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Cities Don't Have To Offer Huge Subsidies To Companies Like Apple and Amazon (theguardian.com)
Greg LeRoy and Maryann Feldman from The Guardian discuss some alternative strategies for cities that want large tech companies like Amazon and Apple to invest locally but don't want to offer huge subsidies. They advise against using "old economy" incentives for "new economy" firms, which are more susceptible to disruption, because it can be costly and counterproductive. Unfortunately, many politicians continue to mismatch incentives "especially because some tech companies have become very aggressive about demanding big tax breaks," reports The Guardian. From the report: Here are two proven alternative strategies. The first could be called "back to basics." A regional government inventories existing small- and medium-sized firms, the backbone of many local communities. Typically family-owned and located in micropolitan and rural areas, these firms are often neglected by policymakers and shortchanged by incentive programs. A regional government asks: which industry sectors are we already comparatively good at? Which of those sectors have the best futures? How can our public systems help those promising firms grow? Do they need export assistance? Customized training? Technology diffusion? More engineering-school graduates? There are some simple fixes that could go a long way.
The second alternative takes this same approach and applies it to very young companies and to emerging technologies with more speculative prospects. This was North Carolina's successful strategy from the 1950s until the mid-1990s. Making no big bets on any one company, the state invested in all levels of education, created its community college system and upgraded the state universities. It also focused on highway upgrades and other infrastructure investments. [...] Austin, Texas, currently the hottest tech-led economy in the U.S., provides a model: there, local entrepreneurs became local champions, creating early incubators, reinvesting their gains and working with local government.
The second alternative takes this same approach and applies it to very young companies and to emerging technologies with more speculative prospects. This was North Carolina's successful strategy from the 1950s until the mid-1990s. Making no big bets on any one company, the state invested in all levels of education, created its community college system and upgraded the state universities. It also focused on highway upgrades and other infrastructure investments. [...] Austin, Texas, currently the hottest tech-led economy in the U.S., provides a model: there, local entrepreneurs became local champions, creating early incubators, reinvesting their gains and working with local government.
The whole incentive cities give to get businesses to move in gets abused to hell. It needs to stop. My city had been doing it for years while current businesses in the city got completely screwed over, get absolutely no tax breaks or anything. It's completely unfair for everyone that's currently in the city while new businesses were receiving 5 year tax breaks and their buildings half payed for by the tax payers of the city.
It completely had a negative affect on the city where all the old businesses just go up and left for better places.
First you pay them to come. Then you pay them not to leave.
First you pay them to come. Then you pay them not to leave.
Yup. We played that game in my country, and have paid Hollywood something like $575 million over the last few years.
Everytime anyone makes any noises about no longer paying the Danegeld, the workers protest in the streets, despite being forced to give up all sorts of worker protections just to keep their jobs.