Governments court tech firms

Although dot-com companies continue to slide, a new national survey reports

that a vast number of state and local economic development agencies still

see e-businesses and technology-related investment as a top priority. And,

many governments are using the Internet as a calling card.

KPMG LLP reported that 97 percent of the 113 state and local agencies

surveyed rated Internet and other technology companies as the most sought-after

sector. They were followed by biotechnology, biomedicine and pharmaceutical

companies; then came the communications industry.

The survey, released March 28, was conducted in the late fall of 2000,

before the recent spate of layoffs at tech firms and the demise of some

dot-coms. Nevertheless, Betty McIntosh, a partner in KPMG's Strategic Relocation

and Expansion Services division, predicted increased competition among states

and communities in offering incentives to lure such companies to town.

"Getting the right place and getting the right mix [of incentives] from

the tax base to the training base to the workforce...will probably get more

critical now, not less," she said.

Web-based marketing has been useful to show what a state or local community

has to offer to companies looking to expand or open a new facility, McIntosh

said. The report showed that three-quarters of the agencies said the Internet

provides a "competitive edge" as they offer economic and marketing information

on their sites.

McIntosh said it's a good way for a company to seek information anonymously

about an area without being "bombarded" with information from an economic

development agency.

"[But] a Web site has to be user-friendly and have good information,"

McIntosh said.

Other findings include:

* Four out of five state agencies and half of local agencies modified

their incentive packages to accommodate high-tech firms.

* Nearly half of state and local agencies reported that investment in

their communities was attributable to high technology.

* Agencies said labor force incentives were most commonly offered to

high-tech companies, followed by recruitment and college-shared curricula.

* States, more than local communities, are more likely to face international

competition for the companies.

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