Florida is home to one of the most robust and expanding economies in the United States. In fact, with a GDP that is larger than most countries (17th largest in the world), Florida is a global economic power, and to increase our standing, it is crucial that the state is able to successfully attract new and expanding businesses.
When businesses decide where to relocate or expand, many factors can tip the scales in one direction or the other. Created as a way to encourage investment by offsetting taxes, fees, or other costs, economic development incentives can make a significant difference for a new or expanding business considering a change. Every state offers some kind of incentives to businesses, generally using reductions in taxes, loans from the state, or grants to make their state the best option for specific companies or industries.
The competition among states in attracting businesses is fierce, because convincing a large company to relocate or build an office, manufacturing plant, etc., in a state can lead to tens of thousands of jobs, and billions of dollars in capital flowing through that state’s economy.
As technology has given businesses the ability to invest almost anywhere, the use of economic development incentives has grown significantly, creating a bit of an arms race between states competing for job creation and economic development. While these benefits are seen by critics as a “handout” to business, a state attempting to compete in the modern economy without using at least some incentives would be akin to a college in a major athletic conference attempting to field competitive teams without offering the scholarships available to them.
It would be naïve to believe that a state could successfully implement a robust economic development strategy without offering appropriate companies an environment within which they could flourish, create new jobs, and provide a positive economic impact. Incentives are, and must be seen as, simply one tool in the economic development arsenal of a state government, but the impact of this one tool can have long-lasting effects. Economic development incentives are not a substitute for the fundamentals of good economic growth, like a good tax structure and a well-trained workforce, but they cannot be ignored as a part of the overall strategy for economic development.