State of the Workforce

HAMPTON ROADS State of the Workforce and Gap Analysis 2017

The Consortium This report is a result of cooperation between Opportunity Inc. of Hampton Roads, the Peninsula Council for Workforce Development, the Greater Peninsula Workforce Development Consortium, the Hampton Roads Economic Development Alliance, and ReInvent Hampton Roads. Opportunity Inc. is the operating arm of the Hampton Roads Workforce Development Board and Virginia Local Workforce Development Board 16 (LWDB 16), and serves (cities) Chesapeake, Franklin, Norfolk, Portsmouth, Suffolk, and Virginia Beach; and (counties) Isle of Wight and Southampton. Opportunity Inc. seeks to meet the business community s need for trained and qualified workers, increase per capita income, promote greater corporate competitiveness, and improve regional prosperity through initiatives that strengthen the regional workforce. The organization has been tasked with providing the leadership necessary to deliver a sound workforce development strategy for our region. The Peninsula Council for Workforce Development (PCFWD) and the Greater Peninsula Workforce Development Consortium (GPWDC) comprise Virginia Local Workforce Development Board 14 (LWDB 14), and serve (cities) Hampton, Newport News, Poquoson, and Williamsburg; and (counties) Gloucester, James City, and York. PCFWD and GPWDC work to LOCAL WORKFORCE DEVELOPMENT BOARD SERVICE AREA Greater Peninsula Workforce Development Board, Virginia Hampton Roads Workforce Development Board, Virginia Greater Peninsula Workforce Development Board others Hampton Roads Workforce Development Board others Cities: Hampton, Newport News, Poquoson, and Williamsburg Counties: Gloucester, James City, and York Cities: Chesapeake, Franklin, Norfolk, Portsmouth, Suffolk, and Virginia Beach Counties: Isle of Wight and Southampton Map Source: Department of Labor, CareerOneStop. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 3

ensure a robust local economy with economic opportunity through a wide variety of services and programs designed for both adults and youth seeking employment, career direction, or job advancement. The Hampton Roads Economic Development Alliance (HREDA) is an accredited economic development organization representing (cities) Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, and Virginia Beach; and (counties) Isle of Wight and Southampton. HREDA markets Hampton Roads as the primary region of choice for economic investment and business expansion and serves as the area s lead regional economic development and marketing organization to recruit and encourage new and expanded business development as well as a talented business employment pool to locate in Hampton Roads. The Hampton Roads State of the Workforce 2016 report is a look at where we ve been, where we are today, and what opportunities and challenges lay ahead. It provides a foundation for discussion and planning as it allows us to work toward creating our own future. 4 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Acknowledgements Emsi would like to thank Hampton Roads Opportunity Inc., the Peninsula Council for Workforce Development, the Greater Peninsula Workforce Development Consortium, and the Hampton Roads Economic Development Alliance for the opportunity to prepare this report. This study is the result of a group effort. The authors would like to thank our colleagues at Emsi for their assistance with this study in particular Jason Helsel and Jane Kolar for their assistance with organizing and conducting interviews, James Howard, and Josh Wright, who contributed greatly to the coordination of the project and the production of this document. The authors would also like to thank the representatives from the organizations and companies that contributed to this study. The list of these constituents can be found in Appendices B and C of this report. These organizations representatives took the time to meet with Emsi researchers and provide insight into the Hampton Roads economy and region. Additionally, many other companies participated in online surveys and phone interviews. John Hawkins, Director of Workforce Development and Senior Consultant Debbie Maranger Menk, Director of Consulting Alivia Metts, Economist Timothy Aylor, Economist Eric Walker, Research Analyst HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 5

Executive Summary The Hampton Roads region of Virginia, as discussed in this report, comprises 15 cities and counties in southeastern Virginia; the eastern border is the Atlantic coast, while to the south lies the border with North Carolina. This study provides an overview of the labor force, business activity, demographics, and economic trends for the area. The intent is for workforce and economic development entities, educators, and business leaders to use the information presented here to coordinate efforts and target activities to better support worker skill development, job creation, and improved economic opportunities for everyone. Population There are 1.7 million residents of Hampton Roads, which is about 20% of the total state population. The Hampton Roads population is more diverse then either Virginia or the U.S., with 45% of residents identifying as racial or ethnic minorities. The median age of residents is similar to the state of Virginia and the U.S. The poverty rate is slightly higher in Hampton Roads than in the state, but is lower than in the U.S. Education Spending on K-12 public education is less in Hampton Roads schools ($10,901 per student) than for Virginia ($11,523) or the U.S. ($12,010). Teacher salaries are lower than for the state, while student to teacher ratios are slightly higher in Hampton Roads than for the state. High school graduation rates for Hampton Roads students have risen about five percentage points over the last 10 years, but remain below graduation rates for the state overall. Hampton Roads students trail overall Virginia standardized test scores. The passing rates for standardized tests for Hampton Roads eighth graders in 2015 were 68% and 71% (writing and math, respectively) while state scores were 71% and 73%. Labor Force Slightly more than 830,250 Hampton Roads residents are in the civilian labor force. This number does not include military. The Hampton Roads working population has higher percentages of high school graduates and people who have attended some college or have 6 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

an associate s degree than does Virginia or the U.S. Likewise, there are fewer (as a percent) people who do not have at least a high school diploma. However, the percent of people who have college or graduate degrees is lower than for the state. This would seem to indicate a population well-suited to trades which dominate the occupational needs of Hampton Roads employers. Cluster analysis This analysis considered eight industry clusters that represent opportunities for the Hampton Roads economy and Hampton Roads businesses to diversify away from reliance on government contract work. Most business people interviewed said that diversifying their customer base to move away from being so reliant on government contracts is a critical component of their business strategies. The industry segment clusters reviewed in this report are: Advanced manufacturing Ship repair and ship building Food and beverage manufacturing Port operations, logistics, and warehousing Life sciences Business and consulting services Information analytics and security Tourism and recreation These clusters are industries that offer a strong future for the Hampton Roads economy. Combined, they represent about 16% of the Hampton Roads gross regional product (GRP). These industries offer diverse opportunities for Hampton Roads residents in that many key occupations require little formal education, while just as many other key occupations require at least a college degree. This range allows Hampton Roads residents the ability to earn a living regardless of educational choice or background. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 7

Contents 3 THE CONSORTIUM 5 ACKNOWLEDGEMENTS 6 EXECUTIVE SUMMARY 15 INTRODUCTION Survey Results / 16 18 SECTION I: DEMOGRAPHICS PROFILE Population Trends / 18 Age / 19 Diversity / 20 Poverty / 22 25 SECTION II: EDUCATIONAL PROFILE Enrollment / 25 Diversity / 26 Student Poverty / 27 Investments in Education / 28 Academic Performance / 31 Dropout Rates / 31 Standardized Tests / 32 Educational Attainment / 33 Postsecondary Education / 34 8 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

39 SECTION III: EMPLOYMENT & LABOR FORCE The Importance of the Labor Force / 39 The Hampton Roads Labor Force / 39 Employed / 40 The Unemployment Rate / 41 Exiting Military / 43 The Labor Force Participation Rate / 45 The Employment-to-Population Ratio / 47 Wage and Salary Trends / 48 Commuting Patterns / 49 Business Establishments / 49 Employment Changes in the Hampton Roads Economy / 51 Largest Regional Employers / 52 Top Occupations / 53 58 SECTION IV: INDUSTRY CLUSTER PROFILES Industry Clusters / 60 Location Quotients / 62 Industry Cluster Description / 63 Labor Market Gap Analysis / 64 Supply Chain Analysis / 65 Advanced Manufacturing / 66 Ship Repair and Ship Building / 76 Food and Beverage Manufacturing / 82 Port Operations, Logistics, and Warehousing / 90 Life Sciences / 99 Business and Consulting Services / 107 Information Analytics and Security / 115 Tourism and Recreation / 122 131 CONCLUSION 132 APPENDICES References / 132 Appendix A: Detailed Military Exits by Occupation / 133 Appendix B: Survey Results / 142 Appendix C: Focus Group Results / 152 Appendix D: Detailed Data Tables for Local Areas / 155 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 9

TABLE OF FIGURES Figure 1.1. Annual Average Population Growth / 19 Figure 1.2. Millennials and Baby Boomers, Percent of Total Population (2015) / 20 Figure 1.3. Total Population Diversity Trends / 21 Figure 1.4. Poverty Rates, Total Population / 22 Figure 1.5. Childhood Poverty Rate Trends / 23 Figure 1.6. Poverty Rates of Population 65 and Over / 24 Figure 2.1. Free and Reduced Lunch Eligibility Rates, 2015 / 27 Figure 2.2. Student/Teacher Ratio for K-7th Grade / 29 Figure 2.3. Student/Teacher Ratio for 8th-12th Grade / 29 Figure 2.4. Teacher Salary Trends, adjusted for inflation / 30 Figure 2.5. Educational Attainment of Population Age 25 and Over, 2015 / 33 Figure 3.1. Monthly Year-over-Year Percent Change in Labor Force, Hampton Roads / 40 Figure 3.2. Unemployment Rate Trends / 42 Figure 3.3. Labor Force Participation Rates / 45 Figure 3.4. Labor Force Participation Rates by Age Group, Virginia Beach-Norfolk-Newport News, VA-NC Metro Area (Change in Percentage Points, 2010-2015) / 46 Figure 3.5. Workplace Age Trends in Hampton Roads / 47 Figure 3.6. Employment-to-Population Ratio Trends / 48 Figure 3.7. Average Earnings Trends (adjusted in 2015 dollars), 2005 2015 / 48 Figure 3.8. Industrial Employment Composition; Hampton Roads, Virginia, and U.S., 2015 / 51 Figure 3.9. Employment Changes in the Hampton Roads Economy, 2005-2015 / 51 Figure 4.1. Hampton Roads Industry Clusters Size of Cluster Based on 2015 Employment / 61 Figure 4.2. Hampton Roads Industry Clusters Concentration of Employment, 2015 / 62 Figure 5.1. Advanced Manufacturing Cluster, 2015 Job Distribution / 66 Figure 5.2. Advanced Manufacturing Employment Trends; YOY Employment Growth / 68 Figure 6.1. Ship Repair and Ship Building Cluster, 2015 Job Distribution / 76 Figure 6.2. Ship Repair and Ship Building Employment Trends; YOY Employment Growth / 77 Figure 7.1. Food and Beverage Mfg. Cluster, 2015 Job Distribution / 82 Figure 7.2. Food and Beverage Manufacturing Employment Trends; YOY Employment Growth / 84 Figure 8.1. Port Operations, Logistics, and Warehousing Cluster, 2015 Job Distribution / 90 Figure 8.2. Port Operations, Logistics, and Warehousing Employment Trends; YOY Employment Growth / 92 Figure 9.1. Life Sciences Cluster, 2015 Job Distribution / 99 Figure 9.2. Life Sciences Employment Trends; YOY Employment Growth / 100 Figure 9.3. U.S. Biological and Medical Research and National Institution on Health s Appropriations, 2003-2015, Adjusted for Inflation / 101 Figure 10.1. Business and Consulting Services Cluster, 2015 Job Distribution / 107 Figure 10.2. Business and Consulting Services Employment Trends; YOY Employment Growth / 109 Figure 11.1. Information Analytics and Security Cluster, 2015 Job Distribution / 115 Figure 11.2. Information Analytics and Security Employment Trends; YOY Employment Growth / 116 Figure 12.1. Tourism and Recreation Cluster, 2015 Job Distribution / 122 Figure 12.2. Tourism and Recreation Employment Trends; YOY Employment Growth / 123 10 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE OF TABLES Table 1.1. Total Population Trends / 18 Table 1.2. Median Age of Population, 2015 / 19 Table 1.3. Population Age Group Trends Millennials Join Baby Boomers in the Labor Force (Percent of Total Population)* / 20 Table 1.4. Racial Make-up of Working Residents, Hampton Roads / 21 Table 1.5. Total Population Living in Poverty / 22 Table 1.6. Population under the Age of 18 Living below the Poverty Line / 23 Table 1.7. Population 65 and Over Living Below the Poverty Line / 24 Table 2.1. Student Enrollment Trends / 25 Table 2.2. Student Diversity, Percent of Total Student Population / 26 Table 2.3. Racial Make-up of Private School Students, Hampton Roads (2014) / 26 Table 2.4. Eligibility for Free and Reduced Lunch Programs / 27 Table 2.5. Real Expenditures per Student / 28 Table 2.6. Teacher Salary Trends, adjusted for inflation / 30 Table 2.7. High School Graduates / 31 Table 2.8. Dropout Rates / 32 Table 2.9. SOL Passing Rates for 8th Graders / 33 Table 2.10. Educational Attainment Trends of Population Age 25 and Over / 34 Table 2.11. Completions from Public Universities and Community Colleges / 35 Table 2.12. LWDB 14 Postsecondary Completions, 2015 / 36 Table 2.13. LWDB 14 Completions by Program / 36 Table 2.14. LWDB 16 Postsecondary Completions, 2015 / 37 Table 2.15. LWDB 16 Completions by Program / 38 Table 3.1. Labor Force Trends / 39 Table 3.2. Number of Employed / 41 Table 3.3. Military / 41 Table 3.4. Number of Unemployed / 42 Table 3.5. Military Exits by Locality, 2015 / 43 Table 3.6. Military Exits by Occupation group, 2015 / 44 Table 3.7. Labor Force Participation Rates by Prime-age Wage-Earners Virginia Beach-Norfolk-Newport News, VA-NC Metro Area / 46 Table 3.8. Real Per Capita Income (adjusted in 2015 dollars), 2005-2015 / 49 Table 3.9. Regional Commuting Patterns (2014) / 50 Table 3.10. Business Establishments / 50 Table 3.11. Largest Employers in Hampton Roads, Ranked by Employment Size / 52 Table 3.12. Top 25 Occupations in the Hampton Roads Region, Ranked by Employment / 53 Table 3.13. Top Fastest-Growing Occupations in the Hampton Roads Region, Ranked by Job Growth Rate / 54 Table 3.14. Educational Completions and Openings, Hampton Roads / 56 Table 4.1. Hampton Roads Employment, Earnings and Establishments by Industry Sector (2015) / 58 Table 4.2. Hampton Roads Gross Regional Product by Industry Sector / 59 Table 4.3. Hampton Roads Industry Clusters Performance Trends / 61 Table 5.1. Advanced Manufacturing Cluster Industry Employment Trends, Hampton Roads / 67 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 11

Table 5.2. 25 Largest Occupations in Advanced Manufacturing with Occupational Skills / 69 Table 5.3. Advanced Manufacturing Occupational Openings and Completions / 71 Table 5.4. Advanced Manufacturing Regional Demand Met by Hampton Roads Companies / 73 Table 5.5. Advanced Manufacturing Supply Chain / 74 Table 5.6. Advanced Manufacturing Manufactured Products Supply Chain / 74 Table 5.7. Hampton Roads Advanced Manufacturing Companies Sales in Region and Exported Out of Region / 75 Table 6.1. Ship Repair and Ship Building Cluster Industry Employment Trends, Hampton Roads / 77 Table 6.2. Staffing Pattern for Ship Repair and Ship Building Showing the 25 Largest Occupations / 78 Table 6.3. Ship Repair and Ship Building Occupational Openings and Completions / 79 Table 6.4. Ship Repair and Ship Building Supply Chain / 80 Table 6.5. Ship Repair and Ship Building Manufactured Products Supply Chain / 81 Table 6.6. Hampton Roads Ship Repair and Ship Building Companies Sales In-Region and Exported Outof-Region / 81 Table 7.1. Food and Beverage Manufacturing Cluster Industry Employment Trends, Hampton Roads / 83 Table 7.2. Staffing Pattern for Food and Beverage Manufacturing Showing the 25 Largest Occupations / 85 Table 7.3. Food and Beverage Manufacturing Occupational Openings and Completions / 86 Table 7.4. Food and Beverage Manufacturing Regional Demand Met by Hampton Roads Companies / 87 Table 7.5. Food and Beverage Manufacturing Supply Chain / 88 Table 7.6. Hampton Roads Food and Beverage Manufacturing Companies Sales In-Region and Exported Out-of-Region / 89 Table 8.1. Port Operations, Logistics, and Warehousing Cluster Industry Employment Trends, Hampton Roads. / 91 Table 8.2. Staffing Pattern for Port Operations, Logistics, and Warehousing Showing the 25 Largest Occupations / 93 Table 8.3. Port Operations, Logistics, and Warehousing Occupational Openings and Completions / 94 Table 8.4. Port Operations, Logistics, and Warehousing Regional Demand Met by Hampton Roads Companies / 95 Table 8.5. Port Operations, Logistics, and Warehousing Supply Chain / 96 Table 8.6. Port Operations, Logistics, and Warehousing Manufactured Products Supply Chain / 97 Table 8.7. Hampton Roads Port Operations, Logistics, and Warehousing Companies Sales In-Region and Exported Out-of-Region / 98 Table 9.1. Life Sciences Cluster Industry Employment Trends, Hampton Roads / 100 Table 9.2. Staffing Pattern for Life Sciences Showing the 25 Largest Occupations / 102 Table 9.3. Life Sciences Occupational Openings and Completions / 103 Table 9.4. Life Sciences Regional Demand Met by Hampton Roads Companies / 104 Table 9.5. Life Sciences Supply Chain / 105 Table 9.6. Life Sciences Manufactured Products Supply Chain / 106 Table 9.7. Hampton Roads Life Sciences Companies Sales In-Region and Exported Out-of-Region / 106 Table 10.1. Business and Consulting Services Cluster Industry Employment Trends, Hampton Roads / 108 Table 10.2. Staffing Pattern for Business and Consulting Services Showing the 25 Largest Occupations / 110 Table 10.3. Business and Consulting Services Openings and Completions / 111 Table 10.4. Business and Consulting Services Regional Demand Met by Hampton Roads Companies / 112 Table 10.5. Business and Consulting Services Supply Chain / 113 12 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Table 10.6. Hampton Roads Business and Consulting Services Companies Sales In-Region and Exported Out-of-Region / 114 Table 11.1. Information Analytics and Security Cluster Industry Employment Trends, Hampton Roads / 116 Table 11.2. Staffing Pattern for Information Analytics and Security Showing the 25 Largest Occupations / 117 Table 11.3. Information Analytics and Security Openings and Completions / 118 Table 11.4. Information Analytics and Security Regional Demand Met by Hampton Roads Companies / 119 Table 11.5. Information Analytics and Security Supply Chain / 120 Table 11.6. Hampton Roads Information Analytics and Security Companies Sales In-Region and Exported Out-of-Region / 121 Table 12.1. Tourism and Recreation Cluster Industry Employment Trends, Hampton Roads / 123 Table 12.2. Staffing Pattern for Tourism and Recreation Showing the 25 Largest Occupations / 124 Table 12.3. Tourism and Recreation Openings and Completions / 125 Table 12.4. Tourism and Recreation Regional Demand Met by Hampton Roads Companies / 127 Table 12.5. Tourism and Recreation Supply Chain / 128 Table 12.6. Tourism and Recreation Manufactured Products Supply Chain / 129 Table 12.7. Hampton Roads Tourism and Recreation Companies Sales In-Region and Exported Out-of- Region / 130 Table D.1. Total Population Trends / 155 Table D.2. Population Age Group Trends / 156 Table D.3. Population Living in Poverty* / 156 Table D.4. Population under the Age of 18 Living below Poverty Line / 157 Table D.5. Population 65 and Over Living below the Poverty Line / 158 Table D.6. Student Enrollment Trends / 158 Table D.7. Real Expenditures per Student / 159 Table D.8. High School Graduates / 160 Table D.9. Educational Attainment Trends of Population Age 25 and Over / 160 Table D.10. Completions from Public Universities and Community Colleges / 161 Table D.11. Labor Force Trends / 162 Table D.12. Number of Employed / 163 Table D.13. Number of Unemployed / 164 Table D.14. Real Per Capita Income / 165 Table D.16. Business Establishment / 166 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 13

14 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Introduction The purpose of this study is to provide a snapshot and assessment of the labor force, business activity, demographics, and economic trends of the Hampton Roads region. The intent is for workforce and economic development entities, educators, and business leaders alike to use the information presented here to coordinate efforts and target activities to better support worker skill development, job creation, and improved economic opportunities for everyone. The geography used for this report is the combined areas of Local Workforce Development Boards 14 and 16, which is comprised of 15 counties or cities: (cities) Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg; (counties) Gloucester, James City, Isle of Wight, Southampton, and York. These areas are shown in the map below. Map Source: Emsi Developer To understand the region s workforce assets and economic development needs, a threepronged research approach was used. The research team, in conjunction with Opportunity Inc., conducted an online survey, held multiple focus groups, and quantified the demographics, labor force, and economic activities for the region using multiple data sources, which are cited throughout the study. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 15

The focus groups and survey conducted for this research study helped to create a fuller picture of the trends and needs of the industries studied for this report, as seen by leaders in each of the areas. A common theme across the groups is a desire to see a more regional focus by economic developers with more unity in marketing and branding. Many of these industries recruit nationally for specialized skills or higher-level positions. A strong regional identity contributes to those efforts. The other most commonly expressed theme is the impact of Department of Defense (DoD) spending on the area s economy. This manifests itself in some different aspects, including the following: Overreliance on military contracts for business revenue Need to diversify customer base Difficulty in helping exiting military personnel transition to civilian jobs Lack of entrepreneurial spirit, creativity, and focus on innovation ( the military culture does not generate entrepreneurs ) 36+34+24+5+45+37+37 55+45+59+36+45+42+39 9+20+17+59+10+21+25 SURVEY RESULTS Survey Results Key Concerns for Hampton Road Businesses Extremely Concerned Moderately Concerned Not Concerned 59% 59% 55% 45% 45% 45% 42% 36% 36% 37% 37% 39% 34% 24% 25% 20% 21% 17% 9% 10% 5% Increasing Labor Costs Training Employees Continuous Change in Technology Transporation Issues Retaining Qualified Employees Regulatory Costs of Doing Business Aging Workforce The chart shown above sums up the survey results and reflects commonly held views expressed both in the survey and focus groups. In summary, labor force issues dominate business concerns with increasing costs, employee retention, training and technology, an aging workforce, and workforce commute costs at the top of employers concerns. This report is organized as follows: 16 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Section I is a demographic profile of the region. It sets the stage for the subsequent sections and explains the demographic makeup of the Hampton Roads region, discusses poverty and income levels, and looks at average educational attainment levels of Hampton Roads citizens. Section II delves more deeply into the educational profile of the region, and further examines regional investment in education and current outcomes from the spending for education. Education attainment of the residents (coupled with number of completions in the area, employment, and openings data) allows us to understand the current skill base in the Hampton Roads area and what education and training opportunities will be needed to retain and attract businesses in those major industry clusters identified. (See the cluster analysis discussion in Section IV.) Section III examines the labor market from a supply and demand perspective. This section looks at the size, availability, skills, and commuting patterns of working Hampton Roads residents. The section further provides a discussion of the types of jobs available, education requirements for those jobs, listings of the largest employers, and profiles for top occupations in the region. The final section, Section IV, examines the region s major industrial clusters. For consistency, the industry clusters chosen are the same clusters used by ReInvent Hampton Roads. 1 These industries offer economic growth and good opportunities to diversify the Hampton Roads economy. They are groups of similar industry sectors that, when combined, represent the industrial drivers of the economy. This section discusses the trends for these significant Hampton Roads industries. The survey and the focus groups were organized by the industries of the respondents. Therefore, the results from these are woven into the discussions for the various industries throughout Section IV. There are a number of appendices to this report to provide richer detail of the highlights discussed. These appendices include demographic tables for each of the individual cities or counties of the region, details for exiting military personnel by type of occupation, and survey and focus group results. 1 Source: Reinvent Hampton Roads (http://reinventhr.org/focus.html). Reinvent Hampton Roads began in 2012 as the regional economic competitiveness initiative at the Hampton Roads Community Foundation, southeastern Virginia s largest grant and scholarship provider. Its goal is to help the Hampton Roads region reinvigorate its economy and position it to thrive now and in the future. Part of its work includes incubating important community initiatives where it serves as facilitator, convener, incentivizer, and collaborator. Reinvent Hampton Roads is a community leadership initiative focused on generating high-paying, satisfying jobs to underpin a vibrant economy. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 17

SECTION I: Demographics Profile The demographics of a region affect the size and composition of the labor force and its overall economy, and vice versa. Stagnant population growth can weaken its economic base and create skill shortages. The patterns described below directly impact labor force trends, particularly labor force participation rates (see Section III). POPULATION TRENDS Hampton Roads is home to more than 1.7 million residents and its population differs from the rest of the state in some ways with lower population growth rates, a slightly younger population, and greater racial diversity, to name a few. While the populations of Hampton Roads, the state of Virginia, and the nation have risen since 2005, growth rates have not been equal. As presented in Table 1.1 below, the pace of growth in population for the United States and Virginia has slowed slightly since 2005, whereas Hampton Roads population grew at a faster pace than the previous five years. However, over the past decade, Virginia s growth has outpaced that of the Hampton Roads region (Table 1.1 and Figure 1.1) and the nation. Population growth in the Hampton Roads area was led by Williamsburg and James City County, both growing at an annual rate of 1.5 to 2% over the last five years. Some of this population growth has stemmed from people migrating into the state for retirement, as the percentage of residents 60 and older has grown in the last decade. TABLE 1.1. Total Population Trends POPULATION ANNUAL AVERAGE POPULATION GROWTH 2005 2010 2015 2005 2010 2010 2015 LWDB 14 506,756 514,132 524,386 0.3% 0.4% LWDB 16 1,125,678 1,148,413 1,182,282 0.4% 0.6% Hampton Roads 1,632,434 1,662,545 1,706,668 0.4% 0.5% Virginia 7,577,114 8,025,386 8,410,175 1.2% 1.0% United States 295,516,599 309,347,057 321,252,743 0.9% 0.8% Source: Emsi 2016.4 Dataset 18 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

FIGURE 1.1. Annual Average Population Growth Annual Average Population Growth 2005 2010 Annual Average Population Growth 2010 2015 24+32+32+96+72 32+48+40+80+64 0.3% 0.4% 0.6% 0.4% 0.4% 0.5% 1.2% 1.0% 0.9% 0.8% LWDB 14 LWDB 16 Hampton Roads Virginia United States Source: Emsi 2016.4 Dataset AGE The median age of Hampton Roads residents is similar to the median ages for Virginia and the United States as displayed in Table 1.2 below. However, what stands out is that each LWDB is comprised of a slightly different age demographic. LWDB 14 comprises more baby boomers while LWDB 16 comprises a larger share of millennials particularly when compared with the state and nation (see Table 1.3 and Figure 1.2). The demographic composition of the population directly affects the composition of the labor force (see Section III). TABLE 1.2. Median Age of Population, 2015 MEDIAN AGE LWDB 14 40 LWDB 16 37 Hampton Roads 38 Virginia 38 United States 38 Source: U.S. Census Bureau, American Community Survey 5-Year Estimates The two largest generations living today are the millennials and baby boomers. Millennials (ages 18-34 in 2015) number 416,580 in the Hampton Roads region, surpassing the 403,760 baby boomers (ages 51-69). Both generations have been on the rise in this region over the past decade. Residents in sub-region LWDB 16 comprise the largest share of millennials (25%), a larger share than the state and nation both at 21%. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 19

TABLE 1.3. Population Age Group Trends Millennials Join Baby Boomers in the Labor Force (Percent of Total Population)* 2005 2010 2015 MILLENNIALS BOOMERS MILLENNIALS BOOMERS MILLENNIALS BOOMERS LWDB 14 21.1% 20.3% 21.6% 22.7% 22.9% 24.6% LWDB 16 9.2% 18.8% 23.6% 21.1% 25.1% 23.2% Hampton Roads 22.2% 19.3% 23.0% 21.6% 24.4% 23.7% Virginia 20.7% 21.2% 20.9% 22.4% 21.3% 24.8% United States 20.4% 20.6% 20.3% 22.3% 20.8% 24.7% * Millennials were ages 18-35 in 2015 and 51-69 for baby boomers. Due to the limiting breakdown by the Census, age cohorts 20-34 were used for millennials and 50-69 for baby boomers. Source: Emsi 2016.4 Dataset FIGURE 1.2. Millennials and Baby Boomers, Percent of Total Population (2015) Millennials Boomers 69+75+73+64+62 74+70+71+74+74 24.6% 25.1% 24.4% 24.8% 24.7% 22.9% 23.2% 23.7% 21.3% 20.8% LWDB 14 LWDB 16 Hampton Roads Virginia United States Source: Emsi 2016.4 Dataset DIVERSITY Diversity in the workforce can be a driving factor in helping businesses appeal to larger markets and customer preferences. The variety of backgrounds and experiences that can be found in diverse employee groups often brings more creativity into the workplace. Many local economies have economic development efforts that seek to attract a diverse population base in efforts to increase local entrepreneurship and grow local creative endeavors, such as in the arts. Hampton Roads has a more diverse population base than either the state of Virginia or the country, partly due to the large share of federal government jobs which attracts people from all areas of the country. As shown in Figure 1.3, nearly 41% of Hampton Roads citizens identify 20 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

FIGURE 1.3. Total Population Diversity Trends 2005 2010 2015 LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES White 59.1% 58.5% 58.7% 67.6% 66.5% 57.1% 56.4% 56.6% 64.9% 63.8% 55.9% 55.0% 55.3% 62.7% 61.6% Hispanic or Latino 3.1% 3.2% 3.1% 5.4% 13.2% 3.8% 3.8% 3.8% 6.6% 14.5% 4.7% 4.7% 4.7% 7.6% 15.5% Black or African American 32.3% 32.0% 32.1% 19.8% 12.8% 32.5% 32.2% 32.3% 19.7% 13.0% 32.0% 31.7% 31.8% 19.7% 13.2% Asian/Pacific Islander 2.5% 3.5% 3.2% 4.8% 4.4% 2.8% 3.9% 3.6% 5.7% 4.9% 3.2% 4.4% 4.0% 6.5% 5.5% American Indian/ Alaska Native 0.4% 0.4% 0.4% 0.4% 1.1% 0.5% 0.5% 0.5% 0.5% 1.2% 0.6% 0.6% 0.6% 0.7% 1.4% Other, Two or More 2.4% 2.4% 2.5% 2.0% 2.0% 3.1% 3.2% 3.2% 2.6% 2.5% 3.4% 3.6% 3.6% 2.9% 2.8% Source: Emsi 2016.4 Dataset themselves as ethnic or racial minorities, compared to slightly less than the state and the nation overall (32% and 35%, respectively). Organizations and communities stand to gain several benefits from having a diverse workforce. Many firms experience growth in market share and are able to penetrate new markets or experience greater innovation with increasing diversity. Likewise, many communities have achieved greater success in attracting creative, skilled talent as their communities grow more diverse. More than one-third of the Hampton Roads working residents classify themselves as ethnic or racial minorities. TABLE 1.4. Racial Make-up of Working Residents, Hampton Roads 2010 2015 White Alone 63.0% 62.2% Black or African American Alone 31.0% 31.7% American Indian or Alaska Native Alone 0.5% 0.5% Asian Alone 4.0% 3.8% Native Hawaiian or Other Pacific Islander Alone 0.0% 0.0% Two or More Race Groups 1.6% 1.8% * 2005 data is not available Source: U.S. Census Bureau, Quarterly Workforce Indicators HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 21

POVERTY Poverty rates are one measure used to gauge the health of regional economies because it is felt that as the economy grows, so do employment and income growth. Using federal poverty guidelines, Figure 1.4 illustrates that poverty rates in the past decade moved upward during the last recession and continued to climb a number of years into the recovery. Poverty in the Hampton Roads region remains significantly lower than the nation, 12% compared to 15%, and slightly above the state at 11%. 2 FIGURE 1.4. Poverty Rates, Total Population 2010 2015 62+58+59+58+79 72+71+71+66+89 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% HAMPTON LWDB 14 LWDB 16 ROADS VIRGINIA UNITED STATES 2010 10.3% 9.7% 9.9% 9.7% 13.2% 2015 12.0% 11.8% 11.9% 11.0% 14.9% Source: U.S. Census Bureau, American Community Survey TABLE 1.5. Total Population Living in Poverty POPULATION LIVING BELOW POVERTY LINE TOTAL CHANGE PERCENTAGE CHANGE 2010 2015 2010 2015 2010 2015 LWDB 14 52,750 62,655 9,905 18.8% LWDB 16 111,210 139,672 28,462 25.6% Hampton Roads 163,960 202,327 38,367 23.4% Virginia 781,516 921,822 140,306 18.0% United States 40,917,513 47,749,043 6,831,530 16.7% * 2005 data is not comparable to more current years and, therefore, was not used Source: U.S. Census Bureau, American Community Survey 2 For further research on poverty measures, the following information and resources may be useful: Current research suggests that, on average, families need an income of about twice the federal poverty level just to afford basic expenses. There are a growing number of individuals and families who, despite being employed, are unable to afford the basic necessities of housing, food, child care, health care, and transportation. Through a series of new, standardized measurements, United Way is quantifying the size of the workforce in each state that is struggling financially, and the reasons why. These measurements provide a broader picture of financial insecurity than traditional federal poverty guidelines. The county-by-county report analyzing this ALICE (Asset-Limited, Income Constrained, Employed) population for Virginia is expected to be released in early 2017 (see www.unitedwayalice.org). 22 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Poverty is especially hurtful to children as they can be more impacted by hazardous or unhealthy living conditions, poor educational opportunities, and other risks. These risk factors may impact physical or emotional development, which may further reduce the acquisition of skills required for a career and a steady income. One in six persons under the age of 18 in Hampton Roads is living in poverty. Hampton Roads childhood poverty rates were at 16.5% in 2015 more elevated than for the state at 13.4% but lower than the nation at 19.2% (see Figure 1.5). There were nearly 9,800 more children under the age of 18 living in poverty from 2010 to 2015, a 16% increase (see Table 1.6). FIGURE 1.5. Childhood Poverty Rate Trends 2010 2015 80+83+83+67+96 20.0% 16.0% 12.0% 8.0% 4.0% HAMPTON LWDB 14 LWDB 16 ROADS VIRGINIA UNITED STATES 2010 13.8% 13.7% 13.7% 11.7% 16.8% 0.0%69+69+69+59+84 2015 16.0% 16.6% 16.5% 13.4% 19.2% Source: U.S. Census Bureau, American Community Survey TABLE 1.6. Population under the Age of 18 Living below the Poverty Line POPULATION UNDER 18 LIVING BELOW POVERTY LINE TOTAL CHANGE PERCENTAGE CHANGE 2010 2015 2010-2015 2010-2015 LWDB 14 18,856 21,160 2,304 12.2% LWDB 16 41,860 49,321 7,461 17.8% Hampton Roads 60,716 70,481 9,765 16.1% Virginia 243,239 280,144 36,905 15.2% United States 13,980,497 15,760,766 1,780,269 12.7% * 2005 data is not comparable to more current years and, therefore, was not used Source: U.S. Census Bureau, American Community Survey HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 23

Millions of elderly Americans are economically insecure and struggle with rising health care and other living costs. Though they may be above the poverty level, factors such as health problems, job loss, unexpected caretaking of grandchildren, or other life events can quickly drive this fixed-income demographic into poverty. Table 1.7 and Figure 1.6 illustrate elderly poverty trends (age 65+) and rates. The number of Hampton Roads elderly living in poverty has grown since 2010 but as a share of the total population 65 and older, it has declined meaning that there are more people age 65 and older living in the Hampton Roads region. Statewide, the number of elderly living in poverty increased only 6.8%. LWDB 16 showed the largest jump in number of elderly living in poverty but did not move much as a share of the total cohort population. As a share of the total 65 and older population, all areas shown in Figure 1.6 (below) experienced a drop from 2010 to 2015. FIGURE 1.6. Poverty Rates of Population 65 and Over 2010 2015 55+69+64+68+85 10.0% 8.0% 6.0% 4.0% 2.0% HAMPTON LWDB 14 LWDB 16 ROADS VIRGINIA UNITED STATES 2010 6.3% 7.4% 7.0% 7.7% 8.8% 0.0%63+74+70+77+88 2015 5.5% 6.9% 6.4% 6.8% 8.5% Source: U.S. Census Bureau, American Community Survey TABLE 1.7. Population 65 and Over Living Below the Poverty Line POPULATION OVER 65 LIVING BELOW POVERTY LINE TOTAL CHANGE PERCENTAGE CHANGE 2010 2015 2010-2015 2010-2015 LWDB 14 4,233 4,369 136 3.2% LWDB 16 9,232 10,242 1,010 10.9% Hampton Roads 13,465 14,611 1,146 8.5% Virginia 76,058 81,207 5,149 6.8% United States 3,554,291 4,058,359 504,068 14.2% * 2005 data is not comparable to more current years and, therefore, was not used Source: U.S. Census Bureau, American Community Survey 24 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

SECTION II: Educational Profile ENROLLMENT Total public school enrollment in the U.S. increased only slightly during the last decade. Table 2.1 illustrates that total public school enrollment in the U.S. increased by 0.2% a year, reaching 50.3 million students. Virginia public school enrollment grew significantly faster, with a total of 5.7% growth over the decade. Departing from this trend, enrollment in Hampton Roads public schools declined, dropping by nearly 15,000 students between 2005 and 2015 (see Table 2.1). The number of students enrolled in Hampton Roads schools is impacted by the number military families in the area. Much of the decline in Hampton Roads school enrollment could be attributable to fewer numbers of active duty military families; from 2005 to 2015, the number of military personnel in Hampton Roads declined by an estimated 22,000 members. In addition to those enrolled in public schools, one in every 16 Hampton Roads students is in private schools (17,000 students). Private school enrollments have seen a similar decline to those in public schools. The total number of students enrolled in all Hampton Roads schools is approximately 280,000 students. TABLE 2.1. Student Enrollment Trends STUDENT ENROLLMENT TOTAL CHANGE TOTAL % CHANGE AVERAGE ANNUAL % CHANGE REGION 2005 2010 2015 2010-2015 2010-2015 2010-2015 LWDB 14 87,318 83,872 81,771-2,101-2.5% -0.5% LWDB 16 189,844 184,109 180,587-3,522-1.9% -0.4% Hampton Roads 277,162 267,981 262,358-5,623-2.1% -0.4% Virginia 1,214,737 1,252,720 1,284,047 31,327 2.5% 0.5% United States 49,113,000 49,484,000 50,268,000 784,000 1.6% 0.3% Source: Virginia Dept. of Education, U.S. Dept. of Education HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 25

DIVERSITY The diversity of students enrolled in Hampton Roads public schools reflects the diversity of the region s population. Approximately three-quarters of the students enrolled in Hampton Roads private schools are white, as shown in Table 2.3, and about 12% of the students are African American. As can be seen in Table 2.2, approximately 40% of the students in Hampton Roads public schools are African American a decrease from 43% in 2005. This share of public school enrollment is more than twice the national percentage. The percentage of white students also decreased, while the numbers of Hispanic and Asian students grew. TABLE 2.2. Student Diversity, Percent of Total Student Population 2005 2010 2015 RACIAL MAKE-UP OF STUDENTS, HAMPTON ROADS LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES White 48.7% 47.0% 47.5% 58.8% 57.0% 44.7% 43.2% 43.6% 54.1% 52.4% 41.6% 41.3% 41.4% 50.5% 49.3% Black or African American 43.4% 44.0% 43.8% 26.6% 17.2% 40.7% 40.3% 40.4% 24.1% 16.0% 39.2% 39.6% 39.5% 22.9% 15.6% Hispanic or Latino 4.0% 3.5% 3.6% 7.5% 19.9% 7.2% 6.5% 6.7% 11.4% 23.1% 9.4% 8.1% 8.5% 14.4% 25.9% Asian/Pacific Islander 2.8% 3.6% 3.3% 5.1% 4.6% 4.0% 6.1% 5.4% 4.1% 2.4% 6.5% 6.8% 6.7% 5.1% 2.9% Other, Two or More 0.6% 1.5% 1.2% 1.7% 0.1% 3.0% 3.6% 3.4% 6.0% 5.0% 3.0% 3.8% 3.6% 6.8% 5.3% American Indian/ Alaska Native 0.5% 0.3% 0.4% 0.3% 1.2% 0.4% 0.4% 0.4% 0.3% 1.1% 0.3% 0.3% 0.3% 0.3% 1.0% Source: Virginia Dept. of Education, U.S. Dept. of Education TABLE 2.3. Racial Make-up of Private School Students, Hampton Roads (2014) 2014 RACE OR ETHNICITY PRIVATE SCHOOL ENROLLMENT % OF PRIVATE SCHOOL ENROLLMENT White 12,534 74.2% Black or African American 1,985 11.8% Asian 927 5.5% 2 or more races 768 4.5% Hispanic 487 2.9% Pacific Islander 126 0.7% Native American 65 0.4% Total Private School Enrollment 16,892 100% Source: National Center for Education Statistics 26 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

STUDENT POVERTY Several federal programs support children s nutritional needs. In 2014, the federal government spent about $20 billion to reimburse schools, child care centers, and after-school programs for children s meals. Those programs benefit mainly school-age children from low-income households. Eligibility rates for these programs can indicate the level of child poverty rate in a region. At some point in the year, nearly half of low-income households with children receiving a free or reduced-price lunch experienced food insecurity difficulty providing enough food for all members of the household owing to a lack of resources, according to the U.S. Department of Education. In 2005, the rate of free school lunch eligibility in Hampton Roads was comparable to the rate for Virginia. However, the percentage of those eligible for the school free lunch program rose sharply in the last decade. Table 2.4 shows a six-percentage point increase from 2005-2010 (similar to Virginia s increase). However, the rate of eligibility in Virginia during 2010-2015 dropped, while the Hampton Roads region experienced another large increase. As shown in Figure 2.1, the rates of eligibility in the country as a whole exceeded the rates in Hampton Roads and Virginia. TABLE 2.4. Eligibility for Free and Reduced Lunch Programs REGION 2005 2010 2015 REDUCED LUNCH ELIGIBILITY RATE FREE LUNCH ELIGIBILITY RATE REDUCED LUNCH ELIGIBILITY RATE FREE LUNCH ELIGIBILITY RATE REDUCED LUNCH ELIGIBILITY RATE FREE LUNCH ELIGIBILITY RATE LWDB 14 7.8% 28.2% 6.6% 35.0% 6.5% 40.5% LWDB 16 8.0% 28.7% 6.7% 34.7% 6.0% 40.9% Hampton Roads 7.8% 28.4% 6.7% 34.8% 6.1% 40.8% Virginia 7.2% 25.9% 6.1% 32.1% 5.8% 31.4% United States 9.0% 33.0% 7.7% 40.4% 8.6% 51.0% Source: Virginia Dept. of Education, U.S. Dept. of Education FIGURE 2.1. Free and Reduced Lunch Eligibility Rates, 2015 Free Lunch Eligible Reduced Price Lunch Eligible 70% 0%77+78+78+60+97 12+11+12+11+16 60% 50% 40% 30% 20% 10% LWDB 14 LWDB 16 Hampton Roads Virginia U.S. Source: Virginia Dept. of Education, U.S. Dept. of Education HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 27

INVESTMENTS IN EDUCATION Pupil Expenditures Spending on education varies from state to state and even among individual school districts. Hampton Roads public school districts spent approximately $11,000 per student in 2015. This is nearly 5% less than average statewide expenditures. Table 2.5 illustrates that spending per student, when adjusted for inflation, has been flat or falling in the Hampton Roads region, Virginia, and nationwide over the last decade. Because school systems usually depend on property taxes for financial support, the housing market slump in 2007 resulting in lower house prices reduced school district incomes in many localities. TABLE 2.5. Real Expenditures per Student REAL SPENDING PER PUPIL (2015 DOLLARS) CHANGE IN SPENDING REGION 2005 2010 2015 2005-2010 2010-2015 LWDB 14 $11,487 $10,930 $10,820 -$557 -$110 LWDB 16 $10,832 $11,355 $10,938 $523 -$417 Hampton Roads $11,038 $11,222 $10,901 $184 -$321 Virginia $11,581 $11,630 $11,523 $48 -$107 United States $12,588 $12,988 $12,020* $400 -$968 * 2013 is the most updated data available for U.S. Source: Virginia Dept. of Education, U.S. Dept. of Education Student-Teacher Ratios Nationwide, the numbers of students per teacher has increased steadily over the past decade at both public and private schools. The ratio of students per teacher for grades K-12 across the U.S. is 16.1 (not shown below), while the ratio of students per teacher for grades K-12 in the Hampton Roads region is 14.0. 3 This is comparable to statewide ratios, as indicated by Figures 2.2 and 2.3, on the next page. However, these charts further illustrate that during the past decade, the number of students per teacher has grown in the region and statewide. This could be due to shrinking budgets a direct impact of the recession. A breakout between grade schools and high school is not available for private schools in Hampton Roads. There are 16,900 total students in grades K-12 in private schools, with 1,850 teachers. This is a ratio of 9.1 students per teacher. 4 3 National Center for Education Statistics. Data for 2013. http://nces.ed.gov/programs/coe/indicator_clr.asp 4 Ibid. 28 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

FIGURE 2.2. Student/Teacher Ratio for K-7th Grade 2005 2010 2015 Student/Teacher Ratio 15.0 14.0 13.0 12.0 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 85+90+88+88 92+92+92+92 99+97+98+95 LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA 2005 12.1 12.8 12.6 12.6 2010 13.2 13.1 13.1 13.2 2015 14.1 13.9 14.0 13.6 Source: Virginia Department of Education FIGURE 2.3. Student/Teacher Ratio for 8th-12th Grade 2005 2010 2015 Student/Teacher Ratio 15.0 14.0 13.0 12.0 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 89+76+80+80 90+87+88+86 88+92+91+89 LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA 2005 12.7 10.9 11.4 11.4 2010 12.9 12.4 12.5 12.3 2015 12.6 13.1 13.0 12.7 Source: Virginia Department of Education HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 29

Teacher Salaries Adjusted for inflation, the average teacher salary in Hampton Roads for the 2015 school year was about $52,500 a 2% decline from 2010. Shortly after the recession, salaries began to increase in the Hampton Roads region, Virginia, and nationwide. However, in the past few years, they have leveled off, perhaps indicating the lagging effects of recession-driven budget shortfalls. The stagnation in salaries may be due to very low levels of inflation in the U.S. economy over the past decade. Another potentially contributing factor is that teachers with seniority are paid more; as they retire and are replaced by teachers with less seniority, the starting salaries of the newer teachers can lower the overall average of teacher pay. Figure 2.4 and Table 2.6 show that the average annual Hampton Roads teacher salary was cut by over $1,000 between 2005 and 2015. This was, however, significantly less than the $2,800 decline nationwide. Portsmouth s average inflation-adjusted teacher salary rose the most among Hampton Roads localities in the past decade, from $38,903 in 2005 to $51,500 in 2015. FIGURE 2.4. Teacher Salary Trends, adjusted for inflation 2005 2010 2015 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $083+88+86+85+95 87+91+90+91+100 84+90+88+92+95 SUB-REGION LWDB 14 SUB-REGION LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES 2005 $49,241 $52,170 $51,271 $50,774 $56,598 Average Teacher Salary (2015 dollars) 2010 $51,720 $54,418 $53,592 $53,892 $59,481 2015 $50,118 $53,530 $52,467 $54,486 $56,610* * 2014 is the most updated data available for U.S. Source: Virginia Department of Education, U.S. Dept. of Education TABLE 2.6. Teacher Salary Trends, adjusted for inflation AVERAGE TEACHERS SALARIES (2015 DOLLARS) CHANGE IN SALARY 2005 2010 2015 2005-2010 2010-2015 LWDB 14 $49,241 $51,720 $50,118 $2,480 -$1,603 LWDB 16 $52,170 $54,418 $53,530 $2,248 -$888 Hampton Roads $51,271 $53,592 $52,467 $2,320 -$1,125 Virginia $50,774 $53,892 $54,486 $3,118 $594 United States (2014) $56,598 $59,481 $56,610 $2,882 -$2,871 * 2014 is the most updated data available for U.S. Source: Virginia Department of Education, U.S. Dept. of Education 30 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

ACADEMIC PERFORMANCE Obtaining a high school diploma is an important indicator of future success in college and in the workplace. The high school graduation rate has trended upward in most areas of the country in the past decade, and this was the case in Hampton Roads as well. However, many students still never graduate, and while these numbers are decreasing, educators across the country make continued efforts to close the gaps that remain in many communities. Since 2005, dropout rates have declined and high school graduation rates have improved in schools throughout the Hampton Roads region. These improvements have been significant as high school graduation rates rose by 10 percentage points from 2005-2015, as shown in Table 2.7. Among Hampton Roads localities, Williamsburg-James City County and Gloucester County led the way with 93.3% and 96.1% graduation rates, respectively. Gloucester County also posted among the largest gains in graduation rate an increase of 28 percentage points over the decade. TABLE 2.7. High School Graduates FRESHMAN GRADUATE RATE FOR PUBLIC SCHOOL STUDENTS PERCENTAGE POINT CHANGE 2005 2010 2015 2005-2010 2010-2015 LWDB 14 76.2% 80.7% 81.3% 4.5 0.6 LWDB 16 64.6% 72.0% 77.2% 7.4 5.2 Hampton Roads 68.1% 74.6% 78.5% 6.5 3.9 Virginia 76.3% 83.1% 83.0% 6.8-0.1 United States (2014) 73.2% 79.0% 82.3%* 5.8 3.3 * 2014 is the most updated data available for U.S. Source: Virginia Department of Education DROPOUT RATES Dropping out of high school is associated with potential difficulties for a number of personal and societal outcomes. For example, according to the U.S. Department of Education, not completing high school translates to a loss of approximately $670,000 in income over a lifetime compared to a person holding a high school diploma. 5 Given this importance, it is encouraging that many Hampton Roads localities lowered the numbers of dropouts in the last decade. Table 2.8, on the next page, illustrates that Virginia and the Hampton Roads region improved by nearly half a percentage point over the decade. Franklin City and Gloucester County led the way in reducing the dropout rate, both posting reductions of over two percentage points. 5 U.S. Department of Education. Trends in High School Dropout and Completion Rates in the United States: 1972 2012. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 31

TABLE 2.8. Dropout Rates DROPOUT RATE FOR PUBLIC HIGH SCHOOL STUDENTS PERCENTAGE POINT CHANGE 2005 2010 2015 2005-2010 2010-2015 LWDB 14 1.4% 2.3% 1.1% 0.9-1.2 LWDB 16 2.0% 2.3% 1.5% 0.3-0.8 Hampton Roads 1.8% 2.3% 1.4% 0.5-0.9 Virginia 1.9% 2.0% 1.5% 0.1-0.5 * The State of Virginia reports on the number of students in grades 7-12 who drop out during the school year. The U.S. dropout rate is based on ages 16-24 years and, therefore, is not comparable and not listed. U.S. Source: Virginia Department of Education STANDARDIZED TESTS Virginia public schools Standards of Learning (SOL) tests were designed to set minimum requirements for what students should know and be able to do at the end of each grade or course in a variety of subjects. The SOL tests in reading, writing, mathematics, science, and history/social science provide measures set by the Virginia Board of Education. In the Hampton Roads region, the percentage of students achieving at the proficient or advanced level on Standards of Learning assessments in writing and math regularly trail the state by a few percentage points. Beginning in 2010, the state rolled out changes (for each of the different academic subjects) over a five-year period, and successfully revamped the SOL tests. Because of these testing changes, comparisons of test scores for tests taken in 2010 and later years are not useful. However, it is still valid to compare the relative difference in scores between Hampton Roads students and students in the rest of the state. The impacts of the changes in the tests are discussed below. Measuring eighth-grade performance in 2015, Table 2.9 shows that 68.4% of students achieved proficient or advanced scores in reading, slightly less than the 71.0% that passed the test statewide. However, in math, Hampton Roads students closed the gap that existed in 2010. In 2010, Hampton Roads students scored 4.4 percentage points lower than the state average, while by 2015, they were less than three percentage points below the average. Hampton Roads writing scores were below Virginia state averages. In 2010, Hampton Roads students scored almost four percentage points higher than statewide average scores. By 2015, Hampton Roads students had fallen almost three percentage points below the state average. Scores in the region and state fell considerably from 2010 to 2015. The comparison of scores from 2010 to 2015 show drops from passing rates between 80% and 90% in 2010 to barely 70% by 2015. However, the comparison is not entirely valid because the testing methodology changed during this five-year period. As educators explained regarding the first year after the new math tests were administered, This all stems largely from the fact that the math SOL exams are so new. It was the first year in which students were tested under revised math standards aimed at better preparing them for college or post-graduation employment. 32 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Overall math test results were down notably from the 2010-11 school year That is something educators attribute to more rigorous testing that moves beyond multiple choice questions and encourages critical thinking. 6 TABLE 2.9. SOL Passing Rates for 8th Graders 2010 2015 WRITING MATH WRITING MATH LWDB 14 86.0% 79.8% 67.7% 65.9% LWDB 16 87.5% 78.0% 68.7% 73.0% Hampton Roads 87.0% 78.6% 68.4% 70.8% Virginia 83.1% 83.0% 71.0% 73.0% * Comparable data not available for the U.S. Source: Virginia Department of Education EDUCATIONAL ATTAINMENT Long-term changes in educational attainment cause structural change in the economy. Regional increases in educational attainment in the past decade can be considered a structural change with a permanent impact on the labor market. Hampton Roads residents have an advantage in that more than one-third have either completed some college or hold an associate s degree, compared to 27% statewide and 29% nationally. Figure 2.5 and Table 2.10, on the next page, illustrate these trends. FIGURE 2.5. Educational Attainment of Population Age 25 and Over, 2015 12+18+77+75+28+53+38 11+21+78+77+27+55+31 12+20+78+76+27+53+33 18+19+75+59+21+62+45 22+21+84+62+24+55+33 LWDB 14 LWDB 16 Hampton Roads Virginia United States 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Less than 9th Grade to High School Some Associate s Bachelor s Graduate 9th Grade 12th Grade Diploma College degree degree Degree and Higher Source: EMSI 2016.4 Dataset 6 NBC29.com. Math SOL Scores Plummet Across the State. August 14, 2012. http://www.nbc29.com/ story/19274520/math-sol-scores-plummet-across-the-state HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 33

The percentage of Hampton Roads adults who have a high school education is lower than for the state or country. As Table 2.10 shows, the number of workers who have a high school education but have not obtained a high school diploma is also lower 11% in the region compared to 13% statewide and 14% nationwide. The data also reveal that a larger percent of the 25-and-over cohort have some college or associate s degree compared to the state and nation 34% in Hampton Roads compared to 27% statewide and 29% nationally thus indicating a skilled workforce well-prepared for technical careers. However, the share of population age 25 and over who have earned a bachelor s degree or higher is lower than the state and nation. TABLE 2.10. Educational Attainment Trends of Population Age 25 and Over 2005 2010 2015 EDUCATION ATTAINMENT LEVEL LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES Less Than 9th Grade 4.5% 4.9% 5.0% 7.1% 8.1% 2.8% 3.0% 3.0% 5.1% 6.0% 4.0% 3.8% 4.0% 6.1% 7.3% 9th Grade to 12th Grade 6.6% 7.1% 7.0% 6.7% 7.0% 6.4% 8.2% 7.7% 7.9% 8.3% 6.1% 7.0% 6.8% 6.4% 6.9% High School Diploma 27.5% 27.8% 27.9% 26.5% 29.5% 26.4% 26.4% 26.7% 25.4% 28.3% 25.5% 26.1% 26.1% 24.9% 28.0% Some College 24.6% 24.5% 24.4% 19.1% 20.2% 25.6% 26.0% 25.7% 20.0% 21.2% 25.0% 25.6% 25.3% 19.7% 20.8% Associate s Degree 8.5% 8.5% 8.5% 6.8% 7.5% 8.8% 8.6% 8.6% 6.8% 7.7% 9.4% 8.9% 9.0% 7.1% 7.9% Bachelor s Degree 17.2% 17.6% 17.2% 20.0% 17.5% 18.0% 17.7% 17.6% 20.3% 17.9% 17.5% 18.2% 17.8% 20.8% 18.2% Graduate Degree and Higher 11.0% 9.7% 10.0% 13.8% 10.3% 12.0% 10.1% 10.6% 14.5% 10.7% 12.5% 10.4% 10.9% 15.1% 11.0% Source: EMSI 2016.4 Dataset POSTSECONDARY EDUCATION Emsi determined education output by Classification of Instructional Program (CIP) codes and identified the number of completers for every award level within those CIP codes. To find the output for all public and private education institutions in the region, Emsi used data from the Integrated Postsecondary Educational System (IPEDS). 7 This data is publicly available through the National Center for Educational Statistics. Completions data were averaged for a five-year period, 2010 through 2015, to smooth out any bumps in enrollment that may be unique to a particular academic year. 7 This data comes with inherent weaknesses. First, numbers are available only for institutions that participate in or are applicants for any federal financial assistance program authorized by the Higher Education Act (HEA). Also, IPEDS does not account for the fact that some people may receive multiple degrees or certifications, so when the number of degrees awarded exceeds the number of people receiving the degrees, the number of completers can be overstated. Nevertheless, this system is the best source for collecting data regarding a broad range of educational institutions. 34 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Regional enrollment in degree-granting postsecondary institutions climbed by nearly 6% per year between 2005-2010, comparable to the statewide increase. However, between 2010-2015, attainment slowed to a 3% average annual growth rate. Table 2.11 shows that this translates into more than 27,000 new postsecondary completions annually in the region. TABLE 2.11. Completions from Public Universities and Community Colleges POST SECONDARY GRADUATES AVERAGE ANNUAL GROWTH RATE 2005 2010 2015 2005-2010 2010-2015 LWDB 14 6,051 6,586 7,439 1.7% 2.5% LWDB 16 12,357 17,491 20,307 7.2% 3.0% Hampton Roads 18,408 24,077 27,746 5.5% 2.9% Virginia 84,933 110,496 138,093 5.4% 4.6% United States 3,715,621 4,460,527 4,990,972 3.7% 2.3% Source: Emsi 2016.4 Dataset Residents in nearly every community in the Hampton Roads region have made significant strides to advance their education and skills over the past decade. Community enrollment increased in every locality in recent years. Tables 2.12 and 2.14, on the next page, show the distribution of certificates and degrees granted by institution within LWDB 14 and LWDB 16. Both regions had an especially large community college enrollment concentration for their populations in 2015, driven by strong attendance at Tidewater Community College (4,252 completions) and Thomas Nelson Community College (1,700 completions), among others. Both LWDB 14 and LWDB 16 also have strong completions numbers from colleges and universities. In LWDB 14, the College of William and Mary produced 2,840 graduates and Christopher Newport University produced 1,298 graduates. Old Dominion University leads LWDB 16 with 5,430 graduates, followed by ECPI University s 3,644 graduates. Tables 2.13 and 2.15 show the number of completions by program within each region. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 35

TABLE 2.12. LWDB 14 Postsecondary Completions, 2015 INSTITUTION AWARD OF LESS THAN 1 ACADEMIC YEAR AWARD OF AT LEAST 1 BUT LESS THAN 2 ACADEMIC YEARS ASSOCIATE'S DEGREE AWARD OF AT LEAST 2 BUT LESS THAN 4 ACADEMIC YEARS College of William and Mary 0 0 0 0 2,010 0 565 9 256 9 2,831 2,840 Christopher Newport University 0 0 0 0 1,204 0 94 0 0 0 1,298 1,298 Hampton University 0 1 0 0 667 0 149 3 105 4 921 925 Thomas Nelson Community College 359 438 903 0 0 0 0 0 0 797 903 1,700 Bryant & Stratton College-Hampton 0 0 91 0 15 0 0 0 0 0 106 106 Centura College-Newport News 37 0 64 0 0 0 0 0 0 37 64 101 Riverside College of Health Careers 0 42 49 54 0 0 0 0 0 96 49 145 Everest College-Newport News 0 116 35 0 0 0 0 0 0 116 35 151 Bethel College 0 1 7 0 9 0 0 0 0 1 16 17 Dominion School of Hair Design 14 13 0 0 0 0 0 0 0 27 0 27 Regency Beauty Institute-Newport News 0 78 0 0 0 0 0 0 0 78 0 78 Luckes Beauty Academy 0 6 0 0 0 0 0 0 0 6 0 6 Tomorrow's Image Barber Academy of Virginia BACHELOR'S DEGREE POST- BACCALAUREATE CERTIFICATE 0 12 0 0 0 0 0 0 0 12 0 12 Virginia School of Hair Design 0 33 0 0 0 0 0 0 0 33 0 33 Total for LWDB 14 410 740 1,149 54 3,905 0 808 12 361 1,216 6,223 7,439 Source: EMSI 2016.4 Dataset MASTER'S DEGREE POST-MASTERS CERTIFICATE DOCTORAL DEGREE ALL CERTIFICATES ALL DEGREES ALL COMPLETIONS TABLE 2.13. LWDB 14 Completions by Program CIP CODE 52 Business, Management, Marketing, And Related Support Services COMPLETIONS % OF TOTAL COMPLETIONS COMPLETIONS CHANGE % COMPLETIONS CHANGE RELATED JOBS 2010 2015 2015 2010-2015 2010-2015 2015 1,048 1,244 16.7% 196 18.7% 87,725 45 Social Sciences 793 928 12.5% 135 17.0% 4,726 51 Health Professions and Related Programs 1,181 837 11.3% -344-29.1% 39,375 26 Biological and Biomedical Sciences 315 468 6.3% 153 48.6% 4,641 42 Psychology 367 431 5.8% 64 17.4% 3,954 24 Liberal Arts and Sciences, General Studies And Humanities 208 411 5.5% 203 97.6% 2,797 30 Multi/Interdisciplinary Studies 296 293 3.9% -3-1.0% 7,510 13 Education 244 281 3.8% 37 15.2% 16,676 22 Legal Professions and Studies 251 242 3.3% -9-3.6% 4,376 9 Communication, Journalism, And Related Programs 183 225 3.0% 42 23.0% 4,396 23 English Language and Literature/Letters 234 205 2.8% -29-12.4% 3,119 54 History 239 204 2.7% -35-14.6% 3,882 11 Computer and Information Sciences And Support Services 147 193 2.6% 46 31.3% 7,611 40 Physical Sciences 145 169 2.3% 24 16.6% 3,551 50 Visual and Performing Arts 208 159 2.1% -49-23.6% 5,528 Totals for LWDB 14 5,859 6,290 84.6% 431 7.4% 199,865 36 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 2.14. LWDB 16 Postsecondary Completions, 2015 INSTITUTION AWARD OF LESS THAN 1 ACADEMIC YEAR AWARD OF AT LEAST 1 BUT LESS THAN 2 ACADEMIC YEARS ASSOCIATE'S DEGREE AWARD OF AT LEAST 2 BUT LESS THAN 4 ACADEMIC YEARS BACHELOR'S DEGREE POST- BACCALAUREATE CERTIFICATE MASTER'S DEGREE POST-MASTERS CERTIFICATE DOCTORAL DEGREE ALL CERTIFICATES ALL DEGREES ALL COMPLETIONS Old Dominion University 0 0 0 0 3,951 103 1,082 40 254 143 5,287 5,430 ECPI University 0 635 1,905 0 1,072 0 32 0 0 635 3,009 3,644 Tidewater Community College 1,015 343 2,894 0 0 0 0 0 0 1,358 2,894 4,252 Regent University 0 0 18 0 473 65 604 60 348 125 1,443 1,568 Norfolk State University 0 0 15 0 992 0 189 0 10 0 1,206 1,206 Eastern Virginia Medical School 0 0 0 0 0 0 255 0 134 0 389 389 Virginia Wesleyan College 0 0 0 0 354 0 0 0 0 0 354 354 ITT Technical Institute-Norfolk 0 0 154 0 64 0 0 0 0 0 218 218 Bryant & Stratton College-Virginia Beach 0 0 143 0 41 0 0 0 0 0 184 184 South University 0 0 10 0 123 0 45 0 0 0 178 178 Sentara College of Health Sciences 0 0 38 0 127 0 0 0 0 0 165 165 Centura College-Virginia Beach 0 0 114 0 40 0 0 0 0 0 154 154 Paul D Camp Community College 85 84 127 0 0 0 0 0 0 169 127 296 The Art Institute of Virginia Beach 0 17 35 0 57 0 0 0 0 17 92 109 Centura College-Chesapeake 0 0 91 0 0 0 0 0 0 0 91 91 Advanced Technology Institute 140 299 90 0 0 0 0 0 0 439 90 529 Centura College-Norfolk 116 19 49 0 0 0 0 0 0 135 49 184 Fortis College-Norfolk 17 113 19 25 0 0 0 0 0 155 19 174 Everest College-Chesapeake 0 350 16 0 0 0 0 0 0 350 16 366 Wave Leadership College 0 0 14 0 0 0 0 0 0 0 14 14 Virginia Beach Theological Seminary 0 0 0 0 0 0 10 0 0 0 10 10 Tidewater Tech-Trades 214 116 0 0 0 0 0 0 0 330 0 330 Virginia Beach City Public Schools School of Practical Nursing 0 12 0 0 0 0 0 0 0 12 0 12 Central School of Practical Nursing 0 16 0 0 0 0 0 0 0 16 0 16 Aviation Institute of Maintenance- Chesapeake 0 0 0 93 0 0 0 0 0 93 0 93 Cayce/Reilly School of Massage 13 0 0 0 0 0 0 0 0 13 0 13 Rudy & Kelly Academy-A Paul Mitchell Partner School 0 119 0 0 0 0 0 0 0 119 0 119 Empire Beauty School-Virginia Beach 0 75 0 0 0 0 0 0 0 75 0 75 The Chrysm Insitute of Esthetics 75 0 0 0 0 0 0 0 0 75 0 75 Wards Corner Beauty Academy-Norfolk 0 38 0 0 0 0 0 0 0 38 0 38 Suffolk Beauty Academy 0 21 0 0 0 0 0 0 0 21 0 21 Total for LWDB 16 1,675 2,257 5,732 118 7,294 168 2,217 100 746 4,318 15,989 20,307 Source: EMSI 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 37

TABLE 2.15. LWDB 16 Completions by Program CIP CODE PROGRAM DESCRIPTION COMPLETIONS % OF TOTAL COMPLETIONS COMPLETIONS CHANGE % COMPLETIONS CHANGE RELATED JOBS 2010 2015 2015 2010-2015 2010-2015 2015 51 Health Professions and Related Programs 5,518 4,984 24.5% -534-9.7% 95,333 52 Business, Management, Marketing, and Related Support Services 1,890 2,218 10.9% 328 17.4% 202,325 45 Social Sciences 1,064 1,577 7.8% 513 48.2% 9,265 13 Education 1,295 1,413 7.0% 118 9.1% 37,256 11 15 47 Computer and Information Sciences and Support Services Engineering Technologies and Engineering- Related Fields Mechanic and Repair Technologies/ Technicians 963 1,159 5.7% 196 20.4% 21,083 720 1,003 4.9% 283 39.3% 28,154 427 746 3.7% 319 74.7% 18,692 30 Multi/Interdisciplinary Studies 634 710 3.5% 76 12.0% 15,848 12 Personal and Culinary Services 338 710 3.5% 372 110.1% 68,678 14 Engineering 471 662 3.3% 191 40.6% 21,270 42 Psychology 426 559 2.8% 133 31.2% 7,353 24 43 Liberal Arts and Sciences, General Studies and Humanities Homeland Security, Law Enforcement, Firefighting and Related Protective Services 778 543 2.7% -235-30.2% 4,740 416 468 2.3% 52 12.5% 100,986 26 Biological and Biomedical Sciences 220 414 2.0% 194 88.2% 9,977 23 English Language and Literature/Letters 358 412 2.0% 54 15.1% 5,591 Totals for LWDB 16 15,518 17,578 86.6% 2,060 13.3% 646,553 38 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

SECTION III: Employment & Labor Force THE IMPORTANCE OF THE LABOR FORCE The labor force is composed of those people age 16 and over in the civilian noninstitutionalized population, including those classified as unemployed. Understanding labor force composition, particularly in terms of skills availability, provides some indications of an economy s dynamism. For example, some economists project lower rates of economic growth in coming years driven largely by the slowing growth of the labor force. Nationwide, slowing labor force growth may be due to several factors, including but not limited to the following: Demographic shifts increases or decreases in retirees or youth Discouraged workers who have dropped out due to lack of job prospects People who stay in school longer or return to school THE HAMPTON ROADS LABOR FORCE The Hampton Roads region had roughly 830,250 residents in the labor force in 2015. That is only 0.6% greater than in 2010, or 5,050 residents (Table 3.1 below). Pre-recession, the labor force was growing at a fairly consistent rate (averaging over 1% annually). But the recession took its toll on residents; the number of people in the labor force slowed throughout the recession and continues to do so (see Figure 3.1). The slower growth is attributed partly to the sluggish labor force growth in LWDB 14 over the past decade. TABLE 3.1. Labor Force Trends LABOR FORCE COMPOUND ANNUAL GROWTH RATE 2005 2010 2015 2005-2010 2010-2015 LWDB 14 243,129 253,325 253,408 0.8% 0.0% LWDB 16 539,023 571,879 576,846 1.2% 0.2% Hampton Roads 782,152 825,204 830,254 1.1% 0.1% Virginia 3,909,434 4,154,452 4,224,090 1.2% 0.3% United States 149,140,225 153,785,938 157,407,156 0.6% 0.5% Source: BLS, Local Area Unemployment Statistics HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 39

The slowing growth in the labor force indicates an uncertain market for job seekers and perhaps discouraging many to exit the labor force. According to the U.S. Census Annual Social and Economic Supplement to the Current Population Survey 2004-2014, the greatest reasons for people not working now compared to 10 years ago was a large influx of retirements, followed by going to school and filing for disability. FIGURE 3.1. Monthly Year-over-Year Percent Change in Labor Force, Hampton Roads 4.0% 3.0% 2.0% 1.0% 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1.0% 2.0% 3.0% Source: BLS, Local Area Unemployment Statistics EMPLOYED By U.S. Bureau of Labor Statistics terms, the definition of employed is persons age 16 and over in the civilian noninstitutionalized population who are either working (including part-time) or have a job but were temporarily absent from work. Each employed person is counted only once, even if he or she holds more than one job. The number of employed in the Hampton Roads region only grew 0.3% per year from 2005 to 2010 but started to pick up from 2010 to 2015, jumping 0.7% growth per year during this time. LWDB 16 has performed better by this measure over the past decade than LWDB 14 (see Table 3.2, on the next page). 40 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 3.2. Number of Employed EMPLOYED COMPOUND ANNUAL GROWTH RATE 2005 2010 2015 2005-2010 2010-2015 LWDB 14 233,225 233,454 240,357 0.0% 0.6% LWDB 16 517,605 528,985 549,114 0.4% 0.7% Hampton Roads 750,830 762,439 789,471 0.3% 0.7% Virginia 3,788,763 3,878,118 4,059,044 0.5% 0.9% United States 142,169,688 139,726,361 149,856,347-0.3% 1.4% Source: BLS, Local Area Unemployment Statistics The number of people in the labor force is understated in the Hampton Roads region because of the large military presence. As shown above (Table 3.1), there are 830,250 civilian people counted in the Hampton Roads region labor force, 789,471 of which are employed (Table 3.2) and an additional 87,849 employed military personnel (Table 3.3). Nearly 81% of all military personnel in the Hampton Roads region work in LWDB 16. Over the past decade, the number of military personnel in the Hampton Roads region dropped by nearly 19%, or 20,500. Over two-thirds were lost from 2005-2010. Table 3.3 summarizes the number of military personnel over the past decade. TABLE 3.3. Military MILITARY AVERAGE ANNUAL GROWTH RATE 2005 2010 2015 2005-2010 2010-2015 LWDB 14 19,063 17,897 16,809-1.3% -1.2% LWDB 16 89,315 77,339 71,040-2.8% -1.7% Hampton Roads 108,378 95,236 87,849-2.6% -1.6% Source: Emsi, Dataset 2016.4, Non-QCEW Employees THE UNEMPLOYMENT RATE After a steep rise during the recession and its prolonged recovery, the unemployment rate in the Hampton Roads region has recovered in recent years. By 2015, the region had an average unemployment rate of 5.0% a decline of 3 percentage points from 2010 but still elevated from its pre-recession rate of 4.2% in 2005 (Figure 3.2, on the next page). The Virginia and Hampton Roads economies have consistently experienced lower unemployment rates than the U.S. As explained later in this section, the relatively low unemployment rate can be attributed to a healing economy coupled with a shrinking of HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 41

primary-age wage earners (defined in this report as ages 25-54) participating in the labor force. In 2015, there were a little more than 40,000 people in Hampton Roads who were unemployed (Table 3.4). Typical of many areas across the country, unemployment rates vary across the region. Poquoson City had the lowest 2015 unemployment rate of 3.8% followed closely by Southampton County at 4.0% and Gloucester County at 4.1%. The areas with the highest unemployment rates include Franklin City at 6.7%, followed by Williamsburg and Portsmouth at 6.3% and 6.2%, respectively. FIGURE 3.2. Unemployment Rate Trends 2005 2010 2015 12.0% 41+40+40+36+51 78+75+76+71+96 52+48+49+44+53 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% SUB-REGION LWDB 14 SUB-REGION LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES 2005 4.1% 4.0% 4.0% 3.6% 5.1% 2010 7.8% 7.5% 7.6% 7.1% 9.6% 2014 5.2% 4.8% 4.9% 4.4% 5.3% Source: BLS, Current Population Survey, Local Area Unemployment Statistics TABLE 3.4. Number of Unemployed UNEMPLOYED COMPOUND ANNUAL GROWTH RATE 2005 2010 2015 2005-2010 2010-2015 LWDB 14 9,904 19,871 13,051 14.9% -8.1% LWDB 16 21,418 42,894 27,732 14.9% -8.4% Hampton Roads 31,322 62,765 40,783 14.9% -8.3% Virginia 120,671 276,334 165,046 18.0% -9.8% United States 6,970,537 14,059,577 7,550,809 15.1% -11.7% Source: BLS, Local Area Unemployment Statistics 42 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

EXITING MILITARY The impact military personnel and their families have on the Hampton Roads region is substantial during and potentially immediately after their transition out of the military, if they choose to stay. Table 3.5 shows the number of military people (from any base) who left the military in 2015 and intended to live in Virginia immediately after transitioning. Among those who left the military in 2015 and now reside in Virginia, nearly two-thirds chose to live in the Hampton Roads region. These 8,207 people are employed in 160 distinct occupations. For details on all 160 occupational categories, see Appendix A. TABLE 3.5. Military Exits by Locality, 2015 LOCALITY MILITARY EXITS REGION % STATE % Chesapeake 247 3% 2% Franklin 7 0% 0% Gloucester 47 1% 0% Hampton 509 6% 4% Isle Of Wight 52 1% 0% James City 125 2% 1% Newport News 443 5% 3% Norfolk 3,775 46% 28% Poquoson 46 1% 0% Portsmouth 924 11% 7% Southampton 9 0% 0% Suffolk 158 2% 1% Virginia Beach 1,435 17% 11% Williamsburg 1 0% 0% York 429 5% 3% Total 8,207 100% 60% Remainder of Virginia 5,421 N/A 40% Virginia State Total 13,628 N/A 100% Source: The National Crosswalk Service Center Table 3.6, on the next page, shows the broader categories of employment for 8,207 people who left the military in 2015 and settled in Hampton Roads. Many of these occupations match well with the occupational needs of the Hampton Roads industry clusters discussed in Section IV. Half of the occupations are in maintenance, repair, transportation, administrative services, office support, or materials handling all occupations needed by manufacturing businesses, port operations, logistics companies, and the shipyards. Another 9.6% are in protective services and 10% in health care fields. Several focus groups of business leaders in Hampton Roads were conducted for this report. Representatives for all industries expressed the difficulty in translating veterans skills into understandable terms to match industry-specific employment offerings. This is sometimes HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 43

also reflected in job performance. The military s Transition Assistance Program (TAP) has not been effective by the standards of these industry leaders. However, in the hotel industry, many of the maintenance people have a military background and have been found to be very well prepared. TABLE 3.6. Military Exits by Occupation group, 2015 2-DIGIT SOC DETAILED OCCUPATION TOTAL EMPLOYMENT % OF TOTAL 49 Installation, Maintenance, and Repair 2,483 30.3% 53 Transportation and Material Moving 829 10.1% 33 Protective Services 789 9.6% 43 Office and Administrative Support 778 9.5% 00 Not Elsewhere Classified 575 7.0% 31 Health care Support 421 5.1% 29 Health care Practitioners 406 4.9% 15 Computer and Mathematical 399 4.9% 47 Construction and Extraction 325 4.0% 17 Architecture and Engineering 276 3.4% 35 Food Preparation and Serving Related 237 2.9% 11 Management Occupations 163 2.0% 13 Business and Financial Operations 152 1.9% 27 Arts, Design, Entertainment, Sports, and Media 121 1.5% 51 Production 82 1.0% 41 Sales and Retail 65 0.8% 19 Life, Physical, and Social Sciences 46 0.6% 23 Legal 34 0.4% 21 Community and Social Services 20 0.2% 25 Education, Training, and Library 3 0.0% 45 Farming, Fishing, and Forestry 2 0.0% 39 Building and Grounds Cleaning and Maintenance 1 0.0% Total 8,207 100.0% Source: The National Crosswalk Service Center with data from the Defense Manpower Data Center 44 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

THE LABOR FORCE PARTICIPATION RATE Another indicator of labor market supply and demand is the labor force participation rate. This broader measure is the share of population (age 16+) that is either working or actively seeking work. Across the country, the labor force participation rate has been steadily declining for the past 15 years. The trend continues with nearly a net decline of two percentage points between 2010 (64.3) and 2015 (62.6). Some economists have attributed this to the recession followed by the unusually slow recovery that caused some workers to become discouraged and permanently drop out of the labor force particularly the younger working-age cohorts coupled with the demographic shift of an aging workforce, resulting in a somewhat structural shift in our labor force dynamics. This means that if the workers who make up the decline in the labor force participation rate would not be in the labor force even if job prospects were strong, then there would be no sizable influx of workers into the labor market as a robust recovery takes hold. Consequently, the unemployment rate would fall much more quickly. Conversely, a cyclical change occurs when willing workers, previously discouraged by the weak job market, are drawn back into the labor market by a robust recovery; they boost the labor force participation rate (since they are now actively looking for work) and also impact the unemployment rate. This trend is occurring nationwide, and it is critical in understanding the current workforce and skills needed for a region to succeed in helping businesses prosper. Figure 3.3 illustrates labor force participation trends during the recession and post-recession. The 2015 Hampton Roads rate of 66.8% is more than four percentage points higher than the nation. FIGURE 3.3. Labor Force Participation Rates 2010 2015 80% 70% 60% 50% 40% 30% 20% 10% 0% 94+99+98+95+90 90+95+94+91+87 HAMPTON LWDB 14 LWDB 16 ROADS VIRGINIA UNITED STATES 2010 67.2 70.8 69.7 67.7 64.3 2015 64.6 67.8 66.8 65.2 62.2 Source: BLS, Local Area Unemployment Statistics HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 45

Figure 3.4 shows which age groups experienced the largest declines in labor force participation. Teens entering the workforce were hit hardest, followed by those ages 25 to 59. Table 3.7 provides a breakdown of labor force participation rate for this cohort. FIGURE 3.4. Labor Force Participation Rates by Age Group, Virginia Beach-Norfolk-Newport News, VA-NC Metro Area (Change in Percentage Points, 2010-2015) 0+14+52+0+0+0+0+0+97+58+36+0+26 0.8% 3.0% 0.0% 5.7% 3.4% 2.1% 1.6% 1.1% 1.3% 0.3% 2.5% 3.0% 4.3% 16 19 20 21 22 24 25 29 30 34 35 44 45 54 55 59 60 61 62 64 65 69 70 74 75+ 74+0+0+19+43+52+0+23+0+0+0+5 Age Group Source: U.S. Census Bureau, American Community Survey TABLE 3.7. Labor Force Participation Rates by Prime-age Wage-Earners Virginia Beach-Norfolk- Newport News, VA-NC Metro Area PRIME-AGE WAGE EARNER COHORT 2010 2015 CHANGE IN PERCENTAGE POINTS 25-29 84.5% 83.3% -1.1% 30-34 84.7% 82.2% -2.5% 35-44 86.4% 83.4% -3.0% 45-54 81.8% 81.8% 0.0% * Prime-age wage earners are defined as 25-54 for the purposes of this study Source: U.S. Census Bureau, American Community Survey The proportion of jobs staffed by older workers has grown significantly since the middle of last decade. This is similar to national trends. Factors playing into this phenomenon include but are not limited to the following: The aging of the baby boomer cohort The growing attraction of many Hampton Roads communities to older individuals A need or desire by those near retirement age to continue working and recover or grow their retirement savings lost in the recession An improved health care system that allows people to work longer 46 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Changing lifestyle decisions where many are choosing to work later into life than previous generations Figure 3.5 further illustrates that the percentage of late-career workers has risen, while the proportion of workers between 30 and 54 has been in decline. FIGURE 3.5. Workplace Age Trends in Hampton Roads Age 29 or younger Age 30 to 54 Age 55 or older 25+56+19+G 23+54+23+G 19% 56% 25% 23% 23% 2010 2014 54% * 2014 is the most recent data available Source: U.S. Census Bureau, LEHD On the Map For younger workers, having a job is important for building job skills and credentials as well as for beginning to accumulate wealth. During the recession and for years afterward, many young workers found fewer opportunities in shrinking industries like construction and manufacturing and instead went to work in lower-paying retail and food service jobs. Others, in response to the lagging economy, chose to attain more education or left the workforce all together. In coming years, this may change as millennials increasingly reach prime working age. THE EMPLOYMENT-TO-POPULATION RATIO Another broad measure of labor market strength is the employment-to-population ratio the proportion of working-age population that are employed. Similar to the labor force participation rate, it indicates a higher degree of participation for the Hampton Roads region than is the case nationwide, as shown in Figure 3.6, on the next page. Of course, this indicator is cyclical. However, the behavior of the employment-to-population ratio reflects the slow recovery from the recession. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 47

FIGURE 3.6. Employment-to-Population Ratio Trends 2010 2015 70% 60% 50% 40% 30% 20% 10% 84+89+87+93+89 LWDB 14 LWDB 16 HAMPTON ROADS VIRGINIA UNITED STATES 2010 56.0 59.7 58.4 64.1 58.5 0%84+90+88+96+88 2015 56.1 59.6 57.7 62.3 59.3 Source: BLS, Local Area Unemployment Statistics WAGE AND SALARY TRENDS Wage increases (adjusted for inflation) in the Hampton Roads region, Virginia, and the nation have been modest since 2005, as illustrated in Figure 3.7. Hampton Roads workers earnings are lower than the state and nation. FIGURE 3.7. Average Earnings Trends (adjusted in 2015 dollars), 2005 2015 Hampton Roads Virginia United States $55,000 $63,200 $61,500 2015 Avg. $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Emsi 2016.4 Dataset 48 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Levels of unemployment in the Hampton Roads region and across the country have fallen since the last recession, which would suggest the potential for a tightening of labor markets and resulting higher incomes. But a look at income data in Table 3.8 suggests that for many Hampton Roads workers, real wages wages adjusted for inflation have been flat or even falling during the past decade. This mirrors similar wage stagnation in the U.S. economy. Before the recession, the growth of LWDB 14 real incomes were more than 10 times that of statewide incomes. The LWDB 14 gains also boosted overall Hampton Roads regional incomes. Since the recession, growth in income levels for LWDB 14 has slowed to slightly less than that of Virginia as a whole. TABLE 3.8. Real Per Capita Income (adjusted in 2015 dollars), 2005-2015 REAL PER CAPITA INCOME ($2015) AVERAGE ANNUAL GROWTH RATE 2005 2010 2015 2005-2010 2010-2015 LWDB 14 43,303 45,811 47,911 1.1% 0.9% LWDB 16 41,778 42,404 44,306 0.3% 0.9% Hampton Roads 42,540 44,108 46,109 0.7% 0.9% Virginia 48,931 49,283 52,052 0.1% 1.1% United States 43,573 43,779 48,112 0.1% 1.9% Source: U.S. Census Bureau, American Community Survey COMMUTING PATTERNS In 2014, 83% of Hampton Roads residents worked and lived in Hampton Roads. Of the nearly 640,000 primary jobs worked by Hampton Roads residents, roughly 107,700 (17%) commuted outside of the Hampton Roads region. Table 3.9, on the next page, provides a breakdown of commuting patterns for the Hampton Roads workforce development board sub-regions. According to Census data, Newport News City (LWDB 16) has the largest number of people commuting in, followed by Norfolk in LWDB 14. BUSINESS ESTABLISHMENTS Across the country, new business formation has undergone a slowing trend after peaking prior to the 2007-2009 recession. However, the last few years have been a period of economic expansion. Table 3.10 shows that net increases in LWDB 16 business establishments have been similar to expansion activity in the U.S., with nearly 10% more businesses in 2015 than in 2005. However, overall regional establishment growth was muted by a much smaller increase in the number of new businesses in LWDB 14. Lastly, the number of Virginia establishments grew 17.3% since 2005. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 49

TABLE 3.9. Regional Commuting Patterns (2014) LWDB 14 NUMBER SHARE LWDB 14 Total Primary Jobs of Residents 193,655 100.0% LWDB 14 Residents Employed and Living in LWDB 14 129,213 66.7% LWDB 14 Residents Commuting to LWDB 16: 23,826 12.3% Chesapeake 5311 2.7% Franklin 0 0.0% Isle of Wight 0 0.0% Norfolk 10,197 5.3% Portsmouth 893 0.5% Southampton 0 0.0% Suffolk 0 0.0% Virginia Beach 7425 3.8% LWDB 14 Residents Employed and Living in Hampton Roads Region 153,039 79.0% LWDB 14 Residents Commuting outside Hampton Roads Region 40,616 21.0% LWDB 16 NUMBER SHARE LWDB 16 Total Primary Jobs of Residents 444,568 100.0% LWDB 16 Residents Employed and Living in LWDB 16 345,749 77.8% LWDB 16 Residents Commuting to LWDB 14: 31,739 7.1% Gloucester 0 0.0% Hampton 11,772 2.6% James City 0 0.0% Newport News 19,722 4.4% Poquoson 0 0.0% Williamsburg 0 0.0% York 245 0.1% LWDB 16 Residents Employed and Living in Hampton Roads Region 377,488 84.9% LWDB 16 Residents Commuting outside Hampton Roads Region 67,080 15.1% * 2014 is most recent data available Source: U.S. Census Bureau, LEHD On the Map TABLE 3.10. Business Establishments ESTABLISHMENTS % CHANGE IN ESTABLISHMENTS REGION 2005 2010 2015 2005-2015 LWDB 14 11,176 11,598 11,747 5.1% LWDB 16 26,130 27,549 28,606 9.5% Hampton Roads 37,306 39,147 40,353 8.2% Virginia 205,985 231,030 241,614 17.3% United States 8,613,968 9,032,974 9,400,188 9.1% Source: Emsi 2016.4 Dataset 50 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

EMPLOYMENT CHANGES IN THE HAMPTON ROADS ECONOMY The Hampton Roads economy is closely tied to both coastal and inland commerce. Because of this, its economic makeup differs from Virginia as a whole. For example, Figure 3.8 illustrates that government comprises a larger share of employment in the Hampton Roads region compared to the state as a whole, while the service sector captured a larger percentage of employment in Virginia and nationwide. FIGURE 3.8. Industrial Employment Composition; Hampton Roads, Virginia, and U.S., 2015 Goods Producing Services Government 11+60+29+G12+67+21+G15+69+16+G 29% Hampton Roads 11% 12% 16% 15% 21% Virginia U.S. 60% 67% 69% Source: Emsi 2016.4 Dataset Figure 3.9 shows a breakdown of the top five largest-employing sectors in the Hampton Roads region. The most noticeable changes in the industry composition of the region over the past decade was in construction and health care. The total share of construction jobs to total jobs went from 6.4% to 4.8% as a result of the housing market crash. The number of construction jobs during that timeframe totaled a net loss of nearly 16,150 while health care jobs gained a net 25,190 during the same period of time. The health care industry went from comprising 8.2% of total jobs to 10.8%. FIGURE 3.9. Employment Changes in the Hampton Roads Economy, 2005-2015 Change in Jobs (2005-2015) INDUSTRY 2005 2015 Government 29.2% 28.7% Health Care and Social Assistance 8.2% 10.8% Retail Trade 10.4% 10.2% Accommodation and Food Services 7.9% 8.7% Manufacturing 6.8% 6.2% Health Care & Social Assistance Accomm. and Food Services Prof., Sci., & Technical Services Other Services Educational Services Transpo. and Warehousing Finance and Insurance Admin. & Support Services Real Estate Wholesale Trade Information Retail Trade Manufacturing Government Construction 100+76+42+29+26+26+18+18+14+10 93+30+17+14+13 20,000 10,000 0 10,000 20,000 Source: Emsi 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 51

LARGEST REGIONAL EMPLOYERS Table 3.11 below shows the largest non-retail and non-military employers in the Hampton Roads region. 8 Combined, these organizations employ more than 150,000 (about 17% of the total employment in Hampton Roads). Ship building, health care, and education are the key sectors among these employers. TABLE 3.11. Largest Employers in Hampton Roads, Ranked by Employment Size EMPLOYER CITY # EMPLOYEES INDUSTRY Huntington Ingalls Industries, Inc. (NNShipbuilding) Newport News 24,000 Shipbuilding and repair Sentara Healthcare Norfolk 22,000 Health care Virginia Beach City Public Schools Virginia Beach 10,600 Educational services Norfolk Naval Shipyard Portsmouth 8,500 Shipbuilding and repair Riverside Health System Newport News 8,000 Health care Virginia Beach City Virginia Beach 7,000 Municipal government Norfolk City Public Schools Norfolk 6,500 Educational services Chesapeake City Public Schools Chesapeake 5,700 Educational services Newport News City Newport News 5,600 Municipal government Naval Medical Center Portsmouth Portsmouth 5,400 Health care Newport News City Public Schools Newport News 4,600 Educational services Norfolk City Public Schools Norfolk 4,400 Municipal government NASA Langley Research Center Hampton 4,000 Aerospace R&D Old Dominion University Norfolk 3,300 Educational services The Colonial Williamsburg Foundation Williamsburg 3,100 Cultural services and activities Hampton City Public Schools Hampton 3,000 Educational services Portsmouth City Public Schools Portsmouth 3,000 Educational services Bank of America Norfolk 3,000 Finance, banking, insurance, real estate Chesapeake City Chesapeake 2,900 Municipal government Chesapeake Regional Medical Center Chesapeake 2,400 Health care Gold Key / PHR Hotels & Resorts Virginia Beach 2,400 Hospitality GEICO Direct Virginia Beach 2,300 Finance, banking, insurance, real estate TE Connectivity, LTD Hampton 2,200 Manufacturing College of William & Mary Williamsburg 2,100 Educational services Smithfield Packing Company Smithfield 2,100 Food and beverage manufacturing STIHL, Inc. Virginia Beach 2,100 Manufacturing Suffolk City Public Schools Suffolk 2,000 Educational services Portsmouth City Portsmouth 2,000 Municipal government BAE Systems Norfolk Ship Repair (Norshipco) Norfolk 2,000 Shipbuilding and repair Note: this list does not include retail establishments or military bases themselves but does include military contractors Source: Hampton Roads Economic Development Alliance 8 Does not include military bases themselves but does include military contractors. 52 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TOP OCCUPATIONS The top 25 occupations, in terms of numbers of employees, are shown in Table 3.12 along with accompanying wages. These occupations provide 282,160 jobs approximately one-third of the jobs held by Hampton Roads residents. Of these occupations, only one in the top 10 (registered nurses) has average wages above $16.00 per hour. TABLE 3.12. Top 25 Occupations in the Hampton Roads Region, Ranked by Employment SOC DESCRIPTION 2010 JOBS 2015 JOBS 2010 2015 % CHANGE MEDIAN HOURLY EARNINGS 41-2031 Retail Salespersons 27,819 28,504 2.5% $12.66 41-2011 Cashiers 21,547 22,573 4.8% $10.72 35-3021 Combined Food Preparation and Serving Workers, Including Fast Food 20,268 21,644 6.8% $10.74 43-9061 Office Clerks, General 17,416 17,740 1.9% $15.10 29-1141 Registered Nurses 12,636 14,114 11.7% $29.68 35-3031 Waiters and Waitresses 12,703 13,717 8.0% $12.74 37-2011 Janitors and Cleaners, Except Maids and Housekeeping Cleaners 13,435 13,310-0.9% $12.17 43-4051 Customer Service Representatives 12,016 12,796 6.5% $15.30 43-5081 Stock Clerks and Order Fillers 10,733 11,502 7.2% $13.64 43-6014 Secretaries and Administrative Assistants, Except Legal, Medical, and Executive 10,315 10,064-2.4% $15.91 11-1021 General and Operations Managers 9,201 9,337 1.5% $58.70 39-9021 Personal Care Aides 6,748 9,329 38.2% $10.24 43-1011 First-Line Supervisors of Office and Administrative Support Workers 8,598 9,031 5.0% $25.61 43-3031 Bookkeeping, Accounting, and Auditing Clerks 9,144 8,877-2.9% $17.44 53-7062 Laborers and Freight, Stock, and Material Movers, Hand 8,513 8,873 4.2% $13.56 41-1011 First-Line Supervisors of Retail Sales Workers 7,493 7,647 2.1% $20.03 25-1099 Postsecondary Teachers 7,099 7,537 6.2% $31.53 49-9071 Maintenance and Repair Workers, General 7,367 7,351-0.2% $17.26 35-2014 Cooks, Restaurant 6,390 7,274 13.8% $12.33 31-1014 Nursing Assistants 6,527 7,114 9.0% $12.12 25-2021 Elementary School Teachers, Except Special Education 7,574 7,104-6.2% $29.80 53-3032 Heavy and Tractor-Trailer Truck Drivers 6,899 6,924 0.4% $18.36 13-2011 Accountants and Auditors 6,385 6,787 6.3% $34.02 37-2012 Maids and Housekeeping Cleaners 6,928 6,611-4.6% $10.61 13-1199 Business Operations Specialists 5,968 6,397 7.2% $35.04 Total of Top 25 occupations 269,767 282,157 4.6% $18.01 Source: Emsi 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 53

Table 3.13 shows those occupations that added the most jobs from 2010-2015. Of these rapidly growing occupations, about half offer median wages above $16.00 per hour. The data show that the number of health care occupations rose briskly and include both highly skilled and less-skilled occupations. The jobs shown in Tables 3.12, 3.13, and 3.14 do not include military jobs. TABLE 3.13. Top Fastest-Growing Occupations in the Hampton Roads Region, Ranked by Job Growth Rate SOC DESCRIPTION 2010 JOBS 2015 JOBS 2010-2015 % CHANGE MEDIAN HOURLY EARNINGS 39-9021 Personal Care Aides 6,748 9,329 38.2% $10.24 31-1011 Home Health Aides 2,856 3,496 22.4% $11.53 53-7061 Cleaners of Vehicles and Equipment 1,728 2,037 17.9% $12.99 13-1111 Management Analysts 5,199 5,949 14.4% $42.25 31-9092 Medical Assistants 2,586 2,943 13.8% $14.43 35-2014 Cooks, Restaurant 6,390 7,274 13.8% $12.33 39-5012 Hairdressers, Hairstylists, and Cosmetologists 3,681 4,163 13.1% $14.63 51-4041 Machinists 1,967 2,208 12.3% $22.77 29-1141 Registered Nurses 12,636 14,114 11.7% $29.68 31-9091 Dental Assistants 1,900 2,122 11.7% $15.86 29-2061 Licensed Practical and Licensed Vocational Nurses 4,138 4,609 11.4% $19.24 11-9199 Managers, All Other 2,696 3,000 11.3% $38.63 17-3029 35-9031 Engineering Technicians, Except Drafters, All Other Hosts and Hostesses, Restaurant, Lounge, and Coffee Shop 1,876 2,079 10.8% $35.08 2,359 2,605 10.4% $10.56 15-1199 Computer Occupations, All Other 2,071 2,284 10.3% $41.76 49-3023 Automotive Service Technicians and Mechanics 4,200 4,605 9.6% $19.33 35-3011 Bartenders 2,302 2,523 9.6% $15.53 31-1014 Nursing Assistants 6,527 7,114 9.0% $12.12 53-7064 Packers and Packagers, Hand 2,753 2,993 8.7% $12.46 15-1121 Computer Systems Analysts 2,458 2,669 8.5% $41.33 43-3021 Billing and Posting Clerks 2,363 2,564 8.5% $15.47 35-3031 Waiters and Waitresses 12,703 13,717 8.0% $12.74 35-1012 First-Line Supervisors of Food Preparation and Serving Workers 5,186 5,576 7.5% $16.44 53-5011 Sailors and Marine Oilers 1,829 1,963 7.4% $19.97 13-1199 Business Operations Specialists, All Other 5,968 6,397 7.2% $35.04 Top 25 fastest growing occupations 105,119 118,330 12.6% $20.66 Source: Emsi 2016.4 Dataset 54 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Table 3.14, on the next page, shows the occupations in the Hampton Roads region with the most annual openings. For occupations that require training beyond a high school diploma, the completions column gives an indication of regional supply of trained job candidates relative to the demand as indicated by annual openings. The table helps illustrate the most apparent gaps that exist between Hampton Roads educational institutions and regional occupational openings. As outlined earlier, Emsi determined education output by Classification of Instructional Program (CIP) codes and identified the number of completers for every award level within those CIP codes. The association between program completions and occupations can vary significantly. It s quite common that multiple educational programs may train for a single occupation. For example, there are five unique educational programs which train for general and operations managers. But in other cases, the association of a program and occupation is both specific and direct. For instance, to become a nurse there is typically one option: the registered nursing program. Conversely, some occupations do not require a specific educational pathway. Sales jobs frequently fall into this category. While there may be certain training programs that are a better fit for a sales career (e.g., business administration) they are by no means a prerequisite. One can have a successful sales career with a psychology degree, an engineering degree, or no degree whatsoever. Finally, the program-to-occupation crosswalk is not prescriptive; it simply attempts to describe what is typical. There are no completions shown for educational levels below what is required for the job. If an occupation s entry-level requirement is a bachelor s degree, the completions data shows the number of people who have completed bachelor s degrees or higher in programs relevant to that occupation. Education and health care occupations are responsible for the most apparent gaps in those occupations requiring an associate s degree or higher, with the largest single gap found in postsecondary teachers. Among the top five occupations requiring a postsecondary nondegree award, nursing assistants were observed as having the most significant gap roughly 370. These occupations, with educational requirements for entry, represent the growing workforce needs facing Hampton Roads employers. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 55

TABLE 3.14. Educational Completions and Openings, Hampton Roads AVERAGE ANNUAL OPENINGS 2010-2015 EMPLOYMENT 2015 RELATED COMPLETIONS 2015 SOC OCCUPATION DESCRIPTION REPLACEMENT JOBS NEW JOBS TOTAL OPENINGS TOTAL JOBS % OF TOTAL JOBS CERTIFICATES ASSOCIATE'S DEGREES BACHELOR'S DEGREES GRADUATE DEGREES TOTAL COMPLETIONS TOP 5 REQUIRING NO FORMAL EDUCATIONAL CREDENTIAL 41-2031 Retail Salespersons 1,150 154 1,304 28,504 3.3% 0 0 2 0 2 41-2011 Cashiers 1,057 207 1,264 22,573 2.6% 0 0 0 0 0 35-3021 Combined Food Preparation and Serving Workers, Including Fast Food 826 288 1,114 21,644 2.5% 1 0 0 0 1 35-3031 Waiters and Waitresses 759 203 962 13,717 1.6% 0 0 0 0 0 39-9021 Personal Care Aides 103 516 619 9,329 1.1% 28 35 0 0 63 TOP 5 REQUIRING HIGH SCHOOL DIPLOMA OR EQUIVALENT 43-4051 Customer Service Representatives 387 201 588 12,796 1.5% 0 0 0 0 0 43-9061 Office Clerks, General 490 85 575 17,740 2.0% 0 0 0 0 0 33-9032 Security Guards 273 48 321 5,130 0.6% 0 30 0 0 30 35-1012 43-1011 First-Line Supervisors of Food Preparation and Serving Workers First-Line Supervisors of Office and Administrative Support Workers 193 78 271 5,576 0.6% 28 35 12 0 75 181 87 268 9,031 1.0% 0 41 48 0 89 TOP 5 REQUIRING SOME COLLEGE, NO DEGREE 25-9041 Teacher Assistants 212 0 212 6,337 0.7% 23 0 0 0 23 43-3031 Bookkeeping, Accounting, and Auditing Clerks 135 0 135 8,877 1.0% 29 74 0 0 103 15-1151 Computer User Support Specialists 90 39 129 3,608 0.4% 3 411 490 2 906 49-2011 Computer, Automated Teller, and Office Machine Repairers 26 5 31 675 0.1% 0 0 0 0 0 27-2011 Actors 16 3 19 218 0.0% 0 0 53 8 61 TOP 5 REQUIRING POSTSECONDARY NONDEGREE AWARD 31-1014 Nursing Assistants 248 123 371 7,114 0.8% 0 0 0 0 0 29-2061 Licensed Practical and Licensed Vocational Nurses 181 98 279 4,609 0.5% 739 0 0 0 739 39-5012 Hairdressers, Hairstylists, and Cosmetologists 143 122 265 4,163 0.5% 355 0 0 0 355 53-3032 Heavy and Tractor-Trailer Truck Drivers 186 76 262 6,924 0.8% 146 0 0 0 146 49-3023 Automotive Service Technicians and Mechanics 161 81 242 4,605 0.5% 364 102 0 0 466 TOP 5 REQUIRING ASSOCIATE'S DEGREE 25-2011 Preschool Teachers, Except Special Education 124 15 139 2,823 0.3% NA 0 31 18 49 17-3029 17-3023 Engineering Technicians, Except Drafters, All Other Electrical and Electronics Engineering Technicians 74 48 122 2,079 0.2% NA 4 172 0 176 70 23 93 1,961 0.2% NA 207 170 0 377 23-2011 Paralegals and Legal Assistants 57 9 66 1,616 0.2% NA 86 7 0 93 29-2034 Radiologic Technologists 29 22 51 1,142 0.1% NA 99 0 0 99 56 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

AVERAGE ANNUAL OPENINGS 2010-2015 EMPLOYMENT 2015 RELATED COMPLETIONS 2015 SOC OCCUPATION DESCRIPTION REPLACEMENT JOBS NEW JOBS TOTAL OPENINGS TOTAL JOBS % OF TOTAL JOBS CERTIFICATES ASSOCIATE'S DEGREES BACHELOR'S DEGREES GRADUATE DEGREES TOTAL COMPLETIONS TOP 5 REQUIRING BACHELOR'S DEGREE 29-1141 Registered Nurses 431 308 739 14,114 1.6% NA NA 499 113 612 13-2011 Accountants and Auditors 244 80 324 6,787 0.8% NA NA 162 106 268 11-1021 General and Operations Managers 267 47 314 9,337 1.1% NA NA 932 371 1,303 13-1111 Management Analysts 129 154 283 5,949 0.7% NA NA 925 338 1,263 13-1199 Business Operations Specialists, All Other 145 108 253 6,397 0.7% NA NA 0 0 0 TOP 5 REQUIRING MASTER'S DEGREE 21-1014 Mental Health Counselors 73 50 123 1,874 0.2% NA NA NA 44 44 29-1171 Nurse Practitioners 24 39 63 952 0.1% NA NA NA 29 29 11-9032 21-1012 Education Administrators, Elementary and Secondary School Educational, Guidance, School, and Vocational Counselors 57 0 57 1,419 0.2% NA NA NA 144 144 47 4 51 1,514 0.2% NA NA NA 231 231 11-9033 Education Administrators, Postsecondary 32 9 41 639 0.1% NA NA NA 154 154 TOP 5 REQUIRING DOCTORAL OR PROFESSIONAL DEGREE 25-1099 Postsecondary Teachers 286 136 422 7,537 0.9% NA NA NA 97 97 29-1069 Physicians and Surgeons, All Other 68 40 108 1,914 0.2% NA NA NA 147 147 23-1011 Lawyers 69 4 73 2,276 0.3% NA NA NA 374 374 29-1051 Pharmacists 38 22 60 1,338 0.2% NA NA NA 61 61 29-1123 Physical Therapists 38 20 58 978 0.1% NA NA NA 62 62 Note: These occupations have a typical entry-level education. They are ranked by most number of average annual openings. There are no completions shown for educational levels below what is required for the job. Source: EMSI 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 57

SECTION IV: Industry Cluster Profiles The Hampton Roads region is home to more than 40,000 establishments that employ more than 870,000 people. The regional economy is projected to add more than 30,000 jobs, or 3.6%, in the next five years (Table 4.1). The Hampton Roads economy produces $83.6 billion per TABLE 4.1. Hampton Roads Employment, Earnings and Establishments by Industry Sector (2015) EMPLOYMENT PROJECTED GROWTH % PROJECTED GROWTH AVERAGE EARNINGS ESTABLISHMENTS NAICS INDUSTRY SECTOR 2015 JOBS 2020 JOBS 2015-2020 2015-2020 2015 2015 90 Government 250,399 250,638 239 0.1% $70,730 1,152 62 Health Care and Social Assistance 94,438 109,189 14,751 15.6% $53,978 5,898 44 Retail Trade 88,684 90,789 2,105 2.4% $29,433 5,331 72 Accommodation and Food Services 75,920 78,821 2,901 3.8% $18,978 3,700 31-33 Manufacturing 54,121 52,080-2,041-3.8% $77,196 1,003 54 56 Professional, Scientific, and Technical Services Admin. and Support and Waste Mgmt. and Remediation Services 49,557 53,902 4,345 8.8% $75,013 4,699 46,445 49,622 3,177 6.8% $36,184 2,249 23 Construction 41,491 41,517 26 0.1% $52,663 3,979 81 Other Services (except Public Administration) 38,840 40,327 1,487 3.8% $25,765 3,663 48-49 Transportation and Warehousing 24,610 25,354 744 3.0% $64,336 1,007 52 Finance and Insurance 22,398 24,114 1,716 7.7% $77,956 2,022 42 Wholesale Trade 18,215 18,082-133 -0.7% $66,964 1,443 53 Real Estate and Rental and Leasing 15,549 16,292 743 4.8% $51,231 1,993 61 Educational Services 15,264 17,050 1,786 11.7% $43,209 529 71 Arts, Entertainment, and Recreation 13,035 13,902 867 6.7% $25,761 518 51 Information 10,978 9,776-1,202-10.9% $64,880 422 55 Management of Companies and Enterprises 10,093 9,940-153 -1.5% $110,152 327 11 Crop and Animal Production 1,901 1,731-170 -8.9% $33,787 155 22 Utilities 1,398 1,410 12 0.9% $112,241 42 99 Unclassified Industry 310 600 290 93.5% $35,196 204 21 Mining, Quarrying, and Oil and Gas Extraction 86 104 18 20.9% $83,217 17 Totals for Hampton Roads 873,732 905,239 31,507 3.6% $54,966 40,353 Source: Emsi Developer 2016.4 dataset 58 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

year of value-added goods and services (Table 4.2). The government sector is the largest sector of the Hampton Roads economy, accounting for more than one-third of gross regional product (GRP). The manufacturing sector is the next largest, at 7.2% of the GRP (Table 4.2). This section of the report provides descriptions and analyses for eight industry clusters in Hampton Roads, including labor market gap and supply chain analyses. TABLE 4.2. Hampton Roads Gross Regional Product by Industry Sector TOTAL EARNINGS PROPERTY INCOME TAXES LESS SUBSIDIES GROSS REGIONAL PRODUCT (GRP) % OF TOTAL GRP NAICS INDUSTRY SECTOR 2015 2015 2015 2015 2015 90 Government $17,763,598,803 $10,918,667,545 $ $28,682,266,349 34.3% 31-33 Manufacturing $4,226,161,435 $1,497,554,008 $324,433,306 $6,048,148,749 7.2% 62 Health Care and Social Assistance $5,333,838,081 $233,923,133 $119,390,474 $5,687,151,689 6.8% 54 Professional, Scientific, and Technical Services $4,191,364,240 $335,262,952 $113,460,894 $4,640,088,086 5.5% 44 Retail Trade $2,772,062,149 $307,703,084 $978,761,760 $4,058,526,993 4.9% 52 Finance and Insurance $2,260,567,410 $1,233,451,288 $219,584,213 $3,713,602,910 4.4% 23 Construction $2,398,092,316 $664,190,567 $35,691,871 $3,097,974,754 3.7% 53 Real Estate and Rental and Leasing $1,667,281,770 $1,288,954,608 $117,799,817 $3,074,036,196 3.7% 42 Wholesale Trade $1,475,494,971 $745,324,850 $605,655,890 $2,826,475,710 3.4% 56 Administrative and Support and Waste Management and Remediation Services $1,996,380,436 $360,996,102 $50,902,700 $2,408,279,239 2.9% 48-49 Transportation and Warehousing $1,660,719,624 $661,033,379 $85,532,093 $2,407,285,096 2.9% 72 Accommodation and Food Services $1,506,176,758 $340,296,497 $319,484,989 $2,165,958,245 2.6% 51 Information $761,178,978 $763,988,733 $98,691,340 $1,623,859,052 1.9% 81 55 Other Services (except Public Administration) Management of Companies and Enterprises $1,187,408,463 $47,049,634 $81,319,081 $1,315,777,179 1.6% $1,151,172,593 $126,677,435 $34,044,226 $1,311,894,255 1.6% 61 Educational Services $700,736,257 $28,660,136 $29,135,699 $758,532,092 0.9% 71 Arts, Entertainment, and Recreation $397,602,391 $80,098,083 $73,287,910 $550,988,384 0.7% 22 Utilities $159,379,283 $248,874,082 $127,391,875 $535,645,240 0.6% 11 Crop and Animal Production $99,174,996 $30,913,938 $9,023,598 $139,112,532 0.2% 21 Mining, Quarrying, and Oil and Gas Extraction $22,755,565 $41,043,074 $5,889,051 $69,687,690 0.1% NA Other Non-Industries $ $7,355,290,535 $1,157,471,224 $8,512,761,759 10.2% Totals for Hampton Roads $51,731,146,519 $27,309,953,664 $4,586,952,012 $83,628,052,195 100.0% Source: Emsi Developer 2016.4 dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 59

INDUSTRY CLUSTERS The Hampton Roads region can achieve economic success and growth by capitalizing on economic strengths, here categorized into similar industries called clusters. Industry cluster analysis highlights the strengths and weaknesses of each of those industries and shows where focus needs to be placed to encourage growth. Each industry cluster is comprised of key industries that have a high level of economic integration and interdependency. When analyzing these clusters, it is important to compare their regional concentration with the national average. This comparison reveals the industry cluster s [relative] concentration in the region, measured by location quotient (LQ; see more in the following section). Industries with high concentration (or LQ) are said to be specialized in a region. In Hampton Roads particularly, unique factors within the local economy allow each of the following eight private-sector industries to have a strong concentration: Advanced manufacturing Ship repair and ship building Food and beverage manufacturing Port operations, logistics, and warehousing Life sciences Business and consulting services Information analytics and security Tourism and recreation These clusters were chosen based on a recent study for the Hampton Roads region. 9 Each cluster represents areas for growth and diversification for the Hampton Roads economy as well as opportunities for regional businesses to diversify their market base. Table 4.3, on the next page, summarizes projected employment growth for each cluster and corresponding concentration (measured by location quotient, LQ). Figure 4.1 shows projected industry cluster job growth arrayed against average annual earnings. Most of the clusters in Hampton Roads pay more than average and are projected to add jobs in the region. The information analytics and security cluster is projected to experience the greatest growth while advanced manufacturing is projected to suffer the greatest contraction. The sole lower-paying cluster is tourism and recreation. 9 Dr. Larry Filer, The Hampton Roads Industry Cluster Mapping Project, ReInvent Hampton Roads and Old Dominion University, August 2016. 60 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 4.3. Hampton Roads Industry Clusters Performance Trends EMPLOYMENT PROJECTED GROWTH % PROJECTED GROWTH CONCENTRATION (LQ) AVERAGE EARNINGS TOTAL SALES GROSS REGIONAL PRODUCT (GRP) ESTABLISHMENTS JOBS MULTIPLIER INDUSTRY CLUSTER 2015 JOBS 2020 JOBS 2015-2020 2015-2020 2015 2015 2015 2015 2015 2015 Advanced Manufacturing 8,260 7,474-786 -9.5% 10.5 $69,849 $2,964,599,009 $1,042,583,757 123 2.2 Ship Repair & Ship Building Food & Beverage Manufacturing Port Operations, Logistics, & Warehousing 26,255 26,588 333 1.3% 45.3 $62,966 $7,478,643,352 $2,643,448,292 42 2.1 5,958 5,473-485 -8.1% 3.2 $51,311 $3,217,803,180 $822,434,182 79 2.3 13,913 14,753 841 6.0% 4.3 $78,257 $3,974,713,816 $1,589,993,183 521 2.6 Life Sciences 1,989 2,122 133 6.7% 0.8 $79,271 $798,042,112 $239,615,109 234 2.1 Business & Consulting Services Information Analytics and Security 33,802 34,738 936 2.8% 1.0 $90,212 $7,187,367,169 $4,112,074,278 2,933 2.1 18,542 20,038 1,497 8.1% 1.2 $78,513 $3,394,425,507 $1,965,394,298 1,305 2.0 Travel & Recreation 18,175 17,761-413 -2.3% 2.3 $31,739 $1,546,048,461 $846,290,726 679 1.5 Totals for Hampton Roads Priority Clusters 126,892 128,948 2,056 1.6% 11.4 $67,765 $30,561,642,604 $13,261,833,825 5,916 2.1 Totals for All Hampton Roads Industries 873,732 905,239 31,507 3.6% 3.4 $54,966 $231,815,174,882 $83,628,052,195 40,353 1.9 Source: Emsi 2016.4 Dataset FIGURE 4.1. Hampton Roads Industry Clusters Size of Cluster Based on 2015 Employment $120,000 Average Annual Earnings (2015) $105,000 $90,000 $75,000 $60,000 $45,000 $30,000 Advanced Manufacturing Food & Beverage Manufacturing Business and Consulting Services Ship Repair & Ship Building Port Operations, Logistics, & Warehousing Life Sciences Information Analytics and Security $15,000 Tourism $0 15% 10% 5% 0% 5% 10% 15% 20% Projected % Job Growth (2015 2020) Source: Emsi 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 61

LOCATION QUOTIENTS Location quotients are useful for studying the composition of jobs in an area relative to the national concentration. In other words, a location quotient shows the industry s share of an area s employment relative to the national average. For example, a location quotient of 2.0 indicates that an industry accounts for twice the share of employment in the area than it does nationally, and a location quotient of 0.5 indicates that the area s share of employment in the industry is only half the national share. As illustrated in Figure 4.2 below, business and consulting services, with an LQ of 0.76, is three-quarters as concentrated regionally as nationwide. Though likely unsurprising to Hampton Roads residents, the ship repair and ship building cluster has an extremely high concentration 45.3 LQ. This means that for the size of the economy of Hampton Roads, ship repair and building is more than 45.3 times more concentrated than would be expected in another economy of similar size. Figure 4.2 shows the location quotient for each of the eight clusters in this study, graphed by average annual earnings and projected job growth or loss between 2015 and 2020. FIGURE 4.2. Hampton Roads Industry Clusters Concentration of Employment, 2015 $120,000 Average Annual Earnings (2016) $100,000 $80,000 $60,000 $40,000 Advanced Manufacturing, 1.75 Ship Repair & Ship Building, 30.32 Food & Beverage Manufacturing, 1.22 Business and Consulting Services, 0.76 Port Operations, Logistics, & Warehousing, 1.08 Information Analytics and Security, 0.9 Life Sciences, 0.36 $20,000 Tourism, 1.39 $0 30% 20% 10% 0% 10% 20% 30% Projected % Job Growth (2015 2025) Source: Emsi 2016.4 Dataset 62 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

INDUSTRY CLUSTER DESCRIPTION The following sections profile each of these key eight industry clusters in Hampton Roads. Each profile has a description of the industry cluster, including revenues and employment. The profiles each also have a labor gap analysis and a supply chain analysis. The labor gap analysis examines the supply (the availability of qualified applicants) and the demand (jobs needing to be filled by employers) for labor by using labor market information to analyze recent employment trends, the occupational composition by industry, and the education pipeline of the available workforce. The supply chain analysis shows the demand for an industry cluster s goods and services coupled with information on the cluster supply chain (the purchases made by companies in the cluster). The first figure shown in each cluster description is a map of Hampton Roads region that shows cluster jobs by local area. The next graphic is a table that highlights employment trends for the cluster, illustrating which cluster sectors have been hiring, which sectors have been shedding jobs, and generally where cluster employment is located in the region. The last figure in each cluster description is a chart showing year-over-year cluster employment changes compared with state and national trends. Data is used to provide a descriptive component of what has happened, what is currently happening, and what is projected to happen within any given industry cluster, industry sector, or occupation. This data can also be evaluated from varying perspectives to provide a larger context of economic understanding. For example, geographically specific data can better display regional effects when compared with a larger geography (e.g., state or nation) and indicate whether a region may have a comparative advantage in any particular sector. Each of the following metrics provided for the labor market gap analysis or supply chain analysis offers a different perspective of industry performance, the regional fit, or the economic ripple effects of cluster activity. The tables for each industry cluster contain the following data: Historical job growth and current size Future job growth projection Industry concentration (location quotient) Job multiplier effects Industry average wage Establishments Historical job growth and current size measures the current employment and past employment by industry sector. It also measures whether an industry has been growing or declining. Future job growth projection incorporates the historical growth and performance of an industry and factors in the growth expectations of an industry at a larger geographic scale (i.e., state, nation, or even global expectations). Industry projection rates are based on past trends carried forward and published projections from state and federal sources. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 63

Industry concentration (location quotient) compares the concentration of employment in a regional industry with employment in the same industry for similar regions across the nation. The national average is set to 1.0. As explained in the location quotient section above, any industry with a concentration greater than 1.0 is considered to have high concentration. Job multiplier effects indicate the importance of a job to the regional economy. For example, if a single job has a multiplier of 3, then this one job supports two other jobs in the regional economy due to an indirect or induced effect. Industry average wage is based on industry staffing patterns and the average occupational wage associated with that staffing pattern. The average wage indicates the quality of jobs in a region. Establishments provides the current and historic number of establishments in the region. A change in establishments can be a factor in determining the stage of an industry. For example, if the number of establishments declined while job numbers themselves remained strong, the industry might be consolidating. LABOR MARKET GAP ANALYSIS Two tables are provided for each labor market gap analysis section for each cluster. The first table lists the top 25 occupations for the sector, the wages, the number of people employed in each occupation within the cluster, and the total number employed in each occupation in all industries within the region. This provides an understanding of the share of employment the cluster has within the region, and an assessment of the competition the cluster faces from other companies within the region for finding qualified employees. The second table shows the educational requirements for each of the top 25 occupations for the cluster, which can provide insight into the compensation levels for certain occupations. (Note that the educational requirements reflect national averages and hence may differ from specific requirements of Hampton Roads employers.) The table also shows the average annual openings for each occupation as well as regional completions relevant for each occupation. For example, if an occupation s entry-level requirement is a bachelor s degree, the completions data shows the number of people who have completed bachelor s degrees (or higher) in programs related to that occupation. The table helps illustrate the most apparent gaps that exist between Hampton Roads educational institutions and regional occupational openings. As outlined earlier, Emsi determined education output by Classification of Instructional Program (CIP) codes and identified the number of completers for every award level within those CIP codes. The association between program completions and occupations can vary significantly. It s quite common that multiple educational programs may train for a single occupation. For example, there are five unique educational programs which train for general and operations managers. In other cases, the association of a program and occupation is both specific and direct. For instance, to become a nurse there is typically one option: the registered nursing program. Conversely, some occupations do not require a specific educational pathway. Sales jobs 64 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

frequently fall into this category. While there may be certain training programs that are a better fit for a sales career (e.g., business administration) they are, by no means, a pre-requisite. One can have a successful sales career with a psychology degree, an engineering degree, or no degree whatsoever. Finally, the program-to-occupation crosswalk is not definitive; it simply attempts to describe what is typical. To find the output for all public and private education institutions in the region, Emsi used data from the Integrated Postsecondary Educational System (IPEDS). This data is publicly available through the National Center for Educational Statistics. Completions data were averaged for a five-year period, 2010 through 2015, to smooth out any bumps in enrollment that may be unique to a particular academic year. There are no completions shown for educational levels below what is required for the job. If an occupation s entry-level requirement is a bachelor s degree, the completions data shows the number of people who have completed bachelor degrees or higher in programs relevant to that occupation. SUPPLY CHAIN ANALYSIS Three distinct topics (quantified in three tables) are discussed for each supply chain analysis. These analyses evaluate each cluster s economic performance in the region to provide insights into regional strengths, weaknesses, and opportunities for growth. The first table shows the total demand for each industry sector within a given cluster. This is the demand by Hampton Roads residents and businesses for the products and/or services produced by that industry sector regardless of whether the products or services are actually produced within the region. Furthermore, the table shows how much of local demand is met by companies within the region and how much of local demand is met by importing from other regions. This comparison helps determine opportunities to expand local businesses shares of local demand. For example, if only 10% of regional demand for a product is being met by regional companies, this table will quantify the value of the remaining 90% of demand that could be met by regional companies. (Note that the data for goods or services imported into the region does not include foreign imports.) The second table shows the supply chain for each industry cluster. This table shows the purchases made by companies in the regional industry cluster according to product or service. These purchases are used to run a company and include everything from services to consumable supplies to capital investment in manufacturing equipment. The table also shows how much of the cluster s supply chain need is met by the companies inside the region and how much is imported. The final table shows total cluster sales, both inside and outside the region. This is useful for understanding how much revenue a cluster is bringing into the region through its sales of goods or services outside of the region. Industries that predominately export their products bring new money into the economy, which in turn drives other regional businesses. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 65

ADVANCED MANUFACTURING Manufacturing industries are categorized as advanced if they meet certain criteria: 1) their research and development (R&D) spending per worker is in the 80th percentile (or higher) of all industries, 2) their share of workers in occupations that require a high degree of science, technology, engineering, and math (STEM) knowledge is above the national average, and 3) they use innovative technology to improve products or processes. Advanced manufacturing industries typically offer competitive wages, contribute handsomely to a region s gross regional product (GRP), and offer career pathways for workers with a wide variety of education and skills, including many middle-skill jobs. However, advanced manufacturing usually requires fewer (higher-skill, higher-paid) workers than traditional manufacturing because many of the lower-skill processes have been automated. Twenty-five of these industries make up the advanced manufacturing cluster in Hampton Roads (see Table 5.1 for the full list of industries). Figure 5.1 below shows the 2015 job distribution for the advanced manufacturing cluster throughout Hampton Roads. Virginia Beach had the largest number of advanced manufacturing jobs in 2015 (2,650), followed by Newport News (2,203), Chesapeake (1,516), and Hampton City (660). FIGURE 5.1. Advanced Manufacturing Cluster, 2015 Job Distribution Source: Emsi 2016.4 Dataset Table 5.1, on the next page, provides an overview for each of the individual industry sectors that comprise the advanced manufacturing cluster in Hampton Roads. Included are historic, current, and projected employment; historic and projected average annual percent growth (or decline); historic and current employment concentration (LQ); average earnings; total sales; gross regional product (GRP); historic and current establishments (businesses); and jobs multipliers. The table is sorted largest to smallest by 2015 employment. 66 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 5.1. Advanced Manufacturing Cluster Industry Employment Trends, Hampton Roads EMPLOYMENT AVERAGE ANNUAL PERCENTAGE CHANGE CONCENTRATION (LQ) AVERAGE EARNINGS TOTAL SALES GROSS REGIONAL PRODUCT (GRP) ESTABLISHMENTS JOBS MULTIPLIER 2010 2015 2020 2010-2015- NAICS INDUSTRY SECTOR JOBS JOBS JOBS 2015 2020 2010 2015 2015 2015 2015 2010 2015 2015 333991 325992 331523 333911 336510 Power-Driven Handtool Manufacturing Photographic Film, Paper, Plate, and Chemical Manufacturing Nonferrous Metal Die-Casting Foundries Pump and Pumping Equipment Manufacturing Railroad Rolling Stock Manufacturing 1519 1706 1760 2.3% 0.6% 34.2 35.0 $76,892 $539,356,595 $253,628,580 1 1 2.0 773 1035 912 6.0% -2.5% 7.1 14.4 $82,635 $460,121,550 $163,571,783 2 2 2.5 723 697 565-0.7% -4.1% 6.2 4.8 $87,816 $260,453,400 $83,877,852 4 4 2.3 391 584 648 8.3% 2.1% 2.6 3.7 $85,106 $298,505,552 $122,632,007 2 3 2.6 274 502 463 12.9% -1.6% 2.5 3.0 $58,883 $225,938,454 $35,667,066 1 2 2.6 332322 Sheet Metal Work Manufacturing 390 463 490 3.5% 1.2% 0.7 0.8 $55,885 $100,407,157 $31,309,214 23 21 1.8 336310 333912 Motor Vehicle Gasoline Engine and Engine Parts Manufacturing Air and Gas Compressor Manufacturing 599 389 169-8.3% -15.3% 2.1 1.1 $81,790 $229,001,767 $50,603,930 4 4 3.0 279 340 373 4.0% 1.9% 2.5 2.8 $61,418 $122,896,406 $44,162,553 4 3 2.1 339116 Dental Laboratories 314 300 250-0.9% -3.6% 1.0 1.0 $57,384 $34,138,502 $18,853,150 44 40 1.6 336320 333612 336360 Motor Vehicle Electrical and Electronic Equipment Manufacturing Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing Motor Vehicle Seating and Interior Trim Manufacturing 247 239 30-0.6% -34.0% 0.8 0.7 $29,300 $34,360,362 $7,966,339 3 2 1.6 120 228 277 13.7% 4.0% 1.7 3.2 $78,200 $64,630,882 $27,940,820 1 2 2.0 72 227 187 25.9% -3.8% 0.3 0.6 $50,875 $101,779,257 $17,533,830 1 2 2.4 333517 Machine Tool Manufacturing 174 225 233 5.2% 0.7% 0.9 1.0 $93,180 $51,601,377 $25,452,863 3 4 2.0 333924 334513 335931 335932 333244 325991 335929 333243 325314 334517 333112 335311 334290 Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing Instruments and Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables Current-Carrying Wiring Device Manufacturing Noncurrent-Carrying Wiring Device Manufacturing Printing Machinery and Equipment Manufacturing Custom Compounding of Purchased Resins Other Communication and Energy Wire Manufacturing Sawmill, Woodworking, and Paper Machinery Manufacturing Fertilizer (Mixing Only) Manufacturing Irradiation Apparatus Manufacturing Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing Power, Distribution, and Specialty Transformer Manufacturing Other Communications Equipment Manufacturing 111 194 162 11.8% -3.6% 1.1 1.4 $87,184 $95,396,308 $33,183,479 2 2 2.4 426 147 80-19.1% -11.6% 1.3 0.4 $39,200 $10,734,626 $6,624,594 6 5 1.3 42 132 136 25.6% 0.6% 0.2 0.7 $62,330 $27,578,491 $14,447,710 3 4 1.6 161 124 106-5.1% -3.1% 2.6 2.1 $45,643 $17,903,824 $9,264,176 1 1 1.5 273 117 30-15.6% -23.9% 4.6 2.7 $75,875 $31,297,502 $11,223,777 5 2 2.1 128 111 98-2.8% -2.6% 1.4 1.1 $81,002 $50,467,777 $17,861,728 2 2 2.5 95 104 76 1.8% -6.0% 1.4 1.4 $71,760 $60,140,133 $14,088,095 1 3 2.2 21 90 85 34.4% -1.2% 0.3 1.1 $77,070 $24,616,495 $8,831,340 3 3 2.1 132 88 74-7.8% -3.4% 2.8 1.9 $65,298 $58,181,391 $17,755,836 4 4 2.4 5 83 110 75.6% 5.7% 0.0 1.2 $92,663 $27,632,761 $12,316,904 1 1 2.1 124 63 86-12.8% 6.7% 1.3 0.7 $28,910 $18,179,912 $4,101,178 2 1 1.6 42 39 41-1.3% 0.9% 0.3 0.3 $78,589 $10,464,819 $4,358,420 2 4 1.8 95 33 33-19.4% 0.2% 0.7 0.3 $111,188 $8,813,708 $5,326,533 2 1 2.2 Totals for Advanced Manufacturing* 7,530 8,260 7,474 1.9% -2.0% 9.3 10.5 $69,849 $2,964,599,009 $1,042,583,757 127 123 2.2 Totals for All Hampton Roads Industries 856,047 873,732 905,239 0.4% 0.7% 3.2 3.4 $54,966 $231,815,174,882 $75,115,290,436 39,147 40,353 1.9 Source: EMSI 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 67

The advanced manufacturing cluster accounted for 8,260 jobs and 123 establishments in 2015, less than 1% of the total employment and total establishments in Hampton Roads. Overall employment for this cluster is 10.5 times more concentrated in Hampton Roads than would be expected based on national employment averages (see Location Quotient within the Introduction). As a whole, the cluster experienced weak job growth over the last five years (approximately 2% year over year) and is expected to decline by an average of 2.0% each year for the next five years. Going forward, adding jobs in this cluster will remain a challenge. Total sales for all companies in this cluster were nearly $3 billion (1.3% of total regional sales) and the cluster contributed more than $1 billion to the region s gross regional product (1.2% of total GRP) in 2015. Among cluster industries, power-driven hand-tool manufacturing is the largest employer in this cluster and has maintained steady employment, adding jobs in the five years following the recession. Between 2010 and 2015, Hampton Roads moved away from some advanced industries and into others. Instruments and related products manufacturing, motor vehicle gasoline engine and engine parts manufacturing, and printing machinery and equipment manufacturing experienced the highest number of jobs lost in this period. However, powerdriven hand-tool manufacturing, railroad rolling stock manufacturing, and photographic film, paper, plate, and chemical manufacturing expanded employment. Overall, the number of Hampton Roads jobs in this cluster increased by 1.9% from 2010 to 2015. Historically, Hampton Roads manufacturers in these advanced manufacturing sectors have paralleled the growth and decline experienced by the industry cluster throughout the state of Virginia. However, Hampton Roads manufacturing has declined faster than the state s manufacturing industry during downturns, but also improves faster than the state s industry. Figure 5.2 shows that the year-over-year (YOY) growth rate for Hampton Roads surpassed that of the nation just prior to the recession (2007-2009) and rebounded in 2015. FIGURE 5.2. Advanced Manufacturing Employment Trends; YOY Employment Growth Hampton Roads Virginia United States 20% 15% Year-Over-Year Growth Rate 10% 5% 0% 5% 10% 15% 20% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Emsi 2016.4 Dataset 68 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Labor Market Gap Analysis Table 5.2 lists the top 25 occupations in advanced manufacturing. These occupations account for 54% of all cluster employment. The table provides the number of people employed by occupation in the cluster, and the number of people employed in that occupation in all industries in the region. This indicates the level of competition employers may face from industries outside the cluster when hiring for key occupations. TABLE 5.2. 25 Largest Occupations in Advanced Manufacturing with Occupational Skills EMPLOYED IN INDUSTRY CLUSTER % OF INDUSTRY CLUSTER TOTAL JOBS EMPLOYED IN REGION INDUSTRY CLUSTER'S % OF REGIONAL JOBS MEDIAN HOURLY EARNINGS IN REGION SOC OCCUPATION DESCRIPTION 2010 2015 2015 2015 2015 2015 51-2092 Team Assemblers 606 643 7.8% 3,393 19.0% $12.96 51-1011 First-Line Supervisors of Production and Operating Workers 352 403 4.9% 3,451 11.7% $29.84 51-4041 Machinists 330 398 4.8% 2,407 16.5% $22.47 51-9061 41-4012 51-4122 Inspectors, Testers, Sorters, Samplers, and Weighers Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products Welding, Soldering, and Brazing Machine Setters, Operators, and Tenders 228 249 3.0% 2,104 11.8% $20.24 205 242 2.9% 5,248 4.6% $25.03 136 187 2.3% 762 24.5% $20.80 11-1021 General and Operations Managers 155 173 2.1% 10,348 1.7% $51.01 49-9041 Industrial Machinery Mechanics 135 165 2.0% 2,106 7.8% $23.13 51-4072 Molding, Coremaking, and Casting Machine Setters, Operators, and Tenders, Metal and Plastic 157 155 1.9% 404 38.4% $16.26 43-5071 Shipping, Receiving, and Traffic Clerks 138 154 1.9% 2,276 6.8% $14.63 53-7062 Laborers and Freight, Stock, and Material Movers, Hand 128 143 1.7% 9,781 1.5% $12.17 43-5061 Production, Planning, and Expediting Clerks 119 139 1.7% 2,691 5.2% $26.47 17-2141 Mechanical Engineers 126 136 1.6% 1,907 7.1% $40.87 13-1023 Purchasing Agents, Except Wholesale, Retail, and Farm Products 108 129 1.6% 2,368 5.4% $31.80 51-9199 Production Workers, All Other 110 126 1.5% 1,625 7.8% $15.84 43-9061 Office Clerks, General 106 118 1.4% 18,946 0.6% $14.10 49-9071 Maintenance and Repair Workers, General 104 114 1.4% 8,015 1.4% $16.05 43-4051 Customer Service Representatives 99 110 1.3% 14,393 0.8% $14.37 17-2112 Industrial Engineers 106 110 1.3% 833 13.2% $38.13 17-3013 Mechanical Drafters 83 94 1.1% 1,127 8.4% $24.46 51-2022 Electrical and Electronic Equipment Assemblers 111 93 1.1% 403 23.0% $14.79 17-3023 Electrical and Electronics Engineering Technicians 91 91 1.1% 1,949 4.7% $28.67 13-2011 Accountants and Auditors 80 90 1.1% 7,531 1.2% $30.24 51-9023 51-4011 Mixing and Blending Machine Setters, Operators, and Tenders Computer-Controlled Machine Tool Operators, Metal and Plastic 74 88 1.1% 220 40.0% $15.17 80 86 1.0% 232 37.0% $16.03 Totals for Top 25* 3,965 4,436 54% 104,520 4.2% $20.80 Totals for All Advanced Manufacturing* 7,530 8,260 100% 873,732 0.9% $19.37 * Employed in Region column is employment for all industries, not just for advanced manufacturing Source: EMSI 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 69

The occupation with the most jobs in the advanced manufacturing cluster is team assemblers at 645 jobs. This occupation comprises 7.8% of the cluster s total jobs. However, there are nearly 3,400 team assemblers employed in the region, meaning the cluster employs about 1 in 5 of all team assemblers. Team assemblers make the second-lowest hourly wage ($12.96), and as shown in Table 5.3 on the next page, have an educational requirement of a high school diploma. At more than $50 per hour, managers are paid the most. As shown in Table 5.3, the entry-level requirement for many positions is a high school diploma or equivalent. (Note that these educational requirements reflect national averages and may differ from specific requirements of Hampton Roads employers.) Five of the top 25 occupations engineers (mechanical and industrial), managers, accountants, and purchasing agents typically require a bachelor s degree. The manufacturers interviewed stated that they have apprenticeship programs to use in hiring entry-level workers and provide training in needed trade skills. Because of the maritime industries and skilled trades in the region, advanced manufacturers compete with those employers for apprentices, and some company representatives said they would like to see more apprenticeship programs to support regional needs. Military veterans are good candidates for apprenticeship programs, in part because they have passed the security clearances and background checks often required for government contract work. According to those interviewed, most occupations offer a considerable amount of on-the-job training. For certain positions, particularly management, hiring managers conduct national searches. Because of the military presence in Hampton Roads, companies in this sector often recruit exiting military personnel. Many human resource managers look for soft skills in job candidates rather than technical or hard skills (the exception being math) because they can train for the hard skills. One skill and certification in short supply is the computer numerical control (CNC) certification for machinists. The positions most difficult to fill are hydraulic engineers, machinists, and pipe fitters. Table 5.3 shows the average annual openings (averaged over the past five years) for specific occupations within Hampton Roads. The regional completions column shows the total completions for all Hampton Roads educational programs (by type of program), regardless of industry sector. This means that while 1,300 people completed programs that supply general and operations managers, a wide variety of industries (including outside the advanced manufacturing cluster) may be competing to hire those people. 70 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 5.3. Advanced Manufacturing Occupational Openings and Completions None = No formal educational credential High School = High school diploma or equivalent Some College = Some college, no degree Certificate = Postsecondary nondegree award Associate s = Associate s degree Bachelor s = Bachelor s degree Master s = Master s degree Doctoral = Doctoral or professional degree SOC 43-4051 OCCUPATION DESCRIPTION Customer Service Representatives TYPICAL ENTRY LEVEL EDUCATION AVERAGE ANNUAL OPENINGS 2010-2015 REPLACEMENT JOBS NEW JOBS TOTAL OPENINGS EMPLOYMENT 2015 TOTAL JOBS % OF TOTAL JOBS CERTIFICATES RELATED COMPLETIONS 2015 High School 387 201 588 14,393 1.6% 0 0 0 0 0 43-9061 Office Clerks, General High School 490 85 575 18,946 2.2% 0 0 0 0 0 53-7062 Laborers and Freight, Stock, and Material Movers, Hand None 366 78 444 9,781 1.1% 0 0 0 0 0 13-2011 Accountants and Auditors Bachelor's 244 80 324 7,531 0.9% NA NA 162 106 268 11-1021 49-9071 41-4012 General and Operations Managers Maintenance and Repair Workers, General Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products Bachelor's 267 47 314 10,348 1.2% NA NA 932 371 1,303 High School 239 25 264 8,015 0.9% 64 0 0 0 64 High School 178 9 187 5,248 0.6% 0 22 10 0 32 51-2092 Team Assemblers High School 114 38 152 3,393 0.4% 0 0 0 0 0 51-4041 Machinists High School 88 49 137 2,407 0.3% 0 0 0 0 0 51-1011 13-1023 43-5061 49-9041 51-9199 First-Line Supervisors of Production and Operating Workers Purchasing Agents, Except Wholesale, Retail, and Farm Products Production, Planning, and Expediting Clerks Industrial Machinery Mechanics Production Workers, All Other High School 97 36 133 3,451 0.4% 0 0 0 0 0 Bachelor's 93 40 133 2,368 0.3% NA NA 2 0 2 High School 92 33 125 2,691 0.3% 0 0 0 0 0 High School 60 52 112 2,106 0.2% 0 0 0 0 0 High School 67 36 103 1,625 0.2% 0 0 0 0 0 17-2141 Mechanical Engineers Bachelor's 85 14 99 1,907 0.2% NA NA 111 0 111 17-3023 51-9061 43-5071 51-4122 Electrical and Electronics Engineering Technicians Inspectors, Testers, Sorters, Samplers, and Weighers Shipping, Receiving, and Traffic Clerks Welding, Soldering, and Brazing Machine Setters, Operators, and Tenders Associate's 70 23 93 1,949 0.2% NA 207 170 0 377 High School 78 14 92 2,104 0.2% 0 0 0 0 0 High School 68 4 72 2,276 0.3% 0 0 0 0 0 High School 35 19 54 762 0.1% 229 16 0 0 245 17-2112 Industrial Engineers Bachelor's 35 4 39 833 0.1% NA NA 0 0 0 17-3013 Mechanical Drafters Associate's 31 6 37 1,127 0.1% NA 0 0 0 0 51-4072 51-2022 51-9023 51-4011 Molding, Coremaking, and Casting Machine Setters, Operators, and Tenders, Metal and Plastic Electrical and Electronic Equipment Assemblers Mixing and Blending Machine Setters, Operators, and Tenders Computer-Controlled Machine Tool Operators, Metal and Plastic High School 24 2 26 404 0.0% 0 0 0 0 0 High School 15 3 18 403 0.0% 0 25 0 0 25 High School 15 3 18 220 0.0% 0 0 0 0 0 High School 11 1 12 232 0.0% 0 0 0 0 0 Totals for Top 25* NA 3,249 902 4,151 104,520 12.0% 293 270 1,387 477 2,427 Totals for Hampton Roads NA 29,141 9,616 38,757 873,732 100% 9,355 9,948 31,197 15,834 66,334 * NAICS 927110 Space Research and Technology is not available in the Emsi dataset Source: EMSI 2016.4 Dataset ASSOCIATE'S DEGREES BACHELOR'S DEGREES GRADUATE DEGREES TOTAL COMPLETIONS HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 71

Supply Chain Analysis Table 5.4, on the next page, provides a picture about the total demand in Hampton Roads by all Hampton Roads residents and businesses for products made by companies in the advanced manufacturing industry cluster worth a total of $1.3 billion in the region. In Table 5.4, we see that the companies in these sectors meet slightly more than half of regional demand for their products, while the region imports the other half of regional needs for these products. This would seem to indicate potential markets for local suppliers. Sheet metal work manufacturing, for example, supplies 69% of local demand, supplying $73.7 million of total local demand of $107.2 million, while $33.5 million is purchased by Hampton Roads residents and businesses from outside the region. Other industry sectors that could tap into the Hampton Roads market include the following: Motor vehicle electrical and electronic equipment manufacturing Instruments and related products manufacturing for measuring, displaying, and controlling industrial process variables Power, distribution, and specialty transformer manufacturing Other communications equipment manufacturing Current-carrying wiring device manufacturing Custom compounding of purchased resins Table 5.5 shows the economic development opportunity to build up the region s supply chain supporting advanced manufacturing companies. This table shows the goods and services that companies within the advanced manufacturing industry cluster buy to use in making their products. Approximately one-third of advanced manufacturing supply needs are met within the region, while two-thirds are purchased from outside. In total, the value of the advanced manufacturing supply chain for Hampton Roads manufacturers is $1.5 billion. Most of imported supplies are manufactured goods rather than services, although wholesale trade, management services, and transportation services have significant levels of demand supplied from outside the region. Table 5.6 shows the types of manufactured products purchased by Hampton Roads advanced manufacturing companies. Table 5.7 shows the amount of goods sold by Hampton Roads companies both inside and outside the region. These companies sell nearly $3 billion of products, of which $2.3 billion is sold outside Hampton Roads, thus bringing substantial revenues into the region. 72 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 5.4. Advanced Manufacturing Regional Demand Met by Hampton Roads Companies NAICS 336320 336310 336360 INDUSTRY SECTOR Motor Vehicle Electrical and Electronic Equipment Manufacturing Motor Vehicle Gasoline Engine and Engine Parts Manufacturing Motor Vehicle Seating and Interior Trim Manufacturing SATISFIED IN-REGION % SATISFIED IN-REGION 2015 DEMAND SATISFIED OUT- OF-REGION (IMPORTS) % SATISFIED OUT-OF- REGION TOTAL DEMAND % OF TOTAL DEMAND $28,760,857 14% $181,678,308 86% $210,439,165 16% $56,632,219 35% $104,541,849 65% $161,174,068 12% $58,573,240 49% $60,749,163 51% $119,322,403 9% 332322 Sheet Metal Work Manufacturing $73,732,431 69% $33,450,575 31% $107,183,005 8% 336510 333911 333912 333112 333924 334513 Railroad Rolling Stock Manufacturing Pump and Pumping Equipment Manufacturing Air and Gas Compressor Manufacturing Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing Instruments & Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables $62,356,836 61% $39,772,643 39% $102,129,479 8% $79,186,519 99% $780,076 1% $79,966,595 6% $47,614,735 93% $3,325,696 7% $50,940,431 4% $11,995,337 27% $32,938,648 73% $44,933,985 3% $33,709,931 79% $8,757,087 21% $42,467,018 3% $6,574,569 16% $34,848,224 84% $41,422,793 3% 339116 Dental Laboratories $11,813,957 34% $22,850,688 66% $34,664,645 3% 333517 Machine Tool Manufacturing $27,278,645 83% $5,538,759 17% $32,817,405 2% 335311 331523 335931 325991 335929 334517 333612 325992 334290 333243 325314 333991 333244 335932 Power, Distribution, and Specialty Transformer Manufacturing Nonferrous Metal Die-Casting Foundries Current-Carrying Wiring Device Manufacturing Custom Compounding of Purchased Resins Other Communication and Energy Wire Manufacturing Irradiation Apparatus Manufacturing Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing Photographic Film, Paper, Plate, and Chemical Manufacturing Other Communications Equipment Manufacturing Sawmill, Woodworking, and Paper Machinery Manufacturing Fertilizer (Mixing Only) Manufacturing Power-Driven Handtool Manufacturing Printing Machinery and Equipment Manufacturing Noncurrent-Carrying Wiring Device Manufacturing $7,949,664 24% $24,671,939 76% $32,621,603 2% $30,308,166 98% $623,800 2% $30,931,965 2% $9,398,340 32% $19,534,218 68% $28,932,558 2% $14,093,599 54% $12,162,960 46% $26,256,558 2% $18,625,300 73% $6,743,790 27% $25,369,090 2% $13,725,197 58% $9,829,672 42% $23,554,869 2% $17,264,530 80% $4,441,716 20% $21,706,246 2% $18,843,776 87% $2,742,777 13% $21,586,553 2% $6,229,156 31% $13,970,125 69% $20,199,281 2% $11,729,720 69% $5,293,044 31% $17,022,764 1% $6,396,075 47% $7,204,616 53% $13,600,691 1% $12,557,005 100% $18 0% $12,557,023 1% $8,550,284 92% $762,400 8% $9,312,684 1% $7,937,070 95% $458,850 5% $8,395,920 1% Totals for Advanced Manufacturing* $681,837,158 52% $637,671,638 48% $1,319,508,797 100% Totals for All Hampton Roads Industries $74,076,005,229 39% $117,397,461,062 61% $191,473,466,291 NA * NAICS 927110 Space Research and Technology is not available in the Emsi dataset Source: Emsi 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 73

TABLE 5.5. Advanced Manufacturing Supply Chain NAICS INDUSTRY SECTOR IN-REGION % IN-REGION 2015 PURCHASES OUT-OF-REGION (IMPORTS) % OUT- OF- REGION TOTAL PURCHASES % OF TOTAL PURCHASES 31-33 Manufacturing $188,041,623 20% $752,656,081 80% $940,697,703 62.0% 42 Wholesale Trade $60,239,761 38% $96,947,913 62% $157,187,674 10.4% 55 Mgmt. of Companies and Enterprises $108,502,224 74% $37,402,353 26% $145,904,577 9.6% 48-49 Transportation and Warehousing $20,640,831 39% $31,891,141 61% $52,531,972 3.5% 54 Prof., Scientific, and Technical Services $25,896,083 51% $24,879,362 49% $50,775,446 3.3% 52 Finance and Insurance $16,312,919 50% $16,133,278 50% $32,446,197 2.1% 56 Admin. and Support and Waste Mgmt. and Remediation Services $18,924,330 68% $8,906,705 32% $27,831,036 1.8% 53 Real Estate and Rental and Leasing $7,255,365 30% $16,943,730 70% $24,199,095 1.6% 51 Information $8,116,760 37% $13,726,238 63% $21,842,998 1.4% 22 Utilities $8,986,484 45% $10,920,028 55% $19,906,512 1.3% 44 Retail Trade $8,685,224 81% $2,031,292 19% $10,716,516 0.7% 21 Mining, Quarrying, and Oil and Gas Extraction $714,144 9% $7,572,965 91% $8,287,108 0.5% 72 Accommodation and Food Services $7,037,319 85% $1,247,630 15% $8,284,949 0.5% 81 Other Services (except Public Administration) $4,612,514 73% $1,737,947 27% $6,350,462 0.4% 23 Construction $3,198,585 70% $1,386,432 30% $4,585,017 0.3% 90 Government $1,238,282 66% $627,809 34% $1,866,090 0.1% 71 Arts, Entertainment, and Recreation $547,958 31% $1,221,607 69% $1,769,565 0.1% 61 Educational Services $546,162 47% $623,359 53% $1,169,522 0.1% 62 Health Care and Social Assistance $582,581 79% $152,183 21% $734,765 0.0% 11 Crop and Animal Production $10,367 17% $51,335 83% $61,702 0.0% Totals for Advanced Manufacturing* $490,089,517 32% $1,027,059,388 68% $1,517,148,905 100% * NAICS 927110 Space Research and Technology is not available in the Emsi dataset Source: Emsi 2016.4 Dataset TABLE 5.6. Advanced Manufacturing Manufactured Products Supply Chain NAICS INDUSTRY SECTOR IN-REGION % IN-REGION 2015 PURCHASES OUT-OF-REGION (IMPORTS) % OUT- OF- REGION TOTAL MANUFACTURED GOODS PURCHASES 331 Primary Metal Manufacturing $18,208,310 8% $209,826,634 92% $228,034,944 332 Fabricated Metal Product Manufacturing $45,154,387 25% $134,307,871 75% $179,462,258 325 Chemical Manufacturing $12,782,545 9% $133,702,848 91% $146,485,393 333 Machinery Manufacturing $24,186,242 29% $60,533,374 71% $84,719,616 326 Plastics and Rubber Products Manufacturing $9,715,960 14% $58,625,850 86% $68,341,810 336 Transportation Equipment Manufacturing $42,487,153 63% $24,807,185 37% $67,294,338 335 Electrical Equipment, Appliance, and Component Manufacturing $10,672,556 23% $35,880,237 77% $46,552,794 322 Paper Manufacturing $8,129,393 28% $20,840,060 72% $28,969,453 334 Computer and Electronic Product Manufacturing $4,826,540 19% $20,340,357 81% $25,166,897 324 Petroleum and Coal Products Manufacturing $2,075,779 9% $20,163,768 91% $22,239,548 339 Miscellaneous Manufacturing $725,998 7% $10,058,331 93% $10,784,329 327 Nonmetallic Mineral Product Manufacturing $4,579,323 44% $5,888,949 56% $10,468,272 321 Wood Product Manufacturing $1,327,321 21% $4,997,944 79% $6,325,265 311 Food Manufacturing $720,675 12% $5,075,197 88% $5,795,871 313 Textile Mills $160,339 3% $4,716,062 97% $4,876,401 314 Textile Product Mills $1,129,538 51% $1,065,606 49% $2,195,144 323 Printing and Related Support Activities $771,799 58% $566,012 42% $1,337,810 316 Leather and Allied Product Manufacturing $13,594 2% $558,666 98% $572,260 337 Furniture and Related Product Manufacturing $170,422 34% $329,050 66% $499,471 312 Beverage and Tobacco Product Manufacturing $159,792 36% $279,084 64% $438,876 315 Apparel Manufacturing $43,957 32% $92,995 68% $136,953 Total Manufacturing Purchases $188,041,623 20.0% $752,656,081 80.0% $940,697,703 74 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 5.7. Hampton Roads Advanced Manufacturing Companies Sales in Region and Exported Out of Region NAICS INDUSTRY SECTOR IN-REGION 333991 325992 333911 331523 336310 Power-Driven Handtool Manufacturing Photographic Film, Paper, Plate, and Chemical Manufacturing Pump and Pumping Equipment Manufacturing Nonferrous Metal Die-Casting Foundries Motor Vehicle Gasoline Engine and Engine Parts Manufacturing % OF TOTAL 2015 SALES OUT-OF-REGION (EXPORTS) % OF TOTAL TOTAL SALES % OF TOTAL SALES $12,557,005 2% $526,799,590 98% $539,356,595 18.2% $18,843,776 4% $441,277,774 96% $460,121,550 15.5% $79,186,519 27% $219,319,033 73% $298,505,552 10.1% $30,308,166 12% $230,145,234 88% $260,453,400 8.8% $56,632,220 25% $172,369,547 75% $229,001,767 7.7% 336510 Railroad Rolling Stock Manufacturing $62,356,836 28% $163,581,618 72% $225,938,454 7.6% 333912 336360 Air and Gas Compressor Manufacturing Motor Vehicle Seating and Interior Trim Manufacturing $47,614,735 39% $75,281,671 61% $122,896,406 4.1% $58,573,239 58% $43,206,018 42% $101,779,257 3.4% 332322 Sheet Metal Work Manufacturing $73,732,431 73% $26,674,726 27% $100,407,157 3.4% 333924 333612 335929 Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing Speed Changer, Industrial High- Speed Drive, and Gear Manufacturing Other Communication and Energy Wire Manufacturing $33,709,931 35% $61,686,377 65% $95,396,308 3.2% $17,264,530 27% $47,366,352 73% $64,630,882 2.2% $18,625,300 31% $41,514,833 69% $60,140,133 2.0% 325314 Fertilizer (Mixing Only) Manufacturing $6,396,074 11% $51,785,317 89% $58,181,391 2.0% 333517 Machine Tool Manufacturing $27,278,645 53% $24,322,732 47% $51,601,377 1.7% 325991 336320 Custom Compounding of Purchased Resins Motor Vehicle Electrical and Electronic Equipment Manufacturing $14,093,599 28% $36,374,178 72% $50,467,777 1.7% $28,760,857 84% $5,599,505 16% $34,360,362 1.2% 339116 Dental Laboratories $11,813,958 35% $22,324,544 65% $34,138,502 1.2% 333244 Printing Machinery and Equipment Manufacturing $8,550,284 27% $22,747,218 73% $31,297,502 1.1% 334517 Irradiation Apparatus Manufacturing $13,725,197 50% $13,907,564 50% $27,632,761 0.9% 335931 333243 333112 335932 334513 335311 334290 Current-Carrying Wiring Device Manufacturing Sawmill, Woodworking, and Paper Machinery Manufacturing Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing Noncurrent-Carrying Wiring Device Manufacturing Instruments and Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables Power, Distribution, and Specialty Transformer Manufacturing Other Communications Equipment Manufacturing $9,398,340 34% $18,180,151 66% $27,578,491 0.9% $11,729,720 48% $12,886,775 52% $24,616,495 0.8% $11,995,337 66% $6,184,575 34% $18,179,912 0.6% $7,937,070 44% $9,966,754 56% $17,903,824 0.6% $6,574,569 61% $4,160,057 39% $10,734,626 0.4% $7,949,664 76% $2,515,155 24% $10,464,819 0.4% $6,229,155 71% $2,584,553 29% $8,813,708 0.3% Totals for Advanced Manufacturing* $681,837,157 23% $2,282,761,850 77% $2,964,599,007 100% Totals for All Hampton Roads Industries $69,428,788,808 30% $162,386,386,050 70% $231,815,174,858 NA * NAICS 927110 Space Research and Technology is not available in the Emsi dataset Source: Emsi 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 75

SHIP REPAIR AND SHIP BUILDING The ship repair and ship building cluster is one of the largest and better-paid industry clusters in the region. The ship building industry produces large seagoing vessels intended for the merchant fleet (cargo or passenger transport), the off-shore energy industry, or military purposes. It also includes products and services supplied for the building, conversion, and maintenance of these ships. Ship building is an important and strategic industry in the United States. Shipyards help to maintain marine infrastructure and national security interests (military ship building). This cluster has maintained steady employment until very recently and employed 26,300 workers in 2015. The employees of the ship building, repairing, and boat building cluster form a significant presence in the Hampton Roads labor market (Table 6.1). The concentration of jobs in ship building, repairing, and boat building is 45.3 times greater than the national average. Ship repair and ship building grew 2% per year in the last five years. Average annual earnings are about $63,000. Figure 6.1 below shows the 2015 job distribution for the ship repair and ship building cluster throughout Hampton Roads. Newport News had the largest number of ship repair and ship building jobs in 2015 (21,595), followed by Norfolk (3,089). FIGURE 6.1. Ship Repair and Ship Building Cluster, 2015 Job Distribution Source: Emsi 2016.4 Dataset Ship repairing and building is the largest industry sector in this cluster, employing 26,204 jobs in comparison to boat building s 51 jobs in 2015, as shown in Table 6.1. Ship building is comprised of establishments primarily engaged in operating a shipyard. The boat building sector typically produces boats for personal use. Table 6.1, on the next page, provides an overview for each of the two individual industry sectors that comprise the ship repair and ship building cluster in Hampton Roads. Included are historic, current, and projected employment; historic and projected average annual percent growth 76 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 6.1. Ship Repair and Ship Building Cluster Industry Employment Trends, Hampton Roads EMPLOYMENT AVERAGE ANNUAL PERCENTAGE CHANGE CONCENTRATION (LQ) AVERAGE EARNINGS TOTAL SALES GROSS REGIONAL PRODUCT (GRP) ESTABLISHMENTS JOBS MULTIPLIER 2010 2015 2020 2010-2015- NAICS INDUSTRY SECTOR JOBS JOBS JOBS 2015 2020 2010 2015 2015 2015 2015 2010 2015 2015 336611 Ship Building and Repairing 23720 26204 26550 2.0% 0.3% 41.1 45.4 $89,676 $7,470,214,186 $2,641,293,037 39 37 2.1 336612 Boat Building 70 51 38-6.0% -5.7% 0.4 0.2 $36,256 $8,429,167 $2,155,255 6 5 1.5 Totals for Ship Repair and Ship Building 23,790 26,255 26,588 2.0% 0.3% 41.0 45.3 $62,966 $7,478,643,352 $2,643,448,292 45 42 2.1 Totals for All Hampton Roads Industries 856,047 873,732 905,239 0.4% 0.7% 3.2 3.4 $54,966 $231,815,174,882 $75,115,290,436 39,147 40,353 1.9 Source: EMSI 2016.4 Dataset (or decline); historic and current employment concentration (LQ); average earnings; total sales; gross regional product (GRP); historic and current establishments (businesses); and jobs multipliers. The table is sorted largest to smallest by 2015 employment. Ship repair and ship building in Hampton Roads maintained a steady growth rate until 2007, dipped slightly in 2008, and recovered. The regional industry showed resilience during the 2007-2009 recession relative to the national industry which experienced substantial job loss (Figure 6.2). The story was different in 2013 and 2014, with Hampton Road s year-over-year job change of -5%. However, employment projections anticipate the industry maintaining its job count through the year 2020. FIGURE 6.2. Ship Repair and Ship Building Employment Trends; YOY Employment Growth Hampton Roads Virginia United States 20% 15% Year-Over-Year Growth Rate 10% 5% 0% 5% 10% 15% 20% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Emsi 2016.4 Dataset Labor Market Gap Analysis Table 6.2 lists the top 25 occupations in ship repair and ship building. These 25 occupations account for 62% of all cluster employment. The table provides the number of people employed by occupation in the cluster, and the number of people employed in that occupation in all industries in the region. This provides an understanding as to the level of competition employers face from industries outside of the cluster in hiring for key occupations. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 77

The occupation with the most jobs in the ship repair and ship building cluster is welders with 2,100 jobs. This occupation comprises 8.0% of the cluster s total jobs. There are 2,610 welders employed in the region, meaning that the cluster employs about 4 out of 5 welders in the region. TABLE 6.2. Staffing Pattern for Ship Repair and Ship Building Showing the 25 Largest Occupations SOC OCCUPATION DESCRIPTION EMPLOYED IN INDUSTRY GROUP % OF INDUSTRY GROUP TOTAL JOBS EMPLOYED IN REGION INDUSTRY GROUP'S % OF REGIONAL JOBS MEDIAN HOURLY EARNINGS IN REGION 2010 2015 2015 2015 2015 2015 51-4121 Welders, Cutters, Solderers, and Brazers 1,928 2,100 8.0% 2,610 80.5% $20.00 47-2111 Electricians 1,088 1,219 4.6% 5,762 21.2% $20.73 51-1011 First-Line Supervisors of Production and Operating Workers 1,075 1,194 4.5% 3,451 34.6% $29.84 47-2152 Plumbers, Pipefitters, and Steamfitters 1,067 1,184 4.5% 5,495 21.6% $19.39 51-2092 Team Assemblers 942 1,037 4.0% 3,393 30.6% $12.96 51-4041 Machinists 681 790 3.0% 2,407 32.8% $22.47 51-9122 Painters, Transportation Equipment 639 712 2.7% 1,069 66.7% $19.84 47-2031 Carpenters 602 673 2.6% 5,379 12.5% $16.58 17-2141 Mechanical Engineers 581 661 2.5% 1,907 34.7% $40.87 43-5061 Production, Planning, and Expediting Clerks 568 634 2.4% 2,691 23.6% $26.47 51-4122 Welding, Soldering, and Brazing Machine Setters, Operators, and Tenders 559 586 2.2% 762 76.9% $20.80 17-3013 Mechanical Drafters 508 539 2.1% 1,127 47.8% $24.46 49-9096 Riggers 473 529 2.0% 1,188 44.5% $22.57 17-2121 Marine Engineers and Naval Architects 438 495 1.9% 818 60.5% $37.49 51-4192 Layout Workers, Metal and Plastic 448 451 1.7% 439 102.6% $21.53 51-2041 Structural Metal Fabricators and Fitters 400 431 1.6% 685 63.0% $15.58 51-9198 Helpers--Production Workers 362 383 1.5% 1,115 34.3% $12.58 43-5081 Stock Clerks and Order Fillers 317 355 1.4% 12,334 2.9% $12.32 53-7062 Laborers & Freight, Stock, & Material Movers, Hand 314 346 1.3% 9,781 3.5% $12.17 13-1023 Purchasing Agents, Except Wholesale, Retail, and Farm Products 309 347 1.3% 2,368 14.7% $31.80 47-2211 Sheet Metal Workers 309 341 1.3% 1,609 21.2% $21.55 49-9071 Maintenance and Repair Workers, General 303 336 1.3% 8,015 4.2% $16.05 47-1011 First-Line Supervisors of Construction Trades and Extraction Workers 300 337 1.3% 4,321 7.8% $26.87 43-9061 Office Clerks, General 262 293 1.1% 18,946 1.5% $14.10 47-2141 Painters, Construction and Maintenance 262 290 1.1% 2,564 11.3% $16.36 Totals for Top 25 14,734 16,264 62% 100,236 16.2% $20.73 Totals for All Ship Repair and Ship Building 23,790 26,255 100% 873,732 3.0% $19.37 * Employed in Region column is employment for all industries, not just for advanced manufacturing Source: EMSI 2016.4 Dataset As shown in Table 6.3, on the next page, the entry-level requirement for many positions is a high school diploma or equivalent. These educational requirements reflect national averages, and may differ from specific requirements of Hampton Roads employers. Three of the top 25 occupations engineers (mechanical and marine) and purchasing agents typically require a bachelor s degree. Table 6.3 shows the average annual openings (averaged over the past 5 years) for specific occupations within Hampton Roads. The regional completions column shows the total completions for all Hampton Roads educational programs (by type of program), regardless of 78 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 6.3. Ship Repair and Ship Building Occupational Openings and Completions None = No formal educational credential High School = High school diploma or equivalent Some College = Some college, no degree Certificate = Postsecondary nondegree award Associate s = Associate s degree Bachelor s = Bachelor s degree Master s = Master s degree Doctoral = Doctoral or professional degree SOC OCCUPATION DESCRIPTION TYPICAL ENTRY LEVEL EDUCATION AVERAGE ANNUAL OPENINGS 2010-2015 REPLACEMENT JOBS NEW JOBS TOTAL OPENINGS EMPLOYMENT 2015 TOTAL JOBS % OF TOTAL JOBS CERTIFICATES RELATED COMPLETIONS 2015 43-9061 Office Clerks, General High School 490 85 575 18,946 2.2% 0 0 0 0 0 43-5081 53-7062 49-9071 Stock Clerks and Order Fillers Laborers and Freight, Stock, and Material Movers, Hand Maintenance and Repair Workers, General None 406 154 560 12,334 1.4% 0 0 0 0 0 None 366 78 444 9,781 1.1% 0 0 0 0 0 High School 239 25 264 8,015 0.9% 64 0 0 0 64 47-2111 Electricians High School 206 36 242 5,762 0.7% 107 28 0 0 135 47-2152 51-4121 Plumbers, Pipefitters, and Steamfitters Welders, Cutters, Solderers, and Brazers High School 112 48 160 5,495 0.6% 2 0 0 0 2 High School 104 48 152 2,610 0.3% 229 16 0 0 245 51-2092 Team Assemblers High School 114 38 152 3,393 0.4% 0 0 0 0 0 51-4041 Machinists High School 88 49 137 2,407 0.3% 0 0 0 0 0 47-2031 Carpenters High School 125 10 135 5,379 0.6% 2 0 0 0 2 51-1011 13-1023 43-5061 47-2141 First-Line Supervisors of Production and Operating Workers Purchasing Agents, Except Wholesale, Retail, and Farm Products Production, Planning, and Expediting Clerks Painters, Construction and Maintenance High School 97 36 133 3,451 0.4% 0 0 0 0 0 Bachelor's 93 40 133 2,368 0.3% NA NA 2 0 2 High School 92 33 125 2,691 0.3% 0 0 0 0 0 None 87 23 110 2,564 0.3% 2 0 0 0 2 17-2141 Mechanical Engineers Bachelor's 85 14 99 1,907 0.2% NA NA 111 0 111 47-1011 First-Line Supervisors of Construction Trades and Extraction Workers High School 77 19 96 4,321 0.5% 171 28 0 0 199 47-2211 Sheet Metal Workers High School 55 12 67 1,609 0.2% 2 0 0 0 2 49-9096 Riggers High School 42 23 65 1,188 0.1% 0 0 0 0 0 51-9122 Painters, Transportation Equipment 51-9198 Helpers--Production Workers 51-4122 17-2121 Welding, Soldering, and Brazing Machine Setters, Operators, and Tenders Marine Engineers and Naval Architects High School 29 30 59 1,069 0.1% 0 0 0 0 0 None 54 5 59 1,115 0.1% 0 0 0 0 0 High School 35 19 54 762 0.1% 229 16 0 0 245 Bachelor's 28 17 45 818 0.1% NA NA 0 0 0 17-3013 Mechanical Drafters Associate's 31 6 37 1,127 0.1% NA 0 0 0 0 51-2041 51-4192 Source: EMSI 2016.4 Dataset Structural Metal Fabricators and Fitters Layout Workers, Metal and Plastic High School 17 12 29 685 0.1% 0 0 0 0 0 High School 14 9 23 439 0.1% 0 0 0 0 0 Totals for Top 25 NA 3,086 869 3,955 100,236 11.5% 808 88 113 0 1,009 Totals for Hampton Roads NA 29,141 9,616 38,757 873,732 100% 9,355 9,948 31,197 15,834 66,334 ASSOCIATE'S DEGREES BACHELOR'S DEGREES GRADUATE DEGREES TOTAL COMPLETIONS HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 79

industry sector. This means that while 245 people completed programs for welding, a wide variety of industries (including those outside of the ship repair and ship building cluster) may be competing to hire those people. The educational pipeline (as defined by schools reporting program completions by students) for the ship repair and ship building cluster is difficult to measure, as many educational institutions do not provide the specific training required for these occupations. The actual skills training for work in this industry cluster is most likely provided by training and apprenticeship programs run by the companies and organizations in the industry. Supply Chain Analysis While regional demand for an industry cluster s products and services is discussed in the other industry cluster profiles, it is not applicable for the Hampton Roads ship repair and ship building industry cluster. Because the ship repair and ship building industry cluster in Hampton Roads derives the majority of its revenues from work for the U.S. Department of Defense, the breakdown of demand for the region is not available. In Table 6.4, we see that 73% of Hampton Roads ship repair and ship building supply chain needs (that is, what the businesses in this industry need to purchase to be able to build ships or boats and to conduct business) are purchased from outside of the region. Of total supply chain needs of nearly $4 billion, $2.8 billion is purchased from outside of Hampton Roads. This TABLE 6.4. Ship Repair and Ship Building Supply Chain NAICS INDUSTRY SECTOR IN-REGION % IN-REGION 2015 PURCHASES OUT-OF-REGION (IMPORTS) % OUT-OF- REGION TOTAL PURCHASES % OF TOTAL PURCHASES 31-33 Manufacturing $171,155,982 9% $1,797,061,594 91% $1,968,217,577 50.2% 42 Wholesale Trade $111,626,056 32% $239,477,790 68% $351,103,846 9.0% 54 56 55 Professional, Scientific, and Technical Services Administrative and Support and Waste Mgmt. & Remediation Services Management of Companies and Enterprises $128,969,047 46% $148,978,791 54% $277,947,837 7.1% $152,334,249 57% $112,687,687 43% $265,021,936 6.8% $185,149,533 85% $32,967,466 15% $218,117,000 5.6% 53 Real Estate and Rental and Leasing $22,746,958 12% $166,077,259 88% $188,824,217 4.8% 52 Finance and Insurance $81,335,039 46% $93,603,105 54% $174,938,143 4.5% 51 Information $48,946,019 33% $98,163,740 67% $147,109,758 3.8% 48-49 Transportation and Warehousing $44,834,373 31% $100,203,754 69% $145,038,127 3.7% 72 Accommodation and Food Services $59,052,692 84% $10,964,940 16% $70,017,632 1.8% 22 Utilities $17,653,840 55% $14,174,020 45% $31,827,860 0.8% 81 Other Services (except Public Administration) $17,276,632 62% $10,419,403 38% $27,696,035 0.7% 71 Arts, Entertainment, and Recreation $4,430,991 32% $9,208,929 68% $13,639,920 0.3% 61 Educational Services $6,831,611 51% $6,643,700 49% $13,475,311 0.3% 44 Retail Trade $9,437,402 85% $1,730,915 15% $11,168,317 0.3% 23 Construction $4,444,932 66% $2,251,222 34% $6,696,154 0.2% 62 Health Care and Social Assistance $4,627,234 91% $454,069 9% $5,081,303 0.1% 21 Mining, Quarrying, and Oil and Gas Extraction $90,359 8% $1,066,119 92% $1,156,479 0.0% 90 Government $131,015 76% $40,593 24% $171,608 0.0% 11 Crop and Animal Production $1,852 3% $53,796 97% $55,648 0.0% Totals for Ship Repair and Ship Building $1,071,075,816 27% $2,846,228,892 73% $3,917,304,708 100% Source: Emsi 2016.4 Dataset 80 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

demonstrates a strong possibility for Hampton Roads companies to find new customers within this industry cluster, and perhaps develop a new market niche in ship repair and ship building companies. Almost all manufactured goods are candidates for supplying the industry, as are professional services and transportation services. Table 6.5 shows the types of manufactured products purchased by Hampton Roads ship repair and ship building companies. Table 6.6 shows the total amount of goods or services sold by Hampton Roads ship repair and ship building companies. These companies sell nearly $7.5 billion of products and services. Because the ship repair and ship building industry cluster in Hampton Roads derives the majority of its revenues from work for the U.S. Department of Defense, the breakdown of total sales between in-region sales and out-of-region sales is not available. TABLE 6.5. Ship Repair and Ship Building Manufactured Products Supply Chain NAICS INDUSTRY SECTOR IN-REGION % IN-REGION 2015 PURCHASES OUT-OF-REGION (IMPORTS) % OUT- OF- REGION TOTAL MANUFACTURED GOODS PURCHASES 333 Machinery Manufacturing $15,152,117 3% $466,731,975 97% $481,884,092 331 Primary Metal Manufacturing $13,544,531 3% $416,962,562 97% $430,507,093 332 Fabricated Metal Product Manufacturing $20,216,144 6% $299,421,373 94% $319,637,518 334 Computer and Electronic Product Manufacturing $25,420,848 13% $176,011,659 87% $201,432,507 326 Plastics and Rubber Products Manufacturing $17,553,643 13% $113,750,843 87% $131,304,487 336 Transportation Equipment Manufacturing $27,415,035 25% $81,842,598 75% $109,257,633 325 Chemical Manufacturing $6,723,128 8% $77,700,830 92% $84,423,958 327 Nonmetallic Mineral Product Manufacturing $15,574,764 27% $41,809,526 73% $57,384,290 321 Wood Product Manufacturing $2,757,480 7% $37,534,900 93% $40,292,381 322 Paper Manufacturing $3,503,317 10% $32,664,363 90% $36,167,680 335 Electrical Equipment, Appliance, and Component Manufacturing $8,408,278 28% $21,957,271 72% $30,365,549 324 Petroleum and Coal Products Manufacturing $999,837 7% $12,475,214 93% $13,475,051 314 Textile Product Mills $4,765,451 57% $3,535,344 43% $8,300,794 339 Miscellaneous Manufacturing $669,134 9% $6,524,768 91% $7,193,901 337 Furniture and Related Product Manufacturing $4,367,680 61% $2,770,035 39% $7,137,716 311 Food Manufacturing $1,026,229 28% $2,621,963 72% $3,648,192 323 Printing and Related Support Activities $2,403,763 67% $1,195,030 33% $3,598,793 313 Textile Mills $37,338 4% $940,513 96% $977,851 312 Beverage and Tobacco Product Manufacturing $510,613 55% $421,369 45% $931,982 315 Apparel Manufacturing $106,530 38% $170,206 62% $276,735 316 Leather and Allied Product Manufacturing $122 1% $19,252 99% $19,375 Total Manufacturing Purchases $171,155,982 8.7% $1,797,061,594 91.3% $1,968,217,577 Source: Emsi 2016.4 Dataset TABLE 6.6. Hampton Roads Ship Repair and Ship Building Companies Sales In-Region and Exported Out-of-Region NAICS INDUSTRY SECTOR 2015 SALES IN-REGION % OF TOTAL OUT-OF-REGION (EXPORTS) % OF TOTAL TOTAL SALES 336611 Ship Building and Repairing NA NA $7,470,214,186 99.9% 336612 Boat Building NA NA $8,429,167 0.1% Totals for Ship Repair and Ship Building NA NA $7,478,643,352 100% Totals for All Hampton Roads Industries $69,428,788,808 30% $162,386,386,050 70% $231,815,174,858 NA * NAICS 927110 Space Research and Technology is not available in the Emsi dataset Source: Emsi 2016.4 Dataset % OF TOTAL SALES HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 81

FOOD AND BEVERAGE MANUFACTURING Food and beverage manufacturing plants transform raw agricultural materials into products for intermediate or final consumption by applying labor, machinery, energy, and scientific knowledge. Some products may serve as inputs for further processing (such as syrup for manufacturing soda). Figure 7.1 shows the 2015 job distribution for the food and beverage manufacturing cluster throughout Hampton Roads. Isle of Wight County had the largest number of food and beverage manufacturing jobs in 2015 (2,461), followed by Suffolk (1,410), James City (592), and Newport News (400). FIGURE 7.1. Food and Beverage Mfg. Cluster, 2015 Job Distribution Source: Emsi 2016.4 Dataset Table 7.1, on the next page, provides an overview for each of the individual industry sectors that comprise the food and beverage manufacturing cluster in Hampton Roads. Included are historic, current, and projected employment; historic and projected average annual percent growth (or decline); historic and current employment concentration (LQ); average earnings; total sales; gross regional product (GRP); historic and current establishments (businesses); and jobs multipliers. The table is sorted largest to smallest by 2015 employment. These plants employed about 6,000 workers in 2015. The animal slaughtering industry employed the largest number of food and beverage manufacturing workers (2,400 jobs), followed by coffee and tea manufacturing (730 jobs). Slowing job gains in this cluster may have been influenced by industry consolidation that is increasingly prevalent across the country. Consolidation is occurring in many food processing industries where plant sizes have increased sharply and mergers have led to fewer but larger companies. In many cases, changing processing plant technologies and the emergence of new scale economies has facilitated or prompted consolidation. When market demand grows 82 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

slowly, increased consolidation can lead to increased concentration in an area as well as fewer competitors. Overall employment for this cluster is 3.2 times more concentrated in Hampton Roads than would be expected based on national employment averages. The cluster as a whole experienced weak job growth over the last five years (less than half a percent year over year) and it is expected to remain nearly flat with average of employment change of 0.7% each year for the next five years. Going forward, adding jobs in this cluster will remain a challenge. Total sales for all companies in this cluster were $3.2 billion (1.4% of total regional sales) and the cluster contributed more than $800 million to the region s gross regional product (1.0% of total GRP) in 2015. TABLE 7.1. Food and Beverage Manufacturing Cluster Industry Employment Trends, Hampton Roads EMPLOYMENT AVERAGE ANNUAL PERCENTAGE CHANGE CONCENTRATION (LQ) AVERAGE EARNINGS TOTAL SALES GROSS REGIONAL PRODUCT (GRP) ESTABLISHMENTS JOBS MULTIPLIER 2010 2015 2020 2010-2015- NAICS INDUSTRY SECTOR JOBS JOBS JOBS 2015 2020 2010 2015 2015 2015 2015 2010 2015 2015 311611 Animal (except Poultry) Slaughtering 2,390 2,366 1,860-0.2% -4.7% 2.8 3.1 $52,105 $1,304,585,360 $201,668,240 3 4 2.1 311920 Coffee and Tea Manufacturing 711 729 734 0.5% 0.1% 8.0 6.4 $86,849 $604,745,783 $122,486,710 5 5 3.1 311710 Seafood Product Preparation and Packaging 619 654 617 1.1% -1.2% 2.8 3.2 $48,615 $203,364,236 $44,130,380 9 9 2.0 312120 Breweries 620 570 606-1.7% 1.2% 4.1 2.1 $75,514 $498,389,299 $213,785,049 3 10 4.0 311911 Roasted Nuts and Peanut Butter Manufacturing 404 413 420 0.5% 0.3% 5.4 5.0 $74,364 $339,276,405 $112,794,732 5 5 2.7 327213 Glass Container Manufacturing 205 234 233 2.7% -0.1% 2.2 2.9 $89,648 $82,586,447 $30,547,236 1 1 2.2 311340 115115 424510 Nonchocolate Confectionery Manufacturing Farm Labor Contractors and Crew Leaders Grain and Field Bean Merchant Wholesalers 154 203 221 5.7% 1.8% 1.6 1.8 $31,435 $50,347,241 $12,441,539 4 5 1.7 147 147 149-0.1% 0.3% 0.1 0.1 $26,973 $4,877,364 $4,144,420 0 0 1.2 119 144 126 3.7% -2.5% 0.4 0.5 $84,417 $44,650,870 $28,337,411 5 5 2.5 114112 Shellfish Fishing 192 140 128-6.1% -1.8% 2.1 1.7 $34,019 $21,851,203 $14,573,085 14 16 1.3 114111 Finfish Fishing 152 111 105-6.1% -1.0% 1.6 1.3 $54,725 $33,777,902 $22,532,800 9 6 1.4 333241 Food Product Machinery Manufacturing 5 108 112 84.7% 0.9% 0.0 1.0 $52,599 $19,855,176 $7,123,297 1 1 1.6 115111 Cotton Ginning 57 61 68 1.4% 2.1% 1.2 1.6 $57,525 $4,411,306 $3,746,548 4 3 1.3 115116 Farm Management Services 5 29 42 41.6% 7.9% 0.0 0.3 $34,013 $1,581,851 $1,343,842 1 4 1.2 115112 115114 Soil Preparation, Planting, and Cultivating Postharvest Crop Activities (except Cotton Ginning) 16 18 20 2.4% 2.0% 0.1 0.1 $43,004 $1,864,330 $1,584,027 3 3 1.2 38 15 19-17.3% 5.2% 0.1 0.0 $27,271 $537,334 $456,703 2 2 1.1 114119 Other Marine Fishing 12 9 8-5.2% -2.3% 1.4 1.3 $23,882 $1,022,435 $671,372 0 0 1.2 115113 Crop Harvesting, Primarily by Machine 1 8 5 51.6% -9.0% 0.0 0.0 $26,636 $78,638 $66,792 0 0 1.1 Totals for Food and Beverage Manufacturing 5,847 5,958 5,473 0.4% -1.7% 3.5 3.2 $51,311 $3,217,803,180 $822,434,182 69 79 2.3 Totals for All Hampton Roads Industries 856,047 873,732 905,239 0.4% 0.7% 3.2 3.4 $54,966 $231,815,174,882 $75,115,290,436 39,147 40,353 1.9 Source: EMSI 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 83

Figure 7.2 shows that after posting double-digit year over year percentages of job losses during the last recession, the food and beverage manufacturing cluster rebounded but nonetheless continues to show flat job growth. FIGURE 7.2. Food and Beverage Manufacturing Employment Trends; YOY Employment Growth Hampton Roads Virginia United States 20% 15% Year-Over-Year Growth Rate 10% 5% 0% 5% 10% 15% 20% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Emsi 2016.4 Dataset Labor Market Gap Analysis Table 7.2, on the next page, lists the top 25 occupations in food and beverage manufacturing. These 25 occupations account for 70% of all cluster employment. The table provides the number of people employed by occupation in the cluster, and the number of people employed in that occupation in all industries in the region. This provides an understanding as to the level of competition employers face from industries outside of the cluster in hiring for key occupations. The occupation with the most jobs in the food and beverage manufacturing cluster is meat, poultry, and fish cutters and trimmers at 882 jobs. This occupation comprises 14.8% of the cluster s total jobs. There are nearly 1,300 meat, poultry, and fish cutters and trimmers employed in the region, meaning that the cluster employs about two-thirds of all meat, poultry, and fish cutters and trimmers. In Table 7.3, we see that only one occupation requires formal education beyond high school (general and operations managers). These occupations also require almost no work experience for entry-level positions. All offer on-the-job training. The pay scales for these occupations are low, with most occupations paying less than $20 per hour (see Table 7.2 above). Because this industry is generally viewed as entry-level with low educational requirements, there are few program completions that serve the industry (see Table 7.3). Further, because many of the largest occupations in this industry cluster are entry-level positions, they may held by part-time or seasonal workers who are still in school. 84 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Some fields that support this industry, even if they are not typically thought of as occupations in food and beverage manufacturing, have shortages in the number of annual completions to provide enough workers. These fields support a wide variety of industries, which may also contribute further to worker shortages in these occupations, namely sales representatives, heavy truck drivers, and maintenance and repair workers. TABLE 7.2. Staffing Pattern for Food and Beverage Manufacturing Showing the 25 Largest Occupations SOC OCCUPATION DESCRIPTION EMPLOYED IN INDUSTRY GROUP % OF INDUSTRY GROUP TOTAL JOBS EMPLOYED IN REGION INDUSTRY GROUP'S % OF REGIONAL JOBS MEDIAN HOURLY EARNINGS IN REGION 2010 2015 2015 2015 2015 2015 51-3022 Meat, Poultry, and Fish Cutters and Trimmers 873 882 14.8% 1,291 68.4% $11.25 51-9111 Packaging and Filling Machine Operators and Tenders 355 355 6.0% 1,154 30.8% $16.97 51-3023 Slaughterers and Meat Packers 291 284 4.8% 292 97.4% $12.29 51-3092 Food Batchmakers 235 256 4.3% 344 74.5% $11.78 53-7064 Packers and Packagers, Hand 236 240 4.0% 3,137 7.6% $11.64 51-1011 53-7062 First-Line Supervisors of Production and Operating Workers Laborers and Freight, Stock, and Material Movers, Hand 199 207 3.5% 3,451 6.0% $29.84 194 195 3.3% 9,781 2.0% $12.17 45-3011 Fishers and Related Fishing Workers 230 168 2.8% 150 112.3% $17.89 45-2092 Farmworkers and Laborers, Crop, Nursery, and Greenhouse 154 147 2.5% 586 25.1% $10.25 49-9041 Industrial Machinery Mechanics 116 128 2.2% 2,106 6.1% $23.13 53-7051 Industrial Truck and Tractor Operators 114 115 1.9% 2,451 4.7% $16.06 51-9061 41-4012 Inspectors, Testers, Sorters, Samplers, and Weighers Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products 108 111 1.9% 2,104 5.3% $20.24 102 109 1.8% 5,248 2.1% $25.03 53-7061 Cleaners of Vehicles and Equipment 94 96 1.6% 2,310 4.2% $11.84 51-3099 Food Processing Workers, All Other 93 93 1.6% 229 40.5% $11.53 49-9071 Maintenance and Repair Workers, General 88 90 1.5% 8,015 1.1% $16.05 53-3032 Heavy and Tractor-Trailer Truck Drivers 85 86 1.4% 7,459 1.2% $16.48 53-3031 Driver/Sales Workers 76 77 1.3% 3,749 2.1% $11.34 51-9198 Helpers--Production Workers 86 81 1.4% 1,115 7.2% $12.58 51-2092 Team Assemblers 71 80 1.3% 3,393 2.3% $12.96 53-7063 Machine Feeders and Offbearers 76 80 1.3% 594 13.4% $14.34 51-3093 Food Cooking Machine Operators and Tenders 75 77 1.3% 140 55.0% $11.88 51-9199 Production Workers, All Other 71 74 1.2% 1,625 4.6% $15.84 11-1021 General and Operations Managers 66 71 1.2% 10,348 0.7% $51.01 41-2031 Retail Salespersons 59 62 1.0% 30,992 0.2% $10.90 Totals for Top 25 4,149 4,164 70% 102,064 4.1% $12.96 Totals for All Food and Beverage Manufacturing 5,847 5,958 100% 873,732 0.7% $19.37 * Employed in Region column is employment for all industries, not just for advanced manufacturing Source: EMSI 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 85

TABLE 7.3. Food and Beverage Manufacturing Occupational Openings and Completions None = No formal educational credential High School = High school diploma or equivalent Some College = Some college, no degree Certificate = Postsecondary nondegree award Associate s = Associate s degree Bachelor s = Bachelor s degree Master s = Master s degree Doctoral = Doctoral or professional degree SOC OCCUPATION DESCRIPTION TYPICAL ENTRY LEVEL EDUCATION AVERAGE ANNUAL OPENINGS 2010-2015 REPLACEMENT JOBS NEW JOBS EMPLOYMENT 2015 RELATED COMPLETIONS 2015 41-2031 Retail Salespersons None 1,150 154 1,304 30,992 3.5% 0 0 2 0 2 53-7062 11-1021 49-9071 53-3032 53-7061 41-4012 53-7064 Laborers and Freight, Stock, and Material Movers, Hand General and Operations Managers Maintenance and Repair Workers, General Heavy and Tractor-Trailer Truck Drivers Cleaners of Vehicles and Equipment Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products Packers and Packagers, Hand TOTAL OPENINGS TOTAL JOBS None 366 78 444 9,781 1.1% 0 0 0 0 0 Bachelor's 267 47 314 10,348 1.2% NA NA 932 371 1,303 High School 239 25 264 8,015 0.9% 64 0 0 0 64 Certificate 186 76 262 7,459 0.9% 146 0 0 0 146 None 124 66 190 2,310 0.3% 0 0 0 0 0 High School 178 9 187 5,248 0.6% 0 22 10 0 32 None 112 48 160 3,137 0.4% 0 0 0 0 0 51-2092 Team Assemblers High School 114 38 152 3,393 0.4% 0 0 0 0 0 51-1011 First-Line Supervisors of Production and Operating Workers High School 97 36 133 3,451 0.4% 0 0 0 0 0 53-3031 Driver/Sales Workers High School 98 19 117 3,749 0.4% 0 0 0 0 0 49-9041 53-7051 51-9199 51-9061 51-3022 51-9111 Industrial Machinery Mechanics Industrial Truck and Tractor Operators Production Workers, All Other Inspectors, Testers, Sorters, Samplers, and Weighers Meat, Poultry, and Fish Cutters and Trimmers Packaging & Filling Machine Operators and Tenders 51-9198 Helpers--Production Workers 45-2092 53-7063 Farmworkers and Laborers, Crop, Nursery, and Greenhouse Machine Feeders and Offbearers High School 60 52 112 2,106 0.2% 0 0 0 0 0 None 82 22 104 2,451 0.3% 106 0 0 0 106 High School 67 36 103 1,625 0.2% 0 0 0 0 0 High School 78 14 92 2,104 0.2% 0 0 0 0 0 None 62 19 81 1,291 0.1% 0 0 0 0 0 High School 67 6 73 1,154 0.1% 0 0 0 0 0 None 54 5 59 1,115 0.1% 0 0 0 0 0 None 36 4 40 586 0.1% 0 0 0 0 0 None 21 6 27 594 0.1% 0 0 0 0 0 51-3092 Food Batchmakers High School 19 5 24 344 0.0% 0 0 0 0 0 45-3011 Fishers and Related Fishing Workers None 15 9 24 150 0.0% 0 0 0 0 0 51-3023 Slaughterers & Meat Packers None NA NA 0 292 0.0% 0 0 0 0 0 51-3099 51-3093 Food Processing Workers, All Other Food Cooking Machine Operators and Tenders Source: EMSI 2016.4 Dataset None NA NA 0 229 0.0% 0 0 0 0 0 High School NA NA 0 140 0.0% 0 0 0 0 0 Totals for Top 25 NA 3,492 774 4,266 102,064 11.7% 316 22 944 371 1,653 Totals for Hampton Roads NA 29,141 9,616 38,757 873,732 100% 9,355 9,948 31,197 15,834 66,334 % OF TOTAL JOBS CERTIFICATES ASSOCIATE'S DEGREES BACHELOR'S DEGREES GRADUATE DEGREES TOTAL COMPLETIONS 86 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Supply Chain Analysis Table 7.4 provides a picture about the total demand in Hampton Roads by all Hampton Roads residents and businesses for products made by companies in the food and beverage manufacturing industry cluster, which is a $1 billion industry in the region. In Table 7.4, we see that the companies in these sectors meet nearly two-thirds of regional demand for their products, while the region imports the other third of regional needs for these products. Because farm-related products and services are the sectors that import the most (such as soil preparation, planting, and cultivating), the ability for regional businesses to meet a greater share of local needs may be limited. TABLE 7.4. Food and Beverage Manufacturing Regional Demand Met by Hampton Roads Companies 2015 DEMAND NAICS INDUSTRY SECTOR SATISFIED IN-REGION % SATISFIED IN-REGION SATISFIED OUT- OF-REGION (IMPORTS) % SATISFIED OUT-OF- REGION TOTAL DEMAND % OF TOTAL DEMAND 311611 Animal (except Poultry) Slaughtering $251,460,717 64% $144,493,954 36% $395,954,671 39% 312120 Breweries $151,347,284 66% $78,374,000 34% $229,721,283 22% 311710 Seafood Product Preparation and Packaging $53,055,917 70% $22,558,557 30% $75,614,475 7% 311920 Coffee and Tea Manufacturing $58,217,402 93% $4,097,909 7% $62,315,311 6% 424510 311911 311340 Grain and Field Bean Merchant Wholesalers Roasted Nuts and Peanut Butter Manufacturing Nonchocolate Confectionery Manufacturing $15,455,184 30% $35,391,780 70% $50,846,964 5% $35,287,720 78% $10,132,313 22% $45,420,033 4% $25,440,845 71% $10,144,885 29% $35,585,730 3% 327213 Glass Container Manufacturing $20,212,677 72% $7,678,534 28% $27,891,211 3% 114111 Finfish Fishing $16,325,655 61% $10,387,669 39% $26,713,324 3% 333241 115115 Food Product Machinery Manufacturing Farm Labor Contractors and Crew Leaders $10,066,453 46% $12,011,725 54% $22,078,178 2% $4,174,728 22% $14,623,391 78% $18,798,119 2% 114112 Shellfish Fishing $11,369,753 70% $4,775,907 30% $16,145,660 2% 115114 115112 Postharvest Crop Activities (except Cotton Ginning) Soil Preparation, Planting, and Cultivating $525,989 6% $8,640,548 94% $9,166,538 1% $1,573,857 29% $3,824,019 71% $5,397,876 1% 115116 Farm Management Services $1,101,199 41% $1,574,565 59% $2,675,764 0% 115113 Crop Harvesting, Primarily by Machine $77,486 5% $1,437,967 95% $1,515,453 0% 114119 Other Marine Fishing $762,322 54% $651,480 46% $1,413,802 0% 115111 Cotton Ginning $589,691 67% $292,575 33% $882,266 0% Totals for Food & Beverage Manufacturing $657,044,878 64% $371,091,778 36% $1,028,136,657 100% Totals for All Hampton Roads Industries $74,076,005,229 39% $117,397,461,062 61% $191,473,466,291 NA Source: Emsi 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 87

Table 7.5 shows the goods and services that companies within the food and beverage manufacturing industry cluster buy to use in making their products. Approximately one-fourth of food and beverage manufacturing supply needs are met within the region, while threefourths of inputs are purchased from outside the region. In total, the value of the food and beverage manufacturing supply chain for Hampton Roads manufacturers is $2 billion. Of these imported supplies, nearly $800 million are agricultural products which are tied to the land. There is likely almost no potential for relocating this industry sector work to Hampton Roads. Of the other $713 million purchased from outside of the region, there is potential for Hampton Roads companies to find new customers, and perhaps a new market niche, among food and beverage manufacturing companies. Chemicals, plastics, rubber, and paper manufacturing are candidates for supplying the industry, as are wholesale trade services, information services, and transportation services. TABLE 7.5. Food and Beverage Manufacturing Supply Chain 2015 PURCHASES NAICS INDUSTRY SECTOR IN-REGION % IN-REGION OUT-OF-REGION (IMPORTS) % OUT- OF- REGION TOTAL PURCHASES % OF TOTAL PURCHASES 11 Crop and Animal Production $33,130,179 4% $795,749,716 96% $828,879,895 40.0% 31-33 Manufacturing $305,555,443 49% $321,874,643 51% $627,430,086 30.3% 42 Wholesale Trade $51,896,217 30% $121,969,255 70% $173,865,472 8.4% 48-49 Transportation and Warehousing $36,866,040 28% $95,764,922 72% $132,630,962 6.4% 55 54 Management of Companies and Enterprises Professional, Scientific, and Technical Services $59,598,143 51% $56,612,434 49% $116,210,577 5.6% $18,257,167 35% $33,176,787 65% $51,433,954 2.5% 52 Finance and Insurance $10,319,678 41% $15,006,673 59% $25,326,351 1.2% 22 Utilities $7,788,416 34% $15,039,931 66% $22,828,347 1.1% 56 Administrative and Support and Waste Management and Remediation Services $10,848,994 58% $7,754,454 42% $18,603,448 0.9% 51 Information $4,361,679 25% $13,332,987 75% $17,694,665 0.9% 53 Real Estate and Rental and Leasing $6,033,407 37% $10,381,361 63% $16,414,768 0.8% 72 Accommodation and Food Services $6,801,380 68% $3,228,957 32% $10,030,337 0.5% 21 Mining, Quarrying, and Oil and Gas Extraction $480,514 6% $8,128,510 94% $8,609,024 0.4% 44 Retail Trade $4,546,654 65% $2,439,398 35% $6,986,052 0.3% 81 Other Services (except Public Administration) $3,878,368 57% $2,917,152 43% $6,795,520 0.3% 23 Construction $2,681,443 56% $2,086,995 44% $4,768,438 0.2% 71 Arts, Entertainment, and Recreation $499,730 26% $1,415,168 74% $1,914,899 0.1% 61 Educational Services $347,975 25% $1,067,611 75% $1,415,586 0.1% 90 Government $450,005 49% $475,036 51% $925,041 0.0% 62 Health Care and Social Assistance $299,518 61% $194,588 39% $494,106 0.0% Totals for Food and Beverage Manufacturing $564,640,951 27% $1,508,616,576 73% $2,073,257,527 100% Source: Emsi 2016.4 Dataset 88 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

In addition to supplying local demand, as seen and discussed in Table 7.4 above, this industry exports most of its production outside of the region, bringing substantial revenue to the Hampton Roads region. After meeting $657 million in local demand, this industry exports $2.6 billion of goods and services outside of Hampton Roads (Table 7.6). TABLE 7.6. Hampton Roads Food and Beverage Manufacturing Companies Sales In-Region and Exported Out-of- Region 2015 SALES NAICS INDUSTRY SECTOR IN-REGION % OF TOTAL OUT-OF-REGION (EXPORTS) % OF TOTAL TOTAL SALES % OF TOTAL SALES 311611 Animal (except Poultry) Slaughtering $251,460,716 19% $1,053,124,644 81% $1,304,585,360 40.5% 311920 Coffee and Tea Manufacturing $58,217,402 10% $546,528,381 90% $604,745,783 18.8% 312120 Breweries $151,347,284 30% $347,042,015 70% $498,389,299 15.5% 311911 311710 Roasted Nuts and Peanut Butter Manufacturing Seafood Product Preparation and Packaging $35,287,720 10% $303,988,685 90% $339,276,405 10.5% $53,055,917 26% $150,308,319 74% $203,364,236 6.3% 327213 Glass Container Manufacturing $20,212,677 24% $62,373,770 76% $82,586,447 2.6% 311340 424510 Nonchocolate Confectionery Manufacturing Grain and Field Bean Merchant Wholesalers $25,440,845 51% $24,906,396 49% $50,347,241 1.6% $15,455,184 35% $29,195,686 65% $44,650,870 1.4% 114111 Finfish Fishing $16,325,655 48% $17,452,247 52% $33,777,902 1.0% 114112 Shellfish Fishing $11,369,753 52% $10,481,450 48% $21,851,203 0.7% 333241 115115 Food Product Machinery Manufacturing Farm Labor Contractors and Crew Leaders $10,066,453 51% $9,788,723 49% $19,855,176 0.6% $4,174,728 86% $702,636 14% $4,877,364 0.2% 115111 Cotton Ginning $589,691 13% $3,821,615 87% $4,411,306 0.1% 115112 Soil Preparation, Planting, and Cultivating $1,573,857 84% $290,473 16% $1,864,330 0.1% 115116 Farm Management Services $1,101,198 70% $480,653 30% $1,581,851 0.0% 114119 Other Marine Fishing $762,322 75% $260,113 25% $1,022,435 0.0% 115114 Postharvest Crop Activities (except Cotton Ginning) $525,989 98% $11,345 2% $537,334 0.0% 115113 Crop Harvesting, Primarily by Machine $77,486 99% $1,152 1% $78,638 0.0% Totals for Food and Beverage Manufacturing $657,044,877 20% $2,560,758,302 80% $3,217,803,179 100% Totals for All Hampton Roads Industries $69,428,788,808 30% $162,386,386,050 70% $231,815,174,858 NA Source: Emsi 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 89

PORT OPERATIONS, LOGISTICS, AND WAREHOUSING Establishments in port operations, logistics, and warehousing industry cluster primarily employ people who move cargo to and from ships, trucks, trains, or warehouses, or manage the operations of these facilities. The industry sectors in this cluster are engaged in: Operating merchandise warehousing and storage facilities. These establishments generally handle goods in containers, such as boxes, barrels, and/or drums, using equipment, such as forklifts, pallets, and racks. Arranging transportation of freight between shippers and carriers. These establishments are usually known as freight forwarders, marine shipping agents, or customs brokers and offer a combination of services spanning transportation modes. Providing transportation of cargo without transporting passengers, via air, rail, truck, or sea. Operating port facilities for any of air, rail, bus, and freight transportation services. It also includes related operation services and support activities such as inspections, maintenance, repairs, security, and loading/unloading. Figure 8.1 below shows the 2015 job distribution for the port operations, logistics, and warehousing cluster throughout Hampton Roads. Norfolk had the largest number of these jobs in 2015 (4,872), followed by Chesapeake (2,877) and Portsmouth (1,641). FIGURE 8.1. Port Operations, Logistics, and Warehousing Cluster, 2015 Job Distribution Source: Emsi 2016.4 Dataset This cluster employed about 14,000 workers in 2015, with annual average jobs growth of about 2% since 2010. Port and harbor operations, deep sea transportation, marine cargo handling, and general warehousing are among the largest sectors in this cluster of 18 distinct industry segments, as shown in Table 8.1, on the next page. Although the industry in total is growing, some specialized services within this cluster, such as nonscheduled chartered freight air transport, less than truckload freight hauling, 90 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

farm product storage, and other specialized freight handling or storage have declined. Competition from other ports and increased corporate emphasis on streamlining logistics have most likely contributed to a decline in demand for specialized services. For example, within the auto industry, it was common to use helicopters to deliver critical parts for just-intime manufacturing demands. Since the recession, the industry has undergone significant restructuring, with an emphasis on supplier location or diversification of suppliers to avoid lastminute, high-cost freight deliveries. TABLE 8.1. Port Operations, Logistics, and Warehousing Cluster Industry Employment Trends, Hampton Roads. EMPLOYMENT AVERAGE ANNUAL PERCENTAGE CHANGE CONCENTRATION (LQ) AVERAGE EARNINGS TOTAL SALES GROSS REGIONAL PRODUCT (GRP) ESTABLISHMENTS JOBS MULTIPLIER 2010 2015 2020 2010-2015- NAICS INDUSTRY SECTOR JOBS JOBS JOBS 2015 2020 2010 2015 2015 2015 2015 2010 2015 2015 493110 488510 General Warehousing and Storage Freight Transportation Arrangement 2,787 2,955 3,282 1.2% 2.1% 0.9 0.7 $55,426 $384,378,179 $214,593,394 59 65 1.8 1,563 1,843 1,972 3.4% 1.4% 1.4 1.5 $74,448 $379,236,068 $177,564,237 93 89 2.2 488320 Marine Cargo Handling 1,047 1,647 1,943 9.5% 3.4% 4.2 5.9 $81,513 $360,660,344 $167,875,118 10 9 2.4 541614 Process, Physical Distribution, and Logistics Consulting Services 674 1,410 1,981 15.9% 7.0% 1.1 2.1 $89,912 $217,811,247 $141,418,729 88 108 2.0 484121 General Freight Trucking, Long- Distance, Truckload 900 1,035 1,072 2.8% 0.7% 0.3 0.3 $45,556 $197,486,080 $74,019,517 81 79 1.6 483111 Deep Sea Freight Transportation 1,036 1,003 947-0.7% -1.1% 14.7 15.6 $201,691 $1,515,793,793 $433,498,970 14 14 9.3 488310 Port and Harbor Operations 1,150 918 670-4.4% -6.1% 10.8 8.1 $73,542 $180,648,311 $83,837,228 7 7 2.2 488390 484122 488330 484230 493120 Other Support Activities for Water Transportation General Freight Trucking, Long- Distance, Less Than Truckload Navigational Services to Shipping Specialized Freight (except Used Goods) Trucking, Long-Distance Refrigerated Warehousing and Storage 810 915 800 2.5% -2.6% 13.1 17.8 $70,145 $174,299,645 $79,585,107 27 22 2.1 850 681 640-4.4% -1.2% 0.7 0.5 $64,680 $147,007,566 $55,024,744 26 27 1.9 410 367 372-2.2% 0.3% 3.6 3.4 $88,051 $88,997,075 $41,232,334 20 14 2.4 380 344 337-2.0% -0.4% 0.6 0.4 $55,246 $62,565,652 $23,352,493 33 32 1.7 320 351 335 1.8% -0.9% 1.1 1.1 $53,641 $44,311,395 $24,442,536 15 15 1.7 493190 Other Warehousing and Storage 248 130 95-12.2% -6.0% 1.0 0.5 $78,871 $27,749,233 $15,311,610 19 21 1.6 483113 483211 493130 483212 481212 Coastal and Great Lakes Freight Transportation Inland Water Freight Transportation Farm Product Warehousing and Storage Inland Water Passenger Transportation Nonscheduled Chartered Freight Air Transportation 245 128 86-12.1% -7.8% 3.9 1.9 $120,299 $119,075,167 $33,983,062 4 4 5.6 14 64 94 35.1% 8.1% 0.1 0.5 $85,601 $43,536,399 $12,504,775 4 7 4.4 158 56 67-18.7% 3.8% 3.1 0.9 $57,999 $7,899,379 $4,180,824 4 2 1.6 27 34 41 4.8% 3.7% 1.1 1.3 $54,589 $14,151,528 $3,942,798 5 4 3.0 42 33 18-4.9% -11.5% 0.9 0.7 $57,408 $9,106,754 $3,625,705 4 2 2.0 Totals for Port Operations, Logistics and Warehousing 12,663 13,913 14,753 1.9% 1.2% 4.1 4.3 $78,257 $3,974,713,816 $1,589,993,183 513 521 2.6 Totals for All Hampton Roads Industries 856,047 873,732 905,239 0.4% 0.7% 3.2 3.4 $54,966 $231,815,174,882 $75,115,290,436 39,147 40,353 1.9 Source: EMSI 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 91

As can be seen in Figure 8.2, the industry lost jobs during the recession and has only recently begun to recover. Technology is a factor affecting current and future industry and job growth. Large ports have increasingly added new technologies to improve productivity. Warehouses and trucking also continue to automate operations. FIGURE 8.2. Port Operations, Logistics, and Warehousing Employment Trends; YOY Employment Growth Hampton Roads Virginia United States 20% 15% Year-Over-Year Growth Rate 10% 5% 0% 5% 10% 15% 20% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Emsi 2016.4 Dataset Labor Market Gap Analysis Table 8.2, on the next page, lists the top 25 occupations in port operations, logistics, and warehousing. These 25 occupations account for 78% of all cluster employment. The table provides the number of people employed by occupation in the cluster, and the number of people employed in that occupation in all industries in the region. This provides an understanding as to the level of competition employers face from industries outside of the cluster in hiring for key occupations. The occupation with the most jobs in the port operations, logistics, and warehousing cluster is heavy truck drivers at 1,721 jobs. This occupation comprises 12.4% of the cluster s total jobs. However, there are nearly 7,500 truck drivers employed in the region, meaning that the cluster employs about 1 in 4 of all truck drivers. As can be seen in Table 8.3, with the exception of management or office positions, the industry cluster in general requires little formal education beyond high school. Some non-office positions that require additional training include truck drivers, ship captains or pilots, and engineering technicians. Most material handling positions require on-the-job training, but no formal education above high school. Table 8.3 shows the average annual openings (averaged over the past five years) for specific occupations within Hampton Roads. The regional completions column shows the total 92 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 8.2. Staffing Pattern for Port Operations, Logistics, and Warehousing Showing the 25 Largest Occupations SOC OCCUPATION DESCRIPTION EMPLOYED IN INDUSTRY GROUP % OF INDUSTRY GROUP TOTAL JOBS EMPLOYED IN REGION INDUSTRY GROUP'S % OF REGIONAL JOBS MEDIAN HOURLY EARNINGS IN REGION 2010 2015 2015 2015 2015 2015 53-3032 Heavy and Tractor-Trailer Truck Drivers 1,732 1,721 12.4% 7,459 23.1% $16.48 53-7062 Laborers and Freight, Stock, and Material Movers, Hand 1,323 1,379 9.9% 9,781 14.1% $12.17 53-7051 Industrial Truck and Tractor Operators 837 865 6.2% 2,451 35.3% $16.06 53-5011 Sailors and Marine Oilers 789 835 6.0% 1,918 43.6% $18.59 53-5021 Captains, Mates, and Pilots of Water Vessels 742 815 5.9% 1,661 49.1% $32.52 43-5011 Cargo and Freight Agents 646 778 5.6% 1,133 68.7% $19.98 53-5031 Ship Engineers 596 625 4.5% 1,298 48.2% $25.00 43-5081 Stock Clerks and Order Fillers 383 385 2.8% 12,334 3.1% $12.32 53-7064 Packers and Packagers, Hand 290 291 2.1% 3,137 9.3% $11.64 43-9061 Office Clerks, General 236 278 2.0% 18,946 1.5% $14.10 43-4051 Customer Service Representatives 224 272 2.0% 14,393 1.9% $14.37 53-1031 43-1011 First-Line Supervisors of Transportation and Material-Moving Machine and Vehicle Operators First-Line Supervisors of Office and Administrative Support Workers 219 229 1.6% 1,240 18.5% $28.50 196 229 1.6% 9,994 2.3% $22.71 13-1111 Management Analysts 123 226 1.6% 6,534 3.5% $39.44 11-1021 General and Operations Managers 188 221 1.6% 10,348 2.1% $51.01 41-3099 Sales Representatives, Services, All Other 179 220 1.6% 4,933 4.5% $24.97 43-5071 Shipping, Receiving, and Traffic Clerks 211 216 1.5% 2,276 9.5% $14.63 53-7063 Machine Feeders and Offbearers 206 205 1.5% 594 34.5% $14.34 53-3033 Light Truck or Delivery Services Drivers 190 191 1.4% 3,689 5.2% $14.52 53-1021 First-Line Supervisors of Helpers, Laborers, and Material Movers, Hand 157 160 1.2% 745 21.5% $22.39 49-9071 Maintenance and Repair Workers, General 148 159 1.1% 8,015 2.0% $16.05 43-3031 Bookkeeping, Accounting, and Auditing Clerks 135 152 1.1% 8,545 1.8% $16.32 43-5032 Dispatchers, Except Police, Fire, and Ambulance 123 132 0.9% 873 15.1% $15.06 53-7021 Crane and Tower Operators 104 110 0.8% 642 17.1% $25.63 43-6014 Secretaries and Administrative Assistants, Except Legal, Medical, and Executive 87 106 0.8% 11,032 1.0% $15.33 Totals for Top 25 10,063 10,800 78% 143,970 7.5% $16.32 Totals for All Port Operations, Logistics and Warehousing 12,663 13,913 100% 873,732 1.6% $19.37 * Employed in Region column is employment for all industries, not just for advanced manufacturing Source: EMSI 2016.4 Dataset completions for all Hampton Roads educational programs (by type of program), regardless of industry sector. This means that while 1,300 people completed programs that supply general and operations managers, a wide variety of industries (including as well as outside of the ports operation, logistics, and warehousing cluster) may be competing to hire those people. Industry representatives for this cluster expressed frustration at working with community colleges or universities, with one saying, Most don t really lay out the red carpet for employers. Soft skills, particularly good communication skills, are an area of weakness for employees in this cluster. Regarding worker retention, common themes were excessive work obligations some requiring around the clock on-call status, difficult commutes, and lack of stability. Because many occupations are in the trades, employers in this cluster would like to see more emphasis in high schools on career paths towards apprenticeships and trade skills training. Many organizations in this cluster actively offer field trips and career fairs to interest students in pursuing trades occupations. Computer literacy, math, and communication skills are the most highly prized for this industry cluster s employers. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 93

TABLE 8.3. Port Operations, Logistics, and Warehousing Occupational Openings and Completions None = No formal educational credential High School = High school diploma or equivalent Some College = Some college, no degree Certificate = Postsecondary nondegree award Associate s = Associate s degree Bachelor s = Bachelor s degree Master s = Master s degree Doctoral = Doctoral or professional degree SOC 43-4051 OCCUPATION DESCRIPTION Customer Service Representatives TYPICAL ENTRY LEVEL EDUCATION AVERAGE ANNUAL OPENINGS 2010-2015 REPLACEMENT JOBS NEW JOBS TOTAL OPENINGS EMPLOYMENT 2015 TOTAL JOBS % OF TOTAL JOBS CERTIFICATES RELATED COMPLETIONS 2015 High School 387 201 588 14,393 1.6% 0 0 0 0 0 43-9061 Office Clerks, General High School 490 85 575 18,946 2.2% 0 0 0 0 0 43-5081 Stock Clerks & Order Fillers None 406 154 560 12,334 1.4% 0 0 0 0 0 53-7062 11-1021 Laborers and Freight, Stock, and Material Movers, Hand General and Operations Managers None 366 78 444 9,781 1.1% 0 0 0 0 0 Bachelor's 267 47 314 10,348 1.2% NA NA 932 371 1,303 13-1111 Management Analysts Bachelor's 129 154 283 6,534 0.7% NA NA 925 338 1,263 43-1011 49-9071 53-3032 43-6014 53-7064 41-3099 43-3031 53-5021 First-Line Supervisors of Office and Administrative Support Workers Maintenance and Repair Workers, General Heavy and Tractor-Trailer Truck Drivers Secretaries and Administrative Assistants, Except Legal, Medical, and Executive Packers and Packagers, Hand Sales Representatives, Services, All Other Bookkeeping, Accounting, and Auditing Clerks Captains, Mates, and Pilots of Water Vessels High School 181 87 268 9,994 1.1% 0 41 48 0 89 High School 239 25 264 8,015 0.9% 64 0 0 0 64 Certificate 186 76 262 7,459 0.9% 146 0 0 0 146 High School 177 3 180 11,032 1.3% 0 0 0 0 0 None 112 48 160 3,137 0.4% 0 0 0 0 0 High School 141 11 152 4,933 0.6% 0 22 0 0 22 Some College ASSOCIATE'S DEGREES BACHELOR'S DEGREES GRADUATE DEGREES 135 0 135 8,545 1.0% 29 74 0 0 103 Certificate 81 34 115 1,661 0.2% 0 0 0 0 0 53-5011 Sailors and Marine Oilers None 74 33 107 1,918 0.2% 0 0 0 0 0 53-7051 53-3033 Industrial Truck and Tractor Operators Light Truck or Delivery Services Drivers None 82 22 104 2,451 0.3% 106 0 0 0 106 High School 90 11 101 3,689 0.4% 146 0 0 0 146 43-5011 Cargo and Freight Agents High School 43 40 83 1,133 0.1% 0 0 0 0 0 53-5031 Ship Engineers Certificate 50 29 79 1,298 0.1% 0 0 0 0 0 43-5071 53-1031 53-1021 43-5032 Shipping, Receiving, and Traffic Clerks First-Line Supervisors of Transportation and Material- Moving Machine and Vehicle Operators First-Line Supervisors of Helpers, Laborers, and Material Movers, Hand Dispatchers, Except Police, Fire, and Ambulance High School 68 4 72 2,276 0.3% 0 0 0 0 0 High School 44 9 53 1,240 0.1% 0 0 0 3 3 High School 31 5 36 745 0.1% 0 0 0 0 0 High School 27 9 36 873 0.1% 0 0 0 0 0 53-7021 Crane and Tower Operators High School 28 7 35 642 0.1% 0 0 0 0 0 53-7063 Machine Feeders and Offbearers Source: EMSI 2016.4 Dataset None 21 6 27 594 0.1% 0 0 0 0 0 Totals for Top 25 NA 3,855 1,178 5,033 143,970 16.5% 491 137 1,905 712 3,245 Totals for Hampton Roads NA 29,141 9,616 38,757 873,732 100% 9,355 9,948 31,197 15,834 66,334 TOTAL COMPLETIONS 94 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Supply Chain Analysis Table 8.4 provides a picture about the total demand in Hampton Roads by all Hampton Roads residents and businesses for products and services provided by companies in the port operations, logistics, and warehousing industry cluster, which is a $2.5 billion industry in the region. In Table 8.4, we see that the companies in these sectors meet almost half of regional demand for their products and services, while the region imports slightly more than half of regional needs for these products and services. The significant gaps in local supply are for general and long-haul freight trucking, which make up more than $700 million of regional needs met by outside (of the region) companies. Much of this is likely due to shipping products (from elsewhere in the U.S.) to the ports to be exported (or the reverse, shipping imported products arriving at the ports to other U.S. markets). TABLE 8.4. Port Operations, Logistics, and Warehousing Regional Demand Met by Hampton Roads Companies NAICS 484121 493110 484122 488510 483211 484230 INDUSTRY SECTOR General Freight Trucking, Long- Distance, Truckload General Warehousing and Storage General Freight Trucking, Long- Distance, Less Than Truckload Freight Transportation Arrangement Inland Water Freight Transportation Specialized Freight (except Used Goods) Trucking, Long-Distance SATISFIED IN-REGION % SATISFIED IN-REGION 2015 DEMAND SATISFIED OUT- OF-REGION (IMPORTS) % SATISFIED OUT-OF- REGION TOTAL DEMAND % OF TOTAL DEMAND $139,824,908 21% $511,892,247 79% $651,717,154 26% $227,924,100 63% $136,684,528 37% $364,608,627 14% $114,199,006 38% $186,799,162 62% $300,998,167 12% $164,249,032 73% $59,531,593 27% $223,780,625 9% $29,120,204 13% $192,417,199 87% $221,537,403 9% $55,303,317 37% $93,941,302 63% $149,244,618 6% 483111 Deep Sea Freight Transportation $131,859,985 89% $15,586,141 11% $147,446,125 6% 483113 541614 Coastal and Great Lakes Freight Transportation Process, Physical Distribution, & Logistics Consulting Services $44,850,080 33% $91,260,594 67% $136,110,674 5% $82,937,609 96% $3,577,866 4% $86,515,476 3% 488320 Marine Cargo Handling $47,357,714 100% $49,572 0% $47,407,286 2% 493190 Other Warehousing and Storage $22,964,671 72% $8,862,143 28% $31,826,814 1% 493120 483212 Refrigerated Warehousing and Storage Inland Water Passenger Transportation $27,750,534 87% $3,981,253 13% $31,731,787 1% $8,752,740 28% $22,479,674 72% $31,232,414 1% 488310 Port and Harbor Operations $29,601,088 97% $786,663 3% $30,387,751 1% 481212 488330 493130 488390 Nonscheduled Chartered Freight Air Transportation Navigational Services to Shipping Farm Product Warehousing and Storage Other Support Activities for Water Transportation Totals for Port Operations, Logistics and Warehousing $7,205,587 29% $17,854,409 71% $25,059,997 1% $24,263,324 97% $746,789 3% $25,010,114 1% $5,520,089 47% $6,102,495 53% $11,622,584 0% $9,864,689 100% $5,469 0% $9,870,157 0% $1,173,548,676 46% $1,352,559,097 54% $2,526,107,773 100% Totals for All Hampton Roads Industries $74,076,005,229 39% $117,397,461,062 61% $191,473,466,291 NA Source: Emsi 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 95

Table 8.5 shows the economic development opportunity to build up the region s supply chain supporting port operations, logistics, or warehousing companies. This table shows the goods and services that companies within this cluster buy to use in making their products or providing their services. Approximately half of port operations, logistics, and warehousing supply needs are met within the region, while half of inputs are purchased from outside the region. In total, the value of the port operations, logistics, and warehousing supply chain for Hampton Roads companies is $2.2 billion. Most of imported supplies are for transportation services or manufactured goods. The manufactured goods most imported are paper, petroleum, coal, chemicals, plastics, rubber, and mineral products. TABLE 8.5. Port Operations, Logistics, and Warehousing Supply Chain 2015 PURCHASES NAICS INDUSTRY SECTOR IN-REGION % IN-REGION OUT-OF-REGION (IMPORTS) % OUT- OF- REGION TOTAL PURCHASES % OF TOTAL PURCHASES 48-49 Transportation and Warehousing $388,697,661 69% $178,651,406 31% $567,349,067 25.5% 31-33 Manufacturing $72,889,411 13% $476,229,173 87% $549,118,584 24.7% 56 Administrative and Support and Waste Management and Remediation Services $125,636,670 59% $86,631,733 41% $212,268,402 9.5% 53 Real Estate and Rental and Leasing $153,623,073 81% $36,653,060 19% $190,276,133 8.6% 42 Wholesale Trade $69,597,562 44% $90,307,623 56% $159,905,185 7.2% 54 Professional, Scientific, and Technical Services $68,053,120 57% $51,873,513 43% $119,926,633 5.4% 52 Finance and Insurance $69,459,511 60% $45,394,523 40% $114,854,034 5.2% 90 Government $50,379,682 81% $11,572,405 19% $61,952,088 2.8% 51 Information $26,250,113 50% $26,412,923 50% $52,663,037 2.4% 22 Utilities $19,839,177 39% $30,686,157 61% $50,525,334 2.3% 55 Management of Companies and Enterprises $33,294,543 68% $15,821,492 32% $49,116,035 2.2% 44 Retail Trade $23,820,863 79% $6,361,107 21% $30,181,970 1.4% 23 Construction $15,958,908 70% $6,779,820 30% $22,738,728 1.0% 81 21 Other Services (except Public Administration) Mining, Quarrying, and Oil and Gas Extraction $13,504,794 75% $4,513,235 25% $18,018,029 0.8% $135,086 1% $11,616,003 99% $11,751,089 0.5% 72 Accommodation and Food Services $5,294,624 76% $1,713,329 24% $7,007,953 0.3% 71 Arts, Entertainment, and Recreation $1,211,836 41% $1,737,035 59% $2,948,871 0.1% 61 Educational Services $1,533,154 66% $799,129 34% $2,332,284 0.1% 62 Health Care and Social Assistance $929,623 83% $184,433 17% $1,114,056 0.1% 11 Crop and Animal Production $22,027 2% $869,130 98% $891,157 0.0% Totals for Port Operations, Logistics and Warehousing $1,140,131,439 51% $1,084,807,230 49% $2,224,938,668 100% Source: Emsi 2016.4 Dataset 96 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

Table 8.6 shows the types of manufactured products purchased by Hampton Roads port operations, logistics, and warehousing companies. TABLE 8.6. Port Operations, Logistics, and Warehousing Manufactured Products Supply Chain 2015 PURCHASES NAICS INDUSTRY SECTOR IN-REGION % IN-REGION OUT-OF-REGION (IMPORTS) % OUT- OF- REGION TOTAL MANUFACTURED GOODS PURCHASES 324 Petroleum and Coal Products Manufacturing $22,132,804 6% $378,510,617 94% $400,643,421 332 Fabricated Metal Product Manufacturing $19,341,713 40% $28,571,875 60% $47,913,588 336 Transportation Equipment Manufacturing $14,346,843 43% $18,874,939 57% $33,221,782 333 Machinery Manufacturing $4,679,262 31% $10,316,212 69% $14,995,474 325 Chemical Manufacturing $2,135,587 17% $10,561,288 83% $12,696,875 326 Plastics and Rubber Products Manufacturing $1,440,147 16% $7,355,365 84% $8,795,512 322 Paper Manufacturing $1,577,208 18% $6,985,129 82% $8,562,337 334 Computer and Electronic Product Manufacturing $347,774 7% $4,683,209 93% $5,030,983 323 Printing and Related Support Activities $1,601,572 47% $1,796,060 53% $3,397,632 335 Electrical Equipment, Appliance, and Component Manufacturing $1,120,867 43% $1,470,861 57% $2,591,728 311 Food Manufacturing $930,423 38% $1,490,041 62% $2,420,464 314 Textile Product Mills $1,740,401 84% $340,401 16% $2,080,802 339 Miscellaneous Manufacturing $352,084 17% $1,720,537 83% $2,072,621 331 Primary Metal Manufacturing $48,928 3% $1,565,731 97% $1,614,659 321 Wood Product Manufacturing $183,963 17% $908,127 83% $1,092,090 327 Nonmetallic Mineral Product Manufacturing $462,678 64% $258,446 36% $721,123 312 Beverage and Tobacco Product Manufacturing $218,818 45% $268,383 55% $487,201 337 Furniture and Related Product Manufacturing $178,985 44% $228,250 56% $407,235 313 Textile Mills $14,145 6% $234,140 94% $248,284 315 Apparel Manufacturing $34,939 30% $81,376 70% $116,315 316 Leather and Allied Product Manufacturing $271 3% $8,188 97% $8,459 Total Manufacturing Purchases $72,889,411 13.3% $476,229,173 86.7% $549,118,584 Source: Emsi 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 97

Table 8.7 shows the amount of goods and services sold by Hampton Roads companies both in and outside of the region. These companies sell nearly $4 billion of products and services, of which $2.8 billion is sold outside of Hampton Roads, bringing substantial revenues into the region. TABLE 8.7. Hampton Roads Port Operations, Logistics, and Warehousing Companies Sales In-Region and Exported Out-of-Region 2015 SALES NAICS INDUSTRY SECTOR IN-REGION % OF TOTAL OUT-OF-REGION (EXPORTS) % OF TOTAL TOTAL SALES % OF TOTAL SALES 483111 Deep Sea Freight Transportation $131,859,985 9% $1,383,933,808 91% $1,515,793,793 38.1% 493110 General Warehousing and Storage $227,924,100 59% $156,454,079 41% $384,378,179 9.7% 488510 Freight Transportation Arrangement $164,249,032 43% $214,987,036 57% $379,236,068 9.5% 488320 Marine Cargo Handling $47,357,714 13% $313,302,630 87% $360,660,344 9.1% 541614 484121 Process, Physical Distribution, and Logistics Consulting Services General Freight Trucking, Long-Distance, Truckload $82,937,609 38% $134,873,638 62% $217,811,247 5.5% $139,824,907 71% $57,661,173 29% $197,486,080 5.0% 488310 Port and Harbor Operations $29,601,088 16% $151,047,223 84% $180,648,311 4.5% 488390 484122 483113 Other Support Activities for Water Transportation General Freight Trucking, Long-Distance, Less Than Truckload Coastal and Great Lakes Freight Transportation $9,864,689 6% $164,434,956 94% $174,299,645 4.4% $114,199,006 78% $32,808,560 22% $147,007,566 3.7% $44,850,079 38% $74,225,088 62% $119,075,167 3.0% 488330 Navigational Services to Shipping $24,263,324 27% $64,733,751 73% $88,997,075 2.2% 484230 Specialized Freight (except Used Goods) Trucking, Long-Distance $55,303,317 88% $7,262,335 12% $62,565,652 1.6% 493120 Refrigerated Warehousing and Storage $27,750,535 63% $16,560,860 37% $44,311,395 1.1% 483211 Inland Water Freight Transportation $29,120,204 67% $14,416,195 33% $43,536,399 1.1% 493190 Other Warehousing and Storage $22,964,671 83% $4,784,562 17% $27,749,233 0.7% 483212 Inland Water Passenger Transportation $8,752,740 62% $5,398,788 38% $14,151,528 0.4% 481212 Nonscheduled Chartered Freight Air Transportation $7,205,587 79% $1,901,167 21% $9,106,754 0.2% 493130 Farm Product Warehousing and Storage $5,520,089 70% $2,379,290 30% $7,899,379 0.2% Totals for Port Operations, Logistics and Warehousing $1,173,548,676 30% $2,801,165,140 70% $3,974,713,816 100% Totals for All Hampton Roads Industries $69,428,788,808 30% $162,386,386,050 70% $231,815,174,858 NA Source: Emsi 2016.4 Dataset 98 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

LIFE SCIENCES Core industries within the life sciences cluster primarily manufacture surgical, medical, dental, optical, ophthalmic, and veterinary instruments and supplies. This cluster also includes research and development institutions in biotechnology and life sciences, which have a growing presence in the region. Establishments in this cluster produce complex chemical and biological substances used in medications, vaccines, diagnostic tests, and similar medical applications. This is the smallest of the eight clusters considered, but several sectors within the cluster are growing rapidly. The life sciences cluster supports a variety of other industries, most notably the health care industry. Figure 9.1 below shows the 2015 job distribution for the life sciences cluster throughout Hampton Roads. Norfolk had the largest number of life sciences jobs in 2015 (871), followed by Virginia Beach (243) and Chesapeake (232). FIGURE 9.1. Life Sciences Cluster, 2015 Job Distribution Source: Emsi 2016.4 Dataset Table 9.1, on the next page, provides an overview for each of the individual industry sectors that comprise the life sciences cluster in Hampton Roads. Included are historic, current, and projected employment; historic and projected average annual percent growth (or decline); historic and current employment concentration (LQ); average earnings; total sales; gross regional product (GRP); historic and current establishments (businesses); and jobs multipliers. The table is sorted largest to smallest by 2015 employment. The life sciences cluster accounted for nearly 2,000 jobs and 234 establishments in 2015. Overall employment for this cluster is only 80% of the concentration expected for the Hampton Roads region, based on national employment averages. The cluster as a whole experienced weak job growth over the last five years (approximately 0.1% year over year). Total sales for all companies in this cluster were nearly $800 million; the cluster contributed $239 million to the region s gross regional product in 2015. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 99

TABLE 9.1. Life Sciences Cluster Industry Employment Trends, Hampton Roads EMPLOYMENT AVERAGE ANNUAL PERCENTAGE CHANGE CONCENTRATION (LQ) AVERAGE EARNINGS TOTAL SALES GROSS REGIONAL PRODUCT (GRP) ESTABLISHMENTS JOBS MULTIPLIER 2010 2015 2020 2010-2015- NAICS INDUSTRY SECTOR JOBS JOBS JOBS 2015 2020 2010 2015 2015 2015 2015 2010 2015 2015 621511 Medical Laboratories 710 964 1,162 6.3% 3.8% 0.7 0.9 $61,320 $120,279,115 $65,291,750 39 140 1.7 339116 Dental Laboratories 314 300 250-0.9% -3.6% 1.0 1.0 $57,384 $34,138,502 $18,853,150 44 40 1.6 325199 339113 541711 334517 325412 334510 325414 339115 339112 339114 325411 All Other Basic Organic Chemical Manufacturing Surgical Appliance and Supplies Manufacturing Research and Development in Biotechnology Irradiation Apparatus Manufacturing Pharmaceutical Preparation Manufacturing Electromedical and Electrotherapeutic Apparatus Manufacturing Biological Product (except Diagnostic) Manufacturing Ophthalmic Goods Manufacturing Surgical and Medical Instrument Manufacturing Dental Equipment and Supplies Manufacturing Medicinal and Botanical Manufacturing 346 228 123-8.1% -11.6% 1.8 1.1 $98,008 $489,948,197 $74,528,890 3 5 4.3 90 125 145 6.8% 2.9% 0.2 0.2 $68,107 $32,773,109 $16,430,452 9 12 2.2 53 131 159 19.6% 4.0% 0.1 0.1 $58,718 $21,041,053 $9,061,544 13 17 1.9 2 83 110 110.9% 5.7% 0.0 1.2 $92,663 $27,632,761 $12,316,904 1 1 2.1 14 66 86 35.8% 5.3% 0.0 0.1 $121,648 $41,181,091 $24,168,872 1 6 3.4 35 33 21-1.1% -9.1% 0.1 0.1 $66,571 $8,311,920 $5,763,526 3 2 1.8 57 31 51-11.6% 10.6% 0.4 0.2 $60,219 $14,380,838 $9,126,709 4 2 2.5 334 14 0-46.8% -100.0% 1.9 0.1 $61,891 $2,312,068 $1,118,096 16 4 1.9 13 8 11-9.6% 5.7% 0.0 0.0 $188,281 $4,430,787 $2,334,679 3 4 3.4 5 4 3-4.4% -5.6% 0.1 0.0 $93,303 $1,568,873 $597,828 1 1 2.3 3 2 2-7.8% 0.0% 0.0 0.0 $2,407 $43,798 $22,710 0 0 1.1 Totals for Life Sciences 1,978 1,989 2,122 0.1% 1.3% 1.1 0.8 $79,271 $798,042,112 $239,615,109 137 234 2.1 Totals for All Hampton Roads Industries 856,047 873,732 905,239 0.4% 0.7% 3.2 3.4 $54,966 $231,815,174,882 $75,115,290,436 39,147 40,353 1.9 Source: EMSI 2016.4 Dataset FIGURE 9.2. Life Sciences Employment Trends; YOY Employment Growth Hampton Roads Virginia United States 20% 15% Year-Over-Year Growth Rate 10% 5% 0% 5% 10% 15% 20% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Emsi 2016.4 Dataset 100 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

When compared to state and national trends, the recession impacted employment in the life sciences cluster in the Hampton Roads region more severely than in Virginia or the U.S. (as shown in Figure 9.2, on the previous page). Employment declined by 15.4% in 2010 but has recovered well. Figure 9.3 reflects the role federal funding has on the overall cluster s performance. Employment in medical and dental labs, R&D in biotechnology, and other research efforts to advance the nation s medical industry was directly impacted by the sequestration. As can be seen in Figure 9.3, biological and medical research fell over the past decade, however, Congress has begun restoring research budgets which will, hopefully, result in extended growth for Hampton Roads. FIGURE 9.3. U.S. Biological and Medical Research and National Institution on Health s Appropriations, 2003-2015, Adjusted for Inflation U.S. Biological and Medical Research Fell for Over a Decade Congress Has Begun Restoring Research Budgets $35 FY 2016 Increase Sequestration $30 ACTUAL DOLLARS Billions $25 INFLATION- ADJUSTED DOLLARS Inflationary Losses Real Growth $20 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Federation of American Societies for Experimental Biology Labor Market Gap Analysis Table 9.2, on the next page, lists the top 25 occupations in life sciences. These 25 occupations account for 57% of all cluster employment. The table provides the number of people employed by occupation in the cluster, and the number of people employed in that occupation in all industries in the region. This provides an understanding as to the level of competition employers face from industries outside of the cluster in hiring for key occupations. The occupation with the most jobs in the life sciences cluster is phlebotomists at 228 jobs. This occupation comprises 11.5 % of the cluster s total jobs. However, there are nearly 1,400 phlebotomists employed in the region, meaning that the cluster employs about 1 in 6 of all phlebotomists. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 101

TABLE 9.2. Staffing Pattern for Life Sciences Showing the 25 Largest Occupations SOC OCCUPATION DESCRIPTION EMPLOYED IN INDUSTRY GROUP % OF INDUSTRY GROUP TOTAL JOBS EMPLOYED IN REGION INDUSTRY GROUP'S % OF REGIONAL JOBS MEDIAN HOURLY EARNINGS IN REGION 2010 2015 2015 2015 2015 2015 31-9097 Phlebotomists 157 228 11.5% 1,373 16.6% $14.21 29-2011 Medical and Clinical Laboratory Technologists 78 110 5.5% 1,169 9.4% $24.25 51-9081 Dental Laboratory Technicians 140 96 4.8% 174 55.2% $19.06 29-2012 Medical and Clinical Laboratory Technicians 58 80 4.0% 922 8.7% $16.37 43-4051 Customer Service Representatives 50 58 2.9% 14,393 0.4% $14.37 29-2034 Radiologic Technologists 42 58 2.9% 1,263 4.6% $25.53 51-2092 Team Assemblers 84 56 2.8% 3,393 1.6% $12.96 51-1011 First-Line Supervisors of Production and Operating Workers 49 37 1.8% 3,451 1.1% $29.84 51-8091 Chemical Plant and System Operators 50 36 1.8% 75 48.3% $26.19 43-5021 Couriers and Messengers 25 34 1.7% 355 9.7% $12.52 43-9061 Office Clerks, General 32 32 1.6% 18,946 0.2% $14.10 51-9011 Chemical Equipment Operators and Tenders 42 29 1.5% 109 26.6% $23.41 51-9061 43-1011 Inspectors, Testers, Sorters, Samplers, and Weighers First-Line Supervisors of Office and Administrative Support Workers 35 27 1.4% 2,104 1.3% $20.24 23 27 1.3% 9,994 0.3% $22.71 11-1021 General and Operations Managers 26 25 1.3% 10,348 0.2% $51.01 43-3021 Billing and Posting Clerks 19 25 1.2% 3,075 0.8% $14.56 29-2035 Magnetic Resonance Imaging Technologists 17 24 1.2% 188 12.6% $32.60 43-4171 Receptionists and Information Clerks 18 24 1.2% 7,414 0.3% $13.04 41-3099 Sales Representatives, Services, All Other 16 23 1.1% 4,933 0.5% $24.97 17-2112 Industrial Engineers 22 18 0.9% 833 2.2% $38.13 17-3029 Engineering Technicians, Except Drafters, All Other 15 17 0.9% 1,998 0.9% $34.27 51-4041 Machinists 21 17 0.8% 2,407 0.7% $22.47 43-5061 Production, Planning, and Expediting Clerks 18 17 0.8% 2,691 0.6% $26.47 49-9071 Maintenance and Repair Workers, General 22 17 0.8% 8,015 0.2% $16.05 49-9041 Industrial Machinery Mechanics 20 16 0.8% 2,106 0.8% $23.13 Totals for Top 25 1,079 1,130 57% 101,729 1.1% $22.71 Totals for All Life Sciences 1,978 1,989 100% 873,732 0.2% $19.37 * Employed in Region column is employment for all industries, not just for advanced manufacturing Source: EMSI 2016.4 Dataset As shown in Table 9.3 on the next page, the entry-level requirement for many positions is a high school diploma or equivalent. These educational requirements reflect national averages, and may differ from specific requirements of Hampton Roads employers. Table 9.3 shows the average annual openings (averaged over the past 5 years) for specific occupations within Hampton Roads. The regional completions column shows the total completions for all Hampton Roads educational programs (by type of program), regardless of industry sector. This means that while 1,300 people completed programs that supply general and operations managers, a wide variety of industries (including as well as outside of the life sciences cluster) may be competing to hire those people. 102 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 9.3. Life Sciences Occupational Openings and Completions None = No formal educational credential High School = High school diploma or equivalent Some College = Some college, no degree Certificate = Postsecondary nondegree award Associate s = Associate s degree Bachelor s = Bachelor s degree Master s = Master s degree Doctoral = Doctoral or professional degree SOC OCCUPATION DESCRIPTION TYPICAL ENTRY LEVEL EDUCATION AVERAGE ANNUAL OPENINGS 2010-2015 REPLACEMENT JOBS NEW JOBS TOTAL OPENINGS EMPLOYMENT 2015 TOTAL JOBS % OF TOTAL JOBS CERTIFICATES RELATED COMPLETIONS 2015 ASSOCIATE'S DEGREES BACHELOR'S DEGREES GRADUATE DEGREES TOTAL COMPLETIONS 43-4051 Customer Service Representatives High School 387 201 588 14,393 1.6% 0 0 0 0 0 43-9061 Office Clerks, General High School 490 85 575 18,946 2.2% 0 0 0 0 0 11-1021 43-1011 49-9071 43-4171 General and Operations Managers First-Line Supervisors of Office and Administrative Support Workers Maintenance and Repair Workers, General Receptionists and Information Clerks Bachelor's 267 47 314 10,348 1.2% NA NA 932 371 1,303 High School 181 87 268 9,994 1.1% 0 41 48 0 89 High School 239 25 264 8,015 0.9% 64 0 0 0 64 High School 194 68 262 7,414 0.8% 0 0 0 0 0 51-2092 Team Assemblers High School 114 38 152 3,393 0.4% 0 0 0 0 0 41-3099 Sales Representatives, Services, All Other High School 141 11 152 4,933 0.6% 0 22 0 0 22 51-4041 Machinists High School 88 49 137 2,407 0.3% 0 0 0 0 0 51-1011 43-5061 17-3029 49-9041 First-Line Supervisors of Production and Operating Workers Production, Planning, and Expediting Clerks Engineering Technicians, Except Drafters, All Other Industrial Machinery Mechanics High School 97 36 133 3,451 0.4% 0 0 0 0 0 High School 92 33 125 2,691 0.3% 0 0 0 0 0 Associate's 74 48 122 1,998 0.2% NA 4 172 0 176 High School 60 52 112 2,106 0.2% 0 0 0 0 0 43-3021 Billing and Posting Clerks High School 60 40 100 3,075 0.4% 0 22 0 0 22 51-9061 Inspectors, Testers, Sorters, Samplers, and Weighers High School 78 14 92 2,104 0.2% 0 0 0 0 0 31-9097 Phlebotomists Certificate 34 44 78 1,373 0.2% 0 0 0 0 0 29-2011 Medical and Clinical Laboratory Technologists Bachelor's 30 26 56 1,169 0.1% NA NA 26 0 26 29-2034 Radiologic Technologists Associate's 29 22 51 1,263 0.1% NA 99 0 0 99 29-2012 Medical and Clinical Laboratory Technicians Associate's 22 18 40 922 0.1% NA 7 0 0 7 17-2112 Industrial Engineers Bachelor's 35 4 39 833 0.1% NA NA 0 0 0 51-9011 51-8091 51-9081 Chemical Equipment Operators and Tenders Chemical Plant and System Operators Dental Laboratory Technicians High School 13 6 19 109 0.0% 0 0 0 0 0 High School 12 3 15 75 0.0% 0 0 0 0 0 High School 10 4 14 174 0.0% 0 0 0 0 0 43-5021 Couriers and Messengers High School 13 0 13 355 0.0% 0 0 0 0 0 29-2035 Magnetic Resonance Imaging Technologists Associate's NA NA 0 188 0.0% NA 99 0 0 99 Totals for Top 25 NA 2,760 961 3,721 101,729 11.6% 64 294 1,178 371 1,907 Totals for Hampton Roads NA 29,141 9,616 38,757 873,732 100% 9,355 9,948 31,197 15,834 66,334 Source: EMSI 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 103

Supply Chain Analysis Table 9.4 provides a picture about the total demand in Hampton Roads by all Hampton Roads residents and businesses for products or services offered by companies in the life sciences industry cluster, which is a $2.8 billion industry in the region. In Table 9.4, we see that the companies in these sectors meet about 10% of regional demand for their products, while the region imports 90% of regional needs for these products. This would seem to indicate a strong need for local suppliers. The industries that stand out for relying most heavily on imported goods are pharmaceutical preparation and research and development in biotechnology, which make up over half the demand for this industry cluster; only 3% of this $1.7 billion demand is met within the region. TABLE 9.4. Life Sciences Regional Demand Met by Hampton Roads Companies 2015 DEMAND NAICS INDUSTRY SECTOR SATISFIED IN-REGION % SATISFIED IN-REGION SATISFIED OUT- OF-REGION (IMPORTS) % SATISFIED OUT-OF- REGION TOTAL DEMAND % OF TOTAL DEMAND 325412 541711 325199 339113 339112 Pharmaceutical Preparation Manufacturing Research and Development in Biotechnology All Other Basic Organic Chemical Manufacturing Surgical Appliance and Supplies Manufacturing Surgical and Medical Instrument Manufacturing $36,618,681 4% $845,787,423 96% $882,406,104 32% $19,989,727 2% $857,511,761 98% $877,501,488 32% $66,259,394 37% $112,370,086 63% $178,629,480 6% $10,388,848 6% $151,244,920 94% $161,633,768 6% $1,430,569 1% $149,515,919 99% $150,946,488 5% 621511 Medical Laboratories $99,745,896 73% $36,002,159 27% $135,748,054 5% 334510 325414 325411 Electromedical and Electrotherapeutic Apparatus Manufacturing Biological Product (except Diagnostic) Manufacturing Medicinal and Botanical Manufacturing $6,419,974 5% $120,442,188 95% $126,862,161 5% $12,418,070 11% $98,902,520 89% $111,320,591 4% $33,541 0% $41,953,938 100% $41,987,479 2% 339116 Dental Laboratories $11,813,957 34% $22,850,688 66% $34,664,645 1% 339115 339114 334517 Ophthalmic Goods Manufacturing Dental Equipment and Supplies Manufacturing Irradiation Apparatus Manufacturing $1,104,102 4% $26,533,260 96% $27,637,362 1% $638,087 2% $24,929,832 98% $25,567,919 1% $13,725,197 58% $9,829,672 42% $23,554,869 1% Totals for Life Sciences $280,586,043 10% $2,497,874,366 90% $2,778,460,409 100% Totals for All Hampton Roads Industries $74,076,005,229 39% $117,397,461,062 61% $191,473,466,291 NA Source: Emsi 2016.4 Dataset 104 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 9.5. Life Sciences Supply Chain NAICS INDUSTRY SECTOR IN-REGION % IN-REGION 2015 PURCHASES OUT-OF-REGION (IMPORTS) % OUT- OF- REGION TOTAL PURCHASES % OF TOTAL PURCHASES 31-33 Manufacturing $42,574,161 17% $200,985,057 83% $243,559,217 53.7% 42 Wholesale Trade $11,468,110 32% $24,930,773 68% $36,398,883 8.0% 11 Crop and Animal Production $1,774,044 5% $34,086,363 95% $35,860,407 7.9% 55 Management of Companies and Enterprises $12,952,893 52% $12,027,433 48% $24,980,326 5.5% 48-49 Transportation and Warehousing $8,517,010 38% $13,668,639 62% $22,185,649 4.9% 54 56 Professional, Scientific, and Technical Services Administrative and Support and Waste Management and Remediation Services $10,175,253 50% $10,190,638 50% $20,365,891 4.5% $7,764,749 57% $5,891,554 43% $13,656,303 3.0% 53 Real Estate and Rental and Leasing $7,796,088 59% $5,405,221 41% $13,201,309 2.9% 22 Utilities $3,688,315 38% $6,064,394 62% $9,752,709 2.2% 52 Finance and Insurance $3,767,036 58% $2,721,791 42% $6,488,827 1.4% 21 Mining, Quarrying, and Oil and Gas Extraction $231,494 4% $5,511,649 96% $5,743,143 1.3% 44 Retail Trade $3,191,332 56% $2,520,693 44% $5,712,025 1.3% 51 Information $2,167,372 41% $3,066,217 59% $5,233,589 1.2% 81 Other Services (except Public Administration) $2,757,491 72% $1,072,100 28% $3,829,591 0.8% 72 Accommodation and Food Services $1,731,812 68% $804,162 32% $2,535,975 0.6% 90 Government $713,631 52% $648,752 48% $1,362,382 0.3% 23 Construction $651,237 52% $593,455 48% $1,244,692 0.3% 61 Educational Services $280,529 43% $367,278 57% $647,807 0.1% 71 Arts, Entertainment, and Recreation $149,470 33% $309,103 67% $458,573 0.1% 62 Health Care and Social Assistance $268,586 68% $124,944 32% $393,530 0.1% Totals for Life Sciences $122,620,611 27% $330,990,216 73% $453,610,827 100% Source: Emsi 2016.4 Dataset Table 9.5 shows the economic development opportunity to build up the region s supply chain supporting life sciences companies. This table shows the goods and services that companies within the life sciences industry cluster buy to use in making their products. Not quite onefourth of the life sciences industry cluster supply needs are met within the region, while threefourths of inputs are purchased from outside the region. In total, the value of the life sciences supply chain for Hampton Roads companies is $454 million. Most of imported supplies are manufactured goods rather than services, although wholesale trade, management services and transportation services have significant levels of demand supplied from outside of the region. Table 9.6 shows the types of manufactured products purchased by Hampton Roads life sciences companies. Table 9.7 shows the amount of goods sold by Hampton Roads companies both in and outside of the region. These companies sell nearly $800 million of products and services, of which $517 million is sold outside of Hampton Roads, bringing substantial revenues into the region. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 105

TABLE 9.6. Life Sciences Manufactured Products Supply Chain NAICS INDUSTRY SECTOR IN-REGION % IN-REGION 2015 PURCHASES OUT-OF-REGION (IMPORTS) % OUT- OF- REGION TOTAL MANUFACTURED GOODS PURCHASES 325 Chemical Manufacturing $30,321,035 19% $127,919,699 81% $158,240,733 324 Petroleum and Coal Products Manufacturing $693,809 3% $26,958,828 97% $27,652,638 311 Food Manufacturing $4,456,834 28% $11,476,229 72% $15,933,063 332 Fabricated Metal Product Manufacturing $2,109,306 24% $6,788,703 76% $8,898,010 339 Miscellaneous Manufacturing $301,949 5% $6,024,176 95% $6,326,125 326 Plastics and Rubber Products Manufacturing $611,271 10% $5,515,472 90% $6,126,743 334 Computer and Electronic Product Mfg. $1,578,177 31% $3,586,906 69% $5,165,082 333 Machinery Manufacturing $802,190 21% $3,058,557 79% $3,860,746 331 Primary Metal Manufacturing $121,470 4% $3,217,450 96% $3,338,921 322 Paper Manufacturing $252,007 13% $1,677,742 87% $1,929,749 336 Transportation Equipment Manufacturing $228,205 13% $1,581,848 87% $1,810,053 335 Electrical Equipment, Appliance, and Component Manufacturing $275,949 20% $1,080,581 80% $1,356,530 321 Wood Product Manufacturing $139,705 13% $900,410 87% $1,040,115 327 Nonmetallic Mineral Product Manufacturing $303,102 48% $332,749 52% $635,851 323 Printing and Related Support Activities $226,896 48% $241,805 52% $468,701 313 Textile Mills $36,354 9% $348,472 91% $384,826 337 Furniture and Related Product Manufacturing $66,244 31% $145,812 69% $212,056 312 Beverage and Tobacco Product Manufacturing $31,738 26% $90,266 74% $122,004 315 Apparel Manufacturing $9,575 23% $31,321 77% $40,896 314 Textile Product Mills $8,233 62% $5,094 38% $13,327 316 Leather and Allied Product Manufacturing $111 4% $2,936 96% $3,047 Total Manufacturing Purchases $42,574,161 17.5% $200,985,057 82.5% $243,559,217 Source: Emsi 2016.4 Dataset TABLE 9.7. Hampton Roads Life Sciences Companies Sales In-Region and Exported Out-of-Region NAICS INDUSTRY SECTOR IN-REGION % OF TOTAL 2015 SALES OUT-OF-REGION (EXPORTS) % OF TOTAL TOTAL SALES 325199 All Other Basic Organic Chemical Mfg. $66,259,394 14% $423,688,803 86% $489,948,197 61.4% 621511 Medical Laboratories $99,745,896 83% $20,533,219 17% $120,279,115 15.1% 325412 Pharmaceutical Preparation Mfg. $36,618,681 89% $4,562,410 11% $41,181,091 5.2% 339116 Dental Laboratories $11,813,958 35% $22,324,544 65% $34,138,502 4.3% 339113 Surgical Appliance and Supplies Manufacturing % OF TOTAL SALES $10,388,848 32% $22,384,261 68% $32,773,109 4.1% 334517 Irradiation Apparatus Manufacturing $13,725,197 50% $13,907,564 50% $27,632,761 3.5% 541711 325414 334510 339112 Research and Development in Biotechnology Biological Product (except Diagnostic) Manufacturing Electromedical and Electrotherapeutic Apparatus Manufacturing Surgical and Medical Instrument Manufacturing $19,989,727 95% $1,051,326 5% $21,041,053 2.6% $12,418,070 86% $1,962,768 14% $14,380,838 1.8% $6,419,974 77% $1,891,946 23% $8,311,920 1.0% $1,430,569 32% $3,000,218 68% $4,430,787 0.6% 339115 Ophthalmic Goods Manufacturing $1,104,102 48% $1,207,966 52% $2,312,068 0.3% 339114 Dental Equipment and Supplies Mfg. $638,087 41% $930,786 59% $1,568,873 0.2% 325411 Medicinal and Botanical Manufacturing $33,540 77% $10,258 23% $43,798 0.0% Totals for Life Sciences $280,586,043 35% $517,456,069 65% $798,042,112 100% Totals for All Hampton Roads Industries $69,428,788,808 30% $162,386,386,050 70% $231,815,174,858 NA Source: Emsi 2016.4 Dataset 106 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

BUSINESS AND CONSULTING SERVICES Firms in the business and consulting services cluster include establishments and service providers primarily designed to support other aspects of a business or to assist unrelated companies. This industry cluster includes corporate headquarter operations. This cluster is also comprised of professional service firms such as consulting, legal services, facilities support services, computer services, engineering and architectural services, marketing, and placement services. Further services include financial services, insurance, accounting services, temporary help, office administrative activities, and building support and security services. This cluster is the largest of the industry clusters considered in this report, and it also has the highest average pay. There are nearly 34,000 people employed in this cluster, with the average annual salary above $90,000. Figure 10.1 below shows the 2015 job distribution for the business and consulting services cluster throughout Hampton Roads. Virginia Beach had the largest number of business and consulting services jobs in 2015 (10,354), followed by Norfolk (7,161), Chesapeake (4,774), and Newport News (3,657). FIGURE 10.1. Business and Consulting Services Cluster, 2015 Job Distribution Source: Emsi 2016.4 Dataset The cluster is projected to grow from 33,800 jobs in 2015 to 34,738 by 2020, an annual average growth rate of 0.5% (Table 10.1). Financial investment and human resources services are among the most rapidly growing sectors projected to increase in job counts over this time. Demand for consulting services is expected to grow as organizations seek ways to improve efficiency and control costs. Total sales for all companies in this cluster were $7.2 billion (3.1% of total regional sales) and the cluster contributed more than $4 billion to the region s gross regional product (4.9% of total GRP) in 2015. HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 107

TABLE 10.1. Business and Consulting Services Cluster Industry Employment Trends, Hampton Roads EMPLOYMENT AVERAGE ANNUAL PERCENTAGE CHANGE CONCENTRATION (LQ) AVERAGE EARNINGS TOTAL SALES GROSS REGIONAL PRODUCT (GRP) ESTABLISHMENTS JOBS MULTIPLIER 2010 2015 2020 2010-2015- NAICS INDUSTRY SECTOR JOBS JOBS JOBS 2015 2020 2010 2015 2015 2015 2015 2010 2015 2015 551114 Corporate, Subsidiary, and Regional Managing Offices 9,086 9,806 9,687 1.5% -0.2% 0.9 0.8 $110,392 $2,316,118,742 $1,277,560,044 296 304 2.3 541330 Engineering Services 11,352 9,037 9,240-4.5% 0.4% 2.1 1.7 $86,938 $1,666,669,450 $871,981,103 458 447 2.2 541110 Offices of Lawyers 5,154 4,792 4,751-1.4% -0.2% 0.7 0.7 $76,202 $759,909,875 $510,709,793 641 667 2.0 524210 Insurance Agencies and Brokerages 3,162 3,217 3,260 0.3% 0.3% 0.7 0.6 $66,335 $616,130,842 $321,015,564 551 559 1.8 541611 Administrative Management and General Management Consulting Services 1,638 2,449 2,917 8.4% 3.6% 0.6 0.7 $70,344 $347,241,818 $225,777,673 319 350 1.6 541613 Marketing Consulting Services 484 787 958 10.2% 4.0% 0.4 0.5 $55,360 $104,370,737 $67,826,500 95 100 1.5 523120 Securities Brokerage 761 676 643-2.4% -1.0% 0.4 0.4 $229,616 $282,201,202 $223,444,420 112 98 2.2 523920 Portfolio Management 714 611 688-3.0% 2.4% 0.7 0.5 $125,829 $254,644,498 $201,595,964 38 40 1.3 523930 Investment Advice 447 410 481-1.7% 3.3% 0.4 0.3 $132,717 $359,644,022 $122,189,867 94 97 1.6 541612 Human Resources Consulting Services 57 382 485 46.2% 4.9% 0.1 0.7 $47,829 $36,142,931 $23,470,085 18 23 1.5 541191 Title Abstract and Settlement Offices 284 328 330 3.0% 0.1% 0.8 0.9 $45,149 $32,441,559 $21,343,129 76 58 1.6 541618 Other Management Consulting Services 249 339 322 6.4% -1.0% 0.4 0.6 $89,267 $71,394,326 $46,372,350 44 63 2.0 541910 Marketing Research and Public Opinion Polling 348 294 308-3.3% 0.9% 0.6 0.5 $40,291 $27,245,096 $18,551,860 14 10 1.3 551112 Offices of Other Holding Companies 173 231 197 6.0% -3.2% 0.4 0.6 $100,342 $49,697,967 $27,280,306 23 22 2.3 523999 Miscellaneous Financial Investment Activities 26 98 152 30.3% 9.1% 0.2 0.6 $130,874 $63,238,739 $21,415,886 8 18 2.3 523110 Investment Banking and Securities Dealing 148 94 45-8.8% -13.6% 0.2 0.1 $228,741 $95,214,910 $75,380,239 19 15 2.6 524291 Claims Adjusting 178 88 89-13.1% 0.1% 0.4 0.2 $49,074 $22,496,510 $11,705,081 20 25 1.4 541199 All Other Legal Services 108 53 58-13.2% 1.5% 0.7 0.3 $41,616 $5,297,344 $3,344,207 17 13 1.5 523130 Commodity Contracts Dealing 3 46 61 72.8% 5.8% 0.0 0.6 $45,545 $3,575,295 $2,811,121 2 8 1.4 523991 Trust, Fiduciary, and Custody Activities 26 44 56 11.1% 4.9% 0.2 0.3 $30,776 $44,079,602 $14,936,492 5 8 1.8 523910 Miscellaneous Intermediation 41 18 12-15.1% -7.9% 0.2 0.1 $141,994 $18,583,892 $14,686,298 7 7 1.2 523140 Commodity Contracts Brokerage 3 1 0-19.7% -100.0% 0.0 0.0 $39,421 $11,027,812 $8,676,294 1 1 2.7 Totals for Business & Consulting Services 34,442 33,802 34,738-0.4% 0.5% 1.2 1.0 $90,212 $7,187,367,169 $4,112,074,278 2,858 2,933 2.1 Totals for All Hampton Roads Industries 856,047 873,732 905,239 0.4% 0.7% 3.2 3.4 $54,966 $231,815,174,882 $75,115,290,436 39,147 40,353 1.9 Source: EMSI 2016.4 Dataset 108 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

FIGURE 10.2. Business and Consulting Services Employment Trends; YOY Employment Growth Hampton Roads Virginia United States 20% 15% Year-Over-Year Growth Rate 10% 5% 0% 5% 10% 15% 20% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Emsi 2016.4 Dataset The cluster lost jobs in 2008, rebounded slightly, and then took significant losses in 2011. Prior to 2010, a similar trend occurred at the state and national levels in the cluster but the cluster did much better at state and national levels in 2011 (illustrated in Figure 10.2). Labor Market Gap Analysis Table 10.2 lists the top 25 occupations in business and consulting services. These 25 occupations account for 55% of all cluster employment. The table provides the number of people employed by occupation in the cluster, and the number of people employed in that occupation in all industries in the region. This provides an understanding as to the level of competition employers face from industries outside of the cluster in hiring for key occupations. The occupations with the most jobs are insurance agents (1,752 jobs) and lawyers (1,491 jobs). These occupations comprise 9.6 % of the cluster s total jobs. However, there are more than 5,000 lawyers and insurance agents employed in the region, meaning that the cluster employs about two-thirds of all insurance agents and lawyers. As shown in Table 10.3, several occupations require a high level of education, with relatively less work experience or on-the-job training expected for entry-level positions. Several companies in this sector participated in focus groups for this study. For these companies, exiting military personnel are a good source of new hires. For entry-level positions, colleges are the preferred source to find new employees. For more experienced employees, firms tend to poach from each other as the application pool continues to shrink because of drug tests, low skills, background checks, and other regulations, according to survey participants. Most companies make heavy use of in-house and on-the-job training. Employers would like HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 109

TABLE 10.2. Staffing Pattern for Business and Consulting Services Showing the 25 Largest Occupations SOC OCCUPATION DESCRIPTION EMPLOYED IN INDUSTRY GROUP % OF INDUSTRY GROUP TOTAL JOBS EMPLOYED IN REGION INDUSTRY GROUP'S % OF REGIONAL JOBS MEDIAN HOURLY EARNINGS IN REGION 2010 2015 2015 2015 2015 2015 41-3021 Insurance Sales Agents 1,780 1,752 5.2% 2,656 66.0% $17.81 23-1011 Lawyers 1,597 1,491 4.4% 2,399 62.2% $43.87 13-1111 Management Analysts 1,030 1,275 3.8% 6,534 19.5% $39.44 43-9061 Office Clerks, General 1,191 1,187 3.5% 18,946 6.3% $14.10 43-4051 Customer Service Representatives 1,061 1,185 3.5% 14,393 8.2% $14.37 17-2051 Civil Engineers 1,487 1,181 3.5% 2,215 53.3% $37.07 23-2011 Paralegals and Legal Assistants 1,109 1,078 3.2% 1,757 61.4% $18.81 11-1021 General and Operations Managers 806 830 2.5% 10,348 8.0% $51.01 43-3031 Bookkeeping, Accounting, and Auditing Clerks 832 816 2.4% 8,545 9.5% $16.32 13-2011 Accountants and Auditors 754 785 2.3% 7,531 10.4% $30.24 43-6014 43-1011 Secretaries and Administrative Assistants, Except Legal, Medical, and Executive First-Line Supervisors of Office and Administrative Support Workers 797 757 2.2% 11,032 6.9% $15.33 665 701 2.1% 9,994 7.0% $22.71 13-2052 Personal Financial Advisors 641 645 1.9% 1,125 57.3% $33.93 43-6012 Legal Secretaries 691 631 1.9% 732 86.1% $14.70 17-2071 Electrical Engineers 617 521 1.5% 1,446 36.0% $37.93 13-1161 Market Research Analysts and Marketing Specialists 400 465 1.4% 2,414 19.3% $25.05 17-3023 Electrical and Electronics Engineering Technicians 498 441 1.3% 1,949 22.6% $28.67 15-1133 Software Developers, Systems Software 443 428 1.3% 2,853 15.0% $46.74 15-1121 Computer Systems Analysts 372 406 1.2% 3,276 12.4% $38.75 15-1132 Software Developers, Applications 364 366 1.1% 4,123 8.9% $41.88 13-1199 Business Operations Specialists, All Other 351 366 1.1% 6,721 5.4% $31.62 41-3099 Sales Representatives, Services, All Other 305 351 1.0% 4,933 7.1% $24.97 17-2141 Mechanical Engineers 426 339 1.0% 1,907 17.8% $40.87 17-3013 Mechanical Drafters 409 338 1.0% 1,127 30.0% $24.46 43-4171 Receptionists and Information Clerks 358 337 1.0% 7,414 4.5% $13.04 Totals for Top 25 18,984 18,673 55% 136,370 13.7% $28.67 Totals for All Business and Consulting Services 34,442 33,802 100% 873,732 3.9% $19.37 * Employed in Region column is employment for all industries, not just for advanced manufacturing Source: EMSI 2016.4 Dataset to see a greater supply of candidates with soft skills such as communication, strong ethics, strategic thinking, networking and relationship building. Stronger math skills were the most frequently mentioned hard skill in high demand. Table 10.3, on the next page, shows the average annual openings (averaged over the past five years) for specific occupations within Hampton Roads. The regional completions column shows the total completions for all Hampton Roads educational programs (by type of program), regardless of industry sector. This means that while 1,300 people completed programs that supply general and operations managers, a wide variety of industries (including as well as outside of the business and consulting services cluster) may be competing to hire those people. 110 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 10.3. Business and Consulting Services Openings and Completions None = No formal educational credential High School = High school diploma or equivalent Some College = Some college, no degree Certificate = Postsecondary nondegree award Associate s = Associate s degree Bachelor s = Bachelor s degree Master s = Master s degree Doctoral = Doctoral or professional degree SOC OCCUPATION DESCRIPTION TYPICAL ENTRY LEVEL EDUCATION AVERAGE ANNUAL OPENINGS 2010-2015 REPLACEMENT JOBS NEW JOBS TOTAL OPENINGS EMPLOYMENT 2015 TOTAL JOBS % OF TOTAL JOBS CERTIFICATES RELATED COMPLETIONS 2015 ASSOCIATE'S DEGREES BACHELOR'S DEGREES GRADUATE DEGREES TOTAL COMPLETIONS 43-4051 Customer Service Representatives High School 387 201 588 14,393 1.6% 0 0 0 0 0 43-9061 Office Clerks, General High School 490 85 575 18,946 2.2% 0 0 0 0 0 13-2011 Accountants and Auditors Bachelor's 244 80 324 7,531 0.9% NA NA 162 106 268 11-1021 General and Operations Managers Bachelor's 267 47 314 10,348 1.2% NA NA 932 371 1,303 13-1111 Management Analysts Bachelor's 129 154 283 6,534 0.7% NA NA 925 338 1,263 43-1011 43-4171 13-1199 First-Line Supervisors of Office and Administrative Support Workers Receptionists and Information Clerks Business Operations Specialists, All Other High School 181 87 268 9,994 1.1% 0 41 48 0 89 High School 194 68 262 7,414 0.8% 0 0 0 0 0 Bachelor's 145 108 253 6,721 0.8% NA NA 0 0 0 41-3021 Insurance Sales Agents High School 121 68 189 2,656 0.3% 0 0 0 0 0 43-6014 15-1132 41-3099 Secretaries and Administrative Assistants, Except Legal, Medical, and Executive Software Developers, Applications Sales Representatives, Services, All Other High School 177 3 180 11,032 1.3% 0 0 0 0 0 Bachelor's 110 61 171 4,123 0.5% NA NA 173 0 173 High School 141 11 152 4,933 0.6% 0 22 0 0 22 43-3031 Bookkeeping, Accounting, and Auditing Clerks Some College 135 0 135 8,545 1.0% 29 74 0 0 103 15-1133 Software Developers, Systems Software Bachelor's 74 44 118 2,853 0.3% NA NA 159 0 159 15-1121 Computer Systems Analysts Bachelor's 67 45 112 3,276 0.4% NA NA 155 100 255 17-2141 Mechanical Engineers Bachelor's 85 14 99 1,907 0.2% NA NA 111 0 111 17-2051 Civil Engineers Bachelor's 89 9 98 2,215 0.3% NA NA 59 0 59 17-3023 Electrical and Electronics Engineering Technicians Associate's 70 23 93 1,949 0.2% NA 207 170 0 377 23-1011 Lawyers Doctoral 69 4 73 2,399 0.3% NA NA NA 374 374 23-2011 Paralegals and Legal Assistants Associate's 57 9 66 1,757 0.2% NA 86 7 0 93 17-2071 Electrical Engineers Bachelor's 54 7 61 1,446 0.2% NA NA 69 6 75 13-1161 Market Research Analysts and Marketing Specialists Bachelor's 32 29 61 2,414 0.3% NA NA 101 2 103 13-2052 Personal Financial Advisors Bachelor's 34 10 44 1,125 0.1% NA NA 120 0 120 17-3013 Mechanical Drafters Associate's 31 6 37 1,127 0.1% NA 0 0 0 0 43-6012 Legal Secretaries High School 16 0 16 732 0.1% 0 0 0 0 0 Totals for Top 25 NA 3,399 1,173 4,572 136,370 15.6% 29 430 3,191 1,297 4,947 Totals for Hampton Roads NA 29,141 9,616 38,757 873,732 100% 9,355 9,948 31,197 15,834 66,334 Source: EMSI 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 111

Supply Chain Analysis Table 10.4 provides a picture about the total demand in Hampton Roads by all Hampton Roads residents and businesses for products and services offered by companies in the business and consulting services industry cluster, which is a $9.5 billion industry in the region. In Table 10.4, we see that the companies in these sectors meet nearly 60% of regional demand for their products and services, while the region imports 41% of regional needs for these products and services. There are no overwhelming gaps in where demand is not being met by local companies. The two industries with the highest demand (engineering services and corporate management services) have about two-thirds of local demand satisfied by local companies. The largest imported activities, in terms of percent imported into the region, are corporate headquarters and commodities dealing both of which are difficult to relocate. TABLE 10.4. Business and Consulting Services Regional Demand Met by Hampton Roads Companies NAICS INDUSTRY SECTOR SATISFIED IN-REGION % SATISFIED IN-REGION 2015 DEMAND SATISFIED OUT- OF-REGION (IMPORTS) % SATISFIED OUT-OF- REGION TOTAL DEMAND % OF TOTAL DEMAND 541330 Engineering Services $1,460,289,040 63% $840,926,223 37% $2,301,215,263 24% 551114 Corporate, Subsidiary, and Regional Managing Offices $1,441,480,995 69% $633,564,974 31% $2,075,045,969 22% 541110 Offices of Lawyers $670,406,971 63% $393,893,318 37% $1,064,300,290 11% 524210 Insurance Agencies & Brokerages $532,111,091 74% $190,688,663 26% $722,799,754 8% 523930 Investment Advice $325,621,133 50% $326,634,844 50% $652,255,977 7% 541611 Administrative Mgmt. & General Mgmt. Consulting Services $294,530,155 46% $351,023,239 54% $645,553,394 7% 523920 Portfolio Management $217,473,255 48% $231,094,856 52% $448,568,111 5% 523120 Securities Brokerage $223,044,330 60% $147,574,191 40% $370,618,521 4% 523110 Investment Banking and Securities Dealing $77,357,763 33% $158,270,539 67% $235,628,302 2% 541613 Marketing Consulting Services $88,014,221 39% $137,310,059 61% $225,324,280 2% 541618 551112 541910 Other Management Consulting Services Offices of Other Holding Companies Marketing Research and Public Opinion Polling $56,418,153 53% $49,867,283 47% $106,285,436 1% $11,073,706 11% $93,793,430 89% $104,867,136 1% $25,056,952 26% $70,634,889 74% $95,691,841 1% 523910 Miscellaneous Intermediation $16,867,256 21% $64,636,683 79% $81,503,939 1% 541612 523999 Human Resources Consulting Services Miscellaneous Financial Investment Activities $31,761,182 40% $46,775,467 60% $78,536,650 1% $45,652,080 66% $23,478,203 34% $69,130,283 1% 524291 Claims Adjusting $22,208,279 36% $39,580,925 64% $61,789,204 1% 523991 541191 Trust, Fiduciary, and Custody Activities Title Abstract and Settlement Offices $35,589,226 58% $25,905,626 42% $61,494,852 1% $29,095,308 81% $7,019,211 19% $36,114,520 0% 523130 Commodity Contracts Dealing $3,300,653 15% $19,066,845 85% $22,367,498 0% 541199 All Other Legal Services $5,181,951 27% $14,205,315 73% $19,387,266 0% 523140 Commodity Contracts Brokerage $8,934,524 49% $9,311,186 51% $18,245,711 0% Totals for Business & Consulting Services $5,621,468,225 59% $3,875,255,971 41% $9,496,724,196 100% Totals for All Hampton Roads Industries $74,076,005,229 39% $117,397,461,062 61% $191,473,466,291 NA Source: Emsi 2016.4 Dataset 112 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

TABLE 10.5. Business and Consulting Services Supply Chain NAICS INDUSTRY SECTOR IN-REGION 54 Professional, Scientific, and Technical Services % IN-REGION 2015 PURCHASES OUT-OF-REGION (IMPORTS) % OUT- OF- REGION TOTAL PURCHASES % OF TOTAL PURCHASES $383,337,032 53% $334,944,392 47% $718,281,424 25.2% 52 Finance and Insurance $319,134,208 57% $244,831,138 43% $563,965,346 19.8% 53 Real Estate and Rental and Leasing $242,585,545 69% $111,372,218 31% $353,957,763 12.4% 51 Information $98,686,413 38% $158,665,026 62% $257,351,439 9.0% 31-33 Manufacturing $49,187,563 20% $198,383,272 80% $247,570,835 8.7% 56 Administrative and Support and Waste Management and Remediation Services $140,246,896 60% $94,240,796 40% $234,487,692 8.2% 72 Accommodation and Food Services $86,495,804 83% $17,358,705 17% $103,854,509 3.6% 48-49 Transportation and Warehousing $31,450,245 39% $48,440,141 61% $79,890,385 2.8% 55 Management of Companies and Enterprises $52,426,952 67% $25,942,536 33% $78,369,488 2.7% 42 Wholesale Trade $23,752,398 40% $35,702,206 60% $59,454,604 2.1% 81 Other Services (except Public Administration) $25,197,189 63% $14,686,632 37% $39,883,821 1.4% 71 Arts, Entertainment, and Recreation $12,585,560 40% $19,094,898 60% $31,680,459 1.1% 90 Government $13,725,113 72% $5,416,096 28% $19,141,208 0.7% 22 Utilities $8,248,997 43% $10,728,649 57% $18,977,646 0.7% 44 Retail Trade $14,352,134 80% $3,624,588 20% $17,976,723 0.6% 61 Educational Services $6,105,207 56% $4,803,882 44% $10,909,089 0.4% 23 Construction $4,329,951 69% $1,944,736 31% $6,274,686 0.2% 62 Health Care and Social Assistance $3,733,593 79% $977,201 21% $4,710,794 0.2% 21 Mining, Quarrying, and Oil and Gas Extraction $258,435 6% $4,108,304 94% $4,366,738 0.2% 11 Crop and Animal Production $15,547 4% $406,020 96% $421,567 0.0% Totals for Business and Consulting Services $1,515,854,782 53% $1,335,671,436 47% $2,851,526,218 100% Source: Emsi 2016.4 Dataset A great deal of business is from government contracts either directly or indirectly through major customers (that is, the customer is dependent on government contracts). For many business service companies, diversifying away from dependency on government contracts is a key long-term strategy, as indicated by focus group participants. Table 10.5 shows the goods and services that companies within the business and consulting services industry cluster buy to use in making their products or offering their services. In total, the value of the business and consulting services supply chain for Hampton Roads companies is $2.9 billion. Roughly 52% of all sales for this cluster in Hampton Roads is for federal government contract work. This dominates the supply chain down into the first-, second-, and lower-tier contractors in this cluster. The supply chain needs for this cluster are met about half by Hampton Roads companies and nearly 50% by out-of-region companies. In Table 10.5 we can see that the sector with the greatest demand met by purchases from outside of the region is in HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 113

professional, scientific, and technical services. Since the vast majority of this industry belongs to this professional services sector, this indicates that when this industry does business with similar businesses, they have to find partners outside the region about 47% of the time. However, about the same amount is purchased in-region. Overall, $1.3 billion is leaving the Hampton Roads region due to supply chain leakage. Table 10.6 shows the amount of goods sold by Hampton Roads companies both in and outside of the region. These companies sell nearly $7.2 billion of products and services, of which $1.6 billion is sold outside of Hampton Roads, bringing substantial revenues into the region. TABLE 10.6. Hampton Roads Business and Consulting Services Companies Sales In-Region and Exported Out-of- Region NAICS INDUSTRY SECTOR IN-REGION 551114 Corporate, Subsidiary, and Regional Managing Offices % OF TOTAL 2015 SALES OUT-OF-REGION (EXPORTS) % OF TOTAL TOTAL SALES % OF TOTAL SALES $1,441,480,995 62% $874,637,747 38% $2,316,118,742 32.2% 541330 Engineering Services $1,460,289,040 88% $206,380,410 12% $1,666,669,450 23.2% 541110 Offices of Lawyers $670,406,971 88% $89,502,904 12% $759,909,875 10.6% 524210 Insurance Agencies and Brokerages $532,111,090 86% $84,019,752 14% $616,130,842 8.6% 523930 Investment Advice $325,621,133 91% $34,022,889 9% $359,644,022 5.0% 541611 Administrative Management and General Management Consulting Services $294,530,155 85% $52,711,663 15% $347,241,818 4.8% 523120 Securities Brokerage $223,044,330 79% $59,156,872 21% $282,201,202 3.9% 523920 Portfolio Management $217,473,255 85% $37,171,243 15% $254,644,498 3.5% 541613 Marketing Consulting Services $88,014,220 84% $16,356,517 16% $104,370,737 1.5% 523110 541618 523999 Investment Banking and Securities Dealing Other Management Consulting Services Miscellaneous Financial Investment Activities $77,357,763 81% $17,857,147 19% $95,214,910 1.3% $56,418,153 79% $14,976,173 21% $71,394,326 1.0% $45,652,080 72% $17,586,659 28% $63,238,739 0.9% 551112 Offices of Other Holding Companies $11,073,706 22% $38,624,261 78% $49,697,967 0.7% 523991 Trust, Fiduciary, and Custody Activities $35,589,226 81% $8,490,376 19% $44,079,602 0.6% 541612 Human Resources Consulting Services $31,761,182 88% $4,381,749 12% $36,142,931 0.5% 541191 Title Abstract and Settlement Offices $29,095,308 90% $3,346,251 10% $32,441,559 0.5% 541910 Marketing Research and Public Opinion Polling $25,056,952 92% $2,188,144 8% $27,245,096 0.4% 524291 Claims Adjusting $22,208,279 99% $288,231 1% $22,496,510 0.3% 523910 Miscellaneous Intermediation $16,867,257 91% $1,716,635 9% $18,583,892 0.3% 523140 Commodity Contracts Brokerage $8,934,524 81% $2,093,288 19% $11,027,812 0.2% 541199 All Other Legal Services $5,181,951 98% $115,393 2% $5,297,344 0.1% 523130 Commodity Contracts Dealing $3,300,653 92% $274,642 8% $3,575,295 0.0% Totals for Business and Consulting Services $5,621,468,223 78% $1,565,898,944 22% $7,187,367,167 100% Totals for All Hampton Roads Industries $69,428,788,808 30% $162,386,386,050 70% $231,815,174,858 NA Source: Emsi 2016.4 Dataset 114 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

INFORMATION ANALYTICS AND SECURITY This cluster consists of information technology and analytical services such as computer systems and networks design, software programming and publishing, and technical consulting services. The need for new applications on mobile devices and tablets will help increase the demand for information technology and analytical services. Furthermore, the health and medical insurance and reinsurance carriers industry sectors will need innovative software to manage new health care policy enrollments and administer existing policies digitally. As the number of people who use digital platforms increases over time, demand for this industry cluster will grow. Concerns over threats to computer security could result in more investment in security software to protect computer networks and electronic infrastructure. In addition, an increase in software offered over the internet should lower costs and allow more customization for businesses, also increasing demand for information technology and analytical services. Figure 11.1 below shows the 2015 job distribution for the information analytics and security cluster throughout Hampton Roads. Chesapeake had the largest number of information analytics and security jobs in 2015 (4,228), followed by Virginia Beach (3,941), Norfolk (3,350), and Hampton City (2,062). FIGURE 11.1. Information Analytics and Security Cluster, 2015 Job Distribution Source: Emsi 2016.4 Dataset Table 11.1, on the next page, provides an overview for each of the individual industry sectors that comprise the information analytics and security cluster in Hampton Roads. Included are historic, current, and projected employment; historic and projected average annual percent growth (or decline); historic and current employment concentration (LQ); average earnings; total sales; gross regional product (GRP); historic and current establishments (businesses); and jobs multipliers. The table is sorted largest to smallest by 2015 employment. The information analytics and security cluster accounted for 18,542 jobs and 1,305 establishments in 2015; about 2% of the total employment and 3% of total establishments HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 115

TABLE 11.1. Information Analytics and Security Cluster Industry Employment Trends, Hampton Roads EMPLOYMENT AVERAGE ANNUAL PERCENTAGE CHANGE CONCENTRATION (LQ) AVERAGE EARNINGS TOTAL SALES GROSS REGIONAL PRODUCT (GRP) ESTABLISHMENTS JOBS MULTIPLIER 2010 2015 2020 2010-2015- NAICS INDUSTRY SECTOR JOBS JOBS JOBS 2015 2020 2010 2015 2015 2015 2015 2010 2015 2015 541512 541712 541511 518210 541690 541519 Computer Systems Design Services Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) Custom Computer Programming Services Data Processing, Hosting, and Related Services Other Scientific and Technical Consulting Services Other Computer Related Services 7,409 8,063 9,554 1.7% 3.5% 1.8 1.5 $89,914 $1,213,416,582 $852,464,322 501 557 1.9 3,303 4,081 4,370 4.3% 1.4% 1.3 1.6 $105,864 $1,073,868,237 $462,522,720 89 80 2.4 2,825 2,164 1,687-5.2% -4.9% 0.7 0.4 $85,908 $307,525,899 $230,296,946 257 281 1.7 1,541 1,620 1,436 1.0% -2.4% 1.1 1.0 $57,334 $306,559,725 $128,830,113 91 57 2.0 810 766 901-1.1% 3.3% 0.7 0.6 $71,321 $109,054,188 $74,407,127 115 122 1.7 311 502 703 10.1% 7.0% 0.4 0.7 $59,349 $81,250,780 $46,026,007 54 83 1.8 511210 Software Publishers 294 372 401 4.8% 1.5% 0.2 0.2 $90,608 $127,153,653 $71,664,421 17 22 2.0 541513 541618 541720 Computer Facilities Management Services Other Management Consulting Services Research and Development in the Social Sciences and Humanities 236 365 428 9.1% 3.3% 0.7 0.9 $69,771 $58,930,190 $33,321,549 16 27 1.9 249 339 322 6.4% -1.0% 0.4 0.6 $89,267 $71,394,326 $46,372,350 44 63 2.0 308 271 236-2.5% -2.7% 0.9 0.8 $65,794 $45,271,926 $19,488,744 15 13 2.0 Totals for Information Analytics & Security 17,285 18,542 20,038 1.4% 1.6% 1.3 1.2 $78,513 3,394,425,507 1,965,394,298 1,199 1,305 2.0 Totals for All Hampton Roads Industries 856,047 873,732 905,239 0.4% 0.7% 3.2 3.4 $54,966 $231,815,174,882 $75,115,290,436 39,147 40,353 1.9 Source: EMSI 2016.4 Dataset FIGURE 11.2. Information Analytics and Security Employment Trends; YOY Employment Growth Hampton Roads Virginia United States 20% 15% Year-Over-Year Growth Rate 10% 5% 0% 5% 10% 15% 20% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Emsi 2016.4 Dataset 116 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

in Hampton Roads. Overall employment for this cluster is 1.2 times more concentrated in Hampton Roads than would be expected based on national employment averages. The cluster is expected to grow by an average of 1.6% each year for the next five years. Total sales for all companies in this cluster were nearly $3.4 billion (1.5% of total regional sales) and the cluster contributed almost $2.0 billion to the region s gross regional product (2.4% of total GRP) in 2015. For this cluster, employment in the U.S. dipped slightly in 2009, while Hampton Roads saw a larger decline. Sector employment rebounded substantially after the recession and has now leveled off in the region. Labor Market Gap Analysis Table 11.2 lists the top 25 occupations in information analytics and security. These 25 occupations account for 67% of all cluster employment. The table provides the number of TABLE 11.2. Staffing Pattern for Information Analytics and Security Showing the 25 Largest Occupations SOC OCCUPATION DESCRIPTION EMPLOYED IN INDUSTRY GROUP % OF INDUSTRY GROUP TOTAL JOBS EMPLOYED IN REGION INDUSTRY GROUP'S % OF REGIONAL JOBS MEDIAN HOURLY EARNINGS IN REGION 2010 2015 2015 2015 2015 2015 15-1132 Software Developers, Applications 1,739 1,871 10.1% 4,123 45.4% $41.88 15-1133 Software Developers, Systems Software 1,225 1,330 7.2% 2,853 46.6% $46.74 15-1151 Computer User Support Specialists 1,080 1,158 6.2% 4,083 28.4% $23.97 15-1121 Computer Systems Analysts 1,019 1,097 5.9% 3,276 33.5% $38.75 43-4051 Customer Service Representatives 558 583 3.1% 14,393 4.1% $14.37 13-1111 Management Analysts 545 580 3.1% 6,534 8.9% $39.44 15-1142 Network and Computer Systems Administrators 535 568 3.1% 2,640 21.5% $37.73 41-3099 Sales Representatives, Services, All Other 534 547 3.0% 4,933 11.1% $24.97 15-1131 Computer Programmers 559 496 2.7% 880 56.3% $30.15 11-1021 General and Operations Managers 408 428 2.3% 10,348 4.1% $51.01 11-3021 Computer and Information Systems Managers 386 415 2.2% 1,806 23.0% $60.84 43-9061 Office Clerks, General 396 412 2.2% 18,946 2.2% $14.10 15-1143 Computer Network Architects 273 278 1.5% 844 32.9% $38.60 15-1134 Web Developers 223 263 1.4% 812 32.4% $26.75 15-1152 Computer Network Support Specialists 239 245 1.3% 918 26.7% $26.42 13-1161 Market Research Analysts and Marketing Specialists 225 243 1.3% 2,414 10.1% $25.05 13-2011 Accountants and Auditors 222 237 1.3% 7,531 3.1% $30.24 43-6014 Secretaries and Administrative Assistants, Except Legal, Medical, and Executive 227 235 1.3% 11,032 2.1% $15.33 15-1122 Information Security Analysts 211 233 1.3% 846 27.6% $39.43 43-3031 Bookkeeping, Accounting, and Auditing Clerks 234 230 1.2% 8,545 2.7% $16.32 41-4011 43-1011 Sales Representatives, Wholesale and Manufacturing, Technical and Scientific Products First-Line Supervisors of Office and Administrative Support Workers 210 219 1.2% 932 23.5% $47.57 197 212 1.1% 9,994 2.1% $22.71 17-3023 Electrical and Electronics Engineering Technicians 170 197 1.1% 1,949 10.1% $28.67 17-2161 Nuclear Engineers 145 193 1.0% 1,331 14.5% $36.89 13-1199 Business Operations Specialists, All Other 178 187 1.0% 6,721 2.8% $31.62 Totals for Top 25 11,737 12,457 67% 128,685 9.7% $30.24 Totals for All Information Analytics and Security 17,285 18,542 100% 873,732 2.1% $19.37 * Employed in Region column is employment for all industries, not just for advanced manufacturing Source: EMSI 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 117

TABLE 11.3. Information Analytics and Security Openings and Completions None = No formal educational credential High School = High school diploma or equivalent Some College = Some college, no degree Certificate = Postsecondary nondegree award Associate s = Associate s degree Bachelor s = Bachelor s degree Master s = Master s degree Doctoral = Doctoral or professional degree SOC 43-4051 OCCUPATION DESCRIPTION Customer Service Representatives TYPICAL ENTRY LEVEL EDUCATION AVERAGE ANNUAL OPENINGS 2010-2015 REPLACEMENT JOBS NEW JOBS TOTAL OPENINGS EMPLOYMENT 2015 TOTAL JOBS % OF TOTAL JOBS CERTIFICATES RELATED COMPLETIONS 2015 High School 387 201 588 14,393 1.6% 0 0 0 0 0 43-9061 Office Clerks, General High School 490 85 575 18,946 2.2% 0 0 0 0 0 13-2011 Accountants and Auditors Bachelor's 244 80 324 7,531 0.9% NA NA 162 106 268 11-1021 General and Operations Managers Bachelor's 267 47 314 10,348 1.2% NA NA 932 371 1,303 13-1111 Management Analysts Bachelor's 129 154 283 6,534 0.7% NA NA 925 338 1,263 43-1011 13-1199 43-6014 15-1132 41-3099 43-3031 15-1151 15-1133 First-Line Supervisors of Office and Administrative Support Workers Business Operations Specialists, All Other Secretaries and Administrative Assistants, Except Legal, Medical, and Executive Software Developers, Applications Sales Representatives, Services, All Other Bookkeeping, Accounting, and Auditing Clerks Computer User Support Specialists Software Developers, Systems Software High School 181 87 268 9,994 1.1% 0 41 48 0 89 Bachelor's 145 108 253 6,721 0.8% NA NA 0 0 0 High School 177 3 180 11,032 1.3% 0 0 0 0 0 Bachelor's 110 61 171 4,123 0.5% NA NA 173 0 173 High School 141 11 152 4,933 0.6% 0 22 0 0 22 Some College Some College ASSOCIATE'S DEGREES BACHELOR'S DEGREES GRADUATE DEGREES 135 0 135 8,545 1.0% 29 74 0 0 103 90 39 129 4,083 0.5% 3 411 490 2 906 Bachelor's 74 44 118 2,853 0.3% NA NA 159 0 159 15-1121 Computer Systems Analysts Bachelor's 67 45 112 3,276 0.4% NA NA 155 100 255 17-3023 Electrical and Electronics Engineering Technicians Associate's 70 23 93 1,949 0.2% NA 207 170 0 377 17-2161 Nuclear Engineers Bachelor's 49 39 88 1,331 0.2% NA NA 0 0 0 15-1142 13-1161 11-3021 Network and Computer Systems Administrators Market Research Analysts and Marketing Specialists Computer and Information Systems Managers Bachelor's 56 23 79 2,640 0.3% NA NA 524 102 626 Bachelor's 32 29 61 2,414 0.3% NA NA 101 2 103 Bachelor's 34 19 53 1,806 0.2% NA NA 445 100 545 15-1131 Computer Programmers Bachelor's 37 8 45 880 0.1% NA NA 287 0 287 15-1122 41-4011 Information Security Analysts Sales Representatives, Wholesale & Mfg., Technical and Scientific Products Bachelor's 18 16 34 846 0.1% NA NA 720 102 822 Bachelor's 31 3 34 932 0.1% NA NA 0 0 0 15-1134 Web Developers Associate's 16 14 30 812 0.1% NA 507 720 102 1,329 15-1143 15-1152 Computer Network Architects Source: EMSI 2016.4 Dataset Computer Network Support Specialists Bachelor's 20 9 29 844 0.1% NA NA 720 102 822 Associate's 22 7 29 918 0.1% NA 411 490 2 903 Totals for Top 25 NA 3,022 1,155 4,177 128,685 14.7% 32 1,673 7,221 1,429 10,355 Totals for Hampton Roads NA 29,141 9,616 38,757 873,732 100% 9,355 9,948 31,197 15,834 66,334 TOTAL COMPLETIONS 118 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

people employed by occupation in the cluster, and the number of people employed in that occupation in all industries in the region. This provides an understanding as to the level of competition employers face from industries outside of the cluster in hiring for key occupations. Software developers comprise the largest two occupations in this cluster, accounting for 17.3% of the cluster s total jobs (3,001 jobs). However, there are nearly 7,000 software developers employed in the region, meaning that the cluster employs about 40% of all software developers. Businesses in this cluster around the Hampton Roads region (see Table 11.3 on the previous page) require a bachelor s degree for several of the occupations in this field and offer little to no on-the-job-training since most learn the skillsets in college. From the interviews with industry leaders, hiring people and keeping highly skilled workers in this cluster can be difficult. Many entry-level jobs have high transferability, and employees leave for even slightly more money. Most companies recruit actively at local colleges or community colleges, and many make use of intern programs. Supply Chain Analysis Table 11.4 provides a picture about the total demand in Hampton Roads by all Hampton Roads residents and businesses for products and services offered by companies in the information TABLE 11.4. Information Analytics and Security Regional Demand Met by Hampton Roads Companies NAICS 541712 541512 518210 INDUSTRY SECTOR Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) Computer Systems Design Services Data Processing, Hosting, and Related Services SATISFIED IN-REGION % SATISFIED IN-REGION 2015 DEMAND SATISFIED OUT- OF-REGION (IMPORTS) % SATISFIED OUT-OF- REGION TOTAL DEMAND % OF TOTAL DEMAND $921,649,513 48% $1,015,147,964 52% $1,936,797,477 27% $1,028,638,150 76% $316,472,573 24% $1,345,110,722 19% $296,086,635 27% $785,638,145 73% $1,081,724,781 15% 511210 Software Publishers $50,394,241 5% $995,338,944 95% $1,045,733,185 15% 541511 541519 541690 541720 541618 541513 Custom Computer Programming Services Other Computer Related Services Other Scientific and Technical Consulting Services Research and Development in the Social Sciences and Humanities Other Management Consulting Services Computer Facilities Management Services $298,296,298 30% $700,757,834 70% $999,054,132 14% $76,438,562 40% $114,845,794 60% $191,284,356 3% $101,343,012 60% $67,348,815 40% $168,691,828 2% $25,254,298 17% $126,997,878 83% $152,252,177 2% $56,418,153 53% $49,867,283 47% $106,285,436 1% $55,376,207 55% $44,903,068 45% $100,279,274 1% Totals for Information Analytics & Security $2,909,895,070 41% $4,217,318,298 59% $7,127,213,369 100% Totals for All Hampton Roads Industries $74,076,005,229 39% $117,397,461,062 61% $191,473,466,291 NA Source: Emsi 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 119

analytics and security industry cluster, which is a $7.1 billion industry in the region. In Table 11.4, we see that the companies in these sectors meet about 40% of regional demand for their products, while the region imports 60% of regional needs for these products. This would seem to indicate potential markets for local suppliers. The strength of these industries is in computer systems design services, which supplies 76% of the $1.3 billion demand in the region. The most significant gap in local supply is in software publishers, where only 5% of the demand is met in the region, as seen in Table 11.4. In Table 11.5, we see that 47% of the supply chain for information analytics and security is met inside of Hampton Roads. Overall, this industry is spending around $700 million on goods and services outside of Hampton Roads. This could create potential opportunities for Hampton Roads companies to find new customers among information analytics and security companies. TABLE 11.5. Information Analytics and Security Supply Chain 2015 PURCHASES NAICS INDUSTRY SECTOR IN-REGION % IN-REGION OUT-OF-REGION (IMPORTS) % OUT- OF- REGION TOTAL PURCHASES % OF TOTAL PURCHASES 54 56 Professional, Scientific, and Technical Services Administrative and Support and Waste Management and Remediation Services $160,766,698 48% $171,569,832 52% $332,336,530 25.1% $104,778,179 58% $74,621,751 42% $179,399,930 13.6% 31-33 Manufacturing $31,307,235 18% $147,515,551 82% $178,822,786 13.5% 53 Real Estate and Rental and Leasing $102,788,055 66% $52,724,521 34% $155,512,576 11.8% 51 Information $35,317,853 30% $81,401,820 70% $116,719,673 8.8% 48-49 Transportation and Warehousing $26,657,431 36% $48,106,465 64% $74,763,897 5.7% 52 Finance and Insurance $37,675,525 53% $33,570,367 47% $71,245,892 5.4% 72 Accommodation and Food Services $44,132,480 80% $10,900,872 20% $55,033,352 4.2% 42 Wholesale Trade $16,120,628 40% $24,083,598 60% $40,204,227 3.0% 55 81 Management of Companies and Enterprises Other Services (except Public Administration) $22,128,517 61% $13,960,163 39% $36,088,680 2.7% $14,347,996 59% $10,005,341 41% $24,353,337 1.8% 61 Educational Services $7,727,984 50% $7,779,279 50% $15,507,263 1.2% 22 Utilities $4,419,093 45% $5,468,580 55% $9,887,673 0.7% 44 Retail Trade $6,696,467 78% $1,924,089 22% $8,620,556 0.7% 71 Arts, Entertainment, and Recreation $3,180,902 40% $4,763,375 60% $7,944,277 0.6% 62 Health Care and Social Assistance $3,077,135 80% $793,068 20% $3,870,203 0.3% 90 Government $2,583,168 70% $1,103,960 30% $3,687,128 0.3% 21 Mining, Quarrying, and Oil and Gas Extraction $197,174 6% $3,329,579 94% $3,526,753 0.3% 11 Crop and Animal Production $212,034 7% $2,856,756 93% $3,068,790 0.2% 23 Construction $880,273 64% $485,574 36% $1,365,846 0.1% Totals for Information Analytics and Security $624,994,827 47% $696,964,540 53% $1,321,959,367 100% Source: Emsi 2016.4 Dataset 120 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017

In this case, professional, scientific and technical services are in the highest demand by these information industries, and the supply of these services are equally provided by companies within and outside of Hampton Roads. Manufacturing of computer products and electronics are candidates for supplying the industry, as are transportation and administrative services. Table 11.6 shows the amount of goods sold by Hampton Roads companies both in and outside of the region. These companies sell nearly $3.4 billion of products and services, of which $485 million is sold outside of Hampton Roads. TABLE 11.6. Hampton Roads Information Analytics and Security Companies Sales In-Region and Exported Out-of- Region 2015 SALES NAICS INDUSTRY SECTOR IN-REGION % OF TOTAL OUT-OF-REGION (EXPORTS) % OF TOTAL TOTAL SALES % OF TOTAL SALES 541512 Computer Systems Design Services $1,028,638,149 85% $184,778,433 15% $1,213,416,582 35.7% 541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) $921,649,513 86% $152,218,724 14% $1,073,868,237 31.6% 541511 518210 Custom Computer Programming Services Data Processing, Hosting, and Related Services $298,296,298 97% $9,229,601 3% $307,525,899 9.1% $296,086,635 97% $10,473,090 3% $306,559,725 9.0% 511210 Software Publishers $50,394,241 40% $76,759,412 60% $127,153,653 3.7% 541690 Other Scientific and Technical Consulting Services $101,343,012 93% $7,711,176 7% $109,054,188 3.2% 541519 Other Computer Related Services $76,438,563 94% $4,812,217 6% $81,250,780 2.4% 541618 541513 541720 Other Management Consulting Services Computer Facilities Management Services Research and Development in the Social Sciences and Humanities $56,418,153 79% $14,976,173 21% $71,394,326 2.1% $55,376,207 94% $3,553,983 6% $58,930,190 1.7% $25,254,298 56% $20,017,628 44% $45,271,926 1.3% Totals for Information Analytics and Security $2,909,895,069 86% $484,530,436 14% $3,394,425,505 100% Totals for All Hampton Roads Industries $69,428,788,808 30% $162,386,386,050 70% $231,815,174,858 NA Source: Emsi 2016.4 Dataset HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017 121

TOURISM AND RECREATION This cluster contains establishments related to hospitality and tourism services and venues. This includes sport venues, casinos, museums, and other attractions. It also includes hotels and other accommodations, transportation, and services related to recreational travel such as reservation services and tour operators. The tourism industry supports over 18,000 jobs, representing 2.1% of total employment in Hampton Roads. This industry was largely impacted by the recession and its sluggish recovery. Business leaders in the tourism and recreation industry cluster said that half of their business is due to military spending in products and services, such as renting out meeting space and business travel room rentals. When military spending is affected (by sequestration for example) per diem allowances drop which, ultimately, impact recreation and travel. Figure 12.1 below shows the 2015 job distribution for the tourism and recreation cluster throughout Hampton Roads. Virginia Beach had the largest number of tourism and recreation jobs in 2015 (5,241), followed by James City (3,207), Williamsburg (2,610), and Norfolk (1,796). FIGURE 12.1. Tourism and Recreation Cluster, 2015 Job Distribution Source: Emsi 2016.4 Dataset Table 12.1 below provides an overview for each of the individual industry sectors that comprise the tourism and recreation cluster in Hampton Roads. Included are historic, current, and projected employment; historic and projected average annual percent growth (or decline); historic and current employment concentration (LQ); average earnings; total sales; gross regional product (GRP); historic and current establishments (businesses); and jobs multipliers. The table is sorted largest to smallest by 2015 employment. The tourism and recreation cluster accounted for 18,175 jobs and 679 establishments in 2015, about 2% of the total employment and total establishments in Hampton Roads. Overall employment for this cluster is 2.3 times more concentrated in Hampton Roads than would be expected based on national employment averages. 122 HAMPTON ROADS STATE OF THE WORKFORCE AND GAP ANALYSIS, 2017