Appendix A 2019 IllinoisEconomicPlan.pdf

A Plan to Revitalize the Illinois Economy and Build the Workforce of the Future October 2019 b

An Illinois economy that creates jobs and expands prosperity to communities across the state is a central part of Governor JB Pritzker’s agenda. Under Governor Pritzker’s administration, the Illinois Department of Commerce and Economic Opportunity’s mission is to support and maintain a strong economic environment for those we serve—taxpayers, employers, workers, and communities—by actively recruiting and growing businesses, maintaining a 21st-century workforce, enhancing innovation, and bringing jobs and investment to underserved communities throughout Illinois.

Table of Contents Greetings from Governor JB Pritzker

Executive Summary

Thinking Big

Providing World-Class Customer Service

Strengths to Build On

Challenges to Overcome

Building the Workforce of the Future

Winning in Key Industries 32 Agribusiness and Ag Tech

37 Energy

41 Information Technology

45 Life Sciences and Healthcare

50 Manufacturing

54 Transportation and Logistics

58 Small Businesses

My Fellow Illinoisans:

Today I am proud to share my vision for creating an economy in Illinois that works for everyone.

Since I took office in January, we’ve already begun making strides toward growing our state’s economy after years of neglect and intransigence. In my first six months in office:

I prioritized, proposed, and implemented record investments in education to prepare our students for good-paying jobs

I signed into law a bipartisan, balanced budget, ushering in a new era of fiscal responsibility and stability

I launched a $45 billion bipartisan investment plan to build new roads, bridges, and other transportation infrastructure, creating hundreds of thousands of jobs

I worked with the business community to extend research and development (R&D) tax credits, helping build up our manufacturing and technology industries

I promoted and helped pass tax incentives for new apprenticeship programs allowing businesses to train their workers on the job

I worked in a bipartisan fashion to lower taxes by phasing out the burdensome corporate franchise tax for 300,000 businesses

For the first time in nearly two decades, we’ve seen simultaneous strong job growth in every region of the state. Underlying my vision is the fundamental principle of equity. No matter their zip code, every Illinoisan deserves economic opportunity.

Where in the past sustainable and inclusive economic development has been elusive, instead I am committed to reinvigorating the most important foundational element of Illinois’ economy: our diverse and talented workforce.

Much of our state’s potential workforce has been underutilized. That’s why we are working to retain and attract young people to Illinois by improving the affordability and quality of our public colleges and universities. Reversing a legacy of commercial disinvestment from black and brown communities, I’m focused on attracting new and existing businesses to those under-resourced communities that present clear opportunities for commercial development. We have brought a new era of fiscal responsibility and balanced budgets to our state, eliminating uncertainty for job creators considering whether to relocate to Illinois.

In short, Illinois has the most talented and dedicated workforce in the nation. We are poised for growth. And we are open for business.

Sincerely, JB Pritzker Governor, State of Illinois

Greetings from Governor JB Pritzker Summer 2019

Illinois has the fundamental building blocks of a thriving, inclusive economy. We have some of the best talent and higher education institutions in the world. We are a global transportation hub, boasting the highest concentration of transportation and logistics companies in the nation.

We have abundant natural resources that provide the foundation for a thriving agricultural sector.

Illinois companies deliver world-changing innovations in tech, life sciences, and manufacturing.

Yet we can do more to bring prosperity and opportunity to every corner of Illinois. When Illinois governments, nonprofits, educational institutions, and businesses come together to execute the right plan, the possibilities for our economy are endless.

This economic plan outlines a vision to reinvigorate our economy and spur equitable growth.

We propose an ambitious agenda that builds on the successes of this administration to reposition state government as a valuable partner to workers and businesses in Illinois.

Aspirational Goals In crafting this plan, we were guided by the following three priorities:

Executive Summary

Executive Summary

Lay the Foundation for Long-Term Growth by investing in and fostering research, entrepreneurship, and innovation.

We will track our progress toward this goal by comparing the state performance to regional and national trends on the following metrics:

• Exports

• Foreign direct investment

• Entrepreneurship

• Patents

• Worker productivity

• R&D spending

Reduce the Equity Gap by investing in, providing support to, and taking down barriers for economically disadvantaged populations.

We will track our progress toward this goal by tracking average earnings relative to the statewide average for the following populations:

• Women

• Rural residents

• People of color

• People with disabilities

• Veterans

• Justice-impacted populations1

• Immigrant populations

Attract More Workers and Businesses to Illinois by aggressively marketing the state and providing a solid foundation for business growth and attraction.

We will track our progress toward this goal by tracking the following metrics:

• Net domestic and international migration

• Jobs created and retained

A Plan to Revitalize the Illinois Economy and Build the Workforce of the Future4

A New Foundation Improving the state’s economy starts with getting some basic things right. In the process of implementing our economic plan, we will ensure that state government and our partners are focusing on the following tasks that will provide a foundation for our other efforts:

• We will market the state to the world. Our location, our people, and our infrastructure provide a strong foundation for long-term economic growth and job creation. We will activate government and business leaders as brand ambassadors for Illinois by providing them with the tools necessary to attract companies, residents, and tourists.

• We will provide excellent customer service. State government will be a valuable economic development partner by listening, assisting, and working transparently to identify the needs of Illinois residents and businesses, determining how to address them, and following through on solutions.

• We will bring about a resurgence of economic opportunity and workforce development in underserved areas, including both urban and rural communities.

One of government’s primary roles is to ensure that those who have faced historical structural barriers have the same opportunity to participate in the economy and benefit from economic growth as everyone else. This administration is working with educational institutions and businesses to enhance skill levels for underserved communities so businesses with job opportunities can thrive. In addition, we are directly addressing barriers that men and women in underserved communities face in their attempts to start and grow new businesses.

• We will foster collaboration by developing regional economic hubs. Economic development is regional. Companies within a region share the same regional workforce, transportation infrastructure, health and education system, and suppliers. We will strive for an Illinois where all the key economic actors in regions across Illinois, including state and local governments, industry, unions, universities, and nonprofits are communicating well and working together to accomplish the same economic vision.

• We will implement evidence-based programs and policies. The stakes for economic development are high. When done correctly, it can positively impact the lives of millions of residents across the state. With these high stakes and our challenged—but improving— fiscal condition, it is incumbent upon us to ensure that our policies are effective. The programs and policies that we adopt will be based on evidence, and we will recalibrate our efforts if we are not achieving our goals.

5Executive Summary

What We’ve Done We’re already getting started on implementing a strategy to help Illinois thrive. In the seven months since this administration took office, we have accomplished a broad range of policy changes and reforms that address the challenges of residents and employers throughout the state.

The following are just a few examples of our successes this year.

We passed the bipartisan Rebuild Illinois capital plan, which is a historic $45 billion investment in creating good jobs, fixing Illinois’ crumbling roads and bridges, and constructing major projects that are essential to the state’s economic future.

We significantly increased Monetary Award Program (MAP) scholarships and AIM

HIGH merit scholarships, allowing 10,000 more students with financial need to attend college in Illinois.

We worked with the General Assembly to implement a new Apprenticeship Tax Credit.

We are expanding successful apprenticeship models, such as the Chicago Apprentice

Network, to get commitments from corporations and community colleges across the state to expand their apprenticeship programs.

We are implementing the new Illinois Works Jobs program, which will help us build a diverse pipeline of workers in the construction and building trades.

We legalized production of cannabis for recreational use, creating a new industry as well as a new opportunity for Illinois farmers. To help social-equity applicants, we will provide grants, loans, and training so they can actively participate in and benefit from the new industry.

Through a new Data Center Tax Credit, we are attracting major investments in data centers—buildings that house servers to store and centralize companies’ data.

To instill confidence in long-term investment in research in the state, we extended the Research and Development Tax Credit through January 1, 2027, which will help spur innovation, particularly in the tech and manufacturing industries.

We worked with the General Assembly to expand and make permanent the

Manufacturers’ Purchase Credit.

We worked with the General Assembly to eliminate the Corporate Franchise Tax, which posed a significantly high compliance burden and penalized businesses for locating or expanding their operations in the state.

Through the Office of Minority Economic Empowerment, we are issuing $15 million in grants to minority-owned businesses and the incubators that serve them.

A Plan to Revitalize the Illinois Economy and Build the Workforce of the Future6

Thinking Big To address some of the state’s biggest economic challenges, we need to think big. Below are the primary, game-changing programs we will pursue to reverse population decline, close the equity gap, and lay the foundation for economic growth across the state.

• Downstate revitalization: We will embark on a comprehensive effort to attract and retain businesses in downstate communities and build a pipeline of young, talented workers and entrepreneurs.

• Increase investment in communities of color: We will invest in transportation, broadband, and small business development while bringing down barriers to the job market and capital in communities of color.

• Retain young talent: We will keep our high school and college graduates here by making college more affordable and providing appealing opportunities in Illinois after graduation.

• Connect the Illinois start-up ecosystem: We will create an online platform that allows Illinois-based small businesses and start-ups to easily access resources, content, and connections to build and grow their businesses from anywhere at any time.

• Treat prospective businesses like valued customers: We will build a premier business-talent matchmaking service, establish processes to receive constant feedback from businesses, and modernize our delivery model of business services.

• Deliver end-to-end career services for displaced workers: We will provide wraparound services, including career counseling, moving services, retraining, and more to help displaced workers navigate job displacement.

7Executive Summary

A Plan to Revitalize Illinois We will implement our vision by focusing on initiatives to achieve the following strategic goals:

• Providing World-Class Customer Service

• Building the Workforce of the Future

• Winning in Key Industries

In each area, we’ve identified specific challenges and action steps to address them.

Providing World-Class Customer Service State government owes Illinois residents a dogged commitment to identify their needs and deliver solutions. We are focused on improvements that will impact how businesses and job seekers obtain state support, which will ultimately enhance their success.

Simplify applications and processes so businesses can access state services and information more efficiently.

Refresh outdated regulations.

Increase awareness and access to programs benefitting businesses and workers.

Solicit continuous feedback from businesses, entrepreneurs, and local organizations to make continuous process improvements.

Modernize delivery of services.

Update and broaden incentive programs.

Clarify the mission and collaboration model with partner public and private entities, such as Intersect Illinois.

Coordinate efforts across all state agencies to achieve greater economic and governmental outcomes.

Building the Workforce of the Future Increasing the skills of the Illinois workforce, particularly for underserved populations, is a win-win for residents and businesses. Residents get an opportunity to provide better lives for their families and pursue careers they are passionate about. And a trained, diverse, and skilled workforce is key to attracting new businesses and helping current Illinois businesses thrive.

Identify and tailor training to high-impact regional clusters and associated in-demand occupations.

Increase collaboration between community colleges and industry to develop apprenticeships and other training programs that meet the specific needs of employers.

Launch a “Governor’s Champions” recognition program to formally acknowledge employers making workforce commitments.

Expand college and career pathway endorsement systems to give high school graduates an early start in key industry areas.

Create a barrier reduction fund for apprentices.

Develop return on investment and qualitative outcome data for various education and training programs.

Establish and support equity goals.

Increase state funding for MAP grants by 50 percent from fiscal year 2019 levels by fiscal year 2023.

Expand efforts to prepare inmates prior to their release with life skills, career readiness, and occupational training.

Improve and expand mass transit systems throughout the state to better connect workers and centers of industry.

Provide information and support for employers seeking to hire and retain immigrant workers and for immigrant workers trying to work in Illinois.

Use smart online tools to connect job seekers to valuable information and programs that work.

Create a one-stop shop for customized workforce solutions.

A Plan to Revitalize the Illinois Economy and Build the Workforce of the Future8

Winning in Key Industries In this economic development plan, we identify a set of concentrated industry clusters in which the state has a large employment base and is positioned to compete globally for talent and investment. The performance of these industries in particular will have a large impact on the state economy, and that impact will be felt across all regions of the state.

Agribusiness and Ag Tech

Energy

Information Technology

Life Sciences and Healthcare

Manufacturing

Transportation and Logistics

Energy

Industry Jobs in 2018

Employment change, 2009–18

Location quotient

Projected employment change, 2016–26

Note: Location quotient is the ratio of the employment share in Illinois to the employment share in the nation. State purchasing coefficient is the share of every $100 spent by companies in this industry that goes to suppliers in Illinois. The “manufacturing” industry includes only manufacturing industries not included in other sectors.

Source: Illinois Department of Employment Security, Quarterly Census of Employment and Wages, 2009 and 2018

Agribusiness and Ag Tech

Life Sciences

Information Technology

Illinois Statistics for Selected Industries

192,084

54,401

137,651

48,751

Transportation and Logistics 515,178

Healthcare 733,133

Manufacturing 417,830

Average wage

$60,106

$95,741

$108,153

$152,030

$70,129

$57,732

$68,260

0.96

0.96

0.84

0.90

1.27

0.94

1.20

22.6% 5.5%

39.5% 11.9%

15.1% 9.4%

5.1% 2.0%

8.1%

1.0%

Number of employers

8,982

2,062

15,780

1,655

40,801

29,713

13,240

State purchasing coefficient

$34

$60

$65

$24

$75

$66

$32

8.0%

Value added per employee

$99,099

$514,050

$129,300

$386,973

$71,731

$96,154

$146,155

3.0%

2.2%

0.0%

Table 1

9Executive Summary

In Table 2, we show the concentration of employment in each industry for each region of Illinois. The numbers reflect the ratio of the share of employment in that industry in the region to the share of employment in that industry to the nation. For example, a “1” means that the region has the same share of employment in that industry as the nation, while a “2” means the region has twice as much employment share in that industry as the nation.

Northern Stateline

Northeast Northwest West CentralEast Central North CentralCentral SouthwestSoutheast Southern

Energy

Industry cluster

State region

Manufacturing

Agribusiness and Ag Tech

Healthcare

Information Technology

Transportation and Logistics

Employment Concentration for Selected Industries by Region, Relative to Nation

Far above average (more than 2.00)

Above average (1.30–2.00)

Average (0.80–1.29)

Below average (less than 0.80)

Employment Concentration* Northwest

Northern Stateline

Northeast

North CentralWest

Central

Central

East Central

Southwest Southeast

Southern

Life Sciences

Note: “Employment Concentration” is the ratio of the employment share in Illinois to the employment share in the nation.

Source: Estimates from Regional Economic Models, Inc., 2018

1.11

0.38

0.72

1.26

0.56

0.80

1.55

1.22

0.55

0.65

1.13

1.39

2.32

0.57

1.18

0.75

0.21

1.21

1.78

0.88

0.86

0.99

1.20

0.78

1.05

1.19

1.44

0.77

1.20

0.25

0.35

2.54

2.49

1.02

1.80

0.87

0.17

0.23

1.71

1.96

1.13

2.67

1.14

0.13

0.44

2.21

1.12

0.87

1.48

1.28

0.05

0.66

1.13

1.48

0.63

1.05

0.98

0.22

0.13

1.07

1.22

1.38

1.34

1.22

0.05

0.41

1.29

0.74

2.00

0.79

Table 2

A Plan to Revitalize the Illinois Economy and Build the Workforce of the Future10

Agribusiness and Ag Tech We propose making a range of investments and starting new programs that will facilitate technology adoption for small and mid-sized farms, encourage innovation among farm suppliers and processors of agricultural products, and boost connections with global markets.

Expand broadband to unserved and underserved rural areas of the state.

Invest in facilities that encourage collaboration between researchers and industry and the commercialization of cutting-edge ag tech products in communities across the state.

Increase funding for University of Illinois Extension to expand business support services for farms.

Convene an ag tech summit, followed by regional ag tech fairs throughout the state to connect technology companies working on solutions for agribusiness with small and mid-sized farmers.

Actively pursue more funding from the USDA and other federal agencies that provide grants for agriculture research and programming.

Provide a Renewable Chemicals Production Tax Credit.

Work with the Illinois Treasurer’s Office to prioritize investment in agribusiness.

Expand and increase awareness of foreign trade zones to facilitate access by food processing and other agribusiness exporters.

Revitalize the partnership between the State and the Regional Development Authority program.

Provide Agricultural Innovation Vouchers to help Illinois farmers transition to in-demand crops, implement renewable farming methods, adopt new technologies, or pivot to a more efficient business model.

Provide eligible businesses, including university-based start-ups, with matching grants when they win federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants.

Energy To address energy challenges, we will make big investments in green infrastructure, promote clean energy innovation across the state, and prepare our workforce for a green energy future.

Improve access to energy efficiency and other clean tech jobs to underserved populations by expanding on successful training and incubator programs.

Through investment in broadband, enable utility companies to more efficiently distribute electricity and lay the foundation for the energy grid of tomorrow.

Build electric vehicle infrastructure for medium- and heavy-duty vehicles.

Build innovation labs near universities that conduct cutting-edge research in clean energy technology.

Work with the Illinois Treasurer’s Office to prioritize investment in clean energy.

Encourage universities to set up programs in which business school students help researchers at universities commercialize their research.

Expand career pathway programs that strengthen the pipeline for energy jobs throughout Illinois.

Provide eligible businesses, including university-based start-ups, with matching grants when they win federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants.

To address the challenges in each industry, we will take the following action steps (more details about the challenges in each industry, and the actions we have taken to address them, are included in the section “Winning in Key Industries,” starting on page 33).

11Executive Summary

Information Technology As we modernize our incentive programs, make major capital investments in infrastructure and broadband, and foster connections between researchers, innovators, and industry, we will be able to more aggressively pursue top tech talent and companies and ensure that we build the relationships and support for homegrown tech companies to start and grow right here in Illinois.

Provide broadband to people interested in creating and growing information technology companies in currently unserved areas.

Provide grants and loans to companies that seek to acquire and rehabilitate sites and facilities for R&D, commercialization, and tech transfer activities.

Work with companies to increase employment in IT occupations in rural and unserved areas.

Give start-ups access to the Research and Development Tax Credit.

Invest in facilities that encourage collaboration between researchers and industry and commercialization of cutting-edge products in communities across the state.

Create a web-based platform to connect start-ups to investors, corporations, universities, resources, and incentives.

Encourage universities to set up programs where business school students help researchers at universities commercialize their research.

Work with cities across Illinois on downtown development to remain competitive in attracting technology talent.

Support efforts to innovate products and services at tech companies.

Expand IT apprenticeships through new programs at community colleges.

Provide eligible businesses, including university-based start-ups, with matching grants when they win federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants.

Life Sciences and Healthcare We will use capital plan funding to build out infrastructure and facilities that meet the needs of life sciences companies and provide credits that spur innovation. We will also provide workforce training for in-demand healthcare occupations and boost our support for small healthcare providers and other businesses to increase technology adoption.

Invest in facilities that encourage collaboration between researchers and industry and commercialization of cutting-edge healthcare products in communities across the state.

Extend broadband to unserved and underserved areas, resulting in more opportunities to provide healthcare via telehealth technologies.

Give start-ups access to the Research and Development Tax Credit.

Work with industry to identify regulations in healthcare that impede innovation and limit access to unserved or underserved individuals, and work with consumer groups to address those regulations.

Build wet lab space and colocate corporations, university researchers, and start-ups.

Renovate and upgrade the Macomb Career and Technical Education Center and nursing building at Spoon River Community College.

Start the Illinois Healthcare Extension to provide support services to small and mid-sized healthcare providers to improve technology adoption and support back-office operations.

Work with the Illinois Community College Board (ICCB) and stakeholders in the industry to address the shortage in a range of healthcare occupations.

Work with the Illinois Treasurer’s Office to prioritize investment in start-up life sciences and biopharmaceuticals companies.

Provide eligible businesses, including university-based start-ups, with matching grants when they win federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants.

Implement the healthcare transformation capital grant program to transform hospital facilities to meet the needs of the communities they serve.

Provide Community Health Center Construction grants to construct and upgrade community health providers for underserved communities.

Assemble and sponsor a healthcare tech road show, including targeted healthcare tech demonstrations across Illinois, especially in downstate communities, to facilitate technology adoption among small and mid-sized healthcare practitioners.

A Plan to Revitalize the Illinois Economy and Build the Workforce of the Future12

Manufacturing We plan to increase our efforts to recruit and train the manufacturing workforce of tomorrow. We will also provide innovation vouchers to facilitate adoption of automated technologies and revise R&D credits to make them available to start-up companies as they develop new products.

Collaborate with manufacturers, workers, and colleges to develop a comprehensive agenda to address the state’s manufacturing challenges.

Give start-ups access to the Research and Development Tax Credit.

Launch a student loan repayment assistance pilot program for graduates of Illinois universities and community colleges that agree to teach manufacturing-related subjects.

Start a Teachers’ Corps among retired manufacturing workers and managers.

Provide Manufacturing Innovation Vouchers to manufacturing companies that develop and execute detailed and strategic plans to make investments that will make their operations more efficient, productive, and competitive.

Issue competitive grants for infrastructure improvements, construction of training facilities, and site remediation and preparation that will facilitate manufacturing investment and growth.

Make investments in manufacturing workforce training infrastructure at community colleges.

Establish two manufacturing training academies at downstate community colleges and eliminate residency requirements for those programs so that any Illinois resident can participate.

Work with the manufacturing industry on a marketing campaign to increase the number of people entering high-demand manufacturing occupations.

Transportation and Logistics To support growth in the transportation industry, we will continue to pursue innovative and effective ways to improve our transportation workforce and infrastructure needs. We will also facilitate innovation in transportation technology and adoption of that technology by small and mid-sized transportation and logistics companies.

Expand successful workforce development programs in transportation, distribution, and logistics.

Work with companies interested in developing innovative transportation projects, such as autonomous fleets, to determine if laws or regulations need to be adjusted to make way for emerging industries.

Expand and increase awareness of foreign trade zones, while using them to complement major intermodal logistics centers.

Make big investments in transportation infrastructure through the Rebuild Illinois capital plan.

Pilot public-private partnerships to attract international investment dollars to the state for infrastructure repair.

Convene a transportation technology summit to tackle the challenge of getting small to mid-sized transportation companies the technology they need to grow.

Provide grants for Illinois transportation companies to purchase and implement track-and-trace technology.

13Executive Summary

Small Businesses While the State already provides a broad range of support for small businesses, we need to do more to expand access to those services, ensure that they are high quality, and make them easy to understand and navigate.

Invest in broadband to expand internet access to entrepreneurs and small business owners across the state so they can expand their reach and customer base.

Consolidate resources and programming into one centralized, web-based location, making it easier for businesses to seek help and take advantage of incentives, grants, and other offerings.

Rigorously evaluate SBDC performance and provide intensive support and intervention for those centers that are not providing local small business owners with the quality services that they need.

Identify the top two to three most burdensome processes for small business owners when they interact with state government, and work with the relevant agencies and industry to simplify or streamline those processes.

Expand the SCORE partnership across the state to increase entrepreneurs’ access to mentors.

Expand the Advantage Illinois loan program by signing more lenders and expanding capital access to more underserved communities across the state.

Focus the Angel Tax Credit on true angel and start-up companies.

14 A Plan to Revitalize the Illinois Economy and Build the Workforce of the Future

Our economic plan is driven by the following foundational principles.

Downstate revitalization: We will embark on a comprehensive effort to attract and retain businesses in downstate communities and build a pipeline of young talented workers and entrepreneurs. We will work closely with towns and cities throughout downstate Illinois to develop comprehensive plans that could include downtown redevelopment; new housing, parks, or shopping centers; transportation and public transit improvements; new or rehabilitated schools or career and technical education centers; and more. We will work with these communities to rehabilitate blighted and historic properties and re-envision outdated infrastructure to renew connections between industry and communities. We will bring to bear coordinated resources from federal, state, and local governments, as well as nonprofits. State resources will include economic development and public infrastructure funds from the state’s historic $45 billion capital plan (Rebuild Illinois), community development block grants, workforce training programs, targeted incentives, and more.

Increasing investment in communities of color: Our state has a legacy of redlining and decades of commercial and industrial disinvestment in communities of color. We will focus efforts and invest resources in transportation, broadband, small business development, and a range of programs that meet those communities’ needs.

We will bring down barriers that affect start-up businesses and low-income workers, and set targets for diversity in government procurement, oversight, and programming.

Retaining young talent: Illinois has experienced a mild but steady decline in population since 2014, with outmigration of young people leading the trend.2 We are working to keep our high school graduates in-state by making our public universities and community colleges more affordable for Illinois students. And we will keep our college graduates here by exploring incentives and programs that will provide appealing opportunities to do fulfilling work in Illinois after graduation.

Connecting the Illinois start-up ecosystem: Access to funding, talent, mentorship, and programming are crucial when starting or growing a business. There are many funding opportunities, mentor programs, physical locations that provide assistance, and online content that entrepreneurs are not aware of or are unable to access. It is our job at the State of Illinois to create awareness of these resources and improve upon them. We will create an online platform that allows Illinois-based small businesses and start-ups throughout the state to easily access resources, content, and connections they need to build and grow their business from anywhere at any time.

Treating prospective businesses like valued customers: Businesses that are considering relocating to Illinois have many factors to evaluate—and one of the most crucial factors is available talent. We will build a premier business-talent matchmaking service to help businesses moving to Illinois get paired with the workforce they need through apprenticeship, training, recruitment, and other talent programs. We will establish processes to receive constant feedback from businesses, entrepreneurs, and local organizations, and follow through on that feedback. And we will modernize our delivery model of services to what customers want, including online, mobile, and simply explained tools and programs that can be accessed from any device, in person, or by phone.

Delivering end-to-end career services for displaced workers: Delivering end-to-end career services for displaced workers: Finding a new job can be stressful, and it is more complicated than just résumé writing, interviewing, and tackling the first day of work. We will establish a pilot program to provide wraparound services, including career counseling, moving services, retraining, and more, for workers who have experienced layoffs or structural shifts in the economy such as major industry decline to help them navigate the many life events that go along with job displacement.

16 A Plan to Revitalize the Illinois Economy and Build the Workforce of the Future

Providing World-Class Customer Service

State government owes Illinois residents a dogged commitment to identify their needs and deliver solutions. The Pritzker administration has identified numerous ways we can provide better service and have already begun to execute on them. We are focused on ensuring that businesses and job seekers obtain the right kind of state support, enhancing their prospects for success.

Simplify applications and processes so businesses can access state services and information more efficiently. Some of the hoops businesses have been forced to jump through are unnecessary, and information about the process can be opaque or difficult to find. As a result, some businesses that cannot afford a consultant or lawyer to decipher the complicated applications don’t seek much-needed support. We are performing a rigorous review of all applications for business services, incentives, and job training, and how those applications are processed, to ensure that they are easy to understand, require only the necessary information, and result in a response within a reasonable and predictable time period. For example, we are reviewing and proposing potential revisions to the currently opaque and legalistic EDGE Tax Credit regulations to ensure that the EDGE application process is easy and transparent for businesses and taxpayers. In addition, we intend to provide a one-stop portal website to give both new and existing businesses a central repository for all permitting, licensing, and registration forms and documents needed to conduct business in Illinois.

Refresh outdated regulations. Each year, we will conduct a regulatory assessment and update to keep up with the pace of rapidly changing industries and eliminate unnecessary or outdated friction points. In this first year, we will catalog all regulations that affect businesses; work with industry, researchers, and citizens’ interest groups to identify which regulations are most burdensome; and require that relevant agencies and rulemaking bodies pursue an open and deliberative process to implement rule changes or processes to reduce this burden.

Increase awareness and access to programs benefitting businesses and workers. Too many businesses are unaware of the programs and services the

State provides, so we have begun and will continue to aggressively market what the

State has to offer. We will assemble a list of economic development organizations, regional chambers, business groups, and community organizations that will receive regular updates on our programs and how to access them. Also, we will aggressively market new grant opportunities associated with economic and community development to qualified applicants, including embarking on social media campaigns when relevant

(when potential applicants are in the general public).

Solicit continuous feedback from businesses, entrepreneurs, and local organizations to make continuous process improvements. We will put in place a new system that allows us to systematically and proactively solicit input from businesses and others who have interacted with the state through our programs and services. This will include surveys, as well as tracking how well we have responded to feedback, whether actions are required in response, and who will follow up on those actions. Private companies that seek to make things easy for their customers have long had systems like this in place. We have set a goal of consistently contacting 500 entities each year—from economic development organizations to major companies to small businesses—to ensure that their needs are met and that they understand how the State can be a valuable partner in growing their businesses and creating new jobs.

Modernize delivery of services. We intend to give customers what they want, including useful online and mobile tools and programs that can be accessed easily from any device, in person, or by phone. Information about state programs has been siloed by agency or funding source, and difficult to navigate. We will revamp economic development tools for businesses, residents, and local governments to improve the user experience and ensure a straightforward path to information and access.

Providing World-Class Customer Service 17

18 A Plan to Revitalize the Illinois Economy and Build the Workforce of the Future

Update and broaden incentive programs. Important economic development tools such as the EDGE Tax Credit, the Enterprise Zone program, and Angel

Investment Tax Credit may need to be refreshed. Our state’s major tax incentives are fundamentally unchanged from what they were several decades ago and address the needs of a relatively narrow set of businesses. In the coming year, we will perform a rigorous evaluation on the effects of all major tax incentive programs and work with the General Assembly to implement reforms to ensure that they have the intended impact, use taxpayer funds efficiently, and do not leave behind small businesses and underserved populations.

Clarify the mission and collaboration model with partner public and private entities, such as Intersect Illinois. Our goal is to maximize the collective impact of state government and our economic development partners. We are working with partners such as Intersect Illinois to ensure their role is appropriately defined.

We will closely coordinate with partners to attract companies considering relocating in

Illinois, convey a coherent message of what Illinois has to offer, and perform valuable research on Illinois’ competitiveness and business and workforce needs.

Coordinate efforts across all state agencies to achieve greater economic and governmental outcomes. The Department of Commerce and

Economic Opportunity, for example, will seek stronger collaborative relationships with the Department of Transportation when assessing economic development infrastructure needs, with the Department of Revenue as it relates to data sharing and evaluation of the State’s tax credit programs, and with education agencies on building a diverse and talented workforce.

Strengths to Build On Illinois has a diverse and dynamic economy. We have some of the best talent and higher education institutions in the world. We are a global transportation hub, boasting the highest concentration of transportation and logistics companies in the nation. We have abundant natural resources that provide the foundation for a thriving agricultural and tourism economy.

Highly Productive Workforce Talent is the single most important factor businesses consider when starting a new operation or relocating to a new site. Illinois has the largest and most productive workforce in the Midwest, and we are competitive with large states across the nation. Illinois workers generate $81 in economic output per hour worked, putting them in the top 10 in the country by productivity and far exceeding productivity in our neighboring states.3 One-third of Illinois residents hold a bachelor’s degree or higher, also outpacing our neighbors and most other competitor states.4

Top Colleges and Universities Illinois has a highly educated and skilled workforce because we have world-class educational institutions. According to U.S. News & World Report, Illinois has two of the top 10 universities in the nation, two of the top 20 engineering programs, two of the top

10 business schools, and two of the top 25 medical schools. Our nine statewide public universities and 50 community colleges provide educational and research opportunities for residents in every corner of the state. Our colleges and universities attract more than

20 A Plan to Revitalize the Illinois Economy and Build the Workforce of the Future

5,000 international students every year who often stay to work or start a business in

Illinois after they graduate.5 Illinois excels in the high-demand fields of computer science, artificial intelligence, and data science, as the second-largest producer of computer science degrees and fifth-largest producer of data science degrees—more than twice the national average. The state is also the fourth-largest producer of MBAs, which are especially important in commercialization and start-ups.6

Our universities are performing cutting-edge research and fostering innovation that can change the world. In 2016, Illinois universities spent $2.4 billion on R&D. These investments have led to paradigm shifts and cutting-edge breakthroughs in medicine, engineering, and technology. Some of the fastest-growing companies in the state started at entrepreneurship programs at Illinois universities.

Center of Transportation and Trade Multimodal transportation and logistics have long been areas of strength for Illinois, with the state ranking third in the country by value of freight shipments. With

$600 billion in goods shipped out in 2017, Illinois was the origin of more freight than

Indiana and Wisconsin combined.7 Illinois boasts the largest rail hub in the country, with a quarter of all national rail traffic and almost half of all intermodal shipments.8

The recent enactment of Rebuild Illinois, the largest transportation infrastructure investment in state history, means that Illinois will remain a leader in transportation and logistics for decades to come.

Our extensive transportation system and global connections provide thousands of

Illinoisans across the state with high-paying employment opportunities. We have the highest share of employment in transportation, logistics, and warehousing of any state in the nation.9 In recent interviews with businesses operating in Illinois, strategic location and accessibility to customers and suppliers were the most often cited assets for doing business in Illinois.10

Abundant Agriculture and Natural Resources Illinois is rich in natural resources that contribute to the state’s economy by facilitating trade, attracting tourists, enhancing the quality of life for residents, and supporting a diverse agricultural industry.

Our fertile farmlands and hard-working farmers have made Illinois a leader in soybean and corn production, which is relied upon globally for food supply, feed for animals, sustainable biodiesel, and more.11 The abundance of corn in the state has also made

Illinois a top producer of ethanol in the United States with billions of gallons of ethanol produced and exported each year.12

Illinois borders the Great Lakes and has more than a thousand miles of navigable waterways. In addition to recreational opportunities for boating and fishing, these waterways provide access to global markets for Illinois businesses. Boats on Illinois rivers carried 29 million tons of freight worth $34 billion in 2015.13

22 A Plan to Revitalize the Illinois Economy and Build the Workforce of the Future

Despite our strengths, some challenges impeding a stronger economy still linger across the state. To build a robust economy that can withstand future downturns and meet the demands of tomorrow’s business community, we need to address these challenges head on.

Outmigration Illinois has experienced a mild outbound migration of approximately 0.3 percent on average for the past five years. This trend is driven particularly by migration among young people, minorities, and rural populations. For the past four years, an increasing number of young people have left the state after graduating high school or college. The

Pritzker Administration’s focus on college affordability and quality education has led to renewed investment in state universities and community colleges. New business creation in communities of color and a downstate revitalization effort undertaken since the beginning of 2019 are intended to reverse outmigration in communities that have historically suffered disinvestment.

Inequality Income inequality in Illinois has ranked high among US states as rural and semirural areas in the state struggle with particularly high poverty. The poverty rate in Chicago-adjacent counties is approximately 5 percent, which is far less than the rate of nearly

30 percent in rural and semirural counties.14

Income inequality by race is also a big challenge for Illinois. The African American unemployment rate in Illinois is 8.8 percent, exceeded only by the African American unemployment rate in Pennsylvania and Washington, DC. For white, Latino, and

Asian Illinois residents, the unemployment rate is less than 4 percent.15 Illinois cities are among the most segregated in the country. According to an analysis by Governing magazine, Peoria and Danville are the most segregated cities in the country compared with peer cities of similar size and demographics, with Springfield and Rockford among the most segregated compared with their peers.16 Segregation has a range of deleterious effects, including an impact on access to adequate housing and schooling, as well as access to job opportunities and entrepreneurial resources.

The new administration has put a priority on reversing income inequality by addressing wage gaps, healthcare costs, college affordability, unfair tax policies, and job creation in forgotten communities.

Indistinct Industry Strengths Regions can capture economic growth by being a top destination for a few specialized industries. Industry specialization in Illinois is less pronounced than in other states. While

Challenges to Overcome we perform well across a broad range of industries, there are few industries in which we are known to be among the best locations.17 We rank in the top five in terms of concentration of employment relative to the nation in only two sectors: “transportation and warehousing” and “wholesale trade.”

Diversification can be an advantage, but it weakens our ability to attract new investment, top businesses, and top talent in some high-growth industries in which we could otherwise have an advantage. These industries include life sciences, information technology, and food manufacturing.

Lagging Commercialization of R&D Start-up companies across the country represent some of the most important job creators and opportunities for growth. Illinois has made enormous strides in building a start-up ecosystem that attracts new entrepreneurs and companies, but it still lags behind most states across the innovation funnel, from R&D funding to the rate of new entrepreneurs.

We are the sixth-largest state by population with the fifth-largest economy in the country, but we rank ninth in R&D spending and 15th in federal R&D support.18 In 2017, our entrepreneurship rate was rising but still only 0.24 percent, well below the national average of 0.33 percent.19

History of Fiscal Imbalances Until this year, the State of Illinois faced significant fiscal imbalances for decades, and the situation was only made worse by a 736-day budget impasse from 2015 to 2017. The fiscal condition of the state has affected the ability of government to operate efficiently and the ability of businesses to invest confidently. It has also driven many costs down to the local government level, where property taxes are now high relative to other states. For the first time in years, in June 2019, Illinois enacted a bipartisan, balanced budget and credit rating agencies have begun to recognize the increasing stability of the state’s fiscal condition.

Unresponsive Bureaucracy The State has not made it easy to understand how to navigate bureaucracy, obtain crucial information, or receive necessary permits and licenses in a timely manner to run a business efficiently and with confidence. Complicated procurement processes make it difficult for small and mid-sized businesses in particular to partner with the State and receive government contracts. Small and mid-sized businesses are disproportionately owned by women, minorities, or people with disabilities.