Bolts from the past/TalentForce.net blogs

August 03, 2006
The Two Company Towns that Could Have…
In the last few months The New York Times has reported on company towns and their demise. In particular, they called out Rouses Point, NY where Wyeth Pharmaceuticals was pulling out and leaving behind 1,250 jobs (of the population of 2.350). Another is Scotia, California where the logging company, Pacific Lumber Company, is abandoning their ownership of the town after 140 years.
We ask the question, “why?”
We are in a time where we fret over the loss of manufacturing and information technology jobs to overseas and many times now to overseas companies, who our corporations now just pay for the labor. Why are we not seeing the beginning of a new trend where states and local governments are not working hard to keep those jobs here and expand even further our skill and talent base?
We do see examples of where it is happening such as in Indiana, which we detailed last week. We also see it in North Dakota, where as Wired reported in their February issue, the Center for Nanoscale Science and Engineering had been created in Fargo. The NDSU’s ResearchPark founder states that the talent among the farming and machinist communities lends itself to the creation and design of new machinery. Add the self-proclaimed strong work Midwest work ethic and NDSU thinks they have a winning combination. The state government is stepping up with a quarter of a billion dollars in funding to promote the creation and research in radio frequency identification technology. The funding and focus is working as Alien Technologies (a silicon valley tech company) is building a plant in Fargo with the commensurate amount of hiring to make North Dakota the global capital of RFID manufacturing. That’s a great story. Talent, plus the funding by corporations to create a new footing for a local economy.
Now what if North Dakota went one step further (further than the incentives that most states see, like Indiana) and created a set of Talent incentives or “Talent Credits” around the state RFID manufacturing initiatives. We will follow the taxonomy of government and introduce our own program acronyms.
· TRI – Talent Relocation Incentive – all existing residents and new talent who come to North Dakota to work in the RFID sector would pay no incomes taxes for the first three years of their employment. Nor would the company be required to match any of those income taxes for payroll tax purposes.
· THIRST – Talent Housing Incentives, Reductions, Stipends and Tax reductions – All employees within the RFID sector would receive a reduction of a third of their real estate taxes on owned properties for the first five years of their employment. Companies and Talent together would have great incentives to bring new talent and businesses to the state. What a recruiting tool.
· TED – Talent Education Degrees – Any state resident who takes a state certified course for the training of RFID technology would be able to do this at state funded institutions with a 50% fee and book reduction.
Let’s go one step further and see what this could mean to Talent and to the Companies who recruit that Talent.
Let’s say that the employee was moving to North Dakota and was going to be an engineer who would make $85,000 and would be buying a $300,000 house.
Here is the math:
Base Salary: $85,000
State Income Tax – 7% ($5958)
Real Estate Taxes
(on a $300K home) @ 1% ($3000)
Net Income after State Taxes = $76,042
After Talent Credits:
Base Salary: $85,000
State Income Tax – 0%
Real Estate Taxes
(on a $300K home) @ .033% ($1000)
Net Income after State Taxes = $84,000
That’s a $7952 positive difference or out another way – a 9.3% income differential to the positive that the employee would receive by making the move or changing employers.
That’s a heck of a recruiting tool for the best Talent.
So, why aren’t states thinking this way? Honestly, we don’t know other than once a good idea gets going in government, there are plenty of special interest reasons why it just shouldn’t work or happen.
We are calling on those who can make this difference, to just give it a try.
If more incentive is needed – we have taken our own shot at the obvious that each state could do to differentiate themselves and get going. And imagine what strength we would have if we got this level of focus on very important issues at hand.
Alabama –
Alaska – Clean and green oil exploration and refinemen
Arizona –
Arkansas –
California – Stem Cell Research
Colorado –
Connecticut –
Delaware –
Florida – Oceanic Food
Georgia –
Hawaii – Tidal Power systems
Idaho –
Illinois –
Indiana – Efficient Manufacturing and Production
Iowa –
Kansas – Energy from the wind
Kentucky –
Louisiana –
Maine –
Maryland –
Massachusetts – Nanotechnology
Michigan – Clean and Green Transportation Systems
Minnesota –
Mississippi –
Missouri-
Montana –
Nebraska-
Nevada –
New Jersey –
New Mexico – Solar Energy
North Carolina –
North Dakota – Radio Frequency ID Tags
Ohio –
Oklahoma-
Oregon –
Pennsylvania –
Rhode Island –
South Carolina –
South Dakota –
Tennessee – Hydropower next generation
Texas – Energy, Alt Energy, Agriculture
Utah –
Vermont –
Washington –
West Virginia – Clean uses of Coal
Wisconsin – Dairy efficiency
Wyoming
We hope you have your own ideas as well and we start to see Free Talent Zones emerge and the beginning of the next generation of Talent Towns!
August 03, 2006 Permalink Comments (0)
July 19, 2006
Follow the Talent
Since February’s publishing of Talent Force, we have been fortunate enough to have seen many examples surface of what we have written about in the book.
One of those concepts is the partnership with companies and municipalities to recreate the modern-day version of the “Company Town”. Hank likes to say that with 40 acres and a wi-fi, anything is possible.
Earlier this year, we wrote a blog that gave some ideas for the Governors of the United States. We would like to go further with that topic here.
The week before last, Google made the announcement that they would hire 1,000 people in Michigan. For Google, a thousand people is still a lot, but it is not enormous. What is significant is that Google looked in a most unusual place for a Silicon Valley based company. They reached to a state where without a retooling of The Talent Force is facing an economic and Talent crisis. I can only imagine the smiles that crossed the faces of every state university in Michigan when they read the announcement; a second chance for Michigan with a long-term attractive employment prospect for future students.
You can read about the announcement here:
http://news.yahoo.com/s/ap/20060711/ap_on_hi_te/google_michigan_7
It is great that Google (and a founder with ties to the state) were able to make this commitment. But states need to do more if they are to make these opportunities even that more attractive to companies and more importantly to the talent that are necessary to make the ventures successful.
I recently received a letter from the Governor of Indiana, Mitch Daniels, asking me as a Hoosier and a supporter of my university, Purdue, to consider bringing my business and jobs to Indiana. I quote from the letter: “Indiana is transforming its economic landscape by undertaking bold and aggressive initiatives to make it easier to conduct business. We have long been a low cost business state, and now we are making it even easier to start, expand and relocate businesses.” The letter goes on to describe the Indiana Economic Development Corporation (IEDC), which was created in 2005 to solely assist businesses to grow and prosper in Indiana. And so far, with good results with over 140 deals done and 18,000 jobs committed to Indiana. The letter attached a set of incentives that the IEDC has created for businesses:
· EDGE – Economic Development for a Growing Economy – a refundable tax credit program created to reward companies creating new jobs with a percentage of payroll taxes credits passed back to the Company
· HBITC – The Hoosier Business Investment Tax Credit – credits against Indianataxes for capital spending
· SBIR – Small Business Innovation Research – matching funds for R&D efforts
· SEF – Skills Enhancement Fund – financial assistance to companies for training (note trainees must be Indianaresidents so they don’t apply to imported talent)
· 21st Century Research and Technology Funds – more funding for R&D
· Industrial Recovery Tax Credit – incentives for investing in facilities requiring rehabilitiation
· The Industrial Development Grant Fund – infrastructure funding for expansion of businesses and new jobs into Indiana
· TECH Fund – The Technology Enhancement Certification Program – a corporation reimbursement grant for training employees in the information technology sector
· VCI – Tax Credit program established to provide individual and company investors an incentive to invest in Indianaearly stage companies.
When I read through the brochure, I was both impressed and depressed at the incentives and programs. Impressed that the state is taking a stand to continue to build the economy, but depressed in that once again, we see another set of programs which miss the most critical ingredient of business and economic success – the Talent to do the work.
While training is great, the reimbursement of training dollars to already state citizens will not provide incentives for new talent to flow into the state, nor will it create a great incentive for new businesses to move to the state only to have to retrain the current talent force.
There must be bolder moves by our legislators if we are to truly break through with innovation and the creation of new types of workers in our country.
Again, we call on our legislators to think outside the box. Next week – we will give examples of what we think can be done.


July 19, 2006 Permalink Comments (1)
July 06, 2006
Free Talent Zones
This is the first of a series of posts regarding a concept we developed in our book ‘Talent Force: A New Manifesto for the Human Side of Business’.
In today’s post we posit the problem, in the second the solution and in the third a study and review of a State with the problem and suggestions to solve.
Local, State and Federal Governments in the United States and throughout the world are beginning to understand the simple fact that there are fewer people in the world available for work and thus input to the economy. Mortality rates have slowed to zero or zero negative in so many countries that now populating areas to keep commerce and tax rates up are becoming a question and strategy.
In a way, the US over the past 40 years has created what we define in our book Talent Force as a “Free Talent Zone” for our friends and neighbors from the south. The results have been positive and negative and thus the war of words has started and will likely continue for some time.
But there may be a different and unique way to think about attracting talent and the periphery commerce and tax base they can bring to an area. And that is what we introduce and explore here.
Historically, attracting and settling talent was the 40 acres and a mule offer post the Civil War. For most, that process worked. Land was provided with the tools to make the land a valued asset.
In the recent past at least two towns in the Midwest have attempted to attract people to their area in order to secure a depleting tax base as people died and children moved to the city. In these instances free land was offered….but no mule or tractor or work. As a result both attempts failed.
But the efforts caused us to consider just what these towns had to offer and what they could have done to make their efforts successful.
Next week we explore our solution.