State Economic Development Bulletin – December 2023
Register: State Planning Grantee Summit (CREC)
Job Growth Holds Up as Economy Gradually Cools (The New York Times)
Identifying Measures of Distress for Economic Development (Argonne National Laboratory)
U.S.-Mexico Trade Trends Indicate Nearshoring Has Momentum (Transport Topics)
BAE Systems Chosen as First CHIPS Act Grantee (The New York Times)
Actions to Strengthen Supply Chain Resilience (The White House)
Idaho Invests in Schools to Meet Workforce Needs (Spokane Journal)
Montana Announces Incentive to Boost Childcare Workforce (NBC Montana)
Aligning State and Local Incentives (Smart Incentives)
New York Plans to Invest $1 Billion to Chip Research (The New York Times)
Funding to Support Small Businesses in 20 States (Department of Treasury)
SEDE Hosts Meeting for Top Executives. (SEDE) The State Economic Development Executives (SEDE) Network is holding its Winter 2024 meeting for state economic development executives or their deputies in Las Vegas on January 29 and 30. Tom Burns (Executive Director of Nevada Governor’s Office of Economic Development) and his team 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. Registration is available here.
Webinar: Alternative Metrics: New Ways to Communicate Incentive Performance (SEDE) Economic development is more than business attraction and retention, but jobs are still the main metric by which programs are evaluated. How can economic development leaders move the conversation beyond “jobs, jobs, jobs” to convey the scope and impact of their efforts? On January 4 at 4pm ET, Ellen Harpel from Smart Incentives and Emily Maher from the National Conference of State Legislatures will discuss alternative metrics, pros and cons of implementation, and the metrics that resonate with legislators and other stakeholders. Register here.
Webinar: National State Planning Grant Webinar (SEDE) Please join CREC on January 11th at 3pm EST for the national State Planning Grant project update! At this webinar, we will present findings based on a comprehensive survey and detailed interviews with each State Planning Grant recipient. CREC will also debut the new State Planning Grant database and webpage and discuss the upcoming national State Planning Grant conference. Register here.
NADO & DDAA Washington Conference (NADO) Join the National Association of Development Organizations (NADO) and the Development District Association of Appalachia (DDAA) for sessions focused on regional development, the federal landscape, and the programs and policies that matter most to Regional Development Organizations and their stakeholders. Conference content will begin on the morning of Sunday, March 10 for NADO Executive Committee members, NADO Board members, NADO Research Foundation Advisory Committee Members, and DDAA Board Members. On the evening of Sunday, March 10, an opening reception will be held for all conference attendees, as well as a dinner for DDAA members. Conference plenary and breakout sessions begin Monday, March 11 and continue through 11:00 a.m. on Wednesday, March 13. Register here.
Register: State Planning Grantee Summit (CREC) Following the NADO & DDAA Washington Conference, CREC will be hosting a Summit for EDA Statewide Planning Grant recipients. This summit is open to both grantees and EDDs. Attendees will have the opportunity to meet other grant administrators and share best practices from their projects. The agenda includes insightful presentations and discussions where grantees can share valuable lessons learned in the grant administration journey. This is an opportunity to meet other grantees, while also offering a platform to provide crucial feedback and learn tips to improve grant applications and management. Register here.
Empowering Economic Development: CREC Policy Academy Progress (SEDE) Nearing the end of CREC Policy Academy, six teams comprised of state and EDD leaders are making progress toward aligning state and regional activities. The report provides detailed insights into the progress and strategies of each team, emphasizing the importance of continued collaboration and long-term alignment in shaping the economic future. Read about their progress and goals that may be helpful in your own state here.
Job Growth Holds Up as Economy Gradually Cools (The New York Times) Employers added 199,000 jobs last month, the Labor Department reported, while the unemployment rate dropped to 3.7%, from 3.9%. The increase in employment includes tens of thousands of autoworkers and actors who returned to their jobs after strikes, and others in related businesses that had been stalled by the walkouts, meaning underlying job growth is slightly weaker. This signals that the economy remains far from recession territory despite a year and a half of interest rate increases that have weighed on consumer spending and business investment. Reinforcing the picture of energetic labor demand, wages jumped 0.4% over the month, more than expected, and the workweek lengthened slightly.
Identifying Measures of Distress for Economic Development (Argonne National Laboratory) Economic distress measures serve as important tools for economic development professionals, providing structure and narrowing focus on key areas of investment. The use of distress measures can illuminate unseen challenges and enable policy makers and professionals to formulate strategies and justify resource allocation tailored to address the unique needs, stresses, and opportunities within their localities. This paper serves as a roadmap to understand the current landscape of distress measures and the origins of distress metrics in economic development, as well as to guide practitioners toward using distress measures, both traditional and novel, within the local economic development context.
Why Healthy Trade Relations Matter for Advanced-Technology Industries (ITIF) Global trade is key to U.S. competitiveness in many advanced traded sectors that have high fixed costs for R&D and engineering. Trade lets firms in these advanced-technology industries access larger markets to achieve scale economies, decrease marginal costs, and gain customer feedback. In 2021, the United States exported $391 billion in advanced-technology products (ATP) around the globe. Of that $391 billion, $124 billion (32%) was to three trading partners: Mexico, Canada, and China. More than half of exports in advanced-technology products went to just 10 nations.
U.S. Begins Discussions on Renewing NAFTA (Reuters) U.S. officials have begun informal talks to prepare for new negotiations on the North American Free Trade Agreement (NAFTA). In the U.S., these internal discussions include potential discussion topics with Mexico and Canada. NAFTA was substituted by the United States-Mexico-Canada Agreement (USMCA) in 2020, with this process being devoid of the “existential drama” that gripped the negotiations in 2017-2018.
U.S.-Mexico Trade Trends Indicate Nearshoring Has Momentum (Transport Topics) The post-pandemic trend toward nearshoring of trade is on course to finish the year strong despite an earlier slowdown in broader trade activity. The U.S. Census Bureau reported that imports from Mexico increased 6.3% year-over-year to $42.9 billion from $40.4 billion in October, while exports increased 6.7% year-over-year to $29.9 billion from $28 billion. Laredo, Texas, has become a focal point of the nearshoring boom as a trade hub situated on the border. TQL data showed that trade going through the city is up about 8% from last year, now making it the busiest trade port in the U.S. with growth expected to continue.
BAE Systems Chosen as First CHIPS Act Grantee (The New York Times) BAE Systems, a defense contractor, will receive the first federal grant from the CHIPS Act. The company is expected to receive a $35 million grant to quadruple its domestic production of a type of chip used in F-15 and F-35 fighter jets, as well as satellites and other defense systems. The grant is intended to help ensure a more secure supply of a component that is critical for the United States and its allies. The award is the first of several expected in the coming months, as the Commerce Department begins distributing the $39 billion in federal funding that Congress authorized under the 2022 CHIPS and Science Act.
Plan for Boosting Advanced Packaging Capabilities for Semiconductors (SSTI) Approximately $3 billion in funding for the National Advanced Packaging Manufacturing Program (NAPMP) will be used to drive U.S. leadership in advanced packaging. Advanced packaging is a cutting-edge design and manufacturing method that places multiple chips with a variety of functions in a densely interconnected two- or three-dimensional “package.” NAPMP will be dedicated to activities that include an advanced packaging piloting facility for validating and transitioning new technologies to U.S. manufacturers, workforce training programs to ensure that new processes and tools are capably staffed, and funding for projects. NIST anticipates announcing the NAPMP’s first funding opportunity in 2024.
Actions to Strengthen Supply Chain Resilience (The White House) Nearly 30 new actions to strengthen supply chains critical to America’s economic and national security were announced in late 2023, aimed to prioritize supply chain resiliency. Robust supply chains are fundamental to a strong economy. When supply chains are smooth, prices fall for goods, food, and equipment, putting more money in the pockets of workers. These actions include the creation of the Council on Supply Chain Resilience, implementing new cross-governmental supply chain data-sharing capabilities, and investing in critical supply chains.
Selections for Advanced Energy Manufacturing and Recycling Grant Program (DOE) The Department of Energy selected seven projects located in several states for negotiation of award for $275 million from the Bipartisan Infrastructure Law to revitalize communities affected by coal mine or coal power plant closures through investments in new builds, retrofits, and expansions of clean energy manufacturing facilities. Selections will increase the domestic manufacturing of critical materials, battery components, energy conservation technologies, and onshore wind to support the transition of former coal workers into clean energy jobs and shift energy infrastructure into hubs for future economic growth. This program is investing in projects that strengthen place-based economic development strategies and utilize existing assets in impacted communities. The next round of the program will include additional programming to include projects that reduce greenhouse gas emissions, another opportunity space for financial assistance to be deployed to small-to-medium manufacturers.
Selections for Industrial Assessment Centers and Building Training and Assessment Centers (DOE) The Department of Energy announced the selection of 27 new Industrial Assessment Centers (IAC) and Building Training and Assessment Centers (BTAC). These workforce training and assessment centers will serve hundreds of industrial facilities and buildings across 25 states and Puerto Rico. They’ll prepare students, apprentices, and incumbent workers for high-quality green jobs, from facility automation specialists to heating, cooling, and refrigeration professionals to advanced manufacturing technicians. Over 75% of these awards will go to organizations that serve disadvantaged communities. In the coming months, the IAC Program will release additional opportunities to expand the network of IACs at community colleges, trade schools, and union training programs.
Bipartisan Bill to Allow Pell Grants for Workforce Programs (The Hill) A group of bipartisan lawmakers introduced legislation to allow students to use Pell Grants for high-quality short-term programs that equip them to join the workforce immediately. The bill says programs must have a cost that lines up with the economic value they provide, give education that makes students competent for “in-demand industries” and offer a process for accreditors to oversee the process. Workforce Pell Grants would be available starting in 2025 and initially funded at $40 million, with another $30 million for each of the next four fiscal years.
How One Manufacturer is Building a Local Talent Pipeline (NAM) Penn Globe, a Connecticut-based outdoor lighting manufacturer, recently oversaw the launch of a long-awaited passion project: the Manufacturing and Technical Community Hub, or MATCH, a New Haven, Connecticut–area nonprofit contract manufacturing organization and training program designed to fill job openings in the sector. MATCH begins with a two-week, earn-as-you-learn program, offered in both English and Spanish. The organization offers training in everything from basic welding to CNC machining, allowing participants to choose the type of manufacturing that interests them most. Then, depending on the complexity of their chosen specialty, they may spend up to six additional weeks in paid, on-the-job training before being placed in jobs with local manufacturers. Unlike job-training offerings that expect a certain level of familiarity with an industry, MATCH starts from scratch. One of MATCH’s main goals is to reach parents, many of them women, who have left the workforce due to difficulty securing childcare.
Idaho Invests in Schools to Meet Workforce Needs (Spokane Journal) The state of Idaho is attempting to address workforce shortages by investing in middle and high school career technical education programs. As of Nov., $35.8 million of the available $45 million in funding through the Idaho Career Ready Students program has been awarded to school districts across the state. The one-time, $45 million investment—administered through the Idaho State Department of Education—is prioritized for in-demand and highly skilled career training, specifically in welding, fabrication, machining, agriculture, forestry, mining, nursing, cybersecurity, and other trades, according to the program’s website. The program allows schools to tailor their career technical education offerings to the unique needs of the community.
Montana Announces Incentive to Boost Childcare Workforce (NBC Montana) The Department of Public Health and Human Services (DPHHS) and Governor Greg Gianforte announced a $3 million in incentives to support Montana’s childcare workforce. The funding will be available to childcare providers and parents who are staff members at registered childcare facilities. The DPHHS estimates over 300 caregivers will be eligible to receive the one-year grant. The funding is part of the Montana Bright Futures project, which they unveiled earlier this year to increase access to quality childcare, promote strong, healthy families, and address childcare workforce availability, recruitment, and retention.
Business Expansions and Incentives
Aligning State and Local Incentives (Smart Incentives) On paper, state and local governments seem well-aligned when offering incentives. Many local programs are enabled by state statute. State incentive programs often require local participation, commonly a city or county contribution to the incentive package. State and local governments both have an interest in supporting good quality investments that benefit their citizens. In reality, incentives are often a source of conflict, with disagreements arising between state and local governments around incentive use. A few lessons learned in aligning state and local incentives includes better communication with local government, prioritizing coordination, and continuing communication even after the deal is done.
Manufacturing Company Plans for $90M Investment in Lewistown (KTVH) VACOM, a high-tech manufacturing company from Germany, is building a new headquarters in Lewistown, Montana. VACOM is a family-held business specializing in vacuum components, measurement technology, and other products using high-tech applications, from microscopes to microchips. The plan is to invest $20 million in the buildings and $15 million in equipment and technology for the first phase. The company expects to ramp up to 100 employees by 2026, and 200 by 2027.
New York Plans to Invest $1 Billion to Chip Research (The New York Times) Gov. Kathy Hochul of New York announced a plan to invest $1 billion to expand chip research activities in Albany, as the state aims to continue as a global semiconductor center. The plan is expected to create 700 new permanent jobs and retain thousands more and includes the purchase of a new version of one of the world’s most expensive and sophisticated manufacturing machines, along with the construction of a new building to house it. The initiative should draw $9 billion in additional investments from chip-related companies. State officials expect it to boost New York’s chances to be selected to host a new National Semiconductor Technology Center, a planned centerpiece of the research portion of federal money that Congress allocated in 2022 as part of the CHIPS Act.
Funding to Support Small Businesses in 20 States (Department of Treasury) The U.S. Department of the Treasury announced the approval of 20 additional state awards under the State Small Business Credit Initiative (SSBCI) Technical Assistance Grant Program, totaling more than $50.8 million. These awards will be used to provide legal, accounting, and financial advisory services to eligible small businesses applying for the SSBCI capital program and other government small business programs. The expanded SSBCI includes funding for technical assistance to help very small businesses – defined as businesses with fewer than ten employees, including independent contractors and sole proprietors – and underserved small businesses applying for SSBCI Capital Programs or other government small business programs.
Springfield Food Distribution Business Proposing $31M Expansion (MassLive) A food distribution company in East Springfield, Massachusetts, is planning a $31 million expansion that will attract some 350 new jobs to the city. Performance Foodservice expects to construct a 117,000-square-foot addition to its existing building. The company, which currently employs about 560 people, plans to prioritize hiring workers from the city and neighborhood. It also expects to use local labor for construction, the announcement said. Company owners have applied for a tax incentive, which was endorsed by the City Council’s Committee on Planning and Economic Development. The recommendation from the committee is to offer a 10-year tax incentive agreement that will call for the company to pay 10% of the assessed real estate taxes in the first year. That will increase by 10% annually until they reach the full amount. The incentive, which will save the company about 53% of its tax bill over the duration of the deal, will only be for the new addition. The company will continue paying the same taxes on its existing building and property.
Howell Foundry Announces $7.4M Modernization Project at Metal Casting Facility (LED) Howell Foundry, an industrial metal casting company, announced it is investing $7.4 million to upgrade its processing facility in West Feliciana Parish. The investment will allow the company to expand its utilization of state-of-the-art 3D technology and meet increasing demand from customers in the paper, energy, mining and petrochemical industries. The company expects to create 26 direct new jobs with an average annual salary of more than $59,000, while retaining 22 current positions. Louisiana Economic Development estimates the project will result in 27 indirect new jobs, for a total of 53 new jobs in the Capital Region. The company expects to start the three-phase expansion project this month and anticipates it will be complete by the end of 2027.
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; Don Pierson (LA), Vice-Chair; Kurt Foreman (DE); Kevin McKinnon (MN); Christopher Chung (NC); Andrew Deye (OH); Sophorn Cheang (OR); Adriana Cruz (TX); Joan Goldstein (VT); 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.