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Author: Ken Poole

  • The Federal Statistical System is at a Crossroads. So Are We

    The Federal Statistical System is at a Crossroads. So Are We

    A new report from the Center for Strategic and International Studies (CSIS) reinforces what C2ER and LMI Institute members already know: the U.S. federal statistical system remains indispensable. The problem is that the system as it currently exists is increasingly misaligned with today’s economic realities. We strongly encourage you to read A Federal Statistical System for the Age of Economic Security (Borges, Girishankar, & Reamer, March 2026). 

    The report suggests that the statistical system we rely on was built for a different era and designed to track national employment, inflation, and growth. Today’s challenges look different. Supply chains. Technological competition. Regional industry dynamics. Economic statecraft. These require more granular, connected, and responsive data. As designed, the system cannot keep pace with this change. 

    This is not just a federal issue. As data users and stakeholders, it is our issue, too. 

    The Challenges are Real 

    The pressures described in the report will feel familiar. Response rates are falling. Budgets have declined in real terms. Eight of thirteen principal statistical agencies have lost at least 16 percent of their purchasing power since 2009, including nearly 19 percent at BLS. Staffing reductions have been severe. Trust in public data has weakened. At the same time, the structures that govern federal statistics make modernization slow, even when the path forward is clear. 

    The imbalance between value and investment is striking. The report notes that data-intensive industries generated $778 billion in revenue in 2022. That figure has nearly doubled over a decade. Federal investment in the system that underpins that activity has remained largely flat.  

    The report also reinforces what practitioners know: Federal statistics are foundational to regional economic development. State and local leaders depend on Census, BLS, and BEA data to plan, to allocate resources, and to manage programs tied to hundreds of billions in federal funding. Increasingly, private data plays a growing role, but it cannot replace official statistics. It cannot match their coverage, consistency, or accountability.  

    Where the Report Points Us 

    The report outlines priority areas that align directly with the work of C2ER and LMI Institute members. Everything from economic modeling to answering real-time questions from elected leaders or private businesses. 

    Measuring regional industrialization remains a core gap. For instance, we lack the data structure needed to understand how clusters form and how place-based investments perform over the long term. This is central to effective economic and workforce development strategies. 

    Workforce capacity within statistical agencies is another pressure point. The system needs new skills and stronger pipelines. This is where LMI leaders have a direct role to play. 

    The LMI Institute re-imagined itself some 15 years ago as a partnership between labor market information data producers and users. The Institute has been at the forefront of this topic calling for long-overdue user-centered design approaches. We need to better align data products with how they are used in practice. Our members are among the most advanced users of federal data. Our experience should shape what comes next. 

    Data sharing and interoperability remain persistent challenges. Progress requires alignment across legal frameworks, technical standards, and incentives. State LMI agencies already operate at the center of this ecosystem and are working on solving this issue, but we need more formal federal recognition and funding support for these activities. 

    What This Means for Our Networks 

    The report frames federal statistics as a strategic national asset. That framing creates clear expectations. Users of the system need to help shape what comes next. 

    Our members should not be passive users. You produce, interpret, and apply these data every day. You know where the system works. You know where it falls short. That insight is essential, and it needs to be visible in this policy moment. 

    The conversation is already underway, and our networks need to show up with evidence and a unified voice. Here is the call to action for C2ER and LMI Institute members: 

    Document how you use federal data in practice. Be specific. What decisions did it inform? What would have happened without it?

    • Identify the gaps that limit your work. Focus on where better data would change outcomes for regions, industries, or workers.
    • Share those examples with C2ER and the LMI Institute. We will aggregate and elevate them in federal discussions.
    • Engage your own channels. Brief your organization’s intergovernmental affairs staff. Speak directly with Congressional offices when opportunities arise.
    • Make the case in practical terms. Tie federal statistics to funding decisions, program design, and measurable economic outcomes.
  • Problem-Finding: The Key to Applied Economic Research Leadership in the Age of AI

    Problem-Finding: The Key to Applied Economic Research Leadership in the Age of AI

    Executive Summary

    Artificial intelligence is reshaping the practice of applied economic and labor market research by automating routine analytical tasks such as data cleaning, literature synthesis, descriptive statistics, and standardized reporting. As these activities become faster and easier to perform, the profession must reconsider where its greatest value lies. The role of applied researchers will increasingly shift away from technical problem-solving and toward helping leaders identify the right problems, interpreting evidence in context, and guiding collaborative efforts to address the economic challenges that matter most to communities.

    This transition elevates the importance of curiosity, judgment, creativity, and leadership in applied research. It also highlights a critical role for the Council for Community and Economic Research (C2ER) in helping researchers adapt by ensuring our professional network members learn from one another, identifying critical emerging economic issues, and developing insight and leadership skills that members need to succeed.

    Two historical comparisons help frame the transition underway. First, the spread of the internet in the 1990s and early 2000s transformed applied research by dramatically reducing the time required to acquire data, shifting researchers’ work from data collection toward analysis and interpretation. Artificial intelligence may extend this shift by automating routine analytical tasks and allowing researchers to focus more on synthesis, judgment, and strategic insight. Second, the restructuring of manufacturing during that period illustrates how technological change can reduce demand for routine work while increasing productivity. The transformation of applied economic research may follow a similar pattern, meaning that fewer opportunities are available for researchers or that certain research skills become integral capabilities for organizational and program leaders.

    As a result, applied researchers must evolve from technical problem-solvers into problem-finders who identify the most important economic challenges facing their communities and guide leaders in finding the best evidence-based solutions to act on them. Researchers’ value will lie in combining multiple data sources, interpreting evidence within local context, and translating analysis into practical guidance for policymakers and practitioners.

    In this environment, C2ER must be more than a provider of tools or training. It must be the place where applied researchers turn for inspiration, motivation, and professional growth and where they sharpen curiosity, creativity, leadership, and critical thinking while learning from peers. By strengthening this professional network, C2ER can help researchers lead efforts to make their communities better places to live, work, play, and do business.

    Background

    As AI advances, routine analytical tasks in applied economic development research are increasingly automated, elevating the importance of interpretation, integration, and strategic insight. Applied researchers must adapt both their methods and their professional roles. Younger researchers, in particular, will need to develop technical fluency more quickly so they can serve as “quality agents,” ensuring that AI outputs are valid and reflect the nuance of real-world economic conditions.

    Research on the evolution of knowledge work points to a similar shift. Jones finds that as knowledge becomes more accessible, researchers spend less time gathering information and more time interpreting and applying it (Jones, 2009). The diffusion of the internet illustrates this transformation. Online data sources and digital archives did not eliminate applied research jobs, but they fundamentally changed them by shifting effort from data acquisition toward analysis and insight. AI represents the next stage of this transition. As organizations integrate automated systems into their workflows, demand for routine analytical tasks declines while demand for oversight, evaluation, and higher-level thinking increases (Microsoft, 2024).

    Economists describe the internet as a “general purpose technology” (or GPT) that reshaped how work is organized across industries. Its most important effect was to reduce the cost of acquiring and transmitting information (Goldfarb, 2019). As access to data expanded, the value of professional work shifted toward interpreting larger volumes of information, integrating multiple sources, and applying insights into decision-making. Today, the scale and complexity of available data exceed what individuals can manage without assistance, making AI an essential tool for analysis. As a result, AI is likely to drive a similar shift across white-collar occupations, including applied economic development research. Early evidence suggests that entry-level roles (often centered on routine analytical tasks) may be the most affected (ADP Research Institute, 2024).

    A parallel can be seen in the restructuring of manufacturing in the late twentieth century. Automation and globalization reduced demand for routine production work, and manufacturing employment fell from roughly 19 percent to 10 percent of the workforce during the 1980s and 1990s  (U.S. Bureau of Labor Statistics). Between 2000 and 2020, automation eliminated 1.7 million additional manufacturing jobs, even as new roles emerged in other sectors  (Hicks, 2015). Manufacturing did not disappear, but it became more productive and more technically demanding, requiring fewer workers with higher skill levels. Similar dynamics may emerge in applied research.

    AI is already automating many of the routine tasks that consume a large share of research time, including data collection and cleaning, literature reviews, descriptive analysis, and standardized reporting. The efficiency gains are significant. AI-assisted systematic reviews can dramatically reduce workload, and organizations report measurable time savings and faster productivity growth where AI is widely adopted (Zhihong Xu, 2025; IBM Institute for Business Value, 2023).

    At the same time, many core elements of applied research remain difficult to automate. Human researchers retain clear advantages in stakeholder engagement, trust-building, and interpreting economic data within local context. They translate analysis into policy-relevant insights that reflect political, institutional, and community realities. Qualitative research, community engagement, and ethical oversight of AI-generated outputs all require human judgment.

    In this environment, applied researchers must reposition themselves from data producers to insight interpreters. Their value will lie less in assembling datasets and more in identifying the right questions, synthesizing diverse information, and translating analysis into decisions that help communities respond to economic change. This shift places a premium on capabilities that machines cannot replicate, including problem identification, contextual interpretation, and stakeholder engagement.

    From Problem-Solvers to Problem-Finders

    Historically, applied economic researchers have been valued for their ability to solve analytical problems. Researchers received a question, assembled the necessary data, conducted analysis, and produced an answer. Artificial intelligence changes this equation. AI systems can increasingly perform many forms of technical analysis once the problem is defined. What AI cannot do effectively is identify which problems matter most to humans. The comparative advantage of applied researchers will increasingly lie in identifying the most important questions facing their communities, engaging with stakeholders, and framing issues in ways that lead to meaningful solutions. In this sense the profession is shifting from problem solving to problem finding.

    That means the successful researchers must acquire a transforming set of skills that rely less on technical competence in key analytic tools and more on understanding context, nuance, and importance to the leaders who are asking questions. Core skills will include:

    1. Integration of multiple data sources. Economic development decisions increasingly require combining traditional public datasets with real-time and administrative sources such as job postings, supply chain signals, workforce program outcomes, and firm-level data. AI tools can merge these sources, but they cannot accurately weight their value. Human researchers can better evaluate their reliability and build more credible analytical frameworks that connect them.
    2. Forward-looking interpretations. Research must expand beyond backward-looking analysis. Traditional time-series analysis explains what happened in the past. AI enables forecasting, scenario testing, and short-term projections that practitioners increasingly require to guide real-world decisions about workforce demand, industry shifts, and regional growth.
    3. Evidence validation. It is widely known and understood that AI systems often produce hallucinated sources, faulty correlations, or misleading interpretations. Applied researchers must serve as quality control actors who test assumptions, verify sources, and explain uncertainty.
    4. Local knowledge and nuance. The value of place-based expertise is the contextual advantage it provides. AI systems rely primarily on electronic data and cannot replicate lived experience or deep local knowledge. Researchers who understand the institutional structures, industry networks, and workforce dynamics of particular regions remain indispensable.
    5. Communication and policy translation. Decision makers need analysis that connects data to practical action. Researchers who clearly explain economic trends and their policy implications will remain highly valuable.

    Beyond these core skills, adapting to this environment will require new technical and professional capabilities. Researchers should develop fluency with AI-assisted analytics tools, including large language models for exploratory analysis and prompt engineering. Data engineering skills will grow in importance as researchers work with APIs and multiple data pipelines. Programming literacy in languages such as Python or R will help researchers integrate AI tools into reproducible workflows. The key skill will be to understand what AI can do and what it fails to do effectively.

    At the same time, complementary skills will become more valuable. These include qualitative research methods, participatory engagement with communities, narrative analysis, and expertise in data governance and algorithmic fairness. Economic decisions are shaped by human behavior, assumptions, and institutional context. AI models cannot fully capture these conditions. Applied researchers will increasingly advise clients on responsible data use, privacy, and ethical evaluation of AI-generated analysis.

    How C2ER Can Help

    The Council for Community and Economic Research (C2ER) must step forward to help the members of our field prepare for these changes and ensure that both new and mid-career researchers remain at the forefront of this transition.

    As we develop our 2026 work program, C2ER is committed to developing more training programs focused on AI in applied economic research. Workshops will address topics such as AI-assisted labor market analysis, integration of real-time data sources, and machine learning approaches to forecasting regional economic trends. These programs will emphasize practical applications relevant to economic development practitioners.

    This role is important because access to AI training remains uneven. Surveys show that while roughly 44 percent of employers report offering AI upskilling programs, only about one-third of workers say they have access to them (Boston Consulting Group, 2025).

    C2ER’s more important role may be to continue its efforts to strengthen the professional network as we adapt to these changes. In an AI-enabled research environment the most valuable capability may be identifying emerging problems early. C2ER’s network of state, regional, and local researchers provides a platform where members can compare experiences, identify emerging economic challenges, and share insights about which issues deserve attention in their communities.

    C2ER also can support better problem identification and prioritization. Through conferences, working groups, and collaborative research, C2ER helps researchers surface the most important economic questions facing their regions. These conversations help researchers move beyond technical analysis toward deeper engagement in shaping economic solutions.

    C2ER also seeks to work with leaders in our field to assess existing standards for responsible AI use in research and offer our own interpretation of these tools. Shared guidance on transparency, methodological disclosure, and validation of AI-generated results will help maintain credibility with policymakers and clients.

    Another important role for C2ER is facilitating shared tools, methods, and infrastructure. AI tools and analytical infrastructure can accelerate research workflows. C2ER can help members experiment with these tools, evaluate their usefulness, and share best practices across the network. Many state and regional research offices lack the resources to develop advanced AI tools independently. C2ER will collaborate through its membership to coordinate shared data pipelines, analytic templates, benchmarking tools, and prompt libraries.

    Peer learning will remain central to this effort. Research on workforce upskilling shows that employees adopt new technologies most effectively through experiential learning and peer exchange rather than formal instruction alone (McKinsey Global Institute, 2023).

    Finally, C2ER has an invaluable role in helping to maintain standards and improve data infrastructure. C2ER plays a critical role in maintaining the integrity of applied research by promoting responsible AI use and advocating for strong federal statistical data systems. C2ER will continue advocating for strong public data infrastructure. AI systems rely on high-quality underlying data. Federal statistical agencies such as the BLS and BEA provide essential state and regional datasets that make applied research possible. Protecting and strengthening this infrastructure remains critical.

    The history of industrial automation offers an important lesson. Technological change rarely eliminates entire fields of work. Instead, it reshapes them. Manufacturing did not disappear when automation arrived. It evolved into a more technologically sophisticated sector requiring different skills. Likewise, the internet transformed our access to data; AI now transforms our ability to manage and manipulate it in ways that are often well beyond our individual capabilities.

    Applied economic development research is likely to undergo a similar transformation. Researchers who treat AI as a tool that expands their analytical capacity will become more productive and more valuable. Those who remain focused primarily on routine analytical tasks will face greater pressure.

    The opportunity for the field is to combine AI-enabled analysis with contextual judgment, stakeholder relationships, and ethical oversight. Only human researchers can provide these, and C2ER can help ensure that applied researchers make the transition to these new roles successfully.

    References

    ADP Research Institute. (2024). Labor Market Trends in AI-Exposed Occupations.

    Boston Consulting Group. (2025). AI at Work Global Survey.

    Goldfarb, A. a. (2019). “Digital Economics”. Journal of Economic Literature, 57(1), 3-43.

    Hicks, M. J. (2015). The Myth and Reality of Manufacturing in America. Ball State University Center for Business and Economic Research.

    IBM Institute for Business Value. (2023). Global AI Adoption Index. 2023.

    Jones, B. F. (2009). “The Burden of Knowledge and the ‘Death of the Renaissance Man’: Is Innovation Getting Harder?”. Review of Economic Studies, 76(1), pp. 283-317.

    McKinsey Global Institute. (2023). Generative AI and the Future of Work.

    Microsoft. (2024). The New Future of Work Report.

    U.S. Bureau of Labor Statistics. (n.d.). Employment by major industry sector, 1980–2000.

    Zhihong Xu, X. Z. (2025, November 4). Machine Learning-Assisted Systematic Review: A Case Study in Learning Analytics. Education Sciences, 15(11), 1488.

     

     

  • Proposed Federal Budget Signals Cuts to Core Economic Data Capacity

    Proposed Federal Budget Signals Cuts to Core Economic Data Capacity

     

    The FY 2026 Budget Appendix includes staffing shifts across the three federal agencies most critical to economic and labor market intelligence: the U.S. Census Bureau, Bureau of Economic Analysis (BEA), and Bureau of Labor Statistics (BLS). These changes may have serious implications for the quality, timeliness, and availability of the data that state and local leaders rely on every day.

    BLS Budget Would Move and Shrink the Agency in the Face of Increased Demand for Labor Data

    The headline budget proposal is at BLS where the President’s proposal would move the agency from the Department of Labor. Already co-located with Census and BEA, this proposal would cement a proposal first introduced during the Obama Administration of aligning all three agencies under one Undersecretary’s office at the Department of Commerce. This represents a huge lift because Congressional oversight agencies for BLS are different than those at Commerce. Furthermore, many of the legal statutes governing the agency and its data management systems are distinct from Commerce. This would require significant legislative changes well outside the budget process.

    Still, the President’s budget proposal would reduce BLS staffing from its current authorized level 2,175 to 1,999 FTEs—a decline of 8%. At a time when communities are asking for more local labor market data to plan for workforce transitions, identify talent gaps, and support employer engagement strategies, cuts of this magnitude could limit BLS’s ability to respond to growing demand for substate and real-time labor market intelligence. All three agencies have been clear that their first focus is on national data to produce the Principal Federal Economic Indicators (PFEIs), a set of key statistical series used to monitor and assess the current state of the U.S. economy. Many of BLS’s cooperative state programs contribute to these indicators, but key popular programs like the Occupational Employment and Wages Statistics do not, meaning that they could become vulnerable to resource constraints.

    BEA Faces Deep Reductions

    If the President’s budget were approved, BEA would see the sharpest drop in total staff (17%), from 488 to 406 FTEs. This level of reduction raises questions about the agency’s capacity to maintain the integrity of the national income and product accounts, regional GDP data, and supply chain analytics—especially as new users depend on this information to navigate economic disruptions. BEA has already announced some changes to its local data programs as a result of past budget decisions and staffing losses.

    At the Census Bureau: A Shift Toward Reimbursable Work

    The Census Bureau’s overall staffing situation is a bit more complicated. In fact, the budget proposal would allow for slight growth in headcount from 8,408 to 8,637 full-time equivalent (FTE) positions. This change, however, would be driven entirely by an increase in reimbursable projects. That modest gain masks a decline in the core workforce responsible for the agency’s most vital functions. Staff supporting current and periodic surveys would drop by 2%, from 5,862 to 5,744 FTEs. Meanwhile, reimbursable positions would grow from 2,546 to 2,893. It is likely that these cuts could mean the end of some specialty surveys although the agency is committed to maintaining the quality and reliability of the decennial census and American Community survey. These trends reflect a growing reliance on short-term, externally funded efforts—at a time when consistent, high-quality federal data programs are more important than ever.

    For all three agencies, actual staffing may be even lower than projected due to early retirements, voluntary separations, and a hiring freeze that has made it harder to retain experienced analysts and technologists. Agency leaders are already grappling with staffing levels that have declined by 10-20 percent since late 2024.

    Why This Matters

    Federal statistical agencies provide the foundation for evidence-based policymaking in economic development, education, workforce, and infrastructure investment. These proposed reductions, particularly those affecting core programs, could make it harder for public and private leaders to track progress, identify needs, and make informed decisions. They also raise concerns about the long-term health of the nation’s statistical infrastructure.

    C2ER will continue to analyze the implications of these proposals and work with partners to ensure that federal data resources remain strong, consistent, and accessible for the communities that depend on them.

    Read the FY 2026 Budget Appendix here. These data points are pulled primarily from pages 192-196, 662-663 of the Appendix to the President’s FY 2026 Discretionary Budget Request released on 5/31/2025.

  • Study: New Data Sources Are Transforming Workforce and Economic Development Research

    Study: New Data Sources Are Transforming Workforce and Economic Development Research

    In the fast-changing landscape of workforce and economic development, new data sources are unlocking fresh insights into how communities grow, how workers move, and how businesses thrive. From linked historical records to real-time credit card transactions, these innovations are revolutionizing regional and urban economics, helping economic and workforce development policymakers make more data-driven decisions.

    A recent NBER study by economists Ran Abramitzky, Leah Platt Boustan, and Adam Storeygard explores the most exciting advances in regional data and how they are being applied to workforce and economic development. Here’s what you need to know:

    Tracking Workforce Dynamics with New Data

    • Historical Census Linkages: Advances in data matching allow researchers to track individuals and families across generations, shedding light on workforce mobility, the impact of early-life economic shocks, and long-term labor market outcomes. This helps communities understand how historical economic shifts continue to shape today’s workforce.
    • Real-Time Job Listings & Business Openings: Platforms like Lightcast (formerly Burning Glass) and LinkedIn provide granular insights into job postings, occupational transitions, and demand for skills in different regions. These datasets allow workforce professionals to anticipate employer needs and shape training programs accordingly.
    • E-Commerce and Digital Transactions: Data from companies like Visa, JPMorganChase, and Alibaba provide a clearer picture of small business dynamics, consumer spending patterns, and local economic activity, offering an alternative to traditional surveys.

    Measuring Economic Development and Regional Growth

    • Mobile Phone & Commuting Data: GPS and smartphone location data—collected from transit cards, ride-hailing apps, and cell tower records—provide a more detailed picture of where workers live and work, how they commute, and how access to transit affects job opportunities.
    • Satellite Imagery & Nighttime Lights: In areas with limited official economic data, researchers are using satellite imagery to measure urban expansion, infrastructure investments, and regional economic productivity. Nighttime light emissions, for example, are a strong proxy for GDP growth and business activity.
    • Business Formation & Firm Location Data: New sources of administrative data, including tax filings and real-time credit card transactions, provide more precise measures of where businesses are forming, how they survive, and what drives local entrepreneurship.

    Why This Matters for Economic Development Professionals

    These advances are not just academic—they’re practical tools for building stronger economies. Cities and regions can now use these data sources to:

    ✅ Refine workforce strategies by identifying high-demand jobs and skill gaps in real time.
    ✅ Improve infrastructure planning by analyzing commuting data to pinpoint transit needs.
    ✅ Measure the impact of economic policies by tracking business openings, closures, and spending patterns.
    ✅ Enhance site selection analysis with deeper insights into local consumer behavior and workforce movement.

    As economic development professionals, we must stay ahead of the curve by leveraging these cutting-edge data sources. By integrating them into workforce planning, business recruitment, and regional policy decisions, we can create stronger, more resilient communities.

    Want to learn more? Check out the NBER study or our C2ER.org for resources, data tools, and research updates.

  • Economic Development Items to Watch in the American Rescue Plan

    C2ER’s Executive Director Ken Poole summarizes the economic development impacts on the 2021 American Rescue Plan:

    The American Rescue Plan proposed by President Biden and currently being considered in the U.S. House would provide $1.9 trillion in economic relief.  While the proposed $1,400 stimulus checks and the national vaccination plan are getting most of the headlines, the plan has quite a few other items to help small businesses and support intermediaries in struggling communities through several provisions. Nine House Committees are completing their mark-up of bills associated with the American Rescue Plan proposal.  Most relevant to business and workforce agencies are provisions that:

    • Provide $50 billion in small business loans and grants (through the Small Business Committee bill).  Of that amount, $35 billion is allocated to leverage about $175 billion in public and private small business loans and investment through low-interest loans and venture capital.   This total includes:
      • $15 billion in Economic Injury Disaster Loan (EIDL) grants to help more than 1 million small businesses to help them get back on their feet.  These funds would be targeted to businesses with 10 or fewer employees that experienced extreme revenue losses in low-income areas.
      • $25 billion in grants to independent restaurants and other food and drinking establishments. $5 billion of the funding would set aside for very small establishments, those with less than $500,000 in 2019 revenues.
      • $7.25 billion to supplement the Payroll Protection Program (PPP).  The bill would also expand PPP eligibility to digital news agencies and 501(c) non-profits, allow non-profits with multiple locations (such as Goodwill or United Way) to apply for assistance. Nonprofits organized under 501(c)4 would continue to be excluded from PPP eligibility.
      • $1.25 billion for the Shuttered Venue Grant Program designed to help small entertainment businesses and cultural institutions.
      • $1.5 billion to the Small Business Administration (SBA) for administrative support, including expenses tied to managing PPP, Shuttered Venues, and independent restaurant programs as well as support for a $175 million Community Navigator pilot program that provides funding to SBA resource partners (e.g., SBDCs, WBCs, and SCORE Chapters) as well as states and localities that are helping business owners learn about COVID-19 relief programs.
    • Provide $10 billion through the Financial Services Committee to renew the State Small Business Credit Initiative (SSBCI) program. 
      • Operated at the U.S. Treasury in collaboration with the states and territories from 2011-2017, the 2010 SSBCI program used $1.5 billion to leverage more than $10 billion in private investment through 2017.
      • $10 billion allocated to the 2021 iteration of the SSBCI program (nicknamed SSBCI 2.0). The main part of the program would allocate $6.5 billion to state agencies in a similar fashion to the 2010 program.  An additional $500 million would be allocated to Tribal governments to implement their own program, and states would receive another $1.5 billion to invest in socially and economically disadvantaged businesses based on state-submitted plans that engage Community Development Financial Institutions and minority depository institutions. Another $1.0 billion would be made available as incentives to states that perform well in achieving their investment goals. The final $500 million is allocated for technical assistance to ensure program success, including an authorization for Treasury to transfer some portion of the funding to the Minority Business Development Agency for this purpose.
    • Provide $3 billion for a bottom-up approach to addressing economic recovery through the Transportation and Infrastructure Committee bill.
      • Allocate $3 billion to the Economic Development Administration (EDA) available until September 30, 2022 for grants to fund community-based economic development efforts responding to and recovering from COVID-19.  At least $450 million of the funds would be tied to job losses resulting from impacts on the travel, tourism, or outdoor recreation sectors.

    Other items of interest include:

    • Provide $350 billion in emergency funding for state, local, and territorial governments to pay front line public workers, distribute the vaccine, scale testing, reopen schools, and maintain other vital services. This language appears to be broader than the original CARES Act funding for states and localities.
    • Provide $30 billion into the Disaster Relief Fund to address persistent shortages in personal protective equipment and other critical supplies such as glass vials and test reagents, and an additional $10 billion investment in expanding domestic manufacturing for pandemic supplies.
    • Provide $75 million for Occupational Safety and Health Administration enforcement and grant funding in support of a COVID-19 Protection Standard, including $10 million to the Susan Harwood training grant program to help keep vulnerable workers healthy and safe from COVID-19.
    • Reimburse employers with less than 500 employees for the cost of emergency paid leave through a refundable tax credit. This would extend the emergency paid leave program through the Families First Coronavirus Response Act from March to September 2021, close loopholes for the largest and smallest employers, and expand paid sick and family leave to help parents with caregiving responsibilities if their schools or care center are closed.
    • Extend assistance for workers who have exhausted their regular unemployment compensation benefits and for unemployed workers who do not typically qualify for unemployment compensation benefits.
    • Provide an additional $30 billion in rental and critical energy and water assistance to help renters and small landlords make ends meet.
    • Provide a $25 billion emergency stabilization fund for child care providers to expand access to high-quality, affordable child care.
    • Allocate $15 billion through the Child Care and Development Block Grant program for those who experienced a job interruption and cannot afford child care.
    • Provide $4 billion to the Substance Abuse and Mental Health Services Administration and the Health Resources and Services Administration to expand access to behavioral health services.

    The Timeline for Debate and Passage

    Most bill markups occurred in the House before President’s Day. The House Leadership is planning to vote on the full package by mid-March. The House Budget Committee plans to finalize the package of bills for vote on a final bill during the week of February 22nd, with a hope of forwarding to the Senate before the end of February. The Senate is expected to act soon thereafter under rules associated with budget reconciliation.  Those rules allow the measure to pass with a simple majority in the Senate. The Democratic Congressional leadership hope that the Senate can debate and pass the legislation for signature by March 14.

     

  • SBA Entrepreneurial Development Programs Offer Key Resources through the CARES Act

    This blog is the second in a series that will highlight opportunities for OEA grantees to sustain and enhance work undertaken in OEA-funded programs by leveraging new programs and funding related to the COVID-19 pandemic response.

    Program Description 

    The Small Business Administration’s (SBA) Office of Entrepreneurial Development (OED) manages several technical assistance programs that provide training and counseling to small business. The network includes Small Business Development Centers (SBDCs), Women’s Business Centers (WBCs), and the Office of Entrepreneurship Education (OEE) which works closely with SCORE volunteer counselors.  With 63 lead Centers and more than 900 service locations, SBDCs represent one of the most extensive networks of small business counseling resources across the nation. Local SBDCs provide free one-on-one consulting and low-cost training to small businesses on business planning, accessing capital, marketing, complying with federal and state regulations, developing new products, and finding new customers in the US and abroad. They are complemented by over 100 WBCs that work closely with women-owned enterprises to ensure they have access to resources, including improving their ability to access federal contracts. OED works with 348 SCORE chapters representing more than 13,000 volunteer business counselors and a free online learning portal, SBA’s Emerging Leaders Initiative. 

    What the Stimulus (CARES Act) Does 

    The CARES Act provides $240 million to SBA’s Office of Entrepreneurial Development for SBDCs and WBCs. The Act stipulates that 80 percent of the funds go to SBDCs and 20 percent to WBCs. The Act also waives any match requirement for these additional funds. The funding essentially doubles available funding to the Centers with additional resources targeted to addressing the anticipated increase in demand for information and help to navigate available small business resources.   

    Program Parameters 

    Funding is being provided to SBDCs and WBCs through a noncompetitive Funding Opportunity Announcement process that requires Centers to describe how they will provide services to meet the spirit and intent of the legislation.1 Centers are expected to enhance their capacity to undertake specific activities addressing COVID–19, such as responding to calls from businesses, conducting webinars, and hiring specialized counselors. Centers may also work through partner organizations in delivering relevant services to small businesses. 

    The funds can be used for educating, training, and advising impacted small business owners and employees on how to: 

    1. Access and apply for Federal resources; 
    2. Reduce and prevent the transmission of COVID–19 and other communicable diseases; 
    3. Address the potential effects of COVID–19 on the supply chains, distribution, and sale of products of covered small business concerns; 
    4. Manage telework and provide remote customer service to reduce possible transmission of COVID–19; 
    5. Mitigate risks associated with cyber threats due to increased remote customer service or telework practices; 
    6. Overcome the consequences of reduced travel or outside activities on covered small business concerns during COVID–19 or similar occurrences; and  
    7. Identify other business practices to mitigate the economic effects of COVID–19 or similar occurrences. 

    Currently, most Centers are reacting to the immediate needs demanded by the public health crisis. The new funding is for a 12–month grant that should allow Centers to structure partnerships designed to increase company awareness about approaches to ensure company survival and resiliency through more strategic business recovery planning and implementation efforts. 

    Discussion and Implications for OEA Grantees 

    At least seven OEA grantees have engaged SBDCs as part of their effort. However, this network is an underutilized resource that could be used to help defense-related business owners access information and develop skills to support their enterprises. With increased flexible funding available, OEA grantees could potentially leverage even greater involvement from SBDCs and WBCs to help defense-related companies learn more about best practices in addressing a variety of challenges. Furthermore, SBDCs and WBCs are seeking new team members and partners to help address the massive increase in demand for SBDC training and counseling services resulting from the COVID-19 crisis. Opportunities include: 

    Cybersecurity awareness training. At least two OEA grantees have already engaged SBDCs to assist in providing cybersecurity awareness to small businesses that are currently or potentially could be in the defense supply chain. Beyond DOD requirements, COVID-19 has created a greater demand for using remote work locations, expanding the deployment of web-enabled robotics, and increasing the use of video conferencing. These all created potential risk points for cybersecurity threats, and they suggest a greater need for SBDCs and OEA grantees to partner to mitigate cybersecurity threats and provide counseling to small businesses (including defense-related companies that are not manufacturers). 

    Assistance with Accessing SBA and Treasury Capital Programs. Many defense-related companies rely largely on traditional financing mechanisms, including bank lending and available contracts to manage cash flows. With slowdowns in production due to disruptions in supply chains and worker safety concerns, defense-related businesses are struggling to ensure that they have the cash flow required to continue operating. DOD has demonstrated a willingness to address some capital needs for its industrial base, but companies farther down the supply chain tiers are less likely to benefit from those policies. SBDCs provide an invaluable resource in helping defense-related companies continue operating and meet the needs of DOD customers. SBDCs provide expertise in available financing options and hands-on help with putting together financial packages for available Federal and state programs that address immediate capital needs as well as existing lending and equity investment programs that could help defense-related companies to access the capital needed to take advantage of growth opportunities. These programs are particularly relevant for OEA grantees promoting innovation in new product development and entrepreneurial efforts to create or expand businesses that could offer new defense-related products or services. 

    Worker Safety and Productivity Improvement Training Associated with Re-opening after COVID-19 Closures or Slow-Downs. Many defense-related companies continued operating in some capacity throughout the COVID-19 crisis while others significantly reduced or shut down production entirely. To get back to full productivity will require ensuring that defense-related companies are taking appropriate measures to protect their workers from the coronavirus. Several organizations have created recovery frameworks designed to help companies get back to full production. These frameworks identify several steps in hazard mitigation designed through improved housekeeping and sanitation standards, redesigning production spaces to increase social distancing, providing protective equipment to reduce virus spread, and restructuring administrative requirement to reduce potential transmission points. The goal is to increase worker confidence that their workspace is safe. SBDCs, working closely with other partners such as MEP Centers, can be invaluable partners in helping to share information with defense-related companies about best practices and guiding companies through one-on-one counseling designed to assess and benchmark efforts to reduce COVID-19 related worker hazards. 

    Resiliency and Business Continuity Training and Awareness. While some companies had business continuity plans, others had to create them on the fly.  Now would be a good time to work with defense-related companies to review what worked and what didn’t for them during the COVID-19 crisis. The goal is to help document the efforts taken and set up more structured plans for potential future disruptions, including the potential for future waves of the COVID-19 virus. For instance, companies must review their supply system to anticipate potentially significant disruptions (something that companies did not previously plan for) and develop plans that recognize greater risks as they review their priorities, develop safeguards, and reduce the potential impact for disruptions. To remain competitive, most businesses will need to consider strategies that address cash flow and revenue sources, distribution and fulfillment, as well as supply chain contingencies in ways that reduce the impact of future regional flare ups of COVID-19 or other man-made or natural disasters on their operations. SBDCs provide a potential resource to gain these insights and to develop best practices that could be shared with companies through structured training programs. In addition, SBDCs could help with developing social media, blog posts, and related communications to help defense-related companies better prepare for future disruptions. 

    Assistance with Matching Entrepreneurs Willing to Create Companies to Meet Supply Chain Gaps Caused by COVID-related Disruptions. COVID-19 is creating a plethora of opportunities for entrepreneurs that can meet new demands for health mitigation and prevention equipment for defense-related firms to possible defense-related product design changes that would protect the warfighter or reduce the need for face-to-face worker for production line defense workers. As entrepreneurs explore these opportunities and test new ideas, they will need a variety of help in designing business plans, developing business models, and finding start-up or product develop support. SBDCs could be a vital force multiplier in reviewing these entrepreneurial ideas and supporting expanded pitch competitions or other options to prepare these ideas (and the businesses supporting them) for potential DOD procurement opportunities. Through their expanded stimulus resources, SBDCs have pre-existing support systems in place and will have expanded staff and partner networks to support these activities in collaboration with OEA grantees. 

    Next Steps 

    SBDCs and WBCs are already able to expand their activities based on a “pre-award” condition that allows reimbursement for COVID-19 related activities before grants are put into place (expected in May and June 2020). OEA grantees seeking to collaborate can reach out to their state SBDC lead Center or to relevant Women’s Business Centers to explore opportunities like those suggested above. In addition, models of how OEA grantees were already working with SBDCs before the COVID-19 crisis can offer some ideas. Those include efforts in Indiana, Texas, Georgia, Hawaii, California’s CASCADE project and Colorado Springs (which leveraged the SBDCs and PTACs to help provide cybersecurity awareness training and some cyber assessments), and Kern County, CA. 

  • President’s Budget Overview for Economic Development and Statistics

    Economic Development Related Cuts

    • The Budget proposes to eliminate funding for many independent agencies, including: the Appalachian Regional Commission; the Delta Regional Authority; the Denali Commission; the Northern Border Regional Commission.
    • Eliminates the Economic Development Administration, which provides small grants with limited measurable impacts and duplicates other Federal programs, such as Rural Utilities Service grants at the U.S. Department of Agriculture and formula grants to States from the Department of Transportation. By terminating this agency, the Budget saves $221 million from the 2017 annualized CR level.
    • Eliminates the Minority Business Development Agency, which is duplicative of other Federal, State, local, and private sector efforts that promote minority business entrepreneurship including Small Business Administration District Offices and Small Business Development Centers.
    • Saves $124 million by discontinuing Federal funding for the Manufacturing Extension Partnership (MEP) program, which subsidizes up to half the cost of State centers, which provide consulting services to small- and medium-size manufacturers. By eliminating Federal funding, MEP centers would transition solely to non-Federal revenue sources, as was originally intended when the program was established.
    • Reduces duplicative and underperforming USDA programs by eliminating discretionary activities of the Rural Business and Cooperative Service, a savings of $95 million from the 2017 annualized CR level.
    • Eliminates the Advanced Research Projects Agency-Energy, the Title 17 Innovative Technology Loan Guarantee Program, and the Advanced Technology Vehicle Manufacturing Program because the private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies.
    • Expands DOL Reemployment and Eligibility Assessments, an evidence-based activity that saves an average of $536 per claimant in unemployment insurance benefit costs by reducing improper payments and getting claimants back to work more quickly and at higher wages.
    • Decreases Federal support for DOL job training and employment service formula grants, shifting more responsibility for funding these services to states, localities, and employers.
    • Helps states expand apprenticeships, an evidence-based approach to preparing workers for jobs.
    • Eliminates funding for the Essential Air Service (EAS) program, which was originally conceived of as a temporary program nearly 40 years ago to provide subsidized commercial air service to rural airports. EAS flights are not full and have high subsidy costs per passenger. Several EAS-eligible communities are relatively close to major airports, and communities that have EAS could be served by other existing modes of transportation. This proposal would result in a discretionary savings of $175 million from the 2017 annualized CR level.
    • Eliminates funding for the unauthorized TIGER discretionary grant program, which awards grants to projects that are generally eligible for funding under existing surface transportation formula programs, saving $499 million from the 2017 annualized CR level. Further, DOT’s Nationally Significant Freight and Highway Projects grant program, authorized by the FAST Act of 2015, supports larger highway and multimodal freight projects with demonstrable national or regional benefits. This grant program is authorized at an annual average of $900 million through 2020.
    • Eliminates funding for Community Development Financial Institutions (CDFI) Fund grants, a savings of $210 million from the 2017 annualized CR level. The CDFI Fund was created more than 20 years ago to jump-start a now mature industry where private institutions have ready access to the capital needed to extend credit and provide financial services to underserved communities.
    • Achieves $12 million in cost savings from the 2017 annualized CR level through identifying and eliminating those SBA grant programs where the private sector provides effective mechanisms to foster local business development and investment. Eliminations include PRIME technical assistance grants, Regional Innovation Clusters, and Growth Accelerators.

    Statistics Related News

    • Provides $1.5 billion, an increase of more than $100 million, for the U.S. Census Bureau to continue preparations for the 2020 Decennial Census. This additional funding prioritizes fundamental investments in information technology and field infrastructure, which would allow the bureau to more effectively administer the 2020 Decennial Census.
    • Consolidates the mission, policy support, and administrative functions of the Economics and Statistics Administration within the Bureau of Economic Analysis, the U.S. Census Bureau, and the Department of Commerce’s Office of the Secretary.
    • Reduces funding for USDA’s statistical capabilities, while maintaining core Departmental analytical functions, such as the funding necessary to complete the Census of Agriculture.