May 13, 2010
I entered “Economic Development Incentive” into an Internet search engine recently and was shocked at the number of results that appeared.
That’s right, 12 million sites that feature programs like targeted tax credits, relocation assistance, business finance programs, deferrals, exemptions and inducements offered by states, large cities, small towns, counties, villages and townships. All are offering some form of business development incentive to attract investment and create new jobs.
In this new economy, it’s become somewhat of a conundrum for groups like ours to spend a tremendous amount of time and resources trying to persuade business decision-makers to create new jobs and add payroll when those same people are being challenged by shareholders and directors to cut costs and become more efficient.
Some experts insist that the jobs lost due to national and global economic recession will come back, while others think private-sector employers have learned to do more with less. I’m not an economist, nor is my crystal ball working right now, so it’s really hard to know what’s coming. Will business development incentives at the state and local level continue to play a fundamental role in the attraction and retention of quality jobs and much-needed investment? Or will job-creators in private enterprise, who’ve adapted quite well to market challenges, politely decline the offers made by political sub-divisions across the globe?
I think there’s probably a balance here, and it’s time for states, cities, towns, counties and townships to develop some real dialogue with business decision-makers and determine what’s most important as we move forward and out of this nasty recessionary period. Employees are being asked to change right along with the economy, job seekers are more savvy than ever, employers are finding it more and more necessary to understand generational priorities. The use of business development incentives should also evolve to a new place. Normal is out. Flexibility is in.
Our public-private partnership for economic development has not used incentives to the extreme that others have and I think that’s good public policy. At the same time, it’s important to be innovative and prepared to facilitate quality projects in the future. That’s why we’ve asked Market Street Services to review how the City of Springfield uses incentives, which ones should be prioritized and perhaps what new and innovative programs should be utilized that haven’t been in the past. The conversation will be very interesting. The recommendations will be shared during the 7th Annual Economic Outlook Conference in October.
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