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Louisiana Moving Toward Cluster-based ED

March 10, 2000

Citing the need to attract knowledge- and technology-based businesses to the state, Louisiana Governor Mike Foster has proposed converting the state’s Department of Economic Development (DED) into Louisiana, Inc., a private, state-chartered, not-for-profit corporation.

The corporation would be designed around a cluster-based economic development strategy focusing on nine traditional clusters and six “seed” high technology clusters with foundations in the state’s university research centers. Each of the clusters would have a Cluster Developer on staff at Louisiana, Inc, to lead the economic development efforts for that cluster by: conducting market analyses for the cluster; defining a market niche or vision for the state’s sector; identify best practices in other states; and prepare business plans to guide the corporations activities to support and grow the cluster. Each Cluster Developer’s compensation package would be performance based.

Seven new service offices would be responsible for coordinating federal grants, providing direct business assistance and financial services, fostering university/technology linkages, and handling communications and PR.

The state’s research universities are recognized as integral partners in the new development strategy. The Governor’s presentation to the media says,“We must capitalize on the research being performed in our universities and grow the dynamic sectors of our economy if we are going to end the brain drain.” Louisiana, Inc. would be responsible for establishing a new Research Foundation to assist the universities in streamlining technology transfer. The corporation also would provide support for developing university-related business incubators and research parks.

In addition to the cluster strategy, Louisiana, Inc. would assume responsibility for many existing economic development programs, including among others, the Technology Transfer Program, the Louisiana Economic Development Corp, the Small and Emerging Business Development Program, and the Workforce Development and Training Program. All regulatory functions and boards currently in DED would be transferred to other state agencies.

The new organization would receive DED’s $6.5 million annual appropriation. While all 127 positions within DED would be eliminated, DED staff may apply for the new unclassified positions within Louisiana, Inc. Louisiana, Inc. is expected to employ 24 people at higher salaries and to outsource many services.

The proposal requires an amendment to the state’s constitution and companion legislation defining the programs and responsibilities for the new corporation. The state legislature will not convene its 2000 Session until April 24, 2000.

More information on the new initiative is available on the Governor’s web site: http://www.gov.state.la.us/