NEW ORLEANS – Louisiana has adopted several measures that give the state and local businesses a leg up when it comes to taking advantage of national and global economic trends. Some economic factors, such as inflation pressures and monetary tightening by the Federal Reserve, lie beyond the reach of the state and local levels, but other factors can significantly boost Louisiana’s economy. For example, Louisiana passed a pro-growth tax reform package in the special legislative session which will help underpin much needed investments by national and international companies.
Since COVID, global supply chains have been realigning which directly impacts Louisiana transportation and infrastructure, especially ports and railways. Louisiana ranks second in total freight moved through the 32 active public ports so as global trade moves more towards “friend-shoring” (a growing trade practice where supply chain networks are focused on countries regarded as political and economic allies) and “near-shoring” (transferring a business operation to a nearby country, especially in preference to a more distant one), ports are impacted.
As a byproduct of economies shifting their trade to more geopolitically aligned partners, economic growth can suffer. Sometimes these realignments are necessitated by global events such as the rerouting of shipping lanes due to the Red Sea crisis that started in December 2023. According to McKinsey Global Institute, this crisis created additional costs, delays, and security complexities. The creation of the Louisiana Ports and Waterways Investment Commission will help Louisiana to weather such changes.
Another major economic trend with enormous potential to launch Louisiana as a global energy hub is the shift towards decarbonization and investments in renewable energy. This shift creates “green” jobs and augments existing energy production. So far only about 10 percent of the required deployment of low-emissions technologies by 2050 have been achieved globally.
Louisiana is poised to attract private investment in emission-reduction technologies such as carbon capture and storage (CCS). According to Louisiana Economic Development, the state offers favorable geology for CO2 injection and storage and an existing network of nearly 50,000 miles of integrated pipeline.
The rise of artificial intelligence (AI) is another major global trend which Louisiana is embracing. According to McKinsey Global Institute, by 2030 up to thirty percent of current hours worked could be automated, accelerated by generative AI (gen AI). Louisiana is poised to take advantage of this shift. In December 2024, Meta and Hub 8 both announced massive investments in building data centers in Louisiana valued at $10B and at least $2.5B respectively. Just six major tech giants, Amazon, Alphabet, Meta, Microsoft, Apple, and TSMC semi-conductors, increased their capital expenditures and R&D investments 20-fold in recent years.
To gain the full productivity benefits of generative AI and other technologies in science, technology, engineering, and mathematics, the Louisiana Board of Regents LaSTEM Advisory Council created nine regional STEM Network Centers strategically positioned across Louisiana to improve access to STEM education, participation, and advancement.
Certain fields are growing so fast that they are now called “arenas” and account for nearly half of profit creation worldwide. Louisiana can take advantage of these by investing in R&D in the areas of e-commerce, biopharma, electric vehicles, AI software and cloud services, digital advertising, semi-conductors, cybersecurity, batteries, modular construction, video games, robotics, industrial and consumer biotechnology, and nuclear fission powerplants.
According to the United Nations, micro, small, and medium-size enterprises are the lifeblood of economies around the world accounting for more than 90 percent of all businesses, roughly half of all value added, and more than two-thirds of business employment. The Louisiana Small Business Administration plays a major role in supporting small business, providing funding programs, counseling, federal contracting certifications, and disaster recovery. They also connect partner organizations, lenders, and other community groups to help small businesses succeed.
