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. Although the event precedes the SSTI Annual Conference, the two events have separate registrations. Sandra Watson, the SEDE Chair and 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.

Economic Development Incentives Evaluation Toolkit (The Pew Charitable Trusts) A new tool from The Pew Charitable Trusts offers an array of resources—reports, webinars, technical assistance memos, testimonies to state legislatures, and presentations from a decade of research and analysis—to help policymakers, researchers, and the public better understand the impact of economic development incentives in their states and around the country. The materials in the toolkit are categorized by the state or locality studied and by subject matter, with each resource addressing a specific element of incentive evaluation and improvement.

Improving Economic Performance Through Strategic Alignment (CREC) CREC recently completed a project for EDA that focused on promoting better alignment in state and regional strategies. The project aimed to improve collaboration by documenting where it occurs successfully, help states and regions design and leverage common plans, and promote better alignment in state and regional strategies to ensure more impactful implementation and execution. This report summarizes CREC’s efforts to develop a more coherent planning process through such activities as developing the SLEDS Database, creating a Best Practices Guide, facilitating the Policy Academy for Strategic Alignment, analyzing Statewide Planning Grant Impacts, and more.

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 💰*

What 66 Economists Say About Where the Economy is Headed (Wall Street Journal)
Forecasters are increasingly upbeat about the economy’s prospects, according to The Wall Street Journal’s latest quarterly survey of business and academic economists. The following graphs in the report show what economists are thinking and how their predictions—and the economy—have changed over recent months and years. Survey respondents were asked a number of questions regarding the economy to compare answers both now and three months ago to determine how opinions changed. Expectations of the labor market were in line with what was said back in July, while predictions for GDP were better than expected.

The Job Market is Chugging Along, Completing a Solid Economic Picture (The New York Times) Fresh employment data for September showed that hiring picked up strongly, the unemployment rate dipped, and wage growth came in strong — adding to a string of recent data pointing to economic resilience. And the incoming evidence points to a clear conclusion: The economy is robust. Data revisions released last week showed that recent growth has been stronger, and incomes have been more solid than previously understood. Retail sales data are holding up. And now, employers appear to be meeting resilient consumer demand by continuing to expand their work forces. Taken together, the recent data suggests that the economy has found a measure of stability after the roller-coaster ride of a pandemic recession and recovery. Workers are no longer changing jobs at a frenetic pace; spending patterns and work habits are no longer in a state of constant flux. That is giving companies an opportunity to reset.

*Trade 📈*

GDP May Get Lift After U.S. Trade Deficit Drops to 5-Month Low (MarketWatch) The U.S. trade deficit sank 11% in August to a five-month low and appeared primed to give a helping hand to the official measure of economic growth in the third quarter. The trade deficit dropped to $70.4 billion in June from $78.9 billion in July. A shrinking deficit is likely to be neutral for GDP in the third quarter, but that depends on what happened in September. Lower deficits add to GDP. Exports rose 2% in August to a record $271.8 billion. Imports slipped less than 1% to $342.2 billion, but they are still near a record high. The Federal Reserve is also likely to keep cutting interest rates, and that could further boost demand for imported goods.

Advancing U.S.-Japan Economic Security Partnership and Countering China (Wilson Center) The global competition for leadership in advanced technology industries continues to intensify, and China has become an increasingly fierce and capable competitor across a range of high-tech industries from artificial intelligence (AI), quantum computing, and semiconductors to biotechnology, electric vehicles (EVs) and batteries, and robotics. Collectively, the author notes that China’s unremitting use of innovation mercantilism and economic coercion constitute a foundational threat to both the currently constructed global trade system and to the economic wellbeing of Japan, the United States, and other allied nations.

Global Trade Grows But Remains Vulnerable to War and Geopolitics (The New York Times) The World Trade Organization stated that the pace of global trade has been ticking up, but that rising geopolitical tensions and uncertainty over economic policy could hamper future growth. In particular, the widening conflict in the Middle East, the global center of oil production, could tangle shipping lanes and raise oil prices, the group said. That could make it harder and more expensive for people around the world to import the energy, food and other products they depend on. The organization said it had seen signs of global trade fracturing along political lines since the beginning of the war in Ukraine. Trade between countries that hold similar political views — based on voting patterns at the U.N. General Assembly — has grown 4 percent more quickly than trade between countries with differing views.

*Industry Trends 💡*

It’s Time to Make Manufacturing Cool Again (Forbes) The perception of manufacturing jobs has impacted the industry in the U.S., with many jobs being shipped overseas and young people having negative opinions of the industry. That’s a big problem. The reality is that American manufacturing is resurgent, with smart factories using advanced machinery to create incredible things—from electric vehicles to groundbreaking pharmaceuticals—with unprecedented speed and sophistication. But even as the industry reinvents itself, labor shortages threaten to derail the U.S. manufacturing renaissance. To bring Gen-Z recruits into the manufacturing workforce, we need to redefine what it means to be a blue-collar worker. That starts with leaning into a transformation that’s already underway and emphasizing the technological developments occurring in the industry that may attract new workers.

The Fiscal Frontier: Projecting AI’s Long-Term Impact on the U.S. Fiscal Outlook (Bookings) In recent years, AI has transformed from a niche tool to a mainstream application. This transformation has been hailed by techno-optimists who envision a future in which AI not only enhances productivity and economic efficiency but also solves complex societal problems. This paper introduces a framework for how AI will affect fiscal budgets through four primary channels: mortality rates and the size of the population, the price of health care services, demands for health care services, and aggregate productivity. Using this framework, it is shown that the nature of the AI shock is critical, as the impact of the shock on annual budget deficits could range from an increase of 0.9% of GDP to a decrease of 3.8% of GDP, with the latter instance effectively halving annual budget deficits. This potential deficit could be due to efficiency gains in health care delivery and how that may impact Social Security and Medicare. Overall, AI Offers a massive opportunity to transform the economy, perhaps especially in the realm of health care delivery.

*Workforce ⚒️*

Short-Term Credentials and the Labor Market: Who Stands to Benefit? (FedCommunities) There is a well-known relationship between the amount of education a person has and their eventual earnings. Generally, the more you learn, the more you earn. For this reason, higher education has often been seen as a road to economic security and intergenerational mobility—the pathway to doing better financially compared to your parents. However, recent trends in higher education are challenging this notion. This is where short-term credentials come into play. However, very little is known about short-term credentials compared to two- and four-year degrees. One of the most important factors in determining the value of short-term credentials is employers’ perception of them. If employers don’t value these credentials, what are the benefits to students? This line of questioning is followed to explore the pros and cons for employers and job candidates.

Is Manufacturing’s Talent Gap Finally Shrinking? (Forbes) For several years, there has been a stat bouncing around manufacturing circles that’s often used to illuminate the pressing talent shortage. A 2021 study from Deloitte and The Manufacturing Institute predicts that by 2030, the industry will be short 2.1 million jobs. Earlier this year, the researchers updated this figure to 1.9 million jobs by 2033. It’s a small adjustment, to be sure, but an adjustment in the right direction, nonetheless. Bringing more workers to manufacturing takes a wide range of investments and approaches. Three keys to talent gap progress are: investing more heavily in the next generation, raising salaries and focusing on culture, and adopting more advanced technology.

Hands on Programs Help Manufacturing-Inclined Students Connect the Dots (Industry Week) The manufacturing industry is changing fast, making it harder to find skilled workers. To tackle this challenge, manufacturers across the country are partnering with schools and industry organizations to engage young people early and explore new talent pools. One program making a difference is Pennsylvania’s What’s So Cool About Manufacturing. Its goal is straightforward: to raise awareness of manufacturing in local communities through a middle-school video contest that highlights what makes local manufacturers “cool.” Another great program for engaging young people is the Early College, Early Career (ECEC) program, launched by MAGNET: The Manufacturing Advocacy and Growth Network. This program aims to create a direct path to jobs in the manufacturing industry for high school students in underserved communities in and around Cleveland by providing students with certifications and hands-on work experience. These efforts show that the future of manufacturing is not just about innovation and technology; it’s also about inclusivity, creativity, and a shared commitment to developing a skilled workforce.

Maricopa County Invests $500K in Apprenticeship Program to Bolster Workforce (Hoodline) Maricopa County, Arizona is enhancing its workforce development efforts by adding $500,000 to its apprenticeship program, which now totals over $12 million in funding. The program aims to train people for in-demand industries like healthcare, IT, and construction, which need skilled workers. By investing in training, the county seeks to improve employment opportunities for residents while also supporting the local economy. The benefits of the program go beyond job placement, offering national certifications, tuition assistance, and an earn-while-you-learn option that can significantly help those struggling financially. Since launching in 2022, the initiative has enrolled 1,703 participants and aims to have 3,000 workers in apprenticeships by 2026. This effort is designed to not only create jobs but also promote economic stability for the entire county.

*Business Expansions and Incentives 📊*

Enterprise Zone Transparency Study (Smart Incentives) In 2023, the Oregon Legislature directed Business Oregon, in consultation with the Legislative Revenue Office, to conduct a study of the transparency of the state’s enterprise zone programs. Oregon takes transparency seriously, and takeaways from the study completed by Smart Incentives include evolving interest in agreement transparency, the need for better access to tax data, the value of plain language reporting, and that transparency is not free. The full report can be found here.

Company Completes its Largest Manufacturing Facility in America in Mississippi (The Clarion-Ledger) The biggest economic development project in Grenada County in recent memory is finally complete. After more than two years of work, Milwaukee Tool this week opened its largest manufacturing plant in the United States. The 500,000 square-foot facility will employ more than 800 people from eight surrounding counties and follows an investment of $60 million. Manufacturing is a common employer in and around Grenada, with up to 35% of the workforce employed in at least one area of the industry. The new Grenada facility is a link in the chain of the company’s other locations throughout Mississippi. Milwaukee Tool currently has manufacturing, distribution and assembly facilities in Greenwood, Jackson, Olive Branch and Clinton, having invested more than $209M in expansion in the state over the last seven years.

North Carolina’s Wolfspeed to Receive $750M for Semiconductor Plant (UPI News) North Carolina’s Wolfspeed Inc. has entered into an agreement with the North Carolina’s Commerce Department to receive $750 million in federal funds to help create a new silicon carbide wafer manufacturing facility. The plant, which will be built in Siler, N.C., will help the country build a reliable domestic supply of semiconductors during the artificial intelligence boon and future energy economy. The funds will come from the CHIPS and Science Act. Wolfspeed said it is the largest producer of silicon carbide technology in the world, pioneering the technology more than three decades ago. It is one of the fastest-growing components of the broader semiconductor industry. The CHIPS and Science Act is allowing local semiconductor companies like Wolfspeed have an international impact by building their domestic capacity.

$9M Expansion into Southeast Memphis, Bringing 200+ New Jobs (WATN Memphis) Texas-based Reconext, an aftermarket electronics company, is expanding to the Memphis area with a more than $9 million investment. The company said the operations expansion in Memphis will bring more than 200 new jobs, including engineering, administrative, and production positions. The company will locate in southeast Memphis and expects to be fully operational in early 2025.

Arlington EDC Offering Interest-Free Small Business Loans Up to $100K (WFAA-TV Dallas-Ft. Worth) According to Arlington Economic Development Corporation, through a partnership with nonprofit LiftFund, it is now able to offer small business loans of up to $100,000 completely interest-free. The new Interest Buydown Program is designed to offer small businesses flexible funding for startup costs, expansion, staffing, and more. The hope is that these businesses will utilize the loans to foster growth, innovation, and job creation. It should be noted that this program is open to Arlington-based businesses that have limited access to funding. According to LiftFund, since 2016, it has helped small business owners receive over $7 million in interest-free loans with various partnerships and programs around Texas.

Louisiana Steel Fabrication Company Plans $25M Expansion (The Advocate) Southland Steel Fabricators said it will spend $25 million to expand its St. Helena Parish manufacturing facility, a move that will create 80 jobs. The jobs, which will be created over the next 3 years, will have an average annual salary of $60,000, according to Louisiana Economic Development. The work will create 117 indirect jobs in metro Baton Rouge. The expansion will add 100,000 square feet to Southland Steel’s Greensburg plant, a move that will increase the robotic welding capacity by 50% and double material processing capabilities. Construction and installation of equipment is expected to start in mid-2025 and continue through 2026. The expansion is being driven by industrial mega-projects in the Louisiana petrochemical industry, which has led to surging demand for fabricated steel.

Goldman Sachs Expands $100M Small Business Program to Minnesota (St. Cloud Times) Investment firm Goldman Sachs launched the expansion of its 10,000 Small Business program into Minnesota. The program will provide investments and resources for rural entrepreneurs. Minnesota is now the seventh state in the 10,000 Small Business program, which provides rural business owners training and resources to grow their small business. Some of the program’s sessions cover topics like understanding leadership styles, identifying a target market and practicing negotiations. Goldman Sachs will invest $100 million across the seven participating states. The investment includes $75 million for community development financial institutions, which provide funding to underserved communities, to supply loans to small businesses. Another $15 million will go toward business education programs at local community colleges and $10 million will fund capacity-building grants. The program’s expansion into Minnesota also comes with $10 million for the Oweesta Corporation to support entrepreneurs in Indigenous communities.

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 74, October 2024

HEADLINES