Economic Development

Georgia Moves Office of Workforce Development Into Economic Development Dept

The Georgia Department of Economic Development (GDEcD) is now the new home of the Governor’s Office of Workforce Development, where it will be repositioned as a new Workforce Division.

Georgia Office of Workforce Development joins Economic Development Dept

Georgia Office of Workforce Development joins Economic Development Dept (photo – georgia.org)

The move ensures that workforce development efforts in Georgia will be aligned with economic realities and the needs of businesses looking to succeed in the state.

Georgia Economic Development Commissioner Chris Carr said he was excited that the Office of Workforce Development was now part of GDEcD, and added that the knowledgeable staff and resources will only enhance GDEcD’s portfolio.

Commissioner Carr added that by aligning these entities, the state gains an enhanced ability to attract new business and ensure that existing industry continues to thrive in a business-friendly climate.

Ben Hames, Deputy Commissioner, Workforce Division, GDEcD, said this move to a streamlined structure highlights Gov. Deal’s understanding that workforce issues are paramount to economic development in Georgia.

This structuring came about as a result of the Governor’s High Demand Career Initiative (HDCI) created earlier this year. It brings the GDEcD together with key business leaders in the state, the Technical College System of Georgia (TCSG) and the University System of Georgia (USG).

Putting the GDEcD and leaders from the industry and educational system together at one table creates a clear picture of what businesses in the state need, pairs them with existing assets, and allows for collective action to tackle the gaps one by one.

Since the GDEcD was coordinating this initiative, it made sense for the Governor’s Office of Workforce Development to be rolled into GDEcD so that their combined resources could be focused and aligned on implementing the initiative.

The new Workforce Division moving into GDEcD will now take the lead on the HDCI initiative to ensure that Georgia’s economic development infrastructure is able to meet the workforce needs of businesses in the state.

Gov. Nathan Deal will be kicking off the HDCI initiative with a series of meetings scheduled to take place over the next two months in Atlanta, Statesboro and Dalton. The Governor will be personally attending each of these three meetings designed to allow USG and TCSG to hear directly from companies in Georgia on their specific workforce needs.

New Mexico Economic Development Dept Deployed $5.4M in SSBCI Funding

The U.S. Department of Treasury has published a report that provides a summary of states’ progress in assisting small businesses with the help of federal funding under the Treasury‚Äôs State Small Business Credit Initiative (SSBCI).

SSBCI report

SSBCI report

According to the report, the New Mexico Economic Development Department and New Mexico Finance Authority have deployed $5,412,974 in SSBCI funding to provide loans for small businesses.

New Mexico utilizes SSBCI funds for attracting private lending and investments into small businesses, and this is often done in partnership with local financial institutions.

NM Economic Development Secretary Jon Barela said these funds are a great resource to drive growth for New Mexico’s small businesses, and added that they invite small business owners to take part in this opportunity which helps leverage their assets and expand.

The SSBCI funded loans provided to small businesses in the state since 2011 have helped attract another $7 million in private investment and created 151 new jobs.

The State of New Mexico was awarded a total of $13,168,350 under SSBCI. Having deployed the initial $5,412,974 to good effect, the New Mexico Economic Development Department has received a second allocation of $4,345,555.

The SSBCI was created within the U.S. Treasury under the Small Business Jobs Act of 2010 as a program to encourage small business lending. SSBCI was authorized to provide $1.5 billion in support of new and existing state programs that invest in and lend to small businesses and small manufacturers.

This $1.5 billion in federal funding is expected to help drive $15 billion in additional private sector investments and lending to small businesses and small manufacturers.

Every state that sought these funds had to demonstrate that their programs had a reasonable expectation of being able to leverage every $1 in SSBCI funding to generate another $10 in new small business investments or lending.

In 2011 and 2012, the Treasury signed SSBCI allocation agreements with 47 states, D.C., five territories and four consortia of municipalities, and is disbursing funds to them in three installments.

As of Dec 31, 2013, the 47 states and other recipients have already been allocated more than $1 billion, and have expended, obligated or transferred more than $750 million of the allocated funding.

Six states reported recycling a total of $5,626,701 that had been repaid and then deployed again into new SSBCI loans or investments.

Read the full SSBCI report – Download (pdf)

Kentucky Economic Development Chief to Lead New Automotive Industry Association

Governor Steve Beshear announced the formation of the new Kentucky Automotive Industry Association, which he said will play a vital role in addressing the challenges, solutions and opportunities facing the industry.

Gov. Steve Beshear announcing KY Automotive Industry Association

Gov. Steve Beshear announcing KY Automotive Industry Association (photo – Kentucky Cabinet for Economic Development)

The Governor said the association will create a unified voice for an industry sector that is profoundly important for the state’s economic health and growth, and will help in highlighting successes and elevating the state’s contributions to the global automotive industry.

The 12-member board of directors of the association is comprised of leaders from industry and government. Larry Hayes, secretary of the Kentucky Economic Development Cabinet, will serve as the inaugural chairman.

Hayes said that the Kentucky Automotive Industry Association was formed hand-in-hand with the state’s auto manufacturers and suppliers. It is a partnership, said Hayes, which he has no doubt will create an environment in which tangible results and continued growth for Kentucky’s economy will be seen.

Auto manufacturing leaders on the board include Eric Henning, regional director for state government relations, General Motors Company; Mike Goss, general manager for external affairs, Toyota Motor Engineering & Manufacturing North America Inc.; and Gabby Bruno, regional director for state government relations, Ford Motor Company.

Automotive supplier leaders on the board include Toru (Richard) Kamioke, president and CEO, Hitachi Automotive Systems Americas Inc.; Rich Whitaker, vice president, Sumitomo Electric Wiring Systems Inc.; Doug Cain, CEO, Mubea North America; Mike Hirsch, vice president of operations for passenger car steering systems, ZF Steering Systems LLC; Kurt Krug, vice president of North American human resources, INOAC; Brandon Kessinger, vice president and general counsel, Akebono Brake Corporation; Jim Rachlin, president, Metalsa Light Vehicles; and Joe Adamcik, director of planning and strategy, AGC Automotive Americas.

These 11 board members and Hayes will develop the association and set strategic goals and activities, taking a leading role in creating collaborative partnerships that will advance the auto industry in Kentucky.

More than 1.2 million vehicles rolled off automotive assembly lines in Kentucky in 2013, leading to $5.5 billion in motor vehicle exports from the state. There are more than 460 motor vehicle-related establishments in the state, and these companies together employ nearly 82,000 people.

Almost 300 motor vehicle-related projects have been announced in Kentucky in the last five years, generating about $4 billion in new investments and 17,600 new jobs.

Georgia Economic Development Dept Gets Presidential E Star Award

The Georgia Department of Economic Development has been selected to receive the Presidential E Star Award. The GDEcD is being awarded for excellence in the export programs and services it offers through its International Trade Division.

Presidential E Award and E Star Award for excellence in exporting

Presidential E Award and E Star Award for excellence in exporting (photo – export.gov)

The “E” and “E Star” awards are the highest honor the nation can bestow on an export service organization.

The history of these awards goes back to World War II, when more than 4,000 war plants received “E” pennants for their production excellence. The flag emblazoned with the big E on it became a badge of honor for American producers involved in the war effort.

In 1961, President Kennedy revived the “E” Award as a means of honoring and recognizing excellence by America’s exporters. The “E Star” is given to recognize continued efforts in export growth by organizations that have already won an “E” Award previously.

Georgia was awarded its first “E” in 1970, and this will be the state’s second “E Star” following one in 2007 for shared leadership approach and facilitation of export activities that lead to export growth among companies in the state.

Governor Nathan Deal said that international trade has a powerful job creation effect which enriches the lives of Georgians and helps the state remain a leader in the global markerplace.

The Governor congratulated the Georgia Economic Development Department’s International Trade Division, and said he looks forward to continuing their partnership to keep Georgia the No.1 place in which to do business.

The International Trade Division of the GDEcD works to match suppliers in Georgia with buyers around the world, and offers a wide range of export promotion services that are available to Georgia companies. Not to mention access to and assistance from the state’s international representatives in 11 strategic global markets.

GDEcD Commissioner Chris Carr said that developing and maintaining solid international exports is vital for bringing investment and jobs to Georgia.

Commissioner Carr noted that exports by Georgia companies were responsible for creating and retaining 227,747 jobs last year, and added that he couldn’t be more proud to work for an organization with a nationally recognized export assistance program.

In 2013, more than 14,500 companies in the state exported $37.6 billion in goods and services to 230 countries and territories. For its part, the GDEcD International Trade Division’s work with 1,346 companies in FY 2013 resulted in 420 export deals worth $35.9 million.

Kathe Falls, director of the International Trade Division, said she was thrilled that the Georgia Department of Economic Development has been selected to receive its second E Star Award. Falls added that they are striving to offer Georgians the highest quality services, and the award recognizes those efforts.

Senate Finance Committee Approves Startup Innovation Credit Act

The Senate Finance Committee has approved a bill that allows startups and small businesses to claim the federal R&D tax credit against their payroll taxes instead of income tax.

Video - Senator Chris Coons discusses the need for R&D tax credits for small businesses

Video – Senator Chris Coons discusses the need for R&D tax credits for small businesses

The bill was originally authored by U.S. Senators Chris Coons and Mike Enzi as a stand-alone bill (pdf) called the Startup Innovation Credit Act.

It was reintroduced as an amendment to a tax extenders package bill that has just been approved by the Senate Finance Committee, and now goes to the floor of the U.S. Senate for a vote from the full Senate.

The amendment to the Internal Revenue Code extends for another two years the original R&D tax credit which had expired on Dec 31, 2013, and further modifies it by helping new startups and small businesses which have little or no income tax liability take advantage of the R&D tax credit.

It would otherwise be available only to large businesses with income tax liabilities significant enough to enable them to claim tax credits. According to the Government Accountability Office (GAO), more than half of this credit goes every year to companies that have $1 billion or more in receipts.

Senator Coons said that the R&D tax credit has helped tens of thousands of American companies make investments for innovation that creates jobs, but startups haven’t been able to take advantage.

The bill would make the Startup Innovation Credit available to companies that are less than five years old and have less than $5 million in gross receipts.

If the two versions of this bill passed by the Senate Finance Committee are both approved and become law, then startups and small businesses that qualify for this tax credit would be able to claim the credit and reduce their Alternative Minimum Tax (AMT) liability or employer-side employment taxes by an equivalent amount up to $250,000.

U.S. Senator for New York Charles E. Schumer, who is one of the sponsors of the amendment, said that this bill will make sure that startups in New York and throughout the country can devote more resources to innovation and creating jobs.

Sen. Schumer added that he will fight for the bill’s passage in the full Senate. Before it can be signed into law, the tax extenders package will need to be approved by the full Senate, and a version of the bill must be approved by the U.S. House of Representatives.

Main Street Montana Project Releases Economic Development Plan

Montana Governor Steve Bullock unveiled an economic development plan for the state that was developed over the last 10 months by the Main Street Montana Project.

Gov. Steve Bullock announcing Main Street Montana Project economic development plan

Gov. Steve Bullock announcing Main Street Montana Project economic development plan (photo – mt.gov)

The announcement was made at events in Billings and Helena by Gov. Bullock and co-chairs of the Main Street Montana Project Bill Johnstone and Larry Simkins.

Simkins is president and CEO of the Washington Companies, and Johnstone is the president and CEO of D.A. Davidson & Co.

Gov. Bullock said that with input from Montana economic development specialists, business and labor leaders, entrepreneurs and educators, the state now has a plan that will allow Montana’s economy to grow for years to come.

The plan is based around five principles (the report calls them “pillars”) that serve as the foundation of the economic development blueprint.

1. Train and educate tomorrow’s workforce today – Apart from traditional education, the report also calls for the alignment of the educational system and programs with the needs of the economy. They also stress on the importance of engaging the private sector to develop job skills in the workforce through apprenticeships and other programs.

2. Create a climate that attracts, retains and grows business – The report suggests making government more efficient and effective while fostering and promoting a business-friendly climate. They also suggest increasing access to capital for new and existing businesses, and improving the coordination between state, local and tribal development agencies and programs.

3. Build upon Montana’s economic foundation – Under this pillar, the report suggests improvement of communications and transportation infrastructure to facilitate trade and exports. They also call for protecting the state’s outdoor heritage and quality of life, and suggest that local communities should be assisted with sustainable development and planning for adjusting to the impacts of development.

4. Market Montana – Key ideas mentioned under this pillar include promotion of the Montana Brand to recruit tourists, workers and businesses, and better coordination of tourism marketing with other elements of the economy. They also say that more investments in marketing tools and programs are needed to increase exports and promotion of goods made in Montana.

5. Nurture emerging industries and businesses and encourage innovation РSuggestions mentioned for this pillar include improving education and job training opportunities and programs, and enhancing the university system’s role as incubator of new technologies and ideas through R&D efforts. They also call for supporting new and emerging businesses by providing access to capital, along with financial and marketing education.

The next phase of the Main Street Montana Project is the implementation of this economic development plan, starting with the “Key Industry Networks” of private sector leaders that will be convened for each of the industry sectors mentioned in the report. Each of these networks will work with state officials to implement specific tasks required of their sector.

Johnstone and Simkins will continue to oversee the Project’s work, and will issue annual reports providing updates of accomplishments and work that still remains to be done.

Read the full plan developed by Main Street Montana Project – Download (pdf)

Pfizer Donates Vacant Buildings in CT for Bioscience Incubator and State Data Center

Governor Dannel P. Malloy, accompanied by the Commissioners of the Connecticut Economic Development and Administrative Services departments, announced that two vacant buildings at the Pfizer Campus in Groton, CT will now house a bioscience business incubator and a state data center.

Gov. Malloy at Pfizer Groton campus announcing CURE incubator and DAS data center

Gov. Malloy at Pfizer Groton campus announcing CURE incubator and DAS data center (photo – ct.gov)

State and local officials were joined in Groton for the announcement by Head of Pfizer Pharmatherapeutics R&D Rod MacKenzie, PhD.

Pfizer will donate Building 286 to Connecticut United for Research Excellence (CURE), which plans to establish the CURE Innovation Commons at this location.

This will be a technology incubator that will serve as a hub for bioscience entrepreneurs, scientists, startups and growing companies.

Pfizer will lease Building 230 to the State of Connecticut at a token annual rent of $1. This building will house a data center for the CT Department of Administrative Services (DAS), and the arrangement with Pfizer will save the state millions of dollars every year.

Gov. Malloy said this agreement is great news for Groton and the surrounding region, and is the culmination of months of negotiations between DAS, CURE and Pfizer that will in the end provide an economic boost for southeastern Connecticut.

The State is pitching in with a $4.2 million grant for CURE Innovations, LLC that will help with the building’s renovation and other startup costs for the 24,000-square-foot incubator with up to seven labs, office space, conference rooms and a large meeting space. The incubator will be able to accommodate six to nine companies and offer additional space for startup projects.

MacKenzie, who is also Groton Laboratories Site Director for Pfizer, said that having CURE in close proximity and working closely with 3,000 Pfizer colleagues will support their objective of turning scientific discoveries into valuable therapies for patients in need, and also demonstrates Pfizer’s commitment to supporting a robust innovation economy in the state.

CURE president Susan Froshauer said the CURE Innovation Commons will be a catalyst for entrepreneurship, innovation and the knowledge-based economy that is so critical to Connecticut’s future.

DAS Commissioner Donald DeFronzo said the data center will support the critical work of around 50,000 state workers, and the challenge of finding a new site for the Connecticut Data Center has been long and difficult, but the solution announced allows DAS to meet its statewide IT objectives in alignment with the goals of sister agency DECD.

DECD is the Connecticut Department of Economic and Community Development. DECD Commissioner Catherine Smith said they are grateful that Pfizer worked so closely with the State and local stakeholders to look for innovative solutions.

Commissioner Smith said she is excited that they are able to announce agreements that benefit Pfizer, the region and the state as a whole.

Michigan Governor’s Economic Development Trip to Germany Nets 3D Printer Manufacturer

Michigan Gov. Rick Snyder, who is visiting Italy and Germany with a delegation of economic development officials, announced that German 3D printer manufacturer voxeljet AG will establish its first U.S. facility in Canton, MI.

voxeljet

Photo – voxeljet

Gov. Snyder said that voxeljet’s decision is good news that underscores Michigan’s attractiveness to leading-edge global companies.

voxeljet CEO Dr. Ingo Ederer said the decision to locate their first U.S. service center in Michigan was based on the site’s proximity to potential customers in the Midwest region that make up a significant part of the U.S. automobile industry and its supply chain.

The company makes industrial 3D printing systems for a diverse range of industries, but the auto industry is the heaviest user of their 3D printing technology.

Dr. Ederer said they have extensive experience serving the 3D printing needs of European automakers, and now look forward to serving U.S. manufacturers.

The voxeljet service center in Canton is expected to be operational by the third quarter of this year, and will create 15-20 high tech manufacturing jobs.

Accompanying Gov. Snyder on the trip are Senior Automotive Adviser Nigel Francis and Michigan Economic Development Corp. President and CEO Michael A. Finney, along with other MEDC officials and representatives from local economic development agencies such as the Detroit Regional Chamber, Southwest Michigan First of Kalamazoo, and Right Place Inc. of Grand Rapids.

Francis said that German and Italian companies are significant investors and employers in Michigan’s automotive economy. He said that the Michigan delegation’s mission message for the trip is that Michigan has everything you need to succeed if you are in the auto industry and looking to invest or expand in North America.

Michigan is home to more than 350 German companies and over 40 Italian companies. These companies employ around 72,000 employees in the state, including a large concentration of high-wage jobs in the advanced automotive manufacturing and R&D sectors.

Apart from voxeljet, Gov. Snyder and the MI delegation also met with ZF Friedrichshafen AG, which has its North American headquarters in Northville, MI and employs more than 1,350 people in the state.

The delegation will also meet with other German companies including Heller Group, Eissmann Automotive Deutschland GmbH, WKW Walter Klein GmbH & Co. KG, and MANN+HUMMEL GmbH.

Gov. Snyder said the marketplace today is global and in order to stay competitive, they have to be aggressive in reaching out to world-class companies and continue their push to create more and better jobs for Michiganders.

NYC Deputy Mayor for Economic Development Unveils Tech Ecosystem Study

New York City Deputy Mayor for Housing and Economic Development Alicia Glen unveiled a study about the NYC Tech Ecosystem.

NYC Tech Ecosystem

NYC Tech Ecosystem (photo – hraadvisors.com)

The report was prepared by HR&A as part of a coalition that includes the Association for a Better New York (ABNY), NY Tech Meetup, Citi and Google.

According to the report, the NYC tech ecosystem contains 291,000 workers, or seven percent of the 4.27 million people who work in New York City. This includes 58,000 tech jobs and 83,000 non-tech jobs in tech companies, and 150,000 tech jobs in non-tech firms.

In the ten years from 2003 to 2013, the City’s tech ecosystem added 45,000 jobs, growing faster than both the City as a whole and the U.S.

Apart from the 291,000 direct jobs, the tech ecosystem also supports another 250,000 jobs through multiplier effects, adding up to a total job creation figure of 541,000 jobs with $50.6 billion in annual compensation, and an annual output of $124.7 billion.

One surprising fact that comes to light in the report is that up to 44 percent (128,000 of the 291,000 jobs) do not require a Bachelor’s degree, and even more surprising is the fact that 11,600 of these are tech jobs in tech companies.

The tech ecosystem workers are also better paid, earning 49 percent more than the $26.50 average hourly wage in the City.

One particularly sweet piece of news is that the tech ecosystem generates more than $5.6 billion in annual tax revenues for the City.

HR&A also suggests public policy considerations to ensure the continued growth of the tech ecosystem. The suggestions are divided into three categories – education and workforce development; real estate and infrastructure; and programs to attract and retain companies and talent.

The suggestions in the first category include an expansion of efforts to include computer literacy and other technical curricula into the City’s primary education system.

Under real estate and infrastructure, they suggest creation and expansion of tech hubs that centralize goods, services and resources that are critical for tech firms. The report also suggests more low-cost and flexible spaces be made available for startups and business incubation, including step-up space for growing companies.

HR&A Advisors, Inc. is an advisory firm which helps clients with real estate, economic development and energy-efficiency issues. Over the past several years, HR&A Inc. has been actively involved in developing strategies for growing the NYC tech ecosystem.

HR&A has been a program manager for the New York City Economic Development Corporation’s Take the H.E.L.M. competition, and they are program managers for the NYC BigApps 2014 competition.

Read the full NYC tech ecosystem study – Download (pdf)

Elimination of Film Production Tax Incentive Would Cost North Carolina 4046 Jobs

A supply chain study of the economic impact of the North Carolina motion picture and television industry suggests that the state would lose 4,046 jobs if the Production Tax Incentive (PTI) program were to be eliminated.

NC film incentives study

NC film incentives study

The study was conducted by Professor Robert Handfield at NC State University’s Poole College of Management.

It was commissioned by five regional film commissions in North Carolina and the Motion Picture Association of America, so that policymakers in the state could have precise answers to questions such as the tax revenues generated by the incentive program, the number of jobs it helps create, and the financial impact of extending and expanding or eliminating the PTI.

Highlights from the study:-

- From 2007-12, the film and television industry spent $1.03 billion in North Carolina, of which the qualified spend was $566 million, which made them eligible for $112 million in tax credits;

- For every $1 in tax credit provided by North Carolina, the film and television industry generates $1.52 of tax revenue and $9.10 of direct spending;

- The film industry in North Carolina provides 4,259 direct jobs with average annual wages of $66,000, as opposed to the average private sector wage of $43,056 in the state;

- If the PTI were to be eliminated, the production level would reduce by close to 90 percent of the 2012 level. The state would lose 4.046 of these jobs, and the industry’s tax contribution would shrink to $4.3 million, a net loss (taking into account the savings in tax credits) of $21 million as compared to 2012 tax revenues.

PTI elimination would also mean that more than 100 small businesses in the state would experience a loss of $164 million in business revenue, and 50 or more small businesses in Wilmington and Charlotte would shut down.

On the other hand, if the incentive program were to be extended, a predictive model shows that the NC film and television industry would grow to $587 million, supporting 30,986 workers including 6,389 in full-time production jobs (a net creation of 1,877 new jobs). Small businesses would experience business revenue growth of more than $86 million.

The report goes on to compare the NC film industry against other states offering film incentives, including how North Carolina stacks up against competing states currently, and how it would fare if the PTI were to be eliminated.

The 25 percent Film Refundable Tax Credit program is scheduled to end on Jan 1, 2015, and state legislators are about to decide whether the program needs to be extended again.

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