Growth through Business Incentives
Growth through Business Incentives
Key Tools for Spurring Development and Diversification
by John A. Adams Jr.
Discussions about what Florida’s business climate should look like post-recession have begun. Yet, they’re happening amid unrelenting foreclosures, a weakened tourism sector and a transitioning aerospace industry. These topics evoke speculative questions such as how will we emerge from this economic crisis and, more importantly, when will we get out. At the state level, Enterprise Florida spearheads efforts to enhance economic growth and diversification. Bolstered by increased job retention and creation efforts, Florida has succeeded in building a solid foundation for growth within its larger clusters, among them: aviation, information technology and life sciences.
Economic growth and diversification don’t just happen. They are the end result of a tactfully executed strategic plan that outlines a roadmap to a promising future for citizens based on business development and retention. Three factors will mark future success for Florida: a stronger standing in the global economy, leadership in and renown for innovation, and effective maximization of its position as the nation’s fourth largest state and the world’s 20th largest economy. We have set the stage for achieving this goal by focusing on seven priorities that position Florida’s economy for further growth.
Focus Areas for Economic Growth and Diversification
1. Diversifying Florida’s Economy through Cluster Strategies – expanding and transforming foundation industries and high-impact targeted industry clusters, and developing new clusters
2. Talent – focusing on enhancing STEM (science, technology, engineering and math education) K-12 enhancement, a demand-driven workforce system, and higher education excellence
3. Innovation – improving research and development, commercialization and venture capital in the state
4. Growth Leadership / Infrastructure – ensuring multi-modal transportation, broadband access statewide, and addressing energy and water issues
5. Business Climate – revamping state incentives, promoting small business, entrepreneurship and business-friendly regulatory environments
6. Global Hub – furthering international commerce (trade, foreign direct investment, tourism) and international infrastructure (transportation, language skills and regulatory issues)
7. Quality of Life – supporting arts and culture and encouraging vibrant communities
Collectively, these priorities form the basis for the recommendations Enterprise Florida is making to the Florida Legislature for its 2010 session.
For economic growth, a stronger emphasis must be placed on the need for more competitive business incentive programs and greater innovation in business and industry. Incentives can be a hard sell in today’s economy as taxpayers seek greater transparency because resources are stretched to the limit. While there are many causes just as important, there are not many that can match the positive impact and direct return on investment that incentive-supported projects and programs bring to the state.
Two recent success stories are company expansions in which incentives played a supporting role. Grupo Eulen in Miami andHealthChem Diagnostics in Port St. Lucie will bring a combined 660 new jobs to Florida and contribute $57 million in capital investment. The award of incentives – which can vary from tax refunds to infrastructure grants to worker training, and be performance-based (e.g., funds are given after job and other contractual requirements are fulfilled) – essentially are an endorsement of a company’s commitment to doing business in Florida and its ability to contribute to the state’s economy. Incentives are an important item in an economic development toolkit and are needed to help Florida remain competitive and well-positioned to grow business and sustain current enterprises in targeted, high-wage industries.
Making Economic Growth the Priority
Although Grupo Eulen and HealthChem Diagnostics, two large companies, represent big wins for Florida, the state values the role and potential of small businesses as well. Most jobs are produced by small and entrepreneurial companies, which are vital toeconomic development. Florida’s more than 1.9 million small businesses contribute innovative products and services to the marketplace. To nurture and advance this type of economic contributor, the Florida Legislature established the Florida Opportunity Fund during its 2007 session via a $29.5 million appropriation. This nonprofit, fund-of-funds, venture capital investment corporation is enabling the state to grow the bank of venture capital statewide. Its intent is to prompt more venture capitalists to invest in Florida, andincrease the availability of seed capital and early stage venture equity capital for investing in up-and-coming businesses.
Economic growth and diversification continue to be a top priority for Florida. The state’s strategic plan, called The Roadmap to Florida’s Future: 2010-2015 Strategic Plan for Economic Development (www.eflorida.com/roadmap), and legislative recommendations represent Florida’s economic needs and those of businesses and local communities. All of us in the economic development sector are committed to strengthening Florida’s economy and to serve citizens with more and better job opportunities.