Economic Development

IBM Announces Formation of Watson Group in NYC With $1B Investment

IBM (NYSE: IBM) announced the formation of the IBM Watson Group dedicated to R&D and commercialization of cloud-delivered cognitive innovations.

IBM Watson Group at NYC Silicon Alley

IBM Watson Group at NYC Silicon Alley (photo – ibm.com)

IBM is getting the new Watson Group started off with a $1 billion investment, including $100 million as venture investments into an ecosystem of startups and businesses that are building cognitive apps powered by Watson.

The Watson Group will be headquartered at 51 Astor Place, in the heart of New York’s “Silicon Alley.”

The Watson Group offices will house a business incubator that offers the technology, tools and tech support that developers and businesses will need to create and launch new products and businesses using Watson’s cognitive intelligence.

It will also have a client solutions center where businesses can experience cognitive technologies first-hand and find out how these technologies can help transform their business.

The Watson Group headquarters will also host workshops and seminars on topics such as development skills, and provide networking opportunities.

More than 2,000 professionals, led by IBM Senior Vice President Mike Rhodin, will be working on designing, developing and accelerating adoption of Watson cognitive technologies. This means cloud-based software, services and apps that are capable of thinking and self-improvement through learning and answering complex questions by analyzing huge amounts of Big Data.

Watson became famous as the IBM supercomputer that won Jeopardy nearly three years ago. It has now been transformed from a physical game playing computer into a much-improved and cloud-based commercial technology.

Watson is now 2,400 percent more improved, as well as 24 times faster and 90 percent smaller. IBM has shrunk Watson down in size from an entire master bedroom to three stacked pizza boxes.

Rhodin said IBM has transformed Watson from a quiz show winner into a commercial cognitive computing breakthrough that is helping businesses engage customers, entrepreneurs build businesses and healthcare organizations personalize patient care.

He added that Watson is one of the most significant innovations in IBM’s 100-year history, and one which he says they want to share with the world. With the creation of the Watson Group and the investments being made, Rhodin said they are striving to make new markets, reach new buyers and transform industries and professions.

Find out more about Watson at IBM.com. 

U.S. Announces Five Zones Under Promise Zone Initiative

The first five of 20 planned Promise Zones under the federal Promise Zone Initiative that was unveiled last year are Los Angeles, San Antonio, Philadelphia, Southeastern Kentucky and the Choctaw Nation of Oklahoma.

 Promise Zones

Promise Zones

Each of these Promise Zones will benefit from intensive federal support and assistance provided at the local level for implementing economic and community development goals.

Each of the selected Promise Zones has put forward a plan detailing how they plan to work with local businesses and community leaders to make investments that will expand opportunity and reward hard work.

Here’s a brief outline of what each Zone has proposed:-

San Antonio, Texas (Eastside Neighborhood) РFocus on job creation and training in key growth areas through a partnership with St. Philip’s College and others.

Empower children with the skills needed by increasing enrollment in quality pre-K programs and installing a STEM focus in the local school district. Offer adult education opportunities.

Facilitate neighborhood revitalization by expanding public safety, better street lighting and demolishing abandoned buildings.

Los Angeles, California (Pico Union, Westlake, Koreatown, Hollywood and East Hollywood) – Provide more affordable housing by preserving existing units and partnering with developers to add more affordable housing units.

Ensure youth have access to high-quality education, and prepare them for college and careers via the Promise Neighborhoods initiative. Partner with L.A. Unified School District (LAUSD) and the Youth Policy Institute for expanding the Full Service Community Schools model from the current seven schools to all 45 Promise Zone schools by 2019.

Partner with the Los Angeles Community College District and career and technical training schools to provide technical training opportunities and prepare youths and adults for high-growth industries.

Invest in transit infrastructure to attract new businesses and create jobs. Empower the Promise Zone Director and Advisory Board to eliminate wasteful and duplicative government programs.

Philadelphia, Pennsylvania (West Philadelphia) – Put people back to work through skills training and adult education, small business development classes, and loans and technical support for small businesses. Develop a supermarket that will provide access to healthy food and create jobs.

Partner with Drexel University and the William Penn Foundation to prepare children for careers. Prevent and reduce crime to attract investments and new residents.

Southeastern Kentucky (Kentucky Highlands) – Implement sustainable economic effort involving eight counties in the Kentucky Highlands region. Create jobs and grow small businesses within the Promise Zone using a revolving loan fund created with the help of $1.3 million in private sector funding.

The University of Kentucky Economic Development Initiative, the East Kentucky Concentrated Employment Program, and the Kentucky Highlands Investment Corporation will provide leadership and entrepreneur training for youth, and also retraining for the local workforce in specific industries.

Eastern Kentucky University will expand technical education programs in the Promise Zone, while Berea College will provide high school students with evidence-based college and career readiness programs.

Choctaw Nation of Oklahoma – Provide workforce training for skilled trades and professionals with a focus on STEM certifications through partnerships with Oklahoma State University, Eastern Oklahoma State College, and the Kiamichi Technology Center.

Make infrastructure Investments including for water and sewerage systems, and pursue economic diversification. Support women-owned businesses in the Promise Zone, and implementation of large-scale greenhouses and technology-enhanced farming and ranching.

The remaining 15 Promise Zones around the country will be announced over the next three years.

Find out more about the Promise Zone Initiative at hud.gov.

Gov. Cuomo Outlines New York’s 2014 Agenda

In his 2014 State of the State Address, New York Governor Andrew M. Cuomo outlined a 2014 agenda focused on creating jobs, making the state more affordable, expanding successful economic policies, rebuilding infrastructure, and making new investments for improving the quality of education.

NY Gov. Cuomo's 2014 State of the State Address

NY Gov. Cuomo’s 2014 State of the State Address (photo – NY Governor’s Office)

Highlights from New York’s 2014 agenda:-

- The fourth round of the Regional Economic Development Council (REDC) awards will recognize and reward plans that incorporate global marketing and export strategies. Global NY will be launched by linking START-UP NY to the Regional Economic Development Council initiatives in order to attract jobs and investment to Upstate New York.

- The Governor proposed the establishment of the NY Genomic Medicine Network. This would be a partnership linking the University at Buffalo’s biomedical research expertise and computational infrastructure with the medical community in New York City. This plan aims to position Upstate New York as a hub for genomic medicine research and jobs.

- Governor Cuomo will use existing statutory authority to launch a pilot medical marijuana research program. Up to 20 hospitals will be allowed to provide medical marijuana to patients being treated for serious illnesses.

- Gov. Cuomo proposed modernization for JFK and LaGuardia airports, including a plan for the State to take over management responsibility for airport construction from the Port Authority so that these critical transportation hubs are modernized quickly and efficiently.

- Gov. Cuomo proposed expediting transmission projects through state-owned rights of way to resolve the bottlenecks created by the state’s antiquated transmission system that is preventing excess Upstate power from entering the Downstate region where demand is high.

- New York’s $10 billion deficit is poised to turn into a $2 billion budget surplus by 2016-17. Instead of using the surplus for increasing spending, Gov. Cuomo has put forward a proposal to provide $2 billion or more in tax relief for New Yorkers and businesses based on recommendations made by the New York State Tax Relief Commission.

- New York will be hosting the 2014 Global NY Summit on World Trade and Investment for reaching foreign investors and creating a peer learning network among regional and local leaders.

- Also in 2014, Gov. Cuomo will host another round of industry summits that will identify economic growth opportunities. One of these summits will be the Upstate-Downstate Food-to-Table Agriculture Summit.

Full agenda outlined in Gov. Cuomo’s 2014 State of the State Address – Download (pdf)

Los Angeles 2020 Commission Report

The Los Angeles 2020 Commission has released a report about the current state and issues being faced by Los Angeles, California.

Los Angeles 2020 Commission Report

Los Angeles 2020 Commission Report

The independent commission was constituted in April 2013 at the request of Los Angeles City Council President Herb Wesson.

The report they released, titled “A Time for Truth,” is the first of two reports the Commission will produce. The second one will cover the Commission’s recommendations and ideas.

This first 50-page report looks at the challenges and pressing issues Los Angeles needs to face up to.

Specific issues cited by the 13-member commission chaired by former U.S. Commerce Secretary Mickey Kantor include weak job creation, poor economic development, lack of industry, traffic, a declining school system, poverty, deficits and budget cuts.

About economic development, the report says – “We lack a coherent or coordinated approach to economic development and soliciting investment in Los Angeles. In fact, we do an abysmal job of identifying and servicing the legitimate needs of the employers already located here. According to a recent survey, 9% of businesses in LA are planning to leave, citing stifling regulations and an unresponsive bureaucracy.”

The report also says Los Angeles has missed out on opportunities. They cite New York taking a leadership role in bioscience with projects such as the Cornell NYC Tech university campus. The report says Los Angeles has no similar project to take advantage of the world-class minds in the region.

The report says the City is hindering private efforts. They cite the three years it took for City Hall to greenlight a $1 billion private investment by USC, which was seeking approval for adding academic buildings, retail space and student housing, in the process creating thousands of jobs.

Other highlights from the report:-

- Among the seven major metropolitan areas, Los Angeles is the only one showing a net decline in non-farm employment over the last decade;

- Los Angeles had 12 Fortune 500 headquarters three decades ago. Now that number has come down to four.

- Los Angeles is dramatically underinvesting in the modernization of its greatest assets including Los Angeles International Airport and the Port of Los Angeles.

- City revenue has been flat since 2009, with a forecast for a one percent revenue growth in 2014. Meanwhile, expenses will grow by more than five percent.

- The Los Angeles Unified School District (LAUSD) spends $7.1 billion to educate around 640,000 students, but less than 60 percent of LAUSD students graduated from high school. Only 32 out of 100 students who enter ninth grade will fulfill the course requirements to enter the UC or Cal State systems.

Read the full Los Angeles 2020 Commission Report – Download (pdf)

Virginia Launches Innovation and Entrepreneurship Measurement System

Virginia Governor Bob McDonnell announced the launch of a portal called the Innovation and Entrepreneurship Measurement System (IEMS) that tracks the performance of Virginia’s Innovation Economy.

Virginia IEMS innovation data portal

The IEMS was developed by the Center for Innovative Technology (CIT) , and provides data on five key metrics of Virginia’s Innovation Economy, in addition to the outcome in terms of the economic impact of innovation and entrepreneurship.

The data on the IEMS portal, collected from private, state and federal sources, is divided into the following six categories – Talent Pipeline; Research and Development; Access to Capital; Commercialization; Business Dynamics; and Outputs.

The talent pipeline category has five indicators, with an arrow trend to show how each one is doing. You can click on any of the indicators to see detailed historical data and charts for each indicator, along with an analysis that explains the implications of the trends.

Knowledge worker migration is currently down, while high-tech employment concentration shows no change. STEM degrees are up, and so is participation in FIRST, a program (usfirst.org) that aims to inspire young people and motivate them to pursue STEM education and careers.

The R&D category data shows that federal R&D is down, as is small business research funding under the National Institutes of Health (NIH) SBIR and STTR programs. But state and corporate R&D intensity are up, and so are the number of patents filed and awarded in Virginia.

The access to capital category shows that private investment is down, and public sector investment shows no change. However, R&D tax credits are up.

The commercialization category shows that university licensing is down, but university startup activity is on the rise and increased by 45 percent between 2007 and 2012.

The business dynamics category shows that the number of startups as a percentage of the population hasn’t changed. The number of fast-growing firms is up, along with broadband access, IPOs, mergers and acquisitions, and entrepreneurial activity. Establishment churn, which measures the rate of businesses opening and shutting down, is going down as the number of businesses closing their doors has lessened.

The Output category shows the economic impact of all these innovation efforts in terms of the high-tech sector’s share of Virginia’s economy. For instance, the revenue generated by Virginia’s high-tech firms increased from 25 to 27.1 percent in between 2007 and 2011.

You can see all the data and trends for Virginia’s Innovation Economy on the IEMS portal.

Windsor-Essex, Ontario Gets $12M Medical Marijuana Investment

CEN Biotech announced that it is making a $12 million investment in Windsor-Essex County, Ontario, Canada to establish a facility that will enable them to grow and sell medical marijuana.

CEN Biotech announcement in Windsor-Essex, Ontario

CEN Biotech announcement in Windsor-Essex, Ontario (photo – WindsorEssex EDC)

The company had announced back in Nov 2013 that they were breaking ground for construction on a six-acre site leased from the Town of Lakeshore. .

The land is already zoned for agriculture, so they didn’t need to apply for zoning. The plot had an existing 26,400-square-foot structure, and CEN Biotech is adding another 58,000 square feet, adding up to facility with a total of 84,400 square feet.

CEN Biotech could begin distributing medical cannabis later this year by late summer or fall.

The company has obtained a license from Health Canada for production, import, export and sale of medical marijuana and seeds. This was made possible after Health Canada reviewed its policies governing control of marijuana prescribed for medical use by physicians.

CEN Biotech President Bill Chaaban said the policy review by Health Canada created an opportunity for the company to use its skills and expertise to create a controlled environment for this medical application.

Sandra Pupatello, CEO of the WindsorEssex Economic Development Corporation, said it was interesting to note that Windsor-Essex might be a prime location to marry high-level security with agribusiness expertise. Pupatello said Health Canada has moved CEN Biotech a step closer to that reality.

Pupatello added that they were pleased to be there for the economic development announcement which she said will benefit the whole region.

Joseph Byrne, an investor in CEN Biotech, said during the media event that the golden goose has landed in Essex County, and it’s a no-brainer that this will bring many jobs to the region.

Byrne noted that he couldn’t think of a better community to launch this industry than Windsor-Essex for two reasons. He mentioned that the community houses the continent’s most robust and secure border environment. Secondly, he said that as a hub for agricultural expertise, the region boasts Canada’s best hub for agriculture.

CEN Biotech is a subsidiary of Madison Heights, Michigan-based Creative Edge Nutrition Inc. In the first half of 2013, Creative Edge clocked up revenues worth around $2 million. But they now expect to generate around $100 million in annual sales within five years, and attribute the projected growth in large part to the expansion in Canada.

Gov. Cuomo Announces $2B Tax Relief Plan for New York

New York Governor Andrew M. Cuomo announced the details of a $2 billion tax relief proposal aimed at reducing property tax burdens and attracting and growing businesses across the state.

Gov. Cuomo announces $2B tax relief plan

Gov. Cuomo announces $2B tax relief plan (photo – NY Governor’s Office)

One of the proposals in the plan calls for the bank tax to be merged with the corporate franchise tax and the rate lowered to 6.5 percent from the existing 7.1 percent.

If implemented, this proposal will provide $346 million in tax relief to businesses in New York State.

Manufacturers get special attention in many of the proposals. One proposal calls for the corporate income tax rate for Upstate manufacturers to be eliminated. This would provide $25 million in tax relief for Upstate businesses.

Another $136 million proposal applies to manufacturers statewide by offering them a new tax credit. The eligible firms would be able to take advantage of a refundable credit against corporate and personal income taxes equivalent to 20 percent of their annual real property taxes.

The plan also calls for an immediate elimination of the two percent Temporary Utility Assessment (18-A) that is levied on industrial customers’ electric, gas, water and steam utility bills, and speed up the phase-out process for other customers. If implemented, this proposal will save businesses and residents in New York State around $600 million over the next three years.

Apart from these measures meant to attract and grow businesses, the tax relief plan includes substantial property tax relief worth a billion dollars, and also reforms the state’s estate tax.

One of the proposed actions is a two-year freeze on property taxes. If implemented, tax rebates in the first year will be available only to home owners within a jurisdiction that stays within the two percent property tax cap.

In the second year, the rebates will be available only to homeowners in localities that stay within the cap and agree to implement a shared services or administrative consolidation plan. New York currently has almost 10,500 separate forms of local governments, many providing duplicative or overlapping services.

Another component of the plan is the creation of a property tax circuit breaker for low- and middle-income households. The State would provide tax relief based on the taxpayer’s ability to pay, provided as a refundable tax credit against personal income tax. Again, only residents of jurisdictions that adhere to the property tax cap will be eligible.

Renters with incomes below $100,000 will likewise get a refundable personal income tax credit that increases with family size.

These proposals were recommended by the NY State Tax Relief Commission in its report submitted last month to the Governor. The Tax Relief Commission was established in Oct 2013 to come up with a series of targeted tax relief proposals.

Governor Cuomo said in a statement that these proposals will keep New York moving in the right direction, creating jobs, growing the economy and providing much-needed relief for struggling families.

NM Governor Unveils Proposals to Attract Tech Firms and Startups

New Mexico Governor Susana Martinez unveiled another set of proposals that aim to attract and develop research, innovation and high-tech firms and startups in the state.

New Mexico tax incentives

NM tax incentives

Specifically, the proposals aim to expand the Angel Investment Credit program, and reform the Technology Jobs Tax Credit and R&D Small Business Tax Credit programs.

The announcement of these proposals was made by Gov. Martinez during a speech at Vibrant Corporation in Albuquerque, NM.

If the changes are approved, the maximum individual investment threshold for the Angel Investment Credit would go up from $100,000 to $250,000. The overall cap for the program would go up from $750,000 to $2 million.

This expansion of the Angel Investment Credit program will encourage angel investors and investment funds who invest in startups to make larger investments and increase the number of investments they make.

Gov. Martinez also proposed a consolidation of the Technology Jobs Tax Credit with the R&D Small Business Tax Credit. The latter one, as currently authorized, is not of much use to the small firms doing R&D that the program was created to assist.

The reform proposal seeks to combine the two credits into a single program, increase the percentage of new investment eligible for credits, and also make the credit refundable to help companies engaged in early-stage R&D activities. These companies typically have a limited tax liability, which means they are unable to utilize the credits available to them under the current program.

A couple of weeks ago, the Governor announced two other proposals to encourage innovation and expand New Mexico’s high-tech workforce.

One of the proposals allocates $2 million to the Technology Research Collaborative for funding collaborative projects between New Mexico’s laboratories and universities. The other proposal reforms the state‚Äôs Higher Education Endowment Fund and invests $7.5 million in it to attract top researchers and professors to state institutions.

Gov. Martinez said New Mexico has tremendous potential to become an even stronger leader in high-tech R&D, but the state has to improve the way in which it rewards the creation of technology-related jobs and supports innovators who want to bring their ideas and products to the marketplace.

Iowa, Nebraska Form Two-State Regional Economic Development Organization

Nebraska Governor Dave Heineman and Iowa Governor Terry Branstad came together in Omaha to sign an agreement to form a two-state, regional economic development organization as a collaboration between southeast Nebraska and southwest Iowa.

Bob Kerrey Bridge between Omaha and Council Bluffs

Bob Kerrey Bridge between Omaha and Council Bluffs (photo – councilbluffs-ia.gov)

The Omaha–Council Bluffs metropolitan area has a regional population exceeding 885,600, and thousands of these residents cross over for work across the Missouri River separating the two cities.

As per the agreement, the Greater Omaha Economic Development Partnership will be joined by regional organizations in Iowa including Advance Southwest Iowa – the freshly minted public-private partnership of the City of Council Bluffs.

Gov. Branstad said there is a national trend throughout the U.S. towards building mutually-beneficial economic development partnerships. He added that this type of regional approach would give them more clout on the national scene and help bring more jobs to southwest Iowa.

Gov. Heineman said a strong regional economy benefits both states, and added that one of the most exciting parts of this announcement was that the Greater Omaha EDP will now be able to provide inquiring companies and clients with more choices.

Other Iowa entities that will formally join the Greater Omaha EDP include the Council Bluffs Chamber of Commerce, Iowa West Foundation, Pottawattamie County and the Western Iowa Development Association.

The Iowa West Foundation, which played a key role in the development of the two-state collaboration, announced a grant of $2.2 million over the next five years to support economic development through the new regional partnership and the Council Bluffs Chamber of Commerce.

Pete Tulipana, president and CEO of the Iowa West Foundation, said the foundation served as a convener of the Iowa partners to begin the dialogue on regional economic development.

Bob Mundt, president and CEO, Council Bluffs Chamber of Commerce, said the Iowa coalition inquired about joining the Partnership in early 2013 after observing the successes and synergies of communities working together as an economic development region.

The two-state partnership will be focusing on a five-year program that will include business retention and expansion, talent recruitment, and entrepreneurship and innovation.

J. Mac Holladay, CEO of Market Street Services which provides strategic economic development planning services, said no other two-state regional program is working on all three of these areas.

Advance Southwest Iowa’s newly hired executive director Mike Dellinger will have an office at the Greater Omaha Chamber so as to allow for a close working relationship with the entire Partnership team.

UVL Migration Study Has Good News For Oregon, Michigan

United Van Lines, a UniGroup, Inc. subsidiary and the largest mover in the United States, has released its 37th Annual Migration Study that tracks which states its customers have been moving from and to during the last year.

 

United Van Lines Migration Study

United Van Lines Migration Study

Oregon replaces D.C. at the top of the list in 2013 with 61 percent of moves associated with the state being inbound ones.

D.C. fell out of favor and took a steep dive after being at the top of the list for inbound migration for five consecutive years.

Oregon was followed by the Carolinas with South Carolina at 60 percent and North Carolina at 58 percent. The District of Columbia and South Dakota at 57 percent were right behind the Carolinas.

Inbound moves accounted for 56 percent in Texas, and Colorado scored 55 percent.

Michael Stoll, professor and chair of public policy at the UCLA School of Public Affairs, said in a statement issued by UVL that business incentives, relatively lower costs of living and industrial growth are attracting people and jobs to the southeastern and western states.

Stoll said the Pacific Northwest was benefiting from continued migration as retirees and young professionals are drawn to green spaces, public transit, and the local arts and entertainment scene.

The pattern of an exodus from the Northeast hasn’t been stemmed. New Jersey (64 percent), New York (61 percent) and Connecticut (59 percent) all rank among the top five states with the highest levels of outbound migration. The other two in the top five are Illinois (61 percent) and West Virginia (60 percent).

The best news in the study was for Michigan, which seems to have finally stemmed the rot after 16 years of migration deficits. Michigan has been moved to “balanced,” which means around the same number moved in as moved out of the state.

Stoll noted that Michigan was moved into the balanced category because of an improvement in its economy over the past two years. Despite having an unemployment rate that’s higher than the national average, home sales and home prices are up, per capita income is up, and the Detroit automakers are hiring.

Apart from Michigan, other states on the balanced list include Alabama, Iowa, Louisiana, Nebraska and Tennessee.

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