Regional Report: Incentives Attracting Firms to the New England States
Some new and creative incentive programs are being provided in the Mid-Atlantic States to help drive the region’s high-tech and other industries.
Massachusetts is selling itself not only as a global innovation hub, but is also forging links with other countries that open trade opportunities for Massachusetts’ businesses.
In October, the Massachusetts Technology Collaborative (MassTech) — a public agency that collaborates across industry, academia, and government — formed a strategic alliance with Medic@lps of Grenoble, France, to spur international collaboration around health IT. In August, MassTech also launched a program with the Israeli Industry Center for R&D (MATIMOP) that will offer grants to eligible applicants to spur cross-nation innovation in health IT.
Connections are also being forged between Canada and Massachusetts via the Massachusetts-Canadian Innovation Partnership. In October, Governor Deval Patrick met with officials and business leaders in Canada to discuss ways to strengthen ties in the clean-tech, innovation, digital health, financial services, digital gaming, life sciences, and academic sectors.
Healthcare is one of six key clusters on which Connecticut is focusing. The others are financial services and insurance, advanced manufacturing, digital media, green technology, and tourism. The state’s recently passed Bioscience Innovation Act establishes a $200 million fund to strengthen Connecticut’s bioscience sector over 10 years. The act also provides for strategic support to entities such as the state’s Jackson Laboratory for Genomic Medicine (JAX).
A quasi-state organization, Connecticut Innovations (CI), is funded with $250 million and is charged with attracting high-tech companies from other states, investing in start-ups, and building innovation centers across Connecticut where entrepreneurs can commercialize their ideas. CI leverages state dollars to encourage private investment in early-stage companies.
Investing in Sustainable Energy
Vermont is fostering sustainable energy by offering new sources of financing. The Vermont Sustainable Energy Loan Fund “will provide a strong impetus to the many Vermont businesses and farms of all sizes that seek to invest in their energy futures in sustainable ways, lower their carbon footprints, and increase their bottom lines,” said Vermont Economic Development Authority (VEDA) CEO Jo Bradley. The fund will also provide loan guarantees to participating financial institutions that enroll loans made to businesses to improve overall energy efficiency.
In recent years, VEDA has approved millions of dollars in financing for commercial and agricultural energy-generation and efficiency projects, supporting investments in hydropower, solar photovoltaic, wind, digester, and biomass initiatives. The new fund improves VEDA operational efficiencies by consolidating all its energy lending under a single umbrella.
Fostering Job Creation
The New England States are also utilizing incentives to foster job creation. In Connecticut, the First Five job creation initiative provides incentives for businesses that create a minimum of 200 new, full-time jobs within the next two years, or 200 new, full-time jobs in the state within five years, depending on the size of their investment.
NBC Sports Group took advantage of the initiative by consolidating four former sites in three Northeast States into new studios and offices in the 32-acre former Stamford Clairol factory. Sealing the deal was a low-interest $20 million loan from the state, which is forgivable if NBC Sports meets its job creation target to hire 450 employees and invest at least $100 million. New Hampshire is working to develop a pipeline of skilled workers for the innovation economy. In October, Governor Maggie Hassan announced the state’s latest round of job training grants to New Hampshire companies.
“New Hampshire’s Job Training Fund is a valuable resource that has helped provide essential skills to thousands of workers,” she notes. “We must maintain our commitment to higher education and job training in order to attract innovative businesses, help existing companies grow, and support the creation of good jobs for New Hampshire’s middle class families.”
Tax and Other Incentives
Companies operating in Maine can greatly reduce or virtually eliminate state taxes for up to 10 years under the Pine Tree Development Zone (PTDZ) program. To qualify, companies must create new, quality jobs in certain business sectors or move existing jobs in those sectors to Maine. Eligible sectors are biotechnology, aquaculture and marine technology, composite materials technology, environmental technology, advanced technologies for forestry and agriculture, manufacturing and precision manufacturing, information technology, and financial services. PTDZ benefits do not apply to jobs moved from one area to another within the state.
Rhode Island’s Small Business Loan Fund Corporation (SBLFC) offers up to $250,000 for working capital to existing manufacturing, processing, and selected services small businesses. Additionally, manufacturers seeking financing to be used for the acquisition of land, buildings, and equipment may qualify for loans in excess of $250,000.
The Rhode Island Economic Development Corporation (RIEDC) is also working on a new database tool to improve client services that will help the RIEDC to better provide data-driven, responsive, and effective assistance to businesses to help them grow.
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