Economic Development Blog

Economic Development

WEDC Releases Wisconsin Economic Future Study

Jun 18

The Wisconsin Economic Development Corporation (WEDC) today released the Wisconsin Economic Future Study highlighting the industries that drive the state’s economy.

Photo – InWisconsin.com

The study was commissioned by WEDC, Milwaukee 7 and the Wisconsin Manufacturing Extension Partnership. It was conducted by the Manufacturing Performance Institute (MPI).

The same study was first conducted by MPI and the WI Department of Commerce in 2005, and this new study compares the state’s economic competitiveness based on data for 2011 against the results in the 2005 study.

As per the study, Wisconsin now has 37 driver industries, which is a huge improvement over the 24 industries identified in the 2005 report. A region-wise breakup shows anywhere between 12-41 industries in each of the seven regions.

John Brandt, the MPI author of the study, says that understanding the industries that drive Wisconsin’s economy and how to better support them would improve economic performance.

The study assesses Wisconsin’s competitiveness based on exports, workforce performance and innovation in the selected driver industries as compared to that of competitive states and the U.S. as a whole.

Lee Swindall, vice president of business and industry development for WEDC, said Wisconsin needs to reinvest in technology, workforce development and productivity in order to improve the state’s competitiveness.

Out of the 37 driver industries, thirty-one have been growing between 2008 and 2011, with manufacturing leading the way.

The gross state product of Wisconsin’s manufacturing industry is $51.3 billion, and the industry employs more than 400,000 workers with carried payrolls in excess of $21 billion. The industry spent $91 billion on materials and more than $4 billion on capital investments in 2011 alone.

Brandt suggests in the report that Wisconsin can positively impact the business climate and these driver industries in four ways, as outlined below:-

- Concentrate regional and state economic development efforts to strengthen driver industries and their industry clusters;

- Create an ongoing “economic future” structure that will be in place, irrespective of external or internal changes, for helping businesses foster and sustain improvement;

- Address both the perceived and real skills shortages facing the state;

- Establish a legislative approach for examining policies that affect driver industries and their clusters, and develop a package that will support business.

The full Wisconsin Economic Future Study is available at inwisconsin.com (registration required).

NYC Forms Partnership With Nextdoor Social Network for Neighborhoods

Jun 14

NYC Mayor Michael R. Bloomberg announced that New York has formed a partnership with Nextdoor, a social network for neighborhoods which helps neighbors stay connected and receive relevant city and safety updates through a mobile application and a secure neighborhood website.

Nextdoor (photo – nextdoor.com)

Nextdoor has already created more than 1,800 such neighborhood websites for all five NYC boroughs, and the City merely has to start sending out information to these networks through the Nextdoor NYCgov website.

Nextdoor staff will be working with the City’s Chief Digital Officer Rachel Haot, and the company plans to hire people in New York City to put together a local team for providing training and outreach.

Haot said that online engagement was a critical element of the Mayor’s Digital Roadmap for New York City. She said they were looking forward to leveraging the platform, and were excited that Nextdoor is hiring a local team for supporting the partnership.

The Digital Roadmap sets out goals New York City must achieve in order to realize its potential as the world’s leading digital city. One of these goals is increasing the City’s digital reach to 5.4 million individuals through social media, mobile apps, the NYC.gov website, newsletters, SMS, and so on.

When the NYC Gov channels were launched on all the major social networks, the social media audience more than doubled to 2.4 million, and has grown considerably since then.

The City already puts out a lot of news, event and emergency notifications to this large audience through social networks such as Twitter, Facebook and Tumblr. Adding Nextdoor to this list will enable them to target postings to specific neighborhoods.

The announcement about the partnership was made by Mayor Bloomberg when he visited the Nextdoor offices in San Francisco, California. New York City joins a stellar list of 120 city governments that are already using Nextdoor, including San Diego and San Jose in California; Dallas, Texas; and Denver, Colorado.

All the information shared on each network is exclusive and password-protected, which means it cannot be found on other sites or through a search engine.

All put together, Nextdoor has 14,000 neighborhood networks. While it is free to use for both individuals and cities, all members are required to verify they live in the neighborhood whose network they are joining on Nextdoor. The network is designed to make neighbors feel comfortable sharing information with each other and build stronger communities.

Nirav Tolia, co-founder and CEO of Nextdoor, said they were honored to work with New York City to provide a platform for New Yorkers that leverages shared neighborhood pride to strengthen neighborhoods across the city.

EDA Provides $9.8M Grant for MN Highway Project

Jun 13

The U.S. Economic Development Administration (EDA) announced a $9.8 million grant for rebuilding a flood-damaged portion of State Highway 169 near Mankato, Minnesota.

Flood damaged section of Hwy 169 (photo – MnDOT/Thomas Zimmerman)

The EDA grant will attract another $10 million in private investment for the project, which is expected to create 500 new jobs in the region.

The investment will be used for raising the grade of three miles of the highway out of the 100-year floodplain in between Saint Peter and Mankato, enabling freight movement even during floods.

The area serviced by the highway is an important part of Minnesota’s agricultural sector, accounting for nearly half of the state’s soybean ethanol and corn production coming from 1,100 farms and 4.3 million acres that are under production.

The divided multi-lane stretch of the highway being rebuilt is used for moving $2 million worth of agricultural goods every day. It is frequently shut down during floods, and a flood in Sept 2010 caused severe road damage exceeding $64 million.

The EDA grant will be provided to the Minnesota Department of Transportation, which already had plans for resurfacing the southbound lanes of Highway 169 next year and raising a flood-prone two mile section of the highway between Saint Peter and Le Sueur. After that, they planned to do the same thing in 2016 for the section of the highway from Mankato to Saint Peter.

MnDOT had not planned to raise the northbound lanes, under the expectation that both the north and south bound traffic can use the higher southbound lanes during flooding.

The EDA’s $9.8 million grant will now help them expand the 2016 project and ensure that freight continues to move just as smoothly even during floods.

U.S. Senator Al Franken said he had seen first-hand what happens when floodwaters make Highway 169 iimpassable, and added that the EDA grant was a smart and forward-looking investment that ensures the economy of the region will not be disrupted by future floods.

This grant has been provided out of the $200 million appropriation provided to the EDA by Congress for assisting communities that received major disaster designations in FY 2011, to be used for long-term economic recovery and infrastructure projects.

Chicago Launches Data Center Express to Streamline Startup Process

Jun 13

Chicago Mayor Rahm Emanuel announced the launch of Data Center Express, an initiative that will provide data center projects in Chicago, Illinois with a single point of contact with the City and streamline the startup process.

Server Farm Realty data center in Chicago (photo – serverfarmrealty.com)

The project was initially launched as a pilot program last year by the Chicago Department of Housing and Economic Development (HED), and is a partnership between the City of Chicago, Commonwealth Edison and World Business Chicago.

Anne Pramaggiore, president and CEO of ComEd, said they were proud to partner with the City and World Business Chicago to cultivate the region’s economic development.

Data Center Express has already been tested on five data center projects that were pushed through the new process.

The announcement was made as the Mayor joined Server Farm Realty CEO Avner Papouchado for the opening of the company’s new 450,000-square-foot data center in what was formerly a General Electric factory and then an operations hub and data center for Northern Trust.

The Server Farm Realty data center project required more than $220 million for redevelopment and transformation into a Tier III data center. Chicago now has a total of 29 active data centers, attracted by a combination of natural and infrastructural advantages.

Apart from stable electricity pricing and a prime location at the center of the national fiber-optic system, Chicago also offers a climate which provides natural cooling for data centers and is safe from the natural disasters that companies on both coasts often have to contend with.

Papouchado said that Chicago’s power rates with a low carbon fuel mix and free cooling all year round aligns with what tech and media companies, financial services firms, healthcare organizations and others are looking for in data center locations.

Mayor Emanuel said that facilities such as the new Server Farm Realty data center highlight why Chicago is primed to be the technology and data capital of this century.

Any company looking to set up a data center in Chicago can contact the City, ComEd or World Business Chicago in order to be included in the Data Center Express process.

RagingWire Announces $150M Data Center Investment in Virginia

Jun 12

Sacramento, California-based RagingWire Data Centers announced a major expansion of its operations in Loudon County, Virginia.

Gov. McDonnell at RagingWire data center opening in July 2012 (photo -ragingwire.com)

Less than a year after opening its 150,000 square-foot data center in Ashburn, VA in July 2012, RagingWire is now planning a $150 million capital investment that will create 50 new jobs over the next five years.

RagingWire also shelled out $20 million in October last year for buying a 75.4 acre site in Loudon County for building another huge data center.

The company specifically mentions that it is committing to make this $150 million investment and create jobs in order to take advantage of a sales tax exemption for purchase of IT equipment and other data center infrastructure spending.

As per the MOU signed between RagingWire and Virginia Economic Development Partnership (VEDP), qualified investments by both RagingWire and its customers will be eligible for an exemption from the five percent sales tax that would otherwise be applicable on millions of dollars worth of servers, routers and other infrastructure purchases such as generators and chillers.

Mark Morrow, chief financial officer at RagingWire, said that the agreement with VEDP strengthens the company’s commitment towards the local business community and also encourages companies in need of colocation and data center space to consider the benefits of selecting RagingWire.

Virginia Governor Bob McDonnell, who cut the ribbon at the opening ceremony for RagingWire’s data center last year, said that the data center sales and use tax exemption program enhances the reputation Virginia has earned as one of the most business-friendly states in the nation.

The sales and use tax exemption program for data centers began in 2009, and was tweaked last year to make it easier for colocation centers to be eligible for the exemption by aggregating the investments and jobs created at the facility by the data center operator and its customers.

It helps that Ashburn has a justified reputation as a “Data Center Alley.” Companies setting up shop here find abundant fiber, low-cost electricity, and an economic development agency that has the expertise to fast-track county approvals for data center projects and get new facilities open on a tight schedule.

Buddy Rizer, the assistant director for Economic Development in Loudoun County, worked with RagingWire executives while they scouted east coast locations. Once the company selected Ashburn, the build-to-suit facility was completed in just 18 months.

Apart from RagingWire, other companies such as Equinix and Digital Realty already have huge data centers in Ashburn. Loudon County boasts of eight million square feet worth of data center projects that have been constructed or are in the pipeline, and says that up to 70 percent of the world’s internet traffic flows through data centers in the county every day.

New Jersey Launches Stronger NJ Business Loan Program

Jun 12

On June 11, 2013, the New Jersey Economic Development Authority’s board approved the creation of a new “Stronger NJ Business Loan” program.

NJ recovery and rebuilding (photo – state.nj.us)

Starting from July 1, low-cost loans of up to $5 million will be available to businesses and non-profits expanding into storm-impacted communities.

The loans are also available to existing establishments that have suffered from physical damage worth at least $5,000 to property, equipment or non-perishable and non-consumable inventory.

All applicants must already have been in existence at the time when Sandy struck New Jersey, and must have at least one location in the state.

The launch of the loan program was preceded by last month’s launch of the Stronger NJ Business Grant program. Both are being administered by the NJ EDA and are funded through $460 million of the state’s CDBG Disaster Recovery allocation for storm-impacted businesses.

In order to qualify, the business must show sufficient capital investment or job retention and creation for a project that positively impacts the local economy; and/or the $5,000 in physical damage mentioned above.

The loan can be used as working capital and for making renovations or new construction, subject to the criteria set forward by HUD for use of CDBG Disaster Recovery funds – that it should be used as a last resort and only provided if funding from other sources is unavailable.

The loan program is expected to utilize $100 million of the CDBG allocation, and will be provided to small businesses with at least $25,000 in annual revenues. The focus will be on businesses in the nine most impacted counties.

New Jersey Governor Chris Christie said that small businesses were the economic and social backbone of Jersey communities that experienced storm damage from Sandy, and the EDA board’s approval of the loan program was the next step in helping storm-impacted businesses rebuild and recover and get back to normal operations.

EDA CEO Michele Brown said that they working to ensure, through the loan and grant programs, that impacted communities and businesses in New Jersey are able to rebuild, recover and thrive. Brown added that they wanted to encourage businesses to expand and invest in the hardest hit communities to promote job creation and retention.

Harvard Kennedy School SIB Lab Announces Social Impact Bond Competition Winners

Jun 11

The Harvard Kennedy School Social Impact Bond Technical Assistance Lab has announced the six winners of a competition held to decide which state and local governments should receive technical assistance from the SIB Lab for implementation of pay-for-success contracts using social impact bonds.

Social Impact Bonds (photo – public domain/wikimedia)

The six winners, who will now get pro bono help from The Rockefeller Foundation and the SIB Lab for the social impact bond projects, are Colorado/Denver, Connecticut, New York, Ohio, South Carolina and Illinois.

Illinois had announced back in April that it was going ahead with an SIB program with the help of $275,000 being provided by the Dunham Fund. The HKS SIB Lab and The Rockefeller Foundation will provide technical assistance for the same project.

Illinois Gov. Pat Quinn said that the state had successfully launched an SIB project for tackling major social problems and strengthening communities, and extended his gratitude to Harvard Kennedy School and the Rockefeller Foundation for their recognition of Illinois as a pioneer in social innovation.

All told, 28 local and state governments applied as participants in the competition seeking assistance for their planned SIB projects. The committee that chose the winners considered the feasibility of the proposed projects, the readiness and level of commitment of the government, and their interest in applying SIBs to new policy areas.

The winners will not only get technical assistance for designing the policy and implementing it, but also get a full-time Government Innovation Fellow who will be based for one year with the recipient government agency handling the project.

SIB Lab Director Jeffrey Liebman, a professor of public policy at Harvard Kennedy School and one of the committee members who chose the winners, said that the SIB Lab was excited to work with innovative mayors and governors trying to achieve better outcomes for citizens and make effective use of taxpayer dollars.

Under the SIB model, governments team up with private investors who fund programs tackling social problems. The investors are repaid only when and if the program achieves the desired outcomes. This allows the government to test innovative solutions for social problems without having to spend taxpayer funds.

Colorado is looking at ways to implement SIB projects for tackling homelessness and early childhood development. Denver Mayor Michael B. Hancock said they were looking forward to working with non-profits and business partners to develop an SIB program that could serve as a model for other cities.

The SIB Lab at HKS was set up with support from The Rockefeller Foundation, which has led the introduction of the concept in the U.S. They have already helped New York and Massachusetts implement SIB projects.

Kippy Joseph, associate director for innovation at The Rockefeller Foundation, said that social impact bonds, which are getting attention from state and local governments all over the country, have moved from concept to execution faster than any other social innovation to be adopted in recent history.

Find out more about social impact bonds and the HKS SIB Lab at hks-siblab.org.

Texas Launches $1M Ad Buy in New York, CT Ahead of Gov. Perry’s Visit

Jun 10

After much publicized visits to California and Illinois, Texas Governor Rick Perry is now heading for New York on June 16, 2013.

Texas campaign targeting NY and CT relocations (photo – texaswideopenforbusiness.com)

Gov. Perry plans to meet with business leaders in the firearm, financial and pharmaceutical industries, and will also be visiting Connecticut during his five day stay until June 20.

Similar to his visits to California and Illinois, TexasOne (a privately funded economic development organization managed by the Governor’s Office) has launched an ad buy in advance of the Governor’s visit to generate interest among businesses interested in relocating to Texas.

But this ad campaign, called “Texas is calling…your opportunity awaits” has a few key differences as compared to the two previous ones.

For starters, TexasOne has paid a million dollars this time for 30-second cable television ads on Fox News, Discovery, CNN, MSNBC, CNBC and ESPN. This is a huge investment compared to the token $24,000 ad buy on six radio stations in California, or the $38,450 mixed media ad buy in Illinois.

Secondly, the two 30-second ads (see them here and here) that are running statewide in New York and Connecticut until June 16 are entirely positive, with Gov. Perry starting off the ads by asking why more jobs and businesses have moved to Texas than any other state.

Others, including Hall of Fame running back Emmitt Smith and director Robert Rodriguez answer the question by talking up the advantages for businesses in Texas and the state’s achievements and progress in various sectors.

Farouk Shami, the Houston-based founder of Farouk Systems which manufactures hair and skin care products, says in one of the ads that he moved 1,200 jobs from China to Texas, where he says “opportunities are plentiful and regulations are fair.”

There is no mention whatsoever of anything negative in the ads about New York or Connecticut’s business climate, despite the obvious inclusion of Connecticut on the Governor’s itinerary while skipping New Jersey, coupled with the statement from the Governor’s Office that he would be meeting with business leaders from the firearm industry.

Many states have been in touch with firearm companies in Connecticut following the state’s passage of gun-control legislation. Gov. Perry himself has publicly exhorted Bristol, CT-based PTR on twitter to relocate to Texas. He has also sent letters to 26 firearm industry manufacturers, including North Haven, CT-based Mossberg & Sons, urging them to relocate.

A new section for the Opportunity campaign has been created on texaswideopenforbusiness.com. Gov. Perry will be hosting receptions in both New York and Connecticut for business executives who get in touch with the Governor’s Office during this week through the aforementioned ad campaign website.

Massachusetts Announces $100M Grant for UMass Life Sciences Projects

Jun 07

Massachusetts Governor Deval Patrick announced $100 million in grants for two life sciences projects, with the lion’s share of $95 million going to the University of Massachusetts (UMass) Amherst.

MLSC (photo – umass.edu)

The investment is part of the billion dollar allocation provided to the Massachusetts Life Sciences Center (MLSC) for promoting life sciences within the Commonwealth.

The UMass Amherst grant will be used for construction of the university’s Life Sciences Laboratories. The $157 million complex will include three research centers dedicated towards forming partnerships with life sciences manufacturers in the region and developing innovative products.

One of the centers will be focused on “personalized health monitoring” and will combine nanotechnology and big data to improve healthcare by developing affordable wearable and wireless bio-sensors that will enable patient data to be monitored 24/7 in real-time.

The center will partner with medical device makers, biotech firms, the health care industry and big data analysts to develop prototypes and test them to assess feasibility for commercial production.

UMass President Robert Caret this investment was an outstanding example of how UMass research supported by MLSC can help create a prosperous and dynamic future for Massachusetts.

The second grant of $5.5 million was provided to the Pioneer Valley Life Sciences Institute. Springfield, MA-based PVLSI is a joint venture between UMass Amherst and the Baystate Medical Center.

PLVSI will use the grant to set up a Center of Innovation in Health Informatics and Technology. This center will likewise focus on incubating innovative technologies involving big data analytics, mobile health and population health management.

Gov. Patrick said their life sciences strategy was about choosing to shape the future, and these investments today would provide the next generation with a better Commonwealth.

The Massachusetts Life Sciences Center was established in 2008 as a quasi-public agency affiliated to the Executive Office of Housing and Economic Development.

MLSC has a mandate to invest a billion dollars over a 10 year period to promote the life sciences, including making investments in public and private institutions to be used for R&D and commercialization of life sciences technologies and products.

Citi-EIU Report – Benchmarking the Future Competitiveness of Cities

Jun 06

A report from the Economist Intelligence Unit (EIU) that was commissioned by Citi says that New York City remains the most competitive city in the world, and will continue to retain the title until at least 2025.

Hot spots 2025 infographic (click to expand)

Hot spots 2025 (infographic – Citigroup/nycedc.com)

The report, titled “Hot Spots 2025: Benchmarking the Future Competitiveness of Cities,” ranks the competitiveness of 120 major cities around the world based on the ability to attract business, talent, capital and tourists.

Here’s the top ten list of the most competitive cities in 2025, in the order of their ranking – New York, London, Singapore, Hong Kong, Tokyo, Sydney, Paris, Stockholm, Chicago and Toronto.

Apart from New York and Chicago, the United States has four other cities in the top 20 list. Washington, D.C. secured 14^th place, while California secured two spots for Los Angeles and San Francisco in the 17^th and 18^th places respectively. Boston is ranked 19^th on the list.

Citi CEO Michael Corbat said that cities around the world are evolving as centers of innovation and economic growth engines. He said the EIU research Citi commissioned enhances an understanding of the factors that drive urban competitiveness and sheds light on how the top performers create their competitive advantage.

The report says New York’s top ranking is because of its financial maturity, institutional character and economic strength.

NYC Mayor Michael R. Bloomberg said that EIU’s recognition of the City’s place at the global economy’s forefront was a testament to the ingenuity of hard-working New Yorkers and efforts the administration has made to diversify New York’s economy.

The report also says a city’s size doesn’t have that much impact on how competitive it is. Environmental governance and sustainable policies do make an impact, with Tokyo scoring high for its ability to deal with natural disasters.

Among U.S. cities, Chicago, Illinois gets the highest score for environmental governance. Chicago Mayor Rahm Emanuel said that decisions made as a city over the next few years will help determine Chicago’s future for decades to come, and added that he was extremely optimistic about the City’s future.

As per the report, some of the biggest factors that impact competitiveness are the quality of the institutions and maritime access.

Nine of the top 10 fastest rising cities on the list are either seaports or have easy maritime access. The reverse also holds true, since most of the cities that are rapidly losing competitiveness are either landlocked or have allowed their seaports to become less accessible.

Read the full Hot Spots 2025 report – Download (pdf)

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