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Manufacturing jobs being created through innovation

Projects are underway in Illinois initiated by innovators and entrepreneurs, that could help President Trump reach his goals to bring back employment and the manufacturing industries in the Rust Belt.

University of Illinois Senior Andrew Knight wants to use his degree in agricultural engineering to start his own manufacturing company. By working at the Champaign-Urbana Community Fabrication Laboratory, he is moving closer to that goal. “Having access to this place is great,” he said. “I can focus on design and development.”

The Maker Movement is underway in Illinois, led by Andrew Knight and like minds, who have an appreciation for reaching out to the world and manipulating it to better suit our needs.

The Maker Movement has gone from simple Do-It-Yourself projects to people creating small-batch manufacturing hubs that can turn into job-creating businesses. This process has been significantly boosted by innovations in 3D printing combined with local communities willing to help create something that will solve a need.

Dr. Quincy K. Brown is the program director of STEM education research at the American Association for the Advancement of Science. She said President Trump could benefit from these innovators in an attempt to foster innovation and new manufacturing growth, similar to what President Obama did with the creation of the National Week of Making and holding a Maker Faire at the White House. “Being able to shout it far and wide that this is a priority. This is something that the president thinks is important that the country really needs. That’s powerful.”

Brown said the nation’s governors can use their platform to better communicate the benefits of a career path in the manufacturing industry. She says Gov. Rauner and others need to help dispel the old myth of a manufacturing career as toiling away in repetitive and dirty conditions. “The governor would be able to say it in terms that the parent would understand so that when their kids come to them saying they want to do this, they’ll say, ‘You know what? That’s really cool,’” she said.

Illinois is in much need of new manufacturing work within the state. While neighboring states are hiring new talent, Illinois shed 11,000 manufacturing jobs last year, according to the Illinois Department of Employment Security.

Florida dedicating $19.5 million to Space Florida

The Department of Transportation in Florida are investing $17 million for the Launch Complex 36, which will be home to Blue Origin’s New Glenn reusable rocket launches.

Blue Origin’s founder, Amazon and Washington Post owner Jeff Bezos, originally announced the plan to use the location in September 2015. Bezos said his company would match the government’s contributions, bringing the total budget for refurbishing the launch complex to $34 million.

Two new rocket models late last year have been announced by Blue Origin, which will be named after the late astronaut John Glenn. Glenn became the first American to ever orbit the Earth in 1962. Blue Origin will open a 750,000 sq. ft. factory for the production and development of new rockets at the Kennedy Space Center in the future, with a goal start date of 2018. Blue Origin has committed to spending $200 million on the facility and is hoping to employ upwards of 330 people from the local economy.

During a public announcement of the project in September 2015, Bezos said “We’re not just launching here, we’re building here,” Florida Governor Rick Scott attended the meeting, where Bezos continued, “Our ultimate vision is millions of people living and working in space.”

The budget includes $19.5 million for “operations and job creation funding for Space Florida,” the public agency within the state department for transportation which deals with the local space industry around Cape Canaveral. It is estmiated the $19.5 million would be divvied up as follows; $10 million for operations, $7 million for new business financing, $1.5 for space-related tourism (as opposed to actually exploring above the atmosphere), and $1 million to beef up R&D in a partnership with Israel.

Recently, Bezos provided an email update regarding the development of the company’s new BE-4 rocket engine. The email addressed some of the progress Blue Origin had made in its design.

Bezos stated “For even more performance, you can add one or more boost pumps ahead of the main pumps. We’ve done that on the oxidizer side of our BE-4 engine. Our Ox Boost Pump (OBP) design leverages 3-D additive manufacturing to make many of the key components,”. He noted the second iteration of the OBP was now being tested.

“The housing is a single printed aluminum part and all of the stages of the hydraulic turbine are printed from Monel, a nickel alloy. This manufacturing approach allows the integration of complex internal flow passages in the housing that would be much more difficult to make using conventional methods. The turbine nozzles and rotors are also 3-D printed and require minimum machining to achieve the required fits.”

Idaho Policy Changes to Fuel Innovation

The Research and Business Development Center and the Idaho National Laboratory (INL) have worked together to quantify INL’s economic impact over the past three years. The recent report on the lab’s economic contributions in Fiscal Year (FY) 2016 demonstrated the substantial benefits nuclear research brings to Idaho.

Innovation at INL is credited with a boost of more than $142 million in one year alone. This reinforces the importance of fueling innovation by making the legislative and policy changes necessary to enable more advancements in nuclear energy.

Members of Congress are looking to introduce the Nuclear Energy Innovation Capabilities Act (NEICA) which would make it easier for America to remain innovative in the nuclear sector.

The legislation would allow the U.S. Department of Energy (DOE) to prioritize partnering with private innovators to test and demonstrate advanced reactor concepts. The measure authorizes the creation of a National Reactor Innovation Center that brings together the technical expertise of the National Labs and DOE to permit the construction of experimental reactors. The Nuclear Regulatory Commission (NRC) would partner with the DOE in this effort, which would enable the NRC to contribute its expertise on safety issues while also learning about the new technologies developed through the Center. This measure strengthens the abilities of national laboratories to partner with private industry to prove the principles behind their ideas.

If you’re an Idaho company that conducts research and development to create new and innovative products or processes then you may be eligible for the state R&D tax credit. Click here to speak with a Swanson Reed specialist to find out more information.

Hawaiian Company Selected for Innovation Incubator

Honolulu-based Ibis Networks has been selected for Wells Fargo’s Innovation Incubator, the first and only Hawaii company chosen for the program.

Ibis Networks and fellow Energy Excelerator startup Geli were among 10 companies chosen for the bank’s five-year, $10 million startup program, which looks to further energy efficiency by accelerating sustainable commercial-building technologies.

The startups in the program will be given up to $250,000 in cash and in-kind technical assistance to advance their technologies.

The companies will also have the opportunity to beta test within Wells Fargo’s real estate footprint.

The Wells Fargo Innovation Incubator program launched in 2014 and is funded by the Wells Fargo Foundation and co-administered by the U.S. Department of Energy’s National Renewable Energy Laboratory.

Ibis recently closed a $2.5 million series A financing, which attracted investors such as Ulupono and EEx Fund One. It has also partnered with Honolulu-based Energy Excelerator and Hawaii Energy to install 1,300 Intelisockets across three University of Hawaii campuses.

Geli, which develops software products that design, automate and manage energy storage, recently closed a $7 million series A and is currently working on designing its Hawaii project as a part of Energy Excelerator’s demonstration track.

All Hawaiian companies conducting research and development and creating innovative products or processes are eligible for the state R&D tax credit. To learn more, contact a Swanson Reed specialist by clicking here.

Hawaii Looking To Promote Innovation to Benefit Local Industries

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Legislators in Hawaii are requesting for the development of a working group dedicated to blockchain technology.

If passed, House Bill 1481, first filed on 25th January, would lead to the creation of a group dedicated to researching “the uses of and best practices regarding blockchain technology”.

The long-term goal of the bill is to seek ways for the technology “to benefit local industries, residents and the State of Hawaii”.

If the bill is passed, the working group would be assigned the duty of preparing a report that investigates potential use cases specific to Hawaii, while also presenting information on how the state itself could leverage the tech.

The bill’s backers suggest that the state should look to the tech as a means for encouraging visitors from abroad to spend – thereby boosting the local economy.

“Digital currencies such as bitcoin have broad benefits for Hawaii. A large portion of Hawaii’s tourism market comes from Asia where the use of bitcoin as a virtual currency is expanding,” the bill reads. “Hawaii has the unique opportunity to explore the use of blockchain technology to make it easier for visitors to consume local goods and services and to drive the tourism economy.”

Hawaii offers an R&D tax credit in which any individual, partnership or corporations may receive for conducting qualifying activities. To find out more of the R&D credit, please contact a Swanson Reed specialist by clicking here.

Hawaii’s Emerging Agriculture Technology Industry

The farming industry in Hawaii is turning to all things tech.

“We’re seeing robots that can plant, water and seed a 10-by-10 plot, pick strawberries and shake mac nut trees. There are infrared sensors to show you how hot the plants are and how much water they need, and drones that can fertilize in perfect amounts,” says Cole Santos, co-founder of Maui Makers.

AgFunder, an online marketplace in ag company ventures, says investment in agriculture technology companies reached $4.6 billion in 2015, double the previous year.

The majority of technology-driven innovation targets valuable large-scale agribusinesses, primarily in the Midwest and along the West Coast, but things are different in Hawaii. The local farming scene is in transition, resulting in a slower adoption of new technologies and processes, says Joshua Uyehara, president of the Kekaha Agriculture Association board of directors.

“As the plantations have gone away, there’s been a void. It’s been a struggle to figure out our agriculture industry. As tech and ag progress in the world around us, we need to figure out how to step back into an industry that hasn’t been standing still. How do we jump back on the treadmill?”

There is a growing community focused on developing innovative solutions for smaller farms that also address Hawaii’s clean energy and food security goals. Among those active in the area are the state’s Energy Excelerator, Blue Startups, XLR8UH and Ulupono Initiative.

“Energy and agriculture are Hawaii’s two biggest advantages as well as our two biggest pain points,” says Tarik Sultan, managing partner at XLR8UH. “We need energy innovation because we’re paying four times more than everyone else. We need agricultural innovation because we have limited lands and resources. In the case of a catastrophic event, Hawaii wouldn’t last two weeks.”

Hawaii offers a tax credit to local companies performing any type of research and development. Thus, the farming companies turning to technology and innovative solutions would receive a credit from the government for doing so. To find out more about the federal and state R&D tax credit, contact one of our specialists by clicking here.

Why Local Companies Should Claim the Georgia R&D Tax Credit

Using the Georgia R&D tax credit against payroll withholding

Legislation allows Georgia R&D tax credit to be used against payroll withholding taxes in Georgia.

How does this work, you ask?

If the company is in net operating losses, they can use the credit against payroll tax. Another benefit of the credit is that if the company has exhausted all of the other credits against 50% of their taxable income and cannot use the R&D credit, they can use the credit through payroll withholding tax reductions.

Unique features of the Georgia R&D tax credit

Unused R&D tax credit does carry forward up to 10 years.
There is a requirement to file an application with the Georgia Department of Revenue at least 30 days prior to filing the company’s Georgia income tax return, including extensions.
The company must wait to receive approval from the State to take advantage of this payroll tax withholding adjustment.
A business enterprise that has established eligibility for the research tax credit is allowed a tax credit equal to 10% of the excess of the qualified research expenses over the base amount on their state taxes.
The credit taken in any one taxable year cannot exceed 50% of the business enterprise’s remaining Georgia net income tax liability after all other credits have been applied.

If you are interested in claiming the state or federal tax credit, click here to speak with a Swanson Reed specialist.

Georgia R&D Credit Extremely Beneficial to Local Businesses

The Federal R&D Tax Credit can be a huge game changer for many U.S. companies, but many business don’t realize that the majority of states offer their own R&D tax credit which can be just as beneficial as the federal credit.

In fact, the credits are quite similar. Activities that qualify for the federal R&D credit can also qualify for a state level credit. Notably, the state of Georgia has one of the most taxpayer friendly R&D credits. The Georgia credit can be up to 10 percent of qualifying expenses, which, for some taxpayers, is a better benefit than the federal credit. However, the benefit of the Georgia credit doesn’t stop there. For companies that don’t have any Georgia income tax liability, an election can be made to utilize the credit against Georgia payroll tax withholding.

Many taxpayers underestimate the state credit and aren’t completely aware of why it is so beneficial. Essentially, the withholding benefit allows companies to monetize the credit. To illustrate, rather than remitting withholding payments to the state each payroll cycle, the company uses the credit against the withholding amount and keeps the “cash” instead. For further benefit, the credit doesn’t expire, and it can be used each payroll cycle until all of the credit has been utilized, resulting in some companies’ “eliminating” the state payroll tax withholding payment for the entire year.

The state R&D credit is often overlooked, but shouldn’t be ignored. The varying state credits should be considered if looking to relocate a company or if an expansion is planned. In some states, even a move to a different county within the same state could result in a difference in state R&D credit available.

Contact a Swanson Reed representative for further assistance on state or federal credits or click here to find out what type of benefits your state offers.

Governor Carney first executive order focused on business

Governor John Carney signed his first executive order on Wednesday introducing supportive measures for Delaware’s startup community.

The executive order establishes a public-private partnership within the Delaware Economic Development Office (DEDO) and tasks a 14-member working group with finding out how the state can help Delaware’s businesses thrive and attract more talent, as well as “support innovation,” according to a release.

The group will work closely with entrepreneurs and deliver a set of recommendations to the governor this coming April.

“Delaware’s economy is in a period of significant transition, and we must adjust our efforts to compete with other states and countries for jobs and talent,” said Carney in a statement.

The initiative is promising for the startup community, which has long been calling for more support from the state.

“I look forward to seeing who is on the working group and how well they understand the needs of the startup community as a whole,” said Mona Parikh, managing director of Start It Up Delaware and the tech community liaison for UD’s Horn Program in Entrepreneurship, who was present at the signing of the order. “Or how much of an effort they put forth to understand its needs, if they are in fact not well-versed in them.”

DuPont investing $200M in Delware research center

The existing DuPont Experimental Station in Wilmington, Delware will soon be renting out their newly redeveloped research space.

During remarks at a Delaware state chamber of commerce meeting, CEO Edward Breen told the room that “Our board of directors just approved a plan to spend $200 million to modernize and upgrade Experimental Station. We’re going to optimize many of our labs, we’re going to set up networked collaboration for our scientists, for our customers.”

Breen elaborated that the upgrade would help allow third-party companies to come in.

“They are going to have to be science-based companies. I’m hoping that there are some with contiguous things that DuPont is interested in. But we really want to use it as an incubation center,” he said.

DuPont’s Experimental Station has a remarkable history of innovation. Opened in 1903, the space was started to help transition DuPont from producing gunpowder and explosives to more chemicals. The research center became the birthplace of some of chemistry’s most notable achievements including Nylon, Kevlar, Mylar polyester and Neoprene — the first synthetic rubber.

The entire center includes more than 50 buildings on 250,000 square meters of space.

Typically around 2,000 scientists now work at the center. But after the $130-billion Dow-DuPont merger was announced in December 2015, the company laid off around 200 scientists at Experimental Station. The layoffs were part of a workforce reduction in Delaware that totaled 1,700 positions.

Some critics have argued that the proposed merger with Dow could be the “death of innovation” but DuPont has announced that it plans to spend $1.7 billion on R&D this year — up from $1.6 billion in 2016.

Several other companies already use space at Experimental Station including Chemours, a DuPont spinoff, and Hygenia, a life sciences company.