Employees are eager to find jobs that offer financial stability, security for themselves and their families, and opportunities for growth. An area that business owners and employers should leverage to attract and retain top talent is local and state-incentivized economic development programs. Now, what are economic development incentives?
Economic development incentives are programs that offset company costs and taxes. Many states work to create strong pro-business environments and use economic development incentives to attract new companies and encourage existing businesses to expand. As a result, this can spur economic activity, foster economic diversification, create new jobs and lead to higher average state wages.
While each state’s workforce, infrastructure and tax climate are important to companies, the reality is, many communities across the U.S. could meet those needs. To give themselves a competitive edge, many communities and states will offer aggressive incentives to attract new business projects and, then, win the jobs and capital those projects create. Strategically designed incentives help communities diversify their economies with high-performing, high-wage industries like technology, advanced manufacturing, aerospace, defense, life sciences and – you guessed it – agribusiness.
How agribusinesses can benefit from economic development incentives
Entrepreneurs and businesses are fundamental to the growth and sustainability of communities across states. Like many industries, agriculture is drastically changing from a labor-intensive industry to an educated, automated and data-based industry. Some of the major advantages agribusiness owners see in using technology are increased crop productivity, reduced impact on the environment, and a reduced use of water, energy and pesticides.
Technology plays a growing role in increasing labor efficiency and automating machine management with a noticeable impact from use of the Internet of Things (IoT), Geographic Information Systems (GIS), Controlled Environment and Data Science. Some of the state-of-the-art farming tools and technologies include crop monitoring drones, livestock sensors, farm digitization software, autonomous vehicles/tractors, crop sensors and mapping.
For example, GroPod by Heliponix is a dishwasher-sized, food computer that grows organic leafy greens. The Heliponix GroPod is an aeroponic appliance that could easily fit in a residential kitchen, and it grows produce three times faster than conventional farming methods, using 95% less water without pesticides. This accelerated growth rate means having a head of leafy greens of choice every single day. The innovative design features a patented, vertical tower inside a climate controlled chamber.
Incentives, such as property tax abatements, corporate tax credits, training grants and more, can play a key role in a company’s decision to grow or locate their operations. For example, Spensa Technologies, acquired by DTN LLC, is a leader in providing vertically integrated precision pest management solutions for modern agriculture. The business had two offices – one in South Carolina, the other in Indiana. They were eager to expand their employee count but needed to determine which state would be best to meet this need. The Indiana Economic Development Corporation ended up winning the project by supporting the company with $40,000 in training grants and $635,000 in conditional job creation tax credits. Of note, the city of West Lafayette also offered a local grant of $65,000 that was used to offset costs of training and relocating new hires from other states.
The fine print
Incentives make a difference. However, businesses should be aware that with incentives come accountability. Well-structured incentive programs typically disburse benefits only after a company makes progress towards their goals (job creation, new payroll, capital investment, so on). Most incentive programs require ongoing compliance reporting in order to receive benefits and may mandate repayment if goals aren’t being met. It is important that businesses understand the terms of their agreements before accepting incentives and to develop a plan that ensures these annual reporting requirements are met.
Communities and states offer incentives to offset deficiencies and level the playing field. Attracting businesses and growing them is a competitive endeavor. In order to attract businesses and employees, incentives should be leveraged to give places a competitive edge. Further, incentives can provide businesses with their own competitive advantage by reducing upfront and ongoing costs of expansion projects.
These days, everyone needs a competitive edge.
Sikich’s site selection and incentives specialists can determine if you qualify for incentives. Any agribusinesses that are adding jobs or making a capital investment in land, building or equipment are most likely eligible. Contact our team to learn how we can help: