devted full time t business develpment, with the title f manager. There are fur staff members designated within the cmmunity develpment functins f the EDC, with the leader f the grup having the title f vice president (implying a greater degree f imprtance t the cmmunity develpment functin ver business develpment). The ttal marketing and prmtin budget fr the EDC is $144,500 r apprximately 10% f the verall budget, which we believe is underfunded and understaffed. Based n ur bservatins with the current structure, the EDC has much f its emphasis in cmmunity develpment which is typically dne by lcal rganizatins and entities, rather than reginal business develpment grups. Hwever, in ur fcus grups, we heard that the EDC needed t cncentrate its effrts n the cre missin f the rganizatin and be fcused as a business develpment rganizatin. In ur pinin, the greatest gd the EDC can prvide its member cunties is t grw prspect and deal flw fr the regin, which will ultimately mean mre emplyment pprtunities fr area residents. As it is currently structured, the EDC can be cnstrued by sme as a reginal chamber f cmmerce based n its current cnfiguratin. Recmmendatins: 1. The EDC needs t devte mre financial resurces t its business develpment functins. Based n ur natinal database f best practices fr EDO s in the U.S. a cmparable reginal EDO with a similar gegraphic size and staff wuld have n less than tw full time persns devted t its business develpment effrts, n mre than ne (if any) in prduct develpment, and a marketing and prmtin budget excluding salaries f $300,000 annually. 2. The EDC needs t add the psitin f Vice President f Business Develpment. This persn will serve as the chief ecnmic develpment fficer fr the EDC. The psitin f manager f ecnmic develpment will reprt directly t the VP f Ecnmic Develpment. 3. The EDC shuld hire a research analyst fr the rganizatin. This persn will be respnsible fr data analysis and disseminatin, respnse t prpsal generatin, and data requests by the LEDO s representing the fur member cunties. This persn can start as a part time emplyee until the EDC is able t generate mre prspect activity as a result f a mre practive business develpment effrt thrugh greater resurces. 116

4. The EDC needs t fcus its resurces n its cre missin f lead generatin, as is the case with best practice reginal EDO s, and have the LEDO s and Chambers f Cmmerce undertake their cre respnsibility f calling n their existing emplyers. 5. The regin must create a sustainable funding surce fr ecnmic develpment that will benefit each cunty and the EDC regin as a whle. If enacted r develped, the Suthwest Indiana regin will be able t differentiate itself as an innvatr by creating a funding surce fr deal clsing, entrepreneurial develpment, venture capital r early stage investment funding, prduct imprvement and marketing (with limitatins). In 1979, the Texas Legislature decentralized ecnmic develpment by giving cities and cunties mre cntrl ver their destiny and allwing each t vte n a sales tax fr thse items described abve. As a result, we believe Texas has the best practice example f sustainable funding fr ecnmic develpment that can be used bradly as it relates t ecnmic develpment n the lcal level.12 In 2010, the taxable sales fr the fur cunty metr was $2.5 billin. A 1% sales fr ecnmic develpment, fllwing the Texas mdel and if each cunty enacted it wuld generate reginally $25 millin a year, which culd be spent n items similar t thse nted abve. If the cunties/regin enacted a ½ sales tax instead f a full 1%, then the tax wuld generate ver $13 millin annually. We believe this effrt culd be achieved in ne f tw ways: Optin 1 - The Indiana Legislature wuld fllw the example f the Texas Legislature in 1979 and give the residents f any cunty r city in the state the ptin t vte in a sales tax with a sunset prvisin, whereby the tax wuld need t be vted n fr a renewal every several years. Based n ur analysis f the Texas mdel, this effrt was led by ne Legislatr wh had the curage and visin t champin this cause. We challenge the Legislative delegatin representing Suthwest Indiana t d the same. 12 TX can use sales tax fr ecnmic develpment fr the fllwing purpses: Prjects fr the prmtin f prfessinal and amateur athletics and sprts, athletics, entertainment, turism, cnventins, and public park purpses and events, including stadiums, ball parks, auditriums, amphitheaters, cncert halls, parks and park facilities, pen space imprvements, museums, exhibitin facilities and related stres; restaurant; cncessin and parking facilities, related transprtatin and related rad, street, water and sewer facilities, ther related facilities that enhance such items listed; Prjects t prmte new r expanded business enterprises that create r retain primary jbs, including public safety facilities, streets and rads, drainage, related imprvements and demlitin f existing structures; Develpment and expansin f affrdable husing Land, buildings, equipment, facilities, expenditures, infrastructure and imprvements fr the creatin r retentin f primary jbs, including transprtatin, facilities, sewage r slid waste dispsal facilities, recycling facilities, air r water pllutin cntrl facilities, facilities fr the furnishing f water t the general public, distributin centers, small warehuse facilities capable f serving as decentralized strage and distributin centers, primary jb training facilities fr use by institutins f higher educatin and reginal r natinal crprate headquarters facilities; and Targeted infrastructure and any ther imprvements, expenditures, r facilities that are related t any f the abve prjects and any ther prjects that the bard determines will prmte new r expanded business and enterprises that create r retain primary jbs and the maintenance and peratin expenses fr any f the abve described prjects. 117

Optin 2 - Wrk with the apprpriate pwers that be t create a special tax district fr the fur cunty area t achieve the same result. Best practice examples: Texas (entire state); Tpeka, KS; Charlestn, SC. 6. The EDC shuld engage and retain a prfessinal capital campaign slicitr t d a five year campaign engaging bth the public and private sectrs. The CEO f the EDC needs t be mre actively engaged in business recruitment and less in capital slicitatin, which itself is a full time respnsibility (r can be if dne effectively). Observatin Understanding the Ecnmic Develpment Prcess: During ur interviews and fcus grups, we were surprised at the number f respndents wh were unaware f the cmplexities f the ecnmic develpment prcess and hw it impacts the SW Indiana regin. There was a lack f understanding n what types f industry targets were cmpatible fr the regin, hw incentives and claw backs wrk, what the rle f the EDC shuld be r is, and what rle elected fficials d and shuld have in the ecnmic develpment f the area. Recmmendatin: 7. The EDC shuld ffer quarterly frums f natinal speakers related t ecnmic develpment fr the benefit f bth ecnmic develpment practitiners and the assciated lcal and reginal vlunteers and elected fficials that represent the regin. 118

Organizatinal Recmmendatins Summary Recmmendatin The EDC needs t devte mre financial resurces t its business develpment functins. The EDC needs t add the psitin f Vice President f Business Develpment. The EDC shuld cnsider hire a research analyst fr the rganizatin. The EDC needs t fcus its resurces n its cre missin f lead generatin. Create a sustainable funding surce fr ecnmic develpment. EDC shuld engage and retain a prfessinal capital campaign slicitr. EDC shuld ffer quarterly frums f natinal speakers related t ecnmic develpment. Respnsible Org Schedule Estimated Cst Tactic EDC 2012 $300K Mdify the budget t allw fr additinal funds fr business develpment marketing. EDC 2012 $110K per year+ Use an executive search firm t find the ideal candidate based n the budget available. EDC 2012 $55K per year Reallcate resurces (FTE) frm cmmunity develpment t research. EDC 2012- Nt applicable LEDO s and Chambers f Cmmerce undertake their cre respnsibility f calling n their existing emplyers. EDC, Chambers f Cmmerce, State Legislature, Lcal Legislative Delegatin, Cities and Cunties 2012-2013 Nt applicable See cmments at recmmendatin #5. EDC 2012 $25K fr feasibility study. Mnthly fees negtiable, but typically arund $20-25K per mnth Interview credible firms related t capital slicitatin EDC 2012 - $20K Offer these frums as a quarterly venue. 119

CONCLUSION E xtensive research and cnversatins with dzens f reginal leaders led t the identificatin f fur industry targets fr Suthwest Indiana t pursue. By fcusing its marketing and attractin effrts, the EDC and its lcal ecnmic develpment grups will be able t practively generate leads and prspects. But t create a cmpetitive advantage, Suthwest Indiana will need t d things differently and with curage. It will need t take the lead in prpsing State legislatin fr a sustainable ecnmic develpment funding mechanism. Academia needs t be supprtive f what skill sets are needed in the glbal envirnment and then adapt accrdingly by ffering the apprpriate curriculum. T create a cmpetitive advantage, Suthwest Indiana will need t d things differently and with curage. Public institutins need t be cnduits fr ecnmic grwth by prviding fr a quality business climate which will nurture business investment f all sizes. Citizens in all f the fur cunties need t shw mre pride with their physical envirnment. These are the themes that we have heard and bserved. Nw we challenge the Regin t mve frward. Suthwest Indiana has achieved success in many areas. It can be a great Regin by implementing these recmmendatins. 120

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