Mismanaging the incentive game, Part 2 Wednesday, July 16, 2003 Cincinnati's deal to bow to pressure from Convergys is coming under tighter scrutiny. Convergys, a spin-off from Cincinnati Bell, is an industry leader in IT services. The company manages billing and customer support functions for communications companies. The company has threatened to move operations to Northern Kentucky, if it does not get its deal in Cincinnati. Convergys wants the tax breaks to consolidate its headquarters and operations, which are now spread out among three sites downtown and a call center in suburban Norwood. Cincinnati's Mayor Luken negotiated a $63.4 million package that includes $33 million in tax credits. But yesterday, he pulled the package from consideration by the City Council. Not enough votes. The City package supplements additional incentives from the State. In all, Convergys is willing to spend about $115 million on buying and renovating a downtown office building, while the city and state are proposing nearly $208 million on tax breaks and grants to keep the company. A member of Cincinnati's City Council has raised an interesting point: If the City heads down this path, what's to prevent any other company demanding a similar deal from the City? Read more. Playing hardball, the company's lobbyist says that the deal is not open to renegotiation. Convergys is using its expansion plans as bait. In seeking its deal with City Hall, Convergys said it will add 225 jobs downtown in the next three years and try to double its work force there to 2,900 in 15 years. At best, these claims are unreliable. Convergys competes in an industry that is undergoing strong shifts abroad. Outsourcing will cause the IT services business in the U.S. to shrink, not grow. The same day Convergys is pressuring City Hall, an industry report from Asia notes that 10% of the U.S. IT jobs will be shifting overseas by the end of 2004. One of the leading companies in the trend: Convergys. Read more. Today in our history of innovation... In 1945, the first atomic bomb was exploded at Los Alamos, New Mexico. posted by Ed Morrison |		This work is licensed under a Creative Commons License. links Some Background on EDPro Weblog The purpose of this weblog is to help economic development professionals -- EDPros -- keep up with the changes sweeping our profession. Strap on your goggles. It's a whole new game. There are no experts any more. The only place to learn about economic development is from other EDPros who are doing it. One other point: the prevaling approach (paradigm, if you like) in economic development is shifting from competition to collaboration. There are a lot of reaasons underlying this shift, but here's the important insight: You, your community, and your region will do better by collaborating and sharing information. So, spread the word...Share the knowledge. Tell a friend about EDPro Weblog. If you are using a news reader, here is the link to syndicate this site: Here's the link if you are a bloglines subscriber: Speaking and workshops on Open Source Economic Development As the idea of Open Source Economic Development starts spreading, more people are asking about it. Visit the I-Open web site to learn more. My colleagues and I are happy to explain the basic concepts in a talk or a workshop. E-mail Susan Alshuler if you'd like to learn more about workshops and speaking. Background on Ed Morrison Download some background information on me here.

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