Vermont: Business and economic development

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As the second-least populated U.S. state, with the second-smallest GDP, in terms of business and economic development Vermont will always be David pushing to compete with bigger and more popular Goliaths. For a small state with a big personality, however, Vermont continues to punch above its weight in a number of key areas.

In 2020, Vermont became one of the few states in the nation to undertake a comprehensive economic development strategy (CEDS), which was completed with invaluable assistance and input from stakeholders around the state, and with guidance and funding from the U.S. Economic Development Authority.

The Vermont 2020 CEDS identifies twelve target business sectors with a strong likelihood of growing the state economy and enhancing the quality of life for its residents, suggesting projects and initiatives that can help each action area and sector grow, as well as anticipating future events and identifying tactics to help build resilience.

The Green Mountain State is already holding its own in economic development. Despite having a population below 650k, World Population Review rates Vermont in a first place tie with South Carolina and Utah for highest rate of employment (97.7%). The unemployment numbers in the state rank at #5, making up just 2.9% as of April 2021.

A number of business owners in the state argue that the rate of unemployment is actually too low, as they are lacking qualified skilled workers for their companies, specifically in the manufacturing industry. This has forced employers to cut back on hours and production, unable to find the help they require.

Birthplace of American manufacturing

As the birthplace of manufacturing in the United States, Vermont boasts a highly-skilled labor pool known for a strong work ethic and attention to craftsmanship. The state nurtures that workforce with a variety of specialized training programs aimed at employers.

Key to this approach is the Vermont Training Program (VTP), which partners with employers and training providers to train Vermont’s employees for the jobs of tomorrow, providing performance-based workforce grants for pre-employment training, and training for both new hires and incumbent workers.

Ranked in the top 20 states in the nation for education, businesses have continual access to new young talent from the 40,000 students spread across Vermont’s 25 highly-regarded colleges and universities, including the University of Vermont in Burlington, and renowned liberal arts school Middlebury College.

From famous ice cream making duo Ben & Jerry to all weather performance socks manufacturer Darn Tough, Vermont has a reputation for inspiring innovative products that deliver exceptional quality. These ingenious businesses foster a happy and productive workforce, making Vermont a melting pot of entrepreneurial talent.

Entrepreneurship

In 2012, Vermont was ranked 8th in the U.S. in the Index of Entrepreneurial Activity by the Kaufman Foundation, and is a hotbed of world-class R&D, sitting in first place nationally in patents filed per capita. This innovation can be seen in action at Burton Snowboards’ 3-D Rapid Prototyping facility.

Likewise, Keurig Green Mountain’s Beverage System R&D Campus in Waterbury is an impressive facility. Another home-grown Vermont product, Green Mountain Coffee Roasters made founder Robert Stiller a billionaire after becoming popular nationally when it was used in pods for Keurig coffee-makers.

Much of the state’s entrepreneurship and innovation feeds into its commitment to helping create a sustainable future both for Vermont and for the nation. Clean energy remains the biggest job creator across the U.S. energy sector, employing nearly three times as many workers as work in fossil fuel extraction and generation.

A continued focus on sustainability has seen Vermont rank consistently as the top state for clean energy jobs per capita, with more than 5% of all jobs employed by clean energy businesses, including the most solar jobs per capita since 2012.

The undisputed jewel in Vermont’s crown in terms of production is its renowned Grade A maple syrup. Vermont leads the nation in maple syrup production, with its almost 2 million gallons a year accounting for nearly half of the total U.S. syrup crop.

Agriculture

In 2000, around 3% of Vermont’s working population were involved in agriculture, which contributed 2.2% to the state’s domestic product. The primary source of agricultural income is dairy farming, which was preserved by state government legislation opposing housing development plans on relatively inexpensive land in the second half of the 20th century.

Around 900 farms producing more than $470m worth of milk each year make up roughly two-thirds of all the state’s agricultural produce. It’s little surprise then that Vermont’s most famous export is ice cream. Ben & Jerry’s Ice Cream was founded in Burlington in 1978, and subsequently sold to Unilever for $326 million in 2000.

In 2019, two-thirds of all milk in New England was produced by Vermont dairies, with a significant portion of that number being shipped into the Boston market, prompting the Commonwealth of Massachusetts to certify that Vermont farms meet Massachusetts sanitary standards.

In 2009, the state boasted 543 organic farms, with 20% of its dairy farms and 23% of its vegetable farms included in that number. By 2016, Vermont’s 134,000 certified organic acres accounted for 11% of its total 1.25 million farm acres.

A growing part of Vermont’s economy is the manufacture and sale of artisan foods and novelty items, trading in part upon the Vermont brand, which the state manages and defends. These specialty exports include Cabot Cheese, the Vermont Teddy Bear Company, Vermont Butter and Cheese Company, as well as several microbreweries and ginseng growers.

Like the other 49 states in the United States, business owners in Vermont can take advantage
of the highly competitive Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which encourage domestic small businesses to engage in Federal Research or R&D with the potential for commercialization.

In addition to national funding, the state of Vermont offers local businesses an economic incentive for business recruitment, growth, and expansion. The Vermont Employment Growth Initiative (VEGI) provides a cash payment to businesses that have been authorized to earn the incentive and go on to meet performance requirements.

Strategic advantage

Boasting a unique combination of high economic growth, an engaged community and a strong education system, Vermont is an ideal place for international companies to do business. Located in the heart of New England, the state offers a strategic advantage to companies doing business with Montreal, Boston, and New York City.

Canada, the United Kingdom, and France are just a few of the countries investing in Vermont. Foreign associates account for over 12,000 jobs in the state, with this number continuing to grow as more companies discover why Vermont is the state to invest in.

In the wake of the COVID-19 pandemic, businesses and economies have had a particularly tough year, and Vermont is no exception. However, as of June 14th 2021, there are no longer any restrictions or requirements for businesses to follow. Vermont’s high vaccination rates mean the vast majority are protected from the virus and keep it from spreading to others.

This means that once again, as it has always been, Vermont is a great place to grow a business. Whether it is a business relocating from another state or wishing to build its beginnings in Vermont, there is a plethora of available market opportunities.

The Vermont Department of Economic Development (DED) is staffed with professionals ready and willing to assist new and expanding companies, working in conjunction with Regional Development Corporations (RDCs) and other strategic partners that together can cater for all business relocation and expansion needs.

Part of the DED’s role is to counsel businesses about the various resources that are available to facilitate employee training, workforce, market expansion, facilities growth, and relocation, as well as coordinating various available programs while collecting commentary from business leaders and reporting it to state leadership.

In addition to being consistently rated among the top three states in the nation for quality of life, health, safety, and education, more than anything, Vermont cultivates innovation. From major corporate headquarters to small companies with a global reach, Vermont’s economy is diverse, full of innovation and propelled by a world-class workforce.

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