ok-safe reporting - oedc 2011 summit - "the new oklahoma economy"- october 2011

OK-SAFE, Inc. – Reporting –October 2011

OK-SAFE, Inc. Reporting- OEDC - 2011 Economic Development Summit –

“The New Oklahoma Economy – Global/Social/Sustainable/Strategic” October 3-4, 2011 Embassy Suites Norman – Conference Center 2501 Conference Drive, Norman, OK

Monday, Oct. 3, 2011 8:30 – 8:45 am – Welcome by Judee Snodderly - 8:45 – 9:00 am – “The New Economy – Global/Social/Sustainable/Strategic” - 2011 Summit Chair, Richard Cornelison, OG&E. Comments: Arkansas regional development board. OEDC’s mission is education and legislative advocacy. Meet and network with other attendees to work OK forward. Higher ed, career tech, local economic development professionals and regional alliance. See videos on the OEDC website for some of the topics and agenda items – global, social, sustainable, and strategic. Availability of technology is greater than ever before. We’re in a social media revolution, but basically it’s technology based –not people, but technology. (Video - Social media is about people. “Kindergarteners are learning on i-pads, not chalkboards.” “Word of mouth is on steroids.” “Social-nomics is here to stay.”) What is our social media strategy? How can we promote sustainable development policies on social media? 9:00 – 9:30 am – “Oklahoma’s CEO” – The Honorable Mary Fallin, Governor, State of Oklahoma (Governor Fallin will discuss her plan to sell Oklahoma in this new economy) Comments: (Fallin arrived late) “Thank you so much Richard. Great crowd today. Remember being here last year. More prosperous economy. I want to thank you Richard for your time and for all you have done for this organization and putting forth this conference. So we can share best practices, challenges facing our great state, at event out of state thank you for being part of the Oklahoma team. Visit with public officials, Bob Sullivan. Task force across the state what I call wealth creators, business creators, they’ve met about 6 months, transportation, education infrastructure Suggestion box of ideas ideas that are game-changers. It is a box of ideas. That is what we’re doing here today. I’m glad that Bob along with Gary will be here to share some of their ideas some you can do this session, some in the future. I know that Dave Lopez has been busy, cause I keep him busy. See him every single week. Taken many trips across the country for economic development, Commerce is really good to bring me contacts. Were some of you on Bob’s team in the room? Thank you. Want to talk to you about – my number one focus is creating jobs, and I think we’ve done a pretty good job doing that. Secretary of Commerce has provided the numbers. Google expansion; Boeing announced 950 jobs, others involved in job expansion. Created 16,000 in the state, moving the state in the right direction. This past legislative session we addressed some of your agenda items. Here’s one – the quick action closing fund. If we get into a competition with another state, it makes sense to have a quick action closing fund. Big jobs in OK. I’m proud that we were able to get that done. How can we make it more economically-feasible to come to Oklahoma – worker’s


compensation program, reduce fraud, waste and abuse, lower worker’s premium cost in the state. I’m proud to report that the NAIC has recommended we reduce our costs. We got some great progress done this year but there is always more to do. Going to look at litigation costs – hard cap, instructions to juries, and ….all worked to make OK more job friendly. Aerospace, workers in our most prosperous industry – we passed a tax credit. Now the budget, I want to mention that we had a $500 Billion budget shortfall, not as bad as some states, but still had to be addressed. Looked at education, transportation, etc. Over 600 ABCs. So one of those things we found was that we had over 700 budget programs, just didn’t make sense. Good rate of return, or good value so we did some IT reform – consolidation of some agencies. Saving some money there. We did something in OK that many states did – we cut our income tax. Recently in Chicago, went to BCBS national headquarters; Navistar; wind corporation. Sorry the governor in IL raised taxes – we’ve cut ours. Makes a difference. Good story to be able to tell. The other part is the workforce itself, which is why we focused on education – we’ve been looking very hard at our workforce needs to make sure we’re producing the kinds of workers the economy needs. Reforms in K-12, accountability, transparency, responsibility. Ending social promotion. If a child is not school-ready, to be ready to be ready to learn. 70,000 OK that haven’t completed college. Big push on reading readiness, ended trial de-novo, grading our schools A-F. Early childhood - one of the best in our nation. When parents want to voluntarily, and its voluntarily, take their children to early childhood education. Third component is Compete to Complete – College America. Skill sets – career-tech or a 4-year degree. All of those things combined will help with your economic development. Special announcement on infrastructure right after this meeting – in just a short time I will announce an exciting roads and bridges program - to be one of the top five in the nation in bridges. Goal by 2019 that all those identified as structurally deficient are identified and corrected. Do the reforms in government that make more business friendly. Attract and retain jobs in our states -will look at tax incentives, focusing on our roads and bridges. Thank you so much for your time today.” 9:30 – 10:30 am – “Oklahoma’s Strategic Assets: Capitalizing on Our Global Position in the New Economy” – Deidre Myers, Oklahoma Department of Commerce, and Erika Luca, Global Business Services, OK Dept. of Commerce. (From the brochure: “The OK Dept. of Commerce will discuss the state’s economic growth potential, competitive edge and location trends to determine targeted sectors in the 21

st century economy.”)

Comments: (Recorded) I have great data for you. Actually have some slides for you on the big screen (See ppt presentation - “Oklahoma’s Strategic Assets, Capitalizing on those Assets. “) How we’re trying to increase FDI. Only the Dakota’s have an employment rate that we have. Idaho. Oklahoma is at 5.6% unemployment rate. OKC has the lowest unemployment rate of any city in it’s size category. We grew business over the recession. Many businesses were able to grow their businesses. Many businesses and site consultants have the same models we have. Mappleme’s software to decide where they’re going to growing. Decisions are made with data. Know intimately the data for your regions. Commerce has the data. Knowledge, skills and abilities. Technology schools can train the people in a matter of months. NAIS industries bar graph. Please let’s look at manufacturing jobs. Brings a lot of jobs into our state – higher value, higher wage. Mining, and oil. Health Care is growing. Composition that is balanced. Top sales revenues in the state? State government is the largest. (See slide) 2010 Top Export Industries (Out of state) – Top is in all the commodities, manufacturing, oil and gas pumping. Industries link together. 2010 Manufacturing Leakage (Manufacturing Satisfied Outside Region) – What do you have to bring into your economy. You want to concentrate on those things that you have some infrastructure already in place. If 50% of our things are already in our state, then you find those things that. Petroleum Refineries, Iron and Steel Mills, Meat processing from carcasses, Other Animal Food, etc. Establishment growth – 2006-2010. Recession that hit OK was not as bad as the rest of the nation. Employment Index – we lost 70,000 jobs. We’ve gained back 40,000 of those jobs.


Employment Change by Month – Net changes in Employment – Manufacturing is very high wages. When you gain a job in manufacturing you gain two other jobs. As manufacturing goes, so does OK. Manufacturing is a variable to watch. Unemployment Rate. 5.5% OK Unemployment Rate by County – Tulsa was hit hardest. Labor Force – we have a reduction in our labor force. We’d like to have a labor force that grows at the same rate as growth rate. Business administration – most over 50. How are we going to replace them? Labor Force Participation Rate slide - People aged 20 and above who are not institutionalized. (Household survey) State 2015 Occupation Projections – 130,000 jobs. 25,000 openings coming up (retirements). Need trainees coming up. Workforce has to be in the pipeline.

OK Dept. of Commerces Diedre Myers’ tag teamed presentation with Erika Lucas. Oklahoma is: GLOBAL. How do we get everyone in the state participating? Globalization – and how we do economic development in OK.

Slide – The World in Flat – T. Friedman quote “There are some who have a different perspective.” WTO; China taking our jobs, and immigration (flow of people) “The reality is that we live in a world economy and we can’t afford to be left behind. I’m not going to say it’s going to be easy we just have to embrace it.” What does globalization mean for Oklahoma? Job creation and higher wages. FDI – the U.S has received billions in FDI. OK 37,000 jobs in OK. Hitachi, Siemans, Umicore, etc. Exports –$ 5.4 billion – Canada, Mexico, Japan, and Russia. Two largest are oil and gas and aerospace industries. Trade development program. FDI in the state Top markets – Western Europe, Canada, Japan, and Mexico. Target a little bit of everything. UK Corp services, and aerospace. Japan advanced manufacturing. FDI – we’re not just competing with TX, KS or surrounding states – we’re competing globally. Avg. wage for manufacturing jobs is $24. Pros- and Cons: How many have heard that NAFTA destroyed jobs? Canada employs people in OK. OK has over 140 foreign-owned companies in OK. Our mission is to grow OK’s economy by FDI. FDI Partnership is a PPP with 9 different econ. Devel. Organizations across the state – Ardmore, Bartlesville, Duncan Area, Greater OKC, Ponca City, Tulsa, OK Business Round Table. EU office in Berlin, Germany. FDI markets on website. We have a PR firm based in NY that helps. Ambassador program – international CEOs to part of this program. We also partner with the FEDS, US(program) International Trade Development – Trade missions in China, Israel, the EU and Mexico. Recipient of the STEP Grant. 95% of the world’s purchasing power is outside of the U.S. WIB – Work Investment Board. Not all the jobs that went to China were We’re open for investment from any country. Chinese investment is on CNN. When your look at 3% is coming to America – there is a lot of interest from the Chinese in energy investment. Yes, we are looking at it is not our primary focus. 85% of China’s FDI goes in to developing countries – ores that they need - advantage in terms of an import/export. Richard Cornelison – one wish, take a strategic planning course. What are the strengths and weaknesses in our state – make sure you align resources with what the markets wants. Ericka’s bio – 10 year experience. 10:30 – 10:45 am – Networking Break


10:45 -11:45 am – Break-Out Sessions GLOBAL – Economic Development/Foreign Direct Investments – Gene DePrez, Global Innovation Partners (Oklahoma Ballroom A) Comments: Good morning. Good to be back in Oklahoma. I spent time with Rick Welman, past chairman of IEDC. Wife and I met at the high school production of Oklahoma. Thank you for your overview of the importance of foreign direct investment, my perspective from working in that field for over 30 years. Know me with my IBM connections, was in the UK for the last three years, came back and decided to start my own business – Global Innovation Partners. Felt it was my time to give back. Building relationships, helping people get connected. My background – Consulting experience with Fantus, Fluor, PwC/IBM. Worked in the second Reagan administration, PPPs. Partnerships and strategic alliances are in my blood. Europe, Asia and other parts of the world. Overview –

strategic and tactical realities

Global investment trends

How FDI decisions are made

Multiple approachers to FDI

Examples

Summary of best practices, do’s and don’t s Slide: Strategic and tactical realities

Major FDI projects are far and few between

Many globally mobile practices will not land in the North America/US, but some will

Emerging economies are becoming investors

Economic pressures create opportunities in both public and private sectors

Global relationships growing importance

Trade, supply chain links, alliance prime the pump (trade relationships)

Slide: Global Investment Trends

Context – turbulence in world economy forcing firms to rethink business strategies positioning in an integrated global economy how and where

In the tight economy companies faced credit and cash-flow challenges. Larger projects with greater up-front investment and risks were often tabled.

Business support services globally decentralized to take advantage of cost and skill across countries and regions; Philippines overtakes India, U.S. remains third.

IBM out of their own labs.

Renewable energy (solar and wind) growing compared to the decline in most other sectors; cross cutting with industrial equipment, electronics, chemicals and energy production all having roles.

Slide: FDI – Multiple Approaches

Traditional competition for investment – focused on competitive advantage, grabbing market share, cost-value tradeoffs a zero sum game.

Blue ocean strategy – creating new markets and opportunities innovation toward uncontested market space.

And…strategic alliances – businesses and EDOs Slide: Traditional Location & Expansion Attraction

Major projects will be few and far between, they will be increasingly spread across the globe.

City Regions/Metro areas emerging countries are becoming more attractive for investment – BRIC countries have 8 of the world’s top 20 metro areas for attracting recent investment (5 in India

Slide: Traditional Location & Expansion – How Decisions are Made

Varies by sector; factors, weighting, data sources

Affected by industry and competitive environment


Impacted by corporate strategy and positioning

Influenced by company and leadership culture

Personality and experience driven

In essence a screening process, with EDOs having little if any influence until short listed, especially with FDI analysis often done by foreign nationals.

When short-listed responsiveness most important.

Incentives may be more or less important depending on the sector and type of operation, or even company culture and CEO/Senior Exec priorities

Slide: The Blue Ocean and Beyond

Innovation plays an important role, especially green and clean

Creating new market demand, a new unlimited pie Slide: Sector vs. Cluster development

Clusters in the EU are pretty much outdated

Cluster development – mainly supply chian dev and growth, passive –what’s available in the marketplace

Sector development – focused on creating talent to lead and create better businesses. Many companies now ”own” and “co-develop” their supply chain – Rolls Royce, Boeing, IBM,

Smaller companies network and partner. Slide: Focus on innovation eco-system…

High tech research, knowledge, practice (with universities)

Related skill bases at all levels

Universities, colleges, K-12

Supporting infrastructure of incubators, accelerators, investors, sector networks, venture managers

Open, flexible, informal “mix-‘em-up” collaboration spaces. (Share cafeterias – RTP re-structuring it’s park to make it a mini-community)

Brand, reputation, perceptions Slide: FDI – Multiple Approaches

A Third and complementary approach building on high growth sectors; collaboration and alliances; across global geographies; with peer EDOs and their constituents; incremental and tactical

Slide: “Innovation + Convergence + Collaboration = Unique global offer…”

Global strategic alliances with foreign companies through foreign EDOs by working with their stakeholders – leveraging the supply chain; complementary strengths, capabilities; complementary markets; complementary geographies (Brazil, Chile)

Slide: FDI Innovation through relationships

Complementary and parallel; for many communities – Select USA at the federal level. Slide: Some examples of Global Partners

British Columbia, Northern England, Silicon Valley – Technology and Innovation

Southwest England, Louisiana – Entertainment, Media, Software

Greater Richmond and Sheffield City Region – Advanced manufacturing

Northern Texas and Northern England – Electronics, hardware, software Slide: Virtual Partnering

LinkedIn – groups and individuals

Social Networking – Twitter, Thinking Digital in the UK

Best Practices communications – IEDC conference, webinars, publications, EDRP; Citiscope Breakthrough innovations in cities; Independent, fact based journalism. Interest and support from Ford Foundation, World Urban Campaign, 100 Cities Initiative, C-40/Bloomberg, McKinsey and others

Slide: Corporate Partnering

IBM Smarter Cities - look for opportunities to partner with these kinds of programs

Siemens

Cisco Slide: High Growth Sectors Slide: Innovate to Drive Growth


In today’s competitive global economy, innovation will be the only path to success.

High growth sectors and companies are almost always innovators Slide: Example – Traditional Large Scale

Life Sciences – Novartis Global Bio-Medical Research Center

Consolidated from all 6 around the world to Cambridge, MA. Close to MIT

Took over the abandoned Necco Candy factory building- put in over $600 million, opened in October 2010. Close to 5,000 employees.

Slide: Example – Traditional Small Scale

Northern European soy milk produces – access to east coast customer base, etc.

Asian shared services center

UK pharma acquisition, merged headquarters Slide: Best Practices

Understand your strengths, niche opportunities – do focus on unique/world calls assets (universities, companies, SME, talent-pool, individuals, technologies research)

Build on high-growth industries. Slide: Best Practices etc.

Target global areas with complementary sectors; build on supply chain relationships; develop EDO peer-to-peer relationships.

Slide: Kelowna, British Columbia

Community population: 150,000

Disney

Vision – expand local capability through partnership and collaboration

Connecting indigenous

Pulled together their strategic alliances –Built “metabridge” – links Silicon Valley with Kelowna, British Columbia

Slide: Opportunities

International Connections

Work both ways communities in the UK (or Germany, or China, Brazil, India) need to create partnerships to grow, too.

Slide: Photo with Obama and Bush.

Invited by SelectUSA – President’s Jobs and Competiveness Council - gave testimony.

Linking FDI and innovation

New ways to attract investment – innovation investment incentives/zones?

Encourage global strategic alliances

Target emerging fast-growing economies

Use of federal resources and presence to attract foreign investment as well as promoting trade

Strengthen national marketing and investment attraction (SelectUSA)

Virtually every other country in the world has a trade/investment entity Slide: Key Takeaways

Understand your strengths, multiple alliances. 11:45 am – 12:00 pm – Networking Break 12:00 – 1:00 pm – Keynote Address – “Economic Development in the New Economy” – Jeff Finkle, Presidents/CEO International Economic Development Council (IEDC) (Oklahoma Ballroom E) (Mr. Finkle will give an overview of the state of economic development and will discuss the issues he believes are critical to continue growing jobs and capital investment in the new economy.) Comments: 1:00 – 1:15 pm – Networking Break


1:15 – 2:30 pm – Break-Out Sessions SUSTAINABLE – Knowledge Economy: Innovation, Entrepreneurship, Technology – Piyush Patel, PL Studios, Inc.; Comments: PL Studios, Inc. grew up in El Reno, OK. First in family to go to college, wrote 6 text books. Launched in 2001 – one employee. 25 full time folks, global customer base. Website in China screen scraped his entire site. Annual revenue $4.3. Slide: Core business – Digital-Tutors

Motion Picture artists,

Video game developers

Visual effects for film

Art and games Slide: Be Different Slide: Growing an Online Company – very difficult Slide: PigeonMe – the easiest way for your friends to find. (Based on carrier pigeons ideas.) Free i-phone app. Pick a place or select a map, pick your friends to meet you. Watch them track in to meet you. How do you monetize a free ‘app’? Showed usage map after two weeks. Viral component. Spot spread out over the U.S. **They collect information anonymously that has way more useful information than selling the app. That demographic information is useful. To Groupon for instance. EO is a peer network for entrepreneurs’ $1M in revenue. Want to meet? Not a consultant = 405-601-4806. Part of an incubator program here in OK. The tax savings was the key component. Green Economy: Renewable, Sustainability, Creating Jobs in the New Economy – Jeff Finkle IEDC. Comments: Fostering the Green Economy – Jeffrey Finkle, CEcD, President & CEO IEDC I’m here to talk about the green economy. Slide: Overview of the U.S. Economy – www.iedc.online.org – at the bottom of the home there are three documents on the green economy. Pew Charitable Trust and the Brookings Institute both have papers on the green economy. Recession has created uncertainty in the market. Slide: Recovery: A Time of Transition –

Energy efficiency measures are gaining ground in the U.S.

Fossil fuel consumption could be reduced in the U.S. by 40% in 2020 if policy changes are made (throw away the argument about whether global warming is man-made) Look at the jobs in the green market.

Unpredictable energy prices are impacting location decisions for business & competitiveness for regions. (Camps of the future will be solar. In the process of developing synthetic fuels for the military – DARPA developing.)

The post-recovery ecnomy will need to focus more on innovation green/low carbon energy. Slide: Green Technology Fosters Economic growth & Job Creation

The U.S. has the potential to reap economic development Slide: The job-creation in the green economy is enormous Slide: Ernst and Young named the U.S. as the most attractive market for renewable energy.

#1 in Wind,

#1 in Solar

#1 in Biomass/other

# 1 in Geothermal Slide: Have to be pro-active

23 state have adopted regional initiatives – have your states instituted a policy requiring a certain percentage of energy standards include renewable energy sources?

Slide: 4 states – Iowa, Minnesota, Texas


Slide: Investors in the U.S. and oversees looking at this investment Slide: The Power of Tax Incentives in Supporting Innovation and Green Investments Slide: Public-Private Partnerships powering the green economy. Siemens in Woodward, OK Slide: Attracting Green FDI for Sustainable Development – renewable energy portfolio standards. Are we going to move forward quick enough or are we going to let China beat us at it? Q & A – Question about subsidies? Jeff Finkle – Some incentives. Invest in existing buildings to make enery efficient improvement. Cellusoic ethanol will put corn-based ethanol out of business. You’ll have wind energy here. Question: Is the goal to target those imports – is it politically feasible to tax those imports? Jeff Finkle – not possible to say. Question: Federal tax policy? FInkle – I don’t see any good policy making decisions going on right now. I said some positive things about the stimulus package during lunch. Question: Tax question again. Question: Explain again how you monetize a free app – it is not the appl it is the data – facebook is scraping that data and selling that data to access to data before anybody else. More than eye-balls and thoughts. Data aggregation that we sell to the highest bidder – i.e. what is the demographic near a restaurant – can localize a marketing plan to aim at 28-mile radius. The race is to get 100,000 users. The minute you turn on our app we encrypt the anonymous data is stored. Pizza and cokes can spur ff a business. Questions: On gamers. Answer: Nerds. I hire a bunch of nerds. Question: incubator program that you were in? Answer: For us, the woman who ran the program reduced the rent. Rack of computers plugged into the wall that we didn’t have to pay the electricity. A lawyer on staff provided. Introduced to an IP attorney, quick books. It was the initial relationship were in place. Copy machine and not having to buy copies. Question: Tea Parties being problematic? Finkle: We’re going to create something that gives policy makers some pushback against the incentives. We’ve had incentives for years. Right or wrong. In the process of this recession we got hit twice. We could pretend we don’t need a policy that subsidizes business. China does. We’re going to start by interviewing a bunch of smart people. Anticipate by out leadership meeting in March we’ll have something prepared. Question: SmartGrid in the rural areas? Answer: There was a lot of money in what was called the SmartGrid. The final mile or whatever we want to call it. Some of the stimulus money is still there. PPP. We’re starting to see some parts of the grid reaching newest industries. Question: Piyush - 9 employees in OK – Have you ever worked with the workforce development board in OK. Piyush: Very hard. Question: Coastal home prices? Piyush: Fewer projects starting. www.eonetwork.com 2:30 – 2:45 pm – Networking Break 2:45 – 4:00 pm – Break-Out Sessions STRATEGIC – Strategy: Why it Matters and How to Do It – Greg Main, President, St. Gregory’s University (Oklahoma Ballroom D) Comments: Former Sec. of Commerce for OK during the David Walters administration. Board of I2E, etc. This is my chance to tell stories about Michigan in 2009-2010. It is a very interesting situation in MI now. MI has been an automobile industry in the past. Came across on article in the Saturday Evening post in 1961 – Michigan the Problem state. How Michigan was declining. Sounds like contemporary Michigan. Nothing has changed. Still lots of concentration in the auto industry. The economy lacks diversity – not just true in the ‘60’s, it was true in the


‘80’s. Michigan went into a recession in 2001 and 2002 and never came out – when the recession hit in 2008 it was still in an economic recession. Lost 80,000 jobs in the 2000’s. Slide: Comparing MI and OK.

Per capita income is less in MI than in OK. ($35,957 vs $36,421) Slide: Spring 2009 Situation Analysis

Economy crumbling – highest unemployment rate (13.3%) in the nation

GM & Chrysler staring into the abyss of bankruptcy

Thousands of supplier companies losing markets with no financing to re-tool for new markets

MI is the poster child of economic devastation - Banks closed off loans to suppliers Slide: The Opportunity

Solid well researched strategy

Strong commitment to Entrepreneurship

A seasoned and talented team Slide: Strategic Approaches to Innovation-Based Economic Development

Graphic – New technology-based climate at the center Slide: Strategic Plan for Transforming MI’s Economy

Arrow graph: Quality of Life to goal Slide: Branding -$40 Million (from tobacco settlement funds, bonded)

Pure Michigan – tourism campaign to introduce MI to national television and social media channels and produces a 3:1 ROI

Narrated by Tim Allen, campaign is declared one of top ten best ever by Forbes

Upper Hand business development campaign with Jeff Daniel s as spokesman, features, CEOs touting exceptional workforce, r&d expertise, strong university and community colleges and quality of life. Airport buys and CNN coverage.

Slide: MI Transformation Strategy: new Global Markets

Potential for significant growth – 1. Advanced energy 2. Solar/Photovoltaic 3. Wind Turbines 4. Etc.

Centers of Energy Excellence Model

Graphic with triangle Private Sector/Academia/Government – three sides of the triangle

Goal: rapidly grow a new industry cluster

Centered on high profile anchor company – Dow Chemicals; Swedish Bio-something, worked for the city of Flint, MI. Used a company that was a cellulosic plants

Slide: MI Tools – Green Energy/Clean Energy

Batteries, etc. Slide: becoming the Epicenter of Advanced Battery Manufacturing

Worked with defense department, automobile industries- hired two consultants with engineering degrees. Mapped the value-chain. In Vehicles and in the grid.

Identify the global players – partners told them who those were.

Assessed their interest level

Began developing incentives – big ones -$1 M +. Tax incentives came from the legislature. Tied to performance.

Allowed them to make applications – with our partners

We ended up with four battery manufacturing plants. Slide: Battery Value Chain Demonstration Slide: From COEE to Center of the Battery World. (Slide with names of battery mfr.) Slide: MI Tools/Strategic Investment

21st

Century Jobs funds

Results – 35 new companies


Slide: Wind

Example of a failed story

Value is in the components – the blades, the hubs,

Found a real issue with quality in the blades, as well in the castings and gear boxes. Slide: The Problem – photo of de-laminated blade – they fall apart. Changing blades out is really expensive. Needed a lighter weight material – went to Dow Chemical. Slide: The “government shouldn’t pick winners and losers” is a hollow sound bite coming the shallow end of the pool. Slide: Brand management and Place Making Slide: More Observations

What works and what doesn’t work: clear and concrete

Economic development is not rocket science. Q & A – Who were the anchors in the triangle? Dow Chemical, Swedish company, others. Q- Winners and Losers comment – explain Answer:Began hearing that argument about 20 years ago when Japan was growing in and industry. Other countries help their businesses out. Companies are no longer in the situation to take the risks that are out there. Otherwise they will lose the battle, in my opinion. Thank you. 4:15 – 5:00 pm – “Targeted Marketing and Branding” – Lea Taylor, What If Creative (Oklahoma Ballroom E) 5:00 – 6:00 pm – Networking Reception and Exhibitor Showcase Tuesday, October 4, 2011 8:30 – 9:30 am – Welcome by Judee Snodderly “The Other GDP – An Oklahoma Assessment” – Del Boyette, Boyette Strategic Advisors (Mr. Boyette will discuss Comments: Opening blah, blah, blah. The description that is in the brochure pretty much covers what I’m going to address. Slide #1: Title “10 Okla Thoughts and Observations on 10/4”. Deirdre talked about this yesterday, as you search for talent, Oklahoma’s current economic situation is a selling point. Your competitors perceive OK as has having a strong economy. Most states have programs to recruit talent back to their states. Because of your economy people are looking at OK as a place to live. Slide #2: Quality Jobs is no longer cutting edge. Arkansas copied it in 1998. QJP is a very, very good program, but it is not cutting edge. Especially at the local level, where you’re competing with Texas. Must have the tools in your tool-box to compete for the right kinds of products. Incentives should have ‘claw-back’ provisions to make sure that your state is protected. It’s not that anyone likes incentives. It would be a much easier thing to sell if it was a level playing field. Unfortunately, it is not a level playing field. You have to compete for projects – and not just in the U.S. – it could be competing against Ireland, etc. Companies want cash to compete (cash from the states). Slide #3: You are committed to Economic Development – you have passed right-to-work law. Slide showed OK City Thunder logo. By going to a right-to-work state, you showed you are truly committed to economic development. You have spent a lot of time on the agenda – don’t question it, don’t think twice about it, just support. Slide #4: Support the “Bold Ideas” – Support regionalism, must cooperate regionally. It is not cutting edge is you’re not on board with regionalism. Rural areas can work together for the types of jobs that you want. Rural


(pronounced ‘rule’) need to work together. Must work cooperatively. Just think if you sold the combined leadership of a regional area. Think regionally. Slide #5: Manufacturing is not dead! Is has not been dead in a lot of the southwestern states. We have seen industry declines in certain sectors. I have been active in COREnet reality (spelling) is in the process of doing CORE 2020 – Corporate Real Estate in 2020 project. Lots of bold ideas – we developed bold statements in this document. One of those bold statements is that manufacturing will grow in the U.S. in the next 10 years. The only difference is that you’re going to have to sell the reality that the days of 500 or 1,000 jobs by manufacturing are from the days of the past. Would you really rather see 50 manufacturers that hires 10 people instead of one manufacturer that hires 500? Used to be about SIC code and distribution centers – no longer. Wealth creation has to be thought of very differently. Slide #6: Leverage Country Music Presence – graphic of Oklahoma Today magazine with country music star on the cover. (Blake Shelton) It is time for this state to leverage the country music industry. Not just that the talent comes from OK and they have homes here. The country music industry can be your niche. (Not the whole music industry.) Mentioned the Gaylords as having built the Grand Ol’ Opry. Corporate real estate have significant investment potential. Slide #7: Tribes offer unique advantages – Leverage this. Continue to explore partnerships with the different tribes. Slide # 8: “Oklahoma is a populist state.” – What does that mean? Webster – representing the interest of the common people. In economic development terms the common people are the ones those in the economic development field are working for. Slide #9: Customer service is often the final differentiation – psychographics. How you treat people and the relations you have with those people is different. As economic development professionals there is no reason that you cannot sell your ideas to the interests of the individuals. To justify $300 M for a business that hires only 70 people. Slide #10: Think about the Other “GDP” – Oklahoma really in the center of the U.S. Have a good geography. And you’re a populist state. Slide #11: Geographics (where?) – Demographics (what) – Psychographics (who?) Slide #12: Geographics – Understand your products/features/benefits Slide #13: Psychographics – “Criteria for segmenting consumer by lifestyle, attitudes, beliefs, values, personality, buying motives..” There are Apps for comparison.

Not all prospects are alike, not all golf, not all men, not all baby boomers, not all Christians. We have to sell to those individuals and sell our community and our state.

Ask question of the prospects

Slide: “A great place to live and raise a family” is not a competitive advantage. Don’t show all the churches during your tour with prospects – sell your community. Make the prospect feel special – prepare for their visit. Sell to them as individuals.

Conclusion. 9:30 – 9:45 am – Networking Break 10:00 – 11:00 am “Strategic Partnerships/Collaborative Initiatives” – Moderator: Janet Smith of PSO Office of entrepreneurship – partnership between I2E and OKC Chamber of Commerce. Topic of panelists is partnerships.


Panelist: Josh O’Brien – I2E and Greater Oklahoma City Chamber. Panelist: Brien Thorstendberg – Ardmore Development Authority Comments: Q 1: Summary of Partnership J.O. The partnership we worked to develop on together on was a state-wide bio-science association B.T. – We worked on the sensor industry. Q2: Catalyst? J.O. – Catalyst? Strategic plan to create a base line to see where we were. Hired a consultant group, took a year. Formed a state-wide organization, one of the few states that didn’t have one already. B.T. – Catalyst? A lot of similarities. Research analysis – formed an alliance with the university. Am and the Ardmore Development Authority hired a consultant firm out of CA to form a state-wide organization. Sensor summit in the summer. Q3 – What successes? J.O. – OK Chamber is the contact for our organization. The OK legislature has on occasion taken a somewhat extreme stance to ban stem cell research which would have had a detrimental impact on our research. Because of the alliance we were able to stop that, against the wishes of some of our members. B.T. – Success – collaboration. Sensor summit coming up. Q4 – Lessons learned, funding? J.O. – Worked with Universities. Missed some opportunities b y not asking for money from some of thekey companies. B.T. – One of the lessons I learned is that I would have started earlier. One aspect I would change, too, is that I would have gotten another company, not just Amethist in Ardmore, so we’d look more state-wide. A lot of companies don’t know about the sensor alliance. Q: Members? J.O. We’ve members from other organizations. Went to 10 leaders and asked for a 4-year commitments of $25,000/yr. Some agreed to $10,000. That’s what we did, we’re slowly pulling more members under the tent. Q: What are the advantages of not doing this by yourself? J.O. – We have some influence with the Chamber, but need others involved in order to last. It provides cover for issues – especially if it’s an issue with the legislature. Then it’s not just the Chamber, it’s more than one organization. B.T. – I agree with all that. One of the things it does is to create credibility. When we can tie in to the Universities, it gives us more credibility when we go out . OSU helps with the Sensor Magazine. Expenses are not out of our pocket. Q: Public? J.O. – Helps get the word out. Real innovation happens when everyone feels comfortable and has a seat at the table. B.T. – We have to the industry involved. OK Bio. You have to have champion. Industries don’t have funds for the support functions, the Chambers, etc. help fill that position. Q: You mentioned a timeline – when did you initiatives started? J.O. Nothing happens as fast you want it to happen. Started in 2006. It’s tough. With the types of collaboratives, everyone has their day jobs. Key was OK Dept. of Labor provided staff? (Check which dept. offered staff?) B.T. – Started about a year ago. We are having a summit in November. Timetable – we hope to have paid membership in about year. And a staff in about a year. Q: Obstacles? J.O. – Similar obstacles as other states, but none like here in OK. We had companies that were very leery of getting into this. Private sector working with government was difficult to make people see the value – this is where the Chamber came in. Donations are important. Getting people to all share in it has taken some effort. B.T. I already spoke about lack of funding, lack of a champion. A lot of companies did not realize they are in the sensor industry. Lack of a focus, or lack of a mission. What are we trying to achieve? Q: What is a sensor? B.T. Gauges in the oil and gas industry. Medical equipment, night vision, a lot of the equipment in the military. Really goes along the whole. Jet airliners filled with sensors. Q: A key component of industry.


Q. I2E – is that related to bio-medical or is it out of it? J.O. – It is definitely out of it. Cross purposing – a lot in the bio-tech world are also in the sensor world. Second largest concentration of jobs is the health center (after Tinker). The problem is the not one health organization – there is multiple. The Chamber support I2E on their individual projects. IDE Grant. Q: Final question – what advice would you give your peers in the audience? J.O. Take a hard look in the mirror; look at all of your history. Look at foundational work, understand your approach, lay out your goals, and then go see these people. Have patience. Brien is trying to put together this sensor alliance. B.T. – I think, too, too often we say we don’t have the money. It has to be a stair step approach. You have to show there is value in the partnership. Have events that bring all the partners together. I.E. Sensor Summit. Q & A from audience. J.O. OK-Bio. Going to work more on the advocacy side with the legislators. To get buy-in. Chamber drive – the International Bio-Conference. B.T. Going to be looking at North Texas, with the universities there. J.O. Where the greatest weaknesses are is where the opportunities are. Chamber and I2E is beginning to sponsor people. Question on PPP – how to make sure both sides get their ROI in those arrangements. Talk about the bold ides? B.T. PPPs – Ardmore Development Authority is to help our area. We have a company Amethyst – had 2 employees, now they have 20. Been a catalyst for our technology park. UML and OSU. Overlap? Made calls to get others involved. J.O. – On the ROI, had to have the conversation about the chasm between the business side and the research side. We have to have more companies grow from it. Bio-science world. If companies don’t grow they won’t get research dollars. David you’re involved in the bio, you’re involved in the sensors. Question about other industries that we think we should be doing these types of associations? J.O. Other ones already out there. Aerospace, unmanned aerial, etc. B.T. Could be for housing, education, etc. Audience: Defense Industry Alliance being established: www. tinkerandtheprimes.com Unmanned Aerial Vehicle Alliance, Oct. 25, 2011. 11:00 am– 12:00 pm – “Oklahoma’s Strengths & Weaknesses from a Business Perspective” – Moderator – Kay Wade, Logan County Economic Development Council Panel Discussion, includes, Jay Wade (Red Earth Systems, OKC); Pam Parks (Blue Wave Boats); Ken Parker (Risk something, Next Thought, Norman, OK); Siobhan Reilly (Food Pro-Tech, Stillwater, OK, not present due to death in the family. ) Food Pro Tech was an incubator company. Got help getting a loan. They hire micro-biologists. Small company that works clear across the state, food testing and analysis. Introduce yourselves:

Ken Parker – building a next generation education platform. Risk Metrics group, new company is Next Thought, sold Risk Metrics for $1.5 B. Next Thought is a technology company that aims to build the next generation educational platform. 12 people in the company. Located in the E-tech incubator in the NEDC. The company is a group of techs – how might tech expand their tech beyond the confines of the campus.

Pam Parks, Seminole. Blue Wave Boats, started 19 yrs ago. Now the biggest boat seller in TX. Look at your manufacturing that you already have, we need you to be talking to us.

Jay Wade, Red Earth Systems, OKC. Part of the re-development of the AT&T plant. Software between accounting and CRM. We have an enormous data center.


Question about workforce, attracting and keeping talent, where do you find your employees? Have you ever used the workforce investment board? (All said No.)

Pam Parks – likes the geriatric force. The younger generation doesn’t know what a time clock is, and don’t know how to work. They want a $100,000/yr to sit behind a desk. We have a few high-tech jobs. We need real people – I’d really like to get a farmhand off the farm rather than the younger generation. Sometimes I feel like a high-school teacher, have to take their cell phones away and give it back at the end of the day. Our avg. age is 38-45 yrs old. The younger crew is just looking for a paycheck. Talk to the employers in your community. They want employees.

Ken Parker – Answer in the context of Risk Metrics group. We ended up with 150 professionals when we ended up selling the company. How do you identify, and attract talent. It is a very different talent pool that you’re pulling from. The first years were dedicated to building the company, the last three years I spent on H.R. OK office was always special because of the quality of people. Also, cost per square foot was the best vs elsewhere, especially globally. It is not for everyone –t here were tradeoffs. In the 12 years we hired 200 people, exported some of them to NY. Had only one manager. Hire bright, ambitious people, then grow the company. Well under 5% in turn-over.

Jay Wade – We have a similar story, as a technology company. Recruiting program. Everybody we employ has to be a creative person. All of our recruiting comes from referrals, the universities; we have a bunch of 20-year olds. We have a very liberal policy in terms of working, dress code not in place, workload, hours flexible (some start at noon.)

Question: In terms of technical resources, where do you find your technical resource. Do you use the universities? I love companies that make stuff. Pam Parks – We use outside companies (chemicals, resins, component), a little bit from the vo-tech school. Ken Parker – From the experience of Next Thought – we find a lot of the talent in state – OSSM. We’re also working with a number of professors at OU. We do lot of our research on the web – can find researchers and expertise. Q: What differentiates you? Ken Parker – Three parts:

1. Content. It will be in the Cloud. 2. Classroom – online classroom, regardless of their geographic location or time. 3. The x-factor – Community - like facebook, and the social networking sites wher e online learners learn

together. Jay Wade – We make stuff, too, Mom. Oklahoma has more technology than it used to. The technology for the federal court system. Q: Is it a problem to access to Capital? Ken Parker – not any more. Pam Parks – we have no debt. We have a very good bank that is behind us. GE changed the loan process. Our dealers had some debt. When the financial crisis happened – the dealers were hit hard. Hurt the marine industry. Took our inventory and moved it around the states until all the boats were sold. Because of assigning by GE, their company is still on the hook for the boat if it doesn’t sell (for three years). We still have GE to deal with because they are still the only flooring plan. (Werein Checotah, OK before they moved to Seminole, OK) Talked with Dept. of Commerce, did not use the Quality Jobs program. Doesn’t do any good to the companies here if you eliminate jobs who qualify. Insure OK is hard to do business with.


End of Notes.

ok-safe reporting - oedc 2011 summit - "the new oklahoma economy"- october 2011

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