[e digicons]:karma:[/e]  

Education.  Access for employees to get on-going education.  While it is always a nice to have, in High Tech, it is really critical.  And I do not mean a University per se.  But Technical schools.

Check.  That is available by the truckload, as well as higher education.  I guess what I'm asking here is:  what goodies can a city offer a business to get them to stay/re-locate/grow?  A free building?  Tax exemption for the first ten years?  

Right now it seems like a businessman's market, there are so many perks and cold hard cash (loans, grants, funds)....this city is paying points on interest rates as well for certain types of businesses...stuff like that... 

Well, it looks like they have all the perks covered, so the remainder is just cost.  And that is usually tax incentives along with distribution. 

On tax, that is a cost, so if the community minizes it, that helps with the analysis.  But the building is a capital cost, so "giving" them one may help some, but also hurt as well.  If you "give" them the building, they then have no financial incentive to stay if a better offer comes around (no disposal or Capital loss by abandoning it).

Distribution is the other thing.  They have to get the parts in and the products out.  So a rail spur to their door is good (the community may pay the rail line to build it), or at least easy access for freight to get to the facility and out of it.  Those are the major costs that will vary from community to community.  Labor, raw materials, and such are probably not going to be that different since it is high tech.

I know when we were in Maine the businesses were leaving in droves because of taxes.  At one time there were alot of manufacturers in Maine.  The shoe industry was big but it became too hard to pay the State of Maine.   They were getting hit hard by the State to pay hefty taxes so they were, one by one, packing up and going elsewhere.  For years we watched them all leave the state. 

My husband had his own business for 20 years and everytime he turned around the State wanted more from him.  He couldn't get out fast enough.  The State turned into basically a welfare and tourist state for the most part not to mention the #1 State in the Union with the highest taxes. 

That's a really good point about giving them the building Doc.

This city isn't desperate, so they won't be giving any buildings away, but they can cut impact fees, forgive start up loans, lots of other incentives.

I'm recommending, instead of blanket incentives, that the city work with each potential business owner to see what they might need.  For instance, a software company might need a break on taxes and other fees, until it gets up and running.  While a widget maker might need loans for processing equipment to get up and rolling...loans the banks aren't necessarily jumping up and down to make, but are more willing when the city back 80% of it, or pays down interest points.

There are ways to fund stuff like this without raising everyone's taxes....like taking the total sales tax collected by the city last year for a certain month(s), and anything over that this year, a portion goes to an economic development fund.  Nothing changes for anyone in taxes or prices, the new money is redirected into a "special" development fund instead of the general fund. 

Manufacturing has taken a hit all over the country, regardless of taxes, but I do get your point.  The higher the taxes, the less incentive to stay in business. 

But even with no taxes and extra perks, (so literally it costs next to nothing to start up, and run the first few years), people just aren't innovating.  There are only so many communications companies, soft ware companies, etc...

I think (and this is my opinion and not based in research) that we are in a weird in-between stage.

Since the Industrial Revolution America has been about manufacturing.  We produced good little male and female factory workers, who did what they were told, eventually unionized, and waited for someone to tell them what to do.

Some even argue our school systems are designed to produce an "industrial force."  Which means, do what you're told, work to live, not live to work mentality.  (Yeah, I know lots of people say this...but find someone PASSIONATE about their job, someone who feels LUCKY to be able to do it, and they generally won't have this mentality.  While they may not live to work, life sure doesn't feel as worthy without it.)

Now that traditional industry is almost gone, is gone for some states.  And people are still in the factory (I do my time, get my money and leave) mentality...many of them are sitting on unemployment, wondering what they're going to do, waiting for someone to come along and tell them what to do.  Why?  Because they weren't trained to be innovative, have new ideas, develop them, and run with it.  They're still waiting for things to "get back to normal." 

It's not just industry, its the whole society.  Even at the university level, there is a void of knowledge when it comes to guiding/developing innovative thinking.  You can't get two people to agree on what it means!

Get a room full of people raised up in the "industrial" mindset and educational system..and what do you have?  Lots of hard workers, sure, but none experienced at taking an idea, fleshing it out, running with it....so you see universities scrambling to come up with some sort of system to teach innovation....when its been bred out of the public for decades. 

It's like breeding out blue eyes (innovation/creativity) because brown eyes (factory mindset/buy more so we can make more) are more profitable.  And doing it for decades.  The one day brown eyes aren't profitable.  

All the sudden you have several generations of brown-eyed people trying to be blue-eyed, but who knows how to do that?   

So we're stuck in this in-between stage between industrial mindset and needing to be innovative. 

Cities can offer no taxes, and all the free buildings they want, if people can't invent things, create common use items, innovate, its all for nothing.  (Again, my opinion.)

So the real issue isn't helping businesses start up...its getting people's long dormant and ignored creativity flowing....and I don't mean sitting around "brain storming."  hahahahah.

Wow....as you can see, I'm still fleshing out this all in my head....hope you understand it.

Well Tova7, you might be right with that last post, but let me assure you that the education is far better in the US than in China. If you think US students are trained to be innovative enough, you haven't seen anything. I have students who can't properly form groups to work in, let alone create an original idea.

Anyway, to actually stay on topic, I'd ask this question- is your city looking to draw in already established companies or looking to foster an environment for startups? I believe the needs will depend on what your city's aim is. Already established companies are going to be looking for low taxes and access to talent.

A startup, on the other hand, is usually just a guy with an idea. Maybe he has a few ideas on how to turn it into a product or service, but I think the most daunting task for any startup is the fact that they usually have no business experience themselves. They may understand their trade well as well as the market which they will be selling to, but the concept of starting a business raises the big question of, "where do you begin?"

The city I live in is also trying to attract high-tech industries to it. And yes, there are special tax priveledges and loans available, but I think the one thing the city has done really right is that, depending on what specific industry you're in, there is a special government-funded (though not officially part of the government) office that's there to specifically help people set up businesses. They're not there to advise you on your specific product/service or potential market- that's for you to figure out. But they are tasked with assisting you of with the governmental requirements. Need a loan for new equipment? Call them and they'll tell you what are the current options. Not sure what paperwork you need to fill out when hiring new employees? Need to obtain a special license or upgrade your business license? They'll help you.

I've met with workers of one of the branches and they're very helpful. I wasn't setting up a business at the time, but they seemed to know their stuff and seemed willing to help me out with whatever I needed. Actually, I had two people talking with me for about an hour to handle my questions.

So if you are looking for upstarts, I would say doing something like this would help a lot. To be clear, these people are not government workers and therefore don't directly handle the paperwork for you (you have to take it to the proper government authorities yourself), but their job is to answer your questions about starting up and help take the guesswork of, "Am I doing this right?" out of the picture.

Hope that was clear- it's pretty late.  Need sleep.

I am still thinking in 20th century terms, or so my post would think.  I said rail lines, but you hinted at the other part of distribution.  Internet!  Yes, access to good high dependability and fast internet would do a lot more for a software company than a rail line.  Still distribution, but kind of different delivery system.

Hope you rested well.

In essence what we have is a three block area in the middle of an affluent suburb that is zoned "light industrial."  We can re-do the zoning, so that's no big deal.  But there are light industrial businesses, mixed in with offices too.  Some of the buildings are empty, and some aren't.  A few of the older buildings have owners that pile junk cars up in back, but we're handling that with code enforcement.

One of the biggest problems right now is companies come into the "industrial park" but then they outgrow it.  There isn't a facility big enough to house their growing business (and remember its in the center of town so they can't spread out)...so yes, the city wants to KEEP the businesses that are there, and help them grow (maybe combine lots or change zoning regulations), as well as draw in new (already established) businesses. 

I really like the idea of giving new business people training.  In fact, Chicago has neighborhood organizations made up of business professionals that give free "training" to new business owners in certain areas to help get those areas growing. For instance, they teach them how to operate computers and keep records, tax laws, etc...like you said, they might know their widget, but probably not all the business end of things

hmmmm.....that might be an option, certainly one I can recommend....thanks! I'm going to research it a little more..!

Wow.  Though I have to say, even at the Masters level every time there is a group project in a class....where the class breaks down into small groups for long-term research, there are big problems.

My groups don't have those problems because I am naturally bossy and have lots of ideas (most of which they hate). hahahaha.

We must be on the same wave length Doc, because I am recommending the city set up and provide free Wi-Fi for the area.  Businesses with internet access, have "potential" for a larger customer base.

Glad I could I could help provide an idea. I'm not sure of the complete ins and outs of how things work around here, but at least it's an idea worth exploring. As far as companies outgrowing industrial parks with nowhere to grow....I've got nothing. It's a bit hard to help because you can only know what a company will need to further its growth until just before its ready to expand. So even if I said rezone certain areas or whatever, that may only fit certain kinds of companies needs.

Hah, I'm actually pretty bossy too by nature (but I prefer to say I have natural leadership abilities...sounds nicer). The students here are really trained to take orders for the most part. Just two quick examples that I read about.

- One article I read discussed complaints that foreign enterprises in certain industries had with Chinese graduates. While the biggest problem for most was their English ability, the complaint against engineers is that they don't really know how to solve a problem. Their entire education is geared towards theory, but they have little to no experience in actually solving problems in their field.

- A guy who had taught in China for a few years wrote an article about his experience, focusing on students' creativity. He was teaching graduate students studying business. He gave them an assignment to come up with a company proposal in two hours- what the company does, how it's going to generate revenue, etc etc. He told his students that the group that wins would be rewarded with some candy bars.

Anyway, he gave an example of starting a restaurant and went through all the things necessary to make it successful (again, not very detailed, but a solid foundation). His class had 6 groups working on this. Five of them came back with their own restaurant ideas. The sixth, and winner, made a catering service. These business students just followed their teacher as closely as possible instead of coming up with a fresh idea.

I thought it was a cultural thing.  We have a few Chinese students in our program.  The female is very quiet, a hard worker, but I've never seen her offer a solution, or even raise her hand in class.  She explained to me once that it was the way she was raised.

I don't know how to get "industrial" minded people to start thinking more creatively, but I know the way to NOT do it is what occurs now at the university level.

For instance, I am working with a very intelligent man on this project.  But he's having a hard time wrapping his mind around the whole "come up with something creative, something that could work" idea.  He calls that "pulling things out of his ass" and he doesn't seem to like it because its uncomfortable... 

But, he's coming around...the only danger is getting him  to take it seriously.  There seems to be an idea in the industrial mindset that says if it requires thought, creativity, and taking a chance...the process doesn't deserve as much diligence as say researching previous methods and applying those.