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Thread: How important is the quality of life in economic development?

  1. #1
    Cyburbian michaelskis's avatar
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    How important is the quality of life in economic development?

    Using things such a Tax Abetments and other funding sources to get companies to move into municipalities is a common thing, but are they more important that the Quality of Life issues in the community?

    Specifically, quality roadways, High Technology infrastructure, educated workforce, comprehensive parks and bike system, low crime rate, great public transportation are all things that more and more companies seem to like, and it seems like they are also factors in Economic Development.

    So it comes down to limited expenditures and you canít do both all the time. What do you do, give the company tax breaks or show them that you have a great quality of life in your community?
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  2. #2
    Forums Administrator & Gallery Moderator NHPlanner's avatar
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    In NH, there are no tax breaks, abatements, or incentives. QOL is our marketing strategy.

    See: http://www.cyburbia.org/forums/showthread.php?t=23154
    "Growth is inevitable and desirable, but destruction of community character is not. The question is not whether your part of the world is going to change. The question is how." -- Edward T. McMahon, The Conservation Fund

  3. #3
    Member CosmicMojo's avatar
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    Read "The Creative Class," which says that QofL is more and more important as our economy moves more towards an intellectual and creative economy and further away from an industrial economy.

    Workers more and more choose where they want to live over what company they want to work for, probably since we change jobs more than our parents did. Jobs come and go, but home and being in a place I like is in my control. I want a lifestyle, not just a job. I want affordable housing and diverse amenities.

    If I were a municipality, I'd market Q of L to companies, and also worker training, educational programs because both help the company get top-notch employees.

  4. #4
    Cyburbian hilldweller's avatar
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    Florida gives away the farm with tax breaks, land, and infrastructure deals. This, in addition to having lots of great golf courses for CEOs is the state economic development strategy. I think quality of life comes in second to having a "pro-business" mindset, whatever that means.

    Quote Originally posted by CosmicMojo
    Read "The Creative Class," which says that QofL is more and more important as our economy moves more towards an intellectual and creative economy and further away from an industrial economy.

    Workers more and more choose where they want to live over what company they want to work for, probably since we change jobs more than our parents did. Jobs come and go, but home and being in a place I like is in my control. I want a lifestyle, not just a job. I want affordable housing and diverse amenities.

    If I were a municipality, I'd market Q of L to companies, and also worker training, educational programs because both help the company get top-notch employees.
    "Quality of Life" is a subjective interpretation. It doesn't mean the same thing to corporate America as it means to planners. Look at the Dallas-Fort Worth area. Most planners wouldn't think that this area has a high quality of life, however a ton of Fortune 500 companies chose to locate there.
    Last edited by NHPlanner; 23 Feb 2006 at 3:42 PM. Reason: Double Reply

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    Cyburbian donk's avatar
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    Having lived in places that sell QofL as their strong point, it only works if you are buying what they have to offer. As an example, I find I have a much higher QofL living in a tiny apartment downtown, then I did when I owned my own home on a 45x120 foot lot in a small town. Judging what QofL is, is the question.

    As for taxes/grant etc., look at NB now, as the training grants and subsidies dry up for call centers they are losing them to lower cost areas. The corporate owners of the CC's don't live in the communities so Q of L is not a concern to them when locating, but operating costs are.
    Too lazy to beat myself up for being to lazy to beat myself up for being too lazy to... well you get the point....

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    Member CosmicMojo's avatar
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    These differences are why you'd do a SWOT anaylsis and determine your target industry so you can tailor your programs and marketing to that industry. Call centers have different siting criteria than Headquarters and Back office functions or chip manufacturers.

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    Cyburbian donk's avatar
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    Quote Originally posted by CosmicMojo
    These differences are why you'd do a SWOT anaylsis and determine your target industry so you can tailor your programs and marketing to that industry. Call centers have different siting criteria than Headquarters and Back office functions or chip manufacturers.
    I realize that, the places I lived thought that by attracting and creating a critical mass of call centre employees other businesses and people would want to locate there too. The reason was based on demographics and minimum population levels for business services.
    Too lazy to beat myself up for being to lazy to beat myself up for being too lazy to... well you get the point....

  8. #8
    Cyburbian
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    What is SWOT?

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    Member CosmicMojo's avatar
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    Quote Originally posted by donk
    I realize that, the places I lived thought that by attracting and creating a critical mass of call centre employees other businesses and people would want to locate there too. The reason was based on demographics and minimum population levels for business services.
    Yeah; the city where I live has targeted HQs, so our marketing is based on Quality of Life. For call centers, you'd focus on the low cost of labor and available worker training programs.

    SWOT analysis is Strengths, Weaknesses, Opportunities, Threats. I like it because it's based in a community's unique situation and the resulting goals tend to be more realistically acheived. Since the goals are born from the existing conditions. And operating from your unique strengths as opposed to trying to be something you aren't is good advice for anyone. And a relocating business is going to look at your actual conditions, not your goals in your comprehensive plan, so it lets you understand how your community is perceived and how that impacts location decisions.

  10. #10
    You have to get the fundamentals right before you can mount a successful marketing campaign. If your streets are full of holes and your residential neighborhoods are trailer parks lower taxes are not going to attract anyone. If I make a terrible consumer product, such as soap that causes clothes to stain, no amount of price reductions are going to get me more buyers.

  11. #11
    Member CosmicMojo's avatar
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    Quote Originally posted by jaws
    You have to get the fundamentals right before you can mount a successful marketing campaign. If your streets are full of holes and your residential neighborhoods are trailer parks lower taxes are not going to attract anyone.
    I agree. It's another reason I like SWOT analysis, because Weaknesses and Threats are given as much consideration as Strengths and Opportunities. You're forced to face your weaknesses and fix them before you start envisioning the future state you want.

    So many comprehensive plans rush over existing conditions, softening up the weaknesses and put all the focus on the vision, how we'd like it to be. If we don't admit weaknesses, we'll never figure out how to get to the ideal.

  12. #12
    Cyburbian Plan-it's avatar
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    Generally, a company will determine a number of locations based upon workforce, quality of life, business climate, location, coast line, etc (whatever is important to the industry). This allows the company to see if they "fit" with the local areas. Once they have a number of choices, they will then try secure incentives to try and gain the financial benefits from areas they are already interested in. The final decision is based upon a combination of financial incentives and how high they ranked on the other factors.
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    Cyburbian Cardinal's avatar
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    Quote Originally posted by michaelskis
    Using things such a Tax Abetments and other funding sources to get companies to move into municipalities is a common thing, but are they more important that the Quality of Life issues in the community?

    Specifically, quality roadways, High Technology infrastructure, educated workforce, comprehensive parks and bike system, low crime rate, great public transportation are all things that more and more companies seem to like, and it seems like they are also factors in Economic Development.

    So it comes down to limited expenditures and you canít do both all the time. What do you do, give the company tax breaks or show them that you have a great quality of life in your community?
    First off, I would say that several things you list are usually considered outside of quality of life. Specifically, anything related to work force is separate, as is technology or other infrastructure, and transportation. Quality of life is usually considered to be things such as parks and recreation, culture and entertainment, housing options, cost of living, and the like. These are factors that are more likely to appeal to a work force, rather than those that impact the viability or cost of a business site.

    Quality of life is usually a seconday factor in the business location decision - as are financial incentives. Work force tends to dominate, with the concerns being an adequate labor pool, the available skill set, and labor costs. Businesses have usually narrowed down their decision to a handful of sites before issues such as incentives or quality of life come into play.

    One of the interesting things I witnessed when working in a "quality of life" place was the arrogance of the establishment in thinking that their community was the only perfect place, and that every employee, and every business would prefer to be there over anywhere else. The reality was that the quality of life in surrounding communities was generally as good. Community A might have better schools and a new fitness center and lower housing costs while Community B had a funky downtown and was right at the foot of the mountains... but in the end there really is no difference.
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  14. #14
    Cyburbian michaelskis's avatar
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    Quote Originally posted by Cardinal
    First off, I would say that several things you list are usually considered outside of quality of life. Specifically, anything related to work force is separate, as is technology or other infrastructure, and transportation. Quality of life is usually considered to be things such as parks and recreation, culture and entertainment, housing options, cost of living, and the like. These are factors that are more likely to appeal to a work force, rather than those that impact the viability or cost of a business site.

    Quality of life is usually a seconday factor in the business location decision - as are financial incentives. Work force tends to dominate, with the concerns being an adequate labor pool, the available skill set, and labor costs. Businesses have usually narrowed down their decision to a handful of sites before issues such as incentives or quality of life come into play.

    One of the interesting things I witnessed when working in a "quality of life" place was the arrogance of the establishment in thinking that their community was the only perfect place, and that every employee, and every business would prefer to be there over anywhere else. The reality was that the quality of life in surrounding communities was generally as good. Community A might have better schools and a new fitness center and lower housing costs while Community B had a funky downtown and was right at the foot of the mountains... but in the end there really is no difference.
    I don't think that I fully agree with you that they are not quality of life issues. I don't think that they are as commonly understood as the ones that you mentioned, but I do think that they do enhance the quality of life within a community, especially in larger cities.

    The other day I was discussing this topic with an economic and community development professor. He mentioned that a while back a few grad students looked at economic development they found that these items were important factors in companies at all levels deciding where to locate their businesses or plant. They had many of these CEO’s list factors in order of importance of the reasons they decided to locate where they are. Most of them did not rate tax incentives all that high, while the items I listed above where rated in the top 10.

    Established quality of life is one of the big differences between Portage and Kalamazoo. One is doing much, much better at attracting new business while the other has a great downtown that is being marketed and developed mostly by a non-governmental group.
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  15. #15
    Cyburbian mallen's avatar
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    Recently we've been going through this type of discussion in my area. I live and work in a high growth, highly desireable metropolitan area. We have never offered economic development incentives - we have been part of that group Cardinal mentioned that sometimes thinks the we have a high quality of life and everyone should locate here because of that.

    Recently, some of the larger desirable target industries/businesses have been locating nearby, but in neighboring communities that do offer tax incentives. Basically, they say "sure we like your quality of life, but we can locate the business in the community next door with tax incentives. We know that our employees will live in your community, go to your schools, etc., but our business gets the tax incentives to be over there."

    Secondly, many companies now hire relocation consultants. These consultants are often compensated according to the tax incentives they can generate. As such, they steer companies to the communities that offer the best incentives. The CEO's are then using quality of life issues to make final decisions, but only for the communities that they are given (ie the ones the consulant steered them to). Our community has been weeded out long ago.

    Personally, I have a philisophical problem with tax incentives. But to remain competetive, to get your community to the table, and not become a bedroom community, they are becoming necessary evils around here.

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    Member CosmicMojo's avatar
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    Quote Originally posted by mallen
    Secondly, many companies now hire relocation consultants. These consultants are often compensated according to the tax incentives they can generate. As such, they steer companies to the communities that offer the best incentives. The CEO's are then using quality of life issues to make final decisions, but only for the communities that they are given (ie the ones the consulant steered them to).
    Very true. When I worked at a regional ED body, we did a survey and a growing percentage of relocating firms use consultants. Operate knowing that only the consultant's short list gets to the CEO. We started to ask how we can appeal to the consultants, not just the companies. The consultants are our first hurdle. Our marketing staff started wining and dining the consultants on a regular basis, not just when they were working with them on a particular project. Our marketing staff would organize a trip to Chicago, identify the top consulting firms, make appointments and develop working relationships with the consultants so they'd think of us, call, and visit. We'd keep them updated with current data and statistics on our city and send all press releases about big relocations to them.

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