The Incentive Game
Should government provide economic incentives to businesses? Advocates say they help local businesses grow and attract talented entrepreneurs and new companies, while critics say the deals are often just taxpayer giveaways that offer little or no return on investment. We asked some experts to weigh in.
“The cost of recruiting a high-tech employee is high. [For] a $130,000 software engineer, your costs may be $20,000. At Voalte, the incentives from the Economic Development Corporation of Sarasota County were really important. We grew from 40 employees to 120, and the EDC provided exactly what we needed at exactly the right time.”—Rob Campbell, Datum chief strategy officer and former Voalte co-founder and CEO
“A city [should invest] like a private investor and expect to get its money back with a rate of return. Maybe give the company a loan and get interest, or maybe get an equity share in the business [to compensate for taking the risk]. The current course is stupid, irrational and counterproductive.” —Michael Shuman, economist and author of the forthcoming book The Local Economy Solution: How Innovative, Self-Financing “Pollinator” Enterprises Can Grow Jobs and Prosperity
“Incentives are just a tool. What works in some places doesn’t work at other times or in other places, and good communities are constantly evaluating and thinking about how to improve them. Sarasota has done that, adding clawback language and beginning to offer incentives on a pay-for-performance basis.”—Mark Huey, president and CEO of the Economic Development Corporation of Sarasota County
“With our EDI2 program, we accept applications from events and service providers that support the tech startup community. Our smallest award is probably around $1,400 and the maximum size is $25,000. We’re trying to help as many people as possible, sprinkling fairy dust around.”—Lindsey Kimball, economic development director for Hillsborough County
“Surrrrre.” —Democratic strategist Zach Morrison, 23, when it was suggested at a Sarasota Tiger Bay Club debate that Tiger Bay forums are a fun hangout for Sarasota’s young people
John Ringling brought the Czecho-Slovakian National Band to Sarasota in 1925. Its members had been recruited from throughout Czechoslovakia and played in various European cities before coming to the United States. Immigration officials held them at Ellis Island in New York until group manager Otokar Bartik guaranteed performance engagements, which ensured that they would not become public charges. Ringling heard them perform in New York, asked Bartik to cancel his planned tour, and hired the band to entertain in Sarasota during the winter season. They quickly became fixtures, playing daily on Main Street and at important community events, until they disbanded because of the Great Depression. –Sarasota County Historical Resources staff