Dateline: Dallas TX. The Supply Chain Leadership Forum kicked off last night with an Executive Summit led by Michael Press, a seasoned expert in helping businesses get the most out of government incentives. The Leadership Forum is an annual event for members of the Supply Chain Consortium, focusing on supply chain best practices, benchmarking, and networking opportunities for members.
We learned that now is an especially good time for companies to look at government-sponsored incentives. Leaving money on the table is never a good idea – but it is certainly a big no-no in this time of economic recovery. Mike hit the nail on the head when he compared capturing these incentives to “noticing the gorilla in a group.” In other words, it should be obvious that companies need to investigate state, federal and local business incentives, and yet a great number of organizations fail to take this step. They simply do not notice the big gorilla in the room.
First, you need to understand what events can trigger government incentives. Some of the triggers besides building a new facility include business expansions, consolidations, mergers, and supply chain organization & reorganization. The key is to begin coordinating with government officials upfront during the planning period and understanding how to leverage your needs with their needs.
States are aware that this is a critical period for business, and so it’s a prime time for them to try and attract companies that are expanding into emerging markets like alternative energy.
Mike also told the group how trends in government incentives have changed in the last 10 years, and it was a real eye-opener for most of us. The top 5 trends are:
1. Shift to Cash. Some states and other entities are monetizing credit if there is no income. For example, Florida allows income tax transferability.
2. Geographies Expanded. Twenty-five states have recently expanded programs that were once limited to certain regions within the states.
3. Industries Expanded. There are more opportunities for government incentives in different industries today. For instance: Nebraska, tourism; South Carolina, agribusiness; Tennessee, forest products; and Illinois, truck manufacturers.
4. Benefits Increased. Some states are emulating federal programs, and certain sectors such as energy efficiency are getting a big boost.
5. Accountability Increased. More government incentives necessarily translate into ensuring that businesses are held accountable, but they are working with companies in light of the economic downturn.
For companies seeking these incentives, it is a give-and-take relationship between government and business that takes a patient, steady hand to manage.
I appreciate Mike taking the time to talk with our Leadership Forum attendees, and I’m looking forward to more good things from this event in the next few days.
Go!Go!Go!
Jim
More Resources
Photo Credit: Eden Pictures