ARIZONA STATE SENATE
Phoenix, Arizona
appropriations; new economy
cluster; infrastructure.
Appropriates $10 million in
each of FY 2001-2002 and FY 2002-2003 from the state general fund to the
Arizona Department of Commerce (DOC) for development grants to active economic
clusters and related foundation implementing organizations.
Arizona’s economic
development strategy is based on a process known as the Governor’s Strategic
Partnership for Economic Development (GSPED).
It, in turn, is based on a cluster/foundation implementation strategy
entailing targeted marketing to attract and sustain industries that create
quality, high-paying jobs that benefit the economy.
An economic cluster is a
geographic concentration of interdependent competitive firms in related
industries that do business with each other. Each cluster includes companies
that sell inside and outside of the region as well as support firms that supply
raw materials, components and business services. Clusters develop over time and
often stem from economic foundations, existing companies and local demand for
products and services.
An economic foundation
provides the support and infrastructure that allows industry to flourish and
includes capital, physical infrastructure, information networks and human
resources. Foundations help clusters
become more competitive. As a result,
businesses within the clusters grow, creating new jobs, taxes, purchases,
volunteers and contributions for the community.
According to DOC, economic
clusters become a powerful magnet for businesses to locate in an area and
create a spawning ground for start-up companies. They create large, diverse
pools of experienced workers; attract suppliers who tend to congregate in their
vicinity for increased efficiency; and foster a competitive spirit that
stimulates growth and innovative strategic alliances. California's Silicon Valley is an example of highly developed cluster-based
economy.
According to the GSPED
Software & Information Industry Cluster and Information Technology
Association of Southern Arizona, funds made available under S.B. 1166 would be
utilized to establish new and enhance existing cluster/foundation business
development programs and would address the needs of regional implementing
organizations and metro/rural areas outside Phoenix and Tucson that are working
towards cluster/foundation development statewide.
·
Workforce Development ($3.5 million) entails
putting in place special awareness, training, job matching and related programs designed to
complement/fill gaps in other workforce development efforts now under way and
target the specific needs of cluster member firms. They would include job
career path awareness programs, school to work mentoring/intern type programs,
support of training institutes and job matching capabilities.
·
Marketing Development ($1 million) entails putting
in place a program to market Arizona's clusters/foundations and member firms
regionally, nationally and internationally.
·
Operational Development ($3.5 million) entails up
to $200,000 would be available to active statewide or regional cluster and
related foundation implementing organizations recognized by GSPED for putting
in place the staff, plans, processes and other resources required to implement
business development projects deemed necessary to improve their member company
competitiveness. Requests for such funding would require justification and
approval on a case-by-case basis.
·
Supplier Chain Development ($1 million) entails
putting in place a program throughout the state that focuses on developing
local sources of products and services deemed necessary to support the development
and growth of Arizona cluster member firms.
·
Capital Development ($500,000) entails putting
in place a promotional, support, networking and forum program that would
increase Arizona cluster member firm access, awareness and use of venture capital.
·
Telecommunications
Infrastructure Development ($500,000) entails putting in place a statewide program oriented
towards the clusters that would encourage and promote rapid
development/deployment of high speed Internet access (at reasonable cost) and
other critically needed telecom facilities. Such a program would include
assessing community telecom needs, implementing a strategic telecom planning
process, telecom infrastructure surveying and mapping and establishment of
electronic teleconferencing capabilities.
S.B. 1166 appropriates a
total of $10 million in each of FY 2001-2002 and FY 2002-2003 from the state
general fund to DOC for development grants for active economic clusters and
related foundation implementing organizations operating under GSPED and
requires the grant monies be allocated for the specified uses.
1. Appropriates $10 million from the state general fund to DOC in each of FYs 2001-2002 and 2002-2003 for development grants for active economic clusters, implementing organizations and foundations operating under GSPED. The appropriation is exempt from lapsing.
2. Allocates the grant monies for the following uses:
·
workforce
development: $3,500,000
·
marketing
development: $1,000,000
·
operational
development: $3,500,000, except that each economic cluster or related
foundation is eligible for only one grant of up to $200,000
·
supplier
chain development: $1,000,000
·
capital
development: $500,000
·
telecommunications
infrastructure development: $500,000
3. Contains a legislative intent clause.
4. Provides for a general effective date.
Prepared by Senate Staff
January 22, 2001