With a population of just over 620,000, Vermont is a small state that maximizes its resources. "Our size allows employers to access responsive public officials at all levels of government" says Governor Jim Douglas, "and our location gives companies access to a market of over 80 million people within a few hundred miles"
Vermont's diverse economic base is helping it weather the recent economic downturn. Traditional industries include manufacturing (computer and electronic products, food, machinery), tourism, agriculture, and captive insurance. They complement expanding industries such as software development, environmental technology, plastics, and other high-tech manufacturing.
In September 2009, Vermont's unemployment rate changed very little at 6.7 percent, and the state continues to lose jobs mainly due to an aging population base. In response, Vermont has embraced the federal EB-5 immigrant investor program as one of many effective tools used to expand existing sectors and recruit new businesses. The program provides preferential consideration for a visa in exchange for job-creating investments in the United States.
A multimillion-dollar expansion at the Jay Peak ski resort - financed in large part by $17.5 million of EB-5 investments - brought forth a new 57-suite hotel, an indoor water park, and an ice arena. Beyond ski areas, Vermont has expanded the industry sectors qualified for EB-5 investment to include manufacturing, professional services, education, and information technology. Recently, state officials inked a deal with South Korean medical supply firm AnC Bio Inc. to build a new $50 million facility in Orleans County. Expected to employ 200 when it opens in 2011, it will manufacture portable dialysis machines, vaccines, and other biomedical supplies.
The Vermont Employment Growth Incentive (VEGI) provides companies that create jobs and make capital investments with a cash refund of part of the new revenues the jobs generate. Alternative energy firms - such as wind-turbine manufacturer Northern Power Systems - have used VEGI incentives to expand. So too have newer firms like Canada-headquartered protective-clothing maker AirBoss Defense, which is locating its manufacturing facility here. Federal community development block grants (CDBG) also are successfully used in state recovery efforts. Vermont gave $1 million in CDBG monies to SB Electronics to help finance a new manufacturing facility producing innovative capacitors used in hybrids and other alternative energy vehicles.
One group helping manufacturers grow profits in tough times is the Vermont Manufacturing Extension Center (VMEC). Since 1996, it has advised 800 of Vermont's 2,000 mostly small manufacturers on how to improve their economic competitiveness, and now is promoting a new state system for innovation-driven business development. According to Bob Zider, VMEC's director/CEO, over the past year about 5,000 manufacturing jobs have been lost in Vermont - down from 35,000 to 30,000. Although this sector - representing 11 percent of state gross domestic product - has clearly been feeling negative effects from the recession, he says the situation is nowhere near as severe as in some other states.
"Most companies are painfully managing through this very challenging time, with a small number actually doing quite well and continuing to grow," says Zider. "Moving forward, we expect to see manufacturing in Vermont slowly regain its strength, and some of the manufacturing jobs that have been shed will be replaced. However, it is unlikely that in the short term there will be any major increase in the number of manufacturing jobs." However, he adds, "Vermonters have a very long history of being resourceful and uniquely creative; [our state] is truly open for business."