Southern Business and Development

Summer 2007

The Incentives Debate: STOP IT, STOP IT, STOP IT! There is no DEBATE!

Editor's note: The next to last paragraph of this Southbound column outlines what we have planned for you as we celebrate our 15th Anniversary of publishing Southern Business & Development. I cannot think of an issue that has been more consistent or controversial over the last 15 years than the issue of incentives granted to locating industry. That being the case, I think this column is very appropriate as we launch four quarterly editions that center on 15 years of publishing this magazine and economic development in general in the world's third-largest economy. Also, at the end of my column is a mention of our very first seminar, "Your Role in Successful Economic Development," which we have planned in Birmingham in February.

It's my opinion that North Carolina has to have the most skeptical news media in the South. Atlanta's media sources are skeptical as well about economic development and how it's successfully practiced, but much of North Carolina's media and some politicos there, simply take the cake.

For example, in a recent article, N.C. Sen. David Hoyle (D-Gaston, N.C.) was quoted as saying, "I wish Congress or federal courts would outlaw incentives" (to locating industry). "If they did, North Carolina would get all the jobs. People love it here (and) they want to be here."

The comment was made regarding the backlash that arose in the media from the incentives North Carolina gave to Google and Dell when those two incredible recognizable nameplates chose the Tar Heel State for huge investments recently.

Again, I will repeat myself. Alabama's economy has been one of the best state economies in the nation over the last four or five years. Its unemployment rate is near three percent and regardless of the lack of labor availability; significant corporate and industrial deals continue to be announced at incredibly high rates in that state.

Over the last dozen years or so, Alabama has invested about $1.2 billion (incentives) to elite corporate names such as Mercedes-Benz, Honda, Hyundai, Toyota and Boeing. Those five major corporations brought with them hundreds of other companies to the state. And just those five companies have paid out about $20 billion in salaries. Did Alabama do the right thing and invest (dole out incentives) for those five companies? You tell me.

All of you anti-incentive folks let me tell you, your "debate" is a waste of time. So, STOP IT! There is no debate. As long as there are borders in this country – they are called states –there will be the freedom to compete in the game that is called economic development.

I will conclude by rewriting what I told a conservative think tank from North Carolina about five years ago. This person adamantly maintained that incentives for locating companies in his state should be outlawed. He said that the money should be used for education and public safety/infrastructure improvements in the Tar Heel State.

My response was, “Well if you do that, North Carolina will be the safest, smartest, 20 percent unemployment state in the nation."

NOTE: This edition is the first of four celebrating our 15th Anniversary of publishing Southern Business & Development. We are going to take the next four editions, or one year, to celebrate our anniversary. This issue looks at what economic development in the South was like in years' 1993-1997. The next issue we will look at many of the significant events that occurred in the South in years' 1998-2002 and the next will focus on 2003-2007. The last issue celebrating our 15th anniversary (Spring 2008) will center on the next five years and what might be in store in the future. We hope you enjoy the series.

THE SEMINAR: February 17-19 we are bringing in some of the South's most well known and successful economic developers, consultants and economists to Birmingham for a two-day seminar. The event is not necessarily designed for economic developers, even though we won't ban them from coming. The goal of the seminar is to educate -- in a crash course -- those people who surround the economic developer, so that his or her team can work together in a much more efficient and effective way. You can register for this event on any of our Web sites. Just click on the "Your Role in Successful Economic Development" icon and register. This seminar is going to fill quickly. You won't believe the lineup of speakers.

www.SB-D.com
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or
www.BioIndustrySouth.com.
Michael C. Randle
mike@sb-d.com