Promise Less, Deliver More — An Economic Development Perspective

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Recently, legislators in Utah and the City of Nashville made notable decisions to curtail the use of economic development incentives in attracting new business and industry to their areas.   Although they came to similar conclusions, neither indicated they thought incentives didn’t work.  Nashville feared a worsening, post-COVID budget shortfall and sought to reserve discretionary funds for other uses.  The state of Utah was interested in slowing growth that some thought might be getting out of control.

Do Incentives Work?
Economists often debate the effectiveness of business incentives with some labeling them as ‘corporate welfare’ and possibly even counterproductive.  When BMW announced a new $650 million assembly facility in the Upstate and promised 2,000 new jobs in 1992, many of these same economists criticized SC lawmakers and local officials as being too aggressive with a $150 million initial incentive package for the company.  With total investment today exceeding $7 billion and over 10,000 jobs attributable to the ever-expanding facility in Greer, it’s clear that the initial incentives offered BMW have provided a significant ‘return on investment’ for the state and region.

How Can You Judge if Incentives Are Beneficial?
While every incentive deal in SC is not as overwhelmingly beneficial as BMW, the Greenville Area Development Corporation performs a cost/benefit analysis on every project that seeks incentives.  Our diligence in evaluating the economic impact of the jobs and investment by the companies we work with helps ensure that Greenville will ultimately benefit from these new and expanding operations.

Every year, GADC joins with partners at the state and local level to review all incentive agreements and monitor them for compliance to agreed-upon capital investment and jobs.  And every year without fail, we find the vast majority of companies have actually invested MORE than they initially promised to Greenville County, and are providing MORE jobs than announced.

Corporations are sometimes depicted as villains, intent on making money at the expense of humanity.  While they are for-profit entities which make decisions for their own advantage, most also realize they must live in our shared community.  They give to charities and donate time and effort for the public good.  They provide pay and benefits to workers which support households and families.  They ultimately help build a better place for all of us to live.

A Closing Thought
There is a reason that economic development is intensely competitive on a global scale, and why incentives are used by communities to recruit and retain corporations.  The new jobs and investment provided by private companies deliver economic security and sustainability that communities want for their citizens.  And these new and expanding entities add significant value to our overall quality of life.

Effective use of incentives may actually be a small price to pay for achieving better jobs and a brighter future for our community.  Thanks for your continuing support.

Mark Farris, President & CEO
Greenville Area Development Corporation


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301 University Ridge
Suite N-4300
Greenville, SC 29601 

(864) 235 – 2008

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