SSTI Digest

Ohio unveiled the Columbus Innovation District this week, marking the third such announcement in less than a year, with a $100 million commitment from JobsOhio, the state’s nonprofit economic development corporation. Other partners in the Columbus initiative include Ohio State University, which will contribute $650 million, and Nationwide Children’s Hospital, with a $350 million commitment. The district is intended to bring together globally recognized education and healthcare research institutions to help create in-demand jobs and fuel $3 billion in economic impact for Columbus and Ohio over the next 10 years. The announcement follows closely on the heels of a similar district in Cleveland that saw a combined commitment of $565 million between the state, JobsOhio, the Cleveland Clinic and other partners, and a Cincinnati Innovation District announced last March. Gov. Mike DeWine said the Columbus district “will be a hub for innovation and growth in Ohio, expanding science, technology, engineering and math (STEM) educational opportunities, positioning Ohio to compete nationally for growing tech and healthcare employers.” The new Columbus initiative will include…

While natural gas production has continued to expand throughout the Appalachian region, the surrounding communities have yet to experience the economic and social benefits that were initially seen as surefire byproducts of the natural gas industry’s growing footprint within the area, according to a new report. The newly released study by the Ohio River Valley Institute weighs the impact natural gas production has had on the national economy against the continuing decline of jobs, income, and population levels throughout the Appalachian region. In their report, the Ohio River Valley Institute explores the economic and social impacts that the natural gas industry, and more specifically the industry’s use of hydraulic fracturing, has had on 22 counties within West Virginia, Pennsylvania and Ohio. While these counties experienced an increase in their contribution to the U.S. gross domestic product between 2008 and 2019, local economic prosperity within the region declined. This included a decrease in the counties’ share of the national population, their share of the nation’s personal income, and the area’s share of national jobs. The authors make note of several…

Ohio’s governor and other state leaders this week announced the creation of a new Cleveland Innovation District, with the state of Ohio, through the Ohio Development Services Agency (DSA), JobsOhio and the Cleveland Clinic committing a combined $565 million to the new district. The new district will bring together Northeast Ohio’s leading healthcare providers and education institutions with the goal of creating a pathogen center with global reach. DSA is committing to $155 million, $100 million will be in the form of a loan, the terms of which are still being finalized, and an estimated $55 million in Job Creation Tax Credits (JCTC) over a 15-year period. JobsOhio will invest $110 million and an additional $300 million will be invested by Cleveland Clinic.

In general, the effect of the pandemic on states’ budgets due to the wave of business, retail, and commerce shutdowns, as well as other reduced economic activity across the nation, is not entirely known, or too early to forecast; however, a number of states are beginning to experience the initial impacts of a substantial downturn. With several states having already enacted their 2020-21 budgets, special sessions are expected later this year to deal with declining revenues. Others ended sessions early without a new fiscal year spending plan in place. Many are also acting quickly to help mitigate the effects of lost revenues and an increased demand for services. Some of the states’ impacts and actions are outlined below. Alaska officials report that the drop in global oil prices will likely add $300 million to the state's current year (2020) budget deficit. The Alaska Journal of Commerce reports the state Legislative Finance Division told lawmakers that the state could experience a $600 million revenue reduction in the 2021 fiscal year, which starts July 1. In Arkansas, lawmakers were called into special session to address an estimated $353 million hit to the state’s…

A report on employment trends from hiring firm Robert Half found that 2020 presents greater challenges for employers looking to expand their workforce as the country’s labor market is near full employment and job openings remain at high levels. When looking specifically at technology hiring, the report reveals that in a survey of IT hiring decision makers, 86 percent reported challenges finding skilled workers. Such conditions have many states seeking new ways to address the skills gap and develop their workforce to attract or keep business. Several recent efforts are detailed below. Last month, Pennsylvania’s Keystone Economic Development and Workforce Command Center, a public-private partnership created last year by the governor to study workforce development, presented its first report to the Wolf administration. It found five major barriers to employment and a list of 42 recommendations to address those barriers. Gov. Tom Wolf’s budget proposes investing $14 million to support the recommendations, building on a $124 million investment to fully fund PAsmart, career and technical centers, industry partnerships, and apprenticeships to provide job skills training.…

In 2019, the administrations and legislatures in many states grappled with if and how to adjust state economic development initiatives to leverage the federal Opportunity Zone (OZ) program. The actions of 12 states that implemented new activities are described below. Notably, many of these state efforts require applications and reports on OZ projects — unlike the federal OZ incentive. Some created a new requirement specific to OZs and some states placed the OZ benefits within existing initiatives that already require such information sharing. Investor use of state OZ benefits, therefore, may be one means by which the costs and benefits of the federal program will be able to be evaluated. Readers should be aware that full appreciation of the state-level benefits for OZ investment go beyond the distinct initiatives described below. Of the 44 states that have an income or capital gains tax, all but five conform with the federal OZ benefits — meaning that investors will receive state capital gains deferrals, reductions and waivers. Alabama The state created a multi-tiered incentive structure providing increasing support as projects make a greater commitment…

Earnings for Appalachian manufacturing workers grew 3.4 percent from 2012 through 2017 to an average of $63,583. The growth is in the Appalachian Regional Commission’s Industrial Make-up of the Appalachian Region, 2002-2017, which reviews employment and wages by sector across the region. Appalachian workers overall saw earnings increase by 3.7 percent over the five years. In the rest of the country, manufacturing wage growth was 1.2 percent or 3.3 percent across all sectors. Wage growth was uneven within the region. Southern Appalachia saw the greatest gains, with 5.2 percent growth, driven in large part by Georgia’s increase of 6.5 percent. Appalachian counties adjacent to metros saw the largest increases (6.4 percent near large metros and 5.8 percent near small ones), although these gains still leave an earnings gap compared to metro-based manufacturing employees in the region. The comparatively strong percentage gains for manufacturing employees in Appalachia has not closed much of the earnings gap with workers outside the region. In 2017, the average manufacturing employee outside of Appalachia earned $79,098 — $15,515 more than those working…

Knowing that research universities are integral to the innovation in this country, states continue their efforts to build the economy by supporting efforts to move the research from the labs to the market. In our ongoing review of state activities in 2019 (see our stories on free tuition offerings, climate change and clean energy), this week we report on new initiatives launched in 2019 that were focused on commercialization of technology. The following programs represent some of those efforts. Alabama Alabama Gov. Kay Ivey participated in a ribbon-cutting ceremony in June for the state’s Invention to Innovation Center (I²C) on the campus of the University of Alabama in Huntsville. The I²C is a regional initiative that will serve as the focal point for incubation, education and support for entrepreneurs across a 15-county region in northern Alabama and south central Tennessee. The program seeks to foster, promote and accelerate the commercialization of technology-based ventures through incubation, co-working, mentorship, funding, and strategic support. The I²C is focused on stimulating the growth of both new and existing regional science and…

As the month of September marks national Workforce Development Month, states around the country continue to forge ahead with programs and initiatives to help train the workforce and attract more workers to open positions. This article highlights two new reports out that detail state efforts in various workforce programs, as well as calling out several new or proposed programs in Ohio, Vermont and Arizona that are designed to increase and develop the workforce in each of those states. The National Association of State Workforce Agencies (NASWA) has released its first State of the Workforce Report, which reports on efforts in all 50 states, including key labor market information and workforce agency profile, along with workforce innovations the state may have chosen to highlight. Similarly, the Education Commission of the States (ECS) has released its first of three 50-state comparisons on state policy models for connecting education to work. The first report in the series explores workforce investment boards, career pathway systems and financial aid programs that are designed to help ensure students’ educational experience prepares them for success in the workplace…

State and regional innovation programs continue to encourage significant economic growth across the country. The most recent example of the impact programs are having comes from JumpStart, a Cleveland-based venture development organization, which recently released its 2018 economic impact report. It found that companies in Ohio and New York fostered by JumpStart generated more than $1 billion in economic impact. This increased the cumulative JumpStart total to $6.6 billion since 2010. Want that kind of economic impact in your region? Attendees of the upcoming SSTI Annual Conference in Providence, Rhode Island, Sept. 9 – 11 will learn lessons learned from programs that are creating a better future through science, technology and innovation and leave the conference with actionable ideas to improve their states and regions. "We are a data-driven organization with a mission to economically transform communities, so it’s very important to study how the companies we’re assisting are impacting the economy," said JumpStart CEO Ray Leach. "This study highlights a strong group of growing startups who are continuing to generate significant…

This week we nearly finish our state of the state coverage, save two remaining governors (Louisiana and Minnesota) who have yet to present their addresses. In reviewing the speeches for news on innovation efforts, we find education taking the main stage in Florida and Tennessee, while Alabama and Ohio’s governors are hoping to build the state’s workforce, and North Carolina, still recovering from natural disasters, wants to decrease greenhouse gas emissions and provide tuition assistance for community college. Many governors are presenting separate budget addresses, and we will continue to monitor those for news on innovation initiatives. Alabama Gov. Kay Ivey, in a state reeling from catastrophic tornado damage this week, focused on rebuilding and growing the state economy, in part through technology activities, as well as educational efforts: “As we anticipate the rising demand of the computer science field, we are continuing our efforts to enhance computer science education in Alabama. Last year, I signed legislation establishing the Alabama School of Cyber Technology and Engineering. We also secured additional funding to create the Alabama…

The state of America’s foreign policy and the livelihoods of its middle-class are inextricably linked, according to a new report from Ohio State’s John Glenn College of Public Affairs and Carnegie Endowment for International Peace. The report’s authors, using Ohio as a lens for their examination, conduct a thorough quantitative and qualitative analysis on this relationship. They find that the relationship between foreign policy and the middle class is complicated, but that improving outcomes for the middle class will ultimately require a comprehensive foreign policy strategy that is tied to economic development. Notably, unlike the many pieces authored from academics and think-tank researchers on the coasts that focus on “the heartland” or foreign policy more broadly, this report features local perspectives from more than 100 economic development stakeholders across six regions in Ohio. The Carnegie Endowment for International Peace plans to release additional state-level case studies throughout 2019. U.S. Foreign Policy for the Middle Class: Perspectives from Ohio explore changes in the state’s manufacturing sector, the impact these…