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Struck by downturns in its manufacturing and constructionindustries, Oregon was hit particularly hard by therecent recession. Unemployment rates in 2010 were morethan twice as high as before the downturn, and amongthe highest in the nation. While economic measureshave shown signs of recovery over the past year andunemployment rates are off their peak levels, the statestill faces the specter of a period of “below trend” growthas it struggles to regain economic footing. However,even through a period of economic stress, the state hascontinued to be a magnet for growth, outpacing the

forward, the state hopes to capitalize on its proximity toand experience in accessing Asian markets to help spurfuture growth.

Bipartisan Approach to Jobs

State legislators and incoming Governor John Kitzhaberhave committed to making job creation the state’s toppriority during 2011, with a bipartisan group of legislators

continued support for a jobs-focused agenda. However,also high on the state legislative assembly’s agenda has

biennium. Estimated at up to $3.5 billion over two years

session was equal to 20 percent of the state’s general fund.

nonconsecutive term in 2011, has proposed several agenda

and pursue job creation in the state. The governor calledfor cuts in pay to government workers, changes in revenuestructures to collect unpaid taxes, reforms to educational

agencies, and no tax increases. The administration has alsoreiterated support for several proposed and pending jobcreation initiatives and programs, including continued statefunding for technology transfer efforts, new bond backingfor infrastructure improvements, increased funding forsome existing economic development funds, and enhancedfunding for business expansion efforts.

State Looks to BOOST Small Business

Retention and Growth

Oregon has created several tax incentive programsdesigned to help new and growing business ventures. The

Standard Enterprise Zones program offers businessesthat choose to locate or expand in one of the state’senterprise zones an exemption from certain property taxesfor 3–5 years. These exemptions may also be coupled withother tax breaks for building a business and creating jobsin rural areas or in the e-commerce industry. The OregonInvestment Advantage gives job-creating businesses inmuch of the state a ten-year income tax exemption. Inaddition, companies that choose to locate in one of thenearly ninety eligible communities can receive a ten-yearwaiver on excise taxes. Oregon supports expansion in itsmanufacturing sector through its Strategic InvestmentProgramzones of the state eligible for property tax exemptions onlarge capital investments, encouraging manufacturers toadd equipment, facilities, modernize lines, and create jobs.

OREGON

Oregon’s Place in the Rankings

1st

3rd Productivity Growth

5th Gross State Product Growth

10th Business Birth Rate

10th Academic R&D Intensity

11th Transportation InfrastructurePerformance

14th Business Tax Climate

14th High Speed Broadband Intensity

15th Export Intensity

16th STEM Job Concentration

16th Entrepreneurial Activity

18th Economic Output Per Job

24th High-tech Share of All Businesses

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Oregon has also worked to support continued jobsdevelopment in its renewable energy sector through theuse of several incentives. The state’s business energytax credit lets manufacturers of renewable energycomponents offset the cost of machinery, equipment, andfacilities with a tax credit of up to 50 percent of eligiblecosts. Low interest loans to build new manufacturingfacilities are provided through Oregon’s State EnergyLoan Program. The state has also incentivizedrenewable energy production by creating rural renewableenergy development zones, which receive propertytax exemptions for certain renewable energy generationfacilities and equipment. Demand for energy from suchfacilities is backed by a state-enacted renewable portfoliostandard.

Small business creation and development are alsopart of Oregon’s job creation approach. The BuildingOpportunities for Oregon Small Business Today(BOOST) Fund offers loans and grants to promising smallbusinesses in the state looking to build up their operations.The program’s operations are focused on companies withunder 100 employees in the manufacturing, processing,and distribution industries. The program’s grant programoffers businesses a grant of up to $2,500 per job createdor trained, supporting job creation and cultivation of newworkforce skills in order to increase business capacityand competitiveness. Oregon also offers small and micro

the Entrepreneurial Development Loan Fund. The

$50,000 to help set up their business ventures, providing

traditional lenders may overlook.

The Oregon Innovation Council (Oregon InC) continuesto be the spearhead of the state’s efforts to build itsknowledge-driven economy. Created in 2005, the Counciloffers the state guidance on how to more effectively shapeand direct its technology-based economic developmentefforts. Audit committees composed of private-sectorbusinesspeople have been formed to evaluate existingpolicies and program implementation. The goal of theprogram is to identify and support innovation initiativesthat will eventually be able to achieve sustainable operationwithout state funding. The Council currently operates aset of signature research centers focused on renewable andgreen energy, nanoscience and microtechnologies, and

state’s university system. The state’s High Tech ExtensionService offers businesses interested in research anddevelopment partnerships access to the research center’sfacilities and services, including lab space, researchers,prototyping assistance, and workforce training.

In order to provide infrastructure needed to drive job

through its Infrastructure Finance Authority. Thestate’s Special Public Works Fund offers communitiesand public agencies throughout the state access to fundsfor infrastructure design, improvement, construction, andplanning conducted in support of economic developmentactivities. Multiple classes of infrastructure project areeligible for loans of up to $10 million. The state also

developments tied to the creation or retention of jobs inmanufacturing and related sectors. Overall grant size isbased on the number of jobs created. In order to maintainthe infrastructure needed to drive the state’s export sector,

expansion and improvement. These programs include amatching fund for marine navigation improvements, aport revolving fund for construction of port facilities andsupport infrastructure, and a port marketing fund.

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Clusters in Oregon

Largest Cluster: Business & Financial Services,223,978 jobs

Largest Growth Cluster: Business & FinancialServices, 42,574 new jobs since 2002

Most Competitive Cluster: Agribusiness, FoodProcessing & Technology, 11,135 new or retained jobsdue to state competitive advantage

Most Concentrated Cluster: Computer &Electronic Product Manufacturing, 2.48 times thenational concentration level