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Tax giveaways to tech firms ​​in the US are ​calculated​ to lure them to cities – but are cities really getting a good deal?

July 3, 2018

By Greg LeRoy and Maryann Feldman : theguardian – excerpt

Every mayor and governor wants to attract hi-tech jobs. And why not? Depending on the nature of the facility, such jobs can be well-paid and strengthen a region’s economy.

But too few elected officials have taken the time to learn how hi-tech companies start up, how they thrive, and how government can best assist them – without overspending on a few big deals.

Getting policy right is critical for high-tech success. It’s more complicated and volatile than the “old economy”: hi-tech firms are more susceptible to disruption. Product life cycles are typically much shorter. Skill sets are more specialised. Some facilities create very few permanent jobs, and some generate a lot of toxins….

Two proven alternatives

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 programmes…

The most important element for public officials and local champions is to have a long-term vision rooted in an informed analysis of local strengths and weaknesses and market potential. Informed by that analysis, incentives to individual firms may make sense, along with the investments in public goods intended to benefit many employers…(more)

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