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it seems you entirely glanced over the fact that it also costs to bring large successful entities to your city. They’re usually also being simultaneously courte
by mygo 8y ago
it seems you entirely glanced over the fact that it also costs to bring large successful entities to your city. They’re usually also being simultaneously courted by other cities. They don’t just want to employ a workforce, they want business incentives. They want tax credits, they want prime location, they want natural resources, they want special exemptions. Often times the city ends up paying for the companies to come there in one way or another. Instead of being the quick payoff you describe, it can very much turn out to be a long and drawn out courting period (how long has this Amazon process been so far?) and also a long-term investment in terms of the projected payoff. And once the large company has used up the incentives they may still decide to uproot themselves from the community they had implanted themselves in and go elsewhere. So it’s still risky.
Either way, whether growing local businesses or courting big ones from elsewhere, it can be a risky investment.
- bradstewart 8y agoI wasn't trying to say that bringing in large businesses is a quick payoff with no costs, but rather offering a possible explanation as to why we typically see cities going after large businesses. Should have made that clear. There is absolutely a cost associated with either option. There is absolutely a payoff period in years or decades with either option. However, I do think it's easier to get a single company to say "yes", than it is to build an ecosystem; particularly in the context of an elected official's term in office.
- mygo 8y agoI disagree. The type of city that a big company would say “yes” to is the same type of city that could grow an ecosystem. Big established companies don’t like moving their headquarters into no-where-ville, they like being in places that any number of startups and fledging businesses could thrive in if the local municipality made that their economic development focus. Look at the 20 finalists for Amazon’s second headquarters: Atlanta, Georgia; Austin, Texas; Boston, Massachusetts; Chicago, Illinois; Columbus, Ohio; Dallas, Texas; Denver, Colorado; Indianapolis, Indiana; Los Angeles, California; Miami, Florida; Montgomery County, Maryland; Nashville, Tennessee; Newark, New Jersey; New York City, New York; Northern Virginia, Virginia; Philadelphia, Pennsylvania; Pittsburgh, Pennsylvania; Raleigh, North Carolina; Toronto, Ontario; Washington, D.C.; All of these places are capable of developing their economy via creating an ecosystem that supports small business growth. And some of them, like Austin Texas and Denver Colorado, already have! I wager that it’s better to support the 2X growth of 20 local businesses that are already doing 1 million dollars in profit annually (so companies of size ~5-10) than it is to bring in one 20-million-dollar business. It’s just not as sexy.