Transcript Slide 1

WASHINGTON STATE DEPARTMENT OF COMMERCE
Commerce Update
February 15, 2011
WEDA Conference
Patti Brooke
Assistant Director,
Department of Commerce
Current state of affairs
Tourism Highlights
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ExperienceWA.com (consumer web site) redesigned and
strongly marketed to targeted consumers
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FY2009: 1,510,000 visits
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FY2010: 1,913,000 visits (+27%)
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FY2011 (6 months): 1,008,000 visits (+14% year over year)
Branded state Travel Planner produced and distributed
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2009: 350,000 print / 37,818 electronic editions (5 languages)
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2010: 350,000 print / 74,480 electronic editions (5 languages)
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2011 Released Today!
Job Creation
Key Commerce Activities
1.
Defining the Department of Commerce: Aligning behind a new mission
to grow and improve jobs
2.
Washington State Export Initiative: Increase number of companies
exporting by 30% in next five years
3.
Aerospace Council: Driving activity and policy recommendations to
ensure Washington remains the best place in the world for aerospace
4.
Clean Energy Leadership Council: Advising the state on how to use the
clean energy transition to drive economic growth
5.
State Energy Strategy: Updating our state’s 17 year old view
6.
State Small Business Credit Initiative: Developing program and
application for $19.7 million of federal funding for small business lending
BSD Organization Detail
Business Services
Patti Brooke
2 FT Staff
Marketing
Tourism
Michele Morgan
2.9 FT staff
Marsha Massey
6 FT staff
BREE/Regional
Mary Trimarco
8 FT staff
Trade
Mark Calhoon
9.8 FT staff
Operations
Karen McArthur
5.5 FT staff
Business Services Division
Primary Customers:
• Economic development professionals (ADOs), businesses, travel operators
Key Activities:
• Business recruitment, retention, expansion in Washington; partner with
economic development professionals
• Lead orchestration of state export initiative activities
• Trade and export assistance and trade mission support
• Washington State Tourism Office and Commission Management
• Represent and champion business climate to national, international, and
statewide press to promote Washington.
• Maintain business recruitment and tourism websites:
www.choosewashington.com and www.experiencewa.com
Aerospace/Defense
/Composites
FDI/Export Initiative
Regional & Sector Manager
ICT
Regional Staff
Recruitment Advisor/Inbound
RFI/Research
Projects and Admin
Clean Tech/Adv
Manufacturing
Life Sciences &
Global Health
BRRE Projects/Successes
COMPANY
CITY
PRODUCT
NEW OR
EXPANDED
REC Silicon
Moses Lake
Polysilicon & Silane Gas
Expanded
SGL/BMW
Moses Lake
Uline
Auburn
Carbon fiber composites
Distributor of shipping, industrial and
packaging materials
Heath Tecna
Bellingham
Metagenics
Gig Harbor
Angeles
Composite
Port Angeles
Technologies, Inc.
(ACTI)
INVESTMENT
(M)
EMPLOYEES
$1,700
520
Recruitment
DATE
COMPLETED
October 11,
2010
mid 2011
$100
80-200
Recruitment
April-11
$20
50-80
August-10
$4
300
Supplier of passenger aircraft interiors Expansion/
and components
Renovation
Nutritional Supplements and
Expanded
Nutraceuticals
Advanced structural composite
assemblies and components serving
the global commercial and military
aerospace markets
December-10 $4
50
Expanded
December-11 $12-$15
120
Barr Tech
Lincoln County Anaerobic digester
Expanded
2011
$11
100
Penply
Port Angeles
Lumber Mill
Re-opened
2010
$1
135
Arlington
Recyclable Plastic Packaging
Recruitment
$7
23
Quincy
Data Center
Expanded
September10
Spring 2012
$100
20+
Quincy
Data Center
Expanded
June-11
$40-60
38+
Bremerton
Composite materials for wheelchairs
and other
Recruitment
2011
$10
200
Seattle
Digital Media Training
Recruitment
January-11
$2
125
Data Center/TBD
Quincy
Data Center Operation
Recruitment
TBD
TBD
100
IT Project/TBA
Redmond
IT Support
Recruitment
2011
TBD
400
Microgreen
Polymers, Inc.
Microsoft
Yahoo.com
Profile
Composites
Academy of
Interactive
Entertainment
Aerospace
Boeing – 737/Tanker/Supply chain
ICT
Leverage cluster status:
mobility, cloud, digi-media, eCommerce/internet
Paris Air Show
12 Active trade service requests
HCL America – FDI win from India
RFQ Alenia
WTIA GoGlobal: Connecting Washington
tech to world markets
Workforce development in composites
Governor’s Europe Mission in June 2011
Life Sciences/Global Health
Clean Technology
Medtech cluster growth
ARRA: leverage funding
Global Health grants
Electrification of Transportation
Startups - commercialization– UW
AWEA trade show
ZymoGenetics remains in Seattle
Supply chain development - renewables
Medical Tourism Support
Recycling of industrial materials
Washington Export Initiative
Building on the NEI the Governor announced her 6 point export strategy on
June 22nd, 2010:
1. Partner with U.S. Dept. of Commerce, SBA and our statewide network of
Small Business Development Centers to “field test” pilot programs
2. $3 million direct state export assistance to new exporters through CERB
3. WSDA “Farm-to-Market Initiative” targets agriculture enterprise
competitiveness
4. Attract foreign students and encourage WA students to study abroad
5. Strengthen & expand key trading partner relationships through activities
such as the Governor’s 2010 Trade Mission to China and Vietnam
6. Seek fully-funded federal transportation reauthorization act that
includes national freight program
Interim Results – WA Export Initiative
 MOU signed and announced end of 2010; WA will serve as a pilot state
on export promotion efforts with the U.S. Department of Commerce
 Co-Location of USEAC with the State Department of Commerce Trade
Team took place in December
 CERB $3 million awarded to 5 projects to support export technical
assistance – all projects are under contract and have started work
 Successful governor’s trade mission to Asia in September with over $10
million in trade and investment
 On the horizon is for the Governor to lead a 10-day mission to Europe at
the end of June with the Paris Air Show the anchor event
 First meeting of Export Working Committee – February 8th- Quarterly
 Applying for SBA grant to support SMEs for exports
Use of Incentives
Industry
Incentives
Energy
• Solar Energy System and Components of Solar Energy Systems Manufacturers – Reduced B&O
Tax Rate
• Machinery & Equipment Used to Generate Electricity Using Renewable Energy - Sales/Use Tax
Exemption
• Solar Hot Water Equipment – Sales/Use Tax Exemption
• Energy Production Using Solar, Methane, & Wind Power - Cost Recovery Program
• Energy Efficient Commercial Equipment – B&O Tax Credit for Purchases
• Clean Alternative Fuel Vehicles and High Mileage Hybrid – Sales/Use Tax Exemption
• Hog Fuel and Forest-Derived Biomass – B&O Tax Credit and Sales/Use Tax Exemption
R&D
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Data
Centers
• sales and use tax exemptions for certain equipment and infrastructure contained in data
centers
Aerospace
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High Technology B&O Credit for R&D Spending
High Technology Sales & Use Tax Deferral/Waiver
Reduced B&O Tax Rate for Manufacturers of Semiconductor Materials
Sales/Use Tax Exemption for Purchases of Semiconductor Gasses & Chemicals
Reduced B&O Tax Rate for Aerospace Businesses
B&O Credit for Preproduction Development Expenditures
B&O Credit for Property/Leasehold Taxes paid on Aerospace Business Facilities
Sales & Use Tax Exemption for Aerospace Businesses for Computer
Hardware/Software/Peripherals
State Promotion Activities
2010 Visits to Choose Washington website
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57, 577 visitors
Top countries were the U.S. with 53, 517 followed by Canada 851 and China with 383 visits
Average time on site: 3.01 minutes
Pageviews: 160, 516
Washington appeared in many publication in 2010, including:
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Fortune Magazine: BSD led a statewide project with Fortune magazine to feature the state’s business environment.
German American Trade Magazine (September/October 2010) Washington State Special Feature
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Expansion Solutions Magazine- Provided and added state content for their November/December issue.
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Harris Infosource Business Directory- Updated State Information.
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Business Xpansion Magazine: coordinated with reporter to provide information and data for October/November state
focus on WA for site selector publication.
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Marples Business Newsletter: coordinated reporter interview on data center taxes, incentives and Washington business
environment with Commerce and Tri-DEC for September issue of this regional industry business publication.
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Area Development Corporate Directory: coordinated with reporter and within Commerce to update Washington data,
including demographics, taxes, incentives, manufacturing categories and contact info listing for upcoming year for site
selector publication.
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British Journal: Supported Trade with submission, including photos for this FDI publication distributed within the U.K. to
CEO’s. (No longer circulated)
Washington Competitiveness Rankings
Ranking Criteria
Overall
attractiveness to
businesses
Cost of Doing
Business
Tax and Labor
Costs to
Businesses
Broad Economic
Development
Year
Index/Report
2010 CEO Magazine
2010 CNBC
2009 Forbes
Moody's Economy.com
2010 Small Business & Entrepreneurship
Council
2010 ALEC-Laffer
2010 Tax Foundation
2009
2009
2009
Degree to Which 2008
Innovation is
2010
Fostered
Attractiveness to a 2009
Specific Industry
Overall Rank
30th
15th
5th
Not updated
Trend
+10 (40th in 2009)
+1 (16th in 2009)
-3 (2nd in 2008)
(29th in 2008)
5th
-1 (4th in 2009)
24th
9th
+1 (25th in 2009)
+3 (12th in 2009)
Beacon Hill
CFED
WA State Economic Climate Study
WEDC Innovation Benchmarks
ITIF/Kauffman
8th
-2 (6th in 2008)
5th
+13 (18th in 2007)
15th
+1 (16th in 2008)
2nd out of 5
N/A
2nd
No change from 2008
Deloitte
3rd out of 5
SOURCE: WA State Dpt of Commerce 2011, McKinsey Competitiveness Report, 2010
N/A
Legislative Activity
• ADO Bills
• WTC/SIRTI merger
• WEDC Changes
• International Trade Related
• IPZ infrastructure
• Projects of Statewide Significance
• Tax Incentives
Business Services - How we operate
• Weekly Project List meetings
• Review projects and initiatives across the state
• Include Trade, Recruitment, Regional Staff plus Governor’s office
• Cross pollinate and prioritize
• Leverage resources e.g. CERB, WIA, Strategic Reserve
• Governor Calendar
• Missions, speaking engagements, company meetings, announcements
• Include our primary employers
• Leverage key opportunities
• Jobs Sub-Cabinet
• Weekly meeting with Agency directors
• Coordinate resources and escalate projects
Weekly Projects List
Rating
1
1
1
1
Project
Name
Project
Type
Industry
Mana
Partners
ger
James
Project Recruitmen Food
All
Palme
Beverage t
Processing
counties
r
Project
Nano
Project
350
Project
Cool
Several
counties;
Clean
Grant,
James
Recruitmen Tech
Yakima,
Palme
t
Manufact
Snohomis
r
uring
h, Pierce,
Clark and
King
Snohomis
h , King
Clean
James Pierce,
Recruitmen Tech
Palme Chelan,
t
Manufact
r
Spokane,
uring
Clark,
Yakima
Recruitmen
t/
logistic
Expansion
James
Pierce
Palme
County
r
Total
Jobs
125+
50-300
State
Potential Lead
Aid/Financ
Results Source
ial Award
TBD
Email
$200M
Sen
Murray's
office
$3M
50 initial initial
Gustavo
150 by $23M
Collante
2013
within 3 s
years
35-40
120,000
sq ft of
refrigerat
ed and
dry
Site
warehous consulta
e to
nt
support contacte
carbon d Susan
fiber
manufact
urer
Toray
Key Issues
Project Update
Key Dates
National beverage mnf for
Water, high volume state of the art facility for
Competitors: AZ, western US. Co packing
8-Feb
NM, NV, OR
producer. Response to RFI
Feb 8
Client manufactures nano
material energy storage
for mobile device and
Energy cost
moving into the electric
Competitors are IN,
1-Feb
vehicle market. Client site
and MI
visit on Feb 1 and 2. CEO
will meet with Sen Murray
1/26/2011
Technical labor
force and
incentives.
Electric vehicle charging
infrastructure
manufacturer.
31-Jan
Met with Clients on Jan 31.
Submitted proposal to
client on Jan 31.
Access to
international ports
and proximity to
Toray.
Energy Costs
Met with client in Tacoma
on Jan 17th with Pierce
County EDB. Awaiting
results
Next Steps
RFI response
Created
On
1/20/20
11
Identify 4 to 6
viable sites for
1/20/20
corporate selection
11
committee to
review
Client will take
proposal to
Taiwanese partner
1/20/20
and will revert
11
short list in
undetermined
time.
1/10/20
11
ADO Contracts and Communication
• Revise contracts July 1, 2011
• Build consensus on key metrics
• Streamline
• Optimize resources
• Implement CRM system for reporting and
communications
Salesforce Snapshots
Salesforce Snapshots
Sector Trends
Aerospace Program Highlights
Recent Activities
• Aerospace Mission to Montreal, April 13 – 16
• WA State Pavilion at Farnborough Air Show, July 19 – 15
• WA State Pavilion at China Air Show, November 16-21
• Aerospace Mission to France, Nov 29 – Dec 3
• PNAA Annual Conference, February 8-9, 2011
Upcoming Activities
• Aerospace Mission to Montreal, May 2-4
• Paris Air Show, June 20-26
• Aircraft Interiors Expo (Seattle), September 12-14
• Aeromart Seattle (tentative), December 2011
Aerospace Program Highlights
Results:
• Since 1/1/2009, Commerce has created over 290 trade cases
in aerospace, working with more than 100 companies.
• These companies have reported over $7 million in export sales
as a direct result of Commerce services.
• Commerce currently has 12 export service requests in
progress for aerospace companies.
• Commerce also organized five local seminars on specific
market opportunities for the aerospace
industry including China, Canada, and Japan.
Key Trends/Opportunities – Defense Sector
• Defense is a small, but growing sector for WA aerospace
• US defense budget is being reduced, but is stable for most programs
supported by WA companies (JSF/F35).
• P-8 Posiedon
• US Navy Maritime Patrol Aircraft – 108 on order, production to begin
soon. A variant has international interest - India has ordered 8.
• Insitu, A Boeing Company
• Recent recipient of a US Navy contract to produce follow on Unmanned
Aerial Vehicle (UAV) for sea surveillance.
• Tanker
• Boeing KC-767 vs Airbus KC -45; decision expected end of March 2011
• T-X Trainer
• Competing to build the follow on Trainer to T-38; WA submitted RFQ to
Alenia in Dec 2010.
Key Trends/Opportunities - Energy
Building Energy Efficiency
• Largely driven by building codes and appliance standards
• Moving toward more efficient building with generation included
• Best building practices integrate envelope, hvac, lighting and occupants
• Efficiency activity driven by utility rebates, programs and public investment
Transportation Electrification
• Washington State is involved in one of the largest demonstration of electric vehicles, charging
infrastructure, energy storage (batteries)
• Key challenge will be integrating with the existing electric system
• Creating opportunities in Software, Composites, Smart Grid
Wind Energy
• State is working with companies to capture more of the wind value chain – spare parts,
operations, maintenance and training
• Counties in East central, Southeast and the Gorge continue to draw development.
• Diverse partners coming together for the world’s largest wind tradeshow , AWEA
• Manufacturers attempting to apply excess capacity to this new sector
Key Trends/Observations - Energy
Smart Grid
• Region involved in the largest smart grid demonstration project
• Numerous companies involved in this transition
• Grid investments will be key to integrating renewable energy
Biofuels / bioeconomy
• Significant aviation biofuel project to fulfill 15% of Seatac’s usage
• Public fleets expanding use; nearing 20% on-road use in western WA
• State contract will expand availability and use of instate produced biodiesel
• Anaerobic digesters continue to be built to address animal wastes
• Legislative effort to fix RFS for biodiesel, require 2% for all on-road users
State Energy /Strategy / Clean Energy Leadership Council
• Analyzing all fuels and sectors
• Retain hydro power advantage – clean & cost-effective
• Innovate technologies and approaches build on the region’s strength
Key Trends/Opportunities - FDI
• China
• Volume of inquiries from China good
• Energy Sector provides significant opportunities
• 2010 Trade Mission Dividends
• Educating the Chinese Investor
• Realization of investments slow
• Commerce has hosted several Chinese delegations totaling nearly 200
individuals. No movement on establishing specific investment plans.
Key Trends/Opportunities - On Shoring
• Trends Driving On-shoring
• Unrealized Cost Savings
• Rising transportation costs
• Rising labor costs in China
• Rising cost and unreliability of energy in offshore locations
• Quality/Reliability Issues
• Consumer Perceptions
• Consumer anger at off-shoring jobs.
• Companies WANT to move back to help U.S. economy
Key Trends/Opportunities - ICT
Cloud Computing
• Greater Seattle emerging as global hub for cloud computing and virtualization
technologies
• Inexpensive, clean hydro power and recent incentives for equipment is drawing large
data centers to the state.
Mobility
• Existing and growing talent pool is drawing wireless carriers, wireless enabling
technologies and wireless application developers to WA and defining our state as a
technology and business leader in mobile computing
• Firms increasingly find access to Asian markets critical in location selection.
Interactive Media
• Greater Seattle offers the nation’s strongest cluster of games companies and leads in
digital arts design. Increasing number of incoming digital arts schools and training
companies looking to support Seattle area cluster.
eCommerce and Internet
• WA companies continue to be a major force online and lead the industry (Amazon)
Key Trends/Opportunities
Life Science/ Global Health
• Medical Devices
• Growing commercialization needs for technology from
universities/medical staff and global health applications
• Medtech clusters in Bothell, South Lake Union, and Federal Way bringing
research and manufacturing together.
• Biomedical Research
• University of Washington continues to contribute to the sector with
approximately $1 billion in externally funded research each year. Any
decreases in funding will impact the sector.
• Global Health
• Gates Foundation and PATH act as critical focal points for this sector.