State Economic Development Executives (SEDE) Network

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  • Brookings: Turning the data center boom into long-term, local prosperity

    The AI goldrush roars on. Hyperscalers like Google and artificial intelligence (AI) upstarts like OpenAI continue to pour massive sums into building gargantuan data centers, often in small- and medium-sized communities.

    As the deals proliferate, concerns are rising about the huge amounts of electricity and water required to keep the centers running. At the same time, pitched battles over zoning and permitting rules are pitting tech-firm developers against local land-use managers, especially in rural and exurban America.

    Yet beyond such infrastructure and resource concerns, sharp debates are also engulfing the facilities’ core economic proposition for communities. Local leaders are questioning the credibility of Big Tech’s promises of spillover effects that will produce high-quality economic development beyond near-term construction. What’s more, skeptics are wondering about the veracity of the developers’ assurances of a thrilling new era of “reindustrialization” across Main Street America.

    These debates raise fundamental questions: To what extent are the data center builders’ promises of economic development more than hype? And if these promises are more than hype, how can communities make sure these pledges translate into a durable local economic advantage?

    Continue reading here.

  • NCSL: Workforce Pell Is Coming. Are State Legislatures Ready?

    The Workforce Pell Grant launches July 1, 2026, giving states a formal role in federal student aid for the first time. States will identify and approve eligible short-term training programs (8-14 weeks, 150-599 clock hours) based on federal criteria: programs must prepare students for high-skill, high-wage, or in-demand jobs, confer stackable credentials toward degrees, and meet 70% completion rates, 70% job placement rates within 180 days, and an earnings value threshold where median graduate earnings above 150% of poverty exceed tuition costs three years post-completion. Governors and state workforce boards will review programs, and states may need to define terms like “in-demand” and “high-wage” while building data systems to track non-credit credential outcomes.

    The timeline is tight—final federal regulations won’t arrive until spring 2026, leaving states just months to submit approved program lists before the academic year begins. State legislatures should consider strengthening data infrastructure to connect postsecondary and workforce systems, aligning state definitions of eligibility terms with forthcoming federal rules, and examining how Workforce Pell interacts with existing state training programs. Students apply via FAFSA, with awards prorated by program length and counting against the 12-semester lifetime Pell cap. Programs that fail performance benchmarks lose funding until they demonstrate improvement and gain state reapproval.

    Read the full article here.

  • AMCC: 10 Questions SMEs Should Ask About Data Centers

    During a February 6, 2026 AMCC call, Dr. Deborah Stine provided an excellent discussion on data centers and advanced manufacturing.

    To view the presentation recording (her presentation begins at the 11:30 mark) and slides, click here.

    The American Manufacturing Communities Collaborative (AMCC) is designed to create and strengthen an alliance of communities with regional economic development initiatives underway dedicated to achieving sustainability through economic growth, improved environmental performance, and inclusive well-paid job creation supporting initiatives to create new opportunities and equity within a revitalized American manufacturing base.

    Read more here.

  • States Take Center Stage: Economic Development Under the One Big Beautiful Act

    Congress enacted the One Big Beautiful Act (OBBA) in July 2025 with clear implications for how states drive growth, competitiveness, and return on public investment. The law amends education and tax policy, but its effects extend well beyond those domains. OBBA tightens the connection between federal resources and state-defined economic outcomes. It places states at the center of validating demand, measuring results, and coordinating systems that shape regional growth.

    At its core, the Act reflects a shift in federal expectations. Federal benefits for credentials and training increasingly depend on earnings, employment, and demonstrated market relevance. For state economic development leaders, this creates an opening to rethink how workforce systems, higher education institutions, and federal place-based tools support broader state growth strategies.

    For states, the most consequential change is the elevation of the state’s role in directing investments in talent pipelines. The new Workforce Pell framework allows federal aid to support short-term, industry-driven training when states certify that the training program  meets labor market demand and deliver earnings above what typical workers with the previous level of education make in that state and thus justifying the investment.. Economic development executives now have a stronger basis to engage governors and state workforce boards, which hold decisive authority over which credentials align with the state’s economic priorities.

    This structure reinforces demand-driven talent development. It encourages tighter alignment among employers, training providers, workforce agencies, and economic development organizations. It also increases the strategic value of state labor market information and longitudinal earnings data. Regions that already integrate these functions gain an advantage. Fragmented systems face growing exposure.

    The Act also reshapes higher education’s role in state economies. OBBA imposes stronger performance expectations across both short-term credentials and degree programs. Programs that consistently produce low earnings outcomes face new disclosure requirements and the risk of losing eligibility. At the same time, new limits on graduate and parent borrowing and the elimination of Grad PLUS are likely to affect enrollment patterns and institutional finance models across state higher education systems.

    For states, these changes matter not only as education policy but also as economic strategy. Institutions will face pressure to reassess their program mix, pricing, and alignment with industry demand. States that treat higher education as a coordinated economic asset, rather than a stand-alone sector, will be better positioned to manage these shifts.

    On the place-based side, the Act raises expectations for existing investment tools without expanding them. Qualified Opportunity Zones remain in place, but outcome requirements increase. Federal oversight now places greater emphasis on whether Zones generate jobs, support business formation, and improve economic conditions in designated communities. Investment volume alone is no longer sufficient.

    This matters for state economic development agencies because in many areas, Opportunity Zones can influence where private capital flows. The new reporting framework increases scrutiny of designation decisions and long-term results. States must now demonstrate that Zones advance broader development objectives rather than operate as passive tax preferences.

    Taken together, these provisions send a clear federal signal. Talent development and place-based investment are being treated as interdependent components of economic development. Both are expected to deliver measurable economic returns. Both rely on state leadership to define priorities and validate outcomes. And both reward regions that align people, institutions, capital, and data around shared growth goals.

    For state economic development executives, the Act brings both opportunity and responsibility. It expands state influence over key levers of growth while raising expectations for performance. States that coordinate workforce, higher education, and investment strategies stand to capture greater value from federal policy. States that cannot demonstrate results face increasing risk as federal support becomes more conditional.

    The One Big Beautiful Act reforms education finance and federal tax incentives. More importantly, it signals that federal economic development policy will increasingly run through the states, with accountability as the price of authority.

  • Podcast: Data Under Pressure: What’s Breaking (and What Still Works) in Economic Intelligence

    From The Ribbon Cut Podcast:

    Public economic data systems are being stretched thinner at the same time local decision-making depends on them more than ever. In this episode of The Ribbon Cut, Susan and Charles are joined by Ken Poole to explain what’s happening behind the scenes at federal data agencies, and why staffing cuts, privacy constraints, and rising demand for localized detail are changing how workforce and economic data should be interpreted.

    In this episode:

    • Why public data systems are struggling to keep up with local demand.
    • How staffing losses at agencies like BLS impact continuity and reliability.
    • Where privacy constraints limit the granularity communities need.
    • Why private data sources are filling gaps—and where caution is required.
    • What this shift means for defensible, data-backed decision-making.

    For economic developers, analysts, and consultants who rely on workforce and employment data, this episode provides essential context for navigating today’s increasingly fragile data environment.

    Listen here.

  • State Developments Snapshot – Issue 89, January 2026

    State Development Snapshot header 2

    News & Resources

    SEDE Hosts Meeting for Top Executives (SEDE) The State Economic Development Executives (SEDE) Network is holding its summer meeting for state economic development executives or their top deputy in Washington, DC on the afternoon of May 4th in conjunction with SelectUSA activities. Leaders are encouraged to attend SelectUSA and take time to stop over for this afternoon SEDE meeting which will be just two blocks from the Investment Summit. Much of the meeting will be dedicated to opportunities for networking among the state economic development commissioners, secretaries and executive directors or their top deputy. Registration and agenda will be available in the coming weeks.

    Proposed Biomanufacturing Center May Create Competition Among States (SSTI) The proposed Biomanufacturing Excellence Act approves a single National Biopharmaceutical Manufacturing Center of Excellence within NIST. It  authorizes $120 million in FY 2026 for NIST to conduct a competitive process to select one non-federal entity to build and operate the center. Eligible applicants include public-private partnerships, institutions of higher education, and multi-institution consortia. Because only a single awardee will be chosen, the proposed legislation likely sets up what is likely to be a stiff competition among many states which have made life sciences and manufacturing key elements of their innovation strategies. These criteria seem to strongly favor regions where industry, academia, and government already collaborate around biomanufacturing.

    Rural Economic Development Tool (Center on Rural Innovation) Every strong local economy is built on good decisions. Good decisions start with clear data. CORI’s Rural Economic Development Tool helps rural leaders move from raw numbers to real insight. It brings together 25 critical indicators, spanning workforce, entrepreneurship, infrastructure, and quality of life, so communities can see what’s working, where opportunity is emerging, and where action matters most. This is data designed to support strategy, strengthen grant applications, and guide long-term investment – without requiring a data team or technical expertise.

    Webinar Recap: Use AI to Research Key Stakeholders and Partners (Building Better Regions EDA CoP) This webinar, hosted by the Building Better Regions Community of Practice, shared information on how participants could leverage AI tools to make stakeholder engagement more responsive, efficient, and impactful. AI can assist with gaining a deeper understanding of a partner or organization that you may be interested in partnering with or receiving funding from, conducting deep research to be better informed when engaging. A recording of the webinar can be found here.

    State Leader Spotlight

    Andrew Deye, Vice President of Strategy, JobsOhio

    Andrew Deye

    Andrew Deye serves as Vice President of Strategy at JobsOhio. In this role, Andrew leads strategy, global business development and research functions at JobsOhio, the state’s private economic development corporation. Since its creation, JobsOhio and its partners have successfully served over 2,500 companies including over 450 new-to-Ohio investments.

    Previously, Andrew worked in investment banking for 8 years most recently as a Vice President at Greenhill & Co. During that time, Andrew provided financial advice to governments, corporations and infrastructure investors on a broad range of transactions (including public-private partnerships, M&A, restructurings and financings) totaling over $40 billion.

    A Cincinnati native, Andrew holds a BS in business administration from Georgetown University and a master’s degree from Harvard’s Kennedy School of Government.

    State Leaders on the Move

    Virginia Secretary of Commerce and Trade

    We’re pleased to share recent leadership changes across State Economic Development leaders. Join us in celebrating these transitions and welcoming new leaders to our community!

    Segura

    Outgoing Leader: Juan Pablo Segura, Secretary of Commerce and Trade

    Juan Pablo led economic growth as the Secretary for the Commonwealth of Virginia through a variety of initiatives and agencies, including the Virginia Economic Development Partnership, the Virginia Innovation Partnership Corporation, Virginia Housing, and more. He oversaw 13 agencies with over 1,300 team members and a $3 billion budget as Secretary.

    Chenery

    Incoming Leader: Carrie Chenery, Secretary of Commerce and Trade

    Carrie is a native Virginian with two decades of experience in economic development, public policy, government relations, and strategic communications through both public service and private business. Her career spans identifying business growth opportunities for clients, leading a regional economic development organization, managing economic development policy for Virginia’s largest private industries, and shepherding legislative and budgetary priorities through the Virginia General Assembly.

    Across the States: Developments to Know

    Meeting the Childcare Challenge: Opportunities for Economic Development Districts (NADO) Childcare costs and shortages are increasingly recognized as barriers to comprehensive regional development. This report examines the drivers of the challenge and the impact it has had in communities across the country. It highlights roles that EDDs are playing to increase childcare accessibility, quality, and affordability in their communities, and has recommendations for districts who have not yet been involved with childcare initiatives. 

    New York Could Offer Universal Childcare in $4.5B Plan (Newsweek) New York has taken the first step toward significantly expanding access to free and low-cost childcare for children under five in the state, with universal child care for those under two in New York City. The move puts NYC to be the first city in the nation to provide free universal childcare.

    DoD to Invest $1B into Company with Regional Presence (Dayton Daily News) The U.S. Department of Defense will invest $1 billion into L3Harris Technologies to expand production of solid rocket motors. The announcement marks the first direct-to-supplier of this kind. The investment will expand production capacity in Ohio.

    Allison Ulaky of the Center for Regional Economic Competitiveness (CREC) led the development of this Bulletin; for questions on the content in this Bulletin contact Bob Isaacson, CREC Senior Vice President.

  • Workforce Pell and Noncredit Training Helps Build the State Talent Pool

    Implications for States

    Overview

    The One Big Beautiful Bill Act of 2025 codified a major proposed change in how the federal government[BI1]  supports workforce training. For the first time, Congress expanded Pell Grant eligibility to include funding for short-term, career-focused programs designed to meet immediate industry needs. Beginning in July 2026, Pell Grants can support programs as short as eight weeks or 150 clock hours, far shorter than the traditional academic programs Pell has historically funded. This shift creates a new federal financing tool for rapid workforce development. Certain noncredit occupational programs may now qualify for Pell support if they align with state-certified labor market demand and meet new federal requirements for completion, job placement, and earnings outcomes (Brown, 2025; U.S. Department of Education [ED], 2025a).

    Supporting (or complementing) short-term and noncredit occupational education combined with state-funded business training grants and incumbent worker upskilling incentives can lead to significant economic returns. States will want to reconsider how to use Workforce Pell (as a new funding mechanism) to support certain industry-driven training programs to emphasize programs with short-term impacts to ensure Federal and state investments complement one another.

    What Workforce Pell Changes in the Talent Finance System

    Under the Workforce Pell rules developed through the Accountability in Higher Education and Demand-driven Workforce Pell (AHEAD) Committee process, governors or their designees decide which training programs are eligible for Pell support. To qualify, programs must prepare people for jobs that states have identified as in demand, high skill, or well paying. States are required to document how they define these jobs, how employers help validate demand, and how programs are reviewed at least every two years in coordination with broader workforce planning efforts (Brown, 2025; ED, 2025b).

    Eligible programs must meet three core requirements:

    • Completion and placement: At least 70 percent of participants must complete the program within 150 percent of the expected timeframe, and at least 70 percent must be employed in the second quarter after leaving the program.
    • Job alignment: Beginning in the 2028–2029 academic year, participants’ jobs must align with the occupation the program is designed to prepare them for, or with a comparable in-demand occupation.
    • Earnings-based cost limit: Program tuition and fees may not exceed the program’s “value-added earnings,” defined as median earnings three years after completion, adjusted for regional cost differences and reduced by 150 percent of the federal poverty guideline. (ED, 2025a).

    These requirements move short-term training decisively toward an outcomes-based funding model and raise the bar for programs historically financed through state grants, employer contracts, or student out-of-pocket payments. It also puts much more pressure on education and training providers to develop the data infrastructure to monitor worker/learner outcomes directly tied to the skill training offered.

    What the Evidence Says About Returns to Short-Term and Noncredit Training

    The evidence follows the design logic of Workforce Pell. Essentially, not all short-term training produces equivalent economic returns and that program selectivity matters. Increased earnings tend to be greater in fields with strong labor demand and wage progression while they are lower in fields that favor short, low-return offerings even when those offerings are responsive to employer needs.

    For instance, recent research by Bahr and Columbus (2025) provides one of the most rigorous large-scale analyses of labor market returns to community college noncredit occupational education. Using longitudinal administrative data from Texas, the authors find that participation in noncredit occupational training is associated with statistically significant earnings gains of approximately $2,000 per year within two years of completion, representing about a 3.8 percent increase over pre-training earnings.

    However, returns vary substantially by field, training type, and duration. Programs in transportation, engineering technologies, mechanics, and welding show returns two to four times larger than average, while some business, marketing, and information-related fields show returns that are statistically indistinguishable from zero. Returns are stronger for longer training durations and for employer-contracted training than for open-enrollment offerings, and they diminish sharply for repeat training spells (Bahr & Columbus, 2025).

    Implications for State-Funded Business Training Grants

    Workforce Pell will not eliminate the need for state-funded business training grants, but it will change how states should use them. First, for many entry-level, widely recognized credentials, Pell Grants can now cover training costs that states have traditionally paid for through their incentive programs. When short-term programs show strong earnings outcomes and meet federal requirements, Pell can finance tuition and fees directly. This creates a strong incentive for states to avoid paying twice for the same training. The effect will be most noticeable in high-demand programs such as commercial driver’s licenses, welding, nursing assistant, and child care credentials, where state and federal funding have often overlapped (ED, 2025a; Bahr & Columbus, 2025).

    Second, state training incentives are also likely to shift toward employer-specific and incumbent worker upskilling. Research shows that training designed and delivered in partnership with employers often produces stronger earnings gains than open-enrollment programs (Bahr & Columbus, 2025). These employer-driven programs typically focus on company-specific skills, new equipment, or process improvements that are critical for productivity but are not easily packaged as portable credentials. As a result, a clearer division of roles is emerging. Federal Pell dollars are better suited to support standardized, widely recognized credentials that feed broad talent pipelines, while state business training grants are best used to help employers upskill their existing workforce and adopt new technologies.

    Third, Workforce Pell also raises the bar for accountability across state training programs. Because federal funding now depends on clear evidence of program completion, job placement, and earnings outcomes, similar expectations are likely to extend to state-funded incentives. Legislators and oversight bodies may increasingly question why state dollars support training programs that cannot demonstrate results comparable to those required for federal assistance.

    Risks and Tensions for State Talent Systems

    Several policy risks arise where Workforce Pell intersects with state training incentives. One risk is the crowding out of flexible training. If states assume Pell will cover most short-term workforce needs and scale back incumbent worker programs, they may underinvest in the firm-specific training that supports productivity gains and technology adoption. Evidence shows that returns to training vary widely by field and design, and that some high-value, employer-driven programs may not qualify for Pell support even when demand is strong (Bahr & Columbus, 2025).

    A second risk involves misalignment around career pathways. While federal rules require Workforce Pell programs to be stackable over time, students who move directly into further education are counted as not employed for job placement purposes. This creates a disincentive for institutions to encourage advancement, which may conflict with state objectives to build a skilled workforce over the long term (Brown, 2025). In certain industries and occupations, longer-term education is valuable but benefits may not be seen within the three-year measurement period.

    A third risk relates to interactions with state aid. New restrictions limit Pell eligibility when non-federal grants or scholarships equal or exceed a student’s cost of attendance. As a result, states may need to revisit last-dollar aid programs and employer-paid training models to avoid unintentionally displacing federal funds or adding administrative complexity (U.S. Department of Education [ED], 2025b).

    Strategic design choices for states
    States can modernize business training grants and incentives to complement Workforce Pell rather than compete with it.

    1. Reframe business training grants as “Pell-complement” funding
      Use state dollars for what Pell does not do well: onboarding supports, transportation, childcare, tools, testing fees, paid release time, wage offsets, and employer coordination costs. This preserves a strong role for state incentives while letting Pell cover eligible tuition and fees where appropriate.
    2. Create a two-lane talent finance model
      Lane A: Pell-aligned portable credential pipelines in which the state role centers on rapid certification of in-demand occupations, employer validation, and helping institutions meet performance guardrails (Brown, 2025).
      Lane B: Customized incumbent worker upskilling and productivity training in which state incentives focus on technology adoption, process improvement, and firm-specific training that increases competitiveness but may not fit Workforce Pell eligibility.
    3. Add performance features to state incentives[BI2]  without copying federal rules
      Workforce Pell requires completion, placement, and earnings-related guardrails (Brown, 2025; U.S. Department of Education, 2025a). State grants can adopt lighter-weight performance signals, such as wage progression, retention, credential attainment, or productivity proxies, while maintaining flexibility for employers.
    4. Use the governor certification role to integrate economic development priorities
      Because governors or designees certify eligible programs and must review in-demand lists regularly (Brown, 2025), states can formalize a process that directly incorporates business attraction targets, cluster strategies, and major project pipelines into the “in-demand” determinations. This approach is one of the cleanest ways to align federal training subsidy with state growth strategy.
    5. Prepare for data and verification capacity needs
      In its analysis, the National College Attainment Network flags that governors will be responsible for verifying job placement and that occupational matching is hard with typical administrative data (Brown, 2025). If states build stronger wage record matching, credential registries, and employer reporting channels, they make compliance easier while also strengthening the case for complementary state training incentives.

    Bottom line for state economic development executives
    Workforce Pell should not replace state business training grants. However, it should encourage state to change what those grants support and how states justify their value. The most effective posture is “federal dollars for portable, demand-certified pipelines” and “state dollars for speed, customization, wraparound supports, and productivity-focused upskilling.” That combination minimizes duplication, protects flexibility for employers, and strengthens statewide talent competitiveness under the new federal rules (Brown, 2025).

    References

    Bahr, P. R., & Columbus, R. (2025). Labor market returns to community college noncredit occupational education. Educational Evaluation and Policy Analysis. https://doi.org/10.3102/01623737251360029

    Brown, C. (2025, December 22). Highlights from the AHEAD Committee: Workforce Pell consensus reached. National College Attainment Network. https://www.ncan.org/news/717100/Highlights-from-the-AHEAD-Committee-Workforce-Pell-Consensus-Reached.htm

    U.S. Department of Education. (2025a). Workforce Pell: Value-added earnings test. https://www.ed.gov/media/document/2025-ahead-workforce-pell-value-added-earnings-test-112702.pdf

    U.S. Department of Education. (2025b). AHEAD negotiated rulemaking: Eligible workforce programs and grant aid from non-federal sources. https://www.ed.gov

     

  • The Impact of the Childcare Challenge on Regional Economic Competitiveness

    Economic development succeeds when regions align talent, infrastructure, and employer demand. Access to quality, affordable childcare is a form of economic infrastructure that directly shapes labor force participation, business productivity, and regional competitiveness.

    National research consistently shows that inadequate access to childcare suppresses workforce participation and slows economic growth. Estimates place the annual cost to the U.S. economy at more than $120 billion in lost earnings, productivity, and tax revenue (First Five Years Fund, 2025). State-level analyses from the U.S. Chamber of Commerce Foundation show that childcare disruptions cost states an average of roughly 0.4 percent of GDP each year (U.S. Chamber of Commerce Foundation, 2024).

    Employer experience reinforces this national picture. A December 2025 statewide survey of hundreds of employers in Virginia found that childcare challenges are directly affecting hiring, retention, and productivity across the Commonwealth (Virginia Chamber of Commerce Foundation, 2025). Not only is childcare a family issue, but it is also a business constraint with measurable economic consequences.

    At the same time, policy research underscores that these impacts reflect deeper structural failures in the childcare market where prices remain unaffordable for families but still insufficient to sustain providers or pay early educators a livable wage (The Century Foundation, 2025). The result is chronic supply shortages and workforce instability that undermine regional labor markets.

    Why Workforce Participation Is the Economic Issue

    Labor shortages remain a defining challenge for state and regional economies. Childcare plays a large role in those shortages. Nationally, more than one-quarter of households report experiencing a job change due to childcare challenges, and a growing share of parents expect to leave the workforce entirely if conditions do not improve (U.S. Chamber of Commerce Foundation, 2024).

    In a December 2025 survey, Virginia employers report similar and often more severe impacts. About 88 percent of employers report that employees are late or miss work due to childcare issues, 65 percent report workers reducing hours, 41 percent report declined job offers or promotions, and 34 percent report workers leaving jobs altogether (Virginia Chamber of Commerce Foundation, 2025). Employers with nontraditional or unpredictable schedules report even greater disruption.

    These outcomes translate directly into reduced labor force participation and weaker execution of workforce strategies. Based on relevant academic studies and employer survey evidence, inadequate access to affordable childcare may reduce overall labor force participation by approximately 0.5 to 1.0 percentage points. Participation among parents of young children may be 7 to 10 percentage points lower than it would be under universally affordable and accessible childcare (Baker, Gruber, & Milligan; U.S. Department of the Treasury, 2021; Virginia Chamber of Commerce Foundation, 2025).

    For regions pursuing growth in sectors with a high share of women in their workforce (e.g., health care, hospitality, logistics, retail, and other labor-intensive industries), childcare access increasingly determines whether economic strategies succeed or stall.

    The Business Cost of Inaction

    For employers, childcare instability drives absenteeism, turnover, and replacement costs. These costs are rising faster than the cost of providing childcare as a retention and workforce stabilization tool. A comprehensive review of the economic literature finds that the average cost of employee turnover is approximately 40 percent of a worker’s annual salary, with a median closer to 24 percent and wide variation by occupation and industry (Bahn & Sanchez Cumming, 2020). In lower-wage and service-sector roles, replacement costs commonly range from 15 to 30 percent of annual wages. For specialized or managerial roles, costs often exceed annual pay.

    This research draws on 31 case studies across industries including health care, hospitality, retail, transportation, education, manufacturing, and finance. It captures both direct costs, such as recruiting and training, and indirect costs, such as lost productivity, service disruptions, and customer loss. These indirect costs are frequently underestimated but materially affect firm performance.

    Virginia employers link many of these pressures directly to childcare instability. In the December 2025 survey, 81 percent of employers reported that childcare challenges affect hiring and retention, and 85 percent reported impacts on business productivity (Virginia Chamber of Commerce Foundation, 2025). Together, the research and employer evidence show that childcare breakdowns create recurring business costs rather than isolated workforce disruptions.

    Household Affordability Shapes Regional Talent Supply

    Childcare affordability directly affects the depth and stability of the labor pool. Average annual childcare costs exceed $12,000 and consume more than 13 percent of household income in many states, far above the commonly cited affordability benchmark of 7 percent (Bipartisan Policy Center, 2020; Economic Policy Institute, 2025).

    In Virginia, affordability and access challenges are tightly linked. Eighty-six percent of employers report that their employees struggle with childcare expenses, and 65 percent report employees cannot find programs with open seats (Virginia Chamber of Commerce Foundation, 2025). When families cannot afford or access care, workers reduce hours, decline advancement opportunities, or exit the workforce.

    The Century Foundation emphasizes that affordability challenges cannot be separated from supply constraints. Public subsidies reach only a fraction of eligible families, while providers face rising overhead costs and persistently low wages that drive educator turnover and limit capacity expansion.

    Long-term impacts compound. Workers who leave the labor force for several years due to childcare constraints can lose hundreds of thousands of dollars in lifetime earnings, weakening household stability and shrinking the regional talent pool (Center for American Progress, 2016). Skills erosion during time out of the workforce raises reentry costs for both workers and public workforce systems.

    What Research Says

    There is broad agreement across federal agencies, business organizations, and labor economists on the core diagnosis. Childcare constraints caused by underinvestment and inadequate supply are market failures that limit productive capacity (U.S. Department of the Treasury, 2021). Employer survey evidence from Virginia strengthens this conclusion and shows that businesses are ready to engage.

    Evaluations of cost-sharing models, such as Tri-Share, suggest that these approaches can improve affordability and workforce attachment for participating families. Employers report improved retention and recruitment, and parents report a higher likelihood of remaining in the workforce (Public Sector Consultants, 2024). However, Tri-Share alone is not sufficient. The Century Foundation finds that scalable solutions also require expanded childcare supply, reductions in childcare deserts, and substantially improved wages for early educators.

    Limits and Design Choices Matter

    In short, affordability alone does not guarantee access. In regions with limited provider capacity, families may qualify for assistance but still struggle to find care. Cost-sharing works best when paired with strategies that stabilize provider finances and expand the early educator workforce.

    Scale matters. Pilot programs demonstrate proof of concept, but system-level labor force impacts require broader adoption and sustained funding.

    Employer participation hinges on cost and simplicity. The Virginia survey shows that cost is the biggest barrier preventing employers from offering childcare benefits. Employers call for increased state funding and incentives to crowd in business, private, and local investment (Virginia Chamber of Commerce Foundation, 2025).

    Administration matters. Programs that reduce complexity, pool public and private funding, and avoid tying benefits to a single employer offer more durable paths to affordability, supply expansion, and workforce stabilization.

    Implications for Regional Economic Development

    Childcare now sits squarely within economic development strategy because it is a critical talent pipeline constraint and disruptor for a stable labor pool. Regions that depend on a reliable workforce must address barriers to work. Evidence from national research, employer surveys, and policy analysis points in the same direction. Childcare constraints limit growth, and shared-responsibility models can help when embedded in a broader strategy.

    Public-private cost-sharing models can play a role when paired with investments that expand supply and address the true cost of quality care. Well-designed approaches crowd in employer investment, stretch public dollars, and address workforce barriers identified directly by businesses.

    To ignore childcare constraints is to accept avoidable limits on labor force participation and productivity. Integrating childcare into workforce and economic development strategy strengthens regions, supports employers, and expands opportunity.

    References

    Bahn, K., & Sanchez Cumming, C. (2020). Improving U.S. labor standards and the quality of jobs to reduce the costs of employee turnover to U.S. companies. Washington Center for Equitable Growth.

    Bipartisan Policy Center. (2020). Demystifying childcare affordability.

    Center for American Progress. (2016). The hidden cost of a failing childcare system.

    Century Foundation, The. (2025). The Tri-Share model is not a solution to the childcare crisis.

    Economic Policy Institute. (2025). Family budget calculator.

    First Five Years Fund. (2025). How a lack of affordable childcare impacts the economy.

    Public Sector Consultants. (2024). Michigan Tri-Share 2024 evaluation report.

    U.S. Chamber of Commerce Foundation. (2024). Untapped potential: How childcare impacts state economies.

    U.S. Department of the Treasury. (2021). The economics of childcare supply in the United States.

    Virginia Chamber of Commerce Foundation. (2025). Childcare is the foundation of Virginia’s economy: Employer survey summary (December 2025).

  • Rebuilding How America Delivers: What State Economic Development Leaders Can Do Next

    States are at a critical inflection point. Significant federal resources have flowed to communities, creating real opportunity to strengthen housing supply, modernize infrastructure, improve water systems, and drive regional growth. These investments also exposed a clear challenge. As AmericaFWD’s State of Play (released December 2025) makes clear, the systems used to plan, fund, and deliver projects are not keeping up with the scale or speed that today’s economy requires.

    For state economic development leaders, the message is straightforward and operational. Communities want results they can see. They want projects that move on schedule, control costs, and translate investment into jobs, competitiveness, and growth. Too often, delivery slows because responsibilities are fragmented, processes are outdated, and incentives across agencies do not align. Capital helps. Execution determines outcomes.

    The report highlights an important advantage that states already have. Local governments, utilities, and regional partners are ready to deliver. When outcomes fall short, the barrier is rarely vision or commitment. It is capacity, coordination, and process. States sit at the center of that equation. When state systems align funding, permitting, technical assistance, and accountability, projects move faster and perform better.

    AmericaFWD also reinforces a lesson state leaders know well. Housing, transportation, water, and economic opportunity operate as connected systems. Treating them separately raises costs and delays impact. Integrated planning across agencies and programs improves sequencing, reduces duplication, and strengthens returns for communities and employers alike. States are uniquely positioned to drive that alignment.

    A central takeaway for states is the importance of capacity. Communities with skilled staff, technical expertise, and clear authority consistently outperform those without it. Strategic technical assistance, clearer guidance, and streamlined state-level processes help local teams manage risk and deliver projects efficiently. This is not about adding bureaucracy. It is about improving performance across the delivery system.

    AmericaFWD’s State of Play offers a constructive path forward. Its near-term agenda focuses on strengthening local capacity, accelerating project delivery, modernizing systems, and sharing what works across states and regions. For state economic development leaders, the opportunity is clear.

    Apply these lessons now to turn investment into durable growth, competitive places, and visible results. This moment calls for sharper execution. The tools are available. The challenge is alignment and delivery. This report provides a practical blueprint for moving faster and delivering better outcomes for states and the communities they serve.

    Read full report here.

  • State Economic Development Bulletin – Issue 88, December 2025

    Issue 88, December 2025

    A Summary of Cutting-Edge Articles Affecting States

    HEADLINES

    SEDE News 🗞️

    Economy and Trade💰

    Workforce ⚒️

    Business Expansions and Incentives 📊

    SEDE News 🗞️

    SEDE Member Spotlight: Eric Paley, Secretary of Economic Development, Massachusetts Executive Office of Economic Development

    Paley joined Massachusetts EOED in September 2025. For more than 25 years prior to entering state government, Paley worked to shape the innovation economy as both a successful entrepreneur and a leading venture capitalist. As co-founder and Managing Partner of Founder Collective, Paley helped build one of the world’s highest-performing seed-stage venture capital funds. His investment portfolio includes groundbreaking technology companies across diverse sectors such as transportation, media, healthcare, consumer, advanced manufacturing and enterprise software, including Uber (NYSE), The Trade Desk (NSDQ), Omada Health, Whoop, Formlabs and Airtable. He served on the Board of Directors of The Trade Desk from its founding until 2023, including as a public director after the company’s IPO in 2016. At Founder Collective, Paley also launched Collective Future, an annual Boston conference bringing together Massachusetts’ most influential innovators across technology, government, media, cultural and non-profit sectors to collaboratively shape the future of the innovation economy.

    Paley holds an MBA from Harvard Business School and a bachelor’s degree from Dartmouth College. He lives in Cambridge with his wife and two children. He previously served on the Board of Directors of the YMCA of Greater Boston and has been engaged in philanthropic efforts primarily to alleviate food insecurity in Massachusetts.

    SEDE Members on the Move: Washington State Department of Commerce

    We’re pleased to share recent leadership changes within the SEDE Network. Join us in celebrating these transitions and welcoming new leaders to our community!

    Outgoing Leader: Grace Yoo, Assistant Director, Economic Development

    Yoo served as Assistant Director and led the Office of Economic Development and Competitiveness teams at Commerce, including industry sector development, circular economy, rural and marketing services, small business export assistance, small business finance and community support, finance and grant services, and contracts and procurement. She has transitioned to Snohomish County, WA as the Strategic Sector Development Director.

    Incoming Leader: Andrea Chartock, Assistant Director, Economic Development

    Chartock has led economic development and competitiveness projects globally for over 25 years, including supporting small and medium-sized enterprises to increase sales, jobs, exports and attract investments in more than 30 countries. She has extensive experience in the industry sectors important to Washington, such as agriculture (tree fruit, grain and berries), information and communication technology, tourism, creative economy, industrial symbiosis, forest products and clean tech. Chartock has a master’s degree in international policy studies as well as an undergraduate degree with honors from Stanford University.

    Manufacturing Momentum Summit: 2025 Report (Center for Regional Economic Competitiveness) U.S. manufacturers face serious workforce challenges reflecting rapid changes in technology that are changing the landscape of manufacturing. These changes will demand new skills and competencies that the current workforce system is not yet capable of supporting. The Manufacturing Momentum Summit, a national roundtable, provided a forum for finding solutions to the challenges facing the advanced manufacturing sector. Participants underscored the urgent need for data infrastructure, more consistent accountability systems, and better communication of workforce outcomes. The report is a summary of the discussions and insights from the August 2025 event.

    Opportunity Zones 2.0: A Guide for Governors and Mayors (Economic Innovation Group) The 2025 Reconciliation Act calls on governors to act by the summer of 2026 by nominating one-quarter of their low-income census tracts for Opportunity Zone (OZ) status. The zone designation process therefore gives governors a rare opportunity to shape the landscape of investment in their states — and channel that investment towards the low-income communities that need it most. The guide will explain OZs and how they work, summarize the national process, and establish a framework for selecting zones with purpose. Experience from OZ 1.0 underscores that OZ designation alone does not generate investment. Only well-chosen zones paired with development-ready policies will attract capital and deliver impact at scale.

    NSF TIP Launches Investment Explorer (NSF) The U.S. National Science Foundation Directorate for Technology, Innovation and Partnerships (NSF TIP) announced the launch of the TIP Investment Explorer, featuring a map and award data, to showcase the scale and impact of NSF TIP’s investments across the nation and in key technology areas. With the new TIP Investment Explorer, users can view interactive connections between lead awards and subawards, summary details by region and investment amounts, and at-a-glance visuals of funding levels.

    Economy and Trade 💰

    The Coalition Imperative: A Guidebook for How Regions Can Sustain Coalitions (Brookings) Cross-sector coalitions – public, private, nonprofit, and philanthropic actors working together on a shared, transformative vision that integrates talent, innovation, and placemaking strategies – offer a compelling approach to grow good jobs and expand economic mobility. When managed well, cross-sector coalitions can help regions achieve greater strategic alignment, resource efficiency, and economic resilience. It distills lessons into five foundational building blocks of cross-sector coalitions (aimed primarily at local and regional leaders), as well as five implications for the future of place-based economic policy (aimed primarily at policymakers and investors).

    The Nation’s Data at Risk: 2025 Report (American Statistical Association) The nation’s federal statistical system is facing a period of unprecedented strain, uncertainty, and transformation. Since the American Statistical Association (ASA) began monitoring the health of the federal statistical agencies in 2023, the system’s core capacity has been tested by significant staff losses, funding shortfalls, and threats to statistical integrity. The report highlights challenges and opportunities across five dimensions: staffing and capacity; system structure and funding; innovation; congressional engagement; and stakeholder support and concludes with a set of nine new recommendations to strengthen and modernize the nation’s statistical foundation.

    Economy in Place Data Visualization Platform (Harvard Kennedy School) Economy in Place is a new data visualization tool to explore local conditions and policies targeting place. It tracks conditions across 700+ commuting zones across the U.S., synthesizing data from a range of sources into interactive dashboards. The platform is practical for place-based practitioners, as it makes a range of data available in an integrated manner at the community zone level, and enables comparisons with neighboring and similar regions.

    Advancing Regional Innovation Economies (Nasdaq Entrepreneurial Center) Entrepreneurship doesn’t just power job creation, it underpins America’s global competitiveness, our communities’ resilience, and the promise of upward mobility. Small businesses account for nearly half of the U.S. workforce and two-thirds of new jobs. Findings show that entrepreneurial outcomes are patterned, not random, and that targeted interventions, private public partnerships, and data-driven policy can unlock untapped market potential in many communities. This report includes regional profiles of Columbus, Kansas City, Minneapolis-St. Paul, New Orleans, Pittsburgh, Portland, Richmond, and Seattle.

    Military Spending in Louisiana Up 77%, Generating $17B in Economic Impact (Louisiana Economic Development) Military-related spending in Louisiana generated more than $17 billion in total economic activity during fiscal year 2024, according to a new statewide analysis released by Louisiana Economic Development. The report shows notable expansion in the state’s defense sector since the previous study four years ago, underscoring the military’s continued impact on jobs, investment and community development. The analysis examines military installations, defense contracts, and retiree and veteran spending to measure the military’s economic impact on the state and within LED’s eight defined regions.

    Workforce ⚒️

    Sustaining Strong Rural Partnerships to Serve Student and Workforce Development Needs (RAND) Rural regions across the United States are facing enduring challenges in aligning postsecondary education with industry and workforce development to advance economic mobility. The Tristate Energy and Advanced Manufacturing (TEAM) Consortium, which spans 45 counties across Ohio, Pennsylvania, and West Virginia, brings together ten community colleges and 14 workforce development boards (WDBs) to serve a largely rural region. In this report, the authors examine the evolution of the TEAM Consortium from 2017 to 2025 and highlight how regional partnerships can tackle persistent workforce and economic development challenges in rural regions.

    State Snapshots of Early Childcare and Education (Urban Institute) Nationwide, the current supply of infant and toddler early care and education (ECE) does not meet demand, and the costs of care are unaffordable for many families.  Snapshots of the ECE landscape for all 50 states, the District of Columbia, and the United States overall can be found in this article.

    Meeting the Childcare Challenge: Opportunities for EDDs (NADO) Childcare costs and shortages are increasingly recognized as barriers to comprehensive regional development. This report examines the drivers of the challenge and the impact it has had on communities across the country. It highlights roles that EDDs are playing to increase childcare accessibility, quality, and affordability in their communities, and has recommendations for districts who have not yet been involved with childcare initiatives.

    NY Announces $40M for Workforce Development in Advanced Nuclear Energy (New York State) Governor Kathy Hochul announced $40 million in new annual workforce development funding over the next four years from the New York Power Authority (NYPA) to develop the workforce needed to support advanced nuclear energy in Upstate New York. The funding, approved by the NYPA Board of Trustees, will directly support the Governor’s call in June for the Power Authority to develop at least one gigawatt of advanced nuclear power in Upstate New York. The Power Authority board also awarded a total of $4 million to universities and organizations to develop and expand programs that prepare New Yorkers for high-demand careers in artificial intelligence, electromechanical trades, and advanced power systems to meet the evolving needs of the renewable energy sector.

    How Virginia Just Redefines the Future of its Biopharma Workforce (BioBuzz) Three of the world’s most influential biopharma companies – AstraZeneca, Eli Lilly, and Merck – announced a joint $120 million investment to build a workforce training center in Virginia. This investment is an indicator for how the future of life sciences talent will be built, distributed, and sustained across America. The new Virginia Center for Advanced Pharmaceutical Manufacturing (VCAPM) will anchor a statewide initiative designed to train 2,000 to 2,500 students annually through stackable credentials and degrees. If three global pharma powerhouses are willing to invest directly in regional talent creation, the message to other states and companies is clear: the competition for biomanufacturing growth will be won not by tax incentives, but by workforce readiness.

    Business Expansions and Incentives 📊

    Austin, TX New Deal with Southwest Airlines to Add 2,000 Jobs (KVUE-TV Austin) A deal approved between the Austin City Council and Southwest Airlines awards Southwest $2,750 for each new Austin-based hire over the next five years. In exchange, the airline plans to add 2,000 high-paying jobs with an average salary of $180,000 and invest in local workforce initiatives. The partnership is expected to bring in nearly $20 million in local tax revenue, and the incentive program will last for five years and pay Southwest up to $5.5 million. Southwest will also donate 10% of its per-job incentive to the city’s new child care assistance fund, and the funding will be contingent upon performance and compliance evaluations.

    California Awards $100M in Tax Credits to 9 Companies (Manufacturing Dive) The California Office of Business and Economic Development awarded $99.9 million in tax credits to nine companies that plan to establish or expand manufacturing operations in the state. The tax incentives, dubbed CalCompetes, will bring in more than $370 million in investments to California. The tax credits will also support an estimated 2,752 jobs, with an average annual salary of $139,000. The nine manufacturers include those that produce aerospace components, data center infrastructure components, and diagnostic devices.

    Rockwell Automation to Build Wisconsin Factory in $2B U.S. Expansion (Start-Midwest) Wisconsin industrial automation technology giant Rockwell Automation recently announced plans to build a new greenfield manufacturing site in Southeastern Wisconsin, as part of a broader effort to expand its U.S. production and digital capabilities. According to Rockwell, it will be their largest manufacturing campus in the world, spanning over 1 million square feet. The project will integrate the latest production technologies, including AI and analytics tools, to provide employees with access to advanced technologies and training.

    The State Economic Development Executives (SEDE) Network engages in regular events throughout the year. State Economic Development.org lists these activities and offers an interactive forum for discussion among peers. The SEDE Steering Committee includes: Sandra Watson (AZ), Chair; Clint O’Neal (AR); Quentin Messer (MI), Kevin McKinnon (MN); Michelle Hataway (MO); Thomas Burns (NV) Hope Knight (NY); Christopher Chung (NC); Andrew Deye (OH); Sophorn Cheang (OR); Ashely Teasdel (SC), Adriana Cruz (TX).

    Allison Ulaky of the Center for Regional Economic Competitiveness (CREC) led the development of this Bulletin; for questions on the content in this Bulletin or for information on the SEDE Network contact Bob Isaacson, CREC Senior Vice President.