This document discusses how state legislatures can improve economic development incentives. It recommends that legislatures set clear goals for incentive programs, fund regular performance evaluations, and work with economic development offices to enhance programs. The document also describes a business incentives initiative involving multiple states that aims to identify best practices for managing incentives and improving data collection and analysis for more effective decision making.

1. ECONOMIC DEVELOPMENT:
BETTER RETURNS WITH
SMART INCENTIVES
NCSL Jobs Summit
San Jose, CA
September 18, 2014

2. 2
Using incentives to achieve state policy
and community goals
Recipient
Deal
Compliance
Effectiveness
Data and
analysis to
enable better
decision-making
Greater
transparency
and
accountability

3. 3 steps state legislatures can take to
create smart incentives
1. Set clear goals for each incentive program
• But allow flexibility on specific metrics
2. Request and fund regular program performance
evaluation
• Enable data sharing
• Provide time and resources
• Use reporting to improve not punish
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3. Work with the executive and economic development
office to improve program performance
• On the same team – creating economic opportunities in your state
• How can incentives support these efforts?

4. Business Incentives Initiative
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• Identify effective ways to manage and assess incentive policies and
practices
• Improve data collection and analysis
• Develop national standards and best practices that states can use to
report on economic development incentives
• Participating states: IN, LA, MD, MI, OK, TN, VA

5. 5
Takeaways
• Incentives should be used to accomplish community goals
– not just win a deal.
• The problem is that we haven’t known which incentives
actually help our communities.
• Communities need better data and analytics throughout
the process to identify what works and enable sound
decisions when awarding incentives.
• The next few years will see tremendous improvements in
the way we talk about and evaluate incentives.

6. Contact Information
Ellen Harpel
President
571/212.3397
eharpel@businessdevelopmentadvisors.com
www.businessdevelopmentadvisors.com
ellen@smartincentives.org
http://www.smartincentives.org/
Twitter: @SmartIncentives
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