This document provides an overview of economic trends and issues in Stephenson County and the surrounding 5-county region from 2000 to 2010. It summarizes demographic changes, industry shifts, employment trends, and business dynamics over this period. Specifically, it shows declines in population, manufacturing employment, and number of businesses, while the services sector grew. The document identifies key regional issues such as industry clusters, occupational demands, workforce skills, and business support as areas for further analysis to help position the economy for future prosperity.

1. Stephenson County
in the Northwest Illinois Region
Regional Prosperity Project
Presented by
Norman Walzer and Brian L. Harger
To
NIDA “Prospering Together” Quarterly Meeting
Stephenson County
Freeport, IL
April 24, 2012

2. Discussion Overview
• Background on 5-County Regional Prosperity Planning Project
– Strategy Development in Anticipation of Implementation
– Relationship to Prospering Together Project: 8.1 Business Attraction
– Enhance Potential of Prospering Together by Regional Networking
• Stephenson County and Regional Changes since 2000
– Demographics and Work Force Capacity
– Industry Shifts
– Business Churning and Vitality
• Positioning Economy for Future Prosperity
– Strengths and Potential of Current Businesses
– Links to Broader Regional Economy (Tentative Data Analyses)
• Next Steps—How 8.1 Business Attraction Can Participate
– What Could We Do? What Should We Do? What Will We Do Next? By When?
– What Data/Analyses Are Needed from Project?
2

3. 3

4. Key Regional Issues
Stephenson County and 5 County Region
• Sources of Business and Job Growth? Relative Losses?
• Dominant Industries in Stephenson County and Region?
• Current and Projected Occupational Demands?
• Adequate, Trained Existing Work Force?
• Emerging Markets and Possible Links?
• Retain Trained Youth For Skills in Future Opportunities?
• Support For Business Starts and 2nd Stage Business
Expansions?
4

5. Trends 2000 to 2010
Stephenson County and 5 County EDA Region*
Trend
Stephenson County Stephenson County
(Percent Change)
EDA Region*
EDA
Region*
(Percent
Change)2000 2010 2000 2010
Total Population 48,920 47,649 2.6% 213,513 210,876 1.2
Population - % Under 18 Years 25.2 22.7 12.2 25.4 23.1 10.3
Population - % 18 to 64 Years 58.4 58.5 2.4 59.1 59.7 0.1
Population - % 65 Years and Older 16.4 18.8 11.9 15.5 17.2 9.2
Total Employment 28,970 26,169 9.7 111,288 102,601 7.8
Employment - % Manufacturing 22.8 14.7 41.7 21.5 13.5 41.9
Employment - % Services 28.4 33.5 6.7 28.1 32.0 5.1
Employment – % Government 10.5 11.9 2.6 12.3 13.6 2.1
Median Household Income (2005 $) $73,351 $74,445 1.5 $71,203 $74,112 4.1
Gross Regional Product (2005 $) $1.471 B $1.513 B 2.9 $5.448 B $5.798 B 6.4
5
* Includes Carroll, Lee, Ogle, Stephenson and Whiteside counties.
Data Source: Woods & Poole Economics, Inc., 2012.

6. Wage Comparisons
Region vs. State and U.S.
Industry Cluster
5-County Annual
Wages per Employee
Pct. of IL Wages Pct. of U.S. Wages
Total All Industries $22,403 71.8% 69.6%
Advanced Materials $48,533 84.8% 110.5%
Agribusiness, Food Processing & Technology $41,559 121.5% 129.1%
Apparel & Textiles $55,868 154.9% 141.0%
Arts, Entertainment, Recreation & Visitor Industries $49,165 75.3% 76.1%
Biomedical/Biotechnical (Life Sciences) $36,194 38.0% 41.1%
Business & Financial Services $34,023 56.2% 62.8%
Chemicals & Chemical Based Products $39,591 85.8% 85.5%
Defense & Security $59,032 115.5% 116.2%
Education & Knowledge Creation $55,984 91.9% 90.4%
Energy (Fossil & Renewable) $65,532 122.3% 134.6%
Forest & Wood Products $61,743 125.6% 123.4%
Glass & Ceramics $58,360 85.6% 77.9%
Information Technology & Telecommunications $70,468 97.9% 100.8%
Manufacturing Supercluster $47,470 103.3% 95.3%
Computer & Electronic Product Mfg $62,508 127.8% 131.1%
Electrical Equipment, Appliance & Component Mfg $76,707 142.2% 148.5%
Fabricated Metal Product Mfg $72,409 58.7% 68.9%
Machinery Mfg $41,709 87.9% 65.3%
Primary Metal Mfg $60,790 77.6% 82.0%
Transportation Equipment Mfg $44,042 95.0% 77.6%
Mining $52,174 91.8% 108.2%
Printing & Publishing $66,650 75.6% 78.2%
Transportation & Logistics $47,113 71.8% 69.6%
6
Data Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages
(QCEW) and the Purdue Center for Regional Development (cluster definitions), 2011.

7. 2011 Wage and Benefit Results
7
Answered Other
• Electrical Generation
• Recycling
• Service
• Commercial
• Egg Production and Processing
• Manufacturing and Administrative
• Snack Food
• Heavy Highway Construction
• Sales & Engineering
• Construction
• Local Government
• Education
• Promotional Product Sales &
Distribution
• Recreation
• Packaging and distribution
• General Construction
Company’s Primary Industry
Industry Response Percent
Response
Count
Manufacturing 56.6% 43
Healthcare and social assistance 19.7% 15
Agriculture 14.5% 11
Transportation and warehousing 9.2% 7
Other (please specify) 26

8. 2011 Wage and Benefit Results
8
Answered Other
• Skill Gap
• Lack of Qualified
Candidates within the
Geographic Area
• Lack of Health Plan
Reasons Why Positions are Difficult to Fill

9. 2011 Wage and Benefit Results
Strategy
Full-time
employees
Part-time
employees
Allow more employees to work from home 10 2
Automation/new technology 24 10
Contract labor - outsourcing 9 3
Eliminate 2nd - 3rd shift 5 1
Eliminate all overtime 20 10
Eliminate cash bonuses (incentives) 8 5
Full time-employees changed to part-time 5 2
Reduced training/employee development, seminars 16 9
Reduced travel 25 12
Reduction in normal work hours - shorter work week 15 7
Temporary closing with reduced pay 2 1
Unpaid furlough - temporary unpaid leave 4 1
Companies Reporting Cost Saving Strategies Implemented

10. Projected Population Trends
Stephenson County, Illinois (2010 to 2020)
10
Data Source: Woods & Poole Economics, Inc., 2012.
-0.8%
2.4%
1.8%
-11.1%
-6.2%
0.0%
6.5%
5.0%
-21.1%
-29.9%
-20.4%
-1.1%
17.0%
31.6%
27.1%
15.0%
5.5%
6.3%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
PopulationChange(2010-2020)
Population Age Cohort
Baby Boomers
Baby Bust
Generation Z
Millennials
Silent
Generation
Generation
Alpha

11. Regional Employment
Five County EDA Region
25%
17%
15%
8%
6%
6%
5%
5%
5%
3%
2%
1% 1% 1%
% Employment for All Industries, 2009
31---- Manufacturing
62---- Health care and social assistance
44---- Retail trade
72---- Accommodation and food services
48---- Transportation and warehousing
81---- Other services (except public administration)
52---- Finance and insurance
42---- Wholesale trade
23---- Construction
56---- Administrative and Support and Waste Mang and
Remediation Srvs
54---- Professional, scientific, and technical services
71---- Arts, entertainment, and recreation
53---- Real estate and rental and leasing
51---- Information
Data Source: U.S. Census Bureau, County Business Patterns, 2009
Note: Industries with employment less than 1% were excluded from chart
11
65%

12. Manufacturing Sector: Employment
Five County EDA Region
* For Industries with More Than 3% Total Industry Employment.
Data Source: U.S. Census Bureau, County Business Patterns, 2009.
12
22.7%
18.8%
17.8%
10.6%
6.3%
5.8%
5.2%
4.1%
3.8%
% Employment by Manufacturing Sector, 2009
332 Fabricated metal product manufacturing
333 Machinery manufacturing
311 Food manufacturing
335 Electrical equipment, appliance, and
component manufacturing
323 Printing and related support activities
326 Plastics and rubber products
manufacturing
336 Transportation equipment manufacturing
325 Chemical manufacturing
331 Primary metal manufacturing
70%

13. Current Industry Cluster Trends
5 County EDA Region (Pre-Recession 2008)
Advanced
Materials
Agribusiness
Food Processing
& Technology
Apparel & Textiles
Arts, Entertainment,
Recreation & Vistor Industries
Biomedical/
Biotechnical
Business &
Financial Services
Chemicals & Chemical
Based Products
Defense &
Security
Education &
Knowledge Creation
Energy
Forest &
Wood Products
Glass &
Ceramics
Information Technology
& Telecommunications
Manufacturing
Supercluster
Mining
Printing &
Publishing
Transportation
& Logistics
0.0
0.5
1.0
1.5
2.0
2.5
3.0
-90% -80% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40%
EmploymentL.Q.(2008)
Change in Employment L.Q. (2004-2008)
Emerging
GrowthMature
Transforming
13

14. Industry Cluster Components
An Example Using the Agriculture, Food Processing and Technology Cluster
Company Name NAICS Industry Description Location
Berner Food & Beverage, Inc. 311 Food Manufacturing Dakota
C J Vitner Company 311 Food Manufacturing Freeport
Furst-Mcness Company 311 Food Manufacturing Freeport
Star Forge, Inc. 33311 Agricultural Implement Manufacturing Freeport
Kolb-Lena Bresse Bleu, Inc. 311 Food Manufacturing Lena
Thompsons Pearl Valley Eggs, Inc. 1123 Animal production Pearl City
High Plains Pork, Inc. 1122 Animal production Winslow
Scheidairy Farms, Inc. 111998 Freeport
Birchen Farms, Inc. 1121 Animal production Pearl City
Illini Protein, Inc. 311 Food Manufacturing Dakota
14
Data Source: Dun & Bradstreet, Inc., 2012.

15. Current Industry Cluster Trends
Stephenson County, Illinois (Pre-Recession 2008)
Industry Cluster
Employment
(2008)
Employment Pct.
Change (2004-2008)
Employment
L.Q. (2008)
Output per
Worker (2008)
Advanced Materials 1,498 2.1 2.08 $366,585
Agribusiness, Food Processing & Technology 1,447 8.2 3.29 $323,179
Biomedical/Biotechnical (Life Sciences) 2,182 7.5 3.40 $185,296
Business & Financial Services 1,159 -18.5 0.71 $149,329
Chemicals & Chemical Based Products 1,313 -31.1 4.19 $451,200
Forest & Wood Products 410 -28.6 1.20 $168,490
Information Technology & Telecommunications 1,005 2.3 1.14 $266,481
Transportation & Logistics 228 -17.1 0.64 $109,937
Fabricated Metal Product Mfg 341 4.9 1.60 $219,879
Machinery Mfg 476 9.2 2.92 $333,720
Computer & Electronic Product Mfg 934 7.0 1.04 $353,936
Transportation Equipment Mfg 226 30.6 3.87 $385,243
Printing & Publishing 238 -14.7 8.30 $136,398
15
Data Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW) and the Purdue
Center for Regional Development (cluster definitions), 2011; Minnesota Implan Group, 2010..

16. Business Trends
Stephenson County, Illinois (2000-2009)
Establishments and Jobs
2000 2009
Numeric
Change
Percent
Change
Establishments Jobs Establishments Jobs
Total
2,970 31,120 3,445 26,276 475 -4,844 16.0 -15.6
Noncommercial
228 3,311 261 3,527 33 216 14.5 6.5
Nonresident
138 8,870 120 5,009 -18 -3,861 -13.0 -43.5
Locally Owned or Managed
2,604 18,939 3,064 17,740 460 -1,199 17.7 -6.3
Self employed (1 employee)
918 918 1,209 1,209 291 291 31.7 31.7
Stage 1 (2-9 employees)
1,416 4,683 1,599 4,754 183 71 12.9 1.5
Stage 2 (10-99 employees)
246 5,533 235 5,313 -11 -220 -4.5 -4.0
Stage 3 (100-499 employees)
20 3,497 17 2,464 -3 -1,033 -15.0 -29.5
Stage 4 (500+ employees)
4 4,308 4 4,000 0 -308 0.0 7.1
16
Data Source: National Employment Time Series (NETS) database, 2012.

17. Business “Churn”
Stephenson County, Illinois (2000-2009)
Number of Firms Closed: -1,660
Number of Jobs: -9,308
Number of Firms Opened: 2,139
Number of Jobs: 6,233
Number of Firms Moved in: 111
Number of Jobs: 857
Number of Firms Moved out: -115
Number of Jobs: -931
Number of Firms Expanded: 829
Number of Jobs: 7,354
Number of Firms Contracted: -831
Number of Jobs: -9,049
17
Data Source: National Employment Time Series (NETS) database, 2012.
Stephenson County

18. Employment Trends
Stephenson County, Illinois
-18.6%
-14.7%
77.8%
-12.8%
-7.1%
-41.7%
32.0%
-23.8%
3.9%
15.4%
-15.2%
6.7%
2.6%
-12.4%
13.1%
-6.3%
-17.6%
-4.4%
-18.5%
13.0%
-4.8%
12.6%
10.0%
6.1%
9.2%
2.5%
-60% -40% -20% 0% 20% 40% 60% 80% 100%
Farm
Forestry, Fishing and Related Activities
Mining
Utilities
Construction
Manufacturing
Transportation and Warehousing
Information
Finance and Insurance
Real Estate, Rental and Leasing
Wholesale/Retail Trade
Services
Government
Percent Change
2010 - 2020
2000 - 2010
Data Sources: U.S. Bureau of Labor Statistics, 2012; Illinois Department of Employment Security, 2012.
18

19. Population Trends by Zip Code
Tri-State Region (2000-2010)
Data Sources: EASI Analytics, Inc., 2011.
19

20. Employment Trends by Zip Code*
Tri-State Region (2000-2010)
*Employment by place of residence.
Data Sources: EASI Analytics, Inc., 2010.
20

21. Shift-Share Analysis
5 County EDA Region
21
Industry Cluster
National Growth
Component
Industrial Mix
Component
Competitive Share
Component
Agribusiness, Food Processing & Technology 173 -160 166
Biomedical/Biotechnical (Life Sciences) 370 701 -735
Mobile Machinery Mfg
Advanced Materials 261 -357 -717
Fabricated Metal Product Mfg 164 -47 -719
Machinery Mfg 119 -13 -111
Transportation Equipment Mfg 44 -95 -211
Transportation & Logistics 78 -101 437
Printing & Publishing 49 96 210
Data Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages
(QCEW) and the Purdue Center for Regional Development (cluster definitions), 2011.

22. Industry Cluster Components
An Example Using the Agriculture, Food Processing and Technology Cluster
NAICS
Code
NAICS Description
EDA 5-County
Region
Employment
Stephenson
County
Employment
111 Crop production n/a n/a
112 Animal production n/a n/a
1141 Fishing n/a n/a
1151 Support activities for crop production 29 1
1152 Support activities for animal production 18 10
311 Food manufacturing 2,414 549
312 Beverage and tobacco product manufacturing 0 0
3253 Pesticide, fertilizer, and other agricultural chemical manufacturing 75 0
33311 Agricultural implement manufacturing 497 70
333294 Food product machinery manufacturing 0 0
42382 Farm and garden machinery and equipment merchant wholesalers 297 37
4245 Farm product raw material merchant wholesalers 349 57
42491 Farm supplies merchant wholesalers 240 73
22
Data Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages
(QCEW) and the Purdue Center for Regional Development (cluster definitions), 2011.

23. Employment Trends
Stephenson County and the 5 County EDA Region*
• Stephenson County and the Region comparable to state and
U.S. in most recent economic cycles except 2009.
• Job losses (%) higher than State or National averages in
current recession.
• Transportation and Warehousing, Finance and Insurance, and
Real Estate gained jobs but did not offset declines in
Manufacturing.
• Manufacturing jobs often tend to pay more so are especially
important.
• Manufacturing 19% of Stephenson County’s Gross Regional
Product in 2010.
* The region consists of Carroll, Lee, ogle, Stephenson and Whiteside counties in Illinois.
23

24. What Do We Know Now?
• Manufacturing Sector Still Viable and Important in GRP
• Strong Industries in 5-County Region Include:
– Agribusiness, Food Processing and Related Technology
– Advanced Materials Manufacturing
– Bio-medical/Bio-technical
– Energy Production
– Transportation and Logistics
– Information Technology and Telecommunications
– Mining
• Employers Face Limitations With Labor Force Availability
• Potential Work Force May Shrink More by 2020
• Recent Business Shifts
– Strong Growth in Stage 1 (2-9 emp.) Local Businesses
– Significant Losses in Stage 3 (100-499 emp.)
24

25. What Do We Know Now? (cont.)
• Strong Assets For Exporting From Region
– Close to Markets for Intermediate and Final Products
• (Rockford, Dubuque, Quad-Cities, Twin Cities, Rochelle, Chicago)
– High Speed Internet Access
– I-88, 294, 290, and I-39 Leading in All Four Directions
– Access to Rail/Highway Hub and Transshipment Point (Rochelle)
– Close to Major Airport Center (Rockford)
• Potential Primary Job Targets (Based on Exports)
– Fabricated Metals Manufacturing (Jobs and Output Growth)
– Food Processing/ Manufacturing (Strong Output Growth, Local Inputs)
– Machinery Manufacturing (Output Growth, Employment Stagnant)
– Plastics/Rubber Products (Jobs and Output Growth)
– Possibly Aerospace Manufacturing (Rockford)
– Possibly Rail Passenger Car Manufacturing (Rochelle)
• New Industries to Market?
25

26. One Way To Proceed With Bus. Attraction
26
Convert at Least One Opportunity to an Outcome
with Clear, Measurable Characteristics

27. How Could We Move Ahead in 8.1 Business Attraction?
Within the Prospering Together Project Framework
Using a Strategic Doing Approach: (Just as an Example)
• NIDA Group Selects Specific Business Directions for Region and Stephenson
– Identify Industries to Market
– Build Work Force Capacity
– Design Marketing Approach
– Determine Infrastructure Needs to Support Expansion Plans etc.
• Form Interest Teams to Explore Network Possibilities with Others in Region
• Each Team Decides:
– What Could We Do Collectively & the Role(s) of Each Member
– Selects At Least One Action Item to Complete in 90 Days
• Teams Meet and Determine Appropriate Actions (Should We Do?)
• Teams Decide on Course(s) of Action (What Will We Do?) and Report to Overall
Group
• At Regular Quarterly Meetings:
– Each Team Reports on Completed Actions in Past 90 Days
– Each Team Plans Activities for Next 90 Days
27

28. Possible Discussion Questions
(Mutually Beneficial Relationship)
How Can Stephenson County Help the 5-County Region Become…
a. A Highly Profitable Agribusiness and Food Processing Center Integrated into
Midwestern Markets Using Local (Regional) Inputs and Specialties.
b. A Major Midwestern Production and Assembly Center for Advanced
Manufacturing Components Produced Locally.
c. Widely Recognized as a Source of Talent, Expertise, and Inputs for the
Emerging Aerospace Cluster in Rockford and Southeast Wisconsin.
d. Major and Profitable User of the Global III Intermodal Terminal (Rochelle).
e. Recognized as Entrepreneurial Region for Generating Successful Business
Starts and Retention.
f. Able to Attract State and Federal Investments to Build Capacity to Stimulate
Entrepreneurship and Expansion.
g. Other? _____________________________

29. For Further Information
Contact:
Center for Governmental Studies
Northern Illinois University
De Kalb, IL 60115
815-753-1907
www.NIUCGS.org
Norman Walzer Brian L. Harger
Senior Research Scholar Research Associate
nwalzer@niu.edu bharger@niu.edu