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Ohio has placed some big bets on tax incentives to keep corporations in Ohio. The local Public Radio station in Cleveland explored the issue in a good radio show. EDPro Ron Kitchens, chief executive officer of Southwest Michigan First, participated in the discussion.

You can listen to the show here. You can download papers by Professor Chirinko here and here.

Business plan competitions are a good way to build an entrepreneurial culture within a community or region.

What do we mean when we say that a community or region does not have a "entrepreneurial culture"? Or that an economy does not have a "culture which supports entrepreneurial risk-taking"?

I explore some of these thoughts here:

Entrepreneurs need networks to survive and thrive. An entrepreneur is a person who builds a business firm resources that he or she does not control. Networks become critical to success. The thicker and more trusted the networks, the faster resources flow to promising ideas.

When we use the term "culture" we are really talking about patterns of behavior and thinking that prevail in a group or region. These patterns are generally automatic in that we don't think about them; they come to us naturally. (In recent years, scientists have learned a lot about the connections between what we think -- our cognitions -- and how we behave. This research has given rise to cognitive behavioral therapy for individuals and groups.)

So, when we talk about a community or region that does not support entrepreneurs, we are really talking about an economy in which people do not have the natural habit to collaborate. That is, they do not think or behave in ways that regularly cross organizational and political boundaries to build trusting relationships. They are also not accustomed to building these relationships intentionally.

If we do not know how to build business networks -- or if these networks are not apparent or accessible to us -- we become averse to risk. Networks help us manage the risks we face. The concept of insurance is based on the idea of a network coming together to help each other manage risk. When we say that a community does not support risk-taking, we are really saying that the community does not have a strong and dynamic set of networks that entrepreneurs can easily enter and leverage.

Business plan competitions are one way to start changing this dynamic. Through the competition, a community or region can start identifying new networks of people who are capable of supporting fast growth companies. These networks engage people who have grounds in technology, finance, business development, accounting, and legal counsel.

Here's an example of a business plan competition in North Dakota. Read more.

I first started to understand the value business plan competitions when I came across an article by the McKinsey consulting firm in the late 1990s. Download the article. (Free registration required.)

As we began to promote business plan competitions at Purdue, we learned that there was not very much background research available to measure the economic impact of a business plan competitions.

At the same time, these competitions represent very high leverage activities, and they can result in new companies forming quickly.

Recently, The Lyles Center at Fresno State University introduced a new twist on business plan competitions. They are opening their latest competition to entrepreneurs from all over the country. However, they provide it is money and professional assistance only if the winning entrepreneurs decide to open the business in Fresno

In a recent post to the Economic Gardening Google group, Tm Stearns noted:

[Here is a] unique way to support  entrepreneurship while marketing a community across the nation. The Lyles Center for Innovation and Entrepreneurship at California State University, Fresno has launched this morning StartItUp, the first ever business plan competition hosted by a community to attract entrepreneurs from across the country and provide them with an exciting way to launch their business. The $250K contest ($100K cash and $150K services) is seeking executive summary submissions through July 31, 2008. Ten finalists will be brought to Fresno to present their plan at a community theatre with the winner presented at half time at the Fresno State/Hawaii football game on October 3. The funds are only available if the entrepreneur starts the business in Fresno. Of course, we will be chasing the other 9 finalists as well and hope that turns into multiple opportunities!

This new idea is yet another example of how economic development incentives are shifting from a focus on companies (which does not work very well) to  focus on people (which is a far more promising approach).

Here are some articles on incentives from the passt week. 

• Michigan is moving to attract filmmakers. Read more.
  
• Minneapolis has designated a new bioscience development zone. Read more.
  
• The Hawaii legislature is considering new incentive for transit oriented development. Read more.
  
• Civic leaders in Birmingham want to educate state law makers ont he importance of expanding incentives beyond manufacturing. Read more.
  
• Minnesota's controversial JOBZ incentives has come under more scrutiny from the state auditor. Read more.
  
• Michigan is considering easing restrictions on its "but for" clause in state incentives. This change would ease restrictions on Michigan companies qualifying for incentives. The clause specifies that local companies must consider relocating in another state before getting tax credits to expand. Read more.
  

Here are some articles on incentives I have come across in the past week. 

• In Iowa, state EDPros are taking a more conservative approach to estimating job impacts. Read more.  
  
• Also in Iowa, EDPros in Dubuque learned the hard lesson of incentives: They are too small to override market forces. Read more. 
• Editorial writers in Minneapolis advise caution when considering incentives for Northwest Airlines. Read more. 
• Business leaders in St Louis used the occasion of their annual meeting to buttonhole legislators on incentives. Read more. 
• A local government official in Buffalo is calling for tighter accountability on incentives. Read more. 

Here are some articles on incentives I came across last week. 

• Cabela's knows how to squeeze a local government for incentives, so it's not surprising that some folks in North Carolina have doubts about the impact. Read more. 
  
• Commentators in Minnesota are asking hard questions about the state's JOBZ program. Confidentiality hampers accountability.  Read more. Here's another article. 
• In Fredricksburgh, VA incentive deals have become routine. Here are the details on one of the latest. Read more. 
• The editor of Expansion Management magazine says incentives are often "just a way to put lipstick on a pig." Read more. 
• A North Carolina county put money on the table to lure a firm from Michigan. Here are the details. Read more. 

Here are articles on incentives I came across in the last week or so. 

• The Minnesota JOBZ incentives are under attack for not being transparent. Read more.
  
• Details on Orlando's incentive deal for AirTrans. Read more.
  
• A commentary in Orland points out that incentives don't always translate to jobs. Read more.
  
• Here's another article out of North Carolina questioning the results form incentives. Read more.
  
• Indiana offered $196 million in incentives for 22,600 jobs in 2007. Read more.
  
• Louisville will be using tax increment financing to a $440 million city center project. Read more.
  

Here are some articles on incentives from the past week or so.

• Palm Springs is passing out tax breaks to get high end hotels. Read more.
• It's been a while since I came across an article on AMD's chip plant in New York. Read more.
• More on incentives in North Carolina: The Fiscal Research Division of the North Carolina General Assembly added fresh fuel to the tax break debate with a report that says the total economic development spending statewide totaled $1.26 billion for fiscal year 2006-2007. Read more. Download the report here.
• Background on the Honda Aero deal in North Carolina. Read more.
• Peoria is trying to promote development in a downtown district with tax incentives to developers. Read more.
• Illinois is trying to lure the FutureGen project with a hefty incentive package. Read more.

Here are articles on incentives from the past week or so. 

• The Austin City Council has passed a resolution to disallow incentives on retail deals. Read more.
•  North Carolina continues to be the state where the battle over incentives policy is the hottest. Read more. 
• One of the engines of incentive deals in North Carolina (and elsewhere) are the law firms and consultants that generate fees from these deals. Read more. 
• Two biotech companies in High Point, NC are arranging an incentive package of about $3 million to stay put. Read more. 
• Playing the recruitment and incentive game is expensive, and it helps when your local newspaper is behind you, as it is in Topeka. Read more. 
• Speed, it turns out, is becoming as important (more important?) than incentives. So communities are moving toward expediting permitting processes. Read more.