SSTI Digest

Ten states from across the country have been selected as part of a unique program designed to grow and strengthen their manufacturers. Over the course of the next year, interdisciplinary state teams will meet together in Washington, D.C., and separately in their home states, to develop and refine strategies impacting manufacturing industries. Based on their specific needs and goals, participating states developed working teams with representatives from areas such as the private sector, governor’s offices, state workforce and economic development departments, Manufacturing Extension Partnership centers, and manufacturing trade associations, among others. The participating states are: Arizona, Colorado, Illinois, Maine, Maryland, Missouri, North Carolina, Pennsylvania, Vermont, and Wisconsin. “The Policy Academy process empowers states to make proactive decisions that can improve the competitiveness of their manufacturing industries,” said Dan Berglund, president and CEO of SSTI, which is helping to coordinate the academy. “Although each state is dealing with their own challenges and circumstances, there are a lot of opportunities for states…

TEDCO’s current portfolio of assisted companies has grown to 326 companies and more than 3,100 jobs, according to an economic impact report by the University of Baltimore’s Jacob France Institute and TEConomy Partners. TEDCO was created by the Maryland State Legislature in 1998 to facilitate the transfer and commercialization of technology from Maryland’s research universities and federal labs into the marketplace. The direct Maryland economic activity generated by these core programs totaled nearly $900 million in 2018, a considerable increase from the $572.3 million in economic activity reported in 2015. Of all TEDCO programs, the Seed Investment Fund has the largest direct impact, accounting for more than half of all employment and direct economic activity.

More than half of the governors have now delivered their state of the state addresses, and TBED initiatives continue to play a prominent role in their plans. Higher ed’s affordability and/or role in the workforce are concerns in Montana, South Carolina, Utah and Vermont. Maryland is looking at clean energy and higher education. Utah is also grappling with burgeoning growth while Vermont considers measures to increase its workforce. Maryland Gov. Larry Hogan’s Jan. 30 state of the state address cited the “historic economic growth and record job creation” the state has experienced to fund education and the state’s other priorities, including eight legislative proposals in tax relief over the next five years. His TBED focus includes: “Tax cuts for the college graduates who worked hard to earn their degree, only to face the harsh reality of crippling student loan debt.” “We’re also proposing tax incentives to revitalize some of our forgotten communities and to make our state’s 149 opportunity zones the most competitive ones in the nation. And tax incentives to encourage the creation of thousands of…

Maryland Governor Larry Hogan’s FY 2020 budget proposal includes $56.5 million in new funding to attract businesses to Opportunity Zones. Other new innovation funding would support manufacturer hiring credits and a seed fund for minority entrepreneurs. Under the governor’s proposal, TEDCO, the state’s primary innovation agency, would see its spending increase from $27 million to $45 million. The Opportunity Zone proposal is likely to garner the most attention from other states, as regions throughout the country are still attempting to make sense of how to leverage the incentive to encourage positive growth. Details are still forthcoming on the exact nature of the proposed programs, but highlights show a multi-faceted approach to encouraging development in the zones: A technology infrastructure fund, operated by TEDCO, would have $16 million to “promote technological development;” A $6 million tax credit fund would incentivize companies to locate or expand in the zones; The state’s Employment Advancement Right Now (EARN) training program would have an additional $3 million for businesses in zones; and, Housing and community…

SSTI has reviewed the ballot initiatives across the country that affect innovation. Several states have energy initiatives on their ballots, while higher education funding is at play in Maine, Montana, New Jersey and Rhode Island. Utah could become only the second state to fund its schools through gas taxes, if a measure there is passed. At the same time, four states have ballot issues addressing redistricting commissions which could have a significant impact on state legislative makeup when lines are redrawn after the 2020 census.

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.

Although SBIR/STTR matching programs have existed at the state and regional levels for years, Montgomery County, Maryland, recently launched the country’s first county-based match program. The county council overwhelmingly approved the program, which will target Montgomery County-based small businesses receiving Phase I or Phase II SBIR/STTR grants through the National Institutes of Health (NIH), whose main offices are also within the county. Subject to appropriations, Bill 41-17 awards will be valued at up to 25 percent of a Phase I grant ($25,000 cap), or 25 percent of a Phase II grant ($75,000 cap). Grantees under this program may receive one county matching grant each year, up to five total grants. Previous research from SSTI found that the Washington D.C. metropolitan area, of which Montgomery County is a part, averaged the third most SBIR/STTR awards of any region over the five-year period from 2013 to 2017. The state of Maryland ranked fourth among all states in average SBIR/STTR awards during that time.  

Due to the effectiveness of employer-sponsored training program, U.S. states are working to build partnerships with industry partners that leverage public resources to help develop a 21st century workforce that addresses specific industry needs. Over the last month, partnerships have been announced between states and key industry leaders including AGCO, CVS, Tesla, and the U.S. Chamber of Commerce Foundation. Some of those collaborations are detailed below.

As the state budgeting process comes to a close, SSTI will report over the coming weeks on actions taken by state legislatures to invest in economic growth through science, technology, innovation and entrepreneurship. This week, we look at the budgets passed and signed by governors in Indiana, which includes new funding for an institute focused on health and life-sciences research and commercialization, and Maryland, which includes funding for the Maryland Technology Development Corporation. Indiana Appropriations bills approved by the Indiana legislature and signed by Gov. Eric Holcomb include funding for technology-based economic development initiatives:  The Indiana Biosciences Research Institute, a new public-private partnership focused on health and life-sciences research and commercialization, will receive $20 million in new funding in FY 2018; The Indiana 21st Century Research and Technology Fund, which provides funding to support R&D and technology commercialization, will receive $30 million in both FY 2017 and FY 2018, a 2.0 percent increase from FY 2016 levels. The Indiana Economic Development Corporation will receive $15 million in…

New legislation in Maryland that takes effect in June provides $1 million in workforce development scholarships and builds on current apprenticeship programs, while also providing tax incentives for new and existing manufacturers to create jobs in areas of the state that need them most. Gov. Larry Hogan signed the More Jobs for Marylanders Act into law last week, a key piece of his jobs initiative. The new legislation establishes scholarships for eligible students enrolled in job training programs at community colleges, and contains measures to encourage high schools to offer additional vocational training, as well as requiring state agencies to analyze their registered apprenticeship programs. This builds on current efforts of Maryland’s Employment Advancement Right Now (EARN) workforce training program, which has already provided training for nearly 2,000 unemployed or underemployed workers. New manufacturers in high-unemployment counties would receive a 5.75 percent wage tax credit, a state property tax credit and a sales and use tax credit for up to 10 years, under the plan. The legislation also waives state filing fees, and all incentives are contingent on the…

With the latest round of state of the state or budget addresses, the states’ governors focused on their states’ financial situation. Education and economic development were still on the minds of leaders in Maine, Maryland, and Texas. With this fifth installment, less than 10 governors have yet to deliver their addresses in the coming weeks or months. Maine Gov. Paul R. LePage began his state of the state commenting that the state’s economy and way of life “are under attack.” In his proposals to keep young people in the state and increase higher wages he focused on higher education: “We are also reducing the cost of higher education. We have increased funding to the University of Maine System, the Maine Community College System and Maine Maritime Academy to help control tuition cost. “We want to make it easier for young people to stay in Maine. I will once again propose funding for zero-interest loans for all higher ed students who decide to live and work in Maine. “We are trying to attract small businesses and successful young professionals. We need creative innovators with an entrepreneurial…

Earlier in the month, Maryland Gov. Lawrence Hogan announced the 2017 Maryland Jobs Initiative, a legislative package that would eliminate all state taxes for 10 years for new manufacturing employers that create jobs in high unemployment areas, as well as incentives for current employers who expand their workforce in those areas. The package also includes $1 million for a program for employers to invest in employee training to keep their skills up to date, $3 million in funding for cyber job training grants, and expansion of an existing program that would make tax credits accessible to investors in cybersecurity startups. Released earlier this week, the governor’s budget recommends funding levels for a variety of tech-based economic development programs, initiatives and tax credits. In his FY 2018 budget proposal, the governor is recommending: ·       Funding for the planning of six new Pathways in Technology Early College High Schools (P-TECH) across the state, doubling the total number of schools in FY 2018. P-TECH graduates earn…