ENTERPRISINGSTATES

CREATING JOBS, ECONOMIC DEVELOPMENT,

AND PROSPERITY IN CHALLENGING TIMES

A Project of the U.S. Chamber of Commerce

and the National Chamber Foundation

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Contents

Executive Summary

The Jobs Imperative: Power to the States

Needed: An American Approach to JobCreation

What is the Best Role for the FederalGovernment in Job Creation?

Innovation and Enterpreneurship Are theKey to Solving the Jobs Imperative

The Vital Role of Infrastructure and BasicIndustries

The Critical Role of States

Conclusion: The Power of States to Lead theJobs Imperative

The States and Economic Development

Measuring States: A List of the TopPerformers

Growing Jobs: How Do They Do It?

Entrepreneurship and Innovation

Exports and International Trade

Infrastructure

Workforce Development and Training

Taxes and Regulation

State Budget Crises

Measuring the States: The Metrics

State Performance

About the Report

The report was prepared by Praxis Strategy Group andJoel Kotkin. Authors from the Praxis team include DeloreZimmerman, Mark Schill, Doug McDonald, Matthew Leiphon,and Dave Roby. Bret Swanson authored parts of the report.Zina Klapper provided editing and additional research. PraxisStrategy Group is an economic research and developmentstrategy company that works with leaders and innovators inbusiness, education and government to create new economicopportunities. Joel Kotkin is an internationally recognizedauthority on global, economic, political and social trends. Hisbook The Next 100 Million: America in 2050 explores how thenation will evolve in the next four decades.

About the U.S. Chamber of Commerce

The U.S. Chamber of Commerce is the world’s largestbusiness federation representing the interests of more than 3million businesses of all sizes, sectors, and regions, as wellas state and local chambers and industry associations.

About the National Chamber Foundation

of the U.S. Chamber of Commerce, is dedicated to identifyingand fostering public debate on emerging critical issues. Weprovide business and government leaders with insight andresources to address tomorrow’s challenges.

About American Free Enterprise. Dream Big.

NCF has partnered with the American Free Enterprise.Dream Big. campaign to spur the creation of 20 million jobsover the next decade – restoring the 7 million jobs lost tothe current recession, and creating the 13 million new jobsthat our growing nation will need in the next 10 years. Itis a comprehensive, multiyear campaign to support freeenterprise through national advertising; grassroots advocacy;citizen, community, and youth engagement; and researchand ideas leadership.

The opinions and conclusions expressed or implied inthe report are those of the research agency. They are notnecessarily those of the National Chamber Foundation andthe U.S. Chamber of Commerce.

ENTERPRISINGSTATESCREATING JOBS, ECONOMIC

DEVELOPMENT, AND PROSPERITY

IN CHALLENGING TIMES

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May 3, 2010

Dear Colleague,

The National Chamber Foundation has partnered with the American Free Enterprise. Dream Big. campaign to spur

the creation of 20 million jobs in the next decade – restoring the 7 million jobs lost to the current recession, and

creating the 13 million new jobs that our growing nation will need in the next 10 years.

Each individual state will play a pivotal role in achieving this goal by creating the conditions for competition,

innovation, and productivity through a focus on education and training, science and technology and

infrastructure. Enterprise-friendly policies at the state level can facilitate local job growth by championing

entrepreneurship and mobilizing effective partnerships for improving the conditions for business and job growth.

Our study connects the success of free enterprise to our nation’s economy by correlating key policy inputs and best

practices in state-driven economic development with job creation and other substantive economic outputs. Brief

case studies of each state highlight policies and strategies that work. From the interviews we conducted for these

case studies, it is clear that the states are making job creation a high priority, and are implementing meaningful

changes in their approaches to job creation. While this varies by state, there is a renewed focus on creating more

favorable conditions for business growth.

As you will soon see, some common themes emerge such as the streamlining of regulatory and permitting

processes, analysis of current tax policies, an increased attention on business creation and support for existing

companies, and a strong emphasis on incentivizing private sector investors primarily with tax credits. Science and

technology- based economic development and clean-tech initiatives are proliferating in virtually all of the states.

Productivity and competitiveness initiatives, while not necessarily job creating, are being used aggressively to

strengthen and retain strong companies who already anchor state economies. There is widespread support for

investment (FDI).

create jobs and economic growth. At the Chamber, we are more committed than ever to promoting jobs through free

enterprise and education. Learn more at FreeEnterprise.com.

Sincerely,

Margaret SpellingsExecutive Vice PresidentNational Chamber Foundation

A LETTER FROM OUR EXECUTIVE VICE PRESIDENT

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EXECUTIVE SUMMARY

The message of Enterprising States is that the 50 “littleRepublics” matter. State policies matter. Governors, state

government has been driving stabilization policy duringthe recent recession, it is the states [and territories] thatwill lead a crucial new growth strategy in the next decade.

to create 20 million jobs over the next decade—restoringthe 7 million jobs lost to the current recession, and creatingthe 13 million new jobs that our growing nation will needin the next 10 years. And while the Federal governmentwill affect the situation on the ground in broad strokes andfrom a distance, Governors and state and local government

growth strategies that can match the speed of the globaleconomy and achieve this growth imperative.

Fiscal challenges can force important policy choicesabout taxation and spending priorities, and states mustbalance those decisions against the need to retain andattract private enterprise. In fact, many states have shown

of Enterprising States are likely to surprise and provepowerful examples for the next wave of state-level policyinnovation.

Consider: the State of North Dakota, perhaps anafterthought to some, was a national leader in job growthover the last decade. Montana, meanwhile, leads in manymeasures of entrepreneurship, Tennessee in severalmeasures of taxes and regulation, and Minnesota onworkforce development and training. Some states, likeTexas and Utah, are strong across the board in botheconomic policies—and economic results. And despite aMidwestern manufacturing meltdown, a State like Indiana

regulatory policies, proving it can be done.

“America is a vast country made up of hundreds of diverseeconomies,” writes study co-author Joel Kotkin. The

be paramount. It is local knowledge and local energy—

entrepreneurs—that will make the difference. Washingtoncan focus on a few overriding national priorities, but mostof the new ideas, new companies, and new jobs will comefrom local initiative.

broad, long-term American trend. U.S. employment hasbeen shifting not to mega corporations but to individualsand smaller units; between 1980 and 2000, the number ofself-employed individuals expanded tenfold to comprise 16percent of the workforce.”

In the coming decades, the U.S. will enjoy a “demographicdividend” of more immigration and higher birthratescompared to most developed nations. This dividend ofhuman capital could be a chief U.S. economic advantage ina global economy. But only if we match this demographicdividend with a “jobs dividend.”

States are much more active than the Federalgovernment on the job creation and economicdevelopment front. While the policies vary by statethere is renewed focus nationwide on creating morefavorable conditions for business growth.

State priorities vary considerably. Some are strongin innovation. Others in exports or workforcedevelopment. Some have weathered tough times withrelative success. Others were not prepared for anextended downturn. The recent recession, however,leaves a number of important lessons and gives allstates a chance to reassess, reboot, and adopt provenstrategies for the future.

High tax rates do not lead to either healthy economiesor budgets. On the contrary, many states with thehighest tax rates and most onerous regulatory regimes

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have experienced the worst budget crises. Taxpayersand businesses are leaving these states. States withmore favorable tax and regulatory climates did notexperience budget problems nearly as severe.

Many states have implemented initiatives forstreamlining red tape to help businesses sort throughthe many layers of government regulation and haveincentivized private-sector investors primarily with taxcredits.

Targeted investments in infrastructure projects at thestate-level can create growth-friendly environments incommunities.

Science- and technology-based economic developmentand clean-tech initiatives are proliferating amongstvirtually all of the states.

Productivity and competitiveness initiatives, while notnecessarily job creating, are being used aggressivelyto strengthen and retain strong companies who alreadyanchor state economies.

There is widespread support for doubling exports

headway using strategies for foreign direct investment(FDI).

Cultivating people through workforce developmentand training will drive economic development at thestate-level.

Regional cultural variety could account fordifferences in entrepreneurial strength. For example,entrepreneurship is notably strong in the West andNortheast-Mid-Atlantic regions. Which begs thequestion: How might we translate this culture ofentrepreneurship to other regions?

Enterprising States is a beginning, not an end. It isan in-depth look at the vast and complex network ofeconomies we call the 50 states and territories. It is an

policy differences that can yield new information to localleaders and lawmakers. Studying the differences amongthe states should help them learn from one another. Whatworks? What doesn’t? By sharing these success stories andlessons learned we hope to create a roadmap to economicresilience and an ongoing dialogue that makes every statestronger.

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THE JOBS IMPERATIVE: POWER TO THE STATES

In the coming decades, the United States will enjoyan enormous demographic advantage over its primarycompetitors in both Europe and East Asia. As countriessuch as Germany, France, Japan, South Korea and evenChina will experience declining workforce growth andrapid aging, by 2050 the pool of people aged 14 to 64 inthe United States is expected to grow by more than 40%,compared to what it was in 2000. In contrast, China’sworkforce will fall by 15%, Europe’s will decline by 25%,and that of Japan will plunge by 44%.1

This growth represents an unprecedented opportunityfor free enterprise in America, but it also poses atremendous challenge. What the United States doeswith its “demographic dividend”—that is, its relativelyyoung working-age population—will largely depend onwhether or not the private sector can generate growth injobs and wealth to help meet the needs of a larger agingpopulation.

Government, too—particularly at the state and local levels—will need to play a role with policies that spur the privatesector. Government can facilitate long-term job growth byestablishing smart approaches to education, immigration,health care, energy, infrastructure, and tax and regulatorypolicies.

A University of Kentucky report prepared for the U.S.Chamber of Commerce has calculated the total number

of new jobs needed “to return the economy to our pre-recession level of employment and provide jobs for allthe expected new entrants.” It concluded, “The nationaltotal is nearly 23 million workers. Almost forty percentof these additional jobs are concentrated in California,Florida, and Texas, three states that comprise 26 percentof the population as of 2008.” Each of the three states thatare predicted to need fewer positions since the start of therecession has fewer than 850,000 people. In these states,North Dakota, South Dakota, and Wyoming, the numberof workers affected by the recession is more than offset byslower population growth projected by the Census.2

And simply to keep pace with population growth in 2010,the New America Foundation estimates, the countryneeds to add more than 125,000 jobs a month.3

The employment imperative is particularly critical today,

administration’s goal of providing 95,000 jobs a month thisyear, 190,000 monthly next year, and 250,000 in 2012, ouroverall unemployment rate is expected to remain over 8%by 2012. According to estimates by the Economic PolicyInstitute, it could take until 2013 or even 2014 to get backto the unemployment levels of before the recession.4

The most critical need is to create jobs for middle andworking class people, and for the young, with the teenunemployment rate now over 24% compared to under 15%

Europe, -25%

China, -10%

Japan, -44%

Korea, -30%

United States, 42%

-45%

-30%

-15%

0%

15%

30%

45%

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Growth of Population Age 15-64

Figure 1. Source: U.S. Census International Database

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in 2007.5

These groups have borne the brunt of the recession—particularly in areas such as construction, whereemployment has contracted by two million jobs since 2006.The nature of the federal stimulus, which focused more onthe social safety net than on infrastructure, appears to havelargely missed this heavily male, blue collar segment.6

Many have been out of work for a long time. Nearly6.3 million Americans have been unemployed forover six months, the largest number since the federalgovernment started keeping track in 1948. The averageduration of unemployment—28.5 weeks—is the highestsince the end of the Second World War. According tothe labor department, right now there are roughly 6.1unemployed people for every job, four times the rate inDecember 2007.

Needed: An American Approach to Job

Creation

More than a year after the passage of the federal stimulus,much more work needs to be done to strengthen of ourfree enterprise system. Some analysts suggest that we takeour lead from the example of European societies, and usetax dollars to stimulate and preserve employment as wellas expand social protections. Others argue that adoptingEuropean models of shorter hours and more leisure might

7 Yet these are not rational choicesfor the United States, since virtually all these societies areaging rapidly, and few have been growing rapidly.

Indeed, many of these societies still have higher rates ofyouth unemployment than the United States. By the end of2009, unemployment for those under the age of 25 stood at21% in the European Union (EU), with some countries—Sweden (27%) and Spain (44%)—at extraordinarily highlevels.8

Overall, the core European countries have not grown asquickly as the United States over the past forty years,and seem to be lagging in the current early stagesof the recovery. This is a long term trend. The core

shrunk considerably, while that of the United States hasremained remarkably stable. For EU countries, expansivesocial protection has not been paired with rapid growth.9

address its unique jobs imperative. Clearly, the expansionand preservation of government employment hasproven stimulative, but private sector employment

continues to be a struggle in most of America.

One third of the stimulus was directed to localgovernment, and public employment has barelydropped. Even so, there is increasing stress on stateand local government, due to the declines in the private

centered approach can be seen in the states—which,after all, cannot print their own money to cover their

inevitability of large cutbacks in public employment.10

Another misplaced approach to job creation is the widelyembraced notion—both at the federal and the locallevels—that government regulations tied to a “green”economy could create a large new employment source.Various studies in countries that have created massiveincentives for such employment—Spain, Germany,

of such policies can be more than off-set by the negativeconsequences of resulting high energy prices.11 Whencap and trade mandates raise energy taxes and the cost ofdoing business, they ultimately inhibit job growth. In thelong run new jobs in energy sectors will be created by thecreation and production of new technologies.

Expanding our production of all energy sources couldbe a major source of jobs. But the experience in some

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United States Construc on

Employment, 1993-2010

Figure 2. Source: U.S. Bureau of Labor Statistics, Current EmploymentSurvey.

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European countries makes clear that green jobs ontheir own cannot be a fundamental driver of future jobcreation. Indeed, literature suggests that much of thejob growth in green industries has occurred in China andother countries. To date, the actual impact of green jobsseems to be less than expected.12

The one likely way to expand green jobs, notes a seriesof studies, would be through greater economic growth.Most new green jobs depend on the expansion of otherkey sectors, notably housing, manufacturing, warehousingand agriculture. As these industries expand, they will bethe prime markets for new, environmentally responsibletechnologies and techniques.13

The only sustainable way for the United States to createjobs lies in a rapid expansion of the private sectoreconomy, including in the construction, manufacturing,and energy sectors. A ‘green’ economy cannot becreated at the expense of the rest of the economy as awhole. Unreasonable constrictions on manufacturingand construction inhibit job growth. And roadblocksto energy development—including to renewable energyprojects—from environmental legislation, as well as fromenvironmentalists and NIMBYs, are also harmful to jobgrowth. Improving the quality of the environment shouldbe a primary concern here, of course, as well. But withoutrobust economic growth, the United States simply willhave to accept a massive decline in living standards.

The growing divergence between advanced countriesshould not be viewed as a matter of right or wrong,

different heritages, faced with different prospects, copewith their evolving futures.

What Is the Best Role for the Federal

Government In Job Creation?

The best role for the federal government is to fundnational priorities like energy, physical infrastructure, andthe national defense, and to set basic health and safetyregulatory guidelines that are carefully balanced againstthe need to maintain low barriers to entry into the market.But, for the most part, the primary mission for economicdevelopment went to the states, and, more importantly, theprivate sector economy.

The mounting federal initiatives to wrest environmental,

examples of a centralization of government power overboth states and private businesses that could take us inthe wrong direction. Although certain times do call forincreased federal activity—legitimate threats to nationalsecurity or economic emergencies, such as the Great

approaching a critical juncture where Washington’s powermay be reaching beyond its effectiveness.

The current impulse to create a high-employment economyby imposing federal restrictions—such as the proposal that

doing so by the manipulation of federal contract awards—marks a departure from our free-market traditions.Similarly, possible federal control over local zoningdecisions—through such organizations as the EPA—alsomark a crossing of the regulatory Rubicon.

States and localities are far better positioned than thefederal government to foster strategic investment,regulations, taxes and incentives that encourage privatesector prosperity. In large part, this is because they aremore responsive to local conditions. Many academicplanners, policy gurus, and national media have tendedto favor large government units as the best way toregulate and plan for the future. But central planners

the plethora of villages, towns, and cities in the UnitedStates: well over 65,000 general-purpose governments.With so many “small towns,” the average local jurisdictionpopulation in the United States is 6,200, small enoughthat nonprofessional politicians can have a serious

United States

Latin America

EU 15

Asia/Oceania

Middle East/Af rica

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10%

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Share of World Gross Domestic Product,1969-2009

Figure 3. Source: USSA Economic Research Service. World Bank WorldDevelopment Indicators, International Financial Statistics of the IMF,Global Insight, and Oxford Economic Forecasting, as well as estimatedand projected values developed by the Economic Research Service allconverted to a 2005 base year.

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impact on local issues. 14

The American preference for solving problems at the stateor local level should be central to the government role injob creation. One size determined in Washington will

address employment problems in different ways. Withinthe limits of constitutional rights, we should let them trytheir hand, and let everyone else learn from their successor improve upon their policies.

Indeed, many Americans on both the right and left areinstinctive decentralists. Our economic evolution mirrorsthis trend. America’s entrepreneurial urge, in contrastto developments elsewhere, has actually strengthened.In 2008, 28% of Americans said they had consideredstarting a business—more than twice the rate for Frenchor Germans. Self-employment, particularly amongyounger workers, has been growing at twice the rate ofthe mid-1990s. 15

For this reason, supporting new businesses—and small

the credit they need is an essential piece of the job-creationpicture. For jobs to grow, these businesses must thrive.

Innovation and Entrepreneurship Are

the Key to Solving the Jobs Imperative

America will depend on its emerging population ofyounger workers to keep expanding its economy. In the1970s, when the coming-of-age of the boomers beganto impact the labor market, labor force growth createda period of higher unemployment. Now, we could see areoccurrence as the large millennial generation starts toseek employment. Yet now, as then, predictions of a long-

develop new opportunities.

This happened to the boomers in the late 1980s, whentalk of long-term high unemployment was replacedwith concerns over a labor shortage. The growth ofnew industries tied to the use of computers, and laterof the internet, created a surge in demand for skilledworkers. As boomers integrated into the workforce andwere replaced by less numerous generation “X”-ers atthe entry level, companies fretted increasingly about adiminishing pool of workers.16

The opportunities for employment created by the riseof new industries, and by the innovative expansion ofestablished businesses, cannot be underestimated. Suchinnovation has long been the source of new growth forthe American economy, although the exact nature of thatinnovation is impossible to predict. Much of the pioneering

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Utah

Nevada

Wyoming

Hawaii

Texas

North Dakota

Alaska

Arizona

New Mexico

Washington

Idaho

Florida

Maryland

Montana

Oklahoma

Georgia

Colorado

New Hampshire

South Dakota

Virginia

Middle Class Job Growth, 2002-2009

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will likely come from skilled immigrants, who areestimated to have started a quarter of all venture-backedpublic companies between 1990 and 2005.17

American trend. U.S. employment has been shifting notto mega corporations, but to individuals and smallerunits; between 1980 and 2000, the number of self-employed individuals expanded tenfold to comprise 16percent of the workforce.

The smallest businesses—the so-called microenterprises—have enjoyed the fastest rate of growth. By 2006 therewere some twenty million such businesses, one for everysix private-sector worker. Hard economic times couldslow this trend, but historically, recessions have servedas incubators of innovation and entrepreneurship. Many

have recently voluntarily left or been laid off by biggercompanies.18

The Vital Role of Infrastructure and

Basic Industries

To succeed in the mid-21st century, Americans alsowill need to pay more attention to the country’s basicindustries. Some assume that the American future canbe built around high-end “creative” jobs, without everreviving the industrial economy or rebuilding our physicalinfrastructure. In the America envisioned by advocates of“the creative economy,” our productive facilities wouldserve mainly as tourist attractions, much as we now visitrestored pioneer villages.19

Such an approach assumes that our rising competitors,notably China and India, will surrender high value

a dangerous and historically ill-considered assumption.

as “copycats” became primary innovators, particularlyin automobiles, semiconductors, and computer games.In the coming decades, Chinese, Indian, and Braziliancompanies—to name a few—will seek to move fromlow-wage work to more specialized, innovative kinds ofproducts. The enormous revenues generated from the lesstrumpeted activities will provide the funds to invest in theirmove into ever higher-end activities.

Americans can create a more prosperous future, but onlyif we focus on maintaining the physical infrastructurenecessary for basic production and transportation, aswell as on developing the intellectual prowess of ourcitizenry. America’s unique demographics require the

country to pay attention not only to high-tech industries

manufacturing, agriculture, and energy.

These critical industries underpin our prosperity andemploy our expanding blue-collar workforce. They canprovide new opportunities for the majority of workers whodo not possess four year or advanced college degrees. In2005, the National Association of Manufacturers, theManufacturing Institute, and Deloitte Consulting surveyed

80% reported that they were “experiencing a shortage of

technicians. By 2020 this shortage could grow to 13million workers. A resurgent manufacturing sector wouldalso boost the country’s technological workforce. By 2007,industry employed about a quarter of the nation’s scientistsand related technicians.20

This revived focus on production would help largeswaths of the country. The Great Plains area, which is

weathered so many challenges in recent decades.Historically neglected regions such as Appalachia would

The Critical Role of States

America is a vast country made up of hundreds ofdiverse economies. From early on, very differentindustries clustered in different places. There has beenwide divergence in the skills and abilities of localpopulations. Although federal intervention is necessary incertain areas—for example, in creating national researchinstitutions or interstate transportation—it is often at thestate or local level that the best policies for a particularregion can be developed.

The need to tailor economic development to local needshas been a critical aspect of the success of our federalsystem. By giving a state wide leeway to develop its ownsolutions to the jobs imperative, we would be providingthe other states with potential role models—as well asa warning system of policies to avoid—in their ownstrategies. The states are described in the famous opinionissued by Supreme Court Justice Louis Brandeis as placesthat “serve as a laboratory” where the nation can “try novelsocial and economic experiments without risk to the rest ofthe country.”21

States have often been leaders in fashioning progressive

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approaches to economic development. Private andstate-sponsored development created the initialnetwork of roads, canals, and steamboats that knittogether regional economies. When President JamesMadison vetoed federal funding for the Erie Canal in1817, the New York legislature used its own tax and creditresources to complete the 363 mile system eight yearslater. Eventually the canal helped assure the EmpireState’s national preeminence. Other states, includingPennsylvania, Ohio, Indiana, Illinois, Maryland andVirginia, followed suit with their own canal-buildingprojects.

In the 1920s and 1930s states—and some municipalities—also invested heavily in wealth-creating infrastructure,including highways and water and power systems. These

of projects from private corporations. States continued tomake these investments throughout the 1950s.22

At the time, no state was more successful at developingits economy than California. Under both Republicanand Democratic Governors, California developed whathas become a widely accepted model of local economicdevelopment based on the expansion of traditionalinfrastructure—roads, bridges, water and energysystems—matched by massive investments in “humancapital”, including a master plan for higher education thatspanned the elite universities to the community colleges.23

California’s state investment and business promotionpolicies inspired other states, notably Texas and NorthCarolina. This state role was also embraced by the youngGovernor of Arkansas, Bill Clinton. Faced with the issuesof a poor, racially divided state, Clinton recognized that,given the deep divisions in Washington, “There is noalternative to continued intense state efforts to deal withour most pressing domestic problems.”

Although unemployment dropped, there remainedproblems relating to national competitiveness and decliningmiddle class wages, Clinton argued. But he continued tobelieve in the exercise of local power. “In a country ascomplex and diverse as ours, in which most job growthis generated by small business,” he noted, “many of these[economic] issues will almost have to be dealt with at thestate level.”24

In David Osborne’s landmark work, Laboratories ofDemocracy, he described how the late 1980s and early1990s saw the emergence of a whole host of innovative

noted, was “creating economic growth”, a notion Governor

Clinton later used effectively in his campaign for thePresidency.25

In today’s federal-level climate, states could potentially

and ‘90s. Chuck McCutcheon, co-editor of Politics inAmerica at CQ-Roll Call Group, suggests that continuedDC “political gridlock” makes the states better suited todeal with major policy issues. At the state and local levels,he suggests, politicians are more likely than their highlypolarized federal counterparts to “get along” with eachother.26

Conclusion: The Power of the States to

Lead the Jobs Imperative

the jobs imperative. As Alexis De Tocqueville observed,it is natural that citizens of a state or locality are moresolicitous about “the increasing prosperity of his owndistrict,” and this serves “to stir men more readily thanthe general interests of the country and the glory of thenation.” 27

As our country grows, reaching 400 million people by2050, the differences between our various states andcommunities will grow. We will have more diverseregional economies, demographics and cultures. We needto look at these local sources—what Thomas Jeffersoncalled “our little Republics”—to lead the jobs imperative.It is an imperative upon which depends the future successof our entire nation.

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THE STATES AND ECONOMIC DEVELOPMENT

States throughout American history have done everythingthey can to cultivate, attract, retain, and grow thebusinesses that comprise the most fundamental buildingblocks of their economy. Even in today’s volatile globaleconomy states with severe unemployment and budgetwoes can point to policies, programs, and investments thatfoster new economic opportunities and create jobs.

Many state economic development organizations wereoriginally established with business recruitment andattraction as their primary focus. But today’s mix of stateapproaches to economic development has moved wellbeyond earlier, sometimes singularly focused attempts to

and/or by offering a business climate based on cheap labor,low taxes, and lenient regulations.

States, nonetheless, still compete with each other forcompanies in “traded sectors” and jobs in the globaleconomy, either directly or by virtue of unique assets

incentives and tax abatements. But there is growingmomentum among governors and state legislatures togrow their economies from within by creating a new set ofcompetitive advantages that include building human capitalthrough workforce development and training, harnessingthe power of science and technology assets, makingstrategic investments in infrastructure, reaching out toglobal markets, developing opportunities related to energyand the environment, and spurring entrepreneurship andinnovation.

Generally, state economic development efforts include aninterrelated array of policies, programs and investments,falling into three major categories: (1) an entrepreneurialapproach focusing on new business and technology-based development, oftentimes with a focus on bolsteringproductivity and innovation; (2) recruitment, expansion,

or investments and other programs, including internationaltrade and export promotion; and (3) “fertile soil” policies28

almost any type of business by streamlining governmentalregulation, optimizing taxes, investing in infrastructure,and/or by providing a better-educated, more highly skilledwork force.

have used and are using now to accelerate growth and

create jobs:

Entrepreneurship and Innovation,

Exports and International Trade,

Infrastructure Investment,

Workforce Development and Training, and

Taxes and Regulation.

While it is up to state governors and legislators to set

at the local and regional level. With well designed state-implemented development tools, effective workforcedevelopment and skills training systems, and stronginfrastructure, states can give local economic developersthe power to assist the growing businesses, to broker thekey partnerships, and to lead the key initiatives that createthe jobs needed to sustain our growing population.

Most of all, states must carefully weigh policy to refrainfrom constructing barriers to private enterprise growth.Many of the most effective economic developmentinitiatives start from grassroots efforts or private sectorbusiness leaders, so supporting these efforts from the statelevel is imperative.

Measuring the States: A List of the Top

Performers

A primary goal of any state economic developmentprogram is not only to increase the number of jobs in thestate, but to improve the quality of jobs and the overallprosperity of the state’s residents.

This study combines metrics for each economicdevelopment policy area to measure overall highperformers in each policy topic area. States arecompared in each metric and top states are determinedby a composite comparison of all metrics in overallperformance and in each policy area. For a full descriptionof all metrics and results for each state, see the Metricssection on page 25.

To establish the overall best performers we combined:

Job growth rate since 2000 and since 2007

Gross State Product (GSP) measures: real GSP growthsince 2000, GSP per job 2008, Growth in GSP per job

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2000-2008

Income: per capita personal income growth 2000-2009and median four person family income adjusted forcost of living, 2009

Top Overall Growth Performers

North Dakota1. – While North Dakota’s lowunemployment and recession resistance is oftenattributed to healthy agriculture and energy sectors, itsconstruction and manufacturing sectors are relativelyhealthy and the state has seen 42% job growth inprofessional and technical services and 36% inmanagement of companies since 2002. North Dakotais the top job performer since the 2007 peak and is

in GSP per job (productivity increase), second in GSPgrowth and third in per capita income growth. Recentinvestments in research and development (R&D)infrastructure are beginning to pay off as the state isthe fastest growing in science, technology, engineering,and mathematics (STEM) job growth.

Virginia2. – Already a professional and technicalservices powerhouse in 2002, Virginia added another135,000 jobs in that sector since that time, fueledby 90,000 new jobs in computer systems design andmanagement and technical consulting services. Thestate’s high incomes and slightly below average cost

family income measure.

South Dakota3. - South Dakota is a strong overallperformer, doing best in productivity and outputmeasures. Partly due to an enterprise-friendly

industry employment than the national norm and has

The state’s manufacturing sector actually gainedjobs since 2002, led by growth in signs, chemicals,communications equipment, and constructionequipment, all averaging more than $43,000 inearnings per worker.

Maryland4. – Maryland landed in the top 20 or betteron all seven performance metrics. Maryland sawstrong growth in technical consulting and computer

research and design services, a sector more than 2.5times as concentrated in Maryland than the nation asa whole and paying nearly $95,000 in earnings perworker.

Wyoming5. – Wyoming’s growth is powered by a

rapidly expanding energy cluster, which added morethan 18,000 jobs since 2002 and now holds 30% ofall employment in the state. The energy growth hasspilled over into business services sectors such asenvironmental consulting, surveying and mapping,and testing laboratories. Its overall manufacturingsupersector also gained jobs, seeing the fabricatedmetal and electrical equipment clusters begin toemerge.

New York6. – While New York saw average job growththrough the beginning of the decade, it has weatheredthe recession better than most other states, and its highproductivity and productivity gains help place it amongour top performers. Accounting for about 8% of alljobs in the state, the professional and technical servicessector added more than 115,000 jobs for 15% growth.

Texas7. – Texas has seen strong job growth this decadeand has weathered the recession well, fueled by 20%expansion of a now 1.1 million job energy cluster.Recently machinery manufacturing and transportationequipment manufacturing clusters are emerging, bothgrowing to more than 90,000 jobs. This has helpedstimulate a 15% expansion in transportation andlogistics including warehousing and storage and manyfreight and specialized trucking sectors.

Iowa8. – A solid performer across most of our metricsIowa’s strength is perhaps in its stability. Thestate’s largest cluster, agribusiness, food processingand technology, grew at a 1% rate since 2002,

group of industries nationally. Iowa’s other mostcompetitive clusters include machinery manufacturing(farm and construction equipment, refrigeration andheating systems, and other commercial equipment)transportation and logistics, and advanced materials(search and navigation equipment and machine shops).

Nebraska9. – Nebraska has added 15,000 jobs to its

by management and technical consulting, managementof enterprises, and credit intermediation, all addingat least 3,000 jobs and averaging $55,000 to $90,000in earnings per worker. The state’s railroads andsupport industries and freight trucking support a strongtransportation and warehousing cluster, and the statehas seen a boom in marketing consulting and marketresearch sectors.

Montana10. – While Montana’s energy and miningclusters added a combined 8,400 high-paying jobsto the state since 2002, Montana’s greatest sourceof national dominance came from the collection of

13

arts, entertainment, recreation, and visitor industries,perhaps a sign that the rest of the nation is beginningto discover the Big Sky country. Montana is alsobeginning to see the emergence of smaller clusters inchemicals, apparel and textiles, and fabricated metalproducts.

Growing Jobs: How Do They Do It?

A review of which states are high performing showsa diverse group—some big, some small; some rural,some urban; some inland, some coastal—but a closerexamination shows a shared pattern of policies by thesehigh performers.

There is no such thing as single a silver bullet strategyfor job creation. Among our top ten performers, all tenhave seen at least 4% job growth since 2002 in mid-level jobs requiring at least long term on-the-job trainingbut less than a four-year degree. Five of the ten statesincreased those jobs more than 10%. At the same timeall ten increased science, technology, engineering, andmathematics (STEM) jobs by at least 4% over the sameperiod, with 7 of 10 growing STEM jobs at least 14%.29

An assessment of top performing states, regardlessof by what measure, eventually gets down to a state’sability to execute successful initiatives. Aside fromminding the basics of primary education and supportiveinfrastructure, success begins with an understanding of astate’s economy and demographics, including its strongpoints and its gaps. States that can mobilize the relevantpartners to put together the strategic networks to buildupon those strengths while addressing the weaknesseswill be winners in the long run.

its success. Top performing states have come up withwinning formulas often based on combining statefunding with federal programs and private sources. Asregional workforce skills gaps become more acute, non-governmental agencies and private enterprises more arewilling to join new collaborative development projects.

Programs such as Kentucky’s “Bucks for Brains” whichrequires universities to match state funds with donationsfrom philanthropists, corporations, foundations, and

Recovery and Reinvestment Act (ARRA) funding incombination with existing state funds to tackle majorinfrastructure programs illustrate unique solutions to

Examples of strong partnerships featuring open

communication are especially evident in high performingexport states. Export programs are based upon effectivecommunication between the importing country, theexporting manufacturer or business, and the stateprogram helping to facilitate the connection.

The TexasOne program creates promotional materialsto market the state and its manufacturers to importingcountries and leads trade missions to importing countriesand hosts reverse trade missions to the state. Nevadaworks with a network of trade representatives intargeted markets throughout Asia, North America andEurope, focused on cultivating distribution channels andfacilitating opportunities for foreign direct investment inNevada enterprises.

Many high performing states offer an array of corporate,manufacturing, and land tax programs. So too, manystates are shying away from direct subsidies forpromised job growth in favor of highly targeted taxcredit programs that require direct investment by

are only realized after new jobs are in place. Othercredit programs target historically underdevelopedgeographical regions.

Other states such as North Dakota, Florida, andMississippi have turned to comprehensive tort reformas another key element enterprise-friendliness. Whether

they ultimately help businesses, large and small, remaincompetitive and free of excessive burdens from excessivelitigation.

Private sector and academic collaboration is one

performing states across all measures. Whether it issuccessful innovation and entrepreneur programssuch as Montana’s TechRanch, Oregon’s InnovationCouncil, Rhode Island’s Center for Innovation andEntrepreneurship, or job creation and economicdevelopment initiatives such as Momentum Mississippi,these private and academic partners are providingcritical input, oversight, and resources to bolster theeffectiveness of state efforts.

Many states are locating business incubators adjacentto universities in partnership with the schools whileothers are building laboratory spaces and otherspecialized infrastructure to offer to growing companieson an a la carte basis. In either case, this business and

new enterprises and provide students the chance for

14

experiential learning while earning their degrees.

While there are obviously other policies or initiativesthat high performing states share there are somecommonalities: building on momentum; deliveringadequate funding for initiatives; developing strongrelationships and communication strategies; enterprise-friendly tax and regulation systems; and vigorouscollaboration between business, government, and educationinstitutions.

Entrepreneurship and Innovation

Entrepreneurial and innovation policies intend to stimulatethe creation and expansion of businesses. Several non-mutually exclusive approaches are being implemented bystates that involve working with individual businesses aswell as working with industry clusters and networks thatinvolve business, government and education.

New Business Development1.technical and managerial assistance and training toindividual businesses30; incubators are often used tohelp start-up companies get traction in the early stagesof the business lifecycle.

Technology-based Development2. – focuses on creatingan environment where businesses can constantlyinnovate and maximize the use of technology31 basedon the following key elements:

An intellectual infrastructure, i.e. universities andpublic or private research laboratories that generatenew knowledge and discoveries;

Mechanisms for transferring knowledge from oneindividual to another or from one company toanother;

Physical infrastructure that includes high qualitytelecommunications systems and affordable highspeed Internet connections;

Highly skilled technical workforce; and

Sources of risk capital.

Industry-cluster Development3. – focusing ongeographical concentrations of similar, related orcomplementary businesses with active channels forbusiness transactions, communications and dialogue.Clusters share specialized infrastructure, labor marketsand services, and are faced with common opportunitiesand threats.32

State research and development (R&D) expenditures variedfrom $618 per million GSP to $9 per million GSP in 2007,indicating wide variation in approach to each state’s rolein funding R&D. However, state investments tended to be

highest in traditionally underperforming research states(as designated by the federal Experimental Program toStimulate Competitive Research program), indicatingstrong state-level initiatives to complement federal researchsupport.33

Top Entrepreneurship and Innovation

Performers

Measurements of innovation and entrepreneurshipinclude growth and concentration of science, technology,engineering and mathematics (STEM) jobs; total researchand development activity in the state; state investmentsin research and development; and two measures ofentrepreneurial activity: high-tech business starts and theKauffman index of entrepreneurial activity.

Montana1.start-up activity led by Bozeman-based TechRanch,an organization formed uniquely by private businessleaders to coordinate entrepreneur support activitiesin the state. Montana places in the top in stateinvestment in R&D, built upon the state’s Board ofResearch and Commercialization Technology, createdby the legislature in 1999 to provide a stable andpredictable funding source for research activities.

Maryland2. – The state is home to 50 federal facilitiesand major research universities, Maryland scores inthe top 10 in concentration of science, technology,engineering, and mathematics (STEM) jobs andintensity of R&D in the economy. A STEM taskforce commissioned by state leaders recentlyreleased a plan to improve technology transfer andenhance STEM education programs to ensure thestate’s education system can meet future demandsof the R&D activities in the state. The MarylandTechnology Enterprise Institute (Mtech) focuses onthree primary goals: educating the next generationof technology entrepreneurs, creating successfultechnology ventures, and connecting state companieswith university resources to help them succeed.Mtech offers programs, courses, workshops, andcompetitions to help aspiring entrepreneurs learn howto commercialize their ideas and products.

Washington3. – Washington is the number 4 state inconcentrations of STEM jobs and R&D activity, butstill places in the top 10 in STEM job growth. Mostof the state’s STEM job growth since 2002 has comefrom the private sector. The state added more than22,000 STEM jobs in software publishing, computersystems design, engineering services, computer

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Alaska4. – Alaska placed in the top ten in overallentrepreneurship activity and high-tech businessstarts. While research is not yet a major part of thestate’s economy, leaders have turned to state funds tostimulate activity—including a proposed $109 million

center—and the state has the sixth highest STEMjob growth rate. Alaska’s Technology Research andDevelopment Center provides small businesses supportin pursuing Small Business Innovation Research(SBIR) awards to aid their development of innovativenew products and services, providing “phase zero”grants and application support. Since programadoption, application success rates in Alaska haveincreased.

New Mexico5. – Partly due to the presence of federalresearch labs, R&D activities account for more ofthe New Mexico economy than any other state andthe state houses a high concentration of STEM jobsto support this activity. In order to better capitalizeon these activities, the legislature passed a ResearchApplications act to establish a research center to morereadily move technologies developed at the state’sfederal labs into the marketplace. The New MexicoPrivate Equity Program invests the state’s severancetax permanent fund in qualifying private equity and

innovative companies. The state investment requiresa private match to the state allocation, allowing NewMexico to leverage its resources while providing

Arizona6. – The state and several counties in southernArizona have led the charge to leverage federalresources to strengthen the state’s innovation economy,creating Innovation Frontier Arizona, a science,technology, engineering, and mathematics (STEM)focused workforce training initiative. The ScienceFoundation Arizona has also focused efforts oncreating a highly trained workforce to aid innovationin the state using its STEM education initiatives andgrant programs.

California7. – The iHub initiative modernizes the state’snational and global competitiveness by stimulatingpartnerships, economic development, and job creation

designated iHubs. The iHubs leverage assets such asresearch parks, technology incubators, universities,and federal laboratories to provide an innovationplatform for startup companies, economic developmentorganizations, business groups, and venture capitalists.

Utah8. - In order to better facilitate technology transferfrom the state’s universities to the private sector, Utah

0 1

Virginia

Massachusetts

Washington

Maryland

Colorado

Delaware

California

New Jersey

New Mexico

Connecticut

Michigan

Minnesota

Utah

New Hampshire

Alaska

Oregon

Texas

Concentration of Science, Technology,Engineering, and Mathematics Jobs, 2009

31%

24%

23%

23%

20%

19%

18%

16%

16%

16%

15%

14%

14%

14%

13%

13%

12%

North Dakota

Wyoming

Nevada

Utah

Virginia

Alaska

Hawaii

New Mexico

Texas

Washington

South Carolina

Maryland

Montana

South Dakota

Alabama

Arkansas

North Carolina

Growth in Science, Technology,Engineering, and Mathematics Jobs,2002-2009

Figure 5. Source: EMSI Complete Employment, 1st Quarter 2010. STEMjobs include technical or associate’s degree level technicians and above.

Figure 6. Source: EMSI Complete Employment, 1st Quarter 2010.STEM jobs include technical or associate’s degree level technicians and

in STEM occupations divided by the nation’s share of all jobs in STEMoccupations. 1.0 is the national “norm” level.

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has implemented a system of licensee grants throughits Centers of Excellence program. Since 2007,private sector businesses, including startups, havereceived grants from the state to aid them in bringingtechnology developed at the state’s universities tomarket, creating new products, companies, andspurring job creation in the technology sector. Thestate has rolled out aggressive tax credits focusing onreducing risk for investments in research and start-upcompanies.

Colorado -9. A major focus of Colorado’s innovationagenda has been the development of a “New EnergyEconomy”—to spur research innovation, Coloradohas adopted an Innovation Investment Tax Credit pilotprogram that provides an income tax credit of up to

involved in research and development.

Virginia -10. The Virginia Innovation Program (VIP) isa $2 million innovation program launched by the stateto fund translational research. The Commonwealthprovides $1 million in funding with the additional $1million representing the funds or assets each institution

intent is to increase licensing opportunities and toencourage corporate partnerships and sponsoredresearch opportunities.

Exports and International Trade

More than 50 million American workers are employed bybusinesses that export, according to the U.S. Department ofthe Treasury. One in four manufacturing jobs depends onexports, and one in every three acres on American farmsis planted for export markets. Whether businesses are large

faster, hire more, and pay better wages than those that donot.

Our neighbors in the Americas—Canada, Latin America,and the Caribbean—purchase over 42 percent of U.S.exports, and Europe and East Asia each account for a 25percent share. Capital goods have historically been thelargest category of U.S exports, including automobiles,engines, parts, and industrial equipment. Exports to Chinaof management, consulting, and public relations servicesincreased by 36 fold from 2002 to 2008. Our exportsto India in construction, architectural, and engineeringservices increased 39 fold over the same period.34

More than a quarter million of America’s small businessesexport, and they account for nearly a third of U.S.merchandise exports, but that’s just one of every 100

companies. There is ample opportunity to create new jobsby helping America’s small businesses start exporting

contacts they need to sell overseas.

Most states promote the expansion of exports either

in-house component of their economic developmentagency. The focus of these state initiatives is to facilitateaccessing the global marketplace by providing training andassistance, building international trade relationships, andadvocating the importance of international trade among thebusiness community.

Top Exports Performers

Export measurements track manufactured exports inthe state of shipment origin, excluding bulk commodityexports usually attributed to the state of port location. Highperforming states are based upon the value of exports asa share of total economic output, change in export valueas a share of economic output, change in a state’s share ofthe nation’s total exports, and overall export growth 2002-2009.

Louisiana1. – Louisiana placed in the top eight statesfor all four export measures. Exports spiked alongwith growth in the energy economy, including smallmanufacturers producing industrial equipment. Thestate’s exports to China totaled $5.4 billion in 2009, upmore than 50% over 2008.

South Carolina2. – To enhance exports, the state hasdeveloped a Port Volume Increase Credit that providesa discretionary tax credit for certain industries thatincrease use of South Carolina ports. The PortVolume Increase Credit is available to manufacturers,warehousers, and distributors that use South Carolinaport facilities and increase base port cargo volume by5% over base-year totals.

Utah3. – Utah places in the top ten for all four exportmetrics. With over 2400 businesses engaged ininternational trade, the state has been among ahandful of states leading the way in export growth.The World Trade Center Utah, in partnership withthe Salt Lake Chamber of Commerce and the

a “support organization”, connecting companies inUtah to international markets, providing training,identifying opportunities, and establishing networkingopportunities through the Utah International TradeHub.

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Texas4. – Texas export total for 2008 was $192.2billion, higher than any other state. Between 2004and 2008 the export total from Texas rose 64%, or$74.8 billion - which was the largest dollar gain of all50 states. In terms of markets, 32% of Texas exports($62.1 billion in 2008) went to Mexico. To maximizethe state’s presence in international markets, the statedeveloped a strategy to market the state’s assets on aninternational scale for both export and foreign directinvestment opportunities. This included creating andimplementing an effective advertising campaign toposition Texas globally as a premier business location

Mississippi5. – Mississippi has worked to increase the

to promote the state’s transportation and distributioncapabilities, and to enhance the state’s brand in theglobal marketplace as a source for quality productsand services. Partly due to investments in keytransportation, shipping, and logistical infrastructurewithin the state, Mississippi has seen exports increaseas a share of its total economic output and the state is aleader in export growth.

Delaware6. – Delaware is part of a cooperative effortof regional banks to assist exporters in submitting

through the Export-Import Bank of the UnitedStates (Ex-Im Bank). This enables Ex-Im Bank to

state has fostered the development of the World

organization that provides international trade servicescomplementing and supporting existing services ofprivate and government agencies, working closely withthe Department of State, International Trade Section toachieve global trade objectives.

Iowa7.

individualized assistance and counseling for Iowacompanies looking to tap international markets,and the state’s Export Trade Assistance Program

international trade missions. Efforts are paying off asthe state places fourth in growth of exports as a shareof gross state product.

Kentucky8. – To help foster growth in exports,Kentucky has developed The Kentucky World TradeCenter (KWTC) to help companies import, export,and establish overseas operations. The KentuckyWorld Trade Center offers counseling, market research

services, translation assistance, trade educationseminars, international events and programs, cross-cultural training, trade missions, and referrals to localinternational service providers.

Kansas9. – To accelerate ongoing trade initiatives,the Kansas Export Finance Program (an export loanguarantee program) was established to help companies

The state issues loan guarantees, encouraging lending

participate in export orders.

Nevada10. – Nevada led the nation in our overall exportgrowth between 2002 and 2009. Looking to buildon its strength, the state has signed a memorandumof understanding with China focused on expandingtrade and private investment activities between Nevadaand China. The state works with a network of traderepresentatives in targeted markets throughout Asia,North America and Europe, focused on cultivatingdistribution channels and facilitating opportunities forforeign direct investment in Nevada enterprises.

Infrastructure

Infrastructure plays a critical role in economicdevelopment and states have taken a lead role in workingwith local, regional and national governments to put it inplace. The basic infrastructure package of the economyincludes highways, airports, harbors, utility distributionsystems, railways, water and sewer systems, andcommunications networks.

In the ever-changing network-centric, innovationdriven economy infrastructure also includes universityand lab facilities, technology and training centers,export processing facilities, and research parks. Theseinfrasystems—integrations of facilities, technology andadvanced socio-technical capabilities—have emerged askey drivers of innovation and the locus of future higher-value industries and higher-paying jobs.

State expenditures on infrastructure include highways, airtransport facilities, and port facilities. Most states haveprograms in place for funding public works in industrialor research parks and for infrastructure associated withindividual business developments. States use their bonding

developed infrastructure banks.

Broadband telecommunication infrastructure is at theforefront of many state public policy initiatives and is

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viewed as indispensable to economic and communitydevelopment. The effect of broadband on job creation,particularly in high tech and other industries dependenton high-speed, highly interactive communications, iswell understood as a way to boost productivity, developnew products and services or create new businessmodels. Some states, e.g. California, also expectexpanded broadband deployment to lead to increased

Top Infrastructure Performers

States are measured based upon three broadband measures:share of lines that are high-speed, share of zip codes

high-speed penetration rate. Other measures include statefunding investments in air and sea ports and measures ofbridge and road conditions.

Florida1. – Florida is the nexus of the WesternHemisphere’s transportation links. The Floridatransportation infrastructure is multi-modal andincludes highways, railways, seaports, airports and aspaceport that enable companies to gain quicker accessto markets and reduce bottom-line costs. The state’s2010-11 budget recommendations include $6.7 billionto build and maintain the roads, bridges, intercitypassenger rail, and other public transportation facilitiesthat grow Florida’s economy and improve the qualityof life for its citizens.

Nevada2. – Nevada is making efforts to expand thedevelopment of its readily available energy resources,

particularly focusing on renewable energy. The statehas worked to streamline permitting processes for newrenewable energy projects and created a transmissioncommittee to identify options available to expandaccess to the grid and enable increased energy exports.The state has also implemented tax abatements focuseddirectly on promoting private sector investment inrenewable energy infrastructure, including facilities forthe transmission of renewable and geothermal energyproduced in the state.

Colorado3. – Home to the Department of Energy’sNational Renewable Energy Laboratory (NREL) andother national labs and major research universities(Colorado’s Collaboratory initiative), the state isfocusing on renewable energy and climate research.In collaboration with funding from the stimulus billthe state working to expand specialized researchinfrastructure and capacity to take advantage of its in-state research institutions.

Utah4. – The Utah Science Technology and Researchinitiative (USTAR) is a long-term, state-fundedinvestment to strengthen Utah’s knowledge economy.This initiative invests in innovation teams andresearch facilities at the University of Utah andUtah State University. The state in collaborationwith the University of Utah and private industryhas put together over $100 million (fundedprimarily with USTAR monies) to develop theNeuroscience Biomedical Technology Building.The interdisciplinary research facility includesa nanofabrication facility, wet and dry labs, core

for research investigators.

Arizona5. – The state and its academic partner, theUniversity of Arizona, have a developed a newbiosciences park designed especially for companiesworking in biosciences, biotechnology, life sciencesand pharmaceuticals, major industry subsectors in thestate. The state utilized academic funding sources incollaboration with federal American Recovery andReinvestment Act monies to develop the facility.

Georgia6. – Four of the top 10 warehouse providersin North America are headquartered in Georgia and90 percent of the top 25 global third party logisticsproviders have operations in Georgia. Nearly 21,000companies throughout all 50 states rely on thedeepwater ports in Savannah and Brunswick andexport to 153 out of 195 countries across the globe—these efforts are supported by nine general-purposeForeign Trade Zones across the state. The industry-

INFRASTRUCTURE & INFRASYSTEMSInfrastructure investments can drive growth

Public Works&

Utilities

InteroperabilityEssentialCommunity

FacilitiesTransactional Innovation

Roadways

Water

WasteTreatment

Energy

Connectivity ->telecommunications

Mobility ->transit, transport,

shipping

Distribution ->water and energy

Hospitals &clinics

Schools &

libraries

Fire & law

enforcementstations

Exportprocessing

zones &facilities

Logisticscenters

SpecializedFacilities ->R&D labs, techparks, skills trainingcenters, high-

performancecomputing

Advanced

infratech and

services forconnectivity,

energy,environment

Infrastructure Infrasystems

Source: Delore Zimmerman and Joel Kotkin. Financing the ProductiveEconomy: The Heartland Development Bank. New America Foundation.Washington, DC. 2008.

Infrastructure as a Driver of Economic Growth andJob Creation

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focused Georgia Center of Innovation for Logistics isthe State’s leading resource for fueling logisticscompetitiveness.

Illinois7. – To maintain and expand its status as aglobal logistics hub, Illinois is addressing pressingrenovations and repairs to state roads and bridges,expanding passenger rail and easing freight congestionthroughout the Chicago region, and increasingaccess to broadband opportunities for unservedand underserved communities, by combining stateinvestments with funding made available through theAmerican Recovery and Reinvestment Act (ARRA).The state is increasing intermodal capacity to alleviateregional freight congestion and to foster new economicdevelopment.

Washington8. – The state is utilizing gas tax andrecovery act funds to address critical safety andcongestion problems in the transportation system,helping to improve the movement of goods tomarket with a strong focus on rail and containerport initiatives—coupled with robust informationtechnology programs—to bolster export ready businessand industry.

Oregon9. – Oregon’s Infrastructure Finance Authority(IFA) assists communities to build infrastructurecapacity to address public health safety andcompliance issues as well as support their ability toattract, retain and expand businesses. The IFA alsoworks with municipalities, state agencies and property

that a site can be developed in 180 days or less) for

North Carolina10. – The Research Triangle Park(RTP) was founded in January 1959 by a committeeof government, university, and business leaders asa model for research, innovation, and economicdevelopment. The vision was to provide a readyphysical infrastructure that would attract researchoriented companies. More than 42,000 full-timeequivalent employees work in RTP with an estimated10,000 contract workers. These employees havecombined annual salaries of over $2.7 billion.

Workforce Development and Training

Workforce development and skills training are now at theepicenter of a new paradigm for economic development.“In states across America, higher education systems,

universities, and community colleges are working to helptheir regions and states advance in the new knowledgeeconomy. They are marshalling each of their coreresponsibilities—education, innovation, knowledgetransfer, and community engagement—in ways designed tospur economic development.”35

As companies become more reliant on competent, high-skilled workers and access to advanced know-how,workforce development becomes an essential ingredient ofinnovation-driven business ecosystems. Gaining access tothe capabilities, expertise, and facilities at universities andcolleges is an increasingly critical asset.36

Many, if not most, states have now embraced and provideresources to further the mission of universities as economicengines and have come to expect that universities will takesteps to facilitate access to higher education resources.Universities are encouraged to be entrepreneurial andcollaborative with partners in business and government—“the triple helix”—in order to facilitate building theirresearch enterprise and bringing ideas and inventions tothe marketplace. Research and development is now aprominent item on many state budgets and comprehensiveprograms to transfer technologies from the university tocommercial interests are commonplace.

Work force training is also a key element of state initiativesdirected at job creation. In particular, customizedtraining programs oriented to the needs of employersand/or emerging industries with high potential, e.g.nanotechnology, are carried out in partnership withcolleges and in many cases the individual businessesthemselves.

There is growing concern that our nation is not preparing

technology, engineering, and mathematics (STEM). The

science is considered one of the greatest threats to ournation’s long-term competitiveness and prosperity. Whileonly one-third of the recent bachelor’s degrees awarded inthe United States are in science and engineering more than

in South Korea.

States invest in education as well as programs forworkforce training and development. Innovative internshipprograms link high school and college students withbusinesses while customized training programs enablebusinesses to deploy a work force that meets their mostpressing needs.

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While much has been written about student achievementand K-12 education reform, this study is focused onworkforce development issues related to postsecondaryeducation and training programs for people who are activein the labor force.

Top Performing Workforce Development

and Training States

Our workforce development and training metrics combinemeasures of educational attainment, higher education

system performance:

Share of public high school students taking advancedplacement exams;

Educational attainment: Bachelor’s degree attainmentof 25-44 year olds;

Higher education output: rate of bachelor’s degreesconferred per 18-24 year old population;

Affordability: undergraduate charge as a share ofdisposable personal income;

Total charge (state and tuition funds) per degree or

Workforce development system performance: Jobretention rate of adult workforce system customerscompared to agreed placement rate goals.

Colorado1. – The Colorado Promise (2006) outlinedan education agenda for the state with three mainobjectives, including 1) to close achievement gapsin schools, 2) to double the number of degrees and

cut the high school dropout rate in half. Workforcetraining and development in the state is modeledaround an employer driven, locally led structure,consulting with regional economic developers andeducators. Initiatives include the Education andLifelong Learning Simulation (WELLS) Center, whichoffers specialized diagnostic and clinical skills trainingto the state’s healthcare workforce, and the Businessand Education Talent Readiness (BETR) Projectis a program focused on developing the science,technology, engineering, and math (STEM) skills ofthe Colorado workforce to better meet the demands ofindustry.

Florida2. – The Expanded Postsecondary ReadinessAssessment (EPRA) focuses on expanding the deliveryof the Florida College Entry-Level Placement Test(College Placement Test (CPT) or ACCUPLACER®)to more high school students. The goal is to identifythose 11th graders who demonstrate readiness and

those who may need additional preparation in highschool to ensure they are ready for postsecondary andcareer success after high school graduation. EmployFlorida links all of Florida’s state and local workforceservices and resources. The partners are WorkforceFlorida, the state policy and oversight board, and theAgency for Workforce Innovation, the state agency,which administers workforce funds. At the locallevel, there are 24 regional workforce boards thatadminister more than 80 “one-stop” centers. FloridaReady to Work is an employee credentialing programthat tests—and scores—job skills. It gives jobseekersa competitive edge, a credential that proves toemployers that they have the right skills for the job. Foremployers, it takes the guesswork out of hiring, savingtime and money.

New York3. – The EMPIRE Promise WorkforceDevelopment Strategy is designed to prepare studentsfor occupations that address workforce shortages. Theprogram includes statewide college recruitment andadmissions strategies and a scholarship program forgraduating students pursuing higher education andpathways into entry-level careers. Critical elementsof the program include a strong alliance with businessand industry and expanded recruitment of underservedpopulations and male students. The Department ofLabor (DoL), Division of Employment, and Workforce

shopping” for employment-related needs. They offermany DoL programs in a single location, includingcareer-related assistance and services for employers.

where the Department of Labor works in tandem withcounty and local workforce agencies.

Massachusetts4. – The state is a top performer in the

who complete a bachelor’s degree within six yearsof enrolling in college (67%). In addition, a very

and degrees relative to the number enrolled. TheMassachusetts Life Sciences Center promotes,coordinates, and invests in life sciences initiatives inthe state. The center oversees a life sciences internshipprogram that offers stipends for 12-week internships atlife sciences companies of less than 100 employees inthe state.

Connecticut5. – The state is a national leader inbachelor degree educational attainment, developedthe Connecticut Accountability for Learning Initiative(CALI). The goal of CALI is to provide a model ofstate support for districts and schools to support the

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process of continuous school and district improvementand to accelerate the closing of Connecticut’sachievement gaps and promote lifelong learning.The initiative has prompted a higher level of studentsto complete degreed studies at the 45 colleges anduniversities, ranging from Ivy League to communitycolleges within the state.

Washington6. – The state’s Strategic Master Plan

in degree production at Washington colleges anduniversities in the coming years to keep pace withprojected demand for college-educated workers inthe state economy. The Education Legacy Trust

public schools, academic help for struggling students,additional enrollments in higher education, and

in higher education. The Education Legacy Trustalso funds science, technology, engineering, andmathematics (STEM) programs including coachingprograms, teacher training funds, and leadershipprograms.

Minnesota7. – Fifty WorkForce Centers throughout the

and plan careers. Business development specialists aredeployed at the centers to help publicize job openingsand provide access to the right training. WorkforceIndustry Specialists work closely with a statewidenetwork of partners to help businesses in key industriesmeet their employee recruitment, training and retentionneeds.

Kansas8. – The state makes an effort to provideaffordable training to all sizes of business withinthe state. Funded by state lottery proceeds, KansasIndustrial Training (KIT) and Kansas IndustrialRetraining (KIR) Programs facilitate and assist injob creation and retention for Kansas businesses. KITfocuses on training for newly created jobs, while KIRis oriented towards skills upgrade training. Investmentsin Major Projects and Comprehensive Training(IMPACT) assist primarily large companies in projectsthat create new jobs.

South Dakota9. – The Board of Regents indicates that

time student in all categories compared to institutionsin the region and across the nation. To get to theaverage amount, South Dakota would need $52 millionin the base budget to perform the same functions.Compared to institutions in regional states, South

Dakota’s public universities do the same with less.South Dakota spends relative more on instruction, lesson administration (institutional support), and more ofits budget on academic support functions (i.e. librariesand computing) than its regional counterparts.

Utah10. – The Utah Educational Savings Plan (UESP)has reached more than $3 billion in assets, showing a

for the future cost of a higher education for their childor grandchild. UtahFutures.org is a comprehensiveone-stop career information website for students, jobseekers and businesses. Individuals can use the site toaccess and organize training, education, and careerinformation online. The education and career portfolioclients build on UtahFutures.org travels with themfrom job to job. An application is available for mobilesmart phones.

Taxes and Regulation

Taxes and regulations impact the decisions and competitiveposition of businesses both large and small. Thecombined burden of excessive taxes and onerous regulationcan not only inhibit new job creation but also jeopardizeexisting jobs. On the other hand, a reasonable tax codeand regulatory environment can reward achievement,

businesses that now compete in a global economy on adaily basis.

The competitiveness of a state’s business climatedepends on numerous factors including the cost ofdoing business, taxes, environmental regulations, andlabor laws. Other factors affecting business climate areentirely outside the control of states and communitiesincluding natural resources and amenities or location-related advantages such as proximity to waterways.

As noted by the Tax Foundation “the most competitivetax systems create the fewest economic distortions byenforcing the most simple, pro-growth tax systemscharacterized by broad bases and low rates.” 37

Consequently a relatively higher overall tax burden forbusiness in one state is not necessarily less competitivewhen compared to another state structuring tax lawsin a less enterprise-friendly manner and not providingequivalent public services. Taxes levied must deliverequivalent services valuable to the business community.

Tax competition among the states of course is a reality.Many states have used tax incentives in conjunction withsubsidies over the years to attract companies, sometimeswith mixed results. Tax abatements or tax-reduced

22

zones are frequently established by states to encourageinvestment and job creation in economically distressedcommunities.

Many states use tax credits applied against a business’sstate tax liability to target certain kinds of preferredbusiness activities. Most recently tax credits for researchand development (R&D) and for private sector individual(angel) investors have come to the forefront. Theexpectation is that tax credits will lead to job creation andthe boosting of innovation, productivity, GSP growth andstate tax revenues, thus laying the groundwork for longer-term prosperity.38

States are focusing tax credits on R&D and for investorsin technology-driven businesses because many of the

direct and indirect research jobs are created in industriesthat employ high-skilled high-wage workers, includingscientists, technicians and production jobs in equipmentmanufacturing. These kinds of jobs and careers arehighly sought after by the states and local communitieswishing to be competitive in the knowledge-based,innovation-driven economy.

Targeted tax credits are often viewed as more effectivethan direct economic development incentives since a tax

to trigger the incentive. It is these direct investmentsin growing, innovative private enterprise that are thefoundations for long term regional growth. Because taxcredits leverage direct outside investment in in-statecompanies, these investment credits are rapidly replacing

State Budget Crises

light on the issue of taxation. By some estimates, state

budget shortfalls in 2009-10 reached $291 billion, and

the crunch will continue for years to come.

California had to close its near $60 billion shortfall

in 2009 using, in part, the issuance of IOUs. Some

California through 2014.

States with very high tax rates on personal and

corporate income were among those with the most

severe budget crises. High-tax California, New York,

and New Jersey, for example, faced some of the worst

budget shortfalls and threats to their credit ratings.

York it was $21 billion.

In 2009, the Pew Center on the States issued a report

card called “Beyond California: States in Fiscal Peril.”

on Pew’s list, 11 of them labored under the most

onerous tax and regulatory regimes, according to our

measures. But none of the 10 best performers on

our tax and regulatory list made Pew’s list of the 10

most favorable tax and regulatory environments by our

measures, only two, Nevada and Florida (among the

very worst victims of the housing bust), were on Pew’s

It does not appear low-tax states suffer budget

crises. On the other hand, high tax rates and

health. Rather, they tend to (1) suppress business

vitality and thus sustainable tax receipts; and (2)

contribute to an unhealthy budget environment,

where higher revenues are presumed and

promised, but often fail to materialize, thus

leading to funding crises and the never ending

temptation of further higher taxes to close the

gaps. It is a vicious cycle.

Overall, 43 states have raised taxes to help

But in an environment where both short- and

long-term economic growth and job creation are

desperately needed, better tax strategies are

imperative.

Gov. Schwarzenegger and a special commission

have proposed sweeping changes to California’s

the tax system. They seek to eliminate the state

corporate income tax and to reduce in individual

income tax rates and replace them with a broader

based business consumption tax. The fate of

this fundamental reform, however, is an open

The lesson is that high tax rates do not

health. Rather, they can push marginal investors

and employers out of the state, and they tend to

lead to boom-bust budget cycles.

23

Overall cost of living index.

South Dakota1. – The state’s top showings in corporatetax and enterprise friendliness have helped build a

added more than 9,000 jobs for 24% growth since2002.

Wyoming2. – Recent windfalls in severance revenuefrom its extraction based industries have helped fundtargeted investments in infrastructure projects thatcreate a growth-friendly environment in communitiesthroughout the state. Astute management of theserevenue sources has placed Wyoming third of all statesin budget gap, positioning it well to maintain its top

small business survival environment.

Tennessee3. – The state offers tax credits for jobs and“super” jobs initiatives for investments of at least $100

paying at least 100 percent of the average occupationalwage in the state. Other incentive programs includecredits for having a headquarters in the state, a tieredrural opportunity initiative, credits for pollution controlequipment and industrial machinery tax credits as wellas emerging industry tax credits, favorable workerscompensation rates, and accelerated depreciation.

Indiana4. – Indiana has a very competitive business

income tax on adjusted gross income and no grossreceipts tax or inventory tax. Programs or initiativesinclude corporate income tax based solely on sales inIndiana, a single-sales factor method of income taxapportionment, tax credit to corporations that relocatetheir headquarters to Indiana, R&D sales tax credit forresearch and development equipment, tax exemptionsfor new technology or processes and permanentexemptions for enterprise IT equipment.

North Dakota5. – North Dakota is one of the few statesoperating with a budget surplus, gets high marks forthe fairness of its legal system, and is the only state toown its own bank. One of the bank’s functions is toprovide a secondary market for real estate and businessloans, which it buys from local banks, along with aportfolio of student and small business loans. The

higher education and purchases the SBA guaranteedportion of business loans. In the last decade, the Bankof North Dakota has turned back a third of a billiondollars to the state’s general fund, offsetting taxes.

direct taxpayer subsidies for business recruitment andare shifting the focus towards stimulating growingbusiness already in the state.

Regulatory requirements among the states also showconsiderable variation. States—each in their own way—balance quality of life considerations with the need toavoid unnecessary costs and barriers for businesses thatlimit economic activity.

implemented initiatives for streamlining red tape to helpbusinesses sort through the many layers of governmentregulation. A number of states have created single pointsof contact or concierge-like services to help businessesnavigate the multiple agencies they must interactwith and the regulations that relate to health, safety,land use, and natural resources. Most, if not all, stateshave implemented e-government solutions to enablebusinesses to more easily interact, comply, and transactwith government service providers and regulatoryagencies.

The litigation environment in a state is also very likely toimpact important business decisions, which could haveeconomic consequences for the states. A recent nationalsurvey of policymakers who care about economic

can be made to the litigation environment in states. Twothirds of law-oriented company executives indicate thatthe litigation environment in a state is likely to impactimportant business decisions at their companies, suchas where to locate. Top issues of concern include tortreform issues in general, especially capping damages,timeliness of court decisions, elimination of unnecessarylawsuits, limits on discovery, and speeding up of the trialprocess.

Top Performing Tax and Regulation

States

State tax and regulation measures include broad-based tax,business environment, and cost measures:

Taxes: Overall state and local tax burden and a statecorporate tax index;

A small business survival index, a broad measure of 36government-imposed or related costs impacting smallbusiness and entrepreneurs;

Size of state budget gap based on a report from thePew Center on the States;

A measure of state liability systems climate, based ona poll conducted by Harris Interactive; and

24

Virginia6. – The state has developed a streamlinedpermitting process, recruitment training programsto help new businesses become operational faster,right-to-work law allowing individuals the right towork regardless of membership in a labor union ororganization, and a six percent corporate income taxrate has not been increased since 1972.

Missouri7. – State law sets the corporate income taxrate at a percentage of net taxable income earned bya business in Missouri. In addition, Missouri allows aportion of federal income tax payments to be deductedbefore computing taxable income. An important taxadvantage for Missouri businesses is the amount ofincome considered taxable, only income earned inthe state is taxed. Manufacturer’s inventories (raw

well as goods and wares of retailers, distributorsand wholesalers are exempt from property taxes inMissouri.

Utah8. – Businesses conducting research within thestate are eligible for tax credits for research expensesand investments in research machinery and equipment.Entrepreneurs looking to relocate to or expand existingoperations can also receive special tax incentivesin support of their job creation activities throughthe state’s Economic Development Tax IncrementFinancing initiative.

Colorado9. – Colorado provides incentives focused onjob creation, employee training, expedited permitting,licensing and infrastructure improvements, localproperty tax abatements, and targeted industry taxrelief. Colorado also has a variety of public and private

resources businesses need to start and grow theirbusiness.

Oklahoma10. – With several programs targeted towards

including manufacturing; research and development;wind power manufacturing; corporate services; datacenters; knowledge-based professional and technical

and specialty hospitals.

25

Measuring the States: The Metrics

For this study we assembled 35 measures of overall

areas for job growth. Data for each measure was tabulatedfor each state and states were compared according toperformance.

displays each state’s performance for each of the 35metrics. Dark red squares indicate a top 10 position in thatmetric and light red squares indicate an 11-25 position ina particular metric. To gauge a state’s performance readacross the page for each state or region. Groupings of redhighlights indicate better performance in that policy area.

States are grouped by region and metrics by policy area foreasy visual comparison to other neighboring states. Forinstance, the Northeast proves to be a poorer performer intax and regulation, as shown by large blocks of white, butdarker red sections can be seen showing the region as awhole showing higher in bachelor’s degree attainment andbroadband penetration.

Economic PerformanceJob Growth, 2000-2009. Percent job growth between

of Labor Statistics Current Employment Survey.

Job Growth, 2007-2009. Percent job growth between

of Labor Statistics Current Employment Survey. Measuresrecent job shifts since the peak year before the recentrecession.

Gross State Product Growth, 2000-2008. Growth ingross state product, 2000-2008, real dollars adjusted for

Gross State Product Output per job, 2008. Totaleconomic output per job, a measure of a state economy’sproductivity. U.S. Bureau of Economic Analysis.

Growth in Gross State Product Output per job, 2000-2008. Percent change in total economic output per jobbetween 2000 and 2008. An indication of a states shifttowards higher value jobs and industries. U.S. Bureau ofEconomic Analysis.

Per capita personal income growth, 2000-2009. Changein real income per person, 2000-2009.

Median income for a four person family, adjusted forcost of living, 2009. Measures income at equal purchasingpower across states. U.S. Census Bureau, MissouriEconomic Research and Information Center, using datafrom Council of Community and Economic Research.

ExportsDollar value of manufactured exports per dollar ofgross state product, 2008. Value of exports equalizedfor the relative size of state economies. Measures theimportance of exports to a state’s economy. Coversmanufactured exports, not including bulk commodities thattend to be credited to the state where the exporting port islocated. U.S. Census Foreign Trade Division, U.S. Bureauof Economic Analysis.

Change in dollar value of manufactured exports perdollar of gross state product, 2002-2008. Measuresincreasing or decreasing role of exports in a state’seconomy. Manufactured exports. U.S. Census ForeignTrade Division, U.S. Bureau of Economic Analysis.

Change in state share of total national exports, 2002-2009. Measures a state’s export performance relative toother states and accounts for overall national export growthor decline. Manufactured exports. U.S. Census ForeignTrade Division.

Change in gross manufactured exports, 2002-2009.Manufactured exports. U.S. Census Foreign TradeDivision.

Innovation and EntrepreneurshipGrowth in science, technology, engineering, andmathematics jobs, 2002-2009. Growth in computerspecialists; mathematical science; engineers; engineeringtechnicians; life scientists; physical scientists; socialscientists; and life, physical, and social science technicians.EMSI Complete Employment, First Quarter 2010.

Concentration science, technology, engineering, andmathematics (STEM) jobs, 2002-2009. Measuresconcentration of STEM jobs in a state versus the nation.Location Quotient: share of STEM jobs in state dividedby share of STEM jobs in nation. EMSI CompleteEmployment, First Quarter 2010.

Research and Development as a share of Gross StateProduct, 2007. Measures the extent to which R&D playsa role in the state economy. Research by any private,university, government, or other agency. National ScienceFoundation Science and Engineering State Indicators,2010.

26

State Agency R&D expenditures per 1 million grossstate product, 2007. Research by state agencies adjustedfor size of economy, excludes research in state-rununiversities and associated labs (academic R&D). NationalScience Foundation Science and Engineering StateIndicators, 2010.

Net high-tech business starts as a share of allestablishments, 2006. Ratio of net high technologybusiness formations to the number of total establishments.National Science Foundation Science and EngineeringState Indicators, 2010.

Kauffman index of Entrepreneurial Activity, 2006-2008. Measure of monthly new business starts derivedfrom the Current Population Survey. KauffmanFoundation.

Taxes and RegulationState and local tax burden, 2008. Composite measure ofoverall state and local tax burden expressed as a share ofincome. Tax Foundation.

State business tax climate index, 2010. Index of taxesaffecting business. Tax Foundation.

Small Business Survival Index, 2009. An indexcombining 36 measures of government imposed orrelated business cost measures affecting a wide varietyof industries and business types. Small Business &Entrepreneurship Council.

Perception of legal system balance and reasonableness,2009. Survey of business leaders and business litigatorsmeasuring perceptions of state legal system fairness andenterprise friendliness. Institute for Legal Reform, 2010.

State Budget Gap, 2010. State budget gap as a percentage

States using data from the Center on Budget and PolicyPriorities, 2010.

State cost of living index, 2009. Missouri EconomicResearch and Information Center, using data from Councilof Community and Economic Research.

Workforce Development and TrainingBachelor’s degree holders among 25-44 year oldpopulation, 2007. National Science Foundation Scienceand Engineering State Indicators, 2010, calculated fromU.S. Census American Community Survey.

Share of public high school students taking AdvancedPlacement Exams, 2008. Measures the extent to whichrigorous curriculum is available in secondary schools.National Science Foundation Science and EngineeringState Indicators, 2010, College Board, Advanced PlacementReport to the Nation.

Bachelor’s degrees conferred per 1,000 18-24 year-olds, 2007. Measures degree output of the state highereducation system. National Science Foundation Scienceand Engineering State Indicators, 2010, National Center forEducation Statistics, U.S. Census Population Estimates.

Average undergraduate charge at public four-yearinstitutions as a share of disposable personal income,2008. Measure of degree affordability adjusted for stateincome levels. National Science Foundation Science andEngineering State Indicators, 2010, National Center forEducation Statistics, U.S. Bureau of Economic Analysis.

2007. Includes funding from appropriations and fees.“The Dreaded P Word,” Patrick Kelley, Delta Cost Project.Employment retention rate goal attainment, 2008.

Ratio of workforce development system adult customersstill employed several months after exit compared toagreed-upon goal rate. Measure of performance of astate’s workforce assistance system. U.S. Department ofLabor Employment and Training Administration.

Infrastructure

speed, 2008. Measure of broadband capacity. FederalCommunications Commission.

providers, 2008. Federal Communications Commission.

Residential broadband penetration rate, 2008.Measure of overall broadband accessibility. FederalCommunications Commission.

Share of budget expenditures devoted to air and seaports, 2006-2007. 2007 Census of Government Finance.

functionally obsolete, 2009. Federal HighwayAdministration, National Bridge Inventory.

Percent of road miles rated mediocre or poor, 2009.Federal Highway Administration.

27

STATE PERFORMANCE

State

IL 47 38 43 7 29 36 4 17 15 14 31 47 24 20 26 36 42 20 27 24 45 49 19 11 22 34 41 16 37 10 31 18 9 6 30

IN 47 40 48 27 34 47 22 7 7 17 30 42 36 17 11 32 40 23 21 15 4 9 13 37 30 11 43 27 39 28 33 36 20 20 18

IA 25 11 16 32 4 20 13 14 4 18 14 21 38 32 31 24 33 20 45 41 5 19 16 18 45 7 32 23 1 37 36 32 46 33 25

KS 27 14 28 37 8 22 7 12 3 23 17 34 26 32 18 27 40 29 40 26 14 37 5 15 43 16 8 10 21 21 39 21 48 16 45

MI 50 50 50 19 47 50 16 6 40 51 50 50 10 6 20 48 33 23 48 23 30 16 23 28 28 25 47 32 27 13 11 34 30 28 34

MN 30 29 30 18 13 35 2 22 28 24 29 42 10 10 37 44 28 39 44 50 11 33 33 6 23 21 30 20 4 20 40 25 28 2 27

MO 30 18 47 36 41 33 20 37 37 42 41 25 29 28 26 24 45 18 5 18 37 13 9 28 47 12 36 25 14 19 37 36 31 38 36

NE 17 8 22 35 6 21 12 36 35 29 18 25 35 37 34 22 26 31 35 34 3 6 5 13 48 10 14 28 11 44 34 25 40 29 15

ND 5 1 2 45 1 2 24 23 9 27 5 1 45 35 5 26 28 18 30 17 2 1 18 14 49 7 6 5 47 36 50 29 14 17 12

OH 49 41 49 26 42 46 11 8 18 50 43 45 25 22 6 42 46 44 38 11 29 17 15 31 33 24 48 26 42 38 4 14 43 23 3

SD 12 7 4 34 2 10 23 39 16 31 13 12 43 45 12 42 21 6 1 1 9 4 5 24 36 13 5 9 29 41 10 29 32 27 24

WI 42 32 39 31 31 39 10 15 13 20 26 28 26 27 29 38 33 39 29 30 22 39 19 22 19 19 17 13 36 7 48 21 45 4 29

CT 44 28 44 3 45 27 6 21 27 16 23 47 10 5 14 38 28 48 18 40 24 39 45 2 11 20 12 46 6 9 19 6 49 42 23

ME 33 25 34 48 33 16 46 35 36 40 44 34 37 39 2 37 10 36 43 45 12 34 39 25 6 14 44 36 35 4 45 4 38 41 33

MA 46 22 33 5 17 24 3 19 33 44 35 42 2 2 47 32 25 27 47 43 9 26 41 1 10 3 26 44 12 26 7 1 21 50 20

NH 21 11 31 23 35 41 14 31 19 33 24 30 14 9 43 44 33 5 50 33 16 22 40 9 26 5 45 15 51 33 9 1 12 39 32

NJ 38 27 38 4 42 25 8 29 23 15 28 45 7 8 16 47 32 50 41 49 32 44 47 3 19 41 39 43 43 34 2 3 50 43 50

NY 28 9 13 2 5 19 40 38 32 47 37 37 22 34 17 38 10 49 20 47 23 46 44 5 2 18 13 39 15 12 23 5 22 46 35

PA 30 21 32 21 30 23 17 33 17 7 20 33 21 14 10 35 49 39 37 27 33 27 29 17 32 6 46 37 48 39 43 13 35 48 38

RI 43 46 36 15 25 14 21 47 46 30 46 30 22 19 40 44 33 39 36 44 38 31 42 12 40 1 37 47 23 8 1 10 7 51 42

VT 37 31 17 41 6 18 43 11 47 38 45 37 20 22 28 34 10 43 28 46 25 43 43 10 11 2 49 42 25 48 28 32 44 44 37

AL 33 35 23 39 14 17 36 13 21 35 34 15 33 26 36 30 47 11 23 9 47 24 11 41 44 33 21 38 34 30 13 46 19 24 13

AR 20 11 27 43 11 9 45 34 29 25 11 15 46 47 22 27 8 36 39 25 44 5 3 49 5 40 26 19 22 24 42 48 41 21 39

DE 39 39 26 1 19 30 19 16 5 19 9 49 6 13 37 50 48 27 49 35 1 25 31 25 16 15 42 48 18 34 17 7 37 8 26

FL 15 47 8 24 16 26 35 25 26 4 19 18 31 40 15 20 10 4 15 6 41 38 30 33 4 42 4 1 7 5 3 14 8 7 2

GA 36 45 37 22 49 49 18 24 20 10 22 37 31 36 49 5 2 35 8 20 27 42 10 23 9 43 23 11 26 22 14 29 11 13 6

KY 41 33 34 38 23 29 31 5 12 11 25 25 42 43 23 38 24 23 42 22 40 15 4 44 30 30 39 22 2 22 47 42 34 40 1

LA 26 3 46 28 44 3 38 4 1 3 8 21 46 49 42 22 21 8 19 29 49 35 24 47 50 38 2 11 31 6 12 36 15 37 40

MD 18 18 15 12 19 13 5 42 30 12 10 12 4 3 13 20 28 47 14 37 20 29 45 4 1 31 28 41 38 43 29 8 18 31 44

MS 45 25 42 49 31 11 47 20 6 9 6 21 50 40 41 29 5 15 13 19 48 11 14 48 45 44 31 17 46 28 6 49 39 26 28

NC 23 35 19 20 26 45 30 32 38 28 32 17 28 18 19 10 33 31 25 39 17 36 22 30 13 36 18 31 20 24 8 14 26 34 11

OK 13 6 25 46 19 8 34 43 41 26 15 21 38 45 23 16 10 31 7 21 31 20 1 42 28 29 7 6 28 2 35 42 23 36 46

SC 28 33 39 44 48 37 39 3 2 8 16 11 40 30 9 18 42 14 9 7 39 18 24 36 21 37 50 30 50 31 27 14 29 19 22

TN 40 35 20 29 9 34 29 18 24 13 27 30 48 31 46 12 17 7 11 13 19 12 2 40 35 32 20 33 17 39 49 42 33 15 8

TX 8 5 10 11 27 32 27 2 8 1 21 8 15 29 44 17 23 8 46 3 36 10 8 34 15 45 15 29 44 17 24 36 13 12 19

VA 16 18 12 9 12 15 1 41 42 45 40 5 1 16 39 2 42 31 4 10 6 14 26 8 3 28 25 24 45 47 21 20 2 30 9

WV 23 14 41 42 36 4 41 30 34 32 38 18 43 37 3 49 49 20 24 36 50 7 17 50 38 9 34 7 19 32 26 46 47 45 41

AK 3 2 44 8 50 12 32 49 50 43 52 6 15 44 8 5 10 1 26 12 33 45 48 39 27 50 3 50 49 50 51 18 5 25 31

AZ 10 49 3 17 22 42 37 26 48 49 49 18 18 25 21 9 3 10 22 16 13 48 34 38 42 4 35 18 30 27 5 28 10 1 16

CA 33 42 21 6 9 38 48 27 43 52 42 37 7 7 32 11 5 45 34 48 46 50 49 18 7 46 33 35 32 16 18 10 17 35 48

CO 19 23 29 16 36 48 25 48 49 46 48 34 5 11 32 5 16 17 12 8 8 28 36 7 8 22 18 2 13 18 20 12 4 9 17

HI 11 30 14 25 24 7 50 50 45 37 47 7 40 42 4 13 26 46 10 42 35 30 50 20 34 39 9 45 40 1 25 1 47 49

ID 8 42 6 46 18 31 28 28 31 36 33 37 19 24 30 5 4 38 17 32 18 23 12 34 41 26 11 14 3 42 41 40 36 14 47

MT 6 9 9 50 15 6 44 44 25 22 3 12 30 15 7 13 1 11 16 31 43 1 32 32 37 23 28 8 24 51 46 40 25 11 7

NV 2 48 1 13 27 43 33 40 11 6 1 3 49 48 48 4 17 2 3 2 28 47 37 46 18 49 9 40 8 3 22 25 6 3 14

NM 7 14 18 30 40 5 49 45 39 41 51 8 9 1 50 19 5 11 32 28 41 8 28 45 24 47 24 34 9 45 32 42 42 10 43

OR 22 44 5 14 3 44 42 9 22 39 36 28 15 12 35 30 8 23 31 38 21 21 38 20 25 27 38 21 33 11 38 21 16 22 4

UT 4 24 7 40 38 40 26 10 10 5 4 3 13 21 44 1 17 29 6 14 7 32 19 25 14 17 21 4 41 14 16 21 24 5 5

WA 14 17 24 10 39 28 15 1 14 48 39 8 3 4 25 13 33 15 33 5 25 41 35 16 17 35 15 3 16 14 30 9 3 32 21

WY 1 3 11 33 46 1 9 46 44 34 12 2 34 50 1 3 17 3 1 4 15 3 26 43 39 48 1 49 5 49 15 34 27 18 10

West

Region

Performance

Midwest

Region

Northeast

Region

South

Region

Exports Innovation Tax & Regulation Workforce Develop. Infrastructure

10 Top Ten States

17 Next 15 States

28

Alabama’s economy has realized considerable job growth

created statewide. In 2008, Alabama announced 441 newand expanding industries that invested over $6.7 billionin the state. Unemployment reached its lowest level inhistory in 2007 and personal incomes are rising at a ratefaster than any other Southern state. To ensure Alabama’sprogress continues, the state has proposed tax reliefthat will target middle class families and promote smallbusiness growth.

Entrepreneurship and Innovation

Alabama Launchpadorganization dedicated to support and promote high-growth entrepreneurship and innovation in Alabama. Theorganization is a partnership among the state’s researchuniversities and the business community. The Economic

corporation funded by more than 68 leading companiesin the state, is a founding partner of Alabama Launchpad.Using a business plan competition and other programs,Launchpad provides a framework for individuals in thestate to develop their business ideas and connect to anetwork of experts, investors, and service providers thatcan increase the odds of success.

The initiative provides opportunities to obtain startupcapital, receive expert guidance, and establish workingrelationships within the business, academic, and investmentcapital communities. Launchpad initiatives include effortsto increase the number of entrepreneurs in Alabama bymaking it easier for new entrepreneurs to connect with anetwork of key individuals that can help them to succeed,providing educational and networking opportunities fornew entrepreneurs, and providng a vetting mechanismthat helps local investors evaluate the risks of startupcompanies.

Exports

The state has set a priority to increase sales and export ofAlabama products to buyers in emerging markets such asIndia, Vietnam and the Middle East. Coordinated by the

Trade Alliance, this initiative includes large, medium andsmall businesses as well as newly exporting companiesfrom every region of the state. The program involvesmentoring efforts to encourage greater involvement in theglobal marketplace and capitalizing on existing Foreign

Alabama Launchpad

Alablama Launchpad is a partnership betweenthe state’s university, business and economicdevelopment communities to encourageand support innovation and high-growthentrepreneurship in Alabama.

Working together, leaders from across thestate are building and mentoring a pipelineof innovative startup companies founded byAlabama entrepreneurs, creating jobs, andpreparing the state for the “new” economy.

Trade Zones. A key example is the chemical productsindustry which exported $2.27 billion worth of products in2008. The chemical industry is the second largest exporterin the state, and employment within Alabama’s chemicalproducts industry stands at over 9,500.

Workforce Development and Training

The state has worked to create training programs tomeet the needs of employees and employers to maximizeretention and productivity. This has involved concertedefforts to strengthen the ties between workforcedevelopment and economic development and to promotesmall business development through the development of astrong and reliable workforce.

The Retrain and Retool for Reemployment programis designed to inform Alabamians, especially dislocatedworkers, of options for assistance. An applicationreview process ensures that funding allocations addressdocumented high-demand, high-wage occupations andthat Regional Workforce Development Council funds aredriven to the local level to meet documented priority needs.

ALABAMA

29

With an economy that’s been described as “1/3 oil,1/3 government, and 1/3 other,” Alaska faces its ownunique set of challenges and opportunities. Isolated,yet exceedingly rich in natural resources, Alaska hasexperienced strong job growth over the past decade asdomestic and global economic growth created strongdemand for its abundant commodities. While commodityprices have retreated from the dizzying heights reached in2008, Alaska still leads the nation in oil production andis taking steps to diversify economically while remainingcommitted to strengthening its strong resource extraction,natural resource processing, and tourism sectors.

Entrepreneurship and Innovation

Alaska has adopted an active role in supportingentrepreneurial research and innovation. The TechnologyResearch and Development Center provides supportto small businesses in pursuing SBIR awards to aid theirdevelopment of innovative new products and services,providing “phase zero” grants and application support.Since program adoption, application success rates inAlaska have increased. Small business technology transfersupport services are also provided. Business expansion,retention, and start-ups are encouraged by a verycompetitive tax environment, with Alaska’s tax burdenamong the lowest in the country.

Exports

Alaska produces a wide variety of raw and processednatural resources. Oil, however, is not a majorinternational export with almost all of the productionbeing consumed domestically. Seafood, minerals, ores,precious metals, forest products, and natural gas are allimportant export products for the state. In order to aidbusinesses in accessing export markets, Alaska operates anexport assistance program, providing guarantees on export

institutions. The state also takes part in private sectorefforts to enhance exports, as a member of the World TradeCenter Alaska, which works to provide Alaskan businesseswith trade related information, assistance services, andinternational networking opportunities.

Alaska Industrial Development & ExportAuthority

AIDEA, a public corporation of the state of Alaska, is

and development of Alaska by providing lines of

Loan Participation Programs

Revenue Bond Provision

Loan Guarantee and Export Finance Support

Development Finance

Rural and Small Business Initiatives and LoanFunds

institutions, and does not provide grants or competedirectly with the private sector. Each year, thecorporation pays a dividend back to the state whichcan then be reinvested. Through 2010, AIDEA hasreturned over $251 million to state coffers. Between2002 and 2009, AIDEA loan participation programsalone have helped Alaska create or retain over 7,600jobs.

ALASKA

Infrastructure

increase access to markets for its existing natural resourceextraction industries. In order to better develop naturalgas reserves in the state, Alaska’s government enactedthe Alaska Gasline Inducement Act. The Act provides asuite of incentives, including monetary reimbursement, toprivate sector companies that partner with the state to build

to end users.

As a result of the act, several major private sectorbusinesses produced proposals, and planning is nowunderway for development of a new line, with a secondindependent development effort underway. The statealso retains the ability to develop and own infrastructurefacilities which are then leased to private companies. Such

to private mines and open facilities to be leased to alogistics company, providing the economic infrastructureneeded to support the creation hundreds of new jobs.

30

Arizona has a strong track record of innovation and is

semiconductor manufacturing sectors. Rapid growthin these clusters allowed the state to enjoy some of thestrongest economic and population growth rates in thenation over the past decade. While the boom has slowedover the past two years, Arizona still hosts emergingbiosciences and environmental technologies clusters,and with its strong solar resources, holds the potential tobecome a leader in the creation and adoption of advancedsolar energy technologies.

Entrepreneurship and Innovation

The past decade has seen Arizona implement a string ofsuccessful initiatives focused on fostering innovation andentrepreneurial activity in the state. As part of the state’sBioscience Roadmap process, it created a biosciencescorridor anchored around the cities of Tucson, Flagstaff,and Phoenix. Launched following the 2002 adoption of aten year plan to grow the industry in the state, the corridorhas been driven by university partnerships and majorstate investments in new and expanded research facilities.Between 2002 and 2008, the corridor saw a 31% increasein bioscience jobs, far outstripping the national increase of12%.

Workforce Development and Training

The state and several counties in southern Arizona haveled the charge to leverage federal resources to strengthenthe state’s innovation economy, creating InnovationFrontier Arizona, a science, technology, engineering, andmathematics (STEM) focused workforce training initiative.

The Science Foundation Arizona has also focused effortson creating a highly trained workforce to aid innovationin the state using its STEM education initiatives and grantprograms. In the northern half of the state, the NorthernArizona Center for Emerging Technologies (NACET)was established by a partnership of public and privatesector groups, and is focused on providing technologyentrepreneurs with incubator and business support servicesduring start-up.

Taxes and Regulation

Arizona implemented an Angel Investment Tax IncentiveProgram to incentivize investment in small businesses andto support new entrepreneurs. While investors may receive

business, the credit is larger for investments in biosciencescompanies.

Renewable energy tax incentives, particularly focused onthe solar energy innovation industry, came online this yearlending more drive to that sector. They include investmenttax credits and steep reductions in property tax burdenon renewable energy manufacturing and headquartersfacilities. Since adoption, several companies haveannounced plans to enter Arizona, bringing the promiseof new technology jobs to the state. Arizona’s adoption ofrenewable portfolio standards, calling for 15% of the state’senergy to come from renewable sources by 2025, hasalso been credited with attracting new energy technologycompanies to the state, drawn by the promise of newmarket outlets for their innovations.

ARIZONAARIZONA

AERO “Fund of Funds”

Access to venture capital has been a challenge

relatively small venture capital community. Inorder to combat this problem AERO, the ArizonaEconomic Resource Organization, has launchedefforts to create an investment fund to supportsmall high-tech startups in the state.

conjunction with a variety of state and privatesector partners to create the fund. While seedmoney to lay the groundwork to create thefund came from the state, the fund will consistof private capital. AERO’s goal is to establishthe fund with $50 million, which will then be“structured and managed to attract overallinvestment of at least $200 million to helpcommercialize Arizona innovations.”

31

Home to a global retail giant and other Fortune 500companies, Arkansas works to maintain an enterprise-friendly environment conducive to job creation by fosteringstrong education, training, and entrepreneurship initiativesand by enhancing state infrastructure to support exportsand manufacturing. These strategies, coupled withstrong public-private partnerships, provide the state witha focused approach to economic development and jobcreation.

Workforce Development and Training

The University of Arkansas for Medical SciencesBioVentures (UAMS Bioventures) was established asa formal outgrowth of the UAMS College of Medicine’sefforts in technology transfer for human health. TheCollege of Medicine established the program to maximizeglobal, industrial interaction with University faculty andto facilitate technology transfer and the creation of startupcompanies. The University of Arkansas Research andTechnology Park, operated by the University of ArkansasTechnology Development Foundation, promotes public-private efforts to create a technology-based economythrough validating, developing and transferring ongoingresearch and inventions from the University out toArkansas companies and start-up ventures.

Entrepreneurship and Innovation

The Arkansas Risk Capital Matching Fund (ARCMF)targets investments in early-stage technology-basedenterprises that are not able to attract adequate sources of

capital for their growth and development. A portion ofthis fund validates early stage technology before otherinvestments can be made.

The Innovation and Entrepreneurship Center (IEC) isa joint effort of the University of Arkansas—Fort Smith,the Fort Smith Regional Chamber of Commerce and theCity of Fort Smith. The launch of the IEC is a signal ofthe region’s commitment to creating an environment thatis conducive to the establishment of new companies and tothe growth of companies already in the region. The IECoffers services that are critical in the development of newand emerging small businesses within the state:

One-on-one business coaching and assistance;Peer networks—that bring together groups ofentrepreneurs to share and learn from each other;A resource center that provides information andconnections to local, state and national resources;A capital clearinghouse that offers information andresources on available capital sources;Business and marketing plan assistance;Loan package development that helps with assemblingand creating the necessary documents to receive

Exports

The Arkansas World Trade Center (ARWTC) wasopened in late 2006 as a “one-stop” trade informationhub that provides services for Arkansas’ businesses andinternational companies including Latin America andAsian trade development, market research, trade missions,trade education services and business support services.

A $70 million state-of-the-art multi-modal facility anchorsa 2,200 acre industrial park. This key infrastructure,coupled with a focus on exports, provides the state with acohesive approach to job and new wealth creation.

Arkansas Quick Action Closing Fund

To enhance state infrastructure funding for newand expanding companies, the Arkansas GeneralAssembly enacted the Governor’s Quick ActionClosing Fund in 2007.

$50 million of the initial appropriation has beenused to attract and/or retain business that haveannounced the creation of more than 5,000 jobswhose salaries are projected to pay approximately125% of the state average hourly wage.

ARKANSAS

32

California consistently ranks as the largest state economyin the United States and represents the eighth largestmarket in the world. California leads the nation inseveral strategic high-tech industry segments, comprisingbetween 20-60% of U.S. market share in electroniccomponents, commercial aerospace, medical instruments,biotechnology, and transportation.

The Golden State also leads the nation in research and

half of the nation’s venture capital investment. Exportshipments of merchandise in 2009 totaled $120 billion,placing California second only to Texas ($163 billion)among the states in terms of total exports. California is thenumber one state for attracting foreign direct investment.

Entrepreneurship and Innovation

Designed to encourage businesses to increase their basicresearch and development activities in California, theresearch and development tax credit allows companiesto receive a 15 percent credit against their bank and

expenses, and a 24 percent credit for basic researchpayments to outside organizations.

The New Hire Tax Credit is a temporary tax incentivethat targets small businesses that create new Californiajobs. This credit is intended to complement existingjob creation tax credits the state offers to employers ingeographically targeted enterprise and other zones.

Effective in early 2010 businesses are able to share

subsidiary companies (known as unitary utilization). This

allocate tax credits within their family of companies.

Infrastructure

The California Infrastructure and EconomicDevelopment Bankand private developments that promote economic growth,revitalize communities and enhance quality of life forCalifornians. The I-Bank has extremely broad statutorypowers to issue revenue bonds, make loans, and providecredit enhancements for a wide variety of infrastructureand economic development projects and other governmentpurposes. The I-Bank is approaching $30 billion in various

Innovation Hub (iHub) Initiative.

The iHub initiative modernizes the state’s nationaland global competitiveness by stimulatingpartnerships, economic development, and job

State-designated iHubs. The “i” in iHub representsthe words innovation, inspiration, invention,ingenuity, and investment. The iHubs leverageassets such as research parks, technologyincubators, universities, and federal laboratoriesto provide an innovation platform for startupcompanies, economic development organizations,business groups, and venture capitalists.

Development

more than 100 programs across 28 statedepartments and create a one-stop shop, aconcierge service, so to speak, that lowers thecost of doing business and makes it easier toinvest and grow and to create jobs.

California returns to the forefront of the transportationpublic private partnership (PPP) market with theenactment legislation that allows for Caltrans and otherpublic agencies to use design-build for certain types ofpublic projects, including transportation projects usingcomprehensive development lease agreements. PPPsand Design-Build Authority will save businesses timeand money. Tapping into private money for neededtransportation projects will mean more jobs created morequickly and needed infrastructure built at a savings to thetaxpayer.

CALIFORNIA

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Workforce Development and Training

Colorado has made workforce development and educationtwo of its top priorities, working both activities into thestate’s overall economic development strategy. Workforcetraining and development in the state is modeled aroundan employer-driven, locally led structure, consulting withregional economic developers and educators.

partnerships to engage business to develop services andtraining as one of its priorities. One example of thisindustry-driven approach to training can be found inthe state’s Work, Education and Lifelong LearningSimulation (WELLS) Center, which offers specializeddiagnostic and clinical skills training to the state’shealthcare workforce. Working in collaboration withpublic and private partners, the Center offers a range oftraining and simulation services, both on and off-site tohelp the state meet the critical need for nurse recruitmentand training. Development of the state’s technology andinnovation workforce is also a focus.

The Colorado Business and Education TalentReadiness (BETR) Project is a program focused ondeveloping the science, technology, engineering, and math(STEM) skills of the Colorado workforce to better meetthe demands of industry. Conceived as a partnershipbetween government, educators, business, and faith basedorganizations, BETR offers STEM based lesson plans,job training, mentorship programs, and interactive toolspromoting STEM careers. Launched as a pilot projectin 2007 the program began a statewide rollout in 2009.Connecting industry needs to service provision alsoextends to the state’s system of community colleges, whichmaintains a career and technical education division. Eachcommunity college has a business advisory council thatworks to identify and meet the training needs of their localbusiness community.

Entrepreneurship and Innovation

A major focus of Colorado’s innovation agenda is thedevelopment of a “New Energy Economy.” In order totake advantage of its status as the home of the NationalRenewable Energy Laboratory (NREL), Colorado launchedthe Colorado Renewable Energy Collaboratory. TheCollaboratory is a research consortium backed by NRELand the state’s three leading research universities. Workingwith private partners, the Collaboratory coordinates efforts

Colorado Fund I

In addition to its focus on energy industry growth,Colorado is actively supporting development of itsbiotechnology, clean-tech, information technology,and medical devices sectors.

In order to help promising Colorado start-ups andearly stage businesses gain access to vital capital,the state established Colorado Fund I, a $25 millionstate-backed venture capital fund.

The Fund, capitalized by money from the state’sVenture Capital Authority, is operated in conjunctionwith an independently controlled private sector fundmanager. Decisions regarding investments aremade by the fund manager with the state setting

Investments in businesses range between$250,000 and $3.375 million.

COLORADO

research at six research centers.

The Bioscience Discovery Evaluation Grant Programprovides grants to early stage bioscience companies whichare working to commercialize technology developed at orin conjunction with one of the state’s research institutions.In 2009, the state adopted the same approach to supportclean-tech innovation in the state by creating a clean-techresearch grant program.

Taxes and Regulation

In order to spur in-state angel investment in promisingnew technology companies, Colorado has adopted anInnovation Investment Tax Credit pilot program that

investments in small businesses involved in research anddevelopment.

Renewable energy manufacturing has been an area ofsuccess for the state, attracting new facilities and creatingthousands of jobs over the past several years, includingseveral major wind energy component manufacturingcenters. This growth is supported by several enterprise-friendly tax policies, including a job growth incentivefund which provides payroll tax credits to supportbusinesses which create new jobs.

34

Connecticut is home to thriving high technology industriessuch as bioscience, aerospace, medical technology anddefense. Connecticut is a research and development huband a leader in emerging technologies including fuel cell,

media industry. The state claims many of the leadinginsurance companies, earning the nickname “InsuranceCapital of the World.” To accomplish this, the state hascapitalized on the intellectual might of over 45 collegesand universities, ranging from Ivy League to communitycolleges turning out highly educated workers andentrepreneurs.

Taxes and Regulation

Connecticut is a national leader in research anddevelopment as a share of Gross State Product. Toaccomplish this the state offers corporate businesstax credits that help promote and bolster research anddevelopment conducted within the state.

These initiatives include tax credits from 1 to 6% ofresearch and development (R&D) expenditures based onthe amount of R&D expenditures and size of company;a 20% credit of the R&D expenditures in the state in thecurrent income year that exceed the company’s R&Dexpenditures of the prior taxable year; and a 25% credit forany increase in grants to institutions of higher learning forR&D related to technology advancement over the 3-yearaverage funding level. Unused R&D credits can be carriedforward and companies with gross income of $70 millionor less can sell the credits to the state for 65% of theirvalue.

These tax credits, coupled with world-class educationalinstitutions, have helped propel the state into one ofthe leading locations for research and developmentopportunities in the country.

Entrepreneurship and Innovation

The state has initiated a program to foster innovation witha focus on helping to protect intellectual property. TheIntellectual Property and Entrepreneurship Law Clinicat the University of Connecticut’s School of Law givesstudents the unique opportunity to counsel Connecticut’sinnovators on an extensive range of intellectual property(patent, trademark, copyright and trade secret) and relatedbusiness law issues. The IP Law Clinic was established bythe Connecticut legislature as part of UConn’s ConnecticutCenter for Entrepreneurs and Innovation (CCEI), to

Connecticut Innovations (CI)

CI provides strategic capital and operationalinsight to push high-tech industries such asenergy, biotechnology, information technology,and photonics.

CI has helped over 100 emerging companiesresearch, develop, and market new products andservices. This activity has attracted over $1 billiondollars in additional investments from private

CI has brought the State of Connecticut over

additional job-years. CI was created by theLegislature in 1989. Since 1995, returns fromits own investments – not state money – havesupported operations and new, forward-thinkingfunding programs.

strengthen Connecticut’s economy with innovative newprograms aimed at supporting emerging companies.Because innovators encounter challenges arising fromboth the law and the marketplace, CCEI partners theLaw School’s IP Law Clinic with the Business School’sInnovation Accelerator.

Workforce Development and Training

In a knowledge-based economy, the development of acomprehensive approach to delivering education andbenchmarking these efforts is essential. Connecticut, anational leader in bachelor degree educational attainment,developed the Connecticut Accountability for LearningInitiative (CALI) to support districts and schools toimplement the process of continuous improvement, toaccelerate the closing of Connecticut’s achievementgaps and to promote lifelong learning. The initiative hasprompted a higher proportion of students to completedegreed studies at the state’s 45 colleges and universities.

CONNECTICUT

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Delaware is renowned for its enterprise-friendly climateand is often referred to as the “corporate capital of theworld,” as more than 60% of Fortune 500 companies areincorporated in Delaware. Coupled with the enterprise-friendly climate, the state has promoted strong initiativesto stimulate exports and science, technology, engineering,and mathematics (STEM) education to solidify and growemerging tech-based industries within the state.

Workforce Development and Training

Delaware has a history of fostering partnerships between

to enhance STEM education. The state has three primaryinitiatives related to STEM education including:

A requirement that all schools offer a rigorous courseof study in STEM subjects;Formalizing, continuing, and expanding collaborationwith industry experts, institutes of higher education,universities, research centers, and other communitypartners to assist teachers in integrating STEM contentacross grade and disciplines; andPreparing more students for advanced studyand careers in STEM disciplines, includingunderrepresented groups and women.

The STEM Coordinating Council works with theDelaware Department of Education to conduct focusedinterventions to target women and other groups

to strengthen STEM teaching, the state created a STEMResidency program for non-traditional candidates towork as assistant teachers in STEM subjects and earn full

DELAWARE

and forgiveness of loans are used to encourage teachers to

Taxes and Regulation

The state has adopted a clear policy to attract new businessand encourage the expansion of existing operations. Keytax features include no state or local general sales tax, nopersonal property or inventory taxes, property tax relief fornew construction and improvements of existing propertyand the exemption of certain investment and holdingcompanies from corporate income tax. Delaware alsorecently lowered its Gross Receipts Tax and reformed itsworkers compensation system.

Exports

stop resource for exporters. Experienced staff providesin-house and on-site counseling to small and medium sized

their current export sales.

Delaware is part of a cooperative effort of regional banksto assist exporters in submitting applications for export

of the United States (Ex-Im Bank). The state has fosteredthe development of the World Trade Center InstituteDelawareinternational trade services complementing and supportingexisting services of private and government agencies,working closely with the Department of State, InternationalTrade Section to achieve global trade objectives.

Intellectual Property Business CreationProgram

This program promotes all businesses within thestate of Delaware. As part of the Initiative, the stateand DuPont established the DuPont Innovation

$80 million capital investment by DuPont in theExperimental Station Laboratories, the donation of250 technology packages to the Delaware EmergingTechnology Center, and a new biotechnologyprogram for high-school students.

The DuPont Innovation Center was created on theExperimental Station campus – DuPont’s largestresearch facility with more than 2,000 scientists. Theinitiative also collaborates with the state to conductbiotechnology seminars for high-school students,providing six programs per year at the InnovationCenter.

$50 million of the initial appropriation has been usedto attract and/or retain business that have announcedthe creation of more than 5,000 jobs whose salariesare projected to pay approximately 125% of the stateaverage hourly wage.

36

Florida’s renown as a national and international touristdestination is matched by an aggressive approach todeveloping an equally appealing business climate to attractand retain businesses. A comprehensive approach to taxand regulatory issues and a focus on infrastructure makesthe sunshine state an appealing destination for businessand job growth as well.

Taxes and Regulation

The state has worked to develop an enterprise-friendlyclimate to help retain and expand existing businesses in thestate and give them a competitive advantage in conductingbusiness on the world stage. Florida has no corporateincome tax on limited partnerships, no corporate incometax on subchapter S-corporations, and no state personalincome tax, with income tax restrictions guaranteed byconstitutional provision. The state also has no corporatefranchise tax on capital stock, no state-level propertytax assessed, no property tax on business inventories, noproperty tax on goods-in-transit for up to 180 days, and nosales and use tax on goods manufactured or produced inFlorida for export outside the state. Production industriesin the state face no sales tax on purchases of raw materials

reusable containers or packaging, and no sales/use tax onco-generation of electricity.

Productive industry in the state is also supported by salesand use tax exemptions on machinery and equipment usedby new or expanding Florida businesses to manufacture,produce or process tangible personal property for sale.Exemptions on labor, parts and materials used in repair ofand incorporated into machinery and equipment, electricityused in the manufacturing process, and certain boiler fuels(including natural gas) used in the manufacturing processare also used to support manufacturing in the state.

High-tech industry receives support through taxexemptions on semiconductor, defense and spacetechnology-based industry transactions involvingmanufacturing equipment, machinery and equipment usedpredominantly in research and development, and the laborcomponent of research and development expenditures.Commercial space activity is also encouraged, with launchvehicles, payloads and fuel, machinery and equipment forproduction of items used exclusively at Spaceport Floridabeing exempt from sales and use taxes. Aircraft parts,

e-Florida

As a premier resource link for business within thestate, eFlorida is an extensive on-line resourcefor data, analysis, research, and news on thestate’s economy.

Resources and links include: 1) data on economicindicators; 2) knowledge and innovation assets;3) reports on foreign direct investment andinternational trade; 4) research on targetedindustry clusters impact and industry analysis;and 5) resource links to streamline informationand data analysis in identifying economic trendsfor job growth and expansion.

taxes. Another key element of the regulatory issue is tortreform which has been a priority for Florida’s enterprise-friendly leaders. Some of their most recent successesinclude the elimination of joint and several liability ratereductions for workers compensation insurance, and class-action suit reform.

Exports

Florida is home to more than 42,000 exporters, the secondhighest number in the United States. The state coordinates

international trade leads. The Florida Export FinanceCorporation

The Florida Trade Partners Alliance (FTPA), the onlyorganization of its kind in the country, is a statewidestrategic alliance of trade and economic developmentpartners that provide export services including counseling,

Infrastructure

Florida is a nexus of the Western Hemisphere’stransportation links. Florida’s transportation infrastructureis multi-modal and includes highways, railways, seaports,airports and a spaceport that enables companies to gainquicker access to markets and reduce bottom-line costs.Florida is currently targeting the completion of existingprojects, with an emphasis on projects that modernize thetransportation system and maximize the use of committedfederal funds.

FLORIDA

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Georgia is a top performer in infrastructure measuresand strong in measures of tax and regulation, workforcedevelopment and training, and exports. This strongoverall performance suggests a comprehensive approachto meeting the ongoing skills and infrastructure needsof retaining, growing and creating jobs in today’s globaleconomy.

Infrastructure

Georgia is home to the world’s largest international airport,the nation’s 4th-largest and fastest-growing container port,and extensive intermodal ground connectivity. In addition,four of the top 10 warehouse providers in North Americaare headquartered in Georgia and 90 percent of the top 25global third party logistics providers have operations inGeorgia.

Nearly 21,000 companies throughout all 50 states rely onthe deepwater ports in Savannah and Brunswick and exportto 153 out of 195 countries across the globe – these effortsare supported by nine general-purpose Foreign TradeZones across the state.

The Georgia Center of Innovation for Logistics,is the State’s leading resource for fueling logisticscompetitiveness, is an industry-focused component ofthe Georgia Department of Economic Development. TheCenter connects with all logistics sectors to provide aunique combination of access to technology leaders anduniversity research and development, expert analysis ofdata and trends, and cross-sector collaboration.

Workforce Development and Training

Georgia’s nationally recognized employee trainingprogram, Quick Start, provides customized training fornew employees in skill-based jobs at no cost to qualifyingcompanies. The training program is given to the companyfor its future use.

Quick Start provides training space, instructors and allneeded materials related to the program, potentially savingcompanies millions of dollars in training costs. Georgia’sHOPE Scholarship provides free tuition at one ofGeorgia’s 34 public colleges or universities for graduatingGeorgia high school seniors with a B or better average. TheHOPE Grant provides an opportunity for all Georgians to

Georgia’s technical colleges and schools.

Single Factor Gross Receipts

In 2005 Georgia adopted a “Single Factor GrossReceipts” apportionment formula. “Single FactorGross Receipts” formula treats a company’sGross Receipts, or sales factor, as the onlyrelevant factor in determining the portion of thatcompany’s income that is subject to Georgia

effective rate of income taxation of Georgia-based manufacturing, distribution and servicecompanies with substantial sales to customersoutside Georgia.

GEORGIA

Entrepreneurship and Innovation

Georgia is home to 25 business incubators and each ofGeorgia’s research universities collaborates with emerginginnovation and technology-based companies through anetwork of Technology Development Centers (TDCs).These centers make numerous research and developmentresources available to member companies, along withaccess to lab space, business support and mentorship. Eachcenter helps to enhance the commercial potential of ideasand innovations.

Taking ideas from the lab to the market as smoothly aspossible is the function of GRA VentureLab, part of theUniversity System of Georgia. Building on 20 years ofexperience, VentureLab helps entrepreneurs evaluate thecommercial value of an idea by bringing faculty togetherwith experienced and successful entrepreneurs.

38

Hawaii, highly dependent on its deeply rooted tourismsector and long-established military bases, is activelyengaged in efforts to diversify and strengthen its economy.The state has implemented programs and policies focusedon boosting workforce readiness, encouraging thedevelopment of high technology businesses, and investingin infrastructure to support job creation and long-termsustainable growth in both its existing and developingeconomic sectors.

Entrepreneurship and Innovation

Hawaii’s growing technology and innovation sector, whilemaking up a smaller proportion of the state economythan the national average, has been growing at a rate thatoutpaces the national average over the past several years.In order to further encourage such growth, the state hasimplemented the Hawaii Innovation Initiative. The goalof the Initiative is to build the state’s capacity to supportinnovation activity, allowing industry and supporting assetsto grow and enabling the economic transformation of theislands.

The state is also focusing on building up its availableinnovation infrastructure, in order to attract companiesand build connections to “creativity centers” throughout

Hawaii’s High TechnologyDevelopment Corporation offers companies andentrepreneurs access to a group of tech incubation

access to innovation support services. The state has alsoimplemented a “virtual incubation program,” focused onsupporting home-based and geographically isolated techstart-ups.

Hawaii has also sought to make use of its highereducational system to support entrepreneurial activity,expanding offerings to include training programs and anentrepreneurship degree program. In order to supportpromising technology start-ups, the Hawaii Business andEntrepreneur Acceleration Mentors (HiBeam) programoffers mentoring support to entrepreneurs, providingentrepreneurs with access to professional advice andguidance in accessing funding. Hawaii is also currentlyexploring the possibility of having the state’s employeeretirement system place funding into privately managed

bolstering tech start-ups looking for access to capital.

The Hawaii Clean Energy Initiative is intendedto move the state beyond its heavy dependenceon imported oil. Launched in conjunction withthe U.S. Department of Energy, the initiativesets renewable portfolio standards aimed atcreating an environment ready for investment inrenewable energy infrastructure and researchin the state. As part of the program, the state isworking to streamline the permitting time for newrenewable energy generation projects, such aswind farms.

The initiative is also focused on changing thestate’s regulatory environment, by reducingbarriers to increased energy infrastructureinvestment. The state is working with energycompanies to drive new investment in renewableenergy infrastructure, and has seen “over 100renewable energy projects involving billions ofdollars of private investment,” proposed by theprivate sector.

Workforce Development and Training

In order to assure a pipeline of available, educated workersin science and technology, Hawaii is placing resourcesinto its science education system. These initiatives includecreating a pilot system of technology academies in highschools, and providing more support to college studentspursuing education in science, technology, engineering,

Infrastructure

Hawaii’s Capital Improvement Plan has accelerated therate at which the state invests in infrastructure projects,with over $1.5 billion dollars committed since 2008.

The Airport Modernization Plan focuses on improvingand upgrading the state’s 15 airports in order to improveits trade infrastructure and to support its vitally importanttourism industry.

HAWAII

39

Idaho has been a center of innovation and advancedresearch for decades, serving as home to the IdahoNational Laboratory (INL), an advanced nuclear energyresearch facility. Science and technology is the state’smost prominent industry today, which is complementedby important industries such as food processing, lumberand wood products, machinery, chemical products, paperproducts, electronics manufacturing, silver and othermining, and tourism.

Entrepreneurship and Innovation

Idaho’s TechConnect, a public-private initiativefounded in conjunction with INL, works to connect thestate’s innovators to entrepreneurial assets in order toenable commercialization processes and create jobs.

and acts as a point of access to the state’s researchinfrastructure for interested businesses.

Innovation promotion is not limited to the public sector.Kickstand,

educational venue for the state’s 3800 tech companies.Kickstand acts as an “entrepreneur support organization,”offering access to a variety of events focused onsupporting the innovation economy, including start-up “speed-dating” and innovation forums. The statealso provides entrepreneurs and businesses seekingexpansion opportunities access to valuable site selectionand demographic information through its GEM State

IDAHO

Prospector database. Accessible online, the site acts asa GIS data hub, providing businesses with informationon workforce, available properties, demographics, andcompetition and synergy reports about potential locations.

Infrastructure

In order to support the adoption and installation ofbroadband networks throughout the state, particularly inrural areas, Idaho makes use of a Broadband InvestmentTax Credit. Aided by the credit, which can value up to

networks to communities throughout the state, supportingbusiness in rural Idaho. The state also makes use ofgrants, such as its Gem Grant program, to aid localcommunities in the installation of infrastructure meant todrive economic development.

Taxes and Regulation

Idaho has enacted a variety of tax policies focused oncreating an environment attractive to business attraction,retention, and expansion. Tax credits and exemptionsinclude a new job tax credit, providing businesses witha credit for each new position created, property tax capsfor large employers, investment tax credits, and sale taxexemptions for businesses involved in sectors includingmanufacturing, processing, and research and development.The state also makes use of an Industrial Revenue Bondprogram, which provides tax free bonding in support of themanufacturing sector.

Project 60

Idaho’s economic development and job creationactivities are focused around Project 60, a“comprehensive effort” to bring together private andpublic sector partners to work towards the goal ofincreasing Idaho’s economic output. The project’smain target is to raise Idaho’s gross state product to$60 billion from an initial $51.5 billion.

In order to work towards this goal, the state and itseconomic development partners have chosen tofocus on three areas of activity; fostering systemicand sustainable growth in Idaho’s existing economicsectors, recruitment of new companies to the state,and increasing foreign direct investment and globalmarket reach.

The initiative encompasses efforts in all areas of thejob creation spectrum, including efforts focused onimproving job training and worker education activities,leveraging the state’s innovation resources (includingthe Idaho National Laboratory), building newinternational relationships in order to build up exportsand investment, and adoption of enterprise-friendlypolicies and regulations.

The over arching goal of the project is connectingefforts across the state, in both business andgovernment, bringing the state together to worktowards the same end goal- sustained economicgrowth.

40

As a heavily industrialized state, Illinois was particularlyhard hit in the recent economic downturn. But the statehas risen to the challenge of addressing downturnsin employment and industry losses to develop acomprehensive approach to addressing critical elementswithin its development approach to create an ongoinginitiative to address tax and regulatory issues, job creationand innovation and workforce retention and training.

Taxes and Regulation

Perhaps no other industry has been hit harder by thecurrent economic downturn than the domestic automotiveindustry. Three Illinois auto manufacturing facilities andtheir numerous Illinois suppliers have shed thousands ofjobs. EDGE (Economic Development for a GrowingEconomy) provides corporate tax credits to companiesthat create or retain jobs in the state rather than locatingor relocating them to other states. But because the autocompanies are experiencing operating losses, they can’ttake advantage of these credits, which jeopardizes morejobs and the loss of any future investment in the plants torestore or add jobs. Proposed legislation has been passedby the General Assembly to enable only these auto-manufacturing companies to retain employee income taxwithholdings as an alternative to the EDGE corporate taxcredits.

Entrepreneurship and Innovation

To encourage economic development and to createnew jobs, the state has developed a program that pairstechnology companies with an Illinois-based researchentity (university or national laboratory) for newproduct development, commercialization or to improvemanufacturing processes. The program is targeted to

supports increased public private partnerships. Privatesector experts will be actively involved to strategicallyattract these critical investments.

The Illinois Science and Technology Coalition (ISTC)is a public-private economic development organizationthat fosters partnerships to develop and execute researchand development initiatives and will provide oversight andmanagement to the initiative. Founded in 2008, the ISTCactively promotes collaboration between public and privatepartners to attract and retain research and developmentresources and talent in Illinois. In addition to managingthis important new grant program, the ISTC will house

Illinois Jobs Now! is a state run and promotedcomprehensive public works initiative withstrategic programs and projects focusing oninfrastructure including:

Roads and bridges and developing a 21stcentury transportation network;

Education with core elements focusing onpreschool through 12th grade educationand higher education;

Community and economic developmentprojects, and special initiatives focused onenvironmental projects.

The project will invest $31 billion in the Illinoiseconomy over six years. Funding for the $31billion Illinois Jobs Now! plan will be provided bya combination of state debt and federal and localmatching funds including accessing over $3.7billion in American Recovery and ReinvestmentAct (ARRA) funds that will help support over439,000 Illinois jobs. The 20-year bonds issuedto provide funding for the State’s $13 billion shareof this six-year capital program will be supportedfrom fee and tax increases.

the Illinois Innovation Council, which will assist the statein developing an innovation agenda and be responsiblefor increasing joint proposals from private companies andresearch labs to the federal government.

Infrastructure

To maintain and expand its status as a global logisticshub Illinois has developed strategic and critical initiativesrelated to its transportation, physical and technologicalinfrastructure systems including roads and bridges,passenger and freight rail, and broadband networks.

To accomplish this, the state has provided millions ofdollars for critical infrastructure that leverages AmericanRecovery and Reinvestment Act (ARRA) funding. Anotherkey component of this infrastructure initiative includessupporting further intermodal facility development toalleviate regional freight congestion and foster neweconomic development and job creation.

ILLINOIS

41

Home of the world famous Indianapolis 500, Indiana has

tax and regulatory initiatives coupled with workforceand training opportunities. The focus is on emergingindustries as well as existing manufacturing industries thathold critical export capacity and serve as a vital force forbringing “new money” into the state economy.

Taxes and Regulation

Indiana has a very competitive business tax structure,

adjusted gross income and no gross receipts tax orinventory tax. The state also has economic developmentprograms for companies creating jobs and raising incomesin Indiana, including tax credits based on job creation andcapital investment.

Programs or initiatives include corporate income tax basedsolely on sales in Indiana, a single-sales factor methodof income tax apportionment, tax credits to corporationsthat relocate their headquarters to Indiana, research anddevelopment sales tax credit for research and developmentequipment, tax exemptions for new technology orprocesses and permanent exemptions for enterprise ITequipment.

Workforce Development and Training

The Indiana Innovation Alliance is a collaborative effortthat joins together the efforts of academia, business, andgovernment to strengthen Indiana’s assets in biosciencesand life sciences. While the state is currently a nationalbiosciences business leader, investment and employmentin this industry are growing rapidly around the world.Purdue and Indiana Universities have developed theinitiative to bring together Indiana’s research universities,

sciences organizations, local economic developmentorganizations, and state government to grow the state’sbioscience economy and increase the competitiveness ofIndiana’s workforce.

Three key strategies include:

developing strong core research capabilities inemerging technology areas and making them availableto university and corporate researchers alike for state-of-the-art health and bioscience research services;

prioritizing and allocating matching funds forlarge-scale, multidisciplinary research grants and

BioCrossroads

BioCrossroads is a public-private entity thatserves as a catalyst for life sciences ideas createdin the state of Indiana. By partnering with thestate’s research institutions, global companies,philanthropic organizations and government toadvance growth and innovation, the organizationmakes connections for the state’s life sciencescompanies and works to accelerate their success.

Indiana has nearly 50 contract service providersfor the pharmaceutical and biotechnologyindustries and more than 6,300 highly-skilledemployees working in this growing industry,ranging from toxicology to drug formulation tocontract manufacturing and cold chain storage.

Working collaboratively to invest, educate andpartner the organization is a key resource forfuture growth in the life science industry within thestate.

INDIANA

initiatives provided by federal research agencies andphilanthropic organizations in strategic bio-economicareas; and

expanding medical education and healthcareinnovation, as well as technical workforcedevelopment, by growing IU’s statewide medicaleducation network, Purdue’s Healthcare TechnicalAssistance Program, and biotechnology andbioengineering education at Purdue.

Exports

Indiana is a national leader in both dollar of exports perdollar Gross State Product (GSP) and change in dollars ofexports per dollar of GSP. This is no coincidence as thestate is a major manufacturer of a myriad of products thatare in high global demand including automobiles and othervehicles, industrial machinery, pharmaceuticals, electricalmachinery, organic chemicals, optical and medicalinstruments, plastics, iron, steel products, aluminumproducts as well as a long list of commodities.

The state has been proactive in nurturing and supportingthese manufacturers and provides key export expertiseand trade missions in support of these industries andsubsectors.

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Iowa’s economy includes some of the most recognizednames in ag-biotech – companies that invest $600 millioneach year in agricultural improvement and researchtechnologies, including a recently developed $19.5 millionstate-of-the-art DNA analysis center. Other industrystalwarts include renewable energy, bioscience, advanced

services.

Entrepreneurship and Innovation

Iowa’s approach to economic development focuses ondeveloping a skilled workforce, increasing job and wealthcreation, and promoting entrepreneurship. A key elementof this is the Innovation and CommercializationDivision that coordinates efforts in the biosciences,information technology, and advanced manufacturingindustries. Their mission is to grow Iowa’s economy byfostering entrepreneurship and supporting the workforce,commercialization, and marketing activities of theseindustries. To accomplish this they have developed a seriesof training and internship programs, funding mechanismsand management talent recruitment efforts to promote andstimulate entrepreneurship within the state.

Exports

Iowa has made a concerted effort to assist businesses to be

China, Germany, Japan and Mexico, the Internationalassists companies in developing international

markets for their products and/or services by providingindividual consulting, in-house training, educationalseminars and by participating in international trade showsand missions to be a cost effective way to enter into newmarkets or expand visibility in existing markets. The state

take advantage of international trade shows and missionsthrough its Export Trade Assistance Program (ETAP).

Workforce Development and Training

The Industrial New Jobs Training Program providesexpanding Iowa businesses with new employee training.Administered by Iowa’s 15 community colleges, the

Depending on wages paid, the business then diverts 1.5 or3 percent of the Iowa state withholding taxes generated bythe new positions to the community college to retire the

I-JOBS

I-Jobs was designed to help the state recoverfrom the natural disasters of 2008 and to preserveor create thousands of jobs. The $830 millionthree-year program, funded with existing stategaming revenue, includes several componentsbut focuses on:

Funding for veterans homes, communitycolleges, and other public improvements;

Disaster recovery and prevention and localinfrastructure;

Improving transportation infrastructure;

Improving the environment and water

Meeting Iowa’s housing needs;

Investing in telecommunications andrenewable energy.

bonds.

Because of this structure, the training is available at whatis essentially no cost since the bonds are retired withdollars that otherwise would have been paid to the state aswithholding taxes.

In addition to increasing worker productivity and company

may also be eligible for reimbursement up to 50 percentof the annual gross payroll costs expended for on-the-job training, as well as a corporate tax credit if Iowaemployment is increased by at least 10 percent.

IOWA

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Known widely as a major agricultural producer, Kansashas also capitalized on its growing productivity, centrallocation, and strong public-private partnerships to grow itseconomy, create new jobs and continually add technologyand value to the products and services that originate in the

the state and the telecommunications sector is an importantpart of the state economy too.

Exports

Kansas has formal contacts with three foreign countries(China, Japan, Mexico) to bolster international tradeopportunities involving agriculture, aviation, machineryand equipment for manufacturing food products, andingredient products. Kansas is currently investigatingadditional opportunities in India, Brazil and Taiwan.To accelerate trade initiatives the Kansas ExportFinance Program (an export loan guarantee program)

participate in export transactions. As one of the few export

is able to issue loan guarantees and thereby encourage

companies to participate in export orders.

Entrepreneurship and Innovation

Kansas Technology Enterprise Corporation (KTEC)is a public-private partnership established to promotetechnology-based economic development. KTEC assistsKansas entrepreneurs and technology companies bysupporting the development and commercialization of newtechnologies through a statewide network designed andbuilt to support researchers, entrepreneurs, and businesses

KANSAS

through each phase of the technology life cycle. Theultimate goal of the program is to create rapid growthcompanies and higher paying jobs.

KTEC’s programs fall into three basic functional areasincluding:

Strategic Research and Development/Centers ofExcellence, which conduct basic and applied industry-led research that is the foundation for new productsand technologies,

Hands-on Business Assistance Incubators are public-private partnerships designed to turn intellectualproperty and science into businesses and products tosell in the marketplace, and

Investment Funds where KTEC provides equityinvestment in early-stage technology companies andhelps companies acquire the capital they need incritical early stages. Since 2006, over 3,180 jobs havebeen created with a cumulative investment of $368million of which $197 million is private investmentand $47 million is funds from the state.

Infrastructure

The Department of Commerce is leading an initiativeto increase broadband Internet access throughout ruralKansas. Connect Kansas is funded primarily by thefederal American Recovery and Reinvestment Act tohelp the state expand broadband access to underservedcommunities. This investment will go toward helping thestate map its current broadband capacity and providing

involved in expanding broadband access to rural areas.

Kansas Industrial Training (KIT) andKansas Industrial Retraining (KIR) Programs

KIT and KIR facilitate and assist in job creation andretention for Kansas businesses. KIT focuses ontraining for newly created jobs, while KIR is orientedtowards skills upgrade training.

KIT and KIR are funded using state lottery proceeds.

Investments in Major Projects andComprehensive Training (IMPACT)

IMPACT primarily assists large companies inprojects that create 100 or more jobs.

The High Performance Incentive Program

Encourages companies to expand their capital

by providing an investment tax credit and an

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racing, Kentucky is quickly becoming famous for itsexporting and affordable cost of living. The latter twoaccomplishments come from a development approachthat involves a collaborative effort involving the state,its educational institutons and the business sector. Thispartnership is helping to develop an economy that isquickly capitalizing on intellectual capacity in its questto create jobs, develop new and emerging industries andcompete in the global market place.

Infrastructure

The Kentucky Infrastructure Authority (KIA) wascreated in 1988 to provide the mechanism for fundingconstruction of local public works projects. In an effort tospur the state’s economy and create jobs, approximately20% of Kentucky’s American Recovery and ReinvestmentAct (ARRA) money is directed toward growinginvestments in state infrastructure. These funds will spurthe state’s economy and create jobs by meeting criticalneeds in areas like highways, mass transit, broadbanddeployment, and local water supplies.

Workforce Development and Training

The Kentucky Postsecondary Education Improvement Actof 1997 created the Strategic Investment and IncentiveFunding Programto advance postsecondary education.

Six distinct trust funds were created: 1) ResearchChallenge, 2) Regional University Excellence, 3)Technology Initiative, 4) Physical Facilities, 5)Postsecondary Workforce Development, and 6) StudentFinancial Aid and Advancement.

Exports

Kentucky companies are quickly becoming competitiveplayers in the global marketplace. Exports to foreigncountries contributed over $19.1 billion to Kentucky’seconomy in 2008, making the state a top performer inexports per dollar of Gross State Product. This businessactivity supports 49,000 direct jobs in the state.

The International Trade Division (ITD) within theKentucky Cabinet for Economic Development providesexport counseling, trade show, trade mission and catalogueshow assistance, trade leads and information concerninglicensing and customs. While the largest dollar volumeof international trade is done by larger companies, small

The Endowment Match Program `a.k.a. Bucks for Brains

Bucks for Brains is designed to attract topresearchers to Kentucky. From 1997 to 2007,the state of Kentucky invested over $350 millionto increase intellectual capital and infuse a newresearch agenda for Kentuch postsecondaryeducation.

state funds with donations from philanthropists,

agencies. Funds are invested and the earningsfund faculty positions, programs, or scholarships.The invested principal remains untouched toprovide a perpetual source of funding to ultimatelymeet the goals through the commercializationof research, the creation of knowledge economyjobs, and the improvement of the economy andstandard postsecondary education.

When fully matched with private donations,this represents over $700 million added to theendowments of Kentucky’s public universities.

businesses are also big in exports. Kentucky companies ofall sizes and industries have been successful in expandingtheir products and services to the international market.

To help foster growth in exports the state has developedThe Kentucky World Trade Centermembership organization helping Kentucky companiesimport, export and establish overseas operations With

World Trade Center offers counseling, market researchservices, translation assistance, trade education seminars,international events and programs, cross-cultural training,trade missions, and referrals to local international serviceproviders.

KENTUCKY

45

hurricanes, Louisiana has moved beyond merely rebuildingand has realized job and income growth – in spite ofthe damage done by Mother Nature and the most recentrecession. Robust interaction with small business andlarge industry alike has helped the state move aggressivelyin meeting the demands of new business growth and jobcreation.

Workforce Development and Training

Oil and gas is one of the state’s leading industries interms of economic impact, tax revenue and employment.Eighty-eight percent of U.S. offshore rigs are located onLouisiana’s Outer Continental Shelf and, counting offshoreproduction, the state is the No. 1 producer of crude oil andthe No. 2 producer of natural gas in the country. The stateis also home to a total of 300 petrochemical manufacturersthat directly employ 27,000 skilled workers.

workforce, the state has partnered with the industry toprovide a dedicated petrochemical operations curriculumthrough the Louisiana Community and Technical CollegeSystem. The two-year associate’s degree in PetroleumTechnologyThe PTEC curriculum equips future workers with theskills needed in the petrochemical industry.

A focus on providing key business sectors with educationaland training tools – in collaboration with industry – tomaintain momentum and provide higher than averagewages is a key component in Louisiana’s efforts to createjobs and maintain competitiveness.

Entrepreneurship and Innovation

The Small Entrepreneurship (SE) Program, alsoknown as the Hudson Initiative, was established to

entrepreneurships (SEs) as well to encourage contractorswho receive contracts from the state to use good faith

the contract. The primary intent of this program is toprovide additional opportunities for Louisiana-based small

of Economic Development to participate in contracting andprocurement with the state. Because of the importance ofsmall business in job creation and innovation, programsfocusing on promoting the growth of these businesses arecritical.

Louisiana FastStart

Launched in 2008, Louisiana FastStart providescustomized workforce recruitment, screening andtraining to new and expanding, eligible companies –all at no cost.

Based on a company’s immediate and long-term

programs that ensure workers are prepared to beproductive.

Using the latest technology to create modules thatcan eliminate training time by up to two-thirds,

when productivity matters most.

FastStart provides new and expanding companieswith round-the-clock availability and immediateresponse time.

LOUISIANA

Exports

As a national leader in exports including share of nation’sexports, dollar of exports per dollar Gross State Productand overall export growth, the state has worked diligentlyto support and promote export related jobs and businesseswithin the state. By expanding investment in infrastructure– including ports, air and rail – the state has realizedexplosive growth with export shipments of goods in2009 totaling $32.7 billion, up 69 percent (fourth highestpercentage growth among the 50 states) from the 2005total of $19.4 billion.

Louisiana was a top ten state in terms of merchandiseexports in 2009. Capitalizing on its strength in exporting,the state has seen foreign investment create jobs in thestate. In 2007, foreign-controlled companies employed52,400 workers in Louisiana. Major sources of Louisiana’sforeign investment in 2007 were the United Kingdom,Germany, France, the Netherlands, and Canada. More thanone-quarter of these jobs (28 percent or 14,700 workers)were in the manufacturing sector in 2007.

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Maine’s investments in an innovation-driven economyas a strategy to create new economic opportunities andgrow jobs is paying off, as evidenced by its leadership inresearch and development (R&D).

The state’s sustained investment began with a $20 millionbond for research and development approved by Maine’svoters in 1998.

Then in 2000 the legislature established the MaineTechnology Institute (MTI), the Maine EconomicImprovement Fund (MEIF), the Advanced TechnologyDevelopment Centers,and the Maine Patent Program.Continued general fund investments of between $20and $25 million per year, as well as additional bondinvestments, have continued to fund growth in Maine’sresearch and development capacity.

Entrepreneurship and Innovation

Building on Maine-based funding opportunities to advancetechnologies, the Finance Authority of Maine (FAME)created the Venture Capital Revolving InvestmentProgram (VRIP) in the mid 1990s. The VRIP is a privateequity resource based on the Fund of Funds concept andwas conceived to bring capital to early-stage companies.Equity investment in young technology ventures is furtherrewarded through the Maine Seed Capital Tax CreditProgram. This program authorizes income tax credits oncash equity provided to Maine businesses.

The Small Enterprise Growth Fund (SEGF) hasprovided millions of dollars in venture capital to innovativeMaine businesses. SEGF requires recipients to provide

The Maine Technology Institute (MTI) was founded inthe late 1990s to make grants and investments of varyingsize that focus primarily on the development cycle of newtechnologies. MTI has been successful in funding the fullspectrum of Maine’s technology sectors.

The Innovation Finance Program builds on thefoundation created by these previous initiatives and

program provides the Maine Public Employees RetirementSystem with an incentive to invest in high-quality venturecapital funds that display both a commitment to seekingMaine investments and the ability to produce favorablereturns to minimize the risk of tax credit redemption.This program increases the supply of venture capital byimproving access of Maine businesses to venture capital

Maine‘s investment in fostering private sector R&Dis showing positive results and validates the state‘sinvestment in the innovation economy.

An economic impact analysis of the companiesserved by state programs shows that between2004 and 2008, the ratio of state‘s return oninvestment was approximately eight to one. Forevery dollar of public investment, eight dollars of

The ratio of public return on investment in 2008was approximately twelve to one.

funds.

Businesses who used Maine’s portfolio of economicdevelopment programs indicated that they created3,602 jobs and retained 13,090 jobs a result of receivingassistance through state incentive programs. When directand indirect effects are included, these outputs totalimpacts of 39,245 jobs and increased statewide economicactivity valued at over $1 billion.

These efforts are led by the MTI program that offersearly-stage, patient capital for the R&D of technologiesthat create new products and services, generating highquality jobs across Maine. Authorized in 1999 by the

state, with programs evaluated annually with a report tothe Legislature each year. In 2008, MTI made 165 awardstotaling just over $7 million, leveraging a co-investment ofnearly $16 million.

Taxes and Regulation

Pine Tree Development Zones (PTDZ) offer eligiblebusinesses the chance to greatly reduce or virtuallyeliminate state taxes for up to ten years.

Eligible businesses receive the following: corporate incometax credit, insurance premiums tax credit, income taxreimbursement, sales and use tax exemptions on personaland real property.

MAINE

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Maryland’s close proximity to the nation’s capital, 50federal agencies, 60 universities, and several Fortune 500corporations make the state a national leader in science,technology, engineering, and mathematics (STEM) relatedindustries. Consequently, the state has been successful increating jobs in advanced technology, defense systems, andhealth sciences. To foster and facilitate this momentumthe state has implemented several entrepreneur andSTEM-related educational programs to galvanize new andemerging ideas and opportunities and make them into joband wealth creating realities.

Entrepreneurship and Innovation

The Maryland Technology Enterprise Institute (Mtech)focuses on three primary initiatives including educatingthe next generation of technology entrepreneurs, creatingsuccessful technology ventures, and connecting companieswith university resources to help them succeed. Mtechoffers programs, courses, workshops and competitions tohelp aspiring entrepreneurs learn how to bring their ideasand products to the world. Among Mtech’s core programs,there has been a $19.6 billion impact on the Marylandeconomy since 1983.

Exports

Maryland’s exports climbed to a record high in 2008, butslowed slightly in 2009 to roughly $9.2 billion. In an effortto help Maryland’s small businesses increase their exports,create jobs, and take advantage of trade opportunities inthe global marketplace, the state announced the launch ofthe Maryland Export Initiative.

Created to complement the National Export Initiative,Maryland’s Export Initiative will focus on providing exportassistance to small businesses, creating jobs and leveraging

part of the Export Initiative, the state will fully fund in FY2011 Export MD grants, a program within the Departmentof Business and Economic Development (DBED) thatawards grants to small and mid-sized companies to assistthem with doing business overseas.

Since July 1, 2009, Maryland has attracted 20 foreign-owned companies. This is twice the number of foreign

half of the foreign-owned companies have located in theMaryland International Incubator.

Dingman Center for Entrepreneurship

Founded in 1986, the Dingman Center forEntrepreneurship is a top-tier entrepreneurialinstitute recognized around the world as a leaderin enterprise creation.

As one of the earliest entrepreneurship centers inthe country, the Dingman Center has dedicateditself to facilitating, supporting, and encouragingentrepreneurial growth in the Mid-Atlantic region.

The Center’s Capital Access Program was

real student and non-student companies

of entrepreneurship.

MARYLAND

Workforce Development and Training

The STEM and Competitiveness Initiative is one ofthree high-priority initiatives launched by the UniversitySystem of Maryland (USM) to address major challengesto Maryland’s educational preparedness, economicleadership, and environment.

The STEM and Competitiveness Initiative centers ondeveloping strategies that strengthen STEM (Science,Technology, Engineering, and Math) education at the K-12level, prepare a highly skilled workforce for STEM-basedjobs, and promote the innovation and entrepreneurshipnecessary to position Maryland for leadership in today’sglobal knowledge economy.

The STEM and Competitiveness Initiative will focusUSM resources on improving those factors by increasingthe number of STEM teachers graduating from USMinstitutions and pursuing teaching careers in the state;preparing more of today’s students for the STEM careeropportunities of the future and improving K-12 STEMeducation; and utilizing the resources of higher educationto foster innovation, entrepreneurship, and businessdevelopment in STEM areas such as the life sciences,sustainable technology, and information technology.

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(R&D) capacity puts it in the top tier of states for measuresof educational attainment, concentration of science,technology, engineering, and mathematics (STEM)workers, bachelor’s degrees granted, and intensity ofresearch and development activity.

Infrastructure

A collaborative network of private businesses, universities– including Massachusetts Institute of Technology, BostonUniversity, and University of Massachusetts – and the Staterecently announced their intent to place a supercomputerin western Massachusetts to serve as the hub of a newinnovation corridor in the Pioneer Valley. Located indowntown Holyoke, the supercomputing center will beone of very few in the nation located outside of federalfacilities or university research labs and is slated to bepowered by green and cost-competitive energy sources.The collaborative recently completed a successful 120-dayplanning process and more than half of the fundraising iscomplete for the facility planned to open in late 2011. Theproject has become a centerpiece of an outreach and socialmedia to engage citizens in efforts to increase innovation-oriented business activity in the Pioneer Valley.

Massachusetts has the highest residential broadband

broadband providers higher than nearly every otherstate. The state created the Massachusetts BroadbandInstitute (MBI) in 2008, giving MBI the authority tocreate a statewide broadband plan and to invest up to $40million of state bond funds in strategic telecommunicationinfrastructure.

The presence of MBI has positioned the state wellfor obtaining federal stimulus funds for broadbanddeployment, including $2 million for a detailed GISbroadband mapping project.

Workforce Development and Training

The Massachusetts Life Sciences Center promotes,coordinates, and invests in life sciences initiatives in thestate. Created in 2006, the Center oversees a life sciencesinternship program that offers stipends for 12-weekinternships at life sciences companies of less than 100employees in the state.

Roxbury Community College recently cut the ribbon ona new biotechnology lab facility to augment its two year

programs. The Massachusetts Biotechnology EducationFoundation and its associated membership organizationshelps integrate science into classrooms, offers an onlineeducation resource center, and is a key link between theeducation system and the biotechnology companies in thestate.

Taxes and Regulation

In 1998 the state legislature combined the MassachusettsLand Bank with the Massachusetts Industrial Financeagency to create MassDevelopment. MassDevelopmentworks in collaboration with private and public-sectordevelopers, businesses, and banks to identify investorsand leverage public and private funds to support economicgrowth. The agency participated in 229 projects in 2009on a largely self-sustaining operating budget of $112million.

MASSACHUSETTS

Massachusetts Alliance for EconomicDevelopment (MassEcon)

MassEcon is a private-public economic developmententity. Founded in 1993, MassEcon began as aconsortium of telecommunications companies,real estate associations, and the state Alliance forEconomic Development. It has since expanded

industries.

MassEcon offers:

Site selection services,

An executive ambassador program forcompanies considering the state,

Research, education and programming on thestate of the Massachusetts economy.

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Michigan is one of the leading states in dollars of exportsper dollar of Gross State Product and research anddevelopment as a share of gross state product. Michiganhas capitalized on its experience and knowledge inautomobile design and manufacturing to help createstrategies to grow its economy and create new jobs.Long renowned as the car manufacturing capital of theworld, Michigan is home to the greatest concentrationof automotive talent in the world, with more than 65,000professionals employed in more than 275 research anddevelopment (R&D) facilities that invest over $10 billionannually.

Entrepreneurship and Innovation

As a global center for automotive R&D, the state and thebusiness community are working to utilize and transfer

effort to retain and expand business and jobs in thestate. To help promote, attract and retain this talent, thestate is investing $2 billion dollars in the developmentand execution of a cohesive marketing campaign andoffering new incentives to Michigan companies to developand produce new technologies through enhanced researchand development. The focus on the emerging industriesof life sciences, `alternative energy, manufacturing andmaterials and homeland security and defense all capitalizeon the research and development acumen and capacitywithin industry and academia. Using state dollars to spurinvestment and leverage private dollars, including foreigninvestment, this effort will help the state maintain itscompetitive advantage related to advanced research anddevelopment.

Exports

Export-supported jobs linked to manufacturing account foran estimated 7.6 percent of Michigan’s total private-sectoremployment. More than one-quarter (27.8 percent) of allmanufacturing workers in Michigan depend on exports

total of 11,205 companies exported goods from Michiganlocations. Of those, 10,057 (90 percent) were small andmedium-sized enterprises with fewer than 500 employees.To support this type of momentum in both exports andsmall and medium-sized business formation, the stateoffers a wide variety of products and services to helpcompanies increase international sales, identify potentialmarkets, meet buyers, partners, agents and distributors, andnavigate export channels.

21st Century Jobs Fund

To spark new investment and create high-tech companies and jobs that will diversify theeconomy, Michigan has developed the 21stCentury Jobs Fund.

The $2 billion dollar fund is used to increase

commercial lending to help jump start the state’seconomy and diversify and grow the state’seconomy for the future.

The Fund focuses its resources in four key areasincluding:

Life sciences,

Alternative energy,

Advanced automotive, manufacturing andmaterials, and

Homeland security and defense.

MICHIGAN

Taxes and Regulation

The state offers an array of business tax incentives tohelp attract and retain high-quality jobs for Michigan’shighly skilled workforce. The state provides corporateinfrastructure assistance, business real estate help,corporate relocation services and corporate incentives.The state has also developed Renaissance Zones wherebusiness taxes may be virtually eliminated for companieslocating in one of the Zones. These Michigan tax-freezones are designed to spur investment and have beenexpanded to support growth in the tool and die industry,agricultural processing, forest products processing andrenewable energy.

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Minnesota’s economy is characterized by a diverseindustry portfolio, a legacy of national leadership ineducation, a highly-skilled and productive workforce,a robust entrepreneurial spirit, and a keen interest ininnovation.

The bioscience industry in Minnesota is internationally

services that advance human health and serve as apowerful economic engine, creating and supporting tens ofthousands of jobs. Minnesota is one of the nation’s leading

and investment services.

From high-tech electronics to high-end food products,the state’s manufacturers produce a wide variety ofgoods that are known throughout the world for theirquality. Minnesota is among the nation’s top producers ofrenewable energy and environmental technology, settingthe pace for the nation to cut fossil fuel consumption andreduce our nation’s carbon footprint.

Entrepreneurship and Innovation

The Minnesota Cup business plan competition foremerging Minnesota entrepreneurs has attracted morethan 4,000 entries since 2005. Beyond the cash and prizes,participants gain exposure for their ideas, strengthentheir business plans, and make strong connections in

secured more than $8 million dollars in capital andbrokered numerous business partnerships, collaborationsand distribution agreements.

2009 was a record year for business startups in

three years, nearly 200 companies announced or completedexpansions in the state.

Infrastructure

The Minnesota Public Facilities Authority (PFA)

help communities build public infrastructure that preservesthe environment, protects public health, and promoteseconomic growth. Since its inception in 1987, the PFA has

projects in communities throughout Minnesota. 2009 wasa record year for investments in water and sewer projects.

R&D and Angel Investor Tax Credits

Minnesota’s R&D tax credit has recently beenexpanded. Once limited to C corporations, thecredit can now be used by startup companies,individuals, limited liability companies and Scorporations making it more attractive for small tolarge-sized companies to conduct research anddevelopment activities in the state. The R&D taxcredit will increase from 5 percent to 10 percent ofR&D expenses up to $2.5 million.

To create greater interest in earlier, riskier, and a

investors - both individuals and pooled funds - canget a 25% tax credit up to $125,000 per year perinvestor.

If all $17 million in tax credits are paid out in the

have been pumped into the state’s companies in

Workforce Development and Training

Regional Math and Science Teacher Academies wereestablished in 2007 to provide high-quality professionaldevelopment to teachers so they can effectively deliverthe Minnesota K-12 Academic Standards in Mathematics.Initial state funding was $3 million and an additional$500,000 was made available through funding from theNational Governors Association. More than 1,000 teachersfrom across the state are currently part of the professionalnetwork established by the Academy.

Taxes and Regulation

The Drive to Excellence reform initiative is reshaping theExecutive Branch of Minnesota state government into anenterprise that is nimble, embraces change and improvescontinuously. The objectives of the Drive to Excellenceprogram are to increase quality, increase customer service,and reduce the costs of government by creating more “one-

government services and by increasing secure and effectiveelectronic delivery of government services. Reformsinclude an e-Licensing Initiative that serves as a one-stoponline shop for business and professional licenses.

MINNESOTA

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Mississippi has strived to develop an enterprise-friendlyenvironment that capitalizes on tax and regulatoryinitiatives that include extensive tort reform, strongparticipation by the private sector in guiding newenterprise creation and a strong focus on transportation,shipping and warehousing. The state is a leader ininternational trade with export-supported jobs linked tomanufacturing accounting for an estimated 6.1 percentof Mississippi’s total private-sector employment. Overone-eighth (13.9 percent) of all manufacturing workers inMississippi depend on exports for their jobs.

Taxes and Regulation

To enhance Mississippi’s legal and liability system andassist business in growing both jobs and new wealthcreation, the state implemented comprehensive tortreform. After tort reform, liability and insurance rateswere decreased, homeowner’s and other property insurancerates went down, and more than 50 new insuranceprograms entered the state. Tort reform created morecompetition, more affordable insurance, and created jobsby reducing unnecessary costs for small businesses.

Other key initiatives by the state include the developmentof tax credits and initiatives focused on broadbandtechnology, manufacturing investment, research anddevelopment skills and skills training and tax exemptionsfor industrial property, construction or expansion.

Entrepreneurship and Innovation

The Mississippi Technology Alliance (MTA) works tofoster strong, fully integrated technology, education andindustrial sectors to create higher paying jobs and a morediverse, stable and competitive economy. Initiatives ofthe Mississippi Technology Alliance include assistingcompanies – especially early-stage companies andentrepreneurs – to connect with investors and investmentcapital and assisting communities in identifying resourcesnecessary to support technology-based economicdevelopment.

three centers to help entrepreneurs, manufacturers,communities and investors create Mississippi companies.The centers include the Center for Innovation andEntrepreneurship, the Center for Innovation-Led Economic Development and the Center forCapital Formation. Since 2002, clients have receivedapproximately $118 million in private equity investment

Momentum Mississippi

Funded entirely by the private sector, MomentumMississippi was formed in 2004 to help addressthe state’s long-term economic plans. MomentumMississippi’s Steering Committee, comprised ofbi-partisan private sector and education leadersfrom around the state, has worked to develop andgenerate ideas and policies to address the state’seconomic and educational development needs.

The issues addressed by Momentum Mississippiinclude:

Education,

Existing business support,

Technology development and transfer,

Workforce development and training,

Business image and climate,

International trade.

MISSISSIPPI

and have added more than 7,000 new jobs with a payrollover $250 million as a direct result of MTA’s work. Theseemployees pay more than $11.5 million in annual stateincome taxes – more than 9 times MTA’s state funding.

Exports

Mississippi exported more than $7 billion worth ofmanufactured goods to international customers in 2008.The growth has continued into 2009 with January andFebruary 2009 exports up 12 percent from the same timeperiod in 2008, placing the state second in the UnitedStates in export growth this year.

Mississippi offers a strong, supportive business climate,where the cost of doing business is low. The state has

involved in exporting and importing, promoting thestate’s transportation and distribution capabilities withinthe Americas and enhancing Mississippi’s brand in theglobal marketplace as a source for quality products andservices produced by a quality workforce. The state isalso investing in key transportation, shipping and logisticsinfrastructure within the state.

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Missouri is working collaboratively with private industry,academia and the federal government to create anenterprise-friendly environment that provides qualitydevelopment programming for small business and trainingand education that yields results in new business formationand new jobs.

Entrepreneurship and Innovation

The Show Me JOBS initiative is a bipartisan plan to getMissourians back to work and support small-businessgrowth. As part of this program the Department ofEconomic Development will work with the MissouriDevelopment Finance Board to create a pool of fundsfor low or no-interest direct loans for small businessesallowing them to expand and create jobs.

A second element of the plan is to develop an automotivejobs task force to ensure that Missouri’s auto workers andother industry employees are at the forefront of production

a report on ways the state can preserve and create jobs thatnot only deal with the direct manufacture of vehicles, butalso the many thousands of other jobs dependent on thatindustry.

to identify ways that the state can gain the maximum

Missouri’s Congressional delegation as well as federal

will qualify for federal stimulus assistance.

Taxes and Regulation

Missouri’s tax structure provides corporations with one ofthe most favorable situations in the nation. In most cases, acompany located in Missouri will have a lower corporatetax bill than in other states. State law sets the corporateincome tax rate at a percentage of net taxable incomeearned by a business in Missouri. In addition, Missouriallows a portion of federal income tax payments to bededucted before computing taxable income.

An important tax advantage for Missouri businesses is theamount of income considered taxable; only income earnedin the state is taxed. Manufacturer’s inventories (raw

goods and wares of retailers, distributors and wholesalersare exempt from property taxes in Missouri.

Missouri Science and InnovationReinvestment Act

MOSIRA is a program designed to getMissourians back to work, educate them for thecareers of tomorrow and harness innovation andtechnology.

MOSIRA creates a funding source to sparkgrowth in research and technology enterprisesby capturing a small percentage of the growth instate revenue over a base year from a designatedgroup of Missouri science and innovationcompanies.

Funding will be reinvested in a wide range ofprograms designed to attract top science talent

to create new Missouri-based technologycompanies, recruit and build strategic scienceinfrastructure, and create a continuum of capitalprograms to increase access to risk capital forearly-stage technology companies created in orrecruited to Missouri.

Workforce Development and Training

The Training for Tomorrow program is a $12 million

them working in growing industries. The grants will helpMissouri community colleges create or expand trainingprograms to serve additional students. Under Trainingfor Tomorrow, member institutions of the MissouriCommunity College Association will partner with thegovernment of the county to develop or expand programs

MISSOURI

53

renewable wind energy, Montana is well positioned for newjob creation. In most cases this job growth will be drivenby small to medium-sized knowledge-based enterprisesthat are attracted to the state for its high quality of life andaccess to the vast outdoor recreational opportunities.

Entrepreneurship and Innovation

activity, garnering a top position for business climateand entrepreneurship in multiple indices. Business startrates and other measures of entrepreneurial activity haveremained above national average in the state over the pastdecade. Montana has worked to create and encouragean environment that sustains such momentum, enactingpolicies and structures tailored to support business growthand well-being. The state’s Entrepreneur DevelopmentProgram works statewide with local partners, includingthe state’s community colleges, to provide businesstraining to potential entrepreneurs and support services toexisting businesses. Montana offers Indianpreneurshipcourses on and near its seven reservations, providingaspiring Native American entrepreneurs with training andmentoring focused on starting and growing a successfulbusiness.

Montana State University is home to the Centerfor Entrepreneurship for the New West, offeringentrepreneurial training and curriculum. Students

support to companies located in the center’s tech businessincubator. Commercialization of technologies developedin the state is supported by the Montana TechnologyInnovation Partnership, which also works to connecttechnology companies to resources in the state’s universitysystem.

Montana has centered much of its economic developmentactivity around the “Cowboy Boot Economy,” a bootshaped area of western and south central Montana that ishome to most of the state’s major population centers, and isseen as an “island of prosperity” in the region. Efforts toexpand and foster innovation in the state have largely beenfocused in this region.

Taxes and Regulation

“Outside the boot,” the state is attempting to spurdevelopment of its abundant energy resources andencouraging the use of new and innovative energy

TechRanch

TechRanch is a leading business developmentassistance organization focused on high-tech sectors.

TechRanch’s purpose is to help entrepreneurspursuing ventures in the high technology markets to

less investment capital than they could otherwise.TechRanch has developed expertise in bootstrapping,recruiting talent in rural markets, raising capital

developing near term strategic plans aimed at getting

TechRanch operates a Technology Accelerator,providing space and support to technology start-ups.

TechRanch was founded in 2000 by a group ofMontana business leaders. Since that time it hasserved over 60 start-up companies throughoutMontana.

MONTANA

technologies. The state has implemented a variety ofincentives to encourage private investment in the sector,including a reduction in taxes on new wind generation,biodiesel and renewable energy facilities, and carbonsequestration equipment and property. The state hasalso enacted reductions in taxes on renewable energygeneration. In order to spur development of newtransmission capacity, the state has reduced taxes on somehigh voltage transmission installations and has reducedtaxes on land in transmission project right-of-ways.

Montana has streamlined and shortened permitting andregulatory processes in order to ease barriers to access fornew and expanding businesses. The state has organizedits business licensing operations around a “One Stop”model, allowing new and expanding businesses to obtainor renew most or all of their needed licenses and permitsin one location, easing the burden on businesses. Thestate also provides a variety of business tax incentivesand credits. These include property tax abatementsfor research, development, and industrial equipment,

business investments, credits for research and developmentactivities, and tax credits for expanding manufacturingbusinesses.

54

agribusiness, and logistics, Nebraska utilizes an “untiringand deliberate approach” to foster new job creation andeconomic development that is bolstered and supportedby consistent and strong leadership, with no drastic ebbs

momentum to retain and grow their employment base bycapitalizing on a “slow and steady wins the race” approachto economic development and by focusing on informationtechnology-centric businesses (including data centers),biotech, and food.

Exports

Nebraska’s export focus plays on its strengths related tovalue-added agriculture, biotech, smart manufacturing andlogistics. Building on strong and enduring relationships,the state’s primary export partners include:

China (targeting second tier cities),

Brazil (Nebraska is a pilot state for Partners of theAmericas), and

Europe (with a focus on wind, solar and agriculturalequipment).

The state recently promoted a “reverse trade mission”where they hosted over 140 business leaders from 10nations to learn about the capacity, products, and people ofNebraska.

Infrastructure

The state’s approach is straightforward: affordable powerand pervasive connectivity. Nebraska is the only publicpower state in the U.S. and therefore is able to offer veryreliable and affordable power rates. The state is currentlyinvesting in four new “Power Parks” across the stateto attract new intense power users. Nebraska is one ofthe leading states in terms of delivering high-speed dataservice to the entire state.

Workforce Development and Training

Nebraska has leveraged existing dollars – interest from theState Unemployment Insurance Trust Fund – to providegrants to private business to support skills enhancement.Nebraska was a leader in implementing the Dream It-Do It campaign to support education in manufacturing,science, and technology.

Nebraska’s university system is connected with ShizoukaUniversity, working collaboratively on food processingand safety, and with the Shanghai Institute for Antibodiesat the new $60 million facility in Shanghai’s ZhangjiangHi-Tech Park. Researchers there are teaming up to developnew cancer treatments and to study the combinationof traditional Chinese medical practices with modernmedicine. The state is working to enhance educationallevels and industry skill sets to mesh with industry needswith a strong P-16 Initiative (improving education on alllevels) and a public-private partnership with the PeterKiewit Institute (IT and engineering).

NEBRASKA

Nebraska Advantage

A major element in the Nebraska toolbox is theNebraska Advantage incentive package thatprovides:

Investment, wage, and R & D tax credits;

Customized job training;

State and local exemptions for purchases of

related services; and

Microenterprise and inventory credits andexemptions.

In the past three years, the Nebraska Advantageprogram’s 200 plus applicants have created 16,861new jobs and generated more than $5.4 billion in newcapital investment in the state.

55

Famous worldwide for its successful hospitality, tourism,and gaming sectors, Nevada was marked by nearlyunparalleled economic growth over much of the pastdecade. The boom years, however, have given way to amore challenging set of economic conditions over the pasttwo years and the state is now working to adjust to thechange in climate. An enhanced drive towards economic

as a readily recognizable “global community” is nowthe name of the game. The state’s goal is to regain itspreviously meteoric economic momentum, strengtheningits position as a world-class tourist destination and takingadvantage of emerging opportunities in the renewableenergy sector and international trade.

Exports

The export sector has been a notable economic strength forNevada. While the past two years have seen growth ratesstall, the state still led the nation in overall export growthbetween 2002 and 2009. Nevada’s key export industriesare focused on extraction activities, including ores andprecious metals, but the state has also developed exportsof manufactured goods such as electrical machinery.Looking to build on its strength, the state has signed amemorandum of understanding with China focused onexpanding trade and private investment activities betweenNevada and China.

The state works with a network of trade representativesin targeted markets throughout Asia, North America andEurope, focused on cultivating distribution channels andfacilitating opportunities for foreign direct investment inNevada enterprises. The state has found such infusionsof foreign investment a useful way to help businesses makeup for shortages of domestic investment capital caused bythe recent recession. Efforts to develop a Las Vegas WorldTrade Center, focused on leveraging the city’s status as apremier destination for trade and industry conferences,thus increasing international business activity in the state,are also underway.

Infrastructure

Nevada is making efforts to expand the development ofits readily available energy resources with a particularfocus on renewable energy including solar, geothermal,hydro, and biomass energy. Attracting investment forthe development of energy infrastructure, includingtransmission capacity, is being embraced as a necessary

wNevada Procurement Outreach Program

Nevada is focusing on the use of procurementas a way to support new technology start-upsin the state. Connecting new businesses toopportunities to make sales to governmentagencies is perhaps the “strongest device” thestate has available to help new tech entrepreneursfund their early operations without the use ofdirect grants or loans.

The Nevada Procurement Outreach Programprovides businesses with training on and supportin bidding on government contracts, at no cost tothe business seeking assistance.

NEVADA

step towards creating growth and job creation in the sector.

The state streamlined permitting processes for newrenewable energy projects and created a RenewableEnergy Transmission Advisory Access Committee toidentify options available to the state to expand access tothe grid and enable increased energy exports.

The state has also implemented tax abatements focuseddirectly on promoting private sector investment inrenewable energy infrastructure, including facilities forthe transmission of renewable and geothermal energyproduced in the state.

Transportation infrastructure, in particular air transport,is also an area of strength for Nevada. Las Vegas, as an

to destinations around the nation and world, connectingNevada’s businesses to markets near and far.

Taxes and Regulation

Nevada has no corporate income tax or personal incometax, and is home to one of the lowest overall tax burdensnationally, an advantage which it attempts to make use ofin business attraction and retention efforts. Competitiveproperty tax rates in growth centers such as Las Vegas andClark County are also part of the tax package that the stateuses to entice businesses looking to expand or relocate.

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New Hampshire is a leader in research and development,measured as a share of Gross State Product, and theconcentration of jobs in science, technology, engineering,and mathematics (STEM). The “Live Free or Die” statehas developed an array of enterprise-friendly tax initiativesthat promote research and development and is mobilizing aconcerted, statewide effort directed at developing emerginghigh-tech businesses.

Taxes and Regulation

New Hampshire has one of the lowest tax burdens in thecountry. The state has no sales tax, use tax, broad-baseincome tax, capital gains tax, or inventory tax. To bolsterresearch and development within the state, the legislatureenacted a research and development credit that is appliedagainst business taxes paid to the state of New Hampshire.In 2007 the Legislature designated $1,000,000 for each of

development” expenditures are wages paid to employeesof the business for services rendered within the state thatqualify and are reported as a credit by the business.

Workforce Development and Training

New Hampshire Working is a three-part approach to help

part of New Hampshire Working, the state partners withbusinesses and workers to provide an alternative to layoffs.Companies and workers agree to reduced hours instead oflayoffs, and the state makes up part of the lost wages for

their jobs, their health insurance and most of their incomeand companies retain the skilled workers they need torecover. Taxpayers avoid increased costs as the demand forstate services increases as unemployment rises. And, withmore people working, the economy is stronger.

The second part of the initiative reduces up front trainingcosts for companies, often an impediment to hiring, andhelps workers get new jobs. Unemployed workers are

participating in up to six weeks of on-the-job training at apotential new employer.

Under the third part of New Hampshire Working, NewHampshire job agencies develop a plan for assessing thejob skills of all newly unemployed workers. Workers then

New Hampshire Innovation ResearchCenter

NHIRC was created by the legislature in 1991 for

technology development and innovation.

NHIRC fosters collaboration between NewHampshire businesses and universities to

engineering, and associated technology transfer.

NHIRC’s goal is to assist New Hampshireindustry in becoming more competitive and,thereby, retain and increase employment.

NHIRC helps New Hampshire companiesupgrade old products or develop new products.With NHIRC support, university-industrycollaboration fosters innovation and helps topreserve and increase the number of jobs.

are able to take the results of those assessments to potential

hires will have the necessary skills.

Entrepreneurship and Innovation

TheCommercialization (ORPC) develops and manages theintellectual property portfolio of the University of NewHampshire (UNH). The mission of the ORPC is to buildresearch partnerships that result in commercialization andeconomic development. The ORPC serves as the focalpoint for advocacy and support of UNH’s intellectualproperty and provides faculty and staff with informationabout and assistance with intellectual property protectionby patent, copyright, or other means.

The ORPC also facilitates transfer of University researchresults to the public by bringing scientists and the businesscommunity together in relationships of mutual advantage.ORPC provide focus and assistance statewide through theInnovation Research Center, a matching grant programfunded by the NH Legislature.

NEW HAMPSHIRE

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New Jersey’s strong pharmaceutical industry, coupledwith a high-tech conglomeration around Princeton andan advanced services sector in Northern New Jersey, helpmake the state a leader in the concentration of science,technology, engineering, and mathematics (STEM) jobs.This high concentration of managers, professionals, andcollege-educated residents working in knowledge jobsenables New Jersey’s businesses to more effectively pursueglobal export markets and to successfully attract foreigndirect investment.

Infrastructure

New Jersey’s ports are critical to the state’s economy.The Port of New York and New Jersey is the largest portcomplex on the east coast of North America and thesecond largest in the United States. The ports’ strategiclocation, developed transportation infrastructure, and

within one day’s drive, are key assets that have made thestate a gateway for international trade.

The ports and freight industry support more than 500,000jobs and move goods valued at more than $850 billionannually. Critical investments are being made by the statein coordination with private industry to support the growthof the state’s ports and logistics infrastructure. The statecontinues to work with various public and private entitiesresponsible for domestic and international goods movementto ensure the industry and the state remains competitive.

Entrepreneurship and Innovation

The Edison Innovation Fund supports university researchand development in the growth of core industries vital tothe state’s economy, including life sciences, clean energy,and information and communication technologies.

The fund advances the state’s Energy Master Plan byencouraging the use of clean and renewable energy. Amajor outcome of these investments is an increase the“tech transfer” rate—the process by which the results of

The fund continues to assist technology and life sciencecompanies by improving access to technical resources,

well as laboratory and acceleration space in state supportedfacilities.

Edison Innovation Fund

The Edison Innovation Fund seeks to create,sustain, and grow technology and life sciencesbusinesses that will lead to well-paying jobopportunities. The Fund supports technology andlife science initiatives throughout all stages ofdiscovery, development, and commercialization.

Strategies and funding priorities include:

Provide support to colleges, universities,and companies to help develop thecommercial potential of research;

Accelerate the commercialization oftechnology;

based support to the state’s technologybusinesses.

NEW JERSEY

Workforce Development and Training

Under the Edison Innovation Fund, the State of New Jerseyhas created three Innovation Zones throughout the statethat encompass state universities, research institutions andrelated businesses. Innovation Zones are a collaborativestate effort involving the New Jersey EconomicDevelopment Authority (EDA), New Jersey Commissionon Science and Technology (CST), and other stateagencies.

The Zones are designed to spur collaborative effortsand to encourage the rapid transfer of discoveries from

incentives are available to eligible technology and lifesciences businesses locating in these zones.

partnership opportunities coordinated by the CST. EachInnovation Zone is anchored with an existing or plannedstate-of-the-art technology center, offering companies

production space at attractive rents.

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As the home of major national laboratory facilities,including Los Alamos National Laboratory and SandiaNational Labs, New Mexico has been a center ofcutting edge research and innovation activity since the1940s. Today these major facilities employ thousands ofscientists and highly trained support staff, commercializetechnology, and serve as a magnet attracting additionalresearch, development, and entrepreneurial activity to thestate.

Entrepreneurship and Innovation

In order to better capitalize on these major science andtechnology assets and to foster the growth of high-techemployment in New Mexico, the state established the NewMexico Private Equity Program. Under this programfunds in the state’s severance tax permanent fund areinvested in qualifying private equity and venture capital

state allocation, allowing the state to leverage its resourceswhile providing private capital access to innovative local

in New Mexico, has proven quite successful. Once

additional deals above and beyond their initial investment.Venture capital investments in the state have boomed,enabling the creation and growth of new companies andcreating high paying jobs.

The state has also made a commitment to draw high-tech jobs into the more rural areas of the state. TheTechnology Jobs Tax Credit, available throughout thestate, is doubled for research and development jobs createdin rural areas. The development of web developmentservices and software companies in rural areas of the stateis also encouraged with tax incentives and deductions.

Workforce Development and Training

New Mexico’s Job Training Incentive Program(JTIP) is aimed at providing support to companies thatmanufacture products in the state and service companiesthat export a substantial percentage of their services out ofstate. Companies that qualify can access an “aggressive”incentive package, including wage reimbursement duringtraining, coverage of all classroom training expenses, and

related costs.

Infrastructure

New Mexico provides a variety of tax incentives designedto spur business development and job growth. Creditsare offered to companies that create high paying jobs tohelp offset wage expenses. Manufacturing companiesare encouraged to invest in new equipment with a taxcredit applied to procurement of new operating machineryand property. The state also provides a tax credit for

creditstate investors.

NEW MEXICO

New Mexico Partnership (NMP)

Created in 2003, the New Mexico Partnershipis a public-private economic developmentorganization that works to attract new businessesto the state. Funded by the public and privatesectors, NMP acts as a “one stop resource” forbusinesses examining establishing a presence inNew Mexico.

In order to attract companies from sectorsincluding aerospace, agriculture processing,renewable energy, and manufacturing, the NMPoffers interested companies access to a variety ofservices aimed at easing barriers to establishinga presence in the state.

In an effort to deliver better outcomes, NMP’s

performance goals set by the state. Since 2003,NMP’s efforts have aided in the attraction of 38companies and the creation of over 12,000 jobs.

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The Empire State’s economic geography spans a widerspectrum than perhaps any other state. Consequently,New York has crafted its economic development servicestrategy around a strong regional approach to betterserve its multi-faceted economies – ranging from theurbanity of Manhattan and the size of the New York Citymetroplex, to upstate metropolitan areas with an industrialpast, to smaller college towns and rural hamlets. NewYork’s economic development agency, Empire StateDevelopment, is divided into 10 regions with a strong

each region.

The state is in the midst of a radical restructuring of itseconomic development system, consolidating its separate

and unveiling a new job incentive program based onresearch and investment tax credits and credits based onthe realization of jobs instead of the promise of future jobs.

The state’s plans also include a new technology seedfund and a small business revolving loan fund to helpease the strain for capital on small and growing business.The funds will be managed by NYSTAR, the state’stechnology-based economic development arm.

Entrepreneurship and Innovation

Small businesses make up more than 98 percent of allemployers and employ 55 percent of the state’s workforcein New York. They have been hit especially hard by therecession and credit crunch, yet New York has one of thehighest rates of net new business formation in the nation.

In 2009 New York commissioned a task force of over 60small business leaders and policy makers for an exhaustivepublic input process to address the future needs of smallbusinesses in the state. The task force immediatelyproduced a new directory of small business programs toconsolidate and better communicate the resources availableto small companies in the state. The task force produceda series of policy recommendations to stimulate smallbusiness growth:

Increase access to capital: small business revolvingloan fund, seed capital fund, expand existing programs

program;

Reduce red tape: create interagency working groups,

health care costs;

Centers of Excellence

New York has created Centers of Excellence at itsuniversities to support high technology venturesthrough a collaborative approach involving the state,academia, private venture capital companies, and otherprivate and public sector parties.

Established to encourage rapid commercialization

in nanoelectronics, bioinformatics, photonics,environmental systems, wireless applications, andinformation technology.

New York State Foundation for Science,Technology and Innovation

NYSTAR supports technology development, innovationand commercialization activities leading to economicgrowth in New York State.

NYSTAR established the High PerformanceComputation Consortium (HPC2) to enhance researchefforts of universities and advanced technology centerswith their industrial partners through access to highperformance computers.

NEW YORK

New tools for growth: enhance staff trainingfor technical assistance, procurement assistance,technology commercialization, integrate workforceand economic development using a sector-basedstrategy, increase on the job training, improve youthemployment programs;

Improve access to state resources: develop smallbusiness program directory, coordinate the directorywith various web sites, create how-to manuals, updatealternative lending directory.

Infrastructure

Build Now - NY offers “shovel-ready” sites pre-permittedfor building and expansion. Wage, tax, utility, and landcost analyses are already prepared, as are details oninfrastructure, sewer, water, and transportation access.

To ensure all New Yorkers have universal access tohigh-speed broadband internet coverage a BroadbandDevelopment and Deployment Council has been taskedwith the creation and execution of a communicationspolicy to bring all New Yorkers into the digitalinformation age.

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The Research Triangle Park (RTP) is the largest researchpark in the nation making it no wonder that North Carolinais a leader in high-tech business startups. But the RTPis not the only reason for North Carolina’s successes.The state and its educational and business partners havedeveloped a cohesive strategy to create jobs and developnew and emerging enterprises by building on existingassets, resources and competitive advantages within thestate.

Entrepreneurship and Innovation

The North Carolina Entrepreneurship Center at theUniversity of North Carolina at Greensboro providesexpertise in seven major areas where jobs are predictedto grow for the next 20 years: creative industries; familybusiness; franchising; international health care andsocial entrepreneurship; and technology, innovation, and

expertise, support, and services an entrepreneur needs.The Center provides fee-based services and free servicesthrough partnerships with the Service Core of RetiredExecutives (SCORE) and the Small Business Development

Entrepreneurship Center teaches the skills of buildingenterprises that are sustainable and create value, including

educational organizations.

CED (formerly The Council for EntrepreneurialDevelopment) was founded in 1984 to identify, enableand promote high-growth, high-impact companies andto accelerate the entrepreneurial culture of the ResearchTriangle and North Carolina. CED provides education,mentoring, and capital formation resources to new andexisting high-growth entrepreneurs through annualconferences, seminars, workshops, and programs on

CED has assisted entrepreneurs in most industries and atall stages of development including from high-tech, lifesciences, and service companies ranging from one-personstart-ups to 1,000-person businesses. With more than5,500 active members representing over 1,100 companies,CED is the largest entrepreneurial support organization ofits kind in the United States.

Workforce Development and Training

A program that combines both educational aspects andinnovation components is North Carolina’s JobsNOW

The Research Triangle Park

The Research Triangle Park was founded inJanuary 1959 by a committee of government,university, and business leaders as a modelfor research, innovation, and economicdevelopment.

By establishing a place where educators,researchers, and businesses come together ascollaborative partners, the founders of the Parkhoped to change the economic compositionof the region and state, thereby increasing theopportunities for the citizens of North Carolina.

The RTP vision was to provide a ready physicalinfrastructure that would attract researchoriented companies.

employees work in RTP with an estimated10,000 contract workers. These employees havecombined annual salaries of over $2.7 billion.

initiative. This is a collaborative effort including stateagencies, local governments, business leaders, and citizensworking together to create new jobs, put people back towork, and train workers for new and emerging industries.JobsNOW includes several key projects:

Green Energy Plan refocuses state energy policymaking, makes strategic investments in NorthCarolina’s green economy and enhances green-collarworkforce development;

The “12 in 6” program is a workforce development

who have lost their jobs. The initiative will createcommunity college programs in 12 careers, eachrequiring less than six months to complete;

NC Recovery is a program designed to create jobs,address state budget stability, and rebuild and expandthe state’s critical infrastructure, including highwaysand schools.

NORTH CAROLINA

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Supported by three pillars of revenue and job growth – anoil boom, high farm commodity prices, and strong growthin exports – North Dakota has accumulated a projectedstate budget surplus of $1.3 billion dollars.

Success has not come without strong state leadership

where the state has competitive advantages: value-addedagriculture, advanced manufacturing, technology-basedbusinesses, energy, and tourism.

The aim is to not simply grow jobs, but to increase better-paying jobs, wages and per-capita income. Last year,North Dakota’s economic development efforts produced7,850 net new jobs, and North Dakota exports grew 27percent over the previous year, to $1.5 billion.

Taxes and Regulation

North Dakota is the only state to own its own bank. TheBank of North Dakota (BND) is set up as “the Stateof North Dakota doing business as the Bank of NorthDakota,” making the capital of the state the capital ofthe bank. One of the Bank’s functions is to provide asecondary market for real estate and business loans, whichit buys from local banks, along with a portfolio of studentand small business loans. Its residential loan portfolio isnow $500 million to $600 million. Producing a return onequity of about 25 percent, it pays a hefty dividend to thestate, expected to exceed $60 million this year. In the lastdecade the BND has turned back a third of a billion dollarsto the state’s general fund, thereby offsetting taxes.

Entrepreneurship and Innovation

The state has taken steps to encourage investment byoffering aggressive research and development andseed capital tax credit programs. The research anddevelopment tax credit for conducting research in North

a tax year.

The Angel Fund Investment Credit issues an income taxcredit for investing in an angel fund in North Dakota. Thecredit is equal to 45% of the investment, up to a maximumcredit of $45,000 per year. An unused credit may becarried forward up to four tax years.

A Seed Capital Investment Credit for investing in abusiness is also available, equal to 45% of the investment.No more than $112,500 of the credit may be used in anyyear. An unused credit may be carried forward up to four

Centers of Excellence Program

The Center of Excellence program partners NorthDakota campuses with business and investsdirectly in the infrastructure, research capacity,and commercialization capabilities at the state’scolleges and universities.

Over the past biennium, $20 million in stateCenters of Excellence funding has leveragedmore than $70 million in additional fundingfor research and development in agriculture,renewable energy, advanced manufacturing andbusiness technology.

NORTH DAKOTA

tax years.

InnovateND is a venture competition that also providesuseful online educational information, business planningtools, and access to coaches. InnovateND brings togetherentrepreneurs, investors, and educators who help discoverthe opportunity that will bring value to an innovative idea.

Exports

North Dakota’s exports increased by 248% from 2000-2009 and one of every seven manufacturing workersin North Dakota now depends on exports for their job.The is the catalyst in acollaborative effort among the state’s universities, state andfederal government agencies and private export serviceprofessionals to provide North Dakota companies with thesupport they need to succeed in the global marketplace. Its

enables it to move at the “speed of international business.”

for North Dakota companies, helping them identify exportmarkets best suited for their products and services. The

offer assistance in every step of the export process.

One of North Dakota’s top exports markets is Ukraine. The

that is operating a “model farm” to serve as a dealerlocation for North Dakota farm equipment, supplies andexpertise.

62

Ohio’s long history of innovation, research, anddevelopment is symbolized by the innovative spirit of itsnative Wright brothers. Fast-forward to today and thestate has developed programs and tax initiatives that offer

advanced research and development, entrepreneurship, andinnovation.

Entrepreneurship and Innovation

The Ohio Third Frontier is an initiative created in 2002within the Department of Development to establish thestate as an innovation leader. With a 10-year initial lifeand a bipartisan commitment of $1.6 billion, the OhioThird Frontier has worked to expand the state’s high-tech research capabilities that are designed to acceleratethe pace of commercialization within the state. Theinvestments have led to the development of new, innovativeproducts by addressing technical and cost barriershindering market adoption. As a result, the Ohio Third

on the state’s strengths in technology and innovationto create high-wage jobs, new growth companies, andglobally competitive products.

The Third Frontier program is intended to:

Increase the quantity of high-quality research withcommercial relevance to Ohio companies;

Expand access and availability of investmentcapital to create, grow, and attract technology-basedenterprises;

Grow and nurture an increasingly experienced pool ofentrepreneurial management talent;

Address the technical needs of existing companiespursuing new products and production processes; and

Contribute to the expansion of a technologically

Taxes and Regulation

The Ohio Research and Development InvestmentTax Credit provides a nonrefundable tax creditagainst the corporate franchise tax and is designed toencourage Ohio’s corporations to invest in increasedresearch and development activities. The programoffers a nonrefundable tax credit that applies against acorporation’s tax liability. Excess credit not used in thetaxable year in which it is earned may be carried forwardfor up to 7 years. The credit equals 7% of the amount of

Ohio Hubs

The Ohio Hubs program is a long-term strategy topositively impact Ohio’s economy. The Ohio Hubscomplement and leverage the resources andinvestments already working in the state.

Funds expended for support of the Ohio Hubsare designed to propel innovative ideas alongthe commercialization pathway, leading to new

entrepreneurs and companies.

Ohio Hubs help foster a concentration or clusterof companies, applied research assets, leadingbusiness support intermediaries, and knowledge

the deployment and commercialization of servicesand products.

average investment in Qualifying Research Expenses overthe three preceding taxable years and any excess creditnot used for the taxable year in which it is earned may becarried forward for up to 7 years.

Exports

The Ohio Export Assistance Network (OEAN) is a

request of the State of Ohio. It is funded both by the stateand private enterprises. OEAN’s goal is to expand exportopportunities for Ohio businesses. This is achieved via aone to two-year in-house training program that ultimately

existing division. The OEAN’s objectives are to increasea company’s sales volume to reduce unit production cost,expand its customer base to protect it from domestic

with similar companies that have expanded into the globaleconomy. OEAN focuses on small and medium-sizedcompanies that are ready to export or have limited exportexperience.

OHIO

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Oklahoma’s key industries include aerospace, agriculture,bioscience, manufacturing, computer science, energy,nanotechnology, sensors, health, and education. Oklahomahas leveraged these industry clusters to encourage privateand public collaborations and partnerships to spureconomic and job growth throughout the state. With activeparticipation and investment by the state, these industriesand this approach serve as the foundation for creating neweconomic opportunities and involving private industry inthe creation of new businesses and job growth.

Entrepreneurship and Innovation

The Oklahoma Center for the Advancement of Scienceand Technology (OCAST) is a state mechanism forgrowing and diversifying the economy which focuseson promoting programs and projects that provide newjob opportunities and growing research and technologycapabilities to create high-paying jobs for Oklahomans.

The state invests in OCAST to develop science andtechnology research. Researchers are then able to attractpublic and private-sector dollars and other funding. Almost3,000 jobs were created or retained in 2009 with assistancefrom OCAST and its partners with average pay of $44,050,equivalent to 19 percent above Oklahoma’s per capitaincome.

Infrastructure

The Oklahoma Community Economic DevelopmentPooled Finance incentive creates a bonding incentive thattargets job creation and infrastructure development aid,aiming to ensure the quality of the state’s infrastructure forattracting and retaining jobs.

Key elements of this program include a $100 millioninfrastructure pool created for bonding local governmentsissued by the Oklahoma Development FinanceAuthority (ODFA). Bonding capacity and bonds issuedthrough the Economic Development Pool may be paid

net proceeds from both the Infrastructure Pool and theEconomic Development Pool focus on communities that donot exceed 300,000 in population.

i2E

corporation focused on wealth creation by growingthe technology-based entrepreneurial economywithin the state.

In addition to providing commercialization servicesto entrepreneurs, i2E manages a proof-of-conceptfund and the Oklahoma Seed Capital Fund througha contract with the Oklahoma Center for theAdvancement of Science and Technology (OCAST).

For every $1.00 invested by i2E there has been areturn of $19.82.

OKLAHOMA

Workforce Development and Training

The Oklahoma Department of Career and TechnologyEducation provides leadership and resources, and assuresstandards of excellence for a comprehensive statewidesystem of career and technology education. That systemoffers programs and services in 29 technology centerdistricts operating on 57 campuses, 398 comprehensiveschool districts, 25 skill centers and 3 juvenile facilities.The centers conduct customized training for individualbusinesses and provide training at no cost to the businessbased upon the number of jobs being created.

To complement these efforts the Oklahoma Departmentof Commerce initiated a program to recruit knowledge-based, highly-skilled former Oklahomans back to the state.Called Project Boomerang, this project helps facilitatelinkages with employers and potential return migrants ornew residents.

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Oregon is committed to creating a complementaryrelationship between a clean environment and a robusteconomy and is taking an innovation-driven and long-term sustainability approach when investing in economicdevelopment.

Oregon’s manufacturing businesses compete globallyin everything from high-tech and health care to steelfabrication and trucking. Oregon, the largest lumberproducing state in the nation, has worked to streamline

making the industry more competitive and less laborintensive. A concentration of high-tech, “small-tech,” andsemiconductor companies have made a name for Oregonacross the globe as the Silicon Forest.

Oregon is now the global headquarters for some of thebiggest names in outdoor gear and active wear.

Infrastructure

The Infrastructure Finance Authority (IFA) assistscommunities in building infrastructure capacity toaddress public health safety and compliance issues as wellas to support their ability to attract, retain and expandbusinesses. The IFA also works with municipalities, stateagencies, and property owners to prepare industrial land

(providing assurance that a site can be developed in 180

The Oregon Broadband Advisory Council and aBroadband Advisory Council Fund were created in the2009 legislative session to help ensure the implementationof statewide broadband strategies for education, workforcedevelopment, and tele-health, and to promote broadbandutilization by citizens and communities.

Exports

Four global trade specialists and an international trade

in Tokyo, Seoul, Beijing and Shanghai, work with smalland medium-sized Oregon businesses and industries toexpand their exports of goods and services.

assisted directly by state programs increased by over $22million in 2009.

Workforce Development and Training

Education – made up of the Boards of Education andHigher Education – and the Oregon Business Councilmet as the “Tri-Board” to discuss improving studentlearning outcomes and aligning with the needs of businessand industry in Oregon. The Joint Boards furthered thealignment agenda by approving new policies that make iteasier for students to move between education institutionsand better prepare them for postsecondary education.

OREGON

Oregon Innovation Council

Oregon InC brings together private business andhigher education to drive the state’s innovationstrategy - expanding markets for Oregon companies,creating jobs across the state and leveragingOregon’s strengths to compete in the globaleconomy.

Signature Research Centers, an important elementof this innovation strategy, mobilize top researchersand cutting edge laboratories at Oregon’s fourresearch universities.

These centers include: 1) Oregon Nanoscience andMicrotechnologies Institute (ONAMI), 2) Oregon BuiltEnvironment and Sustainable Technologies Center(BEST), helping create new bio-based productsand sources of alternative energy from forests (andforest products) and agricultural land, and 3) Oregon

Translational Research and Drug DevelopmentInstitute (OTRADI) provides Oregon’s universities,research laboratories and private companies

capable of screening thousands of chemicals a day,as well as mentoring and businesses support in the

A 2009 report on Oregon’s Innovation Strategyhighlights these results:

Attracted $23.7 million in new federal grantsand contributions to the state;

Leveraged $36.7 million in industry resources

support); and

Launched 10 new companies—all spun out ofresearch, development and commercializationefforts

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Taking a customer-centric approach to community andeconomic development the Keystone State has established“Governor’s Action Teams” for companies relocatingin the state and “Community Action Teams” (CAT) toserve as a central coordination point for all developmentactivities. While Governor’s Action Teams present a

Action Team system takes a case work approach tocommunity “impact” projects. The CAT helps plan projectgoals and time lines, coordinate multiple public and privatefunding sources, and connect with key partners to see aproject through. The CAT program recognizes that no twocommunities are alike and each initiative requires uniquesolutions.

Taxes and Regulation

Pennsylvania is home to the innovative KeystoneOpportunity Zone (KOZ) program. Partnering with localleaders, the state designates historically under-utilizedbusiness zones currently generating little to no tax revenue.Binding ordinances are passed in these designated zones,making it possible to reduce state and local tax burdens tonear zero.

There are 12 Keystone Opportunity Zones, each designatedby and administered by a local community. Zones are nolarger than 5,000 acres and each contain sub zones of nomore than 10 rural or 20 urban acres. Many KOZs wereformerly industrial and manufacturing facilities, under-

businesses must be new to the state, increase employmentwithin one year of locating, or make capital investments ofat least 10 percent of the previous year’s gross revenue.

Entrepreneurship and Innovation

Keystone Innovation Zones are designated zones incommunities adjacent to colleges, universities, andtechnical schools. The program is designed to helpstimulate technology transfer and new business creation inpartnership with the higher education institutions. Zonesdo not need to be geographically adjacent to the highereducation institution, but must be formally linked to an

industry focus.

The initial phase of the program includes planningand operating grants for the new regional innovationpartnerships, and the program has continued with tax

InnovationWorks

The InnovationWorks Innovation AdoptionGrant program awards $50,000 grants to smallmanufacturers for university research partnershipsto fund product design, rapid prototyping, roboticassembly, machinery design, or manufacturingprocess redesign.

business and are designed to help small, growingmanufacturing businesses innovate and staycompetitive.

Since 2004, the Innovation Adoption Grant Fund hasawarded more than $1.5 million to more than 100companies, generated an additional $2 million inmatching investment in research and developmentfrom private industry, and created or retained morethan 800 jobs with an average annual salary of$45,000.

InnovationWorks is the southwest region subsidiaryof Ben Franklin Technology Partners, one of theoldest and most-recognized technology-basedeconomic development organizations in the nation.

PENNSYLVANIA

credits for participating companies ($12 million in 2009).

Infrastructure

The Pennsylvania Infrastructure Technology Alliance(PITA) is a Pennsylvania Department of Communityand Economic Development (DCED) program designed

knowledge transfer, the discovery of new technologies,and the retention of students. The Alliance brings togetherinfrastructure technology development expertise andconnects complementary infrastructure-related technologydevelopment projects. PITA is collaboration betweenthe state, the Center for Advanced Technology for LargeStructural Systems at Lehigh University, and the Institutefor Complex Engineered Systems at Carnegie MellonUniversity. Key projects and initiatives have includedenvironmental technologies, infrastructure safety andsecurity technology, and innovative infrastructure systemassessment technologies.

The Alliance helps direct the research and educationalcapabilities of two world-class universities towardseconomic issues in the state and it creates an environmentto link Pennsylvania companies with university students.

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Perhaps more than any other state, Rhode Island leadershave stepped forward with a clearly stated strategic planfor job growth. Rhode Island Economic DevelopmentCorporation (RIEDC) released the new cornerstonestrategic plan in 2009 outlining a series of new initiativesto realign the economy. RIEDC realigned many of itscore programs and increased its focus on partnerships afteran outreach program to state businesses, and establisheda governor’s review panel comprised of business, labor,and legislative leaders to recommend ongoing changes toRIEDC programs and strategies.

Entrepreneurship and Innovation

State leaders brought together over 120 leaders in thegreen sector to establish a plan for the energy industry inthe state. The process led to a new Rhode Island GreenEconomy Network and new public roadmap for the greenindustry. The state established a Renewable Energy Fundfor grant and loan funds aimed at stimulating renewableenergy products in the state. Seventeen grants totaling$680,000 were made in 2009.

is parlaying its aquatic resource into the energy industryas well by funding initial research and streamliningpermitting for a new off shore wind energy developmentgenerating 1.32 million megawatts of energy annually. Apower purchase agreement for the project was announcedin late 2009 to line up a customer for the energy and thestate enacted new legislation requiring the state’s largestelectric utility to purchase power from energy producerswithin Rhode Island.

Rhode Island’s Science and Technology AdvisoryCouncil (STAC) is a group of business, academic, andgovernment leaders who advise policy makers on scienceand technology matters. STAC operates a searchable,accessible database of funding opportunities to assistresearchers in tracking and applying for federal researchfunds.

The Rhode Island Center for Innovation andEntrepreneurship (RIEDC) opened its doors in 2009.Established as a partnership between Brown University,RIEDC, the state of Rhode Island, and the city andchamber of commerce in Providence, the Center servesas a tangible hub of entrepreneurial activity for the state.Rhode Island has one of the highest national rates of four-year degrees conferred per its 18-24 year old population,and the new center for innovation is aimed at immersing

Every Company Counts

Rhode Island has combined the efforts of morethan 150 business assistance organizationsunder the common banner of “Every CompanyCounts.”

By creating a common “brand” for smallbusiness assistance and coordinating theefforts of all of the state’s assistance agencies,the program focuses on simplifying theassistance process for the small companiesthat most often fall through the cracks or get lost

The program makes referrals to all other service

a robust website, and pledges to return allincoming phone calls within 24 hours.

students into entrepreneurship and helping universityresearchers evaluate new technologies and gauge theirbusiness viability.

Infrastructure

The redevelopment of the I-95/I-195 interchange inProvidence will open up key waterfront land to newdevelopment and give previously cut-off neighborhoodsthe chance to reintegrate. State economic developers aretaking a lead role to help repurpose some of the newlyavailable land for economic development purposes.

RHODE ISLAND

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As one of the leading export states, South Carolinahas utilized several tax and low cost of doing businessinitiatives to create new jobs within the state. SouthCarolina has one of the lowest corporate income taxesin the Southeast, low cost of unemployment insurance,low workers’ compensation premiums, and a competitiveaverage employer cost for an “employee plus one” healthcare premium.

South Carolina gears its business climate towards fairwage rates, no local income tax, a right-to-work policy,easy access to government, trade secret protection, andincentives that reward job creation and investment.

Exports

To enhance exports the state has developed a Port VolumeIncrease Credit that provides a discretionary tax creditfor certain industries that increase use of South Carolinaports. The Port Volume Increase Credit is available tomanufacturers, warehousers, and distributors that useSouth Carolina port facilities and increase base port cargovolume by 5% over base-year totals. In 2003, the state

Governor and Secretary of Commerce. The initial missionresulted in $120 million in sales for three South Carolinacompanies and has been followed by additional missions toChina. Additionally, the Department of Commerce offersassistance to companies that want to begin exporting orneed help in increasing their exports. Over the last severalyears, the state has provided assistance to more than 2,500

or services. The state holds export-related seminars on

total export value in South Carolina grew by 71%. Thevalue of manufacturing exports also grew 71% between2002 and 2009, from $9.4 billion to $16.1 billion.

Entrepreneurship and Innovation

The South Carolina Center of Economic ExcellenceProgram (CoEE) was established by the state legislaturein 2002 and authorizes the state’s three public researchinstitutions, Clemson University, the Medical University ofSouth Carolina, and the University of South Carolina, tocreate Centers of Economic Excellence in research areasthat advance South Carolina’s economy and capitalize onthe state’s competitive advantages.

The program awards each Center of Economic Excellencefrom $2 million to $5 million in state funds which must bematched on a dollar-for-dollar basis with non-state funds tosupport endowed chairs occupied by world-class scientiststo lead each Center.

To date, more than 45 cutting-edge research centers havebeen created in areas including advanced materials,energy, nanotechnology, health, and optics. There are fourcenters housed at Clemson University International Centerfor Automotive Research – automotive systems integration,manufacturing, design and development, and vehicleelectronic systems integration.

The state has appropriated $180 million from the stateEducation Lottery to fund the program. More than $230million in non-state funds have been invested, and nearlyhalf ($113 million) is comprised of dollar-for-dollarpartnership matches.

ARIZONASOUTH CAROLINA

Job Development Credits (JDCs)

JDCs have been a great resource in attractingnew job creation to South Carolina. JDCs are adiscretionary, performance-based incentive thatrebates a portion of new employees’ withholding

of individual companies.

Qualifying businesses are eligible to receive a tax

job created. A business must increase employmentby a monthly average of ten new jobs.

beginning with year two. The number of new full timejobs is determined by comparing the monthly averagenumber of full time employees for the taxable yearwith the monthly average for the prior taxable year.

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As a national leader in corporate tax and small enterprise-friendliness, South Dakota has made a concerted effort towork with and for small business to accelerate job retentionand job growth. The state has put in place an extensivearray of tax and regulatory statutes aimed at lessening thetax burden on doing business and invested in extensiveinfrastructure to promote research and technologydevelopment.

Infrastructure

Working collaboratively with private industry, the federalgovernment, and federal labs, the state has developedthe abandoned Homestake gold mine into the SanfordUnderground Science and Engineering Lab (SUSEL).A $70 million gift for the Homestake effort from T.Denny Sanford, a leading businessman in South Dakotaand one of the country’s top philanthropists, helped turnthe new deep underground research facility into a reality.Coupled with a National Science Foundation (NSF)award of $29 million, scientists have moved forward indeveloping the lab’s preliminary designs. Constructionhas been completed for the surface laboratory for theLarge Underground Xenon (LUX) dark matter detector.Construction of a surface facility for the Majorana neutrinoexperiment began in December, and excavation is underway at the 4,850-foot depth level on underground space forboth experiments.

Similar projects in the United States show that theHomestake Lab project will have a large economic impacton the entire state. Hundreds of scientists, techniciansand support personnel will work at the laboratory, andthousands of scientists from throughout the world willparticipate in experimentation at SUSEL.

The Sanford Science Education Center will attractstudents, teachers, and visitors from throughout the nation.Several industries have market commercialization potentialin the adjacent town of Lead, SD as a result of the lab. Thismay stimulate start-up companies and spin-off projectsin mining, robotics, communications, explosives, drillingtechnology, air quality, health, safety, mine mapping,sensors, enzymes, animal feeds and medicines, nuclearwaste cleanup, energy, and eco-tourism.

South Dakota has worked to develop a tax andregulatory environment designed to encouragecorporate and small business developmentthrough a comprehensive approach to minimizingtax and government regulatory issues.

The state offers businesses and individuals:

No corporate income tax,

No personal income tax,

No personal property tax,

No business inventory tax, and

No inheritance tax.

Partly because of this enterprise-friendlyenvironment, the state is home to a strong cadre

cluster has added more than 9,000 jobs showing24% growth since 2002.

SOUTH DAKOTA

Entrepreneurship and Innovation

In an effort to build on the momentum generated by thestate’s growth, South Dakota has launched a three-phaseeffort to continue growing jobs and new businesses.Program elements include increasing MicroLoan lendinglimits, expanding existing revolving loan capacity, anddeveloping new industry clusters and enhancing those thatalready exist in the state including health care, biotech,

The state also is working to promote the growth andexpansion of existing businesses by re-establishingthe Manufacturing Extension Partnership (MEP), re-establishing the Procurement Technical Assistance Center(PTAC), and promoting agricultural and natural resourcedevelopment aimed at value-added agricultural projects.

South Dakota is also taking steps to become a net energyexporter in ethanol, biodiesel fuel and wind energy.

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Tennessee has seen the creation of almost 185,000 newjobs, $32 billion in capital investment and 49 corporateheadquarters locations since 2003. Two-thirds of these newjobs have come from the expansion of existing Tennesseecompanies. In just one year, the state landed more than$4 billion dollars in new investments from companies inthe semiconductor, automobile, clean-tech, and chemicalindustries creating more than 3,000 new jobs.

Tennessee’s job creation approach is founded on functional

business leaders, and economic development professionals.A Jobs Cabinet comprised of commissioners fromseven state departments and representatives fromhigher education and business trade groups ensure thatTennessee’s job creation efforts are innovative, customer-focused, and customized on a case-by-case basis.

Exports

Exports and foreign direct investment have shown strongperformance in Tennessee. The state has been highlysuccessful in attracting the U.S. headquarters of companiesfrom Japan and the manufacturing and distribution centersof European companies. Tennessee is an epicenter and astrong magnet for global logistics and distribution and agrowing hub of just-in-time manufacturing in proximity tothe state’s unparalleled overnight delivery capacity.

Taxes and Regulation

Smart tax and regulatory policy in Tennessee consistentlyputs the state in the top tier of low tax, lightly regulatedstates. A hallmark of the state’s interaction withbusiness is consistency of message and straightforward,understandable taxes and regulations with no surprises.The Commissioners of Economic Development andRevenue work closely together to make this possible.

Entrepreneurship and Innovation

TNInvestco takes a unique approach to seeding smallbusinesses with the capital needed to bring a new idea tothe broader marketplace and create jobs in the process.TNIvestco has allocated $120 million dollars in tax creditsto a cross section of venture capital funds with broadexperience in mentoring and developing new companies inTennessee. Those VC funds then market the tax credits toinsurance companies, who purchase the credits with capitalreserves and the venture funds then use the capital to helpTennessee companies grow.

Workforce Development and Training

Fast Track Jobs Training and Fast TrackInfrastructure Development assist companies in trainingnew employees, assisting communities in the developmentof public infrastructure, and help companies cut throughred tape that often hinders development to get theresources and the answers they need. Funds are used forinfrastructure improvements where there is a commitmentby a private sector business to locate or expand in thestate and to create or retain jobs for Tennesseans. Localcommunities and counties are involved with the state toprovide infrastructure for job creating companies in a

Education innovation and reforms that began a decadeago in Tennessee will get a boost when it begins to receive$500 million from the federal government’s Race to theTop competition to implement its comprehensive schoolreform plans over the next four years. Existing initiativesthat have proven successful include lifting the cap on thenumber of charter schools allowed and easing the pathto establishing charters and the Tennessee Value-AddedAssessment System (TVAAS), one of the nation’s oldestand most robust databases for tracking “student growth.”

Clean-Tech Strategy

Tennessee’s clean-tech strategy fosters

technology innovators to commercialize newproducts, processes, and technologies.

The University of Tennessee is collaboratingwith Oak Ridge National Laboratory and severalbusiness partners to research, develop anddemonstrate cellulosic ethanol as a fuel source and

The state has invested in a diverse portfolio ofcompanies that are involved in alternative fuels,energy conservation, and electric and hybridvehicles.

The state is home to the world’s largestmanufacturers of polycrystalline silicon, a criticalcomponent of computer chips and solar panels.Tennessee leveraged USDOE funds to help builda Solar Institute and create a 20-acre, 5 MW solargenerating farm.

TENNESSEE

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Texas has a diverse, globally-oriented business communityand programs and initiatives that help promote newbusiness and job creation within the state. Texas has oneof the lowest tax burdens in the nation, with no personalincome tax, no state tax on property used for pollutioncontrol, no state tax on goods in transit, and no state tax onmachinery and equipment utilized in manufacturing.

Taxes and Regulation

To improve its entrepreneurial climate and to minimize redtape, the state is reducing taxes and pressing for sensibleregulations related to business and property. Key stateinitiatives include a business tax reform that raises therevenue exemption – essentially extending a tax cut toroughly 40,000 small businesses, workers compensationreforms designed to help return injured employees to work,and tort reforms aimed at protecting the state’s economyand improving the availability of medical care in the state.

Infrastructure

impede business growth, the state created regionalmobility authorities, allowing communities to supplementtheir tax funded road systems with toll roads. This givescontrol to local authorities who best know their region’sneeds. Tolls also allow money to stay in the area where itis spent, assuring toll payers that their payments stay in the

More than perhaps any other state, Texas is associated withenergy production. From oil and natural gas to emergingopportunities in renewable energy sources such as windand solar, the state has made considerable investmentsin transmission infrastructure to maintain its position inenergy development and export. A critical commitmentto expanding its transmission grid will maximize theability to move wind power from West Texas to the restof the state. Texas has invested more than $1 millionfrom the Texas Enterprise Fund to support solar energymanufacturing along with another investment of morethan $4.5 million from the Emerging Technology Fund tosupport the commercialization of the next generation ofsolar energy technologies.

Exports

Texas’s export total for 2008 was $192.2 billion, higherthan any other state. Between 2004 and 2008 the export

Texas Enterprise Fund

The Texas Enterprise Fund (TEF) is used toattract new business to the state or assist withexpansion of an existing business.

The TEF can be used for a variety of economicdevelopment projects, including infrastructuredevelopment, community development, jobtraining programs and business incentives.

The TEF is the largest deal-closing fund in theUnited States. Since 2003 it has assisted in thecreation of almost 52,000 jobs and resulted in over$14 billion in capital investment in the state.

Texas Emerging Technology Fund

The Texas Emerging Technology Fund wascreated in 2005 to provide grants to companiesfor commercialization of products, matching funds

in funds have been awarded to 99 early stagecompanies and $153 million in grants for matchingfunding to Texas universities.

total from Texas rose 64%, or $74.8 billion, representingthe largest dollar gain of all 50 states. In terms of markets,Thirty-two percent of Texas exports ($62.1 billion in 2008)went to Mexico, making it the state’s largest internationalmarket.

To maximize its presence in international markets Texasdeveloped a strategy to market the state’s assets on aninternational scale for both export and foreign directinvestment opportunities. This includes creating andimplementing an effective advertising campaign to positionTexas as a premier global business location and the

The TexasOne Program was created as the essentialtool for job creation in Texas, providing a deal-openingfund to generate leads and create promotional materials tocompetitively market the state. Using these resources, thestate launched international missions to several differentcountries in North and South America, Asia and the

the state’s representatives presented an “Invest in TexasSeminar” targeting foreign companies interested ininvesting in or expanding to Texas.

TEXAS

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Utah has embraced a cluster-oriented economicdevelopment strategy. Looking to take advantage ofcompetitive operating costs for select industries, the statehas targeted its efforts on building several sectors of itseconomy, including aerospace, defense, life sciences,

government, through entities including the Governor’s

the private sector and university system to direct effortstowards creating job growth in “industry sectors thatpossess the greatest return on investment for the state.”

Exports

Exports have been an area of strength and continuedgrowth for Utah, even during the recent recession. Withover 2400 businesses engaged in international trade, thestate has been among a handful of states leading the way inexport growth. Existing export strength in primary metalssuch as gold has been coupled with a focus on new andemerging opportunities in the chemical, fabricated metals,and computer and electronics industries to build a robustand healthy export sector.

The World Trade Center Utah, in partnership with the SaltLake Chamber of Commerce and the International Trade

connecting companies in Utah to international markets,providing training, identifying opportunities, andestablishing networking opportunities through the UtahInternational Trade Hub. Facing a challenging economicclimate, Utah has been able to sustain its overall exportlevels over the past two years, and has seen the growthtrend of the past several years resume over the past severalmonths as the economy has recovered. This growth islending support to the state’s manufacturing sector, whichis again expanding and creating jobs.

Entrepreneurship and Innovation

Utah has seen strong growth in science, technology,engineering, and mathematics (STEM) jobs and techstartups, and continues to focus on bolstering the sector. Inorder to better facilitate technology transfer from the state’suniversities to the private sector, Utah has implementeda system of licensee grants through its Centers ofExcellence program. Since 2007, private sectorbusinesses, including startups, have received grants fromthe state to aid them in bringing technology developed atthe state’s universities to market, creating new products,companies, and jobs in the technology sector. The statehas also launched a set of Business Resource Centersin conjunction with universities and other organizationsthroughout the state to support entrepreneurs in startingand growing their businesses.

Businesses conducting research within the state arealso eligible for tax credits for research expenses andinvestments in research machinery and equipment.Entrepreneurs looking to relocate to Utah or expandexisting operations can also receive special tax incentivesin support of their job creation activities, through thestate’s Economic Development Tax Increment Financinginitiative, which provides up to a 30% refundable crediton sales taxes, corporate taxes and withholding taxespaid to the state. The state is also working to provideinfrastructure to drive future innovation in the energysector, to capitalize on its location in the WesternEnergy Corridor. Working with private and publicsector partners, the state is developing a new center forentrepreneurship and energy research to create new jobcreation opportunities.

ARIZONAUTAH

Cluster Acceleration Partnerships (CAP)

As part of Utah’s focus on increasing economicgrowth in its main economic clusters, the statehas implemented pilot programs to support privatesector growth and innovation in targeted industriesby “addressing their needs for talent and innovationsupport.”

The CAP programs, involving partners from theprivate sector, state government, and colleges anduniversities across the state are intended to build

up existing areas of economic strength, identify bestpractices for growth, tailor job training and educationto industry needs, and build the capability of Utah’scolleges and universities to act as engines ofeconomic growth.

While the program is currently limited to three areasof focus – energy, aerospace, and digital media – thestate intends to build out CAP by launching clusterfocused public-private partnerships at all ten stateinstitutions of higher education.

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Recognizing that small and medium-sized enterprisescomprise 98% of all businesses and employ 60% of allworkers in the state, Vermont has oriented its economicdevelopment system towards smaller companies. Thestate’s economic development structure includes the:

Vermont Economic Development Progress Council,an independent approval and authorization boardfor the state’s growth incentive and tax increment

Vermont Economic Development Authority, a

Workforce Development and Training

The Vermont Training Program can cover 50% ofthe cost of training new workers and skills upgrades of

allows smaller and growing companies to access key skillstraining that they may not otherwise afford. The programworks with prospective businesses to structure trainingprograms for the manufacturing, health care, informationtechnology, telecommunications, and environmentalengineering sectors.

Taxes and Regulation

Beginning in 1981, Vermont positioned its tax andregulatory environment to target the captive insuranceindustry. Captive insurance is a risk managementtechnique by which a business forms its own insurance

legislature is responsive to the captive insurance industryby keeping regulations current and friendly, and the statemaintains a knowledgeable team on staff who has takentime to understand the business. Vermont is now thelargest on-shore domicile for captives and the secondlargest in the world.

pay more than $11 billion per year in premiums whichtranslates to $22 million in annual state revenue. A 2006economic impact study credited the captive industry for1,429 direct and indirect jobs paying nearly two-thirdsmore than average wage in the state.

Entrepreneurship and Innovation

The Vermont Center for Emerging Technologiesoperates an incubator and seed capital fund to help providenew businesses the needed entrepreneurial support oftenlacking in smaller states. The Center is structured as a

universities, Norwich University, and Champlain College.The seed capital fund is a revolving evergreen fund andwas capitalized with $3.15 million of initial funds from theState of Vermont and the federal government.

Infrastructure

The Vermont e-state Initiative is an effort to extendbroadband or wireless access to all Vermonters by 2010.The state established the Vermont Broadband Council

Vermonters. Legislative action established the VermontTelecommunications Authority to lead the effort tostimulate broadband and wireless provider build out and tocoordinate public outreach and information.

VERMONT

PursueVT

Many states focus efforts to stem “brain drain” onoften futile attempts at retaining college graduates,Vermont has, instead, focused on recruitment withthe PursueVT initiative.

The program creates and maintains relationshipswith prospective new Vermonters using targeted

information geared towards living and working inVermont.

PursueVT operates a web site and newsletter, andholds job networking events in locations with highconcentrations of Vermont alumni.

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Commonly viewed as one of the most enterprise-friendly states, Virginia has worked hard to developnew and emerging industries and is the home base formany university, private, and government research anddevelopment facilities. Virginia’s success is a testament tothe state’s long term planning and management of money,people, infrastructure, and information.

Taxes and Regulation

Virginia’s efforts to foster an enterprise-friendly climatein the state include a streamlined permitting process,recruitment training programs to help new businessesbecome operational faster, right-to-work laws allowingindividuals the right to work regardless of membership ina labor union or organization, and a six percent corporateincome tax rate, which has not been increased since 1972.

Exports

Virginia exported a record $2.3 billion in agricultural

28% increase over the last two years. This increase comesdespite distressed economic conditions worldwide and inthe midst of an overall national decrease in agriculturalexports. In just two years Virginia’s agricultural exportsgrew by half a billion dollars. While overall agriculturalexports from the United States are down 14 percent,Virginia agricultural exports grew by $100 million in2009.

The state has initiated several programs to accelerateexports including the AIM program, which helps Virginiacompanies that are new to exporting and eager to expandtheir business abroad. During this yearlong program,participants learn a systematic approach to the exportprocess that minimizes risk and maximizes return.

Another key program is Export 3.0 that focuses on theearly stages of the international business developmentprocess – the face-to-face meetings with potential agents,distributors, and customers in a target market. The VirginiaEconomic Development Partnership provides funds andassistance to organize these meetings.

Entrepreneurship and Innovation

Virginia is home to many internationally recognizedresearch and development (R&D) facilities. Federallyfunded R&D facilities, coupled with the research fromVirginia universities, provide Virginia businesses accessto leading researchers and cutting-edge technology. From

VALET

The VALET program assists companies in Virginia toexpand their international business opportunities.

VALET offers a powerful combination of capitalresources provided by the state along withprofessional services from expert, private-sectorpartners.

up their global marketing efforts through thisprogram. Companies have graduated from thiscomprehensive, two-year business accelerationprogram with greater focus on the potential of export

an 88% increase in international sales during andimmediately following the program.

VIRGINIA

the automotive industry to medical research to the nextgeneration of high technology, these research facilitiesoffer support and technology access to business.

Virginia boasts the largest concentration of federal R&Destablishments in the nation – 25% of the total numberof federally funded R&D centers (FFRDCs). This R&Dconcentration also includes over 20 defense-related labsand R&D centers and 19 federal civilian research centersincluding the new Homeland Security Institute, NASA’sLangley Research Center, and DOE’s unique ThomasJefferson National Accelerator Facility. Half of the 228private-sector R&D establishments in Virginia are focusedon bioscience research, followed by a high concentration ofinformation technology research establishments.

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Washington’s innovation-driven economy is comprisedof an array of industries ranging from clean-tech, globalhealth, tourism, and aerospace, to technology, forestry,agriculture, and marine technology. The total number ofregistered businesses in Washington has more than doubledin the last 15 years.

The state has been a global leader in aerospace for nearlya century, and continues to lead in aerospace research anddevelopment and commercial aircraft sales. Washingtonis a international innovation hub for the information andcommunication technology sector including softwarepublishing, interactive media, telecommunications andmobility, online services, e-commerce, network systemsand solutions, and game development and publishing.Clean, renewable, low-cost hydropower has fueled

spinning at the Grand Coulee Dam in 1942.

Workforce Development and Training

The Education Legacy Trust Fundfor lower class sizes in public schools, academic helpfor struggling students, additional enrollments in higher

students in higher education.

The Education Legacy Trust also funds science,technology, engineering, and mathematics (STEM)programs including: 1) a math and science instructionalcoaches program; 2) additional professional developmentdays for middle and high school math and science teachers;3) leadership and assistance for science education reform(LASER) regional partnership activities; and 4) funding

coordinate and promote efforts to develop integrated math,science, technology, and engineering programs in schooldistricts across the state.

Entrepreneurship and Innovation

Innovation Partnership Zones were created in 11communities throughout the state in 2007 to bringresearch, workforce training, and a globally competitivecompany together in close geographic proximity for acooperative, research-based effort that will lead to newcommercially viable products and jobs. The idea is to formindustry clusters around universities and research parks,utilizing resources from higher education institutions to

In 2009, the requirement that a research institution be

Washington Technology Center (WTC)

Washington Technology Center is a statewideeconomic development organization focused ontechnology and innovation that forms connectionsbetween people and resources, and fostersjob growth by helping to move innovative ideasout of the laboratory and into the commercialmarketplace.

WTC’s Research and Technology DevelopmentProgram awards $1 million in applied researchfunding each year to teams comprised ofcompanies and researchers in the state ofWashington.

Washington Technology Center’s work overthe course of 17 years has generated morethan $630 million in additional investment forWashington companies and researchers.

WTC is the recipient of the State Science andTechnology Institute’s 2009 national award forExcellence in Technology Based EconomicDevelopment (TBED).

located within the zone was waived to allow for moreInnovation Partnership Zones to be located in rural parts ofthe state.

Exports

economy, accounting for over 30% of economic growthover the past decade and contributing to almost halfof the state’s new jobs created over the past 30 years.The Port of Seattle and Port of Tacoma together movea combined cargo volume that makes them the secondlargest port complex on the west coast. The WashingtonState Department of Commerce has representatives in 24countries around the world providing in-market businessdevelopment assistance to state businesses.

WASHINGTON

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West Virginia has invested in critical hard and softinfrastructure to foster research and development initiativesfocused on job creation and higher paying jobs. Thestate’s initiatives aimed at increasing the skills required inscience, technology, engineering, and mathematics (STEM)related employment are coupled with a cohesive approachto delivering the infrastructure required to accommodatethis growth – including broadband connectivity andbusiness and industrial parks. In sum, the state hasdeveloped forward-looking programs and infrastructure toaddress the workforce and skills needs of the 21st century.

Entrepreneurship and Innovation

The West Virginia Research Trust Fund was createdin 2008 to leverage public and private investments as acatalyst for strengthening research programs at the state’sleading universities. The Research Trust Fund, also knownas the “Bucks for Brains” program, aims to bolsteractivity in STEM at colleges and universities across WestVirginia. The goal is to connect student learning withfaculty development while increasing graduation rates forscience and math majors, academic performance in upper-division courses, and postgraduate activities in STEM

Initiatives include a long-term campaign that funds studentstipends and high-end instrumentation purchases, whichare used by faculty researchers and students, to build onthe university’s growing achievements and recognizedexcellence in biology and chemistry. The programis designed to build intellectual capital, pioneer neweconomic growth, and create new jobs within the state.

Innovation

The state is upgrading its infrastructure via three key

a statewide Smart Grid Plan to address energy andemergency resilience issues. This effort coincides with TheWest Virginia Statewide Broadband InfrastructureProject that will bring high-speed Internet access toan underserved region by expanding the state’s existingmicrowave public safety network and adding about 2,400

The expanded statewide network will directly connectmore than 1,000 anchor institutions, including public safety

and other critical community facilities at speeds of up to45 Mbps. The project goal is to spur affordable broadband

service impacting more than 700,000 households, 110,000businesses, and 1,500 anchor institutions, by allowing localInternet service providers to connect to the project’s opennetwork.

To accomplish these and other key infrastructure projectsthe state has developed the West Virginia EconomicInfrastructure Bond Fundto foster and enhance economic growth and development.The emphasis is on business and/or industrial parks andfunding priority goes to projects resulting in immediate jobcreation.

Workforce Development and Training

West Virginia’s 21st Century Learning Initiative isfocused on developing internationally rigorous and relevantcurriculum standards (including content, learning skills,and technical tool skills). The initiative also includes abalanced assessment strategy, research-based instructionalpractices, a parallel accountability system, aligned teacherpreparation programs, the development of a 21st centuryleadership continuum, emphasis on pre-K programs, andthe integration of technology tools in every classroom.

ARIZONAWEST VIRGINIA

West Virginia Coal Conversion Initiative

The West Virginia Coal Conversion Initiative is acomprehensive plan that will encompass public/

coal conversion facilities and infrastructure.

and other products for commercial and non-commercial uses.

The West Virginia Coal Conversion Initiative willfocus on the development of state-of-the-art,multi-product facilities that adapt to the changingneeds of the marketplace and produce whatever

it natural gas, diesel fuel, jet fuel, hydrogen, orchemicals.

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drive to be a national leader. The state adopted “Forward”

high-level education, a progressive business climate, and astrong push towards entrepreneurship and innovation in itsquest to attract and retain high quality jobs and businesses.

Taxes and Regulation

Wisconsin aims to keep barriers low for industry by usingproperty tax exemptions for manufacturing machineryand equipment, computers and computer equipment,inventories, and pollution-control equipment. The stateprovides tax credits for energy used in manufacturingand for research and development expenditures, and thestate’s worker’s compensation rates for most industries areconsistently among the lowest in the country. Wisconsinhas single-sales-factor tax treatment and sixty percentcapital gains exclusion, and has no unitary tax on foreign-owned corporations.

Workforce Development and Training

The Wisconsin Sector Strategies Initiative bringstogether employers, representatives of labor, and leadersin economic and workforce development to alignregional training resources to meet the workforce needs

result of Wisconsin’s work with the National Governor’sAssociation Center for Best Practices Policy Academy.To establish the initiative, the state developed a $5.89

commitment to education and training. The initiative isindustry led, regional in focus, and driven by demand withtraining based on the needs of growing economic sectors,not existing programs.

Entrepreneurship and Innovation

The Wisconsin Technology Council is the science andtechnology advisor to the governor and the legislature.Launched in 2001, the Technology Council was createdby a bipartisan act of the governor and the legislature.

and all levels of education, research institutions, andgovernment.

The Tech Council has three main functions. It providespolicy guidance to lawmakers, the governor, state agencies

Forward Wisconsin

Forward Wisconsin is a 501(c)(3) not-for-

recommendation of the Governor’s StrategicDevelopment Commission.

Forward Wisconsin markets the state tocorporate executives, site selection consultants,business decision-makers and investors to raiseawareness about Wisconsin and to encourageinvestment in Wisconsin.

Forward Wisconsin works to boost the state’simage and to attract industry, talent andintellectual capital to Wisconsin by focusing onselected industry clusters.

One of Wisconsin’s key strengths is the ability todraw upon the resources of both the public andprivate sectors and the ability to connect withnew business prospects.

and other institutions in the state. It operates an in-statenetworking organization, the Wisconsin InnovationNetwork (WIN), a community-based organizationdedicated to fostering innovation and entrepreneurship.The Tech Council also works with other statewide and

programs such as:

Wisconsin Entrepreneurs’ Conference, a programfocused on stimulating more entrepreneurial activity inWisconsin across all segments of the economy;

Wisconsin Early Stage Symposium, which is open totechnology companies seeking capital;

Wisconsin Angel Network (WAN) whose mission isto build angel network capital capacity throughoutWisconsin in order to increase the number and amountof seed-stage equity investments; and

Wisconsin Security Research Consortium, aconsortium of research institutions dedicated todelivering world-class science and technologysolutions in response to our nation’s homeland securityrequirements.

WISCONSIN

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Buoyed by strong growth in its dominant energy andminerals sectors, Wyoming has focused on capitalizing onkey strengths to build a strong, resilient, and increasingly

revenue from its extraction-based industries have helpedfund targeted investments in infrastructure projects thatcreate a growth-friendly environment in communitiesthroughout the state. Wyoming is working to make better

job creation, while remaining committed to growing itsagriculture, energy, and minerals sectors.

Infrastructure

Wyoming’s “biggest success story” has been its BusinessReady Community Grant and Loan Program. Using itsseverance driven budget surplus, the funds have been usedto upgrade infrastructure, community amenities, buildings,and other physical assets to support economic development

a bottom up approach to investment, and are focused on“sprucing up” communities to create an environmentconducive to business development. Investments involvea local match and have supported expansion of existingenterprise and attracting new companies to the state.

Leveraging state support, the city of Cheyenne built a new,$70 million logistics center, bringing 700 to 800 new jobsto the community. These new facilities and infrastructurecreate lease revenue to be reinvested into new economicdevelopment projects, further leveraging the initial stateinvestment.

A new supercomputing center developed in partnershipwith the National Center for Atmospheric Researchcapitalizes on an abundant, low cost power supply andcreates a highly competitive environment for new datacenter development.

Entrepreneurship and Innovation

Wyoming has invested in new high-tech facilities andinfrastructure to support emerging growth industries,including advanced energy innovation. The WyomingTechnology Business Center provides services, physicalspace and data center support to high-tech start-ups,helping to launch a series of new companies in the state.

Workforce Development and Training

Investment in “intellectual infrastructure” has also been akey pillar of Wyoming’s job creation strategies. Primary,secondary, and higher education institutions have receivednew funding and support from the state. Partnering withthe University of Wyoming, the state created a School ofEnergy Resources to support development of advancedenergy solutions, providing technology transfer and ahighly educated workforce to spur private sector growth in

activity.

Workforce development and training is supported throughsubsidized training services, with grants of up to $4,000per worker available to businesses.

ARIZONAWYOMING

Wyoming Challenge Loan Program

The Challenge Loan Program buys down interestrates on loans to support entrepreneurs in

facilitating job creation.

SBIR Phase Zero

At relatively minimal expense a Small BusinessInnovation Research “Phase Zero” programprovides support grants for small businesses todevelop Small Business Innovation Researchgrant proposals. The Phase Zero programhas helped the state’s companies measurablyimprove success rates in landing these highlycompetitive awards.

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Located over 4,000 miles from the U.S. mainland, the

dependent on its dominant tuna industry. While theindustry has long been supported by tax-advantaged statusconferred by the federal government, recent changes inlabor, wage, and trade laws have led to an uncertain futurefor the sector in the territory.

Entrepreneurship and Innovation

To support private sector economic growth andDevelopment

Bank of American Samoa. The Development Bank isstructured as a semi-autonomous government agency andacts as a socio-economic development institution for the

support of start-up and existing businesses. In order toaid the Development Bank in its efforts, the territory hascreated an Economic Development Fund, which willsupplement the funding the bank receives from the federalgovernment. The fund will be backed with a portion ofthe territory’s corporate tax receipts, and will be used tosupport and promote private enterprise and job creation inthe territory.

Entrepreneurship is also encouraged by American Samoa’sSmall Business Development Center, which works inpartnership with the territory’s community college tooffer entrepreneurial training, technical assistance, andother business support services to new and establishedentrepreneurs. The Center facilitates a business friendlyenvironment by acting as a point of connection betweenthe private sector, educational institutions, and all levels ofgovernment active in the territory.

Infrastructure

infrastructure, working with private industry to modernizethe territory’s telecommunications system. New undersea

projects are in the works to further increase service. Theterritorial government helped spur the development,

the projects. American Samoa views these investmentsas a way to overcome the territory’s geographic isolation,

allowing intellectual service industries and call centersto establish a presence in the territory. The territory seestourism as a potential engine for economic growth, and ispursuing opportunities to expand air service.

The Northern Mariana Islands are located in the western

including Saipan, Rota, and Tinian, but the vast majority ofthe Commonwealth’s population lives on Saipan.

The economy relies heavily on tourism, especiallyfrom Japan. The agricultural sector is made up of cattleranches and small farms producing coconuts, breadfruit,tomatoes, and melons. Garment production is by far themost important industry with sizable shipments to the U.S.under duty and quota exemptions.

Entrepreneurship and Innovation

The Commonwealth Development Authority (CDA)provides economic loan funds to private and publicsectors for economic development. The Banking Divisiongenerally engages in government and public sectoractivities while the Corporation Division engages in privatesector activities.

The Northern Marianas College Small BusinessDevelopment Center provides free business consultingservices on a limited basis, and no-cost or low-costworkshops/seminars and training programs aimed atstrengthening and diversifying the local economy. TheSBDC offers one-on-one client consulting servicesto entrepreneurs for business plan development, loanpackaging, operational planning, marketing, personnel

as well as other areas of need.

The Marianas Visitors Authority promotes tourism forthe Commonwealth and has grappled with the annualpendulum swing of low demand tourism months, whichhas been especially challenging in recent years as tourism

Infrastructure

The Commonwealth Ports Authority is rehabilitating themain runway at the Saipan International Airport using agrant through the American Recovery and ReinvestmentAct (ARRA).

AMERICAN SAMOA NORTHERN MARIANA

ISLANDS

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Guam, America’s territorial outpost in Asia, is currentlyfacing the prospect of rapid population growth overthe next several years as the Department of Defense

As part of its “Guam Buildup” the military plans toopen a major new Marine Corps base on Guam bringingnearly 25,000 new residents to the island along withtens of thousands more during the construction process.The island is already home to a Navy and Air Forceinstallation. While the planned expansion will bring newopportunities and the prospect of a boom in economicactivity to Guam, the territory also faces infrastructureprovision challenges. The territory has already madeinvestments to upgrade and prepare, and the territorialgovernment is working with the federal government

Guam to better accommodate the added population whileencouraging sustainable economic growth.

Exports

Guam has made a set of agreements and arrangementswith Japan, Australia, and nations in Europe to reducetariffs and spur increased trade. Manufacturing expansionis encouraged under special rules which allow productsproduced on the island from foreign sourced materials tobe sold in the United States duty-free, if enough value is

Infrastructure

The island is currently beginning a series of majorinvestments in its deepwater port facility, in order to better

port modernization process, the territory has partneredwith the private sector to upgrade cargo handling facilitiesat the port. Guam has also placed resources towardsairport upgrades and expansions, in order to betterfacilitate the island’s important tourism industry.

The territory hopes to take advantage of its relatively closeproximity to China, acting as a hub for Chinese tradeand tourists in the region. The territorial governmenthas sought out closer relationships with Australia andhas explored the possibility of working with Australiancompanies to improve Guam’s infrastructure. Investmentsin basic infrastructure, including roads and watersystems, are also underway, such as the 2030 GuamTransportation Plan, with partners from the government,military, and private sector taking part in implementation.

Taxes and Regulation

Guam, as an unincorporated territory, is a separate taxingjurisdiction whose residents and businesses are not subjectto federal income tax. While much of the Guamaniantax system shadows that of the federal government, theterritorial government has adopted a variety of tax andregulatory policies and incentives designed to encourageinvestment and increased business activity on the island.Corporate income tax rebates of up to 75% for 20years, complete property tax abatements, and rebateson corporate dividend taxes are available to businessesin certain sectors, including tourism, manufacturing,

The government of Guam has also made the insuranceindustry a target for growth, adopting regulatory regimesand tax incentives structured to provide support to theindustry. Insurance companies and underwriters mayreceive 100% income tax rebates and 100% abatements onother taxes for up to 20 years.

Residents from 36 nations interested in conductingbusiness in the nation are allowed to visit the territoryunder relaxed visa requirements, helping Guam moreeasily attract potential investors to the island. Should apotential investor be interested in moving to the islandto start a business, Guam holds a waiver from thefederal government setting a lower minimum investmentrequirement to receive an investor visa.

Entrepreneurship and Innovation

New business development is encouraged through Guam’sDevelopment Fund Act. Loans, lines of credit, andloan guarantees are provided to eligible entrepreneurs,

manufacturing, and tourism.

ARIZONAGUAM

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Puerto Rico’s strategic model for a new economy isfocused on growth, competitiveness and jobs. TheCommonwealth has stabilized its credit situation and thereis an emphasis on improving conditions for all businessesthrough strategic infrastructure investments and byaddressing regulatory barriers.

Puerto Rico has a proven 40-year track record as a majorpharmaceutical and medical devices center in the worldwith 25% of the world’s biological manufacturingcapacity now located in Puerto Rico.

The major pillars of Puerto Rico’s long-term growthstrategy are focused on increasing exports and thedevelopment of local intellectual property.

Entrepreneurship and Innovation

Entrepreneurship initiatives have surged since 2009 withover 1,200 participants involved in entrepreneurial trainingcourses, over 200 women involved in a micro businessprogram and over 100 new members added to the PuertoRico World Trade Center (PRWTC).

Efforts intended to transition Puerto Rico to a knowledge-based economy are leveraging the existing industrialbase to create new jobs and businesses by fostering newindustry clusters and consortia with a focus on innovation.A Science and Technology Trust is spearheading theestablishment of Science City, a district of excellence inscience and technology.

Infrastructure

World-class infrastructure investments to reduce theoperational costs of doing business and to build thefuture economy are now underway. $190 million oflocal stimulus funding has been allocated to immediateinvestments in the local economy, of which 70% are ininfrastructure.

The Port of Americas project is now underway to createan international global caliber shipping and distributioncenter capable of handling container ships too large for thePanama canal. New public policy has been implementedthat will facilitate infrastructure investment by publicprivate partnerships.

Economic Incentives for theDevelopment of Puerto Rico

Tax incentives and credits available throughthe Economic Incentives for the Developmentof Puerto Rico Act enable local and foreigncompanies to operate successfully in Puerto Rico

jurisdiction, while taking advantage of a foreigntax structure.

Since 2009 Puerto Rico has completed over 70promotions under the act with a commitment of3,500 jobs and $110 million in investment.

These investments have resulted in expansionsand the creation of new companies and researchand development centers in biotechnology,pharmaceuticals, aerospace and services suchas software development and support.

Taxes and Regulation

Laws are being implemented to reform Puerto Rico’sinstitutional and regulatory framework, to turn governmentinto a facilitator and to strengthen the private sector.Recently passed laws create a new permits system that is

PUERTO RICO

81

Home to the tourist hotspots of the St. Thomas, St. Johnand St. Croix islands and blessed with its Caribbeanlocation and weather, the U.S. Virgin Islands (USVI)is viewed by many as a vacation paradise. Because ofits location and weather, industry in the USVI is basedprimarily around tourism, but the territory is capitalizingon its weather and business friendly climate to grow newindustry, businesses, and jobs.

Taxes and Regulation

To help retain, attract and grow new business the USVIhas worked to cultivate a business environment thatmimics and mirrors its renowned climate. The USVI

the territory including a 90% exemption on local incometaxes, a 90% exemption on dividends, a 100% exemptionon gross receipts taxes, a 100% exemption on propertytaxes, a 100% exemption on excise taxes and 1% customduties. In addition to these tax initiatives the USVI offersmanufacturers duty-free, quota-free access to the U.S.mainland and ability to market and label products with the“Made in the USA” label.

Entrepreneurship and Innovation

In 2002, the USVI developed the RTPark to foster thedevelopment of knowledge-based, e-commerce, and digitalcontent companies within the USVI. RTPark is comprisedof two entities: the University of the Virgin IslandsResearch and Technology Park Corporation, and theResearch and Technology Park Protected Cell Corporation,which holds and can extend to qualifying tenants andstrategic partners generous corporate tax incentives alignedto guidance issued by the U.S. Treasury Department.

Infrastructure

In order to support growth of the territory’s manufacturing

the island has backed bonding and development of newwastewater treatment facilities. The territory has alsoentered into a partnership to work with the NationalRenewable Energy Laboratory and other federal agenciesto diversify the islands energy resources. The territoryplans to make extensive improvements to its powerdistribution and generation network, and has announcedan “aggressive” strategy to deploy new renewable energyresources which will include a focus on industry.

VIRGIN ISLANDS

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14 Wendell Cox, “America Is More Small Town Than We Think,”Newgeography.com, September 10, 2008; Andres Duany,Elizabeth Plater-Zyberk, and Jeff Speck, The Rise of Sprawl andthe Decline of the American Dream (New York: North Point Press,2000), pp. 227-28.

the Edge of Chaos (New York: Crown Business, 2000), p. 271;John Micklethwait and Adrian Wooldridge, The Company: AShort History of a Revolutionary Idea (New York: Modern Library,2003), p. 129; John Micklethwait and Adrian Wooldridge, AFuture Perfect (New York: Random House, 2000), p. 320; StefanTheil, “Europe’s Philosophy of Failure,” Foreign Policy, January-February 2008; Sharon Jayson, “Gen Y Makes a Mark and TheirImprint Is Entrepreneurship,” USA Today, December 8, 2006; Jim

USA Today, December 11, 2006.

16 Clyde Farnsworth, “Gloom Is Spreading as Problems Grow inWorld Economy”, New York Times, November 1, 1976; SusanChira, “In 1990s, What Price Scarce Labor?”, New York Times,October 1, 1989; Penny Singer, “Labor Shortage Seen”, New YorkTimes, October 11, 1987

17 Stuart Anderson and Michaela Platzer, “American Made: TheImpact of Immigrant Entrepreneurs and Professionals on U.S.Competitiveness,” National Foundation for American Policy, 2006;Louise Story, “Seeking Leaders, U.S. Companies Think Globally,”New York Times, December 12, 2007.

the Edge of Chaos (New York: Crown Business, 2000), p. 271;John Micklethwait and Adrian Wooldridge, The Company: AShort History of a Revolutionary Idea (New York: Modern Library,2003), p. 129; John Micklethwait and Adrian Wooldridge, AFuture Perfect (New York: Random House, 2000), p. 320; StefanTheil, “Europe’s Philosophy of Failure,” Foreign Policy, January-February 2008; Sharon Jayson, “Gen Y Makes a Mark and TheirImprint Is Entrepreneurship,” USA Today, December 8, 2006; Jim

USA Today, December 11, 2006.

19 Paul Glader, “Monuments to Labor,” Wall Street Journal, August10, 2004.

20 Richard Deitz and James Orr, “A Leaner, More Skilled U.S.Manufacturing Workforce,” Current Issues in Economics andFinance 12 (February-March 2006); Mark Trumbull, “Small,‘Inner Sunbelt’ Cities Grow,” Christian Science Monitor 99 (July2007), pp. 2-4; Richard Dietz, “Restructuring in the ManufacturingWorkforce: New York State and the Nation,” Federal ReserveBank of New York, Buffalo Branch, Winter 2004. 2005 Skills GapReport—A Survey of the American Manufacturing Workforce,National Association of Manufacturers, the ManufacturingInstitute, and Deloitte Consulting, 2005; Timothy Aeppel, “Firms’New Grail: Skilled Workers,” Wall Street Journal, November22, 2005. Jerry Jasinowksi, “In Search of Skilled Employeesfor America’s Future,” National Association of Joel Popkinand Kathryn Kobe, “U.S. Manufacturing Innovation at Risk,”Council of Manufacturing Associations and the ManufacturingInstitute, February 2006; Barbara Hagenbaugh, “Wanted: FactoryWorkers,” USA Today, December 5, 2006.

21 David Osborne, Laboratories of Democracy: A New Breed ofGovernor Creates Models for National Growth, Harvard BusinessSchool Press, (Boston:1990), introduction

22 Jonathan Hughes, American Economic History,Harper Collins,(New York: 1990), pp.163-165; Louis Hacker, The Course ofAmerican Economic Growth and Development, John Wiley andSons, (New York:1970), pp.107-114, pp.279-284,p.298, p.331

23 Neil Morgan, Westward Tilt: The American West Today”, RandomHouse, (New York:1961), ppp.34-35

24 David Osborne, Laboratories of Democracy: A New Breed ofGovernor Creates Models for National Growth, Harvard BusinessSchool Press, (Boston:1990), pp.xii-xiii

25 David Osborne, Laboratories of Democracy: A New Breed ofGovernor Creates Models for National Growth, Harvard BusinessSchool Press, (Boston:1990), pp.1-15

ENDNOTES1 “U.S. Census Bureau International Data Base”http://www.census.

gov/ipc/www/idb/index.php

2 Dr. Kenneth R. Troske, Director, “Estimated Job Needs for USNationally and By State,” October 8, 2009, Center Foror Businessand Economic Research, Department of Economics, University ofKentucky, Gatton College of Business and Economics, page 3.

3 “Not Out of the Woods: A Report on the New Jobless RecoveryUnderway”, New America Foundation, June 2009

4 “Labor market faces threat of a prolonged jobless recovery”, EPINews, April 1, 2010; Jonathan Weisman, “Forecast Says LaborGrowth Will Remain Lackluster”, Wall Street Journal, Feb. 12,2010

5 David Paul Kuhn, “Dems Wrong War: Health Care Amid JobsCrisis”, Real Clear Politics, March 18, 2010; Peter S. Goodman,“Millions of Unemployed Face Years Without Jobs”, New YorkTimes, February 21, 2010; Justin Lahart, “New Skills, Few JobOffers”, Wall Street Journal, March 17, 2010; “The Lost Wages ofYouth”, Wall Street Journal, March 5, 2010; Cheryl V. Jackson,“6.1 people for every available job”, Chicago Sun-Times, February10, 2010

6 David Paul Kuhn, “The Jobless Gender Gap”, Wall Street Journal,November 27, 2009

7 David Rosnick and Mark Weisbrot, “Are Shorter Hours Good forthe Environment?:A Comparison of US and European EnergyConsumption”, Center for Economic and Policy Research,December 2006; Paul Krugmann, “Learning from Europe”, NewYork Times, January 10, 2010

8 Tristiana More. New Report Reveals the Depth of GermanPoverty”, Time March 25, 2009; Floyd Norris, “Younger JobSeekers Have It Worse”, New York Times, December 13, 2008;Lisa Foderaro, “As the Rich Get Poorer, Teenagers Feel theCrunch”, New York Times, December 13, 2008; Phillip Pangalos,“Greek Riots Test A Shaky Government”, Wall Street Journal,

Poverty in OECD Countries”, OECD Multilingual Summaries,2008, p.3; Phillip Pangalos and David Gauthier-Villars, “Greek

January 22, 2009

9 Landon Thomas, “Britons Cling to Services, Despite Debt”, NewYork Times, March 25, 2010; Marcus Walker and AllessandraGalloni, “Europe crisis presents choice between growth and safetynet”, Wall Street Journal, March 26, 2010; Michael Barone, “It’s awonderful life working for the government”, Washington Examiner,Dec. 230, 2009

10 Conor Dougherty, “As Slump Hits Home, Cities Downsize TheirAmbitions”, Wall Street Journal, December 26-27, 2009

11 Study of the Effects On Employment of Public Aid to RenewableEnergy Sources, Gabriel Calzada Alvarez Phd. UniversidadRey Juan Carlos; Rheinisch-Westfalisches Institut furWirtschaftsforschung, Dr. Manuel Frondel et al, EconomicImpacts from the Promotion of Renewable Energies: The GermanExperience; Danish Stronghold Destroyed by New Energy Taxes,by AF Chief Consultant Troels Ranis, Trra@Di.Dk, And EconomicConsultant Allan Sørensen, ALS@DI.DK February 2010

12 Steven Greenhouse,December 3, 2009, “Elusive Goal ofGreening U.S. Energy”, New York Times, December 3, 2009;, Keith Johnson, Wall Street Journal, “Ill Winds Blow for CleanEnergy” 7-9-09 ; Devon Swezey , It’s Not All Good: WhyAmerica Should Worry About the Clean Energy Race with Asia,Breakthrough Institute, February 2010, Keith Bradsher, “ChinaRacing Ahead of U.S. in the Drive to Go Solar “, New York Times,August 25, 2009, Sam Sherraden, “America’s Green TradeBalance”, New America Foundation, June 22, 2009

13 EMSI [Economic Modeling Specialists Inc.] Data Spotlight,December 2008- April 2009

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Monitor, March 10, 2010

translated by Henry Reeve, Bantam Classic, (New York:2002),pp.186-187

28 Richard Mattoon, Charting an Economic Development Strategyfor Industrial Regions: The Story of the U.S. Midwest in the1990s and Beyond. Networks Financial Institute. Indiana StateUniversity. September 2008.

29 EMSI Complete Employment, 1st Quarter 2010

30 Timothy Bartik. What Works in State Economic Development?W.E. Upjohn Institute for Employment Research.

31 State Science and Technology Institute. Online TBED ResourceCenter.

32 Cluster-Based Strategies for Growing State Economies. NationalGovernor’s Association and the Council on Competitiveness.2007.

33 National Science Foundation State Science and EngineeringIndicators, 2010.

34 Bruce Katz and Julie Wagner. The Next Economy: TransformingEnergy and Infrastructure Investment. Brookings InstitutionMetropolitan Policy Program. February 2010.

35 David F. Shaffer and David J. Wright. A New Paradigm forEconomic Development How Higher Education Institutions AreWorking to Revitalize Their Regional and State Economies. TheNelson A. Rockefeller Institute of Government. University atAlbany, State University of New York. 2010.

36 Council on Competitiveness. Cooperate: A PractitionersGuide for Effective Alignment of Regional Development andHigher Education. Prepared for the U.S. Department of LaborEmployment and Training Administration. 2008.

37 Kail Padgitt, 2010 State Business Tax Climate Index. TaxFoundation. Sept 2009.

38 Robert D. Atkinson, Create Jobs by Expanding the R&D TaxCredit. The Information Technology and Innovation Foundation.WebMemo, January 26, 2010.

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