Vermont Fosters Creativity and Innovation

19 Feb, 2014

By Rachel Hamilton

Vermont’s excellent incentives programs are contributing to an increasingly vibrant economy.

Commissioner Lisa Gosselin of the Vermont Department of Economic Development says, “I think that there is a new Vermont that is emerging that is very exciting.”

The Vermont Employment Growth Incentive (VEGI) program has been around since 2007 and it has strengthened and expanded businesses of all sizes and across sectors throughout the state. Good Jobs First has ranked Vermont third in the nation for its incentive programs, in no small part because VEGI is so effective at creating jobs.

VEGI offers cash payments to businesses to promote economic growth and job creation beyond the organic growth companies would achieve without the incentives — there is a wage threshold, but no restrictions on size or type of business.

Gosselin says, “It’s been very key in growing a lot of companies here.”

Those companies include Commonwealth Dairy LLC, Logic Supply, King Arthur Flour Co., Champlain Mill, MyWeb Grocer Inc., Green Mountain Coffee Roasters, and many others.

Both Gosselin and Joan Goldstein, executive director of Green Mountain Economic Development Corp., agree that Vermont’s government highly values businesses in Vermont.

Goldstein says her experience with the government includes changing a state statute for the sake of a regional business need. “We were able to lobby in the Legislature to get the statute changed,” she says. “I couldn’t believe that we were able to do that for a regional building. The importance of every single business to the state is not taken for granted.”

Gosselin says, “Because we’re small, we really value our employers and work with them to problem solve and look at how we can help them grow.” For example, Vermont was the first state in the nation to launch legislation against the practice of “patent trolling.” The new legislation is designed to reduce the number of bad-faith charges related to patent encroachment. Gosselin says that is good news for Vermont, which CNN named the most innovative state in the nation due to the high number of patents.

Vermont is so committed to innovation and creativity that they have established an Office of the Creative Economy to support arts, culture, businesses and technology in the state, and offer incentives such as the Commercial Film tax credit.

Down to Business

*The Vermont Workforce Education and Training Fund offers grant funds to employers and their collaborating educational or training entities to train workers who are unemployed, underemployed, or at risk of becoming unemployed to help ensure that workers have the required skills.

*The Vermont Seed Capital Fund can provide up to $5 million for qualified businesses moving to or expanding in Vermont as a tax credit with a credit limitation of the lesser of 4 percent of contribution or 50 percent of liability (prior to applying this tax credit).

*The Vermont Procurement Technical Assistance Center has an award-winning BidMatch program to help match businesses that have targeted capabilities with government entities offering opportunities.

*Vermont’s STEM incentive can pay up to $7,500 to qualifying newly hired employees in qualified science, technology, engineering and/or math-related fields.

Industries and Innovations

Susan “Sam” Andersen, executive director of the Central Vermont Economic Development Corp., praises the diversity of industries in the state. “The beauty is that the business community and all of Vermont is a tightly knit tapestry of many colors. It’s a joy to work in economic development here because it’s so diversified.”

The central Vermont region is home to agribusiness, granite quarries, granite finishing, electronics and advanced manufacturing — including wind turbine manufacturing. “We’re a ribbon of development that is surrounded by a rural area. We have everything—from Green Mountain Coffee Roasters and a number of well-established insurance companies, and some high-tech game developers,” Andersen says.

Gosselin notes the synergy between many businesses. “We’re not only the U.S. leader but third in the world in captive insurance,” she says. “All the industries that support that — accounting, legal — are set up here as well, so there’s a great infrastructure here in the state to support other businesses. Within our department, we’ve done a good job of connecting businesses to state and government contracts.”

The state celebrates its digital and technological economy as well. “IBM is one of our largest employers,” Gosselin says. “They have a foundry here. We have strong companies in biotech and rural energy.”

Gosselin points to the growth of burgeoning tech companies such as Dealer.com and Pwnie Express as evidence for the vibrancy of Vermont’s tech economy. Pwnie Express’s manufacturing and R&D facilities are located in Vermont.

Gosselin says the tech companies are complemented by modern manufacturing, “We have a whole composites cluster in southwestern Vermont. We have a great aviation cluster.”

Goldstein says that in her region, “Food and food related businesses are very important — also the advanced manufacturing sector.” She highlights health care services and professional and tech services as well.

Food is important statewide. Gosselin says, “We have some fabulous food. We’re known for our cheeses and our food systems.” In addition to the Vermont Creamery, other famous dairy businesses in Vermont include Cabbot Creamery Cooperative, Commonwealth Dairy and Ben & Jerry’s Ice Cream.

Talent and Education

The Vermont Training Program makes a difference in many industries statewide. Goldstein says many businesses in her region use it, as it provides up to 50 percent of the wage the employer is paying and helps ensure the employees reach their potential.

Goldstein and the Green Mountain Economic Development Corp. helped create an apprenticeship program for their area’s advanced machinists. “There are hardly any young people who say ‘Hey, I wanna be a mold maker,’ so we find promising young people and help them develop a career path,” she says.

The program gives those young people, identified by their employers or educators, the training they need to move beyond entry-level positions at manufacturing jobs and helps ensure that the companies have the skilled labor they need. “This helps to continually attract talent,” Goldstein says.

Vermont also has many universities and career centers. Gosselin says, “We have over 40,000 students here. Travel & Leisure has just named Vermont one of the best places to go to school. We have very low unemployment right now, but still lots of opportunity for growth with our student population.”

Andersen says there is an abundance of employees with the skills for high-tech jobs. “Montréal has incentives going to attract game developers,” she says. “They tend to shed employees who work in security, financial, and medical industry sectors. They’re still called game developers, but it’s a far more vast industry than people are aware of.”

Outdoors and Recreation

Mount Mansfield, a few miles outside of Burlington, is the highest summit in Vermont at 4,393-foot Mount Mansfield State Forest on the western slope is home to a pocket of rare tundra-like vegetation, more typically found in the artic. The eastern slope is home to the Stowe Ski Resort, one of the oldest ski resorts in North America.

Assets

Vermonters also have interstate highway access to large markets such as Boston, Montréal, and New York City. Gosselin says that businesses in the state are poised particularly well to work with foreign investors. “We created the only state run EB-5 program to promote foreign investment and create literally thousands of jobs in the Northeast Kingdom,” she says.

Vermont’s Northeast Kingdom is a three-county region in northeast Vermont, with a population of more than 60,000 people and growing. The EB-5 program works to attract investors from foreign nations who wish to obtain an EB-5 visa, which they can do by investing money and creating jobs in the United States.

Canadian commerce is of particular interest due to its proximity to the region. “We recently signed a memorandum of understanding with Québec to try to grow our companies together,” Gosselin says, adding, “We’ve seen many Canadian companies relocate to Vermont to have a U.S. footprint.”

Gosselin says that businesses can also count on the help of venture capital firms, such as Fresh Tracks Capital, which has invested in companies including Group Zoom, Kohort Inc. Native Energy Inc. and Vermont Teddy Bear Co.

Regional economic development entities also have advantages for expanding companies, Goldstein says. “The local economic development corporations can buy property at low interest rates and pass that along to growing tenants. There’s so much additional pressure on cash flow anyway during expansion, that this is a way to assuage some of that pressure.”

Lifestyle

Vermont’s tourism industry generates about $1.4 billion per year because the state is an excellent place for recreation.

Goldstein says, “The No. 1 thing is that you’re in the most beautiful part of the country.” Andersen has similar views, saying, “People come to Vermont because we are the Tiffany’s of locations. If you want excellent quality of life, and good workers, you come to Vermont.”

One community event Andersen notes is The Strolling of the Heifers in Brattleboro. This unusual annual festival celebrates and promotes local farming. It grew from a small town parade into a regional movement to educate the public about locally raised foods. The original parade includes a stroll by farmers and their calves down Main Street — a gentle and more educational version of Pamplona’s annual Running of the Bulls.

Vermonters can also count on medical care, their state being ranked in the top three nationally by the Commonwealth Fund’s various scorecards on state health since 2007. Andersen praises several Vermont hospitals: Central Vermont Medical Center, Burlington’s Fletcher-Allen, and Dartmouth-Hitchcock in the Hanover area, adding “Heaven forbid you need even more, you’re about three hours from Boston.”

The Opportunity Index currently ranks Vermont at No. 1, with its highest scores coming from the Community Health and Civic Life Dimension. That’s no surprise since that dimension measures things like civic engagement and access to health care and healthy food.

More Info

Vermont Department of Economic Development

Central Vermont Economic Development Corp.

Green Mountain Economic Development Corp.

Illustration by SOMMAI at Free Digital Photos.net