2017 GREATER PHOENIX ECONOMIC COUNCIL HANDOUTS.PDF

THE FUTURE OF THE FINDINGS FROM
AEROSPACE AND THE GREATER
PHOENIX MARKET
DEFENSE INDUSTRY
INTELLIGENCE
IN GREATER PHOENIX PROGRAM
AEROSPACE & DEFENSE
Overview REGIONAL OVERVIEW:
The aerospace and defense industry is adapting and evolving
in the face of significant budget cuts and reduced military
spending. New opportunities have arisen in diverse sectors and 19,980
overseas markets have grown. In February 2013, the Greater Total Employment
Phoenix Economic Council published, The State of Greater
Phoenix's Aerospace and Defense Industry, a detailed report on
the potential impacts of the 2011 Budget Control Act.
127
This updated report explores the current trends affecting
the industry post-sequestration as well as future technology Companies
developments that can drive growth and continue to diversify the
nature of the aerospace industry in Greater Phoenix.
sCes)
Methodology
$98,067
The findings and recommendations contained within the report Average Annual Wage
are based on meetings, roundtables and questionnaires with
24 aerospace and defense companies in Greater Phoenix.
Meetings were facilitated and attended by economic development
professionals from the Greater Phoenix Economic Council's
member communities as part of their business retention and AZ Ranked #1
expansion activities. Companies ranged in size from less than Aerospace Manufacturing
10 employees to 8,000 employees and came from a variety of Attractiveness by
subsectors of the aerospace and defense industry. PricewaterhouseCoopers
2 N. Central Ave.
Suite 2500
Phoenix, AZ 85004
0 _ For a copy of the full report, visit gpec.org/research-reports Greater Phoenix Tel. 602.256.7700
ECONOMIC COUNCIL gpec.org

The Future of the Aerospace and
Defense Industry in Greater Phoenix
Key ThPmpc
Findings were categorized into four major themes that cut across sectors. Recommendations for policy and
program development to address the challenges are presented for each theme.
Arizona was hit hard by sequestration, but firms are
adapting to federal funding uncertainty.
$8B FINDING RECOMMENDATION
AZ DoD Prime Decreased military spending has encouraged Increase support for federal funding and
Contract Dollars cost savings and new technology develop programs to help small businesses
Received in 2015 development, while the unpredictability of produce efficiently and compete for
federal funding has created challenges. government contracts.
Industry growth is being fueled by international military
and consumer spending.
$2,872M FINDING RECOMMENDATION
Greater Phoenix Exports are growing due to increased Promote global recognition of the Greater
Aircraft Product and international military spending and new Phoenix region's aerospace and defense
Parts Exports in 2014 emerging commercial markets overseas. industry to grow exports and foreign
investments.
o Emerging technologies are transforming the industry
00 through product development and process improvement.
$14.41 FINDING RECOMMENDATION
Global Internet Space exploration, additive manufacturing Market the innovative research, development
of Things Market and sensors represent the next phase of and manufacturing taking place in the region
by 2022 technology development, and Greater Phoenix and encourage new projects by modernizing the
companies are competing in these sectors. economic development tools available to firms
to invest in technology.
Automation in manufacturing presents new workforce
opportunities and challenges.
6,119 FINDING RECOMMENDATION
AZ Aerospace and Manufacturing job growth has stalled, the Support Arizona's educational institutions to
Defense Related industry's aging workforce lacks entry level grow the region's engineering talent, while
Certificate and Degree workers, and increased automation will leveraging career and technical education
Completions in 2015 require new and different skills. programs.
For a copy of the full report, visit gpec.org/research-reports

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THE GLOBAL CITIES INITIATIVE, A JOINT PROJECT OF BROOKINGS AND JPMORGAN CHASE
The Metro Phoenix Global and competitiveness on key
Investment Plan examines the economic indicators. GREATER PHOENIX, USA
challenges and opportunities
for attracting and retaining In developing the plan, GPEC KEY STATS
foreign direct investment in conducted interviews with
Greater Phoenix, and develops local business, government
strategies for establishing and community leaders.
the region as a leader in the These interviews, along with
Internet of Things (loT) and data from the Brookings
4.63M
sensor technology applications. Institution, federal sources and
Residents call Greater
The initiatives outlined in the Maricopa Association of Phoenix Home
the plan are designed to Governments, form the basis of (JobsEQ)
encourage growth of the the critical findings in the plan.
region's legacy and emerging
loT assets and improve global Foreign direct investment
readiness, trade, international brings added economic
investment and the region's benefits to a region, beyond 1,573
competitiveness. those incurred by domestic
FOEs Operating in
business attraction. Foreign Greater Phoenix
This strategic plan is an firms tend to be resilient, offer
integral component of the high wage jobs and competitive
Greater Phoenix region's benefits, contribute to a II/ =MP MI(
participation in the Global region's innovation potential, (11!
Cities Initiative, a joint project and provide access to global
$18.5B
of Brookings and JPMorgan research and development.
Real Value of Exports
Chase, designed to help These and other benefits (2015)
metropolitan leaders advance represent a significant
and grow their regional opportunity for Greater Phoenix
economies by strengthening through regional alignment of
international connections foreign attraction efforts.
123,392
Total Export
G For a copy of the full report, visit gpec.org/research-reports Supported Jobs
(2014)

METRO PHOENIX
GLOBAL INVESTMENT PLAN
KEY FINDINGS These findings suggest that for Greater Phoenix, the
opportunity lies in understanding where the region's legacy
1. Historically, foreign direct sectors are evolving and specializing in their emerging
investment into Greater Phoenix has technologies, particularly in the semiconductor and aerospace
not been aligned with the region's industries. By capitalizing on the region's existing supply
aerospace and microelectronics chain, talented workforce and robust research capacity,
clusters. Greater Phoenix has the opportunity to develop a meaningful,
2. The impending Internet of recognized global industry identity.
Things (loT) revolution is creating
new international investment
opportunities for the region. STRATEGIES
3. Greater Phoenix is well positioned
to capitalize on the evolution 1.Enhance the global competitiveness of the region's emerging
and growth of sensor application industry clusters, starting with smart sensor applications.
industries.
2. Launch a full service concierge platform, integrating attraction
4. Due to demographics and the
structure of the region's economy, and aftercare for all new international companies and cluster
foreign entry through mergers and anchor companies..
acquisitions will continue to grow
over the next five to 10 years. 3. Promote a global partnership program that connects parties
interested in joint ventures, acquisitions, or investment
5. Small expansions are becoming opportunities.
a larger portion of domestic and
international investment into 4. Enhance collaboration within and outside metro Phoenix to
Greater Phoenix. capitalize on the region's connection to the CANAMEX trade
6. Many companies who initially corridor in order to support emerging sensor technology
consider Greater Phoenix for companies and other advanced manufacturers.
its low costs, business-friendly
environment and market size,
are drawn to the region for the Through the execution of this plan, the region is committed to
exceptional quality of life. enhancing the competitiveness of domestic and foreign firms,
promoting loT innovation, and launching a new brand for
7. Many international companies feel
highly courted entering the market, Greater Phoenix.
but seek additional connectivity
after arriving.
8. Canada and Mexico are essential 2 N. Central Ave.
partners for both trade relations and Suite 2500
long-term investment opportunities; Phoenix, AZ 85004
Europe and Asia are essential for Greater Phoenix TeL 602.256.7700
near-term FDI strategy. ECONOMIC COUNCIL gpec.org
0 For a copy of the full report, visit gpec.org/research-reports

GREATER PHOENIX ECONOMIC COUNCIL
AU I i Oii PLAN
FISCAL YEAR 2018
Greater ECONOMIC Phoenix COUNCIL

Attract and grow
quality businesses
and advocate for
Greater Phoenix's
competitiveness

A LETTER FROM CHRIS CAMACHO
President & CEO, Greater Phoenix Economic Council
In fiscal year 2018, the Greater Phoenix Economic Council (GPEC)
is set to carry out objectives that will continue to set the standard
for best practices in economic development, and guide the positive
trajectory of a strong, diverse economy.
New and innovative research capabilities will drive the work of
progressive marketing and communications strategies. And while our
business attraction efforts will remain focused on targeted industry
sectors and geographic areas, we will employ tactics to increase
foreign direct investment and domestic attraction.
As we continue to execute against the three-year strategic plan,
the collective partnership between the business, education and
community leaders in Greater Phoenix is more important now than
ever. These strategies will allow us to implement forward-thinking
practices that will shape the position we take as a market. It is the
connected nature of our work that gives us the opportunity to set
the course, and it is the lasting partnerships that give us room to
succeed.
Together, we can elevate the profile of the Greater Phoenix region,
changing the narrative to one focused on the value of doing business
here. The work we do now won't be immediate, but it will be lasting.
ACTION PLAN 2018 2

METRICSd3UDGET
FY18
CONTRACT TARGET STRETCH
Payroll (in Millions) $326.60 $359.26 $413.15
Jobs 6,919 7,611 8,753
High Wage Jobs' 2,698 2,968 3,413
Average High Wage Salary $52,810 $58,678 $67,480
Qualified Prospects 229 252 277
Qualified International Prospects 38 42 46
GPEC Assists' 10 12 14
FOOTNOTES FOR THE METRICS:
1. High Wage Jobs: High wage jobs are those
that are over 125% of the Maricopa County
Median Wage (currently $44,700).
2 GPEC Assist: Companies that located
in the region for which GPEC provided
assistance that do not qualify as a locate,
due to project size, for example; and
would otherwise be listed as "non-reported
locates." This replaces the Emerging Tech
Assist metric from previous reports to better
capture GPEC activities.

FY 2017
REVENUES FORECAST VflIgg
Public Funds $2,302,935 42.0% $2,329,000 42.7% $2,302,900 $26,100 1. 10/0
Private Funds 2,545,000 46.4% 2,707,000 49.7% 2,545,000 162,000 6.4%
New Pledge Revenue 254,500 4.6% 250,000 4.6% 250,000 0.0%
In-Kind Pledges 77,000 1.4% 64,500 1.2% 77,000 (12,500) (16.2%)
Events & Programs 103,600 1.9% 99,700 1.8% 99,700 0.0%
Sponsorships 114,369 2.1% 0.0% 50,000 (50,000) (100.0%)
Grant Income 50,085 0.9% 0.0% 185,000 (185,000) (100.0%)
Other 34,287 0.6% 1,300 0.0% 1,300 0.0%
TOTAL REVENUES $5,481,776 100.0% $5,451,500 100.0% $5,510,900 $(59,400) (1.1%)
,
OPERATING EXPENDITURES
Business Development 405,947 8.0% 384,900 7.0% 454,600 (69,700) (15.3%)
Marketing 182,665 3.6% 226,400 4.1% 215,100 11,300 5.3%
Research & Strategy 247,425 4.9% 272,500 4.9% 272,600 (100) (0.0%)
External Relations 110,986 2.2% 190,200 3.4% 192,600 (2,400) (1.2%)
Resource Management 260,481 5.1% 324,300 5.9% 218,200 106,100 48.6%
Personnel 3,071,394 60.4% 3,070,700 55.5% 3,318,600 (247,900) (7.5%)
Facilities 447,133 8.8% 877,000 15.9% 512,300 364,700 71.2%
In-Kind 77,000 1.5% 64,500 1.2% 77,000 (12,500) (16.2%)
Events & Programs 231,071 4.5% 120,000 2.2% 190,000 (70,000) (36.8%)
TOTAL OPERATING EXPENDITURES 5,034,103 99.0% 5,530,500 100.0% 5,451,000 79,500 1.6%
NON-OPERATING EXPENDITURES
Grant Expenses 50,085 1.0% 0.0% - 100.0%
Total Expenses $5,084,188 100.0% $5,530,500 100.0% $5,451,000 $79,500 1.5%
Net Gain (Loss) $397,588 $(79,000) $59,900 $(138,900)
Less: Capital Expenditures ($841,260) (15,000) (287,000) 272,000
Amortization of Deferred Rent (64,000) (110,000) 150,000 (260,000)
Amortization of Capital Leases (10,500) (2,800) 2,800
Add: Depreciation 26,000 436,200 72,600 363,600
Changes from Operating Activities 41,125 42,225 (1,100)
Net Cash Flows (492,172) 273,325 34,925 238,400
Beginning Cash 2,269,000 1,776,828 1,840,650 (63,822)
ENDING CASH $1,776,828 $2,050,153 $1,875,575 $174,578
ACTION PLAN 2018 4

ACTION ITEMS
FY2018
v STO\ S
SUMMARY
The core mission of GPEC to lead business attraction
for Greater Phoenix will be supported by cutting-edge
research and analytics methodologies as a way to
increase new leads and drive deal flow.
II
Develop and utilize TACTICS
unique analytic tools • Develop and implement a data analytics model to drive better
marketing approaches as well as business attraction strategies
and methodologies to
drive both marketing With the support of research, continue the work of the
Corporate 100 Program — which is focused on connecting
approaches and
with companies in GPEC's targeted industries in the Greater
identification of Phoenix region with headquarters outside the market.
business development
• Conduct an evaluation of the industries that make up Greater
outreach targets. Phoenix's base, to align our attraction strategies with the
industries that will drive the region's future growth.
Partner with the innovation and entrepreneurial ecosystem
in Greater Phoenix to promote the innovation activity in the
market to key venture capital firms as a channel for
business development

MEASURES AND MILESTONES STRATEGIC PLAN OBJECTIVES
• 45% of prospects sourced • Attract more scalable
through GREG direct enterprises in advanced
prospect generation industries
• Implement an analytics-
driven business attraction
model
Analysis conducted of
the region's current
industry sectors, with
recommendations for
realignment of newly
identified target industries
ACTION PLAN 2018 6

Advance competitiveness priorities through
regional collaboration
SUMMARY
Partnering with stakeholders in the public and private
sector, GPEC will convey key messaging related to
competitiveness issues.
TACTICS
As a result of the recommendations of the Competitiveness Council, inform
key decision makers on necessary and relevant tools, and economic
development programs related to competitiveness, focused on enhancing
regional economic dynamism through intensifying innovation, and
modern infrastructure
Advocate for a coordinated and industry-driven regional workforce system
with emphasis on career pathways for middle and high-skilled workers by
supporting PEI's focus on workforce development, through stakeholder
engagement and social outreach
Build support for regional economic development issues — including
transportation, entrepreneurship, and trade — across peer organizations with
united messaging on key issues
MEASURES AND MILESTONES
Conduct ongoing meetings with identified top influencers in the region
• Generate a strategy for using key market leaders as conduits to emerging
companies in the region
Partner with or lead 3 regional events focused on the innovation ecosystem,
such as Venture Madness or Startup Week
STRATEGIC PLAN OBJECTIVES
Lead collaboration across peer organizations to leverage complementary
assets and strengthen coordinated action
Promote innovation and commercialization to support an advanced
industry ecosystem
Advocate for workforce development initiatives to support the growth of
advanced industries
Engage state and local policymakers on new economic development and
competiveness concepts
7

artner with GPEC's member communities
to evaluate community planning necessary
for future projects, and enhance industry
selling strategies through the development of
cohesive messaging around the region's unique
value propositions
SUMMARY
Together with the communities, GPEC will focus on key
industry verticals in the Greater Phoenix region and refine
the business development team's abilities to craft relevant
narratives for business attraction.
TACTICS
Continue the Community Partnership Program to develop and inform
cohesive regional economic development strategies
Refine current and new use cases, value propositioning and industry
diversification strategies
Partner with the communities to mobilize strategic opportunities identified
in Market Intelligence reports
MEASURES AND MILESTONES
Develop co-branded high impact district marketing pieces with
communities as an outcome of CPP meetings
Create and convey regional selling strategies across GPEC
member communities
Work with the member communities to respond to threats and
opportunities discovered in Market Intelligence reports
STRATEGIC PLAN OBJECTIVES
Refine the consultative model with a focus on specialized expertise
and knowledge
Partner with communities to deploy a regional Market Intelligence system
ACTION PLAN 2018 8

Target key audiences through strategic media
lacement and digital platforms to enhance
Greater Phoenix's brand and drive lea
generation for business attraction
SUMMARY
Digital marketing strategies will be deployed
to elevate GPEC's outreach and business
attraction efforts.
TACTICS
Optimize the website to drive performance and lead generation
Employ a marketing campaign focused on California, specific to high-
growth and technology-based companies
Implement lead-generation marketing through digital campaigns to
increase direct sourced leads
Continue a national and international media strategy around promoting
the Greater Phoenix market position
MEASURES AND MILESTONES
• Deploy responsive content specific to California users on GPEC's website
• Increase the average user session duration on the GPEC website
Launch a regional blog to enhance market position and thought
leadership presence
STRATEGIC PLAN OBJECTIVES
Engage targeted audiences through digital platforms to generate leads
and establish GPEC as a thought leader and brand the region as a
location of choice for Foreign Direct Investment
9

mplement strategies to heighten recognition
of the Greater Phoenix region in targete
industries and markets identified by the Metro
hoenix Global Investment Plan
SUMMARY
Execution of the campaign, The Connected
Place, to promote Greater Phoenix,
USA globally.
TACTICS
Conduct an outbound business attraction
strategy focused on Internet of Things (loT)
and sensor technology enabled companies both
nationally and internationally
Enhance relationships with the region's largest
trading partners to increase foreign direct
investment (FDI)
Brand the region as a hub for loT and sensor
enabled technology companies
Engage existing loT and sensor companies
in the region to leverage international market
connections
MEASURES AND MILESTONES
Establish a baseline for loT and sensor industry
prospects
Increase website visits to theconnectedplace.org
Implementation of the FDI aftercare program
Development of the Global Partnership Program
Increase international traffic to GPEC website
STRATEGIC PLAN OBJECTIVES
• Brand the region as a location of choice for
Foreign Direct Investment
ACTION PLAN 2018 10

STAKEHOLDER ENGAGEMENT
LEADERSHIP COUNCILS AND
ADVISORY GROUPS
The collec lye professional expertise of GPEC's councils and advisory
groups help shape the organization's key initiatives, leverages
connections to further job creation and competitiveness efforts and
supports the implementation of programs.
GPEC NEXT COMMUNITY BUILDING
LEADERSHIP COUNCIL CONSORTIUM
Advises GPEC leadership and Applies collective commercial
the board on the development real estate experience to help
of the strategic plan, annual capture business development
action plan and metrics, opportunities and increase
and the Washington, D.C. the region's transactional
Executive Mission. capabilities.
MAYORS AND INTERNATIONAL
FiC] SUPERVISORS COUNCIL LEADERSHIP COUNCIL
Convenes mayors of GPEC Advises on the direction and
communities and county implementation of GPEC's
supervisors for regular export and foreign direct
updates on strategic investment efforts, and
initiatives. provides guidance to increase
program impacts.
ECONOMIC DEVELOPMENT HEALTHCARE
DIRECTORS TEAM INNOVATION COUNCIL
Advises the GPEC President Works to advance healthcare
& CEO, and staff on local and bioscience initiatives
economic development trends, for the region and establish
offers insight on the pulse of Greater Phoenix as a center
city and town councils, and of excellence, anchored by
partners with GPEC to finalize innovative assets and world-
location decisions. class leadership.
I i

BOARD-LEVEL COMMITTEES
BOARD OF EXECUTIVE PERFORMANCE
DIRECTORS COMMITTEE COMMITTEE
Provides oversight of the Acts on behalf of the board Evaluates the performance
organization and helps of directors, advising on of the organization and the
shape GPEC's influence as strategic direction and overall President & CEO.
a regional thought leader. performance of annual goals.
AUDIT
AMBASSADORS
COM MITTEE
At the foundation of GPEC's engagement Assesses internal controls
and oversees auditors and
activity are Ambassadors, whose broad the annual audit.
range of professional backgrounds lend
critical assistance to regional business
climate improvement and business
development efforts.
NOMINATING
Ambassadors help communicate, COMMITTEE
educate, and inform stakeholders, policy- Nominates the at-large
makers, citizens and media about key directors and board officers,
regional economic development issues. and recommends candidates
to the board for approval,
based on nominations received
CERTIFIED AMBASSADORS from mayors and supervisors
of member communities.
Ambassadors who meet certain qualifications become certified
to serve as an extension of the GPEC team and are given the
opportunity to interface more closely with GPEC's staff and
board on program initiatives and mission-critical efforts. FINANCE
COMMITTEE
Sets financial objectives
AMBASSADOR STEERING COMMITTEE for the organization and
Advises on strategic direction of the Ambassadors Program; recommends the annual
designs activities relevant to and in support of GPEC's mission; budgets as part of the
and, serves as a sounding board for emerging initiatives and Action Plan.
supports implementation of programs.
ACTION PLAN 2018 12

GPEC STAKEHOLDER
MEMBER COMMUNITIES
WICKENBURG try ALBUQUERQUE
I LAS VEGAS
CAREFREE
PEORIA
PHOENIX
SCOTTSDALE
101 FOUNTAIN HILLS
51
I LOS ANGELES
BUCKEYE
202
9'67
TOLLESON -1 MESA APACHE JUNCTION
SKY HARBOR
INTERNATIONAL
AIRPORT GILBERT
202
AVONDALE
CHANDLER QUEEN CREEK
347
itk
I Distance in Miles i MARICOPA
0 5 10 CASANIRANDE
I SAN DIEGO
Balla
I TUCSON
13

CHAIRMAN'S COUNCIL CORPORATE COUNCIL EXECUTIVE COUNCIL
05/22/2017
caps airt_ZYPe,;(1.kg ASI ARIZONA STATE 21M1:4 Alliance Bank of
UNIVERSITY OF ARIZONA CcpperFirit as
Insurance Companies t
Curren
CHASE 0 COX. WELLS FARGO National Bank
MARICOPA
DIRECTORS COUNCIL
American Airlines Chicanos Por La Causa Freeport McMoRan Maracay Homes Polsinelli PC
Arizona Cardinals CBRE Copper & Gold Mayo Clinic Quarles & Brady
Arizona Diamondbacks Cousins Properties Goodwill of MidFirst Bank RED Development
CentralArizona
Bank of America Dignity Health Intel Corporation Mortenson Republic Media
Banner Health DMB Associates Kitchell Northern Trust Squire Patton Boggs
BBVA Compass Empire Southwest Knight Transportation OH Partners University of Phoenix
Cancer Treatment Ernst & Young M Culinary Perkins Cole LLP Valley Metro
Centers of America Phoenix Suns
LEADERSHIP COUNCIL
Aetna Daedalus Real JE Dunn Construction Phoenix Tratt Properties
Estate Advisors Children'sHospital
Alexander Building JLL of Arizona TriWest Healthcare
Company Deloitte Renaissance Companies Alliance
Layton Construction
BDO Deutsch Architecture Rose Law Group TruPath
Group Lee & Associates
Blue Cross Blue Ryan Companies Turner Construction
Shield of Arizona El Dorado Holdings Lewis Roca Rothgerber
Savills-Studley University of Arizona
BMO Harris Bank Equality Health Liberty Property Trust
Siemens UPS
Bryan Cave Facility Source Mainstreet Investment
Skanska USA Building USAA
Brycon Construction Gammage & Burnham M+W Group
SmithGroup US Bank
Caliente Construction Goodmans Interior Meritage Homes
Structures Snell & Wilmer VanTrust Real Estate
Celgene Corporation Nationwide Realty
Green Loop Solutions Investors Southwest Airlines Via West Group
CenturyLink
Hensley Newmark Grubb Southwest Gas Weitz Company
Colliers International Knight Frank Corporation
Hines Wespac Construction
Crescent Crown Okland Construction Sunbelt Holdings
Distributing Homeowners Willmeng Construction
Financial Group Opus Development The Plaza Companies Wist Office Products
Cushman & Wakefield Company
Honeywell Transwestern
Commercial Services
AMBASSADOR
3rd Story Architecture Avnet Clark Hill PLC Johnson Carlier MSS
Air Products & BNSF Corporate Interior Keyser On Q Financial
Chemicals Systems
Bristol Global Mobility KTAR Osborn Maledon
Archicon L.C. CoStar Group
Architecture Bury Kutak Rock Resolution Copper
DIRTT Mining
Arizona Community Cenlar Landmark Companies
Foundation Grant Thornton St. Clair Technologies
Central Arizona Macerich
Atmosphere Commerce Park Holualoa Companies Sunstate Equipment
Commercial Interiors Merit Partners Company
Clarius Partners IRIS USA
Midwestern University
ACTION PLAN 2018 14

2 N. Central Ave.
Suite 2500
Phoenix, AZ 85004
602.256.7700
Greater Phoenix
ECONOMIC COUNCIL gpec.org