SEDE Hosts Meeting for Top Executives (SEDE) The State Economic Development Executives (SEDE) Network is holding its Winter meeting for state economic development executives or their deputies in Phoenix on December 9^th immediately preceding the SSTI Annual Conference. Sandra Watson, The SEDE Chair and the President/CEO of the Arizona Commerce Authority will be hosting the meeting. The agenda will include discussions of current issues facing states and many opportunities for networking among the state economic development commissioners, secretaries and executive directors or their top deputy. Top leaders or their deputies can offer input on the agenda and register here.

Build to Scale Funding Opportunity Aims to Boost Technology Entrepreneurship Ecosystems (EDA) The U.S. Economic Development Administration is accepting applications through October 28 for its FY24 $50 million Build to Scale program to support organizations that strengthen entrepreneurial ecosystems to support entrepreneurs as they build and scale technology-driven businesses—and the employees in the new, good jobs they create—to make and deliver new technology products and services. Build to Scale grants fund programs that support innovators, entrepreneurs, and startups transforming ideas into the critical, emerging technologies of the future. EDA expects to make 40 to 50 awards, with expected award amounts spanning from the low hundreds of thousands of dollars up to $5 million.

NSF Awards $42.4M in New Grants to Support the Future of Semiconductors (NSF) The U.S. National Science Foundation, in partnership with Ericsson, Intel Corporation, Micron Technology and Samsung, announced $42.4 million in grants for its Future of Semiconductors (NSF FuSe2) competition. The investment will fuel groundbreaking research and education across various semiconductor technologies, advancing U.S. leadership in semiconductor research and innovation and addressing key challenges in this critical field, including emerging computing tasks and applications, energy efficiency, performance, manufacturing and supply chains. FuSe2 supports 23 cutting-edge research projects across 15 different states and 20 institutions, including nine first-time FuSe awardees, seven minority-serving institutions, and two NSF Established Program to Stimulate Competitive Research jurisdictions.

Over $3B to Support Battery Manufacturing Sector (DOE) The U.S. Department of Energy announced over $3 billion for 25 selected projects across 14 states to boost domestic production of advanced batteries and battery materials nationwide. The portfolio of selected projects, once fully contracted, are projected to support over 8,000 construction jobs and over 4,000 operating jobs. Batteries are critical to strengthening the U.S. grid, powering American homes and businesses, and supporting the electrification of the transportation sector. Administered by DOE’s Office of Manufacturing and Energy Supply Chains (MESC), the selected projects will retrofit, expand, and build new domestic facilities for battery-grade processed critical minerals, battery components, battery manufacturing, and recycling.

Webinars

October 24: The Role of AI in Economic Development (SEDE) Join the SEDE Network on October 24 for this webinar on the role of Artificial Intelligence (AI) in economic development. This presentation from Jeff DeBellis and Maggie Smith from the North Carolina Department of Commerce will cover general trends and specific applications of AI in economic development. Register here.

*Economy 💰*

U.S. Jobs Report Shows Hiring Has Shifted Into Lower Gear (The New York Times) Employers added 142,000 positions in August, the Labor Department reported. That was somewhat fewer than forecast, bringing the three-month average to 116,000 jobs after the two prior summer months were revised down significantly. Over the year before June, the monthly average was 220,000, although that number is expected to shrink when annual revisions are finalized next year. The unemployment rate edged down to 4.2 percent, alleviating concerns after July’s jump to 4.3 percent, which appears to have been driven by weather-related temporary layoffs. In other signs of stability, the average workweek ticked up to 34.3 hours and wages grew 0.4 percent over the month, slightly more than economists had expected but not enough to add significant fuel to inflation.

U.S. Economy is Heading for Soft Landing (Financial Times) The U.S. appears headed for a soft landing, as the economy expands while inflation drifts back to the Federal Reserve’s 2% target, according to projections from economists polled by the Financial Times. GDP growth is expected to be 2.3% in 2024 and 2% in 2025. Unemployment will rise to 4.5% by the end of this year, slightly above the current rate of 4.2% but still historically low, while the core personal expenditures index – the Fed’s preferred inflation gauge – will fall to 2.2% from 2.6% in July.

The Geography of Unequal Recovery (The New York Times) The U.S. economy has added some 19 million jobs in the past four years — all the jobs lost in the pandemic plus millions more. But it has been uneven. As of 2023, more than two in five U.S. counties — 43 percent — still hadn’t regained all the jobs they lost in the early months of the pandemic. The winners have some things in common. They are concentrated in the South and the Mountain West, particularly in suburban counties, which have done well in an era of remote and hybrid work. The losers, by contrast, tend to be concentrated both in big cities, which were hit particularly hard by the pandemic, and in rural areas, which were struggling long before the virus struck. The geography of that unequal recovery helps reveal how the pandemic — and the policies adopted in response to it — reshaped the U.S. economy, changing the kind of work Americans do and where they do it.

The Economic Implications of Aging Boomers and Emerging Millennials (Forbes) More than 4 million Baby Boomers are reaching 65 each year through 2027, and they are exiting the labor force in droves. Meanwhile, the core labor force is growing at a snail’s pace. How the U.S. manages these converging demographic trends will be a monumental challenge in the years ahead. With an aging population, the government will face higher obligations for medical and Social Security costs. There will be fewer workers relative to the number of retirees because of a decades-long decline in birth rates, making it more difficult to support government programs without tax increases, benefit cuts or growing debt. In the long term, immigration and higher productivity may be the only real solutions to our structural labor shortage. Overall, these demographic trends suggest some interesting opportunities.

*Trade 📈*

Trade Finance – A Catalyst for Global Growth and Sustainability (Forbes) Financing sustains and propels global trade. It assures that businesses can operate smoothly across borders by providing essential capital, bridging the gap between production and payment. Despite this critical importance, the global trade finance gap, estimated at $2.6 trillion last year, remains a barrier to growth. This gap hurts small and medium-sized enterprises across sectors as they struggle to secure the financing they need to innovate and expand. As the global economy evolves, trade finance will play an increasingly important role in driving growth, sustainability and social impact. By unlocking the potential of emerging markets, building resilient supply chains and integrating ESG principles into investment decisions, trade finance is helping to shape the future of global commerce.

U.S. Trade Deficit Widest in Two Years on Imports Surge (Industry Week) The U.S. trade deficit in July expanded to its largest since mid-2022. Overall, the trade gap widened to $78.8 billion, from a revised $73.0 billion in June. The growth was slightly more than analysts expected and the widest since June 2022. Businesses were likely to be frontloading imports ahead of an increase in tariffs. In July, imports jumped 2.1% to $345.4 billion, boosted by capital goods like computer accessories. Exports, meanwhile, edged up 0.5% to $266.6 billion. Among individual segments, exports of semiconductors rose but auto shipments and consumer goods fell as well.

U.S. and India Partner to Strengthen Semiconductor Supply Chain (Computer World) A significant step towards reshaping the global semiconductor ecosystem, the U.S. Department of State has partnered with the India Semiconductor Mission (ISM), under the Ministry of Electronics and IT, to explore collaborative opportunities. This partnership is part of the U.S.’s broader strategic initiative under the International Technology Security and Innovation (ITSI) Fund, created by the CHIPS Act of 2022, and aims to secure a more resilient, diversified, and sustainable global semiconductor supply chain. The initial phase of this partnership includes a comprehensive assessment of India’s existing semiconductor ecosystem and regulatory framework, as well as workforce and infrastructure needs. This new collaboration between the U.S. and India is seen as a critical move to address such vulnerabilities by enhancing production capabilities, ensuring diversification, and reducing dependence on a few key markets.

*Industry Trends 💡*

$9 Million to Bolster Clean Domestic Manufacturing and Support Small-Medium Sized Businesses (DOE) The U.S. Department of Energy (DOE) announced an additional $9 million investment in the Industrial Training and Assessment Centers (ITAC) Implementation Grants program. This funding would support 47 small- and medium-sized manufacturers (SMMs) across the country to implement a wide variety of energy and efficiency projects, including installing onsite solar and heat pumps, improving lighting and heating, and electrifying industrial equipment and fleets. The grants announced will help SMMs, which comprise more than 90% of the nation’s manufacturing base, leverage federal support and local expertise to identify cost-effective opportunities to improve energy efficiency, increase competitiveness, and reduce emissions.

Commercial Construction Industry’s Economic Impact on Alabama (Alabama Political Reporter) A newly released report sheds light on the substantial economic contributions of the commercial construction industry in Alabama. The report, titled “Economic Impact of Commercial Construction in Alabama: 2021 Update,” provides comprehensive insights into the industry’s growth and its far-reaching effects on the state’s economy. From 2015 to 2021, the industry’s total impact grew from $15 billion to $17.2 billion. In 2021, the total output produced by commercial construction in Alabama reached an impressive $9.4 billion, marking a significant 97 percent increase compared to 2015 figures. This expansion underscores the industry’s robust performance and pivotal role in driving economic development across the state. Beyond the direct impacts on output, payroll, and employment, the report delves into the broader economic effects of the commercial construction industry. It estimates the total economic impact of commercial construction activities in 2021. It reveals staggering figures: an output impact of $17.2 billion, an earnings impact of $11.4 billion, and an employment impact equivalent to 200,000 full-time jobs.

Michigan Manufacturers Tap Women to Support Industry’s Growth (ArcaMax) As Michigan makes a push to increase manufacturing production and the workforce pipeline in the state, women could play a vital role in the industry’s growth. Women make up about 28% of the manufacturing field in Michigan, according to U.S. Census Bureau data released in 2021. That’s slightly lower than the national figure of 30%. The Michigan Maritime Manufacturing Initiative recently received $50 million in federal funding to train workers for defense production. However, women may not be familiar with what modern manufacturing entails, which presents a challenge in attracting them to the industry. The initiative is focusing on promoting a contemporary view of manufacturing through storytelling. They share stories of women in the industry through their “Hear Her Story” blog series and a podcast, with the goal of showcasing the innovation and technology in modern manufacturing. Women’s participation in manufacturing can help curb the talent shortage, and it’s important to challenge the perception of traditional male and female-dominated roles.

*Workforce ⚒️*

Childcare Use/Expenses Among Families of Different Income Levels (Federal Reserve Bank of Chicago) The Chicago Fed used data from a national survey conducted by the U.S. Census Bureau to examine the childcare arrangements for young children while their mothers were at work, in school, or otherwise not available and how much families paid for these arrangements in recent past. The focus is on arrangements used and amounts paid by families with low incomes, particularly those living in poverty, and compare those with the arrangements used and amounts paid by families with higher incomes. Families living in poverty were substantially less likely to use childcare facilities than families with the highest incomes. This gap in the use of childcare facilities between families in poverty and those with the highest incomes widened during the pandemic. One reason for this gap in the use of childcare facilities is that, in general, facilities are a paid childcare arrangement and for all but families with the highest incomes, more than half of families with young children do not use paid arrangements. However, the gap in the use of childcare facilities between families in poverty and those with the highest incomes remained large even among families that did pay for care.

Massive Workforce Program Launches to Bolster Arizona Economy (KTAR News) The new Ready AZ Initiative is designed to help Arizonans find good-paying jobs. And an executive order mandate that at least 1% of federal grants Arizona receives be specifically allocated to workforce development. This will ensure workers have necessary skills to work on the projects these federal grants fund, such as building semiconductor manufacturing plants, and will also serve Arizona’s long-term economic growth by creating opportunities for current and future workers. The executive order also created the governor’s workforce cabinet, which is responsible for workforce and economic planning. Essentially, the governor’s workforce cabinet will benefit the Arizona economy by connecting residents with workforce education and training, with the executive order allocating over $25 million to workforce development.

Transit Workforce Center Launches Map for Apprenticeship Programs (Mass Transit) The Transit Workforce Center (TWC) has launched a new interactive map, which displays registered apprenticeship programs and mentorship programs at U.S. transit agencies. The tool provides an engaging way to explore how apprenticeship and mentorship programs are being adopted and implemented as an effective workforce development strategy in American transit. The interactive map features a user-friendly interface that displays a variety of relevant information about the programs and transit agencies featured, gathered from national databases and with the assistance of transit unions and agencies. Each map point links to a registered program’s apprenticeship standards, as well as a link to workforce data from TWC’s Transit Workforce Data Dashboard, specifically the Agency Explorer page that TWC says paints a picture of worker demographics. Additionally, the data points contain links to articles and other resources related to a particular program, such as union and transit agency news releases, TWC videos, webinars, and blog posts and local media reports. The map can be found here.

New Semiconductor Pilot Program at UCLA Prepares Community College Students (EurekAlert!) A new workforce development program co-led by the California NanoSystems Institute at UCLA, or CNSI, UCLA Samueli School of Engineering and Pasadena City College aims to train California students for the growing semiconductor industry. The goal of the Semiconductor Manufacturing Program Pilot is to provide critical hands-on training in the industry and help create a skilled statewide workforce that can support semiconductor companies. The program is the final step in a three-pronged approach by CNSI and UCLA Samueli to address workforce development needs in California. With support from federal and state programs and donors, these programs work to enhance student engagement with industry partners and address the need for training that aligns with the needs of high-tech employers. The semiconductor program is built in two stages: a two-week training module for lithography and a monthlong full-time internship at an assigned lab. Students receive a stipend to support them during the internship. For the inaugural summer pilot, 92 applications were received for 10 spots.

*Business Expansions and Incentives 📊*

Evaluating Workforce Development Incentives (Smart Incentives) The Pew Charitable Trusts hosted a webinar on August 20 exploring approaches to evaluating workforce development and job training incentives. Ellen Miller from Virginia’s Joint Legislative Audit and Review Commission (JLARC) and Ellen Harpel from Smart Incentives presented their experiences evaluating workforce incentives in Virginia and New York. Workforce incentives are a growing category. According to the C2ER state incentives database, workforce incentives represent roughly 10% of the total programs, but between 2020 and 2024 their number doubled. As long as workforce and talent remain a top economic development priority, the growth trend will likely continue. Two takeaways are the need for more data to be able to determine whether participating workers are better off as a result, and indications that grants, rather than tax credits, are a more efficient way to achieve the stated policy goals.

Incentive Package of $185.9M Lands $1.4B Natron Plant (The Center Square NC) Plans for a $1.4 billion plant bringing 1,000 jobs to Edgecombe County in eastern North Carolina include a county incentive package worth up to $129.6 million, and another from the state for $56.3 million. California-headquartered Natron Energy is planning a factory producing sodium ion batteries for data centers, electric vehicle fast chargers and various industrial uses. Natron has picked up $20 million from the U.S. Department of Energy and plans a facility 40 times larger than it built in Michigan, according to published reports. The plant is expected to be operational in 2027, and the project is to create 1,062 jobs over five years with an average salary of $64,071. The state says return on investment of public dollars is 22%, or $1.22 for each dollar of potential cost after the grant’s reimbursement payments.

Incentives Lead to $15B Data Center Boom in Indiana (Government Technology) Five years ago, Indiana enacted a law offering tax incentives for data centers. Since then, tech giants like Amazon, Google, Microsoft, and Meta have decided to pump more than $15 billion into construction of data centers across the state. Major new data centers are springing up in LaPorte and nearby New Carlisle to help meet the demand for artificial intelligence, as well as the growing need for data for streaming, medical records, banking and countless other functions in an increasingly digitized society. The hope was to provide financial incentives for large technology companies to build data centers in Indiana. Data centers are expected to account for 8% of electricity usage in the United States by the end of the decade, up from 3% in 2022.

Commerce Invests $2.5M to Support the Semiconductor Industry in Oswego, New York (EDA) The U.S. Economic Development Administration is awarding a $2.5 million grant to the County of Oswego Industrial Development Agency in Oswego, New York, to support the growing manufacturing and semiconductor industries in the region. This grant will support expansion of the Oswego County Industrial Park, including water and roadway improvements, to support business development. This EDA investment will be matched with $2.5 million in local funds and is expected to create 1,200 jobs, retain 250 jobs, and generate $265 million in private investment, according to grantee estimates. As the region prepares for the new Micron facility, it is important to begin investing in the regional production capability and downstream suppliers.

Intel Confirms $3B More in Federal Aid to Produce Chips (The Columbus Dispatch) Intel has won another federal grant worth up to $3 billion as it continues work on its $28 billion project in Licking County, Ohio. The computer chip company said that the new round of funding is for the U.S. government’s Secure Enclave program in which Intel will produce semiconductors for the military. The award is in addition to a preliminary award of $8.5 billion in grants and $11 billion in low-cost loans that Intel received in March from the federal CHIPS and Science Act that was passed in 2022. The legislation also comes with a 25% federal tax credit. Intel also is collecting more than $2 billion in incentives from the state and New Albany, Ohio.

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; Joan Goldstein (VT), Vice-Chair; Kurt Foreman (DE); Kevin McKinnon (MN); Hope Knight (NY); Christopher Chung (NC); Andrew Deye (OH); Sophorn Cheang (OR); Adriana Cruz (TX); and Mike Graney (WV).

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.

State Economic Development Executives Network (SEDE)

State Economic Development Bulletin – Issue 73, September 2024

HEADLINES