By Business Facilities Staff
From the July/August 2018 Issue
You can chart the evolution of an emerging growth sector by comparing our annual Rankings Report with previous editions from year to year. When we introduce a new rankings category, that ranking usually is a high-level evaluation of who’s ahead of the curve. As solid metrics develop and real-time data becomes available, we let the numbers do the talking when we rank the leaders. Then, as sturdy branches blossom from the root of a new growth sector, our rankings categories also subdivide into critical subsets.
Thus a category that appeared under a simple rubric a decade ago—think Alternative Energy Leaders or Best Education—gives birth to myriad offspring that determine the pecking order for items that rapidly are moving to the top of everyone’s agenda, like the number of graduates with STEM-oriented degrees in a state or metro or (eventually) the number of wind turbines in the waters off coastal states.
In this year’s Rankings Report, our 14th annual entry, we’ve refined our cybersecurity ranking to incorporate the latest employment statistics in a red-hot field that already has created a million jobs (300,000 of which are unfilled due to the nationwide skills gap). We also take our first crack at Unmanned Aerial Systems (a.k.a. drones) and Artificial Intelligence.
As the accelerating pace of new technology makes everyone’s head spin, rest assured we’ll keep our feet on the ground and our eyes on the target as we prepare our annual rankings. And so, without further ado, here are the Best of the Best.
14th Annual Rankings: 2018 State Rankings Report
CYBERSECURITY JOBS RACE IS ON
Cybersecurity is without a doubt the hottest emerging growth sector in the United States, the nation which by far has the greatest security challenges to meet, including protecting systems vital to national defense, the financial sector and the electric grid.
In fact, the cybersecurity industry already has created a million jobs in the U.S.—a number that exposes the challenges we need to meet as well as the explosive growth of the cyber sector. There currently are an estimated 768,000 workers employed in cybersecurity, but there also are more than 300,000 cyber jobs that are going unfilled due to a lack of highly skilled workers with the specific STEM skills needed for cybersecurity work.
The ability to track cybersecurity jobs is coming into focus as this red-hot sector matures. CompTIA (the Computer Technology Industry Association), NICE (the National Initiative for Cybersecurity Education (led by the National Institute of Standards and Technology—a.k.a. NIST—a partnership between government, academia and the private sector focused on cybersecurity education, training and workforce development) and the market analytics firm Burning Glass Technologies have created CyberSeek, an interactive tool which tracks cybersecurity employment on a state-by-state as well as national level. The tool also tracts the number of online job listings for cybersecurity-related positions.
Not surprisingly, the birthplace of Silicon Valley dominates the field in our Cybersecurity Jobs Leaders state ranking, based on the estimated cyber job tallies at the end of 2017. California is followed on the leaderboard by Virginia (the top U.S. data center hub), Texas and New York, which as the nation’s financial capital has some unique cybersecurity requirements.
Cybersecurity Ventures, a leading analyst of cybersecurity market data, has predicted in its Cybersecurity Jobs Report 2018-2021 that there will be an estimated 3.5 million unfilled cybersecurity positions by 2021. Cybersecurity jobs forecasts have been unable to keep pace with the dramatic rise in cybercrime, which is predicted to cost the world $6 trillion annually by 2021, doubling $3 trillion in 2015.
The current number of U.S. cybersecurity job openings is up from 209,000 in 2015. At that time, job postings were already up 74 percent over the previous five years, according to a Peninsula Press analysis of numbers from the Bureau of Labor Statistics.
About 65 percent of large U.S. companies currently have a CISO (Chief Information Security Officer) position, up from 50 percent in 2016, according to ISACA, an independent, nonprofit, global association. Cybersecurity Ventures predicts that 100 percent of large companies globally will have a CISO position by 2021.
According to recent studies, the number of companies that report problematic shortages in the cybersecurity skills of their staff has increased steadily over the past several years. While approximately 23 percent of companies indicated such an issue in 2014, more than 50 percent face the same challenge today.
Corporations are responding by placing some or all of their IT security into the hands of third parties. Last year, Microsoft estimated that 75 percent of infrastructure will be under third-party control (i.e., cloud providers or Internet Services Providers) by 2020. MSSPs (Managed Security Service Providers) are a subset of the third-parties, and they focus exclusively on security.
Experts say outsourcing security introduces a whole new risk for enterprises: choosing the right third party which has the cyber defenders, cyber operations and security platforms to effectively combat an increasingly hostile cyberspace.
ALABAMA: BEST BUSINESS CLIMATE
In baseball, they call it “fundamentals.” It’s all about remembering how the game is supposed to be played, the little things as well as the big ones. Stuff like how to run the bases, slide into home and score the winning run. In Alabama, they’ve nailed the economic development fundamentals—maximizing resources with regional cooperation, a diverse growth strategy, world-class workforce training—and they’re running up the score with one big-ticket project after another.
Alabama is BF’s top-ranked state in our flagship Best Business Climate category. What follows is just a sampling of the success that comes knocking when you’ve got a welcome mat that covers all the bases (and basics).
In what has been hailed by state and local economic development leaders as a “legacy project”—a project likely to get significant attention from our Deal of the Year judges this fall—Toyota and Mazda selected Huntsville, AL as the site of their new $1.6 billion joint-venture manufacturing plant. The new plant is expected to create up to 4,000 new jobs, and production is expected to begin by 2021. It will have the capacity to build 300,000 vehicles annually, with production split evenly between two lines for each company to produce a new Mazda crossover model that will be introduced to North American markets and Toyota’s Corolla.
The joint venture represents an investment that Mazda and Toyota plan to make with equal funding contributions. The site for the new plant in Huntsville sits just 14 miles from Toyota Motor Manufacturing of Alabama, which produces four-cylinder, V-6 and V-8 engines for several Toyota models.
“The partnership between Toyota and Mazda will expand innovative automotive manufacturing in Alabama,” said Governor Kay Ivey. “Their decision to locate this new facility in Huntsville is a testament to the talented workforce in our state. We are proud that this partnership puts Alabama on the forefront of technology in this dynamic global industry.”
“Our investment to establish a new vehicle assembly plant with Mazda builds on the very success we have enjoyed in Alabama, where we produce engines for the North America market,” said Toyota Motor Corp. President Akio Toyoda. “Starting from 2021, I’m confident that we run a highly competitive plant, by bringing together the expertise of Toyota and Mazda as well as the excellent Alabama workforce. We are committed to becoming a ‘best-in-town company’ in the city of Huntsville and the state of Alabama, a new hometown for Toyota and Mazda.”
In an exclusive interview with BF a few weeks after the Toyota-Mazda plant was announced, AL Secretary of Commerce Greg Canfield cited several factors that influenced the decision to locate the plant in Huntsville.
“There are many reasons these two great automakers decided to locate their joint-venture manufacturing facility in Huntsville and Alabama,” Canfield told BF. “First, we have built a trusting relationship with Toyota, whose engine plant in Huntsville is undergoing its fifth expansion. In other words, Toyota is familiar with Alabama’s advantages. Drilling down into that, a major reason for Alabama’s selection is the quality of the state’s workforce and our excellent job-training programs.”
Canfield added, “To put it simply, workers in Alabama have proved they can build vehicles that are in demand around the world. ‘Made in Alabama’ is a point of pride for these workers, not just a slogan.”
Workforce development was one of several attributes that sealed the deal, Canfield added. “Alabama has a pro-business, low-cost environment that allows manufacturers to succeed and thrive,” he said. “We also have a track record of working together as a team to provide the critical support that helps companies expand their operations over the years. And while we put together a competitive incentive package, incentives would never be the sole reason that corporate decision-makers select a site for an investment totaling $1.6 billion.”
The Mazda-Toyota plant is another large jewel in a crown full of FDI-funded automotive transplants (and Tier 1 suppliers) that have propelled Alabama into a leadership position among automotive manufacturing states. Since 1993, when Mercedes-Benz put down roots in Tuscaloosa, AL has welcomed Honda, Hyundai, Toyota and now Mazda. Alabama is the fifth-largest producer of cars and light trucks nationally, also home to more than 150 Tier 1 and 2 automotive suppliers in the state.
AL’s business climate is hitting on all cylinders in several other sectors as well as automotive. Here are just two examples among many success stories in 2018:
- GE Appliances will invest $115 million to expand its Decatur Refrigerator Plant in Decatur, AL. The investment will add 255 new jobs to the plant, bringing the total number of full-time employees to nearly 1,300.
- Amazon will invest $325 million to locate its first Alabama fulfillment center in Bessemer, AL, which will create 1,500 full-time jobs in Jefferson County. The company currently operates a sortation center in Mobile, AL.
NV TOPS ECONOMIC GROWTH POTENTIAL
Perhaps no other state got clobbered worse by the Great Recession and its corresponding collapse of the housing market than Nevada. But if you look at the flip side and rank the states that mounted the most impressive recoveries from the fiscal collapse, Nevada also is at the top of the list. The depth of the economic crater Nevada fell into—the state’s unemployment rate hit a staggering 14.5 percent in December 2010—makes its climb back to prosperity nothing short of remarkable.
Nevada did much more than simply ride the rising tide of the national recovery. To put it simply, the Silver State reinvented itself; NV is still one of the world’s foremost gaming and tourism destinations, but now it’s also a rising high-tech hub. Nevada’s potential seems as limitless as the desert sky, which makes it the top-ranked state in our flagship Economic Growth Potential category.
In an exclusive BF Governor’s Report interview earlier this year, Gov. Brian Sandoval credited an aggressive economic development strategy as the critical component that turbocharged NV’s rebound. “The recession and the loss of roughly 184,000 jobs forced us to change our approach to economic development,” Sandoval said. “Our economic development objectives are to catalyze innovation in core and emerging industries, to execute our plan for technology-based growth and to work with industry to prepare sector acceleration plans.”
Nevada’s focus on technology-based growth has drawn an all-star team of top tech players to the state, including Apple, Tesla, eBay, Switch, Amazon and Hyperloop One. But this tech transformation has not been achieved at the expense of NV’s traditional core industries.
“Economic diversification does not mean abandoning our traditional sectors of tourism, mining and agriculture. Rather, other industries have expanded to establish a broader economic foundation,” Sandoval told BF.
By just about any economic indicator, Nevada’s robust economy is in a leadership position. “Today, Nevada leads the nation in private-sector job growth. We’re ranked No. 1 in personal income growth and second in population growth,” Sandoval said. “A record 1,373,700 Nevadans are now working. That’s 261,100 more jobs than the recessionary low, and these jobs are spread across a more diverse industry mix.”
A critical element of Nevada’s successful transformation into a high-tech hub can be found in the state’s willingness to match the warp speed of high-tech development with state programs that can move just as fast—what Sandoval calls sector acceleration plans.
“As [Tesla Founder] Elon Musk said, ‘you’ve created a state where you can move quickly. It’s a real get things done state,’” Sandoval told BF. “I believe other businesses leaders recognize that as well.”
Apple CEO Tim Cook was singing the praises of NV’s ‘get things done’ mantra when he and Gov. Sandoval attended a groundbreaking for Apple’s facility near Reno. “Reno plays an incredibly important role in the products and services that we provide our customers worldwide,” Cook said. “Without the data center here, none of this would be possible. We’ve invested $1.6 billion in the region today and, over the course of the next six years, we intend to invest an additional $1 billion.”
DRONE AGE LEADERS LIFT OFF
At the end of 2013, the Federal Aviation Administration designated seven unmanned autonomous systems (UAS, a.k.a. drones) test sites across the country. During the past five years, these UAS test facilities (stretching from New York and Virginia in the East all the way to Alaska) have been quietly going about their work preparing for the lift off of what is conservatively expected to become a $100-billion industry by the end of this decade. In recent months the FAA began expanding its horizons for the emerging drone industry—literally, by permitting the use of drones that will be controlled by operators who can no longer see them with their eyes (as in “over the horizon”). FAA also has expanded the test program to include the integration of drones into the airspace of a select group of urban centers.
This is all to lay the groundwork (or, more accurately, to prepare the U.S. airspace) for the first wave of commercial UAS enterprises. Ready or not, the Drone Age has arrived: by 2020, there may be as many as 10,000 commercial (and law enforcement) drones quietly zipping about above our heads.
More than five years of government sanctioned testing on UAS has illuminated the outlines of the emerging U.S. drone industry, which means it’s time for our first annual Drone Leaders (Unmanned Aerial Systems) state rankings category.
Our rankings radar has detected that New York is leading the first Drone Leaders formation, followed closely by second-ranked Nevada.
Last fall, officials in New York launched the first portion of what is planned as the first 50-mile air corridor in the nation where unmanned aerial vehicles can safely fly beyond line of sight for testing and development. The Northeast UAS Airspace Integration Research Alliance, or NUAIR, officially activated the corridor by flying a manned aircraft and a small drone in airspace over and around Griffiss International Airport in Rome, NY.
Ground-based sensors and radars developed by Gryphon Sensors, a subsidiary of Syracuse-based SRC Inc., detected and tracked both aircraft in a demonstration that allowed air traffic managers to keep the two craft a safe distance from each other.
The corridor initially consisted of a five-mile circle around Griffiss, in which special sensors and radars were able to detect small drones flying at very low altitudes—something traditional radars around airports cannot do.
The corridor is being expanded this year, with $30 million in state funding, into a 50-mile-long air space stretching from Rome to Syracuse. Officials said construction of the full network of sensors and radars is expected to start by the third quarter of 2018.
The NUAIR alliance, a collection of more than 100 for-profit and non-profit companies, is working to make Central New York and the Mohawk Valley a magnet for the emerging UAS industry.
Nevada, No. 2 in our new category, has been an FAA test site for UAV since the end of 2013 (Nevada was the only test site in the program to encompass an entire state). NV is aiming for the top: earlier this year, Gov. Sandoval applied for the FAA’s UAS Integration Pilot Program (IPP), which aims to enable the deployment of drones in populated areas.
In March, the Nevada Institute for Autonomous Systems (NIAS), manager of Nevada’s UAS Test Sites, and its NASA Unmanned Traffic Management (UTM) partners flew multiple drones over a week-long testing period at the Nevada UAS Test Site at the Reno-Stead Airport. The testing focused on airspace management technologies that will enable the safe integration of UAS into Nevada’s airspace.
NASA provided a Flight Information Management System (FIMS) research platform that will serve as a future prototype system for the FAA to use to coordinate with Unmanned Service Suppliers operating throughout the nation. Research areas of emphasis during the testing included UAS ground control interfacing to locally manage operations, communication, navigation, surveillance, human factors, data exchange, network solutions and BVLOS architecture.
During the drone test week in NV, a team from the Reno Fire Department simulated an incident with a victim experiencing severe blood loss and who needed an immediate transfusion. A multi-rotor UAS from Drone America was equipped with a container which held an actual packet of blood to be transported via drone.
“Nevada’s state-led drone initiatives, in partnership with higher education and private-sector businesses, are an innovative force in this emerging industry,” Gov. Sandoval said.
“Nevada, through the NIAS, played a significant role in the pioneering use of drones and is well positioned, thanks to several international cooperative agreements, to continue the integration of this technology into our airspace, economy and daily lives,” he added. “Based on recent tests and developments, this growth is already well underway.”
TX RULES WIND, CA STILL SUN KING
The second decade of the 21st Century will be remembered for, among other things, the arrival of the tipping point in the adoption of renewable energy. Now competitive with fossil fuels, installed solar and wind capacity has expanded exponentially in the United States during the past five years.
As of the end of 2017, there has been a total of 89,077 MW of wind power installed across 41 states, enough to power 26 million American homes.
The U.S. wind power industry closed 2017 strong, delivering 7,017 megawatts (MW) of new wind power capacity representing $11 billion in new private investment, according to the U.S. Wind Industry Fourth Quarter 2017 Market Report. Twenty-nine new wind farms totaling 4,125 MW came online across 16 states in the fourth quarter.
Texas remains the top-ranked state by far in our Wind Power (Installed Capacity) category. The Lone Star State has nearly three times as much capacity as its closest competitor—Texas would be ranked sixth in the world if it were a country. Oklahoma surpassed Iowa in the fourth quarter to rank second in the nation for total installed wind capacity, illustrating continued strong development activity throughout the American heartland from Texas north to the Dakotas.
The wind industry’s powerful growth is poised to continue in 2018 and beyond, delivering jobs and private investment to rural areas and factory towns. The pipeline of wind farms under construction or in advanced development totals 28,668 MW, a 34 percent increase compared to the end of 2016.
Wind power, the largest source of U.S. renewable electricity generating capacity, now supplies more than 30 percent of the electricity in four states—the top-ranked states in our Wind Power (Percentage of Electricity) category—Iowa, Kansas, Oklahoma and South Dakota.
The U.S. solar industry installed 10.6 gigawatts (GW) of new photovoltaic capacity in 2017, bringing the nation’s total installed solar capacity to nearly 56 GW. However, the 10.6 GW in 2017 represented a 30 percent fall year-on-year from 2016, when 15 GW was installed, according to figures from GTM Research and the Solar Energy Industries Association (SEIA).
“The solar industry delivered impressively last year despite a trade case and market adjustments,” Abigail Ross Hopper, the SEIA’s president and CEO, said in a statement. “Especially encouraging is the increasing geographic diversity in states deploying solar, from the Southeast to the Midwest, that led to a double digit increase in total capacity.”
The non-residential market grew by 28 percent year-on-year, the fourth year in a row it has recorded annual growth. The residential and utility-scale sectors, however, saw installations fall.
California remains the Sun King by far, topping our Installed Solar Power Capacity category every year since its creation, with more than three times the amount of installed capacity as second-place North Carolina.
Industry experts expect the 30-percent dip in installation last year will be remembered as a temporary hiccup in the solar sector. The SEIA is confidently predicting that total installed U.S. PV capacity will more than double over the next five years.
SEIA cites the robust pace of installations in Q1 2018 (2.5 GW, up 13 percent from Q1 2017 and the largest first quarter result tallied to date), which benefitted from many utility-scale projects that slipped from late 2017 to early 2018 due to trade case uncertainty.
California also dominated our Solar Power Employment ranking. With nearly 90,000 jobs related to the solar energy industry, the Golden State is close to having more solar power jobs than all of the other top 10 players combined.
The top five in solar power employment is filled out by Massachusetts (11,539), New York (9,012), Texas (8,873) and Florida (8,589).
Solar is becoming increasingly important to the Empire State. At the beginning of 2017, Gov. Andrew M. Cuomo announced that New York state-supported solar power had increased by almost 800 percent between December 2011 and December 2016, with nearly $1.5 billion leveraged in private investment.
- Business Facilities’ 14th Annual Rankings Report: 2018 Metro Rankings
- Business Facilities’ 14th Annual Rankings Report: 2018 Global Rankings