economic development

As the new administration settles in, the Economic Development Administration (EDA) has updated its investment priorities — the guiding principles behind all of its competitive grants. Changes to the priorities are outlined below so that participants in local innovation economies are better able to align their proposed programs to these federal priorities.

As noted in our separate overview, the 25-page American Jobs Plan provides goals, highlights and proposals, but also raises questions about how proposals would be implemented and even exactly how much money would be spent. Those details presumably will come in the near future when legislative language is submitted. The document and much of the news covering it is organized around six goals. For our readership, we have taken a slightly different approach. Major themes and key aspects of the proposal are below. All quoted text is from the AJP summary released by the White House on the morning of March 31, 2021.

Facing current challenges and a changing economy, Oregon is turning to innovation-based economic growth. Their new 10-year Innovation Plan focuses on ensuring a competitive position through four means — traded sector industries that constantly innovate; a robust entrepreneurial ecosystem; financial capital markets that are open to investing in innovative firms and entrepreneurs; and promoting itself as a place to start and grow in innovative company.

Last month, Gov. Laura Kelly (D), alongside former state governors Mike Hayden (R) and John Carlin (D), and the Lt. Gov. and Secretary of Commerce David Toland, announced “Framework for Growth”, the state’s first economic development plan in over 30 years. The plan, which was a year in the making, is a collaborative effort that involves input from over 2,000 Kansans, the staff of the Department of Commerce, and two former governors.

As governors continue to roll out their State-of-the State addresses in the month of February, we continue to see a heavy focus on recovering from the pandemic. Given most state’s fiscal condition, governors have been generally hesitant to roll out new initiatives during this time, although broadband continues to receive attention, especially with the renewed attention surrounding its importance during the pandemic. Some states, like Maryland and West Virginia, who are emerging from the pandemic on a better footing than they perhaps anticipated, are ready to forge ahead with tax cuts in an effort to attract business and new residents. Other states, like Illinois, are grappling with projected deficits while trying to maintain services. And a new bond proposal in Maine could help connect workers to jobs in high-growth industries while also spurring development in the state’s industries. This week we catch up with those governors who gave their addresses during these first weeks of February and review each of them for news or initiatives relating to their state’s innovation economy.

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.

While economic development tends to be nonpartisan at the state level, many states are limited in their ability to fund innovative programs. In order to fund efforts that may serve as part of a national development strategy, Congress should use the bipartisan support of state efforts to establish and expand federal-state development partnerships and a strategy focused on countering China’s rise in advanced industries. That is the sentiment behind a recent roadmap from the Information Technology & Innovation Foundation (ITIF) that proposes four things Congress should do to align state efforts to an overall mission of outcompeting China.

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.

A trio of plans focused on economic development at the state level were released this month. Noting that it is at an economic crossroads and facing serious challenges, Maine’s Department of Economic and Community Development has issued a new 10-year economic development strategy for the state. Massachusetts has also proposed a new economic development plan, focusing on four key areas, while a new report in Maryland is targeting clean energy as an opportunity for the state to invest in the future.

Turning good intentions into actions is part of the motivation behind a recent report from the Community Strategies Group (CSG) of the Aspen Institute. The report, Rural Development Hubs: Strengthening America’s Rural Innovation Infrastructure, focuses on actions that could build capacity to advance rural community and economic development to improve equity, health and prosperity for future generations. Identifying those that are working to “do development differently” in rural America, the report draws on the wisdom of leaders from 43 rural intermediaries, and includes recommendations on creating stronger rural development systems.