Louisiana Will Target Undeveloped Business Sectors in 2010, Moret Says

BATON ROUGE — During a time of national recession, declining employment in several Louisiana industrial sectors and a dwindling fund to recruit major business expansions, now might not seem the most propitious time to be touting an outlook of extraordinary state job growth for the future. But that is what Louisiana Economic Development Secretary Stephen Moret says the state can achieve with a successful effort to target business sectors that are undeveloped in the state, such as digital media, water management and fuel-efficient vehicle manufacturing. Speaking to the Baton Rouge Rotary Club Wednesday, Moret offered his most detailed explanation to date of his Blue Ocean strategy, which attempts to seek job growth in new areas of business rather than hoping to expand mainly through the state’s existing industries. The Blue Ocean concept, developed by researchers at the international INSEAD graduate business school, has been in vogue in recent years as a way companies should think about how to expand business. It focuses on creating new markets by exploiting new products and services rather than relying on competition in existing markets. For Louisiana, that approach is appropriate, Moret said. Chemical and paper manufacturing and agriculture will continue to be important parts of the Louisiana economy, but the jobs in those industries have been declining, he said. As a result, economists typically predict that Louisiana’s job growth will lag the nation and the southern region. For example, Moody’s Economy.com projects Louisiana will add 290,000 jobs in the next 20 years, whereas the state would increase by 690,000 jobs if it followed the average growth among peer states in the southern region. So Moret has targeted several Blue Ocean growth areas he believes can generate an additional 225,000 to 400,000 direct and indirect jobs for Louisiana by 2030. Among the targeted growth areas is digital media, which refers to the development of programs for education, health care, security and gambling as well as video games and movies. Video game company EA recently opened a testing office in Baton Rouge and Pixel Magic is opening a studio in Lafayette. The state has digital media tax credits in place and New Orleans is a good location for this sector, which has the potential to create 11,000 to 23,000 direct jobs in the state by 2030, Moret said. Another target is manufacturing of vehicles with greater fuel efficiency or alternative sources of power, which could produce 5,000 to 15,000 new direct jobs for the state. Investors behind V-Vehicle hope to secure a federally backed loan to open a Monroe plant producing a low-fuel consumption car. On that same theme, Moret foresees a broad target of industries related to energy efficiency, such as better building materials, renewable fuels and hydro and nuclear power that would potentially provide 16,000 to 27,000 new jobs for the state. Shaw Modular Solutions has a new manufacturing plant in Lake Charles for nuclear power generation components. Also in the energy sector, Moret wants to pursue job growth from new sources of natural gas, ultra-deepwater oil and gas production and enhanced oil recovery techniques for older drilling sites. In the area of water management, Moret wants to make Louisiana “the Netherlands of the U.S.”, referring to the coastal European nation that has learned to tame its intrusive shorelines and waterways. He forecasts the potential for 10,000 to 20,000 new state jobs in the sector. In the health care realm, Moret is targeting specialty hospital and medical districts, research and treatment of obesity and diabetes and pharmaceutical manufacturing. In the past two years the state has relied often on its mega-projects fund to provide incentives, such as site preparation and building costs, to lure new or expanding industries. The fund once had $415 million but only about $55 million is left unobligated. No one is expecting a general boost in the fund in the next budget cycle, when deep cuts are promised in most other state programs. Moret said the fund is “definitely an asset” for the state and that its diminishing size could affect major deals in the future, but it’s not as if Louisiana is the only state with financial constraints these days. “It helps us that other states are also limited,” Moret said.