Delaware Grows With Financial Services, Entertainment, and IT Investment
Mali R. Schantz-Feld (Aug/Sep 08)
From 2006 to 2007, Delaware's economy was bolstered by a 7.73 percent growth in finance and insurance businesses. "These backbone industries have been through many transformations, mergers, and acquisitions in last four years," says Judy McKinney-Cherry, director of the Delaware Economic Development Office (DEDO). She notes that the purchase of MBNA by Bank of America caused "incredible growth of small finance and insurance businesses that were started by former executives of MBNA. We are expecting to see more activity over the next two years from businesses evolving from these types of transactions."
Attracting finance-related businesses, Senate Bill 213, an asset management bill passed this spring, amends the Delaware code to provide asset management corporations with a single-factor system of apportionment for determining corporate income tax. Because of this new legislation, investment management firm BlackRock committed to creating 300 new jobs by 2010.
The sector with the second-largest growth - 5.76 percent - was arts, entertainment, and recreation businesses, which comprise an important economic development component from a quality-of-life perspective. "When companies look for a new location, their skilled workers and professionals need a strong environment with a culture of innovation and creativity," says McKinney-Cherry.
Information technology makes up the third-largest category for business growth, with a 5.25 percent increase. "Throughout the country, information technology was perceived as having its heyday 10 years ago. In Delaware, we are seeing the growth of the next generation." Internet technology company HostMySite.com's latest expansion added 75 jobs. McKinney-Cherry says, "This was a startup from 10 years ago, which has grown to currently serve a client base of more than 60,000 customers worldwide."
In utility and energy-related expansions, Comcast Cable's eastern division is adding 800 staffers for a new customer support center in Newark. Also, in June, Delmarva Power signed a deal with Bluewater Wind to establish the first offshore wind farm in North America that is expected to create construction jobs and a stimulus for additional projects by wind turbine and related suppliers.
Growth in aviation and manufacturing-related industries is related to the national economic picture. McKinney-Cherry explains, "The value of dollar is such that foreign manufacturers are seeking sites in the U.S. for their capital investments to take advantage of the weak dollar."
In conjunction with the Base Realignment and Closure program (BRAC), Delaware is working closely with the Aberdeen Proving Ground in Maryland to help facilitate the move of functions from Fort Monmouth in New Jersey. Approximately 2 to 5 percent of the 8,800 jobs that are slated to be moved from Fort Monmouth to Aberdeen are expected to take root in Delaware. "Any contractors who cannot find workers in Aberdeen are welcome in Delaware as well," says McKinney-Cherry. "We are working closely with state-level departments, Maryland, New Castle County, the University of Delaware, Delaware State University, Delaware Technical and Community College and our work force investment board to meet the needs of relocating businesses and families."