BUSINESS REPORT: Mississippi Aims To Move To The Head Of The Creative Class

Peavy Electronics headquarters in Meridian, MS.

By Jenny Vickers
From the January/February 2012 issue

On January 10, 2012, Phil Bryant was sworn in as Mississippi’s 64th governor. In his speech, Bryant said his economic development and jobs strategy for 2012 includes for pushing for more energy production in Mississippi, including natural gas, bio-fuels, solar power, clean coal technology and tertiary oil recovery, which Bryant says could create thousands jobs.

According to the Mississippi Economic Council (MEC), the state chamber of commerce, the new governor will also use its recently published “Blueprint Mississippi” as a research tool to develop new economic policies and initiatives. In addition to promoting health care and diversity, improving education and making more money available for business expansions, the plan calls for more support for the state’s creative economy, an under-recognized, yet vital component to Mississippi’s economy.

Gov. Bryant announced he will name Jim Barksdale, former Netscape CEO, as interim head of the Mississippi Development Authority (MDA), the state’s lead economic and community development agency. Barksdale’s first goal will be to review the structure of the MDA and help select a permanent boss.

Gov. Bryant replaces Haley Barbour, who served as governor of Mississippi for the past eight years. During his tenure, Barbour and his team realigned economic development and created thousands of higher paying jobs, enacted comprehensive tort reform, reorganized job training efforts and led the state through one of the worst man-made disasters in American history, the BP oil spill.

Clean Energy Moves to Mississippi’s Front Burner

Although the state in the past has “lacked significant policy support for renewable energy” (according to an American Council on Renewable Energy report), Mississippi has been successful in attracting renewable energy manufacturers with favorable tax incentives.

Mississippi’s Clean Energy Initiative provides incentives for companies in the clean energy manufacturing, data center and aerospace industries, three sectors that have demonstrated the potential for significant growth in the state in recent years. The program allows for a 10-year income, franchise, and sales and use tax exemption. This exemption applies to companies that manufacture systems or components used to generate renewable or alternative energy, including but not limited to, biomass, solar, wind, hydro-electric generation, and nuclear power.

In addition, Mississippi’s Energy Investment Loan Program offers low-interest loans for commercial and industrial renewable energy systems ranging from $15,000 to $300,000. The program is supported by revolving loan funds whose interest rates are 3 percent below prime and have a 7-year maximum term.

These incentives are helping to energize Mississippi’s emerging green economy with dozens of renewable energy projects that are creating thousands of new jobs.

In November 2011, multinational conglomerate GE officially opened its new central logistics center for renewable energy components in Olive Branch, Mississippi. The facility is part of GE’s strategy to further improve customer response times throughout North America as more wind and solar energy projects are developed and existing power facilities require maintenance.

GE Energy’s renewable energy services group will use the new logistics center to distribute replacement wind turbine parts and solar technology components. Located in a 212,880-square-foot section of a 452,743-square-foot building, the space is more than three times larger than the previous DeSoto County location of GE’s logistics operation.

The new center is located near a FedEx hub facility, which will expedite faster, easier distributions.

“GE’s decision to move into the Olive Branch facility and establish a new, expanded, integrated renewables logistics center advances our goals to provide excellent lifecycle service to our customers throughout North and South America,” said Diarmaid Mulholland, general manager of wind services for GE’s renewable energy business.

GE joins other companies down south already engaged in renewable energy development, including Stion, which is building a 100-megawatt solar production line in Hattiesburg, creating 1,000 jobs; Soladigm, which is manufacturing smart windows at its plant in Olive Branch, creating more than 300 jobs; and Twin Creeks Technologies, which is manufacturing crystalline silicon solar panels at its plant in Senatobia, creating 500 jobs.

Mississippi’s biomass resources are ranked sixth in the nation, yet remain largely untapped. They hold great potential for the expanded use of biomass heating and production from next generation fuels such as cellulosic ethanol.

The state is home to six biodiesel plants and one bioethanol plant, and plans have been announced to build four commercial scale cellulosic ethanol facilities, which would bring 71 mGy of next generation biofuels online in 2011 and 2012.

In January 2011, Enerkem Inc. was awarded an $80 million loan guarantee from the U.S. Department of Agriculture to construct its waste-to-biofuels project in Pontotoc, Mississippi, which will transform Northeast Mississippi’s municipal solid waste into ethanol.

The loan guarantee is part of the USDA 9003 Biorefinery Assistance Program and follows an award of up to US$50 million from the U.S. Department of Energy, announced in late 2009 for this facility. This combined commitment from U.S. government agencies continues to bolster private sector investment and confirms that Enerkem’s waste-to-biofuel technology is a frontrunner in the development of renewable and alternative energy. The project is expected to create more than 70 new jobs.

“USDA financing for our Mississippi plant demonstrates the confidence in Enerkem as a company equipped to drive the waste-to-biofuels movement across North America and beyond,” said Vincent Chornet, Enerkem’s president and Chief Executive Officer.

In May 2011, KiOR, headquartered in Pasadena, Texas, broke ground at its first commercial biofuel production facility in Columbus. The company is utilizing a method of catalytic conversion to turn cellulosic feedstocks, including timber, wood waste, and sawdust, into a crude oil substitute. The company also plans to build four additional biofuel production facilities throughout the state. KiOR will invest more than $500 million in Mississippi and has committed to create 1,000 direct and indirect jobs in the state.

In June 2011, BlueFire Renewables completed the first phase of construction at its Fulton, Mississippi plant. Once construction is complete, the facility will be capable of producing about 19 million gallons of ethanol per year, using non-food cellulosic waste for the biofuel feedstock.

Looking ahead, if Mississippi continues to cultivate its clean energy market, it could help boost the state’s unemployment rate, which is one of the worst in the nation. According to a recent study by the Mississippi Department of Employment Security, the number of green jobs in Mississippi will grow by 18.5 percent over the next 10 years and add 9,000 new jobs to the state.

Mississippi’s Creative Economy is Growing

Mississippi is the birthplace of America’s music and has produced some of the South’s greatest writers. Today the state is home to countless artists, entrepreneurs and innovators that are not only creating a unique and cultural milieu, but also forming “creative” clusters that are making significant impacts on the state’s economy.

The concept of Mississippi’s “creative economy” is relatively new to the state. The creative economy is defined as is a portion of the economy based in original ideas that includes artists, writers, architects, website designers, graphic artists and interior designers. They include both nonprofit and for-profit entities in three areas of creativity: enterprises, communities and individuals.

To further understand this emerging sector, the MDA and the Mississippi Arts Commission (MAC) undertook a study of the creative economy, releasing its findings in August 2011. The study found that the creative economy, which has been undercounted and under-recognized, can be a major catalyst for job creation and other economic opportunities around the state.

According to the study, the size of the creative economy alone has a large and direct impact on the state’s economy—nearly 3,000 establishments responsible for roughly 40,200 jobs that are engaged primarily in the production, distribution, and marketing of aesthetically or emotionally oriented products or services.

The creative cluster employs more than the defense and security, apparel and textiles, and transportation equipment manufacturing clusters, all of which are important sectors of Mississippi’s economy. It also impacts many other sectors, such as tourism, agriculture, communications and information technologies, furniture and health care.

To help provide the public with a greater understanding of this concept, the MDA and MAC held a series of five events, called the Creative Economy Road Show, in November and December 2011.

“These Creative Economy Road Show events are excellent avenues for learning how to strengthen the creative economy in communities around the state,” said MDA Executive Director Leland Speed. “Mississippi is bursting with creativity, and our state’s creative individuals, businesses and organizations together represent an important sector of our state’s overall economy.”

Currently, the state is home to creative talent including Peavey Electronics Corporation, Viking Range Corporation, Mississippi School for the Arts, University of Southern Mississippi, Blues Heritage Trail, and more. Looking ahead, MDA and MAC will focus on further developing its creative clusters by focusing on existing strengths and looking at ways to build upon them. This, they say, could help Mississippi to further strengthen and diversify its economy and better position many of its communities for a bright and prosperous future.