Advanced Manufacturing Innovation Center (Amic)

ADVANCED MANUFACTURING INNOVATION CENTER (AMIC)

“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.”

November 16 2017

DRAFT 2 AGENDA

01 Project Initiation: Introduction & Economic Context

02 Interviews and Visioning

03 Site Selection

04 Space and Functional Programming

05 Conceptual Design

06 Cost Estimate

DRAFT 3 THE CRITICAL PATH AMIC QUESTIONS

01 What does industry need?

02 At what do the regions industries excel?

03 Who is the Champion?

04 What manufacturing innovation model do we pursue?

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

06 Where does consequential funding come from? 07 What about all that expensive fabrication equipment? 08 Does “place” matter?

DRAFT 4

“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

DRAFT 5

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

It all takes time

DRAFT 6

01 ECONOMIC INTRODUCTION

DRAFT 7 MFG MARKETS ARE IN TRANSITION

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

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

03 Food manufacturing and water

04 Impact of recent environmental regulation enforcement in China

05 There is no level playing field for global manufacturing

US manufacturing workforce policy is pivoting, but 06 how to replace retiring workers remains the big question

DRAFT 8

NATIONAL MANUFACTURING OUTPUT VS. EMPLOYMENTManufacturing Output Pre-Recession Manufacturing Output Post-Recession

Manufacturing Employment Pre-Recession

Manufacturing Employment Post-Recession

$6.5 18

$6.0 17

) 16 s $5.5 o n i l T

15 N $5.0 E Y M

U T ( $ r i l 14 P $4.5 E M P L O O U T 13 $4.0 12

$3.5 11

$3.0 10

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Manufacturing Output Pre-Recession 01 Policy implications of divergence between output Manufacturing Output Post-Recession and employment in manufacturing Manufacturing Employment Pre-Recession Manufacturing Employment Post-Recession DRAFT

$6.5 18 9 NATIONAL MANUFACTURING EMPLOYMENT & OUTPUT CAGR (2010-2016)

TRANSPORTATION MFG. PLASTICS MFG. CHEMICALS MFG. TEXTILES MFG. METALS MFG. MACHINERY MFG. FOOD MFG. WOOD MFG. COMPUTER MFG.

ELECTRICAL MFG. MISCELLANEOUS MFG. MINERALS MFG. 0 .3% 0 .3% 1.2% 1.6% 1.8% 2.9% 2.9% 1.3% 3.8% 0.7% 4.1% 1.0% 4.4% 4.4% 4.5% 1.6% 8.9% 2.0% 0 .2% 0 .2% 1.2% 1.6% 1.8% 2.9% 2.9% 3.8% 4.1% 4.4% 8.9% -0.3% - 1.1% -0. 7% -2.0%

Output Employment

01 Food and Beverage MFG has been the most consistently growing 2016 sector, but growth in output per worker is modest 2015 2014 02 Transportation MFG has grown strongly,2013 but change is in the air 2012 DRAFT 2010 2011 ,496 ,945 ,922 ,537 ,293 ,670 ,497 10 ST. LOUIS MANUFACTURING EMPLOYMENT CAGR (2010-2016) Manufacturing Employment CAGR (2010-2016)

St. Louis MSA 1.5% 1.9%

US 1.1% 1.1%

Source: BLS QCEW

01 For St. Louis, manufacturing growth post recession has been impressive, faster than US average 02 Aerospace and automotive have led the way DRAFT 11 US NAVY/ USAF AIRCRAFT PROCUREMENT F/A-18, EA-18, C-17, AS OF MAY 2017; EXCLUDES FOREIGN MINISTRY SALES

$4,000,000,000

$3,000,000,000 $4,000,000,000 $2,000,000,000 $3,000,000,000 $1,000,000,000 $2,000,000,000 $0 $1,000,000,000 12 13 14 15 16 17 18 19 20

$0 Aircraft Purchases 12 13 14 15 16 17 18 19 20 Modifications of In-Service Aircraft

RDT & E

105%01 Department of Defense Funding for F/A-18 has improved since 5% we last talked billion more new builds budgeted FY 15-18 + $650 ٠$4.8 100% million less in airframe mods 0% 02 Buys the region some time; F-15 and F/A-18 will eventually go 95% DRAFT 5% away 12 CHANGE IN DEFENSE OUTLAY FROM PEAK YEAR 1989 AND 2012

105%

100%

95%

90%

85%

80% 00 01 02 03 04 05 06 07 08 09 10 11

Decrease from 1989 Peak

Decrease from 2012 Peak

01 While DoD funding is beginning to improve toward 2012 threshold, the pace of recovering remains behind the 1989 trajectory 02 Defense contractors remain under pressure DRAFT 13 31% OF TOTAL REGIONAL OUTPUT IS $640,000 MANUFACTURING & LIFE SCIENCES $306 BILLION TOTAL OUTPUT FOR ST. LOUIS $178,000

MANUFACTURING ALL WORKERS

OUTPUT PER WORKER SOURCE: IMPLAN OUTPUT PER WORKER IS 3XALL JOBS DRAFT 14 METALS MFG 36%

LIFE SCIENCES SERVICES 28%

LIFE SCIENCES MFG (4%)

FOOD MFG 18%

$96 OTHER 18% BILLION

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

02 Metal Fabrication is the single largest regional cluster in terms of

output, larger than the plant and life sciences.... DRAFT 15 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...

DRAFT 16

REGIONALSt Louis MANUFACTURING ECOSYSTEM MAP TODAY Economic Development Missouri Partnership Bi-State Technology Developoment Corporation DRS Sustainment Regional Agency Business Gilster-Mary Nestle Purina General Council Lee Corp. World Trade PetCare Co. Motors HBM Holdings Center Emerson St Clair CIVIC County BioSTl WestRock Anheuser-Busch InBev Economic St Louis Freightway PARTNER Monsanto Co. Development Graybar Electric COMPANIES Wash U-Aero- Company Inc. US Steel space Research & Education Olin Brass Center St. Louis Development Mallinckrodt Missouri Corporation Enterprise Sigma-Aldrich Regional US Small Business Wash U-Institute of Zoltek (MilliporeSigma) Adminstration Materials Science Yield Business Council Companies Inc. & Engineering Lab Boeing

GKN Aerospace True Manufacturing SLU SLATE North America St. Louis Regional Company Inc. Chamber TALENT & TRAINING Ranken Technical Institute Ameren Vatterott Southwest Missouri Educational Illinois FUNDERS Centers College Brick City SIUE Makes Lewis & Clark Manufacturing Inc. St. Louis Community @ Ranken Community College College

Cortex Tech Metropolitan St. Louis Shop Manufacturers' St. Louis STL Association Makes Venture Works COM- MUNITY Missouri Association of FACILITIES Midwest Manufacturers Manufacturing Leaders Group Missouri S&T - DRAFT SLU Boeing Center for Supply Chain Aerspace Center Manufacturing 17

REGIONALSt Louis MANUFACTURING ECOSYSTEM MAP Economic Development Missouri Partnership Bi-State Technology Developoment Corporation DRS Sustainment Regional Agency Business Gilster-Mary Nestle Purina General Council Lee Corp. World Trade PetCare Co. Motors HBM Holdings Center Emerson St Clair CIVIC County BioSTl WestRock Anheuser-Busch InBev Economic St Louis Freightway PARTNER Monsanto Co. Development Graybar Electric COMPANIES Wash U-Aero- Company Inc. US Steel space Research & Education Olin Brass Center St. Louis Development Mallinckrodt Missouri Corporation Enterprise Sigma-Aldrich Regional US Small Business Wash U-Institute of Zoltek (MilliporeSigma) Adminstration Materials Science Yield Business Council Companies Inc. & Engineering Lab Boeing

GKN Aerospace True Manufacturing SLU SLATE North America St. Louis Regional Company Inc. Chamber AMIC TALENT & TRAINING Ranken Technical Institute Ameren Vatterott Southwest Missouri Educational Illinois FUNDERS Centers College Brick City SIUE Makes Lewis & Clark Manufacturing Inc. St. Louis Community @ Ranken Community College College

Metric 2010 2015 CAGR

Population 5,988,927 6,076,204 0.3%

Employment 2,658,400 2,796,900 1.0%

GDP $255,865,000,0000 $292,718,000,000 2.7%

R & D Funding $4,464,770,500 $5,545,616,100 4.4%

01 R&D funding in Missouri has increased faster than most economic metrics 02 Positive R&D trends in the State bode well for innovation in Missouri DRAFT 19 NATIONAL R&D FUNDING BY INNOVATION PROCESS PHASE PRE-COMMERCIALIZATION: 2015

$400

$350

$300

$250 VALLEY OF DEATH

O N $200 I

B I L $150

$100

$50

$0 BASIC APPLIED PRE- RESEARCH RESEARCH DEVELOPMENT DEVELOPMENT $66 Billion $84 Billion $14 Billion $360 Billion

01 Transitioning innovations from a theoretical state to a practical application is challenging 02 A resource gap between research and development complicates this process further DRAFT 20 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

01 Despite positive trends in R&D funding post-Recession, Missouri still receives less R&D funding per capita than the US 02 Universities in Missouri find R&D at a per capita rate comparable to the US average 03 All other major sources of R&D funding lag behind US per capita DRAFT funding rates 21 MISSOURI TOTAL R&D FUNDING AND MISSED OPPORTUNITIES 2015

$6.0

$5.0

$4.0

$3.0 O N I

B I L $2.0

$1.0

$0.0 PRIVATE FEDERAL VENTURE CAPITAL ACADEMIC

01 Net gap of about $4.5 billion in R&D statewide

DRAFT 22 CHALLENGES TO MANUFACTURING (BIG DATA)

01 BUSINESS CHALLENGES Finding and penetrating new markets

02 TECHNOLOGY IMPLEMENTATION Integration of software and hardware, and premature obsolescence of new equipment

03 ADDITIVE MANUFACTURING Tremendous potential and significant technical challenges; lack of standards

DRAFT 23 CHALLENGES TO MANUFACTURING (BIG DATA)

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

05 CYBERCRIME Growing importance of data in manufacturing has security implications

06 SUPPLY CHAIN COORDINATION Impact of technology on supply chains

DRAFT 24 ENABLERS TO MANUFACTURING (BIG DATA)

01 3D PRINTING/ ADVANCED MATERIALS Customization and improvements in product quality

02 LOGISTICS Improved transportation links and efficient supply chains

03 ADDITIVE MANUFACTURING Cloud computing, Internet of Things, Big Data, and Analytics

DRAFT 25 ENABLERS TO MANUFACTURING (BIG DATA)

04 STANDARDS Industry standards, replicable processes and replaceable parts

05 INDUSTRIAL HARDWARE Advanced sensors and semiconductors

06 DEMOGRAPHICS + INFRASTRUCTURE Aging population, obsolete infrastructure, and urbanization

DRAFT 26

02 INTERVIEWS & VISIONING

DRAFT 27 INTERVIEWS AND VISIONING

Three Categories of Interviews: 01 Case Studies and Innovation Facilities 02 Manufacturers 03 Universities and Workforce Intermediaries

Critical Path Questions: 01 In what sectors do St. Louis firms have a clear competitive edge? 02 What challenges are local manufacturers facing? 03 Who is our champion?

DRAFT 28 INTERVIEWS- THE FUTURE OF ADVANCED MANUFACTURING

DRAFT 29 INTERVIEWS- THE FUTURE OF ADVANCED MANUFACTURING

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.

DRAFT 30 EMERGING REGIONAL DIFFERENTIATORS

01 Impact and interest of our major manufacturing employers

02 Role of workforce intermediaries- Ranken Tech and Manufacturing Inc.

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

04 Federal support and evolution of Manufacturing USA

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

DRAFT 31 CASE STUDIES

Track 01 Track 02 Incubator Model Innovation/ Research Model Manufacturing Incubator (ICNC) Manufacturing USA Model (LIFT) • Basic incubator • Public-private partnership, non-profit organization • Manufacturers rent space • Hierarchy of membership • Business support services are • Research conducted by all members- only 1 type offered at the site, but the site does not engage in any research itself. 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 DRAFT 32 CASE STUDIES

04 03

01 Advanced Manufacturing Research Center 01 02 Commonwealth Center for Advanced Manufacturing 03 Digital Manufacturing and Design Innovation Institute 04 Lightweight Innovations for Tomorrow 05 Oregon Manufacturing Innovation Center DRAFT 33 CASE STUDIES

01 02 03 Advanced Manufacturing Commonwealth Center for Digital Manufacturing and Research Center Advanced Manufacturing Design Innovation Institute (AMRC) (CCAM) (DMDII)

04 05 Lightweight Innovations for Oregon Manufacturing Tomorrow Innovation Center DRAFT (LIFT) (OMIC) 34 CASE STUDIES Advanced Commonwealth Digital Lightweight Oregon Materials Center for Manufacturing and Innovations for Manufacturing Research Center Advanced Design Innovation Tomorrow Innovation Center (AMRC) Manufacturing Institute (LIFT) (OMIC) (CCAM) (DMDII)

Location Sheffield, England Disputanta, Virginia Chicago, Illinois Detroit, Michigan Scappoose, Oregon

Project Costs $9.3 million $17.6 million $31 million $58 million $4.2 million

Building Gross 48,000 sf 62,000 sf 94,000 sf 100,000 sf 33,800 sf Area

Public/ Private 100%/ 0% 28%/ 72% 100%/ 0% 50%/ 50% 50%/ 50% Funding

University University of Old Dominion University Iowa State University University of Michigan Oregon Tech Institute Partners Sheffield University of Virginia Northwestern University EWI Worldwide Oregon State University Virginia Commonwealth University of Illinois-Chi Ohio State University Portland State University University University of Illinois-Urb Virginia State University University of Michigan Virginia Tech

Corporate Boeing Rolls-Royce Dow Boeing Boeing Partners Rolls-Royce Siemens General Electric General Electric Canon Rolls-Royce Alcoa

Research High performance Manufacturing sys- Systems engineering, Melt processing, Additive processes, Focus machining, milling, tems, surface engi- future factory, product powder processing, hard metal and composites neering, and coatings development, and thermo-mechanical manufacturing, digital design processing, novel/ automation and agile processing optimization, large integrated structuresDRAFT 35 EQUIPMENT

DRAFT 36

03 LOCATION FRAMEWORK

DRAFT 37 LOCATION FRAMEWORK

Intent: 01 Use Case Studies to identify salient factors that influence Innovation Center location decision 02 Identify St. Louis neighborhoods with characteristics that align with Case Study insights

Insight: The private sector needs to contemplate locations that: 01 Align workforce and higher education participation

02 Allow for future expansion & manufacturing preservation

03 Create deliberate serendipity/ place matters

DRAFT 38 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 DRAFT 39 LOCATION CATEGORIES

01 Infill

02 Redevelopment

03 Academic/ Workforce

04 Industrial/ Aerospace

DRAFT 40 LOCATION CATEGORIES | INFILL

39N CORTEX FOX PARK Monsanto Brick City Makes

DRAFT 41 LOCATION CATEGORIES | REDEVELOPMENT

ST LOUIS PLACE ST LOUIS PLACE WELLSTON Ranken NGA

DRAFT 42 LOCATION CATEGORIES | ACADEMIC + WORKFORCE

FLORISSANT VALLEY EAST ST LOUIS GRAND CENTER St. Louis Community East St Louis St. Louis University College Community College

DRAFT 43 LOCATION CATEGORIES | ACADEMIC + WORKFORCE

GRAND CENTER CLAYTON SLEDP Grand Washington University

DRAFT 44 LOCATION CATEGORIES | INDUSTRIAL + AEROSPACE

EAST ST LOUIS WENTZVILLE AIRPORT NORTH East St. Louis Airport GM Boeing

DRAFT 45

04 SPACE & FUNCTIONAL PROGRAM

DRAFT 46 SPACE & FUNCTIONAL PROGRAM

Intent: 01 Use Case Studies to identify main program areas essential to the function needs of the Innovation Center 02 Develop final space and functional program needs based on local building code and zoning requirements

Three Main Program Areas: 01 High Bay Space- joint use manufacturing equipment

02 Specialty Labs- specific company owned equipment for testing and research

03 Workplace- collaborative working, teaming, and meeting spaces

DRAFT 47 PROPOSED AMIC PROGRAM

c y/ Cir Lobb t por Sup g min Tea s tion ksta Wor bs . La ace pec kpl S Wor High Bay Space 20,000 sf Specialty Labs 5,000 sf e pac WORKPLACE y S Ba Open Workstations 5,000 sf High Conference/ Teaming 5,000 sf Support 5,000 sf Circulation/ Lobby 5,000 sf

TOTAL 45,000 sf

DRAFT 48

05 CONCEPTUAL DESIGN

DRAFT 49 CONCEPTUAL DESIGN Intent: 01 Generate preliminary massing and layout based on various Case Study models 02 Develop a conceptual design responding to the specific space and functional program identified for the facility 03 Convey a new aesthetic to represent how innovation and emerging technology are transforming the advanced

Conceptual Design: 01 Site Plan

02 Exterior Perspective

03 Lobby View

04 High Bay View

DRAFT 50 SITE PLAN

GAS/ WASTE/ LIQUIDS STORAGE

SERVICE DOCKS

PLAZA/ ENTRY

MAIN ENTRY SERVICE ENTRY PLAZA/ ENTRY

MAIN ENTRY SERVICE ENTRY

DRAFT 5 15 60 0 5 30

5 15 60 0 5 30 51 FLOOR PLAN

GAS/ WASTE/ LIQUIDS STORAGE

FIRE ELEC PUMP SPECIALTY SPECIALTY SPECIALTY SPECIALTY LAB LAB LAB LAB STORAGE

SERVICE DOCKS

HIGH BAY SPACE

LOBBY/ COLLABORATION

WORKSPACE TRAINING PLAZA/ ENTRY ROOM

MAIN ENTRY SERVICE ENTRY

DRAFT 5 15 60 0 5 30

5 15 60 0 5 30 52

EXTERIOR PERSPECTIVE

MATERIAL STUDIES DRAFT 53 LOBBY/ COLLABORATION

DRAFT 54 HIGH BAY SPACE

DRAFT 55

06 CONCEPTUAL COST

DRAFT 56

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

DRAFT 57

QUESTIONS

DRAFT