Latest News
State Economic Performance
Balance of Payments Dashboard Details Funding Flow between States and Federal Government (Rockefeller Institute)
The Rockefeller Institute of Government has released its second annual report analyzing the distribution of federal budget receipts and expenditures across the United States, providing policymakers and the public with vital information about the redistribution of federal funding and its impact in each state. This year, the report is accompanied by an interactive dashboard that allows users to explore the distribution of funds across all 50 states and view state-by-state breakdowns of how funds are spent.
Who Gives and Who Gets?
Topics and Trends
Industry Watch
Understanding Manufacturers’ Challenges Entering the New Year (NIST-MEP)
The MEP National Network comprises the National Institute of Standards and Technology’s Manufacturing Extension Partnership (NIST MEP), with 51 MEP Centers located in all 50 states and Puerto Rico. For more than a decade, NIST MEP has gathered data from its manufacturing clients asking them about their challenges, providing a peek at what is on the minds of CEOs. The prioritization of challenges has changed as the economic environment and the manufacturing landscape have changed. Some of the challenges have been consistent (such as continuous improvement and product development), while others have become increasingly important over time. The most significant changes to client responses focus on the issue of employee recruitment and retention. The share of MEP clients reporting this as a challenge has nearly tripled and is now the second most frequently reported challenge companies are facing.
Trade/Tariffs
Department of Commerce’s ITA Releases New Market Diversification Tool (International Trade Administration)
Among U.S. companies that export, more than half only export to one market. The Market Diversification Tool can help identify potential new export markets using a company’s current trade patterns. Based on the products a company exports and the markets it currently exports to, the tool uses an algorithm to rank potential markets the business may want to consider as future export markets.
Opportunity Zones
* Special SEDE Blog *
Opportunity Zones: Here We Go Again
Richard Cowden is a journalist and urban planner who served as executive director of the American Association of Enterprise Zones from 1985 to 1999. He retired in 2015 as a managing editor who covered financial services and commercial real estate law at Bloomberg BNA. He shares his insights with the SEDE Network on the Opportunity Zone program – “the @257;rst time since 1993 a true federal enterprise zone-styled policy has reached the operational stages. Like the early proposals advanced by Rep. Jack Kemp, it will test whether capital gains tax incentives can have a positive impact in urban and rural areas.”
How Opportunity Zones Could Transform Communities (Governing)
Opportunity Zones represent a breakthrough approach to community development. The program relies on an ingenious mechanism for spurring investment: Instead of tax credits or other traditional subsidies, investors are offered a temporary tax deferral for capital gains reinvested in designated opportunity zones. A significant hazard, however, is that both investors and opportunity zone communities will need extensive matchmaking to find each other. Therefore, states will need strategies for marketing and promoting their zones, as well as identifying promising investors and steering them toward the best opportunities. For more information, our partners at CDFA have extensive resources available, click here.
The Opportunity Zones program provides a tax incentive for investors to re-invest their unrealized capital gains into Opportunity Funds that are dedicated to investing into Opportunity Zones designated by the chief executives of every U.S. state and territory. Treasury has certified more than 8,700 census tracts as Qualified Opportunity Zones (QOZs) across all states, territories, and the District of Columbia. For a map of all designated QOZs, click here.
Ohio Adds Opportunity Zone Designation to State’s Site Selection Tool (Jobs Ohio)
The JobsOhio Site Selection Portal, which includes approximately 3,500 active commercial/industrial properties across Ohio, has been augmented to reflect Ohio OZs. Specifically, the site has been enhanced in two respects: (1) it displays all OZs across Ohio and, on a site-specific basis, tags the site as either in or out of an OZ. For example, if a user clicks on “South Afton Industrial Park,” the user can see that this Clermont County property is in an OZ under the “Incentives” segment. Since corporate clients think about incentives in total (not just one type), the OZ designation is listed among other incentives such as Enterprise Zone, Foreign Trade Zone, etc. (2) Second, the system also gives users a map of the OZs in Ohio without digging into a specific site by clicking on “Local Layers,” “Incentives,” and then OZs.
Inclusive Growth
Inclusive Growth Resources and Stories (OECD)
Inclusive growth is economic growth that is distributed fairly across society and creates opportunities for all. The Organization for Economic Cooperation and Development (OECD) works to promote policies that will improve the economic and social well-being of people around the world. In many OECD countries, inequalities are at their highest levels in 30 years and are widening. For instance, the top 10 percent of income earners take home over ten times more pay than the bottom 10 percent; children whose parents did not complete secondary school have four times less chances of making it to university than children who have at least one parent with a university education. The OECD provides data, analysis, case studies, and recommendations to learn from one another and invent solutions.
Innovation
Apple is Dropping $1 Billion on a Huge New Campus in Texas (Business Insider)
Apple recently announced that it is building a new $1 billion campus in Austin, Texas to house engineering, R&D, operations, finance, sales, and customer support. It will be powered by 100% renewable energy. The company said the new campus will span 133 acres, and house an initial 5,000 employees, with the potential to expand to 15,000 staff.
Apple has added 6,000 jobs to its US workforce in 2018 and is on track to create 20,000 jobs across the country by 2023. The company currently employs 90,000 people across all 50 states. “Talent, creativity and tomorrow’s breakthrough ideas aren’t limited by region or zip code, and, with this new expansion, we’re redoubling our commitment to cultivating the high-tech sector and workforce nationwide,” Apple CEO Tim Cook said in a statement.
The Austin campus is part of a more general push to expand in the US. Apple also announced that over the next three years, it will be adding 1,000 employees each to its sites in Seattle, San Diego, and Culver City, along with 100 extra in Pittsburgh, New York, Boulder, Boston, and Portland, Oregon.
Infrastructure
What Successful Public-Private Partnerships Do (Harvard Business Review)
Despite spending $2.5 trillion a year on roads, railways, ports, water, and other public infrastructure projects, countries around the world are still falling far short of what they need to invest. Yet, some public-private partnership (P3) initiatives have been highly successful, and they provide a trove of valuable lessons for managing any large project that involves multiple organizations. In particular, effective P3 efforts share three things in common: a commitment to a strong partnership beyond the terms of the contract; built-in mechanisms to share perspectives about the project (especially problems and concerns); and effective ways to rebound from failures to deliver.
Rural Broadband Emerging as Early Theme for 2019 (SSTI)
Action toward improving the availability and speed of broadband in rural areas is emerging as an early theme in 2019, continuing activity from 2018. Oregon, Washington and the USDA all announced new initiatives last month. Specifically, in mid-December, the USDA announced the availability of $600 million in grants and loans to support improvement of broadband accessibility across rural America.
Deal Makers
Incentives in Action
Nebraska Lawmakers Recommend Ending Advantage Act’s Incentives Early (Omaha World-Herald)
A Nebraska Economic Development Task Force, a committee of 10 state senators, released a report with recommendations that call for the state to end its top economic incentive program a year sooner than planned. The senators have called for the sunsetting of the Nebraska Advantage Act at the end of 2019 instead of 2020, saying that they do not believe the program is generating sufficient jobs for the millions of dollars in tax incentives that it provides. They also called on the state to design stronger and more targeted economic incentive programs to replace the 13-year-old Advantage Act and its affiliated programs.
Maryland Proposes $56.5 Million, including Incentives, to Spur Development and Business Creation in ‘Opportunity Zones’ (Baltimore Sun)
Maryland Governor Larry Hogan has proposed a $56.5 million set-aside for economic development and business-creating in Maryland Opportunity Zones. Hogan’s plan involves offering businesses additional state tax credits, job training programs, small business loans and affordable housing incentives, in some cases through proposed legislation.
The State Business Incentives Database is a national database maintained by the Council for Community and Economic Research (C2ER) with almost 2,000 programs listed and described from all U.S. states and territories. The Database gives economic developers, business development finance professionals, and economic researchers a one-stop resource for searching and comparing state incentive programs. To view the information available in the database, click here.
New Growth Opportunities
* We Need Your Help *
The SEDE Network promotes communication and collaboration among state commerce officials. This includes identifying promising practices, shared challenges, and information of mutual benefit. CREC is asking for the help of each state in completing two short surveys to be sent out next week asking about Rural Economic Development Efforts and Workforce Attraction Efforts underway. The responses to these surveys will provide us with valuable information and insights as we prepare next month to host more in depth conference calls on these topics among state economic development officials. During the calls, we will discuss with states lessons learned in these two topic areas. The responses from the surveys and conference calls will be aggregated and incorporated into upcoming white papers on the two topics and/or published in a future edition of the bulletin. Thank you for your assistance and continued support of the network.
Talent Development/Attraction
The Labor Force and Economic Effects of the Opioid Crisis State-by-State (American Action Forum)
While the human toll of the opioid crisis is unquestionable, rising opioid dependency is also likely impacting the nation’s labor market and economy. The study and web tool examine the impact of the opioid crisis on labor force participation and economic growth, both nationally and in each state. While several previous studies have estimated the economic costs associated with the opioid crisis, none has estimated the impact on workers and economic growth in each state.
New Program Offers Connecticut Workers Job Opportunities in Manufacturing (CT Public Radio)
Manufacturers in Connecticut are feeling the pinch of low unemployment, coupled with not enough skilled workers. To address the state’s manufacturing shortage, Connecticut is expanding a free, short-term training program that will help residents upgrade their skills and apply for those available manufacturing jobs. The program, Skill Up for Manufacturing, was initially a short-term “Intro to Manufacturing” course created through the Eastern Connecticut Manufacturing Pipeline Initiative. Now, the model has been expanded into a five-week training program that provides general curriculum that is applicable to most manufacturers in the state, as well as specific on-job training. Besides free classes, Skill Up for Manufacturing participants can receive travel reimbursement, daycare assistance, and a cash stipend for successful completion of the program’s benchmarks.
SEDE Network Updates
For further questions on the content in this Bulletin or for information on the SEDE Network contact Marty Romitti, CREC Senior Research Fellow, at mromitti@crec.net.