Greenmail: Look For A Lot More Of This
by John Laumer, Philadelphia on 12.27.07
For decades it's been common for US State and local governments to offer incentives for favorably citing a business or manufacturing plant within their jurisdiction(s). With so many US manufacturing plants having left for China and Mexico in recent years, States and local units of government are desperate to keep and nurture what they have, especially if the business getting the incentive package is "green."
Here's a recent example of rolling out the green incentives, from Toledo Ohio, USA.
The Lucas County Board of Commissioners and County Treasurer Wade Kapszukiewicz announced a $2 million investment in Xunlight Corporation, a thin-film solar cell manufacturer founded in Toledo...
“The linked deposit program is designed to create jobs, and the business alone will create almost 800 jobs in the next five years. This is a public-private partnership that works,” Kapszukiewicz said.Kapszukiewicz reported 12 other businesses have taken advantage of the linked deposit program, but none will have the transformative impact of Xunlight to Lucas County's economy. The county's program has a $5 million fund for making such loans...
“We are building a high-speed manufacturing plant to produce flexible and lightweight thin photovoltaic film modules using our advanced technology,” said Xunming Deng, P.hD., president and CEO of Xunlight.
The reason we say "look for a lot more of this" is that with the US Federal government only recently offering serious incentives for renewable energy research and development, it will become increasingly prudent for foreign-owned green businesses and home grown entrepreneurs to site "green" operations in the US. (Notably: we have seen the reverse of this happening in the past, with leading edge solar photovoltaic manufacturers starting up JV's in Germany, where government renewable energy incentive programs and market growth had an early start on the US.)
These are nascent "green boom" days for the US, then; and citizens sense that a locality which early on reaches a critical mass of resources for green engineering, design, manufacturing, construction, and so on, might have a legitimate chance to catalyze a Silicon Valley-like zone of green jobs and tax revenue growth. If drought is not a recurring problem for such a place, the better the odds become! Right Toledo?
The new company is preparing to produce a low-cost, efficient product in an emerging market, and the county wanted to keep it in the area, Lucas County Commissioner Pete Gerken said.“Partnerships between the public and private sectors like this help keep a homegrown business to stay home. We want to brand our area as an alternative energy corridor,” he said.
Via::Toledo FREE PRESS, "County investment keeps solar energy firm in Toledo" Image credit::Zunlight website headers.
It's great to be converting dirty, unsustainable, extracting or polluting jobs into green jobs. But the issue is very complex. For example, this solar production facility probably relies on extraction and may have toxic byproducts. And "creating" jobs is in itself a sticky wicket. As I wrote, it's great to shift dirty jobs into green areas. But simply "creating" jobs is typically a population growth engine. Studies have shown that only 1 out of 5 jobs created through economic development incentives go to local residents. 4 out of 5 go to folks who either move with the company or are simply attracted to the areas that are more successful at recruiting firms. Not every community can be a winner at this game. We have thousands of communities competing for "growth," and growth is not a sustainable prosperity strategy.
Not trying to pour cold water on this celebration; just trying to broaden everyone's thinking about these economic development stories!
Dave Gardner
Producer/Director
Hooked on Growth: Our Misguided Quest for Prosperity
www.growthbusters.com