Regional vision plan integration and implementation : phase II : final report - Page 142 |
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136
• Incentive program. A new incentive program passed into law in the spring
of 2008. The incentive program takes into account anchor companies’ power
over their suppliers’ business locations and rewards them for recruiting
suppliers to Michigan. An interviewee compared the incentive to a “finder’s
fee.” Specifically, instead of abating the tax receipts of a supplier who moves
to Michigan, the program refunds a portion of the supplier’s tax receipts to the
anchor company, with greater proximity to the anchor company increasing the
percentage of the refund. The two companies must submit an application
jointly and attest that the relocation would not have occurred but for the
incentive, but the incentive is thought to enable the anchor company to
provide better terms to its supplier which makes the move possible. The
anchor company has five years to bring the supplier into the state after the
application is submitted, and then is eligible to capture the tax refund from its
supplier for the five years following relocation.
3. SmartZones program, which was inspired by Michael Porter’s writing on
clusters, seeks to “create Research Triangle Parks all over the state” of Michigan,
and to focus these new clusters on high-tech development. To do this, the MEDC
won amendment of the state’s local development financing legislation to include
high-tech economic development as a permissible use of tax-increment financing
in designated areas. The MEDC then put out a request for proposals and
communities applied to be a “Smart Zone” which could take advantage of the
amended TIF legislation. As of spring of 2008, there were 12 SmartZones, all of
which have been in place five or six years, according to an interviewee. The local
financing authorities supervising the SmartZones have used the funds to create
business incubators, conduct industrial recruitment, and host job fairs, among
other activities.
C. Industry/Cluster Identification
The focus of the MEDC’s various programs and initiatives doesn’t appear to depend on
any organization-wide industry or cluster analysis. Instead, the various divisions of the
MEDC have separate targeting processes. The MEDC’s more conventional national and
international business development efforts, which occasionally employ the industry
specialists discussed above, ostensibly focus on emerging sectors: alternative energy; life
sciences; advanced manufacturing; and homeland security. The MEDC targets industry
clusters within each sector, but it was unclear from the interviews how these targeting
decisions were made.
The 21st Century Jobs Fund targets the same broad sectors as the national and
international business development unit, but an interviewee noted that the
commercialization funding competition demonstrated just how broad the sectors are:
over 90% of the proposals for the competition were considered to be within the target
clusters.
Object Description
Description
| Title | Regional vision plan integration and implementation : phase II : final report - Page 142 |
| Full Text | 136 • Incentive program. A new incentive program passed into law in the spring of 2008. The incentive program takes into account anchor companies’ power over their suppliers’ business locations and rewards them for recruiting suppliers to Michigan. An interviewee compared the incentive to a “finder’s fee.” Specifically, instead of abating the tax receipts of a supplier who moves to Michigan, the program refunds a portion of the supplier’s tax receipts to the anchor company, with greater proximity to the anchor company increasing the percentage of the refund. The two companies must submit an application jointly and attest that the relocation would not have occurred but for the incentive, but the incentive is thought to enable the anchor company to provide better terms to its supplier which makes the move possible. The anchor company has five years to bring the supplier into the state after the application is submitted, and then is eligible to capture the tax refund from its supplier for the five years following relocation. 3. SmartZones program, which was inspired by Michael Porter’s writing on clusters, seeks to “create Research Triangle Parks all over the state” of Michigan, and to focus these new clusters on high-tech development. To do this, the MEDC won amendment of the state’s local development financing legislation to include high-tech economic development as a permissible use of tax-increment financing in designated areas. The MEDC then put out a request for proposals and communities applied to be a “Smart Zone” which could take advantage of the amended TIF legislation. As of spring of 2008, there were 12 SmartZones, all of which have been in place five or six years, according to an interviewee. The local financing authorities supervising the SmartZones have used the funds to create business incubators, conduct industrial recruitment, and host job fairs, among other activities. C. Industry/Cluster Identification The focus of the MEDC’s various programs and initiatives doesn’t appear to depend on any organization-wide industry or cluster analysis. Instead, the various divisions of the MEDC have separate targeting processes. The MEDC’s more conventional national and international business development efforts, which occasionally employ the industry specialists discussed above, ostensibly focus on emerging sectors: alternative energy; life sciences; advanced manufacturing; and homeland security. The MEDC targets industry clusters within each sector, but it was unclear from the interviews how these targeting decisions were made. The 21st Century Jobs Fund targets the same broad sectors as the national and international business development unit, but an interviewee noted that the commercialization funding competition demonstrated just how broad the sectors are: over 90% of the proposals for the competition were considered to be within the target clusters. |
