Facing a pandemic and devastating hurricanes in 2021, Louisiana brought in over $20 billion in new investment to the state. However, that type of success is nothing new for the head of Louisiana's Economic Development Department, Don Pierson. A former Army Ranger and a veteran of 3 gubernatorial administrations, Pierson has led the team responsible creating a more vibrant Louisiana economy for the past 6 years. Hear his thoughts on tax incentives, whether Louisiana will remain an energy state, and how the conflict in Ukraine could effect the Louisiana economy. That and more on this week's episode of Louisiana Global Gumbo!
Generously Sponsored by Louisiana Economic Development. Visit www.opportunitylouisiana.com to learn more.
Jason French 0:01
If you're going to be the top boss here, you had better anticipate high standards. In Louisiana, we expect one hell of a recruiter. We expect number one rankings each and every year. We expect big investments in facilities. And let's be clear, we expect to beat the teams from Alabama, Texas and every other competitor across the country. I suspect Brian Kelly has learned all this in the last couple months. But there's a leader already in the state who knows it very well. And that's Louisiana economic development Secretary Don Pierson. Number one rankings abound for his team. multi billion dollar facilities are rising along our coast. And he's been the point person for some decisive wins over our state competitors. Hear how he does it as Secretary Pearson joins us on this week's Louisiana Global Gumbo.
Dawn Cole 0:50
This is Louisiana Global Gumbo, a production of the World Trade Center of New Orleans. There are many ingredients necessary to build a global economic powerhouse. People, places, natural resources, entrepreneurial spirits. Join us as we explore the recipe that has made Louisiana force in the global economy. Here are your hosts, Jason French and Ed Webb.
Jason French 1:19
Well, welcome back Ed. I've been flying solo here for a couple of weeks.
Ed Webb 1:24
It's good to be back Jason that had been but it's two episodes of build on Yeah, but not intentionally.
Jason French 1:29
No, no, this is uh, this is a new activity for us. We're learning as we go. And the logistics of recording sometimes it's difficult for us all to be in the same place at the same time. So occasionally, the audience is going to get an episode with just me. They might get an episode with just you every now and then. And we'll be together quite a bit. Oh, wait a minute, that itself will never happen. No, it always be the Jason Tasi audience knows that. So that's good. Well, it's great to have you back. We've had some exciting episodes while you're gone. We had Michael hecht and then last week we had Tellurian CEO Octavio Simoes. That episode for a new podcast. Interesting fact that episode was downloaded in 42 countries. We are truly my friend International. So we absolutely are. So for the World Trade Center, I think that's a that's a great milestone that we reached an audience in 42 countries and hopefully will continue to grow this. But you know what, I suspect a press release.
That is great news. Two great speakers by the way, Hecht and Octavio great presenters, great speakers and again, this story on Tellurian. Well done, but thank you it was all of our all of our guests thus far. And Commissioner Mike strain we've really been, I think accomplishing what we wanted to do, which is talk about where Louisiana stands in the world and how of a significant economic superpower it's becoming from agriculture, energy, tourism, all the different things that we contributed, it's been an important story to tell. Well, very quickly, I'm gonna say this to the audience to the one thing you're good about doing from day one, both of us. Let the guests talk. And we'll continue to do that. And we'll continue that with today's guest. Today we have a special guest, Louisiana economic development Secretary Don Pearson.
Economic Development, when you talk about economic development, growing the economy of a state incentivizing the growth of an economy for businesses, there really is an art to it. And I think we have one of the finest practitioners of it in the country with us today. And I think you are right on target. And I walked in earlier in his office and there are three posters, who tells a 2019,2 020 and 21 each year recipient to be number one, in business growth, they're doing a phenomenal job here. Number one in foreign direct investment, the number one, the Fast Start Program, which helps companies get a trained workforce in places they they bring company, they bring operations into Louisiana, number one employee training program in the country. It's it's amazing what his department has been able to do. And it really has been a testament to his leadership. And Jason, your background too in the states it's really important for for the World Trade Center is our growth opportunities are in small to midsize companies. And this group here is really focused on that segment heavily saying let's grow these small, mid sized companies become bigger, better, stronger, more employees, more revenue coming in. And that's our backbone of the state as far as the that is our growth. Those companies and these folks here at led recognize that well, as I said last week, folks don't tune in to hear us they tune in to hear the guests. So let's go ahead and get to our interview with Secretary Don Pierce.
Well, Mr. Secretary, on last week's episode, we talked with Octavio Simoes of Tellurian, Inc, about the LNG industry and its rapid growth in Louisiana, Louisiana truly becoming an energy superpower. I know from my personal history working with you that led and you have played a big part in that. Can you talk a little bit about LEDs role in the growth of energy exports from Louisiana and how you see that industry going forward?
Secretary Don Pierson 4:55
Sure, I'd be pleased to. we're an energy state and
liberate that gas. So the fracking technology provided that. And all of a sudden, in a very short span of time, we had trillions of cubic feet of natural gas, we are also a state that's network with so many other states. So our pipeline network allows us to pull in from other gas and shale fields across America, add all that together. And the supply side of this is incredible. It didn't take long for corporations, engineers to recognize that we could take this massive amount of natural gas, do the compression process that creates LNG and export energy to the world. And that's what's transpired largely over the last six years. And can you talk a little bit about the energy transition? I know that Louisiana is not only have has Louisiana become a superpower in natural gas exports, but Louisiana is looking to take a leadership role as we start to transition to a lower emission economy. Can you talk a little bit about your department's role in that and trying to explore opportunities in maybe wind, solar and other alternative energies, just as shale gas development and LNG development were a new frontier for us a number of years ago, today, we're on another new frontier with the global climate change with the corporate focus on the reduction of greenhouse gases. It's now a mandate in many boardrooms, to come forward with plans that will secure lower co2 emissions. We recently traveled with our governor to cop 26. And we see it quite clearly that these fields of energy, energy production, and greenhouse gas reduction can coexist is just a matter of placing the engineering the technology and new methods against those outcomes to secure those. And we can talk more about that in depth if you'd like to, I think I'm interested in what the state's doing to incentivize the growth of offshore wind and solar. And is it is it become an active recruitment point for your department to bring in those industries to the state? Sure. And those are somewhat different fields in that one is around the reduction of greenhouse gases in the current manufacturing processes, refining processes, things that go into advanced chemical manufacturing that we do a lot of, but yes, we want to and we have been our state's long been involved in renewables, it just wasn't really recognized. What do I mean by that? You go back many, many years, we've taken the wood waste out of the forest, and use it at boiler fuel in our paper mills and pulp plants and other activities. So we've been working in renewables in terms of wood fiber. And today we're very strong in that in a company called Drax that pelletize is the wood waste, Rails it to the board of Baton Rouge, and then it goes globally into energy production, electricity production, as a renewable resource. We're moving into wind, and we're moving into solar rapidly as well. Secretary we hear regularly in the past year from the World Trade Center side that basically, our role in energy is changing, obviously, in Louisiana, and I've had folks come back and say, well, we're not gonna be an energy State forever. And that's something which we we look into how can you say this? So these things are happening now with LNG and the like. But where do you see some five or 10 years? I certainly strongly disagree with anybody that thinks we're going to transition out of being an energy state. Number one, we're going to continue to power the globe with our LNG production and utilize exporting opportunities are those trillions of cubic feet of natural gas. But here's the here's the key element, the hydrocarbon molecule that comes from natural gas and petroleum is the basic building block for all the things that power the quality of our life. I'm talking about all the advanced chemical manufacturing that goes on. I'm talking about composites. I'm talking about everything that you need for your car, for your house, for your healthcare to drive your hospital. You can't do these things without these basic hydrocarbon building blocks. So will we
as much oil and gas and make refined fuels. Now we're going to move to electric vehicles. However, will we walk away completely from this important feedstock? No way, this is going to remain a prominent feature in our economy for decades to come tell us about the role. And the mission of led the state and why it's so well, it's a fascinating department with a lot of different goals and missions. But if I had to break it down into fundamentals first would be the recruitment of new business to always bringing in a new business. And that's important, not just from continue to grow the pie perspective. But it's also important that we're adopting and working into the new trends, information technology, cybersecurity, digital advanced manufacturing techniques, we play a leading role in aviation and aerospace, we're launching the Boeing Space Launch System, the largest most powerful rocket ever launched in America will soon come off Cape Kennedy, built in Louisiana should have a certified Cajun stamp on the side of it. But the new industry features are important to us, we don't walk away from our existing industries or companies that have been here and part of our tax base, also are the companies that we want to continue to expand and grow. And we find a lot of our growth comes from those companies. And finally, to complete this triangle, so to speak, are all the small businesses out there that make it possible for the existing and the new companies to be successful in the marketplace, they've got to have the goods, the services, the contractors that support their businesses. So really, without all three, you're gonna be hard pressed to have a vibrant economy,
Jason French 11:44
the last two years have certainly presented their fair share of challenges to us all, both personally and professionally. But talk to us a little bit about how you a secretary of economic development how the state has handled the economic impacts of the global pandemic. And any steps you might have taken to to try to support businesses through this incredibly unique done?
Secretary Don Pierson 12:05
Well, that's a great question, we've essentially had a two phased approach to respond to the pandemic. And we put this together in a package that's called a more resilient Louisiana. And you can see the report from the resilient Louisiana commission at our website WWLP dot opportunity louisiana.com. But inside that report, you'll find that we did the triage two phases. First, the immediate actions that needed to be taken to support small businesses and to keep communities safe and provide for well being. Secondly, we go on with almost 400 pages, you don't have to read those, those are just an available appendix. But there is a much more concise document that speaks to things that will make the state stronger in the long run and cover a wide range of topics. That includes equity and diversity. It includes tax reform, almost a to z, how to make the state stronger in the longer term. And that was a hallmark response that the department Korea, it's all just about your reference silly D and your wonderful efforts in terms of promoting Louisiana, international businesses, a big player with your team a number of times with Larry Collins, and of course, just to save some seasons. But tell us more about this, what you're doing there internationally for the state. Yeah, look at the fabric of Louisiana. Look at New Orleans, one of America's very few cities, that is more than 300 years old. We were founded with international trade we were founded with
cooperation and investment coming from a lot of countries, that has not changed. In fact, the momentum has only accelerated with our investments from South Africa, from Asia, from Europe, we run the gamut, and also have strong partners in Canada and Mexico and South and Central America. We are a state that is very open to foreign direct investment, and work seamlessly to make a very profitable opportunity for these countries that choose to invest with us. And well, in fact, I've seen that Louisiana actually leads the nation in foreign direct investment per capita. Is that better? That's absolutely correct. And while it wasn't all foreign direct investment, the idea that we as a state last year in 2021, knowing that we had in the background here storms and the pandemic secured $20 billion in new investment. In fact, if you go back to 2016, we've received $74 billion in new investment in our state. Now not all of that, obviously is international, but there are a lot of strong international components in them. So switching gears for just a second, Louisiana certainly has a unique and generous tax incentive program for manufacturers to recruit manufacturers into the state. Governor Edwards made substantial changes to that program during his time in office, which let's be honest, we're not always necessarily praised by industry across the state. How do you think those changes have been received from your perspective? And do you see any other further changes needed in the system. And if we finally hit the right spot with that program, I think we're in a great place. And I'll concur with you that change is never easy. The governor wanted to see a transition from what had become, for shorthand, I'll call it a rubber stamp, and provide both transparency and a requirement that there's a commitment from the company to deliver jobs and investment to put that in the form of a contract. And look for that to be delivered as the other part that he included was local voice. And that's been a bit controversial, perhaps. But that element, I believe, to be just around a learning curve and learning a new pathway. Look, if I reach across the desk right now and take your checkbook, write myself a check and then hand you the checkbook back, you're going to object to that. And this is what's happening when you take the millage that belongs to a community and redirect it. Now, I would also argue vigorously that it's the wise and appropriate investment for a community to make. We run every one of these models, and the community comes out way ahead when they secure manufacturing in their parish.
Jason French 16:44
This podcast is brought to you by the generous support of our sponsors at Louisiana economic development. Louisiana's diverse landscapes include dense timber forests, and seafood rich coastlines. And every step along the way, you'll find a business environment that strong, diverse and ripe with opportunity. need proof? Louisiana is where NASA and higher ed partners build rockets that will transport the first women and the first person of color to the moon, where the port system delivers the most domestic cargo in the United States. And Louisiana is home to the best workforce development program in the country. See what Louisiana economic development can do for you. Visit opportunity louisiana.com today.
Secretary Don Pierson 17:29
Look at changing gears here real quick. We're going to a regular session in March. And what are your priorities for LED going the session. The key element that we would probably keep a close eye on and ask for our industry partners to also be observing is that the quality jobs program is coming under sunset. Sunset doesn't mean it goes away. It just means it stands for review. This is a workhorse program. It is highly audited, you don't get a check from quality jobs program. Until you've hired the people they've worked a year you've paid the wages. And you get a percentage of these funds rebated back to the employer. So a very fair and appropriate award for net new jobs in our state in targeted industries, not in willy nilly anything. So we believe q-j quality jobs to be an important workhorse program for companies that have been in Louisiana a long time and paying into the tax base or new companies that we're trying to bring in. So we'll be standing in front of the legislature seeking to convince them to renew the quality jobs program. But importantly, not just our voice as an insider, we need our allies and stakeholders to also be speaking to their legislators about the importance of this program.
Jason French 18:56
Mr. Secretary, having worked in the business community for some time, we often hear the comparisons of Louisiana to the big brother to the west of Texas. So I feel obligated to ask you being the head of economic development for Louisiana. How do you view the competition with the state of Texas? How do you view Louisiana measuring up in that competition? And are there things that we could do from a policy standpoint to even further improve our position? visa vie, Texas?
Secretary Don Pierson 19:25
Now, I'm glad you posed the issue. But it is a source of frustration to me in that
Jason French 19:31
and I knew it was that was one of the reasons. Yeah, I
Secretary Don Pierson 19:34
appreciate that. No, but the the comparison is, in my view, rather foolish and I try not to get drawn into that. Louisiana is 4.6 million people. The greater Houston area is 4.6 million people. We've got 1000s and 1000s of square miles to take care of and communities and a whole array of have challenges that the greater Houston area may or may not have. So then you go on to add Dallas Fort Worth, Austin, San Antonio, etc, etc. No, you're going to compare me to something that's seven times my size, this little boxers not going to get in the boxing ring. But meanwhile, we are nimble, we use the skills that we have, we use the vast natural resources that we have to really do a lot of things better than they do in Texas. And we've got speed to market permitting, for our industrial base, we've got so many ways that we're far superior to our neighbors over there. And we're happy to compete, because we'll compete and we'll win.
Jason French 20:46
Well, and I can attest to that having worked for a company that was building manufacturing facilities in Louisiana and Texas, from a permitting standpoint, from an access to be able to work with the visuals and work towards a solution. It was not always our experience that Texas was better. I know, it's a talking point that sometimes is out there. And I just wanted to, to review a little bit with an answer to Great,
Secretary Don Pierson 21:07
thanks for that seeker. And, but the other thing about Texas too, and then they're talented, I'm not gonna say this, that's not true. We know that Houston is the energy capital of the world. But there's a lot of set and forget, if you go to Texas, get in there. And then good luck to you. And in Louisiana, we're small enough to work with our congressional delegation, with our governor with our legislators, we can help companies solve problems, find resources, or get the infrastructure needs met that are problematic to them. And I'll challenge Texas on that anytime.
Jason French 21:44
Well, let me ask you just a follow up question not about Texas, but about competition in general. Obviously, we're going into a legislative session, but it's a regular session, not a fiscal session. So we're not gonna have a lot of tax policy on the table. But we did have some tax changes that just passed this last session, last fiscal session, a vote of the people, you often hear about Louisiana, from the business community, Louisiana being at a competitive disadvantage because of its tax structure. Do you believe that to be true? And a follow up to that is what policy changes would you advocate for that could make us even more competitive to other states?
Secretary Don Pierson 22:16
So regarding that question, is it true or is it false? Well, the correct answer is it depends. What kind of industry are we talking about? What are the demands and the needs of that industry? Are they heavy in energy? Are they heavy in personnel? What are the feedstocks? What are the outputs? So it really varies. And we find overall INTACS, Louisiana competes very favorably. And when they say to me, well, state XYZ doesn't have an income tax. Well, let's look at their property tax folks. And let's get all the tax cards on the table to make the comparison. And I think that's where you'll see us do reasonably well. Now, that said, we do have some challenges that we've been seeking to address and need to continue to provide the level of services and meet the education requirements, and the important things that our tax dollars pay for no specific item really comes to mind relative to tax policy. I know there are some that would want to maybe eliminate the income tax. But before he walked out the door with that amount of money, please tell me how you're going to replace it in the budget. What what's going to make up for that delta signature? How do you want to be remembered during your tenure here at the State? You've done some great things here. We've got a long road ahead of yourself yet here with us. What's your what's your biggest goal? Well, that's a great question.
I think, my line of sight on that. And that I came into the Blanco administration, in January of '05. By August, we were visited by Katrina, and things began to be very impactful in it was a whole different world of economic development that we were engaged in. And really two worlds, you know, the northern part of our state was just fine. Thank you. We were playing golf on that day. But there there were amazing heavy lifts. For us. There were trips to Wall Street to negotiate the gozone bonds and things of that nature and in support the recovery that's been fantastic New Orleans, a different place today. $15 billion dollars were the federal flood protection over there now. The Mississippi River being dredged to 50 feet, that's all the way to Baton Rouge. We are in much better position today in terms of a lot of the infrastructure elements that have come along. I learned significantly from Secretary Michael Olivier. At that time. I went on to serve under secretary Stephen Moray, and work in the general administration. And then with the Edwards administration, I was afforded the opportunity to sort of cherry pick
The best of the different worlds and to integrate thoughts and programs that I felt were important with a particular emphasis on growing the base of that triangle that I talked about a lot more in small business services. So what you want to do as a leader is to leave things better than you found them. And I'm really proud of the team that we have in this award winning department right now. We are the only state in America that's an accredited economic development organization by the International Economic Development Council, our small business programs are awarded, our capture of jobs and investment are awarded. So we've got a lot to be proud of. But I see it as this team that I've put together and the way that they're functioning. And the biggest reward for me, we'll see them continue to do that, for the next decade long after I've left the building.
Jason French 25:53
Following up to that, you know, this podcast that your department generously supports, one of the things that we have tried to do is talk about things that maybe folks outside Louisiana, maybe even folks inside Louisiana don't understand. We've talked about the fact that Louisiana is powering the world. If it was its own country, it would be the third largest producer of export natural gas, that we're feeding the world 60 or 70% of the grain, I believe is what Commissioner strain told us, that the US exports comes through Louisiana. In that vein, can you tell us what you consider the Louisiana's best kept secret or best strength that's going to continue growing the economy here?
Secretary Don Pierson 26:29
Well, there's no single silver bullet out there that really allows me to respond with with one answer. But rather, it's this continued partnership across stakeholder organizations, which is 501 C's, which is our universities and our community colleges, our workforce training system, the elected officials, we've got to have that leadership both at the state, parish and in city levels, that want to support good jobs and the pathway forward. So whether it's in our traditional industries of oil and gas, agriculture, timber, our foundation doesn't change, those are going to remain important. We've got to layer on the jobs of the future in water management and advanced manufacturing, in Digital and Information Technology. And so all of these things become important if we're going to succeed in the longer term. And look, it is a global competition. It is a national competition. businesses and companies can choose to grow where they feel like they have the best opportunity, strategically long term. We've got to continue to demonstrate that value here in Louisiana, and led that's what we do every day. We understand you said jump out of an aircraft, your military. These are your ranger, I believe correct. So there's equip you for this job because by golly, Secretary jumping out of a plane day in and day out, you jumped jumped into a lot here, obviously. Well, and you just saw President Biden pick up the phone and call 1/882 airborne division and move them over to Poland to protect the flank of the Ukraine. That's the former unit that I served with sauted, the governor, the 82nd Airborne Division, that's America's Rapid Deployment Force. Yeah, one of the ways that you get people there quickly is fly by and open the door and jump out of the airplane, which I did, I think somewhere around 60 years, 70 times, usually with about 1000 of my friends. And we'd come down and land on the ground and pack up our shoots and turn them in at a truck and then march off into the wilderness for a week or so. So yeah, the days that I spend now seem a lot less challenging, particularly on cold, rainy nights. But no, I did serve frontline in terms of not combat, but in terms of live and real world training. It's important and makes me feel proud to still be a part of units like that, that are defending our nation, and then ready to come when called.
Jason French 29:12
Well, before we wrap up, since you mentioned the recent deployment of the 82nd airborne. Let's turn to a news item of the day. Obviously, the growing conflict in Ukraine as the secretary of LED, how do you see that conflict impacting Louisiana? I saw today that Russia is in fact one of the largest importers into Louisiana. Has your department started to consider what the impact of that conflict could have here?
Secretary Don Pierson 29:36
Well, certainly there's still a lot of unknowns out there. So this is a speculation on two to 22. But we're already seeing Wall Street retreat. We're already seeing energy prices rise. That's a double edged sword every time that barrel of oil goes up. Quite frankly, it brings more money into our state coffers in production of refined fuels, there's also capacity that we can bring to bear here. But overall, the disruption, the uncertainty, challenges that are ahead, or storms for our economy, they're not fair winds to drive us forward. So a lot of concern relative to that. Then the other unknowns you have and you'll see in global experts just look at various forms of warfare as are they going to be successful tanks? Are they still appropriate on the battlefield? Helicopters in these more sophisticated air defense environments? Those kinds of things. The piece of this that's also being looked at that we have to be concerned about is cyber attacks, you know, how robustly can they shut down oil pipelines in Louisiana through cyber hacks, what happens at refineries, or ports or other infrastructure that's critical, we've long known that they are quite proficient at advancing in this, we've had some time and some abilities to improve our defenses. But certainly, it's an unknown out there. And the bottom line is business hates uncertainty, you know. So the more uncertainty on horizon for us, the harder it is to gain investment to run profitably, to know how to get from point A to point B.
Transcribed by https://otter.ai