“This study was prepared under contract with the St. Louis Economic Development Partnership, Missouri, with financial support from the Office of Economic Adjustment, Department of Defense. The content reflects to views of the St. Louis Economic Development Partnership and does not necessarily reflect the views of the Office of Economic Adjustment.”

ADVANCED MANUFACTURING INNOVATION CENTER (AMIC)

November 16 2017

DRAFT

2

DRAFT

AGENDA

Project Initiation: Introduction & Economic Context

Interviews and Visioning

Site Selection

Space and Functional Programming

Conceptual Design

Cost Estimate

01

02

03

04

05

06

3

DRAFT

THE CRITICAL PATH AMIC QUESTIONS

What does industry need?

At what do the regions industries excel?

Who is the Champion?

What manufacturing innovation model do we pursue?

Who are other public, workforce, and higher education partners?

Where does consequential funding come from?

What about all that expensive fabrication equipment?

Does “place” matter?

01

02

03

04

05

06

07

08

4

DRAFT

“Building new markets is slow, hard work. You don’t just wake up one morning and say....

... I think I’ll take the Chinese market today.”

Philip Hammond British Chancellor of the Exchequer

5

DRAFT

....”You build. You build your product’s presence, your business, your networks, your distribution capability, confidence in your brand.”

It all takes time

6

DRAFT

01 ECONOMIC INTRODUCTION

7

DRAFT

MFG MARKETS ARE IN TRANSITION

US Manufacturing is recovering Growing Robustly, but very different from what it was 10 years ago ٠ 2.5% growth in output/ 1.1% growth in jobs

Impact of the 4th Industrial Revolution- big data, advanced materials, additive manufacturing

Food manufacturing and water

Impact of recent environmental regulation enforcement in China

There is no level playing field for global manufacturing

US manufacturing workforce policy is pivoting, but how to replace retiring workers remains the big question

01

02

03

04

05

06

8

DRAFT

1997

$3.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

$3.5

$4.0

$4.5

$5.0

$5.5

$6.0

$6.5

10

11

12

13

14

15

16

17

18

OUT

PUT

($ T

rillio

ns)

EMPL

OYM

ENT

Manufacturing Output Pre-Recession

Manufacturing Output Post-Recession

Manufacturing Employment Pre-Recession

Manufacturing Employment Post-Recession

$6.5 18

Manufacturing Output Pre-Recession

Manufacturing Output Post-Recession

Manufacturing Employment Pre-Recession

Manufacturing Employment Post-Recession

NATIONAL MANUFACTURING OUTPUT VS. EMPLOYMENT

Policy implications of divergence between output and employment in manufacturing

01

9

DRAFT

1.2%

1.6%

1.8%

2.9%

2.9%

3.8%

4.1%

4.4%

8.9%1.6%

PLASTICS MFG.

CHEMICALS MFG.

-2.0

%

TEXTILES MFG.

1.0%

METALS MFG.

0.7%

MACHINERY MFG.

1.3%

FOOD MFG.

WOOD MFG.

COMPUTER MFG.

ELECTRICAL MFG.

MISCELLANEOUS MFG.

-0.3

%0.

3%

MINERALS MFG.

2.0%

TRANSPORTATION MFG.

8.9%

4.5%

4.4%

4.4%

4.1%

3.8%

2.9%

2.9%

1.8%

1.6%

1.2%

0.2%

-0.7

%

-1.1

%

0.3%

0.2%

,670

2016

,293

2015

,537

2014

,922

2013

,945

2012

,497

2011

,496

2010

EmploymentOutput

NATIONAL MANUFACTURING EMPLOYMENT & OUTPUT CAGR (2010-2016)

Food and Beverage MFG has been the most consistently growing sector, but growth in output per worker is modest

01

Transportation MFG has grown strongly, but change is in the air02

10

DRAFT

1.1%

1.9%

US

St. Louis MSA

Manufacturing Employment CAGR (2010-2016)

Source: BLS QCEW

1.5%

1.1%

ST. LOUIS MANUFACTURING EMPLOYMENT CAGR (2010-2016)

For St. Louis, manufacturing growth post recession has been impressive, faster than US average

01

Aerospace and automotive have led the way 02

11

DRAFT

12 13

95%

100%

105%

$0

$1,000,000,000

$2,000,000,000

$3,000,000,000

$4,000,000,000

14 15 16 17 18 19 20

F/A-18, EA-18, C-17, AS OF MAY 2017; EXCLUDES FOREIGN MINISTRY SALES

12 13

5%

0%

5%

$0

$1,000,000,000

$2,000,000,000

$3,000,000,000

$4,000,000,000

14 15 16 17 18 19 20Aircraft Purchases

Modifications of In-Service Aircraft

RDT & E

US NAVY/ USAF AIRCRAFT PROCUREMENT

Department of Defense Funding for F/A-18 has improved since we last talked ٠$4.8 billion more new builds budgeted FY 15-18 + $650 million less in airframe mods

01

Buys the region some time; F-15 and F/A-18 will eventually go away

02

12

DRAFT

00 01 02 03 04 05 06 07 08 09 10 1180%

85%

90%

95%

100%

105%

Decrease from 1989 Peak

Decrease from 2012 Peak

CHANGE IN DEFENSE OUTLAY FROM PEAK YEAR1989 AND 2012

While DoD funding is beginning to improve toward 2012 threshold, the pace of recovering remains behind the 1989 trajectory

01

Defense contractors remain under pressure 02

13

DRAFT

31%OF TOTAL REGIONAL

OUTPUT IS MANUFACTURING & LIFE

SCIENCES

OUTPUT PER WORKER IS 3XALL JOBS

MANUFACTURING

$640,000

ALL WORKERS

$178,000

OUTPUT PER WORKERSOURCE: IMPLAN

$306BILLION

TOTAL OUTPUT FOR

ST. LOUIS

14

DRAFT

METALS MFG 36%

FOOD MFG 18%

OTHER 18%

LIFE SCIENCES SERVICES 28%

$96 BILLION

LIFE SCIENCES MFG (4%)

Metal Fabrication, including aerospace, automotive, and associated tooling is highly concentrated in St. Louis

01

Metal Fabrication is the single largest regional cluster in terms of output, larger than the plant and life sciences....

02

15

DRAFT

STL PLANT AND LIFE SCIENCES ECOSYSTEM

The region has spent 20 years investing in plant and life sciences and tech, and is now reaping the rewards for a focused strategy....

In comparison, manufacturing is highly fragmented...

16

DRAFT

FUNDERS

PARTNER COMPANIES

FACILITIES

COM-MUNITY

CIVIC

Emerson

Boeing

General Motors

Anheuser-Busch InBev

Monsanto Co.

Mallinckrodt

Nestle Purina PetCare Co.

US Steel

Sigma-Aldrich (MilliporeSigma)

Gilster-Mary Lee Corp.

WestRock

Graybar Electric Company Inc.

True Manufacturing Company Inc.

DRS Sustainment

Olin Brass

Zoltek Companies Inc.

HBM Holdings

GKN Aerospace North America

Brick City Makes

Manufacturing Inc. @ Ranken

STL Venture Works

Cortex St. Louis

Tech Shop

Missouri S&T - Center for Aerspace

Manufacturing

SLU Boeing Supply Chain

Center

Yield Lab

Ameren Missouri

World Trade Center

Midwest Manufacturing Leaders Group

St. Louis Makes

Metropolitan Manufacturers'

Association

Missouri Association of Manufacturers

St Louis Economic

Development Partnership

Missouri Technology Corporation

Regional Business Council

St Louis Freightway

St. Louis Regional Chamber

Bi-State Developoment

Agency

BioSTl

St. Louis Development Corporation

US Small Business Adminstration

Missouri Enterprise

St Clair County

Economic Development

Regional Business Council

TALENT & TRAINING Ranken Technical

Institute

Wash U-Institute of Materials Science

& Engineering

SLU

SIUE

SLATE

Lewis & Clark Community

College

Wash U-Aero-space Research

& Education Center

Southwest Illinois

College

St. Louis Community

College

Vatterott Educational

Centers

REGIONAL MANUFACTURING ECOSYSTEM MAP TODAY

17

DRAFT

FUNDERS

PARTNER COMPANIES

AMIC

FACILITIES

COM-MUNITY

CIVIC

Emerson

Boeing

General Motors

Anheuser-Busch InBev

Monsanto Co.

Mallinckrodt

Nestle Purina PetCare Co.

US Steel

Sigma-Aldrich (MilliporeSigma)

Gilster-Mary Lee Corp.

WestRock

Graybar Electric Company Inc.

True Manufacturing Company Inc.

DRS Sustainment

Olin Brass

Zoltek Companies Inc.

HBM Holdings

GKN Aerospace North America

Brick City Makes

Manufacturing Inc. @ Ranken

STL Venture Works

Cortex St. Louis

Tech Shop

Missouri S&T - Center for Aerspace

Manufacturing

SLU Boeing Supply Chain

Center

Yield Lab

Ameren Missouri

World Trade Center

Midwest Manufacturing Leaders Group

St. Louis Makes

Metropolitan Manufacturers'

Association

Missouri Association of Manufacturers

St Louis Economic

Development Partnership

Missouri Technology Corporation

Regional Business Council

St Louis Freightway

St. Louis Regional Chamber

Bi-State Developoment

Agency

BioSTl

St. Louis Development Corporation

US Small Business Adminstration

Missouri Enterprise

St Clair County

Economic Development

Regional Business Council

TALENT & TRAINING Ranken Technical

Institute

Wash U-Institute of Materials Science

& Engineering

SLU

SIUE

SLATE

Lewis & Clark Community

College

Wash U-Aero-space Research

& Education Center

Southwest Illinois

College

St. Louis Community

College

Vatterott Educational

Centers

REGIONAL MANUFACTURING ECOSYSTEM MAP

18

DRAFT

MANUFACTURING GROWTH RATE

Metric 2010 2015 CAGR

Population

Employment

GDP

R & D Funding

5,988,927

2,658,400

$255,865,000,0000

$4,464,770,500

6,076,204

2,796,900

$292,718,000,000

$5,545,616,100

0.3%

1.0%

2.7%

4.4%

R&D funding in Missouri has increased faster than most economic metrics

01

Positive R&D trends in the State bode well for innovation in Missouri

02

GROWTH RATE COMPARISON: 2010-2015 MISSOURI

19

DRAFT

Transitioning innovations from a theoretical state to a practical application is challenging

01

A resource gap between research and development complicates this process further

02

NATIONAL R&D FUNDING BY INNOVATION PROCESS PHASEPRE-COMMERCIALIZATION: 2015

VALLEY OF DEATH

BASIC RESEARCH

APPLIEDRESEARCH

PRE-DEVELOPMENT DEVELOPMENT

$66 Billion $84 Billion $14 Billion $360 Billion

$0

$50

$100

$150

$200

$250

$300

$350

$400

BILL

ION

20

DRAFT

Despite positive trends in R&D funding post-Recession, Missouri still receives less R&D funding per capita than the US

01

Universities in Missouri find R&D at a per capita rate comparable to the US average

02

All other major sources of R&D funding lag behind US per capita funding rates

03

PER CAPITA R&D RATES $1,600

$1,400

$1,200

$1,100

$800

$600

$400

$200

$0 TOTAL PRIVATE FEDERAL VENTURE CAPITAL ACADEMIC

MO 2010 MO 2015 US 2010 US 2015

21

DRAFT

MISSOURI TOTAL R&D FUNDING AND MISSED OPPORTUNITIES

Net gap of about $4.5 billion in R&D statewide01

2015

$6.0

$4.0

$3.0

$2.0

$1.0

$0.0 PRIVATE FEDERAL VENTURE CAPITAL ACADEMIC

$5.0

BILL

ION

22

DRAFT

CHALLENGES TO MANUFACTURING (BIG DATA)

BUSINESS CHALLENGES Finding and penetrating new markets

01

TECHNOLOGY IMPLEMENTATIONIntegration of software and hardware, and premature obsolescence of new equipment

02

ADDITIVE MANUFACTURINGTremendous potential and significant technical challenges; lack of standards

03

23

DRAFT

CHALLENGES TO MANUFACTURING (BIG DATA)

CHANGES IN STANDARDS Adjust to new standards; ISO 9001:2015

04

CYBERCRIMEGrowing importance of data in manufacturing has security implications

05

SUPPLY CHAIN COORDINATIONImpact of technology on supply chains

06

24

DRAFT

3D PRINTING/ ADVANCED MATERIALS Customization and improvements in product quality

01

LOGISTICS Improved transportation links and efficient supply chains

02

ADDITIVE MANUFACTURINGCloud computing, Internet of Things, Big Data, and Analytics

03

ENABLERS TO MANUFACTURING (BIG DATA)

25

DRAFT

STANDARDS Industry standards, replicable processes and replaceable parts

04

INDUSTRIAL HARDWAREAdvanced sensors and semiconductors

05

DEMOGRAPHICS + INFRASTRUCTUREAging population, obsolete infrastructure, and urbanization

06

ENABLERS TO MANUFACTURING (BIG DATA)

26

DRAFT

02 INTERVIEWS & VISIONING

27

DRAFT

INTERVIEWS AND VISIONING

Case Studies and Innovation Facilities Manufacturers Universities and Workforce Intermediaries

01 02 03

Three Categories of Interviews:

In what sectors do St. Louis firms have a clear competitive edge? What challenges are local manufacturers facing?

Who is our champion?

01

02

03

Critical Path Questions:

28

DRAFT

INTERVIEWS- THE FUTURE OF ADVANCED MANUFACTURING

29

DRAFT

The industry is being transformed by additive technologies, specifically how parts and castings are made.

There is a movement away from prototyping and moving directly to production work.

This change in how manufacturers are interfacing with suppliers has unbelievably simplified the process, improved quality and shortened lead times.

Getting this additive technology in the hands of the region would be an immense help.

Training is essential for the next generation of workforce in the industry.

Small and midsized manufacturers may not know what they don’t know.

INTERVIEWS- THE FUTURE OF ADVANCED MANUFACTURING

30

DRAFT

EMERGING REGIONAL DIFFERENTIATORS

Impact and interest of our major manufacturing employers

Role of workforce intermediaries- Ranken Tech and Manufacturing Inc.

Emerging networks- St. Louis Makes/ Midwest Manufacturing Leaders/ SLU Supply Chain Center

Federal support and evolution of Manufacturing USA

Intangibles ٠BioStl ٠Wash U Aerospace Research & Education Center ٠Missouri S&T ٠Innovation Triangle: NGA/ Cortex/ Ranken

01

02

03

04

05

31

DRAFT

Track 01 Incubator Model

Track 02 Innovation/ Research Model

Manufacturing Incubator (ICNC)• Basic incubator • Manufacturers rent space• Business support services are

offered at the site, but the site does not engage in any research itself.

Manufacturing USA Model (LIFT)• Public-private partnership, non-profit organization• Hierarchy of membership• Research conducted by all members- only 1 type

Hybrid Model (CCAM)• Public-private partnership, private leader• Tiered membership system• 2 research types: generic and directed

Research Center Model (AMRC)• Private-university partnership• Tiered membership system• 3 research types: generic, directed, and innovative

CASE STUDIES

32

DRAFT

01

02

04

01 02 03 04 05

Advanced Manufacturing Research CenterCommonwealth Center for Advanced Manufacturing Digital Manufacturing and Design Innovation Institute Lightweight Innovations for Tomorrow Oregon Manufacturing Innovation Center

03

05

CASE STUDIES

33

DRAFT

01Advanced Manufacturing Research Center (AMRC)

02Commonwealth Center for Advanced Manufacturing (CCAM)

03Digital Manufacturing and Design Innovation Institute (DMDII)

04Lightweight Innovations for Tomorrow (LIFT)

05Oregon Manufacturing Innovation Center (OMIC)

CASE STUDIES

34

DRAFT

Advanced Materials Research Center(AMRC)

Sheffield, England

Commonwealth Center for Advanced Manufacturing (CCAM)

Digital Manufacturing and Design Innovation Institute(DMDII)

Lightweight Innovations for Tomorrow (LIFT)

Oregon Manufacturing Innovation Center(OMIC)

Disputanta, Virginia Chicago, Illinois Detroit, Michigan Scappoose, Oregon

$9.3 million $17.6 million $31 million $58 million $4.2 million

48,000 sf 62,000 sf 94,000 sf 100,000 sf 33,800 sf

Location

Project Costs

Building Gross Area

Public/ Private Funding

100%/ 0% 28%/ 72% 100%/ 0% 50%/ 50% 50%/ 50%

University Partners

University of Sheffield

Old Dominion University University of VirginiaVirginia Commonwealth University Virginia State University Virginia Tech

Iowa State UniversityNorthwestern UniversityUniversity of Illinois-ChiUniversity of Illinois-UrbUniversity of Michigan

University of Michigan EWI Worldwide Ohio State University

Oregon Tech Institute Oregon State University Portland State University

Corporate Partners

Boeing Rolls-Royce

Rolls-Royce Siemens Canon

Dow General ElectricRolls-Royce

Boeing General Electric Alcoa

Boeing

Research Focus

High performance machining, milling, and composites

Manufacturing sys-tems, surface engi-neering, and coatings

Systems engineering, future factory, product development, and digital design

Melt processing, powder processing, thermo-mechanical processing, novel/ agile processing

Additive processes, hard metal manufacturing, automation and optimization, large integrated structures

CASE STUDIES

35

DRAFT

EQUIPMENT

36

DRAFT

03 LOCATION FRAMEWORK

37

DRAFT

LOCATION FRAMEWORK

Use Case Studies to identify salient factors that influence Innovation Center location decision Identify St. Louis neighborhoods with characteristics that align with Case Study insights

01

02

Intent:

Align workforce and higher education participation

Allow for future expansion & manufacturing preservation

Create deliberate serendipity/ place matters

01

02

03

Insight: The private sector needs to contemplate locations that:

38

DRAFT

SITE CRITERIA -DETERMINED BY CASE STUDY RESEARCH

• Affordable and available building/land

• Site that can accommodate an existing or new 40,000- 60,000 sf building and parking

• Adjacent to land or buildings that can be re-purposed for growth

• Zoned for industrial/ manufacturing and can be zoned as an innovation district

• Site can be accessed easily by semi-trailer

• Local government support/ access to financial resources

• Physical proximity to partner companies

• Physical proximity to workforce training/ education

• Physical proximity to urban core/ transit

39

DRAFT

LOCATION CATEGORIES

Infill

Redevelopment

Academic/ Workforce

Industrial/ Aerospace

01

02

03

04

40

DRAFT

LOCATION CATEGORIES | INFILL

39N Monsanto

CORTEX FOX PARKBrick City Makes

41

DRAFT

LOCATION CATEGORIES | REDEVELOPMENT

ST LOUIS PLACERanken

ST LOUIS PLACE WELLSTONNGA

42

DRAFT

LOCATION CATEGORIES | ACADEMIC + WORKFORCE

FLORISSANT VALLEYSt. Louis Community

College

EAST ST LOUIS GRAND CENTERSt. Louis UniversityEast St Louis

Community College

43

DRAFT

LOCATION CATEGORIES | ACADEMIC + WORKFORCE

GRAND CENTER CLAYTONWashington UniversitySLEDP Grand

44

DRAFT

LOCATION CATEGORIES | INDUSTRIAL + AEROSPACE

EAST ST LOUIS East St. Louis Airport

WENTZVILLE AIRPORT NORTHBoeing GM

45

DRAFT

04 SPACE & FUNCTIONAL PROGRAM

46

DRAFT

SPACE & FUNCTIONAL PROGRAM

Use Case Studies to identify main program areas essential to the function needs of the Innovation CenterDevelop final space and functional program needs based on local building code and zoning requirements

01

02

Intent:

High Bay Space- joint use manufacturing equipment

Specialty Labs- specific company owned equipment for testing and research

Workplace- collaborative working, teaming, and meeting spaces

01

02

03

Three Main Program Areas:

47

DRAFT

PROPOSED AMIC PROGRAM

Open Workstations Conference/ Teaming Support Circulation/ Lobby

5,000 sf 5,000 sf 5,000 sf 5,000 sf

TOTAL 45,000 sf

High Bay SpaceSpecialty Labs

20,000 sf 5,000 sf

WORKPLACE

High Bay Space

Spec. Labs Workstations Teaming Support Lobby/ Circ

Workplace

48

DRAFT

05 CONCEPTUAL DESIGN

49

DRAFT

CONCEPTUAL DESIGN

Generate preliminary massing and layout based on various Case Study models Develop a conceptual design responding to the specific space and functional program identified for the facility

Convey a new aesthetic to represent how innovation and emerging technology are transforming the advanced

01

02

03

Intent:

Site Plan

Exterior Perspective

Lobby View

High Bay View

01

02

03

04

Conceptual Design:

50

DRAFT

SITE PLAN

0

5

5

15

30

60

PLAZA/ ENTRY

MAIN ENTRY SERVICE ENTRY

SERVICE DOCKS

GAS/ WASTE/ LIQUIDS STORAGE

0

5

5

15

30

60

PLAZA/ ENTRY

MAIN ENTRY SERVICE ENTRY

SERVICE DOCKS

GAS/ WASTE/ LIQUIDS STORAGE

51

DRAFT

FLOOR PLAN

0

5

5

15

30

60

HIGH BAY SPACE

WORKSPACE

LOBBY/ COLLABORATION

TRAINING ROOM

SPECIALTY LAB

SPECIALTY LAB

SPECIALTY LAB

SPECIALTY LAB

STORAGE

ELECFIRE

PUMP

0

5

5

15

30

60

PLAZA/ ENTRY

MAIN ENTRY SERVICE ENTRY

SERVICE DOCKS

GAS/ WASTE/ LIQUIDS STORAGE

52

DRAFT

EXTERIOR PERSPECTIVE

MATERIAL STUDIES

53

DRAFT

LOBBY/ COLLABORATION

54

DRAFT

HIGH BAY SPACE

55

DRAFT

06 CONCEPTUAL COST

56

DRAFT

POLICY 1. Focus on metals and additive MFG

2. Focus on “pre competitive research”

PARTNERS 1. A private sector champion and several partners

2. One or more universities

3. One or more workforce intermediaries

PHASE I FINANCIAL FRAMEWORK 1. Staffing 10 to 20 people

2. Labor budget: $750k to $1.5 million

3. Total operating budget: $1.5 million to $3 million

4. Capital costs: $12-16 million (building and site)

5. Operating equipment: $5 million

57

DRAFT

QUESTIONS