Posts Tagged ‘business incentives’
|From New Business Incentives to Hand to Hand Combat: How Smaller Cities Compete for Investment
Wednesday, January 27th, 2010
By Michelle Cammarata
When the going gets tough, how can economic developers in small cities compete for jobs and investment? For a recent research project, I learned how officials from Richmond to Boise are working harder and smarter. One local official described his work as “hand to hand combat,” reflecting the fierce battle for every project. In this war for new business, the weapons include low business costs, incentives, and a skilled workforce.
Low Costs + Diverse Economy = Stability
Omaha’s low costs and diverse economic base has helped to keep the unemployment rate at just 4.6%.1 With 10,000 jobs, the Air Force is the region’s largest employer. Other institutional employers include the University of Nebraska. Low rents and a skilled workforce support a strong financial services sector, while Omaha’s technology infrastructure and low power costs attract data centers. Nebraska is the nation’s only public power state, and generation and distribution of electricity are provided by a not for profit entity.
Innovations in Incentives
Innovative economic developers are changing business incentives programs to suit the times. Incentives for a New Kentucky (INK) offers tax benefits for companies that are often overlooked: existing businesses and those re-investing in facilities, even if they are not creating new jobs. Officials in Bowling Green believe they have a major advantage in business retention. Faced with the choice to close their local plant or a facility in another state, consolidating companies will choose to stay in Kentucky, they reason. When the economy improves, Bowling Green will capture the new jobs.
Investing in Workforce
Investments in human capital make a major impact as Kingsport, TN has shown with the “Educate and Grow” campaign, designed to reverse the region’s overreliance on heavy manufacturing, shrinking younger workforce, and sinking educational achievement. Local leaders launched a K to 14 program, the first in the country, to extend high school by an optional two years. Kingsport high school graduates are eligible for a scholarship at Northeast State Technical Community College. The community has invested in an “academic village” that includes regional training centers for advanced manufacturing and health professionals. The effort has paid off with new businesses, a growing young adult population, and an increase in residents earning college degrees.
Culture Matters
In headquarters site selection, quality of life plays a major role, and smaller cities with the right assets can win. To beat Atlanta for MeadWestvaco’s headquarters, leaders in Richmond showed that their hometown offers all the cultural amenities of a big city, with shorter commutes and lower housing costs. Greater Richmond boasts 10 colleges and universities, a fine arts museum, a science museum, and 400 years of history.
Small Cities Think Big
Whether their populations and budgets are large or small, the challenges facing economic developers will not disappear any time soon. Yet, no matter where we are in the business cycle, smaller cities can compete and win by thinking big, aiming high, and developing the business climates and cultural assets that employers value.
1 Bureau of Labor Statistics, Nov. 2009
Tags: business incentives, economic develoment, Site Selection
Posted in Workforce & Location Planning | 3 Comments »
