— 1 — © 2015 ViTAL Economy, Inc. Green Building Industry Cluster Study Initiative Launch Meeting October 2015 Frank Knott – [email protected] Jim.

— 1 —© 2015 ViTAL Economy, Inc.

Green Building Industry Cluster Study

Initiative Launch MeetingOctober 2015

Frank Knott – [email protected] Haguewood –

[email protected]


Meeting Agenda

Section #1 – 60 minutes– Orientation to Regional Industry Clusters– Industry Cluster Guidebook– Roles & Responsibilities– Project Schedule– Milestone #1 Plan of Action and Objectives– Reconfirm Industry Cluster Goals– Opportunity Value

Section #2 – 60 minutes– VE Research Process & Initial Hypotheses– Leadership Team Recruitment– Review current initiative research, potential short term wins?– Clarification of green building cluster focus– Brand identity, name the cluster and communication plan– Next steps, actions and assignments


What is an Industry Cluster in a Regional Economy?

• The foundation of a regional economy is a group of clusters, not a collection of unrelated firms. The firms in a cluster have common competitive strengths and needs

• Successful industry clusters are not passive forces in the economy, but consist of active agents who organize resources and actively refine the business environment to be highly efficient and effective in their pursuits

• Clusters are the key organizational unit for understanding and improving the performance of regional economies

• Cluster teams are catalysts….• To provide the vision and leadership• To assess and prioritize opportunities• To link resources, internal and external• To transform regional economies


Framework: Industry Cluster Team Guiding Principles

1. Industry cluster leadership and participation are key to generating outcomes

2. Work plan discipline insures completion all elements of each phase, is key to achieving success

3. Trust and respect is required between companies and individuals

4. Collaboration is recognized as a key to achieving regional goals

5. Uncovered opportunities will immediately have action teams assigned with leadership that accepts ownership of the opportunity.

The Vital Economy Industry Cluster approach achieves measurable results through the recognition and adoption

of key principles that insure measurable success

The Vital Economy Industry Cluster approach achieves measurable results through the recognition and adoption

of key principles that insure measurable success


Guidebook – Project Management Resource


Leadership Team 1.Visionary leadership2.Strategic design, direction & progress assessment 3.Secure and deploy resources as required4.Review and adopt regional and industry goals5.Create and lead action teams6.Co-chairs of industry cluster teams

Roles, Responsibilities and Benefits of a Regional Industry Engaged Framework

Role & Responsibilities Benefits

CED Professionals1.Provide expert guidance and analysis, 2.Coordination and facilitation of action teams3.Federal/State liaison,4. Information & research resource

• Personal, professional growth, capacity in regional economic development

• Expansion of industry leadership• Strategic thinking, cross cluster possibilities• Quick impact on the regional economy

• First in line for industry research and business analysis

• Chance to be first mover on business opportunities

• Ability to lead and direct topics and priorities that directly benefit your business

• Personal, professional growth, capacity in regional economic development

• Expansion of leadership capacity• Strategic thinking and cross cluster analysis

Industry Cluster Teams1.Critical regional industry knowledge and intel2.Establish industry specific goals linked to regional

goals3.Recruit key industry cluster leaders 4.Participate and be knowledge experts on action teams5.Provide recommendations to the leadership team


Formation• Project Team training

• Establish core leadership team

• Define the industry cluster

• Recruit key participants

• Define industry cluster vision and goals

• Establish the industry cluster name and brand identity

• Identify relevant community initiatives

Formation• Project Team training

• Establish core leadership team

• Define the industry cluster

• Recruit key participants

• Define industry cluster vision and goals

• Establish the industry cluster name and brand identity

• Identify relevant community initiatives

Asset Mapping & Research

• Complete regional industry cluster asset mapping

• Develop (6) hypotheses

• Conduct up to 24 interviews

• Identify (4) niche markets

• Determine economic value of the green building cluster

• Define the green building value chain

• Identify and quantify the workforce needs

• Complete cluster gap assessment

• Support up to (4) action teams

Asset Mapping & Research

• Complete regional industry cluster asset mapping

• Develop (6) hypotheses

• Conduct up to 24 interviews

• Identify (4) niche markets

• Determine economic value of the green building cluster

• Define the green building value chain

• Identify and quantify the workforce needs

• Complete cluster gap assessment


Targeted Opportunity

• Test and adjust hypotheses

• Identify 9-12 business case opportunities, (4) niche markets

• Benchmark regional green building industry cluster

• Identify policy/political trends

• Determine regional competitiveness

• Define finance, appraisal, insurance ecosystem for green building market

• Define focus of Green Building Center of Excellence


Targeted Opportunity

• Test and adjust hypotheses

• Identify 9-12 business case opportunities, (4) niche markets

• Benchmark regional green building industry cluster

• Identify policy/political trends

• Determine regional competitiveness

• Define finance, appraisal, insurance ecosystem for green building market

• Define focus of Green Building Center of Excellence


Green Building Industry Cluster Milestone Schedule

Report & Institutionalize

• Set long term performance metrics system for the industry cluster

• Connect cluster goals to CEDS goals

• Prepare and adopt a long-term sustainability plan for the cluster

• Develop a Phase 2 implementation plan for the industry cluster

• Make recommendations for a Green Building Center of Excellence

• Role of existing assets, programs (EDC Zone, etc.) and companies

• Measurement and progress assessment framework

• Pursue business and industry cluster action plans

Report & Institutionalize

• Set long term performance metrics system for the industry cluster

• Connect cluster goals to CEDS goals

• Prepare and adopt a long-term sustainability plan for the cluster

• Develop a Phase 2 implementation plan for the industry cluster

• Make recommendations for a Green Building Center of Excellence

• Role of existing assets, programs (EDC Zone, etc.) and companies

• Measurement and progress assessment framework

• Pursue business and industry cluster action plans

Oct Nov Dec Jan Feb Mar April May June July Aug Sept Oct Nov

Milestone #1 Event Milestone #2 Event Milestone #3 Event Milestone #4 Event


Milestone # 1 Objectives

1. Solidify a green building/services industry cluster leadership team

2. Determine what constitutes the industry cluster? Geographic boundary

3. Craft the industry cluster vision and confirm goals in relation to CEDS

4. Establish the industry cluster name and brand identity

5. Identify and recruit all segments of the industry cluster

6. Identify relevant community initiatives and determine strategic opportunity

7. Characterize the members value for participation

8. Complete basic market trend analysis and regional industry benchmark

9. Clarify cluster team and research team roles in responsibilities

10.Hold a Milestone #1 Workshop


Defining an Opportunity Value

Opportunity value is defined as the quantifiable sum realized through the execution of an industry supply/demand strategy leveraging regional assets. Strategies that leverage existing regional assets can achieve the creation or retention of wealth.

The fundamental principle of asset based CED is to leverage existing assets in a region capturing new economic value.

The creation or retention of wealth through industry supply/demand strategies will create jobs and businesses in a regional economy.

The supply/demand industry cluster strategies that will be developed need to be based upon fundamental business principles and cases. It is recognized that additional feasibility analysis may be required to fully define the opportunity.


Goal Jobs Value GDP ImpactDevelop 200MW of wind energy

Construction 224 Jobs @ $35,900

Operation: 12 Jobs @ $42,400

Project Value 134 turbines @1500KW $389M Produced Energy value $52.5M 200MW x 30% = 60MW 60MW @ .10KW

Employment earnings $554K

Construction $21M 224 direct jobs 168 indirect jobs

Operation $2.2M 12 direct jobs 17 indirect jobs

Utilize 45,000 tons of locally sourced biomass for residential and commercial heating

Fuel sourcing & production: 90 jobs @ $35,000

Construction & installation 40 jobs @ $35,000

Fuel Value $11.2M

Fuel sourcing & production earnings $3.1M Consumer wealth retention $6.9M

Installation earnings $1.4M

Fuel sourcing & production Earnings $8.4M 90 direct jobs 67 indirect jobs Construction $3.7M 40 direct jobs 30 direct jobs

Consumer wealth retention $6.9M

Capture and retain 50MW of locally generated power

250 jobs @ $45,000

Energy value $12.2M

Employment earnings $11.2M

Energy generation $46.5M 250 direct jobs 346 indirect jobs

Realize 50 jobs at $42,000+ linked to renewable energy R&D

50 jobs @ $42,000+ Employment earnings $2.1M+ Local R&D $5.9M 50 direct jobs 37 indirect jobs

Total 666 jobs Project investment value $389M Energy/fuel value $75.9MEarnings and wealth retention $25.2M

$94.6M

Economic impact estimates developed using the Northern New England Economic Scenario Model

Opportunity Value Example


Green Building Industry

Human Resources

Natural Resources

Building Products

Energy Systems

Research & Design

Center of Knowledge

Industry Networks &

Infrastructure

Vermont Brand!

Brattleboro Foreign Trade Zone

Roofing – Panels – Wall coverings – Home kits Beams – Window Frames – Treated Wood

Solar

District Heating Systems

Waste Heat

Co-Gen

Biomass

Energy Management Systems

Green Building Products Market

VE & SeVEDS Green Bldg Industry Cluster Draft Value Chain Ecosystem

Construction & Service Providers

Workforce Develop

Education

Market Research


Section #2 – 60 minutes


Iterative “hypothesis-based” Approach

Benefits of Approach

· There is more data available than time or money to collect it

· Delineates and limits the scope of issues and data that needs to be collected

· Identifies what data and analysis is essential as opposed to what is merely interesting

STEP 1: IdentifyIssues

• Identify 3-5 issues which address questions

• Issues should fully address all we need to understand

Step 4: Collect Data/Complete Analysis/

Iterate Process• Collect required data

and complete analysis to answer key questions

• Reformulate issues based on findings

Step 3: FormulateKey Questions

• Key Questions drive primary research/data collection & analysis

Step 2: FormulateHypotheses

• Create hypotheses that answer each issue

• Hypotheses should completely address each issue

ConsultantSupport

Data Collection and Analytical Approach


VE Research Process-Seven Steps

Issues of Challenge & Opportunity -> Data -> Information -> Knowledge -> Opportunity->Action

Step 1 – Characterize the primary issues of “challenge/opportunity” to be addressed?

Step 2 - Agree on hypotheses to be tested…no more than four, as well as research purpose.

Step 3 – “Data -> Information”- Conduct and document research..test against each hypotheses

Step 4 – “Knowledge” - Integrate and communicate findings,

Describe the business opportunity and challenges

List resource gaps

Step 5 - Identify and agree on next hypothesis to refine the opportunity, if required

Step 6 – “Opportunity”- Provide a summary business case from the research to direct action

Step 7 – “Action” – Recommend implementation plan with leadership and resources require


Example: Hypothesis Testing

Renewable Energy Industry Cluster Hypothesis TestingPremise: Energy costs to Aroostook residents and business sector is an extraordinary burden that places

the region at a disadvantage relative to New England.

Proposition: The Renewable Energy Cluster can address this burden with locally available resources while creating and retaining jobs, inducing wealth creation/retention in the region, and contributing to the realization of the Mobilize Maine vision and goals for Aroostook County.


Three Initial Hypotheses

1. Establishing a National Green Building Systems Knowledge Center of Excellence for the sustainable and resilient built environment that attracts talent, businesses, investment and visitors.

2. The region can achieve increased exports, higher wages and new employment by focusing on green building and energy research, product development and manufacturing with a systems rather than a component focus.

3. The green building markets have a barrier in finance, assessment and appraisal services. The GB cluster can develop creative finance solutions designed to accelerate adoption of green building products and services across the US, creating high wage financial services jobs in the region.

Regional Issues1. Closure of VY – 600 high wage jobs

2. Low percentage of earned income

3. Low wages parity within the laborshed

4. Overall population decline

Regional Opportunities1. Concentration of nationally linked individuals and

entities in the green building and services sector

2. Vermont has a strong culture, reputation and brand in sustainable living and products


Green Building Industry Cluster Goals by 2018

Goal #1: Reverse Population Decline• Increase population to 46,266• Increase proportion of 25-44 year olds to 25% of population• Double the percentage of foreign born resident to 7% of population

Goal #2: Increase the Number of Well Paying Jobs• 1,054 jobs @ $46,340• 702 jobs @ $42,130• Increase wages of 4,650 by $5,000 per year• Increase median income for associates/some college to $32,328• Increase median income for bachelors degrees to $40,597

Goal #3: Improving Workforce Quality• Increase associate degrees/some college and technical certificates

among 18-24 year olds

Goal #4: Raising Household Income Relative to Surrounding Areas• $174M in new wages• $470M in new GDP• Improve the ration of new earned income to total income to .65

• 300 high paying jobs in 5 years, • 180 > $46,340• 120 > $42,130

• # of Associates and technical degrees of 18-24 year old workers

• New regional GDP, TBD once new business opportunities are identified

• $ of new export value

• # of talent workers attracted

• # of visitors attracted

• Increase wages of 790 by $5,000/year

• 4 niche markets

• 9-12 new business opportunities

• 4 green building action teams

• Connection to 3 community economic development initiatives

Green Building Industry Cluster Goals

CEDS 2018 Goals


Who are “the right people to get on the bus”?

Build the Best Team: Region Economies Need

Level 5 Leaders

Level 5 Leader Characteristics:

• Personal humility

• Professional will

• Ambitious for prosperity

• Results driven

• Workmanlike diligence

• Responsible for themselves & others

Source: “Good to Great”, Jim Collins

Level 5 leaders exist in every region; Hint: look for results where individuals do not step

forward to take credit

Level 5

Level 4

Level 3

Level 2

Level 1

Executive LeaderBuilds enduring greatness through a paradoxical blend of personal humility and professional will

Effective LeaderCatalyzes commitment to add vigorous pursuit of a

clear and compelling vision, stimulating higher performance standards

Competent ManagerOrganizes people and resources toward the effective and efficient pursuit of the predetermined objectives

Contributing Team MemberContributes individual capabilities to the achievement

of a group objectives and works effectively with others in a group setting

Highly Capable IndividualMakes productive contributions through talent,

knowledge and good work habits


What is the Strategic Role of SeVEDS Leadership?

Take charge of your regional economy moving it in a new direction through the use of Asset Based principles

1. Create sufficient regional commitment to create “critical mass” of participation and resources

2. SeVEDS is the “key” regional economic development strategy

3. Secure and celebrate true collaboration and resource sharing behavior

4. Achieve alignment of public, private and non-profit sectors to a common strategic economic direction

5. Recognize and pursue the characteristics of a Knowledge Based Economy

6. Create a “culture of innovation and entrepreneurship”

7. Adopt a measurable economic vision of the future and analyze progress


1. Be “Champions of the Green Building Industry Cluster”• Promote and communicate the initiative vision, work plan and activities

2. Lead key participant recruitment• Actively evaluate participation levels and make personal invitations to

key leaders that will bring value

3. Provide guidance and direction• Oversee industry cluster activities at the regional level. • Make key decisions regarding resources and strategic direction

4. Participate (and chair) mapping or action teams• Contribute input and analysis to asset mapping • Lead action teams pursuing new economic opportunities

5. Provide important intel and analysis of information and data• Provide proactive insight and expertise to the regional activities

What is the Tactical Role of Cluster Team Leadership?


BG Industry Cluster Leadership Targets

1. Andrew Dey (Bensonwood)

2. Vern Grubinger (UVM extension professor)

3. Bill Murray (Berkley & Veller Greenwood Country Realtors)

4. Dan Yates (Brattleboro Savings and Loan) (Jodi to arrange appointment for Thursday)

5. Dr. Cary Gaunt (director of campus sustainability at Keene State College) (Jodi to contact)

6. Nadav Malin

Who should Chair this cluster team?


Brand Identity and Communication Plan

Identity?

Internal(Participants)

Local(Community)

External(Industry, Region, Global)

1. Who is going to have primary responsibility?

2. Are there thoughts or previous discussions about a name and brand identity?

3. Is there anyone that should be on the industry cluster team?


Milestone #1 Actions and Assignments


Backup Slides





Recognizing Leadership Styles and Traits• Vision Leaders grasp and communicate the value of a shared economic vision to a broad base of community and

cluster forces

• Innovation Leaders advocate a climate of continuous innovation for each cluster and the overall initiative, as well as the development of entrepreneurial opportunities

• Influence Leaders command the respect of diverse interest groups and whose very presence brings others to the table to insure cluster and initiative success

• Resource Providers value the vision and provide access to resources that enable the vision to succeed at the initiative and/or cluster level

• Research Leaders understand the value of knowledge gathering and knowledge development for the purpose of crafting the basis for out of the box solutions

• Cornerstone Leaders are regulatory, government, business, political and community coalition champions critical to broad adoption of the cluster and initiative strategies

• Collaborative Leaders understand the economic leverage value of shared resources and shared ideas, and communicate the positive value of such behavior to others

• Education Leaders control access to education and training resources and understand the importance of a life long learning resource in support of the initiative

• Economic Leaders understand the importance of changed spending behavior in unleashing traditional spending to transforming an economy

• Connectivity Leaders control access to public and private connectivity resources and champion their linkage to enable the collaborative development of the local economy

• Project Management Leaders are focused on establishing goals and objectives and assuring that cluster-based project initiatives are managed to a successful conclusion and evaluated in terms of intended outcomes


Leadership Development & Support is the Key to Success

PEOPLE: The most important SeVEDS assets are the volunteers that commit their time, talent and treasure to achieve the initiative goals.

Selection: Choice of leaders should be based upon active participation in implementing a Mobilize Maine strategy. Board, cluster team and action team leadership should include a mix of styles, connections and influence.

Training: Mobilize Maine should benefit leaders by providing education and self-improvement activities yearly. This provides value for participation and improves leadership effectiveness and strategy outcomes.

Support: Mobilize Maine must recognize that leadership is a volunteer effort that requires staff support to achieve greater performance. Regional ED professionals must consistently engage and fill gaps in leadership activities

Motivation: Volunteer leaders efforts are fueled by recognition of impact and accomplishment. Regularly Mobilize Maine must highlight progress towards goals and celebrate short term wins.

Focus: ED professionals must consistently reinforce the strategic direction, point in the process and tasks at hand. Clearly defined objectives help to maintain focused effort and result in accomplishment.


Disciplined Steps in Building a New Leadership Team

1. Define the regional CED initiative and the role of the leadership team– What makes this initiative different and why there is a better chance of measureable success?– What is expected of a leadership position?

2. Create a regional leader inventory: Who are the “Right People”?– Who are the TRUE regional leaders? Respected leaders which people follow and value– Who are the private sector leaders whom are expressly invested and committed to prosperity?

3. Design a best practice leadership team and alternates– Prepare an optimal team with gender, economic and representative diversity– Over supply the leadership team as adjustments are inevitable

4. Recruit the leaders with a face-to-face invitation– Conduct personal briefings with leadership prospects outlining their role and expectations– Make the ask, “one year commitment” including a personal and initiative value assessment

5. Convene the group, select chairmanship and conduct training– Assemble the leadership team & reinforce the initiative. What outcomes would they like to see?– Selection of chairman or co-chairman to provide project advice and meeting guidance

6. Launch the regional initiative with consistent and meaningful meeting schedule– Commence the regional initiative utilizing the leadership team as initiative spokesman – Employ best practice meeting management methods, using time and talent wisely


Analysis Format of an Existing Leadership Team

• Name

• Geographic area, North, South, Central, East, West - Urban or Rural

• Age: 15-25, 26-35, 36-45, 46-55, 56-65, 66-75, Over 75

• Gender and Race

• Community Sector: Public, Private, Non-profit, Retired, Tribal, Student, Other

• Industry Sector: Natural Resources/Agriculture, Healthcare, Tourism, Information Tech, Professional Scientific, Manufacturing. Construction, Education, FIRE, Government, Transportation, Energy, Wholesale/Retail, Other

• Leadership Style: (Check all that Apply), Vision, Innovation, Influence, Resource, Project Management, Research, Education, Economic, Connectivity, Collaboration, Cornerstone

• Learning Style: (1=not helpful, 5=very helpful) Visual, Auditory, Explanatory, Interactive

• Commitment Level: Chairmanship, action team leader, action team member, leadership meeting attendance

• What unique talents do you bring to the leadership team?

• What unique resources do you bring to the leadership team?

• Has your leadership position provided professional and personal value?

• Has your leadership position produced the results you expected?

• Questions & Comments

This leadership analysis outline can be used as an individual questionnaire or in a facilitated group discussion. In analysis of existing leadership groups we urge organizations to provide context, set objectives and offer best practice design concepts in advance. Analysis results can be aggregated and compared to preliminary design objectives concluding with group decisions.


Research Meeting Slides


Meeting Agenda

I. Market Description, Segmentation, Trends and Analysis

II. VE Research Process and Hypotheses

III. Timeline for research for December

IV. Actions and Assignments


Source: Purdue Center for Regional Development

ViTAL Economy Industry Cluster DefinitionAn Industry Cluster should establish core value linkages both within and across industry sectors. These linkages creatively leverage the indigenous strengths of a region. Clusters are assessed and prioritized in a collaborative process which insures that the critical challenges and opportunities of a region are continually addressed.

LaborLabor

LaborLabor

Support IndustriesSupport

IndustriesR&D

Specialized Infrastructure

Education & Training

Government Regulator

SuppliersSuppliers CustomersCustomersIndustry DriversIndustry Drivers


Iterative “hypothesis-based” Approach

Benefits of Approach

· There is more data available than time or money to collect it

· Delineates and limits the scope of issues and data that needs to be collected

· Identifies what data and analysis is essential as opposed to what is merely interesting

STEP 1: IdentifyIssues

• Identify 3-5 issues which address questions

• Issues should fully address all we need to understand

Step 4: Collect Data/Complete Analysis/

Iterate Process• Collect required data

and complete analysis to answer key questions

• Reformulate issues based on findings

Step 3: FormulateKey Questions

• Key Questions drive primary research/data collection & analysis

Step 2: FormulateHypotheses

• Create hypotheses that answer each issue

• Hypotheses should completely address each issue

ConsultantSupport

Data Collection and Analytical Approach


VE Research Process-Seven Steps

Issues of Challenge & Opportunity -> Data -> Information -> Knowledge -> Opportunity->Action

Step 1 – Characterize the primary issues of “challenge/opportunity” to be addressed?

Step 2 - Agree on hypotheses to be tested…no more than four, as well as research purpose.

Step 3 – “Data -> Information”- Conduct and document research..test against each hypotheses

Step 4 – “Knowledge” - Integrate and communicate findings, Describe the business opportunity and challenges List resource gaps

Step 5 - Identify and agree on next hypothesis to refine the opportunity, if required

Step 6 – “Opportunity”- Provide a summary business case from the research to direct action

Step 7 – “Action” – Recommend implementation plan with leadership and resources require


Example: Hypothesis Testing

Renewable Energy Industry Cluster Hypothesis TestingPremise: Energy costs to Aroostook residents and business sector is an extraordinary burden that places

the region at a disadvantage relative to New England.

Proposition: The Renewable Energy Cluster can address this burden with locally available resources while creating and retaining jobs, inducing wealth creation/retention in the region, and contributing to the realization of the Mobilize Maine vision and goals for Aroostook County.


Three Initial Hypotheses

1. Establishing a National Green Building Systems Knowledge Center of Excellence for the sustainable and resilient built environment that attracts talent, businesses, investment and visitors.

2. The region can achieve increased exports, higher wages and new employment by focusing on green building product research, development and manufacturing with a systems rather than a component focus.

3. The green building markets have a barrier in finance, assessment and appraisal services. The GB cluster can develop creative finance solutions designed to accelerate adoption of green building products and services across the US, creating high wage financial services jobs in the region..

Regional Issues1. Closure of VY – 600 high wage jobs

2. Low percentage of earned income

3. Low wages parity within the laborshed

4. Overall population decline

Regional Opportunities1. Concentration of nationally linked individuals and

entities in the green building and services sector

2. Vermont has a strong culture, reputation and brand in sustainable living and products


Timeline and Task for December Meeting

• Market description, segmentation, trends and analysis

• Regional economic benchmark

• Preliminary testing of initial hypotheses

• Presentation design and presenter


Research Actions and Assignments

— 1 — © 2015 ViTAL Economy, Inc. Green Building Industry Cluster Study Initiative Launch Meeting October 2015 Frank Knott – [email protected] Jim.

Documents

industry cluster teamsroles

industry research

industry goalscreate

regional economyfirst

regional goals

plan of action

adoption of key principles

key organizational unit