U.S. Federal Government’s Role in Economic Development
Washington State’s economic development ecosystem, like every state’s economic development ecosystem, is complex and consists of collaborative efforts (and occasionally combative efforts) by a variety of stakeholders, ranging from elected officials to state agencies to industry associations to academia to private sector. If we were to spell out every stakeholder, then the list would span several issues of this magazine! In order to remain competitive and drive economic development, these partners and stakeholders must tap into a limited pool of resources comprised of different incentives, grants, infrastructure funds, and workforce development dollars. One of the key sources of economic development support is the United States federal government.
The U.S. federal government plays a key role in state economic development through its policies, programs, and initiatives. While the federal government primarily focuses on national and international issues, it recognizes the importance of fostering economic growth at the state level. Some ways in which the federal government contributes to state economic development include funding and grants, tax policy and incentives, infrastructure investment, workforce development, and emergency assistance. These dollars flow from the White House, Congress, cabinet-level agencies, and additional sources. The relationship is complex, with policies and strategies changing over time. While the effort to win federal funding doesn’t always result in a win, the reward is worth continuous pursuit. Below is a highlight of some of Washington State’s recent victories in federal support.
Regional Hydrogen Hubs
In October 2023 and after a competitive years-long multi-group, multi-state effort, the U.S. Department of Energy (DOE) selected the Pacific Northwest Hydrogen Association’s PNWH2 Hub as one of seven Regional Clean Hydrogen Hubs. The DOE’s Hydrogen (H2) Hubs will infuse public and private funding into the clean economy sector of the Pacific Northwest and scale up the national network of clean hydrogen producers, consumers, and private funding connecting infrastructure. The H2 Hubs will create tens of thousands of jobs while strengthening communities and the national and regional energy security.
The Pacific Northwest Hydrogen Association is a multi-state nonprofit coalition of public and private partners spanning Washington, Oregon and Montana. The coalition includes representatives from Tribal Nations, labor, business and industry, higher education, government and the environmental community. The PNWH2 Hub aims to leverage the abundancy of clean power and innovative technology of the Pacific Northwest to accelerate the region’s transition to clean hydrogen production and use. The hub will focus on decarbonizing hard-to-abate industries across the Northwest.
The PNWH2 Hub is eligible to receive up to $1 billion in federal funding over four DOE-defined development phases spanning nine years, with $20 million allocated for Phase 1. DOE will evaluate the hub’s activities and deliver go/no-go decisions at each phase. DOE and the Pacific Northwest Hydrogen Association will negotiate the final funding and scope for the hub throughout fall 2023.
October 2023 was a great month for Washington State as the winning streak continued. American Aerospace Materials Manufacturing Center (AAMMC) located in Spokane, Washington was designated as one of the 31 inaugural Tech Hubs through the U.S. Department of Commerce’s Economic Development Administration (EDA). Led by Gonzaga University, AAMMC Tech Hub brings together more than 50 public and private partners in the development and manufacturing of composite materials for the future of aircraft.
AAMMC’s proposal focused around repurposing the former Triumph Composite Systems manufacturing plant. The site hosts a 50-acre, 386,000-square foot facility in Spokane, and will transform into an applied research, workforce training, and production facility where research conducted by academic and industry experts contributes directly to new composite materials components built on site for global customers. The refurbished facility will be supported by a network of workforce development training centers located across the region, enhancing job creation and investment across aerospace manufacturing.
The 31 Tech Hubs announced by the EDA were selected from 198 applications from regional consortia of economic development, industry, academia, and workforce partners. A neighboring Pacific Northwest Mass Timber Tech Hub proposal, led by Oregon State University, was also among those designated. Through a memorandum of understanding between OSU and Washington State University, Washington’s legacy timber industry also stands to potentially benefit from the advancement of this regional work in sustainable forest products’ innovation and manufacturing. Funding for the Tech Hub program came from the U.S. CHIPS and Science Act.
Inflation Reduction Act
Washington State businesses and residents are eligible for energy-related savings through the Inflation Reduction Act (IRA), which was passed by the federal government in 2022. The IRA will provide $370 billion in funding for clean energy and environmental justice initiatives nationwide, representing the largest investment in climate action by the U.S. government.
A significant portion of IRA funding includes tax credits and rebates for businesses and residents (homeowners and renters) to make energy efficiency upgrades to their homes or buildings, or purchase clean energy equipment like solar panels, electric vehicles (EVs), and heat pumps. IRA incentives are set to be offered through 2032, providing ample time and opportunity for Washingtonians to plan for and take advantage of IRA savings to make the switch to EVs, heat pumps, and other low-carbon technologies. Many of the IRA incentives can be combined with Washington’s tax credits or rebates to maximize savings. The infusion of IRA money will accelerate Washington’s transition into a carbon-free economy.
It is no secret that the U.S. federal government plays an important role in statewide economic development. Federal funds flow to Washington’s rivers, roads, power grid, communities and businesses, supporting the economic output of the state. Washington State’s gross domestic product (GDP) in 2022 exceeded $725.5 billion dollars and is forecasted to climb above $760 billion dollars in 2023, which would put it in the top 40 countries (yes, you read that correctly). With the influx of once-in-a-generation federal support via the Inflation Reduction Act, CHIPS and Science Act, and other sources, Washington State’s economy will soar even higher.
Transitioning to upcoming aerospace events
The aerospace and defense industry is set to take center stage in 2024 with a series of pivotal events that promise to shape the future of this dynamic sector. Kicking off the calendar is the Aerospace and Defense Supplier Summit, scheduled for March 12-14. This summit provides a unique platform for suppliers, manufacturers, and industry leaders to collaborate and explore innovative solutions. With a focus on networking and forging new partnerships, this event is crucial for businesses aiming to expand their global footprint. The summit’s significance lies in its ability to foster international collaborations, opening doors for the growth of exporting businesses in the aerospace and defense supply chain.
Following closely on its heels is the Aircraft Interiors Expo, scheduled for May 28-30. As the aviation industry continues to evolve, the importance of cutting-edge aircraft interiors cannot be overstated. This expo offers a comprehensive showcase of the latest advancements in cabin design, technology, and materials. For companies looking to enhance their presence in the global market, the expo serves as a gateway to connect with potential clients, fostering partnerships that can propel their exporting business to new heights.
Come July 22-26, the aviation world will turn its attention to the renowned Farnborough International Airshow. With a storied history dating back decades, this event is a cornerstone for the aerospace and defense industry, attracting a global audience of professionals, enthusiasts, and key decision-makers. Beyond the spectacular aerial demonstrations and groundbreaking innovations on display, the airshow serves as an unparalleled platform for businesses to showcase their capabilities and explore opportunities for international collaboration. As countries strive to bolster their defense capabilities, the Farnborough International Airshow is a pivotal arena for companies seeking to expand their exporting ventures.
The Japan International Aerospace Exhibition, scheduled for October 16-18, 2024, provides a strategic conclusion to the year’s major events. Japan’s growing aerospace and defense sector presents a wealth of opportunities for businesses looking to tap into new markets. This exhibition facilitates dialogue and partnerships between international companies and Japanese counterparts, fostering cross-cultural collaborations that can significantly impact the growth of exporting businesses. As the global aerospace and defense landscape continues to evolve, the Japan International Aerospace Exhibition stands out as a key event for companies seeking to establish a foothold in the Asian market.
For those interested in learning more or registering as a delegate for these events — get in touch with Joanna Boatwright, international trade specialist for the Washington State Department of Commerce. You can reach out to Joanna Boatwright via email at email@example.com. Her expertise and guidance will ensure that your participation in these events is seamless and tailored to maximize the growth of your exporting endeavors in the aerospace and defense industry.