Mediating Incentive Use: A Time-Series Assessment of Economic Development Deals in North Carolina

Striking a Balance: A National Assessment of Economic Development Incentives

“…There are a number of factors that could explain this counterintuitive result, including the presence of legacy industries that are declining in total state employment but still indicate high levels of regional concentration. While we recognize that location quotients are a blunt analytical tool, elsewhere, we do show that strategic industry targeting and related institution building at the state level results in robust employment growth from businesses recruitment in those targeted industries (see Lester, Lowe, and Freyer 2014). This suggests an opportunity to collect more detailed data on industry targeting across all states, including identifying the specific industries and industry-supporting institutions that each state promotes and develops to sustain and increase employment growth.…”

“…Each establishment in the NETS database has a D-U-N-S Number (the unique D&B identifier for each establishment) and allows us to gather data on firm name, location (state, county/municipality, and address), subsidiary status (i.e., whether the establishment operates as a subsidiary of another establishments), SIC code, employment, and sales. For a discussion of the use of NETS data to assess the efficacy of subsidies, see Lester, Lowe, and Freyer (2014). We rely on a text-matching algorithm that minimizes differences in company names to locate GJF records in the NETS database.…”

“…The focus is not the incentive, per se, but the larger industrial recruitment strategy-more specifically, the selective use of recruitment to build-out existing industrial strengths and the promotion of nonincentive advantages in order to attract, anchor, and retain firms within specialized sectors (Feser and Luger 2003;Goetz, Deller, and Harris 2009;Lowe and Freyer 2015). Strategies of targeted recruitment can also help reduce demand for cash-equivalent incentives by shifting the focus toward other regional advantages that offer greater value to firms as well as their host communities, including access to quality infrastructure, transferable workforce skills, and specialized industry support services or institutions (Bartik 2005(Bartik , 2018Lester, Lowe, and Freyer 2014;Schunk and Woodward 2003). In this respect, targeting reinforces what most scholars and practitioners already know: incentives are rarely a crucial factor in firm location.…”

A moving target: rethinking industrial recruitment in an era of growing economic uncertainty

“…As one recent illustration, executives from Novartis cited North Carolina's high skilled workforce and quality training institutions when selecting Holly Springs North Carolina for a new $1.2BN vaccine manufacturing plant, even though the state of Georgia offered as substantially larger incentive package (McNaughton, 2006). Additional analysis of all incentive-backed recruitment and retention deals in North Carolina from 1996 to 2008 demonstrates further economic gains, namely higher rates of employment growth from mediated approaches to recruitment in biomanufacturing (Lester et al, 2014).…”

“…The second involves recruitment activities by regional actors in Northeast Mississippi, involving multiple counties and a range of target industries. Recruitment efforts for each case study, including evidence of positive labor market impacts, have been documented in considerable detail elsewhere (Freyer, 2010;Lester et al, 2014;Lowe, 1999Lowe, , 2014, thereby allowing us to concentrate on overlapping institutional features that contribute to higher-order recruitment practice. Three institutional features, which we categorize as embedded practice, are highlighted: first, the presence of a central agency that coordinates economic and workforce development activities and that acts as a gatekeeper for engaging and motivating firms and local community actors; second, emphasis on pre-recruitment planning, which enables practitioners to identify and target prospective firms that not only offer the best fit given the region's existing industrial mix, but that match well with existing development goals and priorities.…”