In This Week's Issue
SSTI News and Analysis
With Focus on Job Creation, Ohio Prioritizes Development
Efforts
JobsOhio, the private, nonprofit corporation authorized to
replace Ohio's economic development system,
would administer state funded programs and services that have a
direct, high-impact on job creation such as business loans,
infrastructure grants and deal-closing funds, according to a report
to the Ohio General Assembly. At the same time, a newly named Ohio
Development Services Agency (ODSA) would focus on programs with a
more indirect impact on job creation, including federally funded
programs and services geared toward communities and individuals.
Dividing the state's programs between the two
entities is expected to better align economic development
functions.
The report outlines the recommended restructuring of programs to
either JobsOhio or ODSA and explains the process used in the
assessment, which was conducted by TechSolve, an Edison Technology
Center based in Cincinnati.
TechSolve used four questions to guide their decisions on which
programs should be moved, retained or eliminated, and also based
its decisions on factors including direct impact of job creation.
Therefore, if the program directly supports the ability to make
competitive offers of assistance to businesses considering moving
to or expanding in Ohio, the program should be moved to JobsOhio,
according to the analysis. TechSolve concluded that some functions
within the Strategic Business Investment Division, including the
Office of Business Development, Office of Loans and Loan Servicing,
and some functions of the Office of Grants and Tax Incentives, as
well as the Ohio Tourism Division, should move to JobsOhio. Most of
the other divisions, especially those receiving federal funds,
would remain with ODSA.
JobsOhio will begin its work this month and accelerate to full
capacity by early 2012, according to the report. The legislature
appropriated $1 million to start the agency, but most of its annual
operating budget will come from the state's
liquor wholesale business, which has annual profits of $228
million, reports the Dayton Daily News. Those funds
won't be available until the end of the year,
however. Meanwhile, the newly structured ODSA would serve as the
successor to the Ohio Department of Development and would be
organized into three divisions: the Business Services Division, the
Community Services Division, and the Operations Division.
The six regional partners identified earlier this year to
coordinate economic development strategies across the state would
identify many of the leads and initiate deals for JobsOhio through
a "JobsOhio Network" within the
Business Services Division. Those agencies would receive public
funds of about $24 million over two years from the Ohio Third
Frontier Commission to staff and coordinate development activities
with JobsOhio, reports The Columbus Dispatch. The newly
structured Business Services Division would house the Innovation
and Investment Office and the following programs focused on growing
the state's tech-based economy: Ohio Third
Frontier, Edison Institutes, and Technology Investment Tax
Credit.
While many of the changes can be implemented through structural
reorganization without statutory changes, some of the
recommendations, including changing the
department's name, require legislative approval.
The transition also is expected to result in the elimination of 211
jobs. Read the report: http://www.development.ohio.gov/Documents/DSA_Report.pdf.
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Tennessee Announces New Program to Support Nine Regional
Business Accelerators
Commissioner of the Tennessee Department of Economic and
Community Development, Bill Hagerty announced the state will commit
up to $2.25 million for the Jobs4TN Regional Entrepreneurial
Accelerators program. The grants will award up to $250,000 to a
regional entrepreneurial accelerator in each of the
state's nine economic development regions. The
Jobs4TN Regional Entrepreneurial Accelerators were announced in
June as a part of Governor Bill Haslam's INCITE
plan. Read the press
release...
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White House Extends Deadline for Comments on SC2
Program
The Obama Administration has announced that it is extending the
comment period for public input on the Economic Development
Administration's (EDA) Strong Cities, Strong
Communities Visioning Challenge (see the July 13, 2011 and July 20,
2011 issues). Due to the strong interest that EDA has already
received, the deadline has been pushed back to September 7, 2011.
Respondents will help EDA shape the eventual federal funding
announcement for the SC2 Pilot Challenge, in which six cities will
be chosen to receive $1 million grants to fund economic visioning
efforts.
Find out more...
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Report on Middle Skill Jobs Gap Presented to Southern
Governors
Governors in the Southern states were presented with findings
from a new report on the growing gap in middle-skill jobs and urged
to adopt a three-part policy framework for reversing the trend
during the Southern Governors' Association
annual meeting last week in Asheville, NC. The report found that
middle-skill jobs account for 51 percent of the
region's jobs today, but only about 43 percent
of the region's workers are currently trained at
this level.
Middle-skill jobs, which include biomedical equipment
technicians, aerospace engineering and operations technicians and
computer support specialists, among others, are so important
because they often pay higher than average wages and exist at the
local level, meaning they are unlikely to be outsourced, according
to the report. Additionally, it takes less time to complete
training for these types of jobs and workers with middle-skill
credentials can often find employment in the innovation sectors of
the economy, such as advanced manufacturing, clean energy and
information technology.
The report provides governors with a set of strategies to close
the middle-skill gaps. These include:
- Establishing sector partnerships to ensure investments in
training and education are targeted to meet the full range of skill
needs of local industries, and that stakeholders connected to those
industries are engaged to ensure the greatest return for local
workers and firms;
- Supporting career pathways to ease transitions between
programs and across institutions. Career pathways adapt existing
programs and services and add new ones to enable individuals to
advance to successively higher levels of education and employment;
and,
- Counting middle-skill credentials by collecting and
aligning outcome data across the full range of agencies that
administer human capital investments.
Governors also can set a bold goal for the number of residents
to be trained with market-ready skills, work to change perception
of middle-skill jobs, attend a Workforce Investment Board meeting
to ask for support, and identify their state's
top ten demand industries and ask leaders to identify positions
that need filled.
State-level data such as jobs by skill level, job openings by
skill level, and percentage change in educational attainment over a
30 year period for each of the 16 Southern states and two
territories is included in the
report from the National Skills Coalition.
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U.S. Manufacturing at a "Moment of
Truth," According to New Booz & Co. Study
If the U.S. continues to neglect the manufacturing sector, the
sector's output could fall by half to meeting
less than 40 percent of the nation's demand,
according to a new study by Booz & Co. and the University of
Michigan's Tauber Institute for Global
Operations, Manufacturing's Wake-up Call. The study
was compiled using a sector-by-sector analysis of U.S. industrial
competitiveness coupled with a survey of 200 manufacturing
executives and experts.
The authors point out three significant findings that emerged
from the study. First, contrary to popular belief, U.S.
manufacturing has been much more productive. Currently,
U.S. companies produce about 75 percent of the products consumed by
the nation. Second, manufacturing will remain largely
regional. According to the authors, no single country will become
"the factory of the world." Instead,
manufacturers will increasingly locate factories close to major
markets, including the U.S., Europe and Southeast Asia.
Third, labor costs and currency rates are playing a decreasing role
in decisions by manufacturing executives. Instead, four other
factors are driving manufacturers' choices:
- The skill level and quality of factory employees, especially
for high-tech facilities;
- The presence of high-impact clusters;
- Access to nearby countries with emerging consumer markets and
lower-cost labor; and,
- A reasonably competitive regulatory and tax environment.
The authors contend that if U.S. business leaders, educators and
policymakers make "a series of identifiable smart
actions and choices" that a manufacturing-driven
economy could produce up to 95 percent of all products consumed by
the nation. According to the report, the series of actions and choices
includes recommendations in four policy areas:
- Attract the best workers — currently,
the U.S. faces a shortage of Qualified manufacturing employees. To
address this problem, policy makers must develop Educational
initiatives that promote engineering, relax federal immigration
regulations for trained knowledge workers (e.g., H-1B
visas) and establish state manufacturing education initiatives
(e.g., scholarships and other programs). Manufacturing companies must also offer a more collaborative
workplace experience, attract workers by attending campus recruitment
events and industry job fairs, increase college internships, form
partnerships with local colleges and universities and partner with
other manufacturers to jointly support specialized training
programs.
- Invest in high-impact clusters — In
the context of manufacturing, clusters are essential to grow
geographic concentrations of interconnected companies, suppliers,
service providers and associated institutions. State and local
governments can encourage clusters by investing in infrastructure—roads, ports, rail lines and communication
links—for centers that have begun to form
organically. However, studies have shown that governments should
not seek to micromanage cluster creation.
- Build a future with Mexico — Mexico offers a cost-conscious and
attractive alternative to China and other distant offshoring sites.
By developing production facilities there, manufacturers can tap a
relatively low-cost labor pool and maintain tight links with
R&D talent and facilities in the United States.
- Simplify and streamline the tax and regulatory structure — Policymakers should reduce taxation levels and
tax code complexity. In the Booz & Company survey, 61
percent of respondents cited government regulations and policies as
having a negative impact on their companies'
U.S. manufacturing output.
Read the report...
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Useful Stats
Educational Attainment of Residents More Than 25 Years Old,
2003-2008
Educational attainment rates in the U.S. rose in both 2007 and
2008, after falling in 2005 and 2006, according to data from the
U.S. Census Bureau's American Community Survey.
Despite the mid-decade dip, the overall trend over the past few
decades has been toward higher rates of attainment at the high
school, Bachelor's and advanced degree levels.
As of 2008, about 85 percent of the U.S. population had completed
high school, up from 80.4 percent in 2000 and 75.2 in 1990. About
27.7 percent of U.S. residents had a Bachelor's
degree or higher in 2008 and about 10.2 percent had received an
advanced degree.
SSTI has prepared a table showing the educational attainment by
state of residents aged 25 and higher for each of the five years
from 2003 to 2008. The Excel version also includes state ranks and
the change in attainment rates for the five year period.
During the 2003-2008 period, most states modestly increased
their education levels. For most, however, the results were mixed.
Only 16 states improved their attainment rates for high school
graduation, Bachelor's degrees and advanced
degrees. The rest experienced declines in at least one area. Only
Delaware suffered a decline in all three metrics, but, even in that
state, high school completions and four-year degrees were up from
2000.
During the five-year period, Maine had the largest increase in
its share of high school graduates. In 2005, 86.6 percent of Maine
residents had completed high school, a rate already higher than the
national average. As of 2008, 89.7 percent had their diploma.
Wyoming had the largest increase in Bachelor's
degrees, though it remains well below the national average.
Though there do not seem to be any obvious regional differences
across the country, both North and South Carolina experienced some
of the larger overall increases in education levels. Both states
increased high school diploma and Bachelor's
degree attainment rates by more than two percentage points. The
number of residents with advanced degrees in the Carolinas grew by
a more modest 0.6 of a percentage point.
The concentration of high school graduates in a particular state
does not appear to be related to Bachelor's and
advanced degree completion rates. Wyoming led the country in high
school completion in 2008, with 91.7 percent of resident having
received their diploma. The state, however, ranked 41st in
Bachelor's complete and 39th in advanced
degrees. The District of Columbia led in
Bachelor's and advanced degrees, but ranked 32nd
in high school completion. In the District, almost half (48.2
percent) of all residents had a Bachelor's
degree, and more than a quarter (26.7 percent) had an advanced
degree. Massachusetts ranked second in both metrics.
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TBED People and Job Opportunities
Job Corner
The Rhode Island Science and Technology Advisory Council
seeks to hire a program
manager to oversee activities of the RI Research
Alliance. The ideal applicant understands and appreciates the
need for supporting economic growth and job creation through
strengthening Rhode Island's collaborative
research platform and is familiar with federal and private funding
streams and how to build and assemble coalitions in order to be
more competitive for large multi-institutional grants.
Read more job postings
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Staff Picks
WSJ: Why Biopharma Start-Ups Should Think M&A, Not
IPO
This Wall Street Journal
blog post explains why biopharma startups and their investors
are likely to get a better deal from an acquisition rather than IPO
in today's economy.
Location Matters for Entrepreneurs: Top Cities by
Industry
Even in a down economy, some industries are flourishing by
setting up shop in cities that have become hubs for their industry
sector. In turn, the cities are supporting the businesses through
mentorship, access to funding and facilities. A map illustrates
seven industry hubs in cities across the U.S. drawing entrepreneurs
and investors.
Read more...
Tech Advocacy Group Touts Public-Private Collaboration for
State and Local Governments
TechAmerica recently released six IT policy recommendations for
state and local government officials focused on the fiscal
challenges across the public sector.
Read the recommendations...
Startup America Announces Board and Sponsors
The eleven founding board members of Startup America are
entrepreneurs from successful companies across the U.S. The
partnership also announced its first corporate sponsors.
Read the list...
Podcast: This Week in TechStars
In addition to their upcoming television documentary series on
BloomburgTV, TechStars produces a weekly video podcast featuring
up-and-coming tech entrepreneurs and leader in business incubation.
Watch this
week's episode...
USDA Unveils Atlas of Rural and Small-Town America
View stats on people, jobs and agriculture in USDA's atlas, which aims to
better understand the economic, demographic, environmental, and
social forces affecting rural regions and communities.
Rural Schools Adopting Shortened School Weeks
A four-day school week is becoming commonplace for many
districts in rural areas as schools struggle with budget cuts,
often leading to reduced class time.
Read more...
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