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 State, Provincial and International Reviews 
Wednesday, May 20 2015
Advancing California's Economy through Advanced Manufacturing

By Tim Johnson

California has slowly pulled itself back from the economic brink of collapse caused by the Great Recession.  Latest economic rankings show that its economy has increased to the 7th largest in the world.

One of the efforts to accomplish this economic vitality came from public policy makers, economic development professionals and academicians that have worked to formulate a new direction for manufacturing in the state.

Over the last decade, the debate in California was mostly over how to rescue and retain manufacturing. California saw its manufacturing sector dwindle due both to the Great Recession and global competition.  

Yet, California continues to have one of the nation’s largest manufacturing sectors.  Recent data illustrates that over 1.2 million or 8.2 percent of the state’s labor force work in the sector.  

So to ensure that manufacturing remains a vital long term component of the state’s economy, both the public and private sectors recognized that the state lacked an advance manufacturing strategy. . . a strategy that can link large and small manufacturers as well as federal, state and regional partners to formulate and implement an industry-driven partnership. Today, California has done just that.

However recognizing one of the hurdles to achieving this goal is the need for an educated labor force.

To answer this need, California employers have created a pipeline to train and educate active-duty service members and veterans for careers in advance manufacturing to fill a workforce shortage for a burgeoning industry.

Lawrence Livermore and Lawrence Berkeley National Laboratories, NASA Ames Research Center and NASA Jet Propulsion Laboratory and other employers are seeking active service members for a plethora of high-paying advanced manufacturing positions. They are collaborating with academia, government agencies and nonprofits to develop an educational and technical training program that will prepare men and women in uniform for a disruptive industry that pays an average of $77,500 a year.

Known as the Troops to Technology Workforce Development Initiative or T3WDI, this unique program creates a pipeline to help service members and vets develop highly-specialized skills. It intends to use higher education to provide relevant curriculum to service members, companies to identify and hire them, and government agencies and nonprofits to provide existing resources to help with the transition from military to civilian workforce. T3WDI is an exciting program that helps America’s heroes find meaningful careers that builds off the technical training they received in the military, and it fills a shortage of high-skilled workers for the industry. The Lawrence Livermore National Laboratory benefits by developing service members for its technical workforce, T3WDI will also help their mission of boosting economic development. The Lab’s goal is to use the program to train 2,500 service members for advanced manufacturing roles in the next five years.

In yet another example of aggressive economic development in advanced manufacturing, Southern California communities united, applied and were selected as one of the federal government’s “Investing in Manufacturing Communities Partnership Initiative.”  President Obama’s Administration formulated an initiative to spur communities to develop integrated, long-term economic development strategies that strengthen their competitive edge in attracting global manufacturers and their supply chains to local communities—increasing investment and creating jobs. The Initiative specifically brings together the resources of multiple federal departments and agencies to support strong, local economic development plans.

One of the twelve areas selected nationally was Southern California.  At the vanguard of innovation in aerospace manufacturing and home to innovative companies like SpaceX, AeroVironment, and Sapphire Energy, the Los Angeles, Orange, San Diego, and Ventura counties, led by the University of Southern California Center for Economic Development, are investing in infrastructure to reduce shipping costs, which are higher today due to congestion by 50-250 percent, and developing a regional workforce training consortium in manufacturing.

Back at the capital in Sacramento, state legislators in 2013 passed a state sales tax exemption program for the purchase of manufacturing equipment in the advanced manufacturing sector. Senate Bill 1128 (S.B. 1128), encourages job creation and economic growth in California. It expands on the existing sales and use tax exemption program for alternative energy and advanced transportation.  Interested companies must apply for this exemption and be approved by the California Alternative Energy and Advanced Transportation Financing Authority. S.B. 1128 expands California’s Senate Bill 71 (S.B. 71) exemption program, which enables the Authority to provide approved companies with a sales and use tax exemption for tangible personal property utilized for the design, manufacture, production, or assembly of advanced transportation technologies or alternative energy source products, components, or systems.  The bill expands that exemption by including “advanced manufacturing” companies that improve upon and create entirely new materials and products through the use of science, engineering, information technologies, high-precision tools and methods, along with a high-performance workforce and innovative business and organizational models, and include the following industries:

  • Micro and nano-electronics, including
  • Semiconductors;
  • Advanced materials;
  • Integrated computational materials engineering;
  • Nanotechnology;
  • Additive manufacturing; and
  • Industrial biotechnology.

While the program does not provide sales and use tax exemptions to all advanced manufacturing projects in California; it is an exciting start. Projects will be evaluated on a case-by-case basis based on basic eligibility and the extent to which the project provides a net benefit to the state.  
While many think the Golden State is down and out, due to over regulation, high taxes and drought, the intellectual capital of its residents can, when mobilized advance its economy.  Californians have and are advancing through advanced manufacturing.

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Posted by: AT 12:01 pm   |  Permalink   |  Email
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