Washington’s Department of Commerce is scaling back a key economic development program amid the state budget crunch, even as business leaders grow more vocal in warning that politicians are falling short in their support for the innovation economy.
Commerce employees working in “sector lead” roles representing key industries were notified this week that their current positions will likely end as the program is reorganized.
Among those impacted: Joseph Williams, the Information and Communications Technology sector lead, who was recognized as the Public Policy Champion for Innovation at the recent GeekWire Awards.
Williams told GeekWire he’s already fielding questions from business leaders about the changes and the impact on their industries.
Sector leads serve as liaisons between the state and private industry, helping to shape policy, attract investment, and promote job growth in key segments of the economy such as aerospace, tech, and life sciences.
The changes come just after Gov. Bob Ferguson approved a new budget Tuesday that includes several new taxes on businesses in an effort to plug a $16 billion budget shortfall.
In a statement, the Department of Commerce cited the newly approved budget and said funding for the “Industry Sector Development Program” was significantly reduced.
The sector lead roles are classified as “exempt management service” positions and are appointed by the commerce director. Joe Nguyen took over as commerce director in January, appointed by Gov. Ferguson, who was elected in November.
Nguyen and Microsoft President Brad Smith both spoke Tuesday at a Technology Alliance’s State of Technology luncheon in Seattle, where the state’s approach to economic development in recent years came under intense scrutiny.
Nguyen called for a shift in how the state fosters innovation, criticizing what he described as a “culture of complexity.”
“We say things like, we want innovation — and then we wrap it in very tight red tape,” he said, urging a move toward one of speed, accountability, and practical impact.
Smith delivered a more pointed critique, saying Olympia has neglected economic development for more than a decade.
“For the last 12 years, we have not had economic development on the agenda in Olympia,” Smith said, a length of time aligning with former Gov. Jay Inslee’s tenure. “It has disappeared.”
The Microsoft president gave a stark warning that was met with applause: “We better wake up. We better wake up.”
Smith and other business leaders have also cautioned that Washington’s new taxes on employers could weaken the tech sector.
Washington state’s Department of Commerce currently manages more than $8 billion across 485 programs, according to Nguyen.
Related: ‘We better wake up’: Microsoft’s Brad Smith sounds alarm as state enacts controversial tax plan
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