Monday, January 25, 2010

States (Not Utah) Investing in Long-Term, High Value, Recession Proof Jobs

PSN, in the inbox, with a bit of something our newly kicked off 2010 legislative session should take into account:

In fact, well-over half of the Fortune 500 list of top companies and just under half of Inc. magazine's list of top small firms were founded during recessions or bear markets on the stock market, according to a 2009 Kauffman Foundation study.  Unemployment often encourages people to found their own firms during recessions, so making sure they have the support to thrive is critical.  New immigrants are an especially strong source of such job creation-- thirty-one percent of the engineering and technology companies founded from 1995 to 2005 had an immigrant as a key founder.

Innovation Economics versus Neoliberal Economics:  Notably, innovation and entrepreneurship in states seems to have little to do with low taxes or weak regulatory protections for workers and consumers.  While the same right-wing economic pundits who supported the bubble economy continue to promote the low tax, weak regulation line for state economic development, the reality is that innovation in states actually requires high state investments and engagement for success.

The Information Technology and Innovation Foundation compiles a State New Economy Index to measure how much states have moved towards generating high-value "knowledge jobs" likely to survive in global competition, built export-oriented manufacturing and services, sustained fast-growing "gazelle" firms and moved their people and firms into the digital economy with a high percentage of jobs in high-innovation technology sectors.  States ranking high on the index included high revenue, high state-investment models such as Maryland, Washington, and Massachusetts, which generally had higher growth in state per-capita incomes between 2002 and 2006 than many supposed "low tax" states that often fail to create long-term high-value jobs.
An argument can be made that a "balanced budget," while not a bad idea, isn't enough in the long term. 

You listening, Michael?

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