Spotlight

January 2014 Newsletter

Commerce Secretary Penny Pritzker Opinion Editorial, U.S. Mayor "Open for Business: Reinventing U.S. Economic Development"

When companies first try to decide where to locate new facilities and create hundreds of jobs, executives often weigh a number of factors: will they have access to a workforce with specialized skills? Can they partner with regional universities on advanced research? Are there local networks of parts suppliers available? What kind of infrastructure exists so companies can ship their products all over the world?

More times than not, it falls to America’s mayors and governors to answer these questions and persuade companies to expand business investment and increase living standards in the United States. And for too long, the federal government has been an imperfect partner in this effort. Unlike counterparts abroad, the U.S. government does not often reward smart development strategies to meet specific commercial needs. Assistance is provided across a patchwork of more than 13 federal departments and agencies, sometimes giving conflicting guidelines — and often rewarding the same grantees year-in and year-out. (The Labor Department rewards grants for workforce training. The National Science Foundation supports research institutions. Commerce and the Small Business Administration support small-and-medium-sized suppliers. And the Transportation Department supports infrastructure.

But to succeed in an increasingly competitive global economy, our communities need far more than that—after all, they aren’t merely competing among them-selves but taking on manufacturing meccas all over the world—from Stuttgart to Shenzhen.

Fortunately, America is poised to enjoy a strong resurgence of investment. Our comparative advantages as a country are many – a strong and growing consumer- driven economy, world-class universities and R&D hubs, an educated and productive workforce, low cost and abundant energy, strong financial institutions, a transparent and predictable regulatory environment, and many more.

To build on these strengths – and at a time of tight government budgets – we need government officials, entrepreneurs, academics, and private sector leaders to come together and devise cutting-edge strategies that turn American communities into globally-competitive commercial hubs.

Last April, the Department of Commerce launched the “Investing in Manufacturing Communities Partnership,” a program designed to revolutionize the way we leverage federal economic development funds. The IMCP is a critical component of the Department of Commerce’s new “Open for Business Agenda,” which places economic growth as priority number one. It is also a vital part of the Obama administration’s effort to better leverage public dollars for economic growth and job creation.

Rather than try to attract individual federal investments one at a time, IMCP encourages American communities to develop comprehensive economic development strategies that will strengthen their competitive edge when it comes to attracting global manufacturers and their supply chains. Through IMCP, the federal government will reward best practices–conditioning federal aid on communities’ strong development plans, and synchronize grant programs across multiple departments and agencies. These strategies will focus on addressing the very issues private investors are raising, and unify the federal government’s approach to economic development.

The approach can work. Consider the advanced composites industry in Salt Lake City, which makes lightweight materials for everything from planes to wind turbines. Years ago, the city’s economic development leaders saw the potential for good jobs in the aviation industry and recognized that high-skilled workers coming out of Utah’s colleges and universities were a differentiator. Salt Lake City marketed their composites industry at trade shows internationally, and it wasn’t long before high-tech firms in the advanced composites industry took notice.

Utah is now home to more than 20 advanced composite companies that employ more than 10,000 workers.

Simply put, we need more stories like this across the nation. We want communities to plan holistically their infrastructure, educational institutions, and skilled workforce with an eye to attracting business investment.

The first phase of the “Investing in Manufacturing Communities Partnership” is already helping us achieve these goals. In September, the administration and our Department awarded 44 communities with $200,000 planning grants as part of the first round of IMCP funding. This assistance allowed communities to design strategies that can help revitalize their manufacturing sector, attract investment, and strengthen their local economies.

Last week the White House and the Department of Commerce launched the second phase of the “Investing in Manufacturing Communities Partnership.” Now, communities will have an opportunity to compete for a special designation that will elevate them in consideration for $1.3 billion in federal dollars and assistance from 10 cabinet departments/agencies.

In order to earn this distinction and recognition, communities must present the best strategy for developing a technology or industry and the attendant investments in workforce and training, advanced research, infrastructure and site development, supply chain support, export promotion and capital access. Those communities that can prove their plans are the strongest for attracting business investment will make them the most competitive.

Upon earning the designation of “Manufacturing Community,” these locales would receive elevated consideration for federal dollars and assistance; a dedicated federal liaison at these agencies who can act as their concierge to the specific services they need; potential challenge grants, subject to the availability of funding; and recognition on a government website, accessible to prospective private investors (foreign and domestic alike) looking for information on communities’ competitive attributes.

Our objective is clear. We can get a better bang for the taxpayers’ economic development dollar through a competition for the best overall strategy. We encourage more communities and mayors to apply.