Saturday, October 23, 2004
Michigan has offered Kmart $45 million in tax incentives to stay put. The offer is contingent on a commitment from the company to keep 1,500 jobs for ten years. Read more.
My own guess is that Michigan would be better off to put the $3,000 per employee per year into early childhood education programs. Learn more. Unfortunately, I can't think of any state that is set up to make these policy trade-offs.
By accepting the challenge of a bidding war, Governor Granholm, who has otherwise shown valuable leadership in economic development, has missed a chance to make a strong statement about Michigan's future direction. Brainpower drives our future prosperity. Incentives will work best if we focus them on people, not companies.
The case of Kmart shows the weakness of our political approach to economic development. Political leaders operate on calculations of short term rewards, not long term benefits.
posted by Ed Morrison |
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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.
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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.
Anatomy of a deal: Michigan's offer to Kmart
