Governments court tech firms
- By Dibya Sarkar
- Apr 13, 2001
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
"[But] a Web site has to be user-friendly and have good information,"
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.