Delaware’s Promise for Economic Growth
By Sam Waltz
Publisher, Delaware Business Times
Delaware is well- positioned for growth over the next decade, according to Delaware Governor Jack Markell, with a blended and balanced portfolio of business activity that will aid Delaware’s economy.
In an exclusive interview with the Delaware Business Times, the Governor cited the following:
- Continued investment and job growth in Delaware’s corporate sector, with a focus on financial services job creation, despite the shrinking presence of AstraZeneca and the impending split of the DuPont Company into two arm’s- length separate companies, much like ICI Americas did in 1993 with Zeneca before ICI disappeared in a 2007 takeover.
- Robust and increasing early-stage activity, focused on technological innovation, early-stage connections with higher education, and increasing availability of venture capital, ranging from companies with a handful of jobs to much larger ones like Bloom Energy.
- Dynamic new growth in traditional SMEs (small and middle-sized enterprises), many of them small manufacturers and service providers.
Workforce Development and a Global Direction
Workforce development “is what really matters to businesses,” said the governor. “That’s what they’re looking for, and they
Publisher Sam Waltz, left, talked with Gov. Jack Markell about the economy.
are incredibly focused on the quality of the workforce.” Markell said he recognizes that “college is not for everyone” and emphasized the need for Delaware to get its partnerships ready.
The preparation of young people for jobs in the “new economy” and
the re-training of longer-term workers from declining industries like auto manufacturing is one of the critical challenges mentioned by the governor.
The economy is global, Markell noted, and multi-national companies have a choice of where they go and where they locate, from R&D to manufacturing.
“I’ve seen just driving down the road how many multi-national companies have created these R&D facilities” in places where they never would have been seen before, said the governor, who has traveled to Israel, India, and China during his tenure.
Markell said he looks to Delaware to be among the most bilingual states in the U.S., noting with pride that 1,500 Delaware elementary age students from K-2nd grade are presently learning in Chinese or Spanish immersion classes. “We have got to be thinking 20 years down the line,” he said.
Employment Trends and DuPont
Turning to Delaware’s current employment trends, the Governor focused on both corporate and smaller and emerging businesses.
“We have to be incredibly focused on smaller businesses, but the larger businesses continue to be really important to us,” he said. He applauded the financial services sector, and noted the recent addition of 1,200 jobs from JPMorgan Chase, 1,000 jobs from Capital One and others, including Citi, Discover and Barclays.
Markell particularly complimented Delaware’s corporate community for its commitment to hiring veterans, and mentioned work done by Delmarva Power and its CEO Gary Stockbridge as well as JPMorgan Chase and many others. Job- hunting veterans in Delaware “are doing considerably better than the national average,” he said.
DuPont continues to invest in the Northern Delaware market, he said, including two new office buildings at its Chestnut Run site at Route 141 and Route 48,as well as a $35 million investment at DuPont Stine Haskell Research Center, as part of its life sciences program.
But Markell also went out of his way to tip his hat to DuPont CEO Ellen Kullman. “Ellen Kullman has been a remarkable CEO,” he said.
He is obviously a bit nervous about the new DuPont Co spinoff, as yet unnamed, for which DuPont tabbed its Vice President Mark Vergnano to lead as its CEO. Mobility of such businesses as they move out from under the parent’s business shadow makes policy-makers nervous as they depend on jobs and job growth for wages.
Today, DuPont generates about $36 billion in sales – about $7 billion in its specialty chemicals and some other lower- growth businesses that were strategically targeted by DuPont late in 2013 to be bundled and spun out on their own by mid-2015.
Small Business and Startups
On the smaller business and entrepreneurial front, Markell described trends that he said are moving Delaware closer to the front of the country’s early- stage economy.
“What we all want to see is a continually growing entrepreneurial sector here in Delaware,” said the governor, who noted the recent closing of a $6 million venture fund to invest in Delaware startups. “For the first time, Delaware was ranked as one of the top 25 Best U.S. Cities for tech startups, according to an article in “Entrepreneur” magazine, noted Markell.
“I’m really encouraged by the startup activity,” he said. “At a recent event, with perhaps 250 people, many of them (were) people I didn’t recognize. It’s not just the “˜usual suspects’ who are showing up.”
Markell cited newer companies like DeNovix in pharma-tech space, as well as a Newark company that designs pre-fab bathrooms sold around the world, with many installations in India.
He also singled out Incyte Pharma, the home-grown success story that was incubated as a start-up pharma at the DuPont Experimental Station before growing into the former Wanamaker’s Department Store on Augustine Cutoff.
As for other challenges, Markell cited continued attention to technical and even human capital infrastructure, ranging from continued improvements to broadband effectiveness to building better relationships at the higher education level with incubating business enterprises that can attract grants and other capital.
Markell, who was an early supporter of The Data Centers (TDC) slated for the University of Delaware STAR campus at the former Chrysler Manufacturing site in Newark, said that the UD review that trumped the TDC project and killed it was “fully appropriate.” But he said he would still like to see founder Eugene Kern bring the TDC project to some other location in Delaware.
The growth in job creation is good, but big corporate structural changes can impact the state’s fortunes seemingly overnight.
Over the last year, Delaware’s economy has created jobs at 3.1 percent, compared to a national average of 1.9%. “That’s the highest in the region, eighth in the country, and the only Eastern state that is higher is Florida,” said Markell.
But, some 25,000 Delawareans who want jobs are without them. “As we have created more jobs, more people flood into the workforce as Delaware job growth accelerated,” he added. He called it encouraging, but added: “Until every Delawarean who wants a job has one, I won’t be satisfied.”