by Mark DiMaio
In 2017, we invited Chamber members to participate in a survey to gauge their view of Delaware's economic health, and provide input on policy priorities. Listed below are the top four, along with ways the Chamber is addressing them.
1. Economic Development
The Chamber is dedicated to promoting an economic climate that strengthens the competitiveness of Delaware businesses and benefits citizens of the state.
2. Cost of Health Care
The Chamber recognizes the growing problem surrounding health care costs.
3. Government Spending
We will continue to advocate for structural changes to Delaware’s budget. Delaware needs fiscal policies that foster business growth and advance the state’s long-term economic future.
4. Education Reform (K-12)
Improving education outcomes is a key factor in developing a skilled workforce and attracting new business to Delaware.
by Mark DiMaio
The future is now for expanding the state’s manufacturing sector. While manufacturing jobs in Delaware continue to increase at a modest pace, building blocks have been put into place to spring Delaware forward. Delaware manufacturing will need to combine organic growth with the long-term development of heavier industries in abandoned and underutilized locations. The modernized Coastal Zone Act should propel new investment in Delaware’s manufacturing sector.
In order for Delaware manufacturing to flourish, a strong and skilled workforce in essential. Many Delaware manufacturers are working with Delaware Technical Community College’s workforce training department to develop future employees to handle the rigors of 21st century advanced manufacturing. This advanced training is needed to develop skilled employees to replace older workers who are retiring. In addition to instruction in subjects such as computer programming and robotics, training also focuses on developing better ‘soft’ skills, such as leadership, teamwork and problem-solving, in order to compete in the modern workplace.
The Delaware State Chamber of Commerce and the Delaware Manufacturing Association invite you to learn more the about the future of Delaware Manufacturing at the Spring Legislative Brunch & Manufacturing Conference.
Contributed by DSCC Member Adesis
Adesis, Inc., a wholly-owned subsidiary of Universal Display Corporation (Nasdaq: OLED), today announced that it will open a new suite of state-of-the-art laboratories in Delaware and expand its organic chemistry team and R&D programs. This additional footprint is expected to help drive growth opportunities in areas including next-generation OLED (organic light emitting diode) emitter and host materials and meet the growing demand for the Company’s custom organic synthesis, research & development, and specialty manufacturing services. Adesis also announced that it became a sponsor of Delaware Innovation Space (DISI) and joined its entrepreneurial innovation community. Working with DISI, Adesis signed an agreement for approximately 7,000 square feet of laboratory space at the Experimental Station in Wilmington, Delaware. The new suite of laboratories, which includes additional ancillary work and meeting space, is expected to augment Adesis’ on-going operations and recently-purchased 47,500 square feet headquarter building in New Castle.
“Delaware is home to a number of great chemical and manufacturing companies like Adesis, who are committed to making a world-class product with a great local workforce,” said U.S. Senator Christopher Coons (D-Del.). “I am delighted to see Adesis and their parent company UDC grow in Delaware as they expand their market reach and product offerings to more users around the world.”
“We are pleased to announce our expanding footprint and increased investment to further boost research, innovation and job opportunities in Delaware,” said Andrew Cottone, President of Adesis, Inc. “As a leading organic synthesis CRO (contract research organization), we are adding to and extending our discovery services and process development capacity for customers across the pharmaceutical, chemical, biomaterials, and catalysts industries. We are enhancing our productivity and effectiveness by streamlining the technology transfer and optimizing the workflow from basic research to specialty manufacturing. Furthermore, by co-locating in our New Castle headquarters and the Experimental Station, we believe that we are building a world-class technology and manufacturing hub to support our customers from innovation to commercialization.”
“Adesis continues to invest in Delaware, and we are thrilled that the company will bring its long track record of innovation to the Delaware Innovation Space,” said Governor John Carney. “We partnered with DuPont and the University of Delaware to create the Innovation Space to foster growth of early-stage scientific-based companies, and encourage collaboration among Delaware’s most talented innovators. The addition of Adesis will support that mission, and we’re thankful for the company’s continued partnership.”
This recent expansion by Adesis was rapidly enabled by the seamless cooperation of the Delaware government and business leaders who have fostered a robust scientific ecosystem.
“The Delaware Innovation Space is pleased to be able to support the growing needs of Adesis and accelerate its business forward right here in Delaware,” said Bill Provine, CEO of the Delaware Innovation Space. “Adesis will be a great new member of our science-based innovation community, and we look forward to working with them to further capitalize on the strengths of our new entrepreneurial ecosystem.”
Adesis has also been assisted by the newly formed Delaware Prosperity Partnership (DPP). The DPP was recently created by Delaware as a public/private partnership to accelerate economic development efforts.
“It has been a pleasure working with Andrew Cottone and Adesis to help facilitate their Delaware expansion, both in New Castle and at the Delaware Innovation Space,” said John Riley, Interim CEO of the DPP. “This would have been difficult to accomplish had the State, DuPont, and the University of Delaware not set the foundation for success with the formation of the Delaware Innovation Space earlier this year.”
by James DeChene
The December labor report was recently released and shows that in 2016 Delaware had a net increase of 350 new jobs over the course of the year, and 2017 is looking to be the same, though there may even be a slight net loss for the year. The January report will reflect what truly happened in 2017, but odds are it won’t be pretty. Surrounding states have seen higher growth than Delaware: Maryland at 2%, Pennsylvania and New Jersey at over 1% - while we are shrinking, they are growing.
This week, members of the Joint Finance Committee started their budget process. Over the next five weeks, members will review agency budgets and various funding requests, including Grant in Aid, and will work to craft a spending plan using the Governor’s recommended budget as a starting point. While forecasted revenues show a 6% increase over last year’s, next year’s growth number is back under 2%. The challenge will be for legislators to be spendthrifts during a time of increased revenues, and planning for the out-years where spending obligations will continue to outgrow revenue. Not an easy task in an election year. More info to come as it develops.
by James DeChene
This week saw the confirmation of former DEDO director Cerron Cade to fill the vacant Secretary of Labor position. The Chamber looks forward to working with Secretary Cade in this new position on issues important to the business community.
Also this week, HB106 was released from committee, which would add two additional personal income tax brackets at $125,000, with a rate of 7.10%, and an additional bracket of $250,000, with a rate of 7.85%. The State Chamber spoke against the bill, noting that it would add volatility to Delaware’s revenue collection at a time when efforts are being made to make Delaware less reliant on volatile sources of revenue. This reliance has an increasing deleterious impact on the State’s long-term sustainability.
Governor Carney released his recommended budget, an increase of 3.49% over last year, which calls for increased spending on education, public safety and making investments in economic development and workforce development. It also includes an increase in the bond bill, along with $100 million in cash as one-time money for projects. Door openers, including class room growth, employee pensions, child care and transportation, were about $60 million in increases.
It also includes:
$12.5 MM — strategic fund
$2 MM — Prosperity Partnership
$9.6 MM — research collaboration
$19.5 MM — high education capital construction
$391.1 MM -- DELDOT road systems
$6 MM — clean water/drinking water
The Chamber will be monitoring ongoing budget discussions and will update you with pertinent info.
as published by Delaware Business Times
By Roger Morris
Special to Delaware Business Times
Coming off a year when Delaware manufacturing jobs rose by almost one-half percent to about 26,000 workers, jobs growth in 2018 is expected to be similarly modest. According to local manufacturers and those who work in manufacturing-related organizations, three major trends will dominate the sector in the coming year:
Job growth will largely be organic
Most job growth will occur within businesses currently located within the state, with little expectations of immediate major manufacturing relocations to the region.
“One of the challenges we have at the Delaware Manufacturing Association is to reach out to growing companies in the state,” said Neil Nicastro, plant manager at PPG Industries’ Dover facility and a leader in the organization. “We try to get these companies in to discuss the challenges to growth they face, and we have seven sub-groups, such as health, advocacy and energy issues, to help in these areas.”
However, long-term growth may involve the relocation of heavier industries into the region, which was part of the rationale for the state changing some provisions of the Coastal Zone Act, to be more attractive for large manufactures to relocate here. Additionally, there are now recently abandoned locations available between Wilmington and the Pennsylvania border.
“I was very impressed when I recently visited the Navy Ship Yard in Philadelphia, and saw what they were doing,” Nicastro said of the 1,200-acre business campus, which is home to more than 12,000 employees and 152 companies. “I can’t help but think we can do something similar in Delaware.”
Programming and robotics part of training
Most of the jobs and job training will be concentrated on what is called “advance manufacturing” instead of traditional manufacturing skills.
“No employer is using the same machinery they were using 30 years ago,” said Rich Heffron, head of the Delaware State Chamber of Commerce, which means that new workers need to be trained in skills such as computer programming and robotics.
“The challenge is to find trained employees to replace older workers who are retiring,” Nicastro added.
Nicastro also thinks it’s important for young people to change their idea of manufacturing as a “dark and dirty” place, and he even invites parents to accompany their teens during career events at the PPG plant during the annual National Manufacturing Week.
Soft skills just as important
Employers are increasingly demanding that young potential workers be trained in “soft skills” as well as technical skills.
“We did a survey of state manufacturers to ask what job skills they are currently looking for,” said Paul Morris, head of workforce training at Delaware Technical Community College, “and we were surprised that about 90 percent said they needed better ‘soft’ skills, such as being skilled in leadership, teamwork and problem-solving.”
Nicastro added that some newly hired young employees have little understanding of workplace practices, even about work scheduling, being surprised that “they’re going to have to work a 40-hour week. What we really need is for more companies to provide job internships for training.”
Finally, while recent federal cuts in corporate tax rates may spur growth, James Butkiewicz, professor and chair of the Department of Economics at the University of Delaware, warned, “My concern is that the tax plan increases the fiscal deficit. This will appreciate the dollar and worsen our trade deficit, and this could hurt manufacturing and agriculture.”
Agilent Technologies Inc. (NYSE: A) today announced that it has been selected as 2017 Company of the Year by Instrument Business Outlook (IBO).
IBO is a respected industry newsletter that tracks trends in the laboratory products markets, monitoring hundreds of life science and analytical instrument companies on a daily basis.
Managing Editor Tanya Samazan noted: "Agilent has grown sales since fiscal 2015 while keeping costs constant. The company's fiscal 2017 revenue growth was its fastest since fiscal 2010. Agilent's new investments have also paid off. Changes include an expansion of Agilent's diagnostics business, entry into new markets such as cell analysis and Raman spectroscopy, and additions to successful franchises in NGS sample preparation and LC/MS, among other key product launches."
"We are pleased that IBO has recognized Agilent as their 2017 Company of the Year, citing our impressive growth," said Mike McMullen, Agilent's president and CEO. "Having the right strategy to secure growth is pivotal, but equally crucial is the right team, resolute in their commitment, and with one focus - to provide solutions and services which enable Agilent´s customers to be successful across the all the markets we serve."
The newsletter highlighted Agilent's increased growth in revenues, operating profit, and net income, noting that the gains were the result of a sustained effort to position the company for future growth.
"It is rewarding that an organization with an in-depth knowledge of the industry, such as IBO, recognizes Agilent´s current strategy is the right one resulting in consistent growth," said Patrick Kaltenbach, president of Agilent's Life Sciences and Applied Markets Group. "Growth fueled by our focus on Innovation with Purpose, introducing differentiated solutions to address customer needs, and our strong Operational Excellence in developing, manufacturing and commercialization of our products, all complemented by our recent acquisitions."
IBO is a twice-monthly publication of SDi, a division of BioInformatics LLC, which offers custom market research and consulting, and strategic advisory services. IBO will present the award to Agilent at the annual conference of the Society for Laboratory Automation and Screening (SLAS) in San Diego in early February.
Legislators returned to Dover this week. Among items passed, the General Assembly included extending reporting deadlines for the Taskforces on the Legalization of Recreational Marijuana and on School Redistricting. Expect reports to come later in the session.
Also passed this week was a bill creating a committee dedicated solely with how Grant in Aid funding will be administered in the future. Calling for the establishment of a review process, and creating metrics to measure success, the committee will work in conjunction, but separately from JFC to distribute Grant in Aid. Next week will be Governor Carney’s State of the State Address on January 18.
The General Assembly returns next Tuesday with a full plate. Work will commence stemming from taskforces that met over the summer and fall, which include school district redistricting and changes in funding models, and the legalization of recreational marijuana. Thrown into the mix will be legislation to raise money to invest in clean water infrastructure, incentivize angel investors to provide capital to small startups in Delaware, and the fight on minimum wage legislation will no doubt continue. These bills, and ones to come, will be the focus of the Chamber this legislative session, along with continuing to implement legislation passed last year—namely the Delaware Prosperity Partnership and the regulations surrounding modernizing the Coastal Zone Act.
In addition, the Chamber will be involved in ongoing budget discussions as the Administration and General Assembly continue to search for ways to address Delaware’s long term economic growth and sustainability. What will be interesting to see this year, is how the Federal tax plan will impact Delaware. Much of what was contained at the Federal level was proposed at the end of last year’s session to help fill a $350 million budget gap, including increasing the standard deduction, reducing itemized deductions, and modifying personal income tax bracket levels. If the projections the state Department of Finance provided last year hold true, that could mean big money for Delaware coffers, and reduce the chances for last minute budget battles this year.
All this, and more, to come. Stay tuned.
James DeChene is the Chamber's Senior Vice President of Government Affairs.