11 Oct Pritzker economic plan for Illinois targets key industries
Gov. J.B. Pritzker has unveiled his much-anticipated five-year economic prescription for the state. It’s ambitious. It’s big. Most important: It’s doable. After years of listening to a governor run down Illinois as a place to do business, it’s good to now have an action plan that identifies the state’s positives and contemplates ways to leverage them.
The most striking thing in the Pritzker economic blueprint is its call for emphasizing help for seven industry clusters: agriculture/agriculture tech, energy, information technology, life sciences/health care, manufacturing, transportation/logistics and small business.
These are sectors where Illinois already has key advantages. The state’s agriculture resources, for instance, are obvious—27 million acres of some of the richest farmland on the planet, for starters. The state is also home to ADM, one of the world’s biggest agribusiness players, as well as giant food companies, and is a center for commodity trading, risk management and the transportation assets needed to move farmers’ yields from the farm to points around the globe.
The Pritzker plan proposes to better integrate tech solutions to agricultural problems including “eroded soils, more pests and pathogens, degraded quality of stored grain, and lower crop yields” from global warming. The University of Illinois on Oct. 8 took a big step toward the future Pritzker envisions by launching the Center for Digital Agriculture, drawing resources from its top engineering, supercomputing, biology and ag programs.
Pritzker also wants to spend $420 million to expand broadband—mostly downstate—enlarge foreign trade zones to facilitate access by food processors and exporters, and increase joint-research efforts at academic and related facilities, such as the proposed Discovery Partners Institute in the South Loop here.
Meanwhile, with industry incumbents such as Abbott and AbbVie, unmatched brainpower at U of I, Northwestern University and the University of Chicago, and nationally respected medical centers, Illinois should be more of a life sciences and biotech hub than it actually is. One impediment, as Crain’s has reported, is a brick-and-mortar issue. Chicago has a real estate problem when it comes to cultivating companies born out of the life sciences research done in its backyard. There’s not enough high-quality lab space for them to grow, and real estate developers aren’t rushing to build more.
While biotech and pharmaceutical breakthroughs take root at area universities, the startups they spur frequently end up located elsewhere—not for a lack of local talent or venture capital, but often because they lack the specialized facilities they need to scale their businesses. To address this deficit, Pritzker’s plan encourages the development of more “wet lab” space and keep more homegrown biotech startups here in Illinois. The blueprint also calls for ensuring that small startup companies—in biotech and beyond—get access to research-and-development tax credits.
Similarly, to take the state’s IT industry to the next level, Pritzker aims to make more capital available both for small startups and expansion-stage firms through efforts such as the just-implemented new tax incentive for data centers. And on the logistics front, the recently passed $45 billion state infrastructure plan includes $492 million for the Create freight rail decongestion program that is key to maintaining Chicago’s status as the continent’s intermodal transportation capital. Another is adding and expanding intermodal logistics centers and directly connecting them to foreign trade zones.
Though some economists say trying to cherry-pick certain industries for help is a losing strategy compared to, say, across-the-board tax cuts, there’s wisdom in identifying and then nurturing certain industry clusters that could grow and pay dividends with the right kind of investment. The sectors targeted in Pritzker’s report are ones where Illinois already has some natural advantages—and that are likely to respond positively to smart investment.