Small businesses will receive state loan dollars and worker training to prepare Missouri markets for a shift to the next generation of jobs, Missouri Gov. Jay Nixon said in St. Joseph Wednesday.

A day after he proposed the elimination of 1,329 state positions in the next several months, Mr. Nixon toured St. Joseph and Kansas City to detail his economic priorities. His upcoming challenges include organizing a massive effort to rebuild the state's economy.

On the floor of a gritty sheet metal shop at Seaman and Schuske Metal Works, Mr. Nixon said he was at the epicenter of a new economy.

"Those next generation jobs will be built right here in small businesses in Missouri," the new Democratic governor said.

"Our job is to make the connectors, so we can expand their markets as we move to lighter fuel vehicles, as we move to new cars in the future, as we move to make wind turbines and looking at alternative energy," he said.

Despite falling state revenue as the economy sours, Mr. Nixon proposed increasing specialty job training and scholarships in health care.

In his first State of the State address Tuesday night, Mr. Nixon said Missouri expects federal economic stimulus money to help create jobs.

At the sheet metal company in St. Joseph, Mr. Nixon said he hopes some laid-off state employees could get the re-training to get a job there.

To "lean" the state bureaucracy, Mr. Nixon has proposed reducing or eliminating 50 state programs and cutting 1,329 state positions.

"It's very difficult decisions we've had to make," Mr. Nixon said. "There are a number of open positions that hadn't been filled, so it won't be as many as the total number."

Ahmad Safi can be reached at ahmadsafi@npgco.com. The Associated Press contributed to this story.