Oregon Plays to its Strengths

n many ways, Sophorn Cheang has been doing the work of economic development long before she took over as Director of Business Oregon. Before being appointed by the governor to this role in early 2021, Cheang had already forged an impactful career by working to remove barriers to business success.

Cheang previously worked as the Director of the Office of Diversity, Equity and Inclusion for the former administration. In that role, Cheang was responsible for creating policies that eliminate bias and other barriers facing Oregon business owners. She also co-coordinated the Governor’s Racial Justice Council.

Today, as head of Business Oregon, she leads a team focused on creating more economic development opportunities for Oregonians while working to attract new businesses to the state. We recently caught up with Cheang for this interview.

Oregon is ranked No. 1 in university licensing of new technologies. How does this fact give Oregon a competitive advantage in both business formation and business attraction?

CHEANG: Oregon is proud to foster the growth of our best and brightest minds. There were 1,245 licensed technologies that came out of Oregon universities in 2022, the most recent year of available data. That is more than double the next closest state: Washington. Most of these licensed technologies came out of the University of Oregon, accounting for 88% of Oregon’s statewide total.

These university licenses are an important metric for innovation as many of these licenses have the potential to be spun off into their own business in Oregon, leading to new business formation and startup activity. Oregon’s universities are a hot spot for innovation and help to spur economic development across the state and nation.

When Intel announced in March that it planned to invest $36 billion into its semiconductor operations in your state, how did that news impact your overall economic development ecosystem?

CHEANG: As a result of the passage of Senate Bill 4 in 2023, Oregon solidified its intentions to invest heavily in the continued growth of the semiconductor industry. By establishing the Oregon CHIPS program and semiconductor industrial land program, our semiconductor firms can feel more confident in their investments in our state.

“By establishing the Oregon CHIPS program and semiconductor industrial land program, our semiconductor firms can feel more confident in their investments in our state.”
— Sophorn Cheang, Business Oregon Director

How are manufacturers able to take advantage of Oregon having no sales tax?

CHEANG: Having no sales tax is a great advantage that we offer to businesses in Oregon. It presents cost savings for companies that produce their products within the state and then export them to other markets.

People often think of the West Coast as an expensive place to do business, but several rankings show that Oregon compares favorably to the national average in several business cost categories. What do you emphasize when you talk to companies based in other states?

CHEANG: We talk about our strengths:

• Compared to the other West Coast states, Oregon offers lower land costs, lower utility costs, a lower cost of living and lower housing costs. Across the board, Oregon is a more cost-effective state to build your business in.
• Oregon’s ideal Pacific Coast location provides particularly easy access between U.S. West Coast and Asian markets.
• Oregon has tremendous assets, is well positioned in key future industries, and is able to attract talent from across North America and internationally.
• Compared to other states, Oregon consistently ranks in the top tier across key measures of economic strength and prosperity.
• Oregon’s unique geographies, industries and communities create a thriving environment for businesses and residents. Beyond its natural beauty, Oregon’s quality of life, talented workforce, competitive costs and access to the Pacific Rim provide a strategic advantage to companies operating here.
• Oregon attracts young, creative workers. Many of them move to Oregon for jobs in our increasingly competitive business services group. Oregon is an emerging market for professional and technical services, such as consulting; advertising and public relations; architecture; graphic and industrial design; and market research. Business services employment grew 58% faster in Oregon than it did in the U.S. over the past 10 years.

One of your target industries is food and beverage. How has that sector changed since the onset of the global pandemic?

CHEANG: Building on Oregon’s diverse range of agricultural products, employment in the food and beverage industry has grown quickly, increasing 34% over the past decade. It is an important growth industry for rural Oregon and has one of the most diverse workforces of Oregon’s target industries.

The food and beverage sector accounted for nearly 36,200 jobs in 2023 — roughly 1.8% of Oregon’s total covered employment. The concentration of food manufacturing jobs in Oregon is roughly 30% higher than the national average; and the concentration of beverage manufacturing jobs is nearly double the national average.  

Employment levels are down 835 jobs (-2.2%) from peak employment in 2019. Most of the loss in employment over the past several years can be attributed to the closure of the NORPAC plant in Stayton, which laid off nearly 500 workers in October of 2019. There were also employment losses by other firms as they navigated the COVID-19 pandemic. The past year employment was largely flat with the state adding only around 138 jobs (+0.4%).

What does Oregon do to attract and grow foreign direct investment? Has your state recorded any big FDI wins lately?

CHEANG: Oregon has a strong history of attracting foreign investment and exporting locally made products and services, which has contributed to the state’s economic output. The most recent data from 2022 indicates that Oregon’s GDP reached $227.9 billion in 2021, a 5.4% increase from 2020. Since 2015, Oregon has attracted 92 foreign direct investment projects, which resulted in creating over 6,600 jobs.

Our international recruiters and in-country representatives help attract FDI to the state. Hundreds of foreign-owned businesses in Oregon hire thousands of employees, and those investments are vital to our growing economy. Specifically, we have seen an increase in semiconductor firms and tech companies in Oregon.

We proactively work internally and with foreign contractors to target FDI prospects who are well aligned with Oregon’s competitive advantages. We focus on companies that are exploring a West Coast presence in the semiconductor industry, bioscience industry, clean-tech and other target industries.

“We focus on companies that are exploring a West Coast presence in the semiconductor industry, bioscience industry, clean-tech and other target industries.”
— Sophorn Cheang, Business Oregon Director

Daimler Truck North America LLC is expanding its presence in Oregon with the construction of 80,000 to 90,000 square feet of cutting-edge facilities in Portland to support innovation, research, development, and testing of electric and hydrogen fuel-cell trucks. Business Oregon provided a forgivable loan of $700,000 from the Strategic Reserve Fund to support this expansion. Daimler Truck is a significant private sector anchor business in Portland for electric mobility, leading the way in transforming the industry from diesel truck fleets to zero-emission vehicles while providing quality clean-technology jobs in engineering and manufacturing.

DTNA is a major employer in the state with over 3,500 employees in Oregon. The presence of these positions not only benefits the individuals employed but also creates a significant boost to the local economy and creates additional indirect and induced economic benefits throughout the metro region and state. The company’s highly skilled engineering positions alone are expected to generate over $1.7 million per year in state income tax revenue.  

Are there any state incentive programs that you feel give Oregon a competitive advantage when you are recruiting companies to the West Coast?

CHEANG: Oregon is focused on helping companies expand their operations, and we would rather see companies open additional sites in Oregon than leave another state. Our team at Business Oregon is here to help businesses meet their growth needs and understand why Oregon may be a good fit for their business.

What is happening in the Oregon Broadband Deployment Program? Can local businesses benefit from this?

CHEANG: The Oregon Broadband Office oversees four distinct grant programs worth $857.4 million that will be used to close Oregon’s digital divide. Indirectly, Oregon businesses will benefit, as nearly 172,000 residential locations currently unserved and underserved gain high-speed reliable broadband access for work, health care, education and social connection.  

How would you describe the environment for small businesses in Oregon?

CHEANG: Oregon is focused on growing our local businesses. We are there from start to finish to assist them with funding and partnerships. The small business sector in Oregon is supported by assistance from Business Oregon’s 80-plus programs. We assist small businesses with funding opportunities, education and training, partnership growth, technical assistance, export market development strategies and more.

Business Oregon awarded $9 million in grants to 5 organizations to establish Centers of Innovation Excellence, which are focused on technology commercialization and applied research and development.
— Source: Business Oregon

Here is some information about a few of these programs:

• Business Oregon awarded $1.825 million in funding from the Rural Opportunity Initiative (ROI) program to 19 Oregon communities. ROI is Business Oregon’s strategic effort to empower rural communities to support entrepreneurs and small business growth through financial support, innovative partnerships, network expansion, capacity support, and access to business development resources. ROI strengthens entrepreneurial ecosystems within and across Oregon’s rural communities with a particular emphasis on diverse populations and low-income households.
• Business Oregon awarded grants to 25 organizations that provide technical assistance to under-served and under-resourced small businesses across the state. The grant program had a total of $4.7 million available to help organizations expand their reach and scale up the assistance provided to these small businesses and entrepreneurs. Common types of technical assistance for small businesses include business plan review and assistance; marketing and brand identity; technology services; access to capital; and business coaching, among many other critical small business services. Services provided by these organizations help ensure that economic recovery and growth is equitable and does not perpetuate long-standing disparities.
• Business Oregon awarded $9 million in grants to five organizations to establish Centers of Innovation Excellence (CIEs). CIEs are public-private partnerships focused on technology commercialization and applied research and development, helping to advance technology and research into marketable products or process improvements in targeted industries.