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After a busy election season that saw gubernatorial elections in 36 states, newly elected and re-elected governors delivered their annual State of the State addresses, kicking off new programs and reviewing the conditions of their states. SSTI reviews the speeches every year and covers news of new developments and initiatives the governors have highlighted as they relate to the innovation economy. New programs are laid out here in the governors own words as excerpts from their State of the State or budget addresses. Not all governors delivered a State of the State, and some that did may not have revealed new innovation-related initiatives and so are not included in our coverage. Common initiatives among the governors that touched on innovation included an emphasis on workforce, education and broadband; water issues for Western governors; and, clean energy.

The recently approved Inflation Reduction Act with new incentives for electric vehicle ownership and energy efficiency is likely to continue a trend among states for the location of major economic development projects, a trend toward everything mega—megasites, megadeals, mega factories, and mega projects. These large-scale manufacturing projects typically feature incentives from state and local governments, such as access to shovel-ready megasites or large tax incentive packages. These new "mega" trends have raised the stakes and increased competition between states as they advocate for the bid of electric vehicle and battery companies looking to expand.

Alabama, Minnesota and Pennsylvania governors are proposing new or increased funding for innovation initiatives. Alabama could see a substantial increase in its Alabama Innovation Fund, while Minnesota’s governor is looking to boost the state’s startup ecosystem and Pennsylvania would increase funding for the Ben Franklin Technology Partners, which has worked for more than 30 years to grow the state’s innovation economy.

Attracting investment to a coal-dependent region with a state-of-the-art AgriTech research and development center is under consideration in Kentucky while Rhode Island is proposing greater investment in developing its blue economy. Kentucky Gov. Andy Beshear and Rhode Island Gov. Daniel J. McKee have both targeted new innovation initiatives to grow their state’s economy in their recently proposed budgets.

A new commentary from a senior policy analyst at the Federal Reserve Bank of Cleveland examines the extent to which disparities exist between Black and whites in labor market outcomes such as levels of labor force participation, unemployment rates, and earnings. Economic inclusion trends have been studied at the national level, but this commentary takes a look at how those disparities vary within and across states with a specific look at the Fourth Federal Reserve District states of Kentucky, Ohio and Pennsylvania.

Faced with the sudden, unprecedented fallout from the COVID-19 pandemic, Gov. Ned Lamont last month launched a new resource to provide workers and businesses in Connecticut with career tools, including partnering with Indeed and workforce training providers. Last week, the Mississippi Legislature passed a bill appropriating $55 million for short-term training and support of programs for training of employees and others displaced due to the health crisis. Minnesota is partnering with Coursera to offer free courses to its workers that have lost jobs because of the pandemic. And noting the reality that many of the jobs previously held in the service industry will not recover, the Wisconsin Economic Development Corporation reported that “the first priority for recovery is to reskill and upskill these workers, and get them back to work as soon as possible, at family-sustaining wages that offer them a strong future.” These efforts are just a few of the initiatives underway across the country to address the workforce crisis.

Governors’ focus on initiatives particular to their state in this latest round of state of the state addresses. As SSTI continues to review the speeches for new innovation proposals, we found states continuing to focus on education with more attention on teacher salaries and efforts extending all the way down to pre-K with a recognition that the future workforce is influenced by many factors. Florida is also hoping to grow its aerospace and manufacturing sectors, while Kentucky’s new governor is looking to ag tech and sports betting as new revenue sources. Occupational licensing reform is also a recurring theme in many states this year, along with clean energy and renewable fuels.

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.

As voters head to the polls next week, some will be deciding the fate of innovation and development-related initiatives, while voters in Kentucky, Louisiana and Mississippi will be voting in gubernatorial elections. The initiatives include a possible additional $3 billion in Texas for cancer research. And in Louisiana, Mississippi, New Jersey and Virginia, legislative chambers are holding regular elections. Those races and initiatives are covered below.

Funds for entrepreneurial training, technical assistance with R&D, and matching grants for innovative small businesses are among the items now part of Minnesota’s economic development toolkit thanks to new funding in the state’s recently signed FY 2020 biennial budget. Under the approved budget, Launch Minnesota will receive $2.5 million in each of the next two fiscal years to support innovation and entrepreneurship. Originally called the Minnesota Innovation Collaborative in Gov. Tim Walz’s proposed budget, the suite of Launch Minnesota programs will be administered by the state’s Department of Employment and Economic Development. The program includes four types of grants: funds for universities and nonprofits offering entrepreneurial training; funds for startups in need of R&D and other types of technical assistance; funds to alleviate housing and/or childcare expenses for entrepreneurs; and, matching funds for SBIR/STTR Phase II awardees.

NexusLA announced the launch of Apprenti Louisiana –  the state’s first registered information technology (IT) apprenticeship program. NexusLA, a Research Park Corporation subsidiary, will partner with Apprenti to support the program. Apprenti, a Seattle-based apprenticeship model, was launched in 2015 by the Washington Technology Industry Association and is now expanding in communities across the U.S.

The ability of states to deliver the services promised to its residents relies on their fiscal soundness. With most states beginning their fiscal year in July, SSTI has reviewed the current fiscal standing for each state and here presents a snapshot of our findings.

Most states ended their fiscal year with a surplus and continue to recover from the Great Recession, with a growing economy and job gains. However, they face continuing demands on their budgets, with expanded Medicaid payments and the growing opioid crisis confronting nearly every state. Such decisions affect the state’s ability to fund innovation efforts, from the amount of support available for higher education and STEM programs, to funding for entrepreneurship, and forging public private partnerships to strengthen innovation programming that the private sector cannot fully support.

Our analysis found that some states that rely on the energy sector to fund their spending priorities continue to struggle, while others are already factoring in anticipated revenues as a result of new Supreme Court rulings involving gaming and online sales tax collections.