The document summarizes Washington's economic development strategy to foster innovation and job creation. It discusses how improving investment, infrastructure, talent, regulations and international business can boost productivity. The strategy focuses on making talent a priority through education, investing in entrepreneurship, connecting through infrastructure, regulating smarter, and expanding international business. It provides examples of this strategy in action through scientific research teams, entrepreneurs in residence, and innovation partnership zones. The strategy aims to reset the economic model from recruitment-driven to innovation-driven growth.

1. Driving Washington’s Prosperity
A Strategy for Job Creation and Competitiveness
TACTC Legislative Contact Conference
January 30, 2013
Olympia, Washington
Presentedto:
SenateTrade&EconomicDevelopmentCommittee
January29,2013
Olympia, Washington
Presentedby:
SteveVanAusdle,Vice-Chair, WEDC
EgilsMilbergs,ExecutiveDirector,WEDC
Washington Economic Development Commission (www.wedc.wa.gov)

2. Investment InfrastructureTalent
Jobs, Wages, and
Standard of Living
Productivity*
Innovation and Entrepreneurship
Regulations Trade
*Improving Productivity will require more innovative uses of existing resources.

3. Our mandate: Foster Innovation Economy
“Legislature finds that in order to achieve long-term
global competitiveness, prosperity and economic
opportunity for all the state’s citizens, Washington
state must become the most attractive, creative and
fertile investment environment for innovation in the
world…”
An act relating to
WA Economic Development Commission ‒ Intent
RCW 43.162.005
WA Economic Development Commission 3

4. Our Mandate: Foster Innovation Economy
“Provide leadership, direction and guidance for…”
– Shared economic development vision
– Long-term, strategic policy model
– Public-private partnership
– Collaboration across boundaries
– Data standards and evaluation of state economic
development system
– Recommendations to Governor and Legislature
An act relating to
WA Economic Development Commission
RCW 43.162
WA Economic Development Commission 4

5. Commission Membership

6. The problem we need to solve!
6WA Economic Development Commission
Data source: U.S. Bureau of Labor Statistics
-197.73
-85.1
-250
-200
-150
-100
-50
0
50
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55
DifferencewithInitialPeriodEmployment
(ThousandsofWorkers)
Months of Recovery
Jobs Recovery Since Start of Recession
Seasonally adjusted non-farm employment, based on 3mma
2001 Recession (3 quarters)
Current Recession
April 2008
56 months

7. WEDC 2.0 7
Data source: Washington State Employment Security Department.
Largest Absolute Changes in Employment
October 2012 year-over-year, based on 3 month moving average

8. Largest Manufacturing Sectors, 2011
By employment, four digit NAICS
WA Economic Development Commission 8
Aerospace Product and
Parts Manufacturing
Ship and Boat Building
Fruit and Vegetable
Preserving and Specialty
Food Manufacturing
Navigational, Measuring,
Electromedical, and Control
Instruments Manufacturing
Plastics Product
Manufacturing
Seafood Product
Preparation and
Packaging
Architectural and
Structural Metals
Manufacturing
Other Miscellaneous
Manufacturing
Sawmills and Wood
Preservation
Semiconductor and Other
Electronic Component
Manufacturing
-35.0%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0
EmploymentChange,2007-2011
Location Quotient, 2011Data source: U.S. Bureau of Labor Statistics,
Census of Employment and Wages; author’s calculations.

9. Change in Non-Farm Employment by Metro Area
November 2012 year-over-year, based on 3 mma, seasonally adj.
WA Economic Development Commission 9Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics.
-1.5%
-1.0%
-0.1%
0.2%
0.8%
0.8%
1.8%
2.0%
2.0%
2.7%
3.0%
4.5%
-2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0%
Rest of State
Kennewick-Pasco-Richland
Bremerton-Silverdale
Longview
Olympia
Wenatchee-East Wenatchee
Yakima
Spokane
Mount Vernon-Anacortes
Tacoma
Seattle-Bellevue-Everett
Bellingham

10. Unemployment rates by county, Nov. 2012
WA Economic Development Commission 10
Data source: U.S. Bureau of Labor Statistics, Current Employment Statistics.

11. Resetting the Economic Development Model
Recruitment-driven Innovation-driven
Investing in company
relocation
Investing in talent, ideas and
infrastructure
Preserve jobs, safety nets Create jobs, grow incomes
Top down development,
short-term fixes
Bottom-up organic growth,
long-term view
Competing regions, closed
systems
Collaborating regions, open
innovation
11WA Economic Development Commission

12. Tuning the productivity engine in response
Innovation in five drivers for jobs and competitiveness
12WA Economic Development Commission
Intellect
Investment
Infrastructure
Improvement
(regulatory)
International

14. Driver One: Fueling the Future
Future—Making Talent a Top
Priority
Making
talent a
top priority
1. Create jobs for
Washingtonians and industry
needs by achieving 60% post-
secondary degrees & credentials.
2. Increase pool of qualified
workers by emphasis on STEM
proficiencies and career and
technical education at the HS
level.
WA Economic Development Commission 14
Prof.
Technical
Unskilled
Prof.
Unskilled
Technical

15. Driver Two: Adding Horsepower
Future—Making Talent a Top
Priority
Investing in
entrepreneurship
1. Improve tax and
regulatory policy to foster
growth of start-ups and job
creating business clusters
2. Invest in world class
research talent, assist new
enterprise formation and
help connect the state's
research base to industry,
entrepreneurs and investors.
WA Economic Development Commission 15

16. Driver Three: Paving the Way
Future—Making Talent a Top
Priority
Connecting
through reliable
infrastructure
1. Implement alternative
financing mechanisms for
transportation infrastructure for
asset preservation, freight
mobility and investment in
economic corridors.
2. Require economic
development and long term job
creation criteria in the capital
budgeting process.
WA Economic Development Commission 16

17. Driver Four: Running Lean
Future—Making Talent a Top
Priority
Regulating
Smarter
1. Systematically review on
sector-by-sector basis all state
regulations for their cost-
effectiveness and determine
overlaps, excessive costs,
obsolescence, redundancy and
solutions.
2. Expand agency use of lean
process improvement to lower
cost of regulatory compliance
and reduce time delays.
WA Economic Development Commission 17

18. Manufacturing Testimony to Senate
Christina Lomasney, Modumetal
November 29, 2012
WA Economic Development Commission 18

19. Driver Five: Firing on all Cylinders
Future—Making Talent a Top
Priority
Expanding
international
business
1. Intensify innovation and
collaboration in the Pacific
Northwest economic region and
support cross-border projects for
economic diversification, expanded
trade and jobs.
2. Drive job creation through a
coordinated system of trade
services between the programs of
Washington State and regional and
federal programs.
WA Economic Development Commission 19

20. Birgitte Ahring
WSU
Biofuels
Chen-Ching Liu
WSU
Smart Grid
WA Economic Development Commission
Scientific teams in:
• Energy systems
• Smart Grid
• Bio-fuels
• Energy Storage
Washington State University – STARS
Strategy Framework in Action
Strategically Targeted Researchers - STARS
University of Washington – STARS
Jonathan Posner
UW
Next Generation
Batteries
& Fuel Cells
Jihui Yang, UW
Next Generation
Batteries
& Energy Recovery
Brandon Pierquet, UW
Design of electronic
systems power
electronics, electric
vehicles
University of Washington – STARS
Daniel Kirchen,
UW
Smart Grid

21. Strategy Framework in Action
20 Entrepreneurs in Residence
WA Economic Development Commission 21
Since inception:
24 EIRs, 59 start-ups, 68 opportunities in the pipeline
11 EIRs, 8 start-ups, 107 direct jobs
2 Regional EIRs, pilot program to foster partnerships, 9
opportunities in the pipeline

22. Strategy Framework in Action
15 Innovation Partnership Zones
WA Economic Development Commission 22

23. Strategy Framework in Action
Next50 – Innovation Contest
WA Economic Development Commission 23
WEDC co-hosted the Commerce & Innovation Economy Month
• Create inspiration short video on Innovation for the next 50 years.
• Judged on Content; creativity, quality, imagination, entertainment, quality
and popularity

24. Vision
Foster a Healthy Economy
and a Healthy Environment
Mission
Collaborators
Initiatives
Values
K-12
University
Center
WWCC
County
City
Port
Chambers of
Commerce
Tourism
Walla Walla Wine
Alliance
Art
Alliance
Sustainable
Living Center
Wallowa
Resources
Utilities
Dept. of
Ecology
Salmon
Recovery
Board
Confederated
Tribes
Water Center
Walla Walla
Watershed
Partnership
Enology &
Viticulture
Center
Downtown
Foundation
Career
Pathways
Infrastructure
Business
Development
Wine & Hospitality
Cluster
Renewable
Energy
Energy
Efficiency
Water
Efficiency
Water
Quality
Watershed
Restoration
Skills
Center
Workforce
Development
Rural Center for
Entrepreneurship
Collaboration
Excellence
Integrity
Entrepreneurship
Partnerships
Sustainability
Innovation Diversity
Learning
Strategy Framework in Action: The Innovation Ecosystem (IPZ) in Walla Walla
Economic, Environmental, and
Cultural Sustainability

25. As Goes Manufacturing,
So Goes the Washington (and Nation)
 Strong association between manufacturing GDP and
real GDP of a state or nation.
 Integrating new knowledge and producing more
complex products and utilizing more advanced
manufacturing processes leads to greater economic
prosperity.
 The linkage between the knowledge networks and
drivers of advanced manufacturing is a very strong
predictor of the variation in incomes across states and
nations.

26. Teamwork wins this Race!
www.wedc.wa.gov
WA Economic Development Commission 26