SSTI Digest

More than 40 percent of Indiana’s manufacturing companies successfully implemented Industry 4.0 technologies in 2021, more than doubling the number that had reported that a year earlier, according to a recent Conexus Indiana report. The advanced manufacturing and logistics (AML) industries are considered the backbone of Indiana’s economy. Indiana manufacturers account for more than $100 billion of the state’s economy and employ 17 percent of the state’s workforce. The industry is at a crossroads, the report holds — challenged to adopt smart technologies and methods to increase its competitiveness. In 2020, Conexus Indiana and the Indiana University Kelley School of Business Center for Excellence in Manufacturing launched an annual survey to measure Indiana industries’ readiness and early adoption of Industry 4.0 technologies. That study provided a baseline for the follow-up study in 2021, which found progress on several fronts. For instance:

With a 20-year history, the Maryland Technology Development Corporation (TEDCO) is reporting an economic impact in 2021 four times greater than what they experienced in 2013. A new independent study found that its six core programs have provided “significant value” to the state’s start-up community, supporting over 10,000 jobs and more than $2 billion in statewide economic activity as of 2021. Meanwhile, BioCrossroads, a non-profit based in Indianapolis, has reported growth in its life sciences initiatives over the past 15 years. BioCrossroads conducts market research and promotes business and technological innovation in life sciences across Indiana. Both TEDCO and BioCrossroads have utilized public capital to develop industry within their respective target states.

Indiana and Illinois are two of the most recent states to implement innovation voucher programs, adding another tool to their efforts to increase economic activity among innovators and entrepreneurs.

Innovation vouchers are provided by governments to small businesses and help foster R&D with access to additional funding and resources. Depending on their design, they can incentivize collaboration between firms and public knowledge providers, such as universities and research institutes, and increase accessibility to crucial resources, such as lab space and specialized equipment, that small businesses would otherwise not have access to.

More than half of the nation’s governors have given their State-of-the-State addresses, and in this week’s coverage of the addresses, we complete our review of those that addressed their constituencies through January. As the COVID-19 crisis highlighted the need for greater broadband connectivity and affordability, we again see the state leaders focusing more attention on building out those capabilities. Diversifying state economies also plays a role in Alaska, Hawaii and New Mexico, while opportunities for development through renewables features in addresses from Nevada and New York. In addition to those states, this week’s installment takes a look at innovation-related initiatives set forth in addresses from the governors of Delaware, Indiana, Massachusetts, Michigan, Missouri, Montana, and Utah.

Eleven states are holding gubernatorial elections this year with nine incumbents seeking reelection, two of which are facing off against their lieutenant governor. Only one governor, Steve Bullock in Montana, is term-limited and unable to seek reelection. In Utah, Gov. Gary Herbert is stepping down from the position he has held for 10 years. While many of the races this year will reflect referendums on the current governor’s response to the COVID-19 pandemic, many of the candidates have announced their innovation and economic development initiatives. In the final stretch of the gubernatorial race, here are some of the candidates’ innovation-related policies, positions and prior accomplishments.

Delaware

Improved prospects for economic development, as opposed to concerns about government efficiency, can play an important role in building support for local government consolidation efforts. The importance of economic opportunities in government consolidation was a key conclusion within Ball State University’s recently published policy brief, Indiana’s Government Modernization Act & Local Government Consolidation Experiences: Process and Politics. The brief examined seven consolidation efforts that occurred in Indiana between 2008 and 2012 and explored the preexisting conditions of the areas.

While each consolidation attempt had unique variables, Ball State’s report did reveal several common elements. Contrary to previously held beliefs, consolidation processes are not necessarily born out of a crisis climate; some were found to be the product of a consensus between two governments to find new ways of solving their shared problems.

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.

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.

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.

Florida

Gov. Ron DeSantis attributed the in-migration of residents from other states to the lack of a state income tax in Florida, and said he will continue that policy with the expectation that further growth will ensue.

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

As a way to help encourage innovation and workforce development in Northern Indiana, a five-year, $42.4 million grant from the Lilly Endowment will support the Labs for Industry Futures and Transformation (LIFT) Network. An effort of the University of Notre Dame and the South Bend – Elkhart Regional Partnership, the LIFT Network will launch iNDustry Labs at Notre Dame’s Innovation Park, a burgeoning innovation district on the campus’ southern end. This is the sixth region in Indiana where the Lilly Endowment has made an economic development commitment.

The program will “serve as a front door to the University for industry partners and others in the LIFT Network to more effectively connect industry and community partners with faculty expertise, students, research capabilities and the university’s entrepreneurship and technology innovation hub,” according to a press release.

This week, we see broadband investment in Indiana; education initiatives that begin with pre-K and extend beyond high school in a number of states; lifelong learning approaches; apprenticeships; climate change and green energy initiatives in Nevada and Washington; and more on governors’ agendas. As governors across the country continue to deliver their state of the state addresses to their legislatures and constituents, SSTI monitors the speeches for news of innovation related initiatives. This week we bring you news of innovation funding from governors in Indiana, Iowa, Kansas, Missouri, Nevada, Rhode Island and Washington.

Indiana Gov. Eric Holcomb gave his address Jan. 15 before the General Assembly, highlighting among other things the state’s growing tech ecosystem. His plan is to take the state to “the next level”:

“But to stay ahead of our competition and keep breaking those jobs records, we must keep sharpening our economic development tools to give us the flexibility to attract more capital investment and more people to locate here. …”